USA: Judge rejects Grupo Modelo’s request to hold Constellation Brands liable for selling Corona-branded hard seltzer without permission

A Manhattan federal judge on December 13 rejected a request from Anheuser-Busch InBev SA's Grupo Modelo to hold Constellation Brands Inc liable for allegedly selling Corona-branded hard seltzer without its permission, Reuters reported.

U.S. District Judge Lewis Kaplan ruled that Modelo is not entitled to an immediate pre-trial win in its trademark case against Constellation, the U.S. distributor of its Corona beer. Kaplan also denied Constellation's bid to end the case early last month.

The decision sets up a jury trial that could turn on how the companies defined the word "beer" in a trademark licensing agreement.

Representatives from Constellation and AB InBev did not immediately respond to requests for comment on December 14.

Modelo filed the lawsuit last year, arguing Constellation's Corona Hard Seltzer breached a licensing agreement and infringed its trademarks. It said the agreement only allowed Constellation to sell beer under the Corona name.

Constellation said the agreement's definition of "beer" also covers hard seltzer, while Modelo said no reasonable jury could find that it encompasses hard seltzer.

Kaplan said on December 13 that Modelo's argument may be stronger, but the agreement's definition of "beer" was still too ambiguous to determine before trial.

"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."

A trial date has not yet been set.

Modelo separately alleged last August that Constellation's tequila- and bourbon-barrel aged Modelo Reserva beers also violate their license agreement, in a case that is currently in mediation.

The case is Cerveceria Modelo de Mexico, S de RL de CV v. CB Brand Strategies LLC, U.S. District Court for the Southern District of New York, No. 1:21-cv-01317.

14 December, 2022