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Restaurants and bars, and every other type of hospitality business, are increasingly using online social media to promote their business. Twitter, Facebook and MySpace are the usual suspects today, but we can expect new entries going forward. Advertising spending in these channels is reported to have eclipsed the $100 million mark this year and is expected to increase. Yet, the dollars spent tell only part of the story. For most restaurants and bars, promoting their business using social media sites is essentially free. It’s this value proposition that promises to making such promotion ubiquitous over the next few years.

Restaurants and bars that serve alcohol must be aware that state liquor laws still apply in this brave new world of social media. A virtual violation is still a violation and can put your license in jeopardy (as well as your pocketbook)!

In Oregon, “advertising” is defined broadly as “publicizing the trade name of a license together with words or symbols referring to alcoholic beverages or publicizing the brand name of an alcoholic beverage.” The OLCC prohibits advertising that, among other things, (1) promotes happy hours involving the temporary reduction in alcoholic beverage prices, (2) encourage drinking because of its intoxicating effect or encourages drinking to excess, (3) involves instantly redeemable coupons for alcoholic beverages, or (4) that is appealing to minors.

The informal, conversational nature of services such as Twitter make violation of these rules easy, too easy. And, don’t think that the OLCC won’t get wise to the use of social media. They launched their own blog in July 2008. Check it out at http://olccblog.blogspot.com/. And, what's posted on these sites, just like the rest of the internet, is expected to have a long shelf life. Before you send off your next tweet, be careful that you’re not inviting your state alcohol regulatory agency to make a visit.

You should also be careful when referring to the competition, members of the public and possibly your state regulatory agency. Keep it friendly. Think before you tweet or post. Getting sued for defamation, causing emotional distress, or just plain bad PR can follow.
 

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A retail sales agent for a Corvalis, Oregon liquor store recently submitted a petition to amend the rules regarding external advertising for Oregon liquor stores. The proposed rule changes would allow Oregon liquor stores more flexibility in advertising their store (i) outside the store’s location, (ii) in publications and (iii) on the internet. The reasons offered for the amendment include leveling the playing field with other retailers of alcohol (beer and wine), distillers and distributors, and providing the public greater access to information. 

You can view the proposed amendment on the OLCC web site at http://oregon.gov/OLCC/.  Follow the “Laws and Rules” link, then follow the link to “Current Petitions Received”.

The OLCC amended the rules regarding advertising in Oregon liquor stores effective September 1, 2008 to allow more modern signing and display practices inside the stores. See OAR 845-015-0175 and -0177. 

The proposed rule changes would continue the trend toward allowing Oregon liquor stores to use more modern advertising practices that are commonly used by other retailers. The OLCC is accepting written comments until 5:00 pm on August 28, 2009.

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Changes at the US Patent and Trademark Office regarding how they handle place-name marks acknowledge that consumers in restaurants are not going to be deceived about the source of their food.  This should make it easier to register place-name restaurant marks such as "Paris Cafe" located in places other than Paris. 

Examination Guide NO. 2-09 Examination Procedures for §2(a) and §2(e)(3) Deceptiveness Refusals for Geographic Marks (11 May 2009)

The elements of a §2(e)(3) refusal apply to service marks as well as marks involving goods.¹³ However, application of the services-place association prong is more difficult to satisfy in that the mere showing that the services at issue often emanate from the place named in the mark is not sufficient.¹⁴ This is especially true for restaurant services because, having chosen a particular restaurant, a customer is aware of the geographic location of the service and is less likely to associate the services with the place named in the mark (e.g., a customer is less likely to identify restaurant services with a region of Paris when sitting in a restaurant in New York). ¹⁵

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