Sony subsidiary denied summary judgment in Cinemavault trademark dispute by Delaware court
Sony subsidiary denied summary judgment in Cinemavault trademark dispute by Delaware Court
A genuine dispute of material fact whether or not Cinemavault achieved adequate market penetration to constitute continuous use under the Lanham Act was found by the court
The U.S. District Court for the District of Delaware denied a motion for summary judgment in Cinemavault, Inc versus Gameshow Network, LLC permitting a trademark infringement and unfair competition lawsuit to proceed to trial. Gameshow Network, LLC’s arguments that Cinemavault, Inc. failed to continuously use its trademark, that Cinemavault, Inc. was judicially estopped from bringing a likelihood of confusion claim, and that relevant Lapp factors precluded Cinemavault from establishing a likelihood of confusion between the two marks at issue were rejected by Judge Joel H Slomsky. Cinemavault had initiated a complaint on January 12, 2023, alleging unfair competition under the Lanham Act and common law trademark infringement. Organised in 2014, Cinemavault, acquires rights to feature films and delivers them to the public directly by “streaming content or indirectly through sub-distribution agreements”.
Gameshow Network, a subsidiary of Sony Pictures Television, began offering free ad-supported streaming television channels under the trademark “Cinevault” in February 2021. Cinemavault alleged that Gameshow Network’s Cinevault trademark infringed upon its own Cinemavault trademark. Gameshow Network argued that Cinemavault could not establish senior trademark rights because Cinemavault “failed to make actual and continuous use of the Cinemavault mark prior to and after November 20, 2020,” which was the date Gameshow Network filed an intent-to-use application to register the Cinemavault trademark with the United States Patent and Trademark Office (USPTO). Cinemavault.com registration lapsed in 2012 and Cinemavault generated neglible revenue and failed to use the mark in ads in the US since 2016, Gameshow Network noted.
Gameshow Network’s assertion that summary judgment was warranted on the issue of continuous use was disagreed with by the court. Judge Slomsky noted that “ownership of a trademark comes from use, not registration.” A genuine dispute of material fact as to whether or not Cinemavault “achieved adequate market penetration to constitute continuous use under the Lanham Act was found by the court. Cinemavault’s revenue was $11,456.61 in 2021 and $9,914.26 in 2022, and that Cinemavault, Inc. continued to do business by receiving royalty payments from films in active distribution and transitioning to a streaming platform; the opinion highlighted. “A reasonable jury could find that [Cinemavault] , made sufficient continuous use of the Cinevault mark to establish ownership; the court concluded. About judicial estoppel, Gameshow Network argued that Cinemavault, Inc. was prevented from asserting a likelihood of confusion claim because a predecessor entity, Cinemavault.com, argued before the USPTO in 2000 that there was “‘no possibility of confusion’ between the Cinevault.com mark and Cinevault mark”. Prior statements regarding differences in sound, meaning, and channels of trade irreconcilably conflicted with Cinemavault, Inc.’s current position; Gameshow contended.
Judge Slomsky found a genuine dispute of material fact regarding whether or not Cinemavault’s current position was irreconcilable with the prior assertions and whether the change in position was made in bad faith. The nature of the “predecessor’s business twenty-five years ago appeared different from the nature of Cinemavault, Inc.’s business today,” the court explained. The opinion noted that, given the exponential growth in technology, streaming services have replaced earlier mediums through which consumers view films. A reasonable jury could find that the evolution of Cinemavault’s business from a business-to-business entity to one that is consumer-facing reconciles the current position with the predecessor’s position; the court concluded. Its mark is eminently distinguishable from Cinemavault’s mark and that direct-to-consumer streaming channels bear to relevant similarities to Cinemavault, Inc.’s former role as a sales agent; Gameshow Network asserted. The marks are similar and that both entities offer direct-to-consumer streaming services for feature films; Cinemavault countered. The court found a genuine dispute of material fact regarding the similarity of the marks, noting that both marks use the word “vault” and have striking similarities in appearance, such as dark backgrounds with light lettering. That the Cinemavault mark’s commercial strength does not appear to be the strongest, the court ascertained but determined that the strength factor is only one in a multifactor analysis and is not dispositive. Ultimately, the court also found genuine disputes of material fact regarding evidence of actual confusion and whether or not the marks move in the same channels of trade, concluding that a jury must resolve these issues.
