Uber and out: court grants limited but still tricky injunction against Uber

Uber Promotions, Inc. v. Uber Technologies, Inc., No.
15-cv-206 (N.D. Fla. Feb. 16, 2016)
 
This is a hardcore test of how you feel about consumer
protection as the sole legitimate aim of trademark law.  Uber Technologies (Tech) rolled into
Gainesville, over the unheeded objections of local senior user Uber Promotions
(Promotions), which among other things provides party buses or limos to take
people to events.  Someone who Googles
“Gainesville party bus” would find, on page two of the results, a listing for
“Uber Promotions.” Generally, its services include  “promotional and event planning services, . .
. graphic, web design and print media photography services, . . . modelling and
talent agency services, . . . private venue rental services,” and “passenger
transportation services, including through limousine and charter services.”  It used “UBER,” “ÜBER,” “UBER PROMOTIONS,”
and “ÜBER PROMOTIONS” since at least 2006.  Tech registered UBERCAB in 2010, then
registered UBER in 2011.  It expanded
permanently into Florida in November 2013, starting with Jacksonville and
reaching Gainesville in August 2014.  But
Tech is an elephant, and Promotions a squirrel. 
Shall the strong do as they will and the weak do as they must?
 
Promotions sent Tech a letter in April 2014 demand ing that
Tech “discontinue the use of the terms ‘Uber Promotions’ in connection with
[Tech’s] marketing and advertising campaigns . . . and undertake in writing
that [Tech] will not at any time in the future use any of [the] Uber Promotions
name in any future mark[et]ing or advertising campaigns, Twitter Accounts, or
apply for registration of any trademarks/service mark that may be confus ingly
similar to Uber Promotions.” Tech responded by (1) removing the term “Uber”
from the title of a page on its website that had previously been titled “Uber
Promotions” and (2) responding (through counsel) that it didn’t agree that
there was a problem, but that to avoid trouble it removed the “Uber Promotions”
reference.
 
Soon after the lawsuit was filed, Tech launched a new
service called UberEVENTS, which allows customers to purchase rides for others
that can be used at a particular time in the future, “a popular option for
corporate events.”
 
Promotions sought to keep Tech out of Florida.  It didn’t get everything it wanted, but what
it did get might pose some interesting technical challenges.
 
First, the court addressed the lurking eBay issue: the court was inclined to agree that no presumption of
irreparable harm was appropriate now. 
But history also indicated that the practice of presuming irreparable
harm from likely success “was grounded upon the sound principle that the harm
associated with trademark infringement is typically irreparable in nature. So
while a court must, in each trademark in fringement case, make a finding of
irreparable harm before an injunction may issue, that finding will often be
made due to the na ture of the harm.” 
Still, the court has considerable equitable discretion to tailor its
relief.
 
Likely success: First, the court agreed with Tech that its
use of UBER related back to the registration of UBERCAB in 2010—though this is
a question of fact under Hana Bank, “this
Court is confident that Tech would be able to convince a jury that UBER and
UBERCAB would be ‘considered the same mark’ by a reasonable consumer,” so UBER
was effectively registered in 2010.
 
The court then asked whether Promotions was entitled to a
reasonable zone of future expansion; §33(b)’s freezing provision suggests
otherwise, but the case law seems to recognize such a zone even when the junior
user is a federal registrant.  The court
also asked what Tech’s nationwide rights were for—its registrations cover “computer software for coordinating
transportation services,” not the provision of actual transportation services
themselves.  (It’s a platform!)  It wasn’t necessary to resolve these issues,
because there was no evidence of a zone of expansion outside Gainesville.  Promotions’ infrequent trips out of town to
various places weren’t enough to show use or likely expansion, except perhaps
for Promotions’ bus service to Ocala Poker and Jai Alai in Reddick, Florida,
which it might have been servicing regularly for many years.  Thus, Promotions was the senior user in
Gainesville.
 
