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Fagnelli Plumbing Co., Inc. v. Gillece Plumbing and Heating

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


July 27, 2010

FAGNELLI PLUMBING COMPANY, INC., PLAINTIFF,
v.
GILLECE PLUMBING AND HEATING, INC., GILLECE SERVICES, LP., THOMAS GILLECE AND JOSEPH BENZ, DEFENDANTS.

The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

MEMORANDUM AND ORDER OF COURT

I. Introduction

Plaintiff, Fagnelli Plumbing Company, Inc., instituted the present action against Defendants, Gillece Plumbing and Heating Inc. ("Gillece Plumbing")*fn1 Gillece Services, LP ("Gillece Services")*fn2 Thomas Gillece,*fn3 and Joseph Benz,*fn4 (collectively, "Defendants") on May 18, 2010. (Doc. No. 1). Plaintiff alleges Defendants improperly registered the domain name "www.fagnelli.com" in violation of sections 43(a) and (d) of the Lanham Act, 15 U.S.C. §§ 1125(a) and (d), and Pennsylvania common law. Before this Court are Defendants' Motions to Dismiss Plaintiff's Complaint (Doc. Nos. 13, 14, 15, and 16) for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P.12(b)(6). For the reasons stated below, Defendant Gillece Plumbing's motion to dismiss is denied, and Defendants Gillece Services, Thomas Gillece, and Joseph Benz's motions to dismiss are granted in part and denied in part.

II. Facts Averred in Complaint

Plaintiff and Defendant Gillece Plumbing are business competitors who both provide plumbing, heating, and cooling services to residential and commercial customers in Western Pennsylvania. (Doc. No. 1 ¶ 10). In an effort to advertise and increase profits, Plaintiff purchased and registered the domain name "www.fagnelliplumbing.com" ("fagnelliplumbing.com"), which is a website that offers Plaintiff's services to prospective customers. Id. at ¶ 11. On March 1, 2007, Defendant Gillece Plumbing registered the domain name "www.fagnelli.com" ("fagnelli.com") through the online registrar GoDaddy.com, Inc. Id. at ¶ 13. On February 12, 2009, Defendant Gillece Plumbing began to divert internet traffic visiting fagnelli.com to "www.gilleceplumbing.com" ("gilleceplumbing.com"), a website that advertises and offers Defendant Gillece Plumbing's services to prospective customers. Id. at ¶¶ 12, 16-17.

After discovering fagnelli.com, Plaintiff sent a cease and desist letter to Defendants, requesting that Defendants refrain from redirecting traffic from fagnelli.com to gilleceplumbing.com, and "transfer ownership and registration" of fagnelli.com to the Plaintiff. Id. at ¶ 18. In response to Plaintiff's request, Defendants ceased redirecting internet traffic from fagnelli.com to gilleceplumbing.com, but refused to transfer ownership and registration of fagnelli.com to the Plaintiff. Id. at ¶¶ 19-20.

III. Discussion

Pursuant to Fed. R. Civ. P. 12(b)(6), this Court is required to dismiss a complaint when it fails to allege ""enough facts to state a claim to relief that is plausible on its face.'" Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Previously, under the Supreme Court's holding in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), a claim could only be dismissed when "no set of facts" could support the plaintiff's contentions. However, under the Supreme Court's recent holdings in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), a plaintiff cannot merely assert legal conclusions or recite "the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S.Ct. at 1949. Rather, the plaintiff must assert a facially plausible claim by pleading "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556).

Although the plausibility standard is dissimilar to a "probability requirement," "it [requires] more than a sheer possibility that a defendant has acted unlawfully." Id. While well-pleaded factual content is accepted as true, legal conclusions couched as factual allegations or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are not entitled to an assumption of truth. Marangos v. Swett, 341 Fed. Appx. 752, 755 (3d Cir. 2000) (quoting Iqbal, 129 S.Ct. at 1949). "[W]here the well-pleaded facts do not permit the court to infer more than a mere possibility of misconduct, the complaint has alleged -- but it has not "show[n]' -- "that the pleader is entitled to relief.'" Iqbal, 129 S.Ct. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)).

In order to satisfy the requirement of Fed. R. Civ. P. 8(a)(2) that a plaintiff include a "short and plain statement of the claim showing that the pleader is entitled to relief," a plaintiff must aver sufficient factual allegations to "nudge" its claims "across the line from conceivable to plausible." Iqbal, 129 S.Ct. at 1951.

