Gatorade’s Use of Sport Fuel Is Fair Use, Appellate Court Affirms

(August 12, 2019) If a competitor uses your trademark to describe its own product, then you might not have an action for infringement of the mark.

Trademarks are protected because they are an indicator of the source of the product. If a registered mark is used descriptively and not as a trademark by a competitor, there is no infringement, the Seventh Circuit noted in affirming the dismissal of a trademark infringement case brought by SportFuel, Inc. against PepsiCo, Inc.

The issue arose after PepsiCo sought to refresh the branding of its Gatorade product using the slogan “Gatorade The Sports Fuel Company.” SportFuel, which owns the trademark SportFuel for sports drinks and dietary supplements, sued for trademark infringement. The trial court granted PepsiCo summary judgment. (See our earlier article on the summary judgment action.)

The problem for SportFuel was that both the trial court and the appellate court found that PepsiCo’s use of the term “Sports Fuel” in connection with Gatorade was fair use. The Sports Fuel term rarely appeared on labels but rather was featured on in-store displays and other advertisements. “Nothing about Gatorade’s use in this context suggests that consumers would view ‘Sports Fuel’ as a source indicator,” the appellate court wrote. “[W]e believe Gatorade employed the term ‘Sports Fuel’ descriptively and not as a trademark. We therefore do not accept that Gatorade used the slogan unfairly or in bad faith.”

While PepsiCo had counterclaimed to cancel the SportFuel mark, that counterclaim was not addressed in this decision. It would be wise, however, to take note that using (or even securing registration for) a trademark that could be used in a descriptive way by your competitors makes for a weak mark that is difficult to protect.

SportFuel, Inc. v. PepsiCo, Inc. and The Gatorade Company, Seventh Cir. No. 18-3010, issued August 2, 2019.