[00:00:04] Speaker 03:
So we're only, we're having one side each arguing, correct?

[00:00:10] Speaker 01:
Yes, Your Honor.

[00:00:11] Speaker 03:
We have other bodies here.

[00:00:13] Speaker 01:
I'm always Brian Bricker is here, helped on the briefs and our client James Mattis from World Champ Tech is here.

[00:00:20] Speaker 03:
All right.

[00:00:21] Speaker 03:
Thank you.

[00:00:21] Speaker 01:
Thank you, Your Honor.

[00:00:25] Speaker 01:
My name is Greg Gilchrist.

[00:00:26] Speaker 01:
I represent World Champ Tech.

[00:00:28] Speaker 01:
You know, we agree with the district court that

[00:00:33] Speaker 01:
the commercial strength of the mark is one of the three important factors that she looked at.

[00:00:39] Speaker 01:
She held that two of our – two of the factors favored World Champ Tech, similarity of the marks and relatedness of the goods and the likelihood of confusion analysis.

[00:00:50] Speaker 01:
But she found that the strength factor

[00:00:53] Speaker 01:
was so in Peloton's favor that that outweighed the other factors.

[00:01:02] Speaker 01:
We think that she made a significant error in the way that she considered commercial strength.

[00:01:09] Speaker 01:
There's been some effort I think on Peloton's part and there was in the district court to sort of run away

[00:01:16] Speaker 01:
from what happened in the development of this mark.

[00:01:17] Speaker 01:
This was not an idle choice or model number where they were choosing to call their new product something that wasn't going to be used in their advertising and promotion of the product.

[00:01:30] Speaker 01:
They spent, you know, there's a protective order, they spent a very large, money that we would all think would be big just to choose the name and then they spent enough money to run a small city

[00:01:43] Speaker 01:
for a long time to advertise the name.

[00:01:48] Speaker 01:
They hammered the market with this new brand, every nook and cranny of the market, everywhere where World Champ Tech would be looking for customers or trying to find customers.

[00:01:58] Speaker 01:
And then the district court essentially said, we're not going to consider the hammer.

[00:02:05] Speaker 01:
And that's one of the things that we think is a serious error in the court's opinion.

[00:02:10] Speaker 03:
You know, there are always... Well, if the consumer sees WCT's app in the Apple App Store, they will also see World Champ Tech listed as the producer of the app immediately next to the app icon and title.

[00:02:28] Speaker 03:
And wouldn't it, a reasonably prudent consumer, see that information and understand that the app is produced by WCT and not by Peloton?

[00:02:39] Speaker 01:
They may see that the app developer is World Champ Tech.

[00:02:43] Speaker 01:
There's some small space devoted for some, I think it's 5,000 characters of text that you can look at at the app store.

[00:02:52] Speaker 01:
But this is an industry where, which to some degree Peloton takes credit for developing, where you immediately think of software

[00:03:00] Speaker 01:
when you think of a Peloton bike.

[00:03:04] Speaker 01:
And in a lot of different areas, and Peloton has an app in the app store, in a lot of different areas people are sponsored or authorized or licensed to create software that works with different products.

[00:03:17] Speaker 01:
So yes, somebody might see the World Champ Tech name, and of course they did see that in the survey that was, in the confusion survey that was conducted, and they still came to the conclusion

[00:03:29] Speaker 01:
that Peloton had been the one to put it out, even though in the survey... Well, your expert on confusion was 12%, right?

[00:03:37] Speaker 01:
The survey showed a net confusion score of 12%.

[00:03:39] Speaker 01:
29% of the people were confused in the test cell and 17% were confused in the control cell.

[00:03:47] Speaker 03:
Well, I also saw Mr. Mathis's declaration that states that WCT's app

[00:03:53] Speaker 03:
was downloaded more than 500 times in 2021 and more than 300 times in 2022, and yet there's no indication that anyone was confused there.

[00:04:05] Speaker 03:
Doesn't that show there was no confusion?

[00:04:09] Speaker 01:
Your Honor, I think that we could fill up most of our page limit with cases that say that the absence of actual consumer reported confusion is not the death knell to a trademark case of summary judgment.

[00:04:22] Speaker 01:
And when a party is small, like World Champ Tech is, the likelihood that you're going to get a report of likely confusion is accordingly also smaller.

[00:04:33] Speaker 01:
And the evidence that was put forward on the absence of actual confusion consists of our inability to show any actual confusion that was reported to World Champ Tech.

[00:04:46] Speaker 01:
And Peloton's witnesses testimony from the research, excuse me,

[00:04:52] Speaker 01:
R&D guy at Peloton essentially said, I don't know of any.

[00:04:58] Speaker 01:
But the record also shows, Your Honor, that we asked them to search their records for Bike Plus app or rules, and they refused to do that.

[00:05:07] Speaker 01:
We made a motion.

[00:05:08] Speaker 01:
They refused to do that.

[00:05:09] Speaker 01:
I've always been taught that if you're going to make an argument about a significant point at trial, you need to provide discovery on it.

[00:05:17] Speaker 01:
They refused to search for Bike Plus app, but they are here saying that

[00:05:21] Speaker 01:
It's important for the court to consider that there's an absence of actual confusion.

[00:05:27] Speaker 01:
At trial, the jury could consider

[00:05:31] Speaker 01:
how much weight, which the courts routinely say is not significant.

