The term ‘beer’ to be defined in Corona hard seltzer case

A jury trial that could adapt how companies define the term ‘beer’ in trademark licence agreements is being suggested as a way to resolve legal disputes for hard seltzers using beer brand names.

The demand has arisen during the recent court battle between AB InBev-owned Grupo Modelo after its request to hold Constellation Brands liable for allegedly selling Corona-branded hard seltzer without its permission was rejected by a federal judge.

According to Reuters, the Manhattan judge Lewis Kaplan has ruled that Modelo is not entitled to an immediate pre-trial win in its trademark case against Constellation and the dispute needs to be resolved with clearer definitions of category clarification.

Last year, Modelo filed a lawsuit against Constellation stating that its Corona hard seltzer breached a licence agreement and infringed its trademarks since it was only allowed to sell beer under the Corona name, not other drinks categories.

During the trial, it was alleged that Constellation has insisted that the agreement’s definition of beer also covers hard seltzer, however Modelo has asserted that it does not.

According to Kaplan: “Modelo has more dictionaries on its side of this debate over the meaning of ‘beer’ than does Constellation Brands Inc. But the fact remains that dictionaries, however important, do not resolve this case.”

A trial date for the matter to be resolved is yet been set.

In a separate battle between the drinks companies that took place last August, Modelo alleged that Constellation’s Tequila- and Bourbon-barrel aged Modelo Reserva beers also violated the current licence agreement. The case is currently in mediation.

As more companies make distribution deals involving popular brand names alongside the mix in drinks category-blurring with the rise of seltzers, RTDs and low and no variants, the definitions of drinks are set to become more heavily disputed.

AB InBev and Constellation Brands were unavailable for comment, despite being contacted regarding the current trademark disputes.