By Nathan Geronimo

Kinbook, LLC, an online social networking company, recently sued Microsoft for unfair competition and reverse trademark infringement in United States District Court.  (Kinbook, LLC v. Microsoft Corp.,2012 U.S. Dist. LEXIS 8570.) Kinbook created a Facebook application called “Kinbox,” which allows Facebook users to create private sub-social networks for sharing of information within a subset of their list of Facebook friends.  Kinbox was formally launched on Facebook in December 2009, and Kinbook’s use of the Kinbox mark was approved in September 2010.

In November 2010 Microsoft released “Kinect,” a motion-sensor interface device for the XBOX 360 that allows users to control the XBOX 360 through gestures and voice commands.  In April 2010, Microsoft released the “Kin” phone, a mobile smart phone for use with the Verizon Wireless mobile phone service.  Microsoft stopped production of the Kin after just two months due to a lack of consumer demand for the product.

Kinbook filed suit, alleging unfair competition and trademark infringement against Microsoft under the theory that Microsoft’s use of the terms “Kin” and “Box” in its marketing of “Kinect” for XBOX 360 and its failed “Kin” phone confused consumers and usurped Kinbook’s business identity and the value of its trademarks, resulting in the unsuccessful start of Kinbox.  To recover under a theory of unfair competition or trademark infringement under the Lanham Act, the elements a plaintiff must prove are the same.  A plaintiff must show: (1) it owns the mark; (2) the mark is valid and legally protectable; and (3) use of the allegedly similar marks is likely to cause confusion with the plaintiff’s mark.  The Court analyzed only the third element, the likelihood of confusion.

The type of confusion alleged by Kinbook is considered “reverse confusion,” which occurs when a larger company uses the trademark of a smaller company and causes confusion as to the source of the smaller company’s goods or services.  In essence, Kinbook alleged that consumers who saw the “Kinect for XBOX” term would be confused as to the source of “Kinbox,” effectively destroying Kinbook’s market presence.  How could anybody confuse Kinect with Kinbox, as Kinect advertising has been substantial and ubiquitous in the past year, and Kinbox is a relatively unknown product with just over 16,750 subscribers as of September 2011?  The answer is that there is almost no likelihood of confusion.  And the Court agreed.

The Court found that there was virtually no visual similarity of the marks, and that a reasonable jury would not find that the term “Kinect for XBOX” was similar in look, sound, or meaning to “Kinbox.”  The Court also found that Kinbook had failed to demonstrate any evidence that “Kinbox” has any degree of marketplace recognition whatsoever, or that the parties’ advertising channels overlapped in any appreciable way.   Additionally, the Court noted that there exists little to no similarity in function between the products and that there was no evidence to suggest Microsoft was aware of Kinbook or Kinbox, or intended to push Kinbook out of the market.  Reverse trademark infringement may be a viable course of action where a more powerful company actively uses a smaller company’s mark to force the latter out of a market.  But where the marks and products are dissimilar, and the bigger company is not even aware of the smaller company, reverse trademark infringement is a stretch.  Kinbook alleged Microsoft’s use of the term “Kinect for XBOX” caused consumer confusion regarding Kinbox.  However, it appears that Kinbook was the only party confused.