`
`UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
`
`Thurgood Marshall U.S. Courthouse 40 Foley Square, New York, NY 10007 Telephone: 212-857-8500
`
`MOTION INFORMATION STATEMENT
`DocketNumber(s): 21-- - - - - - - - - - - - - - - -
`Motion for: Emergency Stay Pending Appeal ,
`
`Caption ruse short title l
`
`Emergency Administrative Stay, and
`
`Expedited Appeal
`
`Set forth below precise, complete statement of relief sought:
`Appellant requests (1) a stay of the District Court's
`
`order (Dk!. 149) pending appeal; (2) an administrative stay pending determination
`
`of this motion by the Court; and (3) expedited consideration
`
`of this appeal.
`
`RiseandShine Corp. v. PepsiCo, Inc.
`
`MOVING PARTY: PepsiCo, Inc.
`- - ' - - - - - - - - - - - - - - -
`Plaintiff
`0 Defendant
`
`~ A ppe llant/P etitioner D A ppellee/Respondent
`
`OPPOSINGPARTY: RiseandShine Corp.
`
`MOVING ATTORNEY: Anton Metlitsky
`OPPOSING ATTORNEY: Paul Tanck
`- - -- - - - - - - - - -- - - -
`( name of attorney, with firm, address, phone number and e-mail]
`Alston & Bird LLP
`- - - - - - - - - - - - - - - - - - - - - - - - - -
`90 Park Ave., New York, NY 10016
`
`O'Melveny & Myers LLP
`
`7 Times Square, New York, NY 10036
`- - - - - - - - - - - - - - - - - - - - - - -
`212 -326-2291 I ametlitsky@omm .com
`--------------'----"----------
`Court - Judge/ Agency appealed from: U.S. District Court for the Southern District of New York - Hon. Lorna G. Schofield
`
`212-210-9438 I paul.tanck@alston .com
`
`FOR EMERGENCY MOTIONS, MOTIONS FOR STAYS AND
`INJUCTIONS PENDING APPEAL:
`Has this request for relief been made below?
`Has this relief been previously sought in this court?
`Requested return date and explanation of emergency:
`Appellant must begin taking action by Tuesday, November 9. Therefore , Appellant requests that the
`
`No
`es
`Yes ~ No
`To comply with the injunction,
`
`~ (cid:143)
`
`V
`
`Please check appropriate boxes:
`
`Has movant notified,-21Fosing counsel (required by Local Rule 27.1 ):
`0 Yes LJ_No (explain): _ _ _ _ _ _ _ _ _ _ _
`
`Opposing counsel's position on motion:
`O unopposed 0
`opposed0 Don't Know
`Does opp~
`counsel intend ~
`tle a response:
`LJYes 0 No ~ Don'tKnow
`
`Court grant a stay pending appeal (or at least an administrative stay) no later than Tuesday, November 9.
`
`Is oral argument on motion requested?
`
`Dy es ,0No (requests for oral argument will not necessarily be granted)
`
`Has argument date of appeal been set?
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`0 Yes ~ No If yes, enter date: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
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`Signature of Moving Attorney:
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`_/_s_/ _A_n_t_o_n_ M_e_tl_it_s_k .... Y _____ Date: November 7' 2021 Service by: O cM/ECF 0 Other r Attach proof of service l
`
`Form T-1080 (rev.12-13)
`
`(cid:143)
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page2 of 304
`
`No. 21-_____
`
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`
`RISEANDSHINE CORP. D/B/A RISE BREWING,
`Plaintiff-Appellee,
`
`v.
`
`PEPSICO, INC.,
`Defendant-Appellant.
`
`On Appeal from the United States District Court
`for the Southern District of New York
`No. 1:21-cv-06324-LGS
`Honorable Lorna G. Schofield
`
`DEFENDANT-APPELLANT’S EMERGENCY MOTION FOR STAY OF
`PRELIMINARY INJUNCTION PENDING APPEAL
`
`
`
`Macey Reasoner Stokes
`Christopher E. Tutunjian
`BAKER BOTTS L.L.P.
`910 Louisiana St.
