Dfinity Foundation v. Meta Platforms, Inc.

— 1 — — 2 — — 3 — — 4 — 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA — 7 — 8 DFINITY FOUNDATION, Case No. 22-cv-02632-CRB 9 Plaintiff, ORDER GRANTING MOTION TO 10 v. DISMISS 11 META PLATFORMS, INC., 12 Defendant. 13 Plaintiff Dfinity Foundation (“Dfinity”) alleges that Defendant Meta Platforms, Inc. 14 (“Meta”) infringed two of its trademarks, the Dfinity Mark and the Rainbow Mark 15 (together, the “Dfinity Marks”) by Meta’s use of a new mark after its rebranding (the 16 “Meta Mark”). See FAC (dkt. 29). Meta moves to dismiss. Mot. (dkt. 34). As explained 17 below, finding this matter suitable for resolution without oral argument pursuant to Civil 18 Local Rule 7-1(b), the Court GRANTS Meta’s motion to dismiss. 19 I. BACKGROUND 20 Dfinity alleges the following: 21 Dfinity is a nonprofit organization that runs the Internet Computer, a public 22 blockchain network. FAC ¶ 7. Dfinity seeks to “provid[e] millions of developers and 23 entrepreneurs with a public compute platform—creating a revolutionary new way to build 24 websites, enterprise systems and internet services within an open environment.” Id. ¶ 8. 25 In doing so, Dfinity “aims to take on Big Tech and its growing control over user data.” Id. 26 From the Internet Computer’s website, https://internet computer.org, users can download 27 “dapps” (or decentralized applications) which allow users to design and develop software 1 || “educational tutorials and courses in the field of distributed computing platforms.” Id. J 2 || 27. To spread awareness of the Internet Computer and its uses, Dfinity sponsors 3 || conferences and hackathons, and gives in-person and virtual presentations. Id. J □□□□□□ 4 |} 35-37. In 2021, Dfinity announced its Developer Grant Program, a grant fund of $200 5 || million “to support initiatives for developers to work on the Internet Computer.” Id. □ 34. 6 In 2018, the USPTO granted registration of its first mark, the Dfinity Mark: — 7 — . CoO 9 DFINITY 10 || Id. 410. Dfinity obtained registration of the Dfinity Mark for use in various computer11 || based services, including: “Computer software for decentralized platforms, namely, 12 || software for using a consensus engine incorporating blockchain technology for securing 13 || data with cryptographic information”; “Design and development of computers and C 14 || software”; and “Hosting of digital content on the Internet, namely, computerized data, 3 15 || files, applications and information.” Id. § 11. Color was not claimed as a feature of the 16 |} mark. Id. 12. 17 In 2021, the USPTO granted registration of its second mark, the Rainbow Mark: — 19 — — 20 — 21 || Id. §§ 13, 15. Unlike the Dfinity Mark, the colors purple, pink, blue, orange, and yellow 22 || are claimed as a feature of the Rainbow Mark, and Dfinity’s usage guidelines require that 23 || these precise colors be used. Id. §] 16-17. 24 The Dfinity Marks have been “consistently used” on Dfinity’s website since 2017. 25 || Id. 418. They are also displayed on search engines like Google, Dfinity’s social media 26 || pages, and on the websites of companies that have built tools using the Internet Computer. 27 || See, e.g., id. J] 38-39, 42. 28 On October 28, 2021, Facebook announced that it was rebranding as Meta, and 1 || shared its new vision “to help bring the metaverse to life.” Id. 9 44.! In his founder’s letter 2 || introducing the rebrand, Mark Zuckerberg indicated that, pursuant to the company’s new 3 || direction, it would work in tandem with other creators and developers in a more 4 || decentralized fashion: “The metaverse will not be created by one company. It will be built 5 || by creators and developers making new experiences and digital items that are interoperable 6 || and unlock a massively larger creative economy than the one constrained by today’s 7 || platforms and their policies.” Id. Meta markets its services in part to creators and 8 || developers to design and build applications on Meta’s VR platform. Id. {| 62-63. 9 In 2022, Meta sought registration of the Meta Mark, described as “a geometric 10 || design consisting of two loops.” Id. 4] 56-60. The Meta Mark is not consigned to a single 11 shape or color, and Meta employs it in a variety of ways, including on its website, social 12 || media channels, and products: — 13 — ie Gaeman _ = | = a ae □ ma OO Meta 15 art | We □ il aN Bee cuecoes g 17 a CL OC 7 1 8 2005 2006 2007 2008 2009 2010 2011 2012 2015 2014 2015 2016 2017 2018 2019 2020 2021 — 19 — 20 a e Meta @ 21 #t Explore - + ov ice P=) =a) = a : 22 8} Settings mr □ Ass A/a Ge A bad 23 a : : □□ -— 24 cS — 25 — — 26 — 27 https://about.fb.com/news/2021/10/founders-letter/. Because Zuckerberg’s founder’s letter is 2g || both extensively quoted in and linked in the complaint, see FAC & n.13, it is incorporated by reference. See, e.g., Knoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018). A | nS 7) □□ = (4 \ □□ i 2 fo) ae) 3 host 4 ST a OOMe fray leita] cOMeta _ verte 5 ~ ees d ) — 7 — 10 - — 11 — 12 |} Id. §§| 47-51. Dfinity also alleges uses of specific “multi-colored versions” of the Meta 13. || Mark: — 14 — 15 □□ F i A 16 ; . € tf — 18 — — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — 27 || Id. 4152. After Meta unveiled its Meta Mark in October 2021, users replied to Dfinity’s 28 || Twitter account with comments on the similarities between the Dfinity Marks and the 1 Meta Mark, and possibilities for partnerships or collaboration between the two entities. Id. 2 ¶ 65. 