Beer lovers sue for trademark dilution

In Insights, Uncategorized

26 April, 2013

Trademarks are, among other things, a guarantee for a certain level of quality. If the quality slips, the consumers may go for a different, competing product. But sometimes consumers seem to stick to their favorites.

An unusual lawsuit has been filed in the US, where consumers have filed a $5 million class action against Anheuser-Busch. The lawsuit involves 10 Anheuser-Busch products, one of them being Budweiser. The consumers accuse Anheuser-Busch of cheating them of alcohol content as stated on the labels of the bottles. Moreover, the lawsuit accuses the company of diluting their beer to boost their profit margins. Therefore, unspecified compensatory damages are sought for anyone in the United States who has bought Budweiser products in the last 5 years.

Strangely enough the lawsuit is not based on the consumers discovering a difference in taste, but on information from former employees of breweries owned by Anheuser-Busch. According to former employees the company allegedly, as a matter of common corporate practice, water down all of their products mentioned in the lawsuit.

One of the California plaintiffs says she bought a six-pack of Budweiser every week for the past four years, and says she feels cheated. One might wonder why she didn’t taste the difference in just one of those 1248 bottles of Budweiser she apparently bought over the years.

Anheuser-Busch calls these allegations completely false, and states that their beers are in complete compliance with labeling laws, and that they proudly adhere to the highest standards in their brewing process.

What is interesting in this case is that usually the dilution of a trademark is caused when a later similar mark leads to dispersion of the earlier mark by making it less distinctive or unique. Therefore the holder of a well-known trademark is allowed to oppose to later applications which would be detrimental to the distinctive character of his earlier mark. However, in this case the action based on dilution of the trademark is brought by consumers. This is rather unusual, and it will be interesting to follow the case.

Finally it will also be interesting to see whether the European consumers will act equivalent to the Americans, especially bearing in mind their relationship with beer. Even though class actions are rather rare within the EU, it is not as if the consumers lack the opportunity of filing such these days. Both the peculiar taste of Black Beauty in beef lasagna and now the watered down beer might also encourage European consumers to bring action against large companies.

Maria Dam Jensen, Associate

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