JOHN G. KOELTL, District Judge.
The third party defendants, Spandex House, Inc. and Sabudh Nath, move to dismiss the Amended Third Party Complaint filed against them by the pro se third party plaintiff, Idil Doguoglu Posey. The original Complaint in this action was brought against Posey by the plaintiff, Elastic Wonder, Inc., alleging federal trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a), and cybersquatting under the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d), along with related declaratory and state law claims. Posey brought counterclaims against Elastic Wonder and a Third Party Complaint against Spandex House and Nath for substantially the same claims that had been brought against her by Elastic Wonder. The third party defendants now move to dismiss the Amended Third Party Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. The Court has jurisdiction under 28 U.S.C. §§ 1331 and 1332.
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor.
Because Posey is proceeding pro se, the Court must "construe [her] complaint liberally and interpret it to raise the strongest arguments that it suggests."
The following allegations are taken from the Amended Third Party Complaint, and are assumed to be true for purposes of this motion to dismiss.
The third party plaintiff Posey is a Swiss fashion designer who has been in the fashion industry for over twenty years and is currently based in New York City. Am. Third Party Compl. ¶ 26. In December 2012, Posey developed the brand Elastic Wonder, a line of leggings.
While Posey was developing the line, she discussed the business with third party defendant Nath.
Posey alleges that while she continued to work on designing and developing marketing materials for the Elastic Wonder brand, Nath "attempted to misappropriate Elastic Wonder" by incorporating the company Elastic Wonder, Inc., registering a similar domain name, and offering her designs to the public displaying the Elastic Wonder name and logo.
Upon becoming aware of Nath's actions, Posey informed Nath that she would no longer be doing business with him and sent him a cease and desist letter demanding that he stop using her brand and designs.
This action began on or about August 12, 2013, when Elastic Wonder, Inc. sued Posey for federal trademark infringement, among other claims. In its Complaint, Elastic Wonder alleges that it owns the Elastic Wonder trademark, and that Posey was merely assisting it in the venture. Compl. ¶¶ 4-7. On or about October 4, 2013, Posey submitted an Amended Answer to the Complaint, alleged counterclaims against Elastic Wonder, and moved for joinder of Nath and Spandex House.
On or about May 1, 2014, the third party defendants filed the present motion to dismiss the Amended Third Party Complaint for failure to state a claim under Federal Rule of Procedure 12(b)(6).
Nath and Spandex House move to dismiss Posey's trademark and advertising claims on the grounds that neither third party defendant uses the Elastic Wonder mark. Therefore, they claim that Posey cannot state a state or federal trademark claim or a cybersquatting claim against them.
To state a claim for trademark infringement under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), a plaintiff must show that it has a valid mark entitled to protection and that "the defendant's use of its mark is likely to cause an appreciable number of ordinarily prudent purchasers confusion as to the origin, sponsorship, or approval of the defendant's product."
The third party plaintiff is required to show "use in commerce" by the third party defendants as a threshold element of a trademark infringement claim.
15 U.S.C. § 1127. Therefore, in determining whether the third party plaintiff has satisfied the use in commerce requirement as to these defendants, the Court looks to "whether the trademark has been displayed to consumers in connection with a commercial transaction."
At the motion to dismiss stage, accepting all of Posey's allegations as true, she has adequately pleaded that Nath and Spandex House used the Elastic Wonder mark in commerce. Posey's allegations that Nath and Spandex House marketed Elastic Wonder products on the internet, at a store, and at a Las Vegas trade show qualify as displaying the Elastic Wonder mark to consumers in connection with commercial transactions.
The third party defendants present various arguments to contend that the facts Posey alleges are simply false. They argue that Spandex House is only a fabric supply company with no interest in selling Elastic Wonder leggings, that neither Nath nor Spandex House were actually present at the Las Vegas trade show, and that Spandex House does not own the website on which Elastic Wonder apparel is being advertised. These arguments raise factual disputes that the Court cannot resolve on a motion to dismiss.
Moreover, the third party defendants may also be liable under theories of indirect trademark infringement. A corporate officer may be personally liable for trademark infringement under the Lanham Act if the officer is a "moving, active, conscious force behind the defendant corporation's infringement."
