Loopt, a venture-backed social networking startup focused on mobile phone applications, has filed a lawsuit against Loop’d Network, a social network for action sports athletes and enthusiasts, over alleged trademark infringement.
The suit, filed earlier this month in the U.S. District Court of Northern California, asks the court to enjoin Loop’d Network from continuing to use the name. Loopt is also seeking damages and three times the profit that Loop’d Network has earned.
The next step in litigation comes this week as San Diego-based Loop’d Network is scheduled to file its response to Mountain View, Calif.-based Loopt’s complaint.Loopt claims to have contacted Loop’d Network about the trademark issue beginning last fall, but says that the two companies were unable to reach an agreement. The naming issue arose in November 2007 when Loop’d Network, which is incorporated under the name Sponsorhouse, rebranded itself toward a wider audience by adopting the new name.
The case is more than just a question of brand or trademark infringement, however. At issue is whether a general social networking site such as Loopt is the same thing as a targeted social network such as Loop’d Network.
The test for trademark infringement is whether consumers are likely to be confused by the two names, says Tom Villeneuve, an attorney at Gunderson Dettmer, who is unaffiliated with both companies.
“Using brand X for social networking and using the same name for dog food wouldn’t be a problem,” he says. “In a lawsuit like this, you determine if confusion would exist in the minds of consumers. Tthat’s your evidence.”
Brian Knapp, the vice president of corporate affairs at Loopt, puts it this way: “Consumers generally understand most social networking services to cover a wide range of subject matters and communities. Accordingly, consumers could easily be confused into believing that Loopt and Loop’d are related, given the similarity of these non-descriptive, coined marks.”
Gretchen Stroud, the counsel for Loop’d Network and a special counsel at Cooley Godward Kronish, had no comment. Don McGuire, the vice president of marketing at Loop’d Network, says that his company does not comment on pending litigation.
Loop’d Network, run by CEO Scott Tilton, was launched as a way to connect amateur athletes, in such “action” sports as skateboarding, skiing and surfing, to brand sponsors. The company boasts it has made 600,000 sponsorship matches. The company says the name change came about as a way to expand its reach with a more consumer-oriented brand.
Loopt, run by CEO Sam Altman, claims in its suit that it has been using its name since September 2006. It was previously named Radiate, then adopted the name Flipt before settling on Loopt. It offers location-based social networking software primarily for mobile phones, but also allows a user to map his or her friends’ locations via the Internet.
Loopt has raised almost $20 million from Y Combinator, New Enterprise Associates and Sequoia Capital. Loop’d Network has raised $1.9 million from undisclosed angel investors. Its board of directors includes Tom Horgan, the CEO of Acorn Technologies, and Lynn Reedy, a senior VP at eBay, according to regulatory filings. It is unclear if these board members are also investors.