Zp No. 314, Llc v. Ilm Capital, Llc et al

REPLY Brief

S.D. Ala.December 16, 2016

28677357 v2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION ZP NO. 314, LLC, Plaintiff, v. ILM CAPITAL, LLC, WE COMMUNITIES, MARY SCHAFFER- RUTHERFORD, and MOBILE CQ STUDENT HOUSING, LLC, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. 1:16-CV-00521-B DEFENDANTS’ REPLY IN SUPPORT OF MOTION TO DISMISS AND/OR FOR MORE DEFINITE STATEMENT COME NOW the defendants ILM Capital, LLC (“ILM”), WE Communities (“WEC”), Mary Schaffer-Rutherford (“Schaffer-Rutherford”), and Mobile CQ Student Housing, LLC (“Mobile CQ” and, together with ILM, WEC, and Schaffer-Rutherford, the “Defendants”) and submit their reply in support of Defendants’ Motion to Dismiss and/or for More Definite Statement (the “Motion,” ECF No. 10). I. INTRODUCTION ZP’s conclusory allegations that its fledgling, descriptive trademark is “famous” and has “generated extensive goodwill” are simply insufficient, as a matter of law, to allow ZP’s claims to proceed. The Eleventh Circuit has plainly recognized as such. The Complaint is also insufficient to state a claim for cybersquatting; ZP’s tactic of naming multiple defendants as a group and attributing every defendant’s actions to every other defendant in an effort to “ferret out” the proper defendant is improper and should not be allowed. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 1 of 14 28677357 v2 2 To remedy its obvious pleading deficiencies, ZP submitted affidavits of two of its attorneys and several exhibits. First, those materials cannot be considered at this stage of the case; they are not part of the Complaint or its exhibits, they are not “central to” the claims, and the authenticity of some of the evidence (which Defendants have never seen) is not “undisputed.” Stripping away ZP’s legal conclusions and considering only the facts which were pled by ZP (or are otherwise properly before the Court), ZP has not stated its claims. Nonetheless, the affidavits submitted by ZP, if considered, actually prove Defendants’ point that ZP’s alleged trademark is not famous and has not acquired secondary meaning. The evidence, taken in the best light for ZP, shows that ZP was using the mark in interstate commerce for only seven and a half months before the complained of actions allegedly occurred. Given the admittedly very short length of use, it is extremely unlikely that ZP will be able to present any facts sufficient to create a genuine issue of material fact on the matter of fame/secondary meaning. Trademark owners with much longer use are routinely ruled against as a matter of law. Further, all of the facts relating to the fame or distinctiveness of its own trademark are exclusively within ZP’s possession or control. As such, if the Court deems it appropriate to convert Defendants’ Motion into one for summary judgment, this case is uniquely suited for an early summary judgment ruling against ZP on the issue of fame/secondary meaning (a ruling which would eviscerate all of ZP’s federal claims). Occasionally, a case comes along where, even if every fact pled by a plaintiff is true, the plaintiff still cannot plead enough facts to overcome judgment as a matter of law. This is one of those cases. As such, Defendants’ Motion should be granted or, in the alternative, summary judgment should granted in Defendants’ favor. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 2 of 14 28677357 v2 3 II. LEGAL ARGUMENT A. Defendants’ Motion Is Due To Be Granted. 1. The Court Should Not Consider The Materials Submitted By Plaintiff. “As a general rule, the district court must ‘limit its consideration to the pleadings and exhibits attached thereto’ when deciding a Rule 12(b)(6) motion to dismiss.” Lewis v. Asplundh Tree Expert Co., 305 Fed. App’x 623, 628 (11th Cir. 2008) (quoting Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000)). However, a court “may consider a document attached to a motion to dismiss without converting the motion into one for summary judgment if the attached document is (1) central to the plaintiff's claim and (2) undisputed.” Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005). For purposes of the foregoing statement, “‘undisputed’ means that the authenticity of the document is not challenged.” Id. 1 In support of its response, ZP submitted two affidavits, each of which contained several exhibits. (See ECF No. 19-1, Affidavit of Emily Moree (“Moree Aff.”); ECF No. 19-2, Affidavit of David Quittmeyer (“Quittmeyer Aff.”).) The affidavits and the exhibits are not part of the Complaint and were not attached to the Complaint as exhibits. Further, the affidavits and related exhibits are not “central to” ZP’s claims and Defendants have no knowledge of the authenticity of the alleged marketing brochure attached to the Moree Affidavit, (ECF No. 19-1 at pp. 5-27), or the e-mail correspondence between Moree and “Susan Bailey.” (Id. at pp. 28-29.) As such, the 1 Also, as explained by Defendants, courts may consider matters of which a court may take judicial notice. (See ECF No. 19 at p. 7.) ZP has not challenged that principle or opposed Defendants’ Request for Judicial Notice, (ECF No. 11), in any way. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 3 of 14 28677357 v2 4 evidentiary materials submitted by ZP cannot be considered without converting Defendants’ Motion into one for summary judgment. 