Credit: Ben Roberts Photo—Getty Images
When is a brand’s marketing ambition too bold? Prime Hydration’s recent dispute with the U.S. Olympic and the Paralympic Committee (USOPC) reveals the risks associated with navigating trademark protections. Prime is a line of energy drinks from Prime Hydration, LLC, largely promoted by internet personalities Logan Paul and Olajide “KSI” Olatunji following the product line’s release in 2022. On July 19, 2024, the USOPC filed a complaint against Prime Hydration, alleging trademark infringement by its advertising and marketing campaigns.
Prime Hydration sells energy drinks with caffeine and sports drinks with electrolytes. The brand has flavors ranging from Orange, Ice Pop, and Meta Moon. Additionally, Prime Hydration often collaborates with sports teams—such as Arsenal FC, the UFC, and the LA Dodgers—and athletes like Patrick Mahomes, Alisha Lehmann, and Tyreek Hill. Ahead of the 2024 Paris Olympics, Prime Hydration partnered with three-time Olympic gold medalist and forward for the Phoenix Suns, Kevin Durant, for a special-edition drink. The design of the drink bottle features numerous references to Durant’s Olympic achievements, and contemporaneous social media promotions urged customers to “step up your hydration game with the Kevin Durant Olympic Prime Drink!”
However, Prime Hydration failed to acquire a sponsorship deal or license with the USOPC. Therefore, USOPC attorneys sent Prime Hydration a cease-and-desist letter, though Prime Hydration continued to sell and market the drink after receiving the letter. As stated in the complaint, “Despite numerous requests from USOPC, [Prime Hydration] did not remove all infringing social media posts. [Prime Hydration] is still actively infringing USOPC marks.”
Source: https://resellcalendar.com/news/news/kevin-durant-prime-reseller-lawsuit-discontinued-logan-paul/
USOPC Lawsuit
In July 2024, USOPC filed its complaint in the United States District Court for the District of Colorado and alleges Prime Hydration’s conduct as “willful, deliberate, and [bad faith]” use of its trademarked symbols and phrases. According to the complaint, Prime Hydration repeatedly used “Olympic-related terminology and trademarks” in its product packaging and its online advertising campaigns with Durant.
The USOPC’s website provides notice of its registered trademarks for the following: OLYMPIC, OLYMPIAN, GOING FOR THE GOLD, TEAM USA, and several other Olympic and Team USA logos. Further, though the USOPC includes specific brand usage guidelines, it explicitly states that only official licensees may use the USOPC trademarks. The USOPC has even gone so far as to warn businesses that are not official sponsors of the Olympic Games to not “deploy advertising campaigns, including social media posts, that are Olympic-themed, feature Olympic trademarks, include games imagery, or even congratulate Olympic performances/performers.”
Legal Basis for the USOPC Claim
These strict prohibitions derive from not only the Lanham Act (15 U.S.C. § 1051 et seq.), but also the statutory protection of the Ted Stevens Olympic and Amateur Sports Act (36 U.S.C. § 220506). The Ted Stevens Act authorizes the USOPC to take civil action against unauthorized use “for the purpose of trade, to induce the sale of any goods or services, or to promote any theatrical exhibition, athletic performance, or competition…[of] any trademark, trade name, sign, symbol, or insignia falsely representing association with, or authorization” by the USOPC or its affiliates. While the Lanham Act only prohibits usage of a trademark that creates a likelihood of confusion for consumers, the Ted Stevens Act additionally allows the USOPC to take civil action against any use of its trademarks, regardless of whether those uses are likely to cause confusion. Therefore, the USOPC effectively has exclusive rights over Olympic IP in the United States.
Rule 40 of the Olympic Charter provides further protection and restriction of the use of Olympic trademarks. The Rule limits how Olympic competitors can be advertised by unsponsored brands during the games. Namely, an unsponsored brand must complete the USOPC’s “personal sponsor commitment” form and follow narrow branding guidelines if advertising during the Rule 40 “blackout period” (July 18, 2024 to August 13, 2024 for the Olympic Games and August 21, 2023 to September 10, 2024 for the Paralympic Games). The Rule only allows for generic marketing of products featuring athletes or support of an athlete’s participation in the games but not both.
Finally, case law strongly supports USOPC in its lawsuit. The USOPC has prevailed in numerous cases over the last several decades, including a summer camp’s use of “Camp Olympic.” This litigation has often targeted small businesses, forcing them to rebrand after decades of operation. For example, Olympic Meat Packers Inc. renamed the company to Olympia Meat Packers Inc. despite forty years of use, and the Improv Olympic Theater also changed its name despite having no relation to sports of any kind. The USOPC even took its litigation to the Supreme Court over the use of the “Gay Olympic Games.” Unfortunately, the Supreme Court upheld the prohibition of the use of “Olympic,” stating that the “legislative history [indicates] that Congress intended to grant the USOPC exclusive use of the word ‘Olympic’ without regard to whether the use of the word tends to cause confusion.”
The Current and Future Effects of the Lawsuit on Prime Hydration
While not the first of its kind, this lawsuit against Prime Hydration serves as a biennial reminder of the Olympic trademark’s sheer strength and the risks associated with pushing branding boundaries of a well-guarded global icon. Even bold and successful brands can face the challenges associated with branding and trademarking, which can lead to reputational and financial implications that impact their bottom line in highly competitive industries. As of late July, Prime Hydration had removed the beverage from its website and social media, though it was still available for online purchase through other retailers. This removal could largely impact the sales of the product and the reputation of the company. Prime Hydration’s branding demonstrates that legal caution is necessary to protect against financial and reputational harm that can result in long-term disputes and strict trademark enforcement. In a competitive landscape where brand imaging is crucial to product growth, companies must be compliant with legal requirements to ensure that its reputation stays intact to promote product growth and sustainability.
Unfortunately, this is not the first time that Prime Hydration has faced legal trouble. Last year, Senator Chuck Schumer (D-NY) called upon the Food and Drug Administration to investigate the energy drink brand for its extremely high levels of caffeine. In April 2024, Prime Hydration was also hit by a consumer class action in the United States District Court for the Southern District of New York over “misleading and deceptive practices” regarding its caffeine advertisement for its drinks. Prime Hydration advertises that its drinks have 200 mg of caffeine, but it actually contains between 215 and 225 mg of caffeine.
Currently, it is unclear how these lawsuits impact Prime Hydration. However, the beverage collaborations with Logan Paul and KSI proved to be profitable. Prime Hydration generated more than $250 million in retail sales in its first year, including $45 million in a single month. Paul and KSI continue to keep Prime Hydration products in the spotlight—by paying for an ad during Super Bowl 57, having live-streamer IShowSpeed dress up in a Prime sports drink bottle during Wrestlemania 40, and signing more athletes and teams to sponsorship deals. Yet, Prime Hydration’s clash with the USOPC underscores a critical lesson for brands: in the pursuit of bold marketing, the cost of overstepping legal boundaries can far outweigh the benefits of creative ambition.
*The views expressed in this article do not represent the views of Santa Clara University.