Tuesday, September 07, 2021

There's no such thing as "leasing real estate in violation of the Lanham Act"

Wakefern Food Corp. v. Marchese, 2021 WL 3783259, No. 2:20-cv-15949-WJM-MF (D.N.J. Aug. 26, 2021)

Always something new in trademark! Wakefern, the largest retailer-owned supermarket coop in the US, sued Marchese for attempting “to lease commercial real estate in violation of the Lanham Act … and New Jersey common law.” 

Wakefern operates approximately 353 supermarkets under various brands such as ShopRite and Fairway Market across several states, and has a registration for ShopRite.

Marchese formed defendant Family Markets for the stated purpose of carrying out a retail supermarket business. In mid-2020, Marchese allegedly contacted Wakefern about the possibility of joining the Wakefern cooperative. He allegedly told Wakefern’s representative that he owned both Family Markets and a number of “Foodtown” supermarket locations across New Jersey, including a specific Foodtown location in Plainsboro. Wakefield told Marchese to submit a summary of his qualifications in writing, but he didn’t follow up. The supposed Plainsboro location was allegedly vacant.

“Marchese also contacted a real estate broker to inquire about a listing of a vacant 50,000 square foot supermarket in Middlesex, New Jersey.” He allegedly informed the broker “that he was interested in leasing the vacant space, that he was the owner/operator of an active supermarket business in Family Markets, that he had an ownership interest in several members of the Wakefern cooperative, including four ShopRite® supermarkets in New Jersey, and that he had started the process of becoming a Wakefern member himself.” Afterwards, the broker contacted Wakefern and was told that Marchese wasn’t a member and had no Wakefern/ShopRite affiliation.

Perhaps overreacting, Wakefern sued for trademark infringement and false advertising in violation of the Lanham Act and violation of state unfair competition law, which is coextensive and thus disappears from our story.

Trademark infringement: This just wasn’t use in commerce. Whether confined to the §1114 definition of “use in commerce” or using some other broader standard for §1127, Marchese’s statement didn’t qualify:

Plaintiff is correct that Marchese’s conduct in invoking Wakefern and the ShopRite® brand may have been an affirmative act ultimately designed to achieve some sort of commercial benefit (i.e. the acquisition of commercial space from which to operate a supermarket). However, there are no allegations that Defendant has ever offered, distributed, possessed, sold, or advertised any goods or services of any kind bearing or imitating Plaintiff’s marks, or even had the capacity to do so. Nor are there any allegations that, had Marchese been successful in securing the vacant commercial property, he would have engaged in any infringing conduct in the actual operation of a supermarket. Indeed, Plaintiff’s allegations suggest that Marchese made false representations to the broker in order to take advantage of the broker’s services rather than to sell or promote his own. Moreover, Plaintiff has not cited any case, and the Court is aware of none, in which a single, private business conversation, without any corresponding dissemination or marketing to the broader purchasing public, has been found to constitute a “use in commerce” for purposes of trademark infringement.

False advertising: Not commercial advertising or promotion. There was no organized campaign to penetrate the market alleged; there was also no targeting of a class of potential purchasers. “Marchese’s allegedly false statements regarding his relationship with Wakefern were made in the context of a private conversation with a targeted individual acting in his capacity as a broker rather than shared more broadly to a class of potential supermarket consumers. Such isolated, private statements, particularly to non-consumers, do not constitute the sort of dissemination to the relevant purchasing public necessary to state a false advertising claim under Section 43(a) of the Lanham Act.” Wakefield did allege that Marchese engaged in “similar conduct with respect to multiple Westside Market stores in New York City.” But there were no other details. “Regardless, even assuming Plaintiff intended to allege that Marchese has continued to claim a relationship with Wakefern to various real estate brokers in order to obtain a commercial lease to operate a supermarket, Plaintiff’s claim would fail: such statements would still be discrete communications targeted to specific non-consumers rather than promotions or advertisements disseminated to a segment of the purchasing public.”

1 comment:

Jeremy said...

It’s an interesting exercise to try to distinguish this case from Mobil Oil v. Pegasus Petroleum.