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In an August 2019 decision, the 7th U.S. Circuit Court of Appeals upheld the earlier finding by the Northern District of Illinois of summary judgment that PepsiCo’s Gatorade division’s use of the phrase “Gatorade The Sports Fuel Company” on its Gatorade family of products did not infringe SportFuel Inc.’s SPORTFUEL trademark because the use of the “Sports Fuel” term by Gatorade was descriptive, not used in a source-indicative manner and thus a “fair use” of that term.
SportFuel is a Chicago-based sports nutrition and wellness consulting firm. The company provides personalized nutrition consulting services to professional and amateur athletes but also sells SportFuel-branded dietary supplements and holds two federal trademark registrations for SPORTFUEL. Gatorade was created in 1965 at the University of Florida College of Medicine; is the official sports drink of the NBA, PGA, MLB, MLS, and many other professional and collegiate organizations; and generally has become a household name. The only link between SportFuel and Gatorade is a nutritionist and dietician named Julie Burns, who founded SportFuel in 1993. Burns became aware of Gatorade’s alleged trademark infringement when she saw a Gatorade commercial featuring the new slogan.
In reviewing the district court’s grant of summary judgment, the 7th Circuit considered SportFuel’s primary argument, namely that Gatorade was using the Sports Fuel term as a trademark de novo, but still reached the same conclusion. The appellate court found that nothing about Gatorade’s use of the term suggested that consumers would view Sports Fuel as a source indicator. Further, the court found that the regular use of the Sports Fuel terminology by other producers of similar products to describe the products they sell, combined with the fact that the U.S. Patent and Trademark Office required Gatorade to disclaim the Sports Fuel terminology when it sought to register the entire slogan, strongly supported Gatorade’s argument that it used “Sports Fuel” descriptively. This fact, combined with the lack of evidence of any bad faith by Gatorade in its selection and/or use of the term, led the court to conclude that the descriptive use was fair and thus could not be infringing regardless of any potential confusion that may have been caused by Gatorade’s use thereof. “If any confusion results, that is a risk the plaintiff accepted when it decided to identify its product with a mark that uses a well known descriptive phrase.” KP Permanent Make-up, Inc. v. Lasting Impression, Inc., 125 S. Ct. 542, 550 (2004).

7th Circuit Upholds Trademark ‘Fair Use’ Doctrine

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