IP Law Daily, TRADEMARK—S.D.N.Y.: Summary judgment denied in GameSense trademark spat, (Sep 25, 2024)

By George Basharis, J.D.

British Columbia Lottery Corporation’s lawsuit against video game accessory maker to proceed to trial.

The U.S. District Court for the Southern District of New York has denied summary judgment to the British Columbia Lottery Corporation (BCLC) in its trademark infringement lawsuit against a video game accessory company using a similar name, setting the stage for the case to go to trial. The court ruled that genuine disputes of material fact exist regarding several key factors used to determine likelihood of consumer confusion between trademarks (British Columbia Lottery Corp. v. Ma, No. 1:23-cv-00649-JPO (S.D.N.Y. Sept. 23, 2024)).

Background. BCLC, a Canadian Crown corporation, launched its GameSense responsible gambling education program in 2009. The program aims to combat health and financial consequences arising from gambling addictions through educational materials, in-person advising, and information centers at casinos. BCLC has licensed the GameSense program to several U.S. casinos and state lottery corporations.

In 2021, Nehemiah Chun Ma applied for a trademark for his company Gamesense, LLC, which sells specialized gaming products like computer mice and keyboards for video game players. BCLC opposed Ma’s trademark application and later filed a lawsuit alleging trademark infringement.

Trademark infringement claims. In its opinion denying summary judgment, the court applied the Second Circuit’s eight-factor Polaroid test to analyze the likelihood of consumer confusion between the two marks. The court found that only one factor—the similarity of the marks—clearly weighed in BCLC’s favor. Both companies use the term “GameSense/Gamesense” in their logos, removing the space between words and using similar black-and-white color schemes with bold fonts. However, the court determined that the other seven factors involved disputed issues of fact that would be more appropriately resolved by a jury at trial.

Strength of the trademark. While BCLC’s registered GameSense trademark gives it some legal protection for gambling-related activities, the court noted that the inherent strength of the term “GameSense” is debatable. A jury could potentially find it to be a relatively weak mark that merely evokes the claimed virtues of the product, similar to how the Second Circuit viewed “Rise Brewing” for a coffee company in a previous case.

Proximity of products and markets. The court found unresolved factual questions about the degree of overlap between BCLC’s responsible gambling education market and Gamesense LLC’s video game accessory market. While BCLC argued there is a close connection due to rising eSports betting, the court said a jury would need to determine whether this creates sufficient market proximity to cause consumer confusion.

Bridging the gap between markets. Although BCLC did not claim it intends to enter the video game accessory market, the court said a jury should evaluate whether typical consumers might assume BCLC would expand into that area. The court noted that even if a company does not plan to enter a new market, consumer assumptions about potential expansion can still be relevant to trademark infringement analysis. This factor, known as “bridging the gap,” requires consideration of whether customers might reasonably expect the trademark owner to expand into the defendant’s market in the future.

Lack of evidence of actual confusion. BCLC did not allege any instances of actual consumer confusion between the two brands. While not necessarily fatal to its case, the court noted this factor does not support granting summary judgment to BCLC. The court cited previous cases indicating that evidence of actual confusion is particularly relevant to the likelihood of confusion inquiry. However, the court also acknowledged that the lack of such evidence might be due to Gamesense LLC’s relatively recent entry into the market, leaving open the possibility that confusion could occur in the future as the brand becomes more established.

Question of defendant’s good faith. Ma admitted he knew about BCLC’s GameSense mark before applying for his own trademark. However, the court said a jury could potentially find Ma lacked bad faith if he believed the markets were sufficiently disconnected to prevent consumer confusion. The court noted that issues of subjective intent are generally inappropriate for summary judgment.

Consumer sophistication. The court found unresolved factual questions about the level of sophistication of both GameSense program participants and Gamesense LLC accessory purchasers. This factor requires further examination at trial. The court noted that the sophistication of consumers is relevant because more sophisticated buyers are generally less likely to be confused by similar trademarks. However, the court determined that the current record does not provide enough information to assess whether the typical consumers of responsible gambling education and video game accessories possess a level of sophistication that would minimize the risk of confusion between the two brands.

New York state law claim also proceeds. In addition to federal Lanham Act claims, BCLC alleged injury to business reputation and trademark dilution under New York state law. The court denied summary judgment on this claim as well, finding disputed factual issues regarding several factors courts use to analyze trademark dilution.

The Case is No. 1:23-cv-00649-JPO.

Judge: Oetken, J.

Attorneys: David Max Dahan (Finger and Finger, APC) for British Columbia Lottery Corp. Kathryn G. Kent (Gerben Perrott, PLLC) for Nehemiah Chun Ma.

Companies: British Columbia Lottery Corp.

Cases: Trademark NewYorkNews