Reserve Media, Inc. v. Efficient Frontiers, Inc.

Filing 359

ORDER RE: PLAINTIFFS THIRD MOTION FOR PARTIAL SUMMARY JUDGMENT 305 by Judge Dean D. Pregerson: The Court GRANTS Reserves Third Motion for Partial Summary Judgment that there is no triable issue of fact as to the infringement of the RESERVE Q marks. Further, having granted summary judgment in favor of Reserve on all of EFIs counterclaims for infringement, the court finds that judgment is also appropriate on Reserves declaratory claim for non-infringement. In light of this order, all pending motions are hereby vacated. MD JS-6. Case Terminated. (lc). Modified on 4/14/2017 .(lc).

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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RESERVE MEDIA, INC.,

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Plaintiff,

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v.
EFFICIENT FRONTIERS, INC., et al.,

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Defendants.

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Case No. CV 15-05072 DDP (AGRx)
ORDER RE: PLAINTIFF’S THIRD
MOTION FOR PARTIAL SUMMARY
JUDGMENT
[Dkt. 305]

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Presently before the court is Plaintiff and Counter-Defendant Reserve Media,

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Inc.’s (“Reserve”) Third Motion for Partial Summary Judgment. After considering the

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parties’ submissions and hearing oral argument, the court adopts the following Order.

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I. BACKGROUND

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The court assumes the parties’ familiarity with the facts, which have been set forth

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more fully in the court’s prior partial summary judgment orders. (Dkts. 235, 296.) In

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brief, Efficient Frontiers, Inc. (“EFI”) is a company that offers software products to

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companies in the hospitality industry. (First Amended Counterclaim (“FAC”) ¶¶ 4, 15-

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17.) EFI’s products assist with catering and event-management, restaurant table

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management, and dining reservations. (FAC ¶¶ 17-19.) Reserve Media, Inc. (“Reserve”)

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is a startup company focusing on restaurant technology, which was founded in 2014.

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(Dkt. 296 at 2.) According to the founders, the company aims to compete with consumer-

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facing software companies that facilitate restaurant reservations. (Id.) The company offers

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products and services using the mark “Reserve.”

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This suit arises out of a trademark dispute between EFI and Reserve. After

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learning about Reserve’s business, EFI sent Reserve a cease-and-desist letter for

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attempting to use a mark that infringes on EFI’s marks “Reserve Interactive and its

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variations.” (Id.) The parties attempted to negotiate their trademark dispute but Reserve

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ultimately filed for declaratory relief seeking a determination that its use of the “Reserve”

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mark does not infringe on EFI’s trademark rights. (Complaint ¶ 14.) EFI responded with

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a counterclaim asserting federal and state causes of action for trademark infringement

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and unfair competition. (FAC ¶¶ 34-60.)

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At issue in this litigation were ten EFI trademarks. Prior summary judgment

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motions addressed whether there were triable issues as to eight of the ten trademarks.

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(See Dkts. 235, 296.) In prior Orders, the court concluded that six of EFI’s marks were not

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valid and protectable as a matter of law because they were descriptive and lacked

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secondary meaning. (Id.) The court also concluded that there was no triable question as to

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Reserve’s willful infringement for any mark. The two trademarks that were not

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addressed in either Order were EFI’s RESERVE Q marks. Given the basis for the prior

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summary judgment orders, the court determined that the best use of judicial resources

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would be to direct the parties to file summary judgment briefs regarding these remaining

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marks so as to ensure that there were triable issues warranting a jury trial. See Portsmouth

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Square Inc. v. Shareholders Protective Comm., 770 F.2d 866, 869 (9th Cir. 1985) (noting that,

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even as late as the final pretrial conference, the district court has authority to sua sponte

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enter summary judgment if no material facts are at dispute in order to “conserves scarce

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judicial resource”). In order to ensure the parties had adequate notice and a “full and fair

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opportunity to ventilate the issues,” see Norse v. City of Santa Cruz, 629 F.3d 966, 972–73
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(9th Cir. 2010) (citing Greene v. Solano Cnty. Jail, 513 F.3d 982, 990 (9th Cir. 2008)), the

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court set a briefing schedule for a third successive summary judgment motion.

