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CASE NO. SACV09-0055 DMG (MLGx) DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
KRONENBERGER BURGOYNE, LLP
Karl S. Kronenberger (Bar No. 226112)
Henry M. Burgoyne, III (Bar No. 203748)
Jeffrey M. Rosenfeld (Bar No. 222187)
150 Post Street, Suite 520
San Francisco, CA 94108
Telephone: (415) 955-1155
Facsimile: (415) 955-1158
karl@KBInternetLaw.com
hank@KBInternetLaw.com
jeff@KBInternetLaw.com
Attorneys for Defendants Jesse Willms,
eDirect, 1016363 Alberta, Ltd. and 1021018
Alberta Ltd.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CONSUMERINFO.COM, INC., a
California corporation,
Plaintiff & Cross-Defendant,
v.
JESSE WILLMS, et al.
Defendants.
CASE NO. SACV09-0055 DMG
(MLGx)
DEFENDANTS’ MEMORANDUM
OF POINTS AND AUTHORITIES
IN SUPPORT OF MOTION FOR
SUMMARY ADJUDICATION
Date: March 12, 2010
Time: 2:00 pm
Place: Courtroom 7
Before Hon. Dolly M. Gee, Judge
JESSE WILLMS and EDIRECT,
Cross-Plaintiffs,
v.
CONSUMERINFO.COM, INC.,
Cross-Defendant.
Case 8:09-cv-00055-DMG-MLG Document 93 Filed 02/12/10 Page 1 of 30
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CASE NO. SACV09-0055 DMG (MLGx) i DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
TABLE OF CONTENTS
INTRODUCTION ........................................................................................ 1
BACKGROUND ......................................................................................... 3
A. The Alberta Defendants' Business Model .............................................. 3
B. The Google AdWords System ................................................................ 4
C. The Alberta Defendants' Credit Report America Business ..................... 4
1. The Alberta Defendants' Contract with Third Parties to Promote Credit
Report America ...................................................................................... 5
D. Plaintiff's Business Model ...................................................................... 5
E. Plaintiff's Purported FREECREDITREPORT.COM Trademark .............. 6
1. Plaintiff's Position Regarding Marks that Are Similar to
FREECREDITREPORT.COM ................................................................ 7
F. Third-Party Use of Identical and Similar Marks....................................... 8
G. Plaintiff's Failure to Use ® During Relevant Time Period ....................... 9
ARGUMENT..............................................................................................10
A. Summary Judgment Standard ..............................................................10
B. Plaintiff knowingly made false statements to the United States Patent
and Trademark Office ...........................................................................11
C. Plaintiff has not produced any evidence that Defendants used the
FREECREDITREPORT.COM mark in commerce .................................13
D. Plaintiff cannot prove a claim for vicarious or contributory trademark
infringement where Plaintiff has not produced any evidence that
Defendants induced or controlled third parties ......................................15
E. Plaintiff cannot prove a claim for trademark infringement because
Plaintiff failed to provide Defendants with notice of Plaintiff's trademark
registration ............................................................................................16
F. Plaintiff's former website is not entitled to trade dress protection ..........18
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CASE NO. SACV09-0055 DMG (MLGx) ii DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
G. Plaintiff cannot prove that Defendants used a counterfeit of the
FREECREDITREPORT.COM mark ......................................................19
H. This circuit does not recognize claims for vicarious or contributory
dilution or false advertising under the Lanham Act ................................22
I. Plaintiff's cannot prove any claim against Defendant Willms as an
individual-as compared to the corporate Defendants ............................23
CONCLUSION ..........................................................................................25
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CASE NO. SACV09-0055 DMG (MLGx) iii DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
TABLE OF AUTHORITIES
Academy of Motion Picture Arts and Sciences v. Network Solutions, Inc.,
989 F. Supp. 1276, 1279 (C.D. Cal. 1997) ............................................23
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986) ...................................10
Coach, Inc. v. Asia Pacific Trading Co., Inc., ___ F. Supp. 2d ___, No. 09-
35, 2009 WL 3808550, *9-10 (C.D. Cal. Nov. 12, 2009) .................. 14, 18
Colgate-Palmolive Co. v. J.M.D. All-Star Imp. & Exp., 486 F. Supp. 2d 286,
289 (S.D.N.Y. 2007) ....................................................................... 20, 21
Credit One Corp. v. Credit One Financial, Inc., No. CV 09-2985, 2009 WL
3199169, at *2 (C.D. Cal. Sept. 23, 2009) .............................................13
CTF Development, Inc. v. Penta Hospitality, LLC, No. 09-02429, 2009 WL
3517617, at *5 (N.D. Cal. Oct. 26, 2009). ............................................12
Davis v. Metro Productions, Inc., 885 F.2d 515, 524 (9th Cir. 1989) ..........24
Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) ........................10
Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 907 (1st Cir.
1980) ....................................................................................................24
Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000)10
Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 265 (9th Cir. 1996) ....16
Horphag Research Ltd. v. Garcia, 475 F.3d 1029 (9th Cir. 2007) ..............14
Inwood Lab., Inc. v. Ives Lab., Inc., 456 U.S. 844, 853-55 (1982) ........ 15, 23
Karl Storz Endoscopy America, Inc. v. Surgical Technologies, Inc., 285
F.3d 848, 853 (9th Cir. 2002) ................................................................13
Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 984, 986,
(9th Cir. 1999) ................................................................................. 15, 23
Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d 788, 806,
807 (9th Cir. 2007) ................................................................................15
Reebok Int’l., Ltd. v. Marnatech Enterprises, Inc., 970 F.2d 552, 559 n.9
(9th Cir. 1992) .......................................................................................18
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CASE NO. SACV09-0055 DMG (MLGx) iv DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
Robi v. Five Platters, Inc., 918 F.2d 1439, 1444 (9th Cir. 1990) ................11
Schneider Saddlery Co., Inc. v. Best Shot Pet Products Intern., LLC, No.
1:06-CV-02602, 2009 WL 864072, *4, *14
(N.D. Ohio March 31, 2009) ............................................................ 19, 22
Webloyalty.com, Inc. v. Consumer Innovations, LLC, 388 F. Supp. 2d 435.
445 (D. Del. 2005) ................................................................................19
Wolf Designs, Inc. v. DHR Co., 322 F. Supp. 2d 1065, 1072 (C.D. Cal.
