RiseandShine Corp. v. PepsiCo, Inc.
| Docket Number | 21 Civ. 6324 (LGS) |
| Decision Date | 02 August 2023 |
| Parties | RISEANDSHINE CORPORATION d/b/a RISE BREWING, Plaintiff, v. PEPSICO INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff RiseandShine Corporation d/b/a Rise Brewing (“Rise Brewing”) brings this trademark infringement suit against Defendant Pepsico Inc. (“PepsiCo”). Plaintiff owns certain registered marks that it uses on its canned coffee-based and tea-based drinks. Plaintiff alleges Defendant infringed on Plaintiff's marks with its canned energy drink “MTN DEW RISE ENERGY” (or “Mtn Dew Rise”). Plaintiff asserts five claims in the First Amended Complaint (“FAC”): trademark infringement, unfair competition and false designation of origin under federal law; and trademark infringement, unfair competition and unjust enrichment under New York law. Following the close of fact and expert discovery, Defendant moves for summary judgment on all claims. For the reasons below, Defendant's motion is granted.
The following facts are drawn from the parties' Rule 56.1 statements and other submissions on this motion. The facts are undisputed or based on record evidence drawing all reasonable inferences in favor of Plaintiff as the non-moving party. See N.Y. State Teamsters Conf. Pension & Ret Fund v. C&S Wholesale Grocers, Inc., 24 F.4th 163 170 (2d Cir. 2022).
mark “Rise Brewing Co.” and No. 5,333,635 for the design mark “Rise Brewing Co.” depicted to the right. Rise Brewing uses these marks, and other word marks containing the word “rise” in connection with its coffee-based and tea-based drinks. It first used these marks on its products beginning in May 2015. Rise Brewing distributes its products nationally. Between 2015 and 2021, it spent approximately $17.5 million in advertising, all of which featured some form of the marks.
Mtn Dew Rise is a fruit-flavored caffeinated energy drink sold by Defendant, launched in 2021. The packaging for both products is depicted below, with certain of Plaintiff's products on the left and Mtn Dew Rise on the right:
Image Omitted.
In January 2021, Plaintiff learned of the forthcoming launch of Mtn Dew Rise and sent Defendant a cease-and-desist letter. In March 2021, Defendant began selling Mtn Dew Rise. Shortly after the launch of Mtn Dew Rise, industry and personal contacts began contacting Rise Brewing employees, making inquiries or statements that suggested a perceived partnership between Rise Brewing and PepsiCo. Defendant's customer service center also received an inquiry asking if Mtn Dew Rise was associated with Plaintiff. Employees of stores that sold both products reported that they believed the products were connected.
On June 15, 2021, Plaintiff commenced this lawsuit in the Northern District of Illinois, alleging federal and state trademark infringement. Plaintiff then moved for a preliminary injunction. The case was transferred to the Southern District of New York. In November 2021, Plaintiff's motion for a preliminary injunction was granted, and Defendant was enjoined from using the “Mtn Dew Rise Energy” mark in connection with canned energy beverages. See RiseandShine Corp. v. PepsiCo., Inc., No. 21 Civ. 6324, 2021 WL 5173862, at *11-12 (S.D.N.Y. Nov. 4, 2021). On July 22, 2022, following briefing and oral argument, the Second Circuit vacated the preliminary injunction. See RiseandShine Corp. v. PepsiCo, Inc., 41 F.4th 112, 125 (2d Cir. 2022) (“RiseandShine II”). Defendant now moves for summary judgment.
Summary judgment is appropriate where the record establishes that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for a nonmoving party.” Frost v. N.Y.C. Police Dep't, 980 F.3d 231, 242 (2d Cir. 2020) (quoting SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009)).[1]“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986); accord Saleem v. Corp. Transp. Grp., 854 F.3d 131, 148 (2d Cir. 2017). In evaluating a motion for summary judgment, a court must “construe the record evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor.” Torcivia v. Suffolk Cnty., 17 F.4th 342, 354 (2d Cir. 2021).
