Greenberg Freeman client Spy Phone Labs LLC develops “apps” for mobile phones. Spy Phone Labs developed an app to allow parents to monitor activity on their child’s mobile phone and, in 2012, began offering the app for download on Google Play, Google’s online marketplace, under the trademarked name SPY PHONE®. As it turned out, “spy phone” was a popular search term for consumers looking for a parental monitoring app, which resulted in the SPY PHONE® app becoming one of the most popular apps on Google Play, with over 1.1 million downloads in its first 10 months.
Seeing Spy Phone Labs’ success, other app developers created similar apps and listed them on Google Play with names that infringed on the SPY PHONE® trademark. In response, Spy Phone Labs would file trademark complaints using Google’s online complaint form, resulting in Google’s removal of the infringing apps.
In June 2013, following an angry exchange between Spy Phone Labs and a developer whose app was removed in response to a trademark complaint, Google declined to remove an infringing app in response to another trademark complaint and, the following week, removed the SPY PHONE® app from Google Play based on an alleged violation of Google’s developer policies. After a brief period when the SPY PHONE® app was allowed back into Google Play, Spy Phone Labs’ developer account was suspended based on allegations of additional policy violations. Protests by Spy Phone Labs that someone was filing false complaints to harm its business fell on deaf ears.
Several weeks later, Spy Phone Labs received an anonymous letter from someone who identified herself as a Google employee. The letter stated that employees at Google responsible for monitoring activity on Google Play were being paid by developers to obtain favorable treatment, and that the SPY PHONE® app had been removed from Google Play at the behest of a competing developer, not because of any policy violation.
Spy Phone Labs retained Michael Freeman of Greenberg Freeman, who commenced a federal lawsuit against Google that included, among others, a claim for contributory trademark infringement, which alleged that Google was enabling other developers to infringe on the SPY PHONE® trademark by failing to remove apps from Google Play with infringing names, and for breach of contract, which alleged that Spy Phone Labs’ suspension violated the terms of the developer agreement between Spy Phone Labs and Google.
Google moved to dismiss the claims against it, arguing that its conduct was protected under the Digital Millennium Copyright Act, that it did not knowingly allow any developer to infringe on the SPY PHONE® trademark, and that it had acted within its rights and discretion under the developer agreement in suspending Spy Phone Labs.
The Court denied Google’s motion to dismiss, finding that Spy Phone Labs had sufficiently pleaded facts that, if proven, would subject Google to liability for contributory trademark infringement and breach of contract, as well as other causes of action alleged in the complaint. The decision is reported at 2016 WL 6025469, 120 U.S.P.Q.2d 1827 (N.D. Cal. Oct. 14, 2016).
Following the decision on the motion to dismiss, rather than continuing with the lawsuit, the parties reached a confidential resolution of their dispute.