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Hard seltzer first hit the marketplace about five years ago and rapidly grew in popularity with sales exceeding $4.5 billion in 2020.  Wanting to ride the wave of success, many companies have introduced hard seltzers into this now crowded space.  But what is a hard seltzer?  Is it a form of beer or something else?  Based on its popularity, most would say, “Who cares whether hard seltzer is beer, just give me one.”  However, Modelo Grupo (“Modelo”) and Constellation Brands (“Constellation”) would say there is a lot riding on the answer.

Modelo, whose parent is Anheuser-Busch InBev (“AB”), created the Corona brand.  In 2013, Constellation acquired perpetual, irrevocable, and exclusive license rights in the Corona marks, which gave Constellation the right to sell products under the Corona trademark.  Then in 2020, Constellation introduced Corona Hard Seltzer, which is a sugar-based, fermented beverage produced in Coahuila, Mexico.  Corona Hard Seltzer is now the fourth most popular hard seltzer in the United States, competing directly with Bud Light Seltzer and other AB hard seltzers.

Modelo sued Constellation in the U.S. District Court for the Southern District of New York over the use of the Corona trademark for Corona Hard Seltzer and for breach of contract, alleging that Constellation only has the right to sell beer products, not hard seltzer, under the Corona brand.   According to Modelo, hard seltzer is not one of the allowable beer beverages.
Continue Reading Beer: You Know It When You Taste It, Or Maybe Not

What happens when a junior trademark holder’s business becomes so popular and well known that it threatens to swamp the reputation of a senior mark holder?  The senior mark holder brings a trademark infringement case alleging “reverse confusion” among its potential customers.  This was the scenario the Ninth Circuit faced in its recent decision in: Ironhawk Technologies, Inc. v. Dropbox, Inc. (decided April 20, 2021).

Ironhawk develops computer software that uses compression technology to allow for the efficient transfer of data, especially in “bandwidth-challenged environments.”  It has marketed its software under the name “SmartSync” since 2004 and obtained a trademark for SmartSync in 2007.  It sells its software primarily to the United States Navy but, in 2013, sold its software to at least one major pharmacy chain.

Dropbox (as most lawyers know) produces cloud storage software that millions of users utilize around the world.  One of Dropbox’s software features, “Smart Sync,” allows a user to see and access files in their Dropbox cloud account without using up any of the user’s hard drive storage. Dropbox launched its Smart Sync feature in 2017 and was previously aware of Ironhawk’s SmartSync mark.  Ironhawk sued Dropbox for violations of the Lanham Act, i.e., trademark infringement, and unfair competition claiming that Dropbox’s use of the name “Smart Sync” intentionally infringed upon Ironhawk’s “SmartSync” trademark.

After some discovery, Dropbox moved for summary judgment.  After applying the Sleekcraft factors [from AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-349 (9th Cir. 1979)], the district court granted summary judgment to Dropbox.  The Court found that “the overwhelming balance of the Sleekcraft factors weighs against a likelihood of confusion” and that no reasonable jury would find any confusion. Ironhawk appealed to the Ninth Circuit from summary judgment.
Continue Reading The Sleekcraft Factors and “Reverse Confusion” Trademark Infringement