Red Bull 'Passing-Off' Settlements

December 9, 2003
American Lawyer, Dec. 03
Industry leaders have always had to protect their brand names. It was true in the 1930s when The Coca-Cola Company helped establish "passing-off" laws to disallow the substitution of Pepsi-Cola when customers specifically ordered Coca-Cola. And as Austria's Red Bull GmbH-with $1.2 billion in sales last year, the Coca-Cola of the fast-growing high-energy drink market-has learned, times have not changed. Red Bull filed suits in federal district courts in Las Vegas, New York, and Philadelphia against establishments in those jurisdictions that used other energy drinks when patrons ordered cocktails mixed with Red Bull. In July and August, Red Bull and its U.S. subsidiary, Red Bull North America, Inc., settled its suits with Las Vegas's Drai's on the Strip, Centro-Fly in New York, and the M Restaurant and Lounge in Philadelphia for undisclosed amounts and an injunction on future passing-off.
 
Red Bull, which controls 70 percent of the global energy drink market, has aggressively gone after violators, sending private investigators into bars and restaurants across the country to find out who's serving Red Bull and who is not. The drink is served exclusively in narrow 8.3-ounce cans that sell for more than a dollar each wholesale, making it an expensive mixer in trendy drinks such as Red Bull-and-vodka and Bullgaritas, and unwieldy for bartenders who prefer mixers with a "gun." [Red Bull doesn't offer volume discounts to large purchasers or syrup versions dispensable from a gun.] To cut costs, some bars turned to cheaper syrup alternatives such as Pure NRG.
 
The company is still searching out imposters. In fact, it has another case pending in San Diego federal district court, and continues to send undercover drinkers into the night-trying to tell Red Bull from pure bull.
 
For Plaintiffs Red Bull GmbH [Fuschl am See, Austria] and Red Bull North America, Inc. [Santa Monica]
 
In-house: Counsel Robert Sorensen [Red Bull North America].
 
Sonnenschein Nath & Rosenthal [Chicago]: James Goniea, Gary Meyerhoff, and associate Peter Soares. [Goniea and Soares are in San Francisco; Meyerhoff is in New York.] Goniea is Red Bull North America's national coordinating counsel on passing-off litigation. Meyerhoff is local counsel for the Centro-Fly litigation. Sonnenschein has represented Red Bull for several years following a beauty contest for antitrust and distribution issues.
 
Kummer Kaempfer Bonner & Renshaw [Las Vegas]: Thomas Kummer and associate James Smyth II.
 
Wiggin & Dana [New Haven]: Joseph Schumacher and associate Kimberly Toomey. [Both are in Conshohocken, Pennsylvania.] Schumacher and Goniea know one another from other distribution work.
 
For defendant Drai's on the Strip [Las Vegas]
 
Beckley Singleton [Las Vegas]: Ike Epstein, Michael Feder, and Daniel Polsenberg. Epstein has worked with Drai's on earlier litigation matters.
 
For defendant M Restaurant and Lounge [Philadelphia]
 
Eric M. Berman, Attorneys at Law [babylon, new york]: associate Robert Kline. [Kline is in King of Prussia, Pennsylvania.]
 
For defendant Centro-fly [New York]
 
Law Offices of Stephen W. Dicker [New York]: Stephen Dicker