1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 WORLD CHAMP TECH LLC, Case No. 21-cv-03202-LB
12 Plaintiff, ORDER GRANTING SUMMARY 13 v. JUDGMENT TO THE DEFENDANT
14 PELOTON INTERACTIVE, INC., Re: ECF Nos. 134, 135 15 Defendant. 16 17 INTRODUCTION 18 The plaintiff World Champ Tech, which offers a mobile-fitness app called “Bike+” and owns a 19 trademark registration for the same name, sued the defendant Peloton Interactive for trademark 20 infringement and other claims after the defendant launched a new line of interactive stationary 21 bicycles under the name “Peloton Bike+.” The defendant raised various affirmative defenses — 22 such as that the plaintiff abandoned its mark by not updating its app and by showing other signs of 23 inactivity — and counterclaimed for trademark cancellation due to abandonment and fraud on the 24 USPTO (in the form of misrepresentations about the continued operability of the app). The parties 25 each moved for summary judgment: the defendant contends that consumers are not likely to be 26 confused and the plaintiff cannot show damages, and the plaintiff contends that the defendants’ 27 affirmative defenses and counterclaims are not viable. The court grants the defendant’s motion for 1 STATEMENT 2 1. The Plaintiff and its Apps 3 The plaintiff is a fitness-technology company that was founded in 2012 by professional cyclist 4 || James Mattis and professional cyclist and Olympic windsurfer Ted Huang. Mr. Mattis is now the 5 || plaintiffs sole member. He developed the Biket+ app, which was first released in February 2014 6 || for the Apple iPhone and Pebble Watch. The 2014 app was a metric-tracking cycling app that was 7 || designed to “track speed, distance, altitude, and grade.” It also “allowed users to capture photos or 8 video along a ride, activate interval timers during a ride, and post details to Facebook, Twitter, or 9 || other services.” Mr. Mattis testified that the app was “more focused on outdoor activities” but was 10 || always “available for indoor bike riding.” The app name was displayed as “Bike+” on the iPhone 11 home screen and as “Bike+ [bike more]” on the Apple App Store, as follows: g — _ Bike+ [bike more] & € 13 : World Champ Tech & @ ‘tee? o
17 || The app was marketed through the Apple App Store, the plaintiff's website, social media
18 including Facebook advertising, and sponsorships and endorsements. ! 19 Mr. Mattis described the 2014 app’s lifecycle. The app, according to Mr. Mattis, “enjoyed 20 || moderate success in the early years after its release, producing tens of thousands of downloads and 21 some revenue” in the form of in-app subscriptions. Then some changes happened: for example, 22 || Mr. Huang left the company in late 2014, the Apple Watch was released in fall 2014 and achieved 23 commercial success, and downloads declined after a 2015 peak. By the end of 2016, Mr. Mattis 24 || “became convinced the company needed an alternative direction.” He then focused on developing 25 a new app dedicated to the Apple Watch. Facebook advertising for the 2014 app — which 26 27 ' Mattis Decl. — ECF No. 137-3 at 1-4 (4 1-12); Mattis Dep. — ECF No. 136-10 at 8 (p. 106:17-22); App Store Preview — ECF No. 136-9 at 2. Citations refer to material in the Electronic Case File (ECF); 28 pinpoint citations are to the ECF-generated page numbers at the top of documents.
1 required payment only “based on impressions or conversions to downloads” — continued until 2 2019. The app also remained available for download, including for Pebble Watch users; even 3 though the Pebble Watch was discontinued in late 2016, “there remains a loyal following among 4 the Pebble Watch community.” But the app was not updated after 2016 because Mr. Mattis 5 considered focusing on the new app to be the best use of his resources.2 6 The defendant also offered evidence about the plaintiff from this time period. Certain 2014 7 projections and comments by the plaintiff differed from what later happened.3 At his deposition, 8 Mr. Mattis testified that: it may have been in 2016 that he last funded Facebook advertising or 9 created a new Facebook ad; the plaintiff has removed the 2014 app from its website; the plaintiff 10 does not have data sufficient to indicate how many bike rides have been tracked using the app; Mr. 11 Mattis could not recall opening the 2014 app since 2019 (though he often works with the latest 12 unreleased build of the app); and Mr. Mattis doesn’t know from personal use how functional the 13 2014 app is (though he receives crash reports from the Apple App Store).4 Also, by the end of 14 2016, the plaintiff had not paid taxes since 2015 and its certificate of incorporation was therefore 15 suspended.5 (This changed after the defendant launched its Bike+ product in 2020, as discussed 16 below.) 17 Mr. Mattis continued developing a new version of the Bike+ app from 2017 until 2020, writing 18 “over 2.4 million lines of code,” or about 1,500 lines per day. Apple announced new machine- 19 learning tools in June 2017 and he sought to use them to create an “on-device coaching system” 20 featuring “fatigue detection.” He “spent substantial amounts of time coding and testing this 21 innovation and applying for a patent . . . that has been since implemented in the Bike+ app.” He 22 started collecting real-world test data in August 2018. Around June 2019, he was nearing 23 completion of a new app, but Apple announced a new Apple Watch operating system that enabled 24
25 2 Mattis Decl. – ECF No. 137-3 at 3 (¶ 8), 4–5 (¶¶ 14–15), 6 (¶ 22). 26 3 Def.’s Opp’n – ECF No. 147-2 at 12 (citing evidence under seal). 27 4 Mattis Dep. – ECF No. 148-3 at 21 (p. 192:13–15), 30–32 (pp. 254:9–256:5), 37–38 (pp. 299:15– 300:25), 40–42 (pp. 328:3–330:9). 1 apps to run independently of a companion iPhone. This required a change in development for Mr. 2 Mattis. He again neared completion by late 2019, but in early 2020 Apple released “StoreKit for 3 Watch apps,” which “would at least theoretically permit World Champ Tech to alter its distribution 4 model to provide for an in app coaching feature for which subscription fees could be charged.” Mr. 5 Mattis began incorporating StoreKit and then “the COVID pandemic struck, impacting 6 development productivity.” He made certain other source-code edits in February 2020. As he 7 prepared for final testing in mid-July 2020, Apple released a new operating system that introduced a 8 bug; on September 2, 2020, he reported this bug to Apple. Another operating-system release 9 occurred in November 2020, and after an inquiry from Mr. Mattis, Apple confirmed on December 10 3, 2020 that the bug was fixed. Mr. Mattis completed final testing and submitted the new Bike+ app 11 to Apple for review on December 21, 2020. The new app then launched in January 2021.6 12 Aside from developing the new app, Mr. Mattis declares that the plaintiff engaged in other 13 commercial activities during the period from 2016 to 2020. This included (1) “[w]ebsite 14 promotion of the app,” (2) Facebook accounts and advertising campaigns until 2019, (3) 15 “agreement to the Apple Developer Program License Agreement and payment of the required, 16 annual $99 developer license fee,” (4) agreement to “the Apple Paid Applications Agreement, 17 which allowed [the plaintiff] to include paid features in [its] apps” and entailed periodic pricing 18 updates (for example, due to changes in currency-exchange rates), (5) “[c]ompliance with the 19 requirements for export under U.S. Department of Commerce policy for software using 20 encryption,” (6) membership in “the Apple App Store Small Business Program,” under which 21 “Apple provides marketing support to small developers, including presentation of apps in 22 responses to Internet search engines,” and (7) “[p]ayment of a $450 monthly service fee . . . for the 23 Heroku cloud data service that supports and maintains key functions of the 2014 Bike+ app.”7 24 25 26
27 6 Mattis Decl. – ECF No. 137-3 at 5–8 (¶¶ 16–29), 13 (¶¶ 40–41). ] Some of this activity “occurred in support of international downloads and sales,” but “[d]omestic 2 || downloads and sales of the Bike+ app continued throughout this time.’””® 3 Like the 2014 app, the 2021 app is for metric tracking while cycling.’ Unlike the 2014 app, the 4 || 2021 app does not include “[bike more]” in its name, leaving only “Bike+,” and the app logo says 5 “Bike” rather than “b+.” The 2021 app appears as follows in the Apple App Store:!° 6 7 Bike+ Intelligent Workout Coach g World Champ Tech
10 11 12 || The 2021 app “shares significant code” with the 2014 app and “contains substantial code that
descends from or extends the code of” of the 2014 app.'! Mr. Mattis testified that the 2021 app is
14 || functional for both indoor and outdoor bike rides.'” It also has subscription coaching features.'° o 3 15 || But Mr. Mattis is “not positive” that the coaching features have ever worked since the 2021 app’s AQ 16 |} launch. He “believed following the completion of testing that it would work.”!* The 2021 app was
17 || last updated in January 2022.!°
18 Mr. Mattis is not aware of any in-app sales since the 2021 app’s launch. He has posted about 19 || the app on social media but he has not encouraged others to post about it on social media. !° He did 20 || not have a written business or marketing plan before launching the app, and he did not create 21 22 || Jd. at 12 (4 38). 3 ° App Store Preview — ECF No. 136-34 at 3. "Td. at 2. 24 P].’s 1st Am. Resp. to Def.’s 1st Set of Interrogs. — ECF No. 136-19 at 19-20 (Interrog. 6). 25 || '? Mattis Dep. — ECF No. 153-10 at 7-8 (pp. 560:22—562:5). 2%6 '3 App Store Preview — ECF No. 136-34 at 3. 4 Mattis Dep. — ECF No. 136-10 at 35 (pp. 545:18-546:17). 27 'S App Store Preview, Version History — ECF No. 136-34 at 5. 28 || ‘6 Mattis Dep. — ECF No. 136-10 at 36 (pp. 563:12—564:8).
