PepsiCo faces preliminary injunction in trademark suit
Cold-brew company Rise Brewing secured a preliminary injunction against food and beverage giant PepsiCo in the companies’ ongoing trademark dispute on Wednesday, November 3.
The dispute between the parties started in June 2021, when Rise filed a lawsuit at the US District Court for the Northern District of Illinois accusing PepsiCo of being a “repeat trademark offender”.
Rise sells ready-to-drink canned coffee and tea-based beverages. The trademark ‘Rise Brewing Co’ is featured on each can, with the word ‘Rise’ appearing in large red capital letters. The mark (trademark registration number 5,333,635) was registered in 2017.
PepsiCo launched its Mtn Dew Rise range of caffeinated energy drinks earlier this year. The range comprises caffeinated canned beverages sold under the mark ‘Mtn Dew Rise Energy’, with the word ‘Rise’ appearing in large, brightly-coloured capital letters.
Rise claimed that it is a “classic case of reverse confusion,” whereby a larger brand adopts the mark of a smaller competitor to confuse customers into thinking the two are connected.
“PepsiCo’s actions in unlawfully adopting Rise Brewing’s mark are the latest chapter of its storied history of taking instead of innovating, a story that is well documented in prior litigations where PepsiCo has repeatedly been accused of and found liable for infringing on others’ trademark rights,” said the complaint.
Now, PepsiCo has been ordered not to use or display the ‘Mtn Dew Rise Energy’ trademark on its canned beverages in the US.
District Judge Lorna Schofield said that Rise had offered “credible evidence on incidents of actual confusion, the likelihood of confusion, and irreparable harm” following an evidentiary hearing in October.
“The two marks are confusingly similar in appearance,” she said. “On both of the parties’ respective products, “RISE” is printed on a beverage can, in large typeface, in all-capital letters, in a bright colour against a light background and is the dominant feature occupying the top third of the can.”
The judge was not persuaded by PepsiCo’s argument that the marks are not confusingly similar because the cans themselves are different sizes and the logos are in different fonts.
PepsiCo had also argued that it would incur substantial costs in rebranding and lost sales if a preliminary injunction were to be granted, but Schofield said she had to balance these costs against the harm that would be done to Rise if it were not granted.
Rise had showed that the risk of reverse confusion is probable, according to Schofield, meaning that Rise is at risk of being overwhelmed by PepsiCo—a larger and better-known company—without the injunction.
Schofield found that Rise “submitted credible evidence that it faces an existential threat” from PepsiCo’s infringement.
The judge added that she was unpersuaded that the harm this may cause PepsiCo was “not of its own making”, because Rise had sent a cease-and-desist letter two months before the launch of the Mtn Dew Rise range.
Under the terms of the preliminary injunction, PepsiCo cannot feature ‘Mtn Dew Rise’ or any mark which is confusingly similar to it in connection with the promotion, sale, or distribution of single use, canned energy beverages, nor can it use the mark in any advertising.
PepsiCo is required to comply with the order within seven days and, within eight days, it must file a report setting out how it has done so. The preliminary injunction will remain in place until the conclusion of the proceedings, or until a motion to dissolve it is granted.
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