By Lucy Rana and Priya Adlakha
The United States District Court of Southern District of New York recently adjudicated upon a trademark infringement action filed by Rise and Shine Corporation d/b/a “Rise Brewing” (the Plaintiff) against PepsiCo, Inc. (the Defendant), for the mark “RISE” in respect of canned caffeine drinks, and laid down the key principles for determining likelihood of confusion, particularly discussing the concept of ‘likelihood of reverse confusion’ and the eight factor balancing test.
Case of the Plaintiff:
The Plaintiff has the marks for “RISE” registered with the USPTO for Coffee and related products. In early 2021, PepsiCo had launched its canned caffeinated drink “MTN DEW RISE ENERGY” which Rise Brewing / the Plaintiff alleges to be an infringement of its mark “RISE”.
It was the case of the Plaintiff that its ready-to-drink canned caffeinated drink Nitro Cold Brew was founded in 2014, and sold under the name “RISE”, wherein “RISE BREWING CO.” is displayed upon each can, with RISE being shown in prominent large, red capital letters against a light background on the top third of the can, with the words “Brewing Co.” appearing in a comparatively smaller font, below “RISE”. The mark was registered with the USPTO in November 2017 under registration no. 5333635. The Plaintiff also has several other registered marks wherein RISE is a part thereof.
Mr. Grant Gyesky, the Plaintiff’s CEO had three meetings with the Defendant’s innovation team to discuss a potential partnership opportunity between the two brands during 2017 – 2019, but those meetings did not reap the desire results and they never resulted into a business relationship.
In January 2021, the Plaintiff got to know about “MTN DEW RISE ENERGY”, a fruit flavoured caffeinated canned beverage that the Defendant intended to launch. Pursuant to which the Plaintiff’s counsel sent a cease and desist notice, asking the Defendant to “abandon any intent” to use the mark “MTN DEW RISE ENERGY” due to a potential confusion that may arise with the Plaintiff’s products.
The parties could not reach to an agreement and the Defendant’s product was launched in March, 2021. The Defendant’s product bears the mark MTN DEW RISE ENERGY which appears prominently in the top portion of the can. The word ‘RISE’ on the Defendant’s product is in all capital and brightly coloured letters against a light background on the top third of the can, and the words ‘MTN DEW’ are in a significantly smaller font immediately above RISE.
|Plaintiff’s Products||Defendant’s Products|
1. Rise Brewing is a small but rapidly growing coffee company that, markets and sells throughout the United States, canned nitro cold brew coffee drinks.
2. Rise Brewing’s RISE-branded products have gained a strong following among caffeine drinkers, and are particularly successful with millennial and Gen-Z consumers, as well as others who prefer the mellow taste of nitro cold brewed coffees over the standard coffee.
3. Pepsico had launched its own “RISE” branded line of caffeinated drinks to specifically target morning coffee drinkers, and marketed it to be sold alongside and compete with Rise Brewing Co.’s “RISE” branded caffeine drinks.
4. Rise Brewing contacted PepsiCo in an effort to resolve this dispute, and PepsiCo was dismissive of Rise Brewing’s concerns, refusing to abandon any of its plans with respect to its infringing mark.
5. While Rise Brewing does not welcome this dispute, it cannot allow PepsiCo to destroy Rise Brewing’s brand and the associated consumer goodwill through wilful and reckless infringement of Rise Brewing’s RISE marks.
Shelves at North California Walmart displaying Conflicting products together
1. The Plaintiff has not met its heavy burden of justifying an injunction. It has shown no basis to enjoin PepsiCo, Inc. from marketing innovative, fruit-flavoured energy drinks that have been on sale nationwide for nearly five months without any consumer confusion. The Plaintiff’s motion should be denied.
2. That there is no likelihood of confusion between PepsiCo’s MTN DEW RISE ENERGY drinks and Rise Brewing’s coffee drinks. Surveys conducted by two independent experts showed no likelihood of consumer confusion.
3. That there is a significant difference between the products, PepsiCo’s MTN DEW RISE ENERGY product is a 16-ounce fruit-flavoured energy drink with distinguishable packaging sold under the “MTN DEW” brand that is marketed against other energy drinks, whereas Rise Brewing’s 7-ounce cold brew coffees are sold under the mark “RISE BREWING CO.”, specifically marketed against other coffees. Mere appearance of the commonly used and highly suggestive word “RISE” does not qualify for a strong mark.
4. That Rise Brewing’s claim for a relief on the word “RISE” should not succeed, since they had told the U.S. Patent and Trademark Office (“USPTO”) that “RISE” is “extremely weak and diluted” with “little source identifying significance” because of widespread third party registrations and use of the word.
5. That Rise Brewing had no evidence of irreparable harm and its delay in seeking a preliminary injunction, waiting over five months after contacting PepsiCo on January 11, 2021 shows Rise Brewing did not believe that there was any imminent risk of irreparable harm.
The Plaintiff sought a preliminary order restricting the Defendant from continuing to manufacture or sell the products bearing the mark “RISE”. The Hon’ble Court noted that a party seeking a preliminary injunction must show an irreparable harm, either a likelihood of success on the merits or both serious questions on the merits as well as a balance of hardships decidedly favouring the moving party and the fact that a preliminary injunction would be in the public interest.
