Trademark Lawsuit Against Groupon Isn’t Going Well–Groupion v. Groupon

By Eric Goldman

Groupion LLC v. Groupon, Inc., 2011 WL 5913992 (N.D. Cal. Nov. 28, 2011)

Groupion provides CRM software as a service (SaaS). Groupon distributes “deal of the day” offers that are typically unprofitable for advertisers and often have the extra “benefit” of causing the advertisers to get trashed on Yelp. Groupion sued Groupon for trademark infringement. I previously blogged on the complaint.

The court denies Groupion’s various motions. The court runs through a typical multi-factor likelihood of consumer confusion analysis:

* mark similarity. Calling this factor “critical,” the court concludes that consumers can keep the marks separate. The visual depictions of the logos are different, Groupion has one more syllable, and the words are portmaneaus from different inspirations (“coupon” + “group” vs. “groupware” + “companion”).

* product similarity. “The parties’ products are used for different functions and purposes, and are purchased by different classes of consumers.”

* marketing channels. The Internet’s commonality is discounted (cite to Network Automation), and the rest of the parties’ channels are disparate as you would expect when one company is B2B and the other B2C.

* mark strength. The court says “Groupion” is weak because others are using similar marks in its field and Groupion didn’t show evidence of the mark’s commercial strength.

* intent. Groupion asserted that Groupon must have selected the mark knowing about it, but Groupion didn’t provide any evidence to that effect. Groupon’s failure to stop after Groupion’s C&D was irrelevant.

* evidence of actual confusion. None of Groupion’s evidence “demonstrates instances of actual confusion by its customers regarding the source of its products.”

* likelihood of expansion. Groupon bought a mobile apps business, but the court says it will use that to distribute deals, not for intracompany groupware.

* purchaser care. B2B software buyers are careful, as are advertisers.

Thus, the factors point against Groupion’s likelihood of success, so the court denies the preliminary injunction, Groupion’s motion for summary judgment and motion to cancel Groupion’s registered mark. I assume Groupon will view this as an invitation to bring its own summary judgment motion and kill this case. The judge’s tone was unmistakable.