# Atari Interactive, Inc. v. Hyperkin Inc.

> District Court, C.D. California · July 27, 2020

URL: https://www.frixlaw.com/law-library/cases/10633988

## Case

- **Court:** District Court, C.D. California
- **Decided:** July 27, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10633988

## How later opinions describe it (automated extraction)

- noting, with respect to plaintiff's clamed mark in the term “freecycle,” that “[s]ome trademarks enter our public discourse and become an integral part of our vocabulary.”
- noting, with respect to strength of trade dress factor, that “Tp|laintiffs have brought forth evidence demonstrating that the LF] trade dress is strongly associated with LFI and its products” based on showing of “secondary meaning”
- explaining that the secondary meaning of a mark 1s established through proof that the public associates the mark “with a single source, even if that source is anonymous”
- finding that goods were related where inter alia, “|t]he goods are often sold through the same . . . retailers, like Toys ‘R Us and WalMart”

## Opinion text

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

See ee CHRISTINAA. SNYDER
Catherine Jeang Not Present N/A
Deputy Clerk Court Reporter / Recorder Tape No.
Attorneys Present for Plaintiffs: Attorneys Present for Defendants:
Not Present Not Present
Proceedings: (IN CHAMBERS) - DEFENDANT’S MOTION FOR SUMMARY
JUDGMENT (Dkt. [41], filed June 1, 2020)
I. INTRODUCTION
Plaintiff Atari Interactive, Inc. (“Atari Interactive”) filed this action against
defendant Hyperkin Inc. (“Hyperkin”) on January 25, 2019. Dkt. 1 (“Compl.”). Atari
Interactive asserts claims for: (1) false designation of origin, in violation of 15 U.S.C. §
1125(a); (2) common law unfair competition; and (3) trademark dilution, in violation of 15
U.S.C. § 1125(c). Id. Hyperkin filed an answer on March 21, 2019. Dkt. 14 (“Answ.”).
The gravamen of Atari Interactive’s claims is that Hyperkin’s videogame console and
joystick controller infringe Atari Interactive’s trade dress in Atari Interactive’s own console
and joystick controller. Id.
Hyperkin filed a motion for summary judgment on June 1, 2020, dkt. 41 (“Mot.”),
and a statement of uncontroverted facts and conclusions of law on June 2, 2020, dkt. 42
(“SUF”). On June 15, 2020, Atari Interactive filed an opposition, dkt. 43 (“Opp.”), a
statement of genuine disputed facts, dkt. 43-1 (“SGDF’”), and a statement of additional
uncontroverted facts, dkt. 43-1 (“AUF”). On June 29, 2020, Hyperkin filed a reply, dkt.
44 (“Reply”), and an opposition to Atari Interactive’s AUF, dkt. 44-1 (“AUF Opp.”).
The Court took Hypkerkin’s motion under submission on July 17, 2020. Dkt. 47.
Having carefully considered the parties’ arguments, the Court finds and concludes as
follows.
II. BACKGROUND
Unless otherwise noted, the Court references only those facts that are uncontroverted
and as to which evidentiary objections have been overruled.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
A. The Atari 2600 Game Console and Joystick Controller
Atari Inc., a well-known videogame company, was founded in California in 1972.
SUF No. 6. In 1977, Atari Inc. began selling the Atar1 2600 videogame console (“the 2600
Console”) and the Atari 2600 joystick controller (“the 2600 Joystick”). Id. No. 7. Users
controlled the 2600 Console by using the 2600 Joystick. The 2600 Console and the 2600
Joystick are pictured below:
piel

Dkt. 41-2 at 11.
In 1980, the United States Patent and Trademark Office (“PTO”’) issued two design
patents, U.S. Patent Nos. D254,544 and D255,565, to Atari Inc. which covered the 2600
Joystick’s ornamental design. SUF No. 57. The design patents contain the following
illustrations depicting the 2600 Joystick’s ornamental design:

SS)
gl ©)
D254.544 .
ie oN BaP si fee | ye
sa = ie PoE 3 □□
e| ne aaron a A i al al a

Dkts. 43-36, 43-37.
Moreover, “[fljor over a decade, Atari Interactive has licensed products such as
apparel and consumer products that depict or incorporate the 2600 joystick design.”? AUF
No. 23. Atari Interactive promotes and sells these products through multiple channels,
including through its own website, through third-party websites, and at industry trade
shows.? AUF Nos. 24-25. Examples of these products are pictured below:

Hyperkin objects to this assertion on hearsay, original evidence, and relevancy
grounds. See AUF Opp. No. 23. The Court OVERRULES these objections. Hyperkin
also disputes Atari Interactive’s assertion that Atari Interactive’s apparel and consumer
products “depict or incorporate the 2600 joystick design,” since, according to Hyperkin,
“the depictions are not consistent” and “Atari Corp. abandoned the 2600 joystick in 1992,
and [Atari Interactive] has not sold replacements.” Id.
3 Hyperkin objects to Atari Interactive’s assertion regarding Atari Interactive’s trade
show activities on hearsay, original evidence, and relevancy grounds. See AUF Opp. No.
25. The Court OVERRULES these objections. Moreover, Hyperkin disputes Atari
Interactive’s assertion regarding Atari Interactive’s website on the grounds that Atari
Interactive’s website “does not show any joysticks for sale that are compatible with the
original Atari 2600 game machine.” AUF Opp. No. 24. Hyperkin also disputes Atari
Interactive’s assertions regarding its sale of promotional products at trade shows and on

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

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Dkt. 43-38.
D. Atari Interactive Declares Chapter 11 Bankruptcy in 2013
Atari Interactive declared Chapter 11 bankruptcy in 2013. SUF No. 64. The parties
dispute whether Atari Interactive did in fact—or was legally required to—list its purported
trade dress rights in the 2600 Console and the 2600 Joystick in its bankruptcy asset
schedules during its bankruptcy proceedings. Hyperkin contends Atari Interactive “failed
to identify any trade dress rights” in “the bankruptcy asset schedules|.|” SUF No. 65.
Atari Interactive’s Chief Executive Officer, Frederic Chesnais, asserts, however, that
“Atari Interactive’s bankruptcy schedules did list a variety of games that either depicted or
incorporated the 2600 joystick trade dress, and any failure to specifically separate the
joystick trade dress from other related intellectual property rights certainly did not reflect
any intent to waive such rights, nor any understanding that Atari Interactive did not hold
such rights.” Dkt. 43-14, Declaration of Frederic Chesnais (“Chesnais Decl.”) § 13.
Chesnais states that “[a]fter the 2013 reorganization, [he] led an initiative to return Atari
Interactive and its affiliates back to profitability and growth.” Id. 45. According to
Chesnais, “[t]hat initiative has succeeded, and the Atari Group is now profitable and has
been engaged in a variety of new and exciting projects for several years.” Id.

Atari Interactive’s website because, according to Hyperkin, “|t]he depictions presented are
not consistent and lack elements of the claimed trade dress,” “Atari Corp. abandoned the
2600 joystick in 1992, and [Atari Interactive] has not sold replacements.” AUF Opp. Nos.
24-25.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
E. Hyperkin’s CirKa A77 Joystick and Retron77 Console
Since its founding in 2007, Hyperkin has “developed various retro products to play
games for products that can no longer be found on the market.” SUF Nos. 77, 79. In 2016,
“Hyperkin began advertising and selling a joystick modeled off the old Atari 2600
joystick[.]” AUF No. 34. Hyperkin sourced this joystick through a Chinese manufacturer,
naming the product the “A77.” AUF No. 35: SUF No. 90. According to Hyperkin, its A77
Joystick is “marked with Hyperkin’s trademark, ““CirKa’ and packaged in highly
distinctive packaging].|” Dkt. 41-3, Declaration of Steven Mar (“Mar Decl.”) □ 11.
Hyperkin’s A77 CirKa Joystick and packing are pictured below:

Pu 2 5 5
als
; een ee ay

th oem □

Mar Decl., Exhs. A, C.
Hyperkin began marketing its Retron 77 console (“the Retron Console”) in 2017,
offering it for sale in July 2018. Mar Decl. § 18. Unlike “game systems that play some
old Atari 2600 games” and which “include games preloaded into the system,” the Retron77
Console allows “people . . . to play their old Atari 2600 cartridges, [sic] on a modern
television.” Mar Decl. □□ 18-19. According to Hyperkin, it “used its federally registered
Hyperkin trademark and federally registered Retron trademark on the Retron77 packing to
make sure customers knew that it was a Hyperkin product.” Id. § 23.
F. Negotiations Between Atari Interactive and Hyperkin
The parties agree that in 2016 or 2017, Hyperkin approached Atari Interactive to try
to obtain a license from Atari Interactive. The parties dispute, however, the potential
license’s scope. According to Atari Interactive, “Hyperkin approached Atari Interactive

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

to try to obtain a license to sell its imitation Atari joystick and console.”* AUF No. 36.
Hyperkin contends, however, that “Hyperkin never asked [Atari Interactive] for any sort
of license for the A77.” Dkt. 44-3, Reply Declaration of Steven Mar (“Reply Mar Decl.”)
| 3. Instead, Hyperkin asserts that it “approached [Atari Interactive] about the possibility
of making a console that could play original cartridges” and that Hyperkin “was interested
in licensing games from [Atari Interactive] so that the consoles would ship with built-in
games.” Id. The parties ultimately did not come to an agreement.
On June 20, 2017, Atari Interactive’s counsel sent Hyperkin a cease-and-desist letter.
Dkt. 43-16. The letter indicated that Hyperkin “has developed, is promoting|,] . . . and is
... offering for sale . .. what appears to be a console platform compatible with legacy Atari
cartridge games|.|” Id. at 2. In addition, Atari Interactive accused Hyperkin of
“prominently displaying registered trademarks and other intellectual properties owned by
Atari, including without limitation the Atari ‘Fuji’ logo and the classic Atari joystick] □□□
Id. Hyperkin’s counsel responded to Atari Interactive’s cease-and-desist letter on July 10,
2017, stating that Hyperkin “believes it has the right to sell products such as the CirKa A77
Joystick Controller.” Dkt. 43-17.
G. Atari Interactive’s Future VCS Console
“Atari Interactive has been actively creating, promoting, and readying to launch a
new gaming system that puts a 21st Century spin on the original 2600 designs” and which
“«nclude[s| a modernized version of the 2600 joystick design|.|” Brown Decl. § 18. Atari
Interactive’s future console and joystick are pictured below:

See Dkt. 43-8, Expert Report of Tim Lapetino (“Lapetino Report”) | 24-25.

4 The Court OVERRULES Hyperkin’s objections that Atari’s statement “itself is
vague, ambiguous and misleading in its use of the term ‘Atari.”” AUF Opp. No. 36.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Il. LEGAL STANDARD
Summary judgment is appropriate where “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The moving party bears the initial burden of identifying relevant portions of the
record that demonstrate the absence of a fact or facts necessary for one or more essential
elements of each claim upon which the moving party seeks judgment. See Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986).
If the moving party meets its initial burden, the opposing party must then set out
“specific facts showing a genuine issue for trial” in order to defeat the motion. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); see also Fed. R. Civ. P. 56(c), (e). The
nonmoving party must not simply rely on the pleadings and must do more than make
“conclusory allegations [in] an affidavit.” Lujan v. Nat’] Wildlife Fed’n, 497 U.S. 871,
888 (1990); see also Celotex, 477 U.S. at 324. Summary judgment must be granted for the
moving party if the nonmoving party “fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party will bear the
burden of proof at trial.” Id. at 322; see also Abromson v. Am. Pac. Corp., 114 F.3d 898,
902 (9th Cir. 1997).
In light of the facts presented by the nonmoving party, along with any undisputed
facts, the Court must decide whether the moving party is entitled to judgment as a matter
of law. See T.W. Elec. Serv.. Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 631 &
n.3 (9th Cir. 1987). When deciding a motion for summary judgment, “the inferences to be
drawn from the underlying facts . .. must be viewed in the light most favorable to the party
opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (citation omitted); Valley Nat’] Bank of Ariz. v. ALE. Rouse & Co., 121 F.3d
1332, 1335 (9th Cir. 1997). Summary judgment for the moving party is proper when a
rational trier of fact would not be able to find for the nonmoving party on the claims at
issue. See Matsushita, 475 U.S. at 587.
IV. DISCUSSION
Atari Interactive’s false designation of origin, dilution, and unfair competition
claims are based on Atari Interactive’s alleged trade dress rights. “In addition to protecting
registered marks, the Lanham Act, in § 43(a), gives a producer a cause of action for the use
by any person of ‘any word, term, name, symbol, or device, or any combination thereof
which is likely to cause confusion as to the origin, sponsorship, or approval of his or her
goods.” Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209 (2000) (citing 15 U.S.C.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
§ 1125(a)) (internal alterations omitted). Accordingly, the Lanham Act’s protections also
extend “to the design of a product as a form of trade dress.” Moldex-Metric, Inc. v.
McKeon Prod., Inc., 891 F.3d 878, 881 (9th Cir. 2018). “Trade dress is the ‘total image of
a product,’ including features such as size, shape, color, texture, and graphics.” Id. (internal
citation omitted). “Unregistered trade dress . . . may be protected under the Lanham Act.”
Id. “To sustain a claim for trade dress infringement,” a plaintiff must establish: “(1) that
its clarmed dress 1s nonfunctional; (2) that its claimed dress serves a source-identifying role
either because it is inherently distinctive or has acquired secondary meaning; and (3) that
the defendant’s product or service creates a likelihood of consumer confusion. Clicks
Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1258 (9th Cir. 2001).
Hyperkin moves for summary judgment as to each of Atari Interactive’s claims, as
well as for partial summary judgment as to the issues of likelihood of confusion,
functionality, and fame. See Mot. The Court notes, however, that “[b]ecause of the factual
nature of trademark disputes, summary judgment is disfavored in the trademark arena.”
Levi Strauss & Co. v. GIFM, Inc., 196 F. Supp. 2d 971, 974 (N.D. Cal. 2002) (citing
Interstellar Starship Servs.. Ltd. v. Epix Inc., 184 F.3d 1107, 1109 (9th Cir. 1999). With
these principles in mind, the Court addresses Hyperkin’s arguments in turn.
A. Atari Interactive’s Standing
Hyperkin argues that Atari Interactive “does not have standing to assert a trade dress
infringement claim because it did not acquire any rights from [the predecessor] Atari
Companies|.|” Mot. at 5. The Court does not find Hyperkin’s argument availing.
Hyperkin argues that “[t|he party claiming ownership of an unregistered mark must
have been the first to use the mark in the sale of goods.” Mot. at 5. Hyperkin further
asserts that “it is indisputable that Atari Inc. was the first to use the claimed trade dress by
selling the original 2600 Console and Joystick” and that Atari Interactive cannot “show a
chain of assignments of unregistered, existing trade dress from Atari Inc., to Atari Corp..,
to JTS, to Hasbro, and then to [Atari Interactive] and that the trade dress was not
abandoned.” Id. at 6. The Court disagrees.
To the extent that Hyperkin challenges Atari Interactive’s standing to enforce trade
dress rights regarding the 2600 Console and the 2600 Joystick simply because Atari Inc.,
Atari Interactive’s predecessor in interest, created the 2600 Console and the 2600 Joystick,
Hyperkin’s argument is unpersuasive. See, e.g., Comm. for Idaho’s High Desert, Inc. v.
Yost, 92 F.3d 814, 820 (9th Cir. 1996) (noting that party could enforce protected trade
name “Committee for Idaho’s High Desert” even where it was not “the first user of the

