OPINION AND ORDER
PAUL A. CROTTY, District Judge.
Plaintiffs Simone Kelly-Brown and Own Your Power Communications, Inc. ("Plaintiffs") bring this action against Oprah Winfrey ("Oprah"), Harpo Productions, Inc., Harpo, Inc., Hearst Corporation, Hearst Communications, Inc., Wells Fargo & Company, Clinique Laboratories, LLC, Chico's FAS, Inc. Estee Lauder Companies, Inc, ABC Companies (1-100), and John Does (1-100) (collectively, the "Defendants"), under sections 32 and 43 of the Lanham Act, New Jersey State law, and common law. Plaintiffs allege that Defendants unlawfully used Plaintiffs' trademark phrase "Own Your Power" (the "Phrase") on the cover of the O Magazine and in promoting a related O Magazine event.
Defendants move to dismiss Plaintiffs' complaint in its entirety, pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, the Court dismisses Plaintiffs' federal claims and declines to exercise supplemental jurisdiction over the state law and common law claims.
Since 1996, Plaintiffs have provided "a personal brand of self-awareness and motivational communications services nationally." (Compl. ¶ 2.) On May 27, 2008, Plaintiffs registered the "Own Your Power" trademark with the United States Patent and Trademark Office. (
On September 13, 2010, the October 2010 O Magazine (the "Magazine") was distributed. (
The Magazine promoted an "Own Your Power event" (the "Event"), to be held on September 16, 2010, which was described as "a lively panel discussion about power featuring some of the notables from this issue's Power List." (
The Magazine and/or the Event was thereafter referred to on one episode of The Oprah Winfrey Show; in the December 2010 edition of the O Magazine; on affiliated websites, including www.oprah.com and www.omagazine.info; and on Harpo and Hearst Communications' Twitter and Facebook accounts. (
On July 28, 2011, Plaintiffs filed this action in the District of New Jersey, asserting a barrage of claims under sections 32 and 43 of the Lanham Act (15 U.S.C. §§ 1114, 1125), for: trademark counterfeiting; trademark infringement; reverse confusion; false designation of origin and unfair competition; contributory trademark infringement; and vicarious trademark infringement. Plaintiffs also assert claims under New Jersey State law and common law for: trafficking in counterfeit marks; common law misappropriation; unfair competition; common law trademark infringement; common law civil conspiracy; interference with prospective business and/or economic advantage; and a violation of the consumer fraud act.
On September 23, 2011, Defendants moved to transfer the case to the Southern District of New York, or, in the alternative, to dismiss the case. On November 3, 2011, District Court Judge Stanley R. Chesler granted Defendants' motion to transfer, and the matter was transferred to this Court. On January 13, 2012, Defendants renewed their motion to dismiss before this Court.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
In ruling on this motion, the Court considers the complaint and the exhibits attached to the complaint, which are integral to the complaint and which Plaintiff clearly relied upon in drafting the complaint.
Defendants argue that Plaintiffs' claims should be dismissed because: (1) Plaintiffs failed to allege that any defendant other than Hearst Communications was involved in the alleged infringement; (2) the First Amendment protects Defendants' speech; (3) Defendants did not make a trademark use of the Phrase; (4) Defendants' use of the Phrase constitutes fair use; (5) Plaintiffs have not stated a claim for trademark counterfeiting; and (6) the state and common law claims are purely derivative.
The Court first addresses Plaintiffs' Lanham Act claims since they are the critical components in the Plaintiffs' complaint.
A. Plaintiffs' Lanham Act Claims
Plaintiffs assert claims under the sections 32 and 43 of the Lanham Act for: trademark counterfeiting; trademark infringement; reverse confusion; false designation of origin and unfair competition; contributory trademark infringement; and vicarious trademark infringement. Defendants argue,
1. Fair Use
The fair use defense allows use of protected marks in descriptive ways, provided it does not identify the source or origin of the goods. The Lanham Act codifies this defense: "the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark,. . . which is descriptive of and used fairly and in good faith only to describe goods or services of [a] party, or their geographic origin." 15 U.S.C. § 1115(b)(4).
A trademark use involves an indication of the source or origin of the goods.
