5-hour Energy victorious in counterfeit energy drink lawsuit

The manufacturer of 5-hour Energy drinks has been awarded $20m in a lawsuit against a group of counterfeiters.

The civil lawsuit - heard in the District Court for the Eastern District of New York - targeted distributors and manufacturers of the counterfeit 5-hour Energy bottles including Advanced Nutraceutical Manufacturing LLC, Nutrition Private Label Inc. and Midwest Wholesale Distributors Inc.

Judge Kiyo Matsumoto granted 5-hour Energy maker Innovation Ventures damages for infringement of its trademarks and copyright. Other defendants - including Baja Exporting - have already reached settlements with the originator company.

Last year, the Department of Justice (DoJ) charged Baja owners Joseph and Adriana Shayota and other defendants of conspiracy to traffic in counterfeit goods, conspiracy to commit criminal copyright infringement and conspiracy to introduce misbranded food into interstate commerce.

Baja had a license to distribute the 5-Hour Energy drink in Mexico under license from Innovation Ventures' subsidiary Living Essentials but breached that agreement by trying to divert cheaper, Spanish-labeled product back into the US market.

They failed in that effort so then used fake English labels and packaging to divert genuine bottles, with the help of Midwest Wholesale Distributors. Eventually they succumbed to the temptation to source complete counterfeits of the brand and - at the height of the operation - the conspirators were producing 75,000 fake bottles per day.

"We are highly gratified by the court's comprehensive 94-page opinion granting us damages on summary judgment of more than $20m against those that manufactured counterfeit 5-Hour Energy, plus attorneys' fees and the costs of our investigators," said Geoffrey Potter of Patterson Belknap Webb & Tyler, counsel for Innovation Ventures, in a statement.