AB InBev suffered a first defeat in a legal dispute with Constellation Brands (CBI) on Tuesday. US District Judge Lewis Kaplan dismissed the lawsuit as unfounded brought by Modelo, AB InBev's Mexican brewery and owner of the Corona beer brand.
In February last year after failing to settle the matter directly, Modelo filed the lawsuit against CBI. (inside.beer, 15.2.2021)
Modelo accused the other side to have violated a sub-licensing arrangement for the Corona brand, which was granted as part of the antitrust regulations after AB InBev took full control of Grupo Modelo in 2013.
The plaintiff argued, that the sub-license agreement only includes rights for the beer category, which means “beer, ale, porter, stout, malt beverages, and any other versions or combinations of the foregoing, including nonalcoholic versions of any of the foregoing” but not for any other products. Hence the launch of a product like Corona Hard Seltzer in February 2020 is seen as a violation of Modelo’s brand rights.
Now, Judge Kaplan ruled that Modelo is not entitled to an immediate pre-trial win because the agreement's definition of "beer" was too ambiguous to determine before trial. However, the judge also denied Constellation's bid to end the case early last month.
"Modelo has more dictionaries on its side of this debate over the meaning of 'beer' than does CBI," Kaplan said. "But the fact remains that dictionaries, however important, do not resolve this case."