Prime Drink Faces Trademark Lawsuit by U.S. Olympic Committee

Often, when a legal controversy or conflict makes headlines, news outlets highlight a few key facts, especially in high-profile cases involving events like the Olympics or prominent YouTube influencers. However, it's crucial to also examine the broader implications of such legal conflicts on public health behaviors and consumer decision-making. In this article, we use the recent trademark dispute between the United States Olympic Committee and Prime Hydration to explore these aspects.

Olympic Committee takes legal action against Prime drink

Copyright law is not the first thing that comes to mind when you think about the Olympics. On Friday, July 19th, the United States Olympic Committee (USOC) sued Logan Paul’s and KSI's co-owned company, Prime Hydration, which used trademarked terms in its marketing to promote its sports drink without the USOC’s permission.

Trademarks and trademark infringement are not only crucial to the behind-the-scenes workings of the Olympics but also play a significant role in the marketing and distribution of healthy foods and beverages. Understanding how brand identities operate in influential contexts, such as the Olympic Games, can illuminate the factors driving product marketing and help consumers make more informed choices.

Details of the lawsuit

In 2022, the sports drink company Prime Hydration was co-founded by YouTube personalities Logan Paul and KSI. The company has faced legal scrutiny in the past for mislabelling the amount of caffeine in its products while marketing to young audiences.

Recently, the U.S. Olympic Committee took legal action in the form of a federal lawsuit against Prime Hydration for using trademarked terms like “Olympics” and “Team USA,” and using U.S. Olympic team player Kevin Durant in its marketing without permission.

The USOC stated that Prime’s use of the terms and Durant’s personality can mislead the public into falsely assuming an association between Prime Hydration and the U.S. Olympic teams. The trademarks in question include the terms "Olympic," "Olympian," and "Team USA," and even more general expressions like "Going for Gold." They further alleged that Prime Hydration did not change their marketing after receiving a cease and desist letter from the USOC.

Currently, Coca-Cola owns exclusive rights to the marketing use of terms associated with U.S. Olympic teams through significant monetary contributions to the USOC.

Prime Hydration's response

The most recent Prime Drink lawsuit updates show that Prime Hydration has not yet issued an official response. However, there are a number of potential legal defenses that they might use against the USOC’s accusations. The strongest of these defenses are defined in trademark law as follows: fair use, parody or social commentary, and First Amendment.

References to Durant’s “Olympic achievements” are technically fact and not trademark use; this is what is called a fair use argument. Prime’s phrasing of its drink as “Olympic Prime” could be thought of as tongue-in-cheek or wordplay, which validates the parody or social commentary defense. Finally, a First Amendment response under U.S. federal law argues that references to the Olympics should be protected under the right to free speech and expression.

Most of these defenses can be challenged by the USOC. The Ted Stevens Olympic and Amateur Sports Act establishes that references to the Olympics are inherently linked to the Olympic brand. Therefore, claims that these references are merely factual descriptions of Durant’s achievements, instances of parody, or exercises of free speech do not negate the fact that, for most consumers, these trademarked terms are immediately associated with the formal Olympic organization.

What is a trademark infringement?

Trademark infringement and copyright law have a lot of legal intricacies. Understanding its basics is a helpful tool for navigating news events like the USOC’s lawsuit against Prime Hydration.

According to the United States Patent and Trademark Office, trademark infringement is “the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.”

The key takeaway here is the confusion and deception of consumers. If your consumers are at risk of confusing the source of the product because of the phrases or images used in marketing, then that can be a trademark issue.

Distinctive design elements and catchphrases are most commonly involved in trademark lawsuits. In the case of the Olympics, their three-ring logo and certain terms associated with the U.S. Olympic team are at this point uniquely associated with the Olympic Games.

Legal implications

The consequences of trademark infringement for a business can include costly legal fees and financial penalties, a damaged reputation, and mandatory destruction or discontinuation of the infringing goods. Losing an infringement lawsuit can severely disrupt a company’s business operations and harm brand equity, especially for smaller businesses.

In 2022, one of the largest trademark infringement lawsuits in the United States took place when the energy drink maker Monster Energy filed and won a $175 million trademark infringement case against its competitor Vital Pharmaceuticals. The latter was accused of misleading the public by marketing its products using similar language and design elements. As is sometimes the case with trademark lawsuits in the sports and health drink industry, the trademark suit was a gateway to bigger suits against Vital for the theft of trade secrets, and, importantly, misleading the public on the effects of its products’ active ingredients.

Understanding the U.S. Olympic Committee’s stance

Prime Hydration’s marketing can count as a trademark violation under the Ted Stevens Olympic and Amateur Sports Act. Originally enacted in 1978 and amended in 1998, it is a United States federal law that establishes a framework for the governance of Olympic and amateur sports in the country. The Act grants the USOC exclusive jurisdiction over all issues pertaining to U.S. participation in the Olympic Games.

