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A startup coffee brand is suing PepsiCo, claiming that the beverage giant used its trademarked name when it launched a new energy drink earlier this year.
Rise Brewing Co. claims that Pepsi violated its trademark when it gave the name "Rise" to a line of Mountain Dew energy drinks in March. The Pepsi launch came with a lot of fanfare. It brought on NBA star LeBron James, who had previously spent 17 years working with rival Coca-Cola, as the face of the new line.
In its complaint, Rise points out that Pepsi was aware of the brand. The beverage giant had "a number of conversations over the years" at industry conventions with Pepsi and Starbucks, the complaint reads. Starbucks has a distribution agreement for packaged coffee drinks with Pepsi.
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Rise CEO Grant Gyesky confirmed that his company spoke with representatives from Pepsi's innovation team twice. Those discussions gave Gyesky the impression that Pepsi was interested in a potential investment or acquisition, he told Insider.
Those conversations were encouraging for Gyesky and his team, he said."We left both meetings thinking that there was a lot of additional things to discuss," he said. But Pepsi didn't end up continuing the conversation, he said.
Pepsi did not immediately respond to a request for comment on the lawsuit and the company's meetings with Rise.
The coffee brand's complaint, filed June 15 in U.S. District Court for the Northern District of Illinois Eastern Division, claims that Pepsi's new energy drink is being mistaken for Rise's coffee beverages.
A photo in the complaint shows Mountain Dew Rise beverages on a Walmart shelf designated for Rise Brewing's products, for example. The lawsuit also points to instances where customers and suppliers contacted Rise Brewing believing that the coffee startups had a relationship with Pepsi.
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Rise Brewing says that it asked Pepsi to change the energy drink's name in light of the mix-ups. According to the complaint, Pepsi responded by saying that consumers weren't likely to mix up an energy drink and a coffee beverage. Pepsi also argued that referencing the Mountain Dew brand on the Rise can made it possible to distinguish the two products — a factor that Rise Brewing's complaint says is likely to confuse consumers more.
Rise is joining a roster of smaller brands that say Pepsi plucked ideas from them. Insider reported Wednesday on two sparkling water brands that interacted with Pepsi before the company introduced its own similar product. Neither brand has taken legal action against Pepsi.
But others have. In May, Pepsi settled a lawsuit from Laboratorios Pisa, a Mexican company that makes a sports drink called Electrolit. In March, a judge in the case ordered Pepsi to delay the release of Gatorlyte, a low-sugar version of Gatorade, as the court evaluated Pisa's claims that Pepsi's product looked too much like Electrolit.
"A lot of the innovation and advancement comes from smaller brands," Gyesky told Insider, adding that startups like his are focused on creating low-sugar, healthier versions of existing beverages.
"It's really important to protect that community because it ends up impacting what people are going to be eating and drinking in the future," he added.
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