`Houston, TX 77002
`Tel: (713) 229-1234
`
`Anton Metlitsky
`O’MELVENY & MYERS LLP
`7 Times Square
`New York, NY 10036
`Tel: (212) 326-2000
`
`Timothy S. Durst
`O’MELVENY & MYERS LLP
`2501 North Harwood St., Suite 1700
`Dallas, TX 75201
`Tel: (972) 360-1900
`
`Attorneys for Defendant-Appellant
`PepsiCo, Inc.
`
`
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page3 of 304
`
`
`
`CORPORATE DISCLOSURE STATEMENT
`
`Pursuant to Federal Rule of Appellate Procedure 26.1, Defendant-Appellant
`
`PepsiCo, Inc. (“PepsiCo”) hereby states, by and through counsel, that PepsiCo has
`
`no parent corporation, and no publicly held corporation owns 10% or more of
`
`PepsiCo’s stock.
`
`Dated: November 7, 2021
`
` /s/ Macey Reasoner Stokes
`Macey Reasoner Stokes
`Christopher E. Tutunjian
`BAKER BOTTS L.L.P.
`910 Louisiana St.
`Houston, TX 77002
`Tel: (713) 229-1234
`
`
`
`
`
`
`
`Respectfully submitted,
`
` /s/ Anton Metlitsky
`Anton Metlitsky
`O’MELVENY & MYERS LLP
`7 Times Square
`New York, NY 10036
`Tel: (212) 326-2000
`
`Timothy S. Durst
`O’MELVENY & MYERS LLP
`2501 North Harwood St., Suite 1700
`Dallas, TX 75201
`Tel: (972) 360-1900
`
`Attorneys for Defendant-Appellant
`PepsiCo, Inc.
`
`
`
`
`i
`
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page4 of 304
`
`
`
`
`
`TABLE OF CONTENTS
`
`Corporate Disclosure Statement ................................................................................. i
`
`Introduction ................................................................................................................ 1
`
`Factual and Procedural Background .......................................................................... 4
`
`I.
`
`II.
`
`As RBC knew when choosing its weak mark “RISE BREWING
`CO.,” its mark must co-exist with all but “virtually identical
`marks.”................................................................................................... 4
`
`RBC made little effort to stop the launch of MTN DEW RISE
`ENERGY and then offered PepsiCo a renewable license to
`continue to sell MTN DEW RISE ENERGY. ...................................... 5
`
`III. MTN DEW RISE ENERGY drinks and RBC’s coffee drinks
`successfully co-exist in the marketplace, with no confusion. ............... 6
`
`IV. The district court enjoins PepsiCo. ....................................................... 7
`
`Argument.................................................................................................................... 8
`
`I.
`
`PepsiCo is likely to succeed on the merits. ........................................... 8
`
`A. None of the factors upon which the district court relied
`show a likelihood of confusion. .................................................. 9
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`The actual consumer confusion factor weighs
`against RBC (Polaroid factor 5). ...................................... 9
`
`RBC’s mark—RISE BREWING CO.—is weak
`(Polaroid factor 1). ......................................................... 12
`
`The marks are not confusingly similar (Polaroid
`factor 2). .......................................................................... 14
`
`The parties’ products are different (Polaroid factor
`3). .................................................................................... 16
`
`PepsiCo’s MTN DEW RISE ENERGY drinks are
`at least equal in quality to RBC’s products
`
`
`
`ii
`
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page5 of 304
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`
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`(Polaroid factor 7). ......................................................... 18
`
`B.
`
`As the district court concluded, the remaining Polaroid
`factors do not support a likelihood of confusion. ..................... 18
`
`C.
`
`The district court’s relief is not properly tailored. .................... 19
`
`II.
`
`The balance of harms strongly tilts in favor of a stay. ........................ 20
`
`A. Absent a stay, PepsiCo will incur irreparable injury. ............... 20
`
`B.
`
`RBC will not face irreparable harm if the injunction is
`stayed......................................................................................... 20
`
`C.
