Foremost Farms USA, Cooperative v. Diamond V Mills, Inc.

Brief in Opposition

W.D. Wis.January 10, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN FOREMOST FARMS USA, COOPERATIVE, Plaintiff, § § § § § v. § § § Case No. 3:16-cv-551 DIAMOND V MILLS, INC., Defendant. § § § § PLAINTIFF’S OPPOSITION TO DEFENDANT’S RENEWED MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 1 of 36 i TABLE OF CONTENTS I. FACTUAL BACKGROUND ............................................................................................. 2 II. LEGAL STANDARDS ...................................................................................................... 4 III. ARGUMENT ...................................................................................................................... 4 A. Foremost Pled Sufficient Facts To Support Claims of Trademark Infringement, False Designation Of Origin, and Unfair Competition. .......................................... 5 1. Foremost Pled Sufficient Facts To Support A Protectable Interest In The NUTRITEK Mark. ...................................................................................... 5 2. Foremost Pled Sufficient Facts To Support Likelihood of Confusion. .... 12 B. Foremost Pled Sufficient Facts At This Early Stage To Support A Claim of Unfair Competition........................................................................................................... 21 C. Foremost’s Cancellation Claim Is Properly Before The Court Because This Case Involves A Registered Mark. ................................................................................ 22 D. Foremost’s Unjust Enrichment Claim Is Properly Before The Court Because It Is Related To Foremost’s Other Claims. .................................................................. 29 E. Alternatively, Should The Court Find Diamond V’s Motion Has Merit, Foremost Respectfully Requests Leave To Amend The Complaint. .................................... 29 IV. CONCLUSION ................................................................................................................. 29 Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 2 of 36 QB\43253780.1 ii TABLE OF AUTHORITIES Cases Airs Aromatics, LLC v. Opinion Victorias Secret Stores Brand Mgmt., Inc., 744 F.3d 595 (9th Cir. 2014) .................................................................................................................................. 27 Allard Enters. Inc. v. Advanced Programming Res., 146 F.3d 350 (6th Cir.1998) ........................ 5 Apex Colors, Inc. v. Chemworld Int'l Ltd., Inc., No. 2:14-CV-273-PRC, 2015 WL 5311403 (N.D. Ind. Sept. 10, 2015) ............................................................................................................. 23, 25 Archer Daniels Midland Co. v. Narula, No. 99 C 6997, 2001 WL 804025 (N.D. Ill. July 12, 2001) ........................................................................................................................................... 8 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................... 4 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................................... 4 Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260 (5th Cir. 1975) .................................................. 7 CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660 (7th Cir.2001) .......................................... passim Cent. Mfg., Inc. v. Brett, 492 F.3d 876 (7th Cir. 2007) ......................................................... passim CFE Racing Prods., Inc. v. BMF Wheels, Inc., 793 F.3d 571 (6th Cir. 2015) ............................. 23 China Int’l Travel Servs. (USA), Inc. v. China & Asia Travel Serv., Inc., No. 08-CV-01293 JSW MEJ, 2008 WL 5480840 (N.D. Cal. Dec. 18, 2008) .......................................................... 24, 26 Ditri v. Colwell Banker Residential Affiliates, Inc., 954 F.2d 869 (3d Cir. 1992) ....................... 27 Echo Travel, Inc. v. Travel Assocs., Inc., 870 F.2d 1264 (7th Cir. 1989) .................................... 21 Facebook, Inc. v. Teachbook.com LLC, 819 F. Supp. 2d 764 (N.D. Ill. 2011) .................. 1, 17, 18 Fantasia Distribution, Inc. v. Rand Wholesale, Inc., No. 14-cv-01546, 2014 WL 6980833 (N.D. Ill. Dec. 10, 2014) .............................................................................................................. passim Flower Mound Dermatology, P.A. v. Nicole Reed Med., PLLC, No. 4:14-CV-280, 2015 WL 137314 (E.D. Tex. Jan. 7, 2015) ......................................................................................... 24, 25 Foster v. DeLuca, 545 F.3d 582 (7th Cir. 2008) ........................................................................... 29 Fuji Photo Film Co., Inc. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591 (5th Cir. 1985) .. 20 GMA Accessories, Inc. v. Idea Nuova, Inc., 157 F. Supp. 2d 234 (S.D.N.Y. 2000) .................... 26 Grey v. Campbell Soup Co., 650 F. Supp. 1166 (C.D. Cal. 1986) ............................................... 10 Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 3 of 36 QB\43253780.1 iii Grey v. Campbell Soup Co., 830 F.2d 197 (9th Cir. 1987) .......................................................... 10 Hallinan v. Fraternal Order of Police Chicago Lodge No. 7, 570 F.3d 811 (7th Cir.2009).......... 4 Illinois Tool Works, Inc. v. Chester Bros. Machined Prods., Inc., No. 05-c-5002, 2006 WL 2191982 (N.D. Ill. July 27, 2006) ....................................................................................... 14, 20 Johnny Blastoff, Inc. v. Los Angeles Rams Football Co., 88 F.3d 427 (7th Cir. 1999) .................. 7 Kathreiner's Malzkaffee Fabriken Mit Beschraenkter Haftung v. Pastor Kneipp Med. Co., 82 F. 321 (7th Cir.1897) ....................................................................................................................... 7 MIH Allegro BV v. Fang, No. LACV1406510JAKASX, 2015 WL 12655399 (C.D. Cal. Jan. 12, 2015) ................................................................................................................................... 24, 25 Mil-Mar Shoe Co. v. Shonac Corp., 75 F.3d 1153 (7th Cir. 1996) .............................................. 21 Mon Aimee Chocolat, Inc. v. Tushiya LLC, No. 15 C 4235, 2015 WL 6407758 (N.D. Ill. Oct. 22, 2015) ............................................................................................................................. 12, 19, 20 My Health, Inc. v. Gen. Elec. Co., No. 15-CV-80-JDP, 2015 WL 9474293 (W.D. Wis. Dec. 28, 2015) .................................................................................................................................. passim New Orleans Louisiana Saints LLC & NFL Props. LLC, 99 U.S.P.Q.2d 1550, 2011 WL 3381380 (TTAB July 22, 2011) ............................................................................................................... 25 Nike, Inc. v. Already, LLC, 663 F.3d 89 (2d Cir. 2011) ............................................................... 27 Packman v. Chicago Tribune Co., 267 F.3d 628 (7th Cir.2001) .................................................... 5 Palmer Hamilton, LLC v. AmTab Mfg. Corp., No. 16-CV-522-JDP, 2016 WL 6775458 (W.D. Wis. Nov. 15, 2016) .............................................................................................................. 2, 22 Patsy’s Italian Restaurant, Inc. v. Banas, 658 F.3d 254 (2d Cir. 2011) ....................................... 11 Patterson v. World Wrestling Entm't, Inc., No. 03-C-0374, 2006 WL 273527 (E.D. Wis. Jan. 31, 2006) ................................................................................................................................... 5, 7, 8 Planet Hollywood (Region IV), Inc. v. Hollywood Casino Corp., 80 F. Supp. 2d 815 (N.D. Ill. 1999) ......................................................................................................................................... 15 Planet Hollywood (Region IV), Inc. v. Hollywood Casino Corp., No. 96 C 4660, 1999 WL 1186802 (N.D. Ill. Dec. 9, 1999) ........................................................................................ 15, 16 Recot, Inc. v. Becton, 214 F.3d 1322 (Fed. Cir. 2000) ................................................................. 11 Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947 (7th Cir. 1992) ................... 8, 9, 10 Slep-Tone Entm't Corp. v. Coyne, 41 F. Supp. 3d 707 (N.D. Ill. 2014) ................................ passim Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 4 of 36 QB\43253780.1 iv Smith Fiberglass Prod., Inc. v. Ameron, Inc., 7 F.3d 1327 (7th Cir. 1993) .................................. 13 Specht v. Google Inc., 747 F.3d 929 (7th Cir. 2014) .................................................................... 23 Specht v. Google, Inc., 135 S. Ct. 724 (2014) ............................................................................... 23 Sullivan v. CBS Corp., 385 F.3d 772 (7th Cir. 2004) ................................................................... 15 Thomas & Betts Corp. v. Panduit Corp., 48 F. Supp. 2d 1088 (N.D. Ill. 1999) .......................... 25 Top Tobacco v. Fantasia Distribution Inc., 101 F. Supp. 3d 783 (N.D. Ill. 2015) ................ 13, 14 Transit Express, Inc. v. Ettinger, 246 F.3d 1018 (7th Cir. 2001) ................................................... 