IP Law Daily, TRADEMARK—N.D. Cal.: Perplexity AI secures cancellation of software company’s ‘PERPLEXITY’ leaf-logo marks, (Jan 27, 2026)

By Ravindra Kumar Singh, B.L.

The court entered default judgment after finding the registration was procured through false use-in-commerce statements and later abandoned through non-use.

The federal district court in San Francisco, California, entered default judgment against Perplexity Solved Solutions, Inc. and ordered the cancellation of its U.S. Trademark Registration No. 6,906,290 after concluding that the registration had been obtained through fraud on the U.S. Patent and Trademark Office (USPTO) and had also been abandoned through non-use. The court held that Perplexity AI, Inc. adequately pled statutory grounds for cancellation under the Lanham Act and that six of the seven factors under Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) weighed in favor of relief, particularly because the trademark owner failed to retain counsel and effectively abandoned the litigation it had initiated (Perplexity Solved Solutions, Inc. v. Perplexity AI, Inc., No. 3:25-cv-00989-JSC (N.D. Cal. Jan. 23, 2026)).

Background. The plaintiff and counterclaim-defendant, Perplexity Solved Solutions, Inc., is a technology-focused business that claimed to provide software-as-a-service. The defendant and counterclaimant, Perplexity AI, Inc., operates an artificial intelligence-driven software business offering information and research tools.

The case centered on Perplexity Solved Solutions’ U.S. Trademark Registration No. 6,906,290, which covered a leaf logo mark. The company applied for registration in October 2021 on a use-in-commerce basis under Section 1(a) of the Lanham Act, identifying the services as “software as a service (SAAS) services featuring software for data analytics and UI testing.”

Perplexity Solved Solutions filed this lawsuit alleging trademark infringement, unfair competition, cybersquatting, and related claims under federal and California law. It alleged that Perplexity AI’s use of the term “Perplexity” in connection with software-related services created a likelihood of confusion. Perplexity AI responded by denying infringement and counterclaiming for cancellation of the ’290 registration on the grounds of fraud on the USPTO and abandonment. As the litigation progressed, Perplexity Solved Solutions’ counsel moved to withdraw due to an irreparable breakdown in the attorney-client relationship. The court granted the withdrawal and repeatedly warned that, as a corporation, Perplexity Solved Solutions could not proceed without licensed counsel. Despite multiple extensions and warnings, the company failed to retain substitute counsel. The court ultimately struck its pleadings, dismissed its affirmative claims with prejudice, entered default on the counterclaims, and considered Perplexity AI’s motion for default judgment.

Jurisdiction and default framework. Before entering default judgment, the court confirmed that it possessed subject matter jurisdiction over the Lanham Act counterclaims and personal jurisdiction over Perplexity Solved Solutions, which had itself invoked the court’s authority by filing the action. The court also found service of process adequate, noting that the company had answered the counterclaims earlier and that notice of the default judgment motion had been properly served.

Fraud. On the merits, the court held that Perplexity AI adequately pleaded fraud as a basis for cancellation under 15 U.S.C. §§ 1115(b)(1) and 1119. Relying on Hokto Kinoko Co. v. Concord Farms, Inc., 738 F.3d 1085 (9th Cir. 2013), the court explained that fraud requires a false representation of material fact, knowledge of falsity, intent to induce reliance, actual reliance, and resulting damage. The court accepted as true the allegations that Perplexity Solved Solutions falsely declared that the leaf logo was in use in commerce and submitted a specimen that did not show any bona fide offering of services. Because proof of use in commerce is a statutory prerequisite for registration under Section 1(a), the court found the misrepresentations material. It further concluded that the company knew its statements were false, intended the USPTO to rely on them, and that the USPTO did rely on those statements in issuing the registration. The court also accepted that Perplexity AI suffered damage by being forced to defend against the enforcement of a registration carrying presumptions of validity, ownership, and exclusivity.

Abandonment. The court also found that the counterclaims sufficiently alleged abandonment under 15 U.S.C. § 1064(3). Citing Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc., 458 F.3d 931 (9th Cir. 2006), the court explained that abandonment requires discontinuance of trademark use and intent not to resume use, which may be inferred from circumstances. The allegations showed that Perplexity Solved Solutions never made bona fide use of the leaf logo in commerce and later rebranded to a different logo before filing suit. Taken together and deemed true on default, these facts supported an inference of both non-use and intent not to resume use of the registered mark.

Standing. Addressing standing, the court held that Perplexity AI had a real and rational basis for believing it would be damaged by the continued existence of the registration. The court relied on Star-Kist Foods, Inc. v. P.J. Rhodes & Co., 735 F.2d 346 (9th Cir. 1984), noting that Perplexity Solved Solutions had asserted the ’290 registration against Perplexity AI in litigation and had relied on it to oppose Perplexity AI’s trademark applications before the USPTO. This was sufficient to establish standing under the Lanham Act.

Remaining Eitel factors. The court found that the remaining Eitel factors favored default judgment. Perplexity AI sought no monetary damages, only cancellation of the registration, reducing concerns about disproportionate relief. There was no realistic possibility of a dispute over material facts, given the default, and the court rejected any claim of excusable neglect in light of Perplexity Solved Solutions’ repeated failure to retain counsel despite explicit warnings.

The Case is No. 3:25-cv-00989-JSC.

Judge: Corley, J.

Attorneys: Jennifer L. Barry (Latham & Watkins LLP) for Perplexity AI, Inc.

Companies: Perplexity Solved Solutions, Inc.; Perplexity AI, Inc.

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