2 2. Plaintiff’s Complaint, As Pled, Does Not State That The One Ten Mark Is Famous Or Distinctive. As demonstrated by Defendants, several of ZP’s claims hinge on whether or not ZP’s mark was “distinctive” and/or “famous” as of May 11, 2016. (See Defendants’ Motion, ECF No. 10, at pp. 7-8 (explaining that mark must be “famous” to support FDTA claim), 11-12 (explaining that mark must be “famous” or “distinctive” for ACPA liability), 17 (explaining that mark must be “distinctive” to prove federal and state unfair competition claims).) ZP does not appear to contest Defendants’ statements of law on that point, instead arguing that it has pled adequate facts to state that its mark is distinctive and/or famous, pointing to several paragraphs of its Complaint. (ECF No. 19 at p. 10 (citing ¶¶ 12-16, 23, 33).) The paragraphs relied upon by ZP contain allegations such as that: its One Ten mark has “been in continuous use”; ZP has “not abandoned” the mark; “[t]he Mark is a famous trademark/service mark”; the mark “is an inherently distinctive trademark/service mark”; the mark has “built up extensive goodwill”; and the mark “serves primarily as a designator of origin of ZP’s services.” (ECF No. 1 at ¶¶ 14-16.) “Pleading elements…is not enough to satisfy Rule 8(a)(2). The rule ‘requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do” to satisfy that rule.’ There must in addition be a pleading of facts.” FNB Bank v. Park Nat’l Corp., 13-0064-WS-C, 2013 WL 1748796, at *2 (S.D. Ala. Apr. 23, 2013) (emphasis 2 As discussed below, it may be appropriate for the Court to convert Defendants’ Motion into one for summary judgment. The additional facts presented to the Court by ZP only further support Defendants’ argument that, as a matter of law, ZP cannot prove fame or distinctiveness. If the additional facts submitted by ZP are ZP’s best and most persuasive facts, then neither the Court nor Defendants should be subjected to further proceedings. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 4 of 14 28677357 v2 5 added). See, e.g., Tropic Ocean Airways, Inc. v. Floyd, 598 Fed. App’x 608, 612 (11th Cir. 2014) (affirming dismissal of complaint, recognizing allegations relating to secondary meaning as “conclusory” and a “formulaic recitation” of the elements of the secondary meaning test); B&F Sys., Inc. v. LeBlanc, 7:07-CV-192(HL), 2011 WL 4103576, at *19-20 (M.D. Ga. Sept. 14, 2011) (holding conclusory statements that trademark was “inherently distinctive,” had “acquired secondary meaning,” and that buyers “recognize [plaintiff’s] products and value them because of their association with [plaintiff]” were insufficient to demonstrate distinctiveness or secondary meaning; “This is merely argument from [plaintiff’s] attorney with no evidence to support the assertion.”); Vedder Software Grp. Ltd. v. Ins. Servs. Offices, Inc., 1:11-CV-00369 (GTS/CFH), 2013 WL 12121098, at *10 (N.D.N.Y. Mar. 22, 2013) (assertion that product possessed “a distinctive interface, containing non-functional elements which, taken as a whole, create a distinctive visual impression upon purchasers or users thereof, thus possessing secondary meaning” was a legal conclusion which would not be considered as a factual allegation in support of the plaintiff’s claims). On this point, the strikingly similar case of Tropic Ocean Airways, in which the Eleventh Circuit affirmed the district court’s dismissal of the plaintiff’s cybersquatting claim due to the plaintiff’s failure to adequately plead facts supporting its claim, appears to be dispositive. See Tropic Ocean Airways, Inc. v. Floyd, 598 Fed. App’x 608 (11th Cir. 2014). As such, a further discussion of that case is warranted. In Tropic Ocean Airways, the plaintiff was a private charter and commercial airline service which transported consumers in interstate and foreign commerce under the trade name Tropic Ocean Airways. The plaintiff had been in business since March 2011 and operated a website located at www.flytropic.com. The defendant was a competitor airline service which Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 5 of 14 28677357 v2 6 registered the domain name tropicoceanairways.com in March 2012. The plaintiff sued the defendant for cybersquatting under 11 U.S.C. § 1125(d). On the defendant’s motion, the district court dismissed the plaintiff’s complaint for failure to plead facts showing that its trademark was “distinctive” and deserving of ACPA protection. See Tropic Ocean Airways, Inc. v. Floyd, Order Dismissing Amended Complaint With Prejudice (ECF No. 43), 4:13-cv-10113-JLK (May 9, 2014) (attached hereto as Exhibit “A”). 3 The court focused particularly on whether or not the plaintiff had sufficiently pled secondary meaning, ultimately concluding that the plaintiff had not, stating: “It is insufficient to merely plead conclusory statements about the mark; support must be provided with facts that show how and why the mark is distinctive.” Id. at p. 7. In arriving at its conclusion, the court rejected the following allegations as “conclusory”: 1) the plaintiff had “‘continuously promoted’ the mark ‘through substantial advertising and marketing’”; 2) the plaintiff “ha[d] ‘expended considerable time, resources, and effort in promoting the mark and ha[d] successfully developed substantial goodwill therein’”; 3) the mark was a “‘symbol of quality services provided by Plaintiff.’” Id. at p. 6. The Eleventh Circuit affirmed the dismissal, agreeing with the district court that “[v]irtually all the allegations in the amended complaint that relate to secondary meaning [we]re conclusory.” Pointing to the same allegations as the district court, the Eleventh Circuit stated that the allegations “contain no factual content”, were “nothing more than a formulaic recitation” of the secondary meaning test, and were insufficient to adequately plead secondary meaning. The Eleventh Circuit then went further and analyzed the only facts adequately pled by the plaintiff - that it 1) used the mark on its website and 2) had been using the mark in commerce for one year 3 The Amended Complaint in that case is appended to the Order as Exhibit “A-1.” Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 6 of 14 28677357 v2 7 at the time the defendant registered the mark. The court held that those two facts, standing alone, were insufficient to state the element of secondary meaning. Id. at 612. Stripping away ZP’s conclusory allegations, as the court did in Tropic Ocean Airways, the only facts relating to the fame and/or distinctiveness of ZP’s mark that are properly before the Court are that: 1) ZP began using One Ten late in 2015 and was using it for less than a year as of May 11, 2016; 2) One Ten is located at the street address 110 Long Street; and, 3) ZP does not own a state or federal registration for One Ten. 4 As in Tropic Ocean Airways, those facts are legally insufficient to state that ZP’s geographically descriptive trademark has acquired secondary meaning (or to establish the heavier requirement of pleading “fame” of the mark). ZP criticizes the cases relied upon by Defendants on the basis that they were decided on summary judgment or in the context of a preliminary injunction. However, many of the cases cited by Defendants - such as the Tropic Ocean Airways case, the Synergy Real Estate of Sw. Fla., Inc. case, and all of the FDTA cases (ECF No. at p. 10) - were decided on 12(b)(6) motions. Further, it is proper for the Court to consider cases decided on summary judgment and on motions for preliminary injunction because those cases provide insight into the actual facts which are pertinent to the secondary meaning/fame inquiry (as opposed to the mere conclusory allegations pled by ZP). In sum, Defendants’ arguments are not “summary judgment arguments” and Defendants are not asking the Court “to be a fact-finder,” as ZP suggests. Instead, Defendants are asking the Court to do exactly what the Court should do on a motion to dismiss - analyze the actual facts stated in the Complaint, disregard the bare legal conclusions, and determine whether the facts are 4 ZP misconstrues Defendants’ argument regarding ZP’s lack of a registration for its trademark. It is obviously not Defendants’ contention that an unregistered mark can never be distinctive or acquire secondary meaning under any circumstances. However, the absence of a registration is probative of the relative fame or distinctiveness of a trademark. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 7 of 14 28677357 v2 8 sufficient to state a claim. Here, they are not and, as such, ZP’s claims that depend upon a finding of fame and/or distinctiveness (i.e. all of its federal claims) should be dismissed. 3. The Proper Defendants To A Cybersquatting Claim. ZP’s failure to plead facts pertinent to secondary meaning is dispositive of its cybersquatting claim. Tropic Ocean Airways at 609-10. Nonetheless, that claim is due to be dismissed for the additional reason that ZP has not adequately pled that any of the defendants is the “registrant” or “authorized licensee” of the domain name at issue. (See Defendant’s Motion, ECF No. 10, at p. 11.) “[T]he ACPA defines a narrow universe of potential defendants: A person may be liable on a cybersquatting claim ‘only if that person is the domain name registrant or that registrant’s authorized licensee.” 1-800-411-I.P. Holdings, LLC v. Ga. Injury Centers, LLC, 71 F. Supp. 3d 1324, 1328 (S.D. Fla. 2014). ZP mischaracterizes Defendants’ argument on this point as one that ownership, registration, or control of the domain name at issue cannot be based on information and belief. That is not Defendants’ argument. Defendants’ position is that a plaintiff in ZP’s situation cannot simply throw as many names in a complaint to later sort out who is and who is not an owner and an authorized licensees. For example, in its brief, ZP states: “The Defendants do not deny that the Campus Quarters group controlled the domain name. If they believe they can deny it in good faith, then they should do so in an answer and not in a motion to dismiss.” (ZP’s Response, ECF No. 19, at p. 9.) Those statements show that ZP has the burden all wrong - the purpose of Rule 8 is to notify defendants of their alleged unlawful activity. It is not to “ferret out” which of several parties might be a proper defendant. 4. ZP Has Otherwise Not Stated A Cybersquatting Claim. Considering only the facts in the Complaint, as the Court must at this stage, ZP has not stated a cybersquatting claim. (See Defendants’ Motion, ECF No. 10, at pp. 16-17.) Nonetheless, Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 8 of 14 28677357 v2 9 because it is a theme of ZP’s response brief, Defendants will address ZP’s repeated suggestion that the “Campus Quarters group’s” alleged refusal to transfer the domain name to ZP constitutes bad faith per se or that any inference should be taken from that allegation. 