Opinion
No. 5:20–CV–651–DAE
2020-12-14
MOTT'S LLP, Plaintiff, v. COMERCIALIZADORA ELORO, S.A. and Vilore Foods Company, Inc., Defendants.
Aaron D. Davidson, Cole Schotz, PC, Dallas, TX, for Plaintiff. Aaron Fountain, DLA Piper LLP, Austin, TX, Jordan Chisek, Pro Hac Vice, DLA Piper LLP, San Francisco, CA, Matthew Ganas, DLA Piper LLP, New York, NY, Melissa A. Reinckens, DLA Piper LLP, San Diego, CA, for Defendants.
Aaron D. Davidson, Cole Schotz, PC, Dallas, TX, for Plaintiff.
Aaron Fountain, DLA Piper LLP, Austin, TX, Jordan Chisek, Pro Hac Vice, DLA Piper LLP, San Francisco, CA, Matthew Ganas, DLA Piper LLP, New York, NY, Melissa A. Reinckens, DLA Piper LLP, San Diego, CA, for Defendants.
ORDER DENYING PARTIAL MOTION TO DISMISS AND DENYING MOTION TO STAY
David Alan Ezra, Senior United States District Judge
Before the Court are two motions filed by Defendant Vilore Foods Company, Inc. ("Defendant" or "Vilore"). The first is a partial motion to dismiss filed on August 10, 2020 (Dkt. # 16), and the second is a motion to stay the proceedings as to Vilore Foods Company filed on August 11, 2020 (Dkt. # 18). This Court held a hearing on the pending motions on November 24, 2020. (See Dkt. # 35.) After careful consideration of the memorandum filed in support of and against the motions, the Court—for the reasons that follow—DENIES both motions. FACTUAL BACKGROUND
This lawsuit arises out of an ongoing trademark dispute between Comercializadora Eloro, S.A. ("Eloro") and Mott's LLP ("Plaintiff" or "Mott's").
Mott's, founded in 1842, produces juice and other products throughout the United States. (Dkt. # 1 ¶ 7.) It owns numerous trademarks, including U.S. Trademark Reg. No. 699,486 ("Clamato Trademark"). (Id. ¶ 8.) Mott's uses this trademark to market and sell Clamato tomato juice cocktail, which was invented in the 1960's. (Id. ¶¶ 9, 12.) The beverage has an additional flavor to clam broth and allegedly "created an entirely new category of blended juice beverages known as ‘seafood blends.’ " (Id. ¶¶ 10, 12.) According to Mott's, the Clamato tomato juice cocktail "was the first in its class, and the Clamato Trademark has maintained its prominent national recognition among seafood blend juice cocktails for decades." (Id. ¶ 13.)
Mott's had acquired Clamato from Nestle, who retained the rights to sell competing products in Mexico, including a beverage called "Kermato." The name was apparently created by combining the words "Clamato" and "Kerns." (Id. ¶ 14.) Kermato could be sold only in Mexico while Clamato could be sold only in the United States. In other words, the parties agreed not to compete across borders.
According to Mott's, Eloro acquired some beverages from Nestle but did not acquire Kermato. Eloro acted as a licensee in Mexico before Eloro began marketing and selling Kermato in the United States in 2015. (Id. ¶ 14.) Eloro registered the Kermato mark with the U.S. Patent and Trademark Office in April 2016. (Dkt. # 16, Ex. 1.)
Vilore is Eloro's domestic distributor of Kermato-branded products. (Dkt. # 1 ¶ 15.) According to Vilore's Partial Motion to Dismiss, Vilore began distributing Kermato products at some point between mid-2019 and early-2020. (Dkt. # 16.)
PROCEDURAL HISTORY
Plaintiff filed a lawsuit against Eloro in the Northern District of Texas in February 2018. See Complaint, Mott's LLP v. Comercializadora Eloro, S.A., Case No. 3:18-CV-00318 (Feb. 7, 2018 N.D. Tex.), ECF No. 1. Plaintiff, however, voluntarily dismissed the case without serving Eloro with process in Mexico. Id., ECF No. 10. In March 2018, Plaintiff also petitioned for cancellation of Eloro's Kermato trademark registration ("Cancellation Proceeding"), which remains pending before the Trademark Trial and Appeals Board ("TTAB"). (See Dkt. # 16, Ex. 3.) The Cancellation Proceeding has been suspended several times (Dkts. ## 20, 24), but it is near the close of discovery (Dkts. ## 18, 24).
