Yeti Coolers Inc. is suing Wal-Mart Stores Inc., claiming drinkware products sold by the retailer are patent and trade dress infringements, among other complaints.
The Austin, Texas-based company, which produces and sells heavy-duty outdoor equipment such as coolers and drinkware, filed a lawsuit in the United States District Court for the Western District of Texas last week.
Yeti said items sold by Wal-Mart are "confusingly similar imitations" and alleges the retailer "has purposefully advertised, promoted, offered for sale, sold and distributed, and continues to advertise, promote, offer for sale, sell and distribute drinkware products that violate Yeti's rights."
Martin Thoma, a principal at Little-Rock based brand leadership firm Thoma Thoma and author of Branding Like the Big Boys, described the lawsuit as a "David vs. Goliath" case with a relatively young company challenging the retail giant. Yeti was founded in 2006.
"A brand is not that tangible thing itself, but it's everything that thing connotes and stands for and creates in the mind of the customer," Thoma said. "So Yeti is clearly concerned that all of its intellectual property, its designs, its advertising, and its brand building are being co-opted by another manufacturer and retailer."
Yeti's claims against Wal-Mart involve three heavy-duty insulated drinkware items it developed, manufactures and sells -- a Rambler Colster beverage holder, and 20- and 30-ounce stainless steel Rambler tumblers.
The United States Patent Office issued a design patent for the Colster beverage holder on March 29, while Yeti claims it owns trade dress rights in the overall look and appearance of the others.
Trade dress typically refers to the visual appearance of a product or its packaging. Federal law protects the trade dress of a product if it is distinctive and if any imitation is likely to cause confusion for consumers. A design that is functional cannot be protected under trademark law.
Mark Henry, a registered patent attorney with Fayetteville-based Henry Law Firm, believes the lawsuit is "fascinating" because it blends design patent and trade dress protection on drinkware, something that could be viewed as a functional item. He predicted it could be tough to show for some of the products, but said the case will be a "substantial" one for Yeti.
"This case brings design patents, which protect the ornamental appearance of something, and then a trade dress, which is the customer association of that brand," Henry said. "They are putting to the test the shape of their cups and they're claiming that their look is so famous that it's entitled to trade dress protection. That's pretty amazing. Think about it: a cup."
Yeti said in its complaint that it has created "unique, distinctive and non-functional designs" to use with its insulated drinkware. The company also said it extensively and continuously promoted and used its designs for years in the United States and, as a result, they have "become well-known indicators of the origin and quality of Yeti's insulated drinkware products."
Yeti sells its insulated beverage holder and 20-ounce tumbler for $29.99, and the 30-ounce tumbler for $39.99, according to the company's website.
Similar drinkware products are listed on Walmart.com. Ozark Trail insulated koozie cups and 20-ounce tumblers are $7.74, while 30-ounce tumblers are $9.94.
The patent and trade dress claims are among nine counts listed in Yeti's lawsuit. Others include trade dress dilution, unfair competition and unjust enrichment. The company is asking for Wal-Mart's products to be recalled and destroyed, and for customers to be refunded. Yeti also is seeking monetary damages.
Wal-Mart spokesman Randy Hargrove said the retailer is in the process of reviewing the complaint and "will respond appropriately with the court."
Wal-Mart has been involved in other infringement-related disputes. The company reached an undisclosed settlement in a trademark infringement case with Adidas in 2008 and, more recently, was among about 30 retailers sued by Converse for trade dress infringement. The U.S. Supreme Court sided with Wal-Mart in a case against children's clothing designer Samara Brothers, Inc., in 2000.
Yeti has been aggressive in defending its products lately, filing a trade dress infringement suit against Missouri-based Mammoth Coolers last December. The company claims Mammoth is selling coolers that are "confusingly similar" to several in its Tundra line, which can range in price from about $300 to $1,300.
Yeti also filed lawsuits against China-based stainless steel drink ware manufacturer Zhejiang Zhuosheng Industry & Trade Co., and restaurant outfitter The Boelter Companies the same day it sued Wal-Mart. Both lawsuits were trade dress infringement claims over 20- and 30-ounce stainless steel tumblers.
Unlike the Wal-Mart lawsuit, the claims didn't also include patent infringement.
"Yeti has worked really hard to develop that brand image and brand reputation," Thoma said. "They've spent a lot of time, intention, money and effort in building that.
"So it's an obligation, or imperative, to any company to strongly defend its brand."
SundayMonday Business on 04/17/2016