2004) ....................................................................................................24
Federal Statutes, Rules, and Other Authorities
15 U.S.C. §1111 .................................................................................. 17, 18
15 U.S.C. §1114 ........................................................................................13
15 U.S.C. §1119 ................................................................................ passim
15 U.S.C. §1120 ......................................................................................... 1
15 U.S.C. §1125 ............................................................................ 14, 17, 18
Fed. R. Civ. P. 56(c) ..................................................................................10
4 J. McCarthy, McCarthy on Trademarks and Unfair Competition §25:10,
§25:24 (4th ed. 2010) ...........................................................................20
Senate Report on the Trademark Counterfeiting Act of 1984 (S. Rep. No.
98-526, 2-4 (1984), reprinted in 1984 U.S.C.C.A.N. 3627, 3628-3630)
....................................................................................................... 21, 23
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CASE NO. SACV09-0055 DMG (MLGx) 1 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
INTRODUCTION
Plaintiff, ConsumerInfo.com, Inc. has adopted a steamroller approach
to litigation, threatening competitors with lawsuits left and right. Behind this
steamroller façade, Plaintiff has been performing a delicate dance around its
purported trademark rights, which are about as weak as they come.
Plaintiff claims to own the trademark FREECREDITREPORT.COM,1
and Plaintiff acquired a United States registration for the same in 2008.
Given the extremely descriptive nature of this mark, Plaintiff made a variety
of statements to the United States Patent and Trademark Office (“PTO”)
about the strength of the mark, the lack of consumer confusion, Plaintiff’s
substantially exclusive use of the mark. Plaintiff’s knowingly made false
statements to the PTO. At the time of Plaintiff’s trademark application,
Plaintiff knew about extensive third-party use of names, phrases, and
language highly similar to Plaintiff’s FREECREDITREPORT.COM mark.
Plaintiff knowingly made these false statements to the PTO, and Plaintiff’s
trademark must be cancelled for fraud on the trademark office, pursuant to
15 U.S.C. §§1119, 1120.
Regarding Plaintiff’s affirmative claims in this action, Plaintiff’s
steamroller approach masks its fundamentally weak claims. Plaintiff and
Defendants competed in providing consumers with credit-related services.
When Defendants gained momentum in this business, Plaintiff filed this
lawsuit, asserting eleven causes of action sounding in trademark and
copyright infringement. Plaintiff has since engaged in Rambo-like discovery,
imposing staggering costs on Defendants and third parties. In the end,
1 Throughout Defendants’ summary adjudication papers, Defendants refer to
Plaintiff’s purported trademark as “Plaintiff’s FREECREDITREPORT.COM
mark.” However, Defendants in no way concede the validity of this
purported trademark or any registration issued to Plaintiff for this trademark.
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CASE NO. SACV09-0055 DMG (MLGx) 2 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
however, Plaintiff has failed to produce evidence supporting its claims.
First, Plaintiff’s claims for trademark infringement and vicarious and
contributory trademark infringement fail where Plaintiff has produced no
evidence that Defendants—as opposed to third parties—published the
allegedly infringing ads. As explained in detail below, Defendants
contracted with third parties to advertise their credit-related services.
Second, Plaintiff’s claim for trade dress infringement is not grounded in
law or fact. Plaintiff has produced no evidence that its former website
landing page had acquired secondary meaning. In fact, Plaintiff has
fundamentally changed its landing page several times, contradicting any
claim that it serves as a unique source identifier.
Third, Plaintiff attempts to shoehorn the facts of this case into a
counterfeiting claim under the Lanham Act. However, the legislative history
and jurisprudence make clear that the Lanham Act’s anti-counterfeiting
provisions were not intended to address the conduct at issue here.
Moreover, the allegedly counterfeit ads actually identified third parties as the
source of the service, contradicting Plaintiff’s claim that the ads were passed
off as the actual goods or services of Plaintiff, the basis for any
counterfeiting claim.
Fourth, while Plaintiff appears to assert claims for contributory and
vicarious false advertising and dilution, this Circuit does not recognize such
claims. Finally, Plaintiffs have failed to produce any evidence that
Defendant Willms—as opposed to the corporate Defendants—engaged in or
knew about the alleged misconduct.
For the reasons discussed herein, the Court should grant judgment to
Defendants on their counterclaim for fraud on the trademark office, and
dismiss Plaintiff’s first, third, fourth, fifth, sixth, seventh, eight, tenth, and
eleventh causes of action.
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CASE NO. SACV09-0055 DMG (MLGx) 3 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
BACKGROUND
A. The Alberta Defendants’ Business Model
Defendants 1016363 Alberta Ltd. and 1021018 Alberta Ltd.
(collectively, the “Alberta Defendants”) operate a diverse line of e-commerce
businesses, selling everything from nutritional supplements to herbal tea to
teeth whitening products. (Declaration of Jesse Willms in Support of
Defendants’ Motion for Summary Adjudication (“Willms Decl.”) ¶3;
Defendants’ Proposed Statement of Undisputed Facts and Legal
Conclusions In Support of Defendants’ Motion for Summary Adjudication
(“PSUF”) ¶¶10-11.) The Alberta Defendants sell these goods and services
through several proprietary e-commerce websites, which they own and
operate. (Willms Decl. ¶3; PSUF ¶12-13.)
For the most part, however, the Alberta Defendants do not advertise
their goods and services themselves. (Willms Decl. ¶4; PSUF ¶14.)
Instead, the Alberta Defendants contract with third parties to advertise their
goods and services. (Willms Decl. ¶4; PSUF ¶15.) Some of these third
parties are known as “affiliate networks,” meaning they act as intermediaries
between merchants and ad publishers (affiliates). (Willms Decl. ¶4; PSUF
¶16.) A merchant engages an affiliate network to promote the merchant’s
offer by entering into an arms-length contract known as an insertion order.
(Id.) This insertion order typically specifies the types of advertisements to
be used to promote an offer (e.g. email ads, banner ads, sponsored link ads,
etc). (Id.) Once an insertion order is signed, the affiliates in the network are
able to review the nature of the merchant’s offer and decide whether they
want to design, create, and publish ads for that offer. (Id.)
The Alberta Defendants also contract with media buyers to promote
their goods and services. (Willms Decl. ¶7; PSUF ¶19.) Unlike affiliate
networks, media buyers negotiate with third parties to display a merchant’s
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CASE NO. SACV09-0055 DMG (MLGx) 4 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
ads. (Id.) In the context of online advertising, a media buyer might contract
with a third party to display banner ads on a specific website. (Id.)
