For more than 15 years TAR HEEL BREW has been brewed in and distributed from Chapel Hill. It is of particularly fine quality and is enjoyed by beer lovers throughout the Southeast. Ramses (R), the president of the brewery seeks legal advice from you on several matters.

 The beer is labeled as follows with the outline of the state in black and the lettering in Carolina blue.

TAR HEEL BREW is distributed in white cans with the above label and the symbol ® on them. Although the lettering style has changed in recent years, the label has remained pretty much the same over time. The mark was registered in North Carolina in 1985. As TAR HEEL’s business began to expand up the east coast, it registered the mark federally in 1992. The following year Ramses decided to change the color of the brew and make it unique. Until recently TAR HEEL BREW was the only beer produced in the world that was Carolina blue. The beer is advertised on radio and television using this jingle: "TAR HEEL BREW, TAR HEEL BREW, the only one that’s Carolina Blue!"

 Much to (R)’s dismay, Volunteer (V), a Tennessee brewery challenged the federal registration. (V) purchased the mark from a Western North Carolina brewery which had been producing NC BEER since 1980 and marketing it only locally with the following label using identical colors:

When the brewery was purchased by the V, it began to sell the product in Tennessee and Kentucky as well as in North Carolina. V’s print advertising claimed that the Carolina blue color of TAR HEEL BREW was not only disgusting but dangerous to the consumer.

 Xon (X) another local brewer that began beer production in 1997, now uses an almost identical color for its beer. (X) advertises in newspapers throughout the south "Buy X’s BEER, the Carolina blue beer from that famous Chapel Hill brewery." There are even billboards on some rural roads that’s says "Drink X’s BEER – it purer, lighter and bluer."

 (R) also has a problem with an employee. (R) occasionally sponsors employee contests for improving efficiency, recycling, etc., and awards monetary prizes. In the internal company newsletter (R) announced that she was seeking employee suggestions for new packaging for TAR HEEL BREW to be used only during the month of October each year when UNC-CH holds its homecoming. Several employees submitted ideas on forms that (R) had provided for the purpose. Zeb (Z), a long-time employee, thought about the packaging issue. He happened to attend the same church as (R), and after services one Sunday stopped (R) to tell her his packaging suggestion: bottling TAR HEEL BREW in bottles that are in the shape of a "Tar Heel" with the big toe serving as the screw-on top. (R) adopted the idea and made a huge amount of money on the Carolina blue beer bottled in the unusual bottles, but did not offer (Z) any financial reward for his suggestion.

 Advise (R) on legal problems with (V), (X) and (Z). Include any remedies that might be appropriate and any defenses that the other parties might have.