Innovation Ventures, LLC v. N2G Distributing, Inc.
763 F.3d 524
| 6th Cir. | 2014Background
- Plaintiff Innovation Ventures (maker of 5-hour ENERGY, “FHE”) developed and heavily marketed a two-ounce energy shot beginning in 2004, achieving dominant market share and substantial advertising expenditures.
- Defendants (N2G, Alpha Performance Labs, and owner Jeffrey Diehl) sold a series of competing small energy-shot products (e.g., “6 Hour Energy”) with similar names, bottle size, color schemes, and warning labels.
- Plaintiff sued under the Lanham Act for trademark and trade dress infringement and false advertising; after a jury trial the jury found multiple products infringed the FHE trademark and trade dress, found most infringements intentional, and awarded $1.75 million.
- The district court entered a permanent injunction against Defendants (and their agents) prohibiting sale of the enjoined products and products confusingly similar to FHE, and later held Defendants and Diehl in contempt for distributing enjoined or confusingly similar modified products.
- Defendants appealed multiple rulings (denial of new trial, discovery and evidentiary rulings, judgment form, and contempt based on the Safe Distance Rule); the Sixth Circuit affirmed in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether evidence supported jury finding of likelihood of confusion (trademark) | FHE pointed to strong brand surveys, near-identical naming pattern (number + "Hour" + "Energy"), related goods, common retail channels, evidence of actual confusion, and circumstantial intent. | Diehl argued lack of sufficient evidence of confusion and offered innocent explanations for similarities. | Affirmed: ample evidence supported likelihood-of-confusion verdict. |
| Whether trade dress infringement was proven | Plaintiff relied on overall visual similarity (size, color scheme, bottle appearance), related goods and marketing, and actual confusion. | Defendants emphasized differences (e.g., omission of blue, some label changes) and argued similarities were coincidental. | Affirmed: jury reasonably found trade dress confusion based on overall visual impression. |
| Whether Defendants’ fair use defense shielded their product names | Plaintiff argued Defendants used marks as source-identifiers and in bad faith (TM symbols, copying), not merely descriptively. | Defendants claimed descriptive, good-faith use of terms (e.g., hours of effect). | Affirmed: evidence supported finding that use was not descriptive or in good faith. |
| Whether the district court properly held Defendants/Diehl in contempt for selling modified products (Safe Distance Rule) | Plaintiff argued injunction barred confusingly similar marks and that minor label changes by a serial infringer did not cure confusion; Safe Distance Rule allows contempt enforcement without full retrial for each modification. | Defendants argued Safe Distance Rule should not apply (esp. to trade dress) and that court effectively tried new parties or improperly applied contempt. | Affirmed: Safe Distance Rule applies; district court did not clearly err in finding modified products confusingly similar and holding contempt. |
Key Cases Cited
- Mike’s Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398 (6th Cir. 2006) (standard for abuse of discretion review on post-trial motions)
- Innovation Ventures, LLC v. N.V.E., Inc., 694 F.3d 723 (6th Cir. 2012) (Lanham Act framework; trademark/trade dress discussion)
- Groeneveld Transp. Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494 (6th Cir. 2013) (likelihood-of-confusion factors and consumer perspective)
- Daddy’s Junky Music Stores, Inc. v. Big Daddy’s Family Music Ctr., 109 F.3d 275 (6th Cir. 1997) (view marks in their entirety; evidence of intent)
- Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) (trade dress protects overall image/appearance)
- Hensley Mfg. v. ProPride, Inc., 579 F.3d 603 (6th Cir. 2009) (fair use elements: descriptive sense and good faith)
- Taubman Co. v. Webfeats, 319 F.3d 770 (6th Cir. 2003) (discussion of Safe Distance Rule in injunction context)
- PRL USA Holdings, Inc. v. U.S. Polo Ass’n, Inc., 520 F.3d 109 (2d Cir. 2008) (Safe Distance Rule utility in contempt/enforcement)
- Porter v. Warner Holding Co., 328 U.S. 395 (1946) (equitable power to issue and enforce injunctions)