B. The Google AdWords System
AdWords is Google’s flagship advertising product, in which advertisers
specify the keywords that will trigger their ads and the maximum amount
they will pay each time a user clicks on that ad (the “bid). (Willms Decl. ¶8;
PSUF ¶20.) When a user runs a search on Google’s search engine, ads
associated with the searched keywords are displayed as “sponsored links”
on the right side of the screen, and sometimes above the main search
results. (Willms Decl. ¶8; PSUF ¶21.) When a user clicks on a sponsored
link, Google charges the advertiser for the click, in an amount less than or
equal to the advertiser’s bid. (Willms Decl. ¶8; PSUF ¶23.)
AdWords also allows advertisers to display banner ads. (Willms Decl.
¶9; PSUF ¶24.) Unlike sponsored links, Google does not use keywords to
determine whether to display banner ads. (Willms Decl. ¶10; PSUF ¶26.)
Rather, Google scans the text of websites that have agreed to display ads,
searching for terms that are relevant to different categories of
advertisements. (Id.) Based on these scanned terms, Google decides
which advertisements to display. (Id.) For both links and banner ads,
Google charges the advertiser each time a user clicks on one of its ads.
(Willms Decl. ¶¶8, 11; PSUF ¶¶23, 27.)
C. The Alberta Defendants’ Credit Report America Business
In August 2008, the Alberta Defendants launched a new service and
website, located at (“Credit Report
America”). (Willms Decl. ¶12; PSUF ¶28.) Credit Report America offered
consumers information about credit scores, credit reports, identity theft, and
online security. (Willms Decl. ¶12; PSUF ¶30.) Credit Report America also
provided instructions to consumers on how to get their free credit reports
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CASE NO. SACV09-0055 DMG (MLGx) 5 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
from the three major credit bureaus, (as required under the Fair and
Accurate Credit Transactions Act). (Willms Decl. ¶13; PSUF ¶31.)
Consumers who signed up for Credit Report America received a seven day
trial membership for a nominal amount. (Willms Decl. ¶14; PSUF ¶32.) If
consumers did not cancel their membership for Credit Report America, they
were then charged on a monthly basis for their access to the Credit Report
America resources. (Willms Decl. ¶14; PSUF ¶33.) Credit Report America
stopped taking orders in April 2009. (Willms Decl. ¶15; PSUF ¶34.)
1. The Alberta Defendants’ Contract with Third Parties to
Promote Credit Report America
Other than very limited test advertising, the Alberta Defendants did not
advertise Credit Report America themselves. (Willms Decl. ¶16; PSUF
¶¶35-36.) Instead they contracted with third parties to promote Credit
Report America. (Willms Decl. ¶¶17-19 & Exs. G & H; PSUF ¶¶37-39.) In
mid 2008, the Alberta Defendants entered into insertion orders with the
affiliate networks IntegraClick dba ClickBooth.com (“ClickBooth”) and Media
Trust dba Advaliant (“Advaliant”) to promote Credit Report America. (Id.)
Also in August 2008, the Alberta Defendants began working with the media
buyer ROI Revolution, Inc. (“ROI”) to promote Credit Report America. (Id.)
Over the next several months, ClickBooth and Advaliant made the Credit
Report America offer available to their affiliates to promote, and ROI worked
with third party media outlets to display advertisements for Credit Report
America. (Willms Decl. ¶22; PSUF ¶42.) Through the efforts of ClickBooth,
Advaliant, and ROI (and their affiliates and partners), a variety of
advertisements were published for Credit Report America on the Internet in
various forms, including banners, sponsored links, and email ads. (Id.)
D. Plaintiff’s Business Model
Plaintiff offers consumers with credit-related services through its
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CASE NO. SACV09-0055 DMG (MLGx) 6 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
website located at (“FreeCreditReport.com”).
(First Amended Complaint (“FAC”) ¶14; PSUF ¶45.) Plaintiff’s
FreeCreditReport.com website states that it provides consumers with a free
credit report. (Declaration of Jeffrey M. Rosenfeld in Support of Defendants’
Motion for Summary Adjudication (“Rosenfeld Decl.”) ¶2 & Ex. A; PSUF
¶46.) However, in order for a consumer to obtain a credit report from
FreeCreditReport.com, the consumer must sign up for Plaintiff’s Triple
Advantage credit monitoring service. (Id.) If a customer doesn’t cancel his
or her membership in Triple Advantage within 7 days, he or she is billed
$14.95 a month. (Id.)
E. Plaintiff’s Purported FREECREDITREPORT.COM Trademark
Plaintiff claims to own a valid United States trademark registration for
FREECREDITREPORT.COM. (FAC ¶16; PSUF ¶51.) In its application for
this trademark registration, Plaintiff declared under penalty of perjury to the
United States Patent and Trademark Office:
“[The FREECREDITREPORT.COM mark] has become
distinctive of the goods/services through the applicant’s
substantially exclusive and continuous use in commerce for at
least the five years immediately before the date of this
statement.”
[¶ ¶ ¶]
“to the best of [Plaintiff’s] knowledge and belief no other person,
firm, corporation, or association has the right to use the mark in
commerce, either in the identical form thereof or in such near
resemblance thereto as to be likely, when used on or in
connection with the goods/services of such other person, to
cause confusion or to cause mistake or to deceive . . .”
(Rosenfeld Decl. ¶4 & Ex. C; PSUF ¶¶54-55)
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CASE NO. SACV09-0055 DMG (MLGx) 7 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
In subsequent filings with the PTO, Plaintiff made similar statements under
oath. (Rosenfeld Decl. ¶6 & Ex. E; PSUF ¶57.) On May 13, 2008, after the
PTO received Plaintiff’s original application and supplemental filings, the
PTO issued a certificate of registration to Plaintiff for
FREECREDITREPORT.COM. (Rosenfeld Decl. ¶3 & Ex. B; PSUF ¶58)
1. Plaintiff’s Position Regarding Marks that Are Similar to
FREECREDITREPORT.COM
Plaintiff has made numerous statements to third parties about names,
phrases, and language that Plaintiff considers confusingly similar to its
FREECREDITREPORT.COM mark. By way of example only,
• Plaintiff sent Defendants letters, in which Plaintiffs claimed that the
phrases “freecreditreport” and “$0 - freecreditreport®” infringed
Plaintiff’s FREECREDITREPORT.COM mark. (Willms Decl. ¶27 & Ex.
J; Rosenfeld Decl. ¶7 & Ex. F; PSUF ¶¶59-60.)
• In response to Defendant Willms’s Second Set of Interrogatories,
Plaintiff claimed the following alleged ads were counterfeits of
Plaintiff’s FREECREDITREPORT.COM mark: a sponsored link ad
containing the phrase “Free Credit Report ™” and “a sponsored link ad
containing the phrase “$0 FreeCreditreport ®” (Rosenfeld Decl. ¶8 &
Ex. G; PSUF ¶61.)
