1 February 2010Trademarks

When brand is everything: protecting IP at Red Bull

Owing to its global market penetration and reach, the Red Bull brand is protected in 203 countries— nearly the entire world. And not just the name ‘Red Bull,’ but also the different elements of the can and brand design.

Red Bull rigorously takes action against infringing rival products based on its ‘Red Bull’, ‘Red’, ‘Bull’ and colour enforcement strategies, including its slogans. The company always seeks to invoke the wellknown trademark argument as any decision stating that the Red Bull Brand is well-known actually strengthens the brand and expands the scope of protection for future cases.

As a result, the company has a reputation for entering into cutting-edge cases in order to push the limits of its protection. At the heart of this strategy is the idea of legal sustainability. “This safeguards the brand value, because a brand that is not well protected cannot build up any value and/or gets quickly diluted,” Casals explains.

“As the brand, especially in the consumer goods industry, is an important—if not the most important—asset, any loss of brand value affects the company’s value and therefore its economic sustainability directly.”

He goes on to explain that this directly influences the economic sustainability of any brand. Diluted brands lose their uniqueness and therefore their attractiveness to the consumer. “In the worst case scenario, [consumers] might be confused and buy a different product,” he says.

If brands of other energy drinks such as Blue Bull, Yellow Bull or Black Bull existed, he points out, the consumer might think these were an extension of the Red Bull brand and buy them instead. “Thus, a legally sustainable brand is not just a ‘nice to have’ but a ‘must’,” he says.

"A legally sustainable brand is not just a 'nice to have', but a 'must'."

The company has faced greater challenges in some countries than others. Casals says that companies in Eastern European countries have been big offenders in his assigned jurisdictions to date. He points out that most Eastern European countries, for historic reasons, do not have a brand protection and enforcement tradition comparable with Western European countries, which have managed a free market economy for decades.

Although this has changed since many have joined the European Union, it is still not fully reflected in the thinking of competitors and consumers. “But this is just a question of time. Some of our recent successes in brand enforcement in the region show that we are on the right track,” he says.

There are many examples of instances where Red Bull has taken action in Europe against copycats:In Belgium, a competitor copied not only the blue and silver trapezoid but also used the word ‘Red’ in the product name together with ‘Bell’s’. That combination ‘Red Bell’s’, which is similarly confusing to ‘Red Bull’, is simply not acceptable. Red Bull won that case in the first instance; the judgment is final and binding.

In Austria, a company launched a product called ‘Red Dragon’. Because of the prefix of the word ‘Red’ before the name of an aggressive animal as well as the bright/dark colour scheme of the can, Red Bull sued. It pursued preliminary injunction proceedings through three instances to the Austrian Supreme Court.

The court granted Red Bull a positive decision based on the well-known status of its brand. No main claim was necessary as the company achieved a worldwide settlement with the counterparty, including damages of €50,000.

Another interesting case concerned the Cobra can. Red Bull pursued this case because of the blue/silver colour scheme on the can as well as the double horse device in front of a sun. The Commercial Court of Vienna granted Red Bull a pan-European preliminary injunction in the first instance. No main claim was necessary as Red Bull achieved a settlement including €11,000 damages.

In Poland, Red Bull took action against the brand ‘American Bull’ because of the use of the word ‘Bull’ and the bull device by the competitor. It won the preliminary proceedings in the second instance and the main claim in the first instance; additionally, Red Bull secured publication of the judgment in a newspaper; the judgment is final and binding.

Red Bull also acted against the Polish Heja can. Red Bull won both the preliminary injunction and the main claim in the first instance. The judgments were granted on the sole basis of Red Bull’s abstract blue/silver colour Community Trademark (CTM) and the court found the other party’s CTM could to be confusingly similar to Red Bull’s.

Additionally, the court based the judgments on the well-known status of the Red Bull CTM. This was Red Bull’s first case in Eastern Europe based on its abstract colour CTM. The judgments are final and binding.

In Hungary, Red Bull initiated an infringement claim against the RB Energy Chocolate/Ice Cream product. Red Bull won the main claim in the first instance against this class of 30 products, based on the well-known status of the Red Bull brand and unfair competition law. The judgment is final and binding.

Casals says that these examples illustrate what can be achieved with a clear and stringent trademark infringement strategy. “It is important to let competitors know that it is not worth even trying to come near to Red Bull’s can get-up or copy any of its brand elements,” he says.

“This is especially true with regard to the colour combinations. It should be taken into account that consumers make their purchase decisions within seconds and base these on the first sight/impression they get. The colour scheme of the product plays a very important role in this process.

"Thus, the above decisions help us keep competitors at a distance and support not only the brand value but also sales directly. Additionally, every decision that pushes the limit also makes the brand stronger from a legal point of view and expands its scope of protection for future cases.”

"It is important to let competitors know that it is not even worth trying to come near to Red Bull's can get-up or copy any of its brand elements."

Casals says that when the company litigates, it has about a 96 percent success rate globally. He regards Red Bull’s biggest recent case as being against the copycat brand Toro XL. Red Bull won in the first instance but the other party has appealed. In the first instance the court in the Netherlands ruled in favour of Red Bull with regard to the mark Toro XL and bull device, based on the likelihood of confusion.

“This shows very well the extensive scope of protection the Red Bull brand has gained,” he says.Casals adds that one of the challenges of working for a one-brand company, as opposed to having a whole portfolio of consumer product brands, is that any mistake—even a minor one—can have a much greater effect as it concerns the whole business and its business strategy.

“The challenge is to avoid any mistakes as they can have a much more severe effect on the company and its business, which depend just on this single brand. This applies particularly for the brand’s legal side,” he explains.

In Europe alone, in 2009, Red Bull dealt with more than 500 enforcement cases, including the counterfeiting cases concerning goods of the secondary market (merchandising products of Red Bull’s sport and event activities). The company has also experienced a greater volume of cases since the onset of the recession: mainly counterfeiting cases.

“We believe this is partly because of the difficult economic climate. Some companies try to save marketing and brand development costs by just copying Red Bull as the market leader,” he says. “Certainly, another reason for the increase over the years is that there are more countries wherethe Red Bull Energy Drink is sold [currently 156]. Thus, more imitators appear.”

With such an aggressive and comprehensive legal strategy though, brand protection is not always cheap. He notes that keeping a firm grasp on costs is very important to the company—one reason for its strong in-house legal team.

“To be cost-effective is always a constant challenge, especially in times of budget cuts,” Casals says. “But we believe that we act in a very cost-effective way. The IP department does as much work as possible in-house before anything is given to external counsel, and the structure and workflow of the IP department is constantly under examination.”

“Any legal action is also very well prepared and investigated before it is initiated so that risks and potential mistakes are minimised. The prosecution and litigation strategy is also under constant review and immediately adapted to the respective situation, if necessary.”

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Trademarks
30 November 2017   A trademark consisting of the mere juxtaposition of two colours, without a systematic arrangement, is not sufficiently precise and uniform to be valid, the EU General Court has ruled in a case concerning the Red Bull blue/silver mark.