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At issue in this motion are EFI’s two RESERVE Q marks. The first RESERVE Q

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mark was registered in October 2012 and is a standard word mark for “computer

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software for database management used in the hospitality industry.” (Carter Decl., Ex. 1.)

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The second mark was registered in March 2013 and is a standard service mark for

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“design, development, implementation and maintenance of software for others in the

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hospitality industry.” (Id., Ex. 2.) These marks are used in connection with EFI’s “ReServe

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Q” online hospitality management software. (Carter Decl. ¶ 5.) ReServe Q is a web-based

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software application that allows business in the hospitality industry to “leverage

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reservations, waitlists, and marketing opportunities.” (Id. ¶ 14, Ex. 11.) The question at

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issue in the instant motion is whether the RESERVE Q marks are valid and enforceable as

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a matter of law and, if so, whether there is a triable issue of fact as to likelihood of

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confusion under the Sleekcraft analysis. Finally, as in the prior motions for partial

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summary judgment, there is a question of whether Reserve is entitled to summary

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judgment on EFI’s damages theories for the RESERVE Q marks.

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II. LEGAL STANDARD

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Summary judgment is appropriate where the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show “that

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there is no genuine dispute as to any material fact and the movant is entitled to judgment

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as a matter of law.” Fed. R. Civ. P. 56(a). A party seeking summary judgment bears the

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initial burden of informing the court of the basis for its motion and of identifying those

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portions of the pleadings and discovery responses that demonstrate the absence of a

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genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). All

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reasonable inferences from the evidence must be drawn in favor of the nonmoving party.

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See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986). If the moving party does not

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bear the burden of proof at trial, it is entitled to summary judgment if it can demonstrate

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that “there is an absence of evidence to support the nonmoving party’s case.” Celotex,

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477 U.S. at 323.

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Once the moving party meets its burden, the burden shifts to the nonmoving party

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opposing the motion, who must “set forth specific facts showing that there is a genuine

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issue for trial.” Anderson, 477 U.S. at 256. Summary judgment is warranted if a party

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“fails to make a showing sufficient to establish the existence of an element essential to

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that party’s case, and on which that party will bear the burden of proof at trial.” Celotex,

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477 U.S. at 322. A genuine issue exists if “the evidence is such that a reasonable jury

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could return a verdict for the nonmoving party,” and material facts are those “that might

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affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248. There

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is no genuine issue of fact “[w]here the record taken as a whole could not lead a rational

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trier of fact to find for the nonmoving party.” Matsushita Elec. Indus. Co. v. Zenith Radio

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Corp., 475 U.S. 574, 587 (1986).

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It is not the court’s task “to scour the record in search of a genuine issue of triable

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fact.” Keenan v. Allan, 91 F.3d 1275, 1278 (9th Cir. 1996). Counsel has an obligation to lay

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out their support clearly. Carmen v. San Francisco Sch. Dist., 237 F.3d 1026, 1031 (9th Cir.

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2001). The court “need not examine the entire file for evidence establishing a genuine

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issue of fact, where the evidence is not set forth in the opposition papers with adequate

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references so that it could conveniently be found.” Id.

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III. DISCUSSION

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“To prevail on [a] trademark infringement claim,” a party must show that “(1) it

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has a valid, protectable trademark, and (2) that [the other party’s] use of the mark is

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likely to cause confusion.” Applied Info. Sciences Corp. v. eBay, Inc., 511 F.3d 966, 969 (9th

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Cir. 2007). The court addresses each of these issues in turn.

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A.

Distinctiveness of RESERVE Q Marks

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This is the court’s third inquiry into whether EFI’s RESERVE marks are distinctive,

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and thus protectable, as a matter of law. See Zobmondo Entm’t, LLC v. Falls Media, LLC, 602

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F.3d 1108, 1113 (9th Cir. 2010). In each of the prior instances, the operative question was
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whether the marks were descriptive, and thus required a showing of secondary meaning,

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Zobmondo, 602 F.3d at 1113, or suggestive, and thus automatically entitled to federal

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trademark protection as “inherently distinctive,” id.; see also Two Pesos, Inc. v. Taco Cabana,

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Inc., 505 U.S. 763, 769 (1992). The question is no different with regards to EFI’s final two

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marks at issue: the RESERVE Q marks.

