A Legal Shot
Can a company maintain and build market share by aggressively suing its rivals? Consider the David vs. Goliath legal battle between Birmingham's On Go Energy drink and Farmington Hills's 5-Hour Energy drink.
(page 1 of 7)
Derrick George was about to pitch his new energy drink to a group of national distributors at a trade show in Chicago when his office called. They said the FBI was at the back door of his business, Aspen Fitness Products in Birmingham, with a search warrant.
The agents, who arrived in three unmarked white vans, proceeded to seize and haul away several boxes of company records. They also interrogated Aspen’s staff, including a new crop of interns, about whether George was a chemist and whether he was a manufacturer, along with other pertinent questions. “All the interns knew was that I was a lawyer, and they pointed to my diploma on the wall,” George says of the May 2009 incident.
“I can’t say for sure who said what to have the FBI search my offices, but my biggest competitor (5-Hour Energy) was across the aisle from me at the trade show. And just as I’m about to present my energy drink to the distributors, the FBI is banging on my door at my office in Birmingham. The timing was rather suspicious.”
It wasn’t until March 2011 that the FBI returned Aspen’s records, sources say. Gina Balaya, public information officer for the U.S. Attorney’s Office in Detroit, says she can neither confirm nor deny that a raid took place. “No charges have been filed against Mr. George or Aspen Fitness Products,” she says.
Soon after the search, George says he heard from various channels who said they were concerned Aspen was under investigation by the FBI. “You can bet I didn’t tell any of my suppliers or contacts the FBI had raided my offices, but someone was out there spreading the news to my network,” George says. “And I’m sure it wasn’t the FBI. They don’t talk to anyone.”
It wasn’t long after the FBI returned his company records that Innovation Ventures in Farmington Hills, which produces, distributes, and sells the popular 5-Hour Energy drink, sued George and Aspen Fitness Products in U.S. District Court. The complaint, which revived similar allegations from a lawsuit in Oakland County Circuit Court that was dismissed in May 2009, claimed Aspen obtained stolen “trade secret formulas” and customer or vendor lists via a former 5-Hour Energy executive. The case is now in discovery.