The docket for the Cancellation Proceeding is publicly available at https://ttabvue.uspto.gov/ttabvue/v?pno=92068031&pty=CAN.
More than two years later, Mott's has re-filed this lawsuit asserting the same causes of action against Eloro as in their 2018 action, but now adds Vilore as a defendant. (Dkt. # 1.) Mott's filed its Complaint on May 29, 2020 asserting four claims against Defendants: (1) trademark infringement under the Lanham Act; (2) trademark infringement under Texas law; (3) violation of the Texas Anti-Dilution Statute; and (4) unfair competition under Texas law. (Id. ) To this date, only Vilore has been served with process. (Dkt. # 9.) In response, Vilore has filed a Partial Motion to Dismiss (Dkt. # 16) and a Motion to Stay the Proceedings (Dkt. # 18). Defendant moves to dismiss Plaintiff's state dilution claim and its request for statutory and treble damages. (Dkt. # 16.) Defendant seeks to stay the proceedings until the TTAB has rendered a decision in the Cancellation Proceeding. (Dkt. # 18.)
Mott's has faced an uphill battle attempting to serve Eloro with process. In Plaintiff's February 2018 lawsuit in the Northern District of Texas, Mott's apparently attempted to serve Eloro through the Hague Convention, but was advised later that year that service could not be completed. (Dkt. # 20, Ex. A, B.) In Plaintiff's Cancellation Proceeding, Eloro failed to respond, and default judgment was rendered in Plaintiff's favor. (Dkt. # 20, Ex. C.) Months later, Eloro retained counsel and persuaded the TTAB to re-open the proceeding, but Eloro still refused to accept service for the lawsuit in the Northern District of Texas. (Dkt. # 20.) Because Plaintiff was "[u]ncertain as to whether the Mexican Authority was still attempting to accomplish service under the Hague Convention," Plaintiff dismissed its lawsuit in federal court. (Id. ) Apparently, the Mexican Authority has just recently informed Plaintiff via email that it received Plaintiff's Complaint and accompanying documents from the prior action in the Northern District of Texas. (Dkt. # 20, Ex. D.)
LEGAL STANDARDS
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for "failure to state a claim upon which relief can be granted." To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In analyzing whether to grant a 12(b)(6) motion, a court accepts as true "all well-pleaded facts" and views those facts "in the light most favorable to the plaintiff." United States ex rel. Vavra v. Kellogg Brown & Root, Inc., 727 F.3d 343, 346 (5th Cir. 2013) (citation omitted). A court need not "accept as true a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.
A district court has broad discretion to stay proceedings to "control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). The party moving for a stay bears a "heavy burden" to demonstrate that it is appropriate. See Coastal (Bermuda) Ltd. v. E.W. Saybolt & Co., 761 F.2d 198, 203 n.6 (5th Cir. 1985).
DISCUSSION
I. Partial Motion to Dismiss
In its Partial Motion to Dismiss, Defendant moves to dismiss Plaintiff's claim under the Texas Anti-Dilution Statute and its request for statutory and treble damages. For the reasons stated below, the Court denies Defendant's Partial Motion to Dismiss.
A. State Dilution Claim
In Defendant's Partial Motion to Dismiss, Vilore provides two reasons why Plaintiff has failed to state its state antidilution claim under Rule 12(b)(6). (Dkt. # 16.) First, Vilore alleges that Plaintiff's state dilution claim is barred under 15 U.S.C. § 1125(c)(6). (Id. ) Second, Vilore argues that Plaintiff has failed to plead any facts in support of its claim beyond conclusory allegations. (Id. )
According to Vilore, Plaintiff's state dilution claim is barred as a matter of law. The statutory bar, 15 U.S.C. § 1125(c)(6), states:
The ownership by a person of a valid registration ... on the principal register under this chapter shall be a complete
bar to an action against that person, with respect to that mark, that—
(A) is brought by another person under the common law or a statute of a State; and
(B) (i) seeks to prevent dilution by blurring or dilution by tarnishment; or (ii) asserts any claim of actual or likely damage or harm to the distinctiveness or reputation of a mark, label, or form of advertisement.
