In this episode, Austin Padgett and Rusty Close delve into the intellectual property battle between cooler giants YETI and RTIC.
In this episode, Austin Padgett and Rusty Close delve into the intellectual property battle between cooler giants YETI and RTIC. They explore how YETI created a lifestyle brand of coolers and drinkware, and how RTIC brazenly entered that market with similar products at half the price, leading to lawsuits over patents, copyrights, and trade dress infringement. The discussion highlights the complexities of patent protection in certain product markets, the importance of brand equity, and the strategic decisions companies make to safeguard their IP and market position.
No Infringement Intended, hosted by Rusty Close and Austin Padgett, is your go-to podcast for exploring the fascinating intersection of intellectual property and pop culture.
No Infringement Intended Podcast — What Were the Cooler Wars? (Part 1)
Hosts: Rusty Close and Austin Padgett
Recorded: December 5, 2024
Aired: March 18, 2025
Austin Padgett:
Hi, folks. You're listening to another episode of No Infringement Intended. This is the intellectual property podcast of the law firm, Troutman Pepper Locke. Thank you for joining us today, and thank you, again, for listening. Our numbers have been, again, out of the roof. We can't imagine how successful the future of this podcast is going to be, given our current status.
As I mentioned in our previous episodes, our management is so thrilled with that we're doing here, and we're just thrilled to bring it to you. It's just an honor to serve. Last month, they gave Rusty a boat ride. So, let me introduce my colleague here. He's Rusty Close. I'm Austin Padgett. We're partners here at the law firm. Rusty, what do we have on deck today.
Rusty Close:
We're going to start with a little word association. I'm going to see where this goes.
Austin Padgett:
Right.
Rusty Close:
Kurt Cobain, Nolan Richardson, and Ice Beer. It's going to be a little tough for you.
Austin Padgett:
Okay.
Rusty Close:
You shouldn't just go, "Oh, boom, I've got it. I know what that is." But I'm going to tell you what it is. That, my friend, is spring break 1994.
Austin Padgett:
What a year?
Rusty Close:
Unbelievable. Panama City Beach.
Austin Padgett:
It had to be Panama City.
Rusty Close:
Of course it did. This is even before MTV started going to Panama City Beach. So, it wasn't to the point where it was completely out of control, but it's pretty out of control. That same week.
Austin Padgett:
There's a reason MTV chose spring break in Panama City.
Rusty Close:
I would say, some of our behavior in 1994 may have played a role. That same week, the Arkansas Razorbacks won the NCAA basketball tournament. The next day, Kurt Cobain died by suicide, and throughout the week, plenty of iced beer, which was a really big thing in 1994, had really just come on the stage, right? This is high school spring break, and I think the statute of limitations has run on any types of bad behavior that was committed during this time period. So, I'm going to talk about this freely.
But when you're at Panama City spring break, and you're 16 years old, and you're drinking Ice Beer, there's not a lot of coolers that are being utilized. You're mainly talking backpacks, and occasionally, you'll see the old traditional Styrofoam cooler. But as I've gotten older, more mature in some ways, live in a neighborhood, the neighborhood has a pool, go on the weekends, lots of adults, lots of kids there. Coolers are far more important. And if you live in the type of neighborhood where I live, you better have yourself a YETI cooler if you want to hang out at the cool end of the pool.
Austin Padgett:
Yes.
Rusty Close:
Do I have a garage or utility room full of YETI products?
Austin Padgett:
I do not. I have entirely weak insulative coolers that I've collected through the years of different sizes and different colors. I would tell you, the most insulative item in our home is my daughter's Stanley mug.
Rusty Close:
Ooh, another big-time product that you're likely to see at the pool.
Austin Padgett:
Absolutely.
Rusty Close:
So, when I go to the pool, I sit on the end of shame with my non-YETI products. It got me thinking about this competitor product that came on the market called RTIC. If you remember or if you're familiar with them, RTIC made a big branding push to say, "We're the same as YETI and were half the price. The performance is the same, half the price." That was their big marketing push.
So, when I see all these YETI coolers at the pool, it really got me thinking about how was RTIC able to enter the market and seemingly be selling what they were advertising as equivalent identical and get away with it. So, that's the question today. What happened in the cooler wars between YETI and RTIC?
Austin Padgett:
This really has a lot of implications for your poolside community.
Rusty Close:
It does, and the status that comes along with it.
Austin Padgett:
Right. We're going to get you out of the kiddie pool area and we're going to get you over to the adult swim.
