Hilsinger Co. v. FBW Invs., LLC

• Decision Date: 17 June 2015
• Docket Number: Civil No. 14–14714–FDS.
• Citation: 109 F.Supp.3d 409
• Parties: The HILSINGER Company, Plaintiff, v. FBW INVESTMENTS, LLC, and Kleen Concepts, LLC, Defendants.
• Court: U.S. District Court — District of Massachusetts

109 F.Supp.3d 409

The HILSINGER Company, Plaintiff,

v.FBW INVESTMENTS, LLC, and Kleen Concepts, LLC, Defendants.

Civil No. 14–14714–FDS.

United States District Court, D. Massachusetts.

Signed June 17, 2015.

Craig M. Scott, Hinckley, Allen & Snyder LLP, Providence, RI, James L. Tuxbury, Hinckley Allen & Snyder, LLP, Boston, MA, for Plaintiff.

Travis S. Crabtree, Gray Reed & McGraw, P.C., Houston, TX, Bruce J. Barker, Chao Hadidi Stark & Barker LLP, Westboro, MA, for Defendants.

MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS TO DISMISS

SAYLOR, District Judge.

This is an action for trademark infringement. Plaintiff Hilsinger Company has brought suit against defendants FBW Investments, LLC and Kleen Concepts, LLC. The complaint alleges that defendants' use of the mark "SHIELDME," in connection with cleaning products has infringed Hilsinger's "SHIELD" brand by creating a likelihood of confusion as to whether "SHIELDME" products "originate with, or are sponsored, affiliated, or approved by, Hilsinger." The complaint asserts claims under the Lanham Act, 15 U.S.C. §§ 1114 and 1125, and for violation of common-law trademark rights.

On February 6, 2015, FBW filed a motion to dismiss the complaint for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2) and improper venue under Fed.R.Civ.P. 12(b)(3), or, in the alternative, to transfer the case to the Southern District of Texas under 28 U.S.C. § 1404(a). On April 14, 2015, Kleen Concepts filed a motion to dismiss for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2).

For the following reasons, FBW's motion to dismiss will be granted and Kleen's motion to dismiss will be denied.

I. Background

A. Factual Background

The Hilsinger Company is a Delaware corporation with a principal place of business in Plainville, Massachusetts. (Second Am. Compl. ¶ 1). It designs and sells eye-care, eyewear, and lens-care products. (Id. ¶ 7). In July 1985, Shield Lenscare Products, Inc. ("SLP") began marketing and selling optical lens cleaning products bearing the word mark, SHIELD. (Id. ¶ 11). On April 25, 1989, SLP obtained a federal trademark registration for SHIELD in connection with "Optical lens cleaning preparation products." (Reg. No. 1,536,028, Second Am. Compl. Ex. A). On June 23, 1999, SLP assigned its interest in the SHIELD Brand to The Hilsinger Company L.P., which subsequently merged with Hilsinger. (Second Am. Compl. ¶ 13). The brand has been used in commerce continuously since approximately July 1985. (Id. ¶ 14).

FBW Investments, LLC is a limited liability company based in Houston, Texas. (Second Am. Compl. ¶ 2). Kleen Concepts, LLC is a limited liability company based in Scottsdale, Arizona. (Id. ¶ 3).

In January 2010, Kleen Concepts began producing and selling products under the SHIELDME mark. (Russell Decl. ¶ 5, Docket No. 46). In July 2010, it applied for trademark registration with the USPTO for the SHIELDME mark for a "Kit containing spray to eliminate bacteria and germs on surfaces, spray to provide antimicrobial protection on surfaces, and antimicrobial c[l]oth." (Second Am. Compl. ¶ 18). On September 20, 2011, Kleen Concepts obtained federal trademark registration 4,027,820 for the first SHIELDME mark. (Id. ¶ 19; Second Am. Compl. Ex. B). On January 21, 2013, Kleen assigned its interest in the '820 trademark to FBW. (Second Am. Compl. ¶ 20). On January 22, 2013, FBW applied for trademark registration with the USPTO for the mark SHIELDME for "Canned pressurized air for dusting and cleaning purposes; Cleaning agents and preparations; Cleaning agents for cleaning surfaces; Cleaning preparations for electronic devices and screens; Hand cleaning preparations." (Id. ¶ 21). On March 18, 2014, FBW obtained federal trademark registration 4,497,007 for the second SHIELDME mark. (Id. ¶ 24; Second Am. Compl. Ex. C).

The complaint alleges that in late 2013 or early 2014, products bearing the SHIELDME marks began appearing in Walmart stores. (Second Am. Compl. ¶ 27). Those products allegedly appeared in close proximity to SHIELD Brand products that Hilsinger had been selling to Walmart for years. (Id. ). Products bearing the SHIELDME marks are also available for purchase online, including at Amazon.com. (Scott Decl. Ex. 4, Docket No. 12–1). The website http://www.shieldmeproducts.com contains information about SHIELDME products, although it is not possible to buy products directly on the site. (Scott Decl. Ex. 5, Docket No. 12–1). The website allows users to tweet product information, "like" products on Facebook, e-mail product information to friends, comment directly on the website, and post comments about the product on the product Facebook page. (Scott Decl. ¶ 2, Ex. 1, Docket No. 26–1). In addition, a "contact" page provides website visitors with contact information for "ShieldMe Products" and allows visitors to send a message. (Scott Decl. Ex. 1, Docket No. 26–1). SHIELDME products are available for purchase (and in-store pick-up after on-line purchase) at Walmart, Sears, and Kmart stores throughout Massachusetts. (Scott Decl. ¶ 12, Ex. 7, Docket No. 12–1; see also Suh Decl., Docket No. 33–2). These products are also available for purchase at a Micro Center Computer and Electronics store in Cambridge, Massachusetts. (Stack Decl. ¶¶ 2–4, Exs. 1–2, Docket No. 47).