15 U.S.C. § 1125(c)(6). Because Eloro's Kermato mark is registered with the U.S. Patent and Trademark Office, Vilore contends that the statute completely bars Plaintiff's state law claim. (Dkts. ## 16, 23.) Further, Vilore suggests that the statutory bar would be rendered meaningless if a party could circumvent it by merely adding a claim to challenge the trademark's validity. (Id. ) Plaintiff, on the other hand, argues that since it is currently challenging the validity of Eloro's trademark in the Cancellation Proceeding before the TTAB, this Court should not dismiss its state law claim. (Dkt. # 19.) Mott's focuses on several cases where federal courts have refused to dismiss state dilution claims in the early stages of litigation when the validity of the trademark at issue is being challenged. (Id. ) Mott's also points to the statutory language—which requires the registration to be "valid"—arguing that "courts must interpret the statutory language as creating a defense against anti-dilution claims only where there is no dispute as to the validity of the trademark registration." (Id. ) In the motion hearing, Mott's also pointed out that the word "owner" in the statute prevents Vilore from relying on the statutory bar because it is the distributor of Kermato, not the owner of the trademark.
The Court agrees with Plaintiff. First, the statutory text is clear that the bar on state dilution claims applies only to claims against the owner of the trademark. See 15 U.S.C. § 1125(c)(6) ("The ownership by a person of a valid registration ... on the principal register under this chapter shall be a complete bar to an action against that person, with respect to that mark."). There is not much authority with respect to this issue. Some courts have held that the statutory bar applies when the defendant is a parent corporation of a wholly-owned subsidiary that owns the trademark. See e.g., N.J. Physicians United Reciprocal Exch. v. Privilege Underwriters, No. 15-6911(FLW), 2016 WL 6126914, at *5 (D.N.J. Oct. 18, 2016). In N.J. Physicians, the district court held that when a wholly-owned subsidiary that is controlled by a parent corporation owns a trademark, the trademark can be treated as "the common property of the parent and the subsidiary corporation." Id. Therefore, both the parent company and the subsidiary are the "owners" for purposes of 15 U.S.C. § 1125(c)(6). Id. However, that is not the case here. Vilore is merely the United States distributor of the Kermato beverage—not a parent company or a subsidiary of Eloro. Because Eloro's trademark is not "common property" of Eloro and Vilore, Vilore is not the owner of the trademark and Plaintiff's state dilution claim is not barred.