4 V.I.P. Foods, Inc. v. Vulcan Pet, Inc., 210 U.S.P.Q. 662, 1980 WL 30228 (N.D. Okla. July 29, 1980) ......................................................................................................................................... 11 V.I.P. Foods, Inc. v. Vulcan Pet, Inc., 675 F.2d 1106 (10th Cir. 1982)........................................ 11 Windsurfing Int'l Inc. v. AMF Inc., 828 F.2d 755 (Fed. Cir. 1987) .............................................. 27 Statutes 15 U.S.C. § 1052(d) ...................................................................................................................... 24 15 U.S.C. § 1119 ............................................................................................................... 22, 23, 25 15 U.S.C. § 1127 ......................................................................................................................... 5, 7 28 U.S.C. § 1367 ........................................................................................................................... 28 Other Authorities McCarthy on Trademarks and Unfair Competition (4th ed.) ................................................ passim McCarthy, Trademarks and Unfair Competition (2d ed. 1984) .................................................... 21 Rules Fed. R. Civ. P. 12(d) ..................................................................................................................... 18 Fed. R. Civ. P. 15(a) ..................................................................................................................... 29 Fed. R. Civ. P. 8(a)(2) ..................................................................................................................... 4 Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 5 of 36 1 Diamond V’s motion to dismiss lacks any merit. Foremost pled sufficient facts to plausibly support each of its claims. In support of its trademark claims, Foremost alleged ownership over an incontestable registration for NUTRITEK as well as use of NUTRITEK for an ingredient used in animal feed long before Diamond V started using NUTRITEK for the same purpose. Foremost also alleged facts supporting likelihood of confusion, including that the parties use identical marks, the parties both use the marks for ingredients used in animal feeds, and the parties both interface with the dairy industry. These facts are presumed true for this motion. Diamond V dismisses these allegations as “conclusory,” but Diamond V’s arguments are premised on inapplicable standards and inapposite cases. Indeed, Diamond V’s motion is rife with citations to summary judgment cases, highlighting the premature nature of its request to dismiss. As this Court and others have noted, “‘[b]ecause the likelihood of confusion test is a fact-intensive analysis, it ordinarily does not lend itself to a motion to dismiss.’” My Health, Inc. v. Gen. Elec. Co., No. 15-CV-80-JDP, 2015 WL 9474293, at *5 (W.D. Wis. Dec. 28, 2015) (Peterson, J.) (quoting Slep-Tone Entm't Corp. v. Coyne, 41 F. Supp. 3d 707, 715 (N.D. Ill. 2014)). Diamond V encourages the Court to look beyond the pleadings and adopt cherry-picked excerpts from Foremost’s website that supposedly show Foremost does not market NUTRITEK for animal consumption. Diamond V essentially asks the Court to convert its motion to dismiss into a one-sided motion for summary judgment. This is unfair and runs contrary to this Court’s and others’ treatment of motions to dismiss. My Health, 2015 WL 9474293, at *5 (declining to take judicial notice of or incorporate by reference exhibits attached to a motion to dismiss); Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 6 of 36 QB\43253780.1 2 Facebook, Inc. v. Teachbook.com LLC, 819 F. Supp. 2d 764, 773 (N.D. Ill. 2011) (same). The Court should decline to consider Diamond V’s improperly offered “evidence.” Diamond V’s other arguments are equally flawed. Diamond V claims that Foremost’s unfair competition claims requires a showing of intent. This is incorrect. But even so, this Court has made clear that it will not ask plaintiffs to show intent at such an early stage in the case. Palmer Hamilton, LLC v. AmTab Mfg. Corp., No. 16-CV-522-JDP, 2016 WL 6775458, at *2 (W.D. Wis. Nov. 15, 2016) (Peterson, J.). Diamond V also claims that Foremost’s cancellation claim cannot be brought offensively. This too is incorrect. The Seventh Circuit had held that the Lanham Act “arms the court with the power to update the federal trademark register to account for a mark’s actual legal status (or lack thereof)” and where “a registrant’s asserted rights to a mark are shown to be invalid, cancellation is not merely appropriate, it is the best course.” Cent. Mfg., Inc. v. Brett, 492 F.3d 876, 883 (7th Cir. 2007). For these and the following reasons, the Court should deny Diamond V’s Renewed Motion to Dismiss and allow Foremost’s claims to proceed. I. FACTUAL BACKGROUND This case involves two registrations for the mark NUTRITEK. Foremost owns the earlier of the two registrations and alleges that Foremost has priority of use of NUTRITEK for the relevant goods and that Diamond V’s use of NUTRITEK creates likelihood of confusion. (Dkt. 16, Counts I-VI). Accordingly, Foremost asserts that Diamond V has no right to use NUTRITEK and thus no right to maintain its registration for the mark. (Id., Count VII). Foremost and its predecessors (collectively, “Foremost”) have used NUTRITEK to market and sell partially demineralized dried whey since at least as early as 1961. (Dkt. 16, ¶¶ 31, 33-34, 37-41, 46-48, 51-53, 55-56, 59). Foremost sells its NUTRITEK product in powder form, in large bulk bags, with NUTRITEK branded on the bags. (Id., ¶¶ 41, 44, 59). Foremost’s Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 7 of 36 QB\43253780.1 3 NUTRITEK product can be and has been blended with other ingredients to form infant formula, specialty dairy products, and animal feed. (Id., ¶¶ 49-50, 54). Foremost applied to register NUTRITEK for partially demineralized dried whey for human consumption in 1962 and U.S. Registration No. 747,696 (“the ‘696 Registration”) issued in 1963. (Id., ¶¶ 35-36). The ‘696 Registration is valid and subsisting and has achieved incontestable status. (Id., ¶ 36). Foremost has continuously sold its NUTRITEK product as an ingredient to manufacturers, customers, and ultimately consumers of products for animal consumption since at least as early as 1995. (Id., ¶¶ 47-48, 53). Diamond V has used NUTRITEK to market and sell a metabolite product since 2014 or 2015. (Id., ¶¶ 62-63, 66-69). Diamond V sells its NUTRITEK product in powder form, in large bulk bags, with NUTRITEK branded on the bags. (Id., ¶¶ 64, 68). Diamond V’s NUTRITEK product is used in products for animal consumption. (Id., ¶¶ 63, 66). Diamond V applied to register NUTRITEK for animal feed supplements in 2014 and U.S. Registration No. 4,728,885 for NUTRITEK (“the ‘885 Registration”) issued in 2015. (Id., ¶¶ 70-71). Foremost has not granted Diamond V permission to use NUTRITEK to market and sell its NUTRITEK product or otherwise. (Id., ¶¶ 78, 91, 100). In early 2016, Foremost sent Diamond V a letter informing Diamond V of Foremost’s rights in NUTRITEK and requesting Diamond V to stop its infringement; Diamond V refused to do so. (Id., ¶¶ 73-74). In August 2016, Foremost filed a Complaint against Diamond V asserting claims for trademark infringement, false designation of origin, and unfair competition. (Dkt. 1, Counts I- VI). Foremost also asserted a claim for cancellation of the ‘885 Registration. (Id., Count VII). On November 16, 2016, Diamond V moved to dismiss Foremost’s Complaint for failure to state a claim. (Dkt. 13). Foremost filed an Amended Complaint alleging additional facts to support Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 8 of 36 QB\43253780.1 4 its claims. (Dkt. 16). Diamond V renewed its motion, again asserting failure to state a claim. (Dkt. 20). II. LEGAL STANDARDS To state a claim upon which relief may be granted, a complaint need only provide a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Rule 8 “does not require ‘detailed factual allegations.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). It is enough that the complainant put the defendant “on notice of the nature of its claims and supported them with plausible allegations.” My Health, 2015 WL 9474293, at *2 (denying motion to dismiss trademark claims). A motion to dismiss pursuant to Rule 12(b)(6) tests the complaint’s legal sufficiency; it is not an opportunity for the court to find facts or weigh evidence. Hallinan v. Fraternal Order of Police Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009); My Health, 2015 WL 9474293, at *5. The “court must accept the complaint’s well-pleaded factual allegations as true and draw reasonable inferences from those allegations in the plaintiff’s favor.” Transit Exp., Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir. 2001). Because Lanham Act claims are so factually intensive, they “ordinarily do[] not lend [themselves] to a motion to dismiss.” Slep-Tone, 41 F. Supp. 3d at 715. III. ARGUMENT Diamond V’s motion must be denied. Foremost plausibly states claims upon which relief may be granted, because it alleges facts that, taken as true, entitle Foremost to the relief it seeks. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 9 of 36 QB\43253780.1 5 A. Foremost Pled Sufficient Facts To Support Claims of Trademark Infringement, False Designation Of Origin, and Unfair Competition. Foremost pled sufficient facts to support its trademark claims. To prevail on a trademark claim, “a plaintiff must establish that (1) [its] mark is protectable, and (2) the defendant’s use of the mark is likely to cause confusion among consumers.” Packman v. Chicago Tribune Co., 267 F.3d 628, 638 (7th Cir. 2001). Here, Foremost alleged facts supporting Foremost has a protectable interest in the NUTRITEK mark for products for animal consumption. (Dkt. 16, ¶¶ 31-61). Foremost also alleged facts supporting that Diamond V uses an identical mark for same or related products and thus causes likelihood of confusion. (Id., ¶¶ 62-74). These factual allegations are presumed true for resolving this motion and are sufficient to support Foremost’s claims. See, e.g., Fantasia Distribution, Inc. v. Rand Wholesale, Inc., No. 14-cv-01546, 2014 WL 6980833, at *3 (N.D. Ill. Dec. 10, 2014). “Whether [Foremost’s] marks are, in fact, valid and infringed are questions of fact for a later stage in the litigation.” See id. 1. Foremost Pled Sufficient Facts To Support A Protectable Interest In The NUTRITEK Mark. Foremost advanced two theories regarding its protectable interest in the NUTRITEK mark: (a) Foremost acquired common law rights in the NUTRITEK mark for products for animal consumption; and (b) Foremost’s registered mark extends to products for animal consumption. a. Foremost Pled Sufficient Facts To Support Common Law Rights In The NUTRITEK Mark. Foremost pled sufficient facts to support that it acquired common law rights in the NUTRITEK mark for products for animal consumption. A party obtains common law rights in a mark through use in commerce. See, e.g., Patterson v. World Wrestling Entm't, Inc., No. 03-C- 0374, 2006 WL 273527, at *18 (E.D. Wis. Jan. 31, 2006). The use need not be extensive, but Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 10 of 36 QB\43253780.1 6 must have occurred prior to any other use. Id. (citing Allard Enters. Inc. v. Advanced Programming Res., 146 F.3d 350, 358 (6th Cir. 1998)). This is consistent with the Lanham Act’s definition of “use in commerce.” 15 U.S.C. § 1127 (mark used in commerce when placed on goods “in any manner” and the goods are “sold” in commerce). Foremost alleged that “Foremost … has continuously sold its NUTRITEK dried whey product to manufacturers, customers and ultimately consumers of animal feed products since at least 1995.” (Dkt. 16, ¶ 53; see also id. at ¶¶ 46-47). Foremost’s NUTRITEK dried whey product “is suitable for a number of uses, including blending the powder with other ingredients for human consumption and animal consumption,” including specifically for “animal feed.” (Id., ¶¶ 45, 54). For these reasons, “various types of manufacturers, customers and ultimately consumers of … animal food product” purchase the NUTRITEK dried whey product. (Id. at ¶ 42). “Regardless of the manufacturer, customer or intended use, Foremost[’s] dried whey is sold under the NUTRITEK mark. […] [W]hen Foremost … sells its dried whey to manufacturers, customers and ultimately consumers of animal feed products, Foremost Farms sells the product in large, bulk bags branded with the NUTRITEK mark. […] The NUTRITEK packaging does not change, regardless of the manufacturer, customer or consumer.” (Id. at ¶ 59). Diamond V wrongly characterizes these factual allegations as “conclusory statements.” (Dkt. 21, at 13). Foremost did not simply assert “Foremost is entitled to common law protection.” That would have been conclusory. Rather, Foremost explained how its use of the NUTRITEK mark on its dried whey product used as an ingredient in animal feed has established its common law rights in the mark for that purpose. (See Dkt. 16, ¶¶ 53-56, 59). Foremost further explained that its use of the NUTRITEK mark for products for animal consumption pre- dates Diamond V’s use by nearly two decades. (See id. at ¶¶ 51, 62). Diamond V complains that Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 11 of 36 QB\43253780.1 7 Foremost did not identify the “type of animal feed” for which NUTRITEK is used (Dkt. 21, at 11), but this sort of detail is not required by Rule 8, Fantasia, 2014 WL 6980833, at *2, and is more appropriately dealt with in the discovery phase of litigation, My Health, 2015 WL 9474293, at *5. While “there is a plausibility standard that must be met, [a] hyper-technical fact pleading is not required.” Fantasia, 2014 WL 6980833, at *2. Diamond V’s arguments reflect a misunderstanding of the type of activity that is required to acquire common law trademark rights. Diamond V suggests that Foremost must engage in a particular type or level of marketing in order to acquire common law rights.1 (See Dkt. 21, at 13- 14). This is incorrect. “[O]wnership may be established even if the first uses are not extensive and do not result in deep market penetration or widespread recognition.” Allard, 146 F.3d at 358; see also Blue Bell, Inc. v. Farah Mfg. Co., Inc., 508 F.2d 1260, 1265 (5th Cir.1975) (“Such use need not have gained wide public recognition.”); Kathreiner's Malzkaffee Fabriken Mit Beschraenkter Haftung v. Pastor Kneipp Med. Co., 82 F. 321, 326 (7th Cir. 1897) (“It is not essential that [a mark’s] use has been long continued, or that the article should be widely known, or should have attained great reputation”). Diamond V’s reliance on Johnny Blastoff, Inc. v. Los Angeles Rams Football Co. is inapposite. There, the Seventh Circuit was considering the type of use apart from actual sales that could establish common law rights. 188 F.3d 427, 434 (7th Cir. 1999). Here, Foremost has alleged actual sales of NUTRITEK for use in products for animal 1 As discussed below, Diamond V improperly relies on unauthenticated printouts from Foremost’s website in order to show a supposed lack of marketing of NUTRITEK for products for animal consumption. (Dkt. 21, at 13). In addition to the myriad of evidentiary and procedural problems with this, Diamond V’s reliance on unauthenticated materials showing Foremost markets NUTRITEK for one purpose to establish that Foremost supposedly does not market NUTRITEK for another purpose is specious at best. Infra § III.A.2.c. Obviously, Foremost may market NUTRITEK in any number of ways for any number of purposes. Pointing to one of those ways fails to establish that Foremost does not market NUTRITEK for a different a purpose in a different way. Moreover, marketing is not a requirement for use in commerce. See 15 U.S.C. § 1127. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 12 of 36 QB\43253780.1 8 consumption, (Dkt. 16, ¶ 53), which alone is sufficient to show use in commerce, Allard, 146 F.3d at 358; Patterson, 2006 WL 273527, at *18. Foremost pled sufficient facts that, if proven, would support its common law rights in the NUTRITEK mark for products for animal consumption. (See Dkt. 16, ¶¶ 53-56, 59); Patterson, 2006 WL 273527, at *18. This motion, however, is not the time to ask whether those facts are proven. The type and level of activity that constitutes use is a factual question that is determined on a case-by-case basis and is best left for summary judgment or trial when the parties have had an opportunity to develop the record. See, e.g., Archer Daniels Midland Co. v. Narula, No. 99 C 6997, 2001 WL 804025, at *10 (N.D. Ill. July 12, 2001). Diamond V’s motion improperly asks the Court to resolve this factual question now. The Court should decline to do so. b. Foremost Pled Sufficient Facts To Support Its Registered Mark Extends to Products For Animal Consumption. Foremost pled sufficient facts to support that its registered NUTRITEK mark extends to products for animal consumption. Foremost alleged ownership over U.S. Registration No. 747,696 (“the ‘696 Registration”) for NUTRITEK for partially demineralized dried whey for human consumption. (Dkt. 16, ¶¶ 35-36). The ‘696 Registration issued on April 2, 1963 and is valid, subsisting, and has achieved incontestable status. (Id., ¶ 36). Trademark protection is not limited to the precise goods and services for which registration was obtained. “[T]he rights of an owner of a registered trademark extend to any goods that might be, in the minds of consumers, ‘related.’” CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660, 679 (7th Cir. 2001). “‘Closely related’ products are those that would reasonably be thought by the buying public to come from the same source, or thought to be affiliated with, connected with, or sponsored by, the trademark owner.” Id. (internal quotations omitted); Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 958 (7th Cir. 1992) (citing Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 13 of 36 QB\43253780.1 9 cosmetics/apparel, toy dogs/dog shows, restaurants/gin, and beer/whiskey as examples of goods and services that may be related). This doctrine “protect[s] the owner’s ability to enter product markets in which it does not now trade but into which it might reasonably be expected to expand in the future.” Id. Foremost alleged that Foremost’s dried whey product and Diamond V’s metabolite product are used in the same manner for the same purpose, namely as ingredients to be blended with other ingredients to form edible products. “Foremost[’s] NUTRITEK dried whey takes the form of an off-white powder.” (Dkt. 16, ¶ 44). “Foremost[’s] NUTRITEK dried whey is suitable for a number of uses, including blending the powder with other ingredients for human consumption and animal consumption,” including “animal feed.” (Id., ¶¶ 45, 54). Similarly, “Diamond V’s NUTRITEK takes the form of a tan powder.” (Id., ¶ 64). “Diamond V’s NUTRITEK ingredient can be blended with other material to produce animal feed.” (Id., ¶ 65). These allegations are factual assertions, not legal conclusions. Accordingly, they are assumed true for the purposes of resolving Diamond V’s motion. My Health, 2015 WL 9474293, at *5. Diamond V wrongly dismisses these allegations as “conclusory.” (Dkt. 21, at 11). Foremost did not simply assert “the NUTRITEK products are related.” That would have been conclusory. Rather, Foremost explained how the similar uses and purposes of the NUTRITEK products (ingredients to be blended with others to create an edible product) could cause consumers to reasonably believe that the products were connected to or associated with one another. (See Dkt. 16, ¶¶ 44, 54, 58, 64-65); see also CAE, 267 F.3d at 679; Sands, 978 F.2d at 958. This is particularly true given the similar manner in which the products are sold (in powder form, in large bulk bags) and the parties’ and products overlapping connection to the dairy industry. (See Dkt. 16, ¶¶ 1, 41, 44, 64, 67-68). Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 14 of 36 QB\43253780.1 10 Diamond V relies upon an improperly restrictive definition of relatedness. While goods may be related if consumers “would use them in conjunction with each other” (Dkt. 21, at 10), conjunctive use is not the test for relatedness. Rather, the test is whether consumers could reasonably make a connection or association between the two products. CAE, 267 F.3d at 679; Sands, 978 F.2d at 958; 4 McCarthy on Trademarks and Unfair Competition (hereinafter “McCarthy”) § 24:3 (4th ed.).2 In other words, the proper inquiry is to ask, “Would consumers reasonably connect or associate these products?” Foremost pled sufficient facts that, if proven, would support an answer of “yes.” (See Dkt. 16, ¶ 44, 54, 58, 64-65). This motion, however, is not the time to ask whether those facts are proven. Indeed, “[w]hether [certain products] are ‘related in the minds of consumers in the sense that a single producer is likely to put out both goods,’ for the purposes of the related goods doctrine, is a[] question of fact that cannot be resolved at the motion-to-dismiss stage.” Fantasia, 2014 WL 6980833, at *3. Diamond V’s motion improperly asks the Court to engage in this factually-intensive inquiry. The Court should decline to do so. To the extent that Diamond V suggests that products for human consumption and products for animal consumption can never be related as a matter of law (Dkt. 21, at 11-12), this is incorrect. To the contrary, multiple courts have determined that products for human consumption and products for animal consumption can be closely related. See, e.g., Grey v. 2 Diamond V supposedly quoted from this section of McCarthy for the proposition that “‘Related’ does not necessarily mean that there is necessarily any physical relationship between the goods or services identified by the conflicting marks. Rather, it means that the marks as used are ‘related’ in the mind of the consuming public.” (Dkt. 21, at 10 (emphasis in original)). Foremost searched for, but was unable to find this quote. Regardless, the quote merely supports that products do not necessarily need to physically fit together or work in conjunction in order for them to be related, which undercuts Diamond V’s reliance on its conjunctive use theory. The material actually provided in this section of McCarthy confirms the correct standard. 4 McCarthy § 24:3 (explaining that beer and whiskey can be related products because “[t]he mental association between beer and whiskey is a reasonable one”). Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 15 of 36 QB\43253780.1 11 Campbell Soup Co., 650 F. Supp. 1166, 1174-75 (C.D. Cal. 1986), aff'd, 830 F.2d 197 (9th Cir. 1987) (public could believe some connection between DOGIVA dog biscuits and GODIVA chocolates); V.I.P. Foods, Inc. v. Vulcan Pet, Inc., 210 U.S.P.Q. 662, 1980 WL 30228, at *5 (N.D. Okla. July 29, 1980) (dog and cat food sold under the V.I.P. mark related to frozen food products sold under the VIP mark, in part due to manner of sales and marketing), rev'd on other grounds, 675 F.2d 1106 (10th Cir. 1982); see also Recot, Inc. v. Becton, 214 F.3d 1322, 1329 (Fed. Cir. 2000) (vacating Board’s dismissal of opposition of FIDO LAY over FRITO LAY in part because “the fact that the goods themselves are different-dog food and human food-does not compel a conclusion that consumers may not confuse the origin of the foods…”). Diamond V cites a half-dozen cases from the 1930s, 40s, and 50s supporting that a mark may be registered for a group of products for human consumption despite its prior use on a group of products for animal consumption or visa versa. (Dkt. 21, at 12). That a mark may be registered in two different categories of products says nothing about those products’ relatedness. It is axiomatic that the PTO’s classification system “exist[s] solely for administrative purposes, and does not affect the substantive rights of a mark’s owner in any way.” Patsy’s Italian Rest., Inc. v. Banas, 658 F.3d 254, 269 (2d Cir. 2011); 3 McCarthy § 19:56. Indeed, “the fact that the goods or services fall in different parts of the USPTO classification system is totally irrelevant to the issue of likelihood of confusion.” 4 McCarthy § 24:6. At bottom, Foremost pled sufficient facts supporting a protectable interest in the NUTRITEK mark for products for animal consumption. This motion is not the proper time to determine whether those facts are proven. Accordingly, Foremost should be allowed to proceed on its trademark claims. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 16 of 36 QB\43253780.1 12 2. Foremost Pled Sufficient Facts To Support Likelihood of Confusion. Foremost pled sufficient facts supporting the following likelihood of confusion factors: (1) similarity between the marks in appearance and suggestion; (2) similarity of the products; (3) the area and manner of concurrent use; (4) the degree of care likely to be exercised by consumers; (5) the strength of the plaintiff’s mark; (6) whether actual confusion exists; and (7) whether the defendant intended to ‘palm off’ his product as that of the plaintiff.” CAE, 267 F.3d at 677-78. “The likelihood of confusion test is an equitable balancing test [and n]o single factor is dispositive.” Id. at 678 (internal citations and quotations omitted). As the Court has recognized, likelihood of confusion is an issue that “require[s] factual development.” My Health, 2015 WL 9474293, at *1. “‘Because the likelihood of confusion test is a fact-intensive analysis, it ordinarily does not lend itself to a motion to dismiss.’” Id. at *5. (quoting Slep-Tone, 41 F. Supp. 3d at 715); see also Mon Aimee Chocolat, Inc. v. Tushiya LLC, No. 15 C 4235, 2015 WL 6407758, at *5 (N.D. Ill. Oct. 22, 2015) (“Likelihood of confusion is ultimately a question of fact, making it difficult to determine at the pleadings stage.”). Diamond V grossly misstates the law by modifying a quote from CAE to read: “the question of whether likelihood of confusion exists may be resolved [as a legal matter] ‘if the evidence is so one-sided that there can be no doubt about how the question should be answered.’” (Dkt. 21, at 15 (emphasis added)). The actual quote reads: “the question of whether likelihood of confusion exists may be resolved on summary judgment ‘if the evidence is so one-sided that there can be no doubt about how the question should be answered.’” CAE, 267 F.3d at 677 (emphasis added). Clearly the law favors Foremost’s (and the Court’s) understanding of the issue. Accordingly, Diamond V’s motion should be denied and Foremost Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 17 of 36 QB\43253780.1 13 should be allowed “the opportunity to develop the evidence to support its case.” My Health, 2015 WL 9474293, at *1. a. Similarity of the Marks. Foremost pled sufficient facts that, if proven, would support that the marks at issue are identical. Both parties use NUTRITEK with an identical spelling and pronunciation. (Compare Dkt. 16, ¶ 41 with id. at ¶ 68; see also id. at ¶ 72). Diamond V does not dispute these allegations (Dkt. 21, at 19). Instead, Diamond V asserts that “allegations that the parties use a mark that is similar spelling and pronunciation are insufficient to state a claim for trademark infringement, without more.” (Id. at 20). Diamond V derives this assertion regarding sufficiency of allegations from a case in which the Seventh Circuit reviewed and affirmed summary judgment of no likelihood of confusion and a case in which a district court denied a motion to dismiss despite the plaintiff only alleging four of the seven likelihood of confusion factors.3 Diamond V’s manufactured law is contradicted by Seventh Circuit teachings on the issue. “The likelihood of confusion test is an equitable balancing test. No single factor is dispositive and courts may assign varying weights to each of the factors depending on the facts presented.” CAE, 267 F.3d at 678 (internal citations and quotations omitted). “[T]he district court must give appropriate weight to the factors that are particularly important based on the facts of each case.” 3 Smith Fiberglass Prods., Inc. v. Ameron, Inc. does not support Diamond V’s assertion. In that case, the Seventh Circuit reviewed a summary judgment decision in which the district court found two of the seven factors favored the plaintiff, but, on balance, no likelihood of confusion existed. 