In March of 2021, PepsiCo Inc. launched a new line of energy drinks under its Mountain Dew brand, using the name Mtn Dew Rise Energy. In June, a Connecticut-based coffee company, Rise Brewing, sued PepsiCo for trademark infringement.
On November 3rd, a judge for the US District Court for the Southern District of New York granted a preliminary injunction ordering that PepsiCo cannot use the MTN DEW RISE ENERGY name while the lawsuit between the parties is proceeding. In response, PepsiCo filed an emergency motion to appeal the injunction on November 7th, 2021, but announced shortly after that it would be dropping the RISE name from its product and simply call it MTN DEW ENERGY.
Background
The plaintiff, Rise Brewing, sells ready-to-drink, canned coffee and tea-based beverages under the brand RISE and alleged that PespiCo’s canned caffeinated drink called MTN DEW RISE ENERGY infringed on its trademarks.
According to the November 3rd opinion, Rise Brewing, which was founded in 2014, had meetings with PepsiCo to discuss a potential partnership opportunity between 2017 and 2019. None of those meetings led to a business relationship, and in January of 2021, attorneys for Rise Brewing sent out a cease and desist to PepsiCo after learning that PepsiCo was on the verge of launching a new caffeinated canned drink under the MTN DEW RISE ENERGY name. No agreement was reached between the parties and PepsiCo launched its product in March of 2021.
Preliminary Injunction
In an effort to stop PepsiCo from continuing to manufacture and sell its RISE products, Rise Brewing filed a preliminary injunction in June 2021.
A preliminary injunction may be granted if a party can show:
- Irreparable harm;
- Either a likelihood of success on the merits or both serious questions on the merits and a balance of hardships decidedly favoring the moving party; and
- That a preliminary injunction is in the public interest.
In this case, the US District Court for the Southern District of New York ruled that the Plaintiff was entitled to a preliminary injunction because it had shown irreparable harm, a likelihood of success on the merits of the trademark infringement claim and that the public interest weighed in favor of granting the injunction, to which PepsiCo filed its appeal with the Second Circuit Court of Appeals.
Likelihood of Success on the Merits
In order to show the likelihood of success of a federal trademark infringement claim, a plaintiff must show that it has a valid trademark which is entitled to protection, and that the defendant’s actions are likely to cause confusion with that mark.
Here, there was no question that the Plaintiff had a valid trademark which is entitled to protection, as the main mark in question has been registered (the “Mark”) since November of 2017.
To establish that the PepsiCo’s actions were likely to cause confusion with their mark, Rise Brewing relied on a “reverse confusion theory.” This occurs when a junior user chooses to use a trademark that “is likely to cause consumers to believe, erroneously, that the goods marketed by the senior user are produced by the junior user.”
A number of factors go into a likelihood of confusion analysis, but the District Court agreed that the Plaintiff was likely to successfully show likelihood of confusion based on “the similarity between the two marks, the proximity of the Defendant’s area of commerce to Plaintiff’s and the credible testimony provided by the Plaintiff on instances of actual confusion.” The District Court further stated that the Plaintiff was at risk of “being overwhelmed by a subsequent user (PepsiCo), where the subsequent user is larger and better known.”
PepsiCo Appealed
PepsiCo filed an appeal arguing that the District Court judge erred in ruling in favor of Rise Brewing because RISE was a weak mark, and the court only focused on the term RISE and not the entirety of each mark. Here, the full marks in question were RISE BREWING CO. and MTN DEW RISE ENERGY.
PepsiCo argued that since Rise Brewing’s mark is weak, it was only entitled to a narrow scope of protection. To offer support of this and refute Rise Brewing’s reverse confusion claim, PepsiCo provided survey results where the results showed not a single consumer of the hundreds that were surveyed thought Rise Brewing’s products were associated with those of PepsiCo.
Rise Brewing responded to this motion providing further support to the reasoning behind the injunction.
PepsiCo Rebrands
All of this led to PepsiCo announcing that it would drop RISE from the name and sell it under MTN DEW ENERGY. A new trademark application for MTN DEW ENERGY was also filed on November 8th, 2021.