[00:05:35] Speaker 02:
But you know what, why would, isn't the burden is to show that your consumers, WCT consumers, are confused, not that Peloton's consumers are confused.

[00:05:46] Speaker 02:
So by you saying, well, Peloton should have produced evidence that its consumers were confused, is not the right question, right?

[00:05:53] Speaker 01:
Well, it's not necessarily our consumers.

[00:05:56] Speaker 02:
Shouldn't we be looking at whether your WCT consumers are confused?

[00:06:00] Speaker 01:
Reports to Peloton, had they looked for them, could have come from consumers of both parties' products or they could have come from consumers of our product that thought that it was going to work or be able to interface with the bike plus bike.

[00:06:18] Speaker 02:
And... Bottom line, the only evidence of any actual confusion that you have is your 12% survey, correct?

[00:06:26] Speaker 01:
the only evidence that we can produce, but I would... That's correct.

[00:06:31] Speaker 02:
And we're required, though, if it's as low as 10 to 20 percent to look for any other supporting evidence of confusion, and that's absent here, correct?

[00:06:42] Speaker 01:
No, I don't think that is correct, Your Honor.

[00:06:44] Speaker 02:
Well, other than the fact that Peloton didn't produce documents, what is the other supporting evidence you have for confusion other than that 12 percent survey?

[00:06:53] Speaker 01:
The Fortune Dynamic case involved a survey

[00:06:56] Speaker 01:
that reported 11 percent confusion, Your Honor.

[00:07:00] Speaker 02:
And the court said, and I believe, if I'm not mistaken... I'm not contesting that you say there's a 12 percent net confusion rate.

[00:07:08] Speaker 02:
What I'm saying is, what is the other supporting evidence to support the 12 percent?

[00:07:14] Speaker 02:
Do you have anything else other than Peloton didn't produce documents?

[00:07:17] Speaker 01:
Do we have any evidence that shows why it was 12 percent other than the survey?

[00:07:22] Speaker 02:
No.

[00:07:22] Speaker 02:
Do you have any other evidence that there may have been confusion

[00:07:26] Speaker 02:
about the marks.

[00:07:28] Speaker 01:
I'm sorry, actual confusion was reported by customers?

[00:07:31] Speaker 02:
Yes.

[00:07:32] Speaker 01:
No, we don't.

[00:07:33] Speaker 01:
We don't have any.

[00:07:35] Speaker 01:
Our client does not spend a lot of time interfacing with its customers.

[00:07:40] Speaker 01:
And as I say, the evidence that there was not any actual confusion evidence on Peloton's side is at least suspect.

[00:07:49] Speaker 01:
But we don't have any evidence

[00:07:52] Speaker 01:
that a consumer reported being confused.

[00:07:53] Speaker 02:
And isn't that required to find likelihood of confusion?

[00:07:57] Speaker 02:
Is some evidence in addition to a 10 to 20 percent survey net confusion ratio?

[00:08:03] Speaker 01:
No, I think, Your Honor, if you look at the Fortune Dynamic case, it says exactly the opposite, that 11 percent survey in that case was sufficient and not only could be considered, but was required to be considered by the court as evidence of actual confusion.

[00:08:18] Speaker 01:
So that's another, that's the second place where we think the court made an error.

[00:08:24] Speaker 01:
She says in her opinion that the parties essentially attack the weight to be given the survey.

[00:08:32] Speaker 01:
But then she never considers it again after that and finds that the actual confusion factor favors Peloton.

[00:08:40] Speaker 01:
But I think if you look at the Fortune Dynamic case, it says the opposite.

[00:08:43] Speaker 01:
It doesn't say that you can consider, it says you must.

[00:08:46] Speaker 01:
And even talks about the- No, okay.

[00:08:51] Speaker 02:
We're not in sync here.

[00:08:53] Speaker 01:
Okay, I'm sorry.

[00:08:54] Speaker 02:
I'm saying for evidence of likelihood of confusion, there has to be more than the survey.

[00:09:00] Speaker 02:
I'm not saying whether you can consider the survey or not.

[00:09:03] Speaker 02:
They didn't file a Daubert motion, right?

[00:09:05] Speaker 02:
They did not.

[00:09:05] Speaker 02:
So, you know, their arguments may go to wait, not admissibility.

[00:09:09] Speaker 02:
I don't know, but I'm just saying in order for us to say there is a likelihood of confusion, doesn't there have to be more than just the survey?

[00:09:16] Speaker 01:
Yes.

[00:09:17] Speaker 02:
Fortune Dynamics talks about admissibility of the survey, and I am not at all

[00:09:22] Speaker 02:
At all they didn't follow Dalbert motion.

[00:09:24] Speaker 01:
I'm not at all saying that that survey of 12 percent shouldn't have been admitted I'm just saying there has to be more to say there's a likelihood to make a finding of a likelihood of confusion There are seeds in the case that say that that's enough all by itself But there is a lot more and I think it does go to the the other factors that the court did consider in our favor said there wasn't

[00:09:47] Speaker 03:
I'm confused.

[00:09:50] Speaker 03:
There is a likelihood of my confusion now.

[00:09:52] Speaker 01:
I think Judge Coe and I were on a different page.

[00:09:54] Speaker 01:
I was trying to answer a question about whether there was evidence of actual reported confusion.

