Chinese tech company fires back at Epic Games in 'Nreal' trademark dispute

(Reuters) - Nreal Technology has sued "Fortnite" maker Epic Games in San Francisco federal court to clear itself from claims that its augmented-reality glasses will cause consumer confusion with Epic's "Unreal" trademarks.

The Monday complaint responds to a lawsuit brought by Epic in May accusing Nreal of trademark infringement in North Carolina. The Chinese tech company asked the California court to declare there was no likelihood of confusion, and argued Cary, N.C.-based Epic filed the lawsuit in its home state to gain an "unfair advantage".

Nreal said in the lawsuit that Epic sued Nreal in North Carolina -- where it says it has no business presence -- after more than a year of settlement discussions "without any prior warning or notice."

Nreal and its attorneys Diana Rutowski and Maria Sokova of Orrick Herrington & Sutcliffe didn't immediately respond to a request for comment. Epic couldn't be reached for comment, and its attorneys in the North Carolina case, Dale Cendali of Kirkland & Ellis and Robert Van Arnam of Williams Mullen, didn't immediately respond to a request for comment.

Nreal hasn't launched its "Nreal Light" mixed-reality glasses, which allow users to interact with real and virtual objects at the same time, in the United States, but sells them in Korea, Japan, Spain, and Germany. Its complaint said it chose the name to evoke "an 'Nth' reality — 'Nth' as a reference to the 'latest' or 'utmost' reality that a user can experience."

Nreal applied to register a U.S. "Nreal" trademark in 2018. Epic opposed the application later that year, arguing the mark was likely to cause confusion with trademarks related to its Unreal games and Unreal Engine development software.

Epic argued in its May complaint that Nreal's launch of Nreal Light in the U.S. was "imminent", and that it was "no coincidence that Nreal named its glasses after the industry-leading engine for creating immersive and interactive three-dimensional content." It said that "Nreal" looks and sounds virtually identical to "Unreal", that the companies' products overlap, and that Nreal also plans to develop game software.

Nreal hasn't yet responded in the North Carolina case, but it told the California court that it doesn't infringe because the marks are different -- one a "common word" and the other "coined by Nreal" -- and are used in different fields to sell different goods. It asked the court for a judgment that the Nreal name wasn't likely to cause confusion and that its use and registration of the Nreal trademark doesn't violate Epic's rights.

"Although it may be argued that both parties offer their goods and services in connection with computer hardware and software products at the most general level, there is no further similarity between their fields of use," Nreal said.

The case is Nreal Technology Ltd v. Epic Games Inc, U.S. District Court for the Northern District of California, No. 3:21-cv-05537.

For Nreal: Diana Rutowski and Maria Sokova of Orrick Herrington & Sutcliffe

For Epic: California attorney information not immediately available

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