17 August 2018Trademarks

Red Bull targets grey market drinks in TM suit

Red Bull has accused (pdf) a wholesaler of distributing energy drinks in the US that were intended for sale in South Africa, in violation of the US Food and Drug Administration (FDA) requirements and Red Bull’s trademark rights.

The energy drinks maker filed its trademark complaint at the US District Court for the District of New Jersey on Wednesday, August 15.

Red Bull said its drink is the industry’s “leading product” and, in 2017, it sold 6.3 billion cans across 171 countries.

Certain Red Bull drinks are authorised for sale only in specific regions, according to the complaint, and Red Bull refers to these as the ‘Grey Market Red Bull Energy Drink’.

The energy drinks maker appoints distributors in geographical regions to maintain the quality associated with these products and ensure they meet the relevant relegations, Red Bull explained.

However, Quality Wholesale Distributors promotes and distributes Grey Market Red Bull Energy Drinks intended for sale in South Africa but which are not authorised for sale in the US, Red Bull alleged.

The energy drinks maker said the Grey Market Red Bull Energy Drink is “materially different” to the product authorised for sale in the US.

For example, Red Bull said it does not travel through authorised supply chains; it does not contain a unique code to allow tracking in the event of a recall; and it presents nutritional information in a manner that does not comply with FDA requirements.

The sale of the Grey Market Red Bull Energy Drink is likely to injure Red Bull’s image and reputation “by creating confusion about, and dissatisfaction with, the Red Bull Energy Drink”, the suit claimed.

Red Bull explained it uses its registered trademarks in the US to advertise its products and also in connection with the sponsorship of athletes, sports teams, and events.

The company said the sale of the drinks has already caused injury to its business reputation and relationship with retailers in the US.

Quality’s acts have infringed Red Bull’s exclusive rights in its marks, with bad faith intent to cause confusion, the complaint alleged.

The energy drinks brand also accused Quality of trademark dilution and unfair competition.

In its complaint, Red Bull requested that the court awards triple damages in addition to attorneys’ fees.

The energy drinks maker also asked the court to prevent Quality from selling any more Grey Market Red Bull Energy Drinks, and to award the energy drinks maker the profits Quality gained from selling the drinks.

Earlier this year, Red Bull targeted another wholesaler over the alleged distribution of its Grey Market Red Bull Energy Drink in the US.

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30 April 2018   Austria-based energy drinks company Red Bull has taken on a wholesale distributor in Washington, DC, over the alleged importation of grey market goods.