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
name” and explaining that, “as a practical matter, CIHD appears to be the direct and
immediate successor of any individuals who used the name between 1978 and 1981.”):;
Gen. Motors Corp. v. Let’s Make A Deal, 223 F. Supp. 2d 1183, 1191 (D. Nev. 2002)
(noting that “plaintiff and its predecessors have been using these marks and trade dress
since 1981.”):; Tamway Corp. v. Sunglass Hut Intl, 173 F.3d 862 (9th Cir. 1999)
(unpublished opinion) (“Tamway has standing to sue if it can establish that Metro, its
purported predecessor in interest, assigned the MINIREADER trademark and trade dress
rights to Tamway.”). Indeed, Atari Interactive submits documents detailing the chain of
title of assets, including intellectual property rights, associated with the Atari brand from
Atari Inc. to Atari Corp. to JTS to Hasbro and then to Infogrames. See Dkts. 43-23, 43-24,
43-25, 43-26, 43-27, 43-28, 43-29, 43-30, 43-31. Nor does the Court find compelling
Hyperkin’s clat1m—for which it provides no authority—that Atari Interactive “itself failed
to consider itself the owner of any trade dress rights” because it purportedly did not list
these rights in the asset schedules it filed during its bankruptcy proceeding. See In re
Electro-Motor, Inc., 390 B.R. 859, 869 (Bankr. E.D. Tex. 2008) (rejecting argument that
debtor’s failure to list intellectual property or trade secrets on debtor’s schedule of assets
during bankruptcy proceeding precluded debtor from suing to enforce intellectual property
rights in subsequent adversary case, explaining “[t]hat assertion is also without merit.”).
Similarly, the disputed record precludes the grant of summary judgment to Hyperkin
on the basis that any trade dress rights in the 2600 Console and the 2600 Joystick were
“abandoned.”* “Under the Lanham Act, a trade dress is not protectable if it has been
abandoned.” Ferrari S.p.A. Esercizio Fabbriche Automobili E Corse _v. McBurnie
Coachcraft Inc., No. 86-cv-1812-B-IEG, 1988 WL 391519, at *4 (S.D. Cal. Aug. 31,
1988). Abandonment of a mark may occur in two ways. See 15 U.S.C. § 1127. First,
abandonment of a mark occurs when “its use has been discontinued with intent not to
5 Hyperkin argues that Atari Interactive and its predecessors abandoned any trade
dress rights in the 2600 Console, since the original 2600 Console featured a wood grain
design, but the original console was subsequently replaced by other devices, including the
all-black Darth Vader 2600 Console and the 2600 Jr., that differed in design. Mot. at 6.
Atari Interactive’s opposition brief indicates, however, that it “will base its case at trial on
(a) Hyperkin’s A77 joystick design; and (b) Hyperkin’s promotion of its Retron77 console
in conjunction with the A77 joystick design.” Opp. at 3 n.1. Put differently, Atari
Interactive states that it “will not claim liability based on the Retron77 console in isolation”
and that “[t]o the extent that the complaint indicates otherwise, [it now] clarifies the scope
of its claims for trial.” Id.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

resume such use.” 15 U.S.C. § 1127. “Intent not to resume may be inferred from
circumstances,” and “[n]onuse for 3 consecutive years shall be prima facie evidence of
abandonment.” Id. Second, abandonment occurs “[w|hen any course of conduct of the
owner. . . causes the mark to . . . lose its significance as a mark.” Id.
It is undisputed that Atari Corporation ceased selling the 2600 Console and the 2600
Joystick in 1992. SUF No. 42. It is also undisputed that between 1996 to 2004, neither
JTS, HIAC, Infogrames, nor Atari Interactive designed, manufactured, released or sold any
standalone videogame console systems or any videogame console products. SUF Nos. 54—
55. However, “|a|bandonment is a question of fact.” Levi Strauss, 196 F. Supp. 2d at 976
(citing Rivard v. Linville, 133 F.3d 1446, 1449 (Fed. Cir.)). And, “ijt is axiomatic in
trademark law that the standard test of ownership is priority of use.” Halicki Films, LLC
v. Sanderson Sales & Mktg., 547 F.3d 1213, 1226 (9th Cir. 2008) (internal citation
omitted). Thus, “the first party to use an abandoned trademark in a commercially
meaningful way, after its abandonment, is entitled to exclusive use and ownership of the
trademark and trade dress.” California Cedar Prod. Co. v. Pine Mountain Corp., 724 F.2d
827, 828 (9th Cir. 1984); accord 3 J. Thomas McCarthy, McCarthy on Trademarks and
Unfair Competition § 17:2 (Sth ed., June 2020 Update) (“Once abandoned, a mark may be
seized immediately and the person so doing so may build up rights against the whole
world.”’). The finder of fact could reasonably determine, based on Atari Interactive’s sale
of the Plug and Play in 2002 and the Flashback 2 in 2005—both of which predated
Hyperkin’s sale of the CirKa A77 Joystick in 2016 and its sale of the Retron77 Console in
2017—that Atari Interactive resumed use of the trade dress, assuming arguendo that its
trade dress in the 2600 Console and 2600 Joystick was abandoned.°

6 The Court notes that “[a] party cannot claim that use subsequent to abandonment of
a mark has revived the rights obtained by the earlier use.” J. Thomas McCarthy, 3
McCarthy on Trademarks and Unfair Competition § 17:3 (Sth ed., June 2020 Update).
Although “a resumption of use . . . cannot cure the preceding abandonment,” a party can
resume using a mark, and “|s}uch a resumption represents a new and separate use with a
new date of first use.” Id. For that reason, the Court finds unavailing Hyperkin’s additional
arguments that: (1) Atari Interactive “cannot defend against a claim of abandonment by
relying on some residual goodwill generated through post-abandonment sales”; and (2) that
Atari Corp., JTS, and Hasbro did not sell the 2600 Console and Joystick at the
time any assignments occurred, any such assignments would not be accompanied by the
goodwill in the products, and thus would be invalid assignments in gross.” Mot. at 10.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Hyperkin further argues that Atari Interactive and its predecessors abandoned any
trade dress in the 2600 Console and the 2600 Joystick because, according to Hyperkin,
“every Atari company failed to stop numerous third-party sales of joysticks identical to the
2600 Joysticks.” Mot. at 7. However, the failure of an owner of a mark to prosecute
infringers is “relevant to the strength of the mark, not abandonment.” adidas-Am., Inc. v.
Payless Shoesource, Inc., 546 F. Supp. 2d 1029, 1078 (D. Or. 2008): accord J. Thomas
McCarthy, 3 McCarthy on Trademarks and Unfair Competition § 17:17 (Sth ed., June 2020
Update) (“In the typical trademark dispute, the relevance of failure to prosecute others 1s
not ‘abandonment,’ but the ‘strength’ of the senior user’s mark.”). Indeed, “[t]he owner of
a mark is not required to police every conceivably related use thereby needlessly reducing
non-competing commercial activity and encouraging litigation in order to protect a
definable area of primary importance.” Playboy Enterprises, Inc. v. Chuckleberry □□□□□□
Inc., 486 F. Supp. 414, 422-23 (S.D.N-Y. 1980). Moreover, the parties each submit
conflicting evidence regarding whether Atari Interactive has enforced its alleged trade
dress rights in the 2600 Console and the 2600 Joystick against other purported infringers.
For example, Hyperkin indicates that it “searched online and on Amazon.com and found
that there were many companies selling generic retro 2600 style joysticks.” Mar Decl. □□□
On the other hand, Atari Interactive’s Chief Executive Officer, Frederic Chesnais, attests
that Atari Interactive has taken action against alleged infringers, including: (1) sending a
cease-and-desist to Hyperkin; (2) bringing suit against “various companies selling products
depicting the 2600 joystick” including “a case we settled with SunFrog, a case that resulted
in a default judgment against RageOn, as well as pending cases against Redbubble,
ooShirts, and Teespring”’; and (3) sending cease-and-desist letters to “two other companies,
Innex and Video Game Advantage|.|” Chesnais Decl. § 11. These factual disputes
preclude the Court from granting summary judgment on this issue.
B. Functionality of 2600 Joystick
Hyperkin next moves for partial summary judgment on the issue of the 2600
Joystick’s functionality. Mot. at 16. According to Hyperkin, “[s]ince there 1s no registered
trade dress, Atari bears the burden of proving that the trade tress is nonfunctional.” Id. at
17. Hyperkin urges that Atari Interactive “cannot meet its burden of proof because of an
expired utility patent.” Id.
“No protection under the Lanham Act is available if the claimed trade dress is
functional.” Moldex-Metric, 891 F.3d at 881. “This requirement makes it very difficult
for sellers to use trademark rights to monopolize designs of products.” Blumenthal
Distrib., Inc. v. Herman Miller, Inc., 963 F.3d 859, 864 (9th Cir. 2020). For unregistered

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
trade dress, the party that seeks protection under the Lanham Act “has the burden of
proving that the matter sought to be protected is not functional.” 15 U.S.C. § 1125(a)(3).
“The trademark statutes do not define functionality.” Moldex-Metric, 891 F.3d at 881.
However, “[i]n TrafFix Devices, Inc. v. Marketing Displays, Inc., the Supreme Court split
functionality into two types, each with its own legal test.” Blumenthal, 963 F.3d at 865
(citing 532 U.S. 23, 32-33 (2001)). “The two types are ‘utilitarian functionality,’ which is
based on how well the product works, and ‘aesthetic functionality,’ which is based on how
good the product looks.” Blumenthal, 963 F.3d at 865 (citing Au-Tomotive Gold, Inc. v.
Volkswagen of Am., Inc., 457 F.3d 1062, 1067 (9th Cir. 2006)). “Ifthe claimed trade dress
has either type of functionality, it is unprotectable.” Blumenthal, 963 F.3d at 865.
In addition, a “plaintiff may define its claimed trade dress as the ‘overall appearance’
of its product,” and “such claimed trade dresses are subject to the tests for utilitarian and
aesthetic functionality, just like any other claimed trade dresses.” Blumenthal, 963 F.3d at
866. “[A]s a matter of law, a product’s ‘overall appearance’ is functional, and thus
unprotectable, where the whole product is ‘nothing other than the assemblage of functional
parts,’ and ‘even the arrangement and combination’ of those parts is designed to make the
product more functional.” Id. at *5 (citing Leatherman Tool Grp., Inc. v. Cooper Indus..,
Inc., 199 F.3d 1009, 1013 (9th Cir. 1999)). “Consistent with that rule, . . . the proper
standard for whether a claimed trade dress consisting of an ‘overall appearance’ is
functional is whether protecting the trade dress threatens to eliminate a substantial swatch
of competitive alternatives in the market.” Blumenthal, 963 F.3d at 866.
Hyperkin does not specifically indicate whether its functionality challenge is based
on “utilitarian functionality” or “aesthetic functionality.” Citing Disc Golf Ass’n, Inc. v.
Champion Discs, Inc., 158 F.3d 1002 (9th Cir. 1998), Hyperkin argues that “[flour factors
are typically considered to determine functionality|.|” Mot. at 17. “The Disc Golf factors
are: (1) whether the design yields a utilitarian advantage; (2) whether alternative designs
are available; (3) whether advertising touts the utilitarian advantages of the design; and (4)
whether the particular design results from a comparatively simple or inexpensive method
of manufacture.” Blumenthal, 963 F.3d at 865 (internal citation omitted). Because
Hyperkin invokes the four factors that the Ninth Circuit articulated in Disc Golf, and
because courts consider those factors in the context of utilitarian functionality, the Court
construes Hyperkin’s argument as one based on utilitarian functionality. See Blumenthal,
963 F.3d at 865 (“To determine whether [utilitarian functionality] is satisfied, we use the
four-factor test from [Disc Golf].”). The Court addresses Hyperkin’s arguments regarding
functionality in turn.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
1. Utilitarian Advantage
Here, Atari Interactive identifies the elements of its trade dress in the 2600 Joystick
as, inter alia, “the rectangular base with a hexagonal joystick mounted near the center, a
single prominent red button located at the top left corner of the base, and a dashed circle
circumscribing the base of the joystick[.]” Compl. § 13: see also Opp. at 21 (describing
design elements of “Joystick Trade Dress” as “the black and orange colors, rectangular
housing, hexagonal joystick, button, and rubber boot with concentric rings.”).’ These
elements are pictured below:

