J.M. Smucker Co. v. Promotion in Motion, Inc., Case No. 5:19cv1116

• Decision Date: 07 November 2019
• Docket Number: Case No. 5:19cv1116
• Citation: 420 F.Supp.3d 646
• Parties: J.M. SMUCKER COMPANY, Plaintiff, v. PROMOTION IN MOTION, INC., Defendant
• Court: U.S. District Court — Northern District of Ohio

420 F.Supp.3d 646

J.M. SMUCKER COMPANY, Plaintiff,

v.PROMOTION IN MOTION, INC., Defendant

Case No. 5:19cv1116

United States District Court, N.D. Ohio.

Signed November 7, 2019

Timothy P. Fraelich, Angela R. Gott, Jones Day, Cleveland, OH, for Plaintiff.

Halden R. Schwallie, Michael N. Ungar, Ulmer & Berne, Cleveland, OH, Jonathan Z. King, Richard S. Mandel, Cowan, Leibowitz & Latman, New York, NY, for Defendant.

MEMORANDUM OPINION AND ORDER

PAMELA A. BARKER, U.S. DISTRICT JUDGE

Currently pending is Defendant Promotion in Motion's Motion to Dismiss Amended Complaint. (Doc. No. 14.) Plaintiff J.M. Smucker Company filed a Brief in Opposition (Doc. No.17), to which Defendant responded (Doc. No. 18.) For the following reasons, Defendant's Motion is GRANTED IN PART and DENIED IN PART, as follows. Defendant's Motion to Dismiss is denied to the extent it seeks dismissal based on the lack of personal jurisdiction, but is granted on the basis of the anticipatory action exception to the first-to-file rule.

I. Procedural History

On May 17, 2019, Plaintiff J.M. Smucker Company (hereinafter "Plaintiff" or "Smucker") filed a Complaint in this Court against Defendant Promotion in Motion (hereinafter "Defendant" or "PIM") seeking a declaratory judgment that its use of the phrase "Fruit is Our 1^st Ingredient" did not infringe on any rights of Defendant. (Doc. No. 1.) PIM filed a Motion to Dismiss on June 17, 2019, arguing that Smucker's Complaint should be dismissed for lack of personal jurisdiction and because it constitutes an anticipatory action designed to deprive PIM of its choice of forum. (Doc. No. 9.)

On July 8, 2019, Smucker filed an Amended Complaint, which added an alternative claim for trademark infringement and unfair competition. (Doc. No. 12.) Pursuant to Stipulation of the parties, PIM's Motion to Dismiss was denied as moot. See Non-Document Order dated July 19, 2019.

PIM filed a second Motion to Dismiss shortly thereafter, on July 22, 2019. (Doc. No. 14.) Therein, PIM again argues that the instant case should be dismissed for lack of personal jurisdiction and because it constitutes an anticipatory action designed to deprive PIM of its choice of forum. (Id. ) PIM further asserts that Smucker's trademark infringement claim should be dismissed for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Smucker filed a Brief in Opposition on August 14, 2019 (Doc. No. 17), to which PIM responded on August 28, 2019 (Doc. No. 18.)

II. Factual Allegations

Plaintiff Smucker is a leading manufacturer of consumer food products in North America, including jams, jellies, and preserves. (Doc. No. 1 at ¶¶ 9, 15.) It is an Ohio corporation with its principal place of business in Orrville, Ohio. (Id. at ¶ 2.)

Defendant PIM is in the business of developing, manufacturing, marketing and distributing branded confectionary, snack, and candy products. See Doc No. 15 (Declaration of Michael Rosenberg (hereinafter "Rosenberg Decl.") at ¶ 2). PIM develops these products under its own brands and also pursuant to license agreements from third party entities. (Id. ) PIM is a Delaware corporation with its headquarters and principal place of business in Allendale, New Jersey. (Id. at ¶¶ 3, 4.)

In 2013, Smucker launched its Smucker's Natural Fruit Spread product line. (Doc. No. 1 at ¶ 16.) This product is made from fruit, sugar, fruit pectin

, and citric acid, and contains no preservatives or high-fructose corn syrup. (Id. at ¶ 17.) Smucker alleges that "it is proud of the fact that fruit is the first ingredient listed on many flavors of its Smucker's Natural Fruit Spread product" and, "from time to time, since at least as early as 2014, it has highlighted that fact in its advertising." (Id. at ¶ 19.)

One of PIM's most successful products is Welch's Fruit Snacks, which was introduced in 2001.¹ (Rosenberg Decl. at ¶ 9.)

