IP Law Daily, PATENT—N.D. Cal.: Likelihood of confusion sufficiently alleged when competing product name used as hashtag, (Apr 25, 2023)

By Patricia K. Ruiz, J.D.

The court focused on three factors most important in the internet context: the similarity of the marks; the relatedness of the goods or services; and the simultaneous use of the web as a marketing channel.

A company’s alleged use of hashtags undeniably similar to the registered marks of its competitor was sufficient to state claims for trademark infringement, false designation of origin, and unfair competition, held the U.S. District Court for the Northern District of California. Finding that most of the Sleekcraft factors showed a likelihood of confusion, the court denied the allegedly infringing company’s motion to dismiss for failure to state a claim (Automated Pet Care Products, LLC v. PurLife Brands, Inc., April 21, 2023, Chhabria, V.).

Registered marks. Automated Pet Care Products, LLC, (d/b/a Whisker) and PurLife Brands, Inc., (d/b/a Smarty Pear) are competitors in the market for automated, self-cleaning litter boxes. Whisker launched its flagship product, the Litter-Robot, 23 years ago. It consists of a rotating chamber that automatically sifts cat waste after each use into a waste drawer, keeping the litter box perpetually clean and eliminating the need for manual scooping. Since the product’s launch, Whisker continued to innovate, launching new and improved models. Whisker holds several trademarks associated with its products, the relevant ones being “Litter-Robot,” “Litter-Robot 3,” “Litter-Robot 3 Connect,” and “Litter-Robot Pinch Detect.” The marks are registered on the federal Principal Register. Whisker holds these marks as standard character marks, without claim to any particular font style, size, or color.

Alleged infringement. In 2021, Smarty Pear, whose founder was formerly affiliated with a company that did business with Whisker, arrived on the scene. Whiskers alleged the founder obtained confidential information about the Litter-Robot and about Whisker’s plans to launch the Litter-Robot 4. Whiskers alleged the founder used this information to market a new and virtually identical automated litter box, the Leo’s Loo. Smarty Pear began advertising Leo’s Loo and its successor Leo’s Loo Too on social media, utilizing the following hashtags: #litterrobot, #LitterRobot, and #litterrobot3. Whisker alleges the use of these hashtags infringes on its trademark rights. Whisker sued Smarty Pear for patent infringement, trademark infringement, false designation of origin, false advertising, and unfair competition. Smarty pear moved to dismiss for failure to state claims on which relief can be granted.

Trademark infringement claim; likelihood of confusion. To state a trademark infringement claim, a plaintiff must adequately allege: (1) it has a valid, protectable trademark; and (2) the defendant’s use of the mark is likely to cause consumer confusion. Whisker’s claims for false designation of origin and unfair competition are subject to the same test and thus rise or fall with its trademark infringement claim, the court noted. Having a federally registered mark, which Whisker does, constitutes prima facie evidence of the validity of the registered mark and of exclusive rights to use the mark on the goods and services specified in the registration. The likelihood of confusion element asks whether a reasonably prudent consumer is likely to be confused as to the origin or source of the goods or services bearing one of the marks. The Ninth Circuit bases this determination on the well-established Sleekcraft factors, and three factors are most important in the internet context: (1) the similarity of the marks; (2) the relatedness of the goods or services; and (3) the simultaneous use of the web as a marketing channel.

The court found all three of these factors weighed heavily in Whisker’s favor. First, the product is virtually identical to Whisker’s. Second, Smarty Pear advertised its product on the same marketing channels that Whisker uses, namely social media sites such as Instagram. Third, the marks are undeniably similar. For example, the #litterrobot3 hashtag is undeniably similar to Litter-Robot 3, and the inclusion of the number 3 makes it especially likely that a reasonably prudent consumer would believe the product being pictured and advertised in the Instagram post is, in fact, the Litter-Robot 3. While the marks may not be identical, the similarities weigh more heavily than the differences.

Smarty Pear noted that Whisker, which disclaimed exclusive rights to the “Litter Robot” word mark, without a hyphen, was unable to register the mark without the hyphen, as the words “Litter Robot” were found by the Trademark Office to be merely descriptive. However, the court found Whisker is not advancing trademark infringement claims based on the disclaimed marks. Instead, the key question is whether the hashtags are confusingly similar to the marks over which Whisker has rights. The court emphasized that the “strength of the mark” factor accounts for the particularity of holding Smarty Pear liable for use of marks that are not protected. The resemblance between the marks the Trademark Office found were merely descriptive and those it agreed to register suggests Whisker’s marks, while valid, are weak. However, significant marketing efforts over the years,, widespread publicity and write-ups, and tens of thousands of rave customer reviews suggest the marks have been strengthened over time.

The court further found that three of the remaining Sleekcraft factors weigh in Whisker’s favor, and none seem to weigh in Smarty Pear’s. First, Smarty Pear’s intent is transparent, and the strategic use of the number three and the upper-case letters in its hashtags evinces an intent to capitalize on Whisker’s goodwill. As to the likelihood of expansion, the Ninth Circuit has held that “a ‘strong possibility’ that either party may expand his business to compete with the other will weigh in favor of finding that the present use is infringing.” Evidence of actual confusion also weighs in Whisker’s favor, as Whisker’s product specialist have had to field customer calls and explain that Leo’s Loo was not a Whisker product.

The court denied Smarty Pear’s motion to dismiss Whisker’s trademark infringement, false designation of origin, and unfair competition claims based on Smarty Pear’s use of hashtags. The court noted it would address the remaining claims in a separate order.

The Case is No. 22-cv-04261-VC.

Attorneys: Allison E. Elkman (Cooley, LLP) for Automated Pet Care Products, LLC. Joshua Voight Vanhoven (Haley Guiliano, LLP) for Purlife Brands, Inc. d/b/a Smarty Pear and Chris Madeiras.

Companies: Automated Pet Care Products, LLC; Purlife Brands, Inc. d/b/a Smarty Pear

Cases: Patent CaliforniaNews