Compl. § 13.
Hyperkin argues that “[s]ince all the elements of the asserted trade dress were
included in the utility patent, or are admittedly functional, there can be no trade dress
protection for the joystick.” Mot. at 19. On September 14, 1982, Atari Inc., Atari
Interactive’s predecessor, obtained a utility patent, U.S. Patent No. 4,349,708 (“the utility
patent”), which encompasses certain elements of the 2600 Joystick. SUF No. 171. A
portion of the utility patent entitled “Summary of the Invention” indicates that: (1) “[t]he
present invention provides a joystick controller in which a conventional handle is moveable
radially with respect to its axis”; (2) “the present invention relies on a simple unitary
resilient member to provide all of the spring action necessary” which is “thus far more
reliable from a construction standpoint and a use standpoint, as well as being less expensive
to construct’; and (3) a “resilient boot is fastened to the handle to maintain it in its nominal
centered position when it is not being manually actuated.” Dkt. 41-2 at 403. Claim 13 of
the utility patent also describes the use of a “firing button projecting above the exposed
surface of the housing unit[.]” Id. at 405. Portions of the utility patent therefore appear to

7 The parties also refer to the dashed circle circumscribing the base of the joystick as
“the compass rose.”

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
refer to elements which also form the basis for Atari Interactive’s claimed trade dress,
including the rectangular housing, the joystick which is centrally situated with respect to
the base, the rubber boot, and the firing button. Further, the finder of fact could conclude
that the utility patent’s summary—which states that “[t]he present invention . . . avoids the
necessity of both wire springs and plastic springs,” “is more reliable from a construction
standpoint and a use standpoint,” and is “less expensive to construct”—indicate that these
elements, which form the bases for Atari Interactive’s claimed trade dress, confer some
utilitarian advantage. See Blumenthal, 963 F.3d at 865 (“A claimed trade dress has
utilitarian functionality if it is essential to the use or purpose of a product or affects its cost
or quality.”).
On the other hand, “functionality is generally viewed as an intensely factual issue.”
Millennium Labs.. Inc. v. Ameritox, Ltd., 817 F.3d 1123, 1129 (9th Cir. 2016) (internal
citations and alterations omitted). And while, “with respect to the factor of utilitarian
advantage, the existence of an expired utility patent is weighty evidence of functionality,
. that fact alone is not dispositive.” Disc Golf, 158 F.3d at 1006. To the contrary, a
“utility patent must be examined closely to ensure that the disclosure of the configuration
is primarily functional and not merely incidental.” Id. (internal citation omitted). Thus, a
plaintiff seeking to enforce its trade dress may establish that its claimed trade dress is
nonfunctional even where elements of the claimed trade dress appear in an expired utility
patent. See Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 516-17 (9th Cir. 1989)
(noting that “considerable support exists for a determination of functionality” where “[a|n
expired utility patent exists” but that plaintiff could nonetheless establish claimed trade
dress was nonfunctional). The disputed record before the Court prevents the Court from
making this determination at the summary judgment stage.°

8 As an example—and despite the fact that Atari Interactive’s predecessor previously
received a utility patent covering the 2600 Joystick—Frederic Chesnais, Atari Interactive’s
Chief Executive Officer, asserts that “[b]ased on my decades of experience in the video
game industry, I know that the 2600 joystick design does not yield a utilitarian advantage”
and that “compared to modern joysticks, the 2600 joystick design is simplistic.” Chesnais
Decl. § 10. The Court finds unavailing Hyperkin’s argument that Chesnais’ statement
should be stricken as a violation of the “sham affidavit” rule, simply because Chesnais
acknowledged, during deposition, that the joystick for the yet-to-be-released, future Atari
console features a “redesigned . . . rubber boot” that “allow|s] for flexibility and manual
ability[.|” Dkt. 44-2 at 44.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
The Court’s determination that the existence of the expired utility patent does not,
itself, require the grant of summary judgment to Hyperkin on the issue of functionality is
bolstered by the fact that the PTO previously issued two design patents to Atari’s
predecessor which cover the 2600 Joystick’s design. A “design patent protects the way an
article looks. In contrast, a utility patent protects the way an article is used and works.”
A-1 Elecs. Inc. v. Pang Chang, No. 02-cv-8579-DSF-CW, 2004 WL 7334928, at *2 (C.D.
Cal. Mar. 1, 2004). Thus, while the existence of a utility patent is evidence that the features
therein claimed as trade dress are functional, “[t]he existence of a design patent may be
some evidence of non-functionality.” In re RLM. Smith, Inc., 734 F.2d 1482, 1485 (Fed.
Cir. 1984): Jenny Yoo Collection, Inc. v. Watters Designs. Inc., No. 3:17-cv-3197-M, 2018
WL 3330025, at *3 (N.D. Tex. June 6, 2018) (“Because a design patent is granted only for
non-functional designs, it can serve as evidence that a plaintiffs trade dress is
nonfunctional.”); accord Govino, LLC v. WhitePoles LLC, No. 4:16-cv-06981-JSW-
KAW, 2017 WL 6442187, at *9 (N.D. Cal. Nov. 3, 2017) (“the fact that govino obtained
four design patents for various drinking glass and decanter designs incorporating the
govino Trade Dress 1s further evidence of non-functionality.”). That the PTO issued both
utility and design patents encompassing the 2600 Joystick further highlights the existence
of a triable issue—the functionality of Atari Interactive’s claimed trade dress in the 2600
Joystick—which the Court cannot determine, as a matter of law, at this juncture. See Fuji
Kogyo Co. v. Pac. Bay Int’L Inc., 461 F.3d 675, 684 (6th Cir. 2006) (“while the product
described in the “714 design patent is almost identical to that in the “488 utility patent, the
utility patent presents a presumption of functionality and the design patent presents a
presumption of nonfunctionality. Clearly, the variety of intellectual property in this case
demonstrates that the issue cannot be decided through evidentiary presumptions. This type
of contradiction cannot be resolved without a trial.”).
Hyperkin also argues that each of the individual elements of Atari Interactive’s
claimed trade dress are functional such that “there can be no trade dress protection for the
joystick.” Mot. at 18. Hyperkin asserts that: (1) the 2600 Joystick’s “hexagonal shape is
functional since it provides contour and texture to aid grip”: (2) “[t|he concentric rings help
center the joystick”: (3) “[t]he base was rectangular to fit into Atari Inc.’s console”; and
(4) “the dashed circle was functional because it let users know the directions for the
joystick.” Id, at 18-19. However, “a product’s overall appearance is necessarily functional
if everything about it is functional, not merely if anything about it is functional.”
Blumenthal, 963 F.3d at 867 (emphases in original).
For example, in Clicks, the Ninth Circuit determined that a pool hall “presented
sufficient evidence of the arbitrariness and non-functional nature of its design decisions

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
and the availability of alternative designs to clear the summary judgment hurdle” where
the pool hall claimed trade dress in its overall appearance. 251 F.3d at 1261. In that case,
the Ninth Circuit identified “various arbitrary elements” of the pool hall’s trade dress
including “the size, placement, and layout of the pool tables; the color combination,
including the contrast between the carpet and the dark wood; the lighting; the neon beer
signs, bar tap handles, and the like; the cue racks; the selection of video games; the floor
covering; the wall treatment; the drink rails: and the millwork.” Id. (emphasis added). The
Ninth Circuit explained that “[t]o be sure, many of these elements, considered in isolation,
may be functional. The issue, however, is whether, taken as a whole, the overall look and
feel of the establishment is functional.” Id. (emphases added).
At bottom, “in evaluating functionality as well as the other elements of a trade dress
claim, it is crucial that” the Court “focus nor on the individual elements, but rather on the
overall visual impression that the combination and arrangement of those elements create.”
Clicks, 251 F.3d at 1259 (emphasis in original). Here, even assuming that individual
elements of Atari Interactive’s claimed trade dress in the 2600 Joystick are functional—
such as the 2600 Joystick’s hexagonal shape, rectangular base, concentric rings, rubber
boot and dashed circles—whether the combination, configuration, and black and red color
scheme’ of these elements, somehow improves the 2600 Joystick’s use so as to render the
2600 Joystick’s “overall appearance” functional is a question for the fact finder. See
Moldex-Metric, 891 F.3d at 882, 887 (determining that functionality of plaintiff
manufacturer’s green ear plugs “is a question for the jury” where defendant argued that
green color of manufacturer’s ear plugs “‘achiev|ed] the function of allowing ear plugs to
be seen during safety compliance checks” but manufacturer argued that green color did not
improve use of ear plugs because “numerous color shades are equally or more visible than
its bright green color and would result in the same function of visibility during compliance
checks|.|”): cf. Talking Rain Beverage Co. Inc. v. S. Beach Beverage Co., 349 F.3d 601,
604 (9th Cir. 2003) (finding that “bike bottle design yields a utilitarian advantage” because
“bottle fits easily into a bicycle bottle holder,” the bottle’s “grip area helps the bottle to
retain its shape for reuse,” and “the grip area makes the bottle easier to grip, particularly
for bicyclists and other users who might use the bottle while exercising.”’).

° The United States Supreme Court has determined “that color alone, at least
sometimes, can meet the basic legal requirements for use as a trademark. It can act as a
symbol that distinguishes a firm’s goods and identifies their source, without serving any
other significant function.” Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159, 166 (1995).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
2. Remaining Golf Disc Factors
The parties dispute whether the remaining Golf Disc factors favor a finding that the
2600 Joystick 1s nonfunctional so as to create a genuine issue for trial. For example, as to
the second Golf Disc factor, Atari Interactive submits evidence indicating that there are
numerous alternative videogame controller designs available to its competitors. Atari
Interactive points to the controllers used in connection with other videogame systems, such
as the controller used with Nintendo’s Nintendo Entertainment System, SEGA’s Mega
Drive six-button controller, Nintendo’s N64 controller, Sony’s Playstation Dualshock
Controller, and Microsoft’s Xbox 360 controller:

Dkt. 43-20.
In response, as to the third Golf Disc factor, which considers whether advertising
touts the utilitarian advantages of the design, Hyperkin asserts that Atari Interactive “could
have, but failed to, present advertisements touting the ornamental nature of the features,
articles extolling the beauty or recognizability of the elements, or customer testimony
praising the joystick’s appearance.” Reply at 22. Hyperkin points out that the only
evidence that Atari Interactive submits to demonstrate that its advertisements do nof tout
the 2600 Joystick’s utilitarian advantages appears to be the declaration of Frederic
Chesnais, Atari Interactive’s own Chief Executive Officer, who attests that “Atari
Interactive has never advertised the functional advantages of the 2600 joystick design.”
Chesnais Decl. § 10. According to Hyperkin, then, Atari Interactive “has done nothing
more than point to . . . [the] lack of functional advertising, as evidence of non-
functionality.” Reply at 23. The Court, however, notes the “difficulties inherent in
requiring a party to prove a negative|.|” Uschold v. Carriage Servs., Inc., No. 17-cv-04424-
JSW, 2020 WL 1466172, at *6 (N.D. Cal. Mar. 6, 2020) (internal citation and alteration
omitted). In addition, while Hyperkin asserts that Atari Interactive failed to present
advertisements touting the 2600 Joystick’s ornamental features, Hyperkin does not present
evidence that Atari Interactive has advertised the 2600 Joystick’s utilitarian features either.
Cf. Talking Rain, 349 F.3d at 603-604 (finding that no genuine issue existed regarding
whether plaintiff water bottle manufacturer’s bottle was functional where its “advertising
tout[ed] its bottle’s utilitarian features,” “refer[red] to its bottle as the “Grip Bottle,’” and

