Lessons from Trademark Litigation Over PATAGONIA for Beer

The Patagonia clothing company commenced trademark litigation with AB InBev over what has been characterized as its “launch” of a new beer brand PATAGONIA in Colorado. Although, this characterization is not accurate. Nevertheless, on its face, the Patagonia clothing company should have a real concern with AB InBev’s PATAGONIA beer brand. AB InBev is BIG and could easily saturate the market with advertising bearing the PATAGONIA brand.

Patagonia was founded as a climbing hardware manufacturing company in about 1960. By about 1970, the company expanded into clothing and it was also the time the PATAGONIA mark was adopted. Fast forward to the present, and the Patagonia company had revenue of about $209M in 2017, and has 33 retail locations nationwide.

And Patagonia expanded into beer in 2016, but not under its PATAGONIA mark. Its beer is branded LONG ROOT ALE. Unfortunately, there is a reason for this.

On July 24, 2007, Warsteiner Importers Agency, Inc. filed an intent-to-use application for PATAGONIA (in standard characters) in connection with “beer.” A statement of use was filed on July 17, 2012 with a specimen of use consisting of a beer bottle with a label depicting a mountain range and the word PATAGONIA. The PATAGONIA application for “beer” matured into a registration on October 16, 2012.

About two months later, on December 20, 2012, Anheuser-Busch, LLC acquired the PATAGONIA registration from Warsteiner Importers Agency, Inc. The assignment was officially recorded with the United States Patent and Trademark Office on February 8, 2013. On October 5, 2018, the PATAGONIA registration was maintained by Anheuser-Busch and the Declaration of Incontestability was filed. This declaration can only be filed if the registered mark has been continuously used for the previous 5 years. This declaration must be valid because Patagonia clothing did not petition to cancel the PATAGONIA registration for beer on the ground that it was abandoned.

For the news outlets to characterize AB InBev as having “launched” the PATAGONIA brand is not accurate. It appears that the PATAGONIA brand for beer has been around for almost 7 years and Anheuser-Busch was in charge of the brand for 99% of that time.

The more pressing problem for Patagonia clothing company is the Colorado Statute of Limitations for Unfair Competition claims. The federal Trademark Act does not contain a statute of limitations like the Copyright Act. Instead, courts look to state unfair competition statutes of limitation to determine whether a trademark infringement claim was not brought in time.

In Colorado, the statute of limitations is 3 years from the time the plaintiff knew or should have known of the infringing act. The Patagonia clothing company has retail stores in Boulder, CO and Denver, CO, and is a large company. Therefore, the key question in the case will be whether Patagonia clothing company knew or should have known of AB InBev’s PATAGONIA beer brand by 2015. If this is the case, then Patagonia clothing company will not succeed in its lawsuit.

The takeaway from this case is the importance as trademark owners to monitor the filings at the Trademark Office, and have a thought out enforcement strategy. Had Patagonia been monitoring the Trademark Office, maybe it would have acquired the PATAGONIA trademark application before Anheuser-Busch. That would have avoided trademark litigation.

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