Thursday, March 29, 2012

More than meets the eye in Transformers search results

Hasbro, Inc. v. Asus Computer International, Inc., CV 11-10437 PSG, (C.D. Cal. March 23, 2012)
Hasbro, owner of the Transformers toys/franchise, sued Asus for making a Transformer tablet and later a Transformer Prime.  As it turns out, Hasbro has a show about Optimus Prime that it is calling Transformers Prime.  The court denied Hasbro’s motion for a preliminary injunction, largely focusing on the potentially descriptive valence of “transformer” as applied to a tablet computer that can convert into a fuller-sized machine with keyboard etc., the expense of the computer ($550-750)/care taken by the purchasers, and Hasbro’s delay in seeking relief.
Some interesting tidbits: Hasbro put in evidence that googling “optimus prime tablet” picks up Asus’s “Transformer Prime” tablet; a search for “Transformer prime” causes Amazon to search its own site for “Asus transformer prime”; and a search for “transformers prime” returns “several Asus hits and Transformers Prime hits.”  But the court wasn’t convinced that this made confusion likely.  First of all, the “s” mattered: “Transformer Prime” made Google return results for Asus mostly, and “Transformers Prime” made it return results for Hasbro’s series.  Moreover, “[r]easonable consumers understand that when executing a key word search, the results they are presented with originate from thousands of sources, if not more.”  In addition, even though there were some hits for the animated series together with hits for the Asus tablet, Hasbro didn’t argue that these products were related (so one looking for the series would hardly end up buying the tablet and vice versa). 
And on Office Depot’s site, searching “Transformers” returned product results for the “ASUS Eee Pad TF 101-A1 Tablet” and several “Razer Transformers 3 RC21” carrying cases – a Transformers-branded product – but the source of each was clearly designated.  In addition, the first result from this search was the “ABBYY PDF Transformer,” “a software product which enables users to convert documents to PDF, and which therefore makes use of the word
‘Transformer’ in a manner similar to Asus.”  Online, commercial retailers combine thousands and even millions of unrelated products, so appearing on search results pages together is “at best equivocal.”  And having both Hasbro and Asus products on the same search page isn’t a big problem when the sources of both are clearly identified; references to the Asus aka Eee Pad Transformer Prime often have a thumbnail image “that clearly and immediately conveys the nature of the products.”  At a minimum, there was a factual question of “whether reasonable consumers shopping for electronics on large inventory sites like Amazon and Office Depot are able to distinguish between products employing the word ‘transformer’ for its primary descriptive meaning, and those referring to the Transformers brand.”
Hasbro also offered two online reviews, not quoted, to add to its evidence of confusion.  Nope: “Though the articles reference Transformers themes in connection with the Asus Eee Pad Transformer Prime, they are tech industry overviews of the development, launch, and capabilities of Asus and its competitor’s products.”  Again, they were at best equivocal; one could equally conclude that the authors weren’t confused.
On dilution, the court said some interesting things.  First, Asus contested fame.  I really think there’s a difference between “Transformers” and “transformer” here.  Asus also argued that Transformers weren’t a household name to the general consuming public, specifically “girls, women and more senior Americans.”  Hmph.  The court concluded, though, that this wasn’t an easy thing to decide on a motion for a preliminary injunction.
Turning to other factors, the court was unpersuaded of the dilution claim on this posture.  Transformer is “a common, descriptive word which Asus uses in its common, descriptive sense.” It’s not a good idea to allow anyone to monopolize such descriptive terms.  Almost a hundred registered marks include some variation of the word, making it unlikely that the Transformers mark was sufficiently distinctive to be protected against dilution.
It’s true that Visa Intern. Service Ass’n v. JSL Corp., 610 F.3d 1088 (9th Cir. 2010), found “” likely to dilute Visa on summary judgment.  There, the 9th Circuit concluded that Visa was a strong, arbitrary mark as applied to credit cards and that Visa was a top credit card brand, and an “e” prefix was unable to distinguish the two marks.  However, the 9th Circuit noted that when “a trademark is also a word with a dictionary definition, it may be difficult to show that the trademark holder’s use of the word is sufficiently distinctive to deserve anti-dilution protection because such a word is likely to be descriptive or suggestive of an essential attribute of the trademarked good.”  (It’s ridiculous to emphasize the TM owner’s use, when the question is the defendant’s use, see, e.g., Apple, but the district court here is stuck with that.)  Also, such a word may already be in use as a mark by third parties.  Thus, the Visa court distinguished its earlier ruling in a case involving Trek Bicycles because the plaintiff’s use there played heavily off of the meaning of “trek.”  By contrast, Visa’s use played only weakly off the dictionary meaning and there was no evidence that a third party had used the word as a mark.  Moreover, the Visa defendant wasn’t using “visa” for its “literal dictionary definition,” which would have made it a different case.
The court here found that factual questions about whether this was more like Visa or more like Trek precluded a finding of likely dilution now.  “Asus’s use of the word ‘Transformer’ squares with one of its dictionary definitions and therefore describes an aspect of its product in a straightforward manner.  Almost a hundred registered trademarks also involve the word ‘transformer,’ dozens of which are registered in International Class 09, the same class as Asus and the Eee Pad.  Unlike Visa’s use of its mark, but like Trek Bicycle’s, the Transformers mark has descriptive attributes as applied to robots that convert or transform into other forms.”  In addition, though the marks are virtually identical on paper, Asus generally marketed its Transformer products with Eee Pad in front and model numbers behind. This was more than a mere “e” prefix or “Corp.” suffix.  Even though dilution doesn’t require substantial similarity, the similarity here was not high enough to favor Hasbro.
In a footnote, the court also discussed a theory developed in detail in Sara Stadler Nelson, The Wages of Ubiquity in Trademark Law, 88 Iowa Law Review 732 (2003): “any dilution by blurring that might occur here is due to Hasbro’s excessive licensing of its Transformers and Transformers related marks to over 800 licensees covering 11,000 different products.”  Dilution is the creation of new and different associations with the plaintiff’s mark, even without confusion.  Asus contended that the fact that the public might associate the brand with products other than toy robots “is the result of Hasbro’s decision to engage in cross-promotions, merchandizing, and excessive licensing.”  The court found this contention interesting but underdeveloped.
The court further emphasized the impact of Hasbro’s delay.  Hasbro knew about Asus’ intent to market the Eee Pad Transformer in mid-January 2011, and sent a single C&D.  Asus responded that “transformer” was a descriptive, noninfringing use and that Hasbro’s rights didn’t extend to the class of high-end computer products.  The Transformer went on sale in April, and Hasbro waited eight more months to sue.  It also waited two months after Asus announced the release of the Transformer Prime before suing and seeking a PI on the eve of the launch.
Asus submitted evidence that a PI would cause it considerable hardship.  “[T]here is typically a very short window of opportunity for a new computer device to capitalize on its ability to offer the latest technology, speed, graphics, and other features most in demand.  Right now, the Asus Eee Pad Transformer Prime TF 201 is the world’s first quad core tablet with Google’s latest Android operating system.”  An injunction would kill its window of opportunity to have that competitive edge, harming its business and that of its suppliers.  Given this harm, exacerbated by Hasbro’s delay, Hasbro hadn’t shown that the balance of hardships tipped sharply in its favor.
In addition, the court agreed that use of a descriptive term to accurately describe a product feature was in the public interest.  As the 9th Circuit has said, “We do not want to prevent the commercial use of descriptive words to name products, as straightforward names are often the most useful identifiers.”  

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