Global drinks giant Red Bull has lost a court battle to block a New Zealand energy drinks maker from selling its own pre-mixed vodka and energy beverage.
Christchurch-based Red attracted the attention of Red Bull's lawyers after launching its own 7 per cent vodka and energy pre-mixed drink last year.
Red Bull, which sells more than five billion cans every year and had $48 million of sales in New Zealand last year, sued the Kiwi company at the High Court in Auckland.
It claimed that Red smelled and tasted like Red Bull, and that the new drink had "piggy-backed" on its well-known brand and ultimately breached the Fair Trading Act.
After receiving legal letters, Red responded by using quotes from Red Bull's lawyers in some of its marketing campaigns.
It even put its red-and-white cans alongside Red Bull's distinctive blue-and-silver cans and asked consumers, "Can you spot the difference?"
Red Bull sought an interim injunction preventing Drink Red Limited from advertising or selling its products ahead of a trial starting on October 31 this year.
However, in a new judgement Justice Tim Brewer rejected the case for an interim injunction.
"There is no evidence that the defendants' products are serious rivals of the plaintiffs' in the marketplace," the judge concluded.
"There is no evidence that, among actual consumers, there is a serious degree of confusion or a serious likelihood of confusion."
Red Bull had two barristers visit 92 premises in Auckland, Wellington and Christchurch in November with the purpose of asking staff what was in the Red vodka and energy drink.
The March 2 hearing was told that 19 per cent of staff members believed that Red was either Red Bull or contained Red Bull.
Red's lawyer Paul Johns slammed the market research as "a very artificial exercise".
Justice Brewer, in his 27-page judgement, accepted there was a serious question to be tried over the two separate trademark claims.
However, he was not satisfied that Red Bull had demonstrated a strong prima facie case, or sufficiently established as fact that Red had mislead and deceived consumers.
"There is too much room for argument," he said.
The judge noted that Red have spent $442,000 on marketing its products, and had "openly invited" customers to notice the differences between the two brands.
The court heard that some Red RTD boxes featured a disclaimer which said: "This product does not contain Red Bull, and it is not endorsed by or affiliated in any way with Red Bull. We know you wouldn't think that, but their lawyers thought you might."
Justice Brewer did not believe that Red had intended to pass off its drink as Red Bull.
The October trial will still go ahead.
"The plaintiffs [Red Bull] have a serious case to be tried on the evidence before me; but I do not consider it to be a strong prima facie case. Instead, I see a real need for many of the plaintiffs' contentions to be tested properly at a trial," the judge said.
Justice Brewer noted that if Red loses the substantive case at trial, they will be unable to pay damages but will be left without any products to sell and their company will collapse.