Anheuser-Busch (AB), the U.S. subsidiary of AB InBev, and outdoor clothing and gear retailer Patagonia have reached a settlement on March 15 over an alleged trademark infringement of Patagonia’s brand name and aesthetic. Both companies filed today a joint stipulation in U.S. District Court for the Central District of California seeking to dismiss the lawsuit. Details of the settlement were not disclosed.
In April 2019, the outdoor apparel company sued the brewing group over the use of its brand name for beer produced by and under license of Patagonia Brewing Company, Bariloche, Río Negro, Argentina, belonging to Cervecería y Maltería Quilmes, AB InBev’s subsidiary in Argentina. “In launching its Patagonia beer, AB deliberately has attempted to take advantage of the tremendous goodwill that Patagonia, Inc. and Patagonia Provisions, Inc. have cultivated in their brand, and the hard-earned reputation that Patagonia, Inc. has built over the last 40 years as a company dedicated to environmental conservation. AB has gone as far as creating a logo that is strikingly similar to Patagonia’s famous mountain silhouette logo that has appeared continuously for decades on millions of products,” the California based clothing company set out in the lawsuit. (inside.beer, 10.4.2019)
AB argued that Patagonia branded beer has been part of its South American portfolio since the AB-InBev merger of 2008 and that it has owned the trademark in the United States since 2012 when German beermaker Warsteiner assigned the registration and trademark to them.
Patagonia’s lawyers replied, among other things, that Warsteiner never used the mark in commerce before assigning it to AB and that AB “made no bona fide commercial use” of the mark in the five years following its registration.
On September 3rd, 2019, the U.S. District Court for the Central District of California denied all of AB’s motions to dismiss in its ongoing trademark litigation and stated that AB must face claims after it unlawfully appropriated Patagonia’s brand.
Last week’s settlement now puts an end to this dispute.
Yvon Chouinard, Patagonia’s founder, started in the late 1950s to make his passion for outdoor activities a business. He built a small shop to produce pitons in his parents’ backyard in Burbank, California, and started selling gear from the back of his car. In 1965, Yvon went into partnership with Tom Frost and started Chouinard Equipment. During the nine years that Frost and Chouinard were partners, they redesigned and improved almost every climbing tool to make them stronger, lighter, simpler and more functional. By 1970, Chouinard Equipment had become the largest supplier of climbing hardware in the United States and started to sell outdoor clothing as well. In 1986, the company committed to donating 10 percent of profits each year to smaller groups working to save or restore habitat. The amount was later upped to one percent of sales, profit or not, that led to the formation of the international organization1% for the Planet in 2002.
In January 2012, Patagonia became the first California company to become a benefit corporation—a legal framework that enables mission-driven companies like Patagonia to stay that way as they grow and change. The company is also a Certified B Corporation. To qualify as a B Corp, a business must have an explicit social or environmental mission and a legally binding fiduciary responsibility to take into account the interests of workers, the community and the environment, as well as its shareholders.