`
`The public interest favors a stay. .............................................. 21
`
`Combined Certifications .......................................................................................... 24
`
`
`
`
`
`
`
`iii
`
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page6 of 304
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`
`
`CASES
`
`Arrow Fastener Co., Inc. v. Stanley Works,
`59 F.3d 384 (2d Cir. 1995) ................................................................................... 2
`
`Cadbury Beverages, Inc. v. Cott Corp.,
`73 F.3d 474 (2d Cir. 1996) ................................................................................. 18
`
`Citibank, N.A. v. Citytrust,
`756 F.2d 273 (2d Cir. 1985) ............................................................................... 20
`
`Estate of P.D. Beckwith, Inc. v. Comm’r of Patents,
`252 U.S. 538 (1920) ............................................................................................ 14
`
`Freedom Card, Inc. v. JP Morgan Chase & Co.,
`432 F.3d 463 (3d Cir. 2005) ............................................................................... 13
`
`Genesee Brewing Co., Inc. v. Stroh Brewing Co.,
`124 F.3d 137 (2d Cir. 1997) ............................................................................... 20
`
`Grand River Enter. Six Nations, Ltd. v. Pryor,
`481 F.3d 60 (2d Cir. 2007) ........................................................................... 20, 21
`
`Guthrie Healthcare System v. ContextMedia, Inc.,
`826 F.3d 27 (2d Cir. 2016) ................................................................................. 11
`
`Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc.,
`58 F.3d 27 (2d Cir. 1995) ................................................................................... 20
`
`Lang v. Ret. Living Publ’g Co.,
`949 F.2d 576 (2d Cir. 1991) ..................................................................... 9, 10, 15
`
`Lever Bros. Co. v. Am. Bakeries Co.,
`693 F.2d 251 (2d Cir. 1982) ......................................................................... 14, 18
`
`Merriam-Webster, Inc. v. Random House, Inc.,
`35 F.3d 65 (2d Cir. 1994) ................................................................................... 11
`
`Miss Universe, Inc. v. Patricelli,
`408 F.2d 506 (2d Cir. 1969) ............................................................................... 19
`
`
`
`iv
`
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page7 of 304
`
`
`
`Nabisco, Inc. v. Warner-Lambert Co.,
`220 F.3d 43 (2d Cir. 2000) ................................................................................. 16
`
`Nken v. Holder,
`556 U.S. 418 (2009) .............................................................................................. 8
`
`Nora Beverages, Inc. v. Perrier Grp. of Am., Inc.,
`269 F.3d 114 (2d Cir. 2001) ......................................................................... 10, 11
`
`Playtex Prods., Inc. v. Georgia-Pacific Corp.,
`390 F.3d 158 (2d Cir. 2004) ............................................................................... 15
`
`Plus Prods. v. Plus Disc. Foods, Inc.,
`722 F.2d 999 (2d Cir. 1983) ......................................................................... 13, 14
`
`Polaroid Corp. v. Polarad Elecs. Corp.,
`287 F.2d 492 (2d Cir. 1961) ...................................................9, 12, 14, 16, 17, 18
`
`Reuters Ltd. v. United Press Int’l, Inc.,
`903 F.2d 904 (2d Cir. 1990) ............................................................................... 20
`
`Savin Corp. v. Savin Group,
`391 F.3d 439 (2d Cir. 2004) ............................................................................... 11
`
`Star Indus., Inc. v. Bacardi & Co. Ltd.,
`412 F.3d 373 (2d Cir. 2005) ................................................................... 10, 12, 15
`
`Sterling Drug, Inc. v. Bayer AG,
`14 F.3d 733 (2d Cir. 1994) ................................................................................. 19
`
`Storck USA, L.P. v. Farley Candy Co.,
`14 F.3d 311 (7th Cir. 1994) ................................................................................ 21
`
`Vitarroz Corp. v. Borden, Inc.,
`644 F.2d 960 (2d Cir. 1981) ......................................................................... 16, 17
`
`W. E. Bassett Co. v. Revlon, Inc.,
`354 F.2d 868 (2d Cir. 1966) ............................................................................... 19
`
`W.W.W. Pharmaceutical Co. v. Gillette Co.,
`984 F.2d 567 (2d Cir. 1993) ............................................................................... 15
`
`
`
`
`
`v
`
`
`
`Case 21-2786, Document 10, 11/08/2021, 3207146, Page8 of 304
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`
`
`INTRODUCTION
`
`For the first time in this Circuit, a court has granted a preliminary injunction
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`to a trademark holder—RiseandShine Corporation d/b/a Rise Brewing (“RBC”)—
`
`who relied solely on anecdotal evidence of confusion, while the defendant—
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`PepsiCo, Inc. (“PepsiCo”)—offered survey evidence showing no likelihood of
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`confusion. The district court issued this unprecedented order all because the marks
`
`at issue (“RISE BREWING CO.” and “MTN DEW RISE ENERGY”) share the
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`commonly used word “Rise.”