3 In April 2022, Dfinity delivered a cease-and-desist letter to Meta demanding that it 4 halt use of the Meta Mark. Id. ¶ 73. Meta did not respond, and Dfinity filed this suit, 5 bringing four claims: (1) trademark infringement in violation of 15 U.S.C. § 1114 ; (2) false 6 designation of origin in violation of 15 U.S.C. § 1125 (a); (3) common law unfair 7 competition; and (4) violation of California’s Unfair Competition Law. Id. ¶¶ 74–101. 8 Dfinity alleges that the similarities between the marks, coupled with the related services 9 and customer bases, will cause confusion because “consumers will mistakenly believe that 10 Meta and its services . . . are connected with, sponsored by, affiliated with, or related to 11 Dfinity and the Internet Computer.” Id. ¶ 64 . 12 Meta then filed this motion to dismiss, as well as a request for judicial notice. Mot.; 13 Request for Judicial Notice (dkt. 35).2 14 II. LEGAL STANDARD 15 Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint may be 16 dismissed for failure to state a claim for which relief may be granted. Fed. R. Civ. P. 17 12(b)(6). Rule 12(b)(6) applies when a complaint lacks either a “cognizable legal theory” 18 or “sufficient facts alleged” under such a theory. Godecke v. Kinetic Concepts, Inc., 937 19 F.3d 1201, 1208 (9th Cir. 2019). Whether a complaint contains sufficient factual 20 allegations depends on whether it pleads enough facts to “state a claim to relief that is 21 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. 22 v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible “when the plaintiff pleads 23 factual content that allows the court to draw the reasonable inference that the defendant is 24 liable for the misconduct alleged.” Id. at 678 . When evaluating a motion to dismiss, the — 25 — — 26 — 2 Meta requests that the Court incorporate by reference nine exhibits and find that an additional 27 twenty-four exhibits are judicially noticeable. Request for Judicial Notice at 7–11. Because the Court need not take notice of all of these documents to decide this motion, the Court instead 1 Court “must presume all factual allegations of the complaint to be true and draw all 2 reasonable inferences in favor of the nonmoving party.” Usher v. City of Los Angeles, — 3 — 828 F.2d 556, 561 (9th Cir. 1987). However, it is “not bound to accept as true a legal 4 conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986); 5 Clegg v. Cult Awareness Network, 18 F.3d 752 , 754–55 (9th Cir. 1994). 6 If a court dismisses a complaint for failure to state a claim, it should “freely give 7 leave” to amend “when justice so requires.” Fed. R. Civ. P. 15(a)(2). A court has 8 discretion to deny leave to amend due to “undue delay, bad faith or dilatory motive on the 9 part of the movant, repeated failure to cure deficiencies by amendment previously allowed, 10 undue prejudice to the opposing party by virtue of allowance of the amendment, [and] 11 futility of amendment.” Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th 12 Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). To determine whether 13 amendment would be futile, courts examine whether the complaint can be amended to cure 14 the defect requiring dismissal “without contradicting any of the allegations of [the] original 15 complaint.” Reddy v. Litton Indus., Inc., 912 F.2d 291 , 296–97 (9th Cir. 1990). 16 III. DISCUSSION 17 A. Trademark Infringement and False Designation of Origin 18 To state either of its Lanham Act claims, Dfinity must allege facts that plausibly 19 show: “(1) a protectable ownership interest in the mark; and (2) a likelihood of consumer 20 confusion in defendant’s use of its allegedly infringing mark.” Lodestar Anstalt v. Bacardi 21 & Co. Ltd., 31 F.4th 1228, 1245 (9th Cir. 2022) (internal quotation marks omitted). 22 Meta argues that Dfinity has failed to establish a protectable ownership interest in 23 the Dfinity Mark, and that there is minimal likelihood of consumer confusion in its use of 24 both the Rainbow Mark. Mot. at 11. The Court agrees, and grants Meta’s motion to 25 dismiss as to both marks. 26 1. Protectable Ownership Interest in the Dfinity Mark 27 To establish a protectable ownership interest, “the party claiming ownership must 1 have been the first to actually use the mark in the sale of goods or services.”3 Sengoku 2 Works Ltd. v. RMC Int’l, Ltd., 96 F.3d 1217 , 1219 (9th Cir. 1996). Under Ninth Circuit 3 law, “use in commerce” requires both “(1) an element of actual use, and (2) an element of 4 display.” Chance v. Pac–Tel Teletrac Inc., 242 F.3d 1151, 1159 (9th Cir. 2001). The 5 display must be “sufficiently public to identify or distinguish the marked goods in an 6 appropriate segment of the public mind.” New W. Corp. v. NYM Co. of Cal., Inc., 595 7 F.2d 1194 , 1200 (9th Cir. 1979) (quoting New Eng. Duplicating Co. v. Mendes, 190 F.2d 8 415, 418 (1st Cir. 1951)). 9 Meta argues that Dfinity has failed to plead “use in commerce” of the Dfinity 10 Mark.4 In its motion, Meta contends that Dfinity has only alleged two facts regarding the 11 Dfinity Mark: (1) that it has “consistently used its marks on its website since 2017,” FAC 12 ¶ 18; and (2) that both the Dfinity Mark and the Rainbow Mark are “valid, protectable 13 marks that Dfinity has used in commerce since at least 2017.” Id. ¶ 77; see also Mot. at 14 12. Meta argues that these allegations are too conclusory to plead use in commerce. Mot. 15 at 12–13. 16 Dfinity responds that it has “provided several examples of its use of the Dfinity 17 Mark, beyond it being on its website since 2017.” Opp’n at 14. Dfinity then lists these 18 alleged uses of the Dfinity Mark: (1) in a July 2018 presentation on “The Future of 19 Blockchain Networks, Tokens, & Registrations,” FAC ¶ 31; (2) in a May 2019 20 presentation during New York Blockchain Week, id. ¶ 32; (3) in a March 2021 virtual 21 event hosted by Dfinity, id. ¶ 33; (4) in May and June 2022, at “Supernova,” the Internet 22 Computer’s inaugural hackathon, id. ¶ 35; and (5) at a conference hosted by the Stanford — 23 — — 24 — 3 Dfinity seems to argue that because the registration of its marks gives it “prima facie evidence of [their] validity,” that means it need not plead use in commerce to demonstrate a protectable 25 ownership interest in an enforcement action. 