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
used “Get a Grip!” slogan, explaining that “at least one meaning of its advertising is that
the bottle is easy to grip.”).
As to the fourth Disc Golf factor, the Ninth Circuit has concluded that “[a] functional
benefit may arise if the design achieves economies in manufacture or use.” Disc Golf, 158
F.3d at 1009 (internal citation and quotation marks omitted). Neither party appears to argue
whether this factor favors a finding that Atari Interactive’s claimed trade dress in the 2600
Joystick is functional.
Ultimately, in determining whether a party’s claimed trade dress 1s functional, “[n]o
one factor is dispositive; all should be weighed collectively|.]” Disc Golf, 158 F.3d at
1006. And, “[t]he issue of functionality has been consistently treated as a question of fact.”
Vuitton Et Fils S.A. v. J. Young Enterprises, Inc., 644 F.2d 769, 775 (9th Cir. 1981). For
these reasons, the Court declines to grant summary judgment to Hyperkin on the issue of
the 2600 Console’s functionality.
C. __Distinctiveness of 2600 Joystick Design
In order to establish trade dress rights, a plaintiff must also establish “that its claamed
dress serves a source-identifying role either because it is inherently distinctive or has
acquired secondary meaning|.]” Clicks, 251 F.3d at 1258. A mark “is inherently
distinctive if its intrinsic nature serves to identify a particular source.” Wal-Mart, 529 □□□□
at 210 (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)). “To
establish secondary meaning, a manufacturer must show that, in the minds of the public,
the primary significance of a product feature or term is to identify the source of the product
rather than the product itself.” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 851
n.11 (1982). Following the Supreme Court’s decision in Wal-Mart, “[t]o succeed on a
trade dress infringement based on product design, the plaintiff must show that her design
has attained secondary meaning.” Art Attacks Ink, LLC v. MGA Entm’t Inc., 581 F.3d
1138, 1145 (9th Cir. 2009). Put differently, “product design trade dress c[an] never be
inherently distinctive and always require|s] proof of secondary meaning.” J. Thomas
McCarthy, | McCarthy on Trademarks and Unfair Competition § 8:11 (Sth ed., June 2020
Update).
Here, the parties appear to agree that Atari Interactive must establish that its □□□□□□□
dress in the 2600 Joystick has acquired secondary meaning. But they disagree as to whether
triable issues exist regarding whether the 2600 Joystick has acquired secondary meaning.
The Court addresses the parties’ arguments in turn.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
1. Genuine Disputes Exist Regarding Whether the 2600 Joystick has
Become Generic
Hyperkin argues that Atari Interactive “cannot establish acquired distinctiveness in
the joystick design because it became generic.” Mot. at 7. According to Hyperkin, “the
2600 joystick design is generic due to every Atari company’s failure to police the claimed
trade dress, leading to numerous third-party sales of generic product.” Id. at 8. Hyperkin
further urges that “the 2600 Joystick design became so generic that it was used for non-
Atari products.” Id.
Hyperkin relies on the Ninth Circuit’s opinion in Freecycle Network, Inc. v. Oey,
505 F.3d 898 (9th Cir. 2007). In that case, the Ninth Circuit reasoned that “[w]here the
majority of the relevant public appropriates a trademark term as the name of a product (or
a service), the mark 1s a victim of “genericide’ and trademark rights generally cease.” Id.
at 905 (emphasis added). The Ninth Circuit explained that “[s]uch genericide can occur as
a result of a trademark owner’s failure to police the mark, resulting in widespread usage by
competitors leading to a perception of genericness among the public, who sees many sellers
using the same term.” Id. (internal citation omitted). Thus, “[g]enericide has spelled the
end for countless formerly trademarked terms, including ‘aspirin,’ ‘escalator,’ ‘brassiere,’
and ‘cellophane.’” Id.
Hyperkin’s argument regarding the alleged “genericide” of the 2600 Joystick is
unpersuasive. First, the Ninth Circuit’s discussion of “genericide” has typically been in
the context of a mark that is a word or term. See Freecycle, 505 F.3d at 905 (noting, with
respect to plaintiff's clamed mark in the term “freecycle,” that “[s]ome trademarks enter
our public discourse and become an integral part of our vocabulary.”) (internal citation
omitted): Elliott v. Google, Inc., 860 F.3d 1151, 1156 (9th Cir. 2017) (‘Genericide occurs
when the public appropriates a trademark and uses it as a generic name for particular types
of goods or services irrespective of its source.”’); accord San Diego Comic Convention v.
Dan Farr Prods., 336 F. Supp. 3d 1172, 1179 (S.D. Cal. 2018) (discussing “genericide” in
context of claimed mark in “Comic Con” name and noting that “|g]eneric terms are not
protectable because they do identify the source of a product.”). By contrast, at issue in this
case is Atari Interactive’s claimed trade dress in the overall appearance of the 2600 Joystick
and its design, not Atari Interactive’s claimed rights in a word mark. And, assuming
arguendo that “genericide” could apply in product design context, “[w]hether a mark 1s
generic is a question of fact.” Advertise.com, Inc. v. AOL Advert., Inc., 616 F.3d 974, 977
(9th Cir. 2010). Moreover, Hyperkin’s “genericide” argument is premised on Atari
Interactive’s alleged failure to police other purported infringers. But in declining to grant

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

summary judgment to Hyperkin on the issue of abandonment, the Court has already
determined that the disputed record precludes the Court from deciding—at the summary
judgment stage and as a matter of law—the extent to which Atari Interactive has policed
other alleged infringers.
2. Genuine Disputes Exist Regarding Whether the 2600 Joystick has
Secondary Meaning
The parties likewise dispute whether the 2600 Joystick has attained secondary
meaning. “Secondary meaning is required to establish the distinctiveness element of a
design trade dress claim.” OTR Wheel Eng’g, Inc. v. W. Worldwide Servs., Inc., 897 F.3d
1008, 1022 (9th Cir. 2018). “The trade dress of a product or service attains secondary
meaning when the purchasing public associates the dress with a particular source.”
Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837, 843 (9th Cir. 1987). “A
plaintiff may establish secondary meaning through direct and circumstantial evidence.”
Cont’] Lab. Prod., Inc. v. Medax Int’l, Inc., 114 F. Supp. 2d 992, 999 (S_D. Cal. 2000).
“Direct evidence, such as consumer surveys and direct consumer testimony, often provides
the strongest evidence of secondary meaning.” CytoSport, Inc. v. Vital Pharm., Inc., 617
F. Supp. 2d 1051, 1079 (E.D. Cal.) (internal citation omitted). “A plaintiff may also
establish secondary meaning through circumstantial evidence, such as: exclusivity,
manner, and length of use, amount and manner of advertising, amount of sales and the
number of customers, and plaintiff's established place in the market.” Cont’] Lab. Prod.,
114 F. Supp. 2d at 1000 (internal citations omitted). In addition, “[e]vidence of deliberate
copying may . . . support an inference of secondary meaning.” Id. (internal citation
omitted).
Hyperkin makes a number of arguments as to why, in its view, Atari Interactive fails
to raise a genuine dispute regarding whether the 2600 Joystick Console has attained
secondary meaning. Hyperkin first assets that “there are no surveys or consumer
declarations.” Mot. at 9. Indeed, it is undisputed that Atari Interactive and its expert, Tim
Lapetino, did not perform any surveys in this case. See SUF Nos. 75—76. And, the Ninth
Circuit has indicated that “[a]n expert survey of purchasers can provide the most persuasive
evidence of secondary meaning.” Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 615
(9th Cir. 1989). But the Ninth Circuit has also subsequently made “clear . . . that survey
evidence is only one of the most persuasive ways to prove secondary meaning, and not a
requirement for such proof.” ‘Yost, 92 F.3d at 822: accord J. Thomas McCarthy, 2
McCarthy on Trademarks and Unfair Competition § 15:30 (Sth ed., June 2020 Update)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
(“Survey data is direct evidence of secondary meaning. But survey evidence is not
required.”’).
Atari Interactive points to sufficient evidence in the record to raise a genuine dispute
regarding whether the 2600 Joystick has acquired secondary meaning. For example, in
connection with its motion for summary judgment, Hyperkin submits the declaration of its
Chief Executive Officer, Steven Mar. See Mar Decl. Mar attests that it “decided to sell”
its CirKa A77 Joystick “because its customers began asking whether Hyperkin carried
replacement joystick controllers for the old Atari 2600 systems.” Id. ] 6. Moreover, during
deposition, Mar testified that “[p]eople who are intro retro gaming” would recognize the
2600 Joystick. Dkt. 43-11, Deposition of Steven Mar (“Mar Dep. Tr.”) at 95:13—18. From
this evidence, a jury could reasonably conclude that because consumers specifically
recognize the 2600 Joystick, they attribute the 2600 Joystick to a particular source, even if
they do not necessarily know that source is Atari Interactive or its predecessors. See
Sazerac Co., Inc. v. Fetzer Vineyards, Inc., 251 F. Supp. 3d 1288, 1303 (N.D. Cal. 2017)
(“Consumers need not be able to identify the source of the product by name.”); Maljack
Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 887 (9th Cir. 1996) (explaining
that the secondary meaning of a mark 1s established through proof that the public associates
the mark “with a single source, even if that source is anonymous”).
In addition, the CirKa A77 Joystick’s packaging indicates that the CirKa A77
Joystick is an “Atari Style” joystick controller:

he gs

wee
Mar Decl., Exh. A. Based on Hyperkin’s own branding of the CirKa A77 Joystick as “Atari
Style,” the finder of fact could reasonably conclude that Atari Interactive’s claimed trade
dress has attained secondary meaning. See, e.g., Brighton Collectibles, Inc. v. Coldwater
Creek Inc., No. 06-cv-01848-H-POR, 2009 WL 10671818, at *6 (S.D. Cal. Apr. 22, 2009)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
(determining that defendant retailer’s internal emails, including, inter alia, a request for
“more “brighton-y’ look for Fall,” are “relevant to prove secondary meaning, as they tend
to show that Brighton products have a distinct look that is well-known.”); Faberge, Inc. v.
Saxony Prod., Inc., 605 F.2d 426, 428 (9th Cir. 1979) (“the trial court properly considered
indirect evidence of secondary meaning, including . . . the fact that Saxony had
intentionally simulated the Brut trade dress in developing its packaging for Bravado|.]”);
Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 157 (9th Cir. 1963)
(finding secondary meaning in name “Black & White,” and noting that when a defendant
uses a name that incorporates the name of an already-existing product, “[t]he only possible
purpose could have been to capitalize upon the popularity of the name chosen.”’). Further,
Hyperkin’s Chief Executive Officer, Steven Mar, testified during deposition that the CirKa
A77 Joystick was modeled after the 2600 Joystick. Mar Dep. Tr. at 70:9-11; cf. Cont’]
Lab. Prod., 114 F. Supp. 2d at 1000 (“Evidence of deliberate copying may . . . support an
inference of secondary meaning.”).
Atari Interactive points to further circumstantial evidence from which the finder of
fact could determine that the 2600 Joystick has attained secondary meaning. Indeed,
“recognition by the trade, by the media and by potential customers” are sources of evidence
regarding whether trade dress has attained secondary meaning. J. Thomas McCarthy, 2
McCarthy on Trademarks and Unfair Competition § 15:30 (Sth ed., June 2020 Update).
Here, Atari Interactive submits evidence that: (1) Hyperkin’s own expert, Curt Vendel, co-
authored a book entitled “Atari Inc.—Business Is Fun,” which indicates that the 2600
Joystick “would be the mainstay for the [2600 Console] and many other products to follow
for years to come,” and that “this model of joystick would become nearly as iconic for
Atari as its ‘Fuji’ logo”; (2) news articles that have been written about the 2600 Joystick,
the 2600 Console, and Atari Interactive’s future videogame console, including one which
indicates that “[a]fter all, there’s no gaming accessory quite as iconic as the” 2600 Joystick:
and (3) other books have written about the history of Atari Interactive’s predecessors, the
2600 Console, and the 2600 Joystick. Dkts. 43-9; 43-20, 43-21.
“Whether a particular trade dress has acquired secondary meaning is a question of
fact|.]” First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1383 (9th Cir. 1987). Thus,
the finder of fact—not the Court—imust determine whether the 2600 Joystick has attained
secondary meaning sufficient to establish the distinctiveness element of Atari Interactive’s
trade dress claims.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
D. Likelihood of Confusion
“Regardless of whether a trade dress is non-functional and is inherently distinctive
(or has acquired secondary meaning), there is no infringement if” the owner of the claimed
trade dress “cannot prove a likelihood of confusion among consumers.” Lisa Frank, Inc.
v. Impact Int’l, Inc., 799 F. Supp. 980, 993 (D. Ariz. 1992). “A likelihood of confusion
exists when consumers are likely to assume that a product or service is associated with a
source other than its actual source because of similarities between the two sources’ marks
or marketing techniques.” Nova Wines, Inc. v. Adler Fels Winery LLC, 467 F. Supp. 2d
965, 979 (N.D. Cal. 2006). “The Ninth Circuit has identified eight factors (‘the Sleekcraft
factors’) to help guide the analysis to determine whether such confusion is likely: (1) the
similarity of the mark(s) or trade dress, (2) the strength of the mark(s) or trade dress, (3)
evidence of actual confusion, (4) the proximity or relatedness of the goods, (5) the degree
to which the marketing channels used for the goods converge, (6) the type of goods and
the degree of care likely to be exercised by the purchasers, (7) the defendant’s intent in
selecting the mark or trade dress, and (8) the likelihood of expansion of the product lines.”
Fiji Water Co., LLC v. Fiji Mineral Water USA, LLC, 741 F. Supp. 2d 1165, 1177-78
(C.D. Cal. 2010) (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979)). “The
test is a pliant one—some factors are more important than others, and the factors need not
be mechanically added up in order to find a likelihood of confusion.” Fiji Water, 741 F.
Supp. 2d at 1178. “Given the highly fact-intensive nature of the Sleekcraft inquiry,
summary judgment on ‘likelihood of confusion’ grounds is generally disfavored.”
Asuragen, Inc. v. Accuragen, Inc., No. 16-cv-05440-RS, 2018 WL 558888, at *3 □□□□□
Cal. Jan. 25, 2018) (internal citation omitted). Accordingly, “the Ninth Circuit has
cautioned district courts to ‘grant summary judgment motions sparingly, as careful
assessment of the pertinent factors that go into determining likelihood of confusion usually
requires a full record.’” Id. (internal citation omitted).
Hyperkin makes a number of arguments as to why, in its view, partial summary
judgment 1s appropriate on the issue of likelihood of confusion. None are availing.
1. Hyperkin’s Reliance on Deckers Outdoor Corp.
Hyperkin argues that “no one is confused as to the source of Hyperkin’s products.”
Mot. at 12. That is because, according to Hyperkin, “[w|here a defendant does not sell a
plaintiff's product as their own, there is no false designation origin based upon similar trade
dress.” Id. at 11. Hyperkin asserts, then, that “[s]ince Hyperkin does not identify [Atari

