TM infringement no matter how dissimilar the marks?

Surface Supplied, Inc. v. Kirby Morgan Dive Systems, Inc., No. C 13–0575, 2013 WL 6354244 (N.D. Cal. Dec. 5, 2013)

Sometimes I think Iqbal/Twombly is for people who don’t own trademarks.  Here, Kirby Morgan sought to amend its counterclaims for trademark infringement, federal dilution, and false advertising. The court allowed the amendment.

The legally interesting parts: First, because the infringement test is a multifactor test, there’s no lower threshold for similarity between the marks for infringement.  Brookfield’s statement that “[w]here the two marks are entirely dissimilar, there is no likelihood of confusion,” such as “Pepsi” and “Coke,” is mere dicta.  One would hope a court would be generous with a prevailing defendant’s attorneys’ fees given such an easy intake standard, but somehow I doubt it.

Second, the same is true for federal dilution, also a multifactor test.  That’s not really Kirby Morgan’s problem, though.  Kirby Morgan’s problem is that it doesn’t have a federally famous, household name mark.  I do not understand how it could plausibly plead that it does. This appears to be a specialized diving company, by definition not federally famous.

(Unsurprisingly, the court also declines to resolve functionality at this stage.)

Finally, although SSI argued that no false advertising claim could fly because Kirby Morgan didn’t allege any actual confusion or lost sales—because SSI hasn’t made any sales yet—the standard is likely deception plus likely injury by lessening goodwill, so Kirby Morgan could plead a false advertising claim.