[00:00:00] Speaker 00: I'd like to save my time for rebuttal. [00:00:03] Speaker 00: May it please the court, I am Raj Abhiyanka, representing the appellant LegalForce RAPC Worldwide PC. [00:00:10] Speaker 00: This case is about deliberate deception, how the appellee LegalForce Japan knowingly used our LegalForce trademark to solicit millions from American venture capital investors, creating confusion and damaging our goodwill in the US market. [00:00:27] Speaker 00: when we filed our initial complaint in June 2022. [00:00:30] Speaker 03: So is your argument based on the premise that equity is a good or a service, or is it that the sales or the equity activities were in connection with something else that is as good as that? [00:00:47] Speaker 03: I want to make sure I understand what your theories are on that point. [00:00:51] Speaker 00: Yeah, so our theories are rested in Reardon LLC versus Reardon Commerce, Inc. [00:00:56] Speaker 00: And our primary theory is that that case is a Ninth Circuit case. [00:01:02] Speaker 00: It addresses the issue of trademark infringement based upon confusion among non-consumers. [00:01:07] Speaker 00: The court identified three types of confusion, which apply here. [00:01:11] Speaker 00: These three confusion types are potential customers. [00:01:15] Speaker 00: individuals who may not have purchased, but yet could be confused by the similar trademark. [00:01:20] Speaker 03: What's the good or service at issue here? [00:01:23] Speaker 00: The good or service that is at issue here is an intangible sale of equity. [00:01:30] Speaker 00: There is no physical good. [00:01:31] Speaker 03: Your theory is that equity is the good or service, and that triggers the Lanham Act. [00:01:37] Speaker 03: It's not that the sale of equity is in connection with some other good. [00:01:41] Speaker 00: Right, the equity itself is the... Equity itself, okay. [00:01:44] Speaker 00: Yes. [00:01:45] Speaker 01: So how would you define goods or services under the Lanham Act? [00:01:50] Speaker 00: So we would define anything that creates consumer confusion that affects the goodwill of... Does not conflate the two parts of it. [00:01:58] Speaker 01: You've got to have... It has to be in connection with goods or service, and then you have to show likelihood of confusion. [00:02:03] Speaker 01: But in reading your brief, it seems to just focus on likelihood of confusion, untethered to goods or services. [00:02:09] Speaker 00: Right. [00:02:10] Speaker 00: Well, the intangible assets of Goodwill affects valuation and is a brand equity in itself. [00:02:17] Speaker 00: So if you think about goods or services in a literal sense, in today's world, much of what we call goods or services are not actually tangible. [00:02:26] Speaker 00: They're websites, they're things that we can't see or touch. [00:02:30] Speaker 00: In this case, if you look at most companies, when they have a valuation done in their company, whether private or public, [00:02:36] Speaker 00: a substantial portion of its assets, whether it's Coca-Cola, Tesla, or anyone else, is the goodwill it carries. [00:02:42] Speaker 00: So in this particular case, we have basically clarified that goodwill is a key part of trademark because the purpose of trademark is to serve as a source identifier. [00:02:58] Speaker 00: And in Horfag Research versus Pellegrini, this Ninth Circuit held that trademark law protects goodwill associated with the brand, and that goodwill is important asset for trademark holders, independent of a physical good or service. [00:03:13] Speaker 00: And the owner of that, you know, we believe the court emphasized in that case that it's not about just protecting consumers from confusion for goods and services, but allowing trademark holders to capitalize on the goodwill they have built over time. [00:03:27] Speaker 00: We've invested in our company millions of dollars in this brand. [00:03:31] Speaker 00: And the idea that the confusion, even though indirectly affected non-consumers, which were the American venture capitalists, affects the potential customers that we have, because they may think we're in a different market than we actually are, that we are producing goods that are different than ours. [00:03:51] Speaker 00: Our goodwill gets tied to a startup, which is not yet profitable where we are. [00:03:58] Speaker 00: We believe that goods and services are not necessarily, as in the traditional sense, the physical items or the services provided by humans. [00:04:09] Speaker 00: But they're the actual intangible equities that could also constitute goodwill. [00:04:19] Speaker 00: It could affect interstate commerce because they affect goodwill. [00:04:23] Speaker 00: And the sale of those securities impact that. [00:04:26] Speaker 05: What case supports this new theory of goods and services? [00:04:32] Speaker 00: What was that? [00:04:33] Speaker 05: What case do you