Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-04853/USCOURTS-cand-5_14-cv-04853-12/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:44 Trademark Infringement

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Case No. 14-cv-04853-PSG

ORDER GRANTING-IN-PART MOTIONS FOR SUMMARY JUDGMENT

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

NOVADAQ TECHNOLOGIES, INC.,

Plaintiff,

v.

KARL STORZ GMBH & CO. K.G., et al.,

Defendants.

Case No. 14-cv-04853-PSG

ORDER GRANTING-IN-PART 

MOTIONS FOR SUMMARY 

JUDGMENT

(Re: Docket Nos. 224, 225, 226, 230)

Product launches are all about creating excitement. Excitement for a product. Excitement 

for the product’s manufacturer. Excitement for the product’s anticipated customers. But not 

everyone is excited, especially a trademark owner that believes the launched product infringes that 

trademark. This dispute offers one such example.

Plaintiff Novadaq Technologies, Inc. specializes in medical imaging products that use its 

SPY-trademarked fluorescence imaging technology.

1

 Defendants Karl Storz GmbH & Co. KG,

headquartered in Germany, and its American counterpart Karl Storz Endoscopy-America, Inc. 

manufacture and sell imaging systems for endoscopic surgery.2 In 2014, Karl Storz launched a 

new product named IMAGE 1 SPIES, which came with software applications called SPIES 

CHROMA and SPIES SPECTRA,

3

prompting Novadaq to file this trademark infringement suit.4

 

1

See Docket No. 28 at ¶¶ 7-21; Docket No. 98 at ¶ 2.

2

See Docket No. 227-1 at ¶¶ 4, 6.

3

See id. at ¶¶ 15-18.

4

See Docket No. 1.

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ORDER GRANTING-IN-PART MOTIONS FOR SUMMARY JUDGMENT

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Both sides now move for summary judgment on a number of issues.5 Novadaq’s motion is 

GRANTED, and Karl Storz’ motions are GRANTED-IN-PART.

I.

Novadaq, a Canadian company, was founded in 2000 and began developing its 

fluorescence imaging technology in 2001.6That same year, Novadaq registered its SPY word 

mark with the United States Patent and Trademark Office.7 Four years later, Novadaq introduced 

its first SPY system to the American market.

8

 Since then, the company has marketed imaging 

devices for use in a variety of surgical applications, and all use what Novadaq calls its proprietary 

SPY fluorescence imaging technology.9 In particular, Novadaq sells a SPY ELITE imaging 

system for open surgical procedures.10 At least since September 2011, Novadaq has organized 

conferences called SPIES or iSPIES, which stand for Summits for Perfusion Imaging and 

Excellence in Surgery.11 

12 13

Novadaq also has ventured into minimally invasive endoscopic surgery, most notably by 

 

5

See Docket Nos. 224, 225, 226, 230.

6

See Docket No. 98 at ¶ 2.

7

See Docket No. 248-4; Docket No. 248-5.

8

See Docket No. 98 at ¶¶ 2-3; Docket No. 230-2 at 19; Docket No. 248-1 at ¶ 3.

9

See Docket No. 98 at ¶ 3; Docket No. 247-13 at 21:22-22:16.

10 See Docket No. 98 at ¶ 3; Docket No. 230-2 at 20; Docket No. 231-116.

11 See Docket No. 223-44 at 17; Docket No. 231-87.

12 Docket No. 248-25.

13 Docket No. 248-42 at NVDQ000864347.

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ORDER GRANTING-IN-PART MOTIONS FOR SUMMARY JUDGMENT

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developing its own SPY-based system that it initially called SPYSCOPE.14 In 2008 and 2009, 

Novadaq exhibited the SPYSCOPE device at industry conferences, including the Society of 

American Gastrointestinal and Endoscopic Surgeons annual meeting in 2009, where Novadaq 

gave Karl Storz head Dr. Sybill Storz a personal demonstration.15 Novadaq secured FDA 

approval for the SPYSCOPE device and placed it with several clinical investigators.16 By the time

Novadaq started selling the device in 2012, however, it had renamed it PINPOINT on the advice 

of its distributor LifeCell.17 Marketing for the PINPOINT product nevertheless specified that it 

featured Novadaq’s SPY technology, as did the body of the product itself starting at least in 

2014.

18

19 20

 

14 See Docket No. 98 at ¶¶ 4-5; Docket No. 248-1 at ¶¶ 4-5; Docket No. 248-25.

15 See Docket No. 98 at ¶¶ 5-8; Docket No. 223-28 at 38:3-43:15; Docket No. 248-1 at ¶¶ 4-7; 

Docket No. 248-19 at 84:1-6; Docket No. 248-25; Docket No. 248-26.

