Fifth Circuit Says No Preliminary Injunction in Boozy Beverage Trademark Fight
The maker of BRIZZY-brand hard seltzer claimed that consumers would confuse a product branded VIZZY hard seltzer with its own. The United States Court of Appeals for the Fifth Circuit disagreed, however, and affirmed the district court’s denial of the preliminary injunction with an explanation as to how the plaintiff failed to demonstrate a substantial likelihood of success on the merits with respect to its trademark infringement claim. Future Proof Brands, L.L.C., v. Molson Coors Beverage Company, et. al., Case No. 20-50323 (5th Cir. December 3, 2020) (Smith, J.).
With a booming market for hard seltzers and ready-to-drink cocktails, it is no surprise that disputes over brand names of the bubbly alcoholic beverages have followed. After the district court denied Proof Brands’ request for a preliminary injunction against Molson Coors’ entry into that market, Proof Brands appealed. The Fifth Circuit issued a reminder that a preliminary injunction is “an extraordinary remedy which should not be granted unless the party seeking it has clearly carried [its] burden of persuasion,” and reviewed the district court’s denial of Future Proof’s request for an abuse of discretion. The Court further noted that under Planned Parenthood Ass’n of Hidalgo Cnty. v. Suehs, Future Proof must demonstrate four factors to obtain a preliminary injunction, namely: (1) a substantial likelihood of success on the merits, (2) a substantial threat of irreparable injury if the injunction is not granted, (3) that the substantial injury outweighs the threatened harm to the party sought to be enjoined and (4) that granting the preliminary injunction would not disserve the public interest. Concluding that Future Proof was unable to demonstrate a substantial likelihood of success on the merits of its trademark infringement claim, the court did not address the remaining three preliminary injunction factors.
Future Proof argued that in the course of determining whether there was a likelihood of confusion between the BRIZZY and VIZZY trademarks, the district court erred in analyzing the various factors, or “digits,” of consumer confusion used by the Fifth Circuit. The Court tackled each of the “digits” assessing the likelihood of consumer confusion, noting that even with “some errors,” the district court correctly concluded that Future Proof failed to show a substantial likelihood of success on its trademark infringement claim.
Starting with the type or strength of the trademark allegedly infringed factor, the Fifth Circuit disagreed somewhat with the district court and found the BRIZZY mark to be suggestive, rather than merely descriptive of “fizzy” beverages. Nevertheless, the Court noted that suggestive marks—like descriptive marks— are “comparatively weak” for purposes of a confusion analysis, and cited a number of third-party carbonated beverage brands sharing the common “-IZZY-” root to affirm its agreement with the district court that BRIZZY is a weak trademark. With a “weak” mark at issue, the Court found the similarity factor to weigh only marginally in favor of the injunction, especially given key differences between the product packaging and labels for the respective BRIZZY and VIZZY beverages.
Moving on to the defendant’s intent factor, in response to Future Proof’s claims that Coors executives were keenly aware of the BRIZZY product when it launched VIZZY, the Court stated that mere awareness of the senior user’s mark does not establish bad intent. Instead, the focus of the inquiry must be whether the defendant intended to derive benefits from the reputation of the plaintiff. On this point, the Court found that Future Proof did not establish any such evidence of intent. The Court elected not to weigh in on an inconsistency in whether the courts treat this factor as neutral or negative and simply found that the lack of evidence of bad faith and intent failed to support an injunction.
As to the evidence of actual confusion factor, the Fifth Circuit found that an isolated incident resulting in a “fleeting mix-up” of the BRIZZY and VIZZY names by one wholesale customer was not sufficient to establish actual confusion among consumers (although the Court did note that the district court was incorrect to conclude that a wholesaler is not a consumer for purposes of actual confusion). Finally, without affidavits, testimony or other evidence supporting a low degree of care exercised by potential purchasers of hard seltzers in retail locations or in bars and restaurants, the Court concluded that this factor also did not favor granting the injunction.
Thus, the Fifth Circuit determined that a number of factors, including defendant’s intent and evidence of actual confusion, which have “special importance” in assessing evidence of a likelihood of consumer confusion, did not support the injunction. As such, the Court concluded that the district court did not commit clear error in its denial of the preliminary injunction on grounds that Future Proof failed to carry its burden of showing a likelihood of success on the merits of its trademark infringement claim.