What’s Really Going on in the CandySwipe Dispute

You may have heard about the dispute between King.com Ltd. (maker of Candy Crush Saga*) and the independent developer Albert Ransom, whose little company, Runsome Apps Inc. publishes the mobile computer game CandySwipe, over the use of CANDY for computer games. The dispute got a lot of alt-press a couple of weeks ago, when Ransom wrote an open letter to King.com (since removed), conceding defeat (“Congratulations! You win!”) and essentially accusing King.com of what is sometimes called “trademark bullying.” Ransom had just learned that King.com “want[ed] to cancel my CandySwipe trademark so that I don’t have the right to use my own game’s name.”

* A game I never, ever would play, by the bye. Free games that make money through in-app purchases are morally wrong.

Ransom laid it on pretty thick:

I hope you’re happy taking the food out of my family’s mouth when CandySwipe clearly existed well before Candy Crush Saga. I have spent over three years working on this game as an independent app developer. I learned how to code on my own after my mother passed and CandySwipe was my first and most successful game; it’s my livelihood, and you are now attempting to take that away from me. You have taken away the possibility of CandySwipe blossoming into what it has the potential of becoming. I have been quiet, not to exploit the situation, hoping that both sides could agree on a peaceful resolution. However, your move to buy a trademark for the sole purpose of getting away with infringing on the CandySwipe trademark and goodwill just sickens me.

Candy isn't the only thing that'll make you sick.

Candy isn’t the only thing that’ll make you sick.

The odd thing about the open letter is that it’s not really legally accurate. Things don’t really suck for Ransom nearly as much as he thinks, particularly if his lawyers handle things correctly. Notably:

  • It is not a foregone conclusion that King.com will be able to cancel Runsome Apps’ registration for CANDYSWIPE. (If Ransom is smart, he won’t give them the chance.)
  • If King.com does cancel Runsome Apps’ registration, Ransom will not necessarily lose the right to call his candy-themed game CANDYSWIPE. (In fact, if he plays his cards right, CANDYSWIPE should be OK.)
  • If King.com does actually stop Runsome Apps from calling its candy-themed game CANDYSWIPE (which I think is really unlikely), Runsome won’t necessarily go out of business (i.e., “take food out of my family’s mouth”).
  • King.com probably didn’t acquire a trademark (CANDY CRUSHER) for the sole purpose of screwing Ransom. King.com was probably killing two birds with that particular stone, as I’ll explain.

Something that Ransom mentions in his open letter but might not be immediately clear is that Ransom actually started the legal dispute. It was Ransom, not King.com, that sought to oppose King.com’s application for CANDY CRUSH SAGA by asserting the priority of his own CANDYSWIPE registration. Nothing wrong with defending your turf. King.com then hit upon a surprising (and lucky) strategy that gave it a chance to cancel Ransom’s registration, which is what prompted the open letter.

The Difference Between a Trademark and a Trademark Registration

Ransom registered CANDYSWIPE for “computer game software for use on mobile and cellular phones”* on July 5, 2011. More important, Ransom claimed a first “use in commerce” of November 13, 2010. King.com, which is based in Malta, applied to register CANDY CRUSH SAGA in the U.S. on March 12, 2012 (technically under § 44(e) based on an EU application filed the same day). Even though King.com hadn’t actually used the mark in the U.S. by that time, it would be treated as though it had.**

* Ransom prepared the application himself and did a good job. I might have at least tried for a broader description of goods and services, but Ransom avoided many of the major mistakes that folks make with their applications.

** Usually, trademark rights don’t vest until the mark is actually used in commerce, but you can, as King.com did, be treated as though you started using the mark earlier if you file an “intent-to-use” type of application. For purposes of the dispute with Ransom, it doesn’t really matter.

In a trademark dispute like this, there are two key questions: (1) who used the mark in commerce first (“priority”); and (2) is there really a likelihood of confusion between the way the two marks are used? In this case, you might be surprised to learn, Ransom had the priority. That put him in the driver’s seat, but it left him with a tough decision: what to do about it?

To understand the difficulty of Ransom’s choice, you need to understand the difference between a trademark and a trademark registration:

  • Simplified tremendously, a trademark is a word, phrase, slogan, design, trade dress, or even color, or some combination thereof, that distinguishes your goods and services from everyone else’s. To get a trademark, you just have to use the mark in commerce.
  • A trademark registration is a way of strengthening an already-existing (or soon-to-be-existing) trademark by asking the U.S. government to give it a stamp of approval. You do NOT need to register a trademark to enjoy trademark protection. But there are benefits to registration that makes it worthwhile. Among the many other benefits, registration makes it easier to expand into new U.S. markets. To get a trademark registration, you have to file an application with the U.S. Patent and Trademark Office (USPTO), which will assess whether a registration is appropriate, then let outside parties intervene to protect their interests. Only after you’ve run that gauntlet will the registration issue.
  • For more on the difference between trademarks and trademark registrations, click here.

If you want someone to stop using a trademark, you have to go to court and get an injunction. If you want to stop someone from getting a trademark registration, you have to either (1) “oppose” the application before the registration issues, or (2) “petition to cancel” the registration if the registration has already issued.*

* There’s actually a sneaky third way, but let’s keep things simple for now.

King.com released Candy Crush Saga in April 2012 for Facebook and November 2012 for mobile devices (at least, according to Wikipedia). Ransom felt that not only was CANDY CRUSH SAGA too reminiscent of CANDYSWIPE, but that the overall look and feel (or “trade dress”) was too similar.

So when King.com’s application for CANDY CRUSH SAGA was thrown open for opposition, Ransom had four choices:

  1. Sue King.com in court for an injunction.
  2. Oppose King.com’s application to stop it from issuing as a registration.
  3. Do both (in which case, the lawsuit effectively determines the fate of the opposition).
  4. Do neither.

To reiterate, when you oppose an application, you’re not stopping its use in the real world, only stopping the registration. Further, what matters is only the mark (i.e., CANDY CRUSH SAGA) as described in the application, not how it’s being used in the real world. Thus, an opposition would do nothing about the trade-dress issues that clearly bothered Ransom. If that was as a big a problem as Ransom said it was, he needed to file a lawsuit. Further, if Candy Crush Saga was causing the actual confusion that Ransom said it was (“I have hundreds of instances of actual confusion from users who think CandySwipe is Candy Crush Saga or that CandySwipe is a Candy Crush Saga knockoff*”).

* This is known as “reverse confusion.”

Strategy: Crushed

So, in the abstract, Ransom’s logical course of action here was to sue*. But lawsuits are expensive, with no guarantee of victory, and King.com’s size would be an advantage: it could spend Ransom into submission. Oppositions are also expensive, but nothing like full-blown lawsuits, and it’s easier to control costs. So Ransom (I’m guessing) decided on a half-measure that he could afford. His strategy must have been to get King.com’s attention and try to work out a compromise.

* Actually, he should have sued AND opposed. What would have happened is that the opposition would block the application and continue to do so until the lawsuit was resolved.

There is nothing wrong with that strategy, except I wonder where there was scope for compromise. King.com was pretty committed to its game (for good reason, as it turned out) and its mark, so it wasn’t about to change the name of the game or its look and feel. It could try to buy off Ransom, but, after reading his “open letter,” do you have the sense that he would sell out? I mean, he made the game “in memory of my late mother who passed away at an early age of 62 of leukemia.” Even if you think everyone has a price, some things aren’t really for sale.

But King.com was still able to use its larger size to its advantage, with a lot of luck. It found an older, but still extant, computer game with “candy” in the title—called “Candy Crusher”—and bought the rights and goodwill to that. Now it (probably) had priority to computer games using CANDY. To use this new-found priority effectively, it wasn’t enough just to say so. No, it had to use CANDY CRUSHER to cancel Ransom’s registration for CANDYSWIPE. That’s just how it works.*

* Basically, Ransom was asserting this registration as a block against King.com’s application. To take advantage of the CANDY CRUSHER mark, King.com had to argue that, in light of CANDY CRUSHER, Ransom never should have been issued the CANDYSWIPE registration in the first place because CANDY CRUSHER was already in use at the time. Put another way: THERE CAN ONLY BE ONE!

The funny thing is that King.com might not have acquired—or even found out about—the “Candy Crusher” game and mark simply to defeat Ransom’s opposition. Think about it: if CANDY CRUSHER has priority over CANDYSWIPE, it also has priority over CANDY CRUSH SAGA. That means CANDY CRUSH SAGA was infringing this obscure little mark, and unlike CANDYSWIPE, there really was no way for King.com to argue otherwise. King.com’s acquisition of CANDY CRUSHER might have been just as defensive as offensive.

