Descriptive mark Bike+ w/minimal marketing fails to show reverse confusion

World Champ Tech LLC v. Peloton Interactive, Inc., 2024 WL 665181, No. 21-cv-03202-LB (N.D. Cal. Feb. 16, 2024)

WCT offers a mobile-fitness app called “Bike+” and owns a trademark registration for that name. It sued Peloton for trademark infringement and other claims after the defendant launched a new line of interactive stationary bicycles under the name “Peloton Bike+.” The court grants summary judgment on lack of likely confusion.

WCT’s app was first released in 2014 for the iPhone and Pebble watch as a metric-tracking cycling app that was designed to “track speed, distance, altitude, and grade.” It also “allowed users to capture photos or video along a ride, activate interval timers during a ride, and post details to Facebook, Twitter, or other services.” Downloads declined after a 2015 peak. WCT became convinced it needed a new direction and focused on developing an app for the Apple Watch. Facebook advertising for the 2014 app continued until 2016 or 2019 and remained available for download; even though the Pebble Watch was discontinued in late 2016, WCT’s principal testified that “there remains a loyal following among the Pebble Watch community.” But the app was not updated after 2016 and was removed from WCT’s website. There’s no data on how many bike rides have been tracked on the app and WCT’s principal didn’t know from personal use how functional the app was. Also, by the end of 2016, WCT hadn’t paid taxes since 2015 and its certificate of incorporation was therefore suspended.

WCT’s principal testified that he continued developing a new version of the Bike+ app from 2017 until 2020, writing “over 2.4 million lines of code,” or about 1,500 lines per day. He sought to use Apple’s machine learning to create an “on-device coaching system” featuring “fatigue detection.” He “spent substantial amounts of time coding and testing this innovation and applying for a patent ... that has been since implemented in the Bike+ app.” He started collecting real-world test data in August 2018. Around June 2019, he was nearing completion of a new app, but Apple announced a new Apple Watch operating system, requiring a change in development. He again neared completion by late 2019, but in early 2020 Apple released another toolset, which “would at least theoretically permit World Champ Tech to alter its distribution model to provide for an in app coaching feature for which subscription fees could be charged.” Then “the COVID pandemic struck, impacting development productivity.” In mid-July 2020, Apple released a new operating system that introduced a bug; in September, he reported this bug to Apple. After an inquiry, Apple confirmed in December 2020 that the bug was fixed. He completed final testing and submitted the new Bike+ app to Apple for review in late December. The new app then launched in January 2021.

initial Bike+ app with [bike more] in name and b+ in icon

2021 Bike+ name with logo and "Bike" in icon

Like the 2014 app, the 2021 app is for metric tracking while cycling. Unlike the 2014 app, the 2021 app does not include “[bike more]” in its screen name, leaving only “Bike+,” and the app logo says “Bike” rather than “b+.” WCT’s principal testified that the 2021 app is functional for both indoor and outdoor bike rides. Although it has subscription coaching features, he was “not positive” that the coaching features have ever worked since the 2021 app’s launch. He wasn’t aware of any in-app sales since the launch. He posted about the app on social media but didn’t encourage others to do so; he didn’t have a written business or marketing plan before launch, and he did not create investor presentations, solicit investors, or raise capital. He paid for one press release, sometime after the app’s “soft launch.”

WCT’s Bike+ mark started as an ITU application on November 23, 2013 for “Downloadable mobile applications for recording and managing cycling activities.” The PTO cited a prior filing for a “BIKEMORE” mark for bicycles, and WCT responded by distinguishing between its software and the prior applicant’s bicycles, pointing out that “[b]icycles are physical objects.” It also argued that because consumers who download an app first go through a selection process that takes several minutes, they are not likely to be confused.

Peloton’s core brand is Peloton. In 2020, it announced a “second, higher-end version” of its (indoor) connected bike and treadmill products. The premium models were given a plus sign in their name: “Peloton Bike+” and “Peloton Tread+.” The Peloton Bike+ “offers features not found on the original bike, including a larger, rotating screen” and “a resistance knob that automatically adjusts to the instructor’s recommendations.” It also offers integration with Apple Watches for metric tracking. The Peloton Bike+ costs up to $1,050 more than the original bike. Peloton chose to add the plus sign “because it is a simple term that consumers understand to signify a product line extension with added features. Numerous leading brands, such as Apple (Apple TV+) and Disney (Disney+), had already adopted ‘+’ for their line expansions.” Thus, the plus sign “can easily be implemented across product lines to indicate a ‘better/best’ product array.”

“All of Peloton’s marketing materials that mention the term ‘Bike+’ are also branded with the [Peloton] mark.”

Peloton Bike+ logo

In December 2020, WCT renewed its registration and filed a declaration of incontestability, claiming an air-temperature-measurement feature even though at that time, it was “highly likely, perhaps certain, that the temperature feature did not work.” In 2021, WCT produced new videos

“for use in marketing and customer support in connection with” its 2021 app. In April 2021, it “took steps to design and develop a new website for use at the domain name worldchamptech.com, prepare content for such website (including writing blog posts that were later posted to the website on May 3 and 4, 2021), and transfer it to a new hosting service.” WCT sued in April 2021.

