AVIVA USA CORP. v. VAZIRANI No. CV 11-0369-PHX-JAT.
902 F.Supp.2d 1246 (2012)
AVIVA USA CORPORATION, an Iowa corporation; and Aviva Brands Limited, United Kingdom limited company, Plaintiffs, v. Anil VAZIRANI, an individual; Vazirani & Associates Financial, LLC, an Arizona limited liability company; Secured Financial Solutions, LLC, an Arizona limited liability company; James Regan, an individual; and Regan & Associates, LLC, an Arizona Limited liability Company, Defendants. Anil Vazirani, an individual; Vazirani & Associates Financial, LLC, an Arizona limited liability company; and Secured Financial Solutions, LLC, an Arizona limited liability company, Counterclaimants, Aviva USA Corporation, an Iowa corporation; and Aviva Brands Limited, a United Kingdom limited company, Counterdefendants.
United States District Court, D. Arizona.
October 2, 2012.
Andrew Foster Halaby , David Gary Barker , Matthew Thomas Schoonover , Snell & Wilmer LLP, Phoenix, AZ, for Plaintiffs and Counter Defendants.
Andrew S. Friedman , Bonnett Fairbourn Friedman & Balint PC, Andrew L. Pringle , David Geoffrey Bray , Timothy J. Thomason , Mariscal Weeks Mclntyre & Friedlander PA, Phoenix, AZ, for Counter Claimants and Defendants.
Brian M. Mueller , Sherman & Howard LLC, Scottsdale, AZ, for Defendants.
JAMES A. TEILBORG, District Judge.
Pending before the Court are the parties' cross-motions for summary judgment. Plaintiffs and counterdefendants Aviva USA Corporation ("AUSA") and Aviva Brands Limited ("ABL", and together with AUSA, "Aviva") have moved for summary judgment on their federal and state trademark infringement and unfair competition claims and on their cybersquatting claim. Defendants Anil Vazirani, Vazirani
Aviva is one of the largest insurance companies in the world and serves customers in the life insurance and annuity sector. Though the Vazirani Defendants once sold Aviva's life insurance and annuity products, and related services, under an agreement with certain affiliates of Aviva, that relationship has been terminated. Defendants now offer those services in competition with Aviva. Defendant Anil Vazirani, Aviva, and other related parties are presently engaged in a series of legal disputes arising out of the termination of the contractual relationship between Mr. Vazirani and Aviva. In the present lawsuit, Aviva alleges that Defendants have infringed Aviva's trademarks and committed acts of racketeering against Aviva.
A. Aviva's Marks
ABL owns U.S. Trademark Registration No. 2,773,101 for the mark AVIVA as used in connection with life insurance underwriting and related services. According to Aviva, AUSA and its affiliates have, with ABL's authorization, used the AVIVA mark in interstate commerce since at least 2006 to identify AUSA and its affiliates as the source of a variety of life insurance and annuity products, and related services, sold by AUSA's affiliates, and to distinguish those products and services from those sold by others. Aviva also asserts that, since at least November 2006, AUSA and its affiliates have used in commerce a trade dress consisting of (1) a yellow, blue, and green color scheme; (2) the appearance of a ray of light emanating from the yellow background; and (3) the use of a serif, all-capitals font for the AVIVA mark (the "Trade Dress"), to identify AUSA and its affiliates as the source of their life insurance and annuity products and related services, and to distinguish those products and services from those sold by others. Aviva also displays a graphic to the left of the AVIVA mark consisting of a blue, almost-square shaped object, joined at the top with, and separated at the bottom from, a green, almost-rectangular shaped object. Aviva alleges that AUSA has expended great effort and expense to develop and maintain the goodwill associated with the AVIVA mark and the Trade Dress (collectively, "Aviva's Marks"). As they appear on AUSA's website, Aviva's Marks look like this:
B. Mr. Vazirani's Relationship with Aviva
Anil Vazirani is an independent life insurance and annuity sales agent. As an independent agent, Vazirani requires the authorization of any carrier whose life insurance or annuity products he wishes to sell. Vazirani's company, Defendant VAF, operates as an independent marketing organization, or "IMO." Defendant SFS conducts
In the time since his contract with Aviva was terminated, Mr. Vazirani initiated four lawsuits. The first, filed in Maricopa County Superior Court on April 13, 2009, asserted claims by Mr. Vazirani and SFS against certain IMO's and others, whom Mr. Vazirani alleged were involved in his termination. One of the IMO's sued in that action was Creative Marketing, an AUSA subsidiary. The second, filed in the U.S. District Court for the District of Kansas on October 9, 2009, asserted claims by Vazirani and SFS against Mark Heitz, a former employee of AUSA, whom Mr. Vazirani alleged was involved in his termination. The third and fourth lawsuits, in which Mr. Vazirani again alleged wrongful conduct in connection with his termination, were filed on January 27, 2011 in Maricopa County Superior Court and on January 28, 2011 in the District of Kansas, respectively. Mr. Vazirani did not name AUSA or ABL as a defendants in any of the suits.
On July 28, 2010, when only the first two suits were being litigated, Mr. Vazirani's counsel sent an email to counsel for Defendants in those suits. At least one of the attorneys who received the letter apparently also represented AUSA at the time. Doc. 182. The email, in its entirety, stated the following:
Doc. 182 at 76 (emphases in original). The is no evidence that any of the invited discussions of settlement or mediation ever took place.
