Delaware Court Denies Sony Subsidiary Summary Judgment in Cinemavault Trademark Dispute

“The court found a genuine dispute of material fact as to whether Cinemavault ‘achieved sufficient market penetration to constitute continuous use under the Lanham Act.’”

The U.S. District Court for the District of Delaware on Tuesday denied a motion for summary judgment in Cinemavault, Inc. v. Gameshow Network, LLC, allowing a trademark infringement and unfair competition lawsuit to proceed to trial. Judge Joel H. Slomsky rejected Gameshow Network, LLC’s arguments that Cinemavault, Inc. failed to continuously use its trademark, that Cinemavault, Inc. was judicially estopped from bringing a likelihood of confusion claim, and that the relevant Lapp factors precluded Cinemavault from establishing a likelihood of confusion between the two marks at issue.

The ruling originated from a complaint initiated by Cinemavault on January 12, 2023, alleging unfair competition under the Lanham Act and common law trademark infringement. Cinemavault, organized in 2014, acquires rights to feature films and delivers them to the public directly by “streaming content or indirectly through sub-distribution agreements.”

Gameshow Network, a subsidiary of Sony Pictures Television, began offering free ad-supported streaming television channels under the trademark “Cinevault” in February 2021. Cinemavault alleged that Gameshow Network’s Cinevault trademark infringed upon its own Cinemavault trademark.

Gameshow Network argued that Cinemavault could not establish senior trademark rights because Cinemavault “failed to make actual and continuous use of the Cinemavault mark prior to and after November 20, 2020,” which was the date Gameshow Network filed an intent-to-use application to register the Cinemavault trademark with the United States Patent and Trademark Office (USPTO). Gameshow Network noted that the Cinemavault.com registration lapsed in 2012 and that Cinemavault generated negligible revenue and failed to use the mark in advertisements in the United States since 2016.

The court disagreed with Gameshow Network’s assertion that summary judgment was warranted on the issue of continuous use. Judge Slomsky noted that “ownership of a trademark comes from use, not registration.” The court found a genuine dispute of material fact as to whether Cinemavault “achieved sufficient market penetration to constitute continuous use under the Lanham Act.” The opinion highlighted that Cinemavault’s revenue was $11,456.61 in 2021 and $9,914.26 in 2022, and that Cinemavault, Inc. continued to do business by receiving royalty payments from films in active distribution and transitioning to a streaming platform. The court concluded that “a reasonable jury could find that [Cinemavault] made sufficient continuous use of the Cinevault mark to establish ownership.”