7 F.3d 1327, 1331 (7th Cir. 1993). This merely supports that district courts must consider each of the factors and then balance them based on their importance. It does not support that a single, particularly important factor, such as similarity of the marks, cannot carry the day. Nor does Top Tobacco v. Fantasia Distribution Inc. support Diamond V’s assertion. In that case, the Northern District of Illinois denied a motion to dismiss trademark claims after reviewing and weighing each of the seven factors. 101 F. Supp. 3d 783, 789-792 (N.D. Ill. 2015). In doing so, the court did not suggest that it would have granted the motion had it found only one of the factors sufficiently pled. Rather, the court found that viewed as a whole, the plaintiff’s pleading gave the defendant “fair notice” of the claims and the ground upon which they rested, which is the appropriate standard. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 18 of 36 QB\43253780.1 14 Id. at 686-87 (emphasis added). Accordingly, the Court must consider all of the factors in its analysis and has discretion to assign them weight according to their importance based on the facts of this case. See id. But it would be inappropriate for the Court to do so at this stage of the case when the evidence concerning each of the factors is yet to be developed. Regardless, as explained below, Foremost alleges facts well beyond the first factor. Diamond V further argues that the similarity of the marks “does not weigh heavily in favor of Foremost’s claims” because the parties use NUTRITEK alongside their main logos. (Dkt. 21, at 20). According to Diamond V, the similarity of the marks cannot be judged by looking at the marks side-by-side, but in the context of the marketplace. (Id.). Even accepting this standard as true, such an inquiry requires factual development and discovery. Per Diamond V’s own case law, this inquiry “is ‘best left for decision after discovery.’” Top Tobacco, 101 F. Supp. 3d at 790. Even if this “argument ‘may have merit in a future phase of litigation,’ … it does not warrant dismissal under Rule 12(b)(6).” Id. When viewed under the proper standard, Foremost’s allegations are sufficient to support that the first factor favors likelihood of confusion. Id.; My Health, 2015 WL 9474293, at *5. b. Similarity of the Products. Foremost pled sufficient facts that, if proven, would support that the NUTRITEK products at issue are similar. “A likelihood of confusion may exist even if the parties are not in direct competition or their products and services are not identical. Rather, because the rights of an owner of a registered trademark extend to any goods that might be, in the minds of consumers, ‘related,’ i.e., put out by a single producer, the more accurate inquiry is whether the public is likely to attribute the products and services to a single source.” CAE, 267 F.3d at 679 (internal citations and quotations omitted). Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 19 of 36 QB\43253780.1 15 Foremost’s allegations support that the public could believe the products at issue are from a single source. The parties’ products are used in the same manner for the same purpose, namely as ingredients to be blended with other ingredients to form edible products. (Compare Dkt. 16, ¶¶ 44-45, 54-55 with id. at ¶¶ 64-65, 69). These allegations are sufficient to support that the second factor favors likelihood of confusion. See Illinois Tool Works, Inc. v. Chester Bros. Machined Prods., Inc., No. 05-c-5002, 2006 WL 2191982, at *2 (N.D. Ill. July 27, 2006) (denying motion to dismiss because court “cannot say, as a matter of law,” that products are dissimilar). Diamond V claims that Foremost did not sufficiently plead this factor because Foremost did not “identify any specific animal feed product its NUTRITEK dried whey is used in[ or] how much NUTRITEK dried why is used in animal feed products.” (Dkt. 21, at 17). Rule 8 does not require this level of detail. Fantasia, 2014 WL 6980833, at *2 (“hyper-technical fact pleading is not required”). The cases that Diamond V cites in support of its interpretation of Foremost’s allegations are summary judgment cases and thus have the wrong procedural posture and apply the wrong standards for resolving the present motion. (Dkt. 21, at 17).4 These cases only highlight why it is inappropriate to resolve the question of likelihood of confusion on a motion to dismiss. 4 In Sullivan v. CBS Corp., the Seventh Circuit reviewed a grant of summary judgment of no likelihood of confusion. 385 F.3d 772, 778 (7th Cir. 2004). In doing so, it analyzed multiple factual issues regarding the products at issue, including the products themselves and where they were sold. Id. In Planet Hollywood (Region IV), Inc. v. Hollywood Casino Corp., the Northern District of Illinois granted summary judgment in part because it found restaurant services and casinos services were not closely related “[b]ased on the evidentiary record before it.” 80 F. Supp. 2d 815, 881 (N.D. Ill. 1999), opinion clarified, No. 96 C 4660, 1999 WL 1186802 (N.D. Ill. Dec. 9, 1999). It only did so after reviewing the evidence in the record and noting that the plaintiff had “offered no survey or other consumer evidence.” Id. These sort of factual inquiries are only possible after a robust discovery period. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 20 of 36 QB\43253780.1 16 c. Concurrent Use. Foremost pled sufficient facts that, if proven, would support concurrent use between the parties. Concurrent use assesses “whether there is a relationship in use, promotion, distribution, or sales between the goods or services of the parties.” CAE, 267 F.3d at 681 (internal quotations omitted). Diamond V claims that “Foremost makes no allegations about where or how it sells its NUTRITEK dried whey product.” (Dkt. 21, at 17). That is false. Foremost alleged the following about distribution and sales: Foremost sells its NUTRITEK product “in large bags with the NUTRITEK mark in sans serif font. The NUTRITEK mark appears in relief on a teal blue background alongside the Foremost name.” (Dkt. 16, ¶ 41). Similarly, Diamond V sells its NUTRITEK product “in large bags with the NUTRITEK mark in sans serif font. The NUTRITEK mark appears in teal blue and black with a silhouette of a dairy cow.” (Id. at ¶ 68). Foremost’s allegations also support that the NUTRITEK products are marketed and sold in overlapping industries. (Compare id. at ¶¶ 46-47 with id. at ¶¶ 66-67). Diamond V complains that Foremost did not “identify the markets” or “the channels of distribution” and asserts that the marks and channels are different. (Dkt. 21, at 17). Again, Rule 8 does not require this level of detail. Fantasia, 2014 WL 6980833, at *2. But even taking Diamond V’s argument at face value, the “argument that confusion is unlikely because the products are sold to different purchasers in different ‘channels of trade’ is not conclusive.” Slep-Tone, 41 F. Supp. 3d at 715. Diamond V also claims that unauthenticated materials from Foremost’s website support that Foremost does not market NUTRITEK for use in animal feed. (Dkt. 21, at 17). Diamond V’s claims and allegedly supporting materials are inappropriately raised in a motion to dismiss and the Court should decline to consider them. This Court has made clear that it will not take Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 21 of 36 QB\43253780.1 17 judicial notice of website printouts in resolving motions to dismiss because such printouts are “not so unequivocally reliable” and require authentication: The court will not take judicial notice of information established by submissions that require authentication. If properly authenticated and supported with affidavits, [the defendant] may submit this evidence in support of a motion for summary judgment, but it is not so unequivocally reliable that the court should take judicial notice of it. My Health, 2015 WL 9474293, at *4. This Court has further made clear that it will not consider every single material from a particular website incorporated by reference into a complaint even if the complaint references the website because a “website is not the equivalent of a single document unequivocally identified and cited in a complaint:” Nor is the court inclined to consider the [defendant’s] website to be a document that is incorporated into the complaint by reference. The incorporated-by- reference principle is a “narrow exception” to the general rule that the court will not consider evidence outside of the complaint when evaluating a Rule 12(b)(6) motion, and the exception typically applies to references to specific, undisputed documents-for example, a contract. See 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002). The complaint does refer to [defendant’s] website, which is available at a specific domain name. But that website is not the equivalent of single document unequivocally identified and cited in a complaint. A website, particularly a complex one like [defendant’s], is a dynamic collection of documents and data that changes over time. A reference to the domain name at which the website can be found is not a reference to a specific document any more than a reference to www.newyorktimes.com is a reference to a specific article. The complaint does not reference the archived screenshots on