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As a general matter, suggestive marks require “a consumer [to] use imagination or

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any type of multistage reasoning to understand the mark’s significance.” Kendall-Jackson

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Winery, Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042, 1047 n. 8 (9th Cir. 1998). By contrast,

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descriptive marks “define qualities or characteristics of a product in a straightforward

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way.” Id. “Whether a mark suggests or describes the goods or services of the trademark

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holder depends, of course, upon what those goods or services are. We therefore adjudge

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a mark’s strength by reference to the goods or services that it identifies . . . .” Entrepreneur

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Media, Inc. v. Smith, 279 F.3d 1135, 1142 (9th Cir. 2002) (internal quotations and citations

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omitted).

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The two tests invoked in the Ninth Circuit to differentiate between suggestive and

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descriptive marks are the “imagination test” and the “competitors’ needs test.”

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Zobmondo, 602 F.3d at 1115. The former asks whether “imagination or a mental leap is

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required in order to reach a conclusion as to the nature of the product being referenced,”

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Rudolph Int’l, Inc. v. Realys, Inc., 482 F.3d 1195, 1198 (9th Cir. 2007) (quotation marks

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omitted), and the latter “focuses on the extent to which a mark is actually needed by

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competitors to identify their goods or services,” Rodeo Collection, Ltd. v. W. Seventh, 812

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F.2d 1215, 1218 (9th Cir. 1987). These two tests are complementary rather than

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independent inquiries as “the more imagination that is required to associate a mark with

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a product or service, the less likely the words used will be needed by competitors to

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describe their products or services.” Zobmondo, 602 F.3d at 1117 (quotations and citations

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omitted).

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Reserve argues that the RESERVE Q marks are descriptive when used in

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connection with “a web-based software application that enables customers to manage
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reservations, call-aheads, and waitlists.” (Dkt. 276 [Carter Decl.] ¶ 15.) In support,

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Reserve notes that EFI selected the letter “Q” as “a play on the word [queue] – a line at a

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restaurant.” (Ex. E [Remmel Depo.], p. 214:6-12.) Given that a queue ordinarily refers to a

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line of people waiting for something, Reserve contends that a literal and unimaginative

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consumer would be able to understand that RESERVE Q refers to a service for managing

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reservations. (Opp’n 4.)

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EFI responds that the RESERVE Q marks are, at a minimum, suggestive. First, EFI

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notes that a consumer might understand “Q” to mean just the letter, the word “cue,” the

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idea of “questions,” among other possibilities. (Opp’n 4-5.) Although Q may have been

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selected because it evokes the idea of a “queue,” it takes at least some imagination to

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connect the two concepts. EFI further contends that, even if Q immediately signified

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“queue,” that does not accurately describe the product in question. EFI’s software does

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not enable someone to “reserve a queue” or a spot in a queue. Rather, EFI argues that the

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software in question deals with table reservations—which often can be done in advance

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and do not require patrons to stand in queue—and also enables businesses to leverage

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reservations for marketing purposes. (Carter Decl. 5.)

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At bottom, EFI’s various “reserve” marks are fundamentally weak. As the court

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has explained in prior Orders, this family of marks invokes the common verb “reserve”

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in a business context where there is almost no other substitute for the service being

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offered. (See Dkt. 235 at 9.) Admittedly, EFI did not use the term in isolation to describe

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its products. However, the majority of the marks at issue appended the word “reserve”

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with equally common words such as “it” or “cloud” or “interactive.” In all these

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instances, “an entirely unimaginative, literal-minded person would understand the

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significance of the reference.” Entrepreneur Media, 279 F.3d at 1142. Thus, on prior

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occasions, the court found that allowing EFI a monopoly over “reserve,” and closely

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associated phrases, would inhibit competitors across a range of businesses dealing with

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reservations from invoking a common word to describe their products and services.

