AB InBev’s Patagonia dispute set for trial

A trademark dispute between clothing label Patagonia and AB InBev could go to trial following a ruling in California’s district court.

The dispute revolves around a beer brand called Patagonia that AB InBev launched last year. AB InBev bought the trademark for Patagonia Beer in the US in 2012, but didn’t launch Patagonia Brewing Company until 2019.

Fashion label Patagonia, which specialises in clothing for outdoor pursuits such as hiking or skiing, launched its own beer, called Long Root, in 2016.

Patagonia learned of the trademark in 2013, but believed that Anheuser-Busch had legitimate rights to it at the time.

However, the brewer then launched its Patagonia beer at pop-up stores at US ski resorts in 2019, along with “Patagonia” branded clothing. Both the beer and apparel featured a mountain logo that infringed Patagonia’s trademarks, the court heard.

Patagonia’s lawyers argue the company’s brand name has become “among the most identifiable brands in the world”, so for AB InBev to launch a beer by the same name in this way, particularly after it had not used the trademark for six years, amounted to unfair competition. Last year, the fashion label sought to invalidate AB InBev’s trademark, asked the court to order it to repay any losses it has incurred as a results of its activities, including profits and attorney fees.

The clothing company said AB InBev was trying to “take advantage of the tremendous goodwill that Patagonia, Inc. and Patagonia Provisions, Inc. (together, ‘Patagonia’ or ‘Plaintiffs’) have cultivated in their brand.” Patagonia also alleges that AB InBev secured the registration of the Patagonia trademark unlawfully.

The first emergence of a “Patagonia” trademark for beer came from Argentina-based brewer Warsteiner Importers Agency Inc. which filed an intent-to-use application for a Patagonia beer trademark in 2006.

It then filed a number of extension requests, including one in 2011 that said it still intended to use the mark, but didn’t intend to import its beer. AB InBev asked it to file one more extension and then bought the application in March 2012, the court was told.

AB InBev’s defence of its beer label was dealt a blow after the California district court ruled that the branding AB InBev used was sufficiently similar that a jury needs to decide if there was true trademark infringement.

The ruling, which was published by Bloomberg Law, also highlights the US’ “anti-trafficking rule”, which prevents companies from buying a trademark before it has been used.

The court ruled in favour of Patagonia’s claim that AB InBev did not have sufficient evidence to claim it had continuously used the mark for five years. It also ruled that AB InBev’s argument that violation of the anti-trafficking rule is not grounds for trademark cancellation “fails as a matter of law”, while the “Patagonia” logos used by the brewer and the fashion brand were “highly, perhaps intentionally, similar”, so consumers could easily confuse the two.

The district court said there were still disputes over whether AB InBev defrauded the U.S. Patent and Trademark Office as it acquired the trademark in 2012. The ruling means these disputes could go to trial next year.

AB InBev and Patagonia did not immediately respond to our request for comment.