Anheuser-Busch InBev has responded to the class action lawsuits accusing it of selling watered-down Budweiser. Knowing the importance of brand image, the above ad was published in 10 major U.S. newspapers on Sunday, March 4th and features a can of water that A-B donates to the American Red Cross for disaster relief. See the full ad here.
The lawsuits in question were filed in Pennsylvania, California and other states, and claim that the labels of Budweiser, Michelob and other beers overstate the alcohol content actually in the beer. According to the lead lawyer, Josh Boxer, the lawsuits are based on information from former employees at the company’s 13 U.S. breweries. Boxer asserts that excess water is added just before bottling that cuts the stated alcohol content by 3 percent to 8 percent.
On February 27th, A-B issued the following statement on the lawsuit:
The claims against Anheuser-Busch are completely false, and these lawsuits are groundless. Our beers are in full compliance with all alcohol labeling laws. We proudly adhere to the highest standards in brewing our beers, which have made them the best-selling in the U.S. and the world.
This will be an interesting case to watch, especially because it appears, at first blush, that the case will boil down to the basic factual question of the A-B’s bottling practices and the specific alcohol content of the beer in question.
Two months after Coronado Brewing Co. filed a Complaint for trademark infringement against Elysian Brewing Co., the two companies have formally settled their dispute. Coronado operates microbreweries and brewpubs in California and is the owner of a U.S. trademark registration for “IDIOT” in connection with beer and related beverages. One of the beers sold in connection with its IDIOT mark is an India pale ale. The lawsuit was prompted by a new India pale ale from Elysian called “Idiot Sauvin.” Coronado alleged that consumers were likely to believe that beers sold by Elysian under the “Idiot Sauvin” name were provided by, approved by, sponsored by, and/or affiliated with Coronado in light of its more senior and registered IDIOT trademark.
According to BeerPulse.com, the dispute has now been resolved, with one of Elysian’s co-founders stating:
I can say that we’ve agreed not to use the word Idiot in the future. The beer in question will be called Savant. As we would with any of our colleagues in the craft brewing industry we will welcome our friends at Coronado to our local market, once they get here. I doubt that we will be collaborating with them on any projects.
The court was formally informed of the settlement on 7/16/12.
Putting aside the merits of the allegations, this case highlights the importance of conducting trademark clearance when selecting a brand name for new products and before any marketing of the product.
In an Opinion issued today, the Sixth Circuit affirmed that (1) Maker’s Mark’s registered trademark for its red dripping wax seal is not “aesthetically
functional” and is thus a protectable mark, and (2) Casa Cuervo, S.A. de C.V.’s Reserva de la Familia tequila infinged that mark by using red dripping wax seals on their bottles that created a likelihood of consumer confusion.
After observing that Marker’s Mark’s red dripping wax seal is “its signature trade dress element,” the Six Circuit held that this design element is not aesthetically functional because there are comparable alternatives for sealing a bottle and protecting the mark does not put other manufacturers at a competitive disadvantage in the market place. As for trademark infringement, the Sixth Circuit noted that this case involved “confusion of sponsorship” and that the factors for determining the likelihood of consumer confusion weighed in favor of Marker’s Mark, especially the strength of the mark and the similarity of Cuervo’s red dripping wax seal. You can read the complete Opinion here.
This ruling highlights that design elements can be an important (and even iconic) part of a product’s brand image and diligent companies can, through advertising and exclusivity, create protectable trade dress rights in those elements that will be protected by the Courts. Here, Maker’s Mark succeeded by recognizing the important relationship beween its dripping, red wax seal and the public image of its product, and then taking all necessary steps to promote and protect that image.
On February 10, 2012, Sazerac Company, Inc. filed suit against Hood River Distillers, Inc. in Federal Court in Louisville. Sazerac claims that its trademarks and trade dress relating to its FIREBALL cinnamon whiskey and FIRE WATER cinnamon liqueur are infringed by Hood Rivers’ new SINFIRE cinnamon whiskey.
In order to bolster its claim that consumers are likely to be confused by the SINFUL mark, Sazerac’s Complaint alleges, among other things, as follows:
“[Hood Rivers' SINFIRE] whisky is golden brown in color and is bottled in a clear flask-like bottle with red and orange flames arising from the bottom of a large black stylized “S.” The “S” has a curly serpent-like tongue extending from the head of the letter, and a pointed devil’s tail at the lower end of the letter emerging from the flames. “SINFIRE” is displayed in block font directly under the flames where the word “SIN” is in black and the word “FIRE” in red. The dominant color combination for the product package is black, red, and orange.”
See the full Complaint here. Without more, the use of “fire” in SINFIRE is likely not enough to find it confusingly similar to FIRE BALL and/or FIRE WATER, even though it applies to the same type of goods. This case might therefore provide some interesting insights on the broader scope of a company’s rights as to additional design elements in its trademarks and trade dress.