Frogbikes Limited (“Frogbikes”), a British bicycle manufacturer, has filed suit in U.S. District Court for the Northern District of Georgia claiming that defendant Frog Scooters, Inc. (“Frog Scooters”) has infringed Frogbikes’ “FROG” trademarks (the “FROG Marks”) with the use of the term “frog” and its stylized “Frog” mark in connection with its scooter rental business. The dispute arises from Frog Scooters’ geographic expansion from Europe to the U.S., where Frogbikes alleges it was already conducting business under the FROG Marks.
Frogbikes is a manufacturer and seller of bicycles from Ascot, England. On July 31, 2013, Frogbikes began U.S. sales of its bicycles. In addition to registering the FROG marks with the U.S. Patent and Trademark Office (“USPTO”), Frogbikes claims common law trademark rights as a result of it use of the FROG Marks in “open and notorious promotion and advertising” across various channels and through different mediums in the U.S. In support of its claim, Frogbikes points to its substantial nationwide sales and heavy social media presence—“16,865 Facebook followers, 9,525 Instagram followers, and 6,465 Twitter followers” who have “viewed posts and advertisements containing products offered under the FROG Marks.”
Defendant Frog Scooters provides scooter rentals through its “Frog”-branded mobile application in European markets such as Ireland and Portugal. The company has also engaged in promotional activities in Atlanta, Georgia in connection with its “Frog”-branded scooter rentals in the U.S. Frog Scooters does not have a registered U.S. trademark associated with electronically powered land vehicles and push scooters, having partially abandoned its application after multiple refusals by the USPTO; Frog Scooters does have a pending federal trademark application that currently covers certain downloadable applications/software, vehicle rentals, and transportation information.
Frogbikes alleges that Frog Scooters has been promoting and offering its “Frog”-branded application for download, allowing users in Atlanta, Georgia to “sign up for a membership to rent motorized scooters under the infringing ‘Frog’ name.” Frogbikes further alleges that Frog Scooters had knowledge of the FROG Marks and “intend to free ride on the goodwill associated with Frogbikes’ FROG Marks in order to confuse and deceive consumers in the marketplace into the mistaken belief that . . . their [goods and services] are associated with or connected to Frogbikes.” Frogbikes seeks damages for the allegedly infringing uses as well as a permanent injunction barring Frog Scooters’ use of the “Frog” mark and name.
Why Prior Use in Target Markets Matters
As a threshold matter, assuming the existence of a protectible trademark, for a party to succeed on a trademark infringement claim, it must prove that its use of its trademark was prior to that of the entity’s use of a conflicting mark. This is generally referred to as having “priority” with respect to the use of a trademark. In the U.S., trademark rights are based on use of a mark in commerce, which can mean sale of goods or packaging bearing the mark, or advertising of services under the mark. Use in commerce can include use on a website or in social media advertising. Being first, or the senior user of a mark, is not sufficient, however, to prove priority if that prior use is not within the territory at issue.
Trademark rights are territorial—meaning they extend only to where a mark is in use. Use in the U.S. before another party may grant you priority of use in the U.S. over that party, but may not give you priority for the purposes of any other territory. Thus, a conflict can arise where companies are using identical or substantially similar marks in different territories and, with brand expansion across various borders run into a use that may have priority in that territory over a mark which was used long before in another territory.
This action presents just such a scenario: Frogbikes originates from the U.K., and Frog Scooters is active in the European market. With global expansion, both companies have arrived in the U.S. Frogbikes alleges that it is the senior user (the first to use a mark) in the U.S. based on its use of FROG Marks in connection with its bicycle products in the U.S. since 2013—prior to when it alleges Frog Scooters began its use. Frogbikes alleges that as a junior user, Frog Scooters cannot use the allegedly-infringing “Frog” name or mark—or any other mark confusingly similar to the FROG Marks—in the U.S., including on its mobile application, which would allow users in Georgia to rent scooters.
As the case proceeds, it will likely turn on whether Frogbikes has priority in the U.S. (i.e., from prior use of the mark here), and whether consumers are likely to be confused as to the origin of the goods/services offered by Frog Scooters via its mobile application or in any other manner. Frog Scooters may have rights to its “Frog” mark in Europe, but if Frogbikes’ use of its FROG Marks in the U.S. predates Frog Scooters’ use in the U.S., Frogbikes is the senior user and, to the extent the marks and goods or services are found to be confusingly similar, there is a risk that Frogbikes can procure injunctive relief prohibiting Frog Scooters from the challenged use of its mark.
To reduce a risk of challenge to use or registration of a mark, it is important to consider how the mark is to be used, including use in e-commerce and on various social media platforms. With the use of a digital advertising scheme, the use of a mark may extend far beyond the territory in which the mark is principally used increasing the risk of challenge to use. Taking a global (at least in key jurisdictions) approach to trademark clearance prior to adoption and use can significantly reduce the risk of challenge arising from parallel brands in different jurisdictions and markets.
Timothy Chung, a law clerk in the New York office, contributed to this post.