Ironhawk Technologies, Inc. v. Dropbox, Inc., No. 19-56347 (9th Cir. 2021)
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Ironhawk filed suit against Dropbox for trademark infringement and unfair competition, alleging that Dropbox's use of the name Smart Sync intentionally infringes on Ironhawk's SmartSync trademark and is likely to cause confusion among consumers as to the affiliation of Ironhawk's product with Dropbox. After the district court concluded that Ironhawk could not prevail because a reasonable trier of fact could not find a likelihood of consumer confusion, Ironhawk appealed based on a theory of reverse confusion.
The Ninth Circuit held that there was a genuine dispute of material fact as to the likelihood of consumer confusion under a reverse confusion theory of infringement and thus reversed the district court's grant of summary judgment for Dropbox, vacating the judgment, and remanding for trial. The panel first concluded that a reasonable jury could find that Ironhawk's potential consumers include commercial customers. Applying the Sleekcraft factors, the panel then concluded that a reasonable trier of fact could find a likelihood of confusion. Therefore, Dropbox has not met its high burden of establishing that no genuine disputes of material fact exist as to the likelihood of confusion between Smart Sync and SmartSync.
Court Description: Lanham Act. The panel reversed the district court’s grant of summary judgment in favor of defendant Dropbox, Inc., vacated the judgment, and remanded for trial in an action brought under the Lanham Act by Ironhawk Technologies, Inc. Ironhawk developed computer software that uses compression and replication to transfer data efficiently in “bandwidth-challenged environments.” It markets this software under the name “SmartSync,” and it obtained a trademark registration for SmartSync in 2007. Dropbox’s “Smart Sync,” launched in 2017, is a feature of Dropbox’s software suite that allows users to see and access files in their Dropbox cloud storage accounts from a desktop computer without taking up the computer’s hard drive space. Ironhawk sued Dropbox for trademark infringement. The panel held that there was a genuine dispute of material fact as to the likelihood of consumer confusion under a reverse confusion theory of infringement, which occurs when a person who knows only of the well-known junior user comes into contact with the lesser-known senior user, and because of the similarity of the marks, thinks that the senior user is the same as or is affiliated with the junior user. Specifically, a reasonable jury could conclude that consumers would believe Dropbox is a source of, or a sponsor of, Ironhawk’s Smart Sync. The panel concluded IRONHAWK TECH. V. DROPBOX 3 that, based on competing evidence, a genuine dispute of fact remained as to the relevant consuming public. Applying the Sleekcraft factors, the panel concluded that a reasonable trier of fact could find a likelihood of confusion. Dissenting, Judge Tashima wrote that he agreed with the general trademark principles articulated by the majority, but he was not persuaded that a reasonable jury could find a likelihood of consumer confusion. Judge Tashima agreed with the majority’s conclusion that the relevant consumer class included not only Ironhawk’s existing military customers, but also potential commercial customers to whom Ironhawk said it marketed its SmartSync software. Judge Tashima wrote that the majority erred, however, in failing to consider that these potential customers were large, sophisticated commercial enterprises, and any sale would be subject to a prolonged sales effort and careful customer decision making.
The court issued a subsequent related opinion or order on July 6, 2021.
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