16 See Docket No. 223-28 at 44:15-22; Docket No. 248-1 at ¶¶ 5-9, 11; Docket No. 248-19 at 84:7-

22; Docket No. 247-15.

17 See Docket No. 223-28 at 44:23-45:23, 219:18-21; Docket No. 248-19 at 84:25-85:24; Docket 

No. 248-29.

18 See Docket No. 248-19 at 89:5-25, 136:3-25; Docket No. 248-21 at 46:24-47:18; Docket No. 

248-29; Docket No. 248-40; Docket No. 248-41; Docket No. 248-42; Docket No. 248-44; Docket 

No. 257-10 at 200:8-20.

19 Docket No. 248-42 at NVDQ000864345.

20 Docket No. 248-40.

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ORDER GRANTING-IN-PART MOTIONS FOR SUMMARY JUDGMENT

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While Novadaq is a relative newcomer to the medical imaging market, Karl Storz is an 

established heavyweight. Founded in Germany in 1945, today the company employs thousands of 

people and has subsidiaries in dozens of countries.21 Building on decades of experience in 

endoscopic imaging, Karl Storz launched the IMAGE 1 system in 2002 and the IMAGE 1 HD 

system in 2007.22 These systems comprise both hardware and software components that enable 

capture, display and recording of real-time images and video from endoscopic procedures.23

Around 2010, Karl Storz coined the SPIES acronym, short for Storz Professional Image 

Enhancement System, for its next-generation product.24 In 2011, Karl Storz applied to register a

SPIES mark in Germany and then in the United States.25 And in March 2014, Karl Storz 

introduced the SPIES system to the American market, bearing the full name IMAGE 1 SPIES and 

including software applications known as SPIES CLARA and SPIES CHROMA.26

27

 

21 See Docket No. 223-16 at 92:21; Docket No. 231-1; Docket No. 231-3; Docket No. 227-1 at 

¶¶ 3, 5. Novadaq raises evidentiary objections to various statements in a declaration by Thomas 

Prescher, the director of upstream marketing at Karl Storz Endoscopy America. See Docket No. 

227-1; Docket No. 247-4 at 4-7. The court need not rule on these objections because Prescher’s 

statements do not affect the court’s ultimate decisions. The court refers to them here only to 

provide context for the reader.

22 See Docket No. 227-1 at ¶¶ 4, 9, 11.

23 See id. at ¶ 9; Docket No. 247-22 at KS015494.

24 See Docket No. 223-16 at 13:16-19, 22:2-4, 26:3-11, 28:4-13.

25 See Docket No. 231-13; Docket No. 231-14.

26 See Docket No. 227-1 at ¶¶ 15-18; Docket No. 247-22 at KS015496-97.

27 Docket No. 247-22 at KS015496.

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28 29

Novadaq brought the present suit in October 2014.30 It alleges under 15 U.S.C. § 1114 that 

Karl Storz’ actions with respect to its SPIES products infringe Novadaq’s SPY-related 

trademarks.

31 Novadaq also brings several other related causes of action under both federal and 

California law.32 Finally, Novadaq seeks the cancellation of several of Karl Storz’ own trademark 

registrations on SPIES and related marks.33

II.

This court has jurisdiction under 28 U.S.C. §§ 1331 and 1367. The parties further 

consented to the jurisdiction of the undersigned under 28 U.S.C. § 636(c) and Fed. R. Civ. 

P. 72(a).

 

28 Docket No. 247-20.

29 Docket No. 258-16.

30 See Docket No. 1.

31 See Docket No. 28 at ¶¶ 55-62.

32 See id. at ¶¶ 63-86.

33 See id. at ¶¶ 87-91.

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III.

Pursuant to Fed. R. Civ. P. 56(a), summary judgment is appropriate when “there is no 

genuine issue as to any material fact and the moving party is entitled to judgment as a matter of 

law.” Material facts are those that may affect the outcome of the case.34 A dispute as to a material 

fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the 

non-moving party.35 All evidence must be viewed in the light most favorable to the non-moving 

party. At this stage, a court “does not assess credibility or weigh the evidence, but simply 

determines whether there is a genuine factual issue for trial.”36 Initially, the moving party bears 

the burden to show that no genuine issue of material fact exists.37 If this burden is met, the burden 

shifts to the non-moving party.

38 Applying these standards to the parties’ claims and the evidence 

in the record, the court concludes that only some of the issues presented can be resolved.

