Hqm, Ltd. v. Hatfield, AW-99-2093.

• Decision Date: 02 December 1999
• Docket Number: No. AW-99-2093.,AW-99-2093.
• Citation: 71 F.Supp.2d 500
• Parties: HQM, LTD., and Hatfield, Inc., Plaintiffs, v. William B. HATFIELD, Defendant.
• Court: U.S. District Court — District of Maryland

Page 500

71 F.Supp.2d 500

HQM, LTD., and Hatfield, Inc., Plaintiffs, v. William B. HATFIELD, Defendant.

No. AW-99-2093.

United States District Court, D. Maryland.

December 2, 1999.

Bruce L. Marcus, Marcus & Bonsib, Greenbelt, MD., Laura Genovese Miller, Camille M. Miller, Woodcock, Washburn, Kurtz, Mackiewicz & Norris LLP, Philadelphia, PA for Plaintiffs HQM, Ltd. and Hatfield, Inc.,

A.J. Cooper, Camilla C. McKinney, Krystal A. Jordan, Cooper & Associates, Washington, D.C. for Defendant William B. Hatfield.

MEMORANDUM OPINION

WILLIAMS, District Judge.

On July 14, 1999, Plaintiffs HQM, Ltd. and Hatfield, Inc. filed a lawsuit against Defendant William B. Hatfield. Plaintiffs' Complaint lists four causes of action: federal service mark infringement, federal unfair competition, common law unfair competition, and federal dilution. Plaintiffs' lawsuit centers on Mr. Hatfield's domain name HATFIELD.COM, which he allegedly registered with Network Solutions, Inc. ("NSI") in February 1995.

Presently before the Court is Defendant's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). A hearing was held in open court on November 3, 1999. For the reasons that follow, the Court will grant Defendant's Motion to Dismiss on all counts.

I.

In deciding on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court must "accept the factual allegations in the Plaintiffs' complaint and must construe those facts in the light most favorable to the Plaintiffs." Flood v. New Hanover County, 125 F.3d 249, 251 (4th Cir.1997) citing Estate Constr. Co. v. Miller & Smith Holding Co., 14 F.3d 213, 217-18 (4th Cir.1994).

The Court, however, is "not bound to accept as true a legal conclusion couched as a factual allegation." See Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 2944, 92 L.Ed.2d 209 (1986), citing Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir.1981), aff'd on other grounds, 460 U.S. 325, 103 S.Ct. 1108, 75 L.Ed.2d 96 (1983). As the Fourth Circuit has explained, "Were it otherwise, Rule 12(b)(6) would serve no function, for its purpose is to provide a defendant with a mechanism for testing the legal sufficiency of the complaint." District 28, United Mine Workers of America, Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085-86 (4th Cir.1979); see also Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994) ("[W]e are not so bound by the plaintiffs legal conclusions, since the purpose of Rule 12(b)(6) is to test the legal sufficiency of the complaint.").

The Court may dismiss a complaint if it fails to state a claim upon which relief may be granted. See Fed. Rule of Civ.P. 12(b)(6), cited in Randall v. United States, 30 F.3d at 522. A motion to dismiss should not be granted 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, 101-102, 2 L.Ed.2d 80 (1957).

While the Plaintiffs and the Defendant presented extraneous matters in their briefings, the Court can and will exercise its discretion to exclude them from consideration and decide this motion as a motion to dismiss. Plaintiffs' original attachments, however, are regarded as part of the Complaint. See Fed. Rule Civ.P. 10(c). The Fourth Circuit and courts in this district have also recognized an exception for written documents referred to in the complaint and relied upon by the plaintiff in bringing the civil action. New Beckley Min. Corp. v. International Union, United Mine Workers of America, 18 F.3d 1161, 1164 (4th Cir.1994); citing Cortec Indus. v. Sum Holding, L.P., 949 F.2d 42, 47-48 (2d Cir.1991) citing Fed. Rule Civ.P. 10(c); Biospherics, Inc. v. Forbes, Inc., 989 F.Supp. 748, 749 (D.Md.1997); In re Medimmune, Inc. Securities Litigation, 873 F.Supp. 953, 957 (D.Md.1995). In bringing their civil action, Plaintiffs relied on letters they sent to Mr. Hatfield, was referring to these letters in the Complaint,¹ refer to them in their opposition brief, and presumably again in their proposed amended complaint. After Plaintiffs filed their opposition brief, Defendant attached Plaintiffs' letters to the reply brief Because Plaintiffs referenced and relied on these documents, the Court will consider them in deciding the motion to dismiss. All other matters are excluded, and the Court will decide Defendant's Rule 12(b)(6) motion as a matter of law.