Rusty Close:
It's going to take some YETI products; it's probably going to take a golf cart and I'm to need a large Bluetooth speaker with a bumping modern country music soundtrack.
Austin Padgett:
Yes, some bro country would really add to your game.
Rusty Close:
It would. I think that would maybe get me at least on the outskirts of the cool end of the pool.
Austin Padgett:
It's a goal. So, tell me – I didn't even realize there were cooler wars going on. I know of these products, but tell me, what is this all about?
Rusty Close:
What's at stake here? Well, so both companies, YETI and RTIC, both from Texas. YETI builds up a pretty ubiquitous brand, and then, seemingly out of nowhere, RTIC comes along and like I said, they're marketing themselves as just as good and half the price. And if you put the products side by side, they look nearly identical. I mean, I think you could probably pick out some distinctions if you spent a lot of time doing it. But it begs the question, people know about patents, people know about these things that we talk about on this highly rated podcast. And you think, well, why do we have all this intellectual property stuff if there's nothing YETI can do to protect themselves from this situation, right? The timeframe here is kind of 2015, 2016.
I think, YETI had to be asking themselves these same questions. Like, how is this possible? We've filed trademarks, we have copyright registrations, we have patents. How can this competitor come into the market and be doing this? I mean, I can only imagine the sort of frustration as all of this is going on, right?
Austin Padgett:
Yes. This is like what our intellectual property holdings are designed to stop, right?
Rusty Close:
To prevent, yes. I mean, that's kind of the thing. I think this situation illustrates some of the challenges with kind of keeping people out of the marketplace when you've built up such a, you know, sort of a brand for yourself and such a niche and successful product line in the marketplace. I think, in some ways, it harkens back in a little, in some ways to what you talked about in a previous episode, where trademarks become genericized because your product becomes so ubiquitous, right? That's not exactly what was at stake here, but it's the same idea. I mean, the goal is to become big and the goal is to become the product that everyone thinks of. But now, you look over and you've got somebody going, "Hey, ours is the same and it's half the price. So, buy ours."
When you look at the lawsuits that YETI filed against RTIC, you can kind of start to piece together what their strategy was at the time. I think in a future episode, we're going to deal with other aspects of the litigation and the cooler wars themselves, which branched over into drinkware and other IP concepts that I think will be helpful. When you think about holistically, how do I protect a brand, my products, my product line, you can kind of see some of the strategies and how they play out.
A lot of times, we're telling our clients, "Look, there may not be any perfect IP protection for what you're trying to do." And we talk about this concept of a thicket, right? So, you want to use patents, and you want to use copyrights, and you want to use trademarks, you want to use trade dress. All of these sorts of concepts that don't overlap each other perfectly, but if you overlap them the best that you can, you create this thicket that makes it a challenge for a competitor to kind of come in and replicate what you're doing.
This seems to be somewhat of a unique situation where despite the thicket that YETI had tried to put together, RTIC still came in and kind of tried to replicate exactly what they were doing. Today, we want to focus specifically on the patents. So, when you hear like, "Oh, I got a patent on that." What does that sort of conjure up in your mind?
Austin Padgett:
Yes, it's a good question. I mean, I have some level of cheat because I'm in an intellectual property department of the law firm. Yet, I have not had a science since high school. So, you're going to have to help me out here, Rusty. What actually is a patent?
Rusty Close:
Yes. I mean, if we get into the technical, what does a patent do? A common misconception is that a patent gives you a right to go do the thing that you got a patent on. I got a patent on this cooler. Therefore, I can now go sell this cooler. It's actually the inverse of that. It's a right to exclude others from selling the cooler that you have a patent on.
Austin Padgett:
Got it. Okay. Now, help me. How is that distinction meaningful?
Rusty Close:
Sure. It is really confusing, and we kind of try to come up with these examples of how can we help people understand this because it's not intuitive at all. One of the examples that we give is, and you got to really kind of play along with this example. Let's say that you, Austin, invented the first roller ball pen, right? You have some sort of repository for ink, you've got an elongate tube that that goes – that the ink goes inside of. And at the end, you've got a rollerball that dispenses the ink onto the paper. You've invented that, you have a patent on it.
I come along and say, "You know what? All of these pins are drying out." And an improvement over that would be a cap to put on the end of this pin, right? So, let's say, your invention, roller ball pen, my invention is roller ball pen plus cap. I can't go out and sell roller ball pens with caps on them, despite having a patent on that, because you have a patent on roller ball pens. You can exclude me from doing it. So, even though mine is more advanced, we'll say, right? It's not just a roller ball pen, it also adds a cap. It is a roller ball pen, so you can exclude me from selling that.
