In April 2019, outdoor apparel company Patagonia, Inc. sued Anheuser-Busch, LLC in the District Court for the Central District of California. Patagonia brought eight claims against the Anheuser-Busch brand “Patagonia Brewing Co.” The claims included trademark infringement, trademark dilution, false designation of origin, and actions to cancel several trademark registrations. Anheuser-Busch filed a motion to dismiss five of Patagonia’s claims, including Patagonia’s trademark dilution claim. Anheuser-Busch argued that Patagonia failed to show that its PATAGONIA trademark had the requisite level of fame and distinctiveness to support a trademark dilution claim. The District Court found Patagonia to have sufficiently alleged the PATAGONIA trademark as being famous and distinctive; therefore, Anheuser-Busch’s motion to dismiss was denied.

Patagonia’s chief complaint was its objection to Anheuser-Busch making and selling beer using a logo similar to Patagonia’s own food and beer line, Patagonia Provisions, as shown below:

Given the prominence of Patagonia’s trademark, Patagonia alleged trademark dilution. To properly allege trademark dilution, Patagonia needed to show: (1) that its trademark is famous and distinctive; (2) Anheuser-Busch is using Patagonia’s trademark in commerce; (3) Anheuser-Busch’s use began after Patagonia’s trademark became famous; and (4) Anheuser-Busch’s use of the trademark is likely to cause dilution by blurring or tarnishment. Jada Toys, Inc. v. Mattel, Inc., 518 F. 3d 628, 634 (9th Cir. 2008). Anheuser-Busch disputed that the PATAGONIA trademark was famous and distinctive.

To show that a trademark is sufficiently famous for a dilution claim, four non-exclusive factors are evaluated: (1) the duration, extent, and geographic reach of advertising and publicity of the trademark, whether by the owner or third parties; (2) the amount, volume, and geographic extent of sales of goods or services offered under the trademark; (3) the extent of actual recognition of the trademark; and (4) whether the trademark was registered on the principal register. 15 U.S.C. § 1125(c)(2)(A).

When a party is trying to assert that its trademark is famous and distinctive, there are no standard metrics for a successful pleading. Here, the District Court found that Patagonia had successfully alleged that its PATAGONIA trademark is famous and distinctive. To do so, Patagonia addressed each of the above four factors, although some allegations were more specific than others. Patagonia alleged two factors: one, that it had a principal registration for the PATAGONIA trademark; and two, that its PATAGONIA trademark has become highly-recognized since its first use more than 40 years ago. However, Patagonia’s assertions as to its advertising numbers were somewhat vague.

Regarding Patagonia’s advertising efforts, Patagonia alleged that it had spent, “enormous amounts of time, money, and effort in advertising and promoting the products and services on which PATAGONIA trademarks are used.” Patagonia, Inc. v. Anheuser-Busch, LLC, 2:19-CV-02702-VAP-JEMx (C.D. Cal. Sept. 3, 2019). This is notable as Patagonia did not allege a quantifiable amount of advertising; rather, it succeeded by alleging only “enormous amounts” of advertising.

Patagonia did provide a discrete number in connection with its sales data – $10 billion. Patagonia alleged that since 1985, Patagonia has done upwards of $10 billion in sales. Id. In reviewing all four factors, the District Court found that Patagonia had properly alleged that its PATAGONIA trademark is famous and distinctive and denied Anheuser-Busch’s motion to dismiss.

This case demonstrates that concrete numbers for every factor may not always be necessary to successfully plead fame and distinctiveness in trademark dilution cases. Further, while the case law indicates that there is no magic number of requisite sales necessary to plead fame, Patagonia’s showing of $10 billion in sales since 1985 (roughly $303M per year) serves as a guidepost for future litigants.

Editor: Catherine Holland

Written by: David C. O'Hair & Jeff Van Hoosear