• On September 24, 2009 Plaintiff initiated an arbitration proceeding
under the Uniform Domain Name Dispute Resolution Policy to recover
1,017 domain names that Plaintiff claimed were confusingly similar to
Plaintiff’s FREECREDITREPORT.COM mark (the “UDRP”), including
by way of example only:
• threecreditreportcompany.com • freecreditreportal.com
• threecreditreporting.com • freecreditreportalabama.com
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CASE NO. SACV09-0055 DMG (MLGx) 8 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
• 1-800-freecreditreport.com • freecreditreportincolorado.com
• feecreditreporting.com • freecreditreportwithnocreditcard.com
• free3creditreportagency.com • freecreditreportcopy.com
• freecreditreportwithoutusingacreditcard.com (Rosenfeld Decl. ¶10 & Ex.
I; PSUF ¶63-64.)
The above-referenced examples are a small set of names, language, and
phrases that Plaintiff has deemed confusingly similar to its
FREECREDITREPORT.COM mark. (Id.)
F. Third-Party Use of Identical and Similar Marks
Between 2005 and 2007, there was extensive third party use of
names, language, and phrases highly similar to Plaintiff’s
FREECREDITREPORT.COM mark. (Declaration of Frederick Cohen in
Support of Defendants’ Motion for Summary Adjudication (“Cohen Decl”)
passim; PSUF ¶¶65-67.) By way of example only, between 2005 and 2007,
the following domain names were used by third parties to display websites
offering credit-related services and/or advertisements:
• freecreditreporthelp.com • freecreditreportsite.com
• freecreditreportcenter.com • freecreditreportsearch.com
• freecreditreportcard.com • freecreditreportnow.com
• freecreditreportbureau.com • freecreditreporting.com
• freecreditreportamerica.com • freecreditreportz.com
• freecreditreport-now.com • creditreport.com
• annualfreecreditreport.com • free-credit-reports.org
• freecreditreportstore.com • free-credit-reports.net (Id.)
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CASE NO. SACV09-0055 DMG (MLGx) 9 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
Moreover, between 2005 and 2007, there were countless websites
that displayed the phrases “free credit report,” “freecreditreport,” and similar
wording. (Id.) By way of example only, these phrases were used on the
following websites:
• - displayed the phrase “free credit report”;
• - displayed the phrase “free credit report”;
• - displayed the phrases “freecreditreport,”
and “freecreditreportcard.com”;
• - displayed the phrase “free-credit-reports.net”;
• - displayed the phrase “free credit report”;
• - displayed the phrase “free credit report”
• - displayed the phrases “freecreditreportz.com”
and “free credit report” (Id.);
Between 2005 and 2007, this extensive third party use could have
been discovered in a matter of minutes by performing routine Internet
searches. (Cohen Decl. ¶¶33-34; PSUF ¶67.) Any reasonable company in
Plaintiff’s position would have been aware of the extensive third party use of
the phrases “freecreditreport,” “free credit report,” and the like before and
during the prosecution of Plaintiff’s trademark application for
FREECREDITREPORT.COM (i.e. between 2006-2008). (Declaration of
Irving S. Rappaport in Support of Defendants’ Motion for Summary
Adjudication (“Rappaport Decl.”) ¶10; PSUF ¶68.)
G. Plaintiff’s Failure to Use ® During Relevant Time Period
Prior to November 4, 2008 Defendants were not aware of Plaintiff’s
registration for the FREECREDITREPORT.COM mark. (Willms Decl. ¶28;
PSUF ¶73.) Nor did Plaintiff use ® in connection with its
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CASE NO. SACV09-0055 DMG (MLGx) 10 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
FREECREDITREPORT.COM mark.
On September 18, 2008 Plaintiff’s counsel sent Defendant Willms their
first demand letter. (Willms Decl. ¶25 & Ex. I; PSUF ¶¶69-70.) The letter did
not mention Plaintiff’s registration of the FREECREDITREPORT.COM mark.
(Id.) Moreover, the printout from the FreeCreditReport.com website, which
was attached to the letter, displayed the FREECREDITREPORT.COM
trademark without the symbol “®”. (Id.)
Moreover, on November 4, 2008 Plaintiff’s counsel sent Defendant
Willms another demand letter. (Willms Decl. ¶27 & Ex. J; PSUF ¶¶72, 74.)
This time, the letter attached a printout of Google search results, displaying
various sponsored link ads. This printout displays Plaintiff’s advertisement
for its FreeCreditReport.com website, using the
FREECREDITREPORT.COM trademark without the symbol “®”. (Id.)
ARGUMENT
A. Summary Judgment Standard
Summary judgment is proper when the pleadings, discovery and
disclosure materials on file, and any affidavits show that there is no genuine
issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law. Fed. R. Civ. P. 56(c). When the nonmoving
party has the burden of proof at trial, the moving party need only point out
“that there is an absence of evidence to support the nonmoving party’s
case.” Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)); Fairbank v. Wunderman
Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000) (holding that the Celotex
“showing” can be made by “pointing out through argument--the absence of
evidence to support plaintiff's claim”). Once the moving party carries its
initial burden, the adverse party “may not rest upon the mere allegations or
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CASE NO. SACV09-0055 DMG (MLGx) 11 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
denials of the adverse party’s pleading,” but must provide affidavits or other
evidence that “set forth specific facts showing that there is a genuine issue
for trial.” Devereaux, 263 F.3d at 1076.
B. Plaintiff knowingly made false statements to the United States
Patent and Trademark Office.
A trademark registration may be cancelled when it was based on false
statements submitted in an affidavit to the PTO. See Robi v. Five Platters,
Inc., 918 F.2d 1439, 1444 (9th Cir. 1990). A party may seek cancellation of a
registered trademark on the basis of fraud by establishing a false
representation regarding a material fact, the registrant's knowledge or belief
that the representation is false, the intent to induce reliance upon the
misrepresentation and reasonable reliance thereon, and damages
proximately resulting from the reliance. See id.
In its trademark application and supporting affidavits, Plaintiff made
several misrepresentations about its exclusive use of the
FREECREDITREPORT.COM mark. Thus, in its trademark application,
Plaintiff declared under penalty of perjury that:
[T]o the best of [its] knowledge and belief no other person, firm,
corporation, or association has the right to use the mark in
commerce, either in the identical form thereof or in such near
resemblance thereto as to be likely, when used on or in
connection with the goods/services of such other person, to
cause confusion or to cause mistake or to deceive . . .