Finally, the third party defendants also may be held liable for contributory trademark infringement. Contributory trademark infringement is a judicially created doctrine derived from the common law of torts that typically applies to manufacturers and distributors of goods.
Posey alleges that Nath and Spandex House supplied fabric for the production of the allegedly infringing Elastic Wonder apparel and maintained a website and storefront where Elastic Wonder apparel was sold.
Accordingly, Posey has stated a claim for trademark infringement against Nath and Spandex House, and the motion to dismiss this claim is
The third party defendants move to dismiss the third party plaintiff's cybersquatting claim under the ACPA for failure to state a claim under Rule 12(b)(6).
To state a claim under the ACPA, a plaintiff must allege that "(1) its marks were distinctive at the time the domain name was registered; (2) the infringing domain names complained of are identical to or confusingly similar to plaintiff's mark; and (3) the infringer has a bad faith intent to profit from that mark."
Posey has alleged that she owned the Elastic Wonder mark when she registered the domain name www.elasticwonder.com on December 12, 2012. Am. Third Party Compl. ¶ 5. She has alleged that Nath and Spandex House registered the domain name www.elasticwondernyc.com with knowledge that she owned the Elastic Wonder trademark in order to "divert customers" from Posey and to "profit from the goodwill" of her trademark. Am Third Party Compl. Count II. These allegations suffice to state a claim under the ACPA.
Similar to their arguments against the trademark claim, the third party defendants argue that the third party plaintiff cannot state an ACPA claim against them because Spandex House is not the owner of the domain www.elasticwondernyc.com. As stated above, the Court must accept the third party plaintiff's allegations as true for purposes of a motion to dismiss. Because Posey alleges facts that plausibly support all of the elements of an ACPA claim, the third party defendants' motion to dismiss that claim is
The third party defendants move to dismiss the third party plaintiff's claim for a judgment declaring that she owns the rights to the Elastic Wonder mark.
The Court can sort out the rights to the Elastic Wonder trademark by eventually adjudicating Elastic Wonder, Inc.'s infringement claims against Posey, Posey's counterclaims against Elastic Wonder, Inc., and Posey's infringement claims against Nath and Spandex House. The claim for declaratory relief is therefore unnecessary. At the argument of the current motion, the third party plaintiff agreed to withdraw the claim for a declaratory judgment.
Accordingly, the third party plaintiff's claim for declaratory relief is
Nath and Spandex House move to dismiss Posey's claim for breach of contract for failure to state a claim upon which relief can be granted.
Under New York law, the elements of a cause of action for breach of contract are: "(1) the existence of a contract, (2) the plaintiff's performance under the contract, (3) the defendant's breach of the contract, and (4) resulting damages."
Posey has not alleged that she and Nath reached any written agreement, nor has she sufficiently alleged the terms and conditions of any oral contract. Posey alleges that she had presented Nath with various ideas for a "partnership deal," Am. Third Party Compl. ¶¶ 28-34, and that after rejecting these proposals initially, Nath eventually "offered to give [Posey] a maximal amount of $5000/month for 6 months only, as petty cash to pay for necessary materials to set up everything, in return for receipts in addition to the Spandex House fabric and sample. . . needed, but everything else would have to be done by them."
While Posey's allegations present a hazy picture of some type of business relationship between Posey and Nath, she does not allege any terms or conditions that either party had to follow. Indeed, it is unclear what amount Posey alleges Nath agreed to pay when she alleges that the amount was a "maximal amount of $5,000/month for 6 months only, as petty cash." This amount could be anywhere from zero to $30,000. Indeed, in her opposition to the present motion, the plaintiff alleges only that there was "some kind of agreement." Third Party Pl.'s Mem. in Opp. At the argument of the current motion, the plaintiff conceded that she did not know if there was a contract.
Even with a liberal reading of the allegations of a pro se party, Posey fails to allege facts that indicate that any agreement between her and Nath existed.
To the extent not specifically addressed above, any remaining arguments are either moot or without merit. For the reasons explained above, the third party defendants' motion to dismiss the third party plaintiff's Amended Complaint is