When evaluating a Rule 12(b)(6) motion, this Court accepts the plaintiff's well-pleaded factual allegations as true, and construes all reasonable inferences in the light most favorable to the plaintiff. Umland v. Planco Fin. Servs., 542 F.3d 59, 64 (3d Cir. 2008) (citing Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006)). However, this Court cannot consider bald assertions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 215 (3d Cir. 2002); Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 n.8 (3d Cir. 1997). Nor should a court consider "whether a plaintiff will ultimately prevail," but rather, must decide "whether the [plaintiff] is entitled to offer evidence to support the claims." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

Therefore, a plaintiff must put forth sufficient facts that, when taken as true, suggest the required elements of a particular legal theory. See Wilkerson v. New Media Tech. Charter Sch., Inc., 552 F.3d 315 (3d Cir. 2008) (citing Phillips, 515 F.3d at 224). However, this standard does not impose a heightened burden on the claimant above that already required by Rule 8, but instead calls for fair notice of the factual basis of a claim while "rais[ing] a reasonable expectation that discovery will reveal evidence of the necessary element." Weaver v. UPMC, Civ. A. No. 08-411, 2008 U.S. Dist. LEXIS 57988 at *7 (W.D. Pa. July 30, 2008) (citing Phillips, 515 F.3d at 234; and Twombly, 550 U.S. at 555).

IV. Application

Plaintiff alleges three separate claims against Defendants: (1) at Count One, Cybersquatting in violation of 15 U.S.C. § 1125(d); (2) at Count Two, Misleading Description in violation of 15 U.S.C. § 1125(a)(1)(A); and, (3) at Count Three, Pennsylvania Common Law Service Mark Infringement and Unfair Competition. The parties agree that Plaintiff's common law claims for trademark infringement and unfair competition are governed by the standard set forth in 15 U.S.C. § 1125(a). See A & H Sportswear Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000) (holding federal trademark infringement and unfair competition claims are measured by identical standards); see also Kos Pharms. V. Andrx Corp., 369 F.2d 700, 706, 708-09 (3d Cir. 2004) (evaluating federal and common law trademark infringement and unfair competition claims under the same standard). Therefore, Plaintiff's common law claims will be addressed in conjunction with its claims under 15 U.S.C. § 1125(a)(1)(A).

A. Cybersquatting in violation of 15 U.S.C. § 1125(d)

"In general, cybersquatting is the act of registering, in bad faith and to garner profit, on the internet a domain name so similar to a distinctive mark that it is confusing." Green v. Fornario, 486 F.3d 100, 103 n. 5 (3d Cir. 2007) (citing Shields v. Zuccarini, 254 F.3d 476 (3d Cir. 2001)); see also 15 U.S.C. § 1125(d)(1)(A). Furthermore, pursuant to 15 U.S.C. § 1125(d)(1)(D), "[a] person shall be liable for using a domain name under [15 U.S.C. § 1125(d)(1)(A)] only if that person is the domain name registrant or that registrant's authorized licensee." Therefore, pursuant to Rule 12(b)(6), this Court must determine whether Plaintiff averred sufficient factual allegations to suggest that: (1) the term "Fagnelli" is a distinctive mark; (2) the term "Fagnelli" is identical or so similar to the domain name fagnelli.com that it is confusing; (3) Defendants registered fagnelli.com in bad faith to garner profit; and, (4) Defendants are the registrant of fagnelli.com or the registrant's authorized licensee. See Shields v. Zuccarini, 254 F.3d 476 (3d Cir. 2001).

1. Distinctive Mark

In order for a trademark to be eligible for legal protection, the mark must be distinct. Carnivale v. Staub Design, LLC, Civ. A. No. 08-764, 2010 U.S. Dist. LEXIS 32668 at *9 (D. Del. Mar. 31, 2010) (citing 2 McCarthy on Trademarks and Unfair Competition § 11.2 (4th ed. 2010)). The distinctiveness of a term is determined by a four category scale that separates terms into the following categories: arbitrary or fanciful, suggestive, descriptive, and generic. See Sabrinsa Corp. v. Creative Compounds, LLC, No. 08-3255, 2010 U.S. App. LEXIS 14023 at *14 (3d Cir. July 9, 2010). Arbitrary or fanciful marks are defined as "terms that neither describe nor suggest anything about the product" and ""bear no logical or suggestive relation to the actual characteristics of the goods'" or services. A & H Sportswear, Inc., 237 F.3d at 221 (quoting A.J. Canfield Co. v. Honickman, 808 F.2d 291, 296 (3d Cir. 1986)). Suggestive marks "require consumer "imagination, thought, or perception' to determine what the product is." Id. at 222 (quoting A.J. Canfield Co., 808 F.2d at 297). Descriptive marks are defined as terms that ""convey[] an immediate idea of the ingredients, qualities or characteristics of the goods,''' while generic marks ""function as the common descriptive name of a product class.'" Id. In order to be distinctive, "a mark must either be suggestive, arbitrary or fanciful, or descriptive with a secondary meaning." Id. A descriptive mark acquires a secondary meaning "when the trademark is interpreted by the consuming public to be not only an identification of a product, but also a representation of the product's origin." E.T. Browne Drug Co. v. Cococare Prods., 538 F.3d 185, 199 (3d Cir. 2008).

