Law and Policy: Monster Wins Trademark Suit, But Contract Dispute Looms

Monster Wins Trademark Suit, But Contract Dispute Looms

Monster Beverage Corp., the maker of Monster Energy, is celebrating a courtroom win this week in a trademark infringement suit against Supply Network, LLC, owner of the brand Monster Mobile which produces a line of hardware tools and accessories. Monster Beverage claimed that, under a similar name, Monster Mobile infringed upon its signature green-and-black color scheme for its products and sold hats and work gloves that bear similarity to accessories the drink maker also markets.

Monster Beverage filed suit against Supply Network in March 2017 in the U.S. District Court for the Central District of California. The suit sought damages from Supply Network and listed multiple examples of what it believed to be trademark infringement.

The case ended this month in a jury trial where Monster Energy was awarded $5 million in punitive damages. Monster Energy was represented by Knobbe Martens law firm.

“Our IP is our strongest asset so the importance of that can’t be understated,” Monster senior legal counsel Greg Gabriel told BevNET in a phone call on Wednesday. In addition to the Monster brand name, Gabriel said recognizing the use of green-and-black was a significant factor for the jury. “Their big argument in this case, the general theme of the case, was that ‘we’re tools and your drinks and nobody’s going to confuse the two.’ But obviously the jury didn’t buy that.”

Gabriel said the jury awarded punitive damages and found Supply Network to be acting in malice or fraud. The case will now move to equitable relief where the court will determine how Supply Network can conduct business moving forward. Monster Energy has a brief due next week and the court will likely deliver a ruling in December.

The trademark victory comes as the company faces a new lawsuit alleging breach of contract and fraud from a celebrity surfer who has appeared in Monster Energy marketing campaigns.

World Surf League champion John Florence, 26, signed a three-year sponsorship deal with Monster Energy in 2017, which would have paid a minimum of $350,000 base amount and a $150,000 media spend per year to allow the company to use Florence’s name and likeness in promotions. But according to a lawsuit filed in May in the Superior Court of California, County of Riverside, three months after signing the deal, Monster attempted to roll back Florence’s annual payments by revoking the $150,000 media spend. Despite not honoring the initial agreement, the lawsuit claims, Monster continued to use Florence’s name and likeness in its advertising.

In the suit, Florence claims he has not received any of the money he is owed under contract. According to the suit, Monster “has since denied having entered into the 2017 Agreement and or any other agreement at any time during 2017.” Florence is now seeking compensation for his contract in addition to punitive damages.

According to a report in the New York Post, Monster claims that Florence hid “material facts” during contract negotiations and “would not have signed the contract if Monster had known such representations by Florence were false.” The company did not elaborate. The Post noted that Florence tore his ACL earlier this year and has not competed since, but the injury came after the contract was signed and it is not known if it is a factor in the dispute.

Speaking with BevNET, Gabriel said he is not involved in this case and could not comment on it. An email sent to Monster requesting comment on the case was not returned on Wednesday.

The Wonderful Company Faces Pregnancy Discrimination Accusations

The Wonderful Company, maker of Fiji Water and POM Wonderful, is facing accusations of pregnancy discrimination and wrongful termination by its female employees, Forbes reported this week.

According to the article, the company entered arbitration with a former marketing director on November 12 who told Forbes she was fired in 2016 while on maternity leave. The former employee, who spoke to Forbes on conditions of anonymity, said she planned to take off 16 weeks as allowed under California’s Family Rights Act (CFRA), but was fired 12 weeks into her scheduled leave — which incidentally is the number of weeks protected by the federal Family and Medical Leave Act (FMLA).

“My job was terminated the day my FMLA expired, exactly twelve weeks to the day,” the former employee told Forbes. “And in California, you’re still covered under CFRA.”

The report, however, alleges a hostile work environment for pregnant women at The Wonderful Company. The former director claims in the months leading up to her leave that she was suddenly “blackballed” and was being “scrutinized for everything.” But she wasn’t the only one whose received this treatment, she claims.

“As my leave was approaching, I knew my job was at risk because I had seen it happen to a lot of other women,” she said in the article.

At the center of the accusations against the company is co-owner Lynda Resnick, who oversees the marketing and product division. Another former employee who spoke to Forbes claims Resnick has a history of being hostile to pregnant workers and has in the past told employees their pregnancies are bad for the company and could compromise their dedication to work.

According to Forbes, a spokesperson for The Wonderful Company said the claims are false and the company will fight the case with its in-house lawyers. The company said the former employee in question was let go in a round of layoffs that reduced her department headcount by 20 percent.

“Central to our company culture is our commitment to providing every employee the opportunity to balance work with raising a family,” the company said in a statement to Forbes. “We have nearly 10,000 employees, and a high percentage are young people at the point in their lives when they are ready to have children. We celebrate the creation of families, and proudly stand by our policy of being one of the most family-friendly employers in the country.”

Consumer Group Asks FTC to Investigate Sucralose Advertising

Consumer group U.S. Right to Know sent a letter this week to the Federal Trade Commission (FTC) urging the department to investigate deceptive marketing practices by companies that manufacture or sell artificial sweetener sucralose — best known by the commercial name Splenda — according to a press release.

In the letter, the group claims companies including The Coca-Cola Co. and sucralose manufacturer Tate & Lyle have misled consumers by claiming that the sweetener does not metabolize or bioaccumulate. However, recent research published in the Journal of Toxicology and Environmental Health contradicts this claim, citing studies on lab rats. However, both companies have claimed sucralose is not metabolized by the body, with Coke notably stating any sucralose absorbed by the body is “rapidly eliminated in urine.”

“Are food companies deceiving consumers by telling them that sucralose doesn’t metabolize or bioaccumulate?” said Gary Ruskin, co-director of U.S. Right to Know, in the release. “That’s what we’re asking the Federal Trade Commission to figure out.”

U.S. Right to Know has previously petitioned the FTC and U.S. Food and Drug Administration (FDA) to force Coke and PepsiCo from using the term “diet” in its branding of Diet Coke and Diet Pepsi, accusing the term of being misleading and deceptive.