Clubhouse reaches undisclosed settlement with the owner of a sports-networking site, which sued the app for trademark infringement

A trademark lawsuit filed against audio-chat app Clubhouse raised questions about whether the company sought to protect its name via a US trademark. 

“It is interesting that Clubhouse, a company valued at $4 billion, has no registered trademark and appears not to have even applied for registration in the US,” said Christine Haight Farley, a professor at American University Washington College of Law.

SBS Consulting Group said in its complaint that the Clubhouse app infringed on the trademark it received for “TheClubhouse,” a networking site for sports business professionals. 

The complaint, filed in US district court in Arizona, said the overlap between the two services included both content and features.

“Included in AEC’s ‘CLUBHOUSE’ topics of interests and clubs are a variety of networking, career growth, and sports business categories selections,” the complaint said. 

A lawyer for SBS Consulting, James P. Muraff, of McDonald Hopkins in Chicago, said via email that the settlement was an amicable resolution. Under the settlement terms, the parties were unable to discuss details.

SBS Consulting said in its Tuesday filing that the parties had agreed to bear their own lawyers’ fees and costs.Meanwhile, Chicago law firm representing SBS Consulting Group declined to comment on the complaint. Clubhouse didn’t respond to a request for comment.

SBS Consulting’s website “TheClubhouse” is a networking site for sports business professionals. The company said in its May filing that the buzzy audio app Clubhouse had infringed on that name.

It’s common for a quickly growing company like Clubhouse to attract lawsuits, some of which may be opportunistic or without merit, said Michael Atkins, a Seattle trademark lawyer, who teaches at the University of Washington School of Law.

SBS Consulting Group launched its “TheClubhouse” site in November 2018. It filed its registration for “THECLUBHOUSE” in May 2019 and the trademark was granted in December of that year. On its website, the name is styled as “theClubhouse.” 

Because the Clubhouse app was the second to the market with its Clubhouse name, the case will center on whether there was the possibility for “reverse confusion.” That’s when a smaller company trademarks its name, which subsequently gets confused by consumers with a newer, bigger rival. 

“By flooding the market with advertising and superior name recognition, it really deprives the first mover of the ability to exploit and grow their trademark, because everyone now is thinking that their trademark is the more well-known company’s trademark,” Atkins said to a News portal via phone from Spain.

“It’s not too late for Clubhouse to file for its own trademark, ” he added.

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