[00:10:04] Speaker 03:
I'm going to agree with Judge Coe that we're going to consider

[00:10:08] Speaker 03:
The 12 percent.

[00:10:09] Speaker 03:
Okay, we're going to consider that document.

[00:10:11] Speaker 03:
But what more is there?

[00:10:13] Speaker 01:
Well, the more is all the other factors of confusion that there are, including the similarity findings that Judge Beeler made in World Champ Tech's favor.

[00:10:21] Speaker 01:
The fact that these are complementary goods that are thought about by consumers is likely coming from the same source.

[00:10:28] Speaker 01:
It's something that Peloton taught the marketplace when it developed this integrated fitness, that you think about the bike and you think about the software as coming from a single source.

[00:10:38] Speaker 01:
So those are factors that are important to likely confusion.

[00:10:42] Speaker 01:
The other factor that I think that the district court got wrong is the vast strength of the mark.

[00:10:49] Speaker 01:
We always talk about strength from two components, the conceptual strength of the mark and the commercial strength of the mark.

[00:10:56] Speaker 01:
And why?

[00:10:57] Speaker 01:
Because the more people that get reached, the more advertising that it does to reinforce the association between a brand and a single source,

[00:11:06] Speaker 01:
the more likely it is that somebody's going to associate that brand with a single source.

[00:11:10] Speaker 02:
Can I ask you about your letter to the Patent and Trademark Office?

[00:11:15] Speaker 02:
You, at that point, said, look, you know, this mark won't be confused with an actual bike.

[00:11:21] Speaker 02:
And you went through very specifically how this isn't an impulse action.

[00:11:26] Speaker 02:
You have to search the app store.

[00:11:28] Speaker 02:
You have to select it.

[00:11:29] Speaker 02:
You have to put in a passcode or a thumbprint.

[00:11:32] Speaker 02:
You have to scan the print.

[00:11:34] Speaker 02:
And then to determine whether you're going to do the WCT software, you have to consider the apps for the other competitors.

[00:11:42] Speaker 02:
And then, you know, depending on the data storage space on your device, you might have to delete some other apps.

[00:11:49] Speaker 02:
It was a very intentional, deliberate, premeditated process.

[00:11:56] Speaker 02:
And at that point, you're arguing, look, it's not likely going to be confused.

[00:12:01] Speaker 02:
So why wouldn't, you know, we look at that and take all those considerations.

[00:12:06] Speaker 02:
At that point you were saying, hey, an end user is going to consider the apps of other competitors, but they're going to make a thoughtful choice.

[00:12:13] Speaker 02:
So give us this trademark.

[00:12:15] Speaker 02:
Why can't we now consider that?

[00:12:18] Speaker 01:
I think that it's an argument that could be made to a jury about why in 2014 our client said

[00:12:30] Speaker 01:
with a physical bike that had no software whatsoever with a stylized mark that its lawyer made arguments at that time that said that there was a distinction between the app that was being offered by World Champ Tech and the physical

[00:12:48] Speaker 01:
non-connected bike that was being sold.

[00:12:51] Speaker 02:
No, let me just quote it.

[00:12:52] Speaker 02:
In determining that WCT software is that for which they're looking, the end user must consider the apps of other competitors, including, quote, Strava, end quote, an app which offers some but not all of the functionality of WCT's offering.

[00:13:07] Speaker 02:
I mean, it

[00:13:09] Speaker 02:
That end quote, that wasn't saying, oh, someone's going to have a physical bike, and that's going to be the decision.

[00:13:14] Speaker 02:
That's saying, nope, there are a bunch of apps here that do similar functionality, but a consumer's going to be careful about choosing ours.

[00:13:23] Speaker 01:
The trademark at issue, the application at issue, had to do with a physical bike versus an app.

[00:13:33] Speaker 01:
Yes, there was a discussion about choosing the app.

[00:13:38] Speaker 01:
And it's true now.

[00:13:39] Speaker 01:
There are a lot of apps, including Strava.

[00:13:42] Speaker 01:
Strava is identified as an app that's a competitor of Peloton's, by Peloton.

[00:13:47] Speaker 01:
It's in the record as a competitor of Peloton.

[00:13:53] Speaker 01:
They don't mention our app, but our app is competitive with Strava.

[00:13:56] Speaker 02:
So yes, at that time, in 2014, where people were looking at apps that were made by third parties and comparing them with a physical... But if Strava and Peloton are competitors, and you're saying, oh, but our consumers will not be confused with Strava's app, but now you're saying, but they will be confused with Peloton's app, who is a competitor of Strava?

[00:14:23] Speaker 01:
And, Your Honor, they were in the survey.

[00:14:26] Speaker 01:
test stimulus showed the Strava app and the Peloton app as choices that could be made.

[00:14:35] Speaker 01:
They still, in that context, said that the Bike Plus app was put out by Peloton.

[00:14:41] Speaker 01:
So yes, there are apps, but over the intervening years, Peloton has taught the marketplace that bikes and software come out from the same person.

[00:14:53] Speaker 01:
They're not just apps made by somebody.

[00:14:55] Speaker 01:
that might be used when you're riding somebody else's bike.

[00:14:58] Speaker 01:
They're the ones that created the association in the consumer's minds between bikes and apps.

[00:15:06] Speaker 01:
And they have their own app in the app store.