5 The Eleventh Circuit has recognized that it is not bad faith to maintain a registration for the purpose of keeping it from competitors. S. Grouts & Mortars, Inc. v. 3M Co., 575 F.3d 1235, 1246-47 (11th Cir. 2009) (holding that the act of registering a domain name, “not to display content, but to prevent others from registering it” is not necessarily indicative of bad faith). Further, as even ZP recognizes, transfer of a domain name is “an” appropriate remedy under the ACPA (i.e. not the only remedy). (ZP’s Response, ECF No. 19, at p. 11 n.4.) Of course, that remedy is only available once a plaintiff has proven a defendant’s liability for cybersquatting and, “[e]ven in egregious cases of cybersquatting,…the district court retains discretion to fashion appropriate relief, and it need not force the transfer of the offending domain name.” Interstellar Starship Servs. v. Epix, Inc., 304 F.3d 936, 948 (9th Cir. 2002). In short, it is plain that, even if a member of the alleged “Campus Quarters group” is a registrant or authorized licensee of the domain name at issue, that individual has no obligation to immediately hand over the domain name and its failure to do so is not ipso facto bad faith. That is especially true since, as ZP acknowledges, the domain name current displays no content and is not redirecting traffic to any other site. 5 Defendants also disagree that the Court should necessarily glean a nefarious intent from the allegation that the “Campus Quarters group” used a registrar service to register the domain name at issue. Even if the “Campus Quarters group” did so, there are a variety of reasons why a domain name registrant would want to use a proxy service to register a domain name - such as keeping its name, address, and phone number off the Internet. The use of a proxy service does not automatically signal bad faith; if it did, the requirement for proving bad faith would be eviscerated in most cybersquatting cases. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 9 of 14 28677357 v2 10 B. If The Court Converts Defendants’ Motion Into One For Summary Judgment, Defendants Have Demonstrated Entitlement To Same. As established by Defendants, when considering only the Complaint and exhibits (as is proper on a motion to dismiss), ZP’s Complaint is due to be dismissed for failure to state a claim. Alternatively, however, the Court may consider the additional materials submitted by ZP and convert Defendants’ Motion into one for summary judgment; the Court need only give ZP “notice and a reasonable time to respond” before ruling. See Fed. R. Civ. P. 56(f). Even considering the Moree Affidavit, it is evident that ZP will be unable to create a genuine issue of material fact that the One Ten mark is famous or has acquired secondary meaning (which One Ten needs to prove to prevail on all of its federal claims). The additional evidence submitted by ZP (presumably its best effort to prop up its insufficient factual allegations) only supports Defendants’ position that ZP’s manner and length of use of the One Ten mark is insufficient for the mark to have acquired secondary meaning or fame (as a matter of law). Again, ZP’s mark is not registered, it relates to one student housing facility in one state, it is geographically descriptive, 6 and the student housing facility is still in “pre-sale” mode as residents are not yet even living there. Further, ZP uses the One Ten mark in several different ways, including “The One Ten” (ECF No. 19-1 at p. 24), “liveoneten” (id. at p. 3), and “One Ten Student Living.” (ECF No. 11-1 at p. 7). ZP’s lack of consistency in the manner in which it uses the One Ten mark makes it further unlikely that “One Ten,” standing alone, has gained secondary meaning (let alone fame). Most compellingly, as the Moree Affidavit shows, ZP was using the mark for less than eight (8) months at the time of Defendants’ alleged unlawful acts. (Moree Aff., ECF No. 19-1, at 6 ZP does not challenge Defendants’ assertion that the mark is geographically descriptive. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 10 of 14 28677357 v2 11 ¶ 5.) ZP did not form as a corporate entity until late August 2015 and the earliest use of the mark that ZP can point to is October 28, 2015 when “The One Ten” was allegedly used in a marketing brochure. (Id.) In the brochure (which plainly was designed to promote Zimmer Development Company and not “The One Ten” or any particular development), the phrase “The One Ten” appears once in 21 pages (in a long list of other developments). 7 (Id. at pp. 6-27.) The Moree Affidavit also indicates that the One Ten mark was not used on the Internet until February 26, 2016 (less than two and a half months before Defendants’ allegedly infringing activity). (Id.) There is virtually no set of facts under which a mark in use for less than eight (8) months can have acquired secondary meaning (let alone become “famous” as a “household name”). The United States District Court for the Northern District of Alabama has recognized that, under Eleventh Circuit precedent, a period as long as two years is generally “insufficient for secondary meaning to attach.” Donut Joe’s, Inc. v. Inteveston Food Servs., LLC, 101 F. Supp. 3d 1172, 1182 (N.D. Ala. 2015) (finding no secondary meaning as a matter of law based on two years of use, advertising expenditures of $200/month, and