Monster loses out in fight with Freek

In Hansen Beverage Co v National Beverage Corp (Case 06-56390, June 29 2007), the US Court of Appeals for the Ninth Circuit has overturned an earlier decision, holding that the lower court had abused its discretion in determining that the maker of Monster energy drinks was likely to succeed in its claim that the trade dress of competing Freek energy drinks infringed the Monster trade dress.

Hansen Beverage Co and National Beverage Corp make competing energy drinks. The Hansen product, sold under the brand name Monster, is packaged in a can bearing a large clawed 'M' and the term 'Monster'. The background colour of the can varies with the flavour of the drink, and is either black or grey, with the 'M' and 'Monster' name in a bold accent colour. The National product, sold under the brand name Freek, is also sold in a can with a background colour that varies with the colour of the drink, but has a dark background and one of four bold accent colours. Unlike Monster drinks, Freek drinks prominently bear the term 'Freek' and the design of a fanciful, distorted face (referred to as 'Freek Man'). Hansen brought a trade dress infringement claim against National.

In granting a preliminary injunction prohibiting the sale of Freek drinks, the US District Court for the Northern District of California concluded that Hansen had met its burden in establishing its right to a preliminary injunction:

• it was likely to succeed in establishing a probability of success on the merits;
  
  
• it had established irreparable injury; and
  
  
• it had convinced the court that the balance of hardships weighed in its favour.

On appeal, the Ninth Circuit disagreed, concluding that Hansen had not established the requisite probability of success on the merits, because it could not establish that the Freek trade dress created a likelihood of confusion.

The Ninth Circuit pointed out that in this case, as in many trademark/trade dress cases, "the similarity of the marks is the factor most probative of the likelihood of confusion". In a case based on trade dress infringement, the mark at issue is the "total image of a product", and includes features such as size, shape, colour combinations, texture or graphics. After analyzing the trade dress of each of the parties' products, the appellate court concluded that notwithstanding the result reached by the district court, it was unlikely that a reasonably prudent consumer in the marketplace would be confused as to the source or origin of the Freek product.

The Ninth Circuit held that the prominent display of the Monster name and stylized 'M' logo on the Monster product, and the prominent display of the Freek name and 'Freek Man' logo on the Freek product "weigh[ed] heavily against a finding of consumer confusion resulting from the overall look of the packaging". The court dismissed out of hand Hansen's arguments that:

• the goods were of the same type and were in direct competition;
  
  
• the channels of trade for both products was the same; and
  
  
• National had expressed a desire to "expand the product to be marketed nationally".

While viewing it as slightly more probative on the issue of likelihood of confusion, the court held that National's efforts to place its Freek products and advertising close to Hansen's did not do much more than make it clear that the products were in direct competition.

The court also dismissed evidence in the form of a "handful of declarations" (including some from Hansen employees) attesting to actual confusion. It found that the declarations did not reliably indicate that the Freek trade dress was likely to confuse "an appreciable number of people", and thus disagreed with Hansen that the confusion evidence overcame the differences in the overall appearance of the trade dresses of the respective parties.

Because Hansen could not establish that it was likely to succeed on the merits of its case against the Freek trade dress, it was not entitled to a preliminary injunction, and the decision of the district court granting the preliminary relief was reversed.

Timothy J Kelly, Fitzpatrick Cella Harper & Scinto, New York