Conversive v. Conversagent

Citation: Conversive, Inc. v. Conversagent, Inc., 433 F.Supp.2d 1079 (D.C. Cal. 2006).

Factual Background
Plaintiff and defendant both marketed software that enabled interaction with computers through natural language. Plaintiff used the federally registered trademarks CONVERSIVE and CONVERSIVE AGENT for its products since December 2002. Plaintiff also owned several other “AGENT” marks, including EASY AGENT and INSTANT AGENT. A third party, Conversagent Corp., filed an intent-to-use application for the CONVERSAGENT mark in 2001, but abandoned the application in January 2003 for failure to file evidence of use of the mark.

By December 2001, Conversagent Corp. had only one employee, and after that date it did not contact any potential customers and its website at “conversagent.com” was not operational. In December 2003, defendant purchased from Conversagent Corp. the “conversagent.com” domain name and all rights and goodwill associated with CONVERSAGENT mark. Defendants acquired no products, technology, customer lists, or advertising materials from Conversagent Corp., and the one employee of that company never went to work for defendant.

In September 2003, defendant filed an intent-to-use federal trademark application for the CONVERSAGENT mark. Before filing its application, defendant became aware of plaintiff and its CONVERSIVE mark and AGENT-formative marks. Plaintiff opposed defendant’s trademark application and the TTAB suspended the opposition pending resolution of this litigation in which plaintiff sued defendant for infringement, unfair competition, and dilution.

Trial Court Proceedings
Plaintiff filed a motion for preliminary injunction, and moved for summary judgment on its claims for infringement, false designation or origin, and unfair competition. The court granted plaintiff’s motions.

The court initially held that plaintiff’s marks CONVERSIVE and CONVERSIVE AGENT were suggestive and that defendant failed to rebut the presumption of validity from the marks’ federal registration. It next held that defendant’s claim of prior rights failed for two reasons: (1) neither defendant nor Conversagent Corp. or any of its related companies used the CONVERSAGENT mark between December 2001 and December 2003 so there were no trademark rights to transfer as of December 2003; and (2) there was no goodwill to transfer because the mark was not continuously used; the mere recitation of the “transfer” of goodwill in the agreement did not automatically establish a valid transfer of goodwill. Accordingly, the court held that plaintiff had priority of rights. The court then found that defendant’s mark was likely to create a likelihood of confusion with plaintiff’s mark because plaintiff’s registered mark was strong; the parties’ products were in direct competition; the marks were “phonetically and visually very similar”; two examples of actual confusion submitted by plaintiff were “very significant”; the parties used the same marketing channels and sold their products to the same consumers; the likelihood of confusion increased where, as here, sophisticated consumers were actually confused; initial-interest confusion was “very likely” because the parties marks and products were “so similar”; and defendant knew of plaintiff’s marks before using “an extremely similar mark on competing goods.”

Accordingly, the court granted summary judgment to plaintiff on its trademark infringement, false designation of origin, and unfair competition claims and entered a preliminary injunction against defendant.

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