At Lager-Heads

Harvey McElhannon sells Diamondback Beer, and was the first to file for that trademark. Now Jerry Colangelo and Major League Baseball want him eighty-sixed.

McElhannon applied with the state for a Diamondback Beer trademark on March 10, 1995; he submitted a national trademark application to the U.S. Patent Office on April 4, 1995. He has been using the name since then. It would seem he is in a strong legal position to keep the rights to the name.

But there's a convoluted history to the name McElhannon picked for his beer. Colangelo was not the first to pick the name "Diamondbacks" for an Arizona sports team. In 1994, a team in the Arizona Fall League registered a trademark calling itself the Chandler Diamondbacks.

With that trademark, the team--part of the fall league, which is owned by Major League Baseball--tried to protect itself against the unauthorized use of the name or logo on no less than 76 items and types of items. The trademark covers everything from bumper stickers and jackets to, curiously, one- and two-piece cloth-diaper sets, and chefs' hats.

Jerry Colangelo "bought" the trademark from the Chandler Diamondbacks to use for his own major league team, as a part of the $130 million he paid for the expansion franchise. But nowhere on the Chandler licensing document is any reference made to using the trademark for beer or any other liquor. And nowhere is such a reference made on the trademark application the Arizona Diamondbacks filed with the federal government last September--almost six months after McElhannon applied for his federal trademark.

No one at Major League Baseball, the Arizona Diamondbacks or the Miller Brewing Company has ever said flatly that Colangelo's purchase of the Chandler Diamondbacks' trademark means McElhannon's sale of Diamondback Beer would violate the law.

But his communications with the team and baseball have not been congenial, either.

McElhannon called Colangelo early last September, about a month before the Diamondbacks-Miller marketing deal was announced. At first, McElhannon says, the two talked genially, not about business or specifics, more like one guy inviting another over to try a beer. And that is exactly what McElhannon planned to do: quaff a couple of frosty Diamondbacks with Jerry, see if the big guy liked it.

Soon into the conversation, however, its tenor changed; McElhannon says that the instant he told Colangelo that he possessed the trademark for Diamondback Beer, the man who is arguably the Valley's most powerful business force "went into shock" and said he'd have to call McElhannon back. He never did.

McElhannon called Colangelo once more, again before the Miller deal was announced. This time, he says, the sports mogul was hostile.

"We found out when you filed it [the trademark]," McElhannon recalls Colangelo saying, with an obvious implication: Harvey was trying to hustle Jerry, Jerry didn't like it and Jerry wasn't going to let it happen.

McElhannon says he is no more a hustler than he is an astronaut.
"I wanted to see if Colangelo liked the beer," McElhannon says, "but that's all. I wasn't asking for his permission to sell my beer; I don't need it."

A few more unpleasant conversations with Arizona Diamondbacks staffers ensued, all of them preceding the announcement of the Miller deal. McElhannon says Rich Dozer, president of the team, called him "litigious" and more or less accused him of trying to put the squeeze on for some fast cash.

Eventually, McElhannon was instructed to cease contacting anyone affiliated with the Arizona Diamondbacks. Henceforth, he was told, he would be dealing exclusively with Major League Baseball's trademark arm--and its battalions of lawyers.

Since then, there have been letters to McElhannon from Major League Baseball giving vague but ominous warnings that the battle over Diamondback Beer is just beginning.

Last November, McElhannon received a letter from MLB's attorneys demanding that he cease and desist manufacturing and selling his beer, destroy whatever quantities of it remained, and rid himself of all labels, boxes or packages bearing the Diamondback Beer name or logo.

McElhannon sent back a letter saying that there were plenty of other products out there using the trademark "Diamondback." He asked whether MLB thought they constituted trademark violations and on what grounds.

The response he received, in January, was not encouraging. MLB's lawyers said McElhannon's request was disingenuous and burdensome, and that he was obviously trying to leverage himself into whatever baseball deal he could get.

Since then, all's been quiet on the baseball front. McElhannon thinks that means something. Whether that something is good or bad, he's not sure.

As murky as trademark law is generally, in this case in particular, a few things are at least as clear as a glass of Diamondback Premium Lager: Miller and the Diamondbacks both want a brew pub at the stadium, and they both want to call it the Diamondback Brewery, or something similar. Major League Baseball wants to keep people from stepping on its trademark toes, and has demonstrated many times that it will engage in litigation to stop such activity. McElhannon has brew-pub dreams but hates spending time with lawyers and in court.

It is true that McElhannon has been using his Diamondback trademark for beer for some time. That could help his legal position, if the Diamondbacks or Major League Baseball sue.

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