Austin Padgett:
If I want to put a cap on my pen, and you hold the patent, I've got a problem.
Rusty Close:
We've got to stand off. The way that this usually ends is, we come to some business arrangement and co-licensing agreement, and then we go compete in the marketplace.
Austin Padgett:
Got it. Okay.
Rusty Close:
So, fundamentally, patent doesn't give you a right to do something, it gives you a right to exclude others from doing that thing. People can quibble with that, but that's an overarching concept. But I think if you’re – if you think about products that you see in the market, and you go, "Oh, YETI, okay, they've got patents on their coolers." Well, you're thinking, they must be able to exclude others from making those coolers.
When you look at the lawsuits from back in 2015, 2016, there are two patents that are asserted by YETI against RTIC. You say, "You're infringing our patents. You're infringing our cooler patents." Dig a little deeper, and the patents, I think, even if you're not familiar with the cool end of the pool, even if you don't have your own YETI products, you've probably seen the rubberized pull latches that secure the lid in place.
Austin Padgett:
Oh, yes. I've tried those out in stores. Yes.
Rusty Close:
Yes. I mean, beautiful. It's kind of like an upside-down T. That's what you got. That's what the patents cover. So, it wasn't a patent for a cooler. It wasn't a patent about some sort of unique way of insulating the cooler, it was a patent for these latches.
Austin Padgett:
Interesting, okay.
Rusty Close:
So, if you're YETI and you're thinking about, how do we protect ourselves from competitors, and you're evaluating your products, and you're thinking through, "Well, what should we try to patent? What are we doing that is new, and novel, and non-obvious?" Those are sort of the standards. Can I get a patent? You can only get a patent on something that is novel, it's new, it's never been done before. And it's non-obvious in that you can't take two pre-existing things and combine them in an obvious way. Okay, well, we make coolers. Coolers have been around forever. Is there something unique, something new, and non-obvious about the way that we insulate them? Well, we did kind of come up with this rubberized latching mechanism. Why don't we go after some patents on that? You get those patents, and if you go back, and you look at the patent claims, the claims are the thing that you actually have a right on. That's what you can exclude someone else from doing.
You write out this whole document, that's called the specification. You explain what your technology is, you draw pictures of it, and then you get into the nitty-gritty details of it. Then, at the end, you draft these claims. In this case, the claims are focused on these latches, the shape of these latches, the material that the latches are made of. All of these sorts of – it's not just a latch for closing a cooler, it's not just a rubberized latch for closing a cooler. It really gets into the specifics about how it's shaped, and how it stretches, but then can go back to its original form, all of these things.
So again, you're thinking, "I'm YETI, I've got patents on my coolers." It's not really that. "I'm YETI, I've got patents on my latches for my coolers." It's not really that either. It's, "I'm YETI, and I've got patents on this specific latch design." So, it's not as easy as just saying, "Well, we've got patents, we won't have to worry about competitors," because it's not easy to get a patent that covers your whole thing, your whole product. What you see in these lawsuits, and what we will get into in additional episodes is, "Okay, well, we've got the patents on the latches. We've got trademarks on our name; we've got trade dress." Which is sort of the shape of the coolers, which is not exactly like other coolers that have existed before ours came along. You think about when we were growing up sort of the typical sort of flip top cooler where it's kind of a triangle roof shape on top and that folds down, or just the one where the – it's a big rectangle and the lid just pops right off. Those are the ones we grew up with, I think, or the Styrofoam coolers.
Austin Padgett:
Yes, that's what called now fishing coolers.
Rusty Close:
Yes, fishing coolers. Unless you're on like a high-end fishing trip, then obviously, you're going to use a YETI.
Austin Padgett:
Right, exactly. Yes.
Rusty Close:
So, you're trying to protect what you can. You've got your patents on your latches. You've got this, let's say, maybe new, and unique, and distinctive shape. You can get a design patent, which is going to protect sort of the look and shape of something, the ornamental features, but not the functional aspects of it. So, it's not going to protect these sorts of stretchy tabs that kind of close the latches. It's not going to protect the insulation aspects. It's just really the shape, how does it look. The classic example is the Coca-Cola bottle. You can get a design patent on that.