15 U.S.C. § 1115 (a); Opp’n at 12–13. The Ninth Circuit does not agree. Lodestar, 31 F.4th at 1248 (“[N]othing in the text of the Lanham Act 26 suggests that its liberalization of the rules for obtaining registration of marks under the Madrid Protocol operates to override the settled foundational principle of trademark law that ‘only use in 27 the marketplace can establish a mark’ and that registration alone ‘does not create a mark or confer ownership’ in a trademark.” (quoting Miller v. Glenn Miller Prods., Inc., 454 F.3d 975 , 979 (9th 1 Center for Blockchain Research, id. ¶ 37. 2 But Meta is correct when it points out that these are all uses of the Rainbow Mark, 3 not the Dfinity Mark. Reply (dkt. 37) at 3. During the July 2018 presentation, the 4 Rainbow Mark appears throughout the presentation, but not the Dfinity Mark.5 In the May 5 2019 presentation, the Rainbow Mark appears both on presentation slides as well as the 6 jacket and computer of the presenter, but the Dfinity Mark is nowhere to be found.6 The 7 same is true of the March 2021 virtual event, the Supernova hackathon, and the 8 presentation at the Stanford Center for Blockchain Research:7 The Rainbow Mark is there 9 and often prominent, but the Dfinity Mark is absent. 10 Stripped of any allegations of use of the Dfinity Mark in any of the events described 11 above, the remaining allegations of its use are as limited as Meta contends: that Dfinity has 12 “consistently used its marks on its website since 2017” and that they are “valid, protectable 13 marks that Dfinity has used in commerce since at least 2017.” FAC ¶¶ 18, 77. First, it is 14 not entirely clear whether “its marks” alleges that both marks have been used on its 15 website or if it has used either of them. A perusal of the website https://dfinity.org8 reveals 16 only uses of the Rainbow Mark. Thus, the only remaining allegation supporting the Dfinity 17 Mark’s use in commerce is the allegation that it is “used in commerce.” FAC ¶ 77. 18 Without any accompanying evidence in the complaint or incorporated by reference, this 19 allegation is too bare and conclusory to survive a motion to dismiss. See, e.g., Beijing 20 Tong Reng Tang (USA), Corp. v. TRT USA Corp., 09-cv-882, 2010 WL 98957 , at *2 21 (N.D. Cal. Jan. 5, 2010). 22 Meta’s motion is thus granted with respect to the Dfinity Mark based on a failure to 23 plead use in commerce. The Court grants Dfinity leave to amend to plead use in commerce 24 of the Dfinity Mark. Leadsinger, 512 F.3d at 532 . — 25 — — 26 — 5 See FAC ¶ 31; https://www.youtube.com/watch?v=e8ZnW9J8N9s. 6 See FAC ¶ 32; https://www.youtube.com/watch?v=xTID4zlgFVY. — 27 — 7 See FAC ¶¶ 33–37; https://www.youtube.com/watch?v=GXLf6rfzO9A; https://www.youtube.com/watch?v=WVeovvm3znE. 2. Likelihood of Consumer Confusion: The Sleekcraft Factors — 1 — To determine whether consumer confusion between the Rainbow Mark and the — 2 — Meta Mark is likely, Ninth Circuit courts apply eight factors, derived from AMF Inc. v. — 3 — Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979): (1) the similarity of the marks; (2) the — 4 — strength of the mark allegedly infringed upon; (3) the proximity between the two entities’ — 5 — goods and services; (4) the likelihood that the infringer will expand into the infringee’s — 6 — market; (5) the degree of care likely to be exercised by purchasers of the services; (6) — 7 — evidence of actual confusion in the marketplace; (7) the similarity of the marketing — 8 — channels used; and (8) the infringer’s intent in selecting the mark. Brookfield Comm’cns, — 9 — Inc. v. W. Coast Ent. Corp., 174 F.3d 1036 , 1053–54 (9th Cir. 1999) (citing Sleekcraft, — 10 — 599 F.2d at 348–49). The Ninth Circuit has cautioned that the Sleekcraft test is “pliant” — 11 — and that “[s]ome factors are much more important than others, and the relative importance — 12 — of each individual factor will be case-specific.” Id. at 1054 . While the first two factors— — 13 — similarity of the marks and the goods and services offered by the two entities—“will — 14 — always be important,” a court may find likelihood of confusion by considering a subset of — 15 — the factors, or additional factors not typically considered. Id. Courts “must be acutely — 16 — aware of excessive rigidity when applying the law in the Internet context; emerging — 17 — technologies require a flexible approach.” Id. — 18 — As explained below, because the Court finds that confusion between the Meta Mark — 19 — and Dfinity’s Rainbow Mark is unlikely as a matter of law, the Court grants Meta’s motion — 20 — as to the Rainbow Mark as well. — 21 — a. Similarity of the Marks — 22 — The similarity of the marks is considered one of the most, if not the most, important — 23 — factor when assessing likelihood of confusion. Id. A court must consider the “sight, sound, — 24 — and meaning” of each mark, they “‘must be considered in their entirety and as they appear — 25 — in the marketplace,’” and “similarities [are] weighed more heavily than differences.” Id. — 26 — (quoting Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1392 (9th Cir. 1993)). On a — 27 — motion to dismiss, “[l]ikelihood of confusion can be determined . . . where the parties have 1 || obviously dissimilar marks.” Mintz v. Subaru of Am., Inc., 716 F. App’x 618 , 620 (9th 2 || Cir. 2017). 