conclusory allegations of confusion don't allege statutory standing for TM claim

Blacks in Technology Int’l v. Greenlee, 2023 WL 4186376, No. 3:20-CV-3008-X (N.D. Tex. Jun. 26, 2023)

On one side: Blacks in Technology International (BIT International), Blacks United in Leading Technology International (BUILT), and Blacks in Technology, Texas (BIT Texas). On the other: Blacks in Technology, LLC (BIT LLC) and two individual defendants, Greenlee and Schultz. After much back and forth, BIT LLC had trademark/unfair competition claims against the BIT International, BUILT, and BIT Texas; I’ll ignore the other claims.

Perhaps because the litigation seems to have been otherwise painful, the court actually gave some attention to the harm story and found that BIT LLC failed to allege that it had standing to bring its trademark claims.

BIT LLC wasn’t the registrant for one of the marks at issue, BLACKS IN TECHNOLOGY, but it could establish that it owned the mark by showing it used the mark as a source identifier, but it made only conclusory assertions that it did so. Under §43(a), it didn’t have to own the mark (or the other asserted registered mark, a “Blacks in Technology” logo) as long as it satisfied the zone of interests and proximate cause tests.

Even if BIT LLC fell within the Lanham Act’s zone of interests, it failed to allege proximate causation of injury. The “paradigmatic direct injury” is “diversion of sales to a direct competitor”; other recognized injuries may include “harm[ing] a plaintiff’s reputation by casting aspersions on its business,” “denigrat[ing] a plaintiff’s product by name,” “damag[ing] the product’s reputation by, for example, equating it with an inferior product,” or “seek[ing] to promote [the defendant’s] own interests by telling a known falsehood to or about the plaintiff or his product.” BIT LLC made only conclusory assertions of likely confusion and resulting damage. “BIT LLC then includes what appears to be a screenshot from a nondescript social media chat forum in which five participants discuss the similarity between BUILT’s logo and BIT LLC’s logo.” And it alleged that the putative “infringement will also lessen the ability of [the Mark and the Logo] to identify and distinguish BIT[ ] LLC’s goods and services, thereby causing harm to BIT[ ] LLC.”

That wasn’t enough.

BIT LLC has failed to allege any economic or reputational injury “flowing directly from the deception wrought by” the advertising of BIT International or BIT Texas. Its complaint makes no mention of any specific advertising by these two parties whatsoever. And BIT LLC’s screenshot demonstrating the apparent confusion of five anonymous users of an unidentified social media chat forum—all of whom were able to distinguish the two logos, and none of whom referred to anything indicating reputational or economic harm—is insufficient to plausibly allege that BUILT proximately caused any injury to BIT LLC via infringement.

Claim dismissed without prejudice.