Since 2015, PIM has prominently used the tagline "Fruit is our 1^st Ingredient!" at the top of the packaging for Welch's Fruit Snacks. (Id. at ¶ 10.) PIM further alleges that it "has also made extensive and repeated usage of the PIM Mark in advertising and promoting the Welch's Fruit Snacks product, spending many millions of dollars on such advertisements, promotions, and marketing." (Id. )

PIM became aware that Smucker was using the slogan "Fruit is Our 1^st Ingredient" in connection with its jams, jellies, and preserves. (Id. at ¶ 11.) On April 2, 2019, PIM sent a cease and desist letter to Smucker, in which it stated that Smucker's "prominent use of an identical replica of the PIM Tagline is likely to deceive consumers into believing that there is some affiliation or connection between the parties' respective products." (Doc. No. 12-1.) PIM stated that "Smucker's conduct...constitutes a violation of the Lanham Trademark Act of 1946, 15 U.S.C. §§ 1114(1) and 1125(a), as well as applicable state law." (Id. ) It demanded that Smucker immediately cease and desist from any further use of designation "Fruit is our 1^st Ingredient" and stated "[u]nless we receive prompt written assurances by no later than April 12, 2019 of Smucker's intention to comply with such demand, we shall have no alternative but to recommend that our client consider further steps designed to protect its valuable trademark rights." (Id. )

On April 19, 2019, Smucker sent a response letter to PIM in which it disputed PIM's claims of infringement. (Doc. No. 12-2.) Specifically, Smucker stated as follows:

The phrase "fruit is our 1st ingredient" is merely descriptive and incapable of functioning as a mark. In both cases, the phrase is merely informational, and is, by definition, descriptive because it literally identifies the ingredients of the respective products. We are within our rights to market our product with a truthful, accurate statement of fact informing consumers about the ingredients of our product.

We do not believe that consumers recognize the Tagline as a trademark, or that it has acquired any secondary meaning, despite the sales and advertising figures referenced in your letter. The phrase "fruit is our 1st ingredient" does not have any commercial impression beyond its ordinary meaning, and it is unlikely that it would be perceived as a mark.

In light of the foregoing, we believe our respective uses of the phrase "fruit is our 1st ingredient" will be able to peacefully coexist in the marketplace without consumer confusion.

(Id. )

PIM responded in a letter dated April 30, 2019. (Doc. No. 12-3.) Therein, PIM asserted that Smucker's "conclusion that the phrase Fruit is Our 1^st Ingredient! is ‘incapable of functioning as a trademark’ because it is merely descriptive is inconsistent with basic principles of trademark law." (Id. ) PIM also "categorically reject[ed] [Smucker's] contention that there is not a likelihood of confusion from the parties' use of the identical slogans." (Id. ) It indicated that "[w]hile our client would prefer to resolve this matter without the need for litigation, it is fully prepared to protect its rights if Smucker insists on continuing with this use rather than developing its own original tagline." (Id. ) PIM stated that it was looking forward to Smucker's "prompt response." (Id. )

On May 14, 2019, PIM sent an email to Smucker "to see if we will be receiving any further response from Smucker on this matter." (Doc. No. 16-4.) In that email, PIM indicated that "if so, we need to receive it by the end of this week." (Id. ) Smucker responded the next day as follows:

"We are referring this matter to our outside counsel for a second opinion, but due to travel schedules we will need additional time to respond. We will get back to you as soon as possible after the INTA Annual Meeting next week." (Doc. No. 16-5.)

Smucker filed the instant lawsuit in this Court two days later, on May 17, 2019. (Doc. No. 1.) That same day, Smucker's outside counsel sent PIM a letter setting forth various arguments rejecting PIM's infringement claim. (Doc. No. 16-6.) Although it had filed suit that day, the letter from Smucker did not advise PIM that it had done so. (Id. ) The docket reflects service was not returned executed on PIM until May 30, 2019. (Doc. No. 4.)

Although it had not yet been served, PIM nonetheless quickly learned that Smucker had filed the instant lawsuit. On May 24, 2019, PIM filed its own action against Smucker for trademark infringement in the United States District Court for the District of New Jersey. (Doc. No. 16-7.) See also Promotion in Motion, Inc. v. The J.M. Smucker Company , Case No. 2:19-CV-12927 (D.N.J.) On June 11, 2019, Smucker filed a motion in the New Jersey action seeking dismissal based on the first-to-file rule or, alternatively, seeking to transfer the instant action to Ohio. As of the date of this Opinion, that motion is still pending.²

III. Analysis

Defendant PIM advances three primary arguments in support of its Motion to Dismiss. First, PIM maintains that the instant action should be dismissed as an "anticipatory action" because it was filed solely to deprive Defendant of its choice of forum. (Doc. No. 14 at pp. 6-10.) Second, PIM argues that this Court lacks personal jurisdiction over it with respect to Smucker's Declaratory Judgment claim (Count I) under both Ohio's Long Arm Statute and the Due Process Clause. (Id. at pp. 10-17.) Finally, PIM asserts that Smucker's alternative Trademark Infringement claim (Count II) should be dismissed for failure to state a claim upon which relief may be granted. (Id. at pp. 17-20.)

The Court will address Defendant's arguments separately, beginning with the threshold issue of personal jurisdiction. See Steel Co v. Citizens for a Better Env't , 523 U.S. 83, 93-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (stating that "the requirement that jurisdiction be established as a threshold matter springs from the nature and limits of the judicial power of the United States and is inflexible and without exception"); Bird v. Parsons , 289 F.3d 865, 872 (6th Cir. 2002) (explaining that courts must first...