Synoptek, LLC v. Synaptek Corp.

• Decision Date: 05 March 2018
• Docket Number: Case No.: SACV 16–01838–CJC(JCGx)
• Citation: 309 F.Supp.3d 825
• Parties: SYNOPTEK, LLC, Plaintiff, v. SYNAPTEK CORPORATION, Defendant.
• Court: U.S. District Court — Central District of California

309 F.Supp.3d 825

SYNOPTEK, LLC, Plaintiff,

v.SYNAPTEK CORPORATION, Defendant.

Case No.: SACV 16–01838–CJC(JCGx)

United States District Court, C.D. California, Southern Division.

Signed March 5, 2018

Douglas Quinton Hahn, Jason H. Anderson, Salil Bali, Steven M. Hanle, Stradling Yocca Carlson and Rauth PC, Newport Beach, CA, for Plaintiff.

David Allan Gauntlett, James A. Lowe, Gauntlett and Associates, Irvine, CA, for Defendant.

ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiff Synoptek, LLC, filed this action on October 4, 2016, against Defendant Synaptek Corporation for trademark infringement, false designation of origin, unfair competition, and trademark cancellation based on Synaptek's use of the '160 mark "SYNAPTEK." (Dkt. 1 [hereinafter "Compl."].) Synaptek filed a counterclaim against Synoptek on March 20, 2017, for non-infringement of trademark. (Dkt. 43.) Before the Court is Synoptek's motion for partial summary judgment for cancellation of Synaptek's '160 trademark. (Dkt. 52 [hereinafter, "Mot."].) For the following reasons, the motion is GRANTED.

II. BACKGROUND

Synoptek is an IT services company that provides a host of computing services, such as IT operations, IT program management, application management, and cloud and hosting services.¹ (Dkt. 59–3 [Complete Separate Statement of Undisputed Facts, hereinafter "SUF"] ¶¶ 1–2, 10–14.) Synoptek serves clients in commercial sectors such as finance, healthcare, and retail, as well as in state, local, and federal government. (Id. ¶ 3.) Synoptek markets its services through internet presence, advertising, press releases, word-of-mouth, and print advertising. (Id. ¶ 16.) Synoptek owns U.S. Trademark Registration No. 3,424,720 ("Synoptek" or "the '720 mark"), which was registered as of May 6, 2008. (Id. ¶¶ 4–5, 7.) The term "Synoptek" is not a recognized word in the English language. (Id. ¶ 8.) The '720 mark is registered in International Class 42 for various computer services.² (Id. ¶ 11.)

Synaptek was incorporated in August 2008, (id . ¶ 58), and is also an IT services company that provides computing services that include systems integration, operations support, program management, application development, and cloud integration, amongst other services,³ (id. ¶¶ 18, 20–21, 25–27). The co-founders of Synaptek were not aware of "Synoptek" at the time they chose their company name. (Id. ¶ 63.) Synaptek is a certified small disadvantaged business ("SBD") and provides IT services to the federal government. (Id. ¶¶ 20–21.) Synaptek maintains a website, but disputes that it sells its services through the site. (Id. ¶ 29.) Synaptek does not dispute that it markets its services through advertising, press releases, word-of-mouth, and print advertising. (Id. ¶ 29.) Synaptek bids on federal government small-business set-aside contracts. (Id. ¶ 70.)

On October 10, 2013, Synaptek filed U.S. Trademark Application No. 80/088,536 ("the '536 application") with the U.S. Patent and Trademark Office ("PTO") seeking a federal registration for the designation "Synaptek." (Id. ¶ 30; Dkt. 52–3 [Declaration of Salil Bali, hereinafter "Bali Decl."] Ex. 7.) The '536 application claimed a date of first use of August 4, 2008, and sought registration in International Class 42 for various IT and computing services. (SUF ¶¶ 23, 30.) On February 23, 2014, the PTO denied the '536 application pursuant to 15 U.S.C. § 1052(d) based on a likelihood of confusion with the marks "Synoptek," "Synetek Solutions" (two marks), and "Synaptyk" (two marks). (Id. ¶ 31; Bali Decl. Ex. 8.) The PTO found that "Synaptek" is the "phonetic equivalent" to all five marks, that the mark owners' services are "identical in part, and otherwise closely related," and noted the "only difference" between "Synaptek" and "Synoptek" was the use of "A" versus "O." (SUF ¶ 32; Bali Decl. Ex. 8.) Synaptek filed a response to the PTO's February 23 denial arguing against the PTO's finding of a likelihood of confusion. (SUF ¶ 33; Bali Decl. Ex. 9.) On September 4, 2014, the PTO issued a final office action denying the '536 application based on a likelihood of confusion between "Synaptek" and the marks "Synoptek" and "Synaptyk" (two marks). (SUF ¶ 34; Bali Decl. Ex. 10.)

