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Hanginout, Inc. v. Google, Inc.

United States District Court, S.D. California

May 13, 2014

HANGINOUT, INC., a Delaware corporation, Plaintiff,
GOOGLE, INC., a Delaware corporation, Defendant

Decided May 12, 2014.

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For Hanginout, Inc. a Delaware corporation, Plaintiff: Andrew D Skale, LEAD ATTORNEY, Benjamin L Wagner, Mintz Levin Cohn Ferris Glovsky and Popeo PC, San Diego, CA.

For Google, Inc., a Delaware, Defendant: Margaret M. Caruso, LEAD ATTORNEY, Quinn, Emanuel, Urquhart & Sullivan, LLP, Redwood Shores, CA.

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Hon. Anthony J. Battaglia, United States District Judge.

On November 26, 2013, Hanginout, Inc. (" Hanginout" ) filed this action against Google, Inc. (" Google" ) alleging trademark infringement, federal unfair competition, and California statutory and common law unfair competition.[1] (Doc. No. 1.) In the First Amended Complaint, Hanginout alleges that it has used the HANGINOUT mark in commerce to market its interactive video-response platform since at least March 2010, and that Google's use of the HANGOUTS mark to market its video-response platform, which is substantially similar if not identical to Hanginout's product, infringes on Hanginout's common law trademark rights. (Doc. No. 14.)

Currently before the Court are Hanginout's motion for preliminary injunction filed on January 22, 2014, (Doc. No. 12), and Google's motion to dismiss the First Amended Complaint filed on February 28, 2014, (Doc. No. 23). Hanginout's motion for preliminary injunction seeks to enjoin Google from using the HANGOUTS mark on the Internet in connection with its social media platform, either nationwide or limited to California. The Court heard oral argument on both motions on April 25, 2014. (Doc. No. 41.) For the reasons set forth below, the Court DENIES Hanginout's motion for a preliminary injunction and DENIES Google's motion to dismiss.


I. Factual Background

Hanginout is a technology based Delaware corporation that has developed mobile video and social media based communication products since at least 2009.[2] (Doc. No. 14 ¶ 10.) At issue in this litigation is Hanginout's interactive video response platform HANGINOUT, which enables users to create, promote, and sell their own brands by engaging directly with

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potential customers via pre-recorded video messages and/or video profiles. ( Id. at ¶ ¶ 12-14.) The HANGINOUT platform also includes a " Q& A" function, wherein users can exchange questions and personal video responses from anyone in the application at any time. ( Id. at ¶ ¶ 14-15.)


Hanginout alleges it adopted the HANGINOUT word and design marks in connection with its social media based platform as early as November 2008, and that for the first year or so developed business plans and the technological know-how to turn its vision into a reality. ( Id. at ¶ 11; Doc. No. 12, Malone Decl. ¶ ¶ 6, 7, Ex. 1.) Thereafter, beginning in early 2010, Hanginout began marketing the HANGINOUT platform through social media and various partnerships with celebrities and professional athletes. (Doc. No. 4 ¶ ¶ 16-17.) For example, in March 2010, Hanginout's company Facebook profile containing the HANGINOUT mark was uploaded and Hanginout partnered with professional athlete Shawne Merriman to shoot a HANGINOUT promotional video. ( Id.)

Approximately a year later, in or around March or April 2011, Hanginout alleges that consumers began registering for HANGINOUT profiles via Hanginout's web-based application and endorsing the product on social-media based platforms such as Twitter and Facebook. ( Id. at ¶ 18.) Thereafter, Hanginout alleges it continued to market the HANGINOUT application through various social-media outlets. ( Id. at ¶ 19.) By May 2011, Hanginout alleges that over 200 customers had registered for and used Version 1.0 of the HANGINOUT Q& A web-based platform. ( Id. at ¶ 20.)

On July 12, 2012, Hanginout filed trademark applications for the HANGINOUT word and design marks with the United States Patent and Trademark Office (" USPTO" ). ( Id. at ¶ 21.) The USPTO assigned Application Serial No. 85674801 to the HANGINOUT word mark and Application Serial No. 85674799 to the HANGINOUT design mark.[3] ( Id. at ¶ 22.) Both applications have since been published by the USPTO for opposition. ( Id. at ¶ 24.) As of the date of this order, neither trademark is officially registered with the USPTO. Two months later, on September 12, 2012, Hanginout officially launched a HANGINOUT iOS application for its web-based platform on the iTunes App Store. (Doc. No. 12 at 5:2-3, 25; Doc. No. 14 ¶ 27.) Since this date, Hanginout alleges that the HANGINOUT app has received hundreds of thousands of views from individuals across the world, received celebrity media attention, has been downloaded and used by consumers across the United States, and has been featured by Apple in the iTunes application portal. (Doc. No. 12 ¶ 27.)


By 2009, Google alleges it had already developed an internal version of what later became its HANGOUTS product, referring to the prototype as " The Hangout." (Doc. No. 30 at 2:24-25, Lachappelle Decl. ¶ 4.) Thereafter, on June 28, 2011, Google made HANGOUTS accessible to the public, including it as one of several products that made up Google, a social layer that connects many of Google's products.[4] (Doc.

