For a brewery truly rooted in the community, consider forming a cooperative, guest post by Sara Stephens, Sustainable Economies Law Center.

For a brewery truly rooted in the community, consider forming a cooperative

The cooperative business model is gaining popularity. Even many craft breweries are forming as co-ops. If you’re thinking of starting a brewpub, the cooperative business model might be the way to go.

The Sustainable Economies Law Center (SELC) is the authority on co-ops. MicroBrewr Podcast recently spoke with SELC as part of a series about breweries as co-ops. Here, Sara Stephens, staff attorney at SELC and the Law Office of Sara Stephens, expands on how the cooperative business model can be applied to breweries.

Disclaimer: This blog post is made available only to give general information about the law and not to provide specific legal advice. The law is different in every state and subject to change. You should consult an attorney about legal questions pertaining to your situation.

For a brewery truly rooted in the community, consider forming a cooperative

Full disclosure: I am Nathan Pierce’s girlfriend wife. Because of that, I am learning more about craft beer than I ever expected I would. Although I’m not a big beer drinker, I am a big fan of entrepreneurship that helps create a more equitable economy. My job as an attorney at Sustainable Economies Law Center is to help people start cooperative businesses, equitable housing and land stewardship models, and other projects that create more resilient communities.

What impresses me most about craft breweries is how unlike conventional businesses they tend to be (in a good way).

  • They give back to their local communities.
  • They collaborate and share with each other.
  • They innovate and take risks.
  • They generally resist selling out to make a bigger profit.
  • And they seem like great places to work.

Because of these qualities, I believe the craft beer industry is ripe for the cooperative movement to take hold.

Cooperative basics and benefits

Cooperatives, I believe, are the best type of business to form if you want to be truly rooted in your community. By “cooperative” I mean an entity that is owned not by outside shareholders but by its members—the people who actively help the business to succeed.

Members might be:

  • The business’ workers (worker co-op)
  • The business’ customers (consumer co-op)
  • Producers of the product it sells (producer co-op)
  • A combination of those categories

Members of a cooperative jointly own the business, share its profits, and democratically manage its operations. This form of business keeps more wealth in the local community because the members (local workers, customers, and/or producers) are its owners. In the case of a brewery, the members could be the workers in the brewery, the consumers of the brewery’s beer, and/or independent brewers whose beer the co-op sells.

These members also have a say in how the business is run, so they can keep it from exploiting its employees or the local environment. Worker cooperative breweries, in particular, allow the people making the beer to have creative input and ownership in their work. Rather than focusing on maximizing returns to shareholders, a cooperative can truly operate for the benefit of its workers and community.

Listen to podcasts about breweries as co-ops:

MicroBrewr 046: Start your brewery as a worker-owned co-op

MicroBrewr 047: Proof of concept for a brewpub co-op

MicroBrewr 049: Planning California’s first cooperative brewpub

The cooperative model is taking hold

If you’ve been listening to MicroBrewr Podcast (particularly episode 046, episode 047, and episode 049), you’ve heard about these and other benefits of running a brewery as a cooperative. You’ve also heard from a couple of breweries that have chosen the cooperative model.

As it turns out, this trend is really taking hold.

Here’s the list of cooperative breweries Nathan and I have compiled so far. Some have not yet opened, but are well on their way. Below each, I’ve also indicated what type of cooperative it is or intends to be (as far as I could tell). Some of the consumer cooperatives below may actually be hybrids, if the workers are also members and exercise democratic self-governance. If you know of other cooperative breweries, tell us about them in the comments!

  1. 4th Tap Brewing Co-op (Austin, TX)
    • Worker cooperative.
  2. Black Star Co-op Pub and Brewery (Austin, TX)
    • Hybrid consumer and worker cooperative. First cooperative brewery in the world. Hear their interview on MicroBrewr Podcast episode 047.
  3. CO-HOP (Chicago, IL)
    • Still in planning. Looks like a producer cooperative and brewery incubator that markets the beer its tenants produce. No posts on their blog or social media in several months; I hope this project is still happening!
  4. Fair State Brewing Cooperative (Minneapolis, MN)
    • Consumer cooperative.
  5. Fifth Street Brewpub (Dayton, OH)
    • Consumer cooperative.
  6. Flying Bike Cooperative Brewery (Seattle, WA)
    • Consumer cooperative.
  7. Full Barrel Cooperative Brewery & Taproom (Burlington, VT)
    • Consumer cooperative, with democratic worker management.
  8. High Five Co-op Brewery (Grand Rapids, MI)
    • Consumer cooperative.
  9. Los Alamos Beer Co-op (Los Alamos, NM)
    • Consumer cooperative.
  10. Miami-Erie Brewing Co-op (Middleton, OH)
    • Consumer cooperative.
  11. San Jose Co-op Brewpub (San Jose, CA)
    • Consumer cooperative. Hear their interview on MicroBrewr Podcast episode 049.
  12. Together We’re Bitter Cooperative Brewing (Kitchener-Waterloo, Canada)
    • Hybrid consumer and worker cooperative.
  13. Utah Brewers Cooperative—Wasatch and Squatters (Salt Lake City, UT)
    • Producer cooperative. Joint marketing of Wasatch Brewery and Squatters Craft Beers.
  14. Yellow City Co-op Brewpub (Amarillo, TX)
    • Consumer cooperative, with democratic worker management.

