In Innovation Ventures, LLC v. N2G Distributing, Inc., the Sixth Circuit affirmed a trademark infringement judgment in favor of the producer of the Five Hour Energy product, as well as the subsequent order by the district court holding the defendant in contempt for violating the permanent injunction entered after the trial. The dispute involves an effort to protect the trademark of the Five Hour Energy drink, which is a key player in the burgeoning energy drink market. The defendants had produced a similar product with a label that arguably looked similar to that of the Five Hour Energy drink, prompting the lawsuit. The Sixth Circuit began by considering whether the Court should order a new trial on the Lanham Act claims to overturn the jury verdict. Applying a deferential standard of review, the Sixth Circuit found no basis to disturb the jury’s verdict. The jury heard ample evidence to support the plaintiff’s claim that a likelihood of confusion exists between the products, which the Court surveyed.
After upholding the jury’s verdict, the Court turned to the contempt order issued post-verdict when the district court concluded that the defendant had violated the injunction to prevent further trademark infringement. The Court first considered the applicability of the so-called “Safe Distance Rule,” which is an equitable principle developed in the context of permanent injunctions to protect intellectual property. It essentially operates to prevent known infringers from using trademarks whose use by non-infringers would not necessarily be actionable, providing “a useful tool in crafting and enforcing permanent injunctions.” This obviates the need for the district court to retry the entire range of issues that may relevant in an infringement action for each small variation the defendant might make to the enjoined mark. The Court held: “the Safe Distance Rule is thus a well-accepted part of the court’s remedial toolkit.” The defendants pointed to an earlier Sixth Circuit case, Taubman Co. v. Webfeats, 319 F.3d 770 (6th Cir. 2003) to argue that the Sixth Circuit looked with disfavor on using the Safe Distance Rule in Lanham Act cases. But the Court described the relevant portion of Taubman as dicta and emphasized that the Court had not held that the Safe Distance Rule could not be applied in this context. It also pointed out that “no other circuit has questioned the continuing viability of the Safe Distance Rule.” In effect, the Sixth Circuit limited Taubman to its facts. It then found that the district court properly invoked the Safe Distance Rule as it determined that the modified products were similar to the protected mark.
This case provides a good overview of the remedial structure of the Lanham Act and steps that parties can take in the face of willful, and repeated, infringement. The Sixth Circuit’s embracing of the Safe Distance Rule can be viewed as a sign that the rule will remain a significant enforcement tool available to district courts in these circumstances.