Red Bull sues rival F1 sponsor Rich Energy for trade mark infringement

Avid followers of Formula 1 racing are likely to be familiar with the energy drink brand "Rich Energy", and its colourful co-founder William Storey. In March 2018 it was reported that the company was in talks to buy the Force India team out of administration (the purchase did not ultimately proceed). Then, in October 2018, Rich Energy became the title sponsor of the Haas team, and quickly grabbed attention through its bold claims and marketing style.

But there seem to have been a few bumps in the road [sorry]. In recent weeks, relations between Haas and Rich Energy have broken down, and the sponsorship has been terminated. In parallel, a boardroom battle between Storey and his investors has resulted in Storey being forced out as a director of Rich Energy Limited (REL). It also seems that Rich Energy will now instead be "Lighting Volt" (despite the fact that a UK trade mark for RICH ENERGY was filed but two weeks ago).  Goodbye, Rich Energy - we hardly knew ye.

Unfortunately, REL still faces a ghost of social media posts past. Along with Mr Storey, it is a defendant in a claim [IP-2019-000064] recently issued in the English High Court by Red Bull GmbH (RBG), owner of Haas' rival F1 team Red Bull Racing. RBG accuses REL and Mr Storey of trade mark infringement.

Red Bull gives you pleadings

Although the defendants have not yet filed a defence, because the claim is under the Shorter Trials Scheme (STS) the Particulars of Claim give a good flavour of the key issues in dispute.

RBG bases its claim on two UK trade marks: no. 3129030 for RED BULL, and no. 3058007 for GIVES YOU WINGS (both for energy drinks in Class 32). It alleges that the defendants have used (in advertising):

  1. The hashtag #betterthanredbull in various posts on the Rich Energy Instagram, Facebook and Twitter pages; 
  2. The signs WINGS and GIVES YOU WINGS as part of "FORGET THE WINGS" and "FORGET WINGS RICH ENERGY GIVES YOU HORNS" on the Rich Energy Facebook page and website; and 
  3. The sign BULL as part of "NO BULL", "No Bull..." (which, on two occasions, was posted in blue and red, the colours prominently features on Red Bull products) and "#nobull" on the Rich Energy Facebook, Twitter and Instagram pages. 
Point 1 is run under s. 10(1) Trade Marks Act 1994 (TMA 1994) i.e. a double identity infringement claim. Interestingly, RBG does not rely expressly on s. 10(4)(e) TMA 1994 (as inserted by Directive (EU) 2015/2436) regarding unlawful comparative advertising.  (The defendants have already admitted in correspondence that the public would read #betterthanredbull as the phrase "better than red bull"). Presumably this is to put the onus on the defendants to raise a defence under the Business Protection from Misleading Marketing Regulations 2008 (Regulations) if they so choose. 

Points 2 and 3 are the basis for s. 10(3) TMA 1994 unfair advantage infringement claims. It seems that REL has already accepted in correspondence that RBG's marks have a reputation. 

Mr Storey is allegedly jointly liable for REL's acts because he was CEO and majority shareholder at all material times, and acted as REL's human agent.  

A never-ending Storey, yesterday

Comment

Given recent events at REL, it will be interesting to see whether REL tries to settle the claim and move on [presumably as quickly as a lightning bolt]. This could be difficult given that (i) RBG might have incurred greater up-front costs in order to comply with the STS rules under Practice Direction 57AB; and (ii) if relations between REL and Mr Storey have broken down irretrievably, it could be tricky to construct a settlement that deals with both defendants. (If this is the case, any settlement between only REL and RBG will need to be done carefully to avoid waiving RBG's claim against the alleged tortfeasor, a problem illustrated in Vanden Recycling v Kras Recycling).

If the claim proceeds and REL runs the defence of lawful comparative advertising in respect of the 10(1) claim, this will require some creativity. How is it that "betterthanredbull" "objectively compares one or more material, relevant, verifiable and representative features of those products" (Regulation 4(d)), for example?

Given that the goods in issue are apparently identical (no "party drink" arguments necessary here) and assuming that a compelling argument for due cause cannot be made, the 10(3) claims will come down to whether the signs used by REL are similar to the relevant RBG trade mark. If only the rather optimistic 2014 US lawsuit alleging misleading marketing in respect of the "GIVES YOU WINGS" slogan had stopped RBG from using the corresponding trade mark in the UK (and if only the relevant trade mark had been registered a little earlier than September 2014)...  

One final point: given the current busyness of the assiduous IP judges in this jurisdiction, if the claim goes ahead it will be interesting to see whether trial takes place within the targeted 10 months of issue. If it does, perhaps more claimants will opt for the STS in future. 


Red Bull sues rival F1 sponsor Rich Energy for trade mark infringement Red Bull sues rival F1 sponsor Rich Energy for trade mark infringement Reviewed by Alex Woolgar on Thursday, July 18, 2019 Rating: 5

3 comments:

  1. The write-up fails to mention that Rich Energy was involved in another case in March of this year which also involved trade marks, albeit the central issue was copyright in a logo used as a trade mark. REL lost that case in the IPEC (see HHJ Melissa Clarke's judgment here) and intended to appeal although it is not immediately clear if permission to appeal has been lodged with the High Court, the trial judge having refused permission at a hearing on 27 June.

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    1. Thanks, Andy - I see there is some interesting stuff on joint tortfeasorship in that judgment as well (Storey was held liable on similar facts). Do let me know if you find out anything more regarding the appeal.

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