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4 July 2022TrademarksSarah Speight

Arbitrator confirms $175m payout for energy drink brand

A dispute between two major US drinks makers has resulted in one of the biggest damages awards over a trademark ever seen.

Monster Energy has successfully enforced a $175 million award from a rival, in what could be one of the largest payouts over trademark infringement in the US.

The court denied the motion on June 30 to vacate the award, requested by Vital Pharmaceuticals (trading as VPX, makers of the Bang Energy drink) and JHO Intellectual Property Holdings, which owns the 'Bang Energy' trademark.

Arbitrator Bruce Isaacs confirmed the win on April 4, and ordered that the plaintiffs pay damages to Monster and co-defendant Orange Bang for infringing the ‘Bang’ mark.

Isaacs also ordered that the plaintiffs pay 5% royalties of all Bang-related sales on an ongoing basis for as long as VPX and JHO make use of the trademark, as well as legal fees of more than $9 million.

He concluded that VPX breached a 2010 settlement agreement between the parties, and that VPX is liable for trademark infringement owing to the defendants demonstrating a “likelihood of confusion” over 'Bang'.

The parties also locked horns over the publication of the interim and final arbitration awards, which VPX wanted to remain confidential but which Monster and Orange Bang were willing to disclose to third parties, such as for regulatory disclosures.

Fundamental questions

In a redacted document, Isaacs wrote: “Although a complicated, contentious and extremely well-litigated case by highly skilled, courteous and professional attorneys, in many ways the case turns on some fundamental, yet crucial, questions.”

Among those questions were: “Was the 2010 settlement agreement, in essence, a ‘you-stay-in-your-lane and I'll-stay-in-my-lane’ trademark co-existence agreement? and what exactly did the parties intend to mean by the terms ‘creatine-based’ and ‘nutritionally fortified’ in paragraph 7 of the 2010 Settlement Agreement?”

Knobbe Martens' managing partner  Steven Nataupsky, who led the team representing Orange Bang, said: “We are gratified by today’s decision by the Court, and I am particularly proud of the work of our team that ensured VPX was held accountable for its actions.”

Background

The case began in 2009, when Orange Bang sued VPX, alleging that the Bang-branded pre-exercise drinks that it sold at the time would cause consumer confusion.

In the settlement the following year, VPX was allowed to continue using the Bang name to sell creatine-based drinks, and to market other drinks if they were sold via vitamin shops, gyms, health clubs, or the supplements sections of grocery shops.

But VPX was found to have broken this agreement and infringed the trademark by selling drinks claiming to contain ‘super creatine’, in a product called ‘Bang Energy RTD’ launched in 2015.

And in 2020, VPX sued Monster, claiming that it had “weaponised” the settlement.

The long-running case includes a lawsuit in April 2019, when Monster sued VPX, alleging that Bang Energy did not contain the chemical compound creatine despite VPX advertising that it did.

This article was updated on July 5 to incorporate comment from Knobbe Martens.

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More on this story

Trademarks
5 February 2020   Red Bull’s trademark was infringed by energy drink maker Big Horn, the English High Court has ruled, stating that Big Horn’s logo was similar enough to Red Bull’s for a consumer to assume there was a connection between the two companies.
Trademarks
5 April 2019   Monster Energy has accused the creators of the Bang energy drink of false advertising, anti-competitive behaviour and stealing trade secrets.