[00:15:10] Speaker 01:
It was there to look at in the survey.

[00:15:12] Speaker 01:
But the PTO said at that time in 2014 that apps and bikes were confusing.

[00:15:22] Speaker 01:
That's why the lawyer was writing.

[00:15:24] Speaker 01:
The PTO said, and never backed away from that, we didn't get told that we could go ahead and use BikeMore.

[00:15:31] Speaker 01:
It wasn't for the BikePlus application.

[00:15:34] Speaker 01:
We didn't get told that we could use it until the BikeMore application went away.

[00:15:39] Speaker 01:
So the PTO record will show that the PTO in 2014, before Peloton became as big as it did, and integrated fitness became as big as it did,

[00:15:52] Speaker 01:
concluded that apps and bikes were likely to be confused if the same names were used.

[00:16:00] Speaker 01:
So if when Peloton's lawyers got together when they learned about the bike plus trademark and investigated our client, they could easily have looked and probably did to see what the PTO thought about confusion between bikes and apps.

[00:16:17] Speaker 01:
And if they looked at the office action response, they would have determined

[00:16:21] Speaker 01:
that the PTO thought those two things were confusing.

[00:16:24] Speaker 01:
So yes, our clients prior counsel argued against that finding, did not win, but made some comments about the process that's

[00:16:36] Speaker 01:
at that time involved in downloading an app.

[00:16:39] Speaker 01:
Of course, we've all gotten a lot more familiar with downloading apps since then.

[00:16:42] Speaker 01:
All right.

[00:16:42] Speaker 03:
So we're over time.

[00:16:43] Speaker 03:
I want to make sure my colleagues don't have additional questions.

[00:16:47] Speaker 03:
No, thank you.

[00:16:48] Speaker 03:
All right.

[00:16:49] Speaker 03:
So we've taken you a minute over, but I'll give you two minutes for rebuttal since we asked you a lot of questions.

[00:16:54] Speaker 01:
I appreciate it, Your Honor.

[00:16:55] Speaker 03:
Thank you.

[00:17:00] Speaker 00:
Good morning.

[00:17:01] Speaker 00:
Good morning, Your Honor.

[00:17:02] Speaker 00:
Jeffrey Davidson, Covington in Berlin on behalf of Peloton.

[00:17:08] Speaker 00:
The district court correctly entered summary judgment.

[00:17:10] Speaker 00:
Cases are not supposed to go to trial pulling jurors out of their daily lives when there is only one reasonable outcome.

[00:17:17] Speaker 00:
Here, no reasonable jury could find that an appreciable number of consumers were likely to believe that WCT's bike plus app originated with Peloton.

[00:17:29] Speaker 03:
Confusion survey.

[00:17:31] Speaker 03:
I think that I know that you say the court shouldn't have considered it, but I'm going to consider it.

[00:17:39] Speaker 03:
And I think you got indications someone else is.

[00:17:42] Speaker 03:
So it's above the 10% that I think that your position would be stronger if it were 10% or 7% or anything like that.

[00:17:55] Speaker 03:
And the Ninth Circuit case law seems to be a bit

[00:17:59] Speaker 03:
confusing that some people think that everything should go to a jury trial.

[00:18:05] Speaker 03:
So tell us about the 12% since it is over the ton, why that isn't enough.

[00:18:15] Speaker 00:
Let me try to address that in two pieces.

[00:18:17] Speaker 00:
So the survey is relevant to this factor of actual confusion.

[00:18:21] Speaker 00:
The overall standard is, is there a likelihood of consumer confusion?

[00:18:25] Speaker 00:
One relevant factor to consider is, well, in the real world,

[00:18:29] Speaker 00:
have we actually seen that confusion emerge?

[00:18:33] Speaker 00:
So at some level, all of us have been conducting the ultimate survey because these products have coexisted in the marketplace for, at this point, more than four years, and there's not a scintilla of evidence that any actual human being has ever been confused to think that WCT's app originated with Peloton.

[00:18:51] Speaker 00:
The survey is at most a proxy or second best evidence for actual confusion.

[00:18:57] Speaker 03:
Well, I asked that in Mr. You don't emphasize this as much as and there might be a reason for this, but the fact that Mr. Mathis is declaration states that WCT app was downloaded more than 500 times in 2021 and more than 300 times in 2022.

[00:19:19] Speaker 03:
How does that had it?

[00:19:22] Speaker 03:
What's your interpretation of how that relates to confusion?

[00:19:26] Speaker 00:
So I think that's a pretty good sample size.

[00:19:28] Speaker 00:
There are people out there who are seeing page views of WCT's app.

[00:19:33] Speaker 00:
There are a few people downloading it.

[00:19:34] Speaker 00:
They are not confused.

[00:19:35] Speaker 00:
There is no evidence of that.

[00:19:38] Speaker 00:
And Mr. Mattis himself wrote, and this is at SCR 170, that he was hoping to find evidence of confusion.

[00:19:45] Speaker 00:
He was on a quest to look for it.

[00:19:47] Speaker 00:
So if his customers were confused, we would know about it.

[00:19:52] Speaker 00:
And that's just ground truth.

[00:19:54] Speaker 00:
We live in a land of reality.

[00:19:55] Speaker 00:
And the reality here is that no one has been confused or is likely to be confused by the party's coexistence.

[00:20:03] Speaker 00:
And I just really want to focus on that for a second.