(Rosenfeld Decl. ¶4 & Ex. C; PSUF ¶55)
Plaintiff’s statements were false, and Plaintiff knew they were false. At the
time Plaintiff filed its trademark application, there was extensive third-party
use of the phrases “freecreditreport.com,” “freecreditreport,” “free credit
report,” and the like. Literally thousands-upon-thousands of websites used
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CASE NO. SACV09-0055 DMG (MLGx) 12 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
these phrases to sell and/or advertise credit-related services. Moreover,
many of these websites were associated with domain names that were
highly similar to FREECREDITREPORT.COM, including by example only:
• freecreditreportcenter.com • freecreditreportcenter.com
• freecreditreportcard.com • freecreditreport-now.com
• freecreditreportstore.com • freecreditreportsite.com
• freecreditreportservice.com • freecreditreportz.com
• freecreditreportnow.com • freecreditreporting.com
• free-credit-reports.org • free-credit-reports.net
No reasonable company in Plaintiff’s position could have been
ignorant of this extensive third-party use. A simple search on the Internet by
Plaintiff would have revealed thousands of these results in seconds. To the
extent Plaintiff argues it was unaware of this third-party use, Plaintiff’s
argument is not credible, and Plaintiff’s intent to mislead, as well as the
trademark office’s reliance on Plaintiff’s false declaration, can be inferred
from these facts. See CTF Development, Inc. v. Penta Hospitality, LLC, No.
09-02429, 2009 WL 3517617, at *5 (N.D. Cal. Oct. 26, 2009). Thus,
Plaintiff’s declaration in support of its trademark application was materially
false, in that there was extensive third-party use of names, language, and
phrases that closely resembled FREECREDITREPORT.COM.
Plaintiff may argue that much of this third-party use involved phrases
that were not confusingly similar to FREECREDITREPORT.COM. Plaintiff’s
argument fails. In the past, Plaintiff has argued that phrases that are far less
similar to FREECREDITREPORT.COM than those described above were
confusingly similar to the FREECREDITREPORT.COM mark. As limited
examples, in the past, Plaintiff has argued that the phrases
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CASE NO. SACV09-0055 DMG (MLGx) 13 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
“freecreditreport,” “Free Credit Report ™,” “freetriplecreditscore.com,”
“threecreditreportcompany.com,” and “freecreditreportwithoutusinga-
creditcard.com” were all confusingly similar to
FREECREDITREPORT.COM.
Given: a) that Plaintiff considers domain names such as
"threecreditreportcompany.com" confusingly similar to
FREECREDITREPORT.COM, b) that common phrases such as
"freecreditreport" or "free credit report," are facially more similar to
FREECREDITREPORT.COM than domain names such as
“threecreditreportcompany.com,” and c) that Plaintiff had to have been
aware of, and intentionally misrepresented, the third-party use of the
phrases "freecreditreport" and "free credit report" when Plaintiff filed its
trademark application, it can only be the case that Plaintiff made
misrepresentations to the PTO when it said it was unaware of third-party use
of confusingly similar phrases.
C. Plaintiff has not produced any evidence that Defendants used the
FREECREDITREPORT.COM mark in commerce.
All of Plaintiff’s trademark infringement and dilution claims fail because
Plaintiff has produced no evidence that Defendants—as opposed to third
parties—used infringing marks.
In order to prevail on a claim of trademark infringement under 15
U.S.C. §1114 or 1125(a), or common law, Plaintiff must produce evidence
that (1) Defendants used the plaintiff’s valid, protectable trademark; and (2)
the use was likely to confuse customers as to the source of the product. See
Karl Storz Endoscopy America, Inc. v. Surgical Technologies, Inc., 285 F.3d
848, 853 (9th Cir. 2002); Credit One Corp. v. Credit One Financial, Inc., No.
CV 09-2985, 2009 WL 3199169, at *2 (C.D. Cal. Sept. 23, 2009) (setting
forth elements of common law infringement claims). And in order to prevail
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CASE NO. SACV09-0055 DMG (MLGx) 14 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
on a claim for trademark dilution under 15 U.S.C. §1125(c), a plaintiff must
show that (1) its mark is famous; (2) the defendant made a commercial use
of the mark; (3) the defendant’s use began after the mark became famous;
and (4) the defendant’s use of the mark caused actual dilution. See
Horphag Research Ltd. v. Garcia, 475 F.3d 1029 (9th Cir. 2007).
Plaintiff claims that sponsored link ads for Credit Report America
infringed on its FREECREDITREPORT.COM mark. However, Plaintiff has
produced no evidence that Defendants—as opposed to third parties—used
an infringing mark in these sponsored link ads. In fact, Plaintiff has not
produced any evidence that Defendants published any sponsored link ads
for Credit Report America. Neither Defendants nor ROI nor Advaliant nor
ClickBooth provided Plaintiff with any such evidence, despite Plaintiff’s
extensive third-party discovery. Rather, all of the sponsored link ads for
Credit Report America were published by third parties—primarily ROI and
affiliates of Advaliant and ClickBooth.
As a result, the alleged trademark infringement was carried out by
third parties—not Defendants. Plaintiff has produced no evidence that
Defendants even knew about this alleged infringement, let alone actually
perpetrated it. Where a plaintiff fails to establish that the defendant was the
one who used the infringing mark, a trademark infringement claim must be
denied. See e.g., Coach, Inc. v. Asia Pacific Trading Co., Inc., __ F. Supp.
2d __, No. 09-35, 2009 WL 3808550, at *10 (C.D. Cal. Nov. 12, 2009)
(granting defendants’ summary judgment motion on trademark claim where
plaintiff provide no evidence connecting defendants to the infringement).
In fact, the only relevant evidence establishes that Defendants sought
to stop the alleged infringement when they first learned about it. Thus, on
November 4, 2008—after receiving Plaintiff’s demand letter—Defendants
orally instructed their affiliate networks to require their affiliate to stop using
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CASE NO. SACV09-0055 DMG (MLGx) 15 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
the FREECREDITREPORT.COM mark. Defendants subsequently sent
emails and letters to their affiliate networks instructing them to prohibit any
infringement of the FREECREDITREPORT.COM mark. Plaintiff’s
unsupported theory—that Defendants published infringing sponsored link
ads—makes no sense in light of this correspondence.
Given that Plaintiff has produced no evidence that Defendants—as
opposed to third parties—used an infringing trademark, Plaintiff’s trademark
infringement and dilution claims fail.
D. Plaintiff cannot prove a claim for vicarious or contributory
trademark infringement where Plaintiff has not produced any
evidence that Defendants induced or controlled third parties.
Plaintiff cannot succeed on its vicarious or contributory trademark
infringement claims because Plaintiff has not produced sufficient evidence
connecting Defendants to the infringing acts.