1 investor presentations, solicit investors, or raise capital.17 He testified that with respect to 2 marketing of the 2021 app, the plaintiff paid for one press release, sometime after the app’s “soft 3 launch.”18 He declares that “[c]onsistent with downscaling of expectations for the app” due to the 4 defendant’s alleged infringement, he has, “at a modest pace, posted regularly about [the plaintiff’s] 5 philosophy[] and the underlying technology and capabilities of the apps” on the plaintiff’s website 6 and on social media. “The Bike+ app regularly is featured in these comments.”19 7 Mr. Mattis declares the total numbers, going back to the Bike+ app’s launch in 2014 and 8 broken down by year, of app downloads, subscribers, search impressions, Apple App Store page 9 views, and app “sessions” (instances of users’ opening the app after downloading it).20 10 11 2. The Plaintiff’s Trademark 12 The plaintiff obtained a trademark registration for the Bike+ mark. It filed an intent-to-use 13 application with the USPTO on November 23, 2013. It filed the statement of use in April 2014 and 14 the mark was registered on July 28, 2015, with registration number 4,782,695.21 The registration is 15 for the following goods: “Downloadable mobile applications for recording and managing cycling 16 activities, namely, the rider’s average and maximum speed, rider’s average and maximum power, 17 heart rate, geographic route taken, outside air temperature, altercations with aggressive drivers, 18 rider-entered route conditions, taking photos and uploading the same to an external computer 19 server for personal review and viewing by others.”22 20 After the plaintiff filed its trademark application, the USPTO cited a third party’s prior filing 21 for a “BIKEMORE” mark for bicycles. The plaintiff responded in March 2014, contending that its 22 mark was not likely to cause consumer confusion. It distinguished between its software and the 23
24 17 Id. at 32 (pp. 534:22–535:25). 25 18 Id. at 3 (pp. 51:24–52:22). 26 19 Mattis Decl. – ECF No. 137-3 at 16–17 (¶ 54). 20 Id. at 14–15 (¶¶ 46–49) (under seal). 27 21 Id. at 8 (¶ 31). 1 prior applicant’s bicycles, pointing out that “[b]icycles are physical objects.” The plaintiff also 2 argued that because consumers who download an app first go through a selection process that 3 takes several minutes, they are not likely to be confused.23 4 5 3. The Defendant and its Bike+ Product Launch 6 The defendant, which was founded in 2012, is a home-fitness company that “bring[s] studio- 7 style workouts into the home.” Its first product was “an indoor stationary bike that replicates an in- 8 studio experience.” That bike was launched in 2013 and, among other features, has a “high- 9 definition touchscreen with built-in stereo speakers to stream live and on-demand classes.”24 10 The defendant now has about seven million members. Its “core brand” is the name Peloton. It 11 conducted a survey finding that about 80% of the “general consuming public” have seen or heard 12 of the Peloton brand. The defendant’s products all feature that name. For example, the “Peloton 13 Row” is a “connected-fitness rowing machine.” The defendant also operates “more than [ninety] 14 . . . brick-and-mortar retail showrooms throughout the United States.”25 15 Over the years, the defendant has released new products. In 2018, it launched the Peloton App, 16 a mobile app for members to do such things as stream Peloton’s classes, track outdoor workouts, 17 and sign up for classes.26 The app enables Peloton subscribers to track metrics when working out, 18 separately from any Peloton class, including when cycling.27 19 On September 8, 2020, the defendant announced that it would offer a “second, higher-end 20 version” of its (indoor) connected bike and treadmill products. This was a “better/best” product 21 strategy consisting of “two models: one a high-quality option and the other a premium, higher- 22 priced option offering additional features.” The premium models were given a plus sign in their 23 name: “Peloton Bike+” and “Peloton Tread+.” The Peloton Bike+ “offers features not found on 24
25 23 Resp. to Off. Action – ECF No. 136-14 at 5–12. 26 24 Cortese Decl. – ECF No. 135-2 at 2 (¶¶ 2–4). 25 Id. at 3 (¶¶ 5–7); Horet Report – ECF No. 138-5 at 10. 27 26 Cortese Decl. – ECF No. 135-2 at 3 (¶ 5). ] the original bike, including a larger, rotating screen” and “a resistance knob that automatically 2 || adjusts to the instructor’s recommendations.” It also offers integration with Apple Watches for 3 metric tracking. Marketing expenditures for the product launch were substantial. The Peloton 4 || Bike+ costs up to $1,050 more than the original bike.”*® 5 The defendant “chose to append a ‘+’ to ‘Bike’ because it is a simple term that consumers 6 || understand to signify a product line extension with added features. Numerous leading brands, such 7 || as Apple (Apple TV+) and Disney (Disney+), had already adopted ‘+’ for their line expansions.” 8 Thus, the plus sign “can easily be implemented across product lines to indicate a ‘better/best’ 9 || product array.””? 10 “All of Peloton’s marketing materials that mention the term ‘Bike+’ are also branded with the 11 [Peloton] mark.” The defendant describes the Peloton mark as “distinctive” and as “typically” ag lL being “emphasize[d]” when its premium model’s name ts displayed. This is how the full name is
13 “often” displayed:°°
45 (PELOTON BIKE +
17 The defendant “is unaware of any instances of consumers confusing or making any connection
18 between [the plaintiff] and [the defendant].” The defendant “has no plans to use the term “Biket’” 19 || other than with its “Peloton Bike+” model.*! 20 Tom Cortese, the defendant’s co-founder and Chief Product Officer, did not learn of the □□□□□□□ 21 and its mobile applications until after the filing of this case. His understanding is that “the other 22 || members of the marketing team and executive team that were involved in conceiving and adopting 23 || the naming convention were also unaware of [the plaintiff] and its mobile applications prior to the 24 25 ?8 Cortese Decl. — ECF No. 135-2 at 3-4 8-12); Feature Comparison — ECF No. 137-49 at 3-4; Brennan Dep. — ECF No. 137-44 at 5 (pp. 120:24—121:20) (providing an estimated minimum amount 2%6 of marketing expenditures) (under seal). ?° Cortese Decl. — ECF No. 135-2 at 4—5 □□□ 14-16). 27 | 30 7a at6 □□□ 22-23). 28 || at 5 19-20).
