Dfinity Foundation v. Meta Platforms, Inc.

Background

Dfinity Foundation alleged that Meta Platforms, Inc. infringed two registered trademarks: the Dfinity Mark and the Rainbow Mark. Dfinity said Meta’s new logo, adopted after its rebranding, was likely to cause consumers to believe that Meta’s services were connected with, sponsored by, affiliated with, or related to Dfinity and the Internet Computer.

Dfinity alleged four claims: trademark infringement under 15 U.S.C. § 1114; false designation of origin under 15 U.S.C. § 1125(a); common-law unfair competition; and violation of California’s Unfair Competition Law. Meta moved to dismiss under Rule 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. The court evaluated whether Dfinity had pleaded enough facts to make its claims plausible, accepting factual allegations as true but not accepting bare legal conclusions.

Dfinity Mark

For the federal trademark claims, Dfinity had to plausibly allege both a protectable ownership interest in its mark and a likelihood of consumer confusion. The court held that Dfinity had not adequately pleaded use in commerce of the Dfinity Mark. Although Dfinity identified several presentations, events, and other activities as examples of use, the court found that those examples displayed the Rainbow Mark rather than the Dfinity Mark. The remaining allegations—that Dfinity had consistently used “its marks” on its website since 2017 and had used the marks in commerce—were too general and unsupported to plead use in commerce of the Dfinity Mark.

The court granted Meta’s motion to dismiss as to the Dfinity Mark and granted Dfinity leave to amend by pleading additional facts showing use in commerce of that mark.

Rainbow Mark and likelihood of confusion

The court analyzed the Rainbow Mark claim under the eight-factor test used in the Ninth Circuit to assess likelihood of consumer confusion. The court compared Dfinity’s Rainbow Mark with Meta’s traditional logo rather than a brief, multicolored image from a video on Meta’s design website. The court found that the screenshot appeared only fleetingly and that Dfinity had not alleged another situation in which that version of the logo was used.

The court found the marks dissimilar in shape and appearance. Dfinity’s logo was a traditional infinity sign with a precise multicolor format, while Meta’s logo had two vertically elongated loops crossing above the midpoint. The court also considered the parties’ services related enough that this factor could not resolve the case at the pleading stage. Both parties marketed software-related services to developers, and the court found it plausible that Meta might expand into services related to Dfinity’s field.

Other factors nevertheless weighed against likely confusion. The court found the Rainbow Mark neither particularly weak nor particularly strong on the motion-to-dismiss record. It considered Dfinity’s customers—technology-oriented developers—to be sophisticated and likely to exercise a high degree of care. The court also found that six Twitter replies cited by Dfinity did not show actual consumer confusion because they responded to a Dfinity tweet, discussed the marks’ similarity, or speculated about a partnership while recognizing that Meta and Dfinity were separate entities. The parties’ use of websites and social media as marketing channels supported confusion only weakly, and Dfinity’s general allegation of intentional misconduct did not establish bad faith.

Considering the factors together, the court held that Dfinity had not plausibly alleged a likelihood of consumer confusion between the Rainbow Mark and Meta’s logo. The court granted Meta’s motion to dismiss the federal trademark and false-designation claims involving the Rainbow Mark, while allowing Dfinity to amend with additional facts concerning its customer base, the care customers use when choosing Dfinity’s software and tools, and any other evidence of actual confusion.

State-law claims and disposition

The parties agreed that Dfinity’s common-law and California unfair-competition claims rose or fell with its federal Lanham Act claims. Because the court dismissed the Lanham Act claims, it granted Meta’s motion to dismiss the state-law and common-law claims as well.

Judge Charles R. Breyer granted Meta’s motion to dismiss with leave to amend. Dfinity could file an amended complaint within 21 days of the order. The opinion does not state that the dismissal was with prejudice or without prejudice.