Juno Online Services, L.P. v. Juno Lighting, Inc.

• Decision Date: 29 September 1997
• Docket Number: No. 97 C 791.,97 C 791.
• Citation: 979 F.Supp. 684
• Court: U.S. District Court — Northern District of Illinois
• Parties: JUNO ONLINE SERVICES, L.P., Plaintiff, v. JUNO LIGHTING, INC., Defendant. JUNO LIGHTING, INC., Counterclaim-Plaintiff, v. JUNO ONLINE SERVICES, L.P. and D.E. Shaw & Co., L.P., Counterclaim-Defendants.

979 F.Supp. 684

JUNO ONLINE SERVICES, L.P., Plaintiff, v. JUNO LIGHTING, INC., Defendant.

JUNO LIGHTING, INC., Counterclaim-Plaintiff, v. JUNO ONLINE SERVICES, L.P. and D.E. Shaw & Co., L.P., Counterclaim-Defendants.

No. 97 C 791.

United States District Court, N.D. Illinois, Eastern Division.

September 29, 1997.

Jeffrey E. Stone, Paula Jill Krasny, McDermott, Will & Emery, Chicago, IL, Raphael V. Lupo, McDermott, Will & Emery, Washington, DC, for Juno Online Services and D.E. Shaw & Co., L.P.

Samuel Fifer, Stuart Altschuler, Ronald Scott Bell, Sonnenschein, Nath & Rosenthal, Chicago, IL, Kirk R. Ruthenberg, Catherine Marie Myers, Sonnenschein, Nath & Rosenthal, Washington, DC, for Juno Lighting, Inc.

MEMORANDUM OPINION AND ORDER

LEINENWEBER, District Judge.

Plaintiff Juno Online Service ("June Online") sues defendant Juno Lighting, Inc. ("Juno Lighting") seeking a declaration that it has not violated federal trademark law. In addition, in Counts II-IV, plaintiff seeks declaratory, injunctive and monetary relief for trademark misuse, as well as for violations of the Lanham Act and state unfair competition law. Defendant now moves to dismiss Counts II-IV for failure to state a cause of action and to strike all claims for monetary relief.

I. BACKGROUND

The following information is taken from plaintiff's amended complaint. Juno Online, a Delaware limited partnership with its principle place of business in New York City, is an online provider with approximately 1.5 million subscribers. Juno Lighting, a Delaware corporation with its principal place of business in Des Plaines, Illinois, is a manufacturer and retailer of recessed and track lighting. Juno Lighting has used the Juno name in its logo since 1976 and holds two federal trademarks for the name "Juno."

The current dispute revolves around the Internet and the use of the domain name "juno.com". The Internet is a network of computers that are linked together, allowing computer users to share information and data. See generally, Intermatic Inc. v. Toeppen, 947 F.Supp. 1227, 1230-32 (N.D.Ill. 1996). Each computer that is linked to the Internet contains a numeric address called an Internet protocol address, or IP address. The numeric IP address has four parts, each separated by a decimal point. An example of such an address would be 123.112.101.1. Am. Compl. ¶ 8. However, since it is easier to use, each computer is given an alphanumeric address, called a domain name, that corresponds to the IP address. When an Internet user types in the domain name, the user's computer reads the name as the numeric IP address and contacts the appropriate computer. An example of such a domain name is "juno.com".¹

To send electronic mail ("e-mail"), the user addresses the message to the domain name of the recipient's e-mail provider. America Online, for instance, is an e-mail provider, whose domain name is "aol.com". Each user of the America Online service is given a user name to use with the domain name (e.g., "harrysmith"