Catching up: Meta wins (one) infringement claim about its rebrand on motion to dismiss

Dfinity Found. v. Meta Platforms, Inc., 2022 WL 16857036, No. 22-cv-02632-CRB (N.D. Cal. Nov. 10, 2022)

Dfinity alleged that Meta infringed its Dfinity and Rainbow marks in its rebranding. The court granted a motion to dismiss on lack of likely confusion.  

Dfinity is a nonprofit organization that runs the Internet Computer, a public blockchain network. Dfinity seeks to “provid[e] millions of developers and entrepreneurs with a public compute platform—creating a revolutionary new way to build websites, enterprise systems and internet services within an open environment.” Users can download “dapps” (or decentralized applications) which allow users to design and develop software using the Internet Computer blockchain. Dfinity’s website also provides users with “educational tutorials and courses in the field of distributed computing platforms.” Dfinity sponsors conferences and hackathons, and gives in-person and virtual presentations. In 2021, Dfinity announced its Developer Grant Program, a grant fund of $200 million “to support initiatives for developers to work on the Internet Computer.”

In 2018, Dfinity secured registration for its Dfinity mark for use in various computer-based services, including: “Computer software for decentralized platforms, namely, software for using a consensus engine incorporating blockchain technology for securing data with cryptographic information”; “Design and development of computers and software”; and “Hosting of digital content on the Internet, namely, computerized data, files, applications and information.” Color was not claimed as a feature of the mark: 

infinity sign with left loop larger than right with DFINITY beneath

In 2021, it secured registration of its second mark, the Rainbow Mark. The colors purple, pink, blue, orange, and yellow are claimed as a feature of the Rainbow Mark, and Dfinity’s usage guidelines require that these precise colors be used:

a more equal infinity sign in different colors on its own

In 2022, Meta sought registration of its new MetamMark, described as “a geometric design consisting of two loops.” Meta employs it in a variety of ways, including on its website, social media channels, and products: 

Dfinity also alleged uses of specific “multi-colored versions” of the Meta Mark:

the infinity symbol in various colored textures

After Meta unveiled its new mark in October 2021, users allegedly replied to Dfinity’s Twitter account with comments on the similarities between the Dfinity Marks and the Meta Mark, and possibilities for partnerships or collaboration between the two entities. Dfinity sued for federal and state trademark infringement.

Dfinity mark: Under Ninth Circuit law, “use in commerce” requires both “(1) an element of actual use, and (2) an element of display.” Dfinity argued that its registration of its marks gives it “prima facie evidence of [their] validity,” so it need not plead use in commerce to demonstrate a protectable ownership interest in an enforcement action. “The Ninth Circuit does not agree.”

All the specific uses to which Dfinity pointed were uses of its rainbow mark. Without “any accompanying evidence in the complaint or incorporated by reference,” the mere allegation that the mark was used in commerce was too bare and conclusory to survive a motion to dismiss, though Dfinity got leave to amend.

Likely confusion with the rainbow mark: The Ninth Circuit has cautioned that the Sleekcraft test is “pliant” and that “[s]ome factors are much more important than others, and the relative importance of each individual factor will be case-specific.” Courts “must be acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.”

Similarity is “one of the most, if not the most, important factor when assessing likelihood of confusion,” and “similarities [are] weighed more heavily than differences.”

What was the Meta mark to which Dfinity’s rainbow mark was to be compared? Dfinity argued that there were “multi-colored versions of” the Meta mark:

But the source for that allegation was an article called “Designing our new company brand: Meta” which describes the process of creating the new mark. “The article includes photos and short videos of the Meta logo in various stages of transformation, and states that the logo ‘can take on infinite textures, colors and movement, capturing the creativity and imagination of a 3D world.’”

None of the photos on the page show the Meta Mark in the color and shape shown by Dfinity in its complaint and opposition; rather, it appears that Dfinity’s version of the Meta Mark comes from a video showing the Meta Mark morphing into different colors, textures, and shapes before ending on the blue, traditional Meta Mark. Dfinity appears to have taken a screenshot of the Meta Mark as it mutates in this video, timing the image to precisely the split second in which it looks most like the Rainbow Mark. Dfinity has not alleged that this “multi-colored version[ ]” of the Meta Mark appears anywhere else but in the video in this article.

The court agreed with Meta the proper comparator was the one registered as a trademark and that appeared on its webpages and products.  “Even assuming the design story is a commercial use of Meta’s trademark—describing the company’s brand evolution from Facebook to Meta and thus 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 confusion.”

main Meta mark in blue

Once that was set, the marks were dissimilar. “Dfinity’s shape is a traditional infinity sign, with the lines crossing at the horizontal and vertical midpoint, and a precise multicolor format that Dfinity instructs users of the logo not to alter. While Meta’s logo can and does appear in different colors, and is not always in the traditional blue, its shape is still dissimilar to Dfinity’s.”—more like an “M” for meta, a video game controller, or a soft pretzel (first two offered by Meta, the last from the court).  The marks were even more dissimilar when they are accompanied by the parties’ names, “which happens often (though not always) in commercial settings.” “The thickness of the lines and the general continuous pattern of two loops intersecting at a midpoint” were the only similarities.

