Align Technologies could safely be dubbed the “saver of social lives” after presenting the world with INVISALIGN tooth aligners and putting an end to the horrors of headgear and braces some of us remember not-so-fondly.

In addition to INVISALIGN, Align makes other innovative products like the ITERO ELEMENT scanner, a computer system and handheld wand-like device with a protective sleeve that takes 3D scans of the inside of a patient’s mouth, teeth, and gums used for preparing individualized INVISALIGN trays. Versions of the ITERO ELEMENT scanner have been recognized by the dental industry not only for their improvements over prior scanning methods—increased accuracy and quality of scanned images—but also for their design. Align owns U.S. Trademark registrations for ITERO, ITERO ELEMENT, and INVISALIGN.

Strauss Diamond Technologies, an industry competitor, began selling its MAGICSLEEVE product in August 2018. The MAGICSLEEVE is a silicone sleeve that covers the wand component of intraoral (inside-the-mouth) scanners and is advertised to the same audience as ITERO ELEMENT scanners and accompanying ITERO sleeves. As the MAGICSLEEVE can be used with ITERO ELEMENT scanners, Strauss advertised them that way, including featuring Align trademarks and product images in its advertisements.

Unsurprisingly, Align filed a motion for preliminary injunction in the Northern District of California against Strauss to enjoin it from “advertising . . . or selling its dental imaging wand sleeve product (MAGICSLEEVE), or any other product for use with Align’s dental imaging (ITERO) scanner system or Align products, and from using the ITERO and Invisalign marks.”

Align argued that Strauss’s use of Align product names in hashtags accompanying social media postings and Align-created content implied an endorsement or association between the two companies that did not exist. Further, Align claimed Strauss was engaging in false advertising by saying the MAGICSLEEVE provided scans 25% faster and “just as sharp” as Align’s ITERO ELEMENT scanner. Align brought six claims against Strauss: four federal claims (trademark infringement, trademark counterfeiting, false association, and false advertising, all under the Lanham Act), and two California state-law claims (unfair competition and false advertising).

Strauss responded that its use of Align’s marks and product images was permitted as “nominative fair use.” Under that defense to trademark infringement, the use of another party’s trademark to identify that party’s product is allowed when the following three-part test is satisfied: (1) the trademark is the only word available to accurately describe the product, (2) the mark is used only as is “reasonably necessary” to identify the product, and (3) the user does nothing that would suggest endorsement by the trademark owner.

But the court disagreed that the defense applied in this case. Initially addressing Strauss’s use of Align’s marks in hashtags like #straightsmiles and #invisalign and Align-created content, the court rejected the argument that it was nominative fair use for two reasons. First, the court noted that in some cases, Strauss was using Align’s marks to refer to its (Strauss’s) own product, not Align’s products (which it called “the foundational assumption of nominative fair use”). Second, the court found that even if the marks were thought to be references to Align’s products, Strauss’s use of them failed the second part of the nominative fair use test because Strauss used Align’s marks more than was “reasonably necessary” to identify Strauss’s product. And yes, we see the apparent disconnect here. As we read this part of the court’s decision, though, its point was that whichever party’s product Strauss was referring to when it used Align’s mark, Strauss used the mark more than “reasonably necessary.” So that provided a second reason why nominative fair use did not apply to Strauss’s use of Align’s marks in the hashtags. Indeed, the court found that Strauss’s use of Align’s marks in the hashtags was never for the purpose of identifying Strauss’s product, or anything for that matter. Instead, the court concluded that Strauss used Align’s marks to imply an association between Strauss and the marks.

Turning to whether Strauss’s use of the ITERO image was nominative fair use, the court found that it suffered from a different problem. In particular, the court agreed that the concept of nominative fair use applied because Strauss had used the image to refer to Align’s product. And while the court found that Strauss’s use of the image passed the first two parts of the test (the product wasn’t readily identifiable without using the word “iTero” and Strauss used the word only as reasonably necessary), the court found that its use failed the third. In the court’s view, by using a distinctive image of Align’s “clearly designed for advertising purposes”—which appeared both in Strauss’s marketing and on Align’s website, thus suggesting “association or affiliation”—Strauss was implying that its MagicSleeve was “in some manner endorsed or authorized by Align.”

After rejecting Strauss’s argument based on nominative fair use, the court weighed the Sleekcraft factors, which are applied to determine if a defendant’s use of a trademark was likely to confuse customers. Here, the court concluded, for reasons it said were similar to why it had rejected Strauss’s nominative fair use defense, that Strauss’s use of Align’s marks implied association and was likely to confuse a reasonable person into thinking its products were endorsed or approved by Align. The court thus determined that Align was likely to prevail on the merits of its trademark infringement claim. And later, finding that Align’s false-association arguments were no different from those it made regarding its trademark infringement claim, the court concluded that for the same reasons Align was also likely to prevail on its false-association claim.

The court also addressed Align’s trademark counterfeiting claim—that Strauss was using counterfeits of Align’s marks to sell the MAGICSLEEVE. But while the court determined that the MAGICSLEEVE was similar to Align’s ITERO sleeve, it rejected Align’s counterfeiting claim on two grounds. First, it concluded that while a counterfeit must be “substantially indistinguishable” from a registered trademark, none of Align’s trademark registrations covered its sleeve. Second, it concluded that while counterfeiting is the “hard core” of trademark infringement, requiring proof that the alleged counterfeited product is a “stitch-for-stich copy” of the genuine article, “the shape, color, and design of the MagicSleeve are different from the iTero sleeve.”

In addressing Align’s false advertising claim under the Lanham Act—which requires proof that the challenged statements were either literally false or literally true but likely to mislead—the court considered two statements of Strauss’s. The first statement—that the MAGICSLEEVE provides a 25% faster scanning—required no real evaluation, since Strauss conceded at oral argument that it was literally false. But the court found it “harder” to evaluate the second statement—that the scans taken with the MAGICSLEEVE are “just as sharp.” While Align had provided evidence that MAGICSLEEVE scans were “often” of lower quality, the court concluded that Align had not shown that MAGICSLEEVE scans were lower in quality most of the time. As a result, the court held, Align had not shown that this statement was false.

In short, the court concluded that Align was likely to prevail on three of its federal claims—trademark infringement, false association, and false advertising. Since Strauss did not dispute that these violations would also be violations of California state law (both unfair competition and false advertising)—and instead responded to the state-law claims by repeating its arguments that it did not violate federal law—the court held that Align was also likely to prevail on its state-law claims.

From there, it was an apparently easy decision to enter a preliminary injunction. The court addressed the remaining factors—whether Align would suffer irreparable harm absent a preliminary injunction, how the equities should be balanced, and the public interest—and found they supported providing injunctive relief. Indeed, the court appears to have rejected Align’s requested relief in only one respect, concluding that enjoining Strauss completely from any advertising or sale of the MAGICSLEEVE, as Align requested, would impose hardship on Strauss and stifle competition. In the end, the court enjoined Strauss both from infringing Align’s registered marks and from publicizing the false statement that the MagicSleeve provides a 25% faster scanning time—a decision sure to leave Align smiling.

The case is: Align Technology, Inc. v. Strauss Diamond Instruments, Inc., No. 18-CV-06663-TS, 2019 WL 1586776 (N.D. Cal. Apr. 12, 2019).