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CPC Properties Inc. v. Dominic Inc.

United States District Court, Third Circuit

August 20, 2013

CPC PROPERTIES, INC., Plaintiff,
v.
DOMINIC, INC., Defendant.

MEMORANDUM

Berle M. Schiller, J.

CPC Properties, Inc. (“CPC”) sued Dominic, Inc. (“Dominic”) based on Dominic’s placement of an image of a crab next to the word “FRIES” on the menus and website of the restaurant Tony’s Place, which Dominic owns and operates. CPC sells seasoned fries under the trademark CRAB FRIES®. Before the Court is CPC’s motion for judgment on the pleadings for its federal trademark infringement and unfair competition, common law trademark infringement and unfair competition, unjust enrichment, and state statutory and common law trademark dilution claims. CPC maintains that there are no issues of material fact because Dominic has admitted all of CPC’s allegations. For the following reasons, the Court grants in part and denies in part CPC’s motion.

I. BACKGROUND

Plaintiff owns and licenses all intellectual property associated with the “CHICKIE’S & PETE’S” network of restaurants and concessions, including the CRAB FRIES® trademark. (Compl. ¶ 8.) Since at least 1978, CHICKIE’S & PETE’S restaurants have used the CRAB FRIES® trademark on menus, signs, and packaging in order to sell their seasoned french fries. (Id. ¶¶ 14, 17.) CPC’s CRAB FRIES® trademark has been continuously used in interstate commerce during this time. (Compl. ¶ 7.) Plaintiff has spent millions of dollars in marketing and promotion centered on this trademark and has gained media and public recognition and goodwill as a result. (Id. ¶¶ 19-21, 24.)

On June 29, 2000, CPC’s predecessor-in-interest brought a number of claims against Dominic, including trademark infringement, arising out of Dominic’s use of the words “CRAB FRIES” in marketing seasoned french fries. (Id. ¶ 27.) The parties settled that dispute on October 16, 2002. (Id. ¶ 29.) As a result of the settlement, Dominic ceased using the terms “CRAB” and “CRAB FRIES” to describe its seasoned french fries. (Id. ¶ 30.)

Recently, Dominic began to use an image of a crab next to the word “FRIES” in an advertisement for its seasoned french fries, and on both its take-out and in-house menus. (Id. ¶¶ 31-33.) On August 3, 2012, CPC sued Dominic for trademark infringement, false designation of origin, common law service mark infringement, unfair competition, unjust enrichment, and trademark dilution. CPC alleges that the overall commercial effect of using an image of a crab next to “FRIES” is the same the effect of using the word “CRAB” next to “FRIES, ” and that prospective purchasers will equate Dominic’s image with CPC’s trademarked good. (Id. ¶¶ 34-36.) CPC alleges that using the image of a crab falsely indicates to potential customers that the parties’ restaurants are affiliated in some manner or that CPC approved Dominic’s use of the image to sell seasoned french fries. (Id. ¶¶ 41-44.) Therefore, CPC alleges, Dominic’s use of the image violates CPC’s exclusive trademark.

On August 9, 2012, the Court entered a Stipulated Preliminary Injunction (“Stipulated PI”), which required Dominic to refrain from using the words “CRAB FRIES” in its sales or advertising, and specifically to immediately remove or obstruct any image of a crab near “FRIES” from its menus, remove such images from its website by August 13, 2012, immediately cancel advertisements using the image, and remove menus featuring even an obstructed crab image from circulation by October 1, 2012. (Stipulated PI at 2-3.) In the Stipulated PI, Dominic also agreed that CPC was likely to succeed on the merits of its claims. (Id. at 1.)

After multiple investigations, CPC alleged that Dominic had violated the Stipulated PI, and on September 6, 2012, CPC filed a motion for contempt arising out of the violations of the Stipulated PI. The Court granted the motion on November 5, 2012, and awarded Plaintiff attorneys’ fees. On May 1, 2013, Plaintiff filed a motion for judgment on the pleadings. Defendant responded on July 5, 2013.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(c) permits motions for judgment on the pleadings after pleadings are closed, “but early enough not to delay trial.” Judgment on the pleadings is appropriate when the movant shows “that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.” Rosenau v. Unifund Corp., 539 F.3d 219, 221 (3d Cir. 2008) (citing Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290 (3d Cir. 1988)). Undertaking this analysis, courts view the facts in the pleadings and inferences to be drawn therefrom in the light most favorable to the nonmoving party. Id. When deciding a motion for judgment on the pleadings, a court should consider the allegations in the complaint, as well as “documents that are attached to or submitted with the complaint . . . and any ‘matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, [and] items appearing in the record of the case.’” Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006) (internal citation omitted); see also Turbe v. Gov’t of V.I., 938 F.2d 427, 428 (3d Cir. 1991) (applying the standards of a motion under Fed.R.Civ.P. 12(b)(6) in the context of a motion under Fed.R.Civ.P. 12(c)).

III. DISCUSSION

A. Defendant’s Failure to Deny Allegations in the Complaint

Plaintiff contends that Defendant’s Answer fails to deny the allegations in the Complaint, and that, therefore, all specific allegations in the Complaint should be deemed admitted. Defendant’s counsel filed an Answer to the Complaint on October 2, 2012, twenty days after it was due on September 12, 2012. In an answer, a “denial must fairly respond to the substance of the allegation.” Fed.R.Civ.P. 8(b)(2). Moreover, “[a]n allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied.” Fed.R.Civ.P. 8(b)(6). If an answer fails to deny any of the allegations in the complaint, those allegations must be accepted as true. See United States ex rel. ‘Automatic’ Sprinkler Corp. of Am. v. Merritt-Chapman & Scott Corp., 305 F.2d 121, 123 (3d Cir. 1962) (deeming admitted allegation in the complaint to which the answer did not respond).

In Dominic’s seven-paragraph Answer, titled “Defendant’s Response to Plaintiff’s Complaint, ” Dominic fails to address the substance of any of the eighty-five paragraphs contained in the Complaint. Indeed, five of the seven paragraphs in its Answer provide a procedural summary of the parties’ conflict. (Answer ¶¶ 1-5.) The remaining paragraphs offer explanations for Defendant’s violations of the Stipulated PI, and assert that Plaintiff has “suffered no meaningful damages” as a result of Dominic’s violations of the Stipulated PI. (Id. ¶¶ 6-7.) The Answer nowhere addresses the specific acts alleged in the Complaint. Instead, the Answer responds only to alleged violations of the Stipulated PI, which have already been remedied at this stage of the litigation. Though Rule 8 allows for a general denial in limited circumstances when “[a] party . . . intends in good faith to deny all the allegations of a pleading—including the jurisdictional grounds, ” Fed.R.Civ.P. 8(b)(3), the Court does not read the Answer as an attempt to deny CPC’s allegations, as it admits and explains a number of the alleged acts. (Id. ¶ 6.) See Charles Novins, Esq., PC v. Cannon, Civ. A. No. 09-5354, 2010 WL 3522793, at *3 (D.N.J. Sept. 2, 2010) (deeming counterclaim’s allegations admitted in light of plaintiff’s failure to submit an answer ...


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