[00:20:06] Speaker 00:
This case presents really a unique situation where WCT, it's a one-person company.

[00:20:12] Speaker 00:
It's essentially defunct.

[00:20:15] Speaker 00:
At the time Peloton's bike was launched, it was not doing any marketing.

[00:20:20] Speaker 00:
uh... it's monthly revenue was thirty six something you think the survey was so far that it should be considered why didn't you file a dalbert motion uh... the few was that wasn't saying anything relevant and and the reason is that uh... in order to know whether the bike plus is what's uh... being associated with peloton the comparator needs to you exclude the possibility that they thought it wasn't relevant so should be considered but now you're arguing no it shouldn't be considered isn't that inconsistent

[00:20:47] Speaker 00:
No, it was not relevant, therefore it adds no weight even on the actual confusion factor.

[00:20:54] Speaker 00:
And let's recall, the actual confusion factor focuses first and foremost on the real world experience.

[00:21:02] Speaker 00:
But I would also say everything gets combined into an overall analysis, as the district court correctly found.

[00:21:09] Speaker 00:
And really, the fact that WCT had no material customer base that could be confused

[00:21:18] Speaker 00:
is a unique fact in this case that means that no reasonable jury could find an appreciable number of consumers.

[00:21:25] Speaker 03:
Well, anytime you have things like eight factor tests and all of that, it's easy enough to find tribal issues within that.

[00:21:36] Speaker 03:
So what do we do about that?

[00:21:39] Speaker 00:
This court has repeatedly affirmed district courts ruling that there was no likelihood of confusion on summary judgment.

[00:21:46] Speaker 00:
The Lerner and Rowe case from last year is a good example of that happening.

[00:21:49] Speaker 00:
I would point to the M2 communications case, the Align versus Lululemon case that has a lot of factual similarity to the case here.

[00:21:57] Speaker 00:
So it just depends on the fact pattern that is presented to this court.

[00:22:03] Speaker 00:
just in the land of reality, there are not consumers of WCT's product who are likely to be confused into thinking it originates with Peloton.

[00:22:13] Speaker 03:
Part of that- You say you're arguing on the one side.

[00:22:16] Speaker 03:
Well, we're going to win anyway.

[00:22:18] Speaker 03:
Why don't you use summary judgment to RIP?

[00:22:23] Speaker 03:
Rest in peace.

[00:22:26] Speaker 03:
Put this baby down because

[00:22:29] Speaker 03:
we're going to win in the end because they've either abandoned their mark or that they misrepresented things to the PTO or any number of things, which would all be defenses that you could raise later.

[00:22:41] Speaker 03:
But I'm sort of just moving us back to the summary judgment.

[00:22:45] Speaker 03:
And there are cases, you know, when you're looking at summary judgments, there are cases that you look at and you say, oh, this is a loser, but that doesn't mean that there's not a triable issue.

[00:22:55] Speaker 03:
So that's where I'm

[00:22:58] Speaker 00:
Yes, and the district court correctly recognized that no reasonable jury looking at this fact pattern could conclude that there's a likelihood of confusion.

[00:23:07] Speaker 00:
And I think one factor I'd like to sort of bring to the foreground here is let's remember what Mark we're talking about.

[00:23:13] Speaker 00:
It's the bike plus Mark.

[00:23:17] Speaker 00:
WCT's principal admitted at his deposition, and this is found at SCR 33, that that is intended to evoke

[00:23:24] Speaker 00:
a better biking experience.

[00:23:26] Speaker 00:
So it's bike plus.

[00:23:28] Speaker 00:
It's a bike, and it is improved in some way.

[00:23:33] Speaker 00:
That is exactly the way that Peloton, when it was making its branding decision, chose to go about it.

[00:23:40] Speaker 00:
It had a bike.

[00:23:41] Speaker 02:
Let me ask you, when Peloton made its branding decision, they were aware of WCT's mark, even got outside counsel's opinion.

[00:23:48] Speaker 02:
Isn't that intent?

[00:23:49] Speaker 02:
Shouldn't that be evidence of intent, that they went ahead anyway, knowing that they would be potentially infringing

[00:23:54] Speaker 00:
Not remotely, your honor.

[00:23:55] Speaker 00:
So WCT's app is registered.

[00:23:58] Speaker 00:
They have a trademark registration.

[00:24:00] Speaker 00:
It's registered in the app slash software category.

[00:24:03] Speaker 02:
So there was no reason to think that Peloton... Well, in-house counsel was concerned enough to get an outside counsel opinion, right?

[00:24:10] Speaker 02:
You wouldn't do that if it was sort of as blase as you're representing, would you?

[00:24:14] Speaker 02:
You would pay for an outside counsel opinion to protect yourself from a claim of infringement in the future if you really thought it was completely different?

[00:24:23] Speaker 00:
I don't think... I mean, we have not put the outside counsel's opinion at issue, so it's not that.

[00:24:26] Speaker 00:
It's just a routine trademark clearance of the type that large companies launching products do all the time.

[00:24:32] Speaker 00:
So, yes, they were...

[00:24:33] Speaker 00:
aware that WCT had a registered mark in the app space.

[00:24:38] Speaker 00:
But that is quite different from a physical bike, a large heavy indoor stationary fitness bike.

[00:24:45] Speaker 00:
And with respect to the district court, this is where we part company with her a little bit.