Even if the statutory language was not clear that only an "owner" may rely on the statutory bar, the Court still finds that it is too premature to dismiss Plaintiff's state dilution claim because Plaintiff is currently challenging the validity of Eloro's trademark. There is no controlling precedent on this issue in the Fifth Circuit. However, it appears that the majority of federal courts that have addressed the issue refuse to dismiss state dilution claims in the early stages of litigation when there is a concurrent challenge to the validity of the trademark at issue. See Viacom Inc. v. Ingram Enters., Inc., 141 F.3d 886, 890–91 (8th Cir. 1998) (deciding that the plaintiff's state dilution claim was not foreclosed because on remand, the plaintiff could have failed to prove its claim for injunctive relief and that it was entitled to the § 1125(c)(3) defense against the state law claim); Buc-ee's, Ltd. v. Panjwani, 4:15-CV-03704, 2017 WL 4221461, at *3–4 (S.D. Tex. Sept. 21, 2017) (denying the defendant's partial motion for summary judgment with respect to the plaintiff's state dilution claim while there was a petition to cancel the defendant's trademark in front of the TTAB because the validity of the trademark was in dispute); Lovetap, LLC v. CVS Health Corp., 1:16-CV-3530-TWT, 2017 WL 3250374, at *2–4 (N.D. Ga. July 31, 2017) (denying the defendant's motion to dismiss with respect to the plaintiff's state dilution claim because the plaintiff was challenging the validity of the defendant's trademark registrations); Sanofi-Aventis v. Advancis Pharm. Corp., 453 F. Supp. 2d 834, 854–55 (D. Del. 2006) (deciding to consider the plaintiff's state dilution claim despite the statutory bar because the plaintiff was challenging the validity of and seeking cancellation of the defendant's trademark in the same lawsuit). But see Global Brand Holdings, LLC v. Church & Dwight Co., No. 17-CV-6571 (KBF), 2017 WL 6515419, at *6 (S.D.N.Y. Dec. 19, 2017) (dismissing the plaintiff's state dilution claim, holding that the statutory bar applies where the trademark is valid at the time the lawsuit is filed). If Mott's prevails in the Cancellation Proceeding, then the statutory bar will not apply. As one court has noted, "it is more efficient to decide this [state law] claim now, rather than requiring plaintiffs to return to litigate this [state] claim" after the defendant's mark is cancelled. Sanofi-Aventis, 453 F. Supp. 2d at 854 n.10.
Even if there were a valid concern that some plaintiffs might add an extra claim to their complaint solely for the purpose of circumventing the statutory bar, this concern does not exist here. Plaintiff filed a petition for cancellation of Eloro's trademark registration with the TTAB on March 2, 2018. (Dkt. # 16.) There is no indication that Plaintiff filed its petition for cancellation for the purpose of preserving a state dilution claim against Vilore over two years later. Cf. Global Brand Holdings, 2017 WL 6515419, at *6 (dismissing the plaintiff's state dilution claim when there was not a challenge to the trademark's validity at the time the case was filed because otherwise "any party could circumvent the state bar simply by including a claim for cancellation of the defendant's mark").
The Court acknowledges that Plaintiff filed its Cancellation Proceeding one month after Plaintiff filed its first lawsuit in the Northern District of Texas. However, there is nothing in the record suggesting that Mott's intentionally filed the Cancellation Proceeding with the hopes of preserving a state dilution claim in a later proceeding against Vilore—who was not a party to the first lawsuit.
Defendant also argues that Plaintiff failed to state a claim under the Texas Anti-Dilution Statute because Plaintiff failed to "plead specific supporting facts and not simply list conclusory allegations that echo the claim elements." (Dkt. # 16.) Specifically, Defendant contends that Plaintiff failed to properly allege that its trademark is "famous," and that Defendant's trademark is likely to cause dilution. (Id. ) Plaintiff maintains that it has pled sufficient facts in its Complaint to satisfy its pleading requirements. (Dkt. # 19.)
The Texas Anti-Dilution statute states,
[T]he owner of a mark that is famous and distinctive, inherently or through acquired distinctiveness, in this state is entitled to enjoin another person's commercial use of a mark or trade name that begins after the mark has become famous if use of the mark or trade name is likely to cause the dilution of the famous mark.
Tex. Bus. & Comm. § 16.103(a). When analyzing whether a trademark is "famous," a court may consider many factors including
(1) [T]he duration, extent, and geographic reach of the advertisement and publicity of the mark in this state, regardless of whether the mark is advertised or publicized by the owner or a third party; (2) the amount, volume, and geographic extent of sales of goods or services offered under the mark in this state; (3) the extent of actual recognition of the mark in this state; and (4) whether the mark is registered in this state or in the United States Patent and Trademark Office.
Tex. Bus. & Comm. § 16.103(b). Plaintiffs must demonstrate the "likelihood of dilution" under a theory of "1) ‘blurring,’ a diminution in the uniqueness or individuality of the mark, or 2) ‘tarnishment,’ an injury resulting from another's use of the mark in a manner that tarnishes or appropriates the goodwill and reputation associated with the plaintiff's mark." E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 279 (5th Cir. 2002) (quoting Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1081 (5th Cir. 1997) ).
