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A Startup Battles Snowflake, the New Tech Goliath

Startup Yeti Data has sued Snowflake for trademark infringement.

Yeti Data, a big data analytics firm, is suing Snowflake in the U.S. and Germany, alleging that the company infringed on its trademark of the name Snowflake. Snowflake, backed by Salesforce and Warren Buffett’s Berkshire Hathaway, went public last week. On the first day of trading, Snowflake’s share price more than doubled to become the largest initial public offering for a software company. 

“Snowflake was our verb. It’s the actual process of how we organize data, meaning the data crystallizes around a sticky object like a snowflake does. This is how we do things,” said Yeti founder Victor Szczerba, who is a former manager of the data division at SAP and McKinsey consultant, in an interview. 

“Their [Yeti’s] branding is arguably as genius as their technical solution: big data is akin to a blinding snowstorm, but customers want to visualize and understand individual snowflakes. Since no one understands snow better than the yeti, Victor and his team called their company Yeti Data and their solution Yeti Snowflake and Snowflake,” said Christian Liedtke, partner at intellectual property law firm acuminis, which is handling the case.

The European Union Intellectual Property Office awarded Yeti Data a trademark for ‘snowflake,’ with coverage in all 27 EU member states and the U.K., according to the lawsuit Yeti filed late July in the U.S. District Court for the Central District of California. Yeti Data holds a federal trademark registration for Yeti Snowflake from the United States Patent and Trademark Office.

“Yeti Data’s claims are without merit. This represents nothing more than a shake down by a virtually non-existent entity,” said a spokeswoman for Snowflake. 

Liedtke said Yeti filed the lawsuit in Germany as well as the U.S. because Snowflake has identified Europe as a growth market. 

“I would note though that the EU case is even more dangerous to Snowflake than the U.S. case. It proceeds on a much faster schedule, a decision can be expected within as little as five to seven months from now, and when the court finds our client’s trademarks are infringed, it must, as a matter of law, issue an injunction barring Snowflake from using its name and the SNOWFLAKE brand in all 27 EU Member States,” he said. 

Yeti tried to reach a settlement with the company before serving a formal lawsuit. But the two parties couldn’t reach an agreement. Snowflake now says Yeti waited too long to approach them about the trademark infringement. It also says the two companies are very different and the use of the name won’t be confusing to customers.

“Without question there exists what trademark law calls likelihood of confusion in this case. The marks are identical — Snowflake vs. Snowflake — and since Snowflake broadened the scope of its business to include data analytics tools the products and services are also identical. These identical products are being sold under practically identical names to the same types of customers using the same channels of trade. This is a textbook example for what constitutes trademark infringement. Arguing, as Snowflake seems to do, that the companies are different and confusion is unlikely is ludicrous,” Liedtke said. 

The argument that Yeti waited too long is less outlandish but also without merit, said the lawyer. “Snowflake did not buy until the summer of 2018. Snowflake did not change its business purpose vis-à-vis the California Secretary of State until late 2019 and did not start to push its analytics tool until as recently as this year,” he said.

According to the lawsuit, “Defendant’s use of the infringing SNOWFLAKE mark on the identical type of products and services is likely to deceive consumers into believing that Defendant’s products come from the same source and are of the same quality as those of Yeti Data, when they are not. Given Defendant’s aggressive and widespread marketing campaign, reverse confusion, i.e. the mistaken belief of consumers that Plaintiff is in fact infringing Defendant’s purported trademarks or is somehow authorized by or affiliated with Defendant is also likely.”

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