Monday, February 17, 2014

Candy crushed?

This is part I in a three-part series on trademark law and, the maker of the popular Candy Crush Saga game.

The life of a trademark attorney can be lonely.  Most of what I do is well out of the spotlight.  But every once in a while, trademarks grab the attention of the public, and that gives me the opportunity to sort things out.

There is a popular movement afoot to boycott Candy Crush Saga, the popular game from  Candy Crush Saga is a more-or-less standard match-3 game, in the tradition of Bejeweled, and it is a distant cousin of Tetris.  The goal of Candy Crush Saga is to progress through a seemingly endless series of levels by manipulating pieces of candy laid out in a grid, aligning three or more pieces of the same color in a specified pattern to make them disappear.

King's contribution to the myriad games of this type is to make the game social.  If you find yourself stuck on a level, you can get assistance from Facebook friends.  King also throttles your progress, allowing you to fail on a level only five times before you must wait a specific period of time to try again--unless, of course, you want to pay them a small fee, $0.99, not to wait.

Recently, a simmering dispute in the U.S. Patent and Trademark Office (USPTO) has come to the forefront of pop culture.  In 2012, King sought to have its trademark CANDY CRUSH SAGA* registered in the United States.  Trademark registration confers on the registrant any number of important rights, the most important of which is to prevent others from making commercial use of trademarks that are confusingly similar to the registered mark.

* - One of the conventions of trademark law is that we use all-caps to indicate when we are talking about a trademark, just to make it easier to pick out.

Trademarks serve as indicators of the source of goods (or services).  When you buy a bottled soft drink that carries "COCA-COLA" on the side, that is an indication to you that the soft drink inside was made by, or under the authority of, a particular company that is responsible for the quality of the goods.  Trademarks are ubiquitous in our society, to the point at which you don't even notice them most of the time.  For a really interesting take on trademarks, it's worth your time to go over to YouTube to watch Logorama (warning: some coarse language), a short film that used more than 2,500 trademarks to animate a story.  Logorama won the Academy Award for Best Animated Short Film for 2009.

The trademark application process includes, at its end, a short period of time in which people and companies who think they would be harmed by a registration to oppose that registration.  If registration is opposed, the USPTO conducts a proceeding known as an "opposition," similar to a lawsuit, in which each side develops and makes its case, and a panel of administrative trademark judges decides whether to allow the registration.  Once a mark is registered, it is also possible to petition the USPTO to cancel that registration.

The available grounds for opposition and cancellation are generally the same.  The most important ground, however, is "likelihood of confusion" between the opposer's (or petitioner's) mark and the mark for which registration is being sought (or has been granted).  Determining whether there is a likelihood of confusion depends on a test of numerous criteria, including the similarity of the marks, the similarity of goods and services to which they are applied, the channels of trade in which the two entities operate, and as many as 10 other factors. 

If the USPTO determines that there is a likelihood of confusion between the two marks, it will either block or cancel, as applicable, the "junior user"'s mark.

In April 2013, a company known as "Runsome Apps, Inc.," which owns a federal registration for CANDYSWIPE, and which coincidentally sells a game that is remarkably similar to King's Candy Crush Saga, filed to oppose King's registration of CANDY CRUSH SAGA.  Runsome argued in its opposition that the two marks are confusingly similar and that because Runsome was first to the USPTO with its registration (dating to 2010), King shouldn't be allowed to register CANDY CRUSH SAGA.

At that point, all was good, I suppose.  I think Runsome's case for confusing similarity is weak at best.  It might have a better case for copyright infringement, because Candy Crush Saga is a fairly direct appropriation of many of the features of Runsome's version, which debuted two years prior to King's.  But that is not the case they filed.

King, which makes an enormous amount of money off the popular addiction to Candy Crush Saga (it is the most popular game on Facebook and boasts 46 million users there, and untold millions who play on smartphones without connecting to Facebook), has some very good lawyers.  Even though King probably had a winning hand already, it took steps to make Runsome's case unwinnable.  King identified a third party that has been using the trademark CANDY CRUSHER for computer games since 2004, and in January, King bought the trademark from that company.

Trademarks are property that can be bought and sold as long as certain rules are followed, and there is absolutely nothing illegitimate about King's purchase.  In fact, apart from the dispute with Runsome, it would probably have been an excellent move on King's part to negotiate for the purchase of the mark CANDY CRUSHER just to avoid having a future dispute with the owner of that mark.

What has struck some people as sneaky, however, is that King has now asked the USPTO to cancel Runsome's registration on the basis of the prior CANDY CRUSHER mark.  It stands to reason--and King is exactly right about this--that if, as Runsome says, CANDY CRUSH SAGA is confusingly similar to CANDYSWIPE, then CANDYSWIPE is confusingly similar to CANDY CRUSHER, and CANDYSWIPE shouldn't stay registered.  The software engineer, as it turns out, is hoist with his own petard, to paraphrase Shakespeare.

Last week, Albert Ransom, the president of Runsome, wrote a heartfelt "open letter" to King, deriding it for its efforts to win the trademark opposition by canceling CANDYSWIPE.  In his letter, Ransom plays the sympathy card heavily, referring to his deceased mother's cancer and his dedication of the game to her memory.  He criticizes King for ripping off his concept and defends his own actions in opposing King's registration as an exercise of his own rights.**  He even quotes a statement by King in support of the rights of intellectual property owners to protect what they create.

** - Ransom also complains that King is trying to stop him from using CANDYSWIPE by canceling his registration.  King might actually take that step, but it is not a foregoing conclusion that cancellation means you have to stop using a mark.

On the trademark level, I don't think much of either case.  If it were up to me, I would deny both aspects of this proceeding.  There is simply no likelihood of confusion among these various marks.  They can all exist on the Register without conflict.  Frankly, I don't think King thinks there is much of a likelihood of confusion; it is simply making the argument as an extension of Runsome's argument.

There is a great outcry, especially in the app-development community, against King for what are termed heavy-handed tactics; a boycott has been urged.  (I note that no one has suggested a boycott of Runsome for filing an opposition against a mark that doesn't have much in common with its own mark. I suspect that's because most people haven't heard the whole story; thus, this post.)

It's probably a good thing for people to stop playing Candy Crush Saga; it's a time-waster and a money-waster.  But those who quit are doing the right thing for the wrong reason, if they are doing it because King is being heavy-handed with a smaller competitor.  The simple fact is that Runsome picked this fight.  Its argument has been turned against it, and it would be well advised to suggest that all simply walk away from the trademark dispute.  To boycott King over this trademark dispute isn't the right move.

Of course, if Runsome wants to sue for copyright infringement, I think that it would stand a far better chance of success with that case.  And if you want to quit playing Candy Crush Saga for that reason, you can do so with a clear conscience.

* * * * *

Part II of this series deals with King's broader and questionable efforts to gain additional trademark registrations, while Part III discusses where we go from here.

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