Hashtags are more popular than ever on social media sites. They frequently are used on Instagram and Twitter to identify or facilitate a search for a keyword or topic. Recent court decisions caution, however, that hashtags may also play a pivotal role in trademark infringement and false advertising cases.

In the last three months, at least two courts have found a likelihood of confusion based on the unauthorized use of a trademark within a hashtag. For instance, in TWTB, Inc. v. Rampick, No. CV 15-3399, 2016 WL 236313, at *8 (E.D. La. Jan. 20, 2016), the District Court for the Eastern District of Louisiana recognized that the "intent" element of the likelihood of confusion analysis hinged on a former licensee's use of the "Lucy's" mark in a hashtag. The court found that notwithstanding the former licensee's testimony concerning the efforts it took to design a new logo and avoid use of the licensor's federally registered trademarks, it was "clearly holding itself out to be the same business" as the licensed "Lucy's Retired Surfer's Bar & Restaurant" through its social media accounts and, in particular, its use of the "lucysnola" hashtag to promote its own restaurant. Id.

Similarly, in Pub. Impact, LLC v. Boston Consulting Grp., Inc., No. 15-13361-FDS, 2016 WL 1048884, at *11 (D. Mass. Mar. 11, 2016), the court found a likelihood of confusion based on the defendant's use of plaintiff's trademark "PUBLIC IMPACT" in defendant's Twitter username, "@4PublicImpact," and its frequently used hashtag, "#publicimpact." The court emphasized that the username was "almost identical to plaintiff's mark," and the hashtag "#publicimpact" was, in fact, identical to the mark. Id. at *7. The court rejected the defendant's contention that it did not use the hashtag as a "mark," and recognized that the fact that the two parties were competitors heightened the likelihood that even a sophisticated consumer would be confused. Id. at *7, *11. Indeed, both cases underscore that use of a competitor's trademark within a hashtag can potentially create a likelihood of confusion in trademark infringement cases.

In addition, at least one federal court has found that "hashtagging" a competitor's name via social media could deceive customers for purposes of a false advertising claim. In Fraternity Collection, LLC v. Fargnoli, No. 3:13-CV-664-CWR-FKB, 2015 WL 1486375, at *1-2 (S.D. Miss. Mar. 31, 2015), Fraternity Collection, a shirt designer and manufacturer, sued one of its fashion designers for declaratory and injunctive relief after she began selling her designs to a competitor using the hashtags "#fratcollection" and "#fraternitycollection" in her social media accounts. In finding that the company stated a claim for false advertising under the Lanham Act, the court "accepte[d] for present purposes the notion that hashtagging a competitor's name or product in social media posts could, in certain circumstances, deceive consumers." Id. at *4.

Courts and administrative bodies have also been adjudicating – albeit inconsistently –whether hashtags can themselves constitute trademarks. In general, while the mere addition of the hashtag symbol to an otherwise unregistrable mark does not render it registrable, a mark including the hash symbol is registrable as a trademark or service mark if it functions as an identifier of the source of the applicant's goods or services. TMEP § 1202.18. However, "[i]f a mark consists of the hash symbol or the term HASHTAG combined with wording that is merely descriptive or generic for the goods or services, the entire mark must be refused as merely descriptive or generic."Id. (also recognizing that "[g]enerally, the hash symbol and the wording HASHTAG do not provide any source-indicating function because they merely facilitate categorization and searching within online social media").

Illustratively, in Coca-Cola Company v. Whois Privacy Protection Service, Inc./Thien Le Trieu, Le Trieu Thien, 2016 WL 692866, Case No. D2015-2078, at *3 (WIPO Feb. 10, 2016), the complainant commenced a Uniform Domain-Name Dispute-Resolution Policy ("UDRP") proceeding after the respondent registered the domain xomtu.com. Complainant maintained that it owned common law trademark rights in the mark "Xomtu," meaning "gather together and have fun," in Vietnamese, and which it used as #xomtu in connection with its "Share a Coke campaign." Id. In holding that XOMTU constituted a common law trademark, the panel first recognized that the mark functions as an identifier of goods and services rather than merely serving as a label that facilitates searching or linking topics within social media. Id. at *7. The Panel noted Complainant's position that there are millions of hits, likes, shares and similar consumer activity on social media identifying #XOMTU exclusively with the Complainant and its products and services and functioning as an identifier of source. Id. at *5. Additionally, the Panel observed that the mark is likely suggestive insofar as "gather together and have fun" does not convey a descriptive or generic connotation of the nature of goods and services associated with the Complainant's use of such mark. Id. at *7. Nevertheless, because XOMTU, without the hashtag, was determined by the panel to be both a source identifier and have secondary meaning, the panel declined to address whether "#Xomtu" constituted a common law trademark per se.Id.

Conversely, in Eksouzian v. Albanese, No. CV 13-00728-PSG-MAN, 2015 WL 4720478, at *7-8 (C.D. Cal. Aug. 7, 2015), the Central District of California expressed its view that hashtags are merely functional tools, and not actual trademarks in and of themselves. In particular, the court found that the use of the hashtag "#cloudpen" on Instagram did not breach the parties' settlement agreement – which, among other things, prohibited the plaintiffs' use of "CLOUD PEN" in association with plaintiffs' products as a unitary mark. The court reasoned that "hashtags are merely descriptive devices, not trademarks, unitary or otherwise, in and of themselves," and that plaintiff's use of the hashtag "#cloudpen" was merely a functional tool to direct the location of its promotion so that it would be viewed by a group of consumers. Id. at *8. The court did recognize, however, that while the hashtag did not constitute a contractual breach, the uses should stop "if consumer confusion is to be avoided." Id. n.8.

Even if courts are not uniformly convinced that the use of a hashtag can constitute trademark use, online advertisers should nevertheless proceed with caution. Recent cases concerning social media marketing suggest that the use of a hashtag can form the basis of a successful trademark infringement or false advertising suit. On the other hand, those seeking to protect marks should consider registering hashtags that also serve as valuable source identifiers.