which [defendant] now relies, and the court will not consider the documents as “incorporated by reference.” My Health, 2015 WL 9474293, at *4. But more to the point, Diamond V’s argument presents a false dichotomy. Brochures showing Foremost markets NUTRITEK for human consumption is not unequivocal evidence that Foremost does not market NUTRITEK for animal consumption. Clearly Foremost could market NUTRITEK for both human consumption and animal consumption. And clearly Foremost could choose to do marketing for human consumption in one way and marketing for Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 22 of 36 QB\43253780.1 18 animal consumption in another. Diamond V presents a blatantly one-sided and limited view of the issue. For this reason, courts are leery of relying on cherry-picked portions of websites at the motion to dismiss stage. Facebook, 819 F. Supp. 2d at 773 (declining to take judicial notice of or incorporate by reference exhibits attached to a motion to dismiss because “allowing [defendant] to cherry pick portions of [plaintiff]’s website to introduce via a motion to dismiss simply because the complaint implicates the two websites would convert an examination of the complaint in to full-blown summary judgment analysis”). To do so would convert the motion to dismiss to a motion for summary judgment, which would be inappropriate at this stage of the litigation.5 Id. d. Degree of Care. Foremost pled sufficient facts that, if proven, would support concurrent use between the parties. Even when “customers are sophisticated and decide to buy only after extensive negotiations, these customers’ technical sophistication about their particular industry does not equate to trademark sophistication.” CAE, 267 F.3d at 683. This is not a case that involves expensive, luxury items. Indeed, Foremost’s allegations show that both NUTRITEK products are sold as bulk products. (Compare Dkt. 16, ¶ 41 with id. at ¶ 68). Foremost’s allegations also show that the parties and their NUTRITEK products interface with the same dairy industry (Dkt. 16, ¶¶ 3, 5, 19, 42, 66), a fact that Diamond V apparently does not dispute (Dkt. 21, at 4). When parties exist in overlapping industries, it is “more likely that even an informed and sophisticated consumer will mistakenly attribute the parties’ products and services to a common source.” Id. When entitled to the proper inferences, 5 In the unlikely event that the Court chooses to convert Diamond V’s motion to dismiss to a motion for summary judgment, Foremost requests leave to summit additional argument and evidence. “When a court converts a motion to dismiss to one for summary judgment, ‘[a]ll parties must be given a Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 23 of 36 QB\43253780.1 19 Foremost’s allegations are sufficient to support that the fourth factor favors likelihood of confusion. See Slep-Tone, 41 F. Supp. 3d at 716 (“given the close relationship between the parties’ products and services, and the fact that they operate within the same industry, these consumers may be just as susceptible as a layperson to mistakenly attribute an unauthorized … mark …”). e. Strength of the Mark. Foremost pled sufficient facts that, if proven, would support that the NUTRITEK mark is strong and entitled to protection. The “strength” of a trademark refers to the mark’s distinctiveness, meaning its propensity to identify the products or services sold as emanating from a particular source. CAE, 267 F.3d at 684. A court may also look to the length of time the mark has been in use and whether the mark has been registered. Id. at 685. Diamond V baldly claims that “Foremost makes no … representation about the strength of its NUTRITEK mark.” (Dkt. 21, at 18). This is false. Foremost alleged that the NUTRITEK mark is inherently distinctive, has been used for dried whey and nationally registered since the 1960s, and has thus acquired secondary meaning. (Dkt. 16, ¶ 31-32, 35-36, 60). “Due to its long-standing association with dried whey, the NUTRITEK mark stands for premium quality whey ingredients to manufacturers, customers and consumers all over the world. As a result, the NUTRITEK mark has acquired secondary and distinctive trademark meaning to manufacturers, customers and consumers.” (Id. at ¶ 60). “Due to its long-standing association with the Foremost name, the NUTRITEK mark stands for premium quality ingredients sourced from Foremost Farms. As a result, the NUTRITEK mark designates ingredients originating only from Foremost Farms.” (Id. at ¶ 61). These ignored, but uncontroverted, allegations are sufficient to reasonable opportunity to present all the material that is pertinent to the motion.’” Facebook, 819 F. Supp. 2d at 770 (citing Fed. R. Civ. P. 12(d)). Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 24 of 36 QB\43253780.1 20 support that the fourth factor favors likelihood of confusion. See, e.g., Mon Aimee Chocolat, 2015 WL 6407758, at *4, 6 (facts alleging length of use sufficient to support distinctiveness and secondary meaning). f. Actual Confusion. Foremost requires additional discovery to ascertain the amount of actual confusion caused by Diamond V’s use of the NUTRITEK mark. Regardless, actual confusion “is not required to prove that a likelihood of confusion exists.” CAE, 267 F.3d at 685. “The likelihood of confusion test is an equitable balancing test [and n]o single factor is dispositive.” Id. at 678 (internal citations and quotations omitted). Accordingly, omitting a factor, like actual confusion, from a complaint’s allegations is not unusual and certainly “is not fatal.” See, e.g., Mon Aimee Chocolat, 2015 WL 6407758, at *6 (failure to allege actual confusion not fatal); Illinois Tool, 2006 WL 2191982, at *2 (no discussion of actual confusion in denying motion to dismiss). g. Defendant’s Intent. Foremost pled sufficient facts that allow the inference that Diamond V intended to trade on Foremost’s and NUTRITEK’s name recognition and goodwill. The marks are undisputedly identical in spelling and pronunciation. (Compare Dkt. 16, ¶ 41 with id. at ¶ 68; see also id. at ¶ 72). They further are displayed on the parties’ packaging in similar fonts and with similar teal color schemes. (Compare Dkt. 16, ¶ 41 with id. at ¶ 68). Defendant asks the Court to weigh these allegations against Diamond V’s own allegations of lack of intent (Dkt. 21, at 19), but this would be improper at this stage of the case. But even if there was an undisputable lack of intent as Diamond V claims (Dkt. 21, at 19), that would not weight in favor of no likelihood of confusion. Lack of intent is “irrelevant to the likelihood of confusion analysis.” CAE, 267 F.3d at 686 (citing Sands, 978 F.2d at 961 (stating that intent is relevant only if the defendant intended to palm off its goods as those of the Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 25 of 36 QB\43253780.1 21 plaintiff); Fuji Photo Film Co., Inc. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591, 598 (5th Cir. 1985) (holding that intent is immaterial when the undisputed evidence shows that the defendant acted in good faith); 3 McCarthy § 23:107 (explaining that proof of intent to deceive or to confuse is not necessary to prove trademark infringement)). In sum, Foremost pled sufficient facts that would support likelihood of confusion. But now is not the proper time to determine whether those facts are proven. Accordingly, Foremost should be allowed to proceed on its trademark claims. B. Foremost Pled Sufficient Facts At This Early Stage To Support A Claim of Unfair Competition. Foremost pled sufficient facts supporting an unfair competition claim. “To establish a case of unfair competition based on trademark infringement, a plaintiff must prove two elements: (1) validity of the mark in question; and (2) infringement.” Echo Travel, Inc. v. Travel Assocs., Inc., 870 F.2d 1264, 1266 (7th Cir. 1989) (citing 1 McCarthy § 15:1 at 657 (2d ed. 1984)). Foremost’s allegations are sufficient to support these elements. Foremost alleged a protectable interest in the NUTRITEK mark for products for animal consumption. Supra § III.A.1.b. Foremost also alleged that Diamond V’s use of the NUTRITEK mark causes likelihood of confusion. Supra § III.A.2. Diamond V claims that an unfair competition claim “‘requires evidence that the defendant intended to mislead or deceive the public into believing that its product was associated with that of the plaintiff.’” (Dkt. 21, at 21 (quoting Mil-Mar Shoe Co. v. Shonac Corp., 75 F.3d 1153, 1155 (7th Cir. 1996)). Diamond V cites Mil-Mar Shoe Co. to support this proposition, but in that case, the Seventh Circuit merely stated (without reviewing the merits) that the district court had declined to grant a preliminary injunction on an unfair competition claim because the plaintiff presented no evidence of intent to mislead. 