3 We must first decide the version of the Meta Mark to which Dfinity’s Rainbow 4 || Mark must be compared. Dfinity argues that its logo must be compared to the below logo, 5 || which is described in the FAC as one of the “multi-colored versions of” the Meta Mark: — 6 — — 8 — 9 || FAC 452; Opp’n at 1, 20. As a source for this version of the Meta Mark, the FAC links to 10 |} an article called “Designing our new company brand: Meta” which describes the process 11 || of creating the Meta Mark.’ FAC at 23 n.19. The article includes photos and short videos 12 || of the Meta logo in various stages of transformation, and states that the logo “can take on 13 || infinite textures, colors and movement, capturing the creativity and imagination of a 3D — 99 — 14 world.” Id. 15 None of the photos on the page show the Meta Mark in the color and shape shown 16 || by Dfinity in its complaint and opposition; rather, it appears that Dfinity’s version of the g 17 || Meta Mark comes from a video showing the Meta Mark morphing into different colors, 18 || textures, and shapes before ending on the blue, traditional Meta Mark. Dfinity appears to 19 || have taken a screenshot of the Meta Mark as it mutates in this video, timing the image to 20 || precisely the split second in which it looks most like the Rainbow Mark.!° Dfinity has not 21 || alleged that this “multi-colored version[]” of the Meta Mark appears anywhere else but in — 22 — 23 ” https://design.facebook.com/stories/designing-our-new-company-brand-meta/. The website is 94 || linked in the complaint and described numerous times, see, e.g., FAC {[] 46—47, 52, and is thus incorporated by reference. Khoja, 899 F.3d at 1002 . 25 10 Meta argues that not only is this a screenshot of the video, it is further manipulated by Dfinity: “Apparently, Plaintiff took a screenshot of a 3D animated illustration within the Design Story, 26 converted it to a static image, flattened and distorted it resemble a traditional infinity symbol, and now argues that logo infringes Plaintiff's rights.” Reply at 1 (first emphasis added). While an 27 eyeball test does indicate that the split second of the video that Dfinity has captured appears to be more akin in shape to the traditional blue Meta logo that ends the video than the screenshot that 2g || appears in Dfinity’s complaint and opposition, the Court need not, and does not, find that the screenshot was further altered by Dfinity. 1 || the video in this article. 2 Meta argues that the Meta Mark alleged by Dfinity is an improper comparator 3 || because it was never used as a trademark nor in a commercial transaction; and the split4 || second appearance of the version of the mark Dfinity seizes upon is “ephemeral,” and thus 5 || cannot “constitute use ‘that confuses the public about the actual source of goods and 6 || services.’” Reply at 6 (quoting Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 677 (9th 7 || Cir. 2005)). Meta argues that the proper comparator is the version that it has registered as 8 || a trademark and that appears on its webpages and products: — 9 — . OO — 11 — 12 The Court agrees. Even assuming the design story is a commercial use of Meta’s 13 |} trademark—describing the company’s brand evolution from Facebook to Meta and thus 14 || related to the goods and services the new brand seeks to market and sell—the use of the |} screenshotted multi-colored mark is so fleeting that it cannot be a source of customer 16 confusion. See, e.g., Nelson-Ricks Cheese Co., Inc. v. Lakeview Cheese Co., LLC, 331 F. 17 || Supp. 3d 1131, 1149 (D. Idaho 2018) (finding that use of marks in very small print at the 18 || bottom of a product information sheet is unlikely to give rise to confusion among 19 || sophisticated customers), aff'd, 775 F. App’x 350 (9th Cir. 2019). Because Dfinity has 20 || failed to allege any other situation in which the screenshotted mark is used, the Court 21 || compares the Rainbow Mark to the traditional Meta Mark, as it is found in numerous 22 || paragraphs of the complaint, on numerous webpages, on Meta’s products, and in Meta’s 23 || trademark filings. See FAC 9] 48-51, 62-63, Exs. C-G. Thus, the proper comparison is 24 || between the following marks, with Dfinity’s Rainbow Mark on the left and the Meta Mark 25 || on the right:!! — 26 — 27 '! Because Court finds that Dfinity fails to allege use in commerce of the Dfinity Mark, as 2g || explained above, the Court does not include the Dfinity Mark in this comparison. Nevertheless, the Dfinity Mark is even less similar to the Meta Mark than the Rainbow Mark is. — 1 — CO OO) — 3 — — 4 — 5 Employing the “sight, sound, and meaning” test, the marks are dissimilar: Dfinity’s 6 || shape is a traditional infinity sign, with the lines crossing at the horizontal and vertical 7 || midpoint, and a precise multicolor format that Dfinity instructs users of the logo not to 8 || alter. See FAC §§] 16-17. While Meta’s logo can and does appear in different colors, and 9 || is not always in the traditional blue, see, e.g., FAC {J 50—51, its shape is still dissimilar to 10 || Dfinity’s: While it includes two loops and bears some resemblance to an infinity sign, the 11 || lines cross above the vertical midpoint and the two loops are squished into vertical oblong 12 || shapes; Meta compares its logo to the letter “M” for Meta, or a video game controller.” 13 |} Mot. at 7. The marks are even more dissimilar when they are accompanied by the parties’ 14 || names, which happens often (though not always) in commercial settings. Compare FAC § 15 |} 18 (Rainbow Mark on Dfinity’s website next to the word “Dfinity”), and FAC 48 (Meta 16 || Mark on its “About Meta” webpage), with FAC § 42 (Rainbow Mark appearing without 17 || the word “Dfinity” on CrowdEats), and FAC § 51 (Meta Mark appearing without the word 18 || “Meta” on its virtual reality system). The thickness of the lines and the general continuous 19 || pattern of two loops intersecting at a midpoint are the only aspects that render these two 20 || marks similar. 