Ever since Apple’s launch of is iPad tablet helped jump start (if not redefine) the tablet computer marketplace, other manufacturers have been playing catch-up for a piece of the action. As Apple’s launch of the iPad 2 was looming on the horizon, Motorola launched its own Android-based tablet computer the end of February 2011 to great fanfare – but with an unfortunate twist. Marketed as the Motorola Xoom, online payment company Xoom Corporation filed a trademark infringement lawsuit the day before Motorola’s launch seeking a temporary restraining order and permanent injunction against Motorola, claiming willful and intentional infringement of its federally registered “XOOM” trademark. Talk about adding to the stresses inherent in any product launch!
What is intriguing about this case is not just the timing, but that it got to this point at all. Normally, companies will perform a clearance search of potential trademarks involving new products. As a well-heeled player in the technology marketplace with a market cap over $21B as of today, Motorola is no stranger to intellectual property protection and strategy. It’s a safe bet that Motorola had a search performed that uncovered Xoom Corporation’s federal registration for the “XOOM” trademark, registered to Xoom Corporation in December of 2004. Granted, the XOOM trademark registration basically claims money/electronic fund transfer services, but such classifications are used by the United States Patent & Trademark Office for internal classification purposes only and have no definitive bearing on likelihood of confusion. According to whois records, Xoom Corporation is also the registrant of the domain name “xoom.com” (created in 1996 by another company, and acquired by Xoom sometime after its formation in 2001). Further, Motorola filed its own trademark application for the term “XOOM” for its tablet computer in October 2010 – something it likely would not have done without performing a trademark search. Forget about merely constructive knowledge of the XOOM trademark registration due to the federal trademark registration – Motorola had to know about the Xoom registration for “XOOM”, albeit for services, not a tablet computer.
So why move forward with an identical mark? First, the likelihood of confusion is lessened by the fact that Xoom’s money transfer services are very different than Motorola’s XOOM tablet. They are marketed to consumers with different needs, through different market channels; however, it seems possible to use Xoom Corporation’s services on the Motorola XOOM tablet. Maybe Motorola felt that they would prevail on likelihood of confusion grounds – or given their resources, bully Xoom Corporation into submission. Unfortunately for Motorola, Xoom Corporation decided to take the offensive – filing suit and claiming “willful and intentional conduct”, triggering the potential for treble damages under the law. Forget about waiting to oppose Motorola’s trademark application – Xoom Corporation probably felt it had little choice but to come out swinging to protect its established (and incontestable) brand given the impending launch of the Motorola product.
To this outside observer, it’s interesting that Motorola decided to proceed with the “XOOM” trademark. Why not try another arbitrary and fanciful term that no one has used rather than risk confusion? Why take the chance on potential litigation? Did it test market that well? Motorola has few legitimate grounds upon which to cancel Xoom Corporation’s “XOOM” registration (due to its incontestable status) – why jeopardize the launch of this product into the extremely competitive tablet computer marketplace? Inquiring minds want to know…but my sneaking suspicion is that this case settles. Why? On March 3, 2011, Motorola filed for federal trademark registration for the trademark “MOTOROLA XOOM”, probably to help distinguish the mark further from the Xoom Corporation trademark – not exactly a vote of confidence.
It’ll be fun to track the progress of this case, if only to glean more about Motorola’s rationale (or lack thereof). Something tells me; however, that this matter will “xoom” to settlement…
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