[00:24:49] Speaker 00:
She found that the products were similar enough.

[00:24:52] Speaker 00:
They really are not.

[00:24:54] Speaker 00:
Judge Koh, as you pointed out, Mr. Mattis himself advocated to the PTO that no one could confuse

[00:25:01] Speaker 00:
an app with a physical bicycle because they were in all manner different.

[00:25:07] Speaker 00:
And that is the case.

[00:25:09] Speaker 00:
Peloton's indoor stationary bikes are sold through channels that are suited towards selling large.

[00:25:15] Speaker 02:
But it does seem that the district court created some errors as to factor one and factor three.

[00:25:22] Speaker 02:
Because on factor one, the court found that WCT's mark was descriptive.

[00:25:27] Speaker 02:
the court sort of bypass the analysis that was supposed to be done about the relative comparisons of the marks.

[00:25:35] Speaker 02:
Would you agree?

[00:25:36] Speaker 02:
Nothing in Ironhawk says that if you find it descriptive, you get to bypass, you know, weighing whether the conceptual strength of WCT's mark, how that compares, and it is overwhelmed by the commercial strength of Peloton's mark, right?

[00:25:50] Speaker 00:
I would not agree, Your Honor.

[00:25:51] Speaker 00:
The mark is descriptive.

[00:25:53] Speaker 00:
It's bike plus.

[00:25:55] Speaker 00:
It doesn't describe everything about the product, but it describes it.

[00:25:59] Speaker 02:
But even if it is, I'm not asking a question about that.

[00:26:03] Speaker 02:
There's nothing in Ironhawk that says if you find it descriptive versus suggestive or anything else that you can bypass that first factor in sleep craft.

[00:26:15] Speaker 00:
Ironhawk and many of the other cases kind of assume that the senior user

[00:26:19] Speaker 00:
has some commercial strength to protect.

[00:26:23] Speaker 00:
Otherwise, why would they be in court?

[00:26:26] Speaker 00:
The district court recognizes that this is an unusual fact pattern where there is essentially nothing to protect.

[00:26:32] Speaker 00:
The brand is valueless.

[00:26:33] Speaker 00:
There are essentially no consumers.

[00:26:35] Speaker 02:
So if the question is... But then wouldn't that then weigh in favor of WCT?

[00:26:40] Speaker 00:
Not with a descriptive mark.

[00:26:42] Speaker 00:
And that would really be a reverse.

[00:26:44] Speaker 02:
Tell me where in Ironhawk it says that you don't have to do the comparison if it's a descriptive senior mark.

[00:26:52] Speaker 02:
Because I don't see that.

[00:26:54] Speaker 02:
And that's kind of what the district court did.

[00:26:55] Speaker 02:
Said, well, this is descriptive.

[00:26:57] Speaker 02:
So, OK.

[00:26:58] Speaker 02:
You're making this conclusion on this factor one.

[00:27:00] Speaker 00:
Ironhawk, there was counsel in Ironhawk, it was just a different fact pattern where the senior user did have

[00:27:06] Speaker 00:
a base of customers and revenues to protect.

[00:27:09] Speaker 00:
So it's not an issue that this court reached, but the district court correctly recognized that we're here for a reason, right?

[00:27:15] Speaker 00:
We're here to protect brands and we're here to protect consumers from confusion.

[00:27:21] Speaker 00:
And in a situation like this one, where there is really nobody to be confused, it follows directly that there is no likelihood of confusion.

[00:27:31] Speaker 00:
These factors are supposed to be used flexibly

[00:27:36] Speaker 00:
in order to answer kind of the fundamental question, which is, is there enough here to take the jury out of their daily lives and adjudicate the case?

[00:27:47] Speaker 00:
You know, here there's only one reasonable outcome.

[00:27:49] Speaker 00:
And so even if you weigh a factor two or a factor or two in favor of the plaintiff, that doesn't get you to an overall conclusion.

[00:27:56] Speaker 03:
Can you respond to what your friend on the other side talked about on the commercial strength?

[00:28:03] Speaker 00:
The commercial strength of Peloton?

[00:28:05] Speaker 00:
Yeah, so Peloton, and one thing to recognize about how these marks appear in the marketplace is that Peloton is not seeking to create brand equity with Bike Plus.

[00:28:19] Speaker 00:
It had a bike, it had a better bike, and it called it Bike Plus.

[00:28:22] Speaker 00:
It had a treadmill, the better one's called Tread Plus.

[00:28:25] Speaker 00:
What Peloton is trying to do is to create equity in the Peloton brand.

[00:28:33] Speaker 00:
And that means something very important for purposes of this case, which is when Peloton uses the word Bike Plus, it does it in proximity to Peloton with all of the characteristics of the Peloton brand, the capital letters, the font, the positioning it next to a descriptive name.

[00:28:55] Speaker 00:
So when a consumer sees that, they see this as Peloton's Bike Plus.

[00:29:01] Speaker 00:
That does not mean that when they then see WCT's app on the App Store with World Champ Tech right there, that they would associate that with Peloton.

[00:29:14] Speaker 00:
And I think that is especially the case because we're talking about, as WCT admitted, sophisticated customers.

[00:29:21] Speaker 00:
He called them serious outdoor biking enthusiasts is their customer base.

[00:29:27] Speaker 00:
They're looking to download something that's about their health, their fitness.

