By: Sharon Urias, Esq. and Natalie Khachikian*, Summer Associate (*Not an Attorney)
A trademark dispute between PepsiCo and a small coffee brand is about to reshape how trademark strength is decided in federal court. The U.S. Supreme Court agreed to hear the case, and the outcome could affect how businesses build and protect their brand names going forward. While the dispute centers on PepsiCo’s MTN DEW RISE ENERGY drink and Rise Brewing’s RISE trademark for canned coffee products, the Court’s decision could have broader implications for how trademark infringement cases are litigated and resolved across the country.
The Rise Brewing and PepsiCo Dispute
The dispute began in 2021 when Rise Brewing sued PepsiCo, alleging that the use of the word “RISE” in PepsiCo’s energy drink infringed Rise Brewing’s trademark rights and created a likelihood of consumer confusion. Rise Brewing argued that consumers could mistakenly believe the products were associated with the company, despite PepsiCo’s much larger market presence.
The U.S. District Court initially agreed and issued a preliminary injunction preventing PepsiCo from using “RISE” in connection with its beverages. Applying the Second Circuit’s eight-factor likelihood-of-confusion test, the court found several factors favored Rise Brewing.
The district court concluded that the “RISE” mark was entitled to protection because it was not directly descriptive, and that both companies prominently displayed “RISE” on their product packaging. The court also noted that the products were sold through similar retail channels, including grocery and convenience stores, and that Rise Brewing presented evidence of actual consumer confusion.
Those factors led the court to find a risk of reverse confusion, which is a trademark theory that arises when a larger company’s marketing power overwhelms the identity of a smaller, established brand. The court reasoned that PepsiCo’s use of “RISE” could cause consumers to believe that Rise Brewing’s products were connected to Mountain Dew rather than the other way around.
The Second Circuit’s Different View
The Second Circuit Court of Appeals later reversed the injunction and ultimately sided with PepsiCo.
According to the appellate court, the word “RISE” is inherently weak because consumers naturally associate it with concepts such as mornings, waking up, coffee, and energy. The court also pointed to the widespread use of “Rise” by other beverage companies, suggesting that the term lacks significant distinctiveness in the marketplace.
The Second Circuit also disagreed with the district court’s conclusion that the products were sufficiently similar to create confusion. Although both products featured the word “RISE,” the court emphasized differences in the packaging, including the products’ colors, fonts, and overall visual presentation.
Most importantly, the appellate court treated trademark strength as a legal issue for the court to decide rather than a factual question reserved for juries. That conclusion is what prompted the Supreme Court review.
The Question Before the Supreme Court
Rise Brewing is asking the Court to resolve a threshold question: who should determine trademark strength in the first place?
Rise Brewing argues that trademark strength depends on factual considerations such as consumer perception, marketplace recognition, and industry use of a mark. Because those issues require evaluating evidence, the company contends they should ordinarily be decided by a jury or other factfinder.
The Supreme Court agreed to hear the case to address this procedural issue and provide guidance on how courts should evaluate trademark distinctiveness moving forward. The question is particularly significant because courts have not been entirely consistent in their approach.
What Is at Stake for Brand Owners?
The Supreme Court’s decision could influence far more than the outcome of this dispute.
Trademark strength is a critical factor in infringement cases because stronger marks generally receive broader protection, while weaker marks receive narrower protection. As a result, the entity responsible for evaluating trademark strength can significantly affect whether a case advances to trial or ends early.
If the Supreme Court agrees with PepsiCo and adopts the Second Circuit’s approach, judges may have greater authority to dismiss trademark cases before they reach a jury. If the Court sides with Rise Brewing, more trademark cases may survive summary judgment and proceed to trial. Such a ruling could also increase settlement pressure and litigation costs because parties would be more likely to face jury trials.
The Court could also choose a middle ground by determining that trademark strength is a mixed question of law and fact. In that scenario, courts may require more extensive factual records before deciding whether a claim can be resolved without a trial.
Looking Ahead
For businesses developing new brands or enforcing existing trademark rights, the case serves as a reminder that trademark protection depends not only on strong branding but also on the legal standards courts use to evaluate a mark’s distinctiveness. As the Supreme Court prepares to weigh in, brand owners across industries should closely monitor the outcome and consider how the decision may affect the future of trademark enforcement.