Still, that wasn’t enough on its own; they were not “obviously” dissimilar, or “so facially dissimilar that they cannot possibly create a likelihood of confusion,” and prior dismissals at the motion to dismiss stage have relied on “clearly different” words appearing in the accused marks. “Because, as explained above, both parties occasionally use the marks without their names attached, words are not dispositive here.”

Thus, the court proceeded to consider the remaining factors. Strength: The court took judicial notice of 1500 other registered trademarks comprising an infinity symbol for the same classes of goods and services as Dfinity’s. That didn’t mean Dfinity’s marks were weak; Meta didn’t show how recognizable those marks were compared to Dfinity’s. “It is certainly possible that Dfinity is the most recognizable infinity sign in its class, in which case even a suggestive mark in a ‘crowded field’ could be stronger than expected.” That’s a fact issue.

So too with commercial strength. “Dfinity pleads facts that show some measure of commercial recognition, which is all that is required on a motion to dismiss.” Given the Ninth Circuit’s description of suggestive marks like the rainbow mark as “presumptively weak,” the court found the mark neither particularly weak nor particularly strong, giving this factor little weight at this stage.

Proximity of goods and services/likelihood of expansion: The services were not “totally unrelated” enough to be dispositive on a motion to dismiss. “While Meta does not now provide the precise services that Dfinity does, it does provide developers and creators with the ability to design, build, and launch VR apps on Meta Quest.” Given Zuckerberg’s founder’s letter launching Meta (“The metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy than the one constrained by today’s platforms and their policies.”), it was plausible that Zuckerberg was describing products and services like Dfinity’s Internet Computer.

While Dfinity targets developers interested in using the blockchain to “build websites, enterprise systems and internet services within an open environment,” Meta targets everyone, including developers, “some of whom presumably are interested in building their products within, or at least compatible with, such an ‘open environment.’” Meta argued that its closed products were antithetical to that vision, and that there was no indication that it was interested in expanding into the realm occupied by the Internet Computer. “But given Meta’s metamorphosis over the last few years, such a move is not implausible on the pleadings.”

Type of goods/degree of care: Here Meta did much better.  “[T]he developers to which Dfinity markets its software are perhaps multitudes more sophisticated [than ordinary consumers online] and exercise a correspondingly higher degree of care.” It didn’t matter that Dfinity offered its services “for little or no cost,” given that they were software services offered to developers. “A service can be both low-cost and sophisticated, and a tech-savvy consumer is not likely to exercise less care if the service is sophisticated, simply because it is also inexpensive…. That these sophisticated people, immersed in the intricacies of the tech world, would be duped by a logo, particularly one that is not similar in key respects, borders on implausible.”

Actual confusion: Dfinity offered six Twitter replies as evidence of actual confusion, though it didn’t link to or plead the contents of the Dfinity tweet to which they were replying. The replies either state that the marks resemble each other (“Too similar,” “meta is copying icp’s logo or something,”) or that the marks’ similarity indicates a partnership between Meta and Dfinity (“Meta+InternetComputer = ...?” “Partnership?” “I see a partnership? Kismet?”).

First, the fact that these statements appear to reply to a tweet from Dfinity itself (regardless of what it said) indicate that they do not represent the natural confusion of a consumer; these replies are derived from some prompting from Dfinity itself rather than experiencing the marks organically as consumers in the marketplace. Second, as Meta argues, these replies indicate a clear understanding that Meta and Dfinity represent different entities, and Dfinity’s original tweet prompted the connection and discussion of similarities between the marks or possible partnerships.

Similarity of marketing channels: similar, but not of heavy weight.

Intent: because of the dissimilarities in marks, and without other allegations of bad faith beyond a general allegation of “willful and wonton disregard of Dfinity’s established and superior rights” in its trademark, this factor weighed against finding a likelihood of confusion.

As a whole, the key factors were: (1) the similarity of the marks; (2) the relatedness of the goods; and (3) the type of goods and degree of care. Without evidence of the mark’s strength or weakness at this stage, the court gave heavier weight to the type of goods and their accompanying customer base, “tech-savvy developers.” “With so sophisticated a product and a customer base, the type of good and the degree of care should be given more weight in this analysis than in the usual trademark infringement case, where laypeople are often the prospective customers.”

Overall, confusion was implausible.