Defendants argue that they used the Phrase in its descriptive sense and not to indicate the source or origin of the goods (the Magazine and the Event). The source of the Magazine was clearly identified by the prominent, and distinctive "O" trademark followed by "The Oprah Magazine."
The O Magazine was also identified as the source of the Event, and the Phrase served to describe the Event's theme. Promotional materials identified the Event as: "O, The Oprah Magazine['s] . . . first-ever own your power event in celebration of the October issue cover story," which involved "a lively panel discussion about power featuring some notables from this issue's Power list." (Compl. Ex. E.) Since the promotional materials clearly identified The O Magazine as the source of the Event, the Defendants' use of the Phrase in relation to the Event was not a trademark use.
Plaintiffs argue, however, that Defendants used the Phrase as a trademark, as demonstrated by the fact that: (1) Defendants filed trademark registrations for other phrases; and (2) Defendants "combined their trademarked `O'" with the Own Your Power trademark to create a "single source identifier." (Pl. Opp. 11-12.) Plaintiffs' first argument is untenable. The fact that Defendants registered other marks, even other phrases, does not mean that their use of any other particular phrase necessarily constitutes a trademark use. To the contrary, the fact that the Defendants obtained and prominently displayed their own trademark on the same page as the Phrase is evidence of non-trademark use.
Plaintiffs' second argument is also without merit, because the fact that Plaintiffs' and Defendants' marks are used in conjunction with each other does not alter the above analysis, where defendants' trademark or reputation is well known, clearly displayed, and used to indicator of the source of the product.
Defendants argue that "trademark use is a threshold requirement for a Lanham Act claim" and, therefore, their non-trademark use alone warrants dismissal. The Second Circuit has recognized that "`use" must be decided as a threshold matter," in analyzing trademark infringement claims, because "no such activity is actionable under the Lanham Act absent the `use' of a trademark."
The Lanham Act requirement that the mark be used "to describe the goods," 15 U.S.C. § 1115(b)(4), "has not been narrowly confined," but rather "permits use of words or images that are used . . . in their `descriptive sense.'"
Plaintiffs' arguments to the contrary—that the Phrase does not describe the contents of the Magazine; that it is "vastly more prominent and visually distinctive" from other text on the cover—are to no avail. The manner in which the Defendants used the Phrase on the cover of the Magazine demonstrates that it served in a descriptive capacity. The Magazine blocks off the trademark "O" in a red box on the upper left hand corner. The Phrase, however, is not blocked off, but rather is placed in the middle of text encouraging readers to: "Unlock Your Inner Superstar," "Tap Into Your Strength"; "Focus Your Energy"; and "Let Your Best Self Shine." (Compl. Ex. D.) While Plaintiffs' Phrase is more prominently displayed than these other phrases, that is because it capsulizes the other phrases, and thus the Magazine's contents. Accordingly, the Court finds the Defendants used the Phrase in a descriptive sense.
As to bad faith, a court considers whether a "defendant in adopting its mark intended to capitalize on plaintiff's good will;" and "the overall context in which the mark appear and the totality of factors that could cause consumer confusion."
Plaintiffs' argue that Defendants' bad faith is evidenced by the fact that they knew of and failed to remove the alleged infringing mark. (Pl. Opp. 13-14.) Failure to completely abandon use of a trademark, however, even after receipt of a cease and desist letter, standing alone "`is insufficient to support an allegation of bad faith' as a matter of law."
Plaintiffs have not alleged facts to plausibly suggest that Defendants intended to capitalize on Plaintiffs' good will or that there was a likelihood of consumer confusion. The appearance of the Phrase as used by Plaintiffs and Defendants, and the context in which the Phrase is used differs significantly. Plaintiffs depict the Phrase in all lowercase blue letters, which are not italicized, followed by a trademark; Defendants depict the Phrase in italics, in white ink on the Magazine and black and pink ink for the Event, mixing capital and lower case letters, and printed in a noticeably different font. (
Furthermore, "[s]o long as the defendants in good faith are using the phrase in its descriptive sense and prominently identifying the product with the defendants' marks, the defendants incurs no liability simply because the materials containing the descriptive phrase are so widely disseminated as to form some degree of association in the public's mind between the phrase and the product."