two federal trademark registrations). See also Security Works!, Inc. v. Security World Int’l, Inc., 94-6625-CIV-MARCUS, 1994 WL 806086, at *4 (S.D. Fla. 1994) (noting that it is “rare” for a mark to acquire secondary meaning in three years). Courts routinely grant judgment as a matter of law on the issue of secondary meaning (and in cases much more compelling than this one). See, e.g., Nola Spice Designs, L.L.C. v. 7 It is unlikely that Zimmer Development Company’s token use of “The One Ten” in a marketing brochure even constitutes sufficient “use in commerce” to qualify the One Ten mark for trademark protection as of October 2015. See, e.g., Int’l Healthcare Exchange v. Global Healthcare Exchange, 470 F. Supp. 2d 365, 371 (S.D.N.Y. 2007) (finding, as a matter of law, that use of marks limited to a “handful of presentations, seminars, and lectures” over a two-year period was “[t]he sort of minimal activity” which was “insufficient to satisfy the ‘use’” element of the “use in commerce” test). Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 11 of 14 28677357 v2 12 Haydel Enters., Inc., 783 F.3d 527, 544 (5th Cir. 2015) (affirming summary judgment and cancellation of registered marks; stating that three and a half years of use was “relatively brief” and, standing alone, did not create an issue for trial that trademark owner had established secondary meaning); Packman v. Chicago Tribune Co., 267 F.3d 628, 641 (7th Cir. 2001) (affirming summary judgment and finding no secondary meaning for use less than three years); Investacorp, Inc. v. Arabian Invs. Banking Corp. (Investcorp) E.C., 931 F.2d 1519, 1525 (11th Cir. 1991) (finding, as a matter of law, that trademark did not acquire secondary meaning despite nine years of exclusive use); Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc., 871 F.2d 590, 596 (6th Cir. 1989) (overruling USPTO determination and holding use of geographically descriptive term for less than three years was insufficient to demonstrate secondary meaning despite presumption of validity afforded by trademark registration); Bank of Texas v. Commerce Sw., Inc., 741 F.2d 785 (5th Cir. 1984) (affirming judgment notwithstanding the verdict against defendants; nine years of exclusive use was insufficient to show acquisition of secondary meaning). And, summary judgment is often granted in cases where marks are “geographically descriptive.” See, e.g., OBX-Stock, Inc. v. Bicast, Inc., 558 F.3d 334, (4th Cir. 2009) (affirming summary judgment on grounds that OBX was “a geographically descriptive abbreviation” with no secondary meaning; holding made despite existence of four federal trademark registrations, use for seven years, expenditures of $173,000 on advertising and promotion during that time, and annual revenue exceeding $1 million in last year of use); Sand Hill Advisors, LLC v. Sand Hill Advisors, LLC, 680 F. Supp. 2d 1107 (N.D. Cal. 2010) (dismissing trademark infringement claim, finding that primarily geographically descriptive mark lacked secondary meaning as a matter of law); Allegheny Coupling Co. v. Betts Indus., Inc., 2010 WL 1068199, at *4-5 (W.D. Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 12 of 14 28677357 v2 13 Penn. Mar. 18, 2010) (same); Bay State Sav. Bank v. Baystate Fin. Servs., LLC, 484 F. Supp. 2d 205, (D. Mass 2007) (dismissing federal and state trademark infringement claims, cybersquatting claims, and dilution claims on summary judgment). Although discovery has not yet commenced in this case, "there is no blanket prohibition on the granting of summary judgment motions before discovery is fully complete." Madura v. BAC Home Loans Servicing, LP, 593 F. App'x 834, 849 (11th Cir. 2014). The Eleventh Circuit has stated that it expects district courts to be open to early summary judgment motions where "a prompt decision will likely avoid significant unnecessary discovery." Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1188 (11th Cir. 2005). Here, there is no amount of discovery from Defendants which will bear on the fame/distinctiveness analysis. The facts relating to those issues are exclusively within the possession and control of ZP (and, in fact, should have been developed before ZP filed its Complaint alleging that its mark was famous, distinctive, and had acquired secondary meaning). As such, an early summary judgment ruling in Defendants’ favor would undoubtedly “avoid significant unnecessary discovery.” III. CONCLUSION Based on the foregoing, Defendants respectfully request the Court to grant their Motion and dismiss ZP’s Complaint, with prejudice, to dismiss ZP’s claims on summary judgment, or to require ZP to amend its Complaint to plead actual facts in support of its allegations. Respectfully submitted this 16th day of December, 2016. s/ Ellen T. Mathews Michael D. Strasavich (STRAM9557) Taylor B. Johnson (BARRT8851) Ellen T. Mathews (MATHE7624) Burr & Forman, LLP 11 North Water Street, Suite 22200 Mobile, Alabama 36602 Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 13 of 14 28677357 v2 14 Tel: (251) 344-5151 Fax: (251) 344-9696 mstrasavich@burr.com tjohnson@burr.com 420 20th Street N, Suite 3400 Birmingham, Alabama 35203 Tel: (205) 251-3000 Fax: (205) 458-5400 emathews@burr.com CERTIFICATE OF SERVICE I hereby certify that on this, the 16th day of December 2016, I filed the foregoing document via the Court’s CM/ECF system, through which the following persons will receive