1 filing of this lawsuit.” Members of the defendant’s in-house legal team “became aware of [the 2 plaintiff] and its trademark registration for a mobile cycling app during the clearance process.”32 3 Specifically, Peloton in-house counsel learned of the trademark in October 2019 and then 4 communicated with outside counsel, who provided an opinion on the subject in November 2019.33 5 6 4. The Plaintiff’s Actions After the Defendant’s Bike+ Product Launch 7 The plaintiff first discovered Peloton’s Bike+ product when it was released in September 8 2020.34 The following occurred after that discovery. 9 As already described, the plaintiff’s 2021 app (which was already in development for a while) 10 launched after that time: “[o]n December 3, 2020, [the plaintiff] received notice from Apple” that 11 a bug reported by the plaintiff on September 2, 2020 had been fixed. “This bug had prevented the 12 submission and lunch, prior to September 2, 2020, of the new . . . mobile applications that [the 13 plaintiff] later launched.” The plaintiff submitted the new app to Apple on December 21, 2020.35 14 On December 1, 2020, the plaintiff renewed its trademark registration and filed a declaration 15 of incontestability. The renewal included an air-temperature-measurement feature even though at 16 that time, it was “highly likely, perhaps certain, that the temperature feature did not work.” Mr. 17 Mattis declares that the reason it did not work was because it “depended on a feed from Weather 18 Underground” that was no longer operational, and that he “cannot remember whether [he] knew at 19 the time [he] renewed the registration that Weather Underground was no longer supporting the 20 feed.”36 21 In March 2021, the plaintiff produced new videos “for use in marketing and customer support 22 in connection with” its 2021 app. In April 2021, it “took steps to design and develop a new 23 website for use at the domain name worldchamptech.com, prepare content for such website 24
25 32 Id. at 5 (¶ 18). 26 33 Dillon-Curran Dep. – ECF No. 137-38 at 4 (pp. 184:16–185:25). 34 Mattis Decl. – ECF No. 137-3 at 15 (¶ 50). 27 35 Pl.’s 1st Am. Resp. to Def.’s 1st Set of Interrogs. – ECF No. 136-19 at 6 (Interrog. 3). 1 (including writing blog posts that were later posted to the website on May 3 and 4, 2021), and 2 transfer it to a new hosting service.”37 3 As of September 2020, the plaintiff’s LLC status was suspended due to its failure to pay taxes 4 since 2015.38 “From February 2021 through April 2021, [the plaintiff] took steps to correct” this 5 tax-filing “oversight.”39 6 The parties’ pre-lawsuit contact began on December 2, 2020: the plaintiff’s lawyer “wrote to 7 raise its rights with [the defendant] and invite a discussion.” The parties held discussions on 8 January 4, 2021, and the defendant solicited further discussions later that month, but the plaintiff 9 elected not to respond substantively. Mr. Mattis “took stock of the resources that would be 10 necessary and then helped counsel investigate the claims and prepare a complaint.” On April 30, 11 2021, the plaintiff filed the complaint.40 12 Mr. Mattis declares that the plaintiff “filed suit as soon as [he] felt it was reasonably practical.” 13 “Just before filing suit, to help decide whether to sue, [Mr. Mattis] created an analysis . . . based 14 on [his] own lay understanding of the rules.” He sent this analysis to his girlfriend “to check [his] 15 assumptions,” and he “was not intending to indicate that [he] expected [the plaintiff] to recover 16 huge sums of money.” He was not “acting opportunistically to take advantage of [the defendant’s] 17 decision to infringe.” Overall, the plaintiff’s actions were allegedly consistent with plans “to sell 18 apps under a [Bike+] trademark.”41 19 20 5. Procedural History 21 The complaint has six claims: (1) federal trademark infringement, 15 U.S.C. § 1114; 22 (2) federal unfair competition, 15 U.S.C. § 1125(a); (3) California unfair competition, Cal. Bus. & 23 Prof. Code § 17200; (4) California false advertising, Cal. Bus. & Prof. Code § 17500; (5) 24
25 37 Pl.’s 1st Am. Resp. to Def.’s 1st Set of Interrogs. – ECF No. 136-19 at 7 (Interrog. 3). 26 38 Mattis Dep. – ECF No. 136-10 at 31 (p. 462:1–14). 39 Pl.’s 1st Am. Resp. to Def.’s 1st Set of Interrogs. – ECF No. 136-19 at 7 (Interrog. 3). 27 40 Mattis Decl. – ECF No. 137-3 at 15–16 (¶¶ 50–51). 1 common-law trademark infringement; and (6) common-law unfair competition. All claims are 2 based on the defendant’s alleged “willful and unauthorized use of [the plaintiff]’s trademark.”42 3 The parties stipulated that the plaintiff’s claims are limited to “the theory that [the defendant]’s 4 conduct is likely to cause reverse confusion, not forward confusion.”43 5 The court has federal-question jurisdiction. 28 U.S.C. §§ 1331, 1338. All parties consented to 6 magistrate-judge jurisdiction.44 Id. § 636(c). The court held a hearing on May 25, 2023. 7 8 STANDARD OF REVIEW 9 The court must grant summary judgment where there is no genuine dispute as to any material 10 fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); 11 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). Material facts are those that may 12 affect the outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is 13 genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving 14 party. Id. at 248–49. 15 The party moving for summary judgment has the initial burden of informing the court of the 16 basis for the motion and identifying portions of the pleadings, depositions, answers to 17 interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material 18 fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). To meet its burden, “the moving 19 party must either produce evidence negating an essential element of the nonmoving party’s claim 20 or defense or show that the nonmoving party does not have enough evidence of an essential 21 element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz 22 Cos., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 23 2001) (“When the nonmoving party has the burden of proof at trial, the moving party need only 24 point out ‘that there is an absence of evidence to support the nonmoving party’s case.’”) (quoting 25 26 42 Compl. – ECF No. 1 at 1 (¶ 1), 12–20 (¶¶ 70–113). 27 43 Joint Case-Mgmt. Statement – ECF No. 130 at 2. 1 Celotex, 477 U.S. at 325). “Where the moving party will have the burden of proof on an issue at 2 trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other 3 than for the moving party.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). 4 If the moving party meets its initial burden, then the burden shifts to the nonmoving party to 5 produce evidence supporting its claims or defenses. Nissan Fire & Marine Ins. Co., 210 F.3d at 6 1103. “Once the moving party carries its initial burden, the adverse party may not rest upon the 7 mere allegations or denials of the adverse party’s pleading, but must provide affidavits or other 8 sources of evidence that set forth specific facts showing that there is a genuine issue for 9 trial.” Devereaux, 263 F.3d at 1076 (cleaned up). If the non-moving party does not produce 10 evidence to show a genuine issue of material fact, then the moving party is entitled to summary 11 judgment. Celotex, 477 U.S. at 322–23. 12 In ruling on a motion for summary judgment, the court does not make credibility 13 determinations or weigh conflicting evidence. Instead, it views the evidence in the light most 14 favorable to the non-moving party and draws all factual inferences in the non-moving party’s 15 favor. E.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88 (1986); Ting 16 v. United States, 927 F.2d 1504, 1509 (9th Cir. 1991). 