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Even beyond this specific business context, the court notes that “reserve” is one of

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a few words so essential to economic activity across domains that courts should be

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particularly cautious about allowing any single private actor to monopolize the use of the

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term. The word reserve means “[t]o set (a thing) apart for some purpose.” 13 Oxford

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English Dictionary (OED) (2d ed. 1989) 701. Along with concepts such as buying, selling,

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renting, and consuming, “reserving” is a basic commercial activity that nearly all

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individuals and business must engage in at times. Given that one of the central aims of

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trademark law is to promote fair and productive economic competition, see New Kids on

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the Block v. News Am. Pub., Inc., 971 F.2d 302, 305 (9th Cir. 1992), any use that seeks to own

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core words such as “reserve” must be scrutinized closely.
Bearing these concerns in mind, the court notes that there is some argument for

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extending its prior holdings about other descriptive “reserve marks” to the RESERVE Q

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marks. Nonetheless, at this juncture, the court determines that these final two marks fall

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slightly on the other side of descriptive-suggestive divide. While Reserve is correct that

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the phrase “Reserve Queue” is conceptually related to the services EFI offers, it does

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require some level of “multistage reasoning” to understand the marks’ significance.

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Specifically, a consumer must first understand that the letter “Q,” even when placed in

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the appropriate context of the reservation management business, specifically means a

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literal queue rather than indicating just the letter or a question. Then, the consumer must

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associate “reserve queue” with a table reservation, waitlist management, and marketing

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platform rather than, say, a line waiting service. See Jacob Bernstein, A Professional Line

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Sitter Throws His Wait Around, New York Times, Oct. 3, 2014, at ST8 (noting the

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emergence of professional line-sitters). Thus, even appropriately defined, the marks

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“subtly connote something about the products,” AMF Inc. v. Sleekcraft Boats, 599 F.2d 941,

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349 (9th Cir. 1979) (describing suggestive marks) rather than defining the product in a

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straightforward manner.

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B. Likelihood of Confusion

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“The test for likelihood of confusion is whether a reasonably prudent consumer in

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the market place is likely to be confused as to the origin of the good or service bearing

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one of the marks.” Dreamwerks Production Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129

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(9th Cir.1998) (internal quotations omitted). Relevant factors include the strength of the

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mark, proximity of the goods, similarity of the marks, evidence of actual confusion,

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marketing channels used, degree of care likely to be exercised by consumers, defendant's

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intent, and likelihood of expansion of product lines. Sleekcraft, 599 F.2d at 348-49. It is

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unnecessary to meet every factor, because the likelihood of confusion test is “fluid.”

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Surfvivor Media, Inc. v. Survivor Prods , 406 F.3d 625, 631 (9th Cir. 2005).
1. Strength of the Mark
“The stronger a mark—meaning the more likely it is to be remembered and

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associated in the public mind with the mark’s owner—the greater the protection it is

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accorded by the trademark laws.” Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174

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F.3d 1036, 1058 (9th Cir. 1999). In order to determine the strength of a particular mark,

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courts take into account both the conceptual strength and the commercial strength of a

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mark. See GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir. 2000).

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“A mark’s conceptual strength depends largely on the obviousness of its

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connection to the good or service to which it refers.” Network Automation, Inc. v. Advanced

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Systems Concepts, Inc., 638 F.3d 1137, 1149 (9th Cir. 2011). As a general matter, suggestive

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marks are protectable, but it is presumed that they are conceptually weak. Brookfield

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Communications, 174 F.3d at 1058 (noting that “[w]e have recognized that, unlike arbitrary

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or fanciful marks which are typically strong, suggestive marks are presumptively

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weak”). As discussed above, the Court finds that Plaintiff’s marks are suggestive, and,

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thus, are presumed weak.

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The second step of the inquiry is to determine the strength of the mark in the

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marketplace. One Indus., LLC v. Jim O'Neal Distrib., Inc., 578 F.3d 1154, 1164 (9th Cir.

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2009). Two undisputed facts suggest that the RESERVE Q marks are commercially weak
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as a matter of law. First, between 2011 and 2015, EFI has generated less than $15,000 in

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sales of the Reserve Q product. (Dkt. 276-1. [Sealed Exs. 72-76].) During the same period,

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EFI’s total sales were between $3 million and $4 million dollars annually. (Id.) Both

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compared to the size of the market and to EFI’s other products, Reserve Q sales were

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marginal. Second, as discussed in the prior orders, EFI’s RESERVE marks, including

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RESERVE Q, are hemmed in all sides by competitors who must also use the term reserve.