electronic service of such filing. David R. Quittmeyer Joseph Craig Campbell Hand Arendall, L.L.C. P.O. Box 123 Mobile, AL 36601 dquittmeyer@handarendall.com ccampbell@handarendall.com s/ Ellen T. Mathews Case 1:16-cv-00521-B Document 24 Filed 12/16/16 Page 14 of 14 Exhibit "A" to Defendants' Reply In Support Of Motion To Dismiss Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 1 of 23 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA K EY W EST DIVISION CASE NO. 13-cv-10113-JLK TROPIC OCEAN AIRW AYS, INC., a Florida corporation, Plaintiff, DR. JULIE FLOYD, an individual, and KEY W EST SEAPLANE SERVICE, INC., a Florida corporation, Defendants. / ORDER DISM ISSING AM ENDED COM PLAINT W ITH PREJUDICE THIS CAUSE comes before the Court upon Defendants' M otion to Dismiss Plaintiff s First Amended Complaint (D.E. 28), filed September 30, 2013. The Court is 1 U on review of the record and careful consideration, thefully briefed on the m atter . p Court finds that the M otion should be granted. 1. BACKGROUND OF TH E CASE This is a cybersquating case arising under15 U.S.C. jl 125(d). The facts, taken Plaintiff is a corporation which offersas true for a M otion to Dismiss, are as follows. private charter and comm ercial airline services transporting passengers in interstate and foreign commerce. D.E. 26 ! 9. Defendant Key West Seaplane Service (ûçDefendant 1 Plaintiff filed an Opposition to the Motion on October 18, 2013 (D.E. 29) to which Defendants replied on October 28, 203 1 (D.E. 30). The Court held oral argument on the matter in Key West on April 29, 2014. D.E. 42. 1 Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 2 of 23 Seaplane'') is one of Plaintifps competitors and similarly offers private charter and commercial air travel. 1d. :12.Defendant Dr. Julie Floyd is co-president of Defendant Seaplane. 1d. In M arch 201 1, Plaintiff began offering air travel under the nam es S%-l-ropic Ocean Airways, lnc.' and ûl-rropic Ocean Airways'. 1d. ! 9. In early March 2012, Defendants registered the domain name 'qropicoceanairways.com>. 1d. ! 13. Plaintiff became aware of this registration in March 20 13. 1d. ! 15. Defendants move to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. II. LEGAL STANDARDS In deciding a motion to dismiss, the Court must accept the pleading's allegations as true and construe them in the light m ost favorable to the Plaintiff. See M r P: Dekalb Cblfr//.y Sch. Dist, 446 F.3d 1 153, 1 156 (1 1th Cir. 2006). çsln analyzing the sufficiency of the complaint, (the Court) limitlsj (itsl consideration to the well-pleaded factual allegations, documents central to or referenced in the complaint, and matters judicialy noticed.' f a Grasta v. First Union Sec., lnc.,358 F.3d 840, 845 (1 1th Cir. 2004). A complaint must contain short and plain statements of the grounds for the court's jurisdiction, of the cause of action, and of the relief sought. Fed. R. Civ. P. 8(a). Under the heightened pleading standards set forth by the Supreme Court in Bell Atl. Corp. v. Twombley 550 U.S. 544 (2007) and Ashcrojt v. Iqbal, 556 U.S. 662 (2010), there must be Sienough facts to state a claim to relief that is plausible on (the) face' of the complaint. Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 3 of 23 Twombley, 550 U.S. at 570. A plaintiff must plead sufficient facts to show relief and dsmore than labels and conclusions. . .a form ulaic recitation of the elements of a cause of action will not do.'' 1d. 15 U.S.C. j 1 125(d) creates a civil cause of action by owners of certain marks against the creation of domain names that harm those m arks. For purposes of this case, 2the protection applies to marks that are distinctive or famous at the tim e of registration . Distinctive marks are protected against the registration of domain names that are identical or confusingly similar to the mark. j 1 125(d)(1)(A)(ii)(I).Famous marks are protected against domain names that are identical to, confusingly similar to, or dilute the mark. j 1 125(d)(1)(A)(ii)(11). or uses a domain nam e that has the requisite effects on distinctive or fam ous marks are liable. j 1 125(d)(1)(A)(i). A person who, with bad faith intent to profit, registers, traffics in, Distinctiveness can be established by showing the m ark is either inherently distinctive or has acquired a secondary meaning. Bavaro Palace, S.A. v. Vacation Tours Inc., 203 Fed. Appx. 252 (1 1th Cir. 2006). If a mark's çsintrinsic nature serves to identify a particular source of a product'' then a mark is inherently distinctive. Fwo Pesos, Inc. v, Taco Cabana, Inc., 505 U.S. 763, 768 ( 1992). Secondary meaning refers to dthe connection in the consumer's mind between the mark and the product's producer.' G# of L earning Found., Inc. TGC, Inc., 329 F.3d 792 (1 1th Cir. 2003). SsAcquired 2 protection also applies to the Red Cross and the United States Olympic Committee. jl 125(d)(1)(A)(iii)(111). 3 Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 4 of 23 distinctiveness'' and çlsecondary meaning'' are considered synonymous. See Fwt? Pesos, 505 U.S. at 769. Determ ining secondary meaning involves four factors: (1) the length and marmer of its use; (2) the nature and extent of advertising and promotion; (3) the efforts made by the plaintiff to promote a conscious connection in the public's mind between the name and the plaintiff s product or business; and (4) the extent to which the public actually identifies the name with the plaintiff s product or venture. Conagra, Inc. v. Singleton, 743 F.2d 1508, 15 13 ( 1 1th Cir. 1984). A descriptive m ark is one which merely identifles a characteristic or quality of a service. Investacorp v. Arabian Inv. Banking Corp. (Investacorp) E.C., 93 1 F.2d 15 19 (1 1th Cir. 1991). In order to garner protection by the cybersquatting statute, a descriptive mark must acquire secondary meaning. 