Pint of order: New York judge asks jury to define ‘beer’ in Corona case

Parent company Modelo’s lawsuit against US distributor for selling hard seltzer hinges on definition of ‘beer’ in licensing agreement

A federal judge wants a New York jury to determine the definition of beer.

Lewis Kaplan of the southern district of New York was considering a request from Modelo to hold liable Constellation Brands, the US distributor of the Mexican brewer’s popular Corona beer, for selling Corona-branded hard seltzer without permission.

On Tuesday, Kaplan ruled that Modelo was not entitled to an immediate pre-trial win. But the judge had also denied Constellation’s attempt to end the case, setting up a jury trial that could turn on how the companies defined the word “beer” in their trademark licensing agreement.

Modelo filed suit last year, arguing Constellation’s Corona Hard Seltzer breached a licensing agreement and infringed trademarks because the agreement only allowed Constellation to sell beer under the Corona name.

Constellation said the definition of “beer” in the agreement also covered hard seltzer.

Modelo said no reasonable jury could read the definition that way.

In his ruling, Kaplan said: “It bears mention that the question whether the [Constellation] hard seltzers fall within the sublicense – ie, whether they constitute ‘beer’ within the meaning of that agreement – came before the court on [Constellation’s] motion to dismiss the original complaint.

“The court denied that motion … essentially on the ground that the word ‘beer’ and other relevant provisions of the sublicense were ambiguous.”

Kaplan said that though Modelo’s argument might be stronger, the definition of “beer” in the agreement 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” Constellation, Kaplan said. “But the fact remains that dictionaries, however important, do not resolve this case.

“The meaning of the sublicense as it relates to [Constellation] hard seltzer products is ambiguous … and while Modelo perhaps has the better of the argument, the court is not now in a position to conclude that no reasonable jury could find for” Constellation.

No trial date was set.

Last August, Modelo separately alleged that Constellation’s tequila- and bourbon-barrel aged Modelo Reserva beers also violate the license agreement. That case is currently in mediation.

  • Reuters contributed reporting


Maya Yang

The GuardianTramp

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