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(Dkt. 235 at 11; Dkt. 296 at 16.) “When similar marks permeate the marketplace, the

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strength of the mark decreases. In a crowded field of similar marks, each member of the

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crowd is relatively weak in its ability to prevent use by others in the crowd.” One Indus.,

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578 F.3d at 1164 (internal quotation marks omitted). EFI’s primary rejoinder on the

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strength of the mark is that it intends to “revamp its product offerings” under the

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RESERVE Q marks. While future plans to improve the strength of the mark may change

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the analysis for purposes of a future infringement claim, it cannot be used to buttress the

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instant claim.

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2. Proximity of the Goods
“Related goods are those products which would be reasonably thought by the

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buying public to come from the same source if sold under the same mark.” Sleekcraft, 599

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F.2d at 348 n. 10 (citation and internal quotation marks omitted). Both parties use marks

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in connection with a software program for accepting and managing dining reservations.

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Although EFI’s product may have additional capabilities, both parties acknowledge that

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goods in question are related. Nonetheless, Reserve argues that the court should follow

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the Ninth Circuit’s statement in Entrepreneur Media that courts should “apply a sliding

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scale approach as to the weight that relatedness will carry dependent upon the strength

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of the trademark holder’s mark.” Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1148

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(9th Cir. 2002). The rationale for this approach is that, “[w]hile the public and the

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trademark owner have an interest in preventing consumer confusion, there is also a

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broad societal interest in preserving common, useful words for the public domain.” Id.

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In Entrepreneur Media, the court was addressing a descriptive mark but that logic should
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extend to weak suggestive marks such as RESERVE Q. Although some imagination is

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required to connect the mark “RESERVE Q” with the products in question, competitors

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in the reservation management industry should not be discouraged from using the term

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“reserve.” Id. (“We do not want to prevent the commercial use of descriptive words to

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name products, as straightforward names are often the most useful identifiers.”).

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Accordingly, the court recognizes that the parties’ goods are related but concludes that

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the factor does not weigh heavily in favor of likely confusion.

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3. Similarity of the Marks
“Similarity of the marks is tested on three levels: sight, sound, and meaning.”

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Sleekcraft, 599 F.2d at 351. As to sight, the marks “must be considered in their entirety and

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as they appear in the marketplace.” Brookfield Communications, 174 F.3d at 1054. EFI’s

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RESERVE Q marks and Reserve’s RESERVE mark are visually distinct. Although both

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marks are comprised of upper case letters, they are depicted in different fonts. Further,

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EFI’s marks are made up of two colors (red and purple) while Reserve’s mark is black.

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Some of the letters in EFI’s marks are different sizes while Reserve’s mark is a uniform

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size. EFI’s marks also have an additional design element (there are three waves or arcs

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emanating from the “Q”) while Reserve’s mark is unadorned. Turning to sound, the

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marks are sonically distinct. EFI’s marks are made up of two words while Reserve’s mark

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is only one word. Furthermore, Reserve ‘s mark is only two syllables while EFI’s is three.

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See Groupion, LLC v. Groupon, Inc., 826 F. Supp. 2d 1156, 1163 (N.D. Cal. 2011) (nothing

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differences in the number of syllables in each mark). Finally, on the issue of meaning, the

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parties recognize that a consumer will understand both uses of the word “reserve” to

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mean the same thing. However, the additional letter “Q,” which is also intended to evoke

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the idea of queue, suggests the two words also have different meaning. Stonefire Grill, Inc.

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v. FGF Brands, Inc., 987 F. Supp. 2d 1023, 1052 (C.D. Cal. 2013) (“Multiple courts have

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found that the presence of a common word does not render two marks similar where

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additional words make the marks distinctive.”) Taken together, this factor weighs against

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a finding of likely confusion.
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4. Evidence of Actual Confusion

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“Evidence that use of the two marks has already led to confusion is persuasive

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proof that future confusion is likely.” Sleekcraft, 599 F.2d at 352. However, due to “the

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difficulty in garnering such evidence, the failure to prove instances of actual confusion is

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not dispositive.” Id.; see Brookfield Communications, 174 F.3d at 1050 (“[D]ifficulties in

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gathering evidence of actual confusion make its absence generally unnoteworthy.”).