The Court finds that Plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." See Twombly, 550 U.S. at 570, 127 S.Ct. 1955. The allegations in Plaintiff's complaint meet several of the factors that courts may consider when determining whether a trademark is famous. See Tex. Bus. & Comm. § 16.103(b). For example, the Complaint alleges that Plaintiff uses the Clamato Trademark to market and sell its products throughout the United States, and the trademark is widely recognized by the public throughout this district and the United States. (Dkt. # 1 ¶¶ 9–10.) Plaintiff also states that it "owns numerous trademarks and copyrights, including U.S. Trademark Reg. No. 699,486." (Id. ¶ 8.) Plaintiff further contends that the Clamato tomato juice cocktail "created an entirely new category of blended juice beverages known as ‘seafood blends,’ " that it "was the first in its class, and the Clamato Trademark has maintained its prominent national recognition among seafood blend juice cocktails for decades." (Id. ¶¶ 12–13.) At the motion to dismiss stage, the plaintiff needs to plead only "enough facts to state a claim to relief that is plausible on its face," and Mott's did so here. Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
The Court acknowledges the difficulty of establishing "fame" for dilution claims. For example, one court held that the University of Texas's longhorn silhouette logo was insufficiently famous for the plaintiff to proceed with its federal Trademark Dilution Revision Act ("TDRA") past the summary judgment stage. Bd. of Regents, the Univ. of Tex. Sys. v. KST Elec., Ltd., 550 F. Supp. 2d 657, 679 (W.D. Tex. 2008). However, there are two reasons why that case is different from the present case. First, that case was decided at the summary judgment stage, not at the motion to dismiss stage. Id. Second, even though the Texas "fame" analysis is similar to the one under federal law, the geographic scope is different. It is much more difficult to demonstrate that a trademark is famous on the national level as opposed to the state level. See id. at 675 ("[I]t simply does not matter, for purposes of a federal dilution cause of action, what the results are of a survey conducted of people in the Austin metropolitan area or the State of Texas" because "the TDRA specifically requires that the mark be ‘widely recognized by the general consuming public of the United States’ "). As many other courts within this Circuit and district have concluded, the Court finds that Plaintiff's allegations with respect to "fame" survive the dismissal stage. See Haas Outdoors, Inc. v. Dryshod Int'l, LLC, No. 1:18-CV-978-RP, 2019 WL 3130231, at *5 (W.D. Tex. July 15, 2019) (holding that the plaintiff sufficiently alleged the "fame" element for its TDRA claim because the plaintiff raised its right to relief above a speculative level at the motion to dismiss stage); Gabbanelli Accordions & Imports, LLC v. Hermes Music Co., 398 F. Supp. 3d 156, 160 (S.D. Tex. 2019) (holding that the plaintiff sufficiently alleged that its trademarks were famous under the Texas Anti-Dilution Statute by asserting that their trademarks were "widely recognized by the public" in Texas and by providing an account of the defendants’ advertisement of allegedly infringing products via social media); YETI Coolers, LLC v. Imagen Brands, LLC, No. 1:16-CV-00578, 2017 WL 2199012, at *8 (W.D. Tex. May 18, 2017) (holding that the plaintiff sufficiently alleged that their trade dresses were "famous" for their state and federal trade dress dilution claims because despite the high bar for establishing "fame," plaintiff's allegations met the Twombly and Iqbal standard).
Plaintiff has properly alleged that there is a likelihood of dilution under a blurring theory. For dilution to occur, the junior mark must be similar to the senior mark. Bell v. Starbucks U.S. Brands Corp., 389 F. Supp. 2d 766, 779–80 (S.D. Tex. 2005) ; E. & J. Gallo Winery v. Spider Webs Ltd., 129 F. Supp. 2d 1033, 1038 (S.D. Tex. 2001), aff'd, 286 F.3d 270 (5th Cir. 2002) ; see Polaroid Corp. v. Polaraid, Inc., 319 F.2d 830, 836 (7th Cir. 1963). Mott's alleges in Paragraphs 20 and 21 of the Complaint:
The standard under state law is lower than the standard under federal law here. Texas dilution claims only require a showing that dilution is "likely" while federal law requires a showing of actual dilution. See Tex. Bus. Comm. Code § 16.103(a) ; Bell v. Starbucks U.S. Brands Corp., 389 F. Supp. 2d 766, 779–80 (S.D. Tex. 2005).
