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Nexsan Technologies Inc. v. EMC Corp.

United States District Court, D. Massachusetts

April 14, 2017





         The issue before this Court is trademark priority. Nexsan Technologies, Inc. (“Nexsan”) is a manufacturer and provider of computer data storage, backup, and management technologies. First Am. Compl. (“Am. Compl.”) ¶ 6, ECF No. 89. EMC Corporation (“EMC”) is a Fortune 200 company that also develops and manufactures data storage technologies. Def. EMC Corporation's Answer, Affirmative Defenses, & Countercls. (“Answer”) 3 ¶ 12, ECF No. 20. Since the commencement of this suit, EMC has been acquired by Dell, Inc. Id.

         In 2016, Nexsan and EMC each independently launched new computer data storage systems branded “UNITY.” Am. Compl. ¶¶ 9, 21. The parties dispute which company has the rights to the UNITY name. On March 22, 2016, Nexsan filed two intent-to-use trademark applications with the United States Patent and Trademark Office (“USPTO”), requesting use of the UNITY and NEXSAN UNITY marks for computer data storage hardware and software.[1] Id. ¶ 7. Nexsan claims to have engaged in market research and testing to introduce its product and the UNITY mark prior to filing its application. Id. ¶ 8. EMC counters that it publicly used the UNITY mark first, in connection with its “VNX” product line beginning in early 2014. Answer 11 ¶ 14.

         Nexsan brought this action seeking declaratory judgment of priority and non-infringement of its trademarks[2] against EMC (count I) under 28 U.S.C. section 2201, and for false designation of origin and unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125 (count II). Am. Compl. ¶¶ 37-49.

         The parties filed cross-motions for summary judgment on the issue of priority to the UNITY mark. Nexsan Technologies, Incorporated's Mot. Summ. J., ECF No. 46; Def. EMC Corporation's Mot. Partial Summ. J., ECF No. 40. Both briefed the issue and submitted statements of fact. Nexsan Technologies' Mem. Supp. Mot. Summ. J. (“Pl.'s Mem.”) 9, 15, ECF No. 47; Nexsan Technologies, Inc.'s Mem. Opp'n EMC Corporation's Mot. Partial Summ. J. (“Pl.'s Opp'n”), ECF No. 57; Nexsan's Local Rule 56.1 Statement Undisputed Facts (“Pl.'s Facts”), ECF No. 50; EMC Corporation's Mem. Law Supp. Mot. Partial Summ. J. (“Def.'s Mem.”), ECF No. 53; EMC Corporation's Statement Undisputed Material Facts (“Def.'s Facts”), ECF No. 54; EMC Corporation's Resp. Nexsan's Local Rule 56.1 Statement Undisputed Facts (“Def.'s Additional Facts”), ECF No. 61; EMC's Reply Supp. Mot. (“Def.'s Reply”), ECF No. 65. By agreement of the parties, the Court held a case stated hearing[3] on January 11, 2017, on the issue of priority of ownership of the UNITY mark. This Court now makes the following findings of fact and rulings of law.


         A. Nexsan Registered the UNITY Mark in March 2016

         In January 2016, Nexsan began researching brand names for a recently developed computer technology. Pl.'s Facts ¶ 7. In polls of Nexsan employees, UNITY was the most preferred of prospective marks. Pl.'s Facts ¶¶ 14-15; Decl. Judy Kaldenberg Supp. Nexsan Technologies' Mot. Summ. J. (“Kaldenberg Decl.”) ¶¶ 13-14, ECF No. 48. On March 7, 2016, Nexsan completed a trademark search for “UNITY” which revealed that the mark was not yet used in relation to computer data technologies. Kaldenberg Decl. ¶ 15; Suppl. Decl. Steven A. Abreu Supp. Nexsan Technologies' Case In Chief Issue Priority, Ex. B Part 1 (“Trademark Search Report”), ECF No. 78-2. Nexsan subsequently filed two intent-to-use applications for the UNITY mark with the USPTO on March 22, 2016. Pl.'s Facts ¶ 18; Def.'s Facts ¶ 33. On April 25, 2016, CRN magazine, an industry publication, previewed a favorable review of Nexsan's UNITY products. Am. Compl. ¶ 10. The following day, Nexsan announced the release of its UNITY line. Id. ¶ 9.

         B. EMC's Pre-Market Activities Regarding Its UNITY Product

         While Nexsan developed its UNITY products, EMC was developing a similar computer system to manage data storage. Def.'s Facts ¶¶ 3-4, 32. Since at least 2015 -- well before Nexsan's development -- EMC had conducted activities related to the development and refinement of this product, which EMC eventually called “UNITY.” Id. ¶ 3. These activities included giving presentations about and shipping beta versions of its UNITY products to customers, partners, and potential customers. Id. ¶¶ 8-21.

         1. “Virtual Geek” Blog

         Chad Sakac (“Sakac”), an EMC employee, maintains “Virtual Geek, ”[4] a blog that discusses trends in the “electronic data storage industry.” Id. ¶ 6. The blog contains a disclaimer stating that it is personal in nature and not authorized by EMC. Pl.'s Facts, Ex. K, About Me (“Virtual Geek Disclaimer”) 1, ECF No. 50-11 (“Content published here is not read or approved in advance by EMC and does not necessarily reflect the views and opinions of EMC. This is my blog, it is not an EMC blog.”).