C. The Defendants' Website and "Blast Emails"
Instead, Mr. Vazirani, along with Mr. Regan and others, implemented a plan to apparently make good on Mr. Vazirani's intention to "publicize the injustices suffered by Mr. Vazirani." Id. This plan primarily involved developing a website that Mr. Vazirani used to criticize Aviva and its business practices ("the Website"). A heading was included on the Website that appeared on each page and read: "AVIVA Uncovered The Sad Truth About Aviva's Business Practices." Doc. 188-1 at 142-52. The heading also incorporates some elements of Aviva's Trade Dress:
The Website includes several different sections, including "Anil's Background," which introduces Mr. Vazirani, his history with Aviva, and his concerns about Aviva, and also includes a photograph of Mr. Vazirani; "Anil's Case Against Aviva," which details the lawsuits initiated by Mr. Vazirani in connection with the termination of his agreement with Aviva; "The Illinois Complaint Against Mark Heitz," which links to a news release about a case alleging deceptive marketing practices against Mr. Heitz and also links to a related complaint filed in that case; "Aviva's Class Action Settlement," which links to a complaint in a case filed against Aviva alleging that Aviva deceptively marketed to elderly people; "Newsroom," which contains no content, but is reserved for "[n]ews releases and related stories" that might appear in that section in the future; and "Tell us
Defendants also registered fourteen domain names in connection with the Website, each of which referenced Aviva. Those domain names are insideaviva.com, avivaexposed.com, avivauncovered.com, aviva-uncovered.com, aviva-lawsuit.com, avivacomplaints.com, avivaplcsucks.com, avivasucksusa.com, anilvaziranivsaviva.com, anilvsaviva.com, avivavsanilvazirani.com, avivavsanil.com, aviva-problems.com, and avivalitigation.com. Doc. 42 at ¶¶ 31-61. Some of these domain names were registered with false names and contact information. Furthermore, Defendants also sent out a series of `blast emails' to hundreds of thousands of life insurance and annuity sales agents and stockbrokers, providing a link to the Website. Doc. 178 at ¶ 3.13. Those emails appear to have all stated, in their entirety, the following: "A detailed summary making a case against Aviva ... http://www.aviva-uncovered.com." E.g., Doc. 179 at 13.
D. Aviva's Racketeering Allegations
In addition to the claims based on trademark infringement, Aviva also alleges that Defendants' conduct constitutes racketeering. Specifically, Aviva contends that Defendants are "participating in, operating and/or controlling a criminal enterprise... targeting Aviva with a campaign of cyber-terrorism in an effort to extort money from Aviva, unfairly compete with Aviva, and otherwise commercially harm Aviva." Doc. 42 at ¶ 1. That alleged "smear campaign" allegedly consists of the Website, "[t]he ostensible purpose [of which] has been to air the Vazirani Defendants' grievances towards Aviva and its associates over the termination of their commercial relationship with the Vazirani Defendants," id. at ¶¶ 1, 4, and the blast e-mails "directed at Aviva's agents, potential agents, and consumers, which disparaged Aviva ... [and] asserted that Aviva had been implicated in a Ponzi scheme...." Id. at ¶ 56. In the amended complaint, Aviva also alleges that the publication of the Website and blast e-mails "have damaged Aviva and will continue to damage Aviva, causing injury to Aviva's reputation and goodwill." Id. at ¶¶ 98, 108, 124. Aviva further contends that the Website and blast e-mails are the fruits of a criminal enterprise directed by Defendants and that, by publishing the Website and e-mails, Defendants have engaged in a "pattern of racketeering activity" that consists of three predicate acts-"[e]xtortion, forgery, and wire fraud." Id. at ¶¶ 5, 20-63. The extortion allegation arises from the email sent by Mr. Vazirani's attorney, in which he describes Mr. Vazirani's intention, in the absence of an equitable settlement or mediation, to publicize negative information about Aviva. The forgery and wire fraud allegations arise from the use of false contact information to register some of the domain names.
E. Aviva's Claims
Aviva subsequently brought suit in this Court, claiming trademark infringement,
II. LEGAL STANDARD FOR SUMMARY JUDGMENT
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support that assertion by ... citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits, or declarations, stipulations... admissions, interrogatory answers, or other materials," or by "showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Id. 56(c)(1)(A) & (B). Thus, summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Initially, the movant bears the burden of pointing out to the Court the basis for the motion and the elements of the causes of action upon which the non-movant will be unable to establish a genuine issue of material fact. Id. at 323, 106 S.Ct. 2548. The burden then shifts to the non-movant to establish the existence of material fact. Id. The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts" by "com[ing] forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting FED.R.CIV.P. 56(e) (1963) (amended 2010)). A dispute about a fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-movant's bare assertions, standing alone, are insufficient to create a material issue of fact and defeat a motion for summary judgment. Id. at 247-48, 106 S.Ct. 2505. However, in the summary judgment context, the Court construes all disputed facts in the light most favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir.2004).
III. AVIVA'S LANHAM ACT INFRINGEMENT CLAIMS
A. Trademark Validity
"Before [trademark] infringement can be shown, the trademark holder must demonstrate that it owns a valid mark, and thus a protectable interest." KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 602 (9th Cir.2005). Here, Aviva claims to have a protectable interest in its AVIVA mark, which its predecessor, Grey Panthers Limited, registered with the U.S. Patent and Trademark Office on Oct. 14, 2003. Doc. 180 at 10. Aviva also claims to have a protectable interest in its Trade Dress, "which [Aviva USA] and its affiliates have used continuously and substantially exclusively since at least November 2006 to identify and distinguish their products and services." Doc. 177 at 12.