This is a reverse confusion case, meaning that “the largest
class of people who might be confused are people familiar with Tech’s marks who
then encounter Promotions’ marks.”  Promotions primarily serves and advertises to
college-age people.
 
The court first looked at the UBER marks except for
UberEVENTS, which it analyzed separately.
 
Strength: Tech argued that the term UBER was laudatory and
descriptive.  There wasn’t much
competitive need for the term UBER, though UBER PROMOTIONS was a closer call on
being laudatory and thus descriptive. 
Though “uber” isn’t extremely uncommon, it’s also “less frequently
encountered—and thus less likely to be perceived by the relevant public as
merely self-laudatory—than a term like ‘super’ or even ‘ultimate.’” Thus,
Promotions’ mark was suggestive.  The
mark wasn’t especially strong conceptually, so this factor slightly favored
Tech.
 
Similarity: There are many ways to be familiar with Tech
without using Tech’s services, given its wide recognition.  The court agreed that the differences between
Tech’s app and Promotions’ logo, together with the fact that Promotions usually
included “Promotions” in its name, made consumer confusion relatively unlikely
on a full encounter.  But “the visual
differences are much less significant for those consumers less familiar with
Tech.”  Tech’s ads and promotional
materials suggested that the most important feature of Tech’s mark was the word
UBER, not any particular design element. 
Indeed, Tech switched logos after the hearing in this case.  If anything, “[t]he fact of the change—and
the fact that it was so well-publicized—might tend to increase reverse
confusion by creating doubt among those familiar with Tech about what its ‘look’
really is.”  Regardless, visual similarity
weighed slightly in favor of Promotions. 
More importantly, “many consumers may have just heard of Tech or read a
news story referencing it, in which case the visual differences are quite
unimportant,” nor would the relatively common word “Promotions” help consumers
distinguish the two.  Plus, Tech often
uses “Uber Promotions” in connection with various promotional campaigns, which
could easily create confusion.   
 
Similarity of services: Though both offered passenger
transportation, the services differed in many important ways—Tech had “driver
partners” using their own cars, while Promotions used more traditional vehicles
such as charter buses, party buses, and limos. Tech focused on moving
individuals or small groups, whereas Promotions focused more on group
transportation. “These differences are not so great that they weigh heavily
against confusion, particularly in light of Tech’s expanding roster of
transportation options,” such as the UberXL service that provides SUVs and
minivans, as well as UberPOOL, which allows customers traveling in similar
directions to share a car and save money, though the latter wasn’t yet
available in Gainesville.  People highly
familiar with Tech would notice the absence of driver partners, but “those who
only know that Tech has something to do with transportation or that it provides
something like a taxi service could very well think that Promotions and Tech
are affiliated based on Promotions’ services.” 
(Also, Amazon just opened a physical bookstore—just because you start
out without employees doesn’t mean you end that way.) This factor tilted
slightly in favor of Tech.
 
Similarity of sales methods weighed heavily in favor of
Tech, because Tech uses an app, whereas one must call, email, text, or send a
Facebook mes sage to Promotions in order to set up a ride. Even people only
vaguely familiar with Tech might well know that its services were app-based.
 
Similarity of advertising methods: both use social media
extensively. Some of Tech’s affiliates even put ads for Tech’s services on
Promotions’ Facebook page. Though the look of Promotions’ ads was quite
different from the look of Tech’s ads, extensive use of social media and
especially Promotions’ Facebook page raised the likelihood of confusion.  Also, Tech’s use of AdWords made it more
likely that certain searches would lead to an ad for Tech being displayed above
the results.  Weighed slightly in favor
of Promotions.
 