75 F.3d at 1155. The plaintiff did not Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 26 of 36 QB\43253780.1 22 appeal this finding and thus the Seventh Circuit did not comment upon the correctness of the district court’s interpretation of the law. The Seventh Circuit went on to reverse the district court for other reasons. Id. When the Seventh Circuit has addressed the issue, it has imposed no intent to deceive requirement. Echo, 870 F.2d at 1266. But even if Diamond V was correct on the law, it would be premature to dismiss this claim for lack of a showing of intent. Foremost alleged sufficient facts from which a fact finder could infer Diamond V intended to trade off of Foremost’s and NUTRITEK’s name recognition and goodwill. Supra § III.A.2.g. Foremost should be allowed to pursue discovery on these allegations. As this Court has held, factual support for a specific intent is “typically in the control of the defendant, so these facts will often have to be alleged on information and belief.” Palmer Hamilton, 2016 WL 6775458, at *2. Accordingly, such facts “need not be persuasive or supported by greater factual detail at” the motion to dismiss phase. Id. C. Foremost’s Cancellation Claim Is Properly Before The Court Because This Case Involves A Registered Mark. Foremost’s claim for cancellation should be allowed to proceed. Foremost has not asserted its claim for cancellation of Diamond V’s registration in isolation. Rather, Foremost asserts claims for trademark infringement, false designation of origin, and unfair competition under the Lanham Act. As a basis for all of these claims, Foremost alleges ownership over its own registered NUTRITEK mark, priority of use of NUTRITEK in the relevant goods, and likelihood of confusion. If Foremost succeeds in proving these allegations, Diamond V has no right to use NUTRITEK and thus no right to maintain its registration. As the Seventh Circuit has instructed district courts, “Where . . . a registrant’s asserted rights to a mark are shown to be invalid, cancellation is not merely appropriate, it is the best course.” Cent. Mfg., 492 F.3d at 883. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 27 of 36 QB\43253780.1 23 Section 1119 of the Lanham Act empowers federal district courts to cancel registrations “[i]n any action involving a registered mark.” 15 U.S.C.A. § 1119; 5 McCarthy § 30:109 (4th ed.) (“The net effect of [Section 1119] is to give to the courts concurrent power with the Patent and Trademark Office to conduct cancellation proceedings.”). Section 1119 reads in its entirety: In any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby. Id. (emphasis added). Section 1119 “arms courts with the power to effectively put the public on notice of its trademark-related judgments.” Cent. Mfg., 492 F.3d at 883. “Because a court’s decision may raise doubts about the validity of a trademark registration, § 1119 arms the court with the power to update the federal trademark register to account for a mark’s actual legal status (or lack thereof) after it has been adjudicated, thereby reducing the potential for future uncertainty over the rights in a particular mark.” Id.; see also Specht v. Google Inc., 747 F.3d 929, 936 (7th Cir. 2014), cert. denied, 135 S. Ct. 724 (2014) (court’s cancellation of registration was “proper” where the underlying mark was known to be invalid). While a Section 1119 cancellation claim can be asserted as a counterclaim, it can also be brought as an affirmative count. See, e.g., CFE Racing Prods., Inc. v. BMF Wheels, Inc., 793 F.3d 571, 578 (6th Cir. 2015). While a plaintiff may not bring a stand-alone claim for cancellation of a registered mark,6 a plaintiff may bring a claim for cancellation in “any action involving a registered mark.” 15 6 This is the focus of Section IV of Diamond V’s Motion. (Dkt. 21, at 23 (citing cases for the proposition that a cancellation claim is not “‘available as an independent cause of action’”). Diamond V’s argument is misplaced because Foremost’s cancellation claim is not an “independent cause of action.” As further explained in footnotes 7-9, all of the cases Diamond V cites either support Foremost’s position or are inapposite. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 28 of 36 QB\43253780.1 24 U.S.C.A. § 1119. Courts have interpreted this to mean that a party may bring a claim for cancellation in an action involving violations of the Lanham Act, such as infringement of a registered mark. See, e.g., Apex Colors, Inc. v. Chemworld Int'l Ltd., Inc., No. 2:14-CV-273- PRC, 2015 WL 5311403, at *4 (N.D. Ind. Sept. 10, 2015) (denying motion to dismiss Section 1119 claim because the case “involve[d]” an allegation of trademark infringement under the Lanham Act and thus the court “has jurisdiction to determine the right to the registration and to cancel the registration under 15 U.S.C. § 1119”); Flower Mound Dermatology, P.A. v. Nicole Reed Med., PLLC, No. 4:14-CV-280, 2015 WL 137314, at *2 (E.D. Tex. Jan. 7, 2015) (denying motion to dismiss Section 1119 claim because “this Court has federal subject matter jurisdiction over the trademark infringement claims asserted under the Lanham Act [and t]he statute itself allows the Court to order the cancellation of registrations ‘[i]n any action involving a registered mark.’ 15 U.S.C. § 1119.”); see also MIH Allegro BV v. Fang, No. LACV1406510JAKASX, 2015 WL 12655399, at *8 (C.D. Cal. Jan. 12, 2015) (denying motion to dismiss Section 1119 claim because plaintiff properly alleged fraudulent registration and “such ‘action involving a registered mark’ provides a basis for the cancellation remedy of § 1119.”). Federal district courts may cancel registrations based on the same grounds that would be applied by the USPTO. See Cent. Mfg., 492 F.3d at 883 (affirming cancellation of mark where it was “shown to be invalid”); 5 McCarthy § 30:112 (“The courts are limited by the same grounds for cancellation as is the Patent and Trademark Office.”). One such ground is priority and likelihood of confusion. Under Section 1052(d), the USPTO may not issue a registration for a trademark if the proposed mark “[c]onsists of or comprises a mark which so resembles a mark registered in the [USPTO], or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 29 of 36 QB\43253780.1 25 applicant, to cause confusion, or to cause mistake, or to deceive.” 15 U.S.C. § 1052(d); see also CFE Racing, 793 F.3d at 594-95 (cancelling registration under Section 1052(d)); China Int’l Travel Servs. (USA), Inc. v. China & Asia Travel Serv., Inc., No. 08-CV-01293 JSW MEJ, 2008 WL 5480840, at *8 (N.D. Cal. Dec. 18, 2008) (same). While a plaintiff could seek cancellation from the USPTO directly, “nothing in § 1119 requires such a step.” Cent. Mfg., 492 F.3d at 883. Further, it is “standard procedure” for the Trademark Trial and Appeal Board (“TTAB”) to stay administrative USPTO proceedings pending the outcome of federal court litigation between the same parties involving related issues. 5 McCarthy §§ 30:111, 32:47. The litigation “does not have to be dispositive of the [TTAB] proceeding to warrant suspension, it need only have a bearing on the issues before the [TTAB].” New Orleans Louisiana Saints LLC & NFL Props. LLC, 99 U.S.P.Q.2d 1550, 2011 WL 3381380, at *2 (TTAB July 22, 2011). This case involves Foremost’s own registered NUTRITEK mark, as registered in the ‘696 Registration. Foremost alleged that it owns the ‘696 Registration (Dkt. 16, ¶¶ 35-36), that it has priority of use over the NUTRITEK mark for the relevant goods (id. at ¶¶ 31, 33-34, 37-41, 46- 48, 52-53, 56, 60-61), and that Diamond V’s use of the NUTRITEK mark creates likelihood of confusion (id. at ¶¶ 72, 84, 93, 102). These allegations form the basis of Foremost’s claims for trademark infringement, false designation of origin, and unfair competition under the Lanham Act. (Id., Counts I, III, IV). Thus, because this case involves the ‘696 Registration, the Court has the power to hear Foremost’s cancellation claim under Section 1119. See, e.g., Apex Colors, 2015 WL 5311403, at *4 (court had jurisdiction to hear cancellation claim based on Lanham Act infringement claim); Flower Mound, 2015 WL 137314, at *2 (same); see also MIH Allegro, 2015 WL 12655399, at *8 (court had jurisdiction to hear cancellation claim based on Lanham Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 30 of 36 QB\43253780.1 26 Act fraud claim). The district court cases that Diamond V cites support this conclusion. (See Dkt. 2 (citing cases from the Northern District of Illinois and Southern District of New York)).7 Further, this case necessarily involves Diamond V’s registered NUTRITEK mark, as registered in the ‘885 Registration. If Foremost succeeds in proving its Lanham Act claims, showing priority of use and likelihood of confusion, Diamond V has no right to use NUTRITEK and thus no right to maintain its registration. See Cent. Mfg., 492 F.3d at 883 (affirming cancellation of registration where underlying mark is shown to be invalid); China Int’l Travel, 2008 WL 5480840, at *8 (cancelling registration based on priority and likelihood of confusion). Consider CFE Racing, in which the Sixth Circuit held that the district court should have cancelled the defendants’ registration after finding that the defendants’ use of the mark caused likelihood of confusion. 793 F.3d 571, 599 (6th Cir. 2015). In CFE Racing, the plaintiff sued the defendants for violations of the Lanham Act and later amended its complaint to seek cancellation of the defendants’ registered mark under Section 1119. Id. at 578. The case went to trial and the jury explicitly found that the defendants’ use of its mark created a likelihood of 7 In Thomas & Betts Corp. v. Panduit Corp., the district court denied the defendant’s motion to dismiss the plaintiff’s cancellation claim. 