IP Law Daily, TRADEMARK—S.D.N.Y.: Declaratory judgement seeking USPTO refusal of pending registration denied, (Mar 31, 2025)

By Thomas K. Lauletta, J.D.

A motion to strike the defendants’ affirmative defense in a trademark infringement action was also denied.

The U.S. District Court in New York City granted plaintiff Groq’s motion to dismiss the defendants’ counterclaims seeking a declaratory judgment directing the USPTO to cancel or refuse Groq’s pending trademark application. In so ruling, the court held that its power under Section 37 of the Lanham Act, 15 U.S.C. § 1119 to adjudicate initial trademark disputes applied to registered, not pending marks. Related to the plaintiff’s trademark claims, the court refused to strike the defendants’ affirmative defense asserting that the plaintiffs did not have a bona fide intention to use its pending trademark in healthcare applications (Groq, Inc. v. Groq Health Inc., No. 1:23-cv-08325-MKV (S.D.N.Y. Mar. 27, 2025)).

The plaintiff Groq, Inc. (“Groq”) is an AI solutions company that develops semiconductor chips to run generative artificial intelligence models faster than conventional hardware. Groq holds registered trademarks in the marks “groq” and “GROQ.” Groq began to use the “groq” mark in 2017.

In 2018, defendant Dr. Comite founded a company originally named Quantiome, Inc., which later became defendant Groq Health Inc. The defendants stated that Quantiome, Inc. had developed a precision medicine application intended to provide personalized recommendations to quantify and optimize health. In February 2018, Dr. Comite filed an application to register QUANTIOME with the U.S. Patent and Trademark Office. Thereafter, Dr. Comite changed the name of her company to Groq Health, Inc.

Groq alleged that Dr. Comite saw Groq’s signage in a building where Groq maintained an office, and “began to rebrand Quantiome as ‘Groq Health’” in 2020. The defendants maintained that Dr. Comite chose the new name for her own “very specific reasons.”

In November 2022, Groq filed an application to register GROQHEALTH as a trademark on an intent-to-use basis. The application included a declaration that Groq “has a bona fide intention to use the mark in commerce.” The defendants allege that Groq’s true intention in filing the GROQHEALTH application was to strengthen its position in pending litigation.

In September 2023 Groq sued Groq Health and Dr. Comite alleging counts including federal and state trademark infringement.

The defendants filed an answer which raised affirmative defenses and asserted counterclaims. The defendants’ second and third counterclaims asserted that (2) Groq had no bona fide intent to use the mark GROQHEALTH, for which Groq had applied for a registered trademark, and, therefore, the USPTO must “refuse registration” or Groq must “abandon” its application and (3) Groq’s “pending application to register GROQHEALTH should be refused.” The defendants’ second affirmative defense alleged that the Groq’s claims against the defendants “are barred because, Groq lacked a bona fide intent to use GROQHEALTH” when it filed the application.

Groq’s motion to dismiss the defendants’ second and third counterclaims and to strike the defendants’ second affirmative defense for legal insufficiency, were the only questions for the court to determine in this proceeding.

Cancelation or refusal of pending trademark applications. The court dismissed defendant Groq Health’s counterclaims seeking declaratory judgment directing that the USPTO refuse to register plaintiff Groq’s trademark registration. The court’s action was based on Section 37 of the Lanham Act, 15 U.S.C. § 1119, which grants authority to decide disputes of registered marks only. Applying “common sense and basic principles of statutory interpretation, the text alone makes plain that this Court has no authority to decide, in the first instance, that a pending application to register a trademark should be canceled or refused by the USPTO.” In so ruling, the court refused to follow a contrary ruling in the Ninth Circuit, stating that it would instead give effect to Second Circuit and Supreme Court decisions holding that Section 37 of the Lanham Act applied to registered marks, not pending marks.

Motion to strike second affirmative defense. The Groq Health’s second affirmative defense asserts that the plaintiff’s claims against the defendants are barred because Groq “lacked a bona fide intent to use GROQHEALTH” when it filed the application. The court refused to strike this defense, noting that motions to strike for legal insufficiency are not favored.

In denying the motion to strike, the court noted that the defendants maintained that they did not infringe the Groq trademarks because there was no likelihood of confusion between “Groq” and “Groq Health” in that the parties were “engaged in completely different lines of business.” Further, the defendants argued that although Groq filed an application to register GROQHEALTH, Groq did so with no bona fide intention to use the mark, merely to strengthen its position in the present litigation. In defending against the plaintiff’s claims, the court stated that the defendants are entitled to press their arguments that Groq, in fact, had no bona fide intention of using GROQHEALTH or otherwise engaging in healthcare applications.

Court action. The court granted the plaintiff’s motion to dismiss the defendants’ second and third counterclaims but denied the plaintiff’s motion to strike the defendants’ second affirmative defense.

The Case is No. 1:23-cv-08325-MKV.

Judge: Vyskocil, M.

Attorneys: Bijal V. Vakil (Skadden, Arps, Slate, Meagher & Flom, LLP) for Groq, Inc. Arshjit Raince (Goodwin Procter LLP) for Groq Health, Inc.

Companies: Groq, Inc.; Groq Health, Inc.

Cases: Trademark NewYorkNews USPTO