Newegg Sues Kohl’s for Infringing Use of Slogan

“Once You Know, You Newegg.” That is the slogan and registered trademark of Newegg, a popular online retailer of consumer electronics and high-tech products. Department-store chain Kohl’s recently began using a similar tagline: “The More You Know, the More You Kohl’s.” On May 14th, Newegg filed a trademark-infringement lawsuit in California seeking to enjoin further use of the similar slogan.

A combination of words used in commerce as a slogan is protectable as a trademark if used to identify and distinguish the source of products or services. Use of a registered slogan by others can be prohibited if there is a likelihood of confusion among the consuming public. Newegg’s action essentially claims that Newegg has a property interest in the “Once You Know, You Newegg” slogan, which it built up at great expense, and that the slogan has become associated in the minds of consumers with “an unsurpassed shopping experience, rapid delivery, and stellar customer service.” According to the lawsuit, Kohl’s, having full knowledge of Newegg’s trademarks and intending to siphon off some of the goodwill associated therewith, began using a deceptively similar slogan in a manner likely to cause direct financial harm to Newegg.

As with most trademark and unfair competition cases, the big question is going to be whether Newegg can prove a likelihood of confusion. Among the more questionable allegations of the lawsuit are those claiming that Kohl’s “attempted to increase traffic to their website by diverting users looking for Newegg’s website” and that confused Newegg customers “visit Kohl’s website believing it to be Newegg’s website.” As suggested by the trademarked slogan itself, Newegg believes its customers are intelligent and savvy — that is why they shop at Newegg. Are these the same people who are going to wind up at Kohl’s website when looking for Newegg, and who are going believe, once they have landed at Kohl’s site, that they have indeed found Newegg? What kind of customer wouldn’t include the term “Newegg” in an online search for Newegg?

Another weakness is the prominent use of the respective companies’ primary marks embedded within the slogans, greatly lessening the likelihood of confusion. In other words, while “the more you know” is undoubtedly similar to “once you know,” once you reach the operative word in the slogan (Newegg or Kohl’s), it’s difficult to remain confused about the identity of the retailer.

Still, Newegg may have a legitimate complaint in that consumers may erroneously assume, due to the similarity of the slogans, that Newegg and Kohl’s have formed an affiliation. While primarily known for its electronics, Newegg has been branching out and expanding its offerings to household products such as those found in department stores like Kohl’s. Newegg’s strongest claim, in my view, is not for infringement but for trademark dilution, a theory that would entitle Newegg to an injunction if Kohl’s new slogan would blur or tarnish the strength of Newegg’s famous slogan. For dilution claims, actual or likely confusion is not required.

  

 

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