Eyebobs, LLC v. Snap, Inc.

259 F.Supp.3d 965

EYEBOBS, LLC, a Delaware limited liability corporation, Plaintiff,

v.SNAP, INC., a Delaware corporation, Defendant.

Case No. 16–CV–4276 (PJS/DTS)

United States District Court, D. Minnesota.

Signed May 8, 2017

James R. Steffen, FAEGRE BAKER DANIELS LLP, for plaintiff Eyebobs, LLC.

Dennis L. Wilson and Christopher T. Varas, KILPATRICK TOWNSEND & STOCKTON LLP, and Kristen G. Marttila, LOCKRIDGE GRINDAL NAUEN P.L.L.P, for defendant Snap, Inc.

ORDER

Patrick J. Schiltz, United States District Judge

This is a trademark-infringement action brought by plaintiff Eyebobs, LLC ("Eyebobs"¹ ) against defendant Snap, Inc. ("Snap"). Eyebobs designs and sells reading glasses, including reading sunglasses. Eyebobs owns an incontestable registered trademark (Registration No. 3484578) protecting a mark consisting of an oval, upward-looking, black-and-white cartoon eyeball placed above the word "Eyebobs." The Court will refer to this mark as the "Registered Mark." The Registered Mark is typically displayed against a golden-yellow background. Eyebobs also claims that it has an unregistered, common-law trademark protecting a mark consisting of the eyeball design itself—that is, the eyeball logo unaccompanied by the word "Eyebobs." The Court will refer to this (claimed) mark as the "Common–Law Mark."

Snap owns the popular Snapchat mobile application (or "app"), which allows users to take photos and videos and send them to other Snapchat users. Snap is in the process of launching a new product called "Spectacles." Spectacles are sunglasses with a built-in camera in the upper right corner (near where the right temple connects to the right end piece). Photos and video that are captured by the camera are wirelessly transmitted to a smart phone on which the Snapchat app is running. In marketing Spectacles, Snap uses a mark that consists of a round, forward-looking, black-and-white cartoon eyeball that is typically displayed against a vibrant-yellow background and that is often placed near the word "Spectacles." The Court will refer to this mark as the "Spectacles Mark."

Eyebobs brought this action against Snap, alleging that Snap's use of the Spectacles Mark infringes Eyebobs' Registered Mark and Common–Law Mark. This matter is before the Court on Eyebobs' motion for a preliminary injunction. For the reasons that follow, Eyebobs' motion is denied.

I. BACKGROUND

Eyebobs was founded in 2001 with "the mission of offering high-quality and fashionable reading glasses at a reasonable price[.]" ECF No. 1 ¶ 7. Eyebobs' product line has since expanded to include sunglasses and frames for prescription lenses. Id. Eyebobs' products can be purchased online, through a mail-order catalog, or at eyewear boutiques and other stores. Shirley Decl. ¶ 24; see Magerman Decl. ¶¶ 7–8. The products generally sell for between $79 and $150. Shirley Decl. ¶ 23. Eyebobs also operates its own retail store in Minneapolis and plans to roll out additional retail stores over the next year. Magerman Decl. ¶ 11; Shirley Decl. ¶ 15. In marketing its products, Eyebobs consistently uses the Registered Mark or a similar combination of the eyeball logo with the word "Eyebobs." ECF No. 1 ¶ 8. Snap contends—and Eyebobs does not seem to dispute—that the Common–Law Mark is not in use. ECF No. 29 at 11; ECF No. 50 at 3:10–4:4. In other words, the parties seem to agree that whenever the eyeball logo appears in commerce, it is accompanied in some way by the word "Eyebobs." See Shirley Decl. ¶¶ 8–18, 20.

Snap's mission is to "develop products that harness the power of cameras in ways that allow people to communicate, express themselves, and share their life experiences." Horowitz Decl. ¶ 3. Snap's first product was the Snapchat mobile app, which, as noted, allows users to record photographs and videos (called "Snaps") with their smart phones and send them to other Snapchat users. Id. ¶ 4. A Snap appears on the receiver's screen for only a few moments before disappearing. Id. Snapchat users can also send chat messages, create visual "Stories" that remain on the user's account for one day, and store Snaps indefinitely as "Memories." Id. ¶ 5.

In September 2016, Snap began advertising its new Spectacles product, which was described as "sunglasses that Snap" and marketed as a camera made "Just for Snapchat." Id. ¶¶ 6, 10; ECF No. 1 ¶ 14. A pair of Spectacles is essentially a hands-free recording device that allows users to take a Snap with the built-in camera and wirelessly add that Snap to the Snapchat app. Horowitz Decl. ¶¶ 6–7. A Snap recorded by a Spectacles camera may be viewed, edited, or shared only through the Snapchat app. Id. ¶ 6. Spectacles come with sun lenses that do not have vision-correcting capabilities, but the sun lenses can be replaced with prescription lenses. ECF No. 1 ¶ 17. Spectacles retail for $129.99. Horowitz Decl. ¶ 9.

