Selfie restraint: It’s hard to show fame and irreparable harm

ArcSoft, Inc. v. Cyberlink Corp., 2015 WL 9455516, No.
15-cv-03707 (N.D. Cal. Dec. 28, 2015)
 
ArcSoft makes the Perfect365 selfie editing app, and sued
defendants for infringing and diluting the trademarks/trade dress of that app
with their YouCam Perfect selfie editing app. 
ArcSoft claimed first use of the Perfect365 mark as of Nov. 2, 2011, and
registered it in 2012, along with a design mark for “Perfect365” and the image
of a human face.  It alleged that over 20
million US consumers have downloaded the app, and that it had “significant
acquired distinctiveness and goodwill” in its mark and in the term “Perfect”
for selfie editing apps.  “The famous
Kardashian family, including Kim Kardashian, Kendall Jenner, and Kylie Jenner
(perhaps the world’s foremost authorities on the selfie), reportedly use the
Perfect365 app to edit their widely-consumed selfies,” amplifying Perfect365’s
consumer recognition.  ArcSoft also
alleged substantial media coverage of the app.
 

Interface for Perfect365

Logo for Perfect365

In addition, ArcSoft claimed to own the following trade
dress: A distinctive purple color scheme throughout the app and app icon; the
Perfect365 mark; the “distinctive (in function and form) photo-taking feature,
which utilizes the smart device’s camera within the app to enable the user to
easily take and edit selfies all within the confines of the app,” with a
circular shutter button at the bottom of the screen comprised of an inner white
circle surrounded by circular bands in ArcSoft’s purple; and the photo-editing
and beautification function of the app, featuring icons reflecting selfie
editing options (e.g., for editing “Blemishes,” “Blush,” and eye features) at
the bottom of screen in ArcSoft’s purple when selected, over a white
rectangular band.  It alleged that this
trade dress had both inherent and acquired distinctiveness.
 

YouCam Perfect interface

YouCam Perfect logo

Trademark dilution: ArcSoft failed to sufficiently allege federal
fame (also required under California law). 
Alleging 20 million US downloads, along with “widespread and favorable
recognition of its Perfect365 Mark throughout the United States,” was
insufficient, despite allegations of celebrity use and media coverage from
outlets from the New York Times to Allure and TechCrunch.  Although the
Perfect365 mark was registered, other factors in assessing fame weighed “heavily”
against ArcSoft.
 
Defendants’ alleged use began in February 2014, and ArcSoft
didn’t plausibly allege that it acquired fame in the approximately 28 months
that passed between its first use date of November 2, 2011 and then.  It didn’t allege that the widespread
recognition and media coverage occurred before February 2014, or allege details
about its advertising.  Even assuming,
contrary to the court’s expectation, that 20 million downloads sufficed (in a
nation of over 318 million), again ArcSoft didn’t allege how many of those
occurred before February 2014.  Nor were
there any nonconclusory allegations about the extent to which consumers
actually recognized the Perfect365 Mark.  Dilution claims dismissed, with leave to
amend.
 
As for trade dress infringement, ArcSoft likewise failed to
plead nonfunctionality.  Given the
explicit functionality of many of the features claimed in its initial
description, ArcSoft retreated in its moving papers to claiming (1) “a
distinctive purple color scheme,” (2) “a unique app icon for the Perfect365
app,” (3) the “Perfect365 Mark itself,” (4) “a circular shutter button at the
bottom of the screen comprised of an inner white circle surrounded by
distinctive circular bands in ArcSoft’s purple,” and (5) the “icons reflecting
selfie editing options …at the bottom of [the] screen in ArcSoft’s
distinctive purple when selected, over a white rectangular band,” or even
further, to “how the shutter button [and] [selfie editing] icons look.”  However, given the importance of defining
trade dress sufficiently to give defendants adequate notice, Arcsoft’s
“shifting-sands approach” to defining the trade dress was insufficient.  Given the apparent concession that the trade
dress described in the complaint wasn’t the trade dress ArcSoft wanted to
assert, this claim was also dismissed with leave to amend.
 
That left only alleged word mark infringement in ArcSoft’s
motion for preliminary injunction, which the court denied for failure to show
irreparable harm.  After Herb Reed
Enterprises, LLC v. Florida Entm’t Mgmt., Inc., 736 F.3d 1239 (9th Cir. 2013), likely
confusion isn’t enough to show irreparable harm, nor are conclusory statements
about lost control over reputation and damage to goodwill.  Thus, ArcSoft’s claims of actual confusion
and lost goodwill, and allegations that these losses were “incalculable,” were
insufficient.  So were claims that
ArcSoft’s success depended on a “broad and loyal user base,” perhaps meaning to
evoke the idea of network effects.
 
ArcSoft offered one incident that provided “some, but not
much, support for its claim of loss of goodwill.” A user, “Rosiella
ShadowsHeart,” posted a one-star review of ArcSoft’s Perfect365 app, stating
“they stole the whole ui and all from You Cam Makeup.” This evidence was “on
the right track,” but still didn’t show irreparable harm.  First, the reference to the whole user
interface meant that the user was relying on the (not-yet-protected) trade
dress, not just the word mark.  Second, a
review consisting of “a single, somewhat ambiguous sentence by an anonymous
internet user” was of minimal probative value even under the relaxed
evidentiary standard applicable to preliminary injunction motions.

An additional declaration from ArcSoft’s legal counsel was no more helpful.  The declaration stated that the number of
users of its app in 2015 had materially decreased by about 1/3 compared to
2014, while defendants engaged in increasingly aggressive promotional efforts.  Moreover, ArcSoft “commenced in-depth
discussions with a major cosmetics company to enter into a partnership to
implement looks sponsored by said company in our Perfect365 app,” but the company
ultimately elected to use the YouCam Makeup app.  This didn’t show a sufficient connection
between the infringement and the lost business, since the timing of defendants’
incorporation and marketing didn’t support a reasonable inference that the
number of Perfect365 app users decreased because of confusion.  Any decrease in downloads, users, and ad
sales reflected economic injury, which could be remedied by money damages.  Also, the cosmetics company, on these
allegations, understood the difference between the two and chose YouCam. “That
is what happens when products compete.”

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