5 Hour ENERGY Flexes its Muscles-Again, and This Time It Got an Energy Shot
By Evan Garcia
The Sixth Circuit recently gave a boost to the “5-hour ENERGY mark.1 In deciding the degree of protection that the mark deserved, the court held that the term was suggestive rather than descriptive because, in isolation, it did not readily convey the qualities of the product.2 The focus of this post is whether the approach taken by the Sixth Circuit in answering this threshold issue was proper. In concluding that it was not, this post illustrates why the underlying rationale used by the Sixth Circuit to deem the mark suggestive was misguided.
The plaintiff and creator of the “5 Hour ENERGY” shot, Innovation Ventures LLC (doing business as Living Essentials, hereinafter “LE”), filed suit against N.V.E. Inc. (“NVE”) for trademark infringement in violation of §1115(a) of the Lanham Act.3 N.V.E., the creator of “6 Hour POWER,” counterclaimed that LE falsely advertised in violation of the Lanham Act and engaged in anti-competitive conduct in violation of the Sherman Act.4 The district court held for N.V.E. on the trademark infringement claim and for LE on defendant’s counter-claims.5 After the District Court granted partial summary judgments to each party, the case was appealed to the Sixth Circuit.6
The Sixth Circuit affirmed the District Court’s grant of summary judgment in favor of LE in regards to N.V.E.’s counter claims and remanded the trademark infringement issue.7 But in resolving the question of whether NVE infringed LE’s mark, the Sixth Circuit was required to determine whether LE’s mark was protectable. Analyzing the court’s resolution of this threshold issue does not implicate either the court’s discussion of the likelihood of confusion test or NVE’s counterclaims. This post thus addresses only a limited portion of the Sixth Circuit’s opinion relating to the threshold protectability issue.8
LE is the market leader in the energy shot business with a 90% share of the energy-shot market.9 NVE’s approximately 5% is the next largest.10 Unsurprisingly, LE is not afraid to flex its muscles and has filed trademark infringement suits against a number of its competitors.11 One can simply add NVE to list. In this latest installment, however, it appears that the Sixth Circuit may have unintentionally given LE the motivation to continue flexing its muscles.
To prove trademark infringement in the Sixth Circuit, one must establish that the mark is protectable and then show a likelihood of confusion amongst consumers.12 In ruling on the threshold protectability issue, the Sixth Circuit Court held that “5 Hour ENERGY” is suggestive and thus protectable (suggestive marks are always protectable).13 This determination by the court bolsters LE’s current case and also its future legal leverage with a new psychological advantage–Circuit Court precedent. Future competitors will now be less likely to challenge LV, both in court and in the marketplace. In reaching this conclusion, however, the Sixth Circuit misapplied trademark law. A closer examination follows.
NVE claimed that the mark “5 Hour ENERGY” was descriptive and lacked distinctiveness.14 Not surprisingly, LE argued that the mark was suggestive. The difference is important because descriptive marks can only be protected upon acquiring secondary meaning–that is, in the mind of consumers the descriptive mark also signifies the source of the product.15 Proving secondary meaning often requires conducting consumer-surveys, market research, and of course, time.16 All of which have a price tag. A suggestive mark, on the other hand, is protectable with no additional showing. The court therefore lifted a considerable burden from LE’s shoulders–making this litigation easier and potentially influencing future challengers.
There is no doubt that the line between suggestive and descriptive marks is a hazy one.17 But there are guiding principles.18 In general, a descriptive mark is one that directly conveys the ingredients, qualities, or characteristics of the product.19 A mark is suggestive if it requires the observer to use imagination or perception to determine the nature of the goods.20 These general rules, however, are only useful if applied with the product in mind. For instance, the mark mint jelly for a condiment would likely be deemed descriptive as it conveys an ingredient in the product. But mint jelly for some sort of Bengay like pain cream, would likely be suggestive because it would require the observer to connect the mark with muscle relief. In determining the mark’s status the language of the Sixth Circuit’s opinion indicates that the court failed to consider the mark with the good.