When this lawsuit was filed, there were no design patents about the shape of the patents that were asserted. So, you kind of think, maybe they looked at the situation and thought, "Well, that's not going to do us much good. It's not going to provide us much protection. So, let's just focus on these functional aspects of our latches. We'll protect ourselves in other ways." But at the end of the day, the patents themselves, arguably to me, didn't afford them that much coverage.
Again, later, we'll get into more of the details, but ultimately, the case gets resolved. It doesn't end in an ultimate jury verdict. The parties agree to a settlement. There are some details available. We know that RTIC had to pay some amount of money to YETI. We know that RTIC had to redesign all of the products that were accused in the lawsuits.
Austin Padgett:
Interesting. Okay.
Rusty Close:
So, anything that was infringing – now, this could be infringing on the patents because of the latches, or infringing in other ways, trade dress, and things like that. They had to redesign all of that. They weren't supposed to sell those products anymore, but I think there was a grace period where they could sell off inventory, which I think is when I bought my own RTIC cooler, because I thought, "Hey, if YETI is suing them, they must think the products are close enough that it's worth their time and money. I'm just going to buy this one because it's half as much." Now, it's on sale because they got to get rid of this inventory.
Austin Padgett:
Yes. What I love is this concept of going to the pool for, what, three, four hours maybe, but having an OP cooler, as my kids would call it, that could keep the cube, the ice cubes go in for like three weeks.
Rusty Close:
It's really important.
Austin Padgett:
Absolutely.
Rusty Close:
Even if you're not drinking Ice Beer, you want it to be as cold as possible, and you at least want people to know, "Hey, if I don't drink all this today, it's still going to be cold when I wake up Monday morning."
Austin Padgett:
Right. I don't even have to put it back in the fridge.
Rusty Close:
No. I mean, that's why I have this thing.
Austin Padgett:
Right.
Rusty Close:
It's also a great canvas for stickers from when you went to Jackson Hole.
Austin Padgett:
Oh, people mark them up.
Rusty Close:
Or your favorite bands, that kind of thing.
Austin Padgett:
Oh, wow. Okay. So, it truly is a lifestyle product and brand then. Okay.
Rusty Close:
I think that gets to the heart of a lot of this and why, how YETI can truly protect themselves is they've built up equity in the lifestyle that surrounds their products. So, IP protection is an aspect of that, but at the end of the day, there's equity in being YETI and people want to be associated with that.
Austin Padgett:
Yes, it's one of those things I'd love to see, because there's an element of what you're describing of, even if you bought the RTIC cooler, you're still not achieving the entirety of a potential goal of status at the pool, right? I would have loved to be in the room discussing, "Okay, well, if our litigation doesn't work out, do we cut prices or how do we competitively manage this?" The answer might be, "We don't have to do anything at all because we have enough brand equity that they'll take maybe a small segment. They'll take the Rustys out there."
Rusty Close:
The people who sit on the kids' end of the pool.
Austin Padgett:
Right. Who are willing to live with this other product.
Rusty Close:
The indignity of having the other product.
Austin Padgett:
Right. But it doesn't have the name brand that's attached to it. So, I think this is begging for another episode where we talk about those trade dress aspects, because I think it's all – you use the word thicket. I mean, it's all wound up together of what is this thing and what are we protecting, which is what comes up a lot of times when we're talking to clients, and they have like a business concept sometimes. Where it's like, there's no traditional way to protect the entirety of it. So, as you described, we're just taking pieces. What we're trying to get is some sort of level of protection that if someone comes and takes enough pieces or an important piece that we have at least have something in the portfolio, the arsenal to come at them with to protect our position, to protect our reputation, whatever it might be. This is a really interesting case of that concept because it ties into this kind of everyday summer night at the pool concept.
Rusty Close:
Yes, it's easy to see it around you. I think part of the goal of this podcast is, when you see those things and you kind of raise these questions in your head, to give you a way to think about, how did this happen? How did this work? How did it come to be that you got YETI and you got RTIC? I mean, they really look the same to me as an ordinary consumer, but I know that IP is a thing. How can they do that? How can they do that?
Funny enough, I was riding down the interstate the other day on my way into the office on the back of a, looked like a work truck, pickup truck, RTIC cooler strapped down. These guys are headed to a job site. Right above the RTIC logo was a YETI sticker that they had stuck on there. Not covering it up. I mean, the sort of the humor in, "Let me show you both of these" kind of thing.
Austin Padgett:
I love it.
