A Michigan federal district court did not err in ruling against N2G Distributing and Alpha Performance Labs on Innovation Ventures, LL C’s (IV’s) trademark and trade dress infringement claims relating to its 5-hour ENERGY (FHE) mark, the Sixth Circuit has determined. Innovation Ventures, LLC v. N2G Distributing, Inc., No. 12-1635 (6th Cir., order entered August 14, 2014). After a jury found that N2G had intentionally infringed IV’s trademark and trade dress with several products, including its 6 Hour Energy product, and awarded IV $1.75 million in damages, N2G appealed on several points.
IV filed its initial complaint in 2008 and won a preliminary injunction against N2G, which pulled 6 Hour Energy from the market and released Pure Energy, a similar product with similar trade dress. IV then amended its complaint to add Pure Energy, and N2G discontinued it and released another similar product— a cycle that continued until IV’s complaint alleged that eight of N2G’s products infringed its trademark and trade dress. The jury agreed that N2G’s products were infringing, and the district court issued a permanent injunction on selling the products. IV later discovered that N2G continued to supply the enjoined products to its customers; on motion to the court, N2G was held in contempt of the injunction and ordered to destroy the products or face fines of $1,000 per day of noncompliance.
N2G appealed to the Sixth Circuit, arguing that the district court erred in denying its motion for a new trial. The circuit court disagreed, finding that a jury could reasonably conclude that infringement occurred based on the evidence presented. “[T]he jury could use their eyes and see that Defendants’ products use similar marks,” the court noted, and found further that “[t]he jury heard ample evidence that an ‘ordinary consumer who would consider buying’ FHE could likely be confused by the marks on Defendants’ products.” The court also rejected N2G’s fair use defense that it was merely a descriptive name, pointing out that the company’s owner “testified that he had no basis for claiming that his products gave 7, 7+, or 14 hours’ worth of energy. A jury could infer that Defendants did not intend to describe what their products did when Defendants weren’t sure of that themselves.
N2G also challenged the Safe Distance Rule, the principle that allows courts to enforce permanent injunctions in intellectual property cases by ensuring that the infringer changes its trademarks and trade dress to be “so far removed from any characteristic of the plaintiff so as to put the public on notice that the two are not related” without subjecting the parties to new trademark contests if the defendant fails to sufficiently change its infringing use. N2G argued that the rule should not be applied in trademark cases brought under the Lanham Act, but the Sixth Circuit dismissed the argument, noting the history of success across jurisdictions in applying the rule in Lanham Act cases.