IP: Monitor online posts about your company: They could jeopardize trademark rights

A Yelp review from You Fit Inc. v. Pleasanton Fitness could establish precedent moving forward

Negative online posts, even anonymous ones with questionable authenticity, can have a significant impact on a company’s sales figures, revenues and bottom line. And now, at least according to one court, they can also be used as evidence of trademark infringement. Earlier this year, a federal court in the Middle District of Florida ruled in You Fit Inc. v. Pleasanton Fitness LLC that an anonymous Yelp review of a fitness club was admissible evidence of actual confusion in a trademark infringement action.

You Fit, Inc. owned and operated health clubs under the “You Fit” name. It brought suit against defendants, including two former franchisees of You Fit who owned and operated health clubs called “Fit U”, alleging claims of trademark infringement, trademark dilution, unfair competition and related state law claims.

The court granted You Fit’s Lanham Act claims in its motion for preliminary injunction after finding that plaintiff was likely to succeed on the merits. In evaluating the various factors that go into “likelihood of confusion”— the test for trademark infringement—the court considered an anonymous review on the popular website Yelp in which a purported consumer reported being “confused” by similarities between the two health clubs. The Yelp post read:

I am soo confused. I was a member at Youfit in Az and when I moved back to cali I saw this place by my house and thought great my gym is here! When I went into the gym, I realized it was called Fit U. They use the same basic color scheme on their sign and the motto seemed the same. When I asked the girl at the desk, who was not nice, said her owner created this brand…Seemed very similar to me as when I was a member at Youfit. Very confusing and a big let down.

Defendants argued that these posts were impermissible hearsay. The court disagreed, finding that the evidence was appropriate and did not constitute hearsay because the comments demonstrated the consumer’s then-existing mental state of confusion and were not used “to prove the truth of the matter asserted in the comment.”

In trademark infringement actions, evidence of actual consumer confusion can be a key factor in a court’s “likelihood of confusion” analysis. While courts recognize the difficulty of obtaining evidence of actual confusion and, therefore, generally do not make such evidence mandatory, it is often identified as the most important factor in the analysis and can weigh powerfully in the plaintiff’s favor. Actual confusion evidence typically takes the form of expensive consumer surveys, testimony of witnesses who were confused, authenticated business records and other documentary evidence, such as misdirected mail, emails and mistaken purchases. Here, the plaintiff managed to avoid the trouble and expense of assembling these customary forms of proof.

The reliability and authenticity of the Yelp evidence was not addressed by the court, leaving many observers scratching their heads as to the potential dangers in placing such heavy reliance on Internet reviews—not to mention the risks of unscrupulous competitors “gaming” the system by posting anonymous reviews that call trademarks into question. Unless and until this uncertainty is dispelled, business owners would be wise to monitor online business review sites and quickly correct any false and misleading statements about their trademarks.

Contributing Author

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Karen Bromberg

Karen H. Bromberg is a partner with Cohen & Gresser LLP and heads its intellectual property and technology group.

Additional Contributors: Joyce Kung

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