Good Planning > Poor Planning, but Luck Sometimes Trumps All
On March 10, I published a blog post about the emotional legal dispute between the small publisher of Candyswipe, called Runsome Apps, and the much larger international publisher of Candy Crush Saga, King.com Ltd.. In that dispute, Runsome Apps actually fired the first shot, opposing King.com’s application to register CANDY CRUSH SAGA in the United States. When King.com located and purchased the rights to an older, very obscure game called “Candy Crusher,” it put the Candyswipe publisher in a bad spot. My advice to the Candyswipe publisher was to drop the opposition before King.com was permitted to bring a counterclaim to cancel the CANDYSWIPE registration.
As it happened, the very next day, the parties agreed to suspend proceedings pending settlement, and the case was withdrawn on April 25 (and formally dismissed with prejudice April 29). According to the Candyswipe webpage, it was all some horrible misunderstanding (?): “I have learned that they picked the CANDY CRUSH name before I released my game and that they were never trying to take my game away.” In the settlement, neither party will have to do anything, i.e., the dispute was a wash: “Both our games can continue to coexist without confusing players.”*
* The truth might be more complicated. Since Runsome had a reasonably strong legal case against King.com, even with King.com’s purchase of CANDY CRUSHER, I hope Runsome received some money in exchange for a covenant not to sue.
Now that the dispute has settled, and we can kind of guess the terms of the settlement, I want to return briefly to the dispute to draw a couple of broad lessons: (1) the importance of being fully informed of your legal options, counterbalanced by, (2) in law as in war, battle plans sometimes don’t survive first contact with the enemy.
Door Nos. 1, 2 and 3
Let’s recall what we know of what happened here. Runsome learned (probably the same way we all did) about King.com’s CANDY CRUSH SAGA product, and further learned of King.com’s application to register CANDY CRUSH SAGA. At this point, Runsome had three major choices: (a) go to court and try to enjoin (i.e., stop) King.com from using CANDY CRUSH SAGA at all; (b) go to the USPTO and try to block King.com’s registration of CANDY CRUSH SAGA; (c) or bide his time and write some (more) letters. (See here or here for the difference between a trademark and a trademark registration.) The advantages and disadvantages of each of these approaches are:
- Seek an Injunction: PRO: if successful, it puts King.com in a terrible bind, since it couldn’t use the very mark it had invested so heavily in; avoids consumer confusion by stopping the use of mark that’s confusingly similar to its own; allows Runsome to talk about similarities in the look and feel of the two games, not just of the marks. CON: the most expensive option, since lawsuits are more expensive than oppositions; threat to King.com would likely provoke a furious (and expensive) response, perhaps more than a little company like Runsome can handle.
- Oppose the trademark application: PRO: it’s cheaper than a lawsuit, and it’s doing something; gets King.com’s attention by threatening something of value to King.com but without directly threatening its mark, so King.com’s response might be more measured than if faced with an injunction. CON: it doesn’t actually do anything for Runsome because, even if successful, King.com may continue to use CANDY CRUSH SAGA; doesn’t do anything immediate to prevent consumer confusion; dispute resolved on the papers, so Runsome can’t talk about the similarities in the games’ look and feel.
- Bide time: PRO: Costs nothing; allows damages to build up; allows time to get King.com’s attention through persistent letter-writing. CONS: Does nothing (at least, not immediately); may not be enough to get a large company’s attention; just puts off the day of reckoning.
In sum: If you want to get something done, you need to sue. If you want to save money, biding your time is your best option. The second option is a half-measure. Put in terms of Runsome’s business objectives, the first option is best if Runsome is genuinely concerned about King.com’s entry into its market with a similar market. If there really is a likelihood of confusion between the two games, King.com is a gigantic threat—it’ll occupy the entire CANDY space for games in the iPhone and Android markets, and CANDYSWIPE will come off, unfairly and incorrectly, as a knockoff. On the other hand, if Runsome’s objective is to get some money for clearing out its mark for King.com, then the best option depends on Runsome’s doggedness and King.com’s previous reactions to Runsome’s overtures (if any).
The Middle Path
Regardless, Runsome chose the half-measure. At first blush, it sounds like the worst-of-both-worlds: expense without the leverage. But there are a couple reasons why Runsome might have chosen it, one good, one bad:
First, let’s assume that Runsome had already tried to reach out to King.com and been rebuffed. Big companies, particularly newly-big companies, often don’t even acknowledge demand letters. They can afford to dare smaller companies to sue. At the same time, a full-blown lawsuit might have been more than Runsome could realistically handle. If all Runsome wanted to do was get King.com’s attention, an opposition would do the trick. It might not gain Runsome anything, and it might not threaten King.com’s entire business model, but it would threaten something of considerable value to King.com. Furthermore, it would get the attention of King.com’s lawyers because they’d have no choice but to respond, and in doing so, they would have to talk to King.com’s management about Runsome’s claims. At that point, negotiations are likely to follow.
Second, Runsome just didn’t know what it was doing. Runsome wasn’t represented by counsel when it filed its (perfectly serviceable) Notice of Opposition, so Runsome might have mistakenly thought that blocking a trademark opposition is the same thing as blocking the use of the applied-for trademark. If so, this is a common mistake. Most people think you need a registration to “trademark” something, so it stands to reason that if you block the registration, you block the whole process of “trademarking.” As explained here and in my last blog post, that’s not how it actually works, though.
Either way, Runsome ended up with a reasonable strategy. The problem with the second scenario, though, is that Runsome didn’t make an informed choice and so may not have made its best choice. If it really was willing to fight tooth and nail to stop CANDY CRUSH SAGA—and there’s some reason to think it was—then the lawsuit would’ve been the way to go.
Bad Luck Strikes
Through bad luck—and some diligent hard work on the part of King.com’s lawyers (again, an advantage from having lots of money)—Runsome’s strategy was torpedoed by the existence of an obscure, Blackberry-only game called CANDY CRUSHER. By purchasing the mark and attendant goodwill, King.com cut the opposition off at the knees, as I explained in my last post.
As it happens, the existence of CANDY CRUSHER doesn’t hurt the lawsuit nearly as much as it hurts the opposition.* Because lawsuits aren’t tied “to the papers,” Runsome would be able to argue that CANDY CRUSHER is not only a weak mark but also in a different market segment. People who still use Blackberries aren’t likely to also be using iPhones and Android devices, and the actual sales of CANDY CRUSHER are certain to be pathetic. In the real world, as opposed on the papers, there isn’t much likelihood of confusion between CANDY CRUSHER and CANDYSWIPE. And Runsome can make these arguments without having to concede the importance of CANDY to all of the marks.
* I would have put that in the PRO column for the lawsuit above, but that wouldn’t have been fair because Runsome couldn’t have known about it when it formulating its legal strategy.
Thanks for reading!