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Council on American-Islamic Relations Action Network, Inc., Et. Al

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Council on American-Islamic Relations Action Network, Inc., Et. Al 2:11-cv-10061-AC-MKM Doc # 21 Filed 08/11/11 Pg 1 of 15 Pg ID 648 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION COUNCIL ON AMERICAN-ISLAMIC RELATIONS ACTION NETWORK, INC., CAIR FOUNDATION, and CAIR-MICHIGAN CHAPTER, INC., Plaintiffs, Case No. 11-10061 -vs- HON. AVERN COHN DEBORAH K. SCHLUSSEL, CAIR MICHIGAN, INC., MICHCAIR, CAIR DETROIT, INC., THE LAW OFFICES OF DEBBIE SCHLUSSEL, WWW.DEBBIESCHLUSSEL.COM, and OWNERS and OPERATORS of WWW.CAIRMICHIGAN.COM, WWW.CAIRMICHIGAN.NET, WWW.CAIRDETROIT.COM, WWW.CAIRDETROIT.ORG, and WWW.CAIRDETROIT.NET, Defendants. ___________________________________________________/ DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS I. INTRODUCTION This is a trademark infringement case. It involves CAIR trademarks owned by the Council on American-Islamic Relations Action Network, Inc. (CAIR).1 The three named plaintiffs are: CAIR, a 501(c)(4) corporation; CAIR Foundation, a nonprofit corporation; and CAIR-Michigan Chapter, Inc. (CAIR-MI), a Michigan nonprofit corporation (collectively, 1The service marks are: the CAIR logo, registration no. 3,484, 022; CAIR COUNCIL ON AMERICAN-ISLAMIC RELATIONS, registration no. 3,243,789; and CAIR, registration no. 3,205,355. (See Doc. 6). 2:11-cv-10061-AC-MKM Doc # 21 Filed 08/11/11 Pg 2 of 15 Pg ID 649 plaintiffs). Plaintiffs claim that defendant Deborah K. Schlussel (Schlussel) and five entities related to Schlussel2 (collectively, defendants) are infringing CAIR trademarks by using each without authorization and in a manner that confuses the public, in violation of the Lanham Act, 15 U.S.C. § 1114, et seq. Particularly, plaintiffs claim that defendants are infringing the trademarks by: filing articles of incorporation and certificates of assumed names using the name CAIR; registering domain names using CAIR3; posting blogs falsely representing itself as plaintiffs; and falsely misrepresenting itself as plaintiffs to the Attorney General of the State of Michigan. Now before the Court is defendants’ motion to dismiss on the ground that plaintiffs do not have standing or fail to state a claim. For the reasons that follow, defendants’ motion will be denied in part and granted in part. II. PROCEDURAL BACKGROUND On January 9, 2011, plaintiffs filed a verified complaint (complaint) for a restraining order against defendants. The complaint was in four counts, claiming trademark infringement under federal and state common law. (Doc. 2). The Court twice heard oral argument on the complaint: on January 7, 2011, and January 10, 2011. After oral argument, plaintiffs filed supplemental briefs in support of its 2The additional named defendants are: CAIR, Michigan, Inc.; MICHCAIR, a Michigan nonprofit corporation; CAIR Detroit, Inc., a Michigan nonprofit corporation; The Law Office of Debbie Schlussel; www.debbieschlussel.com; and the owners and operators of , www.cairmichigan.com, www.cairmichigan.net, www.cairdetroit.com, www.cairdetroit.net, and www.cairdetroit.org . 3The websites at issue, www.cairmichigan.com, www.cairmichigan.net, www.cairdetroit.com, www.cairdetroit.net, and www.cairdetroit.org, have been modified since plaintiffs filed the verified complaint, and no longer use the CAIR trademark outside of the domain name itself. 2 2:11-cv-10061-AC-MKM Doc # 21 Filed 08/11/11 Pg 3 of 15 Pg ID 650 motion for a restraining order, (Docs. 6,7), and defendants filed a motion to dismiss. (Doc. 9). On January 27, 2011, the Court stayed plaintiffs’ motions pending the decision on defendants’ motion. (Doc. 10). On April 13, 2011, the Court again heard oral argument on the matter. During the hearing, the Court allowed plaintiffs fourteen (14) days to file an amended complaint, which was filed on April 27, 2011. (Doc. 16). The amended complaint includes six counts as follows: (I) Federal Trademark Infringement and Conspiracy to Commit Federal Trademark Infringement, under the Lanham Act, 15 U.S.C. § 1114(1); (II) Federal Unfair Competition, False Designation of Origin and Trademark Infringement and Conspiracy to Commit Federal Unfair Competition, false Designation of Origin and Trademark Infringement, under the Lanham Act, § 43, 15 U.S.C. § 1125(a); (III) Federal Cyberpiracy and Conspiracy to Commit Federal Cyberpiracy Anticybersquatting Consumer Protection Act, under the Lanham Act, § 43, 15 U.S.C. § 1125(d)(1)(A); (IV) Federal Trademark Dilution and Conspiracy to Commit Federal Trademark Dilution, under the Lanham Act, § 43, 15 U.S.C. § 1125(c); (V) Trademark Infringement and Unfair Competition and Conspiracy to Commit Trademark Infringement Unfair Competition, under MCL § 429.42 and Michigan Common Law; and (VI) Alter Ego - Piercing the Corporate Veil. (Doc. 16). On May 9, 2011, defendants filed a renewed motion to dismiss, (Doc. 17), to which plaintiffs filed a response, (Doc. 18), and defendants replied, (Doc. 20). The matter is now ready for decision. 