Courtenay Communications Corp. v. Hall, Docket No. 01-9056.

• Decision Date: 24 June 2003
• Docket Number: Docket No. 01-9056.
• Citation: 334 F.3d 210
• Parties: COURTENAY COMMUNICATIONS CORPORATION, Plaintiff-Appellant, v. Patricia HALL and Hallmark Capital Corp., Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

Page 210

334 F.3d 210

COURTENAY COMMUNICATIONS CORPORATION, Plaintiff-Appellant, v. Patricia HALL and Hallmark Capital Corp., Defendants-Appellees.

Docket No. 01-9056.

United States Court of Appeals, Second Circuit.

Argued: April 22, 2002.

Decided: June 24, 2003.

Alfred Ferrer, III, Eaton & Van Winkle, New York, NY, for Plaintiff-Appellant.

Jeffrey W. Herrmann, Vedder Price Kaufman & Kammholz, New York, NY, for Defendants-Appellees.

Before: McLAUGHLIN, F.I. PARKER, SOTOMAYOR, Circuit Judges.

F.I. PARKER, Circuit Judge.

Plaintiff-appellant, Courtenay Communications Corporation ("CCC") appeals from the June 9, 2001 judgment of the United States District Court for the Southern District of New York (Lawrence M. McKenna, Judge), granting the motion of defendants-appellees, Patricia M. Hall and Hallmark Capital Corporation (collectively, "Hall") to dismiss CCC's complaint which alleged various violations of the Lanham Act § 43(a), 15 U.S.C. § 1125(a), and state law claims of libel per se, breach of fiduciary duty and conversion. See Courtenay Communications Corp. v. Hall, No. 01 CIV. 2228(LMM), 2001 WL 669258, at *1 (S.D.N.Y. June 14, 2001). In dismissing CCC's Lanham Act claim, the court relied entirely on its conclusion that CCC's composite mark, which consists of the words "iMarketing News" and various design elements, was generic and not entitled to trademark protection. The court then declined to exercise supplemental jurisdiction over CCC's state law claims and dismissed CCC's complaint. We hold that the district court erred in its trademark analysis, which was improperly based on premature fact-finding. The judgment of the district court is VACATED and REMANDED for further proceedings consistent with this opinion.

I. BACKGROUND

We assume familiarity with the district court decision dismissing CCC's complaint, and denying CCC a preliminary injunction and a temporary restraining order against Hall. The court concluded that CCC's mark was generic and thus not entitled to any trademark protection. On the basis of this determination, the district court dismissed the lawsuit and denied the injunctive relief sought by CCC.

CCC's mark is comprised of the words "iMarketing News" with the following graphic features: the "i" is red, lowercase and the same size as the other letters; "MARKETING NEWS" is in small caps and there is a yellow circle superimposed over the red "i" and part of the "M" in "Marketing News."

In support of its Lanham Act trademark claim, CCC made, inter alia, the following allegations in its complaint:

28. Plaintiff established "iMarketing News" as a trademark for its product.

29. Defendants have a website, www.hallmarkcapital.com, that advertises the services of Ms. Hall and Hallmark Capital.

30. [D]efendants have displayed ... — under the title "What's New" — the mark of "iMarketing News" without the permission of Plaintiff and in a manner that is likely to cause confusion, mistake or deception among persons using ordinary care and prudence in the purchase of defendants' services.

31. In a letter dated February 21, 2001, Plaintiff wrote to defendants and demanded that they remove, inter alia, Plaintiff's trademark from [the website]. Defendants [did not comply.]

32. On defendants' website, a hyperlink under the words "smartest strategic move" in the text beside the "iMarketing News" mark links to another page entitled "Success Stories" and to a paragraph that, because of the association created by the link, describes Plaintiff as "a $15 million privately held direct marketing media company [that] was poorly managed, unfocused and unprepared to take advantage of strategic opportunities. Hallmark Capital provided interim COO services for eight months, overhauling a weak and ineffective corporate infrastructure and creating a strong, dynamic operating environment."

33. Above the paragraph containing the offending statements, a false endorsement purportedly from the "President/Owner" appears stating, "Hallmark Capital gave us the No. 2 executive we had been looking for [sic] years and could never find. Thanks for making this a better place — and us better managers." The President/Owner of Plaintiff never authorized the defendants to use any such statement as an endorsement, and [sic] such President/Owner and Plaintiff consider the services provided by Hall to be unsatisfactory, as evidenced by Plaintiff's termination of Hall.