[00:29:30] Speaker 00:
So these are customers who are sophisticated and they're also used to going through the App Store process that has these repeated validation steps that need to be undertaken.

[00:29:42] Speaker 02:
Under those circumstances, the way that these two... Let me ask you about another error I think the District Court committed.

[00:29:48] Speaker 02:
And that is on factor three.

[00:29:50] Speaker 02:
The court said, well, if there's a house mark, then the reasonable jury is going to say there's similarity.

[00:29:56] Speaker 02:
But the law says that a house mark could aggravate confusion or lessen confusion.

[00:30:02] Speaker 02:
It's not automatically a finding of similarity.

[00:30:06] Speaker 00:
Right.

[00:30:07] Speaker 00:
It depends on the circumstances of the case.

[00:30:09] Speaker 00:
And so for an example in Cone versus- Okay, but what- I'm sorry.

[00:30:13] Speaker 02:
I want a clear answer.

[00:30:14] Speaker 02:
Are you agreeing that a house mark can aggravate or can lessen confusion for similarity in the mark or not?

[00:30:21] Speaker 00:
This court has said that it can, and in some cases, it can dispel confusion.

[00:30:25] Speaker 00:
It depends on the facts of the case.

[00:30:27] Speaker 00:
So in a case like Pett's Mark- Right.

[00:30:28] Speaker 02:
But in this case, the court said, well, the existence of a house mark means reasonable jury will find these are similar.

[00:30:35] Speaker 00:
Right, and she's looking at an overall record that shows that these marks are being deployed in different commercial spaces.

[00:30:41] Speaker 00:
So one is in the physical, large, stationary bike space.

[00:30:45] Speaker 00:
The other is being deployed in the app cyberspace.

[00:30:48] Speaker 00:
One of them is being accompanied with this very notable set of branding conventions on the Palatine side.

[00:30:55] Speaker 00:
One of them's not.

[00:30:56] Speaker 00:
So under those circumstances, this case is much more like Cone versus PetSmart.

[00:31:00] Speaker 00:
That's where pets are family case.

[00:31:03] Speaker 00:
And what this court said in that case is,

[00:31:05] Speaker 00:
Look, when you're talking about a veterinary clinic and a pet store, one large, one small, under those circumstances, the fact that both of the market participants prominently featured the house mark, if anybody was about to be confused by who was the origin, the answer was right there looking at them.

[00:31:27] Speaker 00:
And the same is the case here.

[00:31:29] Speaker 00:
If you're looking at a Peloton Bike Plus, it says right there that it's from Peloton.

[00:31:34] Speaker 00:
If you're looking at WCT's app, it says right there that it's WCT.

[00:31:38] Speaker 00:
So in the real world of whether we should be empaneling a jury to decide this case, there just really is no likelihood of confusion.

[00:31:47] Speaker 00:
And in fact, we have been conducting the ultimate experiment for the past four years of whether a customer could likely be confused.

[00:31:55] Speaker 00:
And we have the answer.

[00:31:56] Speaker 00:
The answer is that no one has been confused.

[00:32:00] Speaker 00:
We've had four years of track record.

[00:32:00] Speaker 02:
But you haven't produced the document, so how do we know?

[00:32:04] Speaker 02:
I mean, that's a lawyer argument, right?

[00:32:06] Speaker 02:
Have you made the document production that could have actually, in fact, disclosed whether any customer was confused?

[00:32:13] Speaker 02:
What was the basis to withhold a discovery, anyway?

[00:32:17] Speaker 00:
Well, I guess I would say a couple things.

[00:32:20] Speaker 00:
It's summary judgment, so it's time to come forward with your evidence and any discovery disputes.

[00:32:24] Speaker 00:
Those are over.

[00:32:26] Speaker 00:
They're not appealing those.

[00:32:28] Speaker 00:
The truth of the matter is that there have been more than 10 depositions, hundreds of interrogatories and requests for admissions, tons of document requests.

[00:32:38] Speaker 00:
So if there were an opportunity for confusion to happen, we would know.

[00:32:41] Speaker 00:
And as you pointed out in my colleague's argument,

[00:32:45] Speaker 00:
The relevant question here is not about Peloton's customer base.

[00:32:49] Speaker 02:
Well, a deposition wouldn't reveal it if the discovery hasn't been collected and reviewed, right?

[00:32:55] Speaker 02:
Maybe people haven't looked.

[00:32:57] Speaker 00:
If the question were, are Peloton's customers confused?

[00:33:00] Speaker 00:
Which it's not.

[00:33:01] Speaker 00:
That is certainly a question you can ask about at deposition.

[00:33:05] Speaker 00:
But the question is not that.

[00:33:06] Speaker 00:
The question is, are WCT's customers confused?

[00:33:09] Speaker 00:
Their client has been on the quest, hoping for evidence of actual confusion.

[00:33:14] Speaker 00:
He would have access to that had it occurred.

[00:33:18] Speaker 00:
And it has not occurred.

[00:33:19] Speaker 02:
So what was the basis to withhold the discovery that you thought it was not relevant?

[00:33:25] Speaker 00:
The discovery issue wasn't raised on appeal, so I haven't looked at that carefully.

[00:33:29] Speaker 00:
It may well have to do with what the request said.