To succeed on a claim for vicarious trademark infringement, a plaintiff
must prove: (1) that the defendant and the infringer have an “apparent or
actual partnership,” (2) “have authority to bind one another in transactions
with third parties” or (3) “exercise joint ownership or control over the
infringing product.” Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d
788, 807 (9th Cir. 2007).
For contributory trademark infringement, a plaintiff must prove that the
defendant: (1) “intentionally induced” the primary infringer to infringe, or (2)
continued to supply an infringing product to an infringer with knowledge that
the infringer is mislabeling the particular product supplied. Perfect 10, Inc.
494 F.3d at 807 (citing Inwood Lab., Inc. v. Ives Lab., Inc., 456 U.S. 844,
855 (1982)). For liability to attach, there must be “[d]irect control and
monitoring of the instrumentality used by a third party to infringe the
plaintiff's mark.” Id. at 807 (citing Lockheed Martin Corp., 194 F.3d at 984)).
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CASE NO. SACV09-0055 DMG (MLGx) 16 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
The Ninth Circuit has noted that these tests for secondary trademark
infringement are even more difficult to satisfy than the rigorous tests for
vicarious and contributory copyright infringement. See id. at 806; see also
Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 265 (9th Cir. 1996)
(noting that “trademark infringement liability is more narrowly circumscribed
than copyright infringement”).
Plaintiff has not produced sufficient evidence to satisfy either the test
for vicarious or contributory trademark infringement. As discussed above,
the alleged trademark infringement was perpetrated by third parties—and
Plaintiff has produced no evidence to the contrary. Defendants did not—and
still do not—know the identities of these third parties. Rather, these third
parties were affiliates of Advaliant and ClickBooth. Plaintiff has produced no
evidence that Defendants intentionally induced these unknown third parties
to infringe the FREECREDITREPORT.COM mark, that Defendants had a
partnership with these third parties, or that Defendants exercised control
over the actions of these third parties. In fact, the evidence demonstrates
that Defendants were unaware of the allegedly infringing conduct until
November 4, 2008. And in November 2008, when Defendants learned of
the alleged infringement, Defendants took affirmative steps to stop it.
In light of these facts—and Plaintiff’s failure to produce any evidence
of a vicarious or contributory relationship between Defendants and the
unknown publishers of the infringing ads—Plaintiff’s contributory and
vicarious trademark infringement claims fail.
E. Plaintiff cannot prove a claim for trademark infringement because
Plaintiff failed to provide Defendants with notice of Plaintiff’s
trademark registration.
Plaintiff’s trademark infringement claims also fail in part because
Plaintiff did not provide Defendants with notice of its trademark registration.
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CASE NO. SACV09-0055 DMG (MLGx) 17 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
The Lanham Act states:
a registrant of a mark registered in the Patent Office, may give
notice that his mark is registered by displaying with the mark
the words "Registered in U. S. Patent and Trademark Office" or
"Reg. U.S. Pat. & Tm. Off." or the letter R enclosed within a
circle . . . [I]n any suit for infringement under this Act by such a
registrant failing to give such notice of registration, no profits
and no damages shall be recovered under the provisions of this
Act unless the defendant had actual notice of the registration.
(15 U.S.C. §1111)
The evidence demonstrates that at least prior to November 4, 2008
Defendant failed to provide notice of its registration for its
FREECREDITREPORT.COM mark. Plaintiff sent Defendants two letters
prior to November 4, 2008. Both of these letters included exhibits displaying
Plaintiff’s use of its FREECREDITREPORT.COM mark in commerce: one
exhibit displayed Plaintiff’s FreeCreditReport.com website and the other
displayed sponsored link ads for the FreeCreditReport.com website.
Neither of these exhibits contained any notice of Plaintiff’s registration of the
FREECREDITREPORT.COM. Moreover, Plaintiff has produced no evidence
that Defendants knew about Plaintiff’s registration, and in fact, Defendants
did not have knowledge of this registration before November 4, 2008.
(Willms Decl. ¶28; PSUF ¶73.)
Because Plaintiff failed to provide notice of its trademark registration,
and has failed to produce evidence that Defendants knew of such
registration, Plaintiff’s trademark infringement claims fail. Importantly,
15 U.S.C. §1111’s notice requirement applies to claims brought under both
15 U.S.C. §1114 for infringement of a registered mark and 15 U.S.C.
§1125(a) for infringement of an unregistered mark, when this claim is based
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CASE NO. SACV09-0055 DMG (MLGx) 18 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
on a registered mark. See Coach, Inc., 2009 WL 3808550 at *9-10; see
also Reebok Int’l., Ltd. v. Marnatech Enter., Inc., 970 F.2d 552, 559 n.9 (9th
Cir. 1992) (stating that §1125(a) claims are subject to §1111). Accordingly,
both Plaintiff’s §1114 claim and §1125 claim are barred by §1111.
F. Plaintiff’s former website is not entitled to trade dress protection.
Plaintiff has failed to produce any evidence that its former website is
entitled to trade dress protection under 15 U.S.C. §1125(a). To prove trade
dress infringement, a plaintiff must demonstrate that: (1) the trade dress is
nonfunctional, (2) the trade dress has acquired secondary meaning, and (3)
there is a substantial likelihood of confusion between the plaintiff's and
defendant's products. To show secondary meaning, a plaintiff must
demonstrate a mental recognition in buyers' minds that products connected
with the trade dress are associated with the same source.
Plaintiff has produced no evidence that its former
FreeCreditReport.com landing page, featuring a block of text with a blonde
woman at the top, has acquired secondary meaning. There is nothing
original or distinctive about this web page, and such images and themes are
echoed in thousands—if not millions—of other websites. (Rosenfeld Decl ¶2
& Ex. A; PSUF ¶50.) Moreover, shortly after Plaintiff sent Defendants a
letter accusing them of trade dress infringement, Plaintiff fundamentally
changed its landing page. Today, Plaintiff’s landing page features a picture
of a young male “slacker” and reformatted text (i.e. the text is longer
displayed in three columns). (Rosenfeld Decl ¶11 & Ex. J; PSUF ¶50.)
These fundamental changes in the look and feel of the
FreeCreditReport.com landing page are inconsistent with the argument that
the former landing page served—and continues to serve—as a source
identifier. And Plaintiff has produced no evidence to the contrary.
