By Jonathan Stempel
(Reuters) - Duracell has failed in its effort to dismiss a lawsuit claiming it violated Energizer Holdings Inc's (N:ENR) trademark rights by using a pink bunny on battery packages that closely resembled the sunglass-clad, drum-beating Energizer Bunny.
In a decision last week, U.S. District Judge Carol Jackson in St. Louis said Duracell, recently bought by Warren Buffett's Berkshire Hathaway Inc (N:BRKa), must face claims that its bunny confuses consumers and irreparably harms Energizer, which has used a bunny mascot since 1989.
Energizer said it has spent hundreds of millions of dollars using its bunny to market its batteries, using the slogan that both "keep going and going and going."
Duracell called Energizer's lawsuit a "thinly veiled" attempt to renegotiate a January 1992 agreement limiting Duracell's use of a bunny in U.S. and Canadian marketing.
It also said many Duracell batteries are made at lower cost in other countries, and that it was should not be liable if distributors send them lawfully to the United States, where a "Duracell Bunny" is incompatible with its branding strategy.
But in a May 18 decision, the judge said such assertions are not a "proper basis" for dismissing the three-month-old lawsuit, and that Energizer's trademark claims could succeed if Duracell had a close relationship with its distributors.
Jackson also dismissed claims against former Duracell parent Procter & Gamble Co (N:PG) and its Gillette unit, finding no sign they sold batteries or were involved in the 1992 agreement.
Gillette bought Duracell in 1996, and P&G bought Gillette in 2005.
A Duracell spokesman had no immediate comment on Tuesday. Energizer spokeswoman Jackie Burwitz said that company does not discuss current litigation.
Berkshire acquired Bethel, Connecticut-based Duracell on Feb. 29 in exchange for about $4.2 billion (£3 billion) of P&G stock. It also assumed about $1.8 billion of cash.
Energizer has offices in Town and Country, Missouri, a St. Louis suburb. It separately announced on Tuesday that it agreed to buy HandStands Holding Corp, which makes car air fresheners, from private equity firm Trivest Partners for $340 million.
The case is Energizer Brands LLC v Procter & Gamble Co et al, U.S. District Court, Eastern District of Missouri, No. 16-00223.