First, Novadaq’s registered SPY mark covers endoscopic medical imaging systems

because the registration is now incontestable and those devices are within the scope of the 

registration. The Lanham Act provides that a registered trademark may become incontestable 

when certain requirements are met, one of which is filing with the USPTO an affidavit “setting 

forth those goods or services stated in the registration on or in connection with which such mark 

has been in continuous use for . . . five consecutive years [after the registration date] and is still in 

use in commerce.”39 An incontestable trademark registration is “conclusive evidence of the 

validity of the registered mark and of . . . the registrant’s exclusive right to use the registered mark 

 

34 See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts that 

may affect the outcome of the suit under governing law will properly preclude the entry of 

summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.”).

35 See id.

36 House v. Bell, 547 U.S. 518, 559-60 (2006). 

37 See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

38 See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 630, 630 (9th Cir. 1987).

39 15 U.S.C. § 1065(3).

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in commerce . . . on or in connection with the goods or services specified in the affidavit” above.40

Even an incontestable trademark registration, however, still is subject to several defenses, 

including “[t]hat the mark has been abandoned by the registrant.”41 “The burden is on the 

challenger to plead and prove one or more of the statutory exceptions to incontestability: they are 

affirmative defenses not put in issue by a general denial.”42 To establish abandonment, the 

accused infringer must show that the trademark owner “is not using its mark on the goods that will 

be effectively excluded by the proposed restriction.”43 “To the extent that courts have applied a 

‘partial abandonment’ theory, it has been limited to situations where the registration describes a 

class of goods or services on which the owner has ceased using his mark.”44

Karl Storz did not plead abandonment among its affirmative defenses.45 Nevertheless, 

Karl Storz now argues, both in its own motion for summary judgment and in opposition to 

Novadaq’s, that Novadaq abandoned its SPY mark with respect to devices used in minimally 

invasive or endoscopic surgery. By failing to plead it earlier, Karl Storz plainly waived its right to 

raise this defense now.

 

40 15 U.S.C. § 1115(b).

41 Id. § 1115(b)(2).

42 6 McCarthy on Trademarks and Unfair Competition § 32:149 (4th ed. 2015); see Dakota Indus., 

Inc. v. Ever Best Ltd., 28 F.3d 910, 913 (8th Cir. 1994); O’Brien Int’l, Inc. v. Mitch, Case No. 79-

cv-0227, 1980 WL 30251, at *7 n.15 (N.D. Cal. June 16, 1980); Philip Morris, Inc. v. Imperial 

Tobacco Co., 251 F. Supp. 362, 379 (E.D. Va. 1965).

43 Levi Strauss & Co. v. GTFM, Inc., 196 F. Supp. 2d 971, 976 (N.D. Cal. 2002) (quoting Milliken 

& Co. v. Image Indus., Inc., 39 U.S.P.Q.2d 1192, 1996 WL 383905, at *2 (T.T.A.B. 1996)).

44 Id. at 977.

45 See Docket No. 30 at 12. At the hearing on this motion, Karl Storz moved for leave to amend 

its pleadings to include the defense, citing the Ninth Circuit’s holding that “absent prejudice to the 

plaintiff, the district court has discretion to allow a defendant to plead an affirmative defense in a 

subsequent motion.” Simmons v. Navajo Cty., Ariz., 609 F.3d 1011, 1023 (9th Cir. 2010). 

Allowing amendment to add this defense at this late date would prejudice Novadaq. The court 

denies Karl Storz’ motion for leave to amend, as it has done once before. See Docket No. 157.

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Even if it had pled the defense, Karl Storz could not succeed on the merits. Novadaq’s 

SPY trademark became incontestable, at the latest, by March 23, 2011, when the USPTO 

acknowledged Novadaq’s affidavit.46 Under Section 1115(b), the registration encompasses “the 

goods or services specified in the affidavit”—namely, “[m]edical imaging systems comprised 

primarily of imaging, lighting, monitoring and video recording equipment and a computer system 

for controlling such equipment.”47 In other words, the registration covers all “medical imaging 

systems” comprising the elements above. Karl Storz has cited no support for the proposition that 

it can carve out endoscopic imaging devices—a class of goods that does not appear separately in 

the registration—for the purposes of proving partial abandonment. In fact, the authority available 

cuts the other way.48

This makes sense. Congress created the incontestability provisions in an effort to accord 

trademarks “the greatest protection that can be given them.”49 Accordingly, the Lanham Act 

narrowly defines abandonment “as (1) discontinuance of trademark use and (2) intent not to 

resume such use.”50 And when applying to register a trademark, the owner specifies the intended 

 