have that most best supports this theory? [00:04:38] Speaker 00: So in Horfak Research LTD versus Pellegrini, it's a 2003 case. [00:04:44] Speaker 00: The Ninth Circuit held the trademark law protects Goodwill's associated brands, and that Goodwill is an important asset for trademark holders. [00:04:53] Speaker 00: So our [00:04:55] Speaker 00: case revolves around the impact of goodwill. [00:04:59] Speaker 03: But do you have a case that says that equity is a good or service? [00:05:03] Speaker 03: No, we don't. [00:05:05] Speaker 03: There are some district court cases that say it's not. [00:05:07] Speaker 03: But are there any cases that say that it is? [00:05:10] Speaker 00: No. [00:05:11] Speaker 00: The district court cases, Cottonwood and International Olympic Commission, are Texas cases. [00:05:16] Speaker 00: They are not holding law. [00:05:19] Speaker 00: And they can be distinguished for a number of reasons. [00:05:24] Speaker 00: Neither of the prior cases dealt indirectly, but with a highly impactful type of confusion that affects toy totals, good wills, or through their actions. [00:05:32] Speaker 00: Here, we have alleged bad faith. [00:05:34] Speaker 00: They not only used this trademark that was the same exact name as ours, they used it in an orange color and their own trade practices to solicit venture capital funds with an American flag next to it. [00:05:49] Speaker 00: And we believe that that conduct, it constitutes a bad faith infringement that helped ultimately that company raise over $100 million in capital. [00:06:00] Speaker 00: So those cases which are not in this district and are also not holding law there in Texas, the district court shouldn't apply here. [00:06:13] Speaker 00: So I'll continue forward with my arguments. [00:06:17] Speaker 00: So what's more is this legal force [00:06:19] Speaker 00: advertisements to American investors during the summer of 2022, as I mentioned, use our distinctive orange color theme. [00:06:26] Speaker 00: They presented a counterfeit legal force mark directly next to an American flag, further reinforcing a false connection with our company, Legal Force RAPC. [00:06:36] Speaker 00: The orange color backgrounds has the words translated to roughly to powerful enterprise is not here. [00:06:43] Speaker 00: It admits their knowledge of our rights and reveals a clear attempt to ride [00:06:47] Speaker 00: on the brand equity we've built in the US, spending millions of dollars to build that brand. [00:06:54] Speaker 00: And through that deception, they successfully raised over $100 million. [00:06:57] Speaker 00: And your honor, trademark infringement is not always black or white. [00:07:02] Speaker 00: It's more than just names and logos and goods and services in a traditional sense. [00:07:06] Speaker 00: It's about the positive associations, the warm and fuzzy feelings that a brand that like legal force builds over time [00:07:15] Speaker 00: We've invested significant resources in developing this brand into a trusted name for IP and trademark registration and legal services. [00:07:22] Speaker 00: And these very associations are what Legal Force Japan is now trying to undermine, and is undermined. [00:07:30] Speaker 00: Even if American venture capitals weren't directly confused, they almost subconsciously were influenced by the similarity. [00:07:37] Speaker 00: Our brand equity built over more than a decade of hard work was leveraged to sway investment decisions. [00:07:44] Speaker 00: And beyond the investors, those who saw press coverage of Legal Force Japan's fundraising efforts likely believe that Legal Force RAPC had shifted focus, perhaps leading them to think that business had become something different. [00:07:58] Speaker 00: And this is the exact type of confusion and harm that trademark law seeks to prevent. [00:08:04] Speaker 00: And that's why we believe Legal Force Japan's actions constitute clear trademark infringement. [00:08:12] Speaker 00: would like to also give you an example. [00:08:14] Speaker 00: Like if you look at Netflix today, imagine a foreign company like Netflix and with similar branding raised funds from American investors. [00:08:24] Speaker 00: After being sued by the real Netflix, the startup rebrands and keeps the funds as raised under false association. [00:08:30] Speaker 00: And in the future, this may not just be institutional investors, it could be individuals, accredited investors, crowd-sourced investors. [00:08:38] Speaker 00: and allowing them to avoid liability by simply changing the name months after, and mind you, they didn't change the name in this case until two months after this lawsuit was filed, would be unjust. [00:08:50] Speaker 00: Investors have subconsciously believed that they're investing in a trusted Netflix brand in that example, and this confusion would harm the goodwill of Netflix and the market value. [00:09:01] Speaker 00: So