Key legal issue: choice of business entity

Since I’m a lawyer, I’ll say a little about one of the biggest legal decisions cooperatives need to make: what entity type to choose.

The most important distinction between a cooperative and a conventional business is the set of principles under which it operates. Check out the International Cooperative Alliance’s Cooperative Principles, which most cooperatives strive to follow.

Your state law may or may not contain a “cooperative corporation” business entity type, or something similar. Even if it does, you could still form something else (like an LLC) and may want to for various reasons. Typically, the LLC or cooperative corporation will be the best choice because they limit your personal liability.

Every state is different, but in California, here are some of the pros and cons of incorporating as a cooperative corporation.

Pros of incorporating as a cooperative:

  • This entity type legally enshrines cooperative principles into the business, requiring democratic decision-making and member ownership. These principles can be part of an LLC’s Operating Agreement, but there is a risk that members could vote to remove the cooperative provisions.
  • The business must incorporate as a cooperative corporation in order to use the word “cooperative” in its business name.
  • The business can raise up to $300 from each member without triggering cumbersome securities laws.
  • If it meets requirements under Subchapter T of the Internal Revenue Code, the business can avoid the double taxation that conventional C-Corporations face. However, LLCs are not taxed at the entity level at all, so both of these entities receive tax benefits.
  • Salaries of owners are not subject to self-employment tax, unlike LLC owner salaries.

Cons of incorporating as a cooperative:

  • Even though all of the workers might be owners of the business (i.e. a worker cooperative), the law might consider them “employees,” requiring the business to follow employment laws. In that case, the business would have to pay minimum wage, deduct payroll taxes, purchase workers compensation insurance, etc. even while it’s just getting the business off the ground. In contrast, members who co-own an LLC generally will not be considered employees.
  • There are more administrative requirements than an LLC, such as annual meetings, Board of Directors meetings, annual report filing requirements, etc.

Resources to start a brewery cooperative

You should meet with a lawyer to determine the best entity choice for you.

Sustainable Economies Law Center also has a free legal resource library on cooperatives (currently under construction).

And the Democracy at Work Institute has some great legal tools, particularly for worker cooperatives.

If you are in the San Francisco Bay Area, the SELC offers drop-in legal advice three times a month for businesses and organizations trying to improve their communities. Come by for advice about your brewery!

The cooperative movement is growing and I hope you’ll join—either as a cooperative brewery entrepreneur or as a member-owner of a cooperative brewery!

Image showing Barn raising in lansing by Alexander W. Galbraith / Wikimedia Commons / Public Domain was modified from its orignal state.


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How to apply for a trademark/service mark, guest post by Paul Rovella, L+G, LLP.

How to apply for a trademark / service mark

There are so many stories about breweries in trademark disputes. We’ve heard about breweries having to change their name, or change the name of their beer, or even being sued for 800 thousand dollars. Following the proper procedure to register your trademarks is one important way to protect you and your brewery.

A trademark is a word or design that is used to identify your company or your product. It can be the generic, plain text, to protect the words, or it can be stylized to protect the design, such as a logo.

A slogan can also be a trademark.

To fully protect your brand, you should register your trademarks with the U.S. Patent and Trademark Office.

Paul Rovella, told us all about trademarks on MicroBrewr Podcast episode 044.

This column is the work product of L+G, LLP, which has offices in Hollister and Salinas. Paul A. Rovella, Esq., an attorney with L+G, LLP, and Max Giacomazzi are the authors of this work. You may contact Paul A. Rovella at

 How to apply for a trademark/service mark

Once you have decided that you would like to apply for trademark/service mark protection (see part 1 for a primer on trademarks and service marks), it is time to apply to the United States Patent and Trademark Office (USPTO) for protection.

Please note, it is not necessary to register a trademark with the USPTO in order to protect it, there are still common law protections for trademarks and service marks based on use in commerce, however, registering a trademark or service mark provides certain benefits, including but not limited to nationwide public notice of ownership and a presumption of ownership of the mark and exclusive right to use the mark nationwide, on or in connection with the goods/services listed in the registration.