17 18 ANALYSIS 19 The defendant moved for summary judgment on the ground that consumers are not likely to be 20 confused about the source of the plaintiff’s app.45 That argument, if correct, would resolve all of 21 the plaintiff’s claims because they all turn on the same likelihood-of-confusion analysis. M2 22 Software, Inc. v. M2 Commc’ns, L.L.C., 281 F. Supp. 2d 1166, 1169 (C.D. Cal. 2003). The court 23 grants summary judgment on this ground. 24 25 26 27 1 1. Legal Standard 2 The United States Trademark Act (Lanham Act) prohibits the unauthorized use in commerce 3 of “any reproduction, counterfeit, copy, or colorable imitation of a registered mark” where such 4 use is likely to cause confusion, to cause mistake, or to deceive. 15 U.S.C. § 1114(1)(a). To 5 prevail on a claim for relief, a plaintiff must prove “(1) that it has a protectible ownership interest 6 in the mark; and (2) that the defendant’s use of the mark is likely to cause consumer confusion, 7 thereby infringing upon the [plaintiff’s] rights to the mark.” Dep’t of Parks & Recreation for Cal. 8 v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1124 (9th Cir. 2006); M2 Software, Inc. v. Madacy 9 Ent., 421 F.3d 1073, 1085 (9th Cir. 2005) (the plaintiff “must show sufficient evidence to permit a 10 rational trier of fact to find that confusion is probable, not merely possible”) (cleaned up). 11 Courts consider eight factors to determine the likelihood of confusion: 12 (1) [S]trength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods 13 and the degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines. 14 15 Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008). The factors are pliant, and the 16 Ninth Circuit has warned against “excessive rigidity” in their application. Id. at 632–33. Instead, 17 “[t]he test is a fluid one and the plaintiff need not satisfy every factor, provided that strong 18 showings are made with respect to some of them.” Surfvivor Media, Inc. v. Survivor Prods., 406 19 F.3d 625, 631 (9th Cir. 2005). Indeed, “[n]either intent nor actual confusion is necessary to 20 establish a likelihood of confusion.” Chanel, Inc. v. Dudum, No. C-12-01966 JCS, 2012 WL 21 5833562, at *4 (N.D. Cal. Oct. 29, 2012), R. & R. adopted, No. C 12-1966 CRB, 2012 WL 22 5835694 (N.D. Cal. Nov. 15, 2012). That said, “some factors — such as the similarity of the 23 marks and whether the two companies are direct competitors — will always be important.” 24 Brookfield Commc’ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1054 (9th Cir. 1999). 25 This is a reverse-confusion case where “consumers dealing with a senior trademark-holder” 26 (the party that first used the mark, which here is the plaintiff) are allegedly confused because they 27 believe “that they are doing business with a junior user” (here, the defendant). M2 Software, 421 1 (describing reverse confusion in more detail). That is, “reverse confusion occurs when a person 2 who knows only of the well-known junior user comes into contact with the lesser-known senior 3 user, and because of the similarity of the marks, mistakenly thinks that the senior user is the same 4 as or is affiliated with the junior user.” Ironhawk Techs., 2 F.4th at 1160. These cases change the 5 likelihood-of-confusion analysis for certain factors, as explained in more detail below. 6 “Because of the ‘intensely factual nature of trademark disputes,’ summary judgment is 7 generally disfavored in trademark cases and should be granted ‘sparingly.’” Monster, Inc. v. Dolby 8 Lab’ys Licensing Corp., 920 F. Supp. 2d 1066, 1070–71 (N.D. Cal. 2013) (quoting Rearden LLC 9 v. Rearden Commerce, Inc., 683 F.3d 1190, 1202, 1210 (9th Cir. 2012)). “[C]areful assessment of 10 the pertinent factors that go into determining likelihood of confusion usually requires a full 11 record.” Rearden LLC, 683 F.3d at 1210 (cleaned up). Still, summary judgment is appropriate 12 when “[t]he distribution of the Sleekcraft factors does not raise a material issue of fact regarding 13 likelihood of confusion.” Surfvivor, 406 F.3d at 634. 14 15 2. Application 16 The court first addresses a threshold issue, which is the defendant’s argument that the 17 plaintiff’s 2014 and 2021 apps are distinct and the latter is not relevant because it was not a bona 18 fide commercial use of the plaintiff’s mark.46 19 “[A] senior user’s post-infringement use of the mark on additional products” should 20 sometimes be excluded from likelihood-of-confusion analysis. Lodestar Anstalt v. Bacardi & Co., 21 31 F.4th 1228, 1252–53 (9th Cir. 2022). Specifically, “the Lanham Act generally limits 22 enforceable trademark rights to bona fide uses that reflect genuine commercial endeavors rather 23 than merely efforts to retain rights in a mark.” Id. at 1254 (cleaned up) (citing 15 U.S.C. § 1127). 24 Thus, “the statute requires commercial use of the type common to the particular industry in 25 question” — use that is “for genuine commercial reasons” and is not a “‘token’ or other 26 insubstantial use[].” Id. at 1255 (cleaned up). But “[a] single sale, or non-sales activities alone, 27 1 may suffice to merit trademark protection upon review of the totality of the circumstances.” Soc. 2 Techs. LLC v. Apple Inc., 4 F.4th 811, 821 n.11 (9th Cir. 2021). 3 Here, the plaintiff’s 2021 app was in continuous (if slow paced) development before and after 4 the launch of the Peloton Bike+. Also, the “2021 app” was in a sense an update to the plaintiff’s 5 existing use in commerce (its 2014 Bike+ app). This is unlike cases where a product launch was 6 merely a reaction to an allegedly infringing product launch, for the purpose of reserving trademark 7 rights. Compare Lodestar, 31 F.4th at 1255 (the plaintiff had decided to suspend a rum project but 8 then reactivated it after the defendant’s allegedly infringing product campaign began; after an 9 initial sale, only sixteen sample bottles were delivered over the next five years; “a reasonable jury 10 . . . could conclude” that the project was a bona fide use), with Soc. Techs., 4 F.4th at 819–22 (the 11 plaintiff’s app was not a bona fide use because after filing its trademark application, the plaintiff 12 did not even develop code for its “Memoji” app until Apple released a similar app, at which point 13 the plaintiff “rushed to develop the code for and release its [app]”). It is true that the 2021 iteration 14 of the plaintiff’s app has arguably been less than robust: for example, there have been no in-app 15 sales, the app’s distinguishing “coaching” feature may not be functional, marketing has been 16 limited, and the app was last updated in January 2022. But viewing the evidence in the light most 17 favorable to the plaintiff, and especially in light of Lodestar, there is a genuine dispute that the 18 2021 app is a bona fide commercial use. 19 The issue then is whether, considering both the 2014 and 2021 apps, the Sleekcraft analysis 20 entitles the defendant to summary judgment on the plaintiff’s claims for liability. With the 21 knowledge that “this inquiry [is] exhausting,” Ironhawk Techs., 2 F.4th at 1161, the court begins 22 at the beginning. 23 The strength of the mark is an important factor. A party that chooses “a common, useful, and 24 descriptive term as a trademark” will not get “the same broad scope of protection that may be 25 accorded to more distinctive and arbitrary marks.” Redken Lab’ys, Inc. v. Clairol, Inc., 501 F.2d 26 1403, 1405 (9th Cir. 1974). “This ‘strength’ of the trademark is evaluated in terms of its 27 conceptual strength and commercial strength.