48 F. Supp. 2d 1088, 1095 (N.D. Ill. 1999). The court found that the plaintiff had pled sufficient facts for an unfair competition claim, which was sufficient to support a related cancellation claim. See id. at 1095 (“T & B will be permitted to proceed on the theory that Panduit is unfairly competing because the term barb tie is a generic term which is likely to cause confusion as to the origin or sponsorship of Panduit's cable ties.”) & 1094 (“While T & B’s allegations as to its Lanham Act unfair competition claim created a justiciable case or controversy at the complaint stage, the Court concludes that the unfair competition claim must continue to be viable in order for this Court to grant the relief of canceling the mark under 15 U.S.C. § 1119.”). In GMA Accessories, Inc. v. Idea Nuova, Inc., the district court dismissed the defendant’s cancellation claim for the plaintiff’s unregistered mark but allowed the defendant to maintain a cancellation claim for the plaintiff’s registered mark. 157 F. Supp. 2d 234, 241 (S.D.N.Y. 2000). The court reasoned that it had jurisdiction based on the defendant’s Lanham Act infringement claim. Id. (“Idea Nuova claims that GMA’s use of the Room on the Run trademark infringes Idea Nuova’s ROOM IN A BOX mark in violation of § 39(a) of the Lanham Act. There exists an independent basis for federal jurisdiction ‘involving’ GMA’s registered trademark; accordingly, GMA’s second argument is rejected.”). Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 31 of 36 QB\43253780.1 27 confusion with the plaintiff’s registered mark. Id. at 594. The Sixth Circuit held “the jury’s verdict necessitates a finding that Defendants’ registered trademark is invalid” and that “‘[i]n light of the jury verdict, which the district court allowed to stand, the district court should have ordered cancellation.’” Id. at 594-95. The appellate cases that Diamond V cites are inapposite because none of the cases involve a scenario where the plaintiff brought and maintained Lanham Act violations. (See Dkt. 21, at 22 (citing cases from the Second, Third, Ninth, and Federal Circuits)). Diamond V’s appellate cases fall into one of two groups. The first group involves cases in which the plaintiff did not claim any violation of the Lanham Act in the first place and thus the cases did not “involv[e] a registered mark” as required by Section 1119.8 The second group involves cases in which the plaintiff’s Lanham Act claims were dismissed, thus rendering them cases that no 8 In Airs Aromatics, LLC v. Opinion Victoria's Secret Stores Brand Mgmt., Inc., the plaintiff sued the defendant for breach of contract and requested cancellation of the defendant’s registration. 744 F.3d 595, 597 (9th Cir. 2014). The district court dismissed the cancellation claim for lack of jurisdiction and the Ninth Circuit affirmed. Id. at 597, 599. The Ninth Circuit held that “cancellation may only be sought if there is already an ongoing action that involves a registered mark; it does not indicate that a cancellation claim is available as an independent cause of action.” Id. at 599. The court concluded that the plaintiff had not brought any claims that would support such jurisdiction. Id. Similarly, in Ditri v. Coldwell Banker Residential Affiliates, Inc., the plaintiff sought cancellation of the defendant’s registrations based on grounds of abandonment, but did not assert any violation of the Lanham Act. 954 F.2d 869, 873 (3d Cir. 1992). The district court dismissed the claim for lack of independent jurisdiction. Id. While the Third Circuit acknowledged that “the district court has concurrent power to order cancellation [in addition to the USPTO] for the obvious reason that an entire controversy may thus be expediently resolved in one forum,” the court concluded that jurisdiction did not exist because the plaintiff did “not contend that the alleged conduct violates any particular section of the Lanham Act or any other statute.” Id. at 873-74. Finally, in Windsurfing Int'l Inc. v. AMF Inc., the plaintiff sued the defendant for patent infringement and the defendant counterclaimed, seeking cancellation of the plaintiff’s registrations. 828 F.2d 755, 756 (Fed. Cir. 1987). The district court allowed the counterclaim to go to trial, found the registered marks generic, and ordered them cancelled. Id. at 757. The Federal Circuit reversed the ruling, finding the district court did not have independent jurisdiction over the cancellation claim. Id. at 758. The court reasoned that Section 1119’s language “involving a registered mark,” “cannot mean the mere presence of a registered trademark, but must be read as involving the right to use the mark and thus the right to maintain the registration.” Id. at 758. The court concluded that “the mere competitor status of the parties” did not satisfy Section 1119. Id. at 758-59. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 32 of 36 QB\43253780.1 28 longer “involv[ed] a registered mark” as required by Section 1119.9 This case does not fit into either group. Foremost has alleged multiple violations of the Lanham Act and none of these claims have been dismissed from the case. Finally, contrary to Diamond V’s assertion, Foremost’s cancellation claim does not “belong[] in the United States Patent and Trademark Office (USPTO).” (Dkt. 21, at 22). While Foremost could have initiated a cancellation proceeding in the TTAB, it was not required to. Cent. Mfg., 492 F.3d at 883. Given the substantial overlap in issues between Foremost’s claims for trademark infringement, false designation of origin, and unfair competition, and its claim for cancellation, Foremost chose the logical course and asserted all of these claims in the same proceeding. Divorcing the cancellation claims from the case would only result in complicating the issues and duplicating efforts on the part of the parties, the Court, and the TTAB. For this very reason, the TTAB stays proceedings pending parallel litigation, even when the litigation may not be “dispositive,” but may merely have “bearing” on the proceeding. New Orleans, 2011 WL 3381380, at *2. There is no reason to believe that the TTAB would have done otherwise had Foremost initiated a parallel cancellation proceeding on the ‘885 Registration. Given that Foremost’s Lanham Act claims will be determinative of Diamond V’s right to its registration, Foremost’s cancellation claim should be allowed to proceed. See Cent. Mfg., 492 F.3d at 883. 9 In Nike, Inc. v. Already, LLC, the plaintiff sued the defendant for trademark infringement and the defendant counterclaimed for cancellation of the mark. 663 F.3d 89, 91 (2d Cir. 2011), aff'd, 133 S. Ct. 721 (2013). The plaintiff subsequently delivered the defendant a covenant not to sue on the trademark and the district court dismissed the plaintiff’s infringement claim for lack of actual controversy and the defendant’s cancellation claim for lack of independent jurisdiction. Id. at 93. The Second Circuit affirmed and held that “a claim for trademark cancellation under § 1119 is insufficient to support federal jurisdiction where a covenant not to sue has resolved the underlying infringement action.” Id. at 99. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 33 of 36 QB\43253780.1 29 D. Foremost’s Unjust Enrichment Claim Is Properly Before The Court Because It Is Related To Foremost’s Other Claims. Diamond V does not dispute that Foremost’s unjust enrichment claim is “so related to the claims arising under” the Lanham Act, but instead focuses on a purely jurisdictional argument. (Dkt. 21, at 25). Nor does Diamond V argue that Foremost failed to allege sufficient facts to support a claim for unjust enrichment. (Id.). Accordingly, if the Court allows even one of the Lanham Act claims to proceed, it should allow Foremost’s unjust enrichment claim to proceed as well. See 28 U.S.C. § 1367; see also My Health, 2015 WL 9474293, at *6 (denying motion to dismiss with respect to non-Lanham Act claims because defendant did “not offer any additional arguments specific” to those claims). E. Alternatively, Should The Court Find Diamond V’s Motion Has Merit, Foremost Respectfully Requests Leave To Amend The Complaint. In the alternative, Foremost respectfully requests that the Court grant Foremost leave to amend the complaint, rather than dismiss the claims outright. Federal Rule of Civil Procedure 15 instructs courts to liberally permit parties to amend pleadings “when justice so requires.” Fed. R. Civ. P. 15(a). Courts generally should grant a plaintiff leave to amend except in very limited circumstances. Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008). Here, Foremost has alleged is claims in good faith and allowing Foremost to amend its claims would not cause undue delay or prejudice to Diamond V. IV. CONCLUSION For the foregoing reasons, the Court should deny Diamond V’s Renewed Motion to Dismiss and allow Foremost’s claims to proceed. Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 34 of 36 QB\43253780.1 30 Dated this 10th day of January, 2017. Respectfully submitted, /s/ Anthony A. Tomaselli Anthony A. Tomaselli aat@quarles.com Anita Marie Boor anita.boor@quarles.com QUARLES & BRADY LLP 33 East Main Street, Suite 900 Madison, Wisconsin 53703-3095 Tel.: 608.251.5000 Fax: 608.251.9166 Attorneys for Foremost Farms USA, Cooperative Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 35 of 36 QB\43253780.1 31 CERTIFICATE OF SERVICE I hereby certify that on January 10, 2017, I electronically filed the foregoing with the Clerk of Court using the Court’s CM/ECF system, which will send notification of such filing to all counsel of record. /s/ Anita Marie Boor Case: 3:16-cv-00551-jdp Document #: 24 Filed: 01/10/17 Page 36 of 36