This is a reverse confusion case.

Peloton initially argued that the 2021 app wasn’t a bona fide commercial use, and thus should be excluded from the confusion analysis. But “[a] single sale, or non-sales activities alone, may suffice to merit trademark protection upon review of the totality of the circumstances.” “Here, the plaintiff’s 2021 app was in continuous (if slow paced) development before and after the launch of the Peloton Bike+.” And it was “in a sense an update to the plaintiff’s existing use in commerce (its 2014 Bike+ app).” Sure, this was “arguably … less than robust: for example, there have been no in-app sales, the app’s distinguishing “coaching” feature may not be functional, marketing has been limited, and the app was last updated in January 2022.” But a jury could find bona fide use.

In reverse-confusion cases, a plaintiff “with a commercially weak mark is more likely to prevail than a plaintiff with a stronger mark, and this is particularly true when the plaintiff’s weaker mark is pitted against a defendant with a far stronger mark.” The Bike+ mark was registered without proof of secondary meaning, creating a presumption of inherent distinctiveness/suggestiveness. Nonetheless, this was the “rare” case where the defendant satisfied its burden of showing descriptiveness. “No imagination is needed to understand from the ‘Bike+’ mark and its context in the marketplace that the plaintiff’s product is an app for enhancing biking.” The mark was further weakened by the presence of similar marks for similar apps in the major app stores: nine other apps in the Apple App Store and the Google Play Store using variants of “Plus” or “+” along with “Bike.”

Still, “the important question in a reverse confusion case is whether the junior mark is so commercially strong as to overtake the senior mark.” But must there be some commercial reputation to overtake? The court concluded that the Ninth Circuit “compares the senior mark’s conceptual strength to the junior mark’s commercial strength.” But it also “assumed that the plaintiff’s mark’s commercial strength must meet some minimum bar.” There wasn’t much here. The court concluded that this factor favored Peloton. [The better view, admittedly confused by the Ninth Circuit, is that reverse confusion requires conceptual strength in the plaintiff’s mark—a “mark” with neither conceptual nor marketplace strength may not even be a mark, and two parties using descriptive terms are unlikely to cause forward or reverse confusion.]

Product/service relatedness: The products were “complementary: the defendant offers a metric-tracking app to accompany its bike, and the plaintiff’s app can be used with indoor stationary bikes.” Favored WCT.

Mark similarity: Peloton’s use of its house mark was significant, but not as helpful for a reverse confusion claim, so this factor also favored WCT.

Actual confusion: none, despite market coexistence since September 2020; favored Peloton.

Marketing channels: favored Peloton, which sells its Bike+ product “exclusively through [its] showrooms and website[ ] and through [Dick]’s Sporting Goods’ stores and website.” WCT hasn’t done much marketing, and the fact that both parties advertise online, including in the App Store and search engines, was “unremarkable under the precedent.” Significantly favored Peloton.

Type of goods and the degree of care likely to be exercised by the purchaser, determined in a reverse confusion case with reference to the alleged senior user’s customers only. Buyers exercise greater care when choosing products related to fitness and health. Favored Peloton

Intent: In a reverse confusion case, “Intent could also be shown by evidence that, for example, the defendant knew of the mark, should have known of the mark, intended to copy the plaintiff, failed to conduct a reasonably adequate trademark search, or otherwise culpably disregarded the risk of reverse confusion.” Peloton’s in-house counsel knew of the plaintiff’s mark before the defendant’s Bike+ product launch and obtained an opinion from outside counsel on the subject at that time. “But especially given that “Bike+” is a descriptive mark, the defendant’s choice of a product name that likewise describes its product mitigates the significance of the intent factor.” Neutral/slightly favored WCT.

Likelihood of expansion: Not relevant, even though Peloton considered developing an app store for its fitness equipment and has applied for trademark registrations related to mobile app features.

The important strength factor favored Peloton, while the other important factors, relatedness of goods/mark similarity, favored WCT. Summary judgment was a close call, but given the absence of confusion evidence, lack of overlapping marketing, and degree of consumer care, it was warranted in this specific context, where WCT’s app was mostly dormant at the time of the Peloton launch. “[C]rucially, the Bike+ mark is descriptive and is joined in the marketplace by equivalent app names and variants on that composite mark. Not surprisingly, despite several years of coexistence, no evidence of actual confusion was submitted.” Adding the 2021 app didn’t help, because its key feature may not be functional, it has achieved no in-app sales, and the plaintiff made almost no meaningful marketing efforts. “[I]f there is so little to overtake, reverse confusion must be unlikely.”

The Ninth Circuit recently said that “[w]hether [the senior mark is] descriptive or suggestive, the important question in a reverse confusion case is whether the junior mark is so commercially strong as to overtake the senior mark.” But it also indicated that, in this court’s words, “if the plaintiff’s mark is descriptive rather than distinctive, the analysis can be different. That point is consistent with rejecting a reverse-confusion claim that lacks sufficient mark strength and supporting marketing efforts.”