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Monster energy drinks are seen for sale in a motorway services shop, Reading, Britain, January 25, 2019. REUTERS/Peter Cziborra

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  • Arbitrator found Bang Energy broke earlier settlement
  • Ruling says drink sales violated trademark rights

(Reuters) - In what would rank among the largest-ever U.S. trademark awards, an arbitrator said Bang Energy maker Vital Pharmaceuticals Inc owes $175 million to Monster Energy Co and Southern California orange-drink maker Orange Bang Inc for violating "Bang" trademark rights, according to a Wednesday filing in California federal court.

VPX Sports broke a 2010 settlement deal with Orange Bang by using the "Bang" name outside the scope of the agreement, the arbitrator said in a 177-page Monday ruling that was made public in Monster's Wednesday request for the court to affirm the award.

The arbitrator also ordered VPX to pay Monster and Orange Bang a 5% royalty on sales of Bang-branded products unless it limits U.S. sales to niche venues such as gyms and grocery store vitamin aisles and stops using the Bang name altogether in 12 states including California, New York and Texas.

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He also awarded Monster and Orange Bang more than $9 million in attorneys' fees and costs.

Monster Energy and Bang Energy are both among the best-selling energy drinks in the United States.

Florida-based VPX said in a Wednesday statement that it was "shocked and disappointed" by the "unprecedented" ruling and would fight it.

Monster attorney John Hueston of Hueston Hennigan said the decision "recognizes that Bang has long competed unfairly in the beverage marketplace."

Orange Bang's attorneys did not immediately respond to a request for comment.

Orange Bang sued VPX in 2009, arguing the Bang-branded pre-workout drinks it sold at the time would cause consumer confusion.

The companies settled the next year, allowing VPX to continue using the Bang name to sell "creatine-based" drinks, and to market other drinks if they were sold through vitamin shops, gyms, health clubs, or "vitamin and dietary supplement" sections of grocery stores.

VPX launched "Bang Energy RTD" in 2015, advertising it as a pre-workout energy drink with "Super Creatine."

Orange Bang's president teamed up with Corona, California-based Monster, which has still-pending false advertising claims against VPX over "Super Creatine," to accuse VPX in 2019 of breaking the settlement and infringing Orange Bang's trademarks.

VPX filed a 2020 lawsuit alleging Monster had wrongly "weaponized" the settlement and requested a ruling that it did not violate Orange Bang's trademark rights.

The case was sent to arbitration, and arbitrator Bruce Isaacs ruled for Orange Bang and Monster on Monday.

Isaacs said VPX broke the settlement and infringed Orange Bang's trademarks, finding Bang Energy RTD is not "creatine-based" because "Super Creatine" is not actual creatine and does not raise the body's creatine levels.

The case is Orange Bang Inc v. Vital Pharmaceuticals Inc, U.S. District Court for the Central District of California, No. 5:20-cv-01464.

For Monster in the court case: John Hueston, Moez Kaba and Allison Libeu of Hueston Hennigan

For Orange Bang in the court case: Steven Nataupsky, Lynda Zadra-Symes, and Matthew Bellinger of Knobbe Martens

For VPX in the court case: Daniel Janssen, Michael Carwin, Johanna Wilbert and Josh Fleming of Quarles Brady; Louis Dorny of Gordon Rees Scully Mansukhani

(NOTE: This story has been updated with additional counsel information for Monster.)

Read more:

Monster Energy defeats rival's trademark claims over low-sugar energy drinks

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Blake Brittain

Thomson Reuters

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com