46 See 15 U.S.C. § 1115; Docket No. 230-5 at NVDQ000052516.

47 Docket No. 230-5 at NVDQ000052522.

48 See DC Labs Inc. v. Celebrity Signatures Int’l, Inc., Case No. 12-cv-1454, 2013 WL 4026366, 

at *2 (S.D. Cal. Aug. 6, 2013) (“[P]artial cancellation is legally possible for abandonment of a 

specific good listed in the registration.”); Monster Cable Prods., Inc. v. Discovery Commc’ns, Inc., 

Case No. 03-cv-3250, 2004 WL 2445349, at *2 (N.D. Cal. Nov. 1, 2004) (“The Trademark Board, 

however, appears to acknowledge the possibility of partial cancellation for abandonment of a 

specific good listed in the registration.”); Levi Strauss, 196 F. Supp. 2d at 976 (“To the extent that 

courts have applied a ‘partial abandonment’ theory, it has been limited to situations where the 

registration describes a class of goods or services on which the owner has ceased using his 

mark.”); Milliken, 1996 WL 383905, at *3; Dak Industries Inc. v. Daiichi Kosho Co., 35 

U.S.P.Q.2d 1434, 1995 WL 454108, at *3-4 (T.T.A.B. 1995); Eurostar Inc. v. “Euro-Star” 

Reitmoden GmbH & Co. KG, 34 U.S.P.Q.2d 1266, 1995 WL 231387, at *5-6 (T.T.A.B. 1994).

49 Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 193 (1985) (quoting S. Rep. No. 

1333, at 6 (1946)).

50 Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc., 458 F.3d 931, 935 (9th Cir. 2006).

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usages for the mark—“those goods on which the mark appears along with, if applicable, their 

channels of distribution.”51 The owner of a registered trademark thus knows exactly what it needs 

to do to avoid abandoning the mark. That is, the owner must maintain an intention to keep using 

the mark in connection with each of the classes of goods that the owner specified in the 

registration. Allowing challengers to chip away at the class of goods covered by a registered 

trademark would introduce uncertainty into the registration system and make it unnecessarily 

difficult for an owner to keep its marks.

Second, Karl Storz has not shown a genuine dispute of fact with respect to its claim of 

laches. “To prevail on a laches defense, a defendant must show two elements: (1) the claimant 

unreasonably delayed in filing suit based on when the claimant knew or should have known of the 

allegedly infringing conduct; and (2) as a result of the delay, the defendant suffered prejudice.”52 

A plaintiff presumptively acts reasonably by bringing a claim within the statute of limitations 

period for the most closely analogous state law claim.53 Under California law, that period is four 

years.

54

 Karl Storz itself admits that the earliest possible triggering date for laches was August 5, 

2011—less than four years before Novadaq filed this suit—and it has not shown any

“extraordinary circumstances” that might overcome the presumption of reasonability.

55

 And 

because a defendant must prove the elements of laches before it can establish acquiescence, the 

 

51 B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1300 (2015).

52 AirWair Int’l Ltd. v. Schultz, 84 F. Supp. 3d 943, 955 (N.D. Cal. 2015) (citing Danjaq LLC v. 

Sony Corp., 263 F.3d 942, 952-56 (9th Cir. 2001)).

53 See Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 997 (9th Cir. 2006).

54 See id. at 997 n.11. Karl Storz disputes this conclusion, but cites no precedent that departs from 

the universal trend.

55 Danjaq, 263 F.3d at 954 (quoting Telink, Inc. v. United States, 24 F.3d 42, 46 n.5 (9th Cir. 

1994)). Karl Storz argues only that Novadaq should have known of Karl Storz’ potential 

infringement in 2011 but that it failed to challenge any of Karl Storz’ registrations for its SPIES 

mark. See Docket No. 245-4 at 16-17. There is no evidence that Novadaq actually learned of the 

alleged infringement until January 2014. See Docket No. 246-4 at 66:25-67:4.

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latter defense falls as well.56

Third, Karl Storz’ other affirmative defenses—of estoppel and unclean hands—fare no 

better. “A defendant in a trademark infringement lawsuit claiming estoppel must show (1) that the 

plaintiff ‘knew [the defendant] was selling potentially infringing’ products; (2) the plaintiff's 

‘actions or failure to act led [the defendant] to reasonably believe that [the plaintiff] did not intend 

to enforce its trademark right’ against defendant; (3) that defendant did not know the plaintiff 

‘actually objected to the sale of its potentially infringing [product]’; and (4) due to its reliance on 

the plaintiff's actions, defendant ‘will be materially prejudiced’ if the plaintiff ‘is allowed to 

proceed with its claim.’”