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Interactive] as the source of its products, and it identifies Hyperkin products with its own
trademarks, no tenable false origin claim exists.” Mot. at 12. The Court disagrees.
In Dastar Corp. v. Twentieth Century Fox Film Corp., the United States Supreme
Court determined that Twentieth Century Fox (“Fox”) could not maintain a Lanham Act
claim for false designation of origin against Dastar, a competing film production company,
based on Dastar’s uncredited use of footage from Fox’s 1949 “Crusade” television series,
which was based on then-General Dwight D. Eisenhower’s book on the Second World
War. See generally 539 U.S. 23 (2003). In that case, “Dastar purchased eight beta cam
tapes of the original version of the Crusade television series, which 1s in the public domain,
copied them, and then edited the series.” Id. at 26 (emphasis in orginal). Dastar
“manufactured and sold” the compilation “as its own product.” Id. at 27. Neither the
compilation, its packaging, nor its screen credits made any reference to Fox’s Crusade
television series. Id.
The Supreme Court explained that the gravamen of Fox’s claim “1s that, in marketing
and selling [Dastar’s compilation] as its own product without acknowledging its nearly
wholesale reliance on [Fox’s] Crusade television series, Dastar has made a ‘false
designation of origin . . . which is likely to cause confusion as to the origin of [its] goods.”
Dastar, 539 U.S. at 31 (internal citation and alterations omitted). The Supreme Court
reasoned that “[i]f ‘origin’ refers only to the manufacturer or producer of the physical
that are made available to the public (in this case the videotapes), Dastar was the
origin. If, however, ‘origin’ includes the creator of the underlying work that Dastar copies,
then someone else (perhaps Fox) was the origin of Dastar’s product.” Id. “In sum, reading
the phrase ‘origin of goods’ in the Lanham Act in accordance with the Act’s common-law
foundations (which were not designed to protect originality or creativity), and in light of
the copyright and patent laws (which were),” the Supreme Court “conclude[d] that the
phrase refers to the producer of the tangible goods that are offered for sale, and not to the
author of any idea, concept, or communication embodied in those goods.” Id. at 37
(emphases in original).
In Deckers Outdoor Corp. v. J.C. Penney Co. Inc., upon which Hyperkin principally
relies, another court in the Central District of California, determined, based on Dastar, that
a boot manufacturer could not state a claim for false designation of origin against a retailer
based on the manufacturer’s claimed trade dress. See generally 45 F. Supp. 3d 1181 □□□□□
Cal. 2014). In that case, Deckers, the manufacturer, alleged that JC Penney, the retailer,
“has offered for sale ‘knock-off UGG boots, which infringe upon the Bailey Button trade
dress and design patents.” Id. at 1183. The court dismissed Deckers’ false designation of

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
origin claim, reasoning that Deckers’ “proposed point of distinguishment—.e., that Dastar
involved a reverse passing-off claim whereas Deckers has brought a passing-off claim—
does not remove this case from Dastar’s grasp.”!° Deckers, 45 F. Supp. 3d at 1185. The
court noted that “Deckers does not allege that JC Penney has sold Deckers’s Bailey Button
Boots as JC Penney’s own products. Rather, Deckers confusingly contends that JC Penney
has appropriated Deckers’s Bailey Button Boot trade dress on to JC Penney’s own boots
and then caused consumer confusion as to the origin of JC Penney’s boots.” Id. The court
therefore determined that “[u|nless JC Penney sold Deckers boots as its own—thus
changing the ‘origin’ for Lanham Act purposes—the fact remains that JC Penney is the
origin of its own goods. Deckers may not use § 1125(a) as ‘a species of perpetual patent
and copyright’ to attach Lanham Act liability to what is more properly the province of
patent and copyright law.” Id. at 1186.
Here, Hyperkin asserts that “[l]ike the defendant in [Deckers], Hyperkin identifies
its CirKa A77 and Retron77 products as originating from Hyperkin itself, not [Atari
Interactive].” Mot. at 11. Hyperkin urges that it “does this through the use of its registered
trademarks and disclaimers.” But Hyperkin’s reliance on Deckers 1s misplaced for several
reasons.
For instance, “[a] decision of a federal district court judge is not binding precedent
in either a different judicial district, the same judicial district, or even upon the same judge
in a different case.” Camreta v. Greene, 563 U.S. 692, 709 n.7 (2011) (internal citation
omitted). To the contrary, “[d]istrict courts are bound by the law of their own circuit.”
Hasbrouck v. Texaco, Inc., 663 F.2d 930, 933 (9th Cir. 1981). The Court is therefore not
bound by Deckers. Moreover, in a post-Dastar decision, the Ninth Circuit has determined
that plaintiffs could maintain a claim for false designation of origin, even where the
defendant did not literally “pass off” its goods as those of the plaintiffs and the defendant
included “disclaimers” on its products “that deny any connection to” the plaintiffs. See
Au-Tomotive Gold, 457 F.3d at 1065, 1077 (rejecting defendant’s argument “that the
disclaimers on its packaging dispel any potential for confusion” and explaining that “[e}ven
if disclaimers may in some cases limit the potential for confusion, here they do not.”); see
also Mercado Latino, Inc. v. Indio Prod., Inc., 649 F. App’x 633, 634 (9th Cir. 2016)

10 “Passing off (or palming off, as it is sometimes called) occurs when a producer
misrepresents his own goods or services as someone else’s. “Reverse passing off,’ as its
name implies, is the opposite: The producer misrepresents someone else’s goods or
services as his own.” Dastar, 539 U.S. at 27 n.1 (internal citations omitted).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
(unpublished opinion) (explaining that Dastar “addressed the narrow instance in which a
plaintiff alleges the defendant has violated the Lanham Act by falsely designating the origin
of ‘a communicative product,’ . . . such as a book or a video” rather than “traditional
trademark and trade dress claims that allege a defendant’s production of tangible goods are
so similar to [those of] the plaintiffs as to confuse consumers.”) (internal alterations
omitted). Moreover, courts and commentators have questioned the Deckers court’s
reliance on Dastar. See, e.g., Green Crush LLC v. Paradise Splash I, Inc., No. 17-cv-
01856-CJC-JDE, 2018 WL 4940825, at *6 n.3 (C.D. Cal. May 3, 2018) (rejecting
argument, based on Deckers, that “[p]laintiff’s false designation of origin claim fails as a
matter of law.”): accord J. Thomas McCarthy, 5 McCarthy on Trademarks and Unfair
Competition § 27:78.30 n.8 (Sth ed., June 2020 Update) (describing Deckers as
“Te|rroneously finding that the rule in Dastar precludes a § 43(a) claim of trade dress
infringement|.]”). The Court therefore declines to grant Hyperkin summary judgment on
this basis.
2. The Sleekcraft Factors
Having determined that neither Dastar nor Deckers preclude Atari Interactive’s false
designation of origin claim, the Court next determines whether genuine disputes exist as to
the likelihood of confusion between the parties’ products.
a. Strength of the Trade Dress
“The stronger a mark—meaning the more likely it is to be remembered and
associated in the public mind with the mark’s owner—the greater the protection it is
accorded by the trademark laws.” Brookfield Comme’ns, Inc. v. W. Coast Entm’t Corp.,
174 F.3d 1036, 1058 (9th Cir. 1999). “This ‘strength’ of the trademark is evaluated in
terms of its conceptual strength and commercial strength.” GoTo.com, Inc. v. Walt Disney
Co., 202 F.3d 1199, 1207 (9th Cir. 2000). “Marks can be conceptually classified along a
spectrum of increasing inherent distinctiveness.” Id. From weakest to strongest, marks are
characterized “from ‘generic,’ afforded no protection; through ‘descriptive’ or
“suggestive,” given moderate protection; to ‘arbitrary’ or ‘fanciful,’ awarded maximum
protection.” Nutri/Sys., Inc. v. Con-Stan Indus., Inc., 809 F.2d 601, 605 (9th Cir. 1987).
By contrast, “commercial strength” refers to “the marketplace recognition value of the
mark.” Lahoti v. Vericheck, Inc., 636 F.3d 501, 508 (9th Cir. 2011). “Likelihood of
confusion in the trade dress context is evaluated by reference to the same factors used in
the ordinary trademark context” including, inter alia, “strength of the trade dress.” adidas
Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 755 (9th Cir. 2018).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Here, Hyperkin asserts that “[t]he claimed trade dress is weak.” Mot. at 12.
According to Hyperkin, “[t]he conceptual strength in the 2600 Console trade dress is non-
existent because, under [Wal-Mart], product design cannot be inherently distinctive.” Id.
at 12-13. Hyperkin further asserts that “any scope of protection [in the 2600 Console]
would [be] very narrow due to widespread third-party use of wood grain and ribbing
elements in electronics and videogames.” Id, at 13. Indeed, one of Hyperkin’s experts,
Curt Vendel—a videogame historian and former designer who was previously an
independent contractor to Atari Interactive—opines that: (1) “Atari Inc. designed the
original VCS/2600 console to include wood grain because that was the style of the times,
a style used by many electronic game systems and in general consumer electronic
products”; (2) “[nJumerous other video game companies used wood-grain or mbbing in
their consoles in the 1970s and early 1980s”; and (3) that “[r]ibbing is also a common
element used for video game systems over the past few decades” such that “Nintendo,
Sega, Sony and Microsoft all used ribbing in their systems.” Dkt. 41-5, Declaration of Curt
Vendel (“Vendel Decl.) 4] 10—11, 16. Hyperkin’s other expert, Ian Bogost, “a key figure
in videogame studies . . . and digital culture[,|’” renders similar opinions regarding the use
of the wood grain. Dkt. 41-4, Exh. B, Expert Report of Ian Bogost (“Bogost Report”) 4
3, 18.
In response, Atari Interactive asserts that the 2600 Console “became the first
widespread home video game console, selling an estimated 30 million units,” and that
design of the 2600 joystick in particular, i.e., its single, bright, orange-red button,
matching compass rose graphic, and the protective joystick boot — became synonymous
with the Atari brand.”!! Opp. at 3. In support of its argument, Atari Interactive relies on
the report of its expert, Tim Lapetino, a design and public relations executive whose work
has focused on logo design and brand identity and who previously served as an adjunct
professor at Chicago Portfolio School and the Executive Director of the Museum of Video
Atari Interactive “clarifies that it will not argue at trial that” Hyperkin’s Retron77
Console “in isolation violates the Lanham Act. Rather, Atari Interactive will assert at trial
that the Retron77 is relevant in that it was unveiled in a promotional campaign that depicted
it together with the [CirKa] A77.” Opp. at 19 (emphasis in original). “In other words, a
facsimile of the 2600 joystick was used to promote an imitation of the 2600 console.” Id.
at 19-20. According to Atari Interactive, then, “[i]n combination, a reasonable juror could
find an unlawful false designation of origin and unfair competition where consumers
viewed the Joystick Trade Dress next to a wood-grained console clearly inspired by the
original 2600 console.” Id. at 20.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Game Art. See Lapetino Report. Lapetino opines that “[nJot only was the Atari 2600
commercially successful, selling an estimated 30 million units over its lifespan, but its
popularity also helped make the console and its accompanying design elements iconic.”
Lapetino Report § 19. According to Lapetino, “[t]he heavy advertising and marketing
created and employed by Atari ensured that the overall design and visual presentation of
the console would go on to symbolize” Atari. Id.; cf, Sutter Home Winery, Inc. v. Madrona
Vineyards, L.P., No. 05-cv-0587 MHP, 2005 WL 701599, at *9 (N.D. Cal. Mar. 23, 2005)
(noting that “even if plaintiff's mark were not conceptually distinctive, it is possible for a
mark to acquire ‘commercial strength’ through use in commerce” and determining that
“evidence of substantial . . . promotional efforts undertaken by plaintiff and its predecessor-
in-interest” and “extensive sales . . . support a conclusion that plaintiff's mark is
commercially as well as conceptually strong.”).
Some courts and commentators have indicated that the “generic” to “arbitrary”
spectrum may be inapt in the context of claims for trade dress infringement. See Sazerac,
251 F. Supp. 3d at 1306 n.15 (noting that the Supreme Court’s decision in “Walmart
suggests that the spectrum is limited to word marks.”); see also J. Thomas McCarthy, 2
McCarthy on Trademarks and Unfair Competition § 11:4 (Sth ed., June 2020 Update)
(“The spectrum of descriptive, suggestive, arbitrary and fanciful was created to categorize
word marks. It is not suitable for non-word designations such as shapes and images and
trade dress such as package and product design.”). Assuming arguendo that the spectrum
applies to trade dress claims, the Ninth Circuit has determined that “[w]hich category a
mark belongs in is a question of fact.” Zobmondo Entm’t, LLC v. Falls Media, LLC, 602
F.3d 1108, 1113 (9th Cir. 2010). Other courts have looked to whether the trade dress has
attained secondary meaning to determine the strength of the claimed trade dress. See Lisa
Frank, 799 F. Supp. at 997 (noting, with respect to strength of trade dress factor, that
“Tp|laintiffs have brought forth evidence demonstrating that the LF] trade dress is strongly
associated with LFI and its products” based on showing of “secondary meaning”); accord
Glob. Tobacco, LLC v. R.K. Co., No. 15-cv-05227-RGK-PJW, 2015 WL 12911451, at *5
(C.D. Cal. Sept. 24, 2015) (“Plaintiff's showing that the Clipper Trade Dress has acquired
secondary meaning, and thus commercial strength, weighs in favor of a likelihood of
confusion.”). The Court has already determined that genuine disputes exist regarding
whether the 2600 Joystick has attained secondary meaning.
“A mark’s overall strength is relative and cannot be determined by mechanistically
assessing its conceptual or commercial strengths.” M2 Software, Inc., v. Madacy Entm’t,
421 F.3d 1073, 1081 (9th Cir. 2005). In accordance with the foregoing, the Court cannot

