The makers of Red Bull have taken on companies who are importing and distributing unauthorized gray market Red Bull Energy Drink products across the United States.
The company brought a suit recently in New York alleging that the bootleg Red Bull Energy Drinks that were only authorized to be sold in other countries were also being diverted into the United States. Red Bull claims that the distribution of such products causes or is likely to cause purchaser or consumer confusion, mistake and/or deception to the detriment of Red Bull and consumers. As I discussed last week in “Should ‘Bootleg’ Toys Be Shut Down?,” trademark owners can obtain relief from the courts if the “gray market” goods are “materially different” than those sold by the trademark owner.
Red Bull alleges that the “material differences” between its products and those being distributed by the New York company include: unfamiliar spelling or language on the cans, different local distributor contact information, a lack of required United States federal and state nutritional information, unfamiliar ingredients identified on the cans, lack of deposit information, different units of measurement, lack of batch coding, lack of expiration dates, and lack of rigorous quality control standards.
This is not the first time that Red Bull has taken action against distributors of gray market goods. In 2006, Red Bull sued a Georgia company for its bootleg distribution of Red Bull products. In April of this year, Red Bull obtained a verdict for twenty-one million dollars against the company and also obtained a permanent injunction against the company prohibiting it from further trademark infringement and trademark dilution. Red Bull is likely hoping for a similar resolution in the New York case.
To say that the Red Bull brand is valuable is an understatement. Red Bull is currently the leader in the energy drink category. In 2008, over 1.3 billion units of the Red Bull Energy Drink were sold in the United States. Red Bull promotes the U.S. Red Bull Energy Drinks featuring its valuable trademarks in connection with numerous athletic events, music festivals, sponsorships, and sports competition (including motor sport) in the United States and around the world.
The courts are not the only venue that Red Bull has sought to police its trademarks. In May of this year, Red Bull filed a 337 Complaint with the International Trade Commission (“ITC”) requesting that it commence an investigation of entities that are selling and distributing imported gray market energy drink products in the United States which are materially different than Red Bull’s energy drinks. The ITC agreed to start an investigation into the matter. Accordingly, Red Bull may obtain government assistance in policing and protecting its Red Bull brand and trademark. The ITC may be bombarded with similar complaints because gray market bootlegging occurs across numerous markets for many types of products, not just energy drinks and toys.