On July 30, 2014, Hilsinger sent FBW a cease-and-desist letter demanding that it stop using the SHIELDME marks. (Scott Decl. Ex. 2). On August 14, 2014, attorney Maria Speth responded to the cease-and-desist letter. (Scott Decl. Ex. 3). In her response, she stated the following:

Our firm represents FBW Investments, LLC, the owner of the federally registered trademark SHIELDME in connection with "kits containing sanitizing spray to eliminate the growth of bacteria and germs on surfaces, disinfecting spray to provide antimicrobial protection on surfaces, and cloth wipes impregnated with all purpose disinfecting preparations, all used for bacteria and germ prevention" and in connection with "canned pressurized air for dusting and cleaning purposes; cleaning agents and preparations; cleaning agents for cleaning surfaces; cleaning preparations for electronic devices and screens; hand cleaning preparations." (Registration numbers 4027820 and 4497007 ). Our client has used the SHIELDME trademark in connection with the products described above for over four years.

(Id. ).

In this proceeding, Speth filed an affidavit in which she stated that in responding to the cease and desist letter, she was acting "on behalf of and at the direction of Kleen Concepts." (Speth Decl. ¶ 7). She stated that "[i]n hindsight, I should have clarified in my August 14, 2014 letter that although FBW was the registrant, Kleen Concepts was the entity that manufactured and sold the SHIELDME product." (Id. ¶ 8).

Ronnie Weinstein, a managing member of FBW, also submitted an affidavit, in which he stated that "FBW has no business operation of any kind. It does not manufacture or sell any product, and it does not provide any service. It only holds real estate assets located in Texas." (Weinstein Decl. ¶ 2, Docket No. 9–1). He further stated that "FBW does not use the SHIELDME trademark or make, sell or distribute any product identified by the mark SHIELDME. To FBW's knowledge, Kleen Concepts is the only entity that has used the SHIELDME mark and sold products under that name." (Id. ¶ 7).

Grant Russell, the manager of Kleen Concepts, submitted an affidavit stating that "FBW does not use the SHIELDME trademark or make, sell or distribute any product identified by the mark SHIELDME." (Russell Decl. ¶ 11, Docket No. 9–2). He further stated that "FBW is not involved in Kleen Concepts' operations. FBW has no control over the sale of any SHIELDME products, including the states in which Kleen Concepts markets, distributes, or sells products. FBW does not receive any form of compensation arising from Kleen Concept's [sic] use of the SHIELDME trademark." (Id. ¶ 12).

At the time that Hilsinger filed this action against FBW, FBW was the record owner of the two SHIELDME mark trademark registrations. (See Weinstein Decl. ¶ 5, Docket No. 9–1). Although the marks were assigned to FBW, the assignment was done "with the understanding that Kleen Concepts would continue to use the trademark." (Id. ). On February 12, 2015, after this action had commenced, FBW assigned both SHIELDME trademarks to Kleen Concepts. (Speth Decl. ¶ 9).

According to Russell, Kleen Concepts "is based entirely in Arizona and has no operations, offices, assets, or employees in Massachusetts." (Russell Decl. ¶ 4, Docket No. 46). It "has not shipped the SHIELDME products into Massachusetts and does not ship [them] into Massachusetts." (Id. ¶ 6). Although Kleen Concepts sells to Walmart, Walmart "picks up SHIELDME products from Kleen Concepts' facility in Scottsdale, Arizona. From Scottsdale, Walmart trucks the products to its distribution centers, none of which are in Massachusetts." (Id. ¶ 7). Kleen Concepts admits that Walmart "ships a small fraction of the SHIELDME products from its distribution center to its retail stores in Massachusetts." (Id. ¶ 8). Kleen Concepts also sells to Sears Roebuck & Co., and ships SHIELDME products to Sears at distribution centers in Pennsylvania, Illinois, Texas, and California. (Id. ¶¶ 9, 10). It does not ship those products directly to Sears or Kmart stores in Massachusetts. (Id. ¶ 11). Likewise, Kleen Concepts admits that it sells its products on Amazon. (Id. ¶ 12). It does not ship directly to customers who buy on Amazon. (Id. ¶ 14). Rather, it ships SHIELDME products to Amazon's distribution centers in Kentucky, Pennsylvania, Arizona, and Indiana. (Id. ¶ 13). In 2014, "Kleen Concepts sold a total of $11,090 worth of SHIELDME lens cleaning products to third-party retailers who brought the products into Massachusetts." (Id. ¶ 18). It sold a total of "$14,900 in all SHIELDME products ... to third-party retailers who brought the products into Massachusetts." (Id. ¶ 19). According...