57 Karl Storz claims that it interpreted Novadaq’s failure to enforce its 

trademark rights against others to mean that Novadaq would not pursue Karl Storz, but it cites no 

evidence from the record—no declaration, no deposition testimony, no email, nothing—to support 

this assertion.

58

As for unclean hands, Karl Storz “must demonstrate that the plaintiff’s conduct is 

inequitable and that the conduct relates to the subject matter of its claims.”59 Karl Storz argues 

that Novadaq’s hands are unclean because Novadaq applied for a trademark registration for 

iSPIES with an inaccurate first use date,

60 included that incorrect first use date in its pleadings 

here61 and continues to prosecute this case in bad faith to expand its trademark rights unlawfully. 

The latter two cannot underlie an unclean hands defense because they relate to the current 

 

56 See AirWair, 84 F. Supp. 3d at 956-57.

57 Id. at 958 (alterations in original).

58 See Docket No. 245-4 at 20-21.

59 Japan Telecom, Inc. v. Japan Telecom Am. Inc., 287 F.3d 866, 870 (9th Cir. 2002) (quoting 

Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837, 847 (9th Cir. 1987)).

60 When it filed the iSPIES application, Novadaq alleged a date of first use of October 2009. See

Docket No. 230-25 at NVDQ000052937. But in discovery responses in this litigation, Novadaq 

admits that in fact it did not use the mark until September 2011. See Docket No. 230-2 at 20-21.

61 See Docket No. 28 at ¶¶ 27, 52. As above, Novadaq no longer claims this date of first use.

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litigation, not to how Novadaq allegedly obtained the asserted trademark rights.

62

 All that remains 

is the incorrect first use date Novadaq provided when applying for the iSPIES trademark 

registration. But Karl Storz does not dispute that Novadaq used the mark before it applied for the 

iSPIES registration.

63

 The claimed date of first use thus was not a material misrepresentation.

64

Furthermore, as Novadaq points out, in this action it has asserted only common law rights to the 

SPIES and iSPIES marks,

65 and trademark registration has no effect on the owner’s common law 

rights in the mark.

66

 Novadaq’s misstatements to the PTO are immaterial to this case and cannot 

support an unclean hands defense.

Fourth, no reasonable jury could find Karl Storz liable for willful infringement of 

Novadaq’s trademarks or for monetary damages. “Willful infringement carries a connotation of 

deliberate intent to deceive.”

67 Conduct that is “deliberate, false, misleading, or fraudulent” meets 

this standard.68 In deciding whether to award attorneys’ fees in a trademark infringement case, the 

Ninth Circuit has said that “[i]nfringement is not willful if the defendant ‘might have reasonably 

 

62 See 6 McCarthy on Trademarks at § 31:51 (“The act of bringing the lawsuit is not the subject 

matter concerning which plaintiff seeks relief. Unclean hands must relate to the getting or using 

the alleged trademark rights.” (citing Sears, Roebuck & Co. v. Sears, 744 F. Supp. 1297, 1300 (D. 

Del. 1990)).

63 See Docket No. 230-2 at 20-21; Docket No. 230-25.

64 See Pony Express Courier Corp. v. Pony Express Delivery Serv., 872 F.2d 317, 319 (9th Cir. 

1989) (“The claim of a date of first use is not a material allegation as long as the first use in fact 

preceded the application date.”).

65 See Docket No. 28 at ¶ 1.

66 See Cal. Cooler, Inc. v. Loretto Winery, Ltd., 774 F.2d 1451, 1454 (9th Cir. 1985).

67 Fifty-Six Hope Road Music, Ltd. v. A.V.E.L.A., Inc., 778 F.3d 1059, 1074 (9th Cir. 2015) 

(quoting Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1406 (9th Cir. 1993), superseded by 

statute on other grounds, Trademark Amendments Act of 1999, Pub. L. No. 106-43, 113 Stat. 

218).

68 Id. (quoting Lindy Pen, 982 F.2d at 1406).

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thought that its proposed usage was not barred by the statute.’”69 The discussion could start and 

end there. At the hearing on these motions, Novadaq represented that it did not move for 

summary judgment of infringement because it felt that genuine disputes of fact remain with 

respect to the likelihood of confusion.70 In other words, Novadaq believes—and the court agrees, 

as detailed below—that a reasonable jury could find that Karl Storz did not infringe any of 

Novadaq’s marks. It follows that Karl Storz reasonably could have believed that it did not 

infringe, meaning that any infringement by Karl Storz was not willful under Blockbuster Videos.

