IP Law Daily, TRADEMARK—N.D. Cal.: Dismissal denied in dispute about ZERO-formative marks between electric vehicle sellers, (May 4, 2023)

By Kevin M. Finson, J.D.

Dismissal was not appropriate because the analysis was fact-intensive and could not be decided at such an early stage of the proceedings.

Zero Motorcycles, Inc. a seller of electric motorcycles using ZERO-formative marks and a “Z” logo, stated claims for trademark infringement against electric vehicle seller Zero Labs Group, LLC, the U.S. District Court in San Jose has held. The defendant’s challenges to the plaintiff’s allegations of likelihood of confusion involved questions of fact not suitable for resolution at the motion to dismiss stage (Zero Motorcycles, Inc. v. Zero Labs Group, LLC, May 3, 2023, Kuelen, S.).

Zero Motorcycles, Inc. (Zero Motorcycles) was a seller of electric motorcycles and owned a registered trademark in the term ZERO MOTORCYCLES as well as other ZERO-formative marks and a “Z” logo. Zero Motorcycles alleged that Zero Labs Group, LLC (Zero Labs), a competitor in the field of electric vehicles, subsequently began using a confusingly similar ZERO LABS mark and “Z” logo. Zero Labs had pending applications to register its marks. Zero Motorcycles brought suit for trademark infringement under federal statutes and California common law, California common law unfair competition, and also sought cancellation of Zero Labs’ pending registration applications. Zero Labs moved to dismiss.

Trademark infringement. Zero Labs argued that the federal and state trademark infringement claims should be dismissed because Zero Motorcycles did not and could not allege facts to support a likelihood of confusion under the Sleekcraft factors. The court held that the likelihood of confusion analysis was “flexible” and “intensely factual” and therefore Zero Motorcycles’ allegations that the marks were similar and that the goods sold were related and sold in similar marketing channels were sufficient to survive a motion to dismiss. The court denied the motion to dismiss the trademark infringement claims.

Cancellation. Zero Motorcycles had alleged that Zero Labs’ registrations and applications should be cancelled because they were obtained by fraud on the USPTO. Zero Labs argued that this claim should be dismissed because the complaint did not satisfy the heightened pleading standard applicable to fraud claims. Reviewing the complaint, the court found that it did not specify exactly who made the allegedly false statements to the USPTO about Zero Labs’ use of the marks in commerce and when those statements were made. The court granted the motion to dismiss the cancellation claim but allowed leave to amend.

The Case is No. 22-cv-04034-SVK.

Attorneys: John T. Gabrielides (Barnes & Thornburg LLP) for Zero Motorcycles, Inc. Eric J. Ball (Fenwick & West LLP) for Zero Labs Group, LLC.

Companies: Zero Motorcycles, Inc.; Zero Labs Group, LLC

Cases: Trademark CaliforniaNews