Snap originally sold Spectacles through vending machines (called "Snapbots") located in various cities across the United States. Id. ¶ 8; see also Routhier Decl. Ex. O. Snap also sold Spectacles through a temporary (and now closed) retail store in Manhattan. Horowitz Decl. ¶ 8. At present, Snap sells Spectacles online via the Spectacles.com website. Id. ¶ 9. In marketing Spectacles, Snap has used the Spectacles Mark, which Snap claims is a stylized depiction of the right lens of a pair of Spectacles. Id. ¶ 11. The Spectacles Mark is sometimes used by itself and sometimes used in conjunction with the word "Spectacles." Id. ¶ 13.

II. ANALYSIS

Eyebobs contends that Snap's use of the Spectacles Mark infringes its trademarks, and Eyebobs now seeks to preliminarily enjoin Snap's continued use of the Spectacles Mark in its marketing of Spectacles.

A. Standard of Review

The Court considers four factors in deciding whether to grant a motion for a preliminary injunction: (1) the movant's likelihood of success on the merits; (2) the threat of irreparable harm to the movant if the injunction is not granted; (3) the balance between this harm and the harm that the non-movant will suffer if the injunction is granted; and (4) the public interest. Dataphase Sys., Inc. v. C L Sys., Inc. , 640 F.2d 109, 114 (8th Cir. 1981). "In deciding whether to grant a preliminary injunction, likelihood of success on the merits is most significant." Laclede Gas Co. v. St. Charles Cty., Mo. , 713 F.3d 413, 419–20 (8th Cir. 2013) (citation and internal quotations omitted). "A preliminary injunction is an extraordinary remedy," and the party seeking a preliminary injunction bears the burden of establishing its entitlement to such relief under the Dataphase factors. Watkins Inc. v. Lewis , 346 F.3d 841, 844 (8th Cir. 2003) (citations omitted).

B. Likelihood of Success on the Merits

Eyebobs brings three claims against Snap. First, Eyebobs sues Snap under § 35 of the Lanham Act for infringing the Registered Mark. 15 U.S.C. § 1114. Second, Eyebobs sues Snap under § 43(a) of the Lanham Act for infringing the Common–Law Mark. 15 U.S.C. § 1125(a). And third, Eyebobs sues Snap under Minnesota law for engaging in deceptive trade practices. Minn. Stat. § 325D.44. The Court will address these claims in turn.

1. Infringement of a Registered Trademark

Eyebobs' main claim is that Snap is infringing the Registered Mark in violation of the Lanham Act. ECF No. 1 ¶¶ 22–30. There is no dispute that Eyebobs has valid ownership rights and a protectable interest in the Registered Mark. See 15 U.S.C. §§ 1057(b), 1115(a) ; Gen. Mills, Inc. v. Kellogg Co. , 824 F.2d 622, 626 (8th Cir. 1987). Thus, whether Eyebobs is likely to succeed on its claim turns on whether Eyebobs will be able to prove that Snap's use of the Spectacles Mark creates "a likelihood of confusion, deception, or mistake on the part of an appreciable number of ordinary purchasers as to an association between [Eyebobs] and [Snap] due to their common use of the [trademarks]." Gen. Mills, Inc. , 824 F.2d at 626.

In a typical trademark-infringement action, the plaintiff alleges that the defendant is causing forward confusion—that is, that the defendant is causing consumers to mistakenly believe that the defendant's products are somehow affiliated with the plaintiff. In such a case, the (junior) defendant is trying to take advantage of the goodwill associated with the (senior) plaintiff. Imagine, for example, a startup shoe company that brands its athletic footwear with a logo that is deceptively similar to the Nike swoosh.

In this trademark-infringement action, however, Eyebobs alleges that Snap's continued use of the Spectacles Mark will cause reverse confusion. Such confusion "occurs when a large junior user [here, Snap] saturates the market with a trademark similar or identical to that of a smaller, senior user [here, Eyebobs]." Minn. Pet Breeders, Inc. v. Schell & Kampeter, Inc. , 41 F.3d 1242, 1246 (8th Cir. 1994) (quoting Sands, Taylor & Wood Co. v. Quaker Oats Co. , 978 F.2d 947, 957 (7th Cir. 1992) ). The harm flowing from reverse confusion is that "[t]he public comes to assume the senior user's products are really the junior user's or that the former has become somehow connected to the latter.... [T]he senior user loses the value of the trademark—its product identity, corporate identity, control over its goodwill and reputation, and ability to move into new markets." Ameritech, Inc. v. Am. Info. Techs. Corp. , 811 F.2d 960, 964 (6th Cir. 1987). To receive preliminary relief, then, Eyebobs must establish "that because of the similar marks, [Eyebobs'] customers are likely to mistakenly think that the more well known [Snap] is the source of, or is sponsoring or backing, [Eyebobs'] goods or services." 4 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 23:10 ( 4TH ED. 2017).

In both forward- and reverse-confusion cases, this Court must weigh the six "SquirtCo factors" in determining whether there is a likelihood of confusion:

(1) the strength of the owner's mark; (2) the similarity between the owner's mark and the alleged

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