Last week more allegations of “trademark bullying” appeared in the headlines. This time, Victory Energize, an energy drink company based in Missoula, Montana, is calling out Monster Energy for sending a cease and desist letter to Victory. Monster’s demand letter is said to charge Victory with infringement of Monster’s distinctive trade dress. So, what say you?
Victory’s preemptive strike and declaratory judgment complaint seeks to gain a hometown advantage, asking a federal court in Montana to declare that Victory Energize’s trade dress does not constitute unfair competition or violate any federal, state, or common law. It also asks for an award of costs and attorneys fees, labeling Monster a “trademark bully” for alleging likelihood of confusion claims that Victory asserts have “no legal or factual basis,” while dredging up some unflattering history pinning Monster as the poster-child for so-called prior “trademark bullying” conduct:
“Because of what is perceived as an overly aggressive stance on protecting its trademark rights beyond their actual scope of protection, [Monster], and its predecessor, Hansen Beverage Company, have been accused of being a “trademark bully” in the media and in law review articles. See, e.g., Leah Chan Grinvald, Shaming Trademark Bullies, 2011 Wis. L. Rev. 625 (using Monster Energy as the example of a trademark bully in the very first paragraph); Sara M. Andrzejewski, Leave Little Guys Alone!: Protecting Small Businesses from Overly Litigious Corporations and Trademark Infringement Suits, 19 J. Intell. Prop. L. 117, Fall 2011.”
“In part, [Monster’s] conduct (via its predecessor-in-interest, Hansen Beverage Company, which was perceived as a trademark bully led to Senator Patrick Leahy seeking Congressional funding to study trademark bullying. See, Ex. C: Rob Petershack, Trademark Bullies to be Studied, WTN News, Oct. 10, 2010; see also. Trademark Technical and Conforming Amendment Act of 2012; S. 2968, 111 Cong. (2d sess. 2010) (Pub. L. No. 111-146).”
What matters in this case, however, will be the allegations relevant to the facts of this dispute, not others’ opinions about prior Monster conduct unrelated to Victory Energize. Given the likely fame of the iconic Monster trade dress (although Monster gets an F for not seeking any federally registered trade dress protection, only one of its registrations even claims rights in the color green), the directly competitive nature of the products, and the close similarity of at least the visual impressions of the above logos, I’m having a hard time getting all jacked up about a “trademark bullying” claim here.
Amazon product reviews seem to suggest that consumers are able to differentiate the different energy drink brands, but that doesn’t refute the possibility that survey evidence could establish that consumers assume a connection with Monster and Victory — perhaps Victory is Monster’s lower cost version? Will discovery end up showing that Victory mimicked the elements of Monster’s trade dress to gain commercial traction and the media attention it has obtained through the filing of this lawsuit? Seriously, should Victory be surprised that Monster actually came knocking?
After all, the visual appearance of these competing logos is pretty similar. Are there differences? Yes, but the similarities will be weighed more heavily, and the price point of these products and their condition of purchase, probably puts them in the category of impulse purchases (which are more likely to result in confusion).
And, what about a dilution claim, where no likelihood of confusion is required for Monster to prevail? Monster must have a heavy dose of brand equity bottled up in the visual impression of its iconic green/white/black aluminum cans. Victory’s declaratory judgment complaint is silent on the question of dilution of a famous mark. Perhaps because Monster didn’t discuss in its opening cease and desist letter, but I suspect that if Monster answers it will not only counterclaim for trade dress infringement, but also take the position that its trade dress comprising a black background, with a green stylized single letter, and white stylized brand name above the word ENERGY in the color green is famous and diluted by the Victory trade dress for competing goods.
Depending on how Monster crafted its cease and desist letter, it might also decide to bring its own action in California and ask the Montana action to be dismissed as anticipatory — basically start a fight over where the fight will be decided. Query whether doing so, however, will play into Victory’s argument that Monster is Goliath, picking on David, simply because it doesn’t like cheaper competition (Victory’s energy drinks are positioned as low cost, only 99 cents per can). Time will tell, so stay tuned.
The complaint is pretty bare bones, but it appears to place too much emphasis on the fact that the USPTO issued this stylized trademark registration:
The problem for Victory, of course, is that the mark it registered claims no color as part of the mark, so the color similarities are invisible to the USPTO. So, this may be perhaps yet one more example of why registration decisions from the USPTO should not control or bind federal judges in infringement or dilution litigation.
Although it is clear that Monster knew about this filing and did nothing to oppose it, can you blame Monster, given the absence of a color claim?
What Monster might be blamed for is waiting too long to object, as Monster clearly knew about Victory’s application more than two years ago, and Victory claims to have been in the marketplace since at least as early as January 1, 2012, more than two years ago. What I’d want to know is when Monster first became aware of the Victory trade dress shown above in green/white/black aluminum cans (USPTO specimen was filed in November of 2012, so was Monster watching the progress of this application?).
Marketing types, would you expect the Victory trade dress to pass scrutiny of the legal team? Are you surprised that Monster Energy cares? Does that make it a trademark bully?