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In the instant case, EFI relies on declarations submitted by users of EFI’s other

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RESERVE products to substantiate the claim that there is at least some evidence of actual

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confusion. (Opp’n 15-16.) As Reserve notes, however, these alleged instances of

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confusion pertain to other EFI marks—specifically, RESERVE INTERACTIVE and

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RESERVE CLOUD—and do not address the instant mark. EFI also relies on an expert

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survey to show consumer confusion between the RESERVE Q and RESERVE marks.

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(Opp’n 16.) Reserve raises a number of objections to relying on this survey, including the

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fact that EFI’s expert did not timely disclose the survey. (See Dkt. 81; Mot. 14-15.) Without

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resolving whether that issue makes the survey data inadmissible, the court notes a

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separate deficiency identified by Reserve, which is that expert survey did not show

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respondents the marks as they appear in the marketplace and instead asked: “How

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different or similar do you think are the names Reserve versus Reserve Q?” and “How

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likely do you think the names Reserve and Reserve Q are associated with products or

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services offered by the same company?” (Dkt. 321-7 [Ex. 28 to Okadigbo Decl.], at 9, 24-

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25, 39, 53.) These questions, without any indication of what the marks actually looked

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like, cannot be used to support EFI’s contention that there was evidence of actual

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confusion. Given that the lack of actual confusion should not be given substantial weight,

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the court finds that this factor is neutral in the overall likelihood of confusion analysis.

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5. Marketing Channels Used
“Convergent marketing channels increase the likelihood of confusion.” M2

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Software, Inc. v. Madacy Entm’t, 421 F.3d 1073, 1083 (9th Cir. 2005). In evaluating this

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factor, courts consider the locations of potential buyers, the price ranges of the goods or
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services, and the types of advertising used. See Sleekcraft, 599 F.2d at 353. Reserve

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contends that this factor weighs against a finding of likelihood confusion because EFI

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markets its products solely to business while Reserve markets to both consumers and

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businesses. (Mot. 11.) EFI responds that Reserve’s multipronged marketing approach

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should not alter the conclusion that both parties rely on at least some of the same

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marketing channels. Instead, according to EFI, the operative facts are that both parties

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market to businesses and that they do so, at least in part, through in-person contacts.

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(Opp’n 17-18 (citing Okadigbo Decl. Ex. 12 [Hong Depo. Trs.] at 213-214; Carter Decl. ¶

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22.) While the parties employ different marketing channels, the evidence does suggest

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that at time their marketing efforts may overlap. Accordingly, the court finds that this

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factor weighs somewhat in favor of a likelihood of confusion.

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6. Degree of Care
“Low consumer care . . . increases the likelihood of confusion.” Playboy Enters., Inc.

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v. Netscape Commc’ns Corp., 354 F.3d 1020, 1028 (9th Cir. 2004). Courts should take into

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account “the type of good or service offered and the degree of care one would expect

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from the average buyer exercising ordinary caution.” See La Quinta Worldwide LLC v.

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Q.R.T.M., S.A. de C.V., 762 F.3d 867, 877 (9th Cir. 2014) (internal quotation marks and

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citation omitted). “When the buyer has expertise in the field, a higher standard is proper

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though it will not preclude a finding that confusion is likely.” Sleekcraft, 599 F.2d at 353.

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“Similarly, when the goods are expensive, the buyer can be expected to exercise greater

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care in his purchases; again, though, confusion may still be likely.” Id.

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The evidence suggests that business consumers selecting a reservation software

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platform are likely to exercise a comparatively higher degree of care. As Reserve notes,

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the average EFI customer pays $3,000 per year and the average Reserve customer pays

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$1200 per year. (Houck Decl., Ex. W [Carter Depo.] at 29:4-16, 64:5-19, 129:13-16.) While

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there is no evidence to contextualize how large an expenditure this is from the

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perspective of the average business owner buying these products, it does suggest that the

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consumers are sophisticated decision-makers and professionals who can be expected to
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exercise a greater degree of care. While EFI notes that this merely an assumption about

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how business owners think, EFI’s own corporate representative acknowledged that

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decision to purchase EFI products was “a big decision.” (Carter Depo. 159:11-163:2.)

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While not necessarily dispositive, it does suggest that this factor weighs against a finding

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of likelihood of confusion.

