PepsiCo has been ordered to stop using the “MTN Dew Rise Energy” name for its branded energy drink line this week after a New York judge ordered a preliminary injunction against the conglomerate in a trademark infringement lawsuit, handing a temporary victory to cold brew coffee maker Rise Brewing Co.
In an opinion issued yesterday in the U.S. District Court Southern District of New York, judge Lorna Schofield ruled that Rise Brewing had presented sufficient evidence that PepsiCo’s MTN Dew Rise line had hurt its business and “demonstrated irreparable harm, a likelihood of success on the merits of the federal copyright claim and that the public interest weighs in favor of granting the injunction.”
“We’re very happy with the way the court ruled,” Rise Brewing co-founder and CEO Grant Gyesky told BevNET today. “The way [the court] saw it is obviously the way we’ve seen this from the beginning when we learned Pepsi was going to launch this product…. So, being able to put this aside as a distraction to the business and a potential risk to the business is obviously a huge one for us.”
Rise Brewing filed the lawsuit against PepsiCo in June, claiming that the New York-based beverage company had knowingly violated its trademark when it launched MTN Dew Rise, an energy drink intended for a morning use occasion, in March. The suit was initially filed in the U.S. District Court for the Northern District of Illinois, but was later transferred to New York at PepsiCo’s request.
The complaint claimed that Rise Brewing had asked PepsiCo to change the product’s name both before and after its launch, but the company refused claiming that the products competed in different categories and argued that the use of the MTN Dew brand name “should absolve them of any wrongdoing.”
MTN Dew Rise has quickly gained a national presence in retail stores as PepsiCo has increased its focus on its energy drink portfolio. According to NielsenIQ, as of October 23 the product had a 0.9% market share of the energy category and has reported $106.6 million in U.S. retail dollar sales to date. The brand is also backed by a marketing campaign featuring NBA All-Star LeBron James.
According to court documents, the preliminary injunction forbids PepsiCo from using or displaying the MTN Dew Rise Energy name in the U.S. market “in connection with the promotion, sale or distribution of single-use, canned energy beverages” or in any advertisements that “will be … circulated, displayed or broadcast in the [m]arket.” PepsiCo has seven days from November 3 to comply with the ruling.
PepsiCo did not return a request for comment.
The order noted that Rise Brewing, which was founded in 2014, had established itself as the exclusive user of the “Rise” trademark for a “single-serving, canned caffeinated beverage” up until PepsiCo released its product and highlighted a visual similarity between the two logos.
Court documents cited witness testimony as another factor in Rise Brewing’s favor. Gyesky told the court the brand had met with PepsiCo in 2017 to explore potential partnerships, with follow-up meetings in 2018 and 2019, but no deal came from the discussions.
Rise Brewing Investor Steve Salinger testified that although he had previously participated in six rounds of funding in the company, he declined to further increase his stake specifically because of growing consumer confusion from the MTN Dew product. Allison Schmidt, a brand ambassador for Rise Brewing, testified that confusion between the two products among consumers and retailers had become the “norm … not the exception” and said “she is regularly asked if Plaintiff’s product is the new coffee version of Mountain Dew.”
Testifying In PepsiCo’s favor, Jim Lee, chief strategy and transformation officer and SVP of PepsiCo Beverages North America (PBNA), cited differences in beverage categories and said that PepsiCo had “never looked” at Rise Brewing’s products because of the company’s joint venture with Starbucks. Greg Lyons, CMO for PBNA, discussed how the company selected the name “MTN Dew Rise,” noting that “Rise” communicates a morning occasion and suggested it has “an emotional meaning” that helps consumers “g[e]t their day started right.”
Though the ruling represents an immediate blow to PepsiCo and could threaten to disrupt the brand’s strategy within the energy drink space, the case remains open.
However, even though the court’s decision is not the final step in this trial, Gyesky said the injunction will help to alleviate a major “distraction” for Rise Brewing and said the company intends to keep its focus on growth and expansion.
“This thing has really been nothing but a detraction from the business; a detraction from sales, a detraction of resources, a detraction of our time,” Gyesky said. “So for all that to go away, it’s going to be a huge lift, I think, for the entire team to be able to get back to focusing on the business.”