San Miguel wins ‘Magnolia’ trademark dispute in U.S.

SAN MIGUEL conglomerate has obtained a favorable ruling from the American appellate court on the use of the “Magnolia” brand for butter, margarine and cheese products sold by its food group in the U.S.

In a disclosure to the Philippine Stock Exchange on Wednesday, San Miguel Pure Foods Co. Inc. said that with this legal victory which also resulted in the lifting of the injuction, the group may not only continue selling its Magnolia products in the U.S. but may consider introducing new food products and food services under this brand.

In a decision dated Aug. 27, the 9th Circuit U.S. Court of Appeals denied the appeal filed by Ramar International Corp. on the March 2013 judgment of the U.S. district court for the Central District of California in favor of San Miguel Corp., Pure Foods and Magnolia Inc. – or collectively the San Miguel group – regarding the use of the “Magnolia” brand.

Additionally, the disclosure said that the Court of Appeals had reversed the injunction issued by the District Court that prevented San Miguel from using the “Magnolia” brand for new Magnolia food products in the U.S. It noted that Ramar had failed to prove that it suffered any irreparable injury by San Miguel’s use of the Magnolia mark on its products in the U.S.

Ramar, which is based in Pittsburg, California, is a leading producer of Filipino food in the US.

In rendering the decision, the US Court of Appeals recognized that San Miguel was using the “Magnolia” brand on its butter, margarine and cheese products to invoke the goodwill that San Miguel had built in the Philippines, not the goodwill created by Ramar in the U.S., the disclosure said.

Citing the court ruling, the disclosure said the court had further acknowledged that Ramar’s president himself admitted on record that his company originally adopted the Magnolia trademark to “leverage the existing strength of San Miguel’s Magnolia brand” to promote its sales of Filipino-style ice cream in the U.S.

The San Miguel conglomerate has owned the Magnolia brand in the Philippines since 1925. The unit was initially only producing ice cream but later on expanded into other dairy products.

According to its website, Magnolia Inc. manufactures and markets butter, cheese, margarine, milk, jellyace and cooking oil. It controls over 90 percent of the non-refrigerated margarine market and over 80 percent of refrigerated margarine business in the country.

Outside of Magnolia Inc.’s dairy products, the San Miguel group also uses the Magnolia brand for its poultry products.

Amid a corporate restructuring in the 1990s, SMC sold its stake in the ice cream venture with Nestlé S.A. of Switzerland. But while SMC gave up its milk and ice cream operations, the group retained the Magnolia trademark because this brand is also used by other dairy products.

For 10 years, SMC stayed out of the ice cream business. In the first five years, it was due to a non-compete clause signed with Nestle. However, SMC did not reenter the ice cream business until 2004.