Though in their Counterclaims, Counterclaimants alleged that Aviva's Trade Dress "is not inherently distinctive and has not acquired secondary meaning," Doc. 50 at ¶ 14, the Counterclaimants have not offered any arguments in their summary judgment briefing contesting the protectability of Aviva's Trade Dress. Nor have Counterclaimants contested the protectability of the AVIVA mark. Aviva moved for summary judgment in its favor on this part of Counterclaim No. 2. Therefore, summary judgment is granted in favor of Aviva on the part of Counterclaim No. 2 that alleges that Aviva's Trade Dress "is not inherently distinctive and has not acquired secondary meaning." The Court will discuss the remainder of the Counterclaims in greater detail below.
B. Commercial Use
Aviva has alleged that Defendants have violated sections 32 and 43(a) of the federal Lanham Act by unlawfully using Aviva's Marks. Section 32 creates liability for any person's use of a registered mark,
This commercial use requirement comports with the primary purpose of the Lanham Act, which is to "protect consumers who have formed particular associations with a mark from buying a competing product using the same or substantially similar mark and to allow the mark holder to distinguish his product from that of his rivals." Bosley, 403 F.3d at 676. The commercial use requirement also ensures that the Lanham Act's prohibitions on speech are consistent with the First Amendment: "As a matter of First Amendment law, commercial speech may be regulated in ways that would be impermissible if the same regulation were applied to noncommercial expressions." Id. at 677 (citing Florida Bar v. Went For It, Inc., 515 U.S. 618, 623, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995)). Further, the Ninth Circuit has stated that "[t]he First Amendment may offer little protection for a competitor who labels its commercial good with a confusingly similar mark, but trademark rights do not entitle the owner to quash an unauthorized use of the mark by another who is communicating ideas or expressing points of view." Id. (quoting Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 900 (9th Cir.2002)).
The distinction between commercial and noncommercial use is particularly important in the context of consumer or editorial criticism and commentary. See 135 Cong. Rec. H 1207, H 1217 (daily ed. April 13, 1989) (statement of Rep. Kastenmeier) ("[T]he proposed change in section 43(a) should not be read in any way to limit political speech, consumer or editorial comment, parodies, satires, or other constitutionally protected material.... The section is narrowly drafted to encompass only clearly false and misleading commercial speech."). Even though a trademark holder will almost never consent to the use of its mark in conjunction with commentary that is critical of the trademark holder or its products and services, the trademark holder also cannot seek the protections of the Lanham Act to stop such critical use when it does not occur in connection with the sale of goods or services. See Bosley, 403 F.3d at 679 ("The Lanham Act, expressly enacted to be applied in commercial contexts, does not prohibit all unauthorized
In Bosley, the Ninth Circuit addressed this distinction between commercial and noncommercial use in the context of a "cybergripe" website. The plaintiff, Bosley Medical Institute ("Bosley Medical"), was a provider of various surgical hair transplantation, restoration, and replacement services. Bosley, 403 F.3d at 674. Bosley Medical also owned the registered mark "Bosley Medical." Id. The defendant, Kremer, was a "dissatisfied former patient" of Bosley Medical who had attempted to sue Bosley Medical for medical malpractice. Id. at 675. After that suit was dismissed, Kremer purchased the domain name www.BosleyMedical.com. Id. Kremer posted on the website associated with that domain name content that was critical of Bosley Medical, which the court summarized as follows:
Id. In addition, prior to creating the website, Kremer delivered to Bosley Medical a letter warning Bosley Medical of Kremer's intention to spread critical information about the company over the internet and also offering the company's president the opportunity to "discuss this" with Kremer.
Id. at 678 (citing TMI, Inc. v. Maxwell, 368 F.3d 433, 435, 438 (5th Cir.2004) (holding that the commercial use requirement is not satisfied where defendant's site had no outside links)). The court also rejected the possibility that the link to Kremer's lawyers included on the site could transform the site from noncommercial to commercial. Id.
Second, the court found that there was no evidence that "Kremer created his website to enable an extortion scheme in an attempt to profit from registering BosleyMedical.com." Id. Distinguishing the case from others in which a party had attempted to sell the domain name to the party owning the trademark, see, e.g., Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1325 (9th Cir.1998), the court stated that "[t]he letter delivered by Kremer to [Bosley Medical's] headquarters is a threat to expose negative information about [Bosley Medical] on the Internet, but it makes no reference whatsoever to ransoming [Bosley Medical's] trademark or to Kremer's use of the mark as a domain name." Id. Thus, the court found that Kremer's mere threat to publicly criticize Bosley Medical on his website, in the absence of an offer to sell the domain name to Bosley Medical, did not constitute a commercial use of Bosley Medical's trademark.
Finally, Bosley Medical's third argument that the commercial use requirement was satisfied was that Kremer used the mark in connection with, and prevented users from obtaining, Bosley Medical's goods and services. As noted by the Bosley court, the Fourth Circuit has endorsed the view that a parody website, though it has no commercial purpose and does not sell any goods or services, may nonetheless meet the Lanham Act's commercial use requirement if it prevents users from obtaining the goods or services of the entity targeted by the parody. Bosley, 403 F.3d at 678-79 (citing People for the Ethical Treatment of Animals v. Doughney ("PETA"), 263 F.3d 359 (4th Cir.2001)). Specifically, the PETA court stated that the defendant in that case "need not have actually sold goods or services," but rather "need only have prevented users from obtaining
The undisputed facts of this case require a similar outcome. Much like the website in Bosley, there is no evidence here that Defendants offered for sale any goods or services on the Website. Nor did the Website contain any links to other sites that offered goods or services for sale. Additionally, there is no evidence that any of Defendants ever attempted to sell the Website or domain name to Aviva or any other party for profit. Based on the Ninth Circuit's decision in Bosley, these facts all strongly urge the conclusion that the Website was noncommercial.
