Judge Refuses to Stay Dropbox Lawsuit

     DALLAS (CN – A federal judge has refused to stay a lawsuit against popular file hosting service Dropbox that claims it stole its name from a rival service.
     U.S. District Judge Sam A. Lindsey denied Dropbox’ motion to stay a lawsuit filed in 2011 by Dallas-based Officeware Corp., which claims it has used the Dropmark name for its FilesAnywhere.com file hosting service since 2004, long before defendant Dropbox was founded in 2007.
     After Dropbox tried to register the trademark with the U.S. Patent and Trademark Office in September of 2009, Officeware and two other companies, YouSendIt Inc. and Box.net Inc., opposed the registration in separate proceedings before the PTO’s Trademark Trial and Appeal Board.
     In its motion, Dropbox tried to suspend the lawsuit pending the outcome of proceedings before the TTAB. Lindsey refused to do so, writing that the only claim the TTAB would consider is the registrability of the trademark and that Officeware’s unfair competition, dilution and unjust enrichment claims would not be considered.
     “The instant case involves issues far beyond the issue of registrability,” Lindsay wrote. “Regardless of the TTAB’s decision, this court would still have to determine the infringement issue independently. As the board cannot afford complete relief for Officeware’s claims, the court determines that a stay is not warranted under the facts and circumstances of this case.”
     Lindsay also agreed with Officeware’s concern that if the stay were granted, Dropbox would have another three and one-half years to use to mark.
     “Considering the median length of the proceedings before the TTAB and Officeware’s allegations of trademark infringement, the court determines that a stay delaying this suit would prejudice Officeware,” Lindsay wrote.
     He adds: “Dropbox asserts that it would be prejudiced by being compelled to defend nearly identical claims in multiple forums, at significant risk of inconsistent rulings. The court finds Dropbox’s argument unpersuasive, as it would still be subject to litigation in multiple forums if a stay were granted because there are claims raised in this litigation that cannot be resolved by the TTAB.”
     Founded in 1999, Officeware is a software design and consulting firm that launched one of the first cloud-based services, according to its web site.Currently the 61st most popular free app on iTunes, Dropbox has over 50 million users and is installed on over 250 million mobile devices, according to its web site.

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