Sports Drink Manufacturer Fairly Used Trademarked Phrase to Describe Its Products

A sports nutrition and wellness consulting firm sued a major manufacturer of sports drinks, arguing that the manufacturer had violated the consulting firm’s trademark when it referred to itself as “The Sports Fuel Company.” The district court granted summary judgment in favor of the manufacturer. The appellate panel affirmed, finding that the manufacturer used the phrase in question as a descriptor and not a source indicator. The panel found that this was an example of fair use.

SportFuel is a Chicago-based sports nutrition and wellness consulting firm whose clients include several of Chicago’s professional sports teams and their athletes. The company provides personalized nutritional consulting services to professional and amateur athletes and also sells SportFuel branded dietary supplements. SportFuel holds two registered trademarks for “SportFuel.” One of SportFuel’s trademarks became incontestable in 2013, and the second was registered for the first time in 2015.

Gatorade was created in 1965 at the University of Florida College of Medicine and public sales began several years later. Gatorade is the official sports drink of the NBA, PGA, MLB, MLS, and many other professional and collegiate organizations. In addition to its traditional sports drinks, Gatorade offers customized sports drinks formulas tailored to the nutritional needs of individual professional athletes. Gatorade began to publicly describe its products as sports fuels in 2013. In 2016, it registered the trademark “Gatorade The Sports Fuel Company.” Gatorade disclaimed the exclusive use of “The Sports Fuel Company” after the Patent and Trademark Office advised the company that the phrase was merely descriptive of its products.

SportFuel eventually filed suit against Gatorade and PepsiCo in August 2016, alleging trademark infringement, unfair competition, and false designation of origin in violation of the Lanham Act. SportFuel also asserted claims of trademark infringement and unfair competition in violation of Illinois law. Gatorade raised counterclaims for cancellation of SportFuel’s trademark. In June 2018, the district court granted summary judgment in favor of Gatorade, finding that Gatorade’s use was a fair use under the Lanham Act. SportFuel then appealed.

The appellate panel began by finding that the record did not support that Gatorade used the term “Sports Fuel” as a source indicator. The panel stated that the packaging and marketing displays of Gatorade’s products featured Gatorade’s house mark and G Bolt logo more prominently than text referencing “Sports Fuel.” The panel stated that nothing about Gatorade’s use in those contexts suggests that consumers would view “Sports Fuel” as a source indicator.

Next, the panel found that Gatorade’s slogan uses “Sports Fuel” in a descriptive, and not suggestive, sense. The panel stated that it required no imaginative leap to understand that a company selling “Sports Fuel” is selling a variety of food products designed for athletes. The panel stated that the fact that non-athletes regularly consume Gatorade’s products has no bearing on whether the term is descriptive. The panel stated that the composition of Gatordae’s consumer base did not change the athletic characteristics of Gatorade’s products.

Finally, the panel found that Gatorade used “Sports Fuel” fairly and in good faith. The panel found that SportsFuel had failed to present sufficient evidence demonstrating bad faith on the part of Gatorade. The panel stated that Gatorade’s stated purpose in adopting the challenged slogan was to help the company better describe its business and the products it sells, and that nothing in the record contradicted that purpose. The panel, therefore, affirmed the decision of the district court.

You can view the opinion here.

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