CORONA trademark license mess: Why folks need to read their documents.
I am always surprised by people who do not read their documents. I get it. Lawyers like me have written agreements so long and complicated that you balk. Well, there is another answer. Do not do business with people who present such agreements. Ten years ago I was looking into a membership at my local DVD rental shop. When I looked at the membership agreement, I read that I was agreeing that anything they gave me was in good working order and if it did not come back in good working order that I would pay them for a replacement and if they had to sue me for the money that I would pay for their attorney and other enforcement costs. Well, I deleted the provisions and the clerk said that he was not allowed to accept any changes. The result was I walked away and my kids were upset. But reading my license and deciding that I did not want to live under its terms is part of being a grown up.
But what has this to do with CORONA beer? The answer is that Grupo Modelo, the Mexican sub of Anheuser-Busch InBev says that Constellation Brands, Corona licensee in North American, violated its license by launching a hard seltzer because Constellation only holds the U.S. license for “beer” which is defined as “beer, ale, porter, stout, malt beverages and any other versions or combinations of the foregoing including non-alcoholic versions of the forgoing.” So, is bubbly water laced with alcohol a beer. I am a chemist and I would think decidedly not. The suit is in the United States District Court for the Southern District of New York. We shall all learn more.
We should certainly take away the need for care when operating under a license. How easy it would have been to discuss the parameters of the license up front. I have negotiated licenses in the food space and great care is taking in defining the space. ###