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
determine, at the summary judgment stage, the strength of Atari Interactive’s claimed trade
dress in the 2600 Console and the 2600 Joystick.
b. Proximity of the Goods or Services
“The proximity or relatedness of goods is relevant to determine whether the products
‘are likely to be connected in the mind of a prospective purchaser.’” Mattel, Inc. v. MGA
Entm’t, Inc., 782 F. Supp. 2d 911, 1008 (C.D. Cal. 2011) (citing Fleischmann, 314 F.2d at
159). “Where goods are related or complementary, the danger of consumer confusion is
heightened.” E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1291 (9th Cir.
1992). “[T]he danger presented is that the public will mistakenly assume there is an
association between the producers of the related goods, though no such association exists.”
Sazerac, 251 F. Supp. 3d at 1305-1306 (internal citation omitted). “The proximity of
goods is measured by whether the products are: (1) complementary; (2) sold to the same
class of purchasers; and (3) similar in use and function.” Network Automation, Inc. v.
Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1150 (9th Cir. 2011).
Hyperkin contends that its Retron77 Console and CirKa A77 Joystick are unrelated
to the 2600 Console and the 2600 Joystick. For example, Hyperkin’s Retron77 Console
an interchangeable cartridge video-game system that plays cartridge ROMs built to run
on the [2600 Console] and its compatible successors. To use it, the customer would need
to acquire original[s] or make their own Atari [2600 Console|-compatible cartridges.”
Bogost Decl. 24. By contrast, Atari Interactive’s “Flashback devices are not video-game
consoles” because “[v|ideo-game consoles . . . are . . . hardware devices that connect to a
television and allow users to insert compatible cartridges, disks, or cards in order to play a
variety of games. The Flashback devices are totally incapable of playing those cartridges.”
Id. § 23. Stated differently, whereas Hyperkin’s Retron77 Console allows users to play
videogames originally designed for the 2600 Console by inserting those games’ decades-
old, physical cartridges, Atari Interactive’s current Flashback devices, which incorporate
its clarmed trade dress in the 2600 Console and 2600 Joystick, come with games pre-
installed on the devices.
That Atari Interactive’s devices, which incorporate its claimed trade dress in the
2600 Console and 2600 Joystick, and Hyperkin’s Retron77 Console are not completely
interchangeable does not mean that they are “unrelated” for the purposes of the Sleekcraft
analysis. To the contrary, the Ninth Circuit has determined that “[t]he use need not be the
same as, nor one 1n competition with the original use. The question is, are the uses related
so that they are likely to be connected in the mind of a prospective purchaser?”

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Fleischmann, 314 F.2d at 159; accord Monster Energy Co. v. BeastUp LLC, 395 F. Supp.
3d 1334, 1353 (E.D. Cal. 2019) (“Goods are ‘related’ if customers are likely to mistakenly
think that the infringer’s goods come from the same source as the senior user’s goods or
are sponsored by, affiliated with or connected with the senior user.”) (internal citation
omitted); accord SunEarth, Inc. v. Sun Earth Solar Power Co., 846 F. Supp. 2d 1063, 1077
(N.D. Cal. 2012) (“Defendants argue that, because they sell photovoltaic products, which
collect electricity that can be sold to the grid, and Plaintiffs do not sell photovoltaic
products and instead sell solar collectors, the parties’ products are dissimilar, precluding a
finding of confusion. However, Defendants focus on exact identity of products, taking too
a view of relatedness.”’); see also Moroccanoil, Inc. v. Zotos Int’l, Inc., 230 F. Supp.
3d 1161, 1173 (C.D. Cal. 2017) (noting that “[t]he Ninth Circuit has held that goods as
dissimilar as movies and sci-fi merchandise are proximate goods.’’).
In addition, Hyperkin’s argument regarding its Retron77 Console does not foreclose
Atari Interactive’s separate claim that Hyperkin’s CirKa A77 Joystick infringes Atari
Interactive’s trade dress rights in the 2600 Joystick. See Compl. § 20 (alleging that
Hyperkin’s “CirKa A77 joystick controller incorporates [the] same . . . distinctive design
elements that make up part of the Atari joystick controller’s trade dress.”). The finder of
fact could conclude that the CirKa A77 is related to Atari Interactive’s products because,
during deposition, Steven Mar, Hyperkin’s Chief Executive Officer, testified that the CirKa
A77 was compatible with both the original 2600 Console and Atari Interactive’s modern
Flashback devices. Mar. Dep. Tr. at 110:23—112:10; cf. M2 Software, 421 F.3d at 1082
(“Where the goods are . . . complementary, the danger of confusion is heightened.”’). And,
courts have also determined that goods may be related where they are sold through the
same channels. See, e.g., Mattel, 782 F. Supp. 2d at 1008 (finding that goods were related
where inter alia, “|t]he goods are often sold through the same . . . retailers, like Toys ‘R
Us and WalMart”). Here, Atari Interactive and Hyperkin both appear to sell their products
through some of the same channels including Walmart, Target, and Amazon. See Brown
Decl. 4] 9, 12; Mar Decl. § 3.
The disputed record prevents the Court from determining, at this juncture, whether
the parties’ products are so related that they present a danger of consumer confusion. See
Calista Enterprises Ltd. v. Tenza Trading Ltd., 43 F. Supp. 3d 1099, 1126 (D. Or. 2014)
(denying motion for summary judgment and noting that the “proximity of goods” factor
“4s disputed and should be resolved by the factfinder.”’).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

c. Similarity of the Trade Dress
“The similarity of the trade dress has always been considered a critical question in
the likelihood of confusion analysis.” Fiji Water, 741 F. Supp. 2d at 1178 (internal citation
omitted). “Obviously, the greater the similarity between the two trade dresses at issue, the
greater the likelihood of confusion.” Id. (internal citation and alteration omitted). “To
assess similarity, courts should consider the two trade dresses in their entirety and as they
appear in the marketplace, judge similarity in terms of appearance, sound, and meaning,
and weigh similarities more heavily than differences.” Id.
The similarity inquiry requires the Court to compare the parties’ products at issue in
this case. See GoTo.com, 202 F.3d at 1205—06. In the trade dress context, the inquiry
requires a “visual inspection.” Fiji Water, 741 F. Supp. 2d at 1177. The 2600 Joystick,
Hyperkin’s CirKa A77 Joystick, the 2600 Console, and Hyperkin’s Retron77 Console are
pictured below:
2600 Joystick CirKa A77 Joystick 2600 Console Retron77 Console
errr 3 im,

a — □ tv □□

Dkt. 41-2, Exh. 1; Bogost Decl., Exh. C. The parties’ products appear to share several
common features. For example, the 2600 Joystick and the CirKa A77 feature a square and
black base, a single red firing button that is situated at the top left, a hexagonal and black
joystick, a black rubber boot with concentric rings that surrounds the joystick, and a dashed
circle that circumscribes the base of the rubber boot and joystick. With respect to the 2600

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
Console and the Retron 77 Console, both are rectangular in shape and feature wood grain
and black ribbing.
Hyperkin urges that “the products differ completely in appearance.” Mot. at □□□□□□
With respect to the 2600 Console and the Retron77 Console, Hyperkin’s expert, Ian
Bogost, points out the purported differences between the consoles, including 1n, inter alia:
(1) shape, (2) detail: (3) front face; (4) bezel; and (5) the location of ports and controls.
Bogost Decl. 4 16. Moreover, while the 2600 Joystick and the CirKa A77 Joystick feature
a compass rose, the dashed circle that circumscribes the base of the rubber boot and
joystick, each party’s compass roses differs in color—the 2600 Joystick’s compass rose is
red, while the CirKa A77’s is black.
The Ninth Circuit has determined that “[r]egardless of how much secondary
meaning it possess, a product’s trade dress will not be protected from an imitator [whose
product] is sufficiently different in its features to avoid such confusion.” First Brands
Corp., 809 F.2d at 1383 (internal citation omitted). Based on the disputed record, the finder
of fact could determine that the parties’ products are so similar that a consumer could be
confused as to the source of Hyperkin’s products. Conversely, the fact finder could also
determine that the parties’ products are dissimilar. These disputes preclude the Court from
granting summary judgment regarding the similarity of the parties’ products. See Monster,
395 F. Supp. 3d at 1357-1358 (denying motion for summary judgment because “a triable
issue remains regarding the similarity of the marks factor.”’); accord Calista, 43 F. Supp.
3d at 1125 (declining to grant summary judgment as to similarity of marks, reasoning that
factfinder will have to decide this.”).
d. Evidence of Actual Confusion
The Ninth Circuit has concluded that “evidence of actual confusion, at least on the
part of an appreciable portion of the actual consuming public, constitutes strong support
for a ‘likelihood of confusion’ finding.” Rearden LLC v. Rearden Commerce, Inc., 683
F.3d 1190, 1210 (9th Cir. 2012). Thus, “[i]f enough people have been actually confused,
then a likelihood that people are confused is established.” Playboy Enterprises, Inc. v.
Netscape Comme’ns Corp., 354 F.3d 1020, 1026 n.27 (9th Cir. 2004) (emphases in
original).
Here, Hyperkin’s Chief Executive Officer, Steven Mar, attests that “[t]o date,
outside this litigation, no one has ever asked Hyperkin whether the Retron77 or A77 were
sold or licensed by any Atari company, or” Atari Interactive. Mar Decl. § 26. However,
[b]ecause of the difficulty in garnering such evidence, the failure to prove instances of

