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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