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Court Denies Injunctive Relief in GROUPON Trademark Dispute Finding Mark Was Not Confusingly Similar to GROUPION Mark

Tuesday, December 6, 2011

Jennifer Gaeta | Bloomberg Law Groupion, LLC v. Groupon, Inc., No. 11-CV-00870, 2011 BL 301435 (N.D. Cal. Nov. 28, 2011) The U.S. District Court for the Northern District of California denied Groupion, LLC's preliminary injunction motion against Groupon, Inc., the popular online coupon site, in a trademark dispute. The court further denied Groupion's motion for summary judgment for cancellation of Groupon's trademark registration.

GROUPION and GROUPON Marks Dissimilar

Putting the issue of priority aside, the court determined that Groupion, a company that develops customer service software, was unlikely to succeed on the issue of confusion by application of the likelihood of confusion factors set forth in GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 1999). The court noted that the similarity of the marks is the critical question in the analysis and that the likelihood of confusion is greater where the similarity of the marks is greater. "Despite the similarity in the spellings of the two words, the Court finds that the marks, when viewed in their entirety and as they appear in the marketplace, are dissimilar." Groupion at 4. The court explained that Groupion: (1) displays its marks using two different colors with the "group" component in black and the "ion" in green, (2) the "G" is the only capitalized letter, and (3) the letters are outlined in white and are on a grey background. The mark also has a tagline "Business Groupware and CRM for the Cloud." Id. The GROUPON mark, on the other hand, is all capitalized, and the letters are white on a black background. There is no tagline. The marks also have a different number of syllables. The court further explained that the GROUPON mark was formed by combining the words "group" and "coupon" whereas the GROUPION mark was formed from combining "groupware" with "companion." The court, therefore, found that the similarity factor weighed against finding a likelihood of confusion.

Products Were Unrelated

Discussing the products, Groupion provides a web-based service and CRM platform, develops customer relations software, and provides a system for merchants to track their customers. Groupon promotes daily deals connecting merchants with consumers. The deals are not effective, however, until a certain, designated number of consumers buy into the deal. "Groupon utilizes 'tipping point' technology. The deals offered are not effective, and customers are not charged, unless the minimum number selected by the merchant purchase the deal." Groupion at 5. Accordingly, "[t]he parties' products are used for different functions and purposes, and are purchased by different classes of consumers. Therefore, the Court finds that Groupon's and Groupion's goods and services are not related." Id. at 6. With regard to the marketing channels, Groupion argued that both products are available on the Internet. The court explained, however, that in today's marketplace, the fact that products or services are available on the Internet is ubiquitous, and does not shed light on whether there would be a likelihood of confusion.

Remaining Factors Did Not Support Confusion

On the issue of strength, the court determined that regardless of where the GROUPION mark falls on the inherent distinctiveness spectrum, there was no evidence of the commercial strength of the mark. Thus, this consideration weighed against finding confusion. On intent, the court noted that the GROUPION mark was not registered when Groupon chose its mark. Moreover, given the differences in the mark, the court found that Groupon's refusal to stop using the mark after receiving a cease and desist letter did not indicate bad faith. As to the remaining factors, the court either found them neutral or weighing against confusion, concluding that Groupion did not show a likelihood of success on the merits as to a likelihood of confusion. The court also stated that Groupion did not show irreparable harm, delayed in seeking preliminary injunctive relief and, therefore, denied injunctive relief. Because of its failure to show confusion, the court also found that it was not entitled to summary judgment on its infringement claim and that there were questions of fact as to Groupion's cancellation claim.
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