Fortres Grand Corp. v. Warner Bros. Entertainment Inc.

Seventh Circuit affirms district court’s dismissal of software company’s reverse-confusion trademark suit, where defendant’s Batman film, The Dark Knight Rises, used words “clean slate” to describe fictional hacking program, and software company alleged that its “Clean Slate” security software lost sales following film’s release.

Fortres Grand Corporation develops and sells a desktop management program called “Clean Slate,” which is security software that wipes away user changes to a shared computer. When Warner Bros. Entertainment released the Batman movie The Dark Knight Rises, which uses the words “clean slate” to describe a hacking program that wiped clean a person’s criminal history, Fortres Grand allegedly experienced an abrupt drop in sales of its software. Fortres Grand filed suit for trademark infringement, alleging that Warner Bros.’ use of the words “clean slate” could cause consumers to be confused about the source of Warner Bros.’ movie (traditional confusion) and about the source of Fortres Grand’s software (reverse confusion).

The district court granted Warner Bros.’ motion to dismiss, holding that Fortres Grand failed to state a claim under either confusion theory and that the film’s use of the words “clean slate” was protected by the First Amendment. Fortres Grand appealed the decision as to its reverse confusion theory only, and the Seventh Circuit Court of Appeals affirmed, without reaching the constitutional issue.

Fortres Grand stated a claim of reverse confusion—when products of the senior user (the first and protected user of the mark) are mistakenly believed to have originated from the junior user (a later and potentially infringing user of the mark). To state a claim for infringement based on reverse confusion, Fortres Grand had to plausibly allege that defendant’s use of the words “clean slate” caused a likelihood that consumers would be confused into thinking Fortres Grand’s Clean Slate software was sponsored by defendant.

In determining the plausibility of an allegation of confusion, the Seventh Circuit applied a seven-factor test: (1) the degree of similarity between the marks in appearance and suggestion; (2) the similarity of the products for which the name is used; (3) the area and manner of concurrent use; (4) the degree of care likely to be exercised by consumers; (5) the strength of the complainant’s mark; (6) actual confusion; and (7) an intent on the part of the alleged infringer to palm off his products as those of another. Although the district court focused on the “similarity of products” factor, concluding that Fortres Grand’s software and Warner Bros.’ movie were so dissimilar that confusion was implausible, Fortres Grand argued on appeal that the proper product to compare to its software was the fictional software in the movie made by the fictional Rykin Data Corporation. The Seventh Circuit disagreed, however, concluding instead that the film—defendant’s tangible good—was the correct comparator product for determining whether reverse confusion existed. The panel held that Fortres Grand alleged no facts that would make it plausible that a superhero movie and a desktop management software are goods related in the minds of consumers in the sense that a single producer is likely to put out both goods.

According to the panel, Fortres Grand’s allegations of reverse confusion were implausible in light of the other factors as well. For example, Fortres Grand alleged that there was actual confusion because of “internet chatter” and “web pages, tweets, and blog posts in which potential consumers question whether the CLEAN SLATE program, as it exists in The Dark Knight Rises, is real and could potentially work.” The panel dismissed this argument, viewing it not as an allegation of actual confusion, but instead as an assertion that consumers are speculating that there really could be a hacking tool that allows users to erase information about themselves from every database on Earth.

The panel noted that Fortres Grand’s claim that defendant’s use of the words “clean slate” had tarnished Fortres Grand’s “clean slate” mark by associating it with illicit software could only be remedied with a dilution claim, but that it “would not be appropriate to use a contorted and broadened combination of the ‘reverse confusion’ and ‘related products’ doctrines to extend dilution protection to non-famous marks.” The strongest factor, in the panel’s view, was the similarity of the marks. Juxtaposed against the weakness of all the other factors, however, this similarity was not sufficient to support a costly dilution suit.