RXD Media, LLC v. IP Application Dev. LLC

• Decision Date: 21 January 2021
• Docket Number: No. 19-1461,19-1461
• Citation: 986 F.3d 361
• Parties: RXD MEDIA, LLC, Plaintiff - Appellant, v. IP APPLICATION DEVELOPMENT LLC ; Apple, Inc., Defendants - Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

986 F.3d 361

RXD MEDIA, LLC, Plaintiff - Appellant,

v.IP APPLICATION DEVELOPMENT LLC ; Apple, Inc., Defendants - Appellees.

No. 19-1461

United States Court of Appeals, Fourth Circuit.

Argued: September 11, 2020

Decided: January 21, 2021

ARGUED: Cecil E. Key, Jr., DIMURO GINSBERG, P.C.-DGKEYIP GROUP, Alexandria, Virginia, for Appellant. Dale Margaret Cendali, KIRKLAND & ELLIS, LLP, New York, New York, for Appellees. ON BRIEF: Bernard J. Dimuro, DIMUROGINSBURG, PC, Alexandria, Virginia, for Appellant. Johanna Schmitt, Nathan S. Mammen, Jordan Miner Romanoff, KIRKLAND & ELLIS, LLP, New York, New York, for Appellees.

Before GREGORY, Chief Judge, and KEENAN and FLOYD, Circuit Judges.

Affirmed by published opinion. Judge Keenan wrote the opinion, in which Chief Judge Gregory and Judge Floyd joined.

BARBARA MILANO KEENAN, Circuit Judge:

This appeal arises from prolonged trademark litigation initiated by appellant RXD Media LLC (RXD) against Apple, Inc. (Apple)¹ over rights to use the "ipad"² mark. The district court awarded summary judgment in favor of Apple on all claims advanced by RXD and on all counterclaims asserted by Apple. Also, based on the court's conclusion that RXD infringed on Apple's marks, the court permanently enjoined RXD from any commercial use of the terms "ipad" or "ipod."

On appeal, RXD challenges the district court's infringement ruling on three bases. First, RXD contends that the district court failed to consider that RXD was the "first user" of the descriptive mark "ipad," and that Apple had not established a distinctive, secondary meaning of "ipad" before RXD's alleged infringing use. Based on these assertions, RXD claims superior rights in the mark that bar Apple's infringement claim as a matter of law. Second, RXD argues that the district court erred in ruling in favor of Apple on its infringement claim because Apple failed to show a likelihood of consumer confusion between the parties’ uses of "ipad." Third, RXD challenges the broad scope of the court's permanent injunction. Separately, RXD argues that the district court erred in rejecting RXD's claim that two of Apple's trademark applications were void because Apple lacked a bona fide intent to use the "ipad" mark for the services listed in those applications.

Upon our review, we hold that the district court properly granted summary judgment in favor of Apple on both its claims and counterclaims, and that the court did not abuse its discretion in its award of injunctive relief to Apple. We therefore affirm the district court's judgment.

I.

In the late 1990s, Apple began releasing a series of "i-products," meaning "Internet products," which included "iMac," a desktop computer, and "iBook," a laptop computer. In 2001, Apple released the first-generation "iPod," a handheld music device, together with a new support program, "iTunes." The "iPod" became very popular and led to multiple generations and variations of the hardware. With each new generation, the device expanded in functionality to include games, notetaking, photograph and video capabilities, and storage and other applications. This progression led to the release of the first "iPhone" in June 2007.

Against this backdrop, RXD decided to create and market a "mobile Internet notepad" that people could use to make "simple" lists online, including grocery lists and "to do" lists. RXD named its new, internet-based notepad "ipad.mobi" and launched the website in September 2007. The original website and logo are depicted below, with the caption enlarged for legibility:

The website did not result in any commercial success for RXD.

In January 2010, Apple released the "iPad," a touch-screen tablet with broad capabilities. In anticipation of and in conjunction with the release, Apple applied for "intent-to-use" trademark protection in the "ipad" mark under the Lanham Act, 15 U.S.C. § 1051(b)(1). Apple filed Application 779274446 (the 446 application) in July 2009, and Application 77913563 (the 563 application) in January 2010, with the United States Patent and Trademark Office. In each application, Apple sought to protect its use of the "ipad" mark in connection with a long list of electronic goods and services. Notably, Apple also owns eight other "ipad" registrations, including one acquired from Fujitsu, Inc. in 2010 that had been filed in March 2003 and registered thereafter. This registration acquired from Fujitsu (the 575 registration) covered computer and digital goods as well as business and marketing services.

