Social media often serves as a powerful mechanism that trademark owners can employ to promote and expand their brands, but a case currently pending in the Southern District of California illustrates just how easily social media can also be used to spread consumer confusion.
In Faegin v. LivingSocial, Inc., No. 14CV00418-WQH-KSC, 2014 WL 5307186, at *1 (S.D. Cal. Oct. 15, 2014), the plaintiffs operated a residential and commercial cleaning service in San Diego called A.T. Your Service Cleaning and Janitorial. They enlisted the services of defendant LivingSocial, an online marketing company, to promote their business with online advertising and discounts through the LivingSocial website and social media channels. The parties signed an agreement for a two-month promotional period that involved the sale of discounted vouchers.
But months after the promotional period had ended, the plaintiffs were startled to receive additional phone calls from potential customers trying to redeem vouchers. An investigation revealed that LivingSocial had been promoting the services of another company in San Diego, At Your Service Housekeeping. LivingSocial’s omission of contact information on the vouchers led to confusion and numerous negative reviews about the plaintiffs’ business on Yelp and Facebook, according to the Complaint in which the plaintiffs alleged federal and federal claims for trademark infringement and false advertising against LivingSocial and the owners of At Your Service Housekeeping.
The district court recently denied LivingSocial’s motion to compel arbitration under the marketing agreement, holding that the original agreement did not contemplate rights or obligations regarding the plaintiffs’ mark or other companies with similar names. Consequently, the dispute did not arise from or relate to the agreement.
The case demonstrates how easily actual consumer confusion can spread through social media and serves as a reminder of the importance of monitoring the Internet and social media for infringing users.
When conducting the likelihood of confusion analysis, courts often consider whether the two opposing parties use or are likely to use similar marketing and advertising channels. Notably, the parties in this case had both turned to the same social media marketer. Though social media access can facilitate would-be infringers, it may also help trademark owners to develop strong trademark infringement claims—in addition to promoting their marks.
Andrea Shannon (andrea.shannon@nortonrosefulbright.com / +1 512 536 3088) is a lawyer in Norton Rose Fulbright’s Austin intellectual property practice.