Failing to research your new business or product name – to make sure someone else isn’t already using it – can be costly. That’s a lesson PepsiCo seems to be learning the hard way in a New York federal lawsuit filed by Riseandshine Corp. (which does business as Rise Brewing).
Details of the Alleged Trademark Infringement
In March 2021, PepsiCo launched a new product: Mtn Dew Rise Energy. The problem? Rise Brewing already has a trademark for its RISE coffee drink. Seeing a threat to its brand, Rise Brewing filed a trademark infringement suit in June and immediately asked the court to issue a preliminary injunction – that is, a temporary order barring PepsiCo from using the Rise name while the lawsuit is pending.
Preliminary injunctions are important tools in trademark litigation. Lawsuits take time – sometimes years – and if an infringer is allowed to keep using a mark while the litigation moves along, the plaintiff’s brand could continue to suffer enough harm that winning the lawsuit may be a hollow victory.
That is Rise Brewing’s fear in the RISE litigation. In the complaint, Rise Brewing points to what it describes as PepsiCo’s documented history of trademark infringement, stating, “By adopting Rise Brewing’s RISE Mark on its own canned caffeine drinks, PepsiCo’s plan follows a well-established pattern—flooding the market with products bearing confusingly similar marks in order to cause consumers to confuse and improperly associate RISE with PepsiCo rather than Rise Brewing.” Without a preliminary injunction, Rise Brewing argued, PepsiCo’s massive marketing operation could bury Rise Brewing.
Court Sides With Rise Brewing
Because they can have a significant and costly effect on the defendant company, preliminary injunctions should not be casually issued. The exact legal standard varies by jurisdiction, but in general, a party asking for a preliminary injunction has the burden of convincing the court that i) it is likely to win the lawsuit in the end; and ii) it is suffering irreparable harm from the ongoing infringement.
In early November 2021, the judge decided Rise Brewing made that showing and issued the preliminary injunction. The court found that there was already evidence that consumers were confusing PepsiCo’s Rise energy drink with Rise Brewing’s trademarked coffee and that PepsiCo’s use of the mark threatened the viability of Rise Brewing. According to the order, PepsiCo must stop using or displaying the Mtn Dew Rise Energy mark “in connection with the promotion, sale or distribution of single-use, canned energy beverages.” All the investment PepsiCo put into branding, marketing, and manufacturing its new product could be lost.
PepsiCo Fights Back Against the Preliminary Injunction
Because the preliminary injunction hits that bottom line, PepsiCo is pushing back. Days after the judge issued the injunction, PepsiCo filed an appeal claiming that the judge erroneously sided with Rise Brewing. PepsiCo argued that Rise knowingly selected a “weak” brand name and that the judge lacked a sound legal basis for issuing a preliminary injunction. The company claims the terms of the injunction will cause “irreparable harm” and that the injunction as issued remains too broad and may lead to unnecessary waste and other harms. While the appeal is pending, however, PepsiCo is bound by the trial court’s order.
All of which adds up to a cautionary tale for most businesses. Not only does this case show how important it is for companies like Rise Brewing to protect their trademarks, but it also serves as a warning that it is risky to adopt a brand name without thoroughly vetting it to be sure you aren’t inviting an infringement suit. Even if a trademark claim is debatable, litigation over who has which rights is often costly. PepsiCo may be big enough to absorb that cost, but most smaller businesses probably aren’t.
If you need help navigating a trademark infringement matter in Minneapolis or St. Paul, call Rubric Legal LLC today at (612) 465-0074 to speak with an experienced and friendly intellectual property attorney.