The Court of Appeal has recently ordered Drink Red to cease selling “RED” branded RTD’s and not to otherwise suggest that Drink Red’s products are associated with the well-known brand of energy drinks, RED BULL.

Red Bull has been selling energy drink products in New Zealand since 1996. In February 2015, Drink Red launched a vodka mixed drink (RTD) under the brand name “RED” (with a backwards “R”). Red Bull of course objected to this given the similarity with its own brand name it had been using in relation to its energy drinks. Drink Red insisted that it was not trying to “free-ride” off Red Bull’s reputation and instead chose the name because it had “strong ties with Russia”.

As if Red Bull was not a dark enough shade of red already, Drink Red then proceeded launched a non-alcoholic energy drink now in direct competition with Red Bull in the energy drink market. Drink Red sarcastically included on its cans the following statement: “This product does not contain Red Bull and it is not endorsed by or affiliated in any way with Red Bull. We know you would not think that but their lawyers thought you might.”

The matter soon escalated to the High Court with Red Bull filing an application to have Drink Red stop selling “RED” (with a backwards “R”) branded energy drinks. Red Bull relied on its registered trade marks and argued that consumers are likely to be misled as to whether there is an association between Drink Red’s products and Red Bull. Red Bull’s application was declined in the High Court.

Red Bull was, however, successful on appeal. The Court of Appeal held that the disclaimer applied to Drink Red products was ineffective, although it was new evidence of internal discussions at Drink Red was critical to Red Bull's success. Internal records revealed that Drink Red had intentionally set out to free-ride off Red Bull’s reputation e.g “[styling] will be the best way to tap into Red Bull’s equity”. Drink Red’s calculated attempt to trade off Red Bull’s intellectual property was frowned upon culminating in the Court granting an injunction ordering Drink Red to stop selling its energy drinks in New Zealand. A full hearing on this dispute is scheduled to take place later this year.