[00:33:33] Speaker 00:
It may have to do with the fact that any confusion by Peloton's customers would not be relevant to the question, which focuses on WCT's customers.

[00:33:44] Speaker 00:
At bottom, I would say that the district court correctly reached an overall weigh-in of the factors that confirmed that there was no likelihood of actual confusion and properly entered summary judgment.

[00:33:54] Speaker 00:
Thank you.

[00:33:55] Speaker 00:
Thank you.

[00:34:03] Speaker 03:
Thank you, Your Honor.

[00:34:06] Speaker 01:
Thank you, Your Honor.

[00:34:08] Speaker 01:
Just in response to one of the last things that was said, Judge Koh, I would point you to the Real versus Amazon case.

[00:34:17] Speaker 01:
It's at 34F4 on page 131.

[00:34:20] Speaker 01:
And at that place, the 11th Circuit collects decisions from

[00:34:26] Speaker 01:
The first, second, third, seventh, ninth, and eleventh circuits, all of which say that in a reverse confusion case, the use of a house mark can aggravate the likelihood of confusion.

[00:34:37] Speaker 02:
Another point that I wanted to go back to was the... But what if their response was, well, but the judge made an assessment and decided in this particular case... Well, the judge did make an assessment in this case and said that, yes, it could aggravate

[00:34:55] Speaker 01:
uh... confusion because uh... coupled with the large advertising expenditure uh... the bike plus brand became exclusively associated with peloton and that's exactly the harm that gets created when somebody would say there was no error on that part right there was no error on that part because the district court didn't assume that the existence of a house mark was automatically aggravating that they made a factual decision based on the record here

[00:35:20] Speaker 02:
and did the required analysis.

[00:35:22] Speaker 02:
That's your position.

[00:35:22] Speaker 01:
We agree with the district court's decision on the similarity of the mark.

[00:35:26] Speaker 01:
She said that that was in our favor, and she referred to the Ninth Circuit decision on that point.

[00:35:33] Speaker 01:
I did also want to go back to this issue of the district court bypassing the commercial strength issue of Peloton's mark, because we do think it's important to that factor.

[00:35:45] Speaker 01:
The Ninth Circuit decisions are just absolutely clear.

[00:35:47] Speaker 01:
The Ironhawk case says it, as you mentioned.

[00:35:50] Speaker 01:
And the Ironhawk case goes a little further.

[00:35:54] Speaker 01:
The only customer they had at that point was the Navy.

[00:35:58] Speaker 01:
And the decision of the court was that, yeah, but we have to consider the prospective customers, not just the customer that they have today.

[00:36:06] Speaker 01:
The Lodestar case is even more explicit on this point, because the Lodestar case involved somebody who was producing... I'd just say you win on strength of the mark, but then why should you win overall?

[00:36:20] Speaker 02:
Well, if we went on strength of the mark and... But you lose on many other things, right?

[00:36:27] Speaker 02:
I think that if we went on the strength of the... You lose on similarity of the mark, evidence of actual confusion, degree of consumer care, marketing channels, likelihood of expansions neutral, then why should you win even if you went on strength of the mark?

[00:36:38] Speaker 01:
Because I think you... The district judge correctly determined that the goods were similar.

[00:36:45] Speaker 01:
She correctly determined that the marks were similar if she concluded

[00:36:49] Speaker 01:
properly that the marks were strong, at least in the hands of Peloton, and weighed that, she would have concluded that factor favored World Champ Tech.

[00:36:58] Speaker 01:
Those are the three important factors that she identified.

[00:37:01] Speaker 01:
The actual confusion evidence should have been considered by the court.

[00:37:05] Speaker 01:
The 12 percent is enough to show that that factor weighs in our favor.

[00:37:10] Speaker 01:
If it's not dispositive of the case, it's very important.

[00:37:13] Speaker 01:
The courts are very clear that the absence of actual reported consumer confusion

[00:37:18] Speaker 01:
makes that factor not that important.

[00:37:21] Speaker 01:
But if there is evidence of actual confusion, that factor is considered as very important.

[00:37:26] Speaker 01:
So that would be the four important factors that would weigh in our favor.

[00:37:30] Speaker 01:
We've disagreed.

[00:37:31] Speaker 01:
We've briefed the issues about the channels.

[00:37:34] Speaker 01:
They were everywhere with the advertising of this brand.

[00:37:38] Speaker 01:
We disagree.

[00:37:40] Speaker 01:
And there are cases, and we cite them, about whether the sophistication

[00:37:46] Speaker 01:
here where you're talking about complementary products, does this go with that, is different from am I choosing, if I'm choosing my vitamins, maybe I'm careful about whether I'm choosing between A and B. Okay, you're over, over, so double over, but let me make sure my colleagues don't have any additional questions.

[00:38:07] Speaker 03:
No, thank you.

[00:38:08] Speaker 03:
All right, so no additional questions.

[00:38:10] Speaker 03:
Thank you both for your argument on this matter.

[00:38:12] Speaker 03:
This will stand submitted.

[00:38:14] Speaker 03:
This court's in recess till tomorrow at 9 AM.

[00:38:17] Speaker 03:
And the students, if you remain, our law clerks will talk to you, and then after we conference, we'll return.

[00:38:25] Speaker 03:
Thank you.

[00:38:25] Speaker 01:
Thank you very much, Madam.

[00:38:50] Speaker ?:
It stands adjourned.