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
actual confusion is not dispositive.” Monster, 395 F. Supp. 3d at 1358 (internal citation
and alteration omitted). Thus, “actual confusion is not necessary to a finding of likelihood
of confusion under the Lanham Act.” Acad. of Motion Picture Arts & Scis. v. Creative
House Promotions, Inc., 944 F.2d 1446, 1456 (9th Cir. 1991). Atari Interactive’s failure
to point to any instances of actual confusion, while not dispositive, weighs slightly against
a finding of likelihood of confusion. See Stonefire Grill, Inc. v. FGF Brands, Inc., 987 F.
Supp. 2d 1023, 1053-54 (C_D. Cal. 2013) (noting, at summary judgment stage, that “the
absence of evidence of actual confusion is generally unnoteworthy because actual
confusion is hard to prove”); Oculu, LLV v. Oculus CR Inc., No. 14-cv-0196-DOC, 2015
WL 3619204, at *13 (C.D. Cal. June 8, 2015) (“The lack of any competent evidence of
actual confusion despite the fact that the marks have co-existed for three years thus weighs
against a finding of likelihood of confusion.”). The Court declines to grant summary
judgment on this basis, however.
e. Marketing Channels
“Convergent marketing channels increase the likelihood of confusion.” Nutri/Sys..,
809 F.2d at 606. “Under this factor, courts should consider whether the predominant
purchasers of the parties’ goods are similar or different, and whether the parties’ marketing
approaches resemble one another.” Sazerac, 251 F. Supp. 3d at 1307 (internal citation
omitted). Put differently, “[i]n assessing marketing channel convergence, courts consider
whether the parties’ customer bases overlap and how the parties advertise and market their
products.” Monster, 395 F. Supp. 3d at 1358-59 (internal citation omitted). “The greater
the degree of overlap, the more likely there is to be confusion.” Fiji Water, 741 F. Supp.
2d at 1180.
The parties offer little argument regarding this factor. The Court notes, however,
that Casandra Brown, Atari Interactive’s Director of Licensing, attests that Atari Interactive
sells its Plug and Play and Flashback devices, which are modeled after the 2600 Joystick
and the 2600 Console, “through major online and brick-and-mortar retailers such as
Walmart, Target, Costco, Kohl’s, and Amazon, just to name a few.” Brown Decl. 49 9, 11.
Similarly, a portion of Hyperkin’s website lists Walmart, Target, GameStop, Amazon Toys
R’ Us, Fry’s Electronics, Groupon, Fye, Micro Center, and Newegg as “SOME OF OUR
RETAILERS.” See Mar Decl. 43. It appears, then, that both companies sell their products
through some of the same channels, including Walmart, Target, and Amazon. The finder
of fact could therefore determine that the parties use convergent marketing channels, giving
rise to a likelihood of confusion. See Monster, 395 F. Supp. 3d at 1359 (determining that

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
“convergent marketing channels” factor favored finding of likelihood of confusion where
“both parties sell their energy drinks through the same retailers] .|’’).
f. Type of Goods and Degree of Purchaser Care
“In analyzing the degree of care that a consumer might exercise in purchasing the
parties’ goods, the question 1s whether a ‘reasonably prudent consumer’ would take the
time to distinguish between the two product lines.” Surfvivor Media, Inc. v. Survivor
Prods., 406 F.3d 625, 634 (9th Cir. 2005). “Courts look to both the relative sophistication
of the relevant consumer and the cost of the item in determining the degree of care likely
to be exercised by the purchaser.” Monster, 395 F. Supp. 3d at 1359 (internal citations
omitted). “[W]hen dealing with inexpensive products, customers are likely to exercise less
care, thus making confusion more likely.” Brookfield, 174 F.3d at 1060. By contrast, the
reasonably prudent consumer is expected “to be more discerning—and less easily
confused—when he is purchasing expensive items, and when the products being sold are
marketed primarily to expert buyers.” Id. (internal citations omitted).
Here, Hyperkin adduces evidence that would tend to undermine Atari Interactive’s
claim that consumers are likely to be confused as to the source of Hyperkin’s CirKa A77
Joystick and Retron77 Console. For example, Hyperkin’s Retron A77 Console “is an
interchangeable cartridge video-game system that plays cartridge ROMs built to run on the
[2600 Console] and its compatible successors. To use it, the customer would need to
acquire original[s] or make their own . . . cartridges.” Bogost Decl. § 24. Accordingly,
Hyperkin’s expert, Ian Bogost, opines that “[t|he audience for such a device is . . . niche[.]”
Bogost Report § 86. The Ninth Circuit has determined that the “degree of care” factor
weighs against a finding of a likelihood of confusion where the purchasers of the products
are “highly specialized,” explaining that such purchasers “would be expected to exercise a
high degree of care in making their purchase decisions.” See Accuride Int’l, Inc. v.
Accuride Corp., 871 F.2d 1531, 1537 (9th Cir. 1989). Moreover, it appears that: Hyperkin
sells its CirKa A77 Joystick for between $14.99 and $50.00 at the retail level and for $8.50
at the wholesale level; Hyperkin sells its Retron77 Console for $70.00; and Atari
Interactive sells its Flashback devices at around $59.99 per unit. Dkt. 41-2 at 30, Dkt. 43-
42 at 2: Dkt. 43-43 at 2; Dkt. 43-44 at 2: Bogost Report 4 91; cf. Surfvivor, 406 F.3d at 634
(“With respect to small, inexpensive goods such as sunscreen, the consumer is likely to
exercise very little care.”). This factor, then, appears to favor Hyperkin.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

g. Hyperkin’s Intent
“When an alleged infringer knowingly adopts a mark similar to another’s, courts
will presume an intent to deceive the public.” Official Airline Guides, Inc. v. Goss, 6 F.3d
1385, 1394 (9th Cir. 1993). A plaintiff “need not prove intent to deceive because intent is
not a necessary element,” but [i]f a plaintiff can prove intent, however, he is likely to
prevail because the courts then presume that the public will be deceived.” Official Airline
Guides, 6 F.3d at 1394.
Hyperkin asserts that it “took extensive efforts to avoid confusion.” Mot. at 16. For
example, its Chief Executive Officer, Steven Mar, attests that Hyperkin engaged in due
diligence for its Retron77 Console and CirKa A77 Joystick, researching existing and
expired trademarks and patents, ultimately determining that any “relevant patents had
expired many years ago and there were no registered trademarks covering any trade dress
relating to the original Atari 2600 or the original Atari 2600 joystick.” Mar Decl. 8. Mar
further asserts that in order to prevent confusion, Hyperkin designed its own packing for
the Retron77 Console and CirKa A77 Joystick, placing disclaimers on the packaging, and
affixing its own trademarks to the products and packaging. See Id. § 11-14, 22-23. The
finder of fact could determine that Hyperkin acted in good faith, weighing against a finding
of likelihood of confusion. See, e.g., Stonefire Grill, 987 F. Supp. 2d at 1055—56 (finding
that “intent” factor weighed against finding of likelihood of confusion where evidence
demonstrated that defendant engaged in a trademark search and “defendant’s attorney . . .
counseled that its proposed mark would not infringe.”).
On the other hand, “[a]bsence of malice is no defense to trademark infringement.”
See Surfvivor, 406 F.3d at 635 (rejecting producers’ argument that they lacked intent where
they “acknowledge|d] being aware of the Surfvivor mark before airing their show, but
contend that they lacked intent to infringe upon that mark.”). Moreover, “obvious
similarity” between products “permits an inference of intent.” See Fiji Water, 741 F. Supp.
2d at 1181. The Court has already determined that the finder of fact could reasonably
determine that Hyperkin’s CirKa A77 Joystick is similar to the 2600 Joystick and that
Hyperkin’s Retron77 Console is similar to the 2600 Console. And, “[k]nowing adoption
of a mark closely similar to one used by another 1s a basis for inferring intent to deceive.”
Aurora World, Inc. v. Ty Inc., 719 F. Supp. 2d 1115, 1164 (C.D. Cal. 2009). Steven Mar,
Hyperkin’s Chief Executive Officer, demonstrated knowledge of Atari Interactive’s
claimed trade dress, even testifying during deposition that the CirKka A77 Joystick was
modeled after the 2600 Joystick. Mar Dep. Tr. at 70:9-11.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
The Court therefore concludes that triable issues exist as to Hyperkin’s intent
regarding its Retron77 Console and CirKa A77 Joystick.
h. _ Likelihood of Expansion of Product Lines
“A strong possibility that either party will expand its business to compete with the
other weighs in favor of finding” a likelihood of confusion. Fiji Water, 741 F. Supp. 2d at
1182. However, “[t]he likelihood of expansion in product lines factor is relatively
unimportant where two companies already compete to a significant extent.” Brookfield,
174 F.3d at 1060.
Here, the Court has already determined that genuine disputes exist regarding the
degrees to which the parties’ products are similar or the parties compete with another.
Accordingly, this factor is relatively unimportant to the Court’s analysis. See Playboy, 354
F.3d at 1029 (determining that likelihood of expansion in product lines factor “is
irrelevant” where the parties’ existing products “are already related|.]”). To the extent that
this factor is relevant, Hyperkin urges that “[t]here is . . . no evidence that [Atari Interactive]
is likely to expand into Hyperkin’s market” because, according to Hyperkin, Atari
Interactive “has never sold or licensed any cartridge-playing console.” Mot. at 16.
However, Casandra Brown, Atari Interactive’s Director of Licensing, attests that “Atari
Interactive has been actively creating, promoting, and readying to launch a new gaming
system that puts a 21st Century spin on the original 2600 designs” and which “include[s]
a modernized version of the 2600 joystick as part of its new system[.]’!* Brown Decl. §
18. Accordingly, the Court declines to grant summary judgment on this issue.

2 Many of the details regarding Atari Interactive’s future console are unclear from the
record, including whether it: (1) will, like Hyperkin’s Retron77 Console, play original,
physical game cartridges; and (2) will be compatible with Hyperkin’s accessories, such as
the CirKa A77 Joystick. Hyperkin’s expert, Ian Bogost, opines, with respect to Atari
Interactive’s future console, that “[d]elays and mystery have mounted as the project has
worn on” and that Atari Interactive recently “announced further delays, supposedly due to
disruption of [its] Chinese supply chain [caused] by the coronavirus outbreak.” Bogost
Report §] 30. These disputes further bolster the Court’s determination that genuine disputes
exist regarding the likelihood of expansion of product lines factor.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
oR RR
While the actual confusion and degree of consumer care Sleekcraft factors weigh
against a finding of likelihood of confusion, the Ninth Circuit has instructed that “[t|he
Sleekcraft factors are intended to function as a proxy or substitute for consumer confusion,
not a rote checklist.” Rearden, 683 F.3d at 1209; accord Fortune Dynamic, Inc. v.
Victoria’s Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010) (“The
Sleekcraft factors are not a scorecard, a bean-counter, or a checklist.”). Therefore, “[g]iven
the open-ended nature of this multi-prong inquiry, . . . summary judgment on ‘likelihood
of confusion’ grounds is generally disfavored.” Rearden, 683 F. 3d at 1210. Indeed, “the
question of likelihood of confusion is routinely submitted for jury determination as a
question of fact.” Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1356 n.5 (9th Cir.
1985). For these reasons, the Court declines to grant Hyperkin partial summary judgment
as to the issue of likelihood of confusion.
E. Dilution Claim
Atari Interactive also asserts a claim for dilution against Hyperkin. See Compl.
45-50. “‘Dilution’ refers to the ‘whittling away of the value of a trademark’ when it’s used
to identify different products.” Adobe Sys. Inc. v. Blue Source Grp., Inc., 125 F. Supp. 3d
945, 969 (N.D. Cal. 2015) (internal citation omitted). “By contrast to trademark
infringement, the injury from dilution usually occurs when consumers aren’t confused
about the source of a product: Even if no one suspects that the maker of analgesics has
entered into the snowboard business, the Tylenol mark will now bring to mind two
products, not one.” Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 903 (9th Cir. 2002)
(emphasis in original). Accordingly, “[w]|hereas trademark law targets ‘interference with
the source signaling function’ of trademarks, dilution protects owners ‘from an
appropriation of or free riding on’ the substantial investment that they have made in their
marks.” Id. “In order to prove a violation, a plaintiff must show that (1) the mark is famous
and distinctive; (2) the defendant is making use of the mark in commerce; (3) the
defendant’s use began after the mark became famous; and (4) the defendant’s use of the
mark is likely to cause dilution by blurring or dilution by tarnishment.” Jada Toys, Inc. v.
Mattel. Inc., 518 F.3d 628, 634 (9th Cir. 2008). “[DJilution is a factual question generally
not appropriate for decision on summary judgment.” Visa Int’] Serv. Ass’n v. JSL Corp..,
610 F.3d 1088, 1090 (9th Cir. 2010). With these principles in mind, the Court addresses
the parties’ arguments in turn.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
1. Fame of Atari Interactive’s Claimed Trade Dress
Hyperkin argues that “|s}ummary judgment as to dilution is appropriate because
| Atari Interactive] failed to produce evidence that the relevant trade dress is famous among
the general public.” Mot. at 20. According to Hyperkin, “there is no evidence, such as
surveys or consumer declarations, showing that the general consuming public associates
the relevant trade dress with [Atari Interactive].”. Id. Hyperkin also points to the
comparatively fewer Twitter followers that Atari Interactive has (less than 80,000) as
compared to its competitors, including Sony (17 million), Microsoft (13 million), Nintendo
(10 million), and SEGA (1 million).!* SUF Nos. 166-70.
Pursuant to the Trademark Dilution Revision Act of 2006 (“the TDRA”), “a mark is
famous if it is widely recognized by the general consuming public of the United States as
a designation of source of the goods or services of the mark’s owner.” 15 U.S.C. §
1125(c)(2). “Niche fame,” which is “fame within only a limited geographic area or a
specialized market segment,” is insufficient.’ Blumenthal, 963 F.3d at 870. “The mark
must have acquired the requisite level of fame by the time the defendant first began to use
the mark in commerce.” Stone Brewing Co., 2020 WL 1508489, at *18 (internal citation
omitted). The TDRA sets forth the following factors to determine whether a mark
possesses the requisite degree of recognition:

