On April 9, 2019, Patagonia, Inc. and Patagonia Provisions, Inc. (collectively referred to as “Patagonia”), sued Anheuser-Busch, LLC (AB) for trademark dilution and obtaining a fraudulent trademark after theprominent beer manufacturer launched a beer called “Cerveza Patagonia” in the United States. Patagonia filed suit following Cerveza Patagonia’s launch, hosted by AB at Colorado ski resorts, where its representatives “dressed in black down jackets with AB’s PATAGONIA logo on the chest and gave out beanies, scarves, and t-shirts all bearing the same PATAGONIA logo,” and marketed the beer as an environmentally-conscious product with its “1 tree for 1 case” pledge.
Court Denies Motion to Dismiss
On July 3, 2019, AB filed a motion to dismiss Patagonia’s claims, alleging Patagonia failed to present sufficient facts to support their seven claims. On September 3, 2019, the United States District Court, Central District of California, denied AB’s motion to dismiss on all claims, but did order Patagonia to file an amended complaint for their fourth claim no later than October 3, 2019. The case centralizes on whether consumers were led to mistakenly believe that Patagonia is somehow connected to, or collaborated on, AB’s Cerveza Patagonia.
Patagonia’s complaint centers on their assertion that AB marketed its Cerveza Patagonia with the goal of misleading consumers into believing the beer is directly connected to the PATAGONIA brand. Patagonia defends their assertion by introducing evidence of quite blatant imitation on AB’s part that extends beyond its use of the PATAGONIA logo. When it launched Cerveza Patagonia, AB modified the neck label to create a new housemark for its products consisting of a mountain silhouette above the PATAGONIA name. This new housemark bears an uncanny resemblance to Patagonia’s P-6 logo and encourages consumers to believe there is a connection between AB’s Cerveza Patagonia and the PATAGONIA brand. Furthermore, AB allegedly attempted to take advantage of Patagonia’s reputation as a leader in environmental stewardship by pairing Cerveza Patagonia’s U.S. release with the slogan: “you buy a case, we plant a tree.”
“In launching its Patagonia beer, AB deliberately has attempted to take advantage of the tremendous goodwill that [Patagonia has] cultivated in their brand, and the hard-earned reputation that [Patagonia] has built over the last forty years as a company dedicated to environmental conservation,” Patagonia said in their filing.
Patagonia’s trademark claims arise under the Lanham Act, as amended by the Trademark Dilution Revision Act of 2006. Trademark dilution is the use of a mark – that is extremely similar to a famous mark – in such a way that by association reduces, or is likely to reduce, the intrinsic or monetary value of the famous mark. To make a successful trademark dilution claim, a plaintiff must plead: (1) the mark is famous and distinctive; (2) the defendant is making use of the mark in commerce; (3) the defendant’s use began after the mark became famous; and (4) the defendant’s use of the mark is likely to cause dilution by blurring or dilution by tarnishment. 1 In order to meet the famousness requirement under the Lanham Act, a mark must be universally recognizable and possess a high level of prominence in consumer markets.
In their complaint, Patagonia asserted that “[t]he mark enjoys strong consumer recognition, is used as a household term to refer to Patagonia or its products, and is recognized around the world and throughout the United States by consumers as signifying high quality products and services from a responsible company… Even if consumers come away from AB’s products with a positive experience, Patagonia’s famous brand and right to control and promote its identity will be eroded and diminished by AB’s use of the PATAGONIA trademark.”
The Court concurred with Patagonia’s assertion that their PATAGONIA mark is “famous” for purposes of federal trademark dilution, citing the duration of the mark’s existence, the money and resources dedicated to promoting the mark, and Patagonia’s approximate $10 billion in global sales since 1985.
Patagonia’s fifth, sixth, and seventh claims focus on a request to cancel AB’s PATAGONIA trademark on several grounds. The Lanham Act gives federal courts authority to cancel an invalid trademark registration. 2
In their fifth claim, Patagonia argued that AB’s PATAGONIA trademark should be cancelled because AB “abandoned the registration after it was purportedly acquired and cannot, several years later, resurrect the abandoned registration.” AB obtained its PATAGONIA trademark from the United States Patent and Trademark Office (USPTO) in 2012, but it remained unused until 2018, when AB launched its Cerveza Patagonia in the United States. The Court concluded that Patagonia sufficiently stated a claim for abandonment, explaining that “a mark is abandoned ‘[w]hen its use has been discontinued with an intent not to resume such use.’” 3
In their sixth claim, Patagonia requested the Court cancel AB’s PATAGONIA trademark because “consumers are and were likely to immediately associate AB’s use of PATAGONIA on beer with Patagonia, Inc.” A false suggestion claim requires the moving party to show the following four elements: (1) that the defendant’s mark is the same or a close approximation of plaintiff’s previously used name or dentity; (2) that the mark would be recognized as such; (3) that the plaintiff is not connected with the activities performed by the defendant under the mark; and (4) that the plaintiff’s name or identity is of sufficient fame or reputation that when the defendant’s mark is used on its goods or services, a connection with the plaintiff would be presumed. 4 The Court determined that Patagonia alleged sufficient facts to move forward with their false suggestion claim because AB’s PATAGONIA trademark falsely suggested a connection to Patagonia, Inc. 5
In their final claim, Patagonia alleged that AB’s PATAGONIA registration was procured unlawfully and through fraudulent misrepresentations to the USPTO based on AB’s Statement of Use and recorded assignment. In order to prove fraud on the USPTO, the party seeking cancellation must show: (1) a false representation regarding a material fact; (2) the registrant’s knowledge or belief that the representation is false; (3) the intent to induce reliance upon the misrepresentation and reasonable reliance thereon; and (4) damages proximately resulting from the reliance. 6 The Court determined Patagonia successfully pledt heir false procurement claim with the requisite particularity under Rule 9(b). 7
Specializing in Trademark Law
Navigating the ins and outs of securing patents and trademarks for your business can be tricky. There are various legal regulations and considerations at play, which can make it difficult to understand the proper course of action. A knowledgeable patent and trademark attorney can make all of the difference, helping you avoid pitfalls and resolve any issues that might arise.
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1 Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634 (9th Cir. 2008) (citing 15 U.S.C. § 1125(c)(1)).
2 Petroliam Nasional Berhad v. GoDaddy.com, Inc., 897 F. Supp. 2d 856, 869 (N.D. Cal. 2012), aff’d, 737 F.3d 546
(9th Cir. 2013) (citing 15 U.S.C. § 1119).
3 15 U.S.C. § 1127.