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1 plaintiff’s mark to the commercial strength of the defendant’s mark. Ironhawk Techs., 2 F.4th at 2 1162. “[T]he important question . . . is whether the [defendant’s] junior mark is so [commercially] 3 strong as to overtake the senior mark.” Id. (cleaned up). Thus, a reverse-confusion plaintiff “with a 4 commercially weak mark is more likely to prevail than a plaintiff with a stronger mark, and this is 5 particularly true when the plaintiff’s weaker mark is pitted against a defendant with a far stronger 6 mark.” Id. at 1162–63 (cleaned up). 7 With respect to conceptual strength, “[f]rom weakest to strongest, marks are categorized as 8 generic, descriptive, suggestive, and arbitrary or fanciful.” GoTo.com, 202 F.3d at 1207. Parties 9 often dispute “how marks in the middle, not so plainly descriptive, nor so plainly distinctive, 10 should be categorized.” Ironhawk Techs., 2 F.4th at 1162. Suggestive marks “suggest a product’s 11 features and require consumers to exercise some imagination to associate the suggestive mark with 12 the product.” JL Beverage Co. v. Jim Beam Brands Co., 828 F.3d 1098, 1107 (9th Cir. 2016). 13 Descriptive marks “define a particular characteristic of the product in a way that does not require 14 any imagination.” Id. “[T]he question [on summary judgment] is whether a reasonable jury could 15 find that [the] mark is at least suggestive[.]” Ironhawk Techs., 2 F.4th at 1162. But “the line 16 between descriptive and suggestive marks is elusive” and “is a question of fact.” Id. (cleaned up). 17 Commercial strength, on the other hand, “is based on actual marketplace recognition.” JL 18 Beverage, 828 F.3d at 1107 (cleaned up). This can be shown “by such factors as extensive 19 advertising, length of exclusive use, public recognition and uniqueness.” Accuride Int’l, Inc. v. 20 Accuride Corp., 871 F.2d 1531, 1536 (9th Cir. 1989). 21 The first question is whether the plaintiff’s Bike+ mark is suggestive rather than descriptive. In 22 this analysis, it matters that the plaintiff has a federal trademark registration. The parties do not 23 dispute that the mark was registered without proof of secondary meaning, which is an “acquired 24 distinctiveness” that is required for a descriptive mark to become protectable. Zobmondo Ent., 25 LLC v. Falls Media, LLC, 602 F.3d 1108, 1113 (9th Cir. 2010). When a mark is registered without 26 proof of secondary meaning, the mark holder is “entitled to a presumption that the mark is 27 inherently distinctive — i.e., suggestive — and the burden shift[s] to [the defendant] to show that 1 can do so “through law, undisputed facts, or a combination thereof,” the plaintiff “cannot survive 2 summary judgment.” Id. But this is a “heavy” burden for the defendant and because the defendant 3 is the moving party, the plaintiff “gets the benefit of reasonable inferences.” Id. 4 This is the rare case where the court can decide as a matter of law that the plaintiff’s mark is 5 descriptive. No imagination is needed to understand from the “Bike+” mark and its context in the 6 marketplace that the plaintiff’s product is an app for enhancing biking. Entrepreneur Media, Inc. 7 v. Smith, 279 F.3d 1135, 1142 (9th Cir. 2002) (“Whether a mark suggests or describes the goods 8 or services of the trademark holder depends . . . upon what those goods or services are. We 9 therefore adjudge a mark’s strength by reference to the goods or services that it identifies[] and as 10 it appears in the marketplace.”) (cleaned up); Zobmondo Ent., 602 F.3d at 1116 (“Our prior 11 precedent makes it clear that merely descriptive marks need not describe the ‘essential nature’ of a 12 product; it is enough that the mark describe some aspect of the product.”). In Entrepreneur Media, 13 for example, the court held that the mark “Entrepreneur,” as applied to the plaintiff’s magazines 14 and computer programs and manuals, was descriptive. 279 F.3d at 1142 (summary-judgment 15 stage); see also Plus Prods. v. Plus Disc. Foods, Inc., 722 F.2d 999, 1006 (2d Cir. 1983) (“The 16 term Plus is an everyday word that indicates something added, and when applied to goods, it 17 merely implies additional quantity or quality.”). “Bike+” is likewise descriptive. 18 The plaintiff’s mark is further weakened by the presence of similar marks for similar apps in 19 the major app stores. Lodestar, 31 F.4th at 1259 n.11 (“[e]vidence of third-party use of a similar 20 mark is relevant to the strength of the mark,” including “for the . . . purpose of showing that the 21 [plaintiff’s mark] has been repeatedly associated with [similar] products”). The defendant 22 submitted evidence of nine other apps in the Apple App Store and the Google Play Store using 23 variants of “Plus” or “+” along with “Bike.”47 The plaintiff responds that it “challenged several of 24 these and the use, if any, stopped,”48 but that does not account for all of them and the fact remains 25 that “the [plaintiff’s mark] has been repeatedly associated with [similar] products.” Id. 26
27 47 Hoyer Report – ECF No. 136-44 at 14 (¶ 44); Google Play Store Page – ECF No. 162-4 at 3. 1 On the mark-strength factor, though, “[w]hether [the senior mark is] descriptive or suggestive, 2 the important question in a reverse confusion case is whether the junior mark is so commercially 3 strong as to overtake the senior mark.” Ironhawk Techs., 2 F.4th at 1162 (cleaned up). In Ironhawk 4 Techs., the plaintiff’s mark was conceptually weak but the court held that given the evidence of 5 the junior mark’s commercial strength, the overall mark-strength issue was for the jury to decide. 6 Id. at 1163. 7 Nonetheless, the parties dispute whether the plaintiff’s mark’s reputation or “commercial 8 strength” might matter for the mark-strength factor in a reverse-confusion case. (Recall that under 9 Ninth Circuit precedent, in reverse-confusion cases the court compares the conceptual strength of 10 the plaintiff’s mark to the commercial strength of the defendant’s mark.) The defendant relies on 11 Aliign Activation Wear, LLC v. lululemon athletica Canada Inc. for the proposition that the senior 12 mark must have more than de minimis goodwill, i.e., it must have some commercial strength for 13 the junior mark to overtake.49 No. 220CV03339SVWJEM, 2021 WL 3117239, at *11 (C.D. Cal. 14 June 7, 2021) (“[T]o survive summary judgment on a reverse confusion claim, [the plaintiff] must 15 raise a genuine issue of material fact that an appreciable number of consumers believe they are 16 purchasing [the defendant’s] products when they are, in fact, purchasing [the plaintiff’s] 17 products.”) (citing Surfvivor Media, 406 F.3d at 630), aff’d, No. 21-55775, 2022 WL 3210698 (9th 18 Cir. Aug. 9, 2022). In Aliign, the court noted that “hardly anyone” purchased the plaintiff’s yoga 19 clothing: the plaintiff had sold seven items “from 2015 onwards.” Id. The court thus held that “no 20 reasonable juror could find an appreciable number of consumers are likely to be confused and 21 believe they are buying lululemon.” Id. 22 In its unpublished decision affirming Aliign, the Ninth Circuit did not address the mark- 23 strength factor or the district court’s “appreciable number” reasoning. 2022 WL 3210698, at *1–2. 