Court limits use of trademark for forthcoming AI-powered agentic browser

A technology company sued artificial intelligence company Perplexity for trademark infringement and unfair competition. Plaintiff claimed exclusive rights to the mark COMET, which it used in connection with a range of technology and consulting services. Perplexity planned to launch an “AI-powered browser for agentic search” under the same name. Plaintiff asked the court to stop Perplexity from using the mark altogether. The court granted a preliminary injunction in part, allowing the browser to launch under the COMET mark, but blocking all other uses of the mark.

To decide whether to issue the injunction, the court applied the standard four-part test. A plaintiff must show a likelihood of success on the merits, a likelihood of suffering irreparable harm without an injunction, that the balance of equities favors relief, and that the injunction is in the public interest.

The court found that plaintiff was likely to succeed on its trademark infringement claim. Plaintiff owned an incontestable federal registration for the COMET mark. That gave plaintiff a strong position on ownership. The court then looked at the likelihood of confusion between the two uses of COMET by applying the Sleekcraft factors, taken from AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979).

• On the question of similarity of the marks, the court noted the marks were identical. That factor weighed heavily in favor of plaintiff.
• On the element of proximity of the competing products, the court found that even though both parties used artificial intelligence and machine learning, their overall products served different functions, had different designs, and targeted different users. That factor favored defendant.
• Concerning the strength of plaintiff’s mark, plaintiff convinced the court that it had built a strong reputation over the last seven years, but the court found that plaintiff’s mark was strong only in a more limited segment of the AI space. That factor moderately favored plaintiff.
• In terms of marketing channels, there was some overlap in audience. Both companies appealed to AI developers and sophisticated users, and Perplexity had the resources to dominate certain markets. That factor slightly favored plaintiff.
• The degree of care exercised by customers favored defendant, since the users of both products were more likely to be careful in making their choices.
• The court found that intent only slightly favored plaintiff, and that it was not a critical factor at this early stage.
• On actual confusion, the evidence was sparse and open to different interpretations, so the court considered this factor neutral.
• On the likelihood of expansion, the court found in favor of plaintiff. It was concerned that Perplexity, as a company “seeking to become an AI juggernaut,” would eventually expand the COMET mark into new products that could directly interfere with plaintiff’s business. The court found this concern reasonable, and Perplexity’s testimony did little to calm those concerns.

The court also found that plaintiff would suffer irreparable harm if Perplexity expanded the use of the COMET mark beyond the browser. The harm could not be undone easily, and confusion in the market could damage plaintiff’s reputation and customer relationships.

On the balance of the equities, the court found that preventing Perplexity from launching the browser would create significant hardship. However, Perplexity had repeatedly promised under oath that it had no plans to use the mark for other services. Therefore, blocking those additional uses would not harm Perplexity. On the other hand, plaintiff would be harmed if Perplexity expanded use of the mark. The court explained that a broad, mistaken injunction would be more harmful than a narrow one that was mistakenly denied.

Finally, the court found that the public interest would be served by protecting plaintiff’s narrow slice of the artificial intelligence market from confusion. Since the risk of confusion was limited to that segment, the court tailored its injunction accordingly.

The court issued an order enjoining Perplexity from using the COMET mark on any service listed in plaintiff’s trademark registration. However, Perplexity was permitted to move forward with launching its AI browser under the COMET mark.

Comet ML Inc. v. Perplexity AI, Inc., 2025 WL 1822477 N.D. Cal. (June 30, 2025)