20. Specifically, Defendants’ conduct is likely to cause initial interest confusion, point of purchase and post-sale confusion, mistake, and deception among customers and potential customers by creating the false belief that Kermato tomato cocktail juice products are made by or affiliated with Clamato.
21. Defendants’ use of a name that is confusingly similar to the Clamato Trademark capitalizes on the goodwill that Mott's has worked diligently to create and maintain over decades as a result of extensive time and millions of dollars invested in the Clamato Trademark.
(Dkt. # 1 ¶¶ 20–21.)
These allegations adequately plead that there is a likelihood of dilution by blurring. For dilution by blurring, "[i]f the plaintiff holds a distinctive trade mark, it is enough that the defendant has made significant use of a very similar mark." Pebble Beach Co. v. Tour 18 I, Ltd., 942 F. Supp. 1513, 1567 (S.D. Tex. 1996) (quoting Freedom Sav. & Loan Ass'n v. Way, 757 F.2d 1176, 1186 (11th Cir. 1985) ). Mott's alleges that the similarities between the "Clamato" and the "Kermato" marks are likely to cause confusion and deception among customers, such that it will create a false belief that Kermato products are associated with Clamato products. (Dkt. # 1 ¶ 20.) Again, Plaintiff need not prove likelihood of dilution by blurring at the pleading stage, it need only plead enough facts to state a claim to relief that is plausible on its face, and Plaintiff has done so here with respect to blurring. See Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
However, Mott's did not sufficiently allege likelihood of dilution by tarnishment. Although Mott's alleges that Vilore and Eloro have appropriated the goodwill of the "Clamato" mark, this is not enough. (See Dkt. # 1 ¶ 21.) Dilution by tarnishment occurs when a mark is "linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner's product." Deere & Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d Cir. 1994) ; Pebble Beach, 942 F. Supp. at 1565. "Tarnishment is more easily found where a defendant's primary purpose in using the mark is to place it in an unsavory context." Pebble Beach, 942 F. Supp. at 1565 ; see Deere & Co., 41 F.3d at 41–42, 45 (finding that a competitor's alteration of a mark for use in a spoof advertisement created a risk that consumers would attribute unfavorable characteristics and ultimately inferior goods and services with the mark); Pillsbury Co. v. Milky Way Prods., Inc., No. C78-679A, 1981 WL 1402, at *14 (N.D.Ga. Dec. 24, 1981) (concluding that the defendant's sexually-oriented variation tarnished the plaintiff's mark); Coca-Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183, 1192–93 (E.D.N.Y. 1972) (holding that dilution existed where the defendant altered the "Coca-Cola" mark to make posters with the caption "Enjoy Cocaine"); see also Chem. Corp. of Am. v. Anheuser-Busch, Inc., 306 F.2d 433, 436–39 (5th Cir. 1962) (affirming the trial court's grant of a permanent injunction against the defendant's use of an adaptation of the plaintiff's slogan, "Where there's life ... there's Bud," for its insecticide slogan, "Where there's life ... there's bugs"). Nothing in the Complaint suggests that Vilore or Eloro has tarnished the "Clamato" mark.
As a result of scant authority on the blurring and/or tarnishment analysis in the Fifth Circuit, courts in this circuit often rely on anti-dilution statutes from other states—particularly New York's statute. See Cottonwood Fin. Ltd. v. Cash Store Fin. Servs., Inc., 778 F. Supp. 2d 726, 746 (N.D. Tex. 2011) ; Pebble Beach Co. v. Tour 18 I, Ltd., 942 F. Supp. 1513, 1564 n.46 (S.D. Tex. 1996). The Fifth Circuit also looks to "the general law of dilution ... in construing the Texas Statute." E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 279 (5th Cir. 2002) (quoting Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1081 (5th Cir. 1997) ).