24 Aside from the Aliign district court’s decision, it is possible to find some other support for the 25 notion that the plaintiff’s junior mark must have some degree of commercial strength for there to 26 be reverse confusion. See Dreamwerks Prod. Grp., Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th 27 1 Cir. 1998) (“Dreamwerks notes that whatever goodwill it has built now rests in the hands of 2 DreamWorks; if the latter should take a major misstep and tarnish its reputation with the public, 3 Dreamwerks too would be pulled down.”); Ironhawk Techs., 2 F.4th at 1160 (describing the senior 4 user in a reverse-confusion case as known to some degree and stating that reverse confusion 5 occurs when a consumer “mistakenly thinks that the senior user is the same as or is affiliated with 6 the junior user”); A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 228 (3d 7 Cir. 2000) (“The chief danger inherent in recognizing reverse confusion claims is that innovative 8 junior users, who have invested heavily in promoting a particular mark, will suddenly find their 9 use of the mark blocked by plaintiffs who have not invested in, or promoted, their own marks.”). 10 Certainly, it is important that the Ninth Circuit’s reverse-confusion test compares the senior 11 mark’s conceptual strength to the junior mark’s commercial strength. Ironhawk Techs., 2 F.4th at 12 1162–63. And here, the defendant’s mark’s commercial strength is significant compared to the 13 plaintiff’s mark’s conceptual strength. What about when the plaintiff’s mark is descriptive, 14 though? Id. at 1162 (“On summary judgment . . . the question is whether a reasonable jury could 15 find that [the plaintiff’s] mark is at least suggestive.”). Or when the plaintiff’s mark is both 16 descriptive and commercially weak? The Ninth Circuit has assumed that the plaintiff’s mark’s 17 commercial strength must meet some minimum bar. Id. at 1163 (“[W]e assess the commercial 18 strength of [the defendant’s] mark and ask whether it is able to swamp the reputation of [the 19 plaintiff’s mark] with a much larger advertising campaign.”). 20 To the extent the plaintiff’s mark’s commercial strength is relevant, there was not much of it 21 for the defendant’s mark to overtake in this case. The current version of the plaintiff’s app 22 (discussed above as the “2021 app”) was under development for a very long time before the 23 defendant’s product launch (with an associated lack of development or promotion of the 2014 24 app), was last updated in January 2022, has achieved no in-app sales, showed declining (and 25 insubstantial) subscriber numbers, has been marketed minimally, and has a key feature that may 26 not be functional. Under these circumstances — where besides being commercially weak, the 27 plaintiff’s mark is (as a matter of law) descriptive — the mark-strength factor favors the 1 The next factor (which is also an important one) is whether the parties are direct competitors 2 or, put another way, “the relatedness of the products and services offered.” Brookfield Commc’ns, 3 174 F.3d at 1055. “Related goods are generally more likely than unrelated goods to confuse the 4 public as to the producers of the goods.” Id. In this “competitive proximity” analysis, the court 5 asks whether “the products are used for similar purposes” and whether “the two companies 6 compete for the patronage of an overlapping audience.” Id. Stated differently, “[t]he proximity of 7 goods is measured by whether the products are: (1) complementary; (2) sold to the same class of 8 purchasers; and (3) similar in use and function.” Network Automation, Inc. v. Advanced Sys. 9 Concepts, Inc., 638 F.3d 1137, 1150 (9th Cir. 2011). But “the mere fact that two products or 10 services fall within the same general field” is not enough. Stonefire Grill, Inc. v. FGF Brands, 11 Inc., 987 F. Supp. 2d 1023, 1050 (C.D. Cal. 2013); Brookfield Commc’ns, 174 F.3d at 1056 (the 12 focus is on the parties’ products rather than their “principal lines of business”). 13 Although the defendant’s product is a $2500 stationary bike and the plaintiff’s is an app, they 14 are complementary: the defendant offers a metric-tracking app to accompany its bike, and the 15 plaintiff’s app can be used with indoor stationary bikes. Wreal, LLC v. Amazon.com, Inc., 38 F.4th 16 114, 132 (11th Cir. 2022) (record evidence of the potential for cross-compatibility, in the form of 17 equivalent cross-compatibility already existing in the market, shows product relatedness). For the 18 same reason, there is at least a genuine dispute that the products are sold to the same class of 19 purchasers and are similar in use and function. This factor thus favors the plaintiff. 20 The third factor, which again is important, is the similarity of the marks. This analysis “rel[ies] 21 on three general principles.” Ironhawk Techs., 2 F.4th at 1164. “First, similarity is best adjudged 22 by appearance, sound, and meaning.” Id. (cleaned up). “Second, the marks must be considered in 23 their entirety and as they appear in the marketplace.” Id. (cleaned up); Lindy Pen Co. v. Bic Pen 24 Corp., 725 F.2d 1240, 1245 (9th Cir. 1984) (“The two marks viewed in isolation are . . . identical, 25 but their similarity must be considered in light of the way the marks are encountered in the 26 marketplace and the circumstances surrounding the purchase of the [products].”); Arcona, Inc. v. 27 Farmacy Beauty, LLC, 976 F.3d 1074, 1080–81 (9th Cir. 2020) (“[N]o reasonable consumer 1 attributes . . . are not remotely similar.”). “Third, similarities are weighed more heavily than 2 differences.” Ironhawk Techs., 2 F.4th at 1164 (cleaned up). 3 The defendant’s use of its “business name or house mark alongside its version of the disputed 4 mark” is important for this factor. Id. “[I]n a reverse confusion case[,] the junior user’s use of a 5 house mark can . . . aggravate confusion by reinforcing the association between the mark and the 6 junior user.” Id.; Americana Trading Inc. v. Russ Berrie & Co., 966 F.2d 1284, 1288 (9th Cir. 7 1992). 8 Despite differences in how the marks have been encountered in the marketplace at times (for 9 example, the plaintiff’s mark’s being encountered in an app store with “bike more” next to it), in 10 the specific context of reverse confusion, the defendant’s use of its housemark means that “a 11 reasonable jury could find that the marks are similar.” Ironhawk Techs., 2 F.4th at 1165; 12 Americana Trading, 966 F.2d at 1288 (due to “the prominence of [the defendant]’s housemark,” 13 the district court “erred by finding no genuine issue of material fact as to similarity of appearance, 14 sound, and meaning”). This factor favors the plaintiff. 15 The fourth factor is whether there is evidence of actual confusion. Jada Toys, 518 F.3d at 632. 16 Although the parties offered competing expert surveys on whether consumers would be confused 17 and the parties dispute (essentially) the weight those reports should be given, it is undisputed that 18 no evidence of actual confusion has been offered. Given that the parties’ products have coexisted 19 in the marketplace since September 2020, the lack of evidence of actual confusion weighs in the 20 defendant’s favor at the summary-judgment stage. Lodestar, 31 F.4th at 1261; Cohn v. Petsmart, 21 Inc., 281 F.3d 837 at 842–43 (9th Cir. 2002). 22 The next factor — the marketing channels used by the parties — also weighs in the 23 defendant’s favor. 24 “Convergent marketing channels increase the likelihood of confusion.” Official Airline 25 Guides, Inc. v. Goss, 6 F.3d 1385, 1393 (9th Cir. 1993) (cleaned up). “In assessing marketing 26 channel convergence, courts consider whether the parties’ customer bases overlap and how the 27 parties advertise and market their products.” Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1 exposed to the products overlap.” Id. (cleaned up); see Ironhawk Techs., 2 F.4th at 1166 (“[B]oth 2 [parties’] employing salespeople is of little significance without evidence those salespeople target 3 the same class of customers.”). If both parties engage in “generic internet advertising,” though, 4 that is insignificant because “most companies today engage in online marketing.” See, e.g., 5 Asuragen, Inc. v. Accuragen, Inc., No. 16-cv-05440-RS, 2018 WL 558888, at *6 (N.D. Cal. Jan. 6 25, 2018). 