`
`That was error. As RBC itself has admitted to the USPTO, “the shared term
`
`‘Rise’ is extremely weak and diluted” due to “extensive” third-party use, “such that
`
`it creates little source-identifying significance that could contribute to any likelihood
`
`of confusion apart from the cited mark as a whole.” And as RBC has further
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`admitted, marks with the word “RISE” are entitled to only a “narrow scope of
`
`protection” and must coexist with all but “virtually identical marks.” Yet the marks
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`here—“RISE BREWING CO.” (which is RBC’s house mark for its various canned
`
`coffee drinks) and “MTN DEW RISE ENERGY” (which is PepsiCo’s mark for its
`
`energy drink sold under its MTN DEW house mark)—are entirely different. The
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`district court’s fundamental legal error was ignoring these overall distinct marks,
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`instead repeatedly treating the word “Rise” as the product names, and on that ground
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`enjoining PepsiCo from using “RISE” in its mark MTN DEW RISE ENERGY.
`
`
`
`1
`
`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page9 of 304
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`
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`Once the focus shifts from the commonplace word “Rise” to the actual marks
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`as used, the district court’s errors in the likelihood of confusion analysis become
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`obvious. RBC’s mark is weak, meaning it is entitled to only a narrow scope of
`
`protection; the two marks are dissimilar on their face and even more so as
`
`encountered by consumers; and each uses the party’s house mark, rendering any
`
`customer confusion as to source highly unlikely.1 That conclusion is confirmed by
`
`actual evidence: hundreds of consumers were surveyed, and, squarely refuting
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`RBC’s reverse confusion claim, not one, upon seeing the RBC trademark at issue,
`
`believed RBC’s products were made by or associated with MTN DEW. There is
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`simply no evidence of harm warranting a nationwide preliminary injunction that
`
`ultimately would prevent 170,000 current retailers from selling MTN DEW RISE
`
`ENERGY to millions of consumers.
`
`This extraordinary order should be stayed under Federal Rule of Appellate
`
`Procedure 8 while PepsiCo pursues an expedited appeal. If the injunction is stayed
`
`but ultimately affirmed, RBC will not be irreparably harmed in the interim. RBC’s
`
`
`1 A “house mark” identifies the provider of various goods (e.g., DENTYNE, MTN
`DEW). See Arrow Fastener Co., Inc. v. Stanley Works, 59 F.3d 384, 388 n.1 (2d
`Cir. 1995). The district court erroneously asserted (without evidence) that RBC’s
`“house mark” was BREWING CO. D.Ct. 149 at 15. RBC’s own evidence
`established that its “house mark” is RISE BREWING CO., under which it markets
`products like Original Black Nitro Cold Brew Coffee and Oat Milk Latte Nitro Cold
`Brew Coffee, see, e.g., Declaration of RBC CEO Grant Gyesky (“Gyesky Decl.”)
`¶ 9.
`
`
`
`2
`
`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page10 of 304
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`
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`product sales are now better than ever. It waited close to six months, from the time
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`it first contacted PepsiCo about MTN DEW RISE ENERGY, to seek a preliminary
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`injunction. Continued sales by PepsiCo of an energy drink, in a different beverage
`
`category from RBC’s drinks and in only 3.7% of the same stores nationwide, will
`
`not harm RBC. Moreover, RBC’s own conduct confirms that it can be made whole
`
`by damages, if any. Before suing, RBC offered PepsiCo a license to keep on selling
`
`MTN DEW RISE ENERGY, so long as PepsiCo paid RBC a share of revenues.