Nevertheless, Aviva argues that Defendants published the Website "in connection with goods or services" because "it seeks to inflict commercial harm on Aviva" and because the intention of the website was "to divert business from Aviva to [Vazirani]." Doc. 206 at 8. However, to the extent that Aviva suggests that the Website is commercial merely because it prevented users from using or obtaining Aviva's goods or services, that argument is unavailing. As previously described, the Ninth Circuit rejected this reasoning in Bosley. See Bosley, 403 F.3d at 679. Accordingly, this Court will not adopt the broad interpretation of commercial use endorsed by the Fourth Circuit in PETA urged here by Aviva.
Aviva further contends that the Website satisfies the Lanham Act's commercial use requirement because it was designed for "commercial gain." Specifically, Aviva states that
Doc. 206 at 8 (citations omitted).
First, there is no mention of Mr. Vazirani's anilvazirani.com website on the Website. Thus, the Website does not give any indication as to how to find that site, other than perhaps through trial-and-error guessing of the domain name. The Court therefore does not find credible Aviva's claim that Mr. Vazirani intended to "drive business" to his other website.
Also, with regard to the July 28, 2010 "extortionate demand" letter, the Court views this communication from Mr. Vazirani's counsel to Aviva's counsel as analogous to the communications between Kremer and Bosley Medical. The July 28, 2010 letter stated, in pertinent part, the following:
Doc. 182 at 76. Clearly, the letter indicates no attempt to "ransom" Aviva's trademarks or to otherwise sell any of Aviva's trademarks. Instead, as was the case in Bosley, the letter is merely "a threat to expose negative information about [Aviva] ..." Bosley, 403 F.3d at 678. Though the letter does mention the possibility of "discuss[ing] a fair and equitable settlement," there is no evidence of any attempt by Mr. Vazirani to profit from any sale of the trademarks. Rather, in the absence of any additional evidence showing otherwise, the only reasonable interpretation of the letter is that Mr. Vazirani believed he had been injured by Aviva and was seeking some sort of restitution, monetary or otherwise, for those injuries.
Aviva also argues that it deems Mr. Vazirani to be a "competitor" and that the Website somehow functions as promotion or advertising for goods or services that compete with those sold by Aviva.
Doc. 188-1 at Exhibit 4. Also, in the "Anil's Case Against Aviva" section, the Website stated the following:
Id. To interpret these statements as advertising goods or services that compete with Aviva is not reasonable. The Website does not even identify any such goods or services. Rather, at most there is only an implication that, as an apparently successful financial adviser who formerly sold Aviva products, Mr. Vazirani might currently sell products that compete with Aviva's products. The Website provides no contact information or any other information that would allow a visitor to the Website to determine whether Mr. Vazirani sells competing products and how the visitor might go about purchasing those products from him.
Hence, in order to connect the Website to an offer from Mr. Vazirani to sell goods or services, a visitor to the Website must first interpret these statements to imply that Mr. Vazirani sells competing products, then leave the Website to research whether that is indeed true and how to
In addition to Aviva's argument that the Website promotes products that compete with Aviva's products, Aviva also argues that "gripe sites," when operated by competitors, satisfy the commercial use requirement. Aviva cites two cases to support this proposition: HER, Inc. v. RE/MAX First Choice, LLC, 468 F.Supp.2d 964 (S.D.Ohio 2007) and Sunlight Saunas v. Sundance Sauna, 427 F.Supp.2d 1032 (D.Kan.2006). These cases, however, can be distinguished from the facts of this case. In HER, Inc., the defendants specifically directed consumers to the defendants' own website in emails that allegedly infringed the plaintiff's marks, and the allegedly infringing domain names routed visitors to the defendants' website, which provided real estate searching services that directly competed with similar services provided on the plaintiff's website. HER, Inc., 468 F.Supp.2d at 968-71. Thus, that court concluded that "the marks were used by the Defendants in connection with the sale of goods and services." Id. at 978 n. 6.
Similarly, in Sunlight Saunas, the court found that the defendants "had no apparent reason to disparage [the plaintiff's] products except to promote their own." Sunlight Saunas, 427 F.Supp.2d at 1057. In support of that conclusion, the court cited to evidence that the defendants' website temporarily "included direct links to competitors [and] also stated that `other companies offer the same products without the fraudulent claims.'" Id. Thus, the court could not "find as a matter of law that [the] defendants' website speech, including the chosen domain name, [was] `noncommercial' speech." Id.
Here, in contrast, Defendants' Website did not contain any direct links to sites offering competing goods or services and did not promote any competing companies' goods or services. Nor did any of the domain names registered to Defendants route visitors to any commercial websites or other sites that competed with Aviva. Rather, all of the domain names routed visitors to Defendants' Website, which had a noncommercial purpose — that is, criticizing Aviva's business practices.
Id. at 679-80. Accordingly, the Vazirani Defendants' motion for summary judgment on Aviva's Lanham Act infringement claims is granted, and Aviva's motion for summary judgment on those claims is denied.
