Gucci America, Inc. v. Hall & Associates

• Decision Date: 14 March 2001
• Docket Number: No. 00 Civ 549 RMB.,00 Civ 549 RMB.
• Citation: 135 F.Supp.2d 409
• Parties: GUCCI AMERICA, INC., Plaintiff, v. HALL & ASSOCIATES, Denise Hall, and Mindspring Enterprises, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

135 F.Supp.2d 409

GUCCI AMERICA, INC., Plaintiff, v. HALL & ASSOCIATES, Denise Hall, and Mindspring Enterprises, Inc., Defendants.

No. 00 Civ 549 RMB.

United States District Court, S.D. New York.

March 14, 2001.

Milton Springut, Tal S. Benschar, Kalow, Springut & Bressler, L.L.P., New York City, for Plaintiff.

Robert Corn-Revere, Hogan & Hartson, L.L.P., Washington, DC, for Defendants.

DECISION AND ORDER

BERMAN, District Judge.

Plaintiff Gucci America, Inc. ("Plaintiff" or "Gucci") filed this action against defendants Hall & Associates and Denise Hall (together, "Hall") and Hall's Web page hosting service, Mindspring Enterprises, Inc. ("Mindspring" and, together with Hall, "Defendants")¹ asserting claims for trademark infringement, false designation of origin and false descriptions and representations, and unfair competition. Plaintiff also asserts a claim for breach of a prior settlement agreement, dated on or about June 1, 1997 (the "Settlement Agreement"), between Hall and Gucci.² Plaintiff seeks injunctive relief, damages and costs. Mindspring now moves to dismiss Plaintiffs claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Fed.R.Civ.P.").³ For the reasons stated below, Mindspring's motion is denied.

I. Background

Plaintiff owns the trademark and trade name "GUCCI" which is utilized on and in connection with various articles of jewelry, fashion accessories, wearing apparel and related services (the "Gucci Trademark"). (Compl. ¶ 4.) Mindspring, an Internet Service Provider ("ISP"), provides Web page hosting services to Hall,⁴ (at least) at the Uniform Resource Locator ("URL")⁵ www.goldhaus.com (the "goldhaus website"). (Id. ¶ 3C.)⁶ By e-mail communications dated March 26, 1999 and March 27, 1999, Mindspring allegedly was twice notified by Plaintiff that Hall was using Mindspring's services to aid in acts of trademark infringement and unfair competition, including the advertising of jewelry on the goldhaus website which bore (and infringed) the Gucci Trademark. (Id.) Plaintiff alleges that, despite the emails, Mindspring continued to permit Hall to use Mindspring's Internet services to infringe Plaintiffs trademark rights, with actual knowledge of, or in reckless disregard of, Plaintiffs rights and Hall's infringement. (Id.) "The activities of Mindspring ... constitute willful and intentional infringement of plaintiff Gucci's registered trademark; are in total disregard of plaintiff Gucci's rights and were commenced and have continued in spite of Mindspring's knowledge that the use of the Gucci Trademark or a copy or a colorable imitation thereof, was and is in direct contravention of plaintiff Gucci's rights." (Id. ¶ 33.)

Plaintiff asserts claims against Mindspring for direct and contributory trademark infringement under Section 32(1) of the Trademark Act of 1946 (the "Lanham Act"), 15 U.S.C. § 1114(1), false designations of origin and false descriptions and representations under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and trademark infringement and unfair competition under New York common law. (See Compl. ¶¶ 1, 18, 23, 31-35.) Mindspring's instant motion is premised upon two ground: (i) that the Communications Decency Act of 1996, 47 U.S.C. § 230 ("Section 230"), "immunizes Mindspring from liability for information posted [on the goldhaus website] by [Hall]," (Mindspring's Mem. at 3); and (ii) that "Plaintiffs theory of trademark infringement is barred by the First Amendment," (id. at 10).

II. Standard of Review

"[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). "In reviewing a [Fed. R.Civ.P.] 12(b)(6) motion, this Court must accept the factual allegations of the complaint as true and must draw all reasonable inferences in favor of the plaintiff." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir.1996) (citing Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.), cert. denied, 513 U.S. 836, 115 S.Ct. 117, 130 L.Ed.2d 63 (1994)). The movant's burden is very substantial, as "[t]he issue is not whether a plaintiff is likely to prevail ultimately, `but whether the claimant is entitled to offer evidence to support the claims.'" Gant v. Wallingford Bd. of Educ., 69 F.3d 669 (2d Cir.1995) (quoting Weisman v. LeLandais, 532 F.2d 308, 311 (2d Cir.1976) (per curiam)). In sum, "[t]he motion to dismiss for failure to state a claim is disfavored and is seldom granted." Bower v. Weisman, 639 F.Supp. 532, 539 (S.D.N.Y.1986) (citing Arfons v. E.I. du Pont De Nemours & Co., 261 F.2d 434, 435 (2d Cir.1958)).

