Fitbug Ltd. v. Fitbit, Inc.

78 F.Supp.3d 1180

Fitbug Limited, Plaintiff

v.Fitbit, Inc., Defendant.

Case No. 13–1418 SC

United States District Court, N.D. California.

Signed January 26, 2015

Simon J. Frankel, Matthew D. Kellogg, Covington & Burling LLP, San Francisco, CA, Alan Ross Arkin, Debra Bodian Bernstein, Linda S. Roth, Mark Jon Rosenberg, Tarter Krinsky Drogin LLP, New York, NY, Kathryn Elizabeth Cahoy, Covington and Burling LLP, Redwood Shores, CA, for Plaintiff.

Andrew P. Bridges, Jedediah Wakefield, Sean Steven Wikner, Todd Richard Gregorian, Fenwick & West LLP, Clement S. Roberts, Michael Aaron Feldman, Timothy Chen Saulsbury, Durie Tangri LLP, San Francisco, CA, Ciara Nicole Mittan, Fenwick and West LLP, Mountain View, CA, for Defendant.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

SAMUEL CONTI, District Judge

I. INTRODUCTION

Now before the Court are two motions for summary judgment in this trademark infringement and unfair competition case. First, Plaintiff Fitbug Ltd. (“Fitbug”) seeks partial summary judgment on likelihood of confusion; Defendant Fitbit, Inc.'s (“Fitbit”) affirmative defense of laches; and Fitbit's fifth and sixth counterclaims. ECF No. 47–3 (“Fitbug Mot.”). Second, Fitbit moves for summary judgment on two affirmative defenses: laches and acquiescence. ECF No. 50 (“Fitbit Mot.”). Both motions are fully briefed,¹ and appropriate resolution without oral argument under Civil Local Rule 7–1(b). Relatedly, Fitbit has filed an objection to reply evidence under Civil Local Rule 7–11(b) or, in the alternative, a motion to file supplemental briefing. ECF No. 81 (“Fitbit Obj.”). Fitbug opposes that request. ECF No. 83. For the reasons set forth below, Fitbug's motion for summary judgment is GRANTED IN PART and DENIED IN PART. Fitbit's motion for summary judgment is GRANTED. Fitbit's objection to reply evidence is DENIED, but the alternative motion for leave to file supplemental briefing is GRANTED.

II. BACKGROUND

Fitbit and Fitbug both produce portable electronic fitness tracking devices. These devices are wearable, and collect data about a user's steps walked, calories burned, activity intensity, sleep, and other health and fitness metrics. Portable electronic fitness tracking devices also connect to the internet or a user's computer or smartphone, and, in conjunction with an application or website, allow the user to view and analyze the data collected, set or track fitness goals, and collect other information relevant to the user's health and fitness plans.

Fitbug owns two federal trademark registrations, and Fitbit also owns a federal trademark registration.

There have been several variations of the parties' logos throughout their history, but the relevant logos are:

Fitbug's original designs: Fitbit's original design:

Fitbug, headquartered in the United Kingdom and founded in 2004, was one of the first companies to enter the portable electronic fitness tracker market. Since that time, Fitbug has made both sales directly consumers (“business-to-consumer” sales), and so-called “business-to-business-to-consumer” sales of its products. Business-to-business-to-consumer sales include sales to health insurance plans, corporate wellness programs, and other programs, and generally involve incentives like bulk discounts as well as special tools for tracking group fitness goals or running fitness competitions. Initially, Fitbug focused on the British market, but in 2005 it sought to sell its products in the United States as well. Since that time, however, Fitbug's success in the United States market has been limited.

Fitbit, headquartered in San Francisco, is one of the leading providers of portable electronic fitness trackers. James Park and Eric Friedman founded the company in March 2007. Fitbit's name was chosen after a poll on Facebook, and at the time the name was chosen, as far as Park is aware, nobody at Fitbit was aware of Fitbug's existence. ECF No. 46–5 (“Park Decl.”) ¶¶ 4–6. However, by December 2007, prior to the launch of Fitbit's website or the sale of its first products, Friedman sent Park a link to the Fitbug website, although Park contends that he thought little of the link at the time. Id. ¶ 7.

Fitbit first announced its products on September 9, 2008. By the next day, Fitbit's website featured information regarding its first device, the Fitbit Classic, as well as a link for businesses or individuals to place orders for the devices. Id. ¶ 13; Ex. 5. Nonetheless, Fitbit did not begin shipping its products until September 2009, and early on, only a small amount of Fitbit's sales were in the business-to-business-to-consumer category. However, over time Fitbit's sales grew substantially both in general and in the business-to-business-to-consumer market.