In determining the distinctiveness of a mark for the purposes of section 1125(d), the United States Court of Appeals for the Third Circuit considers the factors outlined in 15 U.S.C. § 1125(c)*fn5. Shields, 254 F.3d at 482. After considering the factors outlined in section 1125(c), the United States Court of Appeals for the Third Circuit considered the mark "Joe Cartoon" distinct when: (1) the owner used the term "Joe Cartoon" for a period of fifteen years; (2) the owner had used the domain name joecartoon.com to advertise and sell products for a period of approximately four years; (3) the "Joe Cartoon" products were nationally advertised and sold through multiple media outlets; and, (4) the joecartoon.com website received more than 700,000 visits per month. Id. at 482-83.

In this case, Defendants contend the term "Fagnelli" is a descriptive term that lacks a secondary meaning and, therefore, is not distinctive. (Doc. Nos. 13-15 ¶¶ 14-18; Doc. No. 16 ¶¶ 9-13). In its Complaint, Plaintiff alleges that it has used the term "Fagnelli" in the plumbing, heating, and cooling industries for nearly 50 years, used the domain name fagnelliplumbing.com to advertise and offer its services to customers in Western Pennsylvania, and has spent substantial sums on advertising in Western Pennsylvania. (Doc. No. 1 ¶¶ 11, 25).

After considering the factors outlined in section 1125(c), the United States Court of Appeals for the Third Circuit's holding in Shields, and the definition of a descriptive mark with a secondary meaning, this Court finds that Plaintiff's complaint has set forth sufficient facts to suggest that the term "Fagnelli" is distinctive. Considering the extended period of time Plaintiff has used the term "Fagnelli" in the plumbing, heating and cooling industries and Plaintiff's attempts to advertise in Western Pennsylvania, it is plausible that the term "Fagnelli" is a descriptive term with a secondary meaning. Furthermore, the facts presented satisfy several of the factors outlined in section 1125(c), including the duration and extent of the use in connection with goods or services with which the mark is used, the duration and extent of advertising and publicity of the mark, and, the channels of trade for the goods or services with which the mark is used. See Shields, 254 F.3d at 482-83. Therefore, Plaintiff has presented sufficient factual allegations to suggest that the term "Fagnelli" is a distinct mark eligible for legal protection.

2. Confusingly Similar

In order to satisfy the confusingly similar element of section 1125(d), Plaintiff must demonstrate that "plaintiffs mark and defendants' domain name are so similar in sight, sound, or meaning that they could be confused." Carnivale, 2010 U.S. Dist. LEXIS 32668 at *19 (citing 2 McCarthy on Trademarks and Unfair Competition, § 25:78). In Shields, the Court of Appeals found the domain names joescartoon.com, joecarton.com, joescartoons.com, joescartons.com, and cartoonjoe.com confusingly similar to the plaintiffs mark "Joe Cartoon." Shields, 254 F.3d at 483. In this case, the domain name fagnelli.com and the term "Fagnelli" are seemingly identical and more similar than the domain names and mark in Shields. Therefore, Plaintiff has presented sufficient evidence to satisfy this element of section 1125(d).

3. Acted with a Bad Faith Intent to Profit

This Court must next inquire whether Plaintiff pleaded sufficient factual allegations to support a claim that Defendants acted with a bad faith intent to profit from Plaintiff's mark. Under section 1125(d)(1)(B)(1)*fn6, Congress has provided a non-exhaustive list of factors a court must consider when determining whether a defendant acted with a bad faith intent to profit. See Green v. Fornario, 486 F.3d 100, 105 (3d Cir. 2007). Plaintiff's allegations satisfy a number of these factors. First, Plaintiff alleges that Defendants have never used fagnelli.com as a trademark or service mark. Secondly, fagnelli.com does not contain any variation of any legal names of Defendants, nor any other name commonly used to identify Defendants. Plaintiff's factual allegations also suggest Defendants have not used fagnelli.com in connection with a bona fide offering of goods or services, or for a non-commercial or fair use purpose. Furthermore, Plaintiff's allegations that Defendants maintained fagnelli.com to divert customers to Defendants' website, gilleceplumbing.com, suggests Defendants harmed the goodwill associated with Plaintiff's mark, and did so for commercial gain. Plaintiffs also allege that Defendants have registered over 180 domain names that are confusingly similar to the marks of other competitions in the plumbing, heating, and cooling industries. Therefore, Plaintiff has pleaded sufficient facts to suggest Defendants acted in bad faith with an intent to profit when Defendants registered fagnelli.com.