Alas for Ransom, it does appear that Candy Crusher has been available for Blackberry (!?) since at least 2004. CANDY CRUSHER isn’t registered, so King.com will have to prove validity, priority and ownership of the mark the hard way*, but King.com probably has the resources to do that, assuming there isn’t a problem with the chain of title or a major gap in use.

* Recall that one of the benefits of registration is that you don’t need to prove these things.

Strategy: Retreat, Regroup & Flank

This put Ransom in an awkward position. He has taken the position that CANDY CRUSH SAGA is confusingly similar to CANDYSWIPE, so it would be difficult for him to claim that CANDYSWIPE isn’t confusingly similar to CANDY CRUSHER.

What this means is that Ransom’s opposition is a lost cause. If he sticks to his guns, he loses because he doesn’t have priority. If he tries to argue that CANDY CRUSHER isn’t confusingly similar to CANDYSWIPE, then he loses because that same argument would apply as between CANDYSWIPE and CANDY CRUSH SAGA.

But even if his opposition is doomed, CANDYSWIPE isn’t doomed. Ransom can hit the reset button. Now, he’d be arguing the opposite of what he had been arguing: there is no likelihood of confusion between CANDYSWIPE and CANDY CRUSHER (and by extension CANDY CRUSH SAGA). The best way to do this, in my estimation, is for Ransom to drop his opposition and let CANDY CRUSH SAGA issue a registration.

But if he does that, won’t King.com then be able to stop Ransom from using CANDYSWIPE? No. All it means is that King.com gets a registration with a priority to CANDY CRUSHER going back to 2009. Remember, to stop someone from using a mark, you need to go to court and get an injunction. The registration will help King.com do that, but it still needs to win the lawsuit, and I don’t think it can.

But King.com has priority now: doesn’t that mean it’d win the lawsuit? No. Priority is only the first issue King.com needs to win. King.com must also establish that CANDYSWIPE is confusingly similar to CANDY CRUSHER. Surely, no one has an exclusive right to “CANDY” for mobile computer games, right? There’s apparently a computer version of CANDY LAND that dates to at least 2007 (warning: Dora the Explorer is involved), and I’ll bet there are much older versions (like this old DVD version, which seems to date to at least 2000). I expect the facts to show that consumers can distinguish among different computer games that include “CANDY” in their titles.

Look and Feel: An Introduction to Trade Dress

Then, there’s something else: the similarities in the look and feel between Candy Crush Saga and CandySwipe. Ransom couldn’t complain about those similarities in his opposition—because the only thing at issue was the phrase CANDY CRUSH SAGA—but he could in a lawsuit. This raises the possibility that it would be Ransom, not King.com, that would come out on top in a lawsuit. King.com would be well advised to tread carefully.

Would Ransom win a lawsuit against King.com? That’s well beyond the scope of this post because it involves trade dress, and trade dress is a squishy, complicated topic. Trade dress is when the way a product looks or is packaged acts like a trademark. The classic example is the shape of a Coke bottle—you don’t need the mark COKE on the bottle to know what’s inside. But trade dress is traditionally difficult to obtain because you have to prove that consumers actually connect the trade dress with your product, which usually requires expensive and finicky consumer-survey evidence.

Trade dress also has significant (and important) limitations. It can’t encompass any functional or useful features of the product (because that’s what patents are for), and it can’t foreclose others from using clever ideas. Thus, the Ransom doesn’t have a trade dress on the idea of using candy in rows and columns for a computer game, just the particular look and feel of the game.*

* It’s worth noting that “Candy Crusher” seems not to actually use images of candy, and I can’t tell why it’s called that.

Ransom, helpfully, sets forth what he regards as evidence of trade-dress infringement. I’ll let you make the call, but it seems to me he has a bit of an uphill climb.

A Game by Another Name…

Finally—and I think this is a purely theoretical point—even if I’m wrong about everything above and Ransom is forced to change the name of his game, that doesn’t prevent him from continuing to sell his game. He “just” needs change its name. How practical that is varies widely, and I can’t guess how easy it would be for Ransom (and, again, I don’t think he’ll need to). Some marks are more important to marketing than others. It depends on how loyal the customer base is, the extent to which the customer base has come to rely on the old mark to identify your product, the strength of the old mark, and the ease or difficulty of transitioning to the new mark. Some transitions have been successful, even beneficial, but others have been disastrous.

Thanks for reading!