RiseandShine Corporation v. PepsiCo, Inc.
41 F.4th 112 (2022)
Rule of Law:
A preliminary injunction in a trademark infringement case requires a proper assessment of the Polaroid factors, where an inherently weak suggestive mark with extensive third-party usage commands a narrow scope of protection, and overall visual differences between products can outweigh the shared use of a common, non-distinctive term in a crowded market.
Facts:
- RiseandShine Corporation, doing business as Rise Brewing, was founded in 2014 and launched its first cans of nitro-brewed coffee under the "RISE" mark in 2016, selling them nationwide.
- RiseandShine Corporation uses a design mark on its 7-ounce cans featuring the word "RISE" in large, red, sans-serif font on a horizontal line, with thin yellow lines radiating from it, and "Brewing Co." in smaller font below.
- RiseandShine Corporation initially attempted to register the mark "RISE COFFEE CO." but was rejected by the United States Patent and Trademark Office (PTO) due to likelihood of confusion with prior registrations, leading them to register "RISE BREWING CO." and its logo.
- Defendant PepsiCo, Inc. planned to launch a fruit-flavored canned energy drink under the mark "MTN DEW RISE ENERGY."
- In January 2021, RiseandShine Corporation sent a demand letter to PepsiCo, Inc., asking it to abandon its intent to use any confusingly similar "RISE" mark for canned or caffeinated beverages.
- PepsiCo, Inc. rejected RiseandShine Corporation's claims and, in March 2021, launched its 16-ounce "MTN DEW RISE ENERGY" product in various sweet, fruity flavors, selling it in over 170,000 retailers.
- PepsiCo, Inc.'s packaging features bright colors, the word "RISE" in a large, stylized jagged font in an arc, with "MTN DEW" above it and a stylized lion logo below "RISE."
Procedural Posture:
- RiseandShine Corporation (Plaintiff) sued PepsiCo, Inc. (Defendant) in the U.S. District Court for the Northern District of Illinois for trademark infringement under the Lanham Act and New York law.
- On motion of PepsiCo, Inc., the suit was transferred to the U.S. District Court for the Southern District of New York.
- RiseandShine Corporation moved for a preliminary injunction in the U.S. District Court for the Southern District of New York.
- The U.S. District Court for the Southern District of New York (Schofield, J.) granted RiseandShine Corporation's motion for a preliminary injunction, enjoining PepsiCo, Inc. from using its challenged mark pending trial.
- PepsiCo, Inc. (Defendant-Appellant) appealed the preliminary injunction to the United States Court of Appeals for the Second Circuit.
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Issue:
Did the district court abuse its discretion by granting a preliminary injunction based on a likelihood of reverse confusion, by incorrectly assessing the strength of Plaintiff RiseandShine Corporation's suggestive mark and the similarity between the parties' products?
Opinions:
Majority - Leval, Circuit Judge
Yes, the district court abused its discretion by incorrectly assessing the strength of RiseandShine Corporation's mark and the similarity of the products, which were critical errors in its likelihood of confusion analysis. The court found that the district court erred in its evaluation of the strength of Plaintiff’s mark and the similarity in the appearance of the products. While RiseandShine's "RISE" mark was categorized as suggestive, its strong logical association with coffee (suggesting waking up and increased energy) makes it inherently weak and places it at the low end of suggestive marks. Trademark law offers a much narrower scope of protection to marketers using words that describe or suggest product virtues, as seen in Virgin Enterprises Ltd. v. Nawab. This inherent weakness is further exacerbated by extensive third-party usage of "Rise" in the beverage market, as noted in Lang v. Ret. Living Pub. Co. and Plus Prod. v. Plus Disc. Foods, Inc., which RiseandShine itself acknowledged during its PTO registration process. The court also determined that the district court's finding of "confusingly similar" marks was clear error. Despite superficial similarities (a prominent "RISE"), the two products exhibit significant differences in can size, proportion, font style (simple sans-serif vs. angular jagged), word arrangement (horizontal vs. arc), color scheme (warm/neutral vs. bright/bold), and the prominent display of PepsiCo’s house mark "MTN DEW" and a lion logo. These substantial visual distinctions mean that the shared use of the non-distinctive term "Rise" is insufficient to render the products confusingly similar, especially given the mark's inherent weakness. Therefore, the balance of hardships did not favor RiseandShine, and the preliminary injunction was improperly granted.
Analysis:
This case significantly clarifies the evaluation of trademark strength for suggestive marks, emphasizing that marks closely linked to a product's perceived virtues are inherently weak and merit narrow protection, even if formally categorized as 'suggestive.' It reinforces that a nuanced application of the Polaroid factors is critical, preventing a mechanical counting of factors, and highlights how a plaintiff's prior statements to the PTO regarding a crowded market can undermine later claims of mark strength. The ruling establishes a higher bar for plaintiffs seeking preliminary injunctions based on likelihood of confusion when their marks are inherently weak and products bear substantial visual distinctions, even if a common term is shared. This may lead to more rigorous scrutiny of mark strength in future trademark litigation, particularly for common or descriptive-leaning suggestive terms.
