In Ironhawk Technologies Inc. v. Dropbox, Inc., the Ninth Circuit considered two trademarks: SMARTSYNC by Ironhawk Technologies (the earlier-registered, “senior” mark) and SMART SYNC by storage space giant Dropbox (the later-filed,”junior” mark). The district court had granted Dropbox summary judgment on the grounds that, as a practical matter, Ironhawk was primarily selling to a highly sophisticated consumer who was unlikely to experience any confusion: the US Navy.
On appeal to the Ninth Circuit, Ironhawk relied exclusively on a reverse confusion theory of infringement. Reverse confusion is defined as:
“…when a person who knows only of the well-known, junior user comes into contact with the lesser-known senior user, and because of the similarity of the marks, thinks that the senior user is the same as or is affiliated with the junior user.”
Within the Ninth Circuit the test for determining reverse confusion, are factors from the Sleekcraft case.
One of those factors is whether the parties’ marketing channels overlap. The court noted that, while there appear to be very different channels of marketing, the trier of fact should have a chance to determine what weight to afford that factor.
Ironhawk offered some evidence of actual confusion among potential customers, another Sleekcraft factor. Some Navy personnel were aware of Ironhawk’s products, but did not know the source. Although the court implied that it had some doubt that a jury would end up finding in Ironhawk’s favor for this factor, it was nonetheless another issue of fact for a jury to decide.
Another factor, likelihood of expansion of product lines, was decided in favor of Ironhawk. Even if Ironhawk’s entire sales history had been with the Navy, it was trying to attract commercial customers. They already had some marginal success, gaining one private client in 2013.
The court found that SMART SYNC/SMARTSYNC were clearly similar in appearance and sound but were also arguably descriptive, and perhaps suggestive — but that distinction was yet another thing for a jury to decide.
The panel said the Sleekcraft analysis was not performed to decide the case, but rather to determine whether a reasonable jury could find either way on the factors. As such, the district court’s dismissal was vacated, and the case was remanded back for trial.
A dissenting judge agreed with the majority that the relevant consumer classes need to be defined, but asserts that it failed to consider the type of commercial, non-military clients that Ironhawk is targeting. These customers are very large, and like the Navy decision-makers who purchased software for thousands of dollars, relatively sophisticated buyers. It’s not, according to the judge, the kind of decision-making that is going to be done impulsively — and so it would be unlikely that the trademarks would be confused.
Seems to me the Ninth Circuit’s majority was stretching the various factors to find that the case was not ripe for summary judgment. To say that even the relative similarity in appearance or suggestiveness of SMART SYNC and SMARTSYNC required a jury’s determination seems to be avoiding the realm of what a judge could decide as a matter of law. Perhaps they were most convinced to remand by the district court’s deciding the whole case on the likelihood of overlapping marketing channels (selling to the Navy versus selling to the rest of the world), without weighing the other factors. But to say you need a jury to weigh all the factors is a discouraging conclusion for plaintiffs who would otherwise be entitled to a more efficient determination.
Mark S. Kaufman
Kaufman & Kahn
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