In any case, the facts that Novadaq cites could not lead a reasonable jury to find that Karl 

Storz deliberately intended to deceive customers. At most, the evidence suggests that Karl Storz’ 

trademark searches were inadequate, that Karl Storz knew about Novadaq’s similar marks and 

products and that Karl Storz acted unwisely in proceeding despite this knowledge.

71

 But, as the 

Fourth Circuit has put it, “knowledge of another’s goods is not the same as an intent ‘to mislead 

and to cause customer confusion.’”72 Willful infringement requires that Karl Storz intentionally 

misled customers by using Novadaq’s marks, and no evidence in the record suggests that it did. 

To the contrary, Karl Storz executives were annoyed by the possibility that their products might be 

confused with Novadaq’s,

73 and Karl Storz applied to register its own SPIES-related trademarks.74

 

On this evidence, no reasonable jury could find Karl Storz liable for willful infringement. And 

because Novadaq only seeks damages “for recovery of unjust enrichment and disgorgement” and 

 

69 Blockbuster Videos, Inc. v. City of Tempe, 141 F.3d 1295, 1300 (9th Cir. 1998) (quoting Int’l 

Olympic Comm. v. San Francisco Arts & Athletics, 781 F.2d 733, 738-39 (9th Cir. 1986)).

70 See Docket No. 271 at 33:23-34:10.

71 See Docket No. 247-4 at 35-38.

72 George & Co. LLC v. Imagination Entm’t Ltd., 575 F.3d 383, 398 (4th Cir. 2009) (quoting 

Luigino’s, Inc. v. Stouffer Corp., 170 F.3d 827, 831 (8th Cir. 1999)).

73 See Docket No. 247-8 at 72:22-74:17, 111:9-112:12.

74 See Docket Nos. 231-14, 231-24, 231-38, 231-48. 

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not “actual losses,”75 once willful infringement is out of the picture, so are damages.

76

Fifth, the remaining issues on which Karl Storz seeks summary judgment, however, must 

go to the jury. Karl Storz moves for summary judgment of non-infringement because there is no 

confusion. In the Ninth Circuit, likelihood of confusion in a trademark action is evaluated by the 

eight-factor Sleekcraft test.77 The factors are “1. strength of the mark; 2. proximity of the goods; 

3. similarity of the marks; 4. evidence of actual confusion; 5. marketing channels used; 6. type of 

goods and the degree of care likely to be exercised by the purchaser; 7. defendant’s intent in 

selecting the mark; and 8. likelihood of expansion of the product lines.”78 “The test is a fluid one 

and the plaintiff need not satisfy every factor, provided that strong showings are made with respect 

to some of them.”79 “Given the open-ended nature of this multi-prong inquiry, it is not surprising 

that summary judgment on ‘likelihood of confusion’ grounds is generally disfavored.”80

This case is not one of the rare exceptions. Karl Storz raises plausible arguments for why

there is no likelihood of confusion between Novadaq’s SPY marks and Karl Storz’ products, but 

Novadaq does the same on the other side for each Sleekcraft factor. It is unnecessary to 

summarize all of their contentions here, but several factors are pivotal in precluding summary 

judgment. For example, the third Sleekcraft factor is the similarity of the marks in the form in 

 

75 Docket No. 223-12 at 3.

76 Cf. Adray v. Adry-Mart, Inc., 76 F.3d 984, 988 (9th Cir. 1995) (upholding a jury instruction 

conditioning an award of profits on a finding of willful infringement because the plaintiff was not 

seeking damages based on lost sales). Novadaq does not object to Karl Storz’ reasoning on this 

point.

77 AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), abrogated on other grounds by 

Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 810 & n.19 (9th Cir. 2003). 

78 Id. at 348-49.

79 Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 631 (9th Cir. 2005).

80 Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1210 (9th Cir. 2012).

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which the customer encounters them in the marketplace.81 Karl Storz claims that its products are 

always branded with the full name IMAGE 1 SPIES,82 but Novadaq has put forth evidence that 

Karl Storz’ SPIES mark creates its own commercial impression.83 This in itself is a disputed issue 

of fact. So is whether, in either form, the marks—one of which is (or at least includes) the plural 

form of the other—are similar.

Novadaq also has shown a genuine dispute of fact with respect to the fourth and potentially 

most important Sleekcraft factor, evidence of actual confusion.84 In an interrogatory response, 

Novadaq identified a number of instances of confusion,85 several of which Novadaq later 

substantiated with deposition testimony from Novadaq employees and with documentary 

evidence.

86

 Karl Storz introduces its own evidence and argues against the credibility of 

Novadaq’s, but in doing so Karl Storz only highlights that a factual dispute remains.

