In late December, St. Paul-based Summit Brewing Co. filed a lawsuit against two former employees for allegedly sharing trade secrets with a competitor. Though the competitor isn’t named, at least one of the people named in the suit, Jeffrey Spaeth, who was Summit’s vice president of sales and marketing, provided consulting services for Minneapolis-based Surly Brewing Co. for five months last year.
It’s the first such lawsuit in the Twin Cities craft brewing community. But it’s likely not the last—especially as the market matures and employees like brewers move on to different companies.
Trade secret law covers information not generally known that a company uses to its advantage over competitors—information not protected by patent, trademark or copyright—according to Martha Engel, an intellectual property lawyer at Winthrop & Weinstine. And that can truly mean just about anything. Among the most famous examples is the Coca-Cola recipe, which lore had it wasn’t known completely by any single person, but split among two or three people. In the brewing industry, trade secrets might include sales and distribution plans, numbers or prices from supplier contracts, and the specifics of a beer recipe.
“The brewing industry is interesting because of the personal nature of brewing recipes and [that] the brewers that create them are so tied to the brand,” Engel says. “A lot of brewers move to other breweries with their recipes, but who really owns those recipes once they change employers?”
Lawsuits like this typically emerge after messy or acrimonious breakups between employers and former employees. Because of that, Engel says, it’s advisable to have procedures for sharing confidential documents and ensuring that employees sign contracts when they’re hired that clearly specify which items are considered the intellectual property of the organization and what belongs to the employee.
The Summit suit—which seeks damages in the tens of thousands of dollars from the two former employees—could send a shock wave through the local industry. But don’t expect it to ruin the Twin Cities’ traditionally collegial brewing community.
“This could be a game-changer,” Engel says. “But I still believe the industry is very friendly here.”