Gearsource Holdings, LLC v. Google LLC

Background

Google began using “G SUITE” in commerce on September 29, 2016, for a suite of productivity and collaboration software. Google had filed a trademark application in Tonga on June 9, 2016, and later filed a corresponding U.S. application claiming priority from the foreign filing.

GearSource is an online service for buying and selling used theater gear. Its owner, Marcel Fairbairn, proposed the name “G-SUITE” for software GearSource planned to develop on June 30, 2016. GearSource filed a U.S. application for the mark on August 9, 2016, and its registration issued in January 2018. GearSource sued Google on June 26, 2018; Google counterclaimed to cancel GearSource’s registration.

The parties disputed when GearSource first used “G-SUITE” on its downloadable mobile application. GearSource claimed use around May or June 2016. Google argued the application first displayed the mark in 2018. The court described evidence that earlier screenshots did not show the mark, that the mark was added to the application and its description in 2018, and that a screenshot GearSource initially relied on was created in October 2018 rather than 2016.

Summary-judgment ruling

The court granted Google’s motion for summary judgment. Summary judgment is a final ruling without a trial when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law.

For the trademark-infringement claim, the court explained that GearSource had to show both a protectable ownership interest in the mark and a likelihood that Google’s use would confuse consumers. Ownership generally depends on priority of use. The court held that Google’s June 9, 2016 foreign filing date was the proper constructive-use priority date under the Lanham Act. GearSource’s August 9, 2016 U.S. filing date was later, so GearSource had to show actual trademark use before June 9, 2016.

The court also held that GearSource could not rely on its registration to establish priority for the services it alleged were infringed because the registration covered a narrower category of theater-related computer software, while the alleged infringement involved an integrated online business solution with order and payment processing, shipping, and an accounting-system connection. Those alleged rights therefore had to be proven under common-law trademark principles.

The court found that GearSource’s pre-September 29, 2016 use, apart from the mobile application, consisted primarily of internal references and limited communications, which did not establish trademark rights. It then found no genuine factual dispute that the application displayed “G-SUITE” before Google’s June 9, 2016 priority date. The court concluded that the record, including inconsistent theories and recanted or revised testimony, did not support GearSource’s claimed earlier use. It granted Google summary judgment on the trademark-infringement claim and did not reach likelihood of consumer confusion.

The court also granted Google summary judgment on GearSource’s false-advertising claim. It held that the claim was based on the same alleged conduct as the trademark claim and identified no false statement apart from Google’s alleged use of the mark. The court concluded that merely using a trademark is not a false statement about the nature, characteristics, or quality of a product or service.

The court granted Google summary judgment on the unjust-enrichment claim as well. It explained that California does not recognize unjust enrichment as a standalone cause of action, although such a claim may be treated as a request for restitution under a quasi-contract theory. Because GearSource relied on the same facts as its trademark and false-advertising claims and did not show that Google obtained and unjustly retained a benefit from GearSource, the claim failed.

Google’s cancellation counterclaim

The court did not decide Google’s counterclaim seeking cancellation of GearSource’s G-SUITE registration. In light of the summary-judgment ruling, the court directed Google to file, within 14 days after entry of the order, a statement of no more than five pages explaining whether the counterclaim was moot and whether Google intended to proceed. The court stated that it would address the counterclaim in a separate order if Google continued pursuing it.

Sanctions motion

Google sought discovery sanctions, asserting that GearSource repeatedly lied about its discovery efforts, gave false testimony about use of the mark, and destroyed or failed to preserve evidence. The court denied as moot Google’s requests for terminating and evidence-preclusion sanctions because summary judgment had been granted to Google.

The court denied in part and referred in part the sanctions motion. It referred the remaining request for monetary sanctions to Magistrate Judge Corley under the district’s local rule because Judge Corley had extensive familiarity with the discovery disputes. The court stated that any monetary award would depend on what occurred during discovery and on the fees and costs reasonably incurred in litigating those issues.

Motions to seal

The court granted in part and denied in part the motions to seal. It denied Google’s request to seal documents connected with the sanctions motion because the parties had offered only their confidentiality designations and had not provided enough explanation to satisfy the required compelling-reasons standard.

For documents connected with summary judgment, the court found compelling reasons to protect specific nonpublic financial and business information concerning Google’s Cloud Apps business line, including revenue, expenses, profits, paid user accounts, and calculations derived from that information. The court found that Google’s proposed redactions were narrowly tailored to that information and granted the request to seal those portions while denying other portions as reflected in the order’s overall partial disposition.

Disposition

The order granted Google’s motion for summary judgment; denied in part and referred in part the motion for sanctions; and granted in part and denied in part the motions to seal. Judge Haywood S. Gilliam, Jr. signed the order.