Intent: In a reverse confusion case, the concern is that the
infringer will “push[] its [smaller] rival out of the market,” thus “usurp[ing]
[the rival’s] business identity.” Only intent to “usurp identity” through
confusion is relevant.  (Here’s where the
equity kicks in.  What about reckless
indifference to the senior user’s trademark rights?  Tech clearly didn’t intend to misappropriate
Promotions’ goodwill, but it might well have anticipated that its entry into Gainesville
would extinguish that goodwill, which is a kind of “usurping” the identity of
UBER in Gainesville.  How should we think
about that?)  The court was skeptical:
 
It is difficult to believe that
Tech acted with the intent to push Promotions out of the Gainesville market by
using a confus ingly similar mark. Elephants don’t look out for gerbils when
they plow through the bush. Tech adopted its mark before it ever knew of
Promotions and expanded nationally thereafter. Surely it knew that it would
collide with Promotions once it entered Gainesville, but that doesn’t mean it
intended to confuse consumers and thereby hurt Promotions. This factor is not
particularly relevant to the analysis in this case.
 
Actual confusion: There was a fair amount, which is
interesting in light of the court’s conclusion that most of the standard
circumstantial factors either favored Tech or only weakly favored
Promotions.  Promotions received “numerous”
phone calls from customers looking for tech. 
The court found that some of the people who called Promotions looking
for Tech “were indeed “confused” within the meaning of the Lanham Act—that is,
they understood they were calling Promotions and thought Promotions was affiliated
with Tech.” 
 
But Tech’s number is hard to find, so many of the callers
were just misdirected, such as the ones who asked about becoming driver
partners.  Especially since a Google
search for “Uber Gainesville phone number” or “Uber Gainesville phone” brings
up Promotions’ phone number, “it’s likely that a large fraction of the callers
didn’t even grasp that they were calling something called Uber Promotions, but
instead thought they were calling Uber Technologies. This is akin to being
given a wrong number by a telephone operator.” 
The confusion about who they’d reached isn’t relevant trademark
confusion, at least not in a reverse confusion case—it would be highly relevant
to initial interest confusion. “A person who does not even grasp that he is
talking to Promotions on the phone, or that Promotions even exists separate and
apart from Tech, is obviously not going to form a bad opinion of Promotions
based on his ‘confusion,’ nor is Promotions going to lose any business.” The
same was true with emails received by Promotions from people looking for Tech. “The
Los Angeles customer appears to be someone so easily confused that even
trademark law cannot protect her.”
 
Two instances of confusion by former customers of Promotions
were more helpful: they clearly understood what Promotions is, understood what
Tech is, and thought they were affiliated. Also, there was evidence that “a few
Tech customers—and even some driver partners and others affiliated with Tech”—thought
the parties were related.  The
calls/emails were less important, especially since their confusion could be
easily corrected.  “That said, it strains
credulity to think that at least some of the many dozens of callers were not
actually confused, and certainly two of the emailers were.”  Even a few instances of actual confuison were
worthy of note because of how difficult actual confusion is to find.  This factor weighed in Promotions’ favor, “but
it by no means weighs so heavily that a finding of a likelihood of confusion is
inevitable.”
 
All together: The court was especially impressed by the
difference in sales channels: “anyone who has used Tech’s services necessarily
understands that those services are accessed via a smartphone app, and is
unlikely to think that Tech has all of a sudden started to make its services
accessible via other means.”  So, the people
who might be likely to be confused are people who have “heard of, but not used,
Tech’s services.”  But the people in that
group most likely to encounter Promotions’ mark is young people, a group that’s
relatively tech-savvy and therefore likely sensitive to the difference in sales
channels.  (NB: I don’t think tech-savvy
means that; an ability to spit out emojis super fast is not sophistication in
business organizations.)  Plus, a person
who’s heard of Tech might be aware that Tech is available in many locations,
not just Gainesville, “and the local focus of Promotions’ advertising will not
tend to create confusion.”  (Though doesn’t
Tech roll out new services place by place?)
 