21 But dismissal based on this factor alone requires not just that the logos are 22 || dissimilar; the question is whether they are “obviously” dissimilar, or “so facially 23 || dissimilar that they cannot possibly create a likelihood of confusion.” Mintz, 716 F. App’x 24 || at 621. In cases in which courts in this Circuit have decided motions to dismiss on this 25 factor alone, words have often been an aspect of the trademark, with the words being 26 || clearly different. See, e.g., Mintz, 716 F. App’x at 620-21 (comparing “Share the Love” — 27 — 28 One might also compare it to the traditional shape of a soft pretzel. 1 to “A World of Love, for You and Those You Love”); Murray v. Cable Nat’l Broad. Co., — 2 — 86 F.3d 858, 861 (9th Cir. 1996) (comparing “America Speaks” to “America’s Talking”); 3 Knowles v. Spin Master, Inc., 18-cv-5827, 2018 WL 6131207 , at *4 (C.D. Cal. Nov. 2, 4 2018) (comparing “Rusty Rivets” to “Rivets & Ruby”) Marvel Enters., Inc. v. NCSoft 5 Corp., 04-cv-9253, 2005 WL 878090 , at *4 (C.D. Cal. Mar. 9, 2005) (comparing 6 “Statesman” to “Captain America”). Because, as explained above, both parties 7 occasionally use the marks without their names attached, words are not dispositive here. 8 And while Meta is correct that Mintz involved a design as well, the designs in Mintz were 9 far more facially dissimilar than those at issue here. Mintz, 716 F. App’x at 621 (where 10 one design “include[d] a hand that is circumscribed by a heart and includes an entire body” 11 while the other “depict[ed] [only] a hand with a heart on it” that “radiate[d] blue beams”). 12 Therefore, the Court analyzes the rest of the Sleekcraft factors and declines to 13 dismiss Dfinity’s claim based on the first Sleekcraft factor alone. 14 b. Strength of the Rainbow Mark 15 The scope of trademark protection afforded to a mark depends on its strength. See 16 Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1141 (9th Cir. 2002). “The stronger a 17 mark—meaning the more likely it is to be remembered and associated in the public mind 18 with the mark’s owner—the greater the protection it is accorded by the trademark laws.” 19 Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1149 (9th Cir. 20 2011) (quoting Brookfield, 174 F.3d at 1058 ). To determine strength, courts consider both 21 “conceptual strength”—whether a mark is arbitrary, fanciful, suggestive, descriptive, or 22 generic—and “commercial strength”—whether and to what extent a mark is actually 23 recognizable in the marketplace. Id. Commercial strength may be shown by advertising 24 expenditures, length of exclusive use, public recognition, and uniqueness. Id. 25 Dfinity argues that because its marks are suggestive and registered, it is accorded 26 greater protection under the “conceptual strength” prong of the test. Opp’n at 17. Meta 27 argues that such suggestive marks are “presumptively weak,” Brookfield, 174 F.3d at 1 at 17. Meta contends that because there are “fifteen hundred other registered trademarks 2 comprising an infinity symbol for the same classes of goods and services as Plaintiff’s,” 3 the Rainbow Mark is indistinctive in such a “crowded field.”13 Id. 4 On a motion to dismiss, the Court does not find that Dfinity’s marks are weak on 5 the evidence proffered by Meta. While it is not surprising that there are many registered 6 trademarks for marks resembling the infinity sign in the field occupied by Dfinity, Meta 7 does not demonstrate how recognizable those marks are in comparison to Dfinity’s. See 8 Zobmondo Ent., LLC v. Falls Media, LLC, 602 F.3d 1108, 1119 (9th Cir. 2010) (finding 9 that evidence of third-party use of the mark, “without contextual information such as sales 10 figures and distribution locations,” does not demonstrate “long-standing customer 11 understanding”). It is certainly possible that Dfinity is the most recognizable infinity sign 12 in its class, in which case even a suggestive mark in a “crowded field” could be stronger 13 than expected. Cf. Network Automation, 638 F.3d at 1149 (citing Brookfield, 174 F.3d at 14 1058). Discovery would explore such a possibility. 15 Similarly, the Court finds Meta’s conclusory arguments regarding commercial 16 strength to be equally unpersuasive. Contrary to Meta’s arguments, Dfinity pleads facts 17 that show some measure of commercial recognition, which is all that is required on a 18 motion to dismiss. FAC ¶¶ 18–19, 30–43; Vapor Spot, LLC v. Breathe Vape Spot, Inc., 19 15-cv-2110, 2015 WL 12839123 , at *8–9 (C.D. Cal. Sept. 15, 2015). It would be 20 improper for the Court to take these pleadings and find that they establish minimal 21 commercial strength under the Sleekcraft test. Cf. Solid 21, Inc. v. Breitling USA, Inc., — 22 — 512 F. App’x 685, 687 (9th Cir. 2013) (“[T]he inquiry under Rule 12(b)(6) is into the 23 adequacy of the pleadings, not the adequacy of the evidence.”). 24 On this record, other than acknowledging the Ninth Circuit’s description of 25 suggestive marks like the Rainbow Mark as “presumptively weak,” Brookfield, 174 F.3d 26 — 27 — 13 The Court takes judicial notice of the PTO registrations of the other infinity signs identified by 1 at 1058, the Court finds that the Rainbow Mark is neither particularly weak nor 2 particularly strong, and that this factor is accorded little weight in the balance of the 3 Sleekcraft factors at this stage. 