Beyond Meat (BYND) Stock Gains Despite $39 Million Legal Loss in Trademark Case

TLDR

• Beyond Meat was ordered to pay $38.9 million to Vegadelphia Foods for trademark infringement over the slogan “Great Taste, Plant-Based” used in a 2019 Dunkin’ commercial with Snoop Dogg
• The jury awarded $23.5 million in actual damages and $15.4 million in disgorged profits, which is more than half of Beyond Meat’s Q3 revenue of $70.2 million
• BYND stock jumped nearly 20% on Wednesday despite the legal loss, reaching $0.96 with trading volume exceeding 61 million shares
• Vegadelphia claimed the trademark violation destroyed potential business deals worth up to $100 million and trademarked their slogan in 2015
• Beyond Meat plans to appeal the verdict while facing a 14% sales decline in 2024, multiple layoffs, and Q3 earnings that missed analyst estimates

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Beyond Meat stock climbed nearly 20% on Wednesday, a surprising move given the company just lost a $38.9 million trademark infringement case. The plant-based meat maker now owes Vegadelphia Foods for using slogans in a 2019 Dunkin’ advertisement featuring Snoop Dogg.

Beyond Meat, Inc., BYND

The case revolved around phrases like “Great Taste, Plant-Based” and “Plant-Based, Great Taste.” These appeared in commercials promoting the Beyond Sausage sandwich at Dunkin’ locations. The partnership between Beyond Meat and Dunkin’ launched that same year.

Vegadelphia holds a trademark for “Where Great Taste Is Plant-Based,” registered in 2015. The company has been selling plant-based beef and chicken products since before Beyond Meat even existed. They launched five years earlier than their now-famous competitor.

A Massachusetts jury delivered the verdict after seven days of testimony in Boston. They awarded $23.5 million in actual damages and $15.4 million in disgorged profits. That total exceeds half of Beyond Meat’s third-quarter revenue of $70.2 million.

Vegadelphia’s legal team argued the trademark violation killed major expansion opportunities. Attorney Ben Wagner said the company had discussions with food industry executives about deals that could have valued Vegadelphia at $100 million. Those talks fell apart after Beyond Meat flooded the market with similar slogans.

Legal Defense Falls Short

Beyond Meat defended itself by claiming the phrases wouldn’t confuse consumers. The company’s lawyers said the slogans simply described qualities of plant-based products. They reviewed Vegadelphia’s trademark and concluded the phrases were different enough to avoid infringement.

The jury didn’t buy that argument. Dunkin’ had already settled with Vegadelphia in 2023. The lawsuit started in Florida in 2022 before moving to Massachusetts federal court.

Beyond Meat stock reached $0.96 by late morning Wednesday with heavy trading volume topping 61 million shares. Markets closed early for Thanksgiving, but seasonal interest in plant-based products appeared to drive the rally. Some technical analysts spotted resistance at $1.03 with potential targets reaching $1.18.

The stock has become a meme stock favorite at various points this year. In October, BYND surged sharply over just a few sessions, driven more by options trading than business fundamentals. That rally didn’t last long.

Sales Decline and Operational Struggles

Earlier this month, Beyond Meat reported disappointing Q3 results. The company posted earnings per share of -$0.47, missing the analyst consensus estimate of -$0.40. Revenue dropped 13.3% year-over-year.

Sales fell 14% in the first nine months of 2024 compared to the same period last year. The company conducted multiple rounds of layoffs and shut down its China operations entirely. Year-to-date, BYND stock has declined more than 70%.

The legal verdict adds to a growing list of battles. Beyond Meat settled a $7.5 million class-action lawsuit in 2024 over nutritional benefit claims. A judge dismissed an investor class-action lawsuit earlier this year about manufacturing capacity disclosures.

A law firm is currently investigating the company for potential federal securities law violations. Beyond Meat plans to appeal the Vegadelphia verdict.

The company did secure some wins this year. They restructured debt and raised $100 million in debt financing. New partnerships with Walmart, Erewhon, and BrewDog expanded retail presence.

The damages from Wednesday’s ruling represent more than what Vegadelphia initially requested from the jury.

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