If there were no evidence of actual confusion, the court
wouldn’t find likely success on the merits. 
But there was, so it did. “[G]iving great weight to evidence of actual
confusion helps ensure that a judge doesn’t rely (perhaps subconsciously) too
heavily on his own subjective view of the likelihood of confusion” and “helps
counteract the empathetic deficiencies that necessarily distort the analysis of
the remaining factors.”  There were about
five clear instances of people who truly thought that Promotions and Tech were
related “despite having a more-than-casual relationship with the two entities.”  Even a few can be enough, though.  It was a close call, but the court found
likely success on the merits.
 
As for UberEVENTS, confusion was much more likely if it were
allowed to grow in Gainesville pending trial:
 
First, the more “Uber _” services
there are, the more likely it is that a consumer might think that Promotions is
just another branch on the Uber Technologies tree. Second, UberEVENTS is
accessed through a webpage, thus eliminating one of the key differences between
Tech and Promotions. [Ed.: But no reasonable consumer would expect that,
right?] Third, the service allows users to coordinate transportation at a set
time in the future for a large number of people, just like Promotions.
 
Though most driver partners’ vehicles were probably less
lively than a party bus, the services were far closer than with any of Tech’s
other offerings. This one wasn’t a close case.
 
Tech’s laches and estoppel affirmative defenses weren’t
pursued in opposition to the preliminary injunction, and anyway wouldn’t work
as to UberEVENTS because that launched after the lawsuit began.
 
Irreparable harm: Without an injunction, more people would
be confused about the relationship between Tech and Promotion.  “But so what? Where’s the harm? The harm
usually cited as flowing from confusion in a reverse confusion case is the loss
to the senior user of the ‘value of the trademark—its product identity, corporate
identity, [and] control over its goodwill and reputation.’” These harms, if
they occur, aren’t easy to quantify and redress with money damages, which makes
them irreparable. But nonetheless, the harm must be likely, not just possible.
 
The court identified three reasons for concern: (1) Tech’s
high rate of growth in the Gainesville market, allowing it to do Promotions
more harm before trial.  (2) UberEVENTS,
which might even cause Promotions to lose business to forward or initial
interest confusion. (3) Tech’s “massive” public relations problems. The court
pointed to the top Google News search results (as of 5:00 p.m. on February 11,
2016) for “uber florida”:
 

Bad press for “uber florida”

“With all due respect to Tech, Promotions has every reason
not to want potential customers and other members of the public to associate it
with a company that has inspired protests in cities around the world.”
 
Balance of hardships: enjoining Tech from using UBER in
Florida would go way too far.  Promotions
argued that Tech could “make a new app with a new name and operate as a sort of
parallel universe version of itself in the Gainesville area.”  But this would be technically infeasible, if
not impossible, and economically unwise.  Plus, Tech would have to give up the value of
its trademark in Gainesville, “and would have to mount a massive campaign to
introduce itself to the Gainesville public. Promotions’ proposal seems to
ignore the value of name recognition and brand identity, which are the very
things that trademark law seeks to protect.” 
(Look, I’m not a big believer in protecting brand identity.  But if Promotions is the senior user in
Gainesville, Tech doesn’t have any right to name recognition or brand identity
in Gainesville, any more than Delta Dental has a right to expand into airlines
under its existing brand.  The court’s
reasoning seems to ignore §33(b), which freezes the senior user in, but also
freezes the junior user out.)
 
The practical effect of enjoining Tech’s use of its marks in
the Gainesville area would be its cessation of operations.  This would set back Tech’s efforts to build a
customer base before trial.  (Note the
assumption that ultimately it will be able to operate in Gainesville; if true,
the court’s got a point.)  Of course,
self-inflicted injury can be discounted, but here the infringement wasn’t
willful.  Plus, Promotions could have
sued earlier; it waited over a year after Tech moved into the Gainesville
market to file suit. This might not be enough for laches, but it factored into the
balance of hardships.  Thus, the injury
to Tech from a flat ban in Gainesville was more significant than the injury to
Promotions.

