November 19, 2010
Bad news for Robby Gordon and his new Speed Energy drink -- a district court judge has ruled that the logo he uses for the drink is too close to that of Specialized Bicycle Components. Gordon will not be permitted to use the logo or sell the product with the logo on it.
For Gordon, that's a crippling setback. As reported by SceneDaily.com, court filings indicate that Gordon has had more than 2.4 million cans of the energy drink produced, with nearly 1.2 million ready to sell and more than 1.8 million already in the pipeline through established distribution agreements.
Initial production costs on those cans were $1.1 million; the cans can't simply get new labels, and estimates are that it would take at least three months to create a new label and prepare new cans. In addition, the Speed logo has had a sponsor value of about $2.25 million.
Gordon had argued that the logos were aimed at different markets, and continued to manufacture his product even after receiving a cease-and-desist in September. For that reason, plus the fact that Specialized has had its logo in place for 28 years, the judge dropped the hammer.
"In their designs, the marks are very, very similar," U.S. District Court Judge Andrew J. Guilford said in rendering the decision. "Both are stylized S letters, designed to evoke thoughts of speed and movement. When reviewing the papers and exhibits submitted, this Court often had to double-check whose mark it was seeing. Because the letter S doesn’t mean anything, both marks are similar on the question of meaning. The colors used by the two parties are also similar. … In the hustle and bustle of the marketplace, this confusion [between Speed and Specialized] would likely be even greater than in the relative calm of judicial chambers."
The case obviously will proceed, and Specialized will be posting a bond of $3 million to cover damages should Gordon eventually win the lawsuit.
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