`
`On the other hand, the harm to PepsiCo from a wrongful injunction could not
`
`be undone by ultimate reversal of the district court’s order. While PepsiCo will
`
`employ good-faith efforts to mitigate the harm from compliance, given the district
`
`court’s mere seven-day window to do so (which is insufficient time to make and
`
`distribute rebranded products), many retailers will soon be left with empty space on
`
`shelves. The independent bottlers responsible for making and distributing MTN
`
`DEW RISE ENERGY will lose revenues. Millions of consumers who regularly
`
`enjoy MTN DEW RISE ENERGY will soon be unable to buy it. Nor is there a
`
`meaningful remedy for a wrongful injunction—nothing would undo the lost sales,
`
`the wasted inventory, the harm to PepsiCo’s relationships with bottlers, retailers, and
`
`consumers, and the significant impact on the MTN DEW RISE ENERGY brand.
`
`The $250,000 bond also provides insufficient protection because it amounts to less
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`
`
`3
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`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page11 of 304
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`
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`than half of one day of retail sales generated by MTN DEW RISE ENERGY—
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`effectively no remedy at all.
`
`Accordingly, PepsiCo moves to stay, pending appeal, the district court’s
`
`preliminary injunction. D.Ct. 148, 149. PepsiCo requests that the Court act by
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`Tuesday, November 9, which is the practical deadline for PepsiCo’s compliance
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`with the district court’s order to discontinue sales of MTN DEW RISE ENERGY.
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`Should the Court need more time to consider this motion, PepsiCo asks that the Court
`
`enter an administrative stay until it has had time to consider the motion. PepsiCo
`
`also requests expedited consideration of this appeal.2
`
`FACTUAL AND PROCEDURAL BACKGROUND
`
`I.
`
`As RBC knew when choosing its weak mark “RISE BREWING CO.,” its
`mark must co-exist with all but “virtually identical marks.”
`
`RBC deliberately chose a mark, RISE BREWING CO., that is both inherently
`
`and commercially weak. D.Ct. 108-6 (RBC letter to USPTO) at 7. As RBC admitted
`
`to the USPTO, the protections for trademarks that use the word “RISE,” even in the
`
`coffee category alone, are “tightly circumscribed by the extensive third party use of
`
`Rise-formulated marks for similar goods.” Id. RBC further admitted that “many
`
`entities have used the word ‘Rise’ . . . making it unlikely that consumers would give
`
`significant weight to this term in ascertaining the source of such goods.” D.Ct. 108-
`
`
`2 RBC opposes this motion and says it cannot provide a position on whether it will
`file a response until after reading this motion.
`
`
`
`4
`
`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page12 of 304
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`
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`6 at 4. RBC also conceded that “the shared term ‘Rise’ is extremely weak and
`
`diluted, such that it creates little source-identifying significance that could contribute
`
`to any likelihood of confusion apart from the cited mark as a whole.” Id. at 5
`
`(emphases added).
`
`II. RBC made little effort to stop the launch of MTN DEW RISE ENERGY
`and then offered PepsiCo a renewable license to continue to sell MTN
`DEW RISE ENERGY.
`
`RBC has known since at least January 26, 2021, that PepsiCo would go
`
`forward with its use of the MTN DEW RISE ENERGY mark, when PepsiCo
`
`responded to a demand letter from RBC and provided examples of packaging. D.Ct.
`
`108-8 (PepsiCo letter to RBC). Yet, while PepsiCo’s product launched, RBC
`
`delayed seven weeks before even responding to PepsiCo’s January 26 letter. Gyesky
`
`Decl. ¶¶ 33-34; D.Ct. 104, Declaration of PepsiCo Energy Chief Marketing Officer
`
`Fabiola Torres (“Torres Decl.”) ¶ 4. All the while, RBC had no problem raising
`
`money; either its investors were not concerned with PepsiCo’s launch or RBC
`
`concluded that the launch was not important enough to disclose to investors. Oct. 8,
`
`2021 Evidentiary Hearing Tr. (“Tr.”) 51:6-9, 52:1-5.
