Innovation Ventures, LLC v. N2G Distributing, Inc., 2012 WL
1402818 (E.D. Mich.)
Innovation claimed infringement of its 5-Hour Energy trade
dress by defendants’ 6 Hour Energy Shot, Pure Energy, and Nitro2Go Pure Energy,
as well as infringement of its 5-Hour Energy trademark by 6 Hour Energy Shot
and variations of the products that used “up to 7 Hours of Energy,” “7 Hour
Energy,” “7+ Hours of Fast Acting Energy,” and “14 Hour of Energy [sic]” on their
labels. A jury found trademark and trade
dress infringement for many of the products, including a finding of intentional
infringement with respect to certain products, and also found that defendants
falsely described the characteristics of Nitro2Go Instant Energy and Firepower
Extreme products. It found that the
infringement accounted for $1,750,000 of defendants' profits.
Defendants moved for a new trial; the court denied the
motion. Though there was no evidence of
actual confusion, that’s unnecessary. Defendants
argued that the product names were sufficiently different to preclude likely
confusion. The court: “Really! The only difference is the number preceding the
words ‘hour’ and ‘energy.’” Apparently
the court considered the label and the name to be the same for these purposes: “Although
the individual names of the products are different, it was reasonable for the
jury to conclude that the overall impression of Defendants' products
contributed to a likelihood of confusion with Plaintiff's product.”
What about descriptive fair use? Defendants put “TM” after “6 Hour Energy
Shot,” which showed intent to use the term as a mark, and there was testimony
that defendants lacked clinical studies supporting their durational claims, “further
indicated an intention to use the words ‘7 Hour Energy,’ ‘7 Hours of Energy,’
and ‘14 Hour Energy’ as trademarks.” The
court also gave an instruction that defendants couldn’t be liable if the terms
accurately described the products and were used in good faith.
Likewise, the jury was able to consider the similarities and
the differences in the parties’ trade dress (5-Hour Energy has a blue mountain
design; defendants’ lacked any blue and also didn’t have a silhouette of a
human figure running up the mountain, but did have a mountain silhouette and
red-yellow-black like 5-Hour Energy).
The jury wasn’t unreasonable in reaching its verdict.
Further, the similarities in durational terms and appearance
allowed the jury to infer bad intent.
The court also reaffirmed evidentiary rulings that (1)
allowed defendants to introduce evidence about a prior trade dress infringement
case they brought and lost, as evidence that there was no intent to infringe
because defendants’ experience led them to believe they could copy closely
without liability, but excluded the written opinion in that case; and (2)
allowed evidence of a case brought by Hansen Beverage Co. (maker of
Monster/Monster Energy) against defendants’ MONSTER Energy shot, as proof of
motive, intent, or lack of mistake, but likewise excluded the legal filings. Defendants were also given sufficient
opportunity to portray Innovation’s general litigation tactics against other
competitors as anti-competitive.
Innovation Ventures, LLC v. N2G Distributing, Inc., 2012 WL
1402980 (E.D. Mich.)
The court turned to Innovation’s motions for treble damages,
attorneys’ fees, prejudgment interest, permanent injunction, etc. The court found that defendants’ infringement
was sufficiently willful to constitute an exceptional case warranting an
attorneys’ fees award. Innovation argued
that defendants’ use was a “counterfeit,” entitling it to an additional award
of treble damages ($7 million total), or in the alternative that the $1.75
million actual damage award should be increased to reflect defendants’ profits
of over $4.4 million. But Innovation
didn’t present any trial evidence of lost profits, and the undisputed evidence
was that profits were growing greatly during the period of infringement. Thus, the requested awards would be a penalty
and the jury’s award was appropriate.
This also disposed of the request for prejudcment interest: Innovation
didn’t allege any lost opportunity cost or lost revenues; 5-Hour Energy is
still the leading brand.
A permanent injunction was, however, appropriate. Irreparable harm was presumed from
infringement, and defendant N2G was apparently going to file for bankruptcy,
leaving its president to sell the same energy shots through a different
company. However, Innovation didn’t name
the president as a defendant or seek to hold him personally liable. Thus, the court couldn’t enjoin him.
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