setting a precedent here is very important, not just for this case, but the future. [00:09:07] Speaker 00: And this highlights how exploiting a well-known brand, a suggestive trademark, can mislead investors in the future and damage the rightful goodwill of a trademark owner's reputation. [00:09:18] Speaker 00: So with that, I'd like to reserve any balance time I have. [00:09:20] Speaker 05: All right. [00:09:21] Speaker 05: Thank you, counsel. [00:09:29] Speaker 02: May it please the court. [00:09:30] Speaker 02: My name is David Mackman. [00:09:31] Speaker 02: I'm here on behalf of Legal On Technologies Inc., formerly known as Legal Force Inc. [00:09:37] Speaker 02: Now, I say Inc., but this is actually a translation. [00:09:40] Speaker 02: These are Kabushiki-gaisha. [00:09:43] Speaker 02: Legal On Technologies Inc. [00:09:45] Speaker 02: is a Kabushiki-gaisha. [00:09:46] Speaker 02: It is a Japanese company located in Japan, and it sold its Japanese shares. [00:09:53] Speaker 02: I'd like to start by talking about the things that were not appealed because there are several issues that were not raised in the appeal that are residue to Kata and that in my view strongly affect this appeal and are in fact dispositive. [00:10:10] Speaker 02: The court made two rulings that are not appealed. [00:10:13] Speaker 02: The first is a jurisdictional ruling. [00:10:16] Speaker 02: It ruled that it did not have jurisdiction over my client's sale of software using the Legal Force brand in Japan. [00:10:24] Speaker 02: My client has the right, it has the registered trademark for Legal Force in Japan, so it has every right to sell its software there. [00:10:33] Speaker 02: The plaintiff did not establish that those sales were purposely directed at the United States. [00:10:39] Speaker 02: So the only goods and services that are at issue in this case were sold in Japan as a matter of law residue to CADA and therefore are not at issue. [00:10:52] Speaker 02: The one thing that the court did take jurisdiction over is the claim that by advertising shares in the United States, [00:11:02] Speaker 02: there was trademark infringement. [00:11:05] Speaker 02: The sale actually took place in Japan. [00:11:07] Speaker 02: Shares are, they're Japanese shares. [00:11:10] Speaker 02: They can't leave Japan. [00:11:11] Speaker 02: They're an intangible non-corporeal thing. [00:11:14] Speaker 02: They're subject to the Japanese courts. [00:11:19] Speaker 02: The other ruling that the court made that was not appealed is the ruling that plaintiff in his second amending complaint [00:11:28] Speaker 02: had not established that any facts sufficient to grant extraterritorial application of the Lanham Act. [00:11:39] Speaker 02: And that's based on the love decision from this court, the Beach Boys case. [00:11:45] Speaker 02: I wish they all could be California torts was the quote in that case, but [00:11:50] Speaker 02: The court there found that there was no extraterritorial jurisdiction because there was no monetary injury in the United States. [00:11:59] Speaker 02: I raised this in my opposition, and on reply, what plaintiff said in his papers was that he's looking for three kinds of damages, attorney fees, statutory damages, and disgorgement. [00:12:15] Speaker 02: all three of those damages are based entirely on the Lanham Act. [00:12:18] Speaker 02: If the Lanham Act doesn't have extraterritorial application, which it doesn't, according to the Abitron case from the Supreme Court, and which is not appealed in his rest adjudicata here, then none of the relief the plaintiff is seeking is available here, regardless of the question of shares being go to services. [00:12:36] Speaker 03: How is it an extraterritorial application if [00:12:39] Speaker 03: money is raised using the mark in terms of equity in the United States. [00:12:45] Speaker 02: The money isn't raised in the United States. [00:12:47] Speaker 02: The stocks were sold in Japan. [00:12:50] Speaker 02: The money is held in bank accounts in Japan. [00:12:52] Speaker 02: The disgorgement would require an order forcing my client to disgorge from their accounts in Japan. [00:12:59] Speaker 02: And it's the money. [00:13:00] Speaker 03: American investors were involved in the money that was raised. [00:13:04] Speaker 02: These are international investors. [00:13:06] Speaker 02: All of the transactions commenced in Japan. [00:13:09] Speaker 02: I mean, that's an issue of fact, obviously, but all the transactions commenced in Japan and were closed in Japan, there's a very small amount of activity in the United States. [00:13:20] Speaker 02: So the money is in Japan, the shares are Japanese shares, and the agreements are going to be subject to Japanese law, not U.S. [00:13:29] Speaker 02: law. [00:13:30] Speaker 02: And it's securities law, not the law of goods and services, because shares are not a good or services. [00:13:38] Speaker 