SANTA MONICA, Calif. – September 24, 2003 – Red Bull, the manufacturer
and distributor of the well-known energy drink, has reached negotiated settlements with New York City restaurant/nightclub Centrofly, Las Vegas restaurant/nightclub Drai’s on the Strip and Philadelphia restaurant/nightclub M Restaurant and Lounge that resolve “passing off” and other claims alleged in lawsuits filed by Red Bull against those establishments. The three lawsuits, which were filed in federal courts in New York, Nevada and Pennsylvania, respectively, alleged, among other things, that customers visiting Centrofly, Drai’s and M Restaurant who requested Red Bull routinely received a substitute beverage instead of Red Bull without being notified of the substitution. Red Bull alleged in the lawsuits that the substitution of an alternative beverage for Red Bull,without providing the customer with notice of the substitution and an opportunity to reject the alternative beverage, violated Red Bull’s rights and deceived consumers.
The terms of the settlements of each of the lawsuits involve the entry of a permanent injunction against the establishment and its employees that precludes them from “passing off” other beverages as Red Bull. In addition, pursuant to the settlements, each of the restaurants/nightclubs have agreed to pay to Red Bull an undisclosed amount, some portion of which is to compensate Red Bull for the claims alleged in the lawsuits and some portion of which will compensate Red Bull for attorney’s fees incurred in pursuing its claims.
Dan Ginsberg, Red Bull’s Executive Vice President, expressed
satisfaction with the outcomes stating: “The settlements achieve all of our litigation objectives. They ensure that customers will not unwittingly receive a substitute beverage when they order Red Bull, they protect the integrity of the Red Bull brand and they send the message to others that Red Bull will aggressively pursue those who attempt to “pass off” other beverages as Red Bull.
These lawsuits are three among a number of legal actions Red Bull has recently initiated to preserve the integrity of its brand and to ensure that Red Bull drinkers are not misled when they order Red Bull and instead receive another beverage in its place. Red Bull also has filed a
lawsuit against a restaurant/nightclub in San Diego where its investigations revealed routine substitution of alternative beverages for Red Bull were occurring without notice to customers. In addition, Red Bull currently is actively investigating numerous reports of “passing off” at other restaurants/nightclubs across the country, some of which may result in the initiation of additional lawsuits.
“The defendants in the lawsuits filed by Red Bull each were repeatedly warned that the passing off of substitute beverages as Red Bull damaged
the Red Bull brand, deceived consumers and violated federal and state laws,” said Jim Goniea, an attorney at Sonnenschein, Nath & Rosenthal representing Red Bull. “When Red Bull’s investigations revealed that the defendants continued to serve substitute beverages to customers who had requested Red Bull without notifying them of the substitution, lawsuits were initiated to protect Red Bull’s rights and those of its customers. Although Red Bull would prefer to resolve passing off issues whenever possible by educating restaurants, bars and nightclubs concerning their legal obligations and by obtaining voluntary compliance with the law, Red Bull has made a decision to aggressively pursue those who persist in deceiving Red Bull consumers by serving them a substitute product without warning.”
“I was at a bar recently in San Francisco and I ordered a Red Bull. The bartender reached for the soda gun and I told her to hold off. I know Red
Bull doesn’t come out of a gun, but other customers probably don’t,” said Carlton Solle, owner of San Francisco-based restaurant, the White Trash Bistro. “People who want to make sure they really get Red Bull and not another product should order the can so they know what they’re getting!”
# # #
Red Bull Communications Centre
2525 Colorado, Suite 320
Santa Monica, CA 90404
p: 310-393-4647 x5344