“To prevail on a [federal] trademark infringement and unfair competition claim . . . in addition to demonstrating that the plaintiff's mark is protected, the plaintiff must prove that the defendant's use of the allegedly infringing mark would likely cause confusion as to the origin or sponsorship of the defendant's goods with plaintiff's goods.” Starbucks Corp. v. Wolfe's Borough Coffee, Inc., 588 F.3d 97, 114 (2d Cir. 2009); accord Gayle v. Allee, No. 18 Civ. 3774, 2021 WL 120063, at *3 (S.D.N.Y. Jan. 13, 2021). The analysis regarding Plaintiff's state law trademark and unfair competition claims mirrors this standard. See Capri Sun GmbH v. Am. Bev. Corp., 595 F.Supp.3d 83, 145 (S.D.N.Y. 2022) (); Gayle v. Home Box Office, Inc., No. 17 Civ. 5867, 2018 WL 2059657, at *4 ().
“To determine whether there is a likelihood of consumer confusion, [courts in the Second Circuit] look to . . . eight . . . Polaroid factors.” Souza v. Exotic Island Enters., Inc., 68 F.4th 99, 110 (2d Cir. 2023) (citing Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961)). Those non-exclusive factors are:
(1) strength of the trademark; (2) similarity of the marks; (3) proximity of the products and their competitiveness with one another; (4) evidence that the senior user may bridge the gap by developing a product for sale in the market of the alleged infringer's product; (5) evidence of actual consumer confusion; (6) evidence that the imitative mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of consumers in the relevant market.
Id. “[T]he modern test of infringement is whether the defendant's use is likely to cause confusion not just as to source, but also as to sponsorship, affiliation or connection.”
Int'l Info. Sys. Sec. Certification Consortium, Inc. v. Sec. Univ., LLC, 823 F.3d 153, 161 (2d Cir. 2016). Here, Plaintiff relies on a theory of “reverse confusion” -- that when Defendant, the junior user and much larger company, uses the same mark as Plaintiff, the senior user, “consumers might believe that the senior user's success in promoting its brand had led the larger junior user to acquire the senior.” RiseandShine II, 41 F.4th at 124.
The Second Circuit recently has acknowledged ambiguity in its trademark jurisprudence regarding questions of law versus questions of fact. See Souza, 68 F.4th at 108-09; Car-Freshner Corp. v. Am. Covers, LLC, 980 F.3d 314, 328 n.11 (2d Cir. 2020); Kelly-Brown v. Winfrey, 659 Fed.Appx. 55, 58 n.3 (2d Cir. 2016) (summary order). Distinguishing questions of law from questions of fact (or mixed questions of law and fact) is particularly important at summary judgment when questions of fact may not be resolved by the court, while questions of law must be. See Fed.R.Civ.P. 56(a) (). The Circuit has emphasized that this familiar principle governs equally in trademark disputes. See Souza, 68 F.4th at 109 (“[P]ast cases hinting at deference to the district court should not be read to suggest that a district court deciding a motion for summary judgment in a trademark infringement case has greater discretion than it would have in a non-trademark case.”). “As in any other area of law, then, if a factual inference must be drawn to arrive at a particular finding on a Polaroid factor, and if a reasonable trier of fact could reach a different conclusion, the district court may not properly resolve that issue on summary judgment.” Tiffany & Co. v. Costco Wholesale Corp., 971 F.3d 74, 86 (2d Cir. 2020). Traditionally, mixed questions of law and fact are submitted to and decided by the jury but are reviewed on appeal “either de novo or under the clearly erroneous standard, depending on whether the question is predominantly legal or predominantly factual.” United States v. Skys, 637 F.3d 146, 152 (2d Cir. 2011); accord Nat'l Union Fire Ins. Co. of Pittsburgh v. Garpo Marine Servs., Inc., 773 Fed.Appx. 22, 24 (2d Cir. 2019) (summary order). These distinctions, which determine who decides what, are particularly important in this case because the Second Circuit's legal conclusions in RiseandShine II are binding for purposes of Defendant's present motion.
Application of the Polaroid factors involves several levels of analysis involving questions of law and fact. These include (1) the review of evidence as to a particular factor, (2) the determination of whether those facts weigh in favor of one party or another and to what degree and (3) the final weighing of all of the factors together to determine the likelihood of consumer confusion.
As to each individual Polaroid factor,...
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