Is KGB infringing on ChaCha's trademark?

In July 2008, ChaCha, the first human-powered search engine, began attaching a trademark designation in its web communications to the numeric string '242242,' which spells ChaCha and is the company's official SMS code. The Indiana-based company filed for a trademark for 242 242 in February 2008 that was successfully registered in September 2008.

It seemed that by late 2008 ChaCha was fully protected from infringements from other mobile services, cybersquatters, and others attempting to mooch off its brands. ChaCha's fortress of protection included its trademark and dozens of defensively registered typo-variants of 242242.com and registrations of 242242 in various tlds and ccTLDs.

Then came the Knowledge Generation Bureau, better known as 'KGB.'

Neither ChaCha nor we at Jamptap anticipated that 542542.com was a typo-variant worthy of registering. Had we, ChaCha's current troubles might have been lessened.

But KGB did go ahead and pick a strikingly similar SMS code to ChaCha's and register its corresponding domain. And, so, we have to first ask: why did KGB elect to choose a SMS code so similar to ChaCha's 242242 when it could have come up with a bunch of SMS codes that spell commonsense phrases like KGB-HQ, KGB-SPY, KGB-411, KGB-IQ, KGB-247, etc...? Is it because KGB wanted to mimic ChaCha's business model down to the 'T'' and didn't want to take any chances with a SMS code of different length and appearance from ChaCha's? (U.S. common shortcodes come in 5 or 6 digits.)

What can ChaCha do now? The first step is defining the issue at hand, which is that its new competitor, KGB, may be confusing ChaCha's existing and prospective customers with the SMS code of 542542 and the corresponding domain of 542542.com. (To make matters worse for ChaCha, KGB has deeper pockets, much more advertising, and the advantage of being a 'new' service.)

The second step is defining its options and the best option is defending itself via its trademark of 242 242. What ChaCha can do is OPPOSE the registration for the service mark of '542 542' filed by Grape Technology Group, Inc. (aka KGB) on October 10, 2008. That mark was for 'Telecommunication services namely two way sms messaging for search inquiries.' (KGB's filing, by the way, occurred four days before KGB registered the domain 542542.com.) ChaCha can oppose KGB's mark when it becomes 'published' [in the Official Gazette, a weekly publication of the US Patent and Trademark Office] and that may occur sometime in this spring (2009). source

If that fails, ChaCha certainly can file a suit in the federal courts and do the job there. The argument would simply be that another company picked a strikingly similar service mark for a very similar service. If ICANN's rulings provide any guidance here, if (usually) a typosquatter's domain is one character off from a domain protected by a trademark, then the complainant (trademark holder) prevails. One can argue that KGB's mark is one-character off from ChaCha's mark. That's the first part. The second part is proving that KGB provides the same or similar 'goods and services' as ChaCha. That is quite clear, even from their respective trademark filings: both marks pertain to providing 'search engine services' (ChaCha)/'search services' (KGB) via 'text messaging' (ChaCha)/'SMS messaging' (KGB).

ChaCha's survival is threatened and that wouldn't be anything unusual in the realm of business if everyone was playing fair. But KGB isn't playing fair.