Rusty Close:
Yes, it was good stuff. Part of the settlement was that they had to redesign all of these products. I went on the website, the respective websites last night. I pulled them up on two different screens. I brought my wife over and said, "Okay, these guys had to redesign these coolers. This is their, whatever it is, 45-court version. This is their 45-court version. Let me know what you think. What do you see?" It's really hard to tell. Now, we're, what we say, 2015, we're nine years down the road. and it might be that at this point, look, YETI has succeeded, they've grown, they've got every – they are who they are in the industry. This might not be an annoyance to them anymore. So. they're not like they probably were. I have to think how they probably were in 2015 where they're going, "How's this happening? How can this happen?"
Now, nine years down the road, they're not so worried about it. "Okay, look, their coolers are close to ours, maybe they're identical to ours." They don't advertise them anymore in the same way they used to say, "Hey, look, it's the same thing. It's just half the price." Maybe they aren't as bothered by it as they one time were. That plays into a lot of the stuff we do too, is the emotion that goes into it, sort of the injustice of, "They're copying us. I mean, this is ridiculous. They are copying us. How can they do that?"
Austin Padgett:
Yes. One of those interesting things of when you have a settlement agreement, particularly when you have to redesign or rebrand, you've probably had this as well where nobody likes change. So, a lot of times, you have to go through several iterations of the change and finding how can I serve my client and get accomplished what they want to accomplish while still helping them avoid getting back into the dispute with this other party that you know probably is litigious from this one, you definitely, because they've already sued.
Rusty Close:
Sure.
Austin Padgett:
But you have these instances of kind of, where do you put those lines and how do you best serve your client? It's an interesting dance sometimes that you have to do and you have to craft it client by client. And so, I mean, the easy one is just say, "No, you can't do that." But that's a terrible answer a lot of times because there's more to it. It's "No, but" or "No, because this, this, and this." That's clear within the bounds of the settlement agreement where you said you want to do it. So, we need to steer away from that. How can we redesign in a way that we can manufacture with the same types of maybe tooling or parameters? Trying to find those types of solutions.
That's actually where I have a lot of fun on the job day-to-day, is finding kind of practical fixes for potentially big problems. So, these types of cases are actually pretty fun, even when they get to the settlement agreement because you still have to find a solution. Maybe the ink is dry on the settlement and everybody's come to terms, then you've got to live with the reality of what that looks like. You don't want to have to create a whole new machine for recasting the clips on the outside or something. Maybe we need to, as cost-effectively as we can, move this to a different thing. Is this okay and this okay? And how do we measure the risk of all that kind of stuff.
Rusty Close:
That highlights sort of the approach that you and I take, and I think all of our colleagues take that we're not wanting to stand in the way of our clients doing business. We're wanting to help them understand the potential risks of doing what it is they want to do. This isn't for us. It's not a law school exercise and law school exam. I mean, we're trying to think about it from, "Okay. Well, here's the thing we you want to do. You, as a client, want to do. How can we
help you best do that and not just get into trouble?" But like you said, we don't want the answer to be no all the time. "No, you can't do that." "How about if you did it this way?" I think it's kind of the way we try to approach it.
Austin Padgett:
Yes, for sure.
Rusty Close:
Well, we haven't gotten to the bottom of the cooler wars yet because there are other interesting aspects of this. But I wanted to first start with the idea of a patent, give some background on what a patent does and doesn't do, why a company might pursue it or not pursue it. I don't think there's any reason to say they were wrong, that YETI was wrong for not having better patent protection, right? They may have assessed the situation and thought, 'We're not going to be able to get patents on these broad concepts, so we're going to focus our attention on our branding, and our marketing, and the products themselves. But we can get patents on these latches and that will allow us some amount of coverage and protection."
I also want to say, we don't speak for YETI or RTIC. We're just sort of looking back at historical documents and trying to read between the lines, and think about based on our experience and based on what we can see, how it probably came to that point, the decisions that were made. But again, this is all sort of our own interpretation of facts.
Austin Padgett:
Yes, absolutely. I mean, mainly, we're getting at these main concepts of what is a patent. What do you cover? Can it be aspects of products? Can it be little technical features? Things like that. There's certainly a lesson learned on my side as well. So, I'm also proud of us for avoiding the clear cold war dad jokes that we could have had all throughout this episode. So, I'm going to pat myself on the back and one to you as well through cyberspace. So, let me close this out here. I want to remind people that our other episodes are available on all podcast platforms. I want to remind you to also like and subscribe, if you could give us a five-star review. we love that. Certainly, they're starting to mount up with our listenership. But thanks for listening, everyone, and we'll talk to you next time.
Rusty Close:
Thanks, everybody.
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