The court was also concerned to avoid “arming squirrels with bazookas.”  (AKA trademark trolling.)  An injunction against the name in a large
market could cost Tech far more money than Promotions could ever hope to make,
creating a windfall for Promotions given that it could sell the injunction to
Tech for “a sum far exceeding its anticipated profits but still far below the
cost to Tech of obeying the injunction.” 
A permanent injunction after a finding of infringement might be
appropriate in such a case, given the adjudicated violation of trademark law.
But a preliminary injunction required more caution.  The risk of holdup was a concern in any preliminary
injunction proceeding, but was particularly acute in a reverse confusion case,
where a small, regional plaintiff takes on a national behemoth. “[A]
preliminary injunction should not serve as a bazooka in the hands of a
squirrel, used to extract from a more fearsome animal a bounty which the
squirrel would never be able to gather by his own labors—at least not when the
larger animal is mostly without sin.”  (A
skeptic might suggest that courts, like guns, were created by societies
precisely so that the big could not simply do to the small what their size
permitted them to do—and that courts are better equalizers than guns for a
variety of reasons.)
 
Thus, the court would grant Promotions only narrow relief.
The injunction would aim at (1) preventing people looking for Tech’s phone
number from coming across Promotions’ phone number and (2) preventing UberEVENTS
from causing further confusion.  Much
confusion stemmed from the fact that Promotions comes up when one searches
“Uber Gainesville phone” or “Uber Gainesville phone number” on Google. Thus,
Tech would be required to set up a local (352 area code) number to handle calls
from Tech customers and driver partners in the area.  (Won’t this further entrench Tech’s
dominance/crushing of the goodwill of Promotions in Gainesville?)  Tech would also be preliminarily enjoined from
using its marks in connection with UberEVENTS in the area.
 
Public interest: a full injunction against Tech using UBER
in Gainesville wouldn’t serve the public interest, because that would harm Tech’s
driver partners and customers, including its “Freedom in Motion” program, in
which it “facilitates on demand, subsidized transportation services for
residents of senior citizen communities,” and in the “Safe Rides” program,
“which gives university students discounted rates on their rides when returning
home late at night.”  Yanking away Tech’s
lower-cost on-demand transportation, especially when Promotions doesn’t
directly compete with Tech and couldn’t replace its services, would harm
citizens.  But more limited relief would
help reduce confusion without harming consumers.  “While enjoining any further growth of
UberEVENTS might impact Tech’s driver partners, the effect is likely to be very
minor given the fact that UberEVENTS is relatively new and has not yet taken
off in Gainesville.”
 
Bond: Tech asked for a security bond of $64 million, based
upon a broad injunction covering all of Florida. The court had little to go on
for the more limited injunction, so settled on $10,000.
 
Now take a gander at the injunction’s components, and
consider how Tech can accomplish them: (1) No advertising of UberEVENTS in
Alachua County, including a posting promoting UberEVENTS placed on the Facebook
wall or page of people/entities in the county. 
(2) UberEVENTS can’t book events in the county.  (3) Uber has to set up a local phone number
and list it in all available directories. 
(4)  The kicker:
 
Defendant must ensure that a search
conducted with the Google, Yahoo, or Bing search engine using the keywords
“Uber Gainesville phone” or “Uber Gainesville phone number” returns a result
containing Defendant’s 352 areacode number along with words clearly indicating
that the result is associated with Defendant. Such words may in clude “driver
partner,” “app,” or “ride.” Defendant must ensure that this result, while
prominently displayed on the search results page, does not replace the result
for Plaintiff’s phone number that is currently returned when a search is
conducted using these keywords. Compliance may entail using the search engines’
paid advertisement features such as Google AdWords.
 
In addition, Tech was required to “ensure” that a search
conducted with the Google, Yahoo, or Bing search engines using the keywords
“Uber promotions Gainesville phone” or “Uber promotions Gainesville phone
number” didn’t return Tech’s phone number.
 

Court’s suggested configuration of Google search page

Thoughts on the technical feasibility of these measures?

from Blogger http://ift.tt/1VqwZIQ

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