The Hon’ble Court further discussed the following concepts of law before deciding upon the merits of the case:
Likelihood of Success on the Merits:
The Learned Judge noted that the Plaintiff had shown a likelihood of success on the two elements of a federal copyright claim:
- That the Plaintiff has a valid mark that is entitled to protection.;
- That the defendant’s actions are likely to cause confusion with the mark.
Protectability of the Marks:
The Hon’ble Court observed that the mark was registered in November 2017 (bearing Reg. No. 5333635) and is a presumptively valid subject to any legal or equitable defense. The Defendant has not contested the validity of Plaintiff’s various registered RISE marks and thus, the Plaintiff is likely to prevail on the first element of its federal trademark claim, establishing the validity and protect ability of its mark “RISE”.
Likelihood of Confusion:
As for the ingredients for the Likelihood of Confusion, the Hon’ble Court reiterated the principle, that to prevail on the second element of a federal trademark infringement claim, a plaintiff “must demonstrate that . . . the defendant’s ‘actions are likely to cause confusion with that mark.” But “mere possibility” of confusion is not sufficient; rather, a plaintiff must prove “a probability of confusion … which is likely to affect numerous ordinary prudent purchasers.”
Elaborating upon the concept of “reverse confusion” theory under which the plaintiff brought its action, the Court relied upon LVL XIII Brands, Inc. vs. Louis Vuitton Malletier S.A., and emphasizing that the reverse confusion theory protects the mark of a senior user from being overwhelmed by a junior user, typically where the junior user is better known and a larger entity, leading the consumers to conclude that the senior user is the infringer.
To determine the likelihood of reverse confusion, the Hon’ble Court relied upon the eight-factor balancing test, which lays down the following factors for consideration:
- The strength of the trademark;
- The degree of similarity between the plaintiff’s mark and the defendant’s use of mark;
- The proximity and competitiveness of the products;
- The likelihood that the plaintiff could “bridge the gap” by developing a product in the defendant’s market;
- Evidence of actual consumer confusion;
- Evidence that the defendant adopted the imitative mark in bad faith;
- The respective quality of the products; and
- The sophistication of the relevant population of consumers.
Good faith and quality of defendant’s products, are pertinent to issues such as harm to the plaintiff’s reputation and the choice of remedies. Whereas, the rest of the factors directly relate to the concept of likelihood of confusion.
Factor 1 – Strength of Mark:
The Court relied upon Guthrie Healthcare Sys. v. ContextMedia, Inc., wherein it was held that “The first pertinence of the strength of a mark has to do with likelihood of public confusion. The more unusual and distinctive a particular mark, the more likely the consumer will assume, upon seeing it essentially replicated, that the newly observed user is the same as, or affiliated with, the originally observed user.”
Elaborating upon the facts of the present case, the Court took note of the fact that the Plaintiff’s mark is suggestive since the word “RISE” is “not directly descriptive,” but evokes images of morning, which suggests a quality or qualities of the product through the use of imagination, thought and perception.
As for the Defendant’s argument as to the Plaintiff’s acknowledgement of the generic nature of the “RISE” mark before the USPTO in 2015, it was noted that as a general principle, courts do not bind parties to their statements made or positions taken in ex parte application proceedings in front of the PTO.
Factor 2 – Similarity of the Marks:
While dealing with the second factor pertaining to the similarity of the marks, the Hon’ble Court took note of the fact that it was pertinent to look at how the marks are presented in the marketplace, and that while assessing similarity, Courts should look to the overall impression created by the marks/logos and the context in which they are found and consider the totality of factors that could cause confusion among prospective purchasers.
Particularly in the present case, the Hon’ble Court stated that the two marks are confusingly similar in appearance, since both highlight the single word “RISE”. Taking note of the fact that on both of the parties’ respective products, “RISE” was printed on a beverage can, in large typeface, in all-capital letters, in a bright color against a light background and was a dominant feature on the can, as well as the fact that the parties’ respective house marks i.e., “Brewing Co.” and “Mtn. Dew” — appear in much smaller lettering, the Court stated that in a reverse confusion context, the fact that a junior user is using a house mark does not resolve the alleged confusion because the “essence” of a reverse confusion claim “is that the junior user overpowers the senior user’s mark.”
Factor 3 – Proximity of the Products:
Dealing with the third factor of the likelihood of reverse confusion, the Hon’ble Court noted that
the proximity factor applies to both the subject matter of the commerce in which the two parties engage as well as the geographic areas in which they operate, The Hon’ble Court noted that despite the fact that both the parties have offered conflicting evidence for close physical proximity in grocery stores, the premise of the proximity factor is particularly that “the more likely it appears that an enterprise in one party’s area of commerce might also engage in the other party’s area of commerce, the likelihood of affiliation arising out of similarity of marks by the public would be greater.
