On December 8th, Austin, TX-based portable cooler manufacturer YETI Coolers LLC filed a lawsuit asserting patent, trademark, copyright and commercial claims against Bentonville, AR-based Wal-Mart Stores Inc. (NYSE:WMT) The suit, filed in the Western District of Texas, alleges that the mega retailer has been infringing on its IP related to trade dress covering aspects of YETI beverage holders in violation of a settlement agreement stemming from previous litigation activity which had played out between the two companies.
The suit filed by YETI notes that the cooler maker has been involved with the development of insulated drinkware for years; the company was founded in 2005. These insulated drinkware products include 30- and 20-ounce versions of the Rambler Tumbler as well as the Rambler Colster Beverage Holder. Millions of units of such YETI-branded drinkware have been sold throughout the United States and YETI alleges that its designs and trade dress in the drinkware have achieved substantial secondary meaning in the market because of the drinkware’s commercial success.
YETI asserts that it has trade dress rights in the designs and appearances of its drinkware including the design and appearance of the curves, tapers and lines in the walls and rims of its products. The company is also asserting a series of trademarks which cover the use of names like “YETI”, “RAMBLER” and “YETI COLSTER” in commerce on products such as clothing, portable coolers, stainless steel beverage containers, beverageware, temperature-retaining drink vessels and mugs. Federally registered copyrights asserted by YETI in the case cover the design and appearance of YETI labels attached to the drinkware. YETI is also asserting a single design patent, U.S. Patent No. D7252397, issued in March 2016 under the title Beverage Holder.
YETI’s allegations surround Wal-Mart’s retail sale of products which are confusingly similar to YETI’s products; these products have not been authorized for sale by YETI. The allegedly infringing products include 20- and 30-ounce beverage holders and a “Koozie” beverage container which are the same size and shape as the YETI trade dress. These products had previously been the subject of patent and trademark litigation played out between YETI and Wal-Mart in another case filed in Western Texas. A stipulated dismissal entered into that case this March dismissed YETI’s claims with prejudice and gave Western Texas jurisdiction over both YETI and Wal-Mart for the resolution of any dispute arising from the settlement between the two entities.
In the recent complaint, YETI alleges that Wal-Mart continues to promote and market infringing products for sale in violation of the previous settlement agreement between them. YETI’s complaint includes images of the infringing products themselves as well as a screenshot of an online Walmart store advertising a “Yeti Black Stainless Steel Tumbler.” Side-by-side image comparisons of the original and infringing products show that the products sold by Wal-Mart include “YETI”-shaped indentations as well as labels which are very similar to those covered by YETI’s federal copyrights.
YETI’s lawsuit against Wal-Mart includes a total of 16 counts. The first count is for breach of the settlement agreement between the two firms, which Wal-Mart breached both by offering the infringing products for sale as well as by failing to provide notices to YETI validating Wal-Mart’s compliance with the settlement critique; the agreement obliged Wal-Mart to do so by November 15th. A total of nine claims target trade dress and trademark violations including dilution, infringement and false designation of origin, with claims being made under federal statute as well as at common law. There are also individual counts for copyright infringement, patent infringement, unfair competition, misappropriation and unjust enrichment.
Wal-Mart is far from a model citizen when it comes to respecting the intellectual property rights of others. The company has been on the defendant side multiple times in patent infringement proceedings for its responsibility in enabling the sales of knock-off versions of the Bunch O Balloons water balloon-filling invention. Since the beginning of 2016, Wal-Mart Stores Inc. has been a party in a total of 67 district court cases involving patent, trademark or copyright claims according to legal data collected by Lex Machina. In only one case was Wal-Mart a plaintiff asserting intellectual property.