C. Likelihood of Confusion and Nominative Fair Use
Though the Court has found that Defendants' uses of Aviva's Marks do not satisfy the Lanham Act's commercial use requirement, the Court will nevertheless briefly address the issue of likelihood of confusion because Aviva focused almost exclusively on this issue in its motion for summary judgment on its Lanham Act claims. Both sections 32 and 43(a) of the Lanham Act require a showing that a defendant's use of a trademark is "likely to cause confusion" as to the origin of goods or services. The Ninth Circuit typically uses an eight-factor test, known as the "Sleekcraft factors," to assess whether a use of a mark is likely to cause confusion.
The Ninth Circuit, however, has articulated a different test for cases involving nominative use of a trademark, which occurs when a defendant uses a plaintiff's mark to refer to the plaintiff's products, rather than to the defendant's own products. See New Kids on the Block v. News Am. Pub., Inc., 971 F.2d 302, 308 (9th Cir.1992). That test addresses the following three factors:
Id. The Ninth Circuit has further stated the following with regard to nominative use of a trademark:
Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th Cir.2002); see also Mattel v. Walking Mountain Prods., 353 F.3d 792, 810 n. 19 (9th Cir.2003) ("The nominative fair use test replaces the traditional [Sleekcraft] analysis.").
Here, Defendants have raised a nominative fair use defense. Indeed, Defendant's use of Aviva's trademark and trade dress was undoubtedly a nominative use — that is, the mark was used to refer to Aviva and its products and services rather than Defendants and their products and services. As described above, the Website offers no goods or services for sale and references no goods or services other than those of Aviva. Thus, there is no evidence that Aviva's marks were used in conjunction with any of Defendants' goods or services. Moreover, the Website's entire purpose is to criticize Aviva and its products, which typically necessitates the nominal use of the criticized party's mark. See New Kids on the Block, 971 F.2d at 306 ("Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference or any other such purpose without using the mark."). The Sleekcraft factors therefore are not applicable here. See Welles, 279 F.3d at 801.
Furthermore, the Court finds that Defendants' use of the mark and trade dress satisfy the three-factor nominative fair use test from New Kids on the Block. The first factor is easily met, for there is no clear way for Defendants to convey their criticism for a specific entity, Aviva, without naming that specific entity. There is simply no proper descriptive substitute. Cf. New Kids on the Block, 971 F.2d at 308 ("[O]ne might refer to `the two-time world champions' or `the professional basketball team from Chicago,' but it's far simpler (and more likely to be understood) to refer to the Chicago Bulls.").
The third factor is also satisfied. With regard to potential infringement by both the domain names and the Website itself, the content of the Website must be considered under a likelihood of confusion analysis. See Lamparello v. Falwell, 420 F.3d 309, 316 (4th Cir.2005) ("[A] court must evaluate an allegedly infringing domain name in conjunction with the content of the website identified by the domain name."). As described above, the entire website is concerned with criticizing Aviva and its business practices. Therefore, it is not reasonable to conclude that Defendants have taken any actions that would suggest that Aviva supports or endorses the Website or the associated domain names in any way.
The second factor provides a closer question, but is nonetheless also satisfied. On one hand, Defendants did not merely refer to the name "Aviva" using plain text.
Here, however, the stylized logo and distinctive coloring were not used in a commercial or competitive manner, but rather were used solely to identify Aviva as the object of the Website's criticism. Further, Defendants embedded their own critical commentary within the logo, such that it read "Aviva Uncovered The Sad Truth About Aviva's Business Practices." Doc. 188-1 at 144. The Court notes that the purpose of the nominative fair use test is "to address the risk that nominative use of the mark will inspire a mistaken belief on the part of consumers that the speaker is sponsored or endorsed by the trademark holder." Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1176 (9th Cir. 2010). Indeed, the Ninth Circuit specifically identified the second factor as "indirectly" addressing the risk of such confusion: "Consumers may reasonably infer sponsorship or endorsement if a company uses ... `more' of a mark than necessary." Id. In light of that purpose, the Court finds that the amount of Aviva's trademark and trade dress used by Defendants was reasonable. In other words, Defendants' use of the more distinctive colors and font, in light of the very obvious negative commentary directed toward Aviva that is included in the logo, could not reasonably lead to such confusion. Therefore, Defendants have satisfied all three factors of the nominative fair use test. Accordingly, Defendants' use was a nominative fair use, and there existed no likelihood of confusion.
IV. AVIVA'S CYBERSQUATTING CLAIM
The Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d), was enacted to address the problem of "cybersquatting." The Ninth Circuit has generally described this practice as follows:
Interstellar Starship Services, Ltd. v. Epix, Inc., 304 F.3d 936, 946 (9th Cir. 2002). The ACPA states that
15 U.S.C. § 1125(d)(1)(A). Defendants do not contest the second prong regarding the registration of confusingly similar domain names. However, Defendants argue that Aviva's ACPA claim fails because Aviva cannot prove that Defendants had a bad faith intent to profit from the mark.
Indeed, "[a] finding of `bad faith' is an essential prerequisite to finding an
15 U.S.C. § 1125(d)(1)(B)(i). As the Sixth Circuit has stated, "[t]hese factors attempt `to balance the property interests of trademark owners with the legitimate interests of Internet users and others who seek to make lawful uses of other's marks, including for purposes such as comparative advertising, comment, criticism, parody, news reporting, fair use, etc.'" Lamparello, 420 F.3d at 319 (quoting H.R.Rep. No. 106-412, 1999 WL 970519, at *10) (emphasis provided by Lamparello court).