Noting that the proximity factor could apply to both the subject matter of the commerce in which the two parties engage as well as the geographic areas in which they operate, and the fact that the Plaintiff sells coffee and tea drinks, whereas the Defendant sells fruit-flavored energy drinks, the proximity factor tips decidedly in favor of Plaintiff, since the products at issue are both canned, caffeinated drinks which are available at the same trade channels, namely grocery stores and convenience stores, being sold nationally.
The focus was not on the physical proximity on the grocery shelf, but on whether the products are in similar or dissimilar areas of commerce. Here the two canned and caffeinated drinks indisputably are.
Factor 4 – Bridging the Gap:
As for the aspect of bridging the gap, the Hon’ble Court observed that the same is inapplicable since the competitive proximity of the parties’ products had already been established, and does not call for bridging the gap.
Factor 5 – Actual Confusion:
The Hon’ble Court noted that instances of actual confusion resulting from a junior user’s use of a mark to a senior user’s can be powerful evidence which supports a likelihood of confusion, particularly relying upon the credible testimonies presented by the plaintiff which outlined multiple instances of actual confusion since the launch of the Defendant’s product.
Factor 6 – Bad Faith:
Bad Faith could not have been proved at this stage, thus this factor favoured neither party.
Factor 7 – Quality of the Products:
Quality of the Products are likely to affect the magnitude of harm caused to the senior user’s reputation, particularly in the present case it was stated that since the Plaintiff’s products are marketed as being made from organic ingredients, whereas the Defendant’s products are not so, they could negatively impact the reputation of the Plaintiff as a provider of health or organic products, and thus this factor would lie in the favour of the Plaintiff.
Factor 8 – Buyers’ Sophistication:
The Hon’ble Court found the factor pertaining to buyers’ sophistication is to be inconclusive since a purchaser of organic caffeinated drinks might be more discriminating; however, the products are priced at a low price point.
Overall Likelihood of Confusion:
While determining the overall likelihood of confusion, the Hon’ble Court, relying upon the eight factor balancing test, noted that the balance tilted in the favour of the plaintiff, showing a sufficient likelihood of success on the merits to warrant a preliminary injunction.
The Plaintiff has established that there is a likelihood success on the merits of its claim, and is entitled to a presumption of irreparable harm, which has not been refuted by the Defendant.
The Defendant has argued upon the fact that there has been a five month delay in bringing of the motion to rebut the presumption of irreparable harm; however, this argument was held to be unpersuasive by the Court since a cease and desist letter was sent to the Defendant in January, 2021 and there was an ongoing communication between the parties between January and April for a “licensing deal” which could have avoided the present litigation. Therefore, considering the said facts, it cannot be inferred that the Plaintiff had caused any delay.
Balance of Hardship:
The Defendant submitted that it would incur substantial rebranding costs, lost sales and harm to its goodwill if a preliminary injunction is granted, however, the plaintiff has submitted credible evidence to show that it faces an existential threat from the Defendant’s infringement. One aspect of it being the testimony that the Defendant’s product had dissuaded at least one investor from investing in the plaintiff’s brand due to the confusion between the products, and other testimonies make it clear that the Plaintiff’s identity in the market shall suffer if the Defendant is allowed to saturate the market.
Plaintiff has met its burden of demonstrating that the grant of a preliminary injunction would not be in contravention to public interest. The Hon’ble Court held that the Plaintiff was entitled to a preliminary injunction because the Plaintiff had demonstrated irreparable harm, a likelihood of success on the merits of the federal copyright claim and that the public interest weighs in favour of granting the injunction.
The Hon’ble Court discussed and analysed the concept of likelihood of reverse confusion, its fulfilment criteria and the eight factor balancing test for assessment, relying upon a plethora of judicial precedents. Particularly elaborating upon the factors to be considered while determining proximity, which is not solely based upon physical proximity but also encompasses the concept of confusion that may be caused due to affiliation between the products of the senior user and junior user. It is also noteworthy to point out the ongoing talks between the two parties for a proposed business relationship, could also potentially be considered as a factor for the determination of adoption of mark in bad faith.
 Tiffany & Co. v. Costco Wholesale Corp., 971 F.3d 74, 84 (2d Cir. 2020)
 15 U.S.C. § 1115(a)
 Tiffany, 971 F.3d at 84 (quoting Sports Auth., Inc., 89 F.3d at 960)
 Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F.3d 373, 383 (2d Cir. 2005)
 209 F. Supp. 3d 612, 666 (S.D.N.Y. 2016)
 Polaroid Corp. v. Polarad Elecs. Corp. 287 F.2d 492 (2d Cir. 1961) (“Polaroid”)
 826 F.3d 27, 41 (2d Cir. 2016)
 Alpha Media Grp., Inc. v. Corad Healthcare, Inc., No. 13 Civ. 5438, 2013 WL 5912227, (S.D.N.Y. Nov. 4, 2013)
 Sports Auth., Inc., 89 F.3d at 962.
 Virgin Enters. Ltd., 335 F.3d at 149
 Gameologist Grp., LLC v. Sci. Games Int’l, Inc., 838 F. Supp. 2d 141, 160 n.8 (S.D.N.Y. 2011)
 15 U.S.C. § 1116(a)
Shilpi Sinha, Associate at S.S. Rana & Co. has assisted in the research of this article.