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No. 30 at 2:26-28, Leske Decl. ¶ 3, Exs. 1-2.) Among other features, HANGOUTS allows users to engage in live interactions with other users, including instant messaging and real-time video-conferencing. (Doc. No. 34, Caruso Decl. ¶ 3, Ex. 1; Leske Decl. ¶ ¶ 3, 6.) HANGOUTS had 50,000 unique registered users the very first day it launched and 150,000 unique registered users as of July 8, 2011.[5] (Doc. No. 30 at 3:6, Leske Decl. ¶ 3, Ex. 1.) Since HANGOUTS launch, Google contends that users have initiated more than [TEXT REDACTED BY THE COURT] HANGOUT video conferences and the app version of HANGOUTS has been installed on more than [TEXT REDACTED BY THE COURT] mobile devices. ( Id. at 3:6-10, Leske Decl. ¶ ¶ 5-6.)

On April 26, 2013, Google filed an application with the USPTO to register the HANGOUTS mark, which was assigned Application Serial No. 85916316. (Doc. No. 14 ¶ 29.) Thereafter, in or around May 2013, Google released the HANGOUTS iTunes application for the App store. (Doc. No. 12 at 7:2-3.) On July 30, 2013, the USPTO suspended Google's HANGOUTS trademark application after finding that a " pending application(s) may present a bar to registration of the applicant's mark." (Doc. No. 12, Malone Decl., Ex. 26.)

On September 12, 2013, Google launched Hangouts On Air (" HOA" ), which offers users the ability to host interactive conversations with people from around the world. (Doc. No. 29, Ex. 3.) HOA is different from HANGOUTS because HOA is not limited to ten participants and allows the public to view the live feed.[6] (Doc. No. 30, Leske Decl. ¶ ¶ 8-10.) Google alleges that HANGOUTS can be accessed through Gmail, Google websites, or through mobile applications available for Android and iOS devices. ( Id. at ¶ 28.)


I. Hanginout's Motion for Preliminary Injunction

Hanginout moves to preliminary enjoin Google from using the HANGOUTS mark in its messaging and social media platforms, its Q& A platform, and cease advertising and soliciting the HANGOUTS mark in connection with its messaging platform. Because the parties' briefing focused solely on Hanginout's trademark infringement claim under the Lanham Act, the Court does not address Hanginout's federal unfair competition claim or Hanginout's statutory and common law unfair competition claims under California law.

A. Legal Standard

In deciding whether to issue a preliminary injunction, the court must consider: (1) the likelihood of the moving party's success on the merits; (2) the possibility of irreparable injury to the moving party if relief is not granted; (3) the extent to which the balance of hardships tips in favor of one party or the other; and (4) whether the public interest will be advanced by granting preliminary relief. Toyo Tire Holdings of Ams. Inc. v. Cont'l Tire N. Am., Inc., 609 F.3d 975, 982 (9th Cir. 2010) (citing Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22, 20, 129 S.Ct. 365,

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172 L.Ed.2d 249 (2008)). " A preliminary injunction is an extraordinary remedy" that may only be granted " upon a clear showing that the plaintiff is entitled to such relief." Winter, 555 U.S. at 22, 24; Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997) (" And what is at issue here is not even a defendant's motion for summary judgment, but a plaintiff's motion for preliminary injunctive relief, as to which the requirement for substantial proof is much higher." ). The mere possibility that a plaintiff will suffer irreparable injury is insufficient. See Am. Trucking Ass'n, Inc. v. City of L.A., 559 F.3d 1046, 1052 (9th Cir. 2009) (stating that following Winter cases suggesting a lower standard " are no longer controlling, or even viable" ).

B. Analysis

1. Likelihood of Success on the Merits

To state a claim for trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a), a plaintiff must demonstrate that it is: " (1) the owner of a valid, protectable mark, and (2) that the alleged infringer is using a confusingly similar mark." Herb Reed Enters., LLC v. Fla. Entm't Mgmt, Inc., 736 F.3d 1239, 1247 (9th Cir. 2013) (citing Grocery Outlet, Inc. v. Albertson's, Inc., 497 F.3d 949, 951 (9th Cir. 2007)).

i. Ownership of a Valid, Protectable Mark

To establish common law trademark rights in the absence of federal registration, a plaintiff must plead and prove that it is the senior user of the mark with sufficient market penetration to preclude the defendant from using the mark in a specific geographic market.[7] See Sengoku Works Ltd. v. RMC Int'l, Ltd., 96 F.3d 1217, 1219 (9th Cir. 1996) (" To acquire ownership of a trademark it is not enough to have invented the mark first or even to have registered it first; the party claiming ownership must have been the first to actually use the mark in the sale of goods or services." ); Quiksilver, Inc. v. Kymsta Corp., 466 F.3d 749, 761-62 (9th Cir. 2006) (stating that use equated to sales in a specified area); Adray v. Adry-Mart, Inc., 76 F.3d 984, 988 (9th Cir. 1995); Credit One Corp. v. Credit One Fin., Inc., 661 F.Supp.2d 1134, 1138 (C.D. Cal. 2009) (" A party asserting common law rights must not only establish that it is the senior user, it must also show that it has 'legally sufficient market penetration' in a certain geographic market to establish those trademark rights." ).[8] Contrary to Plaintiff's contentions, the Court finds these are two independent determinations--seniority of use and market penetration--both of which must be satisfied in the absence of federal registration.[9]

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a. Senior User

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