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Saidou Ceesay, a packager, waits for a keg to be filled with beer at the Brooklyn Brewery located in the Brooklyn borough of New York, United States, March 9, 2015. REUTERS/Sara Hylton

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(Reuters) - A U.S. appeals court on Wednesday rejected Brooklyn Brewery Corp's bid to cancel a home-brewing kit maker's trademark that the craft brewer said could confuse consumers.

The U.S. Court of Appeals for the Federal Circuit let stand Brooklyn Brew Shop LLC's federal trademark for beer-making kits under its name and allowed a related application to proceed despite the brewery's allegations, but told the U.S. Patent and Trademark Office to reconsider the application on other grounds.

BBS co-founder Stephen Valand said he was "very pleased" with the decision. Its attorney Sean Marshall of Hoffman Marshall Strong said the ruling was a "well-deserved victory" for his client.

The brewery and its attorney John Dabney of Snell & Wilmer didn't immediately respond to a request for comment.

Brooklyn Brewery has been selling craft beer under its name for over 30 years throughout the U.S. Brooklyn Brew Shop, founded in 2009, sells home-brewing kits and accessories.

BBS registered a federal trademark in its name for beer-making kits in 2011, and applied to register a trademark for a stylized version of the name in 2014 for beer-making kits and "sanitizing preparations" for them.

Brooklyn Brewery petitioned the U.S. Patent and Trademark Office in 2015 to cancel the 2011 trademark and reject the new application, arguing they would cause confusion and weren't eligible for trademark protection because they simply described BBS' goods.

The Trademark Trial and Appeal Board ruled for BBS last year, and the brewery appealed.

U.S. Circuit Judge Timothy Dyk, joined by Circuit Judges Kathleen O'Malley and Todd Hughes, agreed with the TTAB in rejecting most of the brewery's challenges.

Dyk said the confusion claims were time-barred unless the brewery could prove that BBS' name would cause "inevitable confusion," and that it didn't meet this standard.

"Although the marks BROOKLYN BREWERY and BROOKLYN BREW SHOP are substantially similar, they are not nearly identical, nor are the goods," Dyk said. "It is not clear that any further analysis was required to reject an inevitable confusion claim."

The court also accepted the board's finding that the brewery's evidence wasn't strong enough to show inevitable confusion.

Dyk, like the board, was also unconvinced by the brewery's argument that BBS' registered trademark wasn't protectable because it describes the goods it sells.

"BREW SHOP does not conjure up an image of a 'beer-making kit' specifically," Dyk said, noting a "brew shop" could sell other goods like brewing equipment, testing devices and ingredients.

The court also found, in an issue it had never addressed, that the brewery didn't have standing to appeal its challenge to BBS' trademark application for cleaning preparations because it didn't make or sell competing goods and wouldn't be injured by the registration.

However, Dyk remanded for the board to determine whether the trademark for beer kits BBS applied for in 2014 was protectable because its name had become distinctive in that field. The board failed to make any findings on the issue, which BBS had argued for in its application.

The case is Brooklyn Brewery Corp v. Brooklyn Brew Shop LLC, U.S. Court of Appeals for the Federal Circuit, No. 20-2277

For the brewery: John Dabney of Snell & Wilmer

For the brew shop: Sean Marshall of Hoffman Marshall Strong

Our Standards: The Thomson Reuters Trust Principles.

Washington-based correspondent covering court cases, trends, and other developments in intellectual property law, including patents, trademarks, copyrights, and trade secrets. Previous experience at Bloomberg Law, Thomson Reuters Practical Law and work as an attorney.

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