The day Fitbit announced its product, Fitbug received several emails and other contacts stating that Fitbit was entering the portable electronic fitness tracking device market. Additionally, a representative of Fitbug sought (unsuccessfully) to contact Fitbit to explore a potential business partnership. Over the next weeks and months, internal communications show that Fitbug was concerned about potential competition from Fitbit, and was contemplating various responses including sending a cease and desist letter.See ECF No. 46 (“Wakefield Decl.”) Exs. 17–23. Nevertheless, Fitbug did not assert any violation of its trademark rights at that time. Instead, Fitbug first assert infringement of its rights by Fitbit in a December 2011 letter. Park Decl. at ¶ 26; Ex. 11. Fitbit denied infringement, and subsequent letters failed to resolve the dispute. Id.

Fitbug filed suit on March 29, 2013 alleging trademark infringement under 15 U.S.C. Section 1114(1), unfair competition under 15 U.S.C. Section 1125(a), common law trademark infringement and unfair competition, violations of the California Business and Professions Code Section 17200, and seeking cancellation of Fitbit's trademark registration. See ECF No. 1 (“Compl.”). Fitbit counterclaimed, alleging unfair competition and false or misleading advertising under California law. ECF No. 43 (“Am. Answer & Counter–Cls.”) at ¶¶ 189–255.

Now, both parties have filed motions for summary judgment seeking to resolve significant portions of these claims. The matter is currently set for trial beginning on February 9, 2015.

III. LEGAL STANDARD

Entry of summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Summary judgment should be granted if the evidence would require a directed verdict for the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the initial burdens of production and persuasion. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir.2000).

IV. DISCUSSION

Fitbug moves for summary judgment on three issues. First, Fitbug believes the Court should find as a matter of law that they have demonstrated a likelihood of confusion among consumers. Second, Fitbug argues that laches do not bar its claims. Finally, Fitbug seeks summary judgment on Fitbit's unfair competition and false advertising claims on the grounds that that Fitbit lacks statutory standing to bring those claims.

Fitbit opposes these arguments and moves for summary judgment in its own right arguing that Fitbug's claims are barred by laches, and, in any event, Fitbug's claims are barred by its acquiescence to Fitbit's use of the Fitbit mark. Because the Court finds that Fitbug's claims are barred by laches, the Court need only address that issue and Fitbit's unfair competition and false advertising claims.

A. Laches

Fitbit's primary argument is that Fitbug's claims are barred by laches. “Laches is an equitable time limitation on a party's right to bring suit, resting on the maxim that one who seeks the help of a court of equity must not sleep on his rights.” Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir.2002) (internal citations and quotation marks omitted). Laches is a defense to both Lanham Act claims (including trademark infringement and unfair competition) as well as to California state law claims. Id. ; Saul Zaentz Co. v. Wozniak Travel, Inc., 627 F.Supp.2d 1096, 1109 (N.D.Cal.2008) ; see also Bridgestone/Firestone Research, Inc. v. Auto. Club De L'Ouest De La France, 245 F.3d 1359, 1362, 1364 (Fed.Cir.2001) (holding that a petition for cancellation of registered trademark was barred by laches). A claim is only barred by laches if the defendant can show “(1) unreasonable delay by plaintiff in bringing suit, and (2) prejudice....” Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 997 (9th Cir.2006) (citing Couveau v. Am. Airlines, Inc., 218 F.3d 1078 (9th Cir.2000) ).

Two issues determine whether a delay was unreasonable. “First [a court] assess[es] the length of delay, which is measured from the time the plaintiff knew or should have known about its potential cause of action.” Jarrow, 304 F.3d at 838. Next, the Court must “decide whether the plaintiff's delay was unreasonable.” Id. The Court will address each in turn.

First, the Court must determine when Fitbug “knew or should have known about its potential cause of action.” Id. This standard can be satisfied by either actual or constructive knowledge, because “[c]ompanies expecting judicial enforcement of their marks must conduct an effective policing effort.” Grupo Gigante Sa De CV v. Dallo & Co. Inc., 391 F.3d 1088, 1102 (9th Cir.2004) (emphasis omitted). Nonetheless, a trademark holder is “ ‘not required to constantly monitor every nook and cranny of the entire nation and to fire both barrels of [its] shotgun instantly upon spotting a possible infringer.’ ” A didas Am., Inc. v. Kmart Corp., No. CV–05–120–ST, 2006 WL 2044857, at *8 (D.Or. June 15, 2006) (quoting Cullman Ventures, Inc. v. Columbian Art Works, Inc., 717 F.Supp. 96, 127 (S.D.N.Y.1989) ).

The undisputed...