Court rules Gatorade’s use of sports fuel phrase is not trademark infringement.

Court rules Gatorade’s use of sports fuel phrase is not trademark infringement.

When a product manufacturer uses something to identify the products they produce that is considered a trademark.  Trademark law is intended to prevent consumers from being confused about the source of a product.  A trademark owner is granted the exclusive right to brand products with their trademark so that consumer will not be confused about who produced a product.

In the United States registering a trademark is a good idea but it is not required to first begin using a trademark to brand products.  Trademarks can be registered with the United States Patent and Trademark Office.  When a trademark is registered with the United States Patent and Trademark Office, the trademark owner is granted certain additional rights.

The rights of a trademark owner are subject to certain limitations.  One of those limitations is fair use.  The trademark fair use defense should not be confused with the copyright fair use defense, the concepts are similar but the elements which a defendant needs to prove are different.   Trademark fair use comes in two forms, nominative fair use and descriptive fair use.  Nominative fair use is when a trademark is used by someone other than the trademark owner to reference products made by the trademark owner.  Descriptive fair use is when a trademark is used in a ordinary, descriptive manner to describe a product.

A case which illustrates the limits of the exclusive rights granted to a trademark owner is Sportfuel, Inc. v Pepsico, Inc., and The Gatorade Company, 16-C-7868 (N.D. Ill. 2016). Sportfuel is a company that provides consulting services related to nutrition.  The company Sportfuel was founded in 1993, registered the phrase Sportfuel as a trademark related to nutritional consulting services in 2008 and expanded the trademark registration to include sports drinks in 2015.  The Gatorade Company was founded at the University of Florida in 1965.  Gatorade is a subsidiary of Pepsi.  Gatorade produces sports drinks and other nutritional products.  In 2015 Gatorade launched an advertising campaign to rebrand itself as Gatorade, the Sports Fuel Company.  Sportfuel took exception to this and filed a lawsuit in 2016 against Gatorade for trademark infringement.

Gatorade claimed that its use of the the phrase Sports Fuel was not intended to identify the source of products, the phrase was being used to describe the products.  Gatorade moved for summary judgement on the grounds that it was not liable for trademark infringement because Gatorade’s use of Sports Fuel was a descriptive fair use.

The court sided with Gatorade and granted the motion for summary judgment in June 2018.  The court found that the Gatorade was using the phrase Sports Fuel descriptively because the name Gatorade was more prominently positioned than the phrase The Sport Fuel Company.  The court reasoned that Gatorade was not using Sports Fuel to identify the company which produced products, but rather to describe attributes of the products.  Because the court found that Gatorade’s use of Sports Fuel was a fair use, the court did not need to analyze if there was a likelihood of consumer confusion.

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