Plaintiff may argue that it needn’t produce evidence of secondary
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CASE NO. SACV09-0055 DMG (MLGx) 19 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
meaning, arguing that its former website was inherently distinctive. An
inherently distinctive trade dress is one that automatically tells a consumer
that it refers to a specific source for a product, such that consumers will be
predisposed to equate the trade dress with the source of a product. See
Webloyalty.com, Inc. v. Consumer Innovations, LLC, 388 F. Supp. 2d 435.
445 (D. Del. 2005). Plaintiff has produced no evidence that consumers
automatically equated the landing page with a blonde woman on the top with
Plaintiff’s services. In fact, it’s hard to imagine more than a handful of
people ever associating this generic website design with Plaintiff’s services.
Because Plaintiff cannot establish secondary meaning of its former
landing page, its trade dress infringement claim must be denied.
G. Plaintiff cannot prove that Defendants used a counterfeit of the
FREECREDITREPORT.COM mark.
Plaintiff attempts to shoehorn the facts of this case into the Lanham
Act’s anti-counterfeiting provision. However, neither the letter nor the intent
of this provision applies.
Plaintiff has identified four alleged incidents of counterfeiting in
violation of 15 U.S.C. §1114(1): a) Defendants’ alleged copying of Plaintiff’s
website trade dress; b) the appearance of the FREECREDITREPORT.COM
mark in a sponsored links ad; c) the appearance of the phrase “Free Credit
Report ™” in a sponsored link ad; and d) the appearance of the phrase “$0
– FreeCreditReport ®” in a sponsored link ad. None of these incidents
constitutes counterfeiting. (Rosenfeld Decl ¶8 & Ex. G; PSUF ¶61.)
First, even if there were evidence that Defendants had published these
ads—and there is not—Plaintiff has still failed to state a claim for
counterfeiting. “Counterfeiting is the act of producing or selling a product
with a sham trademark that is an intentional and calculated reproduction of
the genuine trademark.” Schneider Saddlery Co., Inc. v. Best Shot Pet
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CASE NO. SACV09-0055 DMG (MLGx) 20 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
Products Intern., LLC, No. 1:06-CV-02602, 2009 WL 864072, *14 (N.D. Ohio
March 31, 2009). Counterfeit merchandise is made so as to imitate a well-
known product (e.g. a Rolex watch) in all details of construction and
appearance so as to deceive customers into thinking that they are getting
genuine merchandise. Thus, counterfeiting is “hard core” or “first degree”
trademark infringement; the most egregious form of “passing off.” 4 J.
McCarthy, McCarthy on Trademarks and Unfair Competition §25:10 (4th ed.
2010). This is a high bar, because slight differences, apparent upon minimal
inspection, will defeat an allegation that a mark is counterfeit. See, e.g.
Colgate-Palmolive Co. v. J.M.D. All-Star Imp. & Exp., 486 F. Supp. 2d 286,
289 (S.D.N.Y. 2007) (holding that “Colgate Toothpaste” is not a counterfeit
of “Colgate Toothpaste,” despite exceedingly similar packaging.).
Plaintiff claims that the following sponsored link ads, published by third
parties, were counterfeits of its FREECREDITREPORT.COM mark.
• Free Credit Report
Get Free Credit Report in seconds.
Easy to read & viewable online.
www.CreditReportAmerica.com
• FreeCreditReport.com?
Free 3-Bureau Credit Report & Free
2008 Credit Score Online Today!
www.FreeEquifaxCreditReport.net
• $0 – FreeCreditReport ®
Free 3-Bureau Credit Report.
Seen on CNN, NBC, CBS, & FOX News!
www.CreditReportAmerica.net
(Importantly, two of these ads don’t even promote the Alberta Defendants’
website located at ).
These ads are not counterfeits of Plaintiff’s
FREECREDITREPORT.COM mark. These ads are simply not equivalent to
the selling of fake Rolex watches or Levi’s jeans, the type of misconduct that
the anti-counterfeiting provision targets. See e.g., Senate Report on the
Trademark Counterfeiting Act of 1984 (S. Rep. No. 98-526, at 4 (1984),
reprinted in 1984 U.S.C.C.A.N. 3627, 3630) (explaining that the Act targets
the selling of goods through the use of spurious marks, such as “sewing
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CASE NO. SACV09-0055 DMG (MLGx) 21 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
false brandname labels into cheaply manufactured clothing,” which defrauds
purchasers who “pay for brand-name quality and take home only a fake”).
Instead, the ads produced by Plaintiff are ads for competing services, and
the ads prominently display the name of the competing services in the ad:
e.g. CreditReportAmerica.com. Under no construction of the Lanham Act,
could such ads be considered counterfeits.
Moreover, the ads do not use Plaintiff’s FREECREDITREPORT.COM
mark in an identical or substantially indistinguishable form, and thus cannot
constitute “counterfeits” under the Act. Marks that are similar to a registered
mark, but differ by a letter or two, are not counterfeits. See, e.g. Colgate-
Palmolive, 486 F. Supp. 2d at 289. Thus, two of the three ads submitted as
proof of Defendants’ alleged counterfeiting [i.e. “Free Credit Report” and “$0
– FreeCreditReport ®.”] do not meet this standard based on Plaintiff’s own
admissions. Plaintiff has admitted that such language is not substantially
indistinguishable from its FREECREDITREPORT.COM mark:
First, ConsumerInfo’s statements regarding its substantially
exclusive and continuous use of its
FREECREDITREPORT.COM were not false. Defendants point
to third party use of terms such as “free credit report” and
“creditreport.com.” (Counterclaim ¶¶ 5-9.) However,
ConsumerInfo’s mark is FREECREDITREPORT.COM, and it
must be viewed “as a whole.” (Rosenfeld Decl. ¶12 & Ex. K;
PSUF ¶79.)
So, too, the one ad that includes FREECREDITREPORT.COM, must, in the
Plaintiff’s words, be viewed “as a whole.” And viewing the ad as a whole, a
any reasonable consumer would notice the ad includes a link for a different,
competing service [i.e. www.FreeEquifaxCreditReport.net]. Thus the ad
does not contain a “counterfeit” of Plaintiff’s mark, as the mark is not
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CASE NO. SACV09-0055 DMG (MLGx) 22 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
identical with or substantially indistinguishable from Plaintiff’s mark when
viewed “as a whole.” See Schneider Saddlery Co., 2009 WL 864072, at *4
(noting that “when determining whether a mark is counterfeit, courts
generally consider whether consumers would find the infringing mark
‘identical with, or substantially indistinguishable from’ a registered mark as it
appears in the marketplace, rather than how two marks may appear in the
abstract”).
Nor does Defendants’ alleged copying of Plaintiff’s trade dress on the
Credit Report America website constitute counterfeiting. In passing the anti-
counterfeiting provisions, Congress specifically noted that the provisions did
“not extend to imitations of trade dress or packaging, unless those features
have been registered as trademarks on the Principal Register.” S. Rep. No.
