Gatorade Victorious in Trademark Suit

Advertising Law

In a big win for Gatorade, the U.S. Court of Appeals for the Seventh Circuit affirmed that the company’s use of the phrase “The Sports Fuel Company” was not a trademark violation.

Chicago-based sports nutrition and wellness consulting firm SportFuel provides personalized nutrition consulting services to professional and amateur athletes, and sells SportFuel-branded dietary supplements. The company holds two registered trademarks for “SportFuel,” one for nutrition counseling and a second for goods and services related to dietary supplements.

SportFuel filed a trademark infringement suit against Gatorade after the sports drink company began to publicly describe its products as “sports fuel” in 2013. The phrase appeared as part of a rebranding effort by Gatorade, which registered the trademark “Gatorade The Sports Fuel Company” with the U.S. Patent and Trademark Office (PTO). The company disclaimed the exclusive use of “The Sports Fuel Company” after the PTO advised it the phrase was merely descriptive.

In response to the lawsuit, Gatorade argued that the Lanham Act protects its use of “Sports Fuel” as a fair use. A district court agreed, and the Seventh Circuit affirmed on all three prongs of the defense.

First, Gatorade did not use “Sports Fuel” as a trademark. Product packaging and displays feature Gatorade’s house mark and “G Bolt” logo more prominently than the “Sports Fuel” phrase, the court said, and the term was rarely used directly on product packaging.

Instead, the company “primarily features the slogan on in-store displays and other advertisements—appearing almost as a subtitle to the house mark,” the panel wrote.

While SportFuel countered that Gatorade employed a “TM” symbol with the slogan, the court pointed out that it was important to recognize the slogan “included Gatorade’s trademark-protected house mark,” and that the company specifically disclaimed exclusive use of the phrase “The Sports Fuel Company” in its trademark application.

Further, Gatorade used “Sports Fuel” descriptively, rather than suggestively, the panel found, and therefore not as a trademark. The company provided evidence that the slogan is commonly used in the sports drink industry by multiple companies, and the phrase “clearly describes the category of goods that Gatorade produces,” the court said. “It requires no imaginative leap to understand that a company selling ‘Sports Fuel’ is selling a variety of food products designed for athletes.”

The fact that nonathletes regularly consume Gatorade products had no bearing on whether the term was descriptive, the panel added.

“Just as the pervasive use of yoga pants and other activewear as casual clothing does not change the athletic characteristics of those products, the fact that Gatorade sells more sports drinks to average joes who limit their rigorous exercise to lawn mowing does not change the athletic characteristics of Gatorade’s products,” the Seventh Circuit wrote.

As for the final factor, the court determined Gatorade used the phrase fairly and in good faith. Although the founder of SportFuel had previously worked at Gatorade, the plaintiff presented no evidence that a falling out occurred between the parties, and more than a decade had passed, the court said.

To read the decision in SportFuel, Inc. v. PepsiCo, Inc., click here.

Why it matters: The decision was a resounding victory for Gatorade, with the federal appellate panel affirming its fair use on all three prongs of the defense. The court found Gatorade did not use the phrase “Sports Fuel” as a trademark, instead using it primarily as a “subtitle” to its house mark; that its use of the phrase was descriptive, not suggestive; and that it used the phrase fairly and in good faith.