Because the federal statutory bar does not apply and because Plaintiff sufficiently pled "fame" and "likelihood of dilution," the Court denies Vilore's Motion to Dismiss with respect to Plaintiff's claim under the Texas Anti-Dilution Statute.
B. Plaintiff's Request for Statutory & Treble Damages
Vilore also moves to dismiss Plaintiff's request for statutory and treble damages. (Dkt. # 16.) Plaintiff's Prayer for Relief includes nine subparts, one of which requests that this Court grant
[a] judgment and order requiring Defendants to pay: (1) Plaintiff's damages, including any gains, profits, advantages obtained by Defendants as a result of their acts and omissions; and (2) any actual and statutory damages Plaintiff sustained as a result of Defendant's acts, including treble damages , together with prejudgment and post-judgment interest.
(Dkt. # 1 ¶ 61(vi)) (emphasis added).
Vilore concedes that Plaintiff is entitled to relief under 15 U.S.C. § 1117(a), which outlines the available relief for trademark infringement claims under the Lanham Act. (Dkt. # 16.) According to Vilore, Plaintiff's reference to "statutory" and "treble" damages appears to improperly invoke 15 U.S.C. § 1117(b) - (c), which describes the available relief for counterfeiting claims. (Id. ) In response, Plaintiff has clarified that it is not seeking damages under section 1117(b) or (c). (Dkt. # 19.) Plaintiff seeks "only such damages that are available under 15 U.S.C. § 1117(a) or the Texas Anti-Dilution Act." (Id. )
The Court finds that the parties’ dispute over Plaintiff's request for relief is not a proper basis for dismissal under a Rule 12(b)(6) motion. Federal Rule of Civil Procedure 12(b)(6) permits a party to assert a motion to dismiss based on the "failure to state a claim upon which relief can be granted." Whether a claim for relief should be dismissed under Rule 12(b)(6) turns not on whether all of the relief asked for can be granted, but whether the plaintiff is entitled to any relief. See Lada v. Wilkie, 250 F.2d 211, 212–15 (8th Cir. 1957) (reversing the district court's decision to grant the defendant's 12(b)(6) motion even though the court could not have possibly granted part of the relief that the plaintiffs requested); Lasslett v. Tetra Tech, Inc., DR-13-CV-072-AM-CW, 2015 WL 13805181, at *2 (W.D. Tex. Sept. 30, 2015) (explaining that a Rule 12(b)(6) motion challenges the sufficiency of the claim under Rule 8(a)(2), not the prayer for relief under Rule 8(a)(3)); Celebrity Chefs Tour, LLC v. Macy's Inc., 16 F. Supp. 3d 1159, 1164 (S.D. Cal. 2014) (holding that claims for punitive damages under the Lanham Act are inappropriate but not grounds for dismissal under Rule 12(b)(6) ); see also 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed. 2004) ("[I]t need not appear that the plaintiff can obtain the particular relief prayed for in the complaint, as long as the district judge can ascertain from what has been alleged that some relief may be granted by the court.").
Because statutory and treble damages are remedies , not causes of action, a Rule 12(b)(6) motion is an improper vehicle for dismissing these specific requests for relief. Nonetheless, Plaintiff has already clarified in its response that it seeks "only such damages that are available under 15 U.S.C. § 1117(a) or the Texas Anti-Dilution Act" and "[a]ny confusion that Vilore has regarding Mott's damages claim can be resolved in discovery." (Dkt. # 19.)
II. Motion to Stay
Defendant argues that the Court should stay these proceedings until the TTAB renders a decision in the Cancellation Proceeding. (Dkt. # 18.) Vilore asserts that this will preserve judicial economy for two major reasons. First, the TTAB's decision on the validity of Eloro's trademark will affect whether Plaintiff's state dilution claim will be barred under 15 U.S.C. § 1125(c)(6). (Id. ) In addition, if the TTAB's decision turns on the "likelihood of confusion" between the two marks, the issue may have preclusive effect in this case. (Id. ); see B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 141, 135 S.Ct. 1293, 191 L.Ed.2d 222 (2015). Vilore also points out that the Cancellation Proceeding is in a further stage of litigation than this lawsuit, and thus these proceedings should be stayed. (Dkt. # 18.)
