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United States: From Corn-Gate To You-Stole-My-Trade-Secrets-Gate (Maybe): Defendant Beer Maker Moves To Add A Counterclaim For Trade Secrets Misappropriation In False Advertisement Litigation
MillerCoors (beer maker of Coors Light and Miller Lite) and
Anheuser-Busch ("AB") (competing beer maker of Bud Light)
have been embroiled in a contentious federal district court
litigation in the W.D. of Wisconsin since March 2019. MillerCoors
filed a lawsuit against AB for false advertising and trademark
dilution shortly after AB aired an ad during Super Bowl LIII saying
that MillerCoors uses corn syrup during brewing. MillerCoors'
lawsuit alleges that this ad was part of a "false and
misleading advertising campaign" designed to deceive consumers
into thinking they will consume corn syrup if they drink Coors
Light and Miller Lite, which MillerCoors denies.
On October 17, 2019, eight months into the litigation, AB filed
a motion to add a counterclaim for trade secrets
misappropriation against MillerCoors.
But what was the basis for AB's request? According to its
heavily redacted motion, AB found a document contained in
MillerCoors' production that contained photographic images of
AB's secret recipes for Bud Light and Michelob Ultra. Former AB
employees appear to have been involved (again, heavily redacted
motion...).
But why now and why as a counterclaim in this false advertising
litigation? This is where things get interesting. According to AB,
its counterclaim is appropriate because the claim "arises out
of the occurrences that are the subject of MillerCoors'
complaint" (the standard under Rules 13 and 20). MillerCoors,
on the other hand, strongly opposes. According to its November 8 opposition brief (also heavily redacted),
MillerCoors argued the request to amend should be denied for two
reasons: (1) the amendment would be futile; and (2) the amendment
would "derail" the underlying false advertising
litigation.
As to (1), MillerCoors asserted that AB's proposed
counterclaim had no merit because it would be dismissed on grounds
that, among other things, AB failed to describe the trade secrets
with the requisite level of specificity and particularity.
As to (2), which is clearly MillerCoors' bigger concern,
MillerCoors pointed out numerous facts showing that the parties
were far into the false advertising litigation, including the fact
that parties had already filed summary judgment motions and that
trial was set for the Spring of 2020. According to MillerCoors,
allowing AB to now bring a counterclaim for trade secrets
misappropriation would "derail" the litigation. If AB was
permitted to proceed with its counterclaim, the parties would have
to reopen and take discovery on a number of unrelated issues and
facts. In addition, MillerCoors also pointed out facts suggesting
that AB's move was a strategic litigation tactic to generate
additional publicity for the underlying Corn-Gate litigation
(favorable publicity to AB as being the victim of trade secrets
theft). For example, MillerCoors pointed out that on the same day
of filing its motion, at 2pm ("peak press time,"
according to MillerCoors) "AB provided copies to the press,
issued a press statement, and made counsel available for
interviews." Juicy stuff.
AB filed a reply brief on November 18 under seal (as of the date
of this post, the reply brief remains under seal) and the court has
not yet ruled. However, the court sure has plenty to consider in
determining whether AB should be allowed to bring in its trade
secrets claim at this late stage of the Corn-Gate false
advertisement litigation. If so, the parties will certainly still
be involved in active litigation during Super Bowl LIV—that
thought just made the Super Bowl beer commercials much more
intriguing.
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