Kudos Inc v. Kudoboard LLC

Background

Kudos operates an internet-based software platform that lets users exchange feedback and recognition. It owns several federal trademark registrations for “kudos” and “kudos rewards,” covering services and software involving social networking, employee recognition, rewards, collaboration, and related activities.

Kudoboard operates an online greeting-card platform that lets consumers create and send digital or printed group greeting cards. It registered the Kudoboard mark in 2017 for a website allowing users to create customized online group greeting cards.

Kudos alleged that it first learned of Kudoboard in February 2019, after seeing Kudoboard listed with it in an employee-recognition-software category on G2.com. After an unsuccessful potential-acquisition discussion, Kudos notified Kudoboard that it believed Kudoboard was infringing the Kudos marks. Kudos later sent Kudoboard letters objecting to its use of the Kudoboard mark and then filed this lawsuit.

Kudos asserted federal trademark-infringement, false-designation and unfair-competition, common-law trademark-infringement and unfair-competition, and California statutory unfair-competition claims. Kudoboard asserted a defense that Kudos’s claims were barred by laches, an equitable defense based on unreasonable delay that prejudiced the opposing party. Kudoboard also counterclaimed that the “kudos” marks were generic and should be cancelled.

The parties filed cross-motions for summary judgment on laches. Kudos also moved for summary judgment on Kudoboard’s genericness defense and counterclaim. The parties separately filed motions concerning expert testimony from William Eggington, Kudoboard’s linguistic expert, and Mark Keegan, Kudos’s consumer-confusion expert.

Laches motions

The court applied a four-year limitations period as the period most similar to the trademark claims. Laches may be presumed when a plaintiff sues more than four years after it knew or should have known about the allegedly infringing use, but the defense also requires consideration of whether the delay was reasonable and whether the defendant suffered prejudice.

The court found genuine disputes of material fact about when Kudos should have discovered Kudoboard’s allegedly infringing use. The parties disputed the significance of Kudoboard’s public presence, its 2016 trademark application, and Kudos’s efforts to monitor potentially infringing marks. The court also found a factual dispute about whether Kudos’s delay was reasonable, including disputes concerning the parties’ competition, Kudoboard’s good faith, and Kudos’s enforcement efforts.

Because these factual disputes prevented resolution on summary judgment, the court did not decide the prejudice element. It denied both parties’ motions for summary judgment on the laches defense.

Genericness motion

A trademark is generic when consumers primarily understand it as the name of a class of goods or services rather than as identifying a particular source. The court identified the relevant class here as employee-recognition and rewards software, social-recognition software, or employee-experience platforms, based on the descriptions in Kudos’s trademark registrations.

Kudoboard relied on evidence that “kudos” is a common noun meaning praise or acclaim, that Kudos and its customers sometimes used the word as a noun, that third parties used “kudos” in connection with recognition activities, and that Dr. Eggington’s linguistic analysis found generic uses of “kudo” and “kudos.”

The court held that this evidence did not address the required question: whether consumers of employee-recognition software primarily perceive “kudos” as referring to that class of software rather than to Kudos’s particular services. Evidence of ordinary noun usage or use of “kudos” to describe praise did not establish trademark genericness for the relevant class of software. The court therefore granted in part Kudos’s motion for summary judgment on Kudoboard’s genericness defense and counterclaim.

Eggington opinion

The court granted in part Kudos’s motion to exclude Dr. Eggington’s genericness opinion. Under the evidence rules governing expert testimony, expert evidence must be reliable and helpful to the fact finder. The court did not need to resolve the parties’ disputes about whether Eggington’s linguistic methods were reliable because his opinion did not provide a useful connection to the trademark-specific genericness inquiry.

Eggington’s report addressed how English speakers use “kudo” and “kudos” without reference to a company or third party. The court found that this opinion concerned ordinary noun usage, not whether relevant consumers primarily perceived “kudos” as the name of employee-recognition and rewards software. The court excluded the opinion in Part VII.44.b of Eggington’s report and all characterizations of “kudos” or “kudo” as “generic” terms. The order did not exclude Eggington’s first or third opinions, which concerned the terms’ meaning and consumers’ understanding of “kudoboard” as a semantic unit.

Keegan evidence

The court granted in part and denied in part Kudoboard’s motion to exclude Mark Keegan’s evidence and testimony. The court excluded Keegan’s affirmative report, which reported a consumer survey concerning confusion between Kudos and Kudoboard. The survey tested 381 current users of employee-recognition and engagement software, and Keegan reported a 15.1 percent average net confusion measurement.

The court found the survey’s respondent group improper because it focused exclusively on current users rather than a representative group of consumers most likely to purchase Kudoboard’s products. The survey also used leading introductory language describing the later webpages as pages for companies offering employee-recognition and engagement software. The court held that these issues made the survey results unreliable and granted the motion as to the affirmative report.

The court also excluded the third and fourth opinions in Keegan’s rebuttal report because they addressed Eggington’s genericness opinions, which the court had excluded. The court denied the motion as to Keegan’s first, second, and fifth rebuttal opinions, finding that those opinions permissibly critiqued Eggington’s methods and did not require Keegan to be a linguist.

Sealing motions and disposition

The court granted the parties’ administrative motions to file materials under seal, subject to limited exceptions described in the order’s discussion of footnotes 2 and 4.

In summary, the court denied both parties’ motions for summary judgment on laches; granted in part Kudos’s motion for summary judgment on genericness; granted in part Kudos’s motion to exclude Eggington’s opinions; granted in part and denied in part Kudoboard’s motion to exclude Keegan’s opinions; and granted the administrative sealing motions subject to the stated exceptions. Judge Susan Illston signed the order.