The Motorola Xoom has only been on store shelves since Thursday, but Google’s new flagship tablet is already facing off against a challenger even more menacing than the iPad, the US legal system . A new trademark infringement lawsuit has been filed by Xoom Corp, a money-transfer business which has been in operation since 2003, and they would like to see sales of the new tablet halted pending a formal trial.
Court documents filed in a California District Court show that Xoom Corp does in-fact own the trade name “Xoom”, and the company claims Motorola is misleading customers by making them think it is endorsed by the money-transfer firm. I think it’s safe to say that piggy backing off of the Xoom Corp name wasn’t Motorola’s intent, but given that they only filed for use of the name in October 26th 2010, they certainly have a bit of explaining to do. For a court to agree to a temporary restraining order on sales of the new tablet, Xoom Corp will need to prove Motorola is actively doing harm to the Xoom brand, and is creating mass confusion in the market. This might be difficult given that the two firms are in very different industries, but ultimately that will be for the courts to decide.
Motorola hasn’t issued a public statement yet, but it’s unlikely they will allow the Xoom to get pulled so early in its launch over such a bizarre technicality. The question now is will they pay a royalty to make Xoom Corp go away, or will they fight to the bitter end.