Saturday, October 11, 2008

5-Hour Energy survives preliminary injunction motion

Hansen Beverage Co. v. Innovation Ventures, LLC, 2008 WL 4492644 (S.D. Cal.)

Hansen makes Monster and other energy beverages. Innovation makes the “5-Hour Energy” 2-ounce “energy shot.” In four years, it has made over $150 million in profits. Monster comes in 16-ounce and larger sizes, but Hansen intends to release a small-size product to compete in the energy shot market. Hansen sued for false advertising based on the name “5-Hour Energy” and claims that the product gives “hours of energy now” with “no crash later.”

Hansen argued literal falsity; its expert declared that 5-Hour Energy didn’t, and couldn’t, produce any measurable amount of energy for five hours, with energy defined scientifically and not as an “energized feeling.” Hansen further argued that energy must mean physical, biomechanical energy because of the necessary implication of the picture on the bottle, a person running on top of a mountain, and other pictures in ads of people performing physical activities. Further, any energized feeling doesn’t last five hours. Defendant’s website has a graph purporting to show that only 57.7% of users reported five or more hours of energy. Moreover, 24% of users experienced some sort of “crash,” in contradiction to “no crash later.”

Defendant’s expert opined that a product can boost “energy” without calories, including by using caffeine, taurine, and vitamins as found in 5-Hour Energy. Consumers perceive that they are getting energy. Other products, including Hansen’s own Diet Red Energy product, are called “energy drinks” even without calories. According to one clinical study, the average energy boost experienced by users was 4.92 hours; the bottle warns that “individual results may vary.” Moreover, most users don’t experience a crash, defined as an energy dip below the energy level experienced prior to drinking the beverage.

Given the dispute over the definition of “energy” and related claims, the court found that Hansen hadn’t met its burden of showing literal falsity for purposes of a preliminary injunction. As a result, the other preliminary relief factors tilted against Hansen. The court also found that Hansen’s delay in bringing suit—the product’s been on the market for four years—weighed against preliminary relief. Hansen’s president indicated that he learned of the claims one month before filing suit. But Hansen’s awareness of the energy shot market, in which 5-Hour Energy is a market leader, “must have” predated the lawsuit by “at least several months.” Once again, big companies are not allowed to delay very long—weeks matter.


Anonymous said...

5-Hour Energy is made by Living Essentials.

Anonymous said...

But they are one in the same company.