II.

While Plaintiffs claim that Defendant infringed on their marks, the Court is not bound by Plaintiffs' legal conclusions. Instead, the Court must test the legal sufficiency of the Complaint by its factual allegations. The Court will begin with what Plaintiffs label as "William B. Hatfield's Infringing Activities."² This section of the Complaint alleges the following:

(1) William B. Hatfield registered the domain name HATFIELD.COM with Network Solutions, Inc., in February 1995;³

(2) "As a result of the infringing use of this domain name and activities associated therewith, by Defendant William B. Hatfield, customers of HQM may be confused ... thereby injuring HQM;"⁴

(3) "On information and belief, Defendant William B. Hatfield's primary purpose is to hold the domain name HATFIELD.COM hostage," never responding to letter inquiries sent by Plaintiffs about the domain name;⁵ (4) "HQM risks a substantial loss of good will by having its HATFIELD and HATFIELD and Design marks wrongly associated with [Defendant];"⁶

Elsewhere in the Complaint, the Plaintiffs add these factual allegations about Defendant:

(5) The domain name HATFIELD.COM is active for e-mail purposes;⁷

(6) "On information and belief" William B. Hatfield registered the domain name with "actual and constructive notice" of Plaintiffs' marks;⁸

(7) William B. Hatfield did not have the consent of Plaintiffs to "use its mark."⁹

The remaining factual allegations largely concern Plaintiffs' companies, their meat products, and the use and registration of their marks. Plaintiffs allege they own two marks. Their HATFIELD & Design mark is a "unique logo showing a picture of a pig's head with the word HATFIELD on its hat and under its head"; they have used this logo as a mark since August 1956 and registered it on April 16, 1968.¹⁰ Plaintiffs have used their HATFIELD mark since October 9, 1946 and registered it on October 29, 1996.¹¹

As to their goods and services, Plaintiffs further allege that they have used their marks in connection with meat products.¹² Since 1946, Plaintiffs allege they have spent over $50 million advertising with these marks, and their marks have appeared prominently in print, trade literature and advertising, their web sites and web page.¹³ Plaintiffs also allege that their marks are "distinctive," they "have achieved secondary meaning and significance in the minds of the relevant public," and their marks have become "well known and famous."¹⁴ The remaining allegations are largely legal assertions or conclusions, or are redundant. Among their damage demands, the Plaintiffs request that the Court order "That William B. Hatfield be required to assign the domain name HATFIELD.COM to HQM, Ltd."¹⁵

III.

To decide Defendant's Rule 12(b)(6) motion, the Court will now examine the legal sufficiency of the Complaint against its factual allegations. See Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994). Plaintiffs have alleged four counts: federal service mark infringement, federal unfair competition, common law unfair competition, and federal dilution. The Court believes that Plaintiffs' Complaint fails to state a claim upon which relief may be granted.

A.

Beginning with Count I, Plaintiffs' federal infringement claim, the relevant statute, 15 U.S.C.A. § 1114(1) [Lanham Act 32(1)], establishes liability for anyone who, without the consent of the registrant, "uses 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...." 15 U.S.C.A. § 1114(1) [Lanham Act 32(1)], cited in Lone Star Steak-house & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922 (4th Cir.1995). Plaintiffs fail to allege — even "on information and belief" — that Defendant uses their mark in connection with any "goods or services," much less in a way that would satisfy the likelihood of confusion test. Thus, Plaintiffs' Complaint fails as a matter of statutory law. Less there be any doubt as to what Plaintiffs' argument is, their Complaint states that their infringement claim is based on Mr. Hatfield's alleged registration of the domain name HATFIELD.COM and activating it for e-mail purposes, without Plaintiffs' authorization.¹⁶ Plaintiffs cite no caselaw to support "infringement" based on the factual allegations in the Complaint. To the extent Plaintiffs' are collapsing their infringement claim into their dilution arguments, the Court believes they fail as a matter of law as well. See infra III.B.

For similar reasons, this Court must dismiss Plaintiffs' federal unfair competition claim under 15 U.S.C.A. § 1125(a) [Lanham Act § 43(a)], and Plaintiffs' common law unfair competition claim.¹⁷ The federal unfair competition act creates liability for:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which —

(1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person ... shall be liable in a civil action by any person who...