PepsiCo Appeals Injunction in Mountain Dew Trademark Case

In an emergency motion filed Monday before the Second Circuit Court of Appeals, PepsiCo Inc. has moved to stay a preliminary injunction in a trademark case blocking the use of its Mtn Dew Rise Energy brand, used on Mountain Dew beverages.

The original complaint was filed in June by Riseandshine Corp., better known as Rise Brewing. The plaintiff alleged that the aforementioned PepsiCo product infringed on the trademarks for its brand of canned coffee drinks, marketed as RISE. That lawsuit argued that PepsiCo has a history of trademark infringement, and characterized the introduction of the PepsiCo product as causing reverse confusion, as the later market entrant is the much larger and more recognizable PepsiCo.

Last week, the Southern District of New York judge overseeing the case issued a preliminary injunction in Rise Brewing’s favor, blocking the use of the Mtn Dew Rise Energy brand nationwide. The order sided with the plaintiff’s argument that it faces an existential threat from PepsiCo’s purported infringement.

The appeal, filed just days after the injunction, argues that the judge erred in siding with Rise. They argued that the Rise knowingly chose a “weak” brand name for their product, and that Rise did not attempt to block the launch of Mtn Dew Rise Energy. After the launch of Pepsi’s product, Rise allegedly offered to resolve any disputes if PepsiCo paid it a license fee from the gross sales of their product.

PepsiCo also disagreed with the judge on the legal basis for a preliminary injunction; while the district court saw harm to the plaintiffs, PepsiCo argues that it instead will be irreperably harmed by an injunction. Indeed, PepsiCo argued that the two products currently coexist in the marketplace with no confusion, supported by survey evidence. They also argued that the injunction granted was not narrowly tailored, and could result in waste of cans, among other harms.

Rise also responded to PepsiCo’s motion, siding with the district court and claiming that PepsiCo misinterpreted the judge’s legal arguments. They also argued that confusion was already occurring: “(PepsiCo’s) retail partners have contacted Rise Brewing personnel numerous times about promotions intended for Mtn Dew RISE, and other retail partners have deferred placing orders for Rise Brewing’s products thinking that their shelves were already fully-stocked with Rise Brewing products, when in reality the shelves were stocked with PepsiCo Mtn Dew RISE products.”

Rise is represented by Alston & Bird as well as Goldberg Kohn. PepsiCo is represented by O’Melveny & Myers and Baker Botts.