Tuesday, June 14, 2011

The Court may consider Patent and Trademark Office records in deciding a motion to dismiss

Savtira Corp. (a Delaware company) sued Savtira Corp. (a Florida company) for trademark infringement, unfair competition, and deceptive trade practices.

Plaintiff's first count is for "Trademark Infringement." But plaintiff did not indicate if its claim was based on state or federal law, or whether the claim was a statutory claim or a claim based in common law. On this basis, defendant asked the Court to dismiss the claim. The Court obliged (granting leave to amend the complaint):
The Court concludes that Defendants’ motion to dismiss is due to be granted as to this claim. Plaintiff failed to identify the legal basis for its trademark infringement claim, and therefore it is not sufficient to give Defendants fair notice of what the claim is and the grounds upon which it rests. Twombly, 550 U.S. at 555. Nevertheless, Savtira Delaware’s trademark infringement claim shall be dismissed without prejudice, and Savtira Delaware shall have leave to amend this claim.
Count Two asserts a claim of unfair competition. Defendant moved to dismiss this count because defendant argued it had priority in the mark since plaintiff filed its intent-to-use trademark application after defendant was incorporated. To support this argument, defendant attached a copy of plaintiff's intent-to-use trademark application for the mark. Plaintiff responded by arguing that the Court should not consider the intent-to-use application record, as it was outside the four corners of the complaint. The Court did not agree:
[T]he Eleventh Circuit has adopted the “incorporation by reference” doctrine, under which the district court may take judicial notice of certain facts without converting the motion to dismiss into one for summary judgment, if the attached document is (1) central to the plaintiff’s claim and (2) undisputed. Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002); see also Universal Express, 177 Fed. Appx. at 53 (citing Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1999)). Public records, including administrative agency records, are documents that may be incorporated by reference. Universal Express, 177 Fed. Appx. at 53 (citing Bryant, 187 F.3d at 1278). Because records from the United States Patent and Trademark Office are (1) central to Plaintiff’s claims of trademark infringement and unfair competition and (2) a public record that Plaintiff has not disputed, the Court may consider the records in resolving a motion to dismiss. See Horsley, 304 F.3d at 1134 (11th Cir. 2002).
Plaintiff's backup argument was that it had adequately pleaded the elements of an unfair competition claim under 15 U.S.C. 1525(a). The Court agreed:
To state a claim under 15 U.S.C. § 1125(a), a plaintiff must plead facts that demonstrate (1) that it had prior rights to its mark or name and (2) that the other party had adopted a mark or name that was the same, or confusingly similar to its mark, such that consumers were likely to confuse the two. Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 358 (11th Cir. 1997). To satisfy the first element of trademark infringement under Section 43 of the Lanham Act, proof of a valid trademark, a plaintiff need not have a registered mark. Tana v. Dantanna’s, 611 F.3d 767, 773 (11th Cir. 2010). Ownership of a mark under the Lanham Act is determined by use, and registration does not necessarily create ownership. Compton v. Fifth Ave. Ass’n, Inc., 7 F. Supp. 2d 1328, 1331 (M.D. Fla. 1998); see also In re Wrubleski, 380 B.R. 635, 639 (Bankr. S.D. Fla. 2008) (“The party that first uses a mark, develops common law trademark rights that are, or may be, superior to the rights acquired by a later registrant of the mark.” (quoting Goldberg v. Cuzcatlan Bevs., Inc., 260 B.R. 48, 53 (Bankr. S.D. Fla. 2001))).
Plaintiff adequately pleaded this count because it pleaded: (1) it commenced business first; and (2) defendant's use of the mark would harm plaintiff.

Motion to dismiss granted in part, otherwise denied.
Savtira Corp. v. Hillier, slip op., Case No. 8:11-cv-0719 (M.D. Fla. June 7, 2011) (J. Bucklew)


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