`
`After seeing PepsiCo’s commitment to the MTN DEW RISE ENERGY
`
`brand, RBC still delayed. Showing that RBC did not see PepsiCo’s product as any
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`problem for RBC’s brand, RBC offered PepsiCo in April 2021, after the launch, a
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`financial out—pay RBC a “percentage of gross sales” for a “renewable license” to
`
`
`
`5
`
`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page13 of 304
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`
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`continue selling MTN DEW RISE ENERGY. Tr. 43:2–44:18. When PepsiCo
`
`declined, RBC continued to delay, not seeking injunctive relief until June 29, while
`
`allowing PepsiCo to heavily advertise and distribute MTN DEW RISE ENERGY
`
`nationwide in 170,000 stores for months. Torres Decl. ¶ 23; Declaration of PepsiCo
`
`VP – Commercial Planning Kathryn Walker (“Walker Decl.”) ¶¶ 9–10; Tr. 126:15–
`
`127:12.
`
`III. MTN DEW RISE ENERGY drinks and RBC’s coffee drinks successfully
`co-exist in the marketplace, with no confusion.
`
`MTN DEW RISE ENERGY was perceived as a “big bet” for PepsiCo, Dkt.
`
`35-1 at 60, and by all measures, PepsiCo’s launch of MTN DEW RISE ENERGY,
`
`its innovative fruit-flavored energy drink, has been a success, Torres Decl. ¶¶ 3–5,
`
`8–9, 11, 13–14; Tr. 101:12-18, 118:16–119:22. During its many months of prolific
`
`sales, PepsiCo is unaware of any instance of actual consumer confusion. Walker
`
`Decl. ¶ 12; Torres Decl. ¶ 19; Tr. 130:1–131:11. Moreover, two survey experts have
`
`concluded that there is no evidence of reverse or forward confusion. D.Ct. 106,
`
`Declaration of Philip Johnson ¶ 12; D.Ct. 107, Declaration of Melissa Pittaoulis
`
`¶ 14. The reverse confusion survey (studying whether any consumer would believe
`
`RBC’s products were made by or affiliated with MTN DEW) was conducted after
`
`PepsiCo had sold more than 30 million cans of MTN DEW RISE ENERGY and
`
`after it had invested more than $19 million in advertising, plus national media
`
`coverage in the first 48 hours of launch generating billions of commercial
`
`
`
`6
`
`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page14 of 304
`
`
`
`impressions. Tr. 124:23–125:12. What is more, no survey expert has concluded
`
`there is a likelihood of confusion. RBC has had months and months to conduct its
`
`own survey, but, tellingly, has not.
`
`As MTN DEW RISE ENERGY experienced great success, so did RBC. Its
`
`revenues have grown sharply in the first part of 2021. Tr. 108:15–110:18. And
`
`RBC’s growth continued through the launch of MTN DEW RISE ENERGY, with
`
`monthly sales accelerating both “before the Mtn Dew Rise Energy launch and after
`
`the Mtn Dew Rise Energy launch.” Tr. 108:22–109:3, 109:19-22, 110:14-18. RBC
`
`continues to secure financial backing, raising another $5 million in June, months
`
`after the launch of MTN DEW RISE ENERGY. Tr. 54:4-5.
`
`IV. The district court enjoins PepsiCo.
`
`The district court on November 3, 2021, granted RBC’s motion and enjoined
`
`PepsiCo from using the MTN DEW RISE ENERGY mark in connection with all
`
`sales and advertisements across the United States, requiring compliance within
`
`seven days. D.Ct. 148. The following day, the district court issued an amended
`
`order, which did not alter the substance of the injunction. D.Ct. 149. PepsiCo
`
`promptly moved for a stay pending appeal, D.Ct. 151, which the district court denied
`
`for the reasons discussed in its order granting RBC’s motion, D.Ct. 156.
`
`
`
`7
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`
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page15 of 304
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`
`
`ARGUMENT
`
`Four factors govern whether a court should grant a stay pending appeal: “(1)
`
`whether the stay applicant has made a strong showing that he is likely to succeed on
`
`the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)
`
`whether issuance of the stay will substantially injure the other parties interested in
`
`the proceeding; and (4) where the public interest lies.” Nken v. Holder, 556 U.S.
`
`418, 434 (2009) (citation omitted).
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`Here, a stay is manifestly warranted. PepsiCo will likely succeed on the
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`merits of its appeal. And the balance of hardships strongly disfavor an injunction.
