The beer industry may be booming, but it’s also under attack from a growing menace: imitation brands. Counterfeit products and “knock-off” brands don’t just threaten the revenue of legitimate brands – they can seriously damage. Consumers who unknowingly buy these subpar or even unsafe imitations often associate the poor quality with the real brand, putting years of careful marketing, craftsmanship, and brand identity at risk. The rise of imitation brands poses a significant threat, potentially undoing years of brand building and eroding the trust and integrity that the beer industry relies on.
Modelo and Constellation Brands, which produce and market beers such as Corona, Modelo, and Pacifico, are taking this fight head-on against one Texas distributor, claiming that it has been importing, selling, and promoting beer products that unlawfully imitate the branding of their popular imported beers and therefore are willfully and intentionally misleading the public.
Lawsuit Filed by Modelo Over Trademark Infringement
The lawsuit, filed by brand owner Trademarks Grupo Modelo, S. de R.I. de C.V. and exclusive brand licensee CB Brand Strategies, LLC alleges that Texas-based Oz Trading Group, Inc. a/k/a PZ Trading Group, Inc. is using names and labels that are either identical or highly similar to those associated with Modelo’s beers, including brand names and fanciful names such as “Modelo Trigo,” “Corona Mega,” “Modelito,” “Modelo,” “Cerveza Del Pacifico,” and “Modelo Negra.” Modelo and Constellation Brands assert that such conduct constitutes a blatant attempt to mimic and misappropriate the goodwill of the well-known brands.
Allegations Against Oz Trading
The lawsuit claims that Oz Trading, reportedly run by former Hidalgo, Texas City Councilmember Oziel Trevino, imports the imitation products from Mexico for distribution in the United States. Court documents further allege Oz Trading engaged a consultant to fraudulently acquire the imitated label approvals from the U.S. Alcohol and Tobacco Tax and Trade Bureau, misrepresenting its rights to use the trademarked features. The Complaint brings claims for trademark infringement, unfair competition, trademark dilution, importation of goods bearing infringing marks, false designation of origin, and false advertising under federal, state, and/or Texas common law.
Continued Infringement and False Advertising
While Oz Trading reportedly withdrew its applications for the infringing labels, the lawsuit contends that the company continues to market and sell products that bear the Modelo trademarks, misleading branding, and false advertising. For example, the Complaint notes that Oz Trading’s “Corona Mega” label falsely states that it was brewed in Mexico by “Cerveceria Modelo” and only “imported” by Oz Trading, even though Modelo did not brew or produce the product.
The Impact of Modelo and Constellation Brands’ Marketing Efforts
Modelo’s brands of beer have achieved widespread recognition in the United States, thanks in part to the strategic efforts of Constellation Brands, the company responsible for marketing and distributing Modelo, Corona, and Pacifico products in the U.S., among others. Known for their high-quality ingredients and distinct flavors, these brands have become some of the most popular choices among beer enthusiasts, appealing to a diverse range of consumers.
Constellation Brands has played a crucial role in amplifying the reach and visibility of these brands through extensive television marketing campaigns, which have effectively showcased their authentic Mexican heritage, refreshing taste, and premium quality. Iconic Corona ads, with their signature themes such as “Find Your Beach” and “La Vida Mas Fina” (translated as “the Fine Life”) and entertainment icon promoters such as Snoop Dogg, alongside the Modelo brand’s emphasis on strength and perseverance, have made both brands household names. This comprehensive marketing approach has solidified their status as giants in the beer industry, with Modelo Especial recently dethroning Bud Light as America’s best-selling beer. According to the Complaint, Oz Trading has been willfully and illegally using Modelo’s trademarks, reputation, and robust marketing platform to mislead consumers and drive its own sales. Modelo and Constellation Brands seek a permanent injunction against Oz Trading to prevent any further use of the disputed labels, the destruction of counterfeit products, and compensation for damages.
The Importance of Trademark Protection
Trademark holders must diligently protect their trademark rights and should consult with legal counsel if they have questions about how similar conduct might impact them. For additional information regarding the content of this article or how to protect your brand, please contact Nathan F. Studeny (nfs@kjk.com; 216.736.7284), Robert E. Zulandt, III (REZ@kjk.com; 216.736.7259), or one of KJK’s eCommerce attorneys.