4 c. Proximity between the Parties’ Goods and Services and Likelihood of Expansion — 5 — These two Sleekcraft factors measure the proximity between the two entities’ goods — 6 — and services and the likelihood of the defendant’s expansion into related goods and — 7 — services, because “[r]elated goods are generally more likely than unrelated goods to — 8 — confuse the public as to the producers of the goods.” Brookfield, 174 F.3d at 1055–56. — 9 — The parties need not provide the same services, nor be direct competitors; courts must — 10 — focus on the infringee’s customers and “ask whether they are likely to associate” its — 11 — products with the infringer’s. Dreamwerks Prod. Grp., Inc. v. SKG Studio, 142 F.3d 1127 , — 12 — 1131 (9th Cir. 1998). But where the services are “totally unrelated,” dismissal is — 13 — appropriate. Ketab Corp. v. Mesriani & Assocs., P.C., 734 F. App’x 401 , 406 (9th Cir. — 14 — 2018). — 15 — It cannot be said that the services are “totally unrelated” such that this factor is — 16 — dispositive on a motion to dismiss. Dfinity’s main service is the Internet Computer, “a — 17 — public, blockchain network powered by ‘chain key cryptography.’” FAC ¶ 7. This system — 18 — aims to “provid[e] millions of developers and entrepreneurs with a public compute — 19 — platform” with the long-term aim of “creating a revolutionary new way to build websites, — 20 — enterprise systems and internet services within an open environment.” Id. ¶ 8 . Dfinity — 21 — provides downloadable software to developers, as well as educational services like — 22 — tutorials on its website. Id. ¶¶ 19, 27 . Dfinity also hosts conferences to discuss its work — 23 — with the larger tech community. Id. ¶¶ 19, 30 . — 24 — Meta’s core products are its Facebook and Instagram applications and its virtual — 25 — reality system, Meta Quest. Id. ¶ 51 . While Meta does not now provide the precise — 26 — services that Dfinity does, it does provide developers and creators with the ability to — 27 — design, build, and launch VR apps on Meta Quest. Id. ¶ 63 . While this process still 1 appears to run on the kind of “centralized, closed system” that exemplifies “Big Tech,” 2 there are indications that the kind of work Dfinity and its developers do may soon be at 3 least complementary to Meta’s work and overall mission. Id. ¶¶ 8, 44 . As Mark 4 Zuckerberg’s founder’s letter launching Meta explains: “The metaverse will not be created 5 by one company. It will be built by creators and developers making new experiences and 6 digital items that are interoperable and unlock a massively larger creative economy than 7 the one constrained by today’s platforms and their policies.” Id. ¶ 44 . It seems plausible 8 that Zuckerberg is describing products and services like Dfinity’s Internet Computer. 9 Meta argues that this case is akin to Murray v. Cable Nat’l Broadcasting Co., in 10 which the Ninth Circuit found that the services provided by Murray’s “man-on-the-street” 11 consumer surveys—“America Speaks”—were unrelated to those provided by CNBC’s 12 “America’s Talking,” where CNBC polled viewers by having them call telephone 13 numbers. 86 F.3d at 861 . The Court finds this case more akin, at this stage, to 14 Dreamwerks Production Group v. SKG Studio, 142 F.3d 1127 (9th Cir. 1998). In 15 Dreamwerks, an organizer of Star Trek conventions, the senior user of the “Dreamwerks” 16 mark and a much smaller company, sued DreamWorks, an emerging and powerful film 17 studio. 142 F.3d at 1128 . While the district court dismissed because the companies’ 18 missions and targeted audience were different—“Dreamwerks targets trekkies; 19 DreamWorks targets everyone”—the Ninth Circuit reversed: “[T]he relatedness of each 20 company’s prime directive isn’t relevant. Rather, we must focus on Dreamwerks’ 21 customers and ask whether they are likely to associate the conventions with DreamWorks 22 the studio.” Id. at 1131 . The Ninth Circuit found that because “[e]ntertainment studios 23 control all sorts of related industries,” the notion that Star Trek conventions and a movie 24 studio could be related goods was not at all beyond that court’s imagination. Id. 25 Meta is in a similar bind: Dfinity targets developers interested in using the 26 blockchain to “build websites, enterprise systems and internet services within an open 27 environment.” FAC ¶ 8. Meta targets everyone, including developers, some of whom 1 such an “open environment.” Meta argues that its products are antithetical to that vision, 2 and there is no indication that it is interested in expanding into the realm occupied by 3 Dfinity and the Internet Computer. Mot. at 20–21. But given Meta’s metamorphosis over 4 the last few years, such a move is not implausible on the pleadings, particularly in light of 5 Zuckerberg’s statement at the launch of the Meta brand. FAC ¶ 44. 6 Because it cannot be said that the parties’ services are “totally unrelated” at this 7 stage, nor is it implausible that Meta may expand its business to compete with Dfinity, the 8 question then becomes: Are Dfinity’s customers likely to associate its products with Meta 9 and thus be confused? See Dreamwerks, 142 F.3d at 1131 . 10 d. Type of Goods and Degree of Care 11 Courts assess this factor based on “the typical buyer exercising ordinary caution,” 12 though “[w]hen the buyer has expertise in the field, a higher standard is proper though it 13 will not preclude a finding that confusion is likely.” Sleekcraft, 599 F.2d at 353 . 14 “Confusion is less likely where buyers exercise care and precision in their purchases, such 15 as for expensive or sophisticated items.” Au–Tomotive Gold, Inc. v. Volkswagen of Am., 16 Inc., 457 F.3d 1062, 1076 (9th Cir. 2006) (emphasis added). In Network Automation, the 17 Ninth Circuit held that a district court improperly concluded that “Internet users on the 18 whole exercise a low degree of care,” because they “suspect that there are many contexts 19 in which [that] no longer holds true.” 638 F.3d at 1153 . 