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`Without a stay pending appeal, PepsiCo will suffer irreversible, unquantifiable
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`harms before any chance for meaningful appellate review. With no evidence of
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`irreparable harm to RBC, this Court should stay the preliminary injunction pending
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`appeal.
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`I.
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`PepsiCo is likely to succeed on the merits.
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`In this trademark dispute involving the marks RISE BREWING CO. and
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`MTN DEW RISE ENERGY and a claim of reverse confusion, the question is
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`whether PepsiCo’s use of the mark MTN DEW RISE ENERGY on fruit-flavored
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`energy drinks is likely to cause confusion about the source or sponsorship of RBC’s
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`8
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page16 of 304
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`RISE BREWING CO. coffees.3 A proper analysis of the factors in Polaroid Corp.
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`v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961), shows the answer is
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`clearly no.4
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`A. None of the factors upon which the district court relied show a
`likelihood of confusion.
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`1.
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`The actual consumer confusion factor weighs against RBC
`(Polaroid factor 5).
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`Actionable reverse confusion requires a likelihood that an appreciable number
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`of consumers, after first seeing the junior or subsequent user’s (here, PepsiCo’s)
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`mark, will see the senior or prior user’s (here, RBC’s) mark on its goods and
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`erroneously believe the junior user (PepsiCo) is the source of the goods, with the
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`“potential or actual effect on consumers’ purchasing decisions.” Lang, 949 F.2d at
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`583–84.
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`The district court committed legal error by ignoring what qualifies as relevant
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`evidence of “actual confusion” under governing trademark law. This error is
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`3 “The Lanham Act seeks to prevent consumer confusion that enables a seller to pass
`‘off his goods as the goods of another.’” Lang v. Ret. Living Publ’g Co., 949 F.2d
`576, 582 (2d Cir. 1991) (citation omitted). Here, RBC alleges “reverse confusion,”
`which exists “when a subsequent user selects a trademark that is likely to
`cause consumers to believe, erroneously, that the goods marketed by the prior user
`are produced by the subsequent user.” Id. at 583.
`4 These factors are: “the strength of [the plaintiff’s] mark, the degree of similarity
`between the two marks, the proximity of the products, the likelihood that the
`[plaintiff] will bridge the gap, actual confusion, and the reciprocal of defendant's
`good faith in adopting its own mark, the quality of defendant's product, and the
`sophistication of the buyers.” Polaroid Corp., 287 F.2d at 495.
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`9
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`particularly significant here because RBC relied solely on a reverse confusion
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`theory. As RBC admits, any evidence of alleged forward confusion (i.e., where
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`someone allegedly believes that MTN DEW RISE ENERGY is an RBC product) is
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`irrelevant to its motion. D.Ct. 112 (RBC Reply) at 3. Indeed, such evidence cannot
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`even create a triable issue of fact to survive summary judgment, much less support
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`a preliminary injunction. See Lang, 949 F.2d at 583. Yet the district court’s analysis
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`credited RBC’s witnesses’ vague testimony about confusion generally and a handful
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`of alleged beliefs that MTN DEW RISE ENERGY was an RBC product (which, at
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`most, would be irrelevant forward confusion). See id. The district court also ignored
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`that questions about the relationship between an owner of a mark and an alleged
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`infringer, such as the inquiries on which RBC relies, are not evidence of confusion
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`and again, cannot even create a triable issue of fact. See, e.g., Nora Beverages, Inc.
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`v. Perrier Grp. of Am., Inc., 269 F.3d 114, 124 (2d Cir. 2001); Lang, 949 F.2d 583.
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`And RBC relied solely on self-serving, anecdotal, and often vague recollections
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`from its own employees—none of which involved consumer confusion affecting a
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`purchasing decision. See Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F.3d 373 (2d
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`Cir. 2005) (affirming finding that factor favored party presenting survey evidence
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`when other party’s “evidence of actual confusion consisted entirely of testimony by
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`several interested witnesses recounting a handful of anecdotes, including a number
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`of hearsay statements by unidentified and unidentifiable declarants”); Lang, 949
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`F.2d at 583 (“[T]rademark infringement protects only against mistaken purchasing
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`decisions and not against confusion generally.”) (cleaned up). When the testimony
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`of RBC’s employees is examined through the lens of the legal requirements for
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`reverse confusion—including the basic requirement that the confusion involve the
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`trademarks at issue (and not, for example, an RBC employee saying the word “Rise”
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`in conversation with a busy grocery store employee)—none passes muster.