Similarly, the fifth Sleekcraft factor, the marketing channels used, weighs against summary 

judgment. Novadaq and Karl Storz attend the same trade shows87 and sell to the same doctors.88 

 

81 See Sleekcraft, 599 F.2d at 351.

82 See Docket No. 258-16.

83 See Docket Nos. 231-14, 231-24, 231-38, 231-48 (applications for trademark registrations 

containing SPIES but not IMAGE 1); Docket No. 247-22 at KS015494, KS015498 (pictures and 

screenshots of Karl Storz products where the words IMAGE 1 are separated from the word 

SPIES).

84 See Sleekcraft, 599 F.2d at 352 (“Evidence that use of the two marks has already led to 

confusion is persuasive proof that future confusion is likely.”).

85 See Docket No. 248-48 at 59-70. Several of these instances involved initial interest confusion, 

where a similar mark “capture[s] initial consumer attention,” which can lead to a finding of 

trademark infringement even if no actual sale is completed. Dr. Seuss Enters., L.P. v. Penguin 

Books USA, Inc., 109 F.3d 1394, 1405 (9th Cir. 1997).

86 See Docket No. 247-13 at 58:24-59:25; Docket No. 248-20 at 19:15-20:16, 30:14-31:19, 87:17-

88:19, 144:20-148:20; Docket No. 248-52; Docket No. 248-54; Docket No. 248-55; Docket No. 

257-12 at 143:4-149:16.

87 See Docket No. 247-13 at 54:13-55:23; Docket No. 248-25; Docket No. 248-26; Docket No. 

248-44; Docket No. 248-45.

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Karl Storz argues that this means little, because “the shared use of a ubiquitous marketing channel 

does not shed much light on the likelihood of consumer confusion.”89 But in Network Automation, 

the Ninth Circuit was discussing the Internet as a whole. These industry conventions are “niche 

marketplaces,”

90 where “the general class of . . . purchasers exposed to the products overlap.”91

 

Even if Novadaq and Karl Storz make actual sales through dedicated sales forces and a lengthy 

sales process,92 the companies use the same marketing fora to funnel customers into these sales 

channels. All told, on likelihood of confusion, the parties must plead their cases to the jury.

Karl Storz also seeks summary judgment that it has prior rights to the SPIES and iSPIES 

marks. In general, “[t]he party who first uses a mark in uses a mark is said to have priority over 

other uses.”93 But “in limited circumstances, a party may clothe a new mark with the priority 

position of an older mark.”94 This doctrine, called “tacking,” is “available when the original and 

revised marks are ‘legal equivalents’ in that they create the same, continuing commercial 

impression.”95 In general, it is the jury’s task to determine if two marks are legally equivalent.96 

However, “tacking only applies in ‘exceptionally narrow’ circumstances,”97 and the court may 

 

88 See Docket No. 248-20 at 18:18-19:2, 32:14-25, 36:1-21, 83:5-84:25.

89 Network Automation v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 2011).

90 Id.

91 Sleekcraft, 599 F.2d at 353.

92 See Docket No. 223-32 at 69:20-74:19.

93 Hana Fin., Inc. v. Hana Bank (Hana II), 135 S. Ct. 907, 909 (2015).

94 Id.

95 Id.

96 See id. at 910-911.

97 Hana Fin., Inc. v. Hana Bank (Hana I), 735 F.3d 1158, 1160 (9th Cir. 2013) (quoting 

Brookfield Commc’ns v. W. Coast Entm’t Corp., 174 F.3d 1036, 1047 (9th Cir. 1999)), aff’d, 135 

S. Ct. 907 (2015).

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decide the issue of tacking on summary judgment when “the facts warrant it.”98

The facts do not warrant it here. Karl Storz claims a priority date of February 28, 2011 for 

its SPIES mark because SPIES is the dominant portion of a word-design composite mark that it 

registered in Germany on that date.99 Novadaq argues that Karl Storz cannot claim priority to the 

German registration. Although Novadaq acknowledges that the registration provides prima facie 

evidence that Karl Storz owns this mark, Novadaq contends that it is rebutted by evidence that 

Karl Storz never used the mark in the United States. On this preliminary issue, at least, the court 

agrees with Karl Storz. The deposition testimony that Novadaq cites says only that the specific 

graphic in front of the deponent was associated with a product designed for Europe.100 It does not 

stand for the broad proposition that Karl Storz never had a “bona fide intention to use” the SPIES 

mark in the United States.101

Novadaq’s case for tacking, on the other hand, is more plausible. Novadaq admits that it 

did not use its SPIES or iSPIES marks until September 2011,102 but Novadaq argues that these 

marks are legally equivalent to its SPY mark, which it has used since 2001.103 Karl Storz notes 

that Novadaq used the SPIES and iSPIES marks in connection with academic summits, not the 

medical imaging systems that were covered by the SPY marks.104 But a reasonable jury could find 

that Novadaq chose the names SPIES and iSPIES to trade on Novadaq’s brand identity as “the 

 

98 Hana II, 135 S. Ct. at 911.

99 See Docket No. 231-13. 

100 See Docket No. 247-8 at 87:1-20.

101 15 U.S.C. § 1127.