. . . .

35. The use of the trademark "iMarketing News" or any colorable imitation thereof by defendants is likely to cause confusion, mistake or deception as to the affiliation, connection, association or sponsorship of the services of [defendants] and iMarketing News and/or Plaintiff, and it is believed that it has already caused actual mistake, confusion or deception of the general public.

36. The use of the trademark "iMarketing News" by [defendants] constitutes a knowing and willful false representation concerning the endorsement of their services.

37. These acts of false endorsement by [defendants] have caused and are continuing to cause irreparable injury to the reputation that Plaintiff and iMarketing News have established, and unless the use of iMarketing News by [defendants] is restrained, [defendants] will continue these acts to the detriment of iMarketing News and Plaintiff.

. . . .

39. Plaintiff's trademark "iMarketing News" is the name of Plaintiff's publication of the same name.

40. Defendants, knowing that "iMarketing News" was associated with Plaintiff's publication, sought to take advantage of Plaintiff's trademark and name and engaged in unfair competition by advertising her services on her website by using Plaintiff's trademark.

Compl. ¶¶ 28-33, 35-37, 39-40 [A13-15] Attached to CCC's complaint were printouts from Hall's website that support CCC's allegations.

II. STANDARD OF REVIEW

We review a district court's decision to grant a motion to dismiss de novo. Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir.2003). In considering a motion to dismiss, "we accept all of plaintiff's factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff. We will not affirm the dismissal of a complaint unless it appears beyond doubt, even when the complaint is liberally construed, that the plaintiff can prove no set of facts which would entitle him to relief." Desiderio v. Nat. Ass'n of Sec. Dealers, Inc., 191 F.3d 198, 202 (2d Cir. 1999) (quotations and citations omitted). Further, a complaint need only meet the requirements of our "simplified notice pleading standard [which] relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002); see also Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ("When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.").

When presented with a 12(b)(6) motion, the district court may not consider matters outside of the pleadings without converting the motion into a motion for summary judgment. Friedl v. City of New York, 210 F.3d 79, 83-84 (2d Cir.2000). As this court has noted, "vigorous enforcement of the conversion requirement helps ensure that courts will refrain from engaging in fact-finding when considering a motion to dismiss, and also that plaintiffs are given a fair chance to contest defendants' evidentiary assertions where a court nonetheless does consider evidence extrinsic to the complaint in that context." Amaker v. Weiner, 179 F.3d 48, 50 (2d Cir.1999).

III. DISCUSSION

The district court based its decision to dismiss CCC's complaint entirely on its conclusion that CCC's mark is not entitled to trademark protection because it is generic. See Courtenay Communications Corp., 2001 WL 669258, at *3; see also Courtenay Communications Corp. v. Hall, No. 01 CIV. 2228(LMM), 2001 WL 893863, at *1 (S.D.N.Y. Aug.08, 2001) (denying CCC's motion for reargument, concluding that "the fact that the `i' in plaintiff's asserted mark ... is printed in red surrounded by a yellow circular shape [is not] sufficient when added to a mundanely generic text in very ordinary typefaces to elevate that mark to protectable status." (footnote omitted)).¹ In so doing, the court overlooked two well-established principles when it failed to view the allegations in CCC's complaint in a light most favorable to CCC, and engaged in premature fact-finding — thereby depriving CCC of an opportunity to present evidence to support its claims.

A. The district court failed to view CCC's allegations in a light most favorable to CCC.

CCC's complaint alleged, inter alia, that CCC "established `iMarketing News' as a trademark for its product;" that defendants' use of CCC's mark injures "the reputation that Plaintiff and iMarketing News have established;" and "that `iMarketing News' was associated with Plaintiff's publication." Compl. ¶¶ 28, 37, 40. Although imprecise, these allegations, viewed in a light most favorable to the plaintiff, are sufficient to allege that the mark is distinctive, either inherently (e.g., if it was found to be suggestive in the minds of the public) or otherwise (i.e., if it was found to be descriptive and to have acquired secondary meaning), rather than generic (i.e., if it were found to refer to a genus of products rather than a particular producer's product), and therefore protectable under trademark law.² Based on CCC's allegations, we cannot agree with the district court's conclusion insofar as it may have presumed that CCC did not sufficiently allege a protectable mark.

B. The district court...