‘Lifestyle’ brand Playboy Enterprises International – best known for its soft pornography empire built up by founder and current chief creative officer, Hugh Heffner, since the 1950s, brought its action against the two firms and their principals back in February 2013.
CirTran is a company with roots in the electronics industry – it also manufactures electronics, fitness equipment and household products offshore – but says its primary focus is now manufacturing and marketing the Playboy Energy Drink worldwide, which it has been sub-contracted to do on Play Beverages’ behalf since 2008.
In May, Federal judge Robert Gettleman denied Playboy’s motion to prevent Play Beverages and CirTran from selling the drink and using the company’s trademark rabbit logo, staying the federal action and Playboy’s demand for a preliminary injunction in favor of a parallel state lawsuit in Chicago filed against Playboy.
‘Unlawfully making money off brand’ -- Playboy
Playboy sought around $1.4m in accrued royalties and debt obligations via the federal action, since it claims that a product license agreement for the drink signed with PlayBev in 2006 – allowing it to use ‘Playboy Energy Drink’ and the famous Rabbit Head Design on the drinks – expired on September 30 2012.
In July 2013 CirTran claimed victory against Playboy in the Chicago action – Circuit Court of Cook County Illinois – when Judge Pantle denied Playboy’s attempts to dismiss counter-claims CirTran brought against it.
CirTran and PlayBev claimed alleged breach of the implied covenant of good faith dealing, promissory estoppel and injunctive relief, and the judge allowed the companies to pursue these claims.
This effectively barred Playboy from terminating PlayBev’s licensing agreement during the lawsuit without a further court order, according to CirTran.
But responding to a query on the status of the legal action, a Playboy Enterprises spokesperson told BeverageDaily.com: “PlayBev, CirTran and their principals are illegitimately conducting the Playboy energy drink business and unlawfully making money off of the brand.
“Playboy intends to pursue this matter vigorously against them and others, such as Pure NRG fx, that have not been authorized by Playboy to distribute or to promote Playboy energy drink,” they added.
Playboy drink energizes CirTran sales
The CirTran homepage clearly markets the fact that Playboy Energy Drink is ‘manufactured and distributed’ by CirTran, and the company’s Q2 2013 earnings release (issued on August 19) reveals that 98% of group sales were due to the Playboy Energy Drink line.
Quarterly sales rose a massive 247% year-over-year to $1.096m, while net income for the six months ending June 30 2013 was $1.262m, compared with an H1 2012 loss of $1.993m.
CirTran saluted the jump in sales, better margins, and an April settlement relieving CirTran of approximately $1.4m in “accrued royalties and other debt obligations claimed by former Play Beverages’ partners”, all of which it said drove bottom-line improvements.
Iehab J. Hawatmeh, chairman and president, spoke of CirTran’s hard work marketing and distributing Playboy Energy Drink products in a “burgeoning global marketplace”.
“The past six months, fighting and winning legal battles, have been very satisfying for management and shareholders alike,” he added.
(Playboy Energy Drink Picture Credit: Sebastian Freire/Flickr)