111. ANALYSIS A . Cybersquatting In order to plead a cybersquatting claim, Plaintiff must allege that the çs-l-ropic Ocean Aim ays'' mark was either famous or distinctive in M arch 2012, when Defendant registered the 'qropicoceanairways.com> domain. Given that there are no allegations in the Amended Complaint that the mark is famous, the Court focuses on distinctiveness. The Amended Complaint does not allege that di-l-ropic Ocean Airways'' is inherently distinctive. As pled, the m ark tells consum ers what the company does: tlies seaplanes to tropical locations.However, there are no allegations that the m ark identiGes Plaintifps company as the particular source of a product. The Am ended Complaint does not plead any facts which allege that Plaintiff s particular services, as opposed to that of 4 Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 5 of 23 any other companies which tly to tropical destinations, is readily identifiable from the 3mark . The case at bar is sim ilar to Bavaro Palace, 203 Fed. Appx. at 256. There, the Eleventh Circuit found that the mark SiBavaro Palace'' was merely descriptive because it was a combination of a geographic term (siBavaro,' a section of beach in the Dominican Republic) and a common industry term (d$Palace,' for luxury hotel).Here iûTropic' and5 nd çûAirways'' is aaSûocean'' are geographic terms describing the tropical waterways comm on industry term for airlines. The Amended Complaint does not allege that the mark, in and of itseltl conveys exclusively Plaintiffs services. Rather, Plaintiff has pled a m ark which merely describes what Plaintiff provides. Thus, the Court looks to whether or not Plaintiff has properly pled that the mark had acquired distinctiveness by M arch 2012. The Amended Complaint does not plead such a case. The first factor to acquire a secondary meaning is the length and manner of use. The Amended Complaint pleads, and counsel confirmed at oral argum ent, that the mark began operating air travel in M arch 201 1 and that Defendant registered the copying identically Plaintiff’s TROPIC OCEAN AIRWAYS Trademarks, knowing full well that the Plaintiff is a direct competitor of Defendants. Upon information and belief, Defendants through Defendant Dr. Julie Floyd anonymously registered the Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 13 of 23 - 4 - domain name by utilizing the Internet domain name registration service Domains By Proxy, LLC. 14. In March 2013, Plaintiff became aware that someone had registered the domain name. Plaintiff learned that the domain name was anonymously registered through Domains By Proxy, LLC and Plaintiff, through its principal Mr. Robert Ceravolo, contacted Domains By Proxy, LLC in order to determine who had registered the domain name. Domains By Proxy, LLC would not reveal the domain name registrant’s name. A true and correct copy of the “WHOIS” domain name registration information for the domain name, identifying Domains By Proxy, LLC is attached as Exhibit B. 15. Later in March 2013, Plaintiff through Mr. Ceravolo, contacted Defendant Julie Floyd by telephone, believing her and/or her company to be the true owner and registrant of the domain name. Defendant Julie Floyd revealed that Defendants are indeed the actual owner and registrant of the domain name and had been for over a year. Defendant Julie Floyd informed Mr. Ceravolo that Defendants purchase many domain names such as the domain name with the hopes of selling them to others for a profit. 16. Thereafter, Defendants offered to sell the domain name to Plaintiff. 17. At present, Defendants have “parked” the domain name and, upon information and belief, have not and are not currently using the domain name for any bone fide offering of goods or services or any other legitimate business purpose. Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 14 of 23 - 5 - 18. Upon information and belief, Defendants have engaged in and are continuing to engage in the above conduct willfully and deliberately with full knowledge of Plaintiff’s prior and exclusive rights in and to TROPIC OCEAN AIRWAYS Trademarks, with a bad faith intent to misappropriate Plaintiff’s goodwill and unlawfully traffic in a domain name identical and/or confusingly similar to Plaintiff’s TROPIC OCEAN AIRWAYS Trademarks. By engaging in the activities described herein Defendants have acted in willful disregard of Plaintiff’s trademark rights and have willfully confused and deceived the consuming public and the public at large. COUNT I FEDERAL CYBERSQUATTING (15 U.S.C. §1125(d)) 19. Plaintiff repeats and realleges each and every allegation set forth in paragraphs 1- 19 as if fully set forth herein. 20. Defendants are not authorized to use Plaintiff’s TROPIC OCEAN AIRWAYS Trademarks in any manner and Defendants have no legitimate interest in the TROPIC OCEAN AIRWAYS Trademarks. 21. Defendants have registered, trafficked in, and used or caused to be registered, trafficked in and/or used the domain name , which is identical and confusingly similar to Plaintiff’s TROPIC OCEAN AIRWAYS Trademarks. 