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Even in the venture capital world, where folks are well-heeled and considered well-educated, people can get confused. That’s the argument Wilson Sonsini Goodrich & Rosati attorneys are making in a recent federal trademark lawsuit that pits two New York VC firms against each other. Union Square Ventures, known for its investments in such popular Silicon Valley Web companies as Twitter and FeedBurner, is not happy that a newer VC firm � located three blocks from its office in Manhattan � is building a $500 million fund under the name Union Square Partners. Both offices are within a few blocks of the city’s famed Union Square. Union Square Ventures, represented by Wilson Sonsini partners Jessica Margolis and John Slafsky, was established in 2004. Its name is “recognized and well-known within the financial sector,” according to its June 27 complaint. Union Square Partners, represented by Weil, Gotshal & Manges partner Randi Singer, was incorporated in October 2006 and has allegedly already caused confusion. For instance, Union Square Ventures also claims it regularly receives business plans that have the proper mailing address, but are addressed to “Union Square Partners.” And on May 8, an investor received an e-mail from Union Square Partners, and forwarded it to Union Square Ventures, adding the comment, “This was quite confusing for me,” according to the complaint. These actions constitute unfair competition and have damaged Union Square Ventures “and the business and goodwill symbolized by its mark,” the complaint alleges. In its July 17 response, Union Square Partners denied all allegations and stated several reasons it should be allowed to keep its name. The firm points out that it invests in different kinds of businesses than Union Square Ventures. It funds financial businesses like brokerages and asset management � not Web startups. Furthermore, the response argues, people in the VC world should be smart enough to tell the difference between the firms: “Both the defendants and the plaintiff offer services to sophisticated clientele who are able to easily distinguish between the two companies before making financial decisions.”
‘Just a couple of keywords out of a trademark, thrown into a search engine � that can come up with a competitor’s Web site or product. The chances for confusion or harm are greater these days than they were 10 years ago.’

Robert Andris Ropers, Majeski


Union Square Partners also claims Union Square Ventures cannot be considered a protected trademark because it uses a geographic description. And lastly, Union Square Partners says it has not enjoyed any “unjust enrichment” by the use of its name. Wilson Sonsini’s Slafsky declined to comment, as did Weil, Gotshal’s Singer. Some legal observers say the case shows how important defending one’s brand has become in the now-global VC world. Venture capital firms “are trying to brand much more than they used to ever in the past,” said Bernard Vogel, a corporate partner at Silicon Valley Law Group. Defending trademarks that can be used as keywords in Web searches is also crucial these days, said intellectual property litigator Robert Andris, a partner in the Redwood City office of Ropers, Majeski, Kohn & Bentley. “Just a couple of keywords out of a trademark, thrown into a search engine � that can come up with a competitor’s Web site or product,” he said. “The chances for confusion or harm are greater these days than they were 10 years ago.”
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Andris said juries are usually asked to take several factors into consideration when deciding a trademark dispute, such as whether a name is generic and the likelihood of confusion between the two names. By Andris’s judgment, Union Square Ventures has made a pretty good case. The fact that confusion has already occurred is “a very good indicator of whether there’s likely to be confusion” in the future, he said. It’s also reasonable to think that a third party could wonder whether the two VC firms are affiliated because they’re both in the same industry, he said. Union Square Ventures is seeking to have Union Square Partners barred from using that name, and to have the defendants hand over three times the amount of any profit made from their alleged trademark infringement. Andris said courts in recent years have been demanding more proof than in the past that trademark infringement has directly earned profit for defendants. “In a situation like this, it is going to be a battle of the experts [in court],” he said, “and the experts are going to have to have palpable evidence of causation.”

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