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‘Shorebilly’ trademark dispute spurs judge to bifurcate trial

The dispute over an Ocean City brewery’s use of the word “Shorebilly” could be a two-for-one special after a federal judge separated the trial into two phases last week.

Though the Shorebilly Brewing Co. has said it will change its name, that apparently won’t stop the lawsuit filed by Teal Bay Alliances over the use of ‘Shorebilly.’ (The Daily Record / Alexander Pyles)

Merchandise company Teal Bay Alliances LLC sued the owner of Shorebilly Brewing Co. for trademark infringement earlier this year. The brewery, however, contends it was given written license to use “Shorebilly” by Fish Tales Bar & Grill, another Ocean City establishment that has been using the name “Shore Billy Biker Club” on its merchandise since 2007, about four years before Teal Bay received its own Shorebilly trademark.

U.S. District Court Judge Marvin J. Garbis issued an order Friday bifurcating the issue of Fish Tales’ alleged prior license, saying a determination on that question would impact the rest of the case.

“It’s the judge’s decision, and he wants to hear live witnesses on the issue,” said James B. Astrachan of Astrachan Gunst Thomas P.C. in Baltimore, who represents Southbound One Inc., the company that owns the brewery. “It’s a threshold issue. It could be dispositive, and [the judge] thinks it’s important enough to hear it.”

Teal Bay’s attorney, Samuel D. Littlepage of Dickinson Wright PLLC in Washington, called the decision to bifurcate a “wise move.”

“I think it’s good to get meritless defenses out of way before real trial starts,” Littlepage said. “I think the judge feels the same.”

Teal Bay, which sells clothing and other novelties imprinted with the word “Shorebilly,” filed a lawsuit in U.S. District Court in Baltimore in July claiming the brewery, which opened in May, infringed on its trademark of the word “Shorebilly,” which it has had since 2011.

The brewery claims it has prior entitlement to use the name since Fish Tales, which is owned by Bahia Marina Inc., gave it a written license to use the name “Shorebilly Brewing Co.” Though Fish Tales gave the brewery the license this fall, it is effective as of Jan. 1, 2013, according to a letter filed by the brewery in federal court.

Teal Bay, however, argued that Fish Tales does not have rights to license the mark “Shorebilly Brewing Co.” when its own mark is “Shorebilly Biker Club.” Teal Bay also said it had not been given a copy of the license despite asking multiple times to see it.

“We think it’s a frivolous defense for one thing, because the other bar never used that slogan as a trademark,” Littlepage said. “Having never used it as a trademark and instead just some decorative feature on a shirt, we don’t think they can convey any rights in it.”

In a response letter, however, the brewery contends that both names contain the dominant word “Shorebilly” and that a trademark owner can license its mark in whole or in part, pointing to Harley-Davidson’s right to license the use of the word “Harley” or “Harley-Davidson.”

Littlepage said the decision to bifurcate will narrow the issues in the case.

“We are very confident that we are going to win on that limited issue,” Littlepage said. “That is not an issue that is going to decide the outcome of case one way or other.”

Astrachan, however, said the question of Fish Tales’ prior license is a critical point in the case.

“That is, is there a prior user of this mark?” Astrachan said. “If there is and we have license from a prior user, we may have priority. Regardless of anything else, if you have priority, you are not an infringer.”

Teal Bay was founded in 2008 by Marcus and Barbara Rogerson, a husband and wife who sell merchandise imprinted with a cartoon wave logo and the word “Shorebilly” at retail locations in Ocean City and on their website, shorebillyusa.com.

The Rogersons argue that the brewery and its merchandise have caused confusion among its customers, with some even asking the Rogersons if they are infringing on the brewery’s rights to the name.

Danny Robinson, who owns the brewery on the Boardwalk at 10th Street, argued in a motion to dismiss that “Shorebilly” is a generic term that could not be trademarked. Garbis, however, rejected the motion to dismiss in early October.

The Rogersons also claim the brewery ignored repeated written warnings about using the name before the lawsuit was filed.

The brewery announced in November that it would change its name. It is taking suggestions from fans on its Facebook page through the end of the year, but has not yet chosen a new moniker.

While Robinson, who also owns neighboring bar Hammerheads on the Beach, said in November that the name change renders the lawsuit moot, Teal Bay still intends to pursue the case since it is seeking attorney’s fees and any profits collected by the brewery from the sale of goods or services connected to the word “Shorebilly.”

The first phase of the trial is scheduled for Jan. 16.