To begin, the Court notes that there is no evidence in this case of traditional cybersquatting. That is, there is no evidence that Defendants have made any attempt to sell the registered domain names to Aviva for profit. Accordingly, the sixth factor favors Defendants.
Furthermore, as discussed above, the Court has found that the undisputed evidence demonstrates that the Website was noncommercial and that its purpose was to criticize Aviva and to inform potential consumers about Mr. Vazirani's concerns about Aviva's business practices. Importantly,
S.Rep. No. 106-140, 1999 WL 594571, at *14. In accordance with this guidance, other courts have placed great weight on these considerations in finding a lack of bad-faith intent. See, e.g., TMI, Inc. v. Maxwell, 368 F.3d 433, 438-40 (5th Cir. 2004) ("[T]he site's purpose as a method to inform potential customers about a negative experience with the company is key."); Lucas Nursery & Landscaping, Inc. v. Grosse, 359 F.3d 806, 811 (6th Cir.2004) ("Perhaps most important to our conclusion are Grosse's actions, which seem to have been undertaken in the spirit of informing fellow consumers about the practices of a landscaping company that she believed had performed inferior work on her yard."). Thus, because the Defendants used the domain names primarily for purposes of comment and criticism, and further did not do so for profit, the Court finds that the fourth factor strongly favors Defendants.
The fifth factor also favors Defendants. "This factor recognizes that one of the main reasons cybersquatters use other people's trademarks is to divert Internet users to their own sites by creating confusion as to the source, sponsorship, affiliation, or endorsement of the site." S.Rep. No. 106-140, 1999 WL 594571, at *14. Thus, the factor requires the existence of a likelihood of confusion as to these considerations. As discussed above, there is no evidence that a likelihood of confusion exists with regard to the source of the material on the Website. No reasonable jury could find that the criticism on the Website came from a source other than Mr. Vazirani, and certainly not from Aviva itself. Aviva's only evidence to the contrary consists of users who experienced actual, but temporary, confusion over the source of the Website prior to realizing that, because of the content of the Website, it did not originate from Aviva. See, e.g., Doc. 179 at ¶ 25. Such fleeting confusion is not sufficient to establish a likelihood of confusion.
The first three factors, on the other hand, do not favor Defendants because there is no evidence that Defendants had any rights in the domain names prior to registering the domain names and creating the Website. However, though the domain names used by the Defendants may not be related to any trademarks owned by the Defendants, legal names of the Defendants, or goods or services previously sold by Defendants, the domain names chosen by Defendants do relate to the criticism of Aviva. See Doc. 188-2 at 18-40; Doc. 188-5 at 108-145 (the domain names registered by Defendants included insideaviva.com, aviva-exposed.com, avivauncovered.com, aviva-lawsuit.com, aviva-problems.com,
Similarly, the seventh factor also does not favor Defendants. This factor primarily recognizes that "[f]alsification of contact information with the intent to evade identification and service of process by trademark owners is ... a common thread in cases of cybersquatting." S.Rep. No. 106-140, 1999 WL 594571, at *15. Here, while there is evidence that Defendants provided false contact information with the registration of at least some of the domain names, see, e.g., Doc. 188-2 at 21, there is no evidence that they did so with the intent to evade identification or service of process by Aviva. Indeed, Mr. Vazirani clearly identifies himself on the Website and takes credit for its content. Thus, while this factor certainly doesn't favor Defendants, it only minimally favors Aviva, if at all.
The eighth factor also does not favor Defendants. As is stated in the legislative history of the ACPA,
S.Rep. No. 106-140, 1999 WL 594571, at *15-16 (emphasis added). While it is undisputed that Defendants registered multiple domain names to host the Website, there is no evidence of any desire to sell the domain names to Aviva, and thus no evidence that the Defendants were "sitting on [the] marks" in anticipation of any sale. Further, there is no credible evidence of any "warehousing" of domain names in this case because Defendants registered a total of only fourteen domain names, all of which were related to Defendants' hosting of the Website. Thus, though this factor does not favor Defendants, like the seventh factor, it only minimally favors Aviva, if at all.
Finally, Aviva acknowledges that the ninth factor is inapplicable in this case because "Aviva makes no dilution claim." Doc. 177 at 22. This factor is therefore neutral.
After analyzing the relevant factors, the Court finds that Aviva has failed to establish that Defendants acted with the required bad-faith intent to profit when they registered the domain names. Importantly, because the Website was not commercial, it was used only to criticize Aviva, and the Defendants never made any attempt to sell the domain names for profit, Defendants' actions do not fall within the scope of the ACPA. In other words, Defendants' "conduct is not the kind of harm that [the] ACPA was designed to prevent." TMI, 368 F.3d at 440. Therefore, the Court will grant Defendants' motion for summary judgment on Aviva's ACPA claim and deny
V. AVIVA'S COMMON LAW UNFAIR COMPETITION CLAIM
Aviva has asserted a common law unfair competition claim against Defendants based on the same conduct on which Aviva asserts its Lanham Act claims, i.e., trademark infringement. The Arizona Supreme Court has stated that "the essence of unfair competition is confusion of the public. If such confusion exists, the relevant inquiry is whether the name taken by a defendant has previously come to indicate the plaintiff's business." Taylor v. Quebedeaux, 126 Ariz. 515, 516, 617 P.2d 23, 24 (1980) (citations omitted).