13 The Court OVERRULES Atari Interactive’s objections to the admission of its
competitors’ number of Twitter followers. See Stone Brewing Co.. LLC v. MillerCoors
LLC, No. 3:18-cv-00331-BEN-LL, 2020 WL 1508489, at *19 (S._D. Cal. Mar. 27, 2020)
(considering evidence of party’s “industry-leading social media presence with hundreds of
thousands of followers and/or viewers across multiple platforms” to determine whether
genuine dispute existed regarding famousness of mark for purposes of dilution claim).
4 Prior to 2006, a plaintiff could establish fame, for the purposes of a dilution claim,
based either on “niche fame” or “fame among the general consuming public.” See
Blumenthal, 963 F.3d at 869-70. Although Atari Interactive’s predecessors released the
2600 Console and the 2600 Joystick, which form the bases for Atari Interactive’s claimed
trade dress, prior to 2006, Atari Interactive appears to agree that it must raise a genuine
question regarding “fame among the general consuming public,” rather than niche fame.
See Opp. at 23.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES — GENERAL ‘Oo’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
(i) The duration, extent, and geographic reach of advertising and publicity of the
mark, whether advertised or publicized by the owner or third parties.
(ii) The amount, volume, and geographic extent of sales of goods or services offered
under the mark.
(iii) The extent of actual recognition of the mark.
(iv) Whether the mark was registered under the Act of March 3, 1881, or the Act of
February 20, 1905, or on the principal register.
15 US.C. § 1125(c)(2)(A).
Here, Atari Interactive adduces evidence regarding its sales of products that
purportedly incorporate its claimed trade dress in the 2600 Console and the 2600 Joystick.
For example, Atari Interactive has received at least $3,893,702 in licensing fees for its Plug
and Play devices and $13,724,346 in licensing fees for its Flashback devices, with the
value being significantly higher,” as “this number reflect[s] only Atari Interactive’s
licensing fees.” Brown Decl. §§ 9, 12. In addition, Atari Interactive’s expert, Tim
Lapetino, opines that “the [original] Atari 2600 [was] commercially successful, selling an
estimated 30 million units over its lifespan|.]” Lapetino Report 4 19. Atari Interactive has
further promoted its claimed trade dress in the 2600 Console and the 2600 Joystick in other
ways, including by licensing its use in connection with apparel, consumer products, and
promotional materials. See Brown Decl. 4] 13-17. And, Atari Interactive submits excerpts
from online articles and books which have been written about, or refer to, the 2600 Joystick
and the 2600 Console and reiterate their popularity. See, e.g., Dkt. 43-20 at 11 (“After all,
there’s no gaming accessory quite as iconic as the [2600 Joystick].”); Dkt. 43-20 at 19
(noting that 2600 Joystick “bec[ame] an absolute icon of video game design.’’); Dkt. 43-21
at 10 (“The 2600 . .. was the most popular system of its day|.|”); Dkt. 43-21 at 13 (“Though
the 2600 1s nearly forty years old, it still persists in the popular imagination, and has made
a distinct impression on generations of video game fans.”) cf, Blumenthal, 963 F.3d at 870—
71 (noting, for purposes of dilution of trade dress claim, that “press accounts about the
popularity of the brand, or pop-culture references involving the brand would provide
evidence of fame.’’) (internal citation omitted). Finally, Tim Lapetino opines that Atari
Interactive’s predecessors engaged in “heavy advertising and marketing” that “ensured that
the overall design and visual presentation would go on to symbolize not just Atari, but
video games as a whole, decades after its release.” Lapetino Report ¥ 19; cf. J. Thomas
McCarthy, 4 McCarthy on Trademarks and Unfair Competition § 24:106 (Sth ed., June
2020 Update) (noting that “plaintiffs advertising and promotional efforts to make the mark

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
known” can be “circumstantial evidence” that “the mark has had such an impact on the
public mind . . . that it deserves the label of ‘famous.””’).
“The Ninth Circuit has recognized that fame requires a high standard of consumer
awareness beyond the trademark owner’s specific market—the mark should be a
‘household name’ or ‘part of the collective national consciousness.’” Pinterest, Inc. v.
Pintrips, Inc., 140 F. Supp. 3d 997, 1033 (N.D. Cal. 2015). For example, the Ninth Circuit
has determined that “Tiffany,” “Polaroid,” “Rolls Royce,” “Kodak,” and “Oscar” are marks
with the requisite fame capable of dilution. See Fruit of the Loom, Inc. v. Girouard, 994
F.2d 1359, 1363-64 (9th Cir. 1993). Conversely, the Ninth Circuit has determined that
some marks are insufficiently famous so as to be capable of dilution “despite decades of
use, $3 billion in annual sales, and $5 million in advertising] .|” Vietnam Reform Party v.
Viet Tan - Vietnam Reform Party, 416 F. Supp. 3d 948, 969 (N.D. Cal. 2019) (citing Avery
Dennison Corp. v. Sumpton, 189 F.3d 868, 873-75 (9th Cir. 1999)). Ultimately, however,
“whether a mark is ‘famous’ is a factual matter.” Apple, Inc. v. Samsung Elecs. Co., No.
11-cv-01846-LHK, 2012 WL 2571719, at *7 (N_D. Cal. June 30, 2012). The Court
therefore concludes that the finder of fact—not the Court—must determine whether Atari
Interactive’s claimed trade dress in the 2600 Console and the 2600 Joystick is sufficiently
famous so as to be capable of dilution. See Stone Brewing Co., 2020 WL 1508489, at *21
(denying defendant’s motion for summary judgment as to plaintiffs dilution claim,
explaining that “[w]hile this Court cannot, as a matter of law, find that [p|laintiff’s
STONE® mark is sufficiently famous, it does not find that [p]laintiff’s claims lack all merit
to justify granting summary judgment” because “[a]s the evidentiary record currently
stands, such a determination would be improper on summary judgment.’’).
2. Tarnishing and Blurring
“Courts recognize two principal forms of dilution; tarnishing and blurring.” Kaisha
v. Nat. Health Trends Corp., No. 04-cv-09028-DSF-E, 2005 WL 1041112, at *4 (C_D. Cal.
Jan. 10, 2005) (internal citation omitted). “Blurring occurs when a defendant uses a
plaintiff's trademark to identify the defendant’s goods or services, creating the possibility
that the mark will lose its ability to serve as a unique identifier of the plaintiff's product.”
Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1326 n.7 (9th Cir. 1998) (internal
citations omitted). “Tarnishment occurs when a famous mark is improperly associated
with an inferior or offensive product or service.” Id. (internal citation omitted). Atari
Interactive asserts both theories here. See Compl. § 47.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.

a. Dilution by Tarnishing
“To properly support a dilution by tarnishment claim, a plaintiff must establish that
the famous mark will suffer negative associations as a result of the use of the similar mark.”
Pendleton Woolen Mills, Inc. v. Round Up Ass’n., No. 3:11-cv-592-AC, 2012 WL
2721856, at *7 (D. Or. July 9, 2012). “‘Tarnishment’ generally arises when the plaintiff's
trademark is linked to products of shoddy quality, diminishing the value of the mark
because the public will associate the lack of quality with the plaintiffs unrelated goods.”
Sony Computer Entm’t, Inc. v. Connectix Corp., 203 F.3d 596, 609 (9th Cir. 2000)
(internal citation omitted).
Hyperkin asserts that “there can be no tarnishment by Hyperkin’s acts since the Atari
brand already suffered a negative 1mage through its numerous failures.” Mot. at 20.
Hyperkin’s argument appears to be, then, that since Atari Interactive’s predecessors
suffered several financial setbacks leading to a number of changes in corporate ownership
and culminating in the cessation of sales of Atari videogame devices between the 1990s
and early 2000s, Atari Interactive’s claimed trade dress lacks any goodwill that could be
further diluted by tarnishing. Indeed, “[t]here has to be something to tarnish in order to
find dilution by tarnishment.” Playmakers, LLC v. ESPN, Inc., 297 F. Supp. 2d 1277, 1285
(W.D. Wash. 2003).
However, “[t|he sine qua non of tarnishment is a finding that plaintiff's mark will
suffer negative associations through defendant’s use.” Sony Computer Entm’t, 203 F.3d
at 609 (internal citation omitted). And, Atari Interactive submits evidence—in the form of
purchaser reviews on Amazon—that would allow the fact finder to conclude that
Hyperkin’s CirKa A77 Joystick is of subpar quality. See, e.g., Dkt. 43-42 at 6 (purchaser
review rating CirKa A77 Joystick with “one-star” and referring to CirKa A77 Joystick as
“TRASH!” and “JUNK!!!!!!"); id. at 7 (purchaser review rating CirKa A77 Joystick with
“one-star” and commenting that CirKa A77 Joystick is of “[e]xtremely poor quality.”).
The Court has already determined that summary judgment is inappropriate as to
whether Atari Interactive’s claimed trade dress has attained secondary meaning. The finder
of fact could also determine that the quality of Hyperkin’s products tarnished whatever
goodwill Atari Interactive accumulated as to Atari Interactive’s claimed trade dress. See
Coty Inc. v. Excell Brands, LLC, 277 F. Supp. 3d 425, 434 (S.D.N.Y. 2017) (determining,
after bench-trial, that distributors of high-quality fragrances “ha[d] established a claim of
dilution by tarnishment” where defendant “produced cheap ‘versions’ of [distributors’ |
fragrances, with similar names. . . and nearly identical packaging” and defendant “use[d]

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
inferior oils” and “employ[ed| cheaper packaging components”). For these reasons,
summary judgment is inappropriate as to Atari Interactive’s dilution by tarnishing claim.
b. _ Dilution by Blurring
With respect to blurring, Hyperkin argues that there can be “no blurring since there
were already numerous third-party sellers of 2600 compatible joysticks before Hyperkin
began selling its [CirKa] A77 [Joystick].” Mot. at 20. “To assess dilution by way of
blurring, courts look to “(1) the degree of similarity between the marks; (2) the degree of
distinctiveness of the famous mark; (3) the extent to which the owner of the famous mark
is engaging in substantially exclusively use of the mark; (4) the famous mark’s degree of
recognition; (5) whether the user of the mark intended to create an association with the
famous mark; and (6) any actual association between the two marks.” Monster, 395 F.
Supp. 3d at 1365 (citing 15 U.S.C.A. § 1125(c)(2)(B)). “This test is strikingly similar to
the test for likelihood of confusion under traditional trademark infringement analysis.”
Airwair Int’] Ltd. v. Vans, Inc., No. 5:12-cv-05060-EJD, 2013 WL 3786309, at *7 n.1
(N.D. Cal. July 17, 2013). Because genuine disputes exist regarding the “likelihood of
confusion” element of Atari Interactive’s false designation of origin claim, genuine
disputes similarly preclude the grant of summary judgment to Hyperkin as to Atari
Interactive’s dilution by blurring claim. See Monster, 395 F. Supp. 3d at 1366 (denying
motion for summary judgment as to dilution by blurring claim “[flor the same reasons
discussed above regarding likelihood of confusion” with respect to infringement claim).
F. Unfair Competition Claim
Atari Interactive also asserts a claim for common law unfair competition. See
Compl. 4] 39-44. “The courts have uniformly held that common law and statutory trade-
mark infringements are merely specific aspects of unfair competition.” New W. Corp. v.
NYM Co. of California, 595 F.2d 1194, 1201 (9th Cir. 1979); accord Hokto Kinoko Co. v.
Concord Farms, Inc., 810 F. Supp. 2d 1013, 1032 (C.D. Cal. 2011) (“Whether we call the
violation infringement, unfair competition or false designation of origin, the test is identical
is there a ‘likelihood of confusion?’”’) (internal citation omitted).
Here, the Court has already determined that genuine disputes preclude the Court
from granting summary judgment as to Atari Interactive’s claim for false designation of
origin. For that reason, summary judgment is likewise inappropriate as to Atari
Interactive’s unfair competition claim. See Monster, 395 F. Supp. 3d at 1361 (denying
summary judgment as to “unfair competition claims for the same reasons [the court] has
denied summary judgment on [the] Lanham Act claims.”).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES —- GENERAL ‘0’
Case No. 2:19-cv-00608-CAS(AFMx) Date July 27, 2020
Title ATARI INTERACTIVE, INC. v. HYPERKIN INC.
G. Request for Attorneys’ Fees
“The Lanham Act provides that in ‘exceptional cases’ the court ‘may award
reasonable attorney fees to the prevailing party.’” Brown v. Elec. Arts, Inc., 722 F. Supp.
2d 1148, 1152 (C.D. Cal. 2010) (citing 15 U.S.C. § 1117(a)). Hyperkin asserts that “an
award of attorneys’ fees is appropriate” because Atari Interactive’s “claims are deceptive
and untenable, qualifying as an “exceptional case’ under the Lanham Act.” Mot. at 21.
Because the Court has concluded that genuine disputes preclude the grant of summary
judgment to Hyperkin, Hyperkin is not entitled to an award attorneys’ fees. See Glob.
Truss Am. LLC v. GLP German Light Prod. Inc., No. 11-cv-00168-SJO-SS, 2011 WL
13220296, at *11 (C.D. Cal. Dec. 1, 2011) (denying party’s request for attorneys’ fees
where the court denied party’s motion for summary judgment as to Lanham Act claim).
V. CONCLUSION
For the foregoing reasons, the Court DENIES Hyperkin’s motion in all respects.
IT IS SO ORDERED.
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Initials of Preparer CMJ

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10633988. Public record. Not legal advice.