After Apple filed the 446 and 563 applications, RXD filed its own trademark applications in 2010 for protected use of the "ipad" mark. RXD's applications were suspended by the Patent and Trademark Office in 2012 pending resolution of Apple's applications. RXD opposed Apple's applications, instituting adversary proceedings against Apple before the Trademark Trial and Appeal Board (TTAB).

In 2016, while the TTAB proceedings with Apple were still ongoing, RXD launched a "rebranded" website advertising "cloud storage" services. Among other things, this "rebranded" website offered users the ability to upload photographs, videos, music, and documents. RXD chose the name "ipadtoday.com" for the new website, and released a new logo depicting an image of a cloud accompanied by "ipad™." On the new website, the "ipad™" logo was prominently displayed along with pictures of Apple devices, all of which had the "ipad™" logo superimposed on them. An image depicting RXD's "rebranded" website is included below:

In February 2018, after years of proceedings and a full trial on the merits, the TTAB issued a decision in favor of Apple. The TTAB approved Apple's 446 and 563 applications, dismissed RXD's opposition to those applications, and denied RXD's own applications to register the "ipad" mark. RXD filed the present action in the district court seeking review of the TTAB decision and asserting new claims.

In its complaint, RXD alleged that the TTAB's decision was erroneous because: (1) RXD had superior, established rights to the "ipad" mark; (2) based on RXD's superior rights, Apple's use of the "ipad" mark was likely to confuse the public, within the meaning of the Lanham Act, 15 U.S.C. § 1052(d) ; and (3) Apple's use of the mark constituted unfair competition and false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a). RXD separately alleged that Apple's 446 and 563 applications should be adjudicated void, because Apple lacked a bona fide intent to use the "ipad" mark for the services listed in those applications.³ Based on these allegations, RXD sought a declaratory judgment that its trademark rights in the "ipad" mark were superior to Apple's rights, and "a permanent injunction enjoining [Apple] ... from using, registering, or seeking to register the ["ipad"] mark in connection with any computerized or online services."

Apple filed counterclaims for trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a)(1)(A), and for infringement and "palming off" under Virginia common law. Apple also sought an injunction against RXD. Apple later amended its claims to add allegations of infringement of its "ipod" mark.

Both parties moved for summary judgment. The district court denied RXD's motion and granted Apple's motion in its entirety, upholding the TTAB decision and awarding judgment in favor of Apple on all claims and counterclaims.

As relevant to this appeal, the district court agreed with Apple that RXD's use of the "ipad" mark on its "ipadtoday.com," website unlawfully infringed on Apple's marks, in violation of 15 U.S.C. § 1114. However, in its analysis, the district court failed to address RXD's assertion that Apple did not own a valid, protectable mark capable of being infringed. According to RXD, its use of the mark preceded Apple's use and Apple's establishment of a secondary meaning in the descriptive mark, precluding any possible infringement by RXD. Nonetheless, the district court held that RXD's use of the "ipad" mark was likely to cause consumer confusion, based on survey data submitted by Apple. After consideration of additional briefing, the court entered a permanent injunction prohibiting RXD from any commercial use of the "ipad" or "ipod" marks or any variant of them.

The district court separately rejected RXD's claim that Apple did not have a bona fide intent to use the "ipad" mark for services identified when Apple submitted the 446 and 563 applications, thereby upholding Apple's registrations. The court explained that Apple had a bona fide intent to use the "ipad" mark for the services indicated in Apple's application, which was supported by a license agreement covering the applied-for services and contemporaneous registration certificates showing that Apple had the capacity to produce the applied-for services. RXD appeals.

II.

RXD challenges two aspects of the district court's summary judgment decision. First, RXD contends that the district court erred for several reasons in concluding that RXD's use of the "ipad" mark infringed on Apple's use of the mark. RXD separately challenges the court's dismissal of RXD's claim that Apple's 446 and 563 trademark registrations were void because Apple lacked a bona fide intent to use the "ipad" mark "for cloud storage services" when applying for trademark protection. We address these arguments in turn.

A.

With respect to the district court's ruling in favor of Apple on its infringement claim, RXD raises three issues. RXD initially contends that its use of "ipad," a "descriptive mark," preceded Apple's use and Apple's development of a distinctive, secondary meaning in the mark, thereby barring Apple's infringement claim as a matter of law. Next, RXD maintains that the district court erred in concluding that RXD's use of "ipad" on "ipadtoday.com" caused consumer confusion with Apple's registered trademarks, resulting in infringement of Apple's use of the mark. Finally, RXD challenges the district court...