In Trademark Infringement Matters, Think Twice Before Waiting. Laches May Run from the Date of the Product Announcement, Before the Initial Sales

Fitbit and Fitbug are makers of activity trackers, which are wearable tracking devices that connect to the internet and provide users with feedback about their fitness, quality of sleep, and other personal metrics.

Fitbug’s U.S. trademark rights to FITBUG date back to 2004, when the British device maker filed an intent to use application with the United States Patent and Trademark Office, which registered in 2009. Fitbug began selling its products in United States commerce since at least as early as 2005. Fitbit, on the other hand, filed a trademark application for FITBIT in August 2008 and announced its product launch the following month. However, Fitbit did not begin shipping its products using the trademark FITBIT until September 2009.

Fitbug first asserted infringement of its rights by Fitbit in a December 2011 letter but filed a lawsuit on March 29, 2013.

Deciding the case on summary judgment, the Northern District of California rejected Fitbug’s trademark and unfair competition lawsuit stating that the company had waited an unreasonably long time to file a suit against its competitor.

The principal issue in the case dealt with laches, “an equitable time limitation on a party’s right to bring suit . . . .” The length of delay is typically measured from the time the plaintiff knew or should have known about its potential cause of action. The Court then determines whether plaintiff’s delay was unreasonable.

In this case, Fitbug argued that under the per se rule, “the laches period can never run ‘prior to the defendant’s actual sale of its good or services.” According to the Plaintiff, the clock did not begin to tick until September 2009, when Fitbit first shipped its product. The Court, however, dismissed Fitbug’s argument and found that even though the products had not shipped until September 2009, Fitbit began accepting sales in September 2008. In other words, the Court refused to focus its analysis on the date of the actual sales, but rather determined that Fitbug knew or should have known that Fitbit’s use would result in likelihood of confusion.

The Court noted that “Fitbug had actual knowledge of its potential causes of action against Fitbit in September 2008” because it began receiving communications from consumers alerting them of Fitbit’s activity as early as September 2008 and “a prudent business person should have recognized the likelihood of confusion at that point.

The Court then considered whether the delay was reasonable, and concluded otherwise. The Court noted that Fitbug had failed to diligently protect its mark and that Fitbit’s claim of laches was supported by the economic prejudice to Fitbit, especially considering Fitbit’s substantial growth. Lastly, noting that the laches defense is not available to willful infringers, the Court concluded that Fitbit’s action did not constitute willful infringement.

This case reflects the importance of bringing trademark infringement suits as early as possible. The Courts expansive interpretation of laches indicates that this time-barring defense will begin to run as a soon as a trademark owner knows or should have known that the competitor’s use will result in likelihood of confusion, and even before the allegedly infringing mark is used to sell the products. The case also highlights the importance of due diligence in trademark monitoring and enforcement.

Gibbons will continue to monitor developments in trademark protection in the federal courts.

Paolo A. Strino is a Director in the Gibbons Intellectual Property Department.
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