The Court finds that Defendants used the Phrase in good faith. Accordingly, the Defendants' use of the Phrase constitutes fair use under 15 U.S.C. § 1115(b).
2. Trademark Infringement and False Designation of Origin
Fair use is a defense to federal trademark infringement and false designation of origin claims under 15 U.S.C. §§ 1114 and 1125.
3. Reverse Confusion
Plaintiffs' claim for "reverse confusion" does not present "a new claim, but rather an alternative theory of liability for [trademark] infringement under the Lanham Act."
Moreover, even without the fair use defense, a "reverse confusion" theory of trademark infringement liability would still fail. As stated above a trademark "`use' must be decided as a threshold matter [in a trademark infringement claim] because, while any number of activities may be `in commerce' or create a likelihood of confusion, no such activity is actionable under the Lanham Act absent the `use' of a trademark."
Having failed to state a claim for trademark infringement, Plaintiffs' reverse confusion claim fails, and Count Three is dismissed.
4. Contributory and Vicarious Liability
Plaintiffs seek to hold each Defendant liable for contributory and vicarious liability. Both contributory trademark infringement and vicarious trademark infringement are predicated upon the existence of a direct infringement.
Similarly, Plaintiffs' argument that each Defendant is liable based on an alleged partnership or agency relationship fails because there is no predicate Lanham Act violation to attribute to any purported partner or agent of any Defendant. In any event, Plaintiffs failed to adequately allege that a partnership or agency relationship existed between the Defendants.
While the Event was promoted as "In Partnership" with Chico's, Wells Fargo, and Clinique, simply "calling an organization a partnership does not make it one."
Plaintiffs' partnership by estoppels argument fails. Under New Jersey Law, a "purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership." N.J.S.A. 42:1A-20 (emphasis added).
Plaintiffs also claim that an "apparent agency" relationship existed between the Defendants. Apparent authority "arises from the `written or spoken words or any other conduct of the principal which, reasonably interpreted, causes [a] third person to believe that the principal consents to have [an] act done on his behalf by the person purporting to act for him.'"
In sum, Plaintiffs have not stated a claim for contributory or vicarious liability, and their attempts to premise their claims on partnership or agency law fail. Accordingly, the Court dismisses Counts Five and Six.
The Lanham Act defines a "counterfeit" mark as "a spurious mark which is identical with, or substantially indistinguishable from, a registered mark." 15 U.S.C. § 1127. An alleged counterfeit mark "must be compared with the registered mark as it appears on actual merchandise to an average purchaser."
By comparing Defendants' use of the Phrase to Plaintiffs' use of the Phrase, it becomes abundantly clear that Plaintiffs have not stated a claim for trademark counterfeiting. As discussed above, Plaintiffs depict the Phrase in non-italicized lowercase blue letters, followed by a trademark; Defendants depict the Phrase in italics, in either white ink or a combination of black and pink ink, varying between capital and lower case letters, and printed in a noticeably different font. (
First Amendment Concerns
Having disposed of all of Plaintiffs' federal claims, the Court does not reach Defendants' First Amendment argument.
B. State Law And Common Law Claims
Neither party sufficiently addressed Plaintiffs' state law and common law claims (Counts Seven through Thirteen). Defendants argue that these claims are "analogous or derivative" to the federal claims, but devote only two paragraphs to this argument, and provide no specific analysis. (Def. Br. 28-29.) In their opposition, Plaintiffs do not address Defendants' argument or, in general, the merits of their state law and common law claims.
"[A] district court `may decline to exercise supplemental jurisdiction' if it `has dismissed all claims over which it has original jurisdiction.'"
The Court has federal jurisdiction over this case based on the existence of a federal question, under 28 U.S.C. § 1331, and federal trademark claims, under 28 U.S.C. § 1338, but it has dismissed the federal claims. Accordingly, the Court declines supplemental jurisdiction over the state and common law claims and dismisses those claims without prejudice.
For the reasons above, the Defendants' motion to dismiss the federal claims is GRANTED. The Court declines to exercise supplemental jurisdiction over Plaintiffs' state and common law claims and dismisses those claims without prejudice.
The Clerk of Court is directed to terminate this motion (Dkt. No. 51) and close this case