4. Registrant or Registrant's Authorized Licensee

Defendants Gillece Services, Thomas Gillece, and Joseph Benz allege that they cannot be held liable under section 1125(d) because they are not the registrant's of fagnelli.com or the registrant's licensee. (Doc. Nos. 13-15 ¶¶ 9-12). 15 U.S.C. § 1125(d)(1)(D) provides that "[a] person shall be liable for using a domain name under [section 1125(d)(1)(A)] only if that person is the domain name registrant or that registrant's authorized licensee."

Plaintiff alleges Defendants Thomas Gillece and Joseph Benz authorized and implemented the registration of fagnelli.com, and Defendant Gillece Services is the general partner of Gillece Plumbing. (Doc. No. 1 ¶¶ 3-4, 14-15). Considering the plain language of section1125(d)(1)(D), these allegations, without more, are not sufficient to suggest that Defendants Thomas Gillece, Joseph Benz, and Gillece Services are the registrants of fagnelli.com or registrant's authorized licensee. Therefore, this Court concludes that Plaintiff has failed to allege sufficient facts to state a colorable claim under 15 U.S.C. § 1125(d) against Defendants Gillece Services, Thomas Gillece, and Joseph Benz. Accordingly, those claims will be dismissed.

However, Plaintiff alleges that Gillece Plumbing is the registrant of the domain name, fagnelli.com. Thus, its motion to dismiss is denied.

B. Misleading Description in Violation of 15 U.S.C. § 1125(a)(1)(A) and Common Law Service Mark Infringement and Unfair Competition

In order to state a valid claim under 15 U.S.C. § 1125(a)(1)(A), Plaintiff must plead sufficient facts to suggest: "(1) ownership of a valid and legally protectable mark; (2) that defendant used the mark in commerce; (3) in connection with the sale, preparing for sale, distribution or advertising of goods and services; (4) in a manner likely to confuse customers." 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F. Supp.2d 273, 281-82 (D.N.J. 2006) (citing Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.2d 466, 472 (3d Cir. 1994)) (internal quotations omitted). Defendants do not challenge prong three of this test. Rather, Defendants contend that Plaintiff's Complaint fails to allege sufficient facts to demonstrate that: (1) Defendants own a valid and legally protectable mark;*fn7 Defendants used the domain name fagnelli.com in commerce; and, (3) the redirection of consumers from fagnelli.com to gilleceplumbing.com created a likelihood of confusion*fn8. (Doc. Nos. 13-16).

1. Use in Commerce

Defendants argue Plaintiff failed to plead "use of commerce" as defined under 15 U.S.C. § 1127. (Doc. Nos. 13-15 ¶¶ 20-24; Doc. No. 16 ¶¶ 15-19). 15 U.S.C. § 1127 defines "use in commerce" as "the bona fide use of a mark in the ordinary course of trade." 15 U.S.C. § 1127. Additionally, "a mark shall be deemed to be in the use in commerce -- on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce. . . ." Id.; see also 54 Pa. C.S. §1102.

In J.G. Wentworth, S.S.C. Ltd. Partnership v. Settlement Funding LLC, the United States District Court for the Eastern District of Pennsylvania determined that "purchase and use of a trademark-protected keyword for the purpose of triggering internet advertising constitutes the type of "use of commerce' contemplated by the Lanham Act." Civ. A. No. 06-0597, 2007 U.S. Dist. LEXIS 288 at *11 (E.D. Pa. Jan. 4, 2007). The plaintiff alleged that defendant infringed on its mark when it used plaintiff's mark as a keyword through Google's AdWords program "so that an internet search for those terms produces a Sponsored Link to defendant's website." Id. at *5. The court held that "defendant's use of plaintiff's marks to trigger internet advertisements for itself is the type of use consistent with the language in the Lanham Act which makes it a violation to use "in commerce' protected marks." Id. at *17.

Furthermore, multiple district courts have held that a defendant uses a plaintiff's marks in commerce by operating a website. See Dluhos v. Strasberg, Civ. A. No. 00-3163, 2005 U.S. Dist. LEXIS 34383 at *22 (D.N.J. June 23, 2005) (holding defendant uses plaintiff's marks in commerce by operating a website); see also Trade Media Holdings Ltd. V. Huang & Assocs., 123 F. Supp. 2d 233, 242 (D.N.J. 2000) (holding "[u]sing a domain name to operate a website is a "use in commerce' because it affects a plaintiff's ability to offer services.''); see also Planned Parenthood, No. 97 Civ. 0629, 1997 U.S. Dist. LEXIS 3338 at *10-11 (S.D.N.Y. Mar. 24, 1997) (noting that establishment of a typical home page on the Internet satisfies Lanham Act's "in commerce' requirement).

In this case, Plaintiff avers that Defendant Gillece Plumbing registered fagnelli.com and used the domain name to direct internet traffic to its own website, gilleceplumbing.com. (Doc. No. 1. ¶¶13-16). Additionally, Plaintiff alleges Defendants Thomas Gillece and Joseph Benz authorized and implemented the registration of fagnelli.com, and Defendant Gillece Services is the partner of Gillece Plumbing.

After considering the applicable case law and the language of section 1127, this Court holds Defendants' collective registration, implementation, and use of fagnelli.com to redirect internet traffic constitutes "use of commerce' under the Lanham Act.

2. Likelihood of Confusion

"To prove likelihood of confusion, plaintiff[] must show that consumers viewing the mark would probably assume the product or service it represents is associated with the source of a different product or service identified by a similar mark." Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270, 280 (3d Cir. 2001) (internal citations omitted). In Interpace Corp. v. Lapp, Inc., the United States Court of Appeals for the Third Circuit set forth ten factors that indicate a likelihood of confusion.*fn9 721 F.2d 460, 463 (3d Cir. 1983). "None of these factors is determinative in the likelihood of confusion analysis and each factor must be weighed and balanced one against the other." Checkpoint Sys., 269 F.3d at 280.

Defendants simply argue that "plaintiff has not pleaded any facts to support its general allegation that the redirection in fact caused any likelihood of confusion." (Doc. Nos. 17, 18 n. 6). The Court does not agree with Defendants' argument. The allegedly infringing domain name, fagnelli.com, is striking similar to Plaintiff's mark, "Fagnelli" and Plaintiff's domain name, fagnelliplumbing.com. In addition, Plaintiff alleges that Defendants redirected customers from fagnelli.com to gilleceplumbing.com, a website that advertises and offers Defendants' services. Further, Plaintiff avers that Defendants, by creating the domain name fagnelli.com, likely deceived Plaintiff's existing and potential customers. (Doc. No. 1 ¶¶ 32, 33). Plaintiff also alleges that it has used the term "Fagnelli" in the plumbing, heating and cooling industries for nearly 50 years, and that Plaintiff and Defendants are local competitors who market products via the internet. (Doc. No. 1 ¶¶ 12, 25). Therefore, Plaintiff has pleaded a likelihood of confusion. Applying the Lapp factors, Plaintiff pleaded a high degree a similarity between its mark and the alleged infringing domain name, strength in the mark "Fagnelli" based on secondary meaning analysis above, the goods are marketed through the same channels of trade and advertising, the extent to which the targets of the parties' sale efforts are the same, and the relationship of the goods in the minds of consumers because of similarity of functions. Accordingly, Plaintiff pleaded sufficient facts to support likelihood of confusion.

V. Conclusion

For the foregoing reasons, Defendant Gillece Plumbing's Motion to Dismiss Plaintiff's Complaint (Doc. No. 16) will be denied, and Defendant's Gillece Services, Thomas Gillece, and Joseph Benz's Motions to Dismiss Plaintiff's Complaint (Doc. Nos. 13, 14, and 15) will be granted in part and denied in part. Accordingly,

AND NOW, this 27th day of July, 2010, for the reasons set forth above, IT IS HEREBY ORDERED that Defendant Gillece Plumbing and Heating, Inc.'s Motion to Dismiss (Doc. No. 16) is DENIED, and Defendant's Gillece Services, LLC, Thomas Gillece, and Joseph Benz's Motions to Dismiss (Doc. Nos. 13, 14, and 15) are GRANTED in part, as to Plaintiff's claims under 15 U.S.C. § 1125(d), without prejudice to Plaintiff to file an Amended Complaint, and DENIED in part, as to Plaintiff's 15 U.S.C. § 1125(a) and common law claims. Plaintiff's Amended Complaint (if any) shall be filed on or before August 10, 2010; Defendant's response (Answer or Renewed Motion to Dismiss) thereto shall be filed on or before August 17, 2010, and Plaintiff's Opposition to any Renewed Motion to Dismiss shall be filed on or before August 23, 2010.

SO ORDERED.


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