III. Analysis

A. Mindspring Is Not Immune From Plaintiff's Claims

As Mindspring acknowledges in its motion papers, the interpretation of Section 230 as applied to the (intellectual property) facts presented here is an issue of first impression. (See Mindspring's Mem. at 6.) Mindspring argues that Section 230(c)(1) "immunizes [it] from liability for information posted [on the goldhaus website] by [Hall]." (Mindspring's Mem. at 3.) Section 230(c)(1) provides: "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). Section 230(f)(2) defines "interactive computer service" as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions." Id. § 230(f)(2). Section 230(f)(3) defines "information content provider" as "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service." Id. § 230(f)(3).

Plaintiff does not dispute that Mindspring, as an ISP, is an "interactive computer service." (See Compl. ¶ 3C.) Moreover, the complaint clearly identifies Hall as the "information content provider." (See Compl. ¶¶ 3C, 14-16.) Rather, Plaintiff argues that Mindspring is not immune under § 230(c)(1) from Plaintiffs claims because of the language of Section 230(e)(2), (see Pl.'s Mem. at 3-4): "Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property." 47 U.S.C. § 230(e)(2). The "law[s] pertaining to intellectual property," under which Plaintiff contends that Mindspring is liable, are "a straightforward application of long-established printer-publisher liability and contributory infringement under the Lanham Act," (Pl.'s Mem. at 14). The Court believes that the pivotal issue for consideration here is whether Plaintiff's complaint would withstand a motion to dismiss even in the absence of § 230. The Court believes that the answer to this question is "yes."⁷

1. Plain Language Of Section 230(e)(2)

"It is axiomatic that the plain meaning of a statute controls its interpretation...." Lee v. Bankers Trust Co., 166 F.3d 540 544 (2d Cir.1999) (citing Greenery Rehabilitation Group, Inc. v. Hammon, 150 F.3d 226, 231 (2d Cir.1998)). "[W]hen looking at its language, a court should presume that the statute says what it means." Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1072-73 (2d Cir.1993) (citing Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)); accord United States v. Piervinanzi, 23 F.3d 670, 677 (2d Cir.1994). "Unless otherwise defined, individual statutory words are assumed to carry their ordinary, contemporary, common meaning." Hammon, 150 F.3d at 231 (quotation and citations omitted); accord Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979). "Indeed, when the words of a statute are unambiguous, this first cannon is also the last [and] judicial inquiry is complete." Piervinanzi, 23 F.3d at 677 (quotations and citations omitted).

Section 230(e)(2) unambiguously constrains the Court to construe Section 230(c)(1) in a manner that would neither "limit or expand any law pertaining to intellectual property." 47 U.S.C. § 230(e)(2). Thus, the inquiry involves the application of existing intellectual property law. Under existing intellectual property law, publishers may, under certain circumstances, be held liable for infringement. See 15 U.S.C. § 1114(2)(A)(B); see also Century 21 Real Estate Corp. of Northern Illinois v. R.M. Post, Inc., No. 88 C 0077, 1988 WL 84741 (N.D.Ill. Aug. 9, 1988) (denying motion to dismiss where yellow pages' publishers were alleged to have infringed by listing trademark of (former) licensee who no longer had right to use trademark). Moreover, the United States Supreme Court has held, under the doctrine of contributory infringement, that "if a manufacturer or distributor ... continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement," the manufacturer or distributor itself may held be liable for infringement. Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982); see also Religious Technology Ctr. v. Netcom On-Line Communication Servs., 907 F.Supp. 1361, 1375 (N.D.Cal.1995) (holding that an ISP with knowledge of the infringement may be held liable for contributory copyright infringement). Immunizing Mindspring from Plaintiffs claims, therefore, would "limit" the laws pertaining to intellectual property in contravention of § 230(c)(2). See Mirriam-Webster's Collegiate Dictionary 676 (10th ed.1998) (defining "limit," when used as a verb, to mean "to restrict the bounds or limits of").⁸ The plain language of Section 230(e)(2) precludes Mindspring's claim of immunity.

Although Mindspring recognizes the "appeal" of the Court's...