20 This is almost certainly one of those contexts. If web purchasers, particularly 21 purchasers of sophisticated items, exercise a higher degree of precision in their dealings 22 with and understanding of the internet, the developers to which Dfinity markets its 23 software are perhaps multitudes more sophisticated and exercise a correspondingly higher 24 degree of care.14 See, e.g., Oculu, LLC v. Oculus VR, Inc., 14-cv-196, 2015 WL 3619204 , — 25 — — 26 — 14 Dfinity’s argument that because its services are offered “for little or no cost,” consumers are less likely to exercise care, is unpersuasive. Opp’n at 22 (citing Discovery Comm’cns, Inc. v. Animal 27 Planet, Inc., 172 F. Supp. 2d 1282, 1290 (C.D. Cal. 2001)). These are not “pet-related products and services,” as in Animal Planet, but software offered to developers. Id. A service can be both 1 at *16 (C.D. Cal. June 8, 2015) (“Defendant’s current customers are tech-savvy developers 2 who are designing VR video games, apps, and experiences for retail end users. It is 3 unlikely that these types of sophisticated purchasers will confuse Plaintiff's services with 4 Defendant’s goods and services.”). 5 Dfinity’s customers are “tech-savvy developers” who understand how to harness the 6 Internet Computer for their own projects and businesses, or who seek to learn to do so. 7 Opp’n at 22; see also, e.g., FAC ¶¶ 8, 29. For example, Dfinity has awarded grants to 8 “promising developers and teams” to build tools from a “decentralized tokenized asset 9 management platform” to a “decentralized email that integrates NFTs and distributed 10 storage.”15 FAC ¶ 34. Dfinity’s customers may have participated in its hackathon, used or 11 reviewed its sponsored research at Stanford, or attended its conferences or lectures. See 12 FAC ¶¶ 31–37. That these sophisticated people, immersed in the intricacies of the tech 13 world, would be duped by a logo, particularly one that is not similar in key respects, see 14 supra Section III.2.a, borders on implausible.16 15 e. Instances of Actual Confusion 16 “[A] showing of actual confusion among significant numbers of consumers 17 provides strong support for the likelihood of confusion.” Playboy Enters. V. Netscape 18 Comm’cns Corp., 354 F.3d 1020, 1026 (9th Cir. 2004). While evidence of actual 19 confusion is not necessary, particularly at early stages, see Network Automation, 638 F.3d 20 at 1151, the lack of evidence of actual confusion where the marks have co-existed for a 21 significant period of time weighs against a finding of likelihood of confusion. Oculu, 2015 22 WL 3619204 , at *13. 23 Dfinity proffers six Twitter replies as evidence of actual confusion. FAC ¶ 65. — 24 — — 25 — 15 https://dfinity.org/grants. The website is linked in the complaint and thoroughly described, see FAC ¶ 34, and is thus incorporated by reference. Khoja, 899 F.3d at 1002 . — 26 — 16 Another comparison to Dreamwerks is apt here. The Ninth Circuit instructs courts to “focus on Dreamwerks’ customers and ask whether they are likely to associate [Dreamwerks’] conventions 27 with DreamWorks the studio.” 142 F.3d at 1131 (emphasis added). It is indeed reasonable that lay science fiction fans might associate a convention with the same name as a film studio with that 1 These tweets all appear to reply to a tweet from Dfinity itself, although neither the text of 2 the original tweet, nor any link to the original tweet, was provided in the complaint.17 Id. 3 The replies either state that the marks resemble each other (“Too similar,” “meta is 4 copying icp’s logo or something,”) or that the marks’ similarity indicates a partnership 5 between Meta and Dfinity (“Meta+InternetComputer = …?” “Partnership?” “I see a 6 partnership? Kismet?”). Id. 7 First, the fact that these statements appear to reply to a tweet from Dfinity itself 8 (regardless of what it said) indicate that they do not represent the natural confusion of a 9 consumer; these replies are derived from some prompting from Dfinity itself rather than 10 experiencing the marks organically as consumers in the marketplace. Contra, e.g., 11 Kreation Juicery, Inc. v. Shekarchi, 14-cv-658, 2014 WL 7564679 , at *7 (C.D. Cal. Sept. 12 17, 2014) (finding, as one piece of evidence of actual confusion, that customers placed 13 orders with the wrong restaurant and went to pick them up at their competitor). Second, as 14 Meta argues, these replies indicate a clear understanding that Meta and Dfinity represent 15 different entities, and Dfinity’s original tweet prompted the connection and discussion of 16 similarities between the marks or possible partnerships. See, e.g., Aurora World, Inc. v. 17 Ty Inc., 719 F. Supp. 2d 1115 , 1123–24, 1160–61 (C.D. Cal. 2009) (finding that emails 18 discussing the competitor’s toys as a “[t]otal rip off” and “exact copies” of the plaintiff’s 19 toys did not represent evidence of actual confusion because the authors “understand that 20 there are at least two different plush toy manufacturers”). It thus cannot be said that these 21 tweets evidence actual confusion. 22 f. Similarity of Marketing Channels 23 Having found that the parties’ services are not “totally unrelated” at this stage, the 24 Court also finds that the parties’ marketing channels are similar, but that this factor does — 25 — — 26 — 17 Meta, in its request for judicial notice, provides what it alleges to be the original tweet that prompted the replies in Dfinity’s complaint. Request for Judicial Notice at 4; see id. Ex. 9. Though 27 the original tweet can be incorporated by reference, Foy v. Vinson, 21-cv-2076, 2022 WL 1443761 , at *1 (D. Ariz. May 6, 2022), because the complaint does not provide the link to the 1 not weigh as heavily as the others previously discussed. 