7 The defendant emphasizes that it sells its Bike+ product “exclusively through [its] showrooms 8 and website[] and through [Dick]’s Sporting Goods’ stores and website.”50 Also, the summary- 9 judgment evidence is that the plaintiff has not done much marketing: the last Facebook advertising 10 for the 2014 app was in 2019 (before the defendant’s product launch), and marketing for the 2021 11 app has been limited. The plaintiff counters that the defendant’s advertising “has swamped all 12 channels with [Bike]+ advertising” (and thus occupies the channels used by the plaintiff, such as 13 “the Apple App Store, search engines, and social media”) and that the parties’ marketing experts 14 “describe a long sales funnel in which consumers interested in Peloton’s Bike+ are likely exposed 15 to multiple Bike+ impressions in multiple channels before they buy.”51 16 The parties’ marketing channels are not convergent. For one thing, the fact that the defendant’s 17 substantial advertising campaign encompasses the Apple App Store and internet search engines is 18 unremarkable under the precedent. Moreover, the plaintiff has done very little marketing during 19 the products’ coexistence (i.e., from September 2020 onwards), meaning that the parties’ 20 marketing channels have not themselves exposed a meaningful overlap of consumers to the 21 products. Helix Env’t Plan., Inc. v. Helix Env’t & Strategic Sols., No. 3:18-cv-2000-AJB-AHG, 22 2020 WL 2556341, at *6 (S.D. Cal. May 20, 2020) (one party did “very little marketing” and 23 instead “advertise[d] primarily through word-of-mouth,” so the court “conclude[d] that this factor 24 favor[ed] Defendants”). The defendant’s use of brick-and-mortar stores further separates its 25 marketing channels from the plaintiff’s. Thus, this factor favors the defendant significantly. 26 27 50 Cortese Decl. – ECF No. 135-2 at 6 (¶ 21). 51 Pl.’s Opp’n – ECF No. 149 at 29–30 (citing summary-judgment evidence, including expert 1 The sixth factor is “the type of goods and the degree of care likely to be exercised by the 2 purchaser.” Jada Toys, 518 F.3d at 632. Courts “assess the sophistication of the customers and ask 3 whether a ‘reasonably prudent consumer’ would take the time to distinguish between the two 4 product lines.” Ironhawk Techs., 2 F.4th at 1167 (cleaned up). “In a reverse confusion case, the 5 degree of care exercised by customers is determined with reference to the alleged senior user’s 6 customers only.” Abercrombie & Fitch Co. v. Moose Creek, Inc., 486 F.3d 629, 634 n.2 (9th Cir. 7 2007) (cleaned up). 8 “When the buyer has expertise in the field, or the goods are expensive, the buyer can be 9 expected to exercise greater care in his purchases.” Ironhawk Techs., 2 F.4th at 1167 (cleaned up). 10 In this regard, consumers “in specialized, niche markets may be very sophisticated as to brands 11 and discerning in their purchases. Possible examples could include buyers of mountain climbing 12 equipment and buyers of tap dance shoes.” 4 McCarthy on Trademarks and Unfair Competition 13 § 23:99 (5th ed. Dec. 2023 Update). Thus, district courts have held that buyers exercise greater 14 care when choosing products related to fitness and health. Suja, Life, LLC v. Pines Int’l, Inc., No. 15 16CV985-GPC(WVG), 2016 WL 6157950, at *12 (S.D. Cal. Oct. 24, 2016) (“Consumers 16 choosing products that affect their physical appearance and health are likely to exercise a great 17 deal of care.”) (cleaned up); Reeves v. Gen. Nutrition Ctrs., Inc., No. SACV1001653JAKFFMX, 18 2012 WL 13018362, at *7 (C.D. Cal. Apr. 2, 2012) (similar); Jevo Inc. v. Barre Physique LLC, 19 No. CV-08-06315-R, 2010 WL 11597823, at *20 (C.D. Cal. Feb. 22, 2010) (similar). At the same 20 time, the Ninth Circuit has said that “a discerning consumer might immediately connect the like- 21 named products more readily than an unsophisticated consumer.” Fortune Dynamic, Inc. v. 22 Victoria’s Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1038 (9th Cir. 2010). 23 Here, the plaintiff does not dispute that its customers are sophisticated with respect to 24 connected-fitness products. Instead, the plaintiff relies on the proposition that their sophistication 25 increases the likelihood of confusion.52 The Ninth Circuit’s statement to that effect in Fortune 26 Dynamic was in the context of “the difficulty of trying to determine with any degree of confidence 27 1 the level of sophistication of young women shopping at Victoria’s Secret,” which “only 2 confirm[ed] the need for [the] case to be heard by a jury.” Id. By contrast, there is longstanding 3 precedent that consumer sophistication (at least when known) “can be expected” to result in 4 consumers’ using “greater care in [their] purchases.” Ironhawk Techs., 2 F.4th at 1167. This 5 precedent applies in the online context as well. Network Automation, 638 F.3d at 1150 (“[T]he 6 default degree of consumer care [online] is becoming more heightened as the novelty of the 7 Internet evaporates and online commerce becomes commonplace.”). The purchaser-care factor 8 thus favors the defendant because the plaintiff’s customers can be expected to exercise greater care 9 when browsing the Apple App Store. 10 The court next considers the defendant’s intent in selecting its mark. Jada Toys, 518 F.3d at 11 632. “Evidence that a defendant has an ‘intent to deceive’ customers weighs in favor of finding a 12 likelihood of confusion.” Fortinet, Inc. v. Fortanix, Inc., No. 20-cv-06900-MMC, 2022 WL 13 1128723, at *5 (N.D. Cal. Apr. 15, 2022). But “when a court applies Sleekcraft in a case that 14 presents reverse confusion,” it “may consider several indicia of intent,” bearing in mind that “[t]he 15 Sleekcraft factors are to be applied flexibly.” Marketquest Grp., Inc. v. BIC Corp., 862 F.3d 927, 16 934 (9th Cir. 2017). “At one extreme, intent could be shown through evidence that a defendant 17 deliberately intended to push the plaintiff out of the market by flooding the market with 18 advertising to create reverse confusion.” Id. “Intent could also be shown by evidence that, for 19 example, the defendant knew of the mark, should have known of the mark, intended to copy the 20 plaintiff, failed to conduct a reasonably adequate trademark search, or otherwise culpably 21 disregarded the risk of reverse confusion.” Id. at 934–35; Ironhawk Techs., 2 F.4th at 1167–68 22 (“In the reverse confusion context, we ask whether there is some evidence that the junior user, 23 when it knew of the senior user, was at fault for not adequately respecting the rights of the senior 24 user.”) (cleaned up). “[B]ut no specific type of evidence is necessary to establish intent, and the 25 importance of intent and evidence presented will vary by case.” Marketquest Grp., 862 F.3d at 26 935. 27 The defendant admits that its in-house counsel knew of the plaintiff’s mark before the 1 counsel on the subject at that time.53 The plaintiff contends that this scenario shows that the 2 defendant “culpably disregarded the risk of reverse confusion.”54 It is true that the defendant at 3 least should have known of the plaintiff’s mark at the time of the defendant’s product launch. But 4 especially given that “Bike+” is a descriptive mark, the defendant’s choice of a product name that 5 likewise describes its product mitigates the significance of the intent factor. Edge Games, Inc. v. 6 Elec. Arts, Inc., 745 F. Supp. 2d 1101, 1116 (N.D. Cal. 2010) (in a reverse-confusion case, “there 7 [was] no evidence in the record that EA chose to call [its] product ‘Mirror’s Edge’ for any reason 8 but to describe the visual and thematic aspects of the video game,” and relatedly, “the ‘strength’ of 9 plaintiff’s asserted marks [was] also highly susceptible to attack”). The court thus concludes that 10 this factor is neutral or very slightly in the plaintiff’s favor. 