Nobody likes getting into a trademark dispute, but a recent case is a good reminder that when a legitimate issue arises, there can be a serious penalty for waiting too long to file a claim. Let’s take a look at Fitbug v. Fitbit.
Fitbit, which was founded in 2007, is the most well-known manufacturer of “portable electronic fitness tracking devices.” By my estimation, approximately 99.7% of people in Southern California are wearing one at any given time. I don’t have one, because, of course, my level of fitness is so optimal that there’s no point in measuring it. But for the rest of humanity, it’s a popular item and a widely-recognized brand name.
Fitbug, which is less well-known, started in the UK in 2004 and began selling products in the US in 2005, with limited success. Fitbit claims not to have been aware of Fitbug when they chose their name, but, prior to Fitbit’s launch, the company’s founders reviewed a link to the Fitbug website.
Fitbit first announced its products in September 2008. On that day, Fitbug became aware of this new competitor. They attempted, unsuccessfully, to reach out to Fitbit and had some internal discussions about the matter, but they took no action until December 2011, when they sent Fitbit a letter. The parties were unable to resolve the matter, and Fitbug filed a federal trademark infringement lawsuit on March 29, 2013.
Fitbit’s primary defense was based on the legal theory of laches. From a previous blog post, laches is:
a defense which requires the defending party to prove that:
- the plaintiff unreasonably delayed in enforcing its rights; and
- the delay caused prejudice to the defendant.
(Citing New Directions for Laches Defence.)
Reviewing the laches defense, the Court stated that they must first:
…determine when Fitbug “knew or should have known about its potential cause of action.”…This standard can be satisfied by either actual or constructive knowledge, because “[c]ompanies expecting judicial enforcement of their marks must conduct an effective policing effort.”…Nonetheless, a trademark holder is “‘not required to constantly monitor every nook and cranny of the entire nation and to fire both barrels of [its] shotgun instantly upon spotting a possible infringer.'” (The parts in quotes are citing previous cases on point.)
The last statement is one that is often misunderstood by trademark owners. The law does not require you to go after every possible trademark infringement as soon as it’s detected. However, failure to pursue a legitimate claim in a timely manner can result in a loss of rights. These issues must be carefully evaluated on a case-by-case basis with a knowledgeable trademark attorney.
So when did the Court determine that Fitbug “knew or should have known” about the cause of action for trademark infringement?
[T]he Court finds that Fitbug knew or should have known of the likelihood of confusion by, at the latest, September 2008, after Fitbit’s launch. While Fitbit was not yet shipping its products, at that time, Fitbit was selling similar devices “in the same geographic area under [a] remarkably similar name[] . . . .”…As a result, a prudent business person should have recognized the likelihood of confusion at that point.
Fitbug tried to argue that laches should not apply prior to the actual sale of a competing product – meaning, they argued that the laches clock shouldn’t have started running until Fitbit shipped its first product in 2009. The Court rejected this argument, because the issue is when they knew or should have known about the issue, not when Fitbit’s products actually hit the market.
Fitbug then argued that it appeared possible that Fitbit might have gone out of business in the early days, particularly before they actually shipped products. Therefore, they claimed, laches couldn’t apply to that time period. The Court didn’t accept this point, either, citing McCarthy on Trademarks to state that a party in Fitbug’s position:
…cannot simply wait without explanation to see how successful the defendant’s business will be and then ask for an injunction to take away good will developed by defendant in the interim.
So, as far as the time period to be considered when evaluating the laches defense:
The Court concludes that Fitbug had actual knowledge of its potential causes of action against Fitbit in September 2008. As a result, the length of Fitbug’s delay runs for approximately four and a half years until it filed suit in March 2013.
OK, so was that an unreasonable delay on the part of Fitbug?
To answer that question, the Court discussed the limitation period for an analogous state law cause of action. That will, in most cases, determine the amount of time permitted prior to filing a claim. In this case, the Court didn’t come out and declare that the appropriate amount of time was no more than four years (the statute of limitations in the California Code of Civil Procedure Sections 337 and 343, for those who are playing along at home,) but, essentially, said that Fitbug’s delay of 4.5 years was “presumptively untimely.”
Fitbug put forth several additional arguments related to the laches issue, but the Court rejected all of them and granted summary judgment to Fitbit on this point.
In the end, barring a successful appeal, Fitbug has blown its chance to assert its trademark rights against a much larger opponent. The lesson here is that if you intend to pursue a trademark infringement claim, the clock is ticking.