Here, as described above, there is no likelihood of confusion of the public arising from Defendants' use of Aviva's marks. Defendants' use of any trademarks or trade dress owned by Aviva was a nominative fair use that was not in connection with any goods or services. The use was noncommercial and directed solely at criticizing Aviva. Therefore, because Aviva has failed to provide any evidence of a likelihood of confusion, the Court will grant summary judgment in favor of Defendants on Aviva's common law unfair competition claim and deny Aviva's motion for summary judgment on that claim.
VI. AVIVA'S RACKETEERING CLAIM
Defendants have also moved for summary judgment on Aviva's state-law racketeering claim brought under Arizona's anti-racketeering statute ("AZRAC"). The Court previously granted Defendants' motion for judgment on the pleadings with regard to Aviva's federal racketeering claim. Doc. 169. The Court's decision to grant that motion was based primarily on Aviva's failure to allege a "pattern of racketeering activity" as that phrase is defined under the federal anti-racketeering statute ("RICO"). Id.; see also 18 U.S.C. §§ 1961(5).
AZRAC also requires evidence of a "pattern of racketeering activity." A.R.S. § 13-2314.04(T)(3). Specifically, the statute states the following:
"Pattern of Racketeering Activity" means ...:
Id. AZRAC also contemplates a pattern of racketeering activity arising from "a single act of racketeering," but only in limited circumstances that do not apply in this
The Arizona Court of Appeals concluded in Lifeflite Med. Air Transport, Inc. v. Native Am. Air Servs., Inc. that the Arizona legislature intended that AZRAC's definition of "pattern of racketeering activity" should be interpreted in accordance with the U.S. Supreme Court's interpretation of that phrase in the federal statute. 198 Ariz. 149, 151-53, 7 P.3d 158 (2000). With regard to the federal statute, the Supreme Court has stated that it was Congress' intent that a plaintiff, in order to demonstrate a pattern of racketeering activity, "must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity." H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) (emphasis in original). In that case, the Supreme Court went on to further elaborate on "these two constituents of RICO's pattern requirement" — relatedness and continuity. Id. at 239-49, 109 S.Ct. 2893.
The Lifeflite court considered the propriety of a lower court's use of a jury instruction regarding a plaintiff's burden to establish a pattern of racketeering activity under Arizona law. Lifeflite, 198 Ariz. at 151, 7 P.3d 158. The instruction paraphrased the Supreme Court's interpretation of continuity from H.J. Inc. Id. (The instruction stated, in part, that "`[c]ontinued unlawful activity' means a series of related acts extending over a substantial period of time or past conduct that by its nature projects into the future with a threat of repetition. Acts extending over a few weeks or months and threatening no future criminal conduct are not `continued unlawful activity.'"); see H.J. Inc., 492 U.S. at 241-42, 109 S.Ct. 2893. The court noted that AZRAC, as amended by the Arizona legislature in 1993, "incorporates the Supreme Court's definition of related acts but does not expressly include the Court's definition of continuing activity." Id. at 152, 7 P.3d 158. Nevertheless, the court further observed that "[t]he history of the amendments to Arizona's racketeering statute suggests a legislative awareness of the Supreme Court's definition of continuing activity and an intention to accept it implicitly, if not explicitly." Id. at 153, 7 P.3d 158. Thus, the court affirmed the lower court's use of the instruction: "Because an interpretation of the Arizona statute to include the federal definition of continued unlawful activity is both reasonable and consistent with the apparent legislative intention in amending the statute, we find that the jury instruction was a proper statement of law." Id.
In Aviva's first amended complaint, Aviva alleged violations of both RICO and AZRAC. Doc. 42 at 24-26. Both the RICO and the AZRAC claims were based on identical alleged predicate acts of extortion, forgery, and wire fraud. Id. Defendants moved for judgment on the pleadings with regard to only the RICO claim, and the Court granted that motion. Doc. 169. In doing so, the Court held that the alleged acts of extortion, forgery, and wire fraud did not meet RICO's continuity requirement under the standard announced in H.J. Inc. Based on the Arizona Court of Appeals' holding in Lifeflite, under which this Court must also apply the H.J. Inc. continuity standard to Aviva's AZRAC claim, Aviva's allegations with respect to that claim are necessarily also insufficient
The conclusion is no different at the summary judgment stage. Aviva's allegations that Defendants engaged in a pattern of racketeering activity are simply not supported by the evidence. In the Court's Order of May 10, 2012, 2012 WL 1648419, the Court held that Aviva had properly alleged only one predicate act of extortion, and assumed that Aviva had sufficiently alleged acts of wire fraud and forgery. As the Court discussed in that Order, even if the Court assumes that Aviva can prove acts of extortion, forgery, and wire fraud, these acts together do not constitute a pattern under the H.J. Inc. framework:
Doc. 169 at 8-9 (footnotes omitted). Aviva has not pointed to any evidence in its summary judgment briefing that would alter the Court's conclusion that Aviva has not met the continuity requirement that applies under both RICO and AZRAC. Accordingly, the Court will grant Defendants' motion for summary judgment on Aviva's AZRAC claim.
