Red Bull Maker Takes Competition by the Horns

Red Bull GmbH, the Austrian energy-drink maker, is on a litigation rampage to squelch what it calls illegal importing of its namesake energy drink.

The company and its U.S. affiliate, Red Bull North America Inc., claim that at least five U.S. companies are illegally importing Red Bull products from the United Kingdom, Ireland and Asia and reselling them in the United States, infringing on its copyrights and trademarks and competing unfairly. The company has filed lawsuits against the companies in the U.S. district courts for the Northern District of Illinois, Eastern District of Louisiana and District of Columbia.

The federal filings last month against Chicago Import Ltd., Washington Food and Supply of D.C. and Baltimore Beverage Co., among others, are part of a litigation campaign being spearheaded by Hogan & Hartson's Washington office. The lawsuits, which follow a similar complaint last month with the International Trade Commission, allege that selling the foreign Red Bull products in the United States undercuts the company's efforts to tailor the product to the U.S. market and hurts sales of the Santa Monica, Calif.-based U.S. affiliate.

"When purchasers and consumers encounter the Gray Market Red Bull Energy Drink products, which bear certain of Red Bull's trademarks and copyrighted subject matter but which are otherwise materially different from what U.S. purchasers and consumers expect, they are likely to be confused, and indeed disappointed," the lawsuits say.

The lawsuits allege that there's different labeling on the cans of Red Bull produced by the U.S. affiliate and that the marketing is different. Hogan & Hartson has tapped local counsel to pursue some of the federal cases for Red Bull, including Kent Mathewson of Chicago-based, 35-lawyer Donohue, Brown, Mathewson & Smyth and Jefferson Randolph Tillery of Jones Walker in New Orleans. Although Mathewson mainly referred questions to Hogan Hartson, he did explain the double-pronged campaign against the gray market products.

"The ITC doesn't provide for damages, but it can prevent the importing," Mathewson said. "These district court filings do provide for monetary damages."

Ron Rassin, who is representing Chicago Import in the federal case filed in Chicago, said his client would move to have the case stayed in federal court until there's a decision in the International Trade Commission case. Chicago Import didn't even import that product, but rather bought if from another supplier, said Rassin, who is counsel to Chicago-based Gordon & Rappold Law Offices.

"We were just an innocent purchaser of a product that we thought to be imported properly," Rassin said. "My client thought it was buying a legitimate product."

Hogan & Hartson partner Raymond Kurz, listed on the filing as the lead attorney for Red Bull in the Washington case, didn't immediately return a call seeking comment.

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