A $5 million verdict for trademark and trade dress infringement sounds great on the surface for Monster Energy Co. in its trial with a Florida automotive supply company.
But a strange thing happened on the verdict form ending a nine-day trial in Los Angeles. Jurors awarded all $5 million as punitive damages and zero as damages for infringement. That raises the possibility that Monster may collect nothing and might even be out of luck on injunctive relief.
Lawyers on both sides declared themselves pleased with the outcome. Knobbe Martens Olson & Bear partner Joseph Re emphasized that jurors found Monster’s federally registered marks had been infringed, and Monster owns rights in its trade dress, which were also infringed. Monster will now seek to enjoin Lakeland-based Integrated Supply Network LLC from selling its Monster Mobile and ISN Monster lines of goods. As for damages, “let’s see what happens,” Re said.
Integrated Supply, also known as ISN, is arguing no punitive damages can be awarded in the absence of compensatory damages. And without any tangible showing of harm, Monster has no grounds for an injunction.
“We’re extremely pleased with the verdict and looking forward to the dismissal of all of Monster’s outstanding claims,” said Christopher Madel, whose Minneapolis firm Madel Law was brought in last summer to try the case.
Horvitz & Levy partner Curt Cutting, author of the firm’s Cal Punitives blog, said it sounds as if the punitive award would be on shaky foundation. “Under state law, there must be an award of actual damages to justify a punitive award,” he said.
Monster, which is known for actively policing its IP, brought the suit in 2017. Known primarily for its energy drinks, Monster also sponsors NASCAR, motocross, drag racing and other sports events, and has licensed its marks and distinctive green M logo on autos, motorcycles, driving gloves and a wide variety of apparel. The company accused ISN of infringing with its Monster Mobile branded gloves, hoodies, snack food, thermoses and other merchandise.
ISN argued dozens of companies already use Monster as part of their marks, including prominent names in the motor sports field. Consumers aren’t likely to be confused between ISN’s use of MONSTER MOBILE on automotive tools and Monster Energy’s drink brand, ISN argued.
Knobbe’s Re tried the case before U.S. District Judge Consuelo Marshall with partners Lynda Zadra-Symes, Brian Horne, Marko Zoretic and Jason Champion. “We are pleased that the jury recognized that Monster’s strong IP rights transcend energy drinks and are enforceable against a broad spectrum of goods, including automotive-related products,” Zadra-Symes said in a statement.
Greg Gabriel, senior legal counsel at Monster Energy, said the company “could not have been happier with the dedication, preparation and knowledge of the Knobbe trial team.”
The litigation isn’t over yet. Zadra-Symes emailed ISN’s attorneys seeking confirmation ISN would stop selling ISN Monster and Monster Mobile products by the next day and advise its distributors to do the same. Otherwise, “we will seek immediate relief from the court.”
“Classic,” Madel replied an hour later. “You failed to prove any injury whatsoever and you’re still making demands.”
Zadra-Symes told Madel he’s confusing monetary damages with harm. “Injunctions are the normal remedy in trademark cases and unfair competition cases,” she wrote. And that goes double for defendants “such as ISN, who acted with malice and fraud.”
Madel, who tried the case with partners Jennifer Robbins and Cassandra Merrick, is pointing to a 2014 ruling from Marshall’s Central District of California colleague James Selna. He turned down an injunction against Old Navy where the trademark holder failed to prove damages.
“The court may not conclude that the fact of infringement itself constitutes irreparable harm, and the existence of intangible harms such as a loss of goodwill must be shown by evidence,” not by speculation, Selna wrote.
Madel also makes what appears to be a more novel argument, that Monster lacks standing to move for an injunction. “Because [Monster Energy] suffered no actual damages,” he wrote in a Monday filing before Marshall, “there cannot be an injury in fact that is traceable to any alleged conduct by ISN, thus depriving [Monster Energy] of Article III standing.”