22. Defendants have registered, trafficked in, and used or caused to be registered, trafficked in and/or used the domain name with the bad faith intent to profit from Plaintiff’s trademark. Such bad faith intent includes, but is not limited to, Defendants’ offer to transfer, sell, or otherwise assign the domain name to Plaintiff for financial gain without having Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 15 of 23 - 6 - used, or having an intent to use, the domain name in the bona fide offering of any goods or services. 23. Defendants acted willfully and with full knowledge of Plaintiff’s rights in and to the TROPIC OCEAN AIRWAYS Trademarks. 24. Defendants’ acts constitute unlawful cybersquatting in violation of the Anti- Cybersquatting Consumer Protection Act, § 43(d) of the Lanham Act, 15 U.S.C. § 1125(d). 25. Defendants’ continued ownership and use of the domain name has caused and will continue to cause irreparable harm to the Plaintiff unless the court orders a transfer of the domain name to Plaintiff. Plaintiff has no adequate remedy at law. 26. Pursuant to 15 U.S.C. §§1117(a,d) and 1125(d), Plaintiff is therefore entitled to injunctive relief and the recovery of Defendants’ profits and actual damages or statutory damages up to $100,000.00, enhanced profits and damages, costs, and reasonable attorneys’ fees. PRAYER FOR RELIEF WHEREFORE, Plaintiff prays that the Court: A. Order the transfer of the domain name to Plaintiff within ten (10) days of the entry of a final judgment. B. Permanently enjoin and restrain Defendants, their agents, servants, employees, and attorneys, and those in active concert or participation with any of them from owning, registering, or trafficking in any domain name including the name or mark TROPIC OCEAN AIRWAYS or any name, mark, word, or combination of words confusingly similar thereto. C. Order that Defendants pay to Plaintiff: Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 16 of 23 - 7 - i. Defendants’ profits and Plaintiff’s actual damages and/or statutory damages in the amount of $100,000.00, pursuant to 15 U.S.C. §1117(a,d); ii. Treble damages pursuant to 15 U.S.C. §1117(a) for Defendants’ willful and intentional violation of 15 U.S.C. §1125(d); and iii. The costs of this action and reasonable attorney's fees pursuant to 15 U.S.C. § 1117(a). D. Order Defendants to file with the Court and serve upon Plaintiff, within thirty (30) days of the entry of the final judgment and injunction prayed for herein, a report in writing under oath setting forth in detail the form and manner in which they have complied with the terms of the final order and injunction. E. Order that Plaintiff be awarded such other and further relief as the Court finds just. Dated: September 9, 2013 Respectfully submitted, s/Barry L. Haley_______ Barry L. Haley, Esq. (Fla. Bar No. 123,351) Email: blh@mhdpatents.com Geoffrey Lottenberg, Esq. (Fla. Bar No. 56,240) Email: gl@mhdpatents.com MALIN HALEY DiMAGGIO & BOWEN, P.A. 1936 South Andrews Ave. Fort Lauderdale, FL 33316 Telephone: (954) 763-3303 Facsimile: (954) 522-6507 Attorneys for Plaintiff Tropic Ocean Airways, Inc. I:\12000\12132\Pleadings\WORD Docs\AmendedComplaint.doc Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 17 of 23 EXHIBIT A Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 18 of 23 Share Seaplane Key West, Little Palm Island, Bimini Bahamas http://flytropic.com/ 1 of 3 5/21/2013 11:03 AM Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 19 of 23 © 2010 Tropic Ocean Airways Affordable Website Design Sitemap Seaplane Key West, Little Palm Island, Bimini Bahamas http://flytropic.com/ 2 of 3 5/21/2013 11:03 AM Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 20 of 23 EXHIBIT B Case 1:16-cv-00521-B Document 24-1 Filed 12/16/16 Page 21 of 23 WHOIS search results for: TROPICOCEANAIRWAYS.COM (Registered) See Underlying Registry Data Report Invalid Whois The data contained in GoDaddy.com, LLC's WHOIS database, while believed by the company to be reliable, is provided "as is" with no guarantee or warranties regarding its accuracy. 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Registered through: GoDaddy.com, LLC (http://www.godaddy.com) Domain Name: TROPICOCEANAIRWAYS.COM Created on: 03-Mar-12 Expires on: 03-Mar-14 Last Updated on: 01-Mar-13 Registrant: Domains By Proxy, LLC DomainsByProxy.com 14747 N Northsight Blvd Suite 111, PMB 309 Scottsdale, Arizona 85260 United States Administrative Contact: Private, Registration TROPICOCEANAIRWAYS.COM@domainsbyproxy.com Domains By Proxy, LLC DomainsByProxy.com 14747 N Northsight Blvd Suite 111, PMB 309 Scottsdale, Arizona 85260 United States (480) 624-2599 Fax -- (480) 624-2598 Technical Contact: Private, Registration TROPICOCEANAIRWAYS.COM@domainsbyproxy.com Domains By Proxy, LLC DomainsByProxy.com 14747 N Northsight Blvd Suite 111, PMB 309 Scottsdale, Arizona 85260 United States (480) 624-2599 Fax -- (480) 624-2598 Domain servers in listed order: NS29.DOMAINCONTROL.COM NS30.DOMAINCONTROL.COM Registry Status: clientDeleteProhibited Registry Status: clientRenewProhibited Registry Status: clientTransferProhibited Registry Status: clientUpdateProhibited NameMatch Recommendations GoDaddy.com NameMatch has found similar domain names related to your search. 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