3 2:11-cv-10061-AC-MKM Doc # 21 Filed 08/11/11 Pg 4 of 15 Pg ID 651 III. STANDARD OF REVIEW A. A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint. To survive a Rule 12(b)(6) motion, the complaint’s “factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007); see also Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007). Only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1950 (2009) (internal quotation marks and citation removed). When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief.” Id. In sum, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.” Id. at 1949 (internal quotation marks and citation omitted). “[D]etermining whether a complaint states a plausible claim is context-specific, requiring the reviewing court to draw on its experience and common sense.” Id. at 1940. B. Whether a party has standing under Article III of the Constitution “involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” MX Group, Inc. v. City of Covington, 293 F.3d 326, 332 (6th Cir.2002) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). In every federal case, standing is a threshold inquiry, which requires the court to determine whether “a plaintiff has alleged such a 4 2:11-cv-10061-AC-MKM Doc # 21 Filed 08/11/11 Pg 5 of 15 Pg ID 652 personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction to justify exercise of the court's remedial powers on his behalf.” Id. IV. ANALYSIS A. Count I: 15 U.S.C. § 1114(1) Defendants argue that each individual plaintiff lacks standing under 15 U.S.C. § 1114(1) of the Lanham Act. A trademark infringement claim brought pursuant to 15 U.S.C. § 1114(1) centers on “whether the defendant's use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties.” Autozone, Inc. v. Tandy Corp., 373 F.3d 786, 791-92 (6th Cir. 2004). Particularly, 15 U.S.C. § 1114(1)(a) states: Any person who shall, without the consent of the registrant . use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive . shall be liable in a civil action by the registrant. 15 U.S.C. § 1114(1)(a) (emphasis added); Autozone, supra, at 791-92. Defendants argue that plaintiffs lack standing as follows: CAIR because it assigned away its right to the trademarks, as stated by plaintiffs in the original complaint; CAIR-MI because it does not have exclusive licensee rights to sue because a written license agreement was not attached to the original complaint; and CAIR Foundation because it is neither a registrant nor an exclusive licensee. In response, Plaintiffs argue CAIR has standing under 15 U.S.C. § 1114(1) because, contrary to defendants’ assertion, a license agreement assigning rights to CAIR-MI does 5 2:11-cv-10061-AC-MKM Doc # 21 Filed 08/11/11 Pg 6 of 15 Pg ID 653 not exist. Rather, plaintiffs state that when in the original complaint it claimed that “CAIR- MI has been the exclusive licensee and authorized user of CAIR’s U.S. registrations in the State of Michigan,” (Doc. 2 p. 4), it meant only that CAIR-MI was authorized to exercise the rights, not that a formal license agreement was in effect or that CAIR-MI was an exclusive licensee. Indeed, in the amended complaint, plaintiffs state that “[CAIR] is the owner and registrant of “www.cair.com.” (Doc. 16 ¶ 24). The amended complaint clarifies that “[CAIR] has authorized [CAIR Foundation] to use the CAIR Trademarks nationwide.” (Id. at ¶ 25). In other words, plaintiffs assert that CAIR remains the sole registrant to the trademarks and thus has standing to sue under 15 U.S.C. § 1114(1). The Court agrees. Here, plaintiffs deny a formal assignment of the trademark rights. Moreover, a written licensing agreement has not been presented by either party to demonstrate that one exists. Thus, viewing the facts in a light most favorable to plaintiffs, the pleadings do not demonstrate that CAIR formally assigned its trademark rights to CAIR-MI such that CAIR no longer has standing.
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