Federal Judge Denies Zora Labs’ Bid to Block Deloitte’s Use of ‘Zora AI’

Sterne Kessler’s Monica Riva Talley, director and head of the firm’s Trademark & Brand Protection Practice, spoke to the New York Law Journal on the recent ruling in the trademark case Zora Labs v. Deloitte Consulting. A New York federal judge rejected plaintiff’s request for a preliminary injunction and temporary restraining order, determining that the Polaroid factors govern the court’s evaluation for likelihood of confusion.

In 2023, Deloitte Consulting launched their platform for AI related services named “Zora AI,” but did not file a trademark application for the name. Zora Labs alleged that Deloitte’s “Zora.ai” is identical to its own domain, “Zora.co.” Zora Labs claimed that Deloitte’s use of the name could harm its reputation and mislead users of the system, though the two companies do not operate in the same market.

Talley stated, “The ruling is noteworthy in that the court articulated that just because a software product shares AI functionality, that does not equate with an overlap in the nature of the goods, consumers to which they are directed or channels of trade in which they travel.”

“The court found that the differences in the underlying clients and functionality of the products was a determining factor in denying the preliminary injunction motion,” said Talley, “Recognizing that products utilizing software and AI are practically ubiquitous in today’s tech-driven economy, the court confirmed that more is required to demonstrate proximity of the goods.”