## Facts

- Ironhawk Technologies, Inc. developed data-transfer optimization software marketed as “SmartSync” beginning in 2004 and obtained a federal trademark registration in 2007.
- Ironhawk’s software targeted efficient data transfer in bandwidth-constrained environments; its licenses were sold at high prices, with significant sales primarily to a U.S. Navy unit.
- Ironhawk also pursued commercial customers through outreach and trade shows.
- Dropbox, Inc., a major cloud-storage provider, launched a file-access feature branded “Smart Sync” in 2017 and marketed it broadly to a large user base.
- The record included evidence that Dropbox knew of Ironhawk’s registered “SmartSync” mark before adopting “Smart Sync,” yet proceeded with the branding and extensive advertising.
- Ironhawk sued under the Lanham Act on a reverse confusion theory, alleging Dropbox’s market dominance would cause consumers to believe Ironhawk’s product was affiliated with or sponsored by Dropbox.

## Issues

1. Whether, viewing the evidence in Ironhawk’s favor, a genuine dispute of material fact existed as to likelihood of reverse confusion between “SmartSync” and “Smart Sync” under the Sleekcraft factors.
2. Whether the district court improperly resolved factual disputes about the relevant consuming public, product relatedness, and other Sleekcraft factors at summary judgment.

## Decision

- The Ninth Circuit reversed the grant of summary judgment for Dropbox, vacated the judgment, and remanded for trial.
- The court held a reasonable jury could find reverse confusion and could conclude consumers would believe Dropbox was a source of, or sponsor of, Ironhawk’s “SmartSync.”
- The court found triable disputes concerning the relevant consumer class (military and commercial), similarity of the marks, relatedness of the offerings, overlap in marketing channels, purchaser care, and Dropbox’s intent/notice.
- A dissent would have affirmed, emphasizing sophisticated purchasers, high-cost procurement, product differences, and weak evidence of actual confusion.

## Legal Principles

- Reverse confusion addresses harm where consumers familiar with a commercially powerful junior user mistakenly believe the lesser-known senior user is affiliated with the junior user due to mark similarity.
- Likelihood of confusion is generally a question of fact; summary judgment is improper where competing evidence could support either party under the Sleekcraft factors.
- In reverse confusion, the junior user’s commercial strength and advertising reach can increase confusion risk by overwhelming the senior user’s mark.
- The relevant consuming public may include actual and potential customers; courts must not assume a narrow customer class when the record shows broader marketing efforts.
- At summary judgment, courts must draw reasonable inferences for the nonmovant and avoid weighing evidence on factors such as actual confusion, degree of care, and intent.

## Conclusion

The Ninth Circuit held that disputed facts under the Sleekcraft framework required a jury to decide whether Dropbox’s heavily promoted “Smart Sync” created reverse confusion with Ironhawk’s “SmartSync,” and it sent the Lanham Act claims back for trial.


Ironhawk Techs., Inc. v. Dropbox, Inc., 2 F.4th 1150 (9th Cir. 2021)