The court began its analysis with:
The ‘5 Hour ENERGY’ mark could be characterized as merely descriptive, in the sense that it simply describes a product that will give someone five hours of energy. But that is not the end of such an inquiry. The first question one would ask is how would the energy be transferred? Through food? Through drink? Through injections? Through pills? Through exercise? Also, one would ask what kind of energy is the mark referring to? Food energy (measured in Calories)? Electrical energy? Nuclear energy?
Then the court stated that the mark “shares a closer kinship” with suggestive marks and continued:
The connection between ‘5–hour’ and ‘ENERGY’ is not so obvious that a consumer seeing [5–hour ENERGY] in isolation would know that the term refers to an energy shot rather than, for example, a battery for electronics, an exercise program, a backup generator, or a snack for endurance sports.
The problem with the Sixth Circuit’s rationale is that a mark must be evaluated in connection with the goods upon which it is used and not in isolation.21 After the court correctly noted that the mark may be characterized as descriptive, the superfluous question the court posited of “how” would be readily answered by the reasonable consumer, with a tilt of the head and a big gulp. After all, the product is in fact a small bottle containing 2 oz. of liquid. To be clear, the analysis should have turned on whether or not the mark required an imaginative inference with respect to the product, not in isolation.
The Second Circuit, in Abercrombie & Fitch Co. v. Hunting World, Inc., illustrated this point.22 There, the term “Safari” as applied to men’s and women’s outer garments, was at issue.23 In a thoughtful opinion the court held inter alia that 1) as applied to certain types of clothing the term “Safari” had become generic, but 2) “Safari” had not become generic for boots or shoes.24 The fact that the court found “Safari” to have differing levels of protection in connection with different goods shows that the categorization of a mark depends on the good on which it is used. The Sixth Circuit’s rationale for its categorization of the mark “5-Hour ENERGY” was, therefore, flawed because it failed to consider the good upon which the mark is used–a non-alcoholic drink and dietary supplement.25
Further, numerous marks with even more tenuous connections between the name and the product have been determined descriptive.26 These marks include: CHARTER (a bank); CHEAPER! (cigarettes); 5-MINUTE (glue); KING-SIZED (clothing) and; NO SPOT (a car washing system).27 Indeed, the connection between “5 Hour Energy” and the product is straightforward–the product provides hours of energy to the imbiber–and the mark should have been characterized as descriptive.
By holding 5 Hour Energy suggestive, the Sixth Circuit has unintentionally energized LE’s policing efforts. In a sense, LE can now pursue litigation in the Sixth Circuit at a discount because of the precedential value of the court’s determination. By no means will other litigants be collaterally estopped from challenging the mark’s determination as suggestive28 but they will be deterred from picking that fight.
Ultimately, it is unclear whether the Sixth Circuit’s ruling will affect LE’s future litigation in a meaningful way. But one thing is clear: the Sixth Circuit’s holding is LE’s energy shot and this one lasts longer than 5 hours.
9 Clare O’Connor, The Mystery Monk Making Billions with 5-Hour Energy, Forbes (Feb. 8, 2012, 1:22 PM), available at http://www.forbes.com/sites/clareoconnor/2012/02/08/manoj-bhargava-the-mystery-monk-making-billions-with-5-hour-energy/
11 See e.g., Innovation Ventures LLC v. N2G Distrib., Inc., 779 F.Supp 2d 671 (E.D. Mich. 2011); Innovation Ventures LLC, v. Hoodiamax USA, CV 09-5426 AHM(Shx), 2010 WL 3171318 (C.D. Cal. Aug. 9, 2010).
18 See, e.g., Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir. 1976) (explaining how to identify the four different categories of marks and each category’s level of trademark protection).
22 537 F.2d 4.
23 Id. at 7.
24 Id. at 11.