The Synaptyk marks, U.S. Trademark Registration Nos. 4,015,160 ("the '160 mark") and 4,015,163, were registered to a company from Plano, Texas. (SUF ¶ 37.) The '160 mark has been registered since 2011 in International Class 42 for various computer services.⁴ (Id. ¶ 22.) On March 3, 2015, Synaptek filed a Request for Suspension of the prosecution of the '536 application as well as a Petition for Cancellation of the Synaptyk marks. (Id. ¶ 38; Bali Decl. Ex. 13; Dkt. 54 [Declaration of Edward Schewe, hereinafter "Schewe Decl."] Ex. 36.) In July 2015, Synaptek acquired ownership of the Synaptyk marks. (SUF ¶ 39.) Synaptek thereafter informed the PTO examiner in connection with the '536 application that it now owned the Synaptyk marks, and the '536 application was reinstated. (Id. ¶ 40.) On July 15, 2015, Synaptek filed a Section 7 request to amend the '160 mark to "reflect an updated spelling of its trademark from SYNAPTYK to SYNAPTEK." (Id. ¶ 41; Bali Decl. Ex. 15.) The PTO denied Synaptek's request that same day in light of the ongoing cancellation proceeding for the '160 mark that Synaptek previously had filed. (SUF ¶ 42; Bali Decl. Ex. 16.) Synaptek thereafter filed a Petitioner's Motion to Dismiss as Moot the cancellation proceeding for the '160 mark as it had acquired the Synaptyk marks, (SUF ¶ 98; Schewe Decl. Ex. 40), and filed a response to the PTO's denial of Synaptek's request to amend the '160 mark, (SUF ¶ 99; Schewe Decl. Ex. 41).

On October 27, 2015, the PTO issued another final office action on the '536 application, rejecting registration of the designation "Synaptek" due to a likelihood of confusion with "Synoptek." (SUF ¶ 43; Bali Decl. Ex. 17.) The PTO specifically held that the "marks are essentially phonetic equivalents and thus sound similar," and while the marks have a different vowel, "the vowels ‘A’ and ‘O’ often sound alike and can create words that are phonetically equivalent." (Bali Decl. Ex. 17.) The PTO also held that the two companies' services were "identical in part, and otherwise closely related." (Id. ) On November 12, 2015, the PTO denied Synaptek's July 15, 2015, request for a Section 7 Amendment of the '160 mark because the proposed amendment "would materially alter the character of the mark." (SUF ¶ 44; Bali Decl. Ex. 18.)

On April 20, 2016, Synaptek filed a petition with the PTO Director to accept the Section 7 Amendment of the '160 mark to change "Synaptyk" to "Synaptek." (SUF ¶ 47; Bali Decl. Ex. 20.) Synaptek indicated it had two pending applications for marks, including the '536 application, and attached the PTO's decisions from February 3 and September 4, 2014, on the '536 application. (Bali Decl. Ex. 20.) Synaptek did not attach or mention the PTO's October 27, 2015, final office action rejecting the designation "Synaptek" based on the likelihood of confusion with "Synoptek." (Id. ) On April 27, 2016, Synaptek filed a request for reconsideration of the PTO's October 27 final office action. (SUF ¶ 45; Schewe Decl. Ex. 47.)

On June 10, 2016, the PTO again denied the '536 application based on the likelihood of confusion between "Synaptek" and "Synoptek," and because the parties' services were "identical in part, but otherwise closely related." (SUF ¶ 45; Bali Decl. Ex. 19.) Synaptek did not inform the PTO, in relation to its Section 7 Amendment Petition, of this PTO Office Action. (SUF ¶ 50.) On September 27, 2016, the PTO, through a paralegal trademark specialist rather than the Director, reversed its earlier denial and granted Synaptek's Section 7 Amendment of the '160 mark. (Id. ¶¶ 52–53; Bali Decl. Exs. 21, 36, 49.) An updated certificate for the '160 mark, "Synaptek," was issued on November 1, 2016. (SUF ¶ 110; Schewe Decl. Ex. 52.)

Prior to the PTO's grant of Synaptek's Section 7 Amendment, Synoptek had filed U.S. Trademark Application No. 86/923,471 ("the '471 application") to register the designation "Synoptek Edge" with the PTO on February 29, 2016. (SUF ¶ 54.) On June 21, 2016, the PTO sent Synoptek an Office Action regarding the '471 application. (Id. ¶ 57; Bali Decl. Ex. 44.) The Office Action indicated that the '471 application may be refused because of the likelihood of confusion with the mark "Synaptek" and because Synoptek had not provided acceptable specimens of use.

(Bali Decl. Ex. 44.) On January 25, 2017, the PTO issued a suspension notice stating that in light of the '536 application, the '471 application was suspended until the PTO either registered or abandoned the "Synaptek" mark and because Synoptek had not submitted an acceptable specimen of record. (SUF ¶ 55; Bali Decl. 23.) The '471 mark still has not been registered. (SUF ¶ 56.)

On October 4, 2016, Synoptek filed a Petition for Cancellation of the '160 mark with the PTO, (id. ¶ 109; Schewe Decl. Ex. 53), as well as this action against Synaptek for cancellation of the '160 mark, amongst other causes of action, (Compl.).

III. LEGAL STANDARD

The Court may grant summary judgment on "each claim or defense—or the part of each claim or defense—on which summary judgment is sought." Fed. R. Civ. P. 56(a). Summary judgment is proper where the pleadings, the discovery and disclosure materials on file, and any affidavits show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id. ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. , 477 U.S. at 325, 106 S.Ct. 2548. A factual issue is "genuine" when there is sufficient evidence such that a...