2 It is true, of course, that the complaint indicates that both parties’ market to their 3 developer customer base via the Internet, including their own websites and social media. 4 See, e.g., FAC ¶¶ 18, 38, 48–49. It is also true that the Ninth Circuit ascribes little weight 5 to this fact, given the ubiquity of marketing through websites and social media channels. 6 Cf. Network Automation, 638 F.3d at 1151 . 7 Therefore, while this factor weighs in favor of confusion, it is not accorded 8 significant weight. 9 g. Defendant’s Intent 10 Finally, because the Court finds that the mark is dissimilar (though not “obviously” 11 so), see supra Section III.2.a, and because Dfinity does not allege evidence of bad faith 12 beyond a general allegation of “willful and wonton disregard of Dfinity’s established and 13 superior rights” in its trademark, FAC ¶ 68, the Court finds that this factor weighs against 14 finding a likelihood of confusion. See Arcona, Inc. v. Farmacy Beauty, LLC, 976 F.3d 15 1074, 1081 (9th Cir. 2020). 16 3. Weighing the Factors 17 When weighing the Sleekcraft factors, the Ninth Circuit has repeatedly instructed 18 that courts should not apply them mechanically. Entrepreneur Media, 279 F.3d at 1141 . 19 Some factors—“such as the similarity of the marks and whether the two companies are 20 direct competitors”—are always important to the analysis. Brookfield, 174 F.3d at 1054 . 21 It is also possible to reach a conclusion by considering only a few factors. See, e.g., 22 Dreamwerks, 142 F.3d at 1130–32. Rather, courts consider “what the analysis as a whole 23 reveals about the ultimate question before us: the likelihood of consumer confusion as to 24 the origin of the product or service bearing the allegedly infringing mark.” Entrepreneur 25 Media, 279 F.3d at 1141 . 26 Considering the analysis as a whole, the Court finds that three factors should be 27 more heavily weighted than the rest: (1) the similarity of the marks; (2) the relatedness of 1 similarly weighed three factors: The strength of the mark; the similarity of the marks; and 2 the relatedness of the goods. Dreamwerks, 142 F.3d at 1130 . Because there is little 3 evidence of the mark’s strength or weakness at this stage of the proceedings, see supra 4 Section III.2.b, the Court finds that the type of goods should be more heavily weighted in 5 this context. The customer base in Dreamwerks consisted of lay consumers of 6 entertainment; the customer base in this case is “tech-savvy developers.” Opp’n at 22. 7 With so sophisticated a product and a customer base, the type of good and the degree of 8 care should be given more weight in this analysis than in the usual trademark infringement 9 case, where laypeople are often the prospective customers. 10 The Court finds that the dissimilarity between the marks and the sophistication of 11 the good itself and Dfinity’s customer base militate toward a finding that customer 12 confusion is implausible based on the operative complaint. The marks differ significantly 13 in shape; they are not facially similar, though not so obviously dissimilar as to dismiss on 14 that basis alone. However, coupled with Dfinity’s prospective customer, who is looking to 15 build applications and software using Dfinity’s technology, it is implausible that such a 16 customer would look at these dissimilar marks and be actually confused between Dfinity’s 17 and Meta’s products. And while the goods and marketing channels are similar in certain 18 ways—the parties do market to developers to build and create based on the parties’ 19 software, in Dfinity’s case the Internet Computer, and in Meta’s its VR system, Meta 20 Quest—it is highly unlikely that these sophisticated developers cannot tell the two entities 21 apart, even in light of those similarities. Though Dfinity is not required to present 22 evidence of actual confusion, the evidence Dfinity does provide does not indicate actual 23 confusion, see supra Section III.2.e, and thus does not alter this conclusion. 24 As a result, the Court finds that Dfinity has not alleged a likelihood of consumer 25 confusion on its trademark infringement and false designation of origin claims, and grants 26 Meta’s motion to dismiss as to those claims. Because Dfinity could allege facts that alter 27 this analysis, the Court grants Dfinity leave to amend to plead additional facts that 1 || base, and the degree of care it employs when choosing to build using Dfinity’s software 2 || and tools; and (2) any other evidence of actual confusion among Dfinity’s customers to 3 |} render plausible the allegation that such a customer is likely to be confused between 4 || Dfinity’s Marks and the Meta Mark. Leadsinger, 512 F.3d at 532 . 5 B. — State-Law Claims 6 The parties agree, as does the Ninth Circuit, that Dfinity’s state-law and common7 || law unfair competition claims rise and fall on its Lanham Act claims. See Cleary v. News 8 || Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994) (stating that UCL and common-law unfair 9 || competition claims are “substantially congruent” to Lanham Act claims). Thus, Meta’s 10 || motion to dismiss is granted on these claims as well. 11 || Iv. CONCLUSION 12 For the foregoing reasons, the Court GRANTS Meta’s motion to dismiss with leave € 13 || to amend. Dfinity may file an amended complaint within 21 days of this order. 14 IT ISSO ORDERED. iE 15 Dated: November 10, 2022 CHARLES R. BREYER 16 United States District Judge Z — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 — — 28 —