Litigation Attrition Tactics in the Energy Drink Category

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Bang Energy and its chief executive Jack Owoc have found themselves in the legal crosshairs of Monster Beverage Corp after capturing vast swaths of market share. Bang must defend itself against a wide variety of allegations, one of which involves allegations of false advertising.

Monster alleges that Bang Energy’s growth can be attributed to “deceiving the public about the product’s ingredients and the benefits of consumption.”

In turn, Vital Pharmaceuticals – the parent company of Bang Energy – has countersued Monster for trademark infringement, claiming that Monster’s new product line “Reign Total Body Fuel” copies the flavor profiles and ingredients of Bang Energy.

An analysis of the numbers may provide insight into why Monster Beverage Corp has decided to take a hardline legal stance against Vital Pharmaceuticals Inc.

Bang Energy has been the fastest-growing energy drink in the market. According to Beverage Digest, Monster led the market at 36% in a 12-month span that ended in mid-March 2019.

Bang, on the other hand, came in at the seventh position claiming 3.2% of the total market share. While that may not sound threatening, Bang’s market share has more than doubled to 7% since that time.

One of Bang Energy’s advantages is that it has become the go-to energy drink for performance enhancement and sports nutrition. As such, it has become highly popular at fitness clubs across the United States.

Another product by Vital Pharmaceuticals Inc., the Bang Pre-Workout Master Blaster, has also become a leading seller for the company. The energy drink is advertised as having zero caffeine and “super creatine;” a compound that Monster claims to be a hoax.

Creatine is an amino acid that increases muscle energy and can be taken as an energy supplement. According to Monster, advertising on Bang’s website explicitly states that its product “is not intended to diagnose, treat, cure, or prevent any disease.”

Additionally, Monster claims that a Yale University pharmacologist tested a variety of formulations of Bang’s energy drink and creatine couldn’t be found in the product at all. The legal battle is ongoing as Bang defends against the allegations.

Litigation attrition 

It remains to be seen whether or not Monster is justified in their various lawsuits against Bang, but one thing is clear; Bang Energy has become a serious threat to Monster’s dominance over the energy drink market. To deal with its competitor, some say Monster has adopted the tactic of litigation attrition.

Litigation attrition is a legal strategy whereby large corporations and/or high net worth individuals inundate a competitor that is less capitalized with legal filings until they go out of business.   The goal of litigation attrition is to wear your opponent out financially by having them run out of money trying to match your legal spend, thus they can no longer afford counsel to defend them on the merits of the case.

Historically there are a number of large corporations whom have utilized litigation attrition as a strategy when competition – typically smaller businesses – become a potential threat to their market dominance.  Instead of competing fairly with the market newcomer, these corporations file lawsuit after lawsuit to bankrupt their smaller competitor with massive legal fees.

Litigation attrition favors massive corporations with legions of inhouse lawyers on their payroll and unlimited budgets. Smaller businesses lack the same level of resources as their larger competitors, and will likely fold under the crippling cost of battling long-term litigation.

This tactic is considered to be unethical, but highly effective, allowing large corporations to maintain their market dominance while burying their competition in the process.

Examples of litigation attrition at work 

Once upon a time, Coca Cola made it a practice to send lawyers around the country to find small vendors who sold cola products and sue them out of business.

It worked well for Coca-Cola until they encountered Pepsi, whom not only stood their ground but also won the ensuing legal battle and captured a good chunk of the market. Thus, the “cola wars” began in earnest. Pepsi proved that smaller companies could fight back against litigation attrition tactics, and win.

Another example of litigation attrition occurred during the battle between TerraCycle, a small organic plant food company, and Scotts Miracle-Gro, a massive corporation that dominated a large portion of the fertilizer market.

Miracle-Gro accused TerraCycle of making false claims that their products “outgrows the leading synthetic fertilizer.” They also accused TerraCycle of trade dress violations (essentially packaging that looked similar to their own).

Not having the financial might to face Miracle-Gro in a long-term legal battle, TerraCycle took to the public, starting a website called SuedByScotts.com (no longer active), that exposed the situation to the public and made it appear that Miracle-Gro was bullying TerraCycle.

Scotts eventually dropped the case after an agreement was reached between the two companies. It’s unclear how big a role public perception played in Scott’s decision to reach a settlement.

The legal battle is ongoing

Litigation attrition is a tactic that has seen its fair share of use over the decades. In the case of Bang Energy vs. Monster, it appears that we’re watching the cola wars play out all over again.

This time, Bang Energy is playing the role of Pepsi who’s standing up to the corporate might of Monster who fits into the role of Coca-Cola.

As of this time, our sources reveal that Monster continues to send legions of lawyers after Bang Energy. That being said, Jack Owoc doesn’t seem to be willing to back down anytime soon and appears to be digging in for a long-term legal battle. Only time will tell who will be left standing when the dust settles.

The USA Herald is initiating coverage on lawsuits in the Energy Drink & Shot categories.   If you have a tip or a story you’d like to read, contact us at [email protected].