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7. Defendant’s Intent
The court has previously concluded that there is no evidence of willful

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infringement. (Dkt. 296 at 21:22-23.) Accordingly, this factor weighs against a finding of

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likelihood of confusion.

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8. Likelihood of Expansion of Product Lines
When there is “a strong possibility that either party may expand his business to

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compete with the other,” this factor weighs in favor of finding “that the present use is

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infringing.” Sleekcraft, 599 F.2d at 354 (internal quotation marks omitted). “When goods

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are closely related, any expansion is likely to result in direct competition.” Id. The Court

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must determine whether the allegedly infringing mark is “hindering the plaintiff's

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expansion plans.” Surfvivor Media, 406 F.3d at 634. A plaintiff must offer proof beyond

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mere speculation or generalized expansion goals. See id. (holding that mere “expressed

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interest in”—rather than “concrete evidence” of—expansion tilted factor in favor of

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defendant). Reserve contends that there is no evidence that EFI plans to expand its

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Reserve Q offerings to compete with Reserve. EFI does not dispute this claim but instead

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focuses on the principle that “[w]here two companies are direct competitors, this factor is

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unimportant.” Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1153

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(9th Cir. 2011). EFI contends that, because the two parties are competitors, this factor

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should be ignored. Thus, the court finds that, at a minimum, this factor is neutral and, if

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anything, it weighs slightly in favor of Reserve.

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9. Overall Likelihood of Confusion Analysis
Six of the eight Sleekcraft factors in this case are either neutral or weigh against a
finding of likely confusion. Specifically, the evidence of actual confusion and the
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likelihood of expansion of product lines are neutral. The strength of the marks, the

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similarity of the marks, the degree of care exercised by the relevant consumer, and the

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defendant’s intent all weigh against likely confusion. There is some evidence of overlap

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in marketing channels and an acknowledgement that the goods are proximate. While the

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former suggests some possibility of confusion, the latter will not be given much weight in

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this case where the primary word in the mark is a common term that must be invoked by

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all competitors in this field of business. Given this balance of factors, the court finds that

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EFI has not met its burden to show triable issue as to likelihood of confusion between the

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RESERVE and RESERVE Q marks.

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C. Damages

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Having concluded the summary judgment should be entered in Reserve’s favor on

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the question of liability, the court will not consider the arguments regarding damages.

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D. Declaratory Relief

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Reserve initiated this action seeking a declaration that its “use of the term

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RESERVE does not infringe on any valid trademark right of Defendants or otherwise

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violate Defendants’ rights . . . .” (See Compl.) In the first partial summary judgment

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Order, the court held that EFI’s RESERVE INTERACTIVE word mark was not valid and

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protectable, and thus could not provide the basis for an infringement action against

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Reserve. (Dkt. 235 at 10.) In the second Order, the court came to the same conclusion

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regarding EFI’s RESERVE IT, RESERVE IT 2.0, RESERVE GATEWAY, RESERVE

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UNIVERSITY, and RESERVE CLOUD marks. (Dkt. 296 at 16.) The court also held in the

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second partial summary judgment Order that there was no infringement as a matter of

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law as to EFI’s incontestable RESERVE INTERACTIVE design mark and RESERVE

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ANYWHERE word mark (Id. at 18-19.) Finally, in this Order, the court concluded that

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Reserve was entitled to summary judgment on infringement claims pertaining to the

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RESERVE Q marks after a Sleekcraft analysis. In light of these determinations—that EFI

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cannot show Reserve infringed upon any of EFI’s asserted trademarks—the court finds

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that Reserve is entitled to declaratory relief as a matter of law.
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IV. CONCLUSION
For the reasons stated above, the court GRANTS Reserve’s Third Motion for

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Partial Summary Judgment that there is no triable issue of fact as to the infringement of

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the RESERVE Q marks. Further, having granted summary judgment in favor of Reserve

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on all of EFI’s counterclaims for infringement, the court finds that judgment is also

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appropriate on Reserve’s declaratory claim for non-infringement. In light of this order, all

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pending motions are hereby vacated.

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IT IS SO ORDERED.

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Dated: April 14, 2017

___________________________________
DEAN D. PREGERSON
UNITED STATES DISTRICT JUDGE

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