Court Awards 5-Hour Energy 20 Million In Counterfeit Scheme

NEW YORK CITY -- The U.S. District Court for the Eastern District of New York on March 31 awarded Living Essentials LLC $20 million and complete victory in a high-profile lawsuit against three defendants who had conspired to manufacture and distribute counterfeit 5-hour Energy shots. Living Essentials, the biggest player in the energy-shot market, is the manufacturer of 5-hour Energy.

The court's ruling wraps up the remaining three civil cases in a consolidated action by Living Essentials. The other defendants settled similar charges. Geoffrey Potter, partner at New York City-based Patterson Belknap Webb & Tyler, represented Living Essentials in the litigation against more than 100 companies and individuals that allegedly sold, distributed and manufactured counterfeit 5-hour Energy.

Last June, a grand jury in the Northern District of California issued criminal indictments and then the FBI executed arrest warrants for 10 members of the alleged counterfeiting network that flooded the nation with millions of bottles of fake 5-hour Energy shots. | READ MORE

This reportedly marks the first U.S. criminal prosecution stemming from a food and beverage counterfeiting operation -- a dramatic shift in U.S. District Attorneys' approaches to handling counterfeit food products, which can potentially pose serious public health risks.

The bogus energy shots were produced with unregulated ingredients at an unsanitary facility, according to an indictment from the U.S. Attorney's office for the Northern District of California. They were reportedly removed from store shelves in 2012 soon after the counterfeiting operation was uncovered.

Criminal charges include conspiracy to traffic in counterfeit goods, commit criminal copyright infringement and introduce misbranded food into interstate commerce. The criminal trial is set to begin later this year in the Northern District of California.

"We are highly gratified by the court's comprehensive 94-page opinion granting us damages on summary judgment of more than $20 million against those that manufactured counterfeit 5-hour Energy, plus attorneys' fees and the costs of our investigators," Potter said.