In response, Plaintiff maintains that this lawsuit should not be stayed. (Dkt. # 20.) Plaintiff argues that "the pending TTAB cancellation proceeding will not resolve all issues and claims in dispute" and that regardless of the TTAB's decision, "there may be no issue preclusion that affects this lawsuit." (Id. ) Plaintiff asserts that many courts often do not stay lawsuits while there are pending TTAB proceedings, and that "the overall litigation can be streamlined without staying this suit." (Id. )
The Court agrees with Plaintiff and denies Defendant's Motion to Stay. Defendant has not met its heavy burden to demonstrate that a stay is appropriate here. See Coastal (Bermuda) Ltd., 761 F.2d at 203 n.6.
The U.S. Supreme Court has held that federal courts should give preclusive effect to TTAB decisions on the "likelihood of confusion" issue in later trademark infringement cases "[s]o long as the other ordinary elements of issue preclusion are met [and] when the usages adjudicated by the TTAB are materially the same as those before the district court." B & B Hardware, 575 U.S. at 141–42, 160, 135 S.Ct. 1293. The "likelihood of confusion" standard for federal trademark infringement is the same standard that is used for trademark infringement and unfair competition claims under Texas law. See Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 235 n.7 (5th Cir. 2010) ("A trademark infringement and unfair competition action under Texas common law presents essentially ‘no difference in issues than those under federal trademark infringement actions.’ " (quoting Horseshoe Bay Resort Sales Co. v. Lake Lyndon B. Johnson Improvement Corp., 53 S.W.3d 799, 806 n.3 (Tex. App.—Austin 2001, pet. denied) )); Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 483–84 (5th Cir. 2004) (explaining that the likelihood of confusion standard under federal law also governs "claims for trademark infringement and unfair competition under Texas law").
The TTAB's decision may not have preclusive effect in this case. In the Cancellation Proceeding, Plaintiff has asserted two separate grounds for cancellation of Eloro's trademark (Dkt. # 20.) Plaintiff seeks cancellation because there is a "likelihood of confusion" between the marks and because Eloro lacked ownership rights at the time it filed its registration. (Id. ) Thus, if the TTAB bases its decision on both grounds or solely the "lack of ownership" ground, there will not be any preclusive effect on the "likelihood of confusion" issue. See Restatement (Second) of Judgments § 27 (1980) (explaining the general rule that issue preclusion applies "[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment"); (Dkt. # 20.) Additionally, Plaintiff's state dilution claim will not be barred if Eloro's trademark is rendered invalid by the TTAB. See 15 U.S.C. § 1125(c)(6).
While the Cancellation Proceeding might be in a more advanced stage of litigation, "the parties could end up in district court regardless of the TTAB outcome." Lance Armstrong Found. v. Ohman, A-07-CA-769-SS, 2007 WL 9702317, at *1 (W.D. Tex. Nov. 15, 2007). As Plaintiff suggests, the fact that discovery in the Cancellation Proceeding has nearly concluded could create opportunities to streamline this litigation—for example, "the parties could agree that discovery provided in the Cancellation Proceedings can be used in this lawsuit." (Dkt. # 20.)
Because the Cancellation Proceeding may not be able to resolve all the issues involved in this lawsuit, "the interest in prompt adjudication far outweighs the value of having the views of the [US]PTO." Officeware Corp. v. Dropbox, Inc., 3:11-CV-1448-L, 2012 WL 3262760, at *3 (N.D. Tex. Aug. 10, 2012) (quoting Goya Foods, Inc. v. Tropicana Prods., Inc., 846 F.2d 848, 853–54 (2d Cir. 1988) ). Therefore, this Court denies Defendant's Motion for a Stay. CONCLUSION
For the reasons stated above, Vilore's Partial Motion to Dismiss (Dkt. # 16) is DENIED , and Vilore's Motion to Stay (Dkt. # 18) is DENIED .
IT IS SO ORDERED .