98-526, at 3 (1984), reprinted in 1984 U.S.C.C.A.N. 3627, 3629.
Finally, and perhaps most importantly, Plaintiff has produced no
evidence that Defendants—as opposed to third parties—published the
allegedly counterfeit ads. The Lanham Act’s anti-counterfeiting provisions
contain a heightened intent requirement. As the Senate Report on the Act
noted, “[s]ince counterfeiting is a uniquely pernicious form of trademark
infringement . . . [the plaintiff must] show that the defendant has intentionally
trafficked in goods or services knowing them to be counterfeit.” S. Rep. No.
98-526, at 2 (1984), reprinted in 1984 U.S.C.C.A.N. 3627, 3628. Because
Plaintiff’s evidence of counterfeiting merely implicates the alleged intent of
third parties, Plaintiffs have failed to produce evidence sufficient to maintain
a claim for counterfeiting against Defendants.
Thus, Plaintiff’s attempt to shoehorn its trademark infringement claims
into the Lanham Act’s anti-counterfeiting provisions must be rejected.
H. This circuit does not recognize claims for vicarious or
contributory dilution or false advertising under the Lanham Act.
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CASE NO. SACV09-0055 DMG (MLGx) 23 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
Plaintiff has asserted claims for contributory and vicarious liability
under the Lanham Act. However, Plaintiff has not specified what violations
of the Lanham Act are at issue—but rather, refers to Lanham Act violations
generally. To the extent Plaintiff seeks to impose contributory or vicarious
liability on Defendants for false advertising or dilution (as opposed to
trademark infringement), Plaintiff’s claims fail.
The concepts of contributory and vicarious liability for trademark
infringement do not appear in the text of the Lanham Act. Rather, they are
court-adopted doctrines, based on common law principles of agency and
apparent authority, and accepted by the Supreme Court in Inwood Lab., Inc.
v. Ives Lab., Inc., 456 U.S. 844, 853-54 (1982).
While the Supreme Court has recognized causes of action for
vicarious and contributory trademark infringement, neither the Supreme
Court nor the Ninth Circuit has extended contributory or vicarious liability to
claims for dilution or false advertising under the Lanham Act. In fact, the
Ninth Circuit has specifically noted that no such extension of vicarious and
contributory liability to non-infringement claims has been recognized. See
Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 986 (9th
Cir. 1999) (“Although courts have discussed contributory dilution, no
appellate court or statute has yet established the cause of action.”);
Academy of Motion Picture Arts and Sciences v. Network Solutions, Inc.,
989 F. Supp. 1276, 1279 (C.D. Cal. 1997) (stating “[t]he very fact that there
is no precedent of success on the merits on a contributory dilution claim
weighs strongly against the Court granting a preliminary injunction”).
Because the Ninth Circuit has not recognized vicarious or contributory
false advertising or dilution under the Lanham Act, the Court must deny any
secondary liability claims based on false advertising or dilution.
I. Plaintiffs cannot prove any claim against Defendant Willms as an
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CASE NO. SACV09-0055 DMG (MLGx) 24 DEFENDANTS’ MPA IN SUPPORT OF MOTION FOR SUMMARY ADJUDICATION
individual—as compared to the corporate Defendants.
While Plaintiff named Defendant Jesse Willms in his individual
capacity, Plaintiff has produced no evidence that Willms personally
participated in any of the alleged misconduct. Nor has Plaintiff produced
any evidence that Willms directed employees of the Alberta Defendants to
engage in any misconduct. As a result, Plaintiff’s claims against Willms fail.
“To be personally liable [under the Lanham Act], corporate officers or
directors must do more than merely control corporate affairs: they must
personally take part in infringing activities or specifically direct employees to
do so.” 4 J. McCarthy, §25:24. An officer’s knowledge of tortious conduct
alone is not enough to hold that officer liable for the torts absent other
unreasonable participation in the misconduct. See Wolf Designs, Inc. v.
DHR Co., 322 F. Supp. 2d 1065, 1072 (C.D. Cal. 2004). As recognized by
the Ninth Circuit, “[c]ases which have found personal liability on the part of
corporate officers have typically involved instances where the defendant
was the ‘guiding spirit’ behind the wrongful conduct, . . . or the ‘central figure’
in the challenged corporate activity.” Davis v. Metro Productions, Inc., 885
F.2d 515, 524 (9th Cir. 1989) (quoting Escude Cruz v. Ortho Pharm. Corp.,
619 F.2d 902, 907 (1st Cir.1980)). Plaintiff has failed to produce any
evidence that Willms was the “guiding spirit” in the alleged misconduct:
Lanham Act Claims. Plaintiff has produced no evidence that Willms
personally violated the Lanham Act, or that he instructed others to do so.
First, as discussed above, the allegedly infringing sponsored link ads were
published by third parties—not Willms. Plaintiff has produced no evidence
that Willms created these ads or instructed others to do so. In fact, the
evidence shows that Willms instructed third parties to stop displaying such
ads when he learned of the alleged infringement. Second, Plaintiff has
produced no evidence that Willms designed the Credit Report America
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website, which allegedly infringed Plaintiff’s trade dress. To the contrary,
the Credit Report America website was designed by contractors in India.
And when Willms learned of the alleged trade dress trademark infringement,
he instructed Defendants’ contractors to change the website. Finally,
Plaintiff has produced no evidence that Willms drafted the allegedly false
advertisements or instructed others to do so.
Copyright Claims. Plaintiff has failed to produce evidence that Willms
created banner advertisements that infringed on Plaintiff’s copyrights. The
Alberta Defendants have created thousands of banner ads for their several
websites. While Willms reviews many of these banner ads before they are
sent to affiliate networks or media buyers, it would be impossible for him to
investigate the provenance of each such ad. Plaintiff has submitted that four
of Defendants’ banner ads infringed its copyrights. However, Plaintiff has
produced no evidence that Willms was in involved in the creation of these
four ads out of the thousands produced by the Alberta Defendants.
Because Plaintiff has produced no evidence that Willms was the
“guiding light” or “central spirit” in the alleged misconduct, Plaintiff’s claims
against Willms must be dismissed.
CONCLUSION
For all of the reasons set forth above, the Court should grant
Defendants’ motion for summary adjudication.
Respectfully submitted,
DATED: February 12, 2010 KRONENBERGER BURGOYNE, LLP
By: s/ Karl S. Kronenberger
Karl S. Kronenberger
Attorneys for Defendants
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