Grubbs v. Sheakley Group, Inc., 2015 WL 1321126, No.
1:13cv246 (S.D. Ohio Mar. 18, 2015)
The court adopted the magistrate judge’s recommendations in
this case, dismissing Lanham Act claims (and RICO claims) and declining to
retain jurisdiction over state claims.
Grubbs was the sole owner of Capital Concepts, Inc., a
financial planning, wealth management, and tax preparation firm, which bought
Tri–Serve Ltd. and Triserve # 1 LLC, companies that provided human resources
and financial services to corporations. Defendant Strunk–Zwick worked for
Tri–Serve as a managing director, then as the manager of Capital Concepts, then
Tri–Serve again. Plaintiffs alleged that she schemed to defraud Capital
Concepts, and later Tri–Serve, and to embezzle assets for her own purposes and
for the benefit of other defendants. She allegedly worked with other defendants
to transfer clients, employees, and other assets from Capital Concepts and
Tri–Serve to entity defendants. After
Grubbs presented evidence of Strunk-Zwick’s scheme, including falsified bank
documents, Strunk-Zwick was charged and ultimately convicted of wire fraud.
In July 2009, Strunk–Zwick sent emails to a limited number
of Tri–Serve clients stating that individual defendants were partnering with
Sheakley HR and moving their offices, but that there would be no change to the
services provided other than new contact information. The new address was
listed as: “TriServe LTD c/o Sheakley HR Solutions,” and Tri–Serve’s address
and logo appeared at the bottom of the emails. Plaintiffs alleged that this
represented an affiliation between Tri-Serve and Sheakley.
The court found that plaintiffs failed to plead likely
confusion. Before using the multifactor
confusion test, the threshold question was “whether the defendants are using
the challenged mark in a way that identifies the source of their goods.” Here, the
Tri–Serve name and logo were used in a “non-trademark way.” The emails
specified that clients “will begin to see the Sheakley HR name” as opposed to
the name TriServe in future communications. “The use of TriServe’s mark in a ‘non-trademark
way’ as a source of comparison between the two organizations and to identify to
the email recipients a change in service provider does not make the Entity
Sheakley Defendants liable to plaintiffs for trademark infringement. Because
the emails sent by defendant Strunk–Zwick clearly identify Sheakley as the
future service provider, there is no likelihood of confusion as to the origin
of the future services coming from TriServe.”
Comment: wow, an affiliation confusion claim that I think
should’ve been taken more seriously.
Will wonders never cease? The
problem isn’t that it wasn’t clear that Sheakley would be the service
provider. The problem with the quoted
emails was that they made it sound like Tri-Serve was becoming Sheakley in voluntary fashion. Parts of the emails not quoted in the opinion may have made clear that it
was the individual defendants, not the whole Tri-Serve enterprise, that was
moving, in which case the court’s ruling makes sense. But “TriServe c/o
Sheakley” sure sounds like an affiliation claim standing alone.
False advertising: Here the problem was “commercial
advertising or promotion,” using the Gordon
& Breach test. The 2009 emails
had only 23 recipients, and “[a]bsent allegations as to either the size of the
relevant market or the number of entities within that market that [defendants]
contacted, it remains entirely speculative as to whether [defendants’]
communications have been ‘disseminated sufficiently to the relevant purchasing
public to constitute advertising or promotion within [plaintiffs’] industry.”
No comments:
Post a Comment