Importance of trademark protection for the Olympics

The USOC is strict about trademark usage as a part of the Ted Stevens Act, which protects athletes’ rights, safety, and well-being by putting in place clear boundaries to protect the integrity, value, and exclusivity of the Olympic and Paralympic brands. The Act includes trademark protection as a parameter for a number of reasons:

1. Brand protection. The Olympic logo, name, and symbols are globally recognized and associated with excellence in sports. Legal control ensures that these trademarks maintain their prestigious status and are not diluted by unauthorized or inappropriate use.
2. Revenue generation and athlete support. As seen when comparing the Prime lawsuit to their existing relationship with Coca-Cola, the USOC relies heavily on licensing and sponsorship deals for funding. Protecting its trademarks ensures that only official sponsors can associate with the Olympic and Paralympic brands. This makes sponsorships more lucrative and reliable and provides essential financial support for athletes and programs.
3. Consumer protection. The Olympic brand suggests quality and excellence; strict control over trademark usage prevents unvetted brands from influencing consumers using those implicit associations.

By being stringent about trademark usage, the USOC preserves the value and reputation of the Olympic brand, which in turn protects both athletes and the public.

Prime drink vs. Coca-Cola: a health comparison

Prime Hydration has faced lawsuits in the past for misleading its consumers about the safety and healthfulness of its products. Past Prime drink controversy has included a regulatory investigation into the amount of caffeine in each drink and its associated marketing to children; some countries, such as Canada, have banned the drink altogether. That being said, Coca-Cola, the official sponsor of the U.S. Olympic team, has also faced backlash for negatively impacting the health of the public in the past.

How comparable are the two companies’ products from a health and nutritional perspective? Let’s take a look at the nutritional breakdown of their respective core products: Prime Original Energy and Coca-Cola Original.

In almost every respect, an original Coke has lower levels of nutritional components when compared to Prime Hydration. The most notable nutritional concern in Prime Hydration is related to the volume of caffeine in it; experts recommend a maximum of 400 mg of caffeine per day for adults before it can have negative impacts on health. Chronic exposure to high levels of caffeine can lead to dysregulation of the digestive, liver, and renal (otherwise known as kidney) systems.

Considering the past Prime Drink controversy, where they were accused of under-reporting the volume of caffeine in their drinks, the higher caffeine content in Prime Original can be considered more dangerous to the consumer than the caffeine content in Coca-Cola.

Sugar content and health effects

The Dietary Guidelines for Americans 2020-2025 provides guidelines on sugar consumption and highlights the health effects of excessive sugar intake. They discuss the 85-15 rule of added sugar consumption: a healthful and nutrient-rich diet demands that only a maximum of 15% of an American adult's daily caloric intake can be from added sugars. The other 85% (or more) should be from nutrient-dense and diverse food groups like vegetables, fruits, whole grains, and dairy.

The DGA highlights the importance of limiting energy drink and sweetened beverage consumption to maintain health. Regular intake of the volume of sugar contained in original Coke together with consumption of a diet excessive in calories can lead to obesity, type 2 diabetes, non-alcoholic fatty liver disease, and dental problems over time. Regular non-diet Coke products appear to contain higher sugar content than Prime Drink; however, the latter does contain artificial sweeteners like sucralose.

Additives and preservatives

Both beverages contain sodium benzoate, a preservative used to extend products’ shelf life by inhibiting microbial growth. While there is some risk of benzene, a carcinogen, developing under certain light and heat conditions, the FDA has determined that the degree found in beverages like Coke does not pose significant public health risks.

Both Prime Drinks and the “diet” or unsweetened versions of Coke products contain artificial sweeteners like sucralose and aspartame. These sweeteners offer certain benefits to the consumer such as reduced caloric intake and risk of diabetes, but some studies suggest negative impacts related to disruption of gut health when consumed in high amounts and increase in appetite for sweeter foods.

Regulatory bodies have approved the consumption of the sweeteners used in Prime Drink and Coca-Cola as long as that consumption is below the acceptable daily intake, which is as follows in the U.S.:

• Sucralose: 5 milligrams per kilogram of body weight per day
• Aspartame: 50 milligrams per kilogram of body weight per day

Health implications of the lawsuit

While the past legal scrutiny against Prime could be a motivating factor in the Olympic Committee’s reaction, the reality of the situation is primarily financial.

Impact on public perception

The ongoing legal dispute between the USOC and Prime Hydration does not exist in a vacuum; it can influence the public’s perception of products’ safety and legitimacy. The trademark conflict between Prime Hydration and the Olympics brand is taking place in part because Prime Hydration is not an official sponsor of Team USA, and therefore hasn’t monetarily earned the right to use trademarked Olympic terms in their marketing. Coca-Cola, on the other hand, has contributed significant funds to USOC and the athletes under their care.

The USOC’s endorsement of Coca-Cola may increase the public’s trust in that brand for the same reasons they cite in the Prime lawsuit. When we consider the above comparison of the products’ potential health impacts, we realize that neither company’s affiliation with the Olympics has any real bearing on its product’s nutritional quality or public health impact.

Trademark infringement is a complex legal issue that often arises when an organization seeks to protect itself from damage to its brand integrity, reputation, or potential revenue loss caused by public confusion about the brand. Given the past controversies associated with the brand, the USOC’s lawsuit against Prime Hydration could lead the public to believe that their concerns are related to the health and safety of the product.

However, it’s worth noting that the USOC’s official sponsor is Coca-Cola, a company whose beverages are widely recognized as ultra-processed. It is crucial for beverage companies to be transparent about the health impacts of their products, and for consumers to approach both official and unofficial product sponsorships with a critical eye.