The Supreme Court of the United States has agreed to review the Second Circuit’s decision in RiseandShine Corporation v. PepsiCo, Inc., a case centred on trademark law.
At the heart of the dispute is whether trademark strength constitutes a question of fact in a likelihood-of-confusion analysis under 15 U.S.C. § 1114.
RiseandShine launched a canned nitro-brew coffee in 2016 using “RISE” as a mark, later registering both RISE BREWING CO. as a word mark and its logo as a design mark.
In March 2021, PepsiCo (PEP) launched MTN DEW RISE ENERGY, featuring “RISE” prominently across the top of the can in a large, jagged font.
RiseandShine filed suit in the U.S. District Court for the Southern District of New York and was granted a preliminary injunction blocking Pepsi from using the mark pending trial.
The Second Circuit, reviewing the case on appeal, focused on the strength-of-the-mark factor, which is one of the most important considerations in any likelihood-of-confusion analysis.
The appellate court agreed that RiseandShine’s mark was “suggestive” but found that the close association between “Rise” and coffee actually made the mark weaker rather than stronger.
The Second Circuit also found that RiseandShine had not demonstrated sufficient acquired strength to offset that weakness, partly because other brands were already using “Rise” on coffee products before RiseandShine adopted the mark.
On remand, the district court granted summary judgment to Pepsi, holding that the RISE marks are “inherently weak as a matter of law” under the Second Circuit’s binding conclusion.
RiseandShine appealed again, arguing that the district court impermissibly treated the strength-of-mark factor as a question of law while disregarding material facts about the mark’s acquired strength.
The Second Circuit found both arguments unpersuasive, maintaining its long-held position that the balancing of likelihood-of-confusion factors is a question of law.
Before the Supreme Court, RiseandShine argues that analysing how strong or weak the association is between a trademark and a product involves consumer perception, which is a fact-intensive issue reserved for the trier of fact.
RiseandShine further contends that every other circuit besides the Second Circuit treats the entire analysis of a mark’s conceptual strength as a question of fact, pointing to what it describes as a significant circuit split.
Pepsi counters that while acquired strength is universally treated as factual, the further analysis required to assess conceptual strength demands legal judgment that no other circuit treats as purely factual.
A ruling in favour of RiseandShine could require a fact finder in each trademark infringement analysis, potentially leading to longer and more expensive trials across the federal court system.
A ruling for Pepsi, however, could reshape how federal courts across the country approach trademark cases, introducing new uncertainty as judges adopt different infringement analyses.