11 The final factor — the likelihood of expansion of the parties’ product lines — is treated by the 12 parties as insignificant in their briefs. This factor is more important “[i]n the context of non- 13 competing goods” (unlike the complementary products at issue here). Ironhawk Techs., 2 F.4th at 14 1168 (“[A] strong possibility that either party may expand his business to compete with the other 15 will weigh in favor of finding that the present use is infringing.”) (cleaned up). The plaintiff did 16 submit evidence that the defendant has considered developing an app store for its fitness 17 equipment and has applied for trademark registrations related to mobile app features.55 Some 18 cases, though, have described the likelihood-of-expansion test as whether “the plaintiff’s 19 expansion plans” are being hindered. Surfvivor, 406 F.3d at 634. If anything, this factor favors the 20 plaintiff very slightly, but the factor’s significance is diminished here. 21 Having walked through each factor, the court’s final task is to evaluate the totality of the 22 circumstances. Ironhawk Techs., 2 F.4th at 1169. To survive summary judgment, “the plaintiff 23
24 53 Cortese Decl. – ECF No. 135-2 at 5 (¶ 18); Dillon-Curran Dep. – ECF No. 137-38 at 4 (pp. 184:16– 185:25). 25 54 Pl.’s Opp’n – ECF No. 149 at 31. 26 55 Feb. 2022 New York Times Article – ECF No. 150-18 at 3–4 (the defendant’s CEO floated the idea of creating an app store to run on the equipment’s screen); Trademark Registration – ECF No. 152-40 27 at 2–3 (registration for the mark “Peloton” for (among other things) “downloadable software in the nature of an application for use by individuals participating in exercise classes [and] physical 1 need not satisfy every factor, provided that strong showings are made with respect to some of 2 them.” Surfvivor, 406 F.3d at 631. That said, the Sleekcraft “list does not purport to be exhaustive, 3 and non-listed variables may often be quite important.” Brookfield Commc’ns, 174 F.3d at 1054. 4 The ultimate question is whether “a rational trier of fact could find that confusion is probable.” 5 Ironhawk Techs., 2 F.4th at 1167. 6 Although the court’s task is not to “count beans,” Au-Tomotive Gold, Inc. v. Volkswagen of 7 Am., Inc., 457 F.3d 1062, 1076 (9th Cir. 2006), a recap of the court’s conclusions will be helpful. 8 The following Sleekcraft list shows which factors are the “important” ones and which party each 9 one favors: 10 (1) strength of the marks (important): Defendant 11 (2) relatedness of the goods (important): Plaintiff 12 (3) similarity of the marks (important): Plaintiff 13 14 (4) evidence of actual confusion: Defendant 15 (5) marketing channels: strongly Defendant 16 (6) degree of consumer care: Defendant 17 (7) intent to deceive: neutral or very slightly Plaintiff 18 19 (8) likelihood of expansion: neutral or very slightly Plaintiff 20 Given that two of the important factors came out in the plaintiff’s favor, it is a close call 21 whether summary judgment should be granted. Monster, Inc., 920 F. Supp. 2d at 1070–71 22 (“Because of the intensely factual nature of trademark disputes, summary judgment is generally 23 disfavored in trademark cases and should be granted sparingly.”) (cleaned up). But it’s also 24 important to apply the factors flexibly, taking account of the circumstances of the case. By the 25 time of the defendant’s September 2020 Bike+ product launch, the plaintiff’s Bike+ app was 26 mostly dormant, having gone through an extended update process that finished after September 27 2020. The last meaningful marketing for the app was in 2019. Subscriber and download numbers 1 were insubstantial and declining and a portion of them were for international consumers.56 The 2 Pebble Watch portion of the userbase was a very niche group of consumers who, owing to their 3 very specific search criteria, were unlikely to be confused. And crucially, the Bike+ mark is 4 descriptive and is joined in the marketplace by equivalent app names and variants on that 5 composite mark. Not surprisingly, despite several years of coexistence, no evidence of actual 6 confusion was submitted. 7 The plaintiff’s 2021 app, launched soon after the defendant’s product launch, does not add 8 much to the picture. This is even though the court already held the 2021 app to be a bona fide 9 commercial use, a test that requires only a very minimal showing. The 2021 app’s key feature may 10 not be functional, it has achieved no in-app sales, and the plaintiff made almost no meaningful 11 marketing efforts. 12 This all creates a situation where the plaintiff’s app had very little strength for the defendant’s 13 product launch to overtake. And if there is so little to overtake, reverse confusion must be 14 unlikely. See Ironhawk Techs., 2 F.4th at 1160 (reverse confusion occurs when a consumer 15 “mistakenly thinks that the senior user is the same as or is affiliated with the junior user”); 16 Freedom Card, Inc. v. JPMorgan Chase & Co., 432 F.3d 463, 474–75 (3d Cir. 2005) (“Chase did 17 not overwhelm UTN’s FREEDOM CARD at all. It is undisputed that CompuCredit FREEDOM 18 CARD was not promoted or marketed after December 2001. Thus, FREEDOM CARD was out of 19 the market for more than a year before Chase launched the CHASE FREEDOM card on January 20 27, 2003. We are therefore hard-pressed to understand how CHASE FREEDOM card could have 21 overwhelmed UTN’s FREEDOM CARD[.]”). 22 That said, it’s worth dwelling for a moment on whether this interpretation of the reverse- 23 confusion context is supported by Ninth Circuit precedent. In that regard, the fact that the 24 plaintiff’s mark is descriptive is key. The Ironhawk Techs. court said that “[w]hether [the senior 25 mark is] descriptive or suggestive, the important question in a reverse confusion case is whether 26 the junior mark is so commercially strong as to overtake the senior mark.” 2 F.4th at 1162 27 ] (cleaned up). But see id. (“[T]he question [on summary judgment] is whether a reasonable jury 2 || could find that [the] mark is at least suggestive[.]”). This would seem to suggest that even a 3 descriptive mark is ripe to be overtaken. But that one sentence does not necessarily tell the full 4 story, because in the more recent Lodestar decision, the court said “[g]iven that the [plaintiffs] 5 || mark is properly considered distinctive for purposes of summary judgment, the strength-of-the- 6 || mark factor in this reverse confusion case focuses on whether the junior mark is so commercially 7 || strong as to overtake the senior mark.” 31 F.4th at 1260 (cleaned up). In other words, if the 8 || plaintiffs mark is descriptive rather than distinctive, the analysis can be different. That point is 9 || consistent with rejecting a reverse-confusion claim that lacks sufficient mark strength and 10 || supporting marketing efforts. 11 In sum, under these circumstances, confusion is possible but not probable. /ronhawk Techs., 12 || 2 F.4th at 1167. Having come to the end, the court stops, grants summary judgment to the 13 defendant, and denies the plaintiffs motion for summary judgment as moot. 14 15 CONCLUSION 16 The court grants summary judgment to the defendant and will separately enter judgment. This i 17 || disposes of ECF Nos. 134 and 135. Z 18 IT IS SO ORDERED. 19 Dated: February 16, 2024 LAE 20 LAUREL BEELER 2] United States Magistrate Judge 22 23 24 25 26 27 28