102 See Docket No. 230-2 at 20-21.

103 See Docket No. 248-4 at NVDQ000902643. As Karl Storz points out, Novadaq raised the 

tacking argument for the first time in opposition to this motion. Previously, Novadaq said that it 

first used its SPIES and iSPIES marks in September of 2011. See Docket No. 223-44 at 17.

104 See Docket No. 231-87.

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SPY imaging company.”105 In other words, the jury could decide that Novadaq’s customers 

“perceive[d] [the marks] as conveying the same idea or meaning or evoking the same mental 

reaction.”106

Finally, a reasonable jury could find that Novadaq owns a protectable interest in the 

SPYSCOPE mark. The party claiming a protectable ownership interest in a trademark must show 

that it used the mark in commerce,

107 meaning that goods bearing the mark have been “sold or 

transported in commerce.”108 This “typically occurs when a mark is used in conjunction with the 

actual sale of goods or services.”109 “However, ‘trademark rights can vest even before any goods 

or services are actually sold if the totality of one’s prior actions, taken together, can establish a 

right to use the trademark.’”110 Advertising by itself is not enough, but “advertising combined 

with other non-sales activity . . . can constitute prior use in commerce.”111 The party claiming 

ownership also must show that this prior use was continuous and uninterrupted.112

Novadaq developed an endoscopic imaging system called SPYSCOPE, although it 

changed the name to PINPOINT before it started selling the product to the general public.113 

Before it changed the name, however, Novadaq demonstrated a system bearing the SPYSCOPE 

 

105 Docket No. 248-25.

106 Hana I, 735 F.3d at 1166-67.

107 See Rearden, 683 F.3d at 1203.

108 15 U.S.C. § 1127.

109 Brookfield Commc’ns, 174 F.3d at 1051.

110 Chance v. Pac-Tel Teletrac, 242 F.3d 1151, 1159 (quoting Brookfield Commc’ns, 174 F.3d at 

1052).

111 Dep’t of Parks & Recreation v. Bazaar del Mundo, Inc., 448 F.3d 1118, 1126 (9th Cir. 2006); 

see also New W. Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1200 (9th Cir. 1979).

112 See Bazaar del Mundo, 448 F.3d at 1125-26.

113 See Docket No. 223-28 at 44:15-45:23; Docket No. 248-19 at 84:7-89:1.

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mark at trade shows in 2008 and 2009.

114 Novadaq placed the product with several clinical 

investigators, at least one of whom still uses it today.

115

 And starting in 2009 and continuing at 

least through 2012, a surgeon published and presented the results of clinical trials using a 

SPYSCOPE system.116 A jury could find that this commercial use, limited though it was, sufficed

to give Novadaq an interest in the SPYSCOPE mark. Karl Storz argues that Novadaq abandoned 

any rights it might have had by failing to challenge Boston Scientific’s SPY-related trademark 

registrations

117 and entering into a distribution agreement that barred it from selling products 

under the SPYSCOPE name.118 Regardless, Novadaq has produced evidence that it never 

discarded the SPYSCOPE name completely. That evidence is sufficient to withstand summary 

judgment.

IV.

Novadaq’s motion for partial summary judgment on Karl Storz’ defenses of no ownership, 

abandonment, laches, acquiescence, estoppel and unclean hands is GRANTED. Karl Storz’ 

motion for summary judgment of no willful infringement and no monetary damages is 

GRANTED. Karl Storz’ motions for summary judgment of non-infringement are DENIED.

SO ORDERED.

Dated: November 10, 2015

_________________________________

PAUL S. GREWAL

United States Magistrate Judge

 

114 See Docket No. 248-1 at ¶ 5-7; Docket No. 248-19 at 84:1-6; Docket No. 248-24; Docket No. 

248-26.

115 See Docket No. 248-1 at ¶¶ 7-11; Docket No. 247-13 at 90:9-17; Docket No. 248-19 at 84:7-

85:5.

116 See Docket No. 247-16; Docket No. 248-1 at ¶ 9.

117 See Docket No. 223-30 at 107:8-24.

118 See Docket No. 223-34 at 1.

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