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Monstrous Takeaways from Monster’s $175 Million Trademark Arbitration Victory

July 21, 2022

Monster has matched the size of its energy drinks with its recent arbitration award—securing a staggering $175 million in a trademark dispute heard by arbitrator Bruce Isaacs. While many contractual conflicts are resolved through arbitration, few trademark infringement cases land in arbitration and even fewer involve such a high monetary award.

The dispute arose between two beverage companies, Orange Bang Inc. and Vital Pharmaceuticals Inc., who had maintained a co-existence agreement where Vital would only use the name “Bang” for drinks with creatine. Monster, which later learned about that agreement, joined and proceeded to litigate the matter in exchange for half of the recovery. After the California-based arbitrator, Bruce Isaacs, rendered his opinion in April, respective motions to confirm and vacate the arbitration award ended in the favor of Orange Bang and Monster. U.S. District Judge Dale S. Fischer asserted that Isaacs’ opinion “grapples in good faith with the various conflicts in the case” and that Vital’s arguments fell “far short of the standard for vacating an arbitration award.”

Between Monster’s “intervention” in the dispute and the nine-digit number at the end, the takeaways for those considering arbitration are large. First, the outcome shows the importance of the arbitrator—selecting a specific arbitrator will not just position certain parties better, but can also affect the size of the award. Especially given the great scope of discretion with respect to remedies under the Lanham Act, companies pursuing trademark litigation may want to broaden their horizons with arbitration. Beyond the dollar signs themselves, Monster’s conduct in this matter invites some thought with respect to dispute resolution. Perhaps, sticking one’s nose in other people’s business can pay off. In 2019, Monster entered into an agreement with Orange Bang that assigned parts of the co-existence agreement that Orange Bang entered with Vital in 2010. This maneuver enabled Monster to then join as a co-claimant and litigate the case. In addition to securing a significant payout, Monster may have fulfilled other corporate agendas as another, albeit larger, player in the beverage industry alongside the initial parties.

While Monster’s maneuver could be seen as a gamble that paid off, it is difficult to deny the intentionality of the company’s actions. The idea of joining and co-opting disputes involving industry rivals can hold as much promise as risk. Competitors should take note of this decision because it demonstrates that a competitor with an agenda may involve itself with a third party in arbitration or litigation when it meets that company’s overall strategy in the marketplace. Arbitration, as all of this has shown, could prove to be an effective way of mitigating that risk and maximizing the rewards.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Kent B. Goss
Partner – Los Angeles
Phone: +1.213.443.5504
Email: kgoss@crowell.com
Kyle Pham
Associate – Washington, D.C.
Email: kpham@crowell.com