News

March 25 (Reuters) - A U.S. appeals court on Monday upheld a jury's verdict that Constellation Brands' STZ.N Corona and Modelo hard seltzers do not violate the trademark rights of Anheuser Busch InBev's ABI.BR Grupo Modelo, the maker of Corona and Modelo beers.

The 2nd U.S. Circuit Court of Appeals said the jury properly determined that Constellation's contract to distribute Modelo beers in the U.S. also allowed it to sell hard seltzers using Modelo brand names, in a case that revolved around the companies' definition of "beer."

Representatives for InBev and Constellation did not immediately respond to requests for comment on the decision.

InBev purchased Mexico-based Modelo in 2013. Modelo sued Constellation in 2021 and alleged that Constellation's Corona Hard Seltzer and Modelo Ranch Water breached a provision of their distribution agreement and infringed Modelo's trademarks.

Modelo said that their agreement only allowed Constellation to sell beer and malt beverages using Modelo's branding, while Constellation argued that the agreement's definition of "beer" also covered its hard seltzers.

A federal jury in Manhattan agreed with Constellation last year that the contract allowed for its Modelo-branded seltzer drinks.

On Monday, a three-judge 2nd Circuit panel affirmed that the contract's definition of "beer" was ambiguous enough that a jury had to resolve the question. It also rejected Modelo's challenge to the court's jury instructions on interpreting the agreement.

The case is Cerveceria Modelo de Mexico S de R.L. de C.V. v. CB Brand Strategies LLC, 2nd U.S. Circuit Court of Appeals, No. 23-810.

For Modelo: Jeffrey Wall of Sullivan & Cromwell

For Constellation: Sandra Goldstein of Kirkland & Ellis

Read more:

AB InBev takes Constellation to U.S. court over Corona brand name

AB InBev loses jury trial over Constellation's Corona, Modelo seltzers

Modelo, Constellation clash over meaning of 'beer' in US appeal

(Reporting by Blake Brittain in Washington)

((blake.brittain@tr.com; +1 (202) 938-5713;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.