VII. AVIVA'S CLAIMS FOR DAMAGES
Because the Court has granted summary judgment in favor of Defendants on
VIII. THE COUNTERCLAIMS
Counterclaimants assert claims of: (1) Non-Infringement of § 32 of the Lanham Act, 15 U.S.C. § 1114 (Counterclaim No. 1) Doc. 50 at 10, ¶¶ 8-12; (2) Non-Infringement of Alleged Trade Dress Rights and Unfair Competition (Counterclaim No. 2) Id. at 11, ¶¶ 13-17; and (3) Lack of Federal Cyberpiracy, Violations of § 43(d) of the Lanham Act and the Anti-Cyber Squatting Protection Act, 15 U.S.C. § 1125(d) (Counterclaim No. 3) Id. at 11-12, ¶¶ 18-22.
As relief, Counterclaimants request the following judicial declarations: (1) that counterclaimants have not infringed counterdefendants' trademark rights or violated § 32 of the Lanham Act, 15 U.S.C. § 1114; (2) that counterdefendants alleged trade dress rights are not protectable; (3) that counterclaimants have not infringed counterdefendants' trademark rights in connection with counterdefendants' alleged trade dress rights and have not violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and (4) that counterclaimants have not infringed upon counterdefendants' trademark rights, have not violated § 43(b) of the Lanham Act. and have not violated the Anti-Cyber Squatting Protection Act, 15 U.S.C. § 1125(d). (Id. at 12, ¶¶ C-F).
As discussed more fully in section III(A) above, Aviva is entitled to summary judgment on the part of Counterclaim No. 2 that seeks a declaration that counterdefendants' alleged trade dress rights are not protectable. With regard to the remainder of the requested declaratory relief, the Counterclaimants have failed to establish that they are entitled to the declarations requested because such declarations are based on allegations that are entirely duplicative of Aviva's claims against Counterclaimants.
Aviva previously requested that all of the Counterclaims be dismissed because such Counterclaims were redundant of Counterclaimants' denials and affirmative defenses. The Court denied Aviva's request to dismiss the Counterclaims without prejudice. Doc. 101. The Court found that a challenge to the Counterclaims was premature because Aviva failed to show that there was no doubt that the Counterclaims would be rendered moot by the adjudication of the main action. Id. The Court has now determined that, with the exception of the part of Counterclaim No. 2, on which Aviva is entitled to summary judgment, the remainder of the Counterclaims are duplicative of the claims alleged in Plaintiffs' Amended Complaint.
Counterclaimants have failed to show that they are entitled to declaratory relief in addition to receiving summary judgment in their favor on the claims in Plaintiffs' Complaint. The "Declaratory Judgment Act provides courts with discretion to either grant or dismiss a counterclaim for declaratory judgment." Doc. 101 (internal citation and quotation omitted). Counterclaimants have failed to show the necessity of declaratory judgment on their Counterclaims. Accordingly, the Court will not enter declaratory judgments on the Counterclaims. Moreover, because declaratory judgment is the only relief sought on the Counterclaims, the Counterclaims (Counterclaim No. 1, the remaining part of
IX. AVIVA'S MOTION TO SEAL
Aviva has filed a motion to seal a four-page exhibit attached to the declaration of Chris Jones, which Aviva has filed in support of its motion for summary judgment. A party seeking to seal a document attached to a dispositive motion must overcome a "strong presumption in favor of access" and meet a "compelling reasons" standard. Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006). That is, "the party must articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process." Id. (citations and punctuation omitted). It is then a court's duty to balance the competing interests of the public and the party seeking to seal the record. Id. at 1179. If a court decides to grant the motion to seal, it must "base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture." Id. (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir.1995)).
Compelling reasons to seal a judicial record typically will exist when such court files might become "a vehicle for improper purposes, such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets." Id. (citing Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 598, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978)). However, "[t]he mere fact that the production of records may lead to a litigant's embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records." Id. (citation omitted).
Aviva states that the exhibit it seeks to seal "contains specific information relating to Aviva USA Corporation's ("AUSA's") marketing and advertising budget and actual expenditures, including detailed breakdowns of AUSA's marketing and advertising efforts." Doc. 186 at 2. Aviva further argues that this information is "protectable trade secret information" that Aviva does not make publicly available and that could jeopardize Aviva's competitive standing if Aviva's competitors were to acquire it. Id. at 2-3.
The Court's review of the exhibit indicates that it does indeed contain information related to budgeted and actual expenditures in various marketing-related categories over a time range spanning several years. Furthermore, the information does not appear to be a type that a business would typically make public or choose to reveal to competitors.
On the other hand, it is not immediately apparent how a competitor might use the information in the exhibit to competitively injure Aviva. In its motion, Aviva only generally states that competitive injury will arise from a competitor's decision, based upon seeing the information in this exhibit, to simply spend more on a particular category than Aviva spends, thereby putting Aviva at a competitive disadvantage. Though the Court acknowledges that there is some plausibility to this theory, it nevertheless does involve some conjecture. Thus, while Aviva has to some degree provided a factual basis for the Court to seal this exhibit, it has left some doubt as to how compelling these reasons are.
However, because the Court finds that the public interest in this exhibit will not
Accordingly, the Court finds that Aviva has stated reasons that are sufficiently compelling, if only barely, to grant its motion to seal. Thus, the Court will permit the four-page Exhibit F to the declaration of Chris Jones to be sealed.
Aviva's Motion for Summary Judgment is granted solely to the extent it requests summary judgment on the part of Counterclaimants' Counterclaim No. 2 that alleges that Aviva's Trade Dress "is not inherently distinctive and has not acquired secondary meaning." Aviva's Motion for Summary Judgment is denied in all other respects.
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