Decide on your mark

To apply for a trademark, you must first decide on the mark you are going to use.

There are several important factors to consider when selecting a mark. First, there can be minimal likelihood of confusion with other existing marks. Second, your mark should be easily defensible in court, or be a “strong” mark.

Marks, according to the USPTO, are placed into four categories.

The strongest marks are arbitrary and fanciful marks. These marks have no relevance to the goods being offered, and so are the most easily defensible, such as BELMICO Insurance® or BANANA Tires®.

The next category is suggestive marks. Suggestive marks suggest, but do not describe, the goods being offered. This would include PAGE-A-DAY Calendars®. Suggestive marks are also considered strong marks.

The next category is descriptive marks. Descriptive marks describe the goods being offered, such as CREAMY for yogurt or WORLD’S BEST BAGELS for bagels. Descriptive marks are considered weaker marks, because it can be difficult to defend them.

Generic marks, which don’t even qualify as marks in the legal sense, are the weakest types of marks. This would include BICYCLES for a bicycle retail store or MILK for a dairy-based beverage.

Do a trademark search

After you have decided on a mark, make sure you do a trademark search to see if any other marks are out there which might be confused with yours.

The Trademark Electronic Search System (TESS) is offered by the USPTO for free and is available 24-7 through at “TESS search trademarks.” If you do find a mark that is similar enough with yours that there may be a likelihood of confusion, then you must pick or design a new mark.

Apply for a trademark

Applying for a trademark is complex, and requires adherence to all parts of the trademark code. Many people hire a lawyer specializing in trademark applications to speed up the process, and make sure that no part is missed.

All trademark and service mark applications can be filed electronically using the Trademark Electronic Application System (TEAS) on the USPTO website. You can also file on paper, but filing online is much easier and faster.

There are two different applications, the TEAS and the TEAS Plus. The TEAS is $325 per mark per classification. The TEAS Plus is $275 per mark per classification, but you must meet some extra filing requirements.

Once you file, you will receive a filing date, which is important because if there are two similar marks seeking trademark protection from the USPTO, the one filed first will get priority. However, there are some exceptions to this, such as if a mark which has been in use applies second. In this case, the second applier has rights.

There are a few things that must be included in the application, such as the owner’s information, a drawing of the mark, a description of the goods or services represented by the mark, and for use-based applications, depiction of the mark being used in the stream of commerce.

Once you submit the application online, your materials will be reviewed by a reviewing attorney with the USPTO for conformity to the USPTO rules and regulations before publication.

Image showing USPTO@Alexandria by Kazuhisa OTSUBO on flickr (CC BY 2.0) was modified from its orignal state.


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MicroBrewr 044: What every brewery should know about trademarks, with L+G, LLP Attorneys at Law.

MicroBrewr 044: What every brewery should know about trademarks

There are so many stories about breweries in trademark disputes. The last thing you want is to get sued or pay legal fees to protect yourself. Paul Rovella is attorney and partner at L+G, LLP Attorneys at Law in Hollister, California. He tells us all about trademark issues for your brewery.

Although “common law” provides some protection, you are still at risk.

One especially painful story is that of Backshore Brewing Co. The owner, Danny Robinson told us on MicroBrewr Podcast 041 that he had to change the name of his brewery—and he was still sued for $800 thousand and has already racked up $500 thousand in legal fees.

Some other breweries who have shared their trademark issues on MicroBrewr have included Opposition Brewing Co. (episode 16) and Ferndock Brewing Company (episode 39).

Here are some basic steps to protect yourself:

  • Use the U.S. Patent & Trademark Office’s search tool to see whether someone else is already using the name you want.
  • File for a trademark.
  • Use photos or documentation to prove when you start using your business name and your trademark.

“The importance of trademark registration is actually enforcing,” says Paul, “which could be a time consuming and an expensive endeavor.”

There are other options besides suing to protect your brand.

“I always encourage my clients to try to deal directly with their adversary,” Paul advises. “Because then you’re not paying an attorney to create more paper to send to another attorney.”

From the least strenuous to the most, here are the best options for enforcing your trademark:

  1. Make a polite phone call to the person who is using your trademark.
  2. Send a cease and desist letter.
  3. Get a restraining order or injunction and get a judge to make them stop.

PLEASE NOTE: Nothing on this podcast should be deemed legal advice. If you have any questions about the discussions or subject matter of this podcast, you should consult an attorney.

“Smaller businesses gotta be a little more diplomatic in getting someone to stop using your label.” [Tweet This]


Listener question:

If you could ask one question to every brewer or brewery owner, what would you ask? Let me know.

Book recommendation:

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An upcoming beer style:

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Other resources:

You can reach Paul Rovella and L+G, LLP Attorneys at Law at:

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