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`Moreover, given the lengthy time the parties have co-existed and the huge
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`scale of PepsiCo’s launch, RBC’s sparse anecdotal evidence is de minimis. See Nora
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`Beverages, 269 F.3d at 124; see also Savin Corp. v. Savin Group, 391 F.3d 439, 459
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`(2d Cir. 2004). By contrast, the only survey evidence in the record showed that none
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`of the hundreds of respondents associated RBC’s products with MTN DEW. This
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`factor weighs heavily in PepsiCo’s favor. See, e.g., Merriam-Webster, Inc. v.
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`Random House, Inc., 35 F.3d 65, 72 (2d Cir. 1994) (vacating permanent injunction
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`because trademark holder relied on its own salespersons’ testimony, not consumer
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`testimony or survey evidence).
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`The district court discounted this survey evidence on the ground that it “may
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`be particularly unreliable” in the context of this case, citing this Court’s statement in
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`Guthrie Healthcare System v. ContextMedia, Inc., 826 F.3d 27, 44 (2d Cir. 2016),
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`that “there has been neither long nor significant experience of the two trademarks
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`operating side-by-side in the same market.” D.Ct. 149 at 18. Even setting aside
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`Case 21-2786, Document 10, 11/08/2021, 3207146, Page19 of 304
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`Guthrie’s unique facts, that principle has no application here. At the time of the
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`survey, MTN DEW RISE ENERGY had already spent more than $19 million in
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`marketing and sold 30 million cans, and by the evidentiary hearing, it had generated
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`more than $100 million in retail sales, all while RBC was selling its products. Tr.
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`126:15-21, 127:5-12. With a survey showing no likelihood of confusion, this factor
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`weighs heavily against RBC.
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`2.
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`RBC’s mark—RISE BREWING CO.—is weak (Polaroid factor
`1).
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`The strength-of-the-mark factor concerns the amount of protection to which a
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`plaintiff’s mark is entitled and is determined by two elements: (1) the mark’s
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`classification; and (2) the degree to which the mark is recognized in the
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`marketplace. Star Indus., 412 F.3d at 384–85.
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`Here, RBC chose a mark (RISE BREWING CO.) that is both inherently and
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`commercially weak: it is highly suggestive (rather than arbitrary or fanciful) and
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`commercially diluted, due to what RBC admits is “extensive third-party use of the
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`word RISE” for other goods and services. D.Ct. 108-6 at 7; see also D.Ct. 108 (more
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`than 50 active registered marks with “RISE” or variants) & 108-3–108-5; Tr.
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`143:22–145:11 (more than 100 uses of “RISE” for goods and services). This third-
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`party usage weights this factor heavily against RBC: when a mark is “comprised of
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`an undistinctive word and coexist[s] with extensive third-party usage—it is
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`extremely unlikely that prudent consumers will confuse it with similar marks on non-
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`12
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`competitive goods.” Plus Prods. v. Plus Disc. Foods, Inc., 722 F.2d 999, 1005–06
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`(2d Cir. 1983) (affirming denial of preliminary injunction in reverse confusion case
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`where senior user’s mark was “unquestionably” weak due to extensive third-party
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`use and “the lack of originality and uniqueness” of word “PLUS”).
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`Discounting this third-party use and conceptual weakness of “Rise,” the
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`district court reached the wrong conclusion as to the commercial weakness of RBC’s
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`mark—again based on misunderstandings of trademark law. First, the court
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`erroneously discounted RBC’s admission of extensive third-party usage, based on
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`another district court’s opinion that statements during ex parte trademark
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`applications before the USPTO are not binding. But RBC’s admissions to the
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`USPTO were accurate and are weighty evidence—whether they constitute
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`trademark prosecution estoppel is simply irrelevant. As the Third Circuit explained
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`in a similar case, whether a trademark holder’s prior statements are treated as
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`“estoppel, an admission, waiver, or simply hoisting [the trademark holder] by its
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`ow