02: The Abitron case says that you look at the focus of the statute and the conduct that is described therein. [00:13:46] Speaker 02: That's the use in commerce of the mark in connection with goods and services. [00:13:51] Speaker 02: The goods and services here are software. [00:13:53] Speaker 02: That conduct occurred in Japan. [00:13:56] Speaker 02: it would additionally require under the Supreme Court's Abitron case, the one that says U.S. [00:14:02] Speaker 02: law does not rule the world, and talks about international comedy and respect for foreign sovereignty, that case says that [00:14:11] Speaker 02: The Lanham Act doesn't have extraterritorial effect. [00:14:14] Speaker 02: And in particular, if the focus of the statute, the use in commerce on goods and service occurred outside the United States, then there's no relief in United States courts. [00:14:28] Speaker 02: Now, if we move on to the merits of his claim that somehow the advertisement of shares in the United States is trademark infringement, we run into problems immediately. [00:14:45] Speaker 02: The Lanham Act is what governs trademark infringement. [00:14:49] Speaker 02: It has elements, like every cause of action in federal court. [00:14:53] Speaker 02: It has elements, and those elements include use and commerce on goods and services. [00:14:58] Speaker 02: The only case, and so you can't just read that out of the statute. [00:15:03] Speaker 02: Goodwill is important to trademark analysis, but it's not an element of trademark infringement. [00:15:10] Speaker 02: So he has problems with the statute. [00:15:13] Speaker 02: He didn't have any cases supporting his position when he filed the case or at the hearing on the motion to dismiss or even on his appeal. [00:15:21] Speaker 02: It's a novel theory that's not supported [00:15:24] Speaker 02: by the case law or the plain language of the statute and has no merit. [00:15:30] Speaker 02: He's referred to a case called the Reardon case. [00:15:35] Speaker 02: In that case the court did remand but there was finding that there was some evidence of [00:15:45] Speaker 02: of consumer confusion and that the non-consumer confusion, therefore, could be relevant to evaluating likelihood of confusion. [00:15:55] Speaker 02: The non-consumer confusion is not trademark infringement in itself when it's not tied to actual use with goods and services and to actual consumers. [00:16:06] Speaker 02: The Reardon case [00:16:07] Speaker 02: In addition to having elements, trademark law has a sine qua non, and the sine qua non is consumer confusion. [00:16:16] Speaker 02: That's an essential element of any claim of trademark infringement, and here the consumers, the people buying goods and services, are in Japan. [00:16:26] Speaker 02: The investors are not consumers, they're investors. [00:16:30] Speaker 02: And there's no evidence of confusion among the investors. [00:16:33] Speaker 02: You wouldn't spend, and by the way, I believe the investment was denominated in yen, not dollars. [00:16:40] Speaker 02: And so the value will be fluctuating with currency. [00:16:43] Speaker 02: But you wouldn't put that kind of money into a company without investigating the management team and knowing who you're investing in, what the business plan is, and vetting things such that you're not going to be confused as to where the money is going. [00:17:00] Speaker 02: And you indicated that if I didn't have a lot more to say, I could sit down. [00:17:12] Speaker 02: So unless you have any questions, I will sit down. [00:17:15] Speaker 04: Thank you, counsel. [00:17:19] Speaker 04: Yes, you have a minute. [00:17:23] Speaker 00: Yeah. [00:17:25] Speaker 00: To address a few things, they did a road show in the US, and they sold shares in the US, including right here in Silicon Valley. [00:17:31] Speaker 00: World Innovation Labs is located in Palo Alto. [00:17:34] Speaker 00: Sequoia Capital is in Palo Alto. [00:17:36] Speaker 00: Goldman Sachs is here. [00:17:37] Speaker 00: They had multiple trips to the US. [00:17:39] Speaker 00: They hired a US CEO. [00:17:41] Speaker 00: And moreover, sale of goods and services includes a sale of legal services. [00:17:46] Speaker 00: We sell legal services which are intangible. [00:17:48] Speaker 00: And that is defined under the Trademark Act, and the USPTO rules as a classification of a trademark, which we have. [00:17:55] Speaker 00: And the sale of equities for a business like ours, which raises money as well at the same time in the same kind of competitive space of internet legal services in a broad sense, can create a confusion with our legal service, which is a service under the Trademark Act. [00:18:12] Speaker 00: So those are the main things that I wanted to say. [00:18:16] Speaker 05: All right. [00:18:16] Speaker 05: Thank you very much, Council. [00:18:18] Speaker 05: Legal Forest RAPC versus Legal Forest Bank is submitted.