         On May 5, 2014, Sakac published a Virtual Geek blog post titled “VNX architectural evolution keeps rolling (VNXe 3200 Project Liberty).” Pl.'s Facts, Ex. J, VNX Architectural Evolution Keeps Rolling (“Virtual Geek Post”) 1, ECF No. 50-10; Def.'s Facts ¶ 7. The post describes some of EMC's recent technologies and uses the word “unity” in reference to some of those developments, stating, for example, that “[w]e continue to stress and expand the footprint of the new ‘Unity' code stack in VNXe, ” “with vNXe, the Unity codebase conversion is complete, ” and “[t]he Unity codebase in the VNXe is also the right vehicle.” Virtual Geek Post 2, 4.

         One EMC employee, Brian Henderson (“Henderson”), testified that he first became aware of EMC's UNITY product via Sakac's blog post. Def.'s Facts, Ex. 2, Dep. Brian P. Henderson (“Henderson Dep.”) 23:8-18, ECF No. 54-4. Henderson, however, was equivocal about his understanding of the post, stating: “I think [Sakac] takes liberties, and I am not sure what is happening in this, this section right here . . . . It is worded really weird.” Pl.'s Facts, Ex. M., Sept. 27, 2016 Dep. Brian P. Henderson (“Nexsan Henderson Dep.”) 152:8-12, ECF No. 50-13. Henderson also acknowledged that EMC used code names for the Unity products, and that code names are rarely used as the actual brand name. Pl.'s Facts ¶¶ 27, 30. This is done to “obfuscate the name” of the final product. Pl.'s Facts ¶ 29; Nexsan Henderson Dep. 28:4-22.

         2. Beta Testing

         EMC conducted beta testing on what would become its UNITY products. Answer 11 ¶ 16; Def.'s Mem. 5-6. Participation in the beta test program was limited to twenty organizations, each handpicked by EMC. Pl.'s Facts ¶¶ 39, 41; Pl.'s Facts, Ex. L (“Thunderbird Beta Opportunity E-mail”), at EMC-087537, ECF No. 50-12 (“Like any other EMC Beta test program, the number of slots for customer participation is limited. Participants will need to meet the [listed] requirements.”). In December 2015, EMC shipped beta versions of the products to the twenty select organizations “for trial use and training.” Def.'s Facts ¶¶ 14, 20; Def.'s Facts, Ex. 1, Decl. Brian Henderson (“Henderson Decl.”) ¶¶ 4, 7, ECF No. 54-1. This testing continued into early 2016. Def.'s Facts ¶ 17.

         a. Beta Test Name

         EMC's title for the product under testing was inconsistent. At various times, EMC called the tested product (or components thereof) “Thunderbird, ” “Oberon, ” and “UNITY.” Pl.'s Facts ¶ 42; Thunderbird Beta Opportunity E-mail, at EMC-087536-37 (“In Q1 of 2016, the Corporate Systems Engineering team will be running the Thunderbird Beta program. As you may already know, the Thunderbird release is a brand new Unity platform that is expected to GA in Q2 of 2016.”).

         EMC frequently referred to the beta program as Thunderbird. For instance, in an e-mail from Jason Fonseca dated February 4, 2016, the subject line is “Unity Licenses.” Decl. R. David Hosp Supp. EMC's Opp'n Nexsan's Mot. Summ. J., Ex. 9 (“Fonseca Email”), at EMC-083816, ECF No. 62-9. The opening sentence of the e-mail, however, says “[EMC] will be continuing customer testing next week as part of the Thunderbird Beta.” Id. Similarly, in another EMC e-mail chain titled “CSE Feedback on Thunderbird Needed, ” EMC staff are asked to “provide feedback . . . on the Thunderbird product.” Def.'s Facts, Ex. 25 (“Gento E-mail”), at EMC-035979, ECF No. 54-27. Additionally, the beta project final report is titled “EMC Thunderbird: Beta, Final Report.” Suppl. Decl. Steven A. Abreu Supp. Nexsan Technologies' Case Chief Issue Priority, Ex. D, EMC Thunderbird: Beta, Final Report (“Thunderbird Final Report”) 1, ECF No. 78-12.

         Some beta test products displayed the UNITY mark, such as on the opening screen and the hardware bezel, Def.'s Facts ¶ 16, but there is no evidence that this occurred before Nexsan's registration of the UNITY mark. Henderson testified that during beta testing, the UNITY mark did not appear on the hardware, but was added to the hardware “probably close to external launch” of the UNITY product. Nexsan Henderson Dep. 109:9-110:2. Similarly, the UNITY opening screen is dated May 2016, Def.'s Facts, Ex. 7 (“EMC Unity Screen”), at EMC-037675, ECF No. 54-9, a date falling after Nexsan's March 22, 2016 registration of the mark, Pl.'s Facts ¶ 18; Def.'s Facts ¶ 33.

         b. Beta Test ...

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