Tuesday, February 13, 2018

TrueNorth not truly famous, court rules on motion to dismiss

TrueNorth Companies, L.C. v. TruNorth Warranty Plans, LLC, No. C17-31, 2018 WL 794700 (N.D. Iowa Feb. 8, 2018)

TrueNorth sued TruNorth for trademark infringement and dilution based on their respective marks; here the court dismisses the dilution claim for failure to plausibly plead fame.

TrueNorth alleged that it consistently used the word “TrueNorth” and two specific logo designs in commerce in connection with its business since 2000. Since 2001, TrueNorth invested well over $30 million in marketing efforts to strengthen the TrueNorth brand.  It alleged that its brand was “well-known and recognized in the transportation industry as a leader in insurance and financial strategies, as evidenced by TrueNorth’s partnerships with some of the nation’s leading motor carriers, as well as TrueNorth’s work with transportation associations.” It also had three registered marks.

TrueNorth argued that it had done enough to plausibly plead fame under Twiqbal, and cited cases allowing minimal pleading, including a case accepting that BoatU.S. and TowBoatU.S. were plausibly pled to be famous marks.  Nope.  Dilution fame requires fame beyond a niche market. “While the pleading standard itself is not rigorous and this type of claim is not subject to a heightened pleading standard (such as claims that fall under Rule 9(b)), the nature of a dilution claim itself makes it difficult to ‘state a claim to relief that is plausible on its face.’”  

Even accepting TrueNorth’s allegations, they fell well short of plausible fame, a rigorous standard.  Allegations of $30 million in marketing efforts since 2001, with no further details regarding the extent or geographic reach of its advertising and publicity, were too vague.  TrueNorth alleged that it has offices in six states, provides financial and insurance services to a wide variety of client types across the United States, and services clients around the country, but that wasn’t enough detail in terms of “amount, volume, and geographic extent of sales of goods or services offered under [its] mark.”

Conclusory allegations that the brand was well-known and recognized in the transportation industry, as evidenced by its partnerships, were insufficient because a mark’s fame must go beyond a niche market, such as the transportation industry. And registration alone was insufficient to establish plausibility of dilution fame: “[o]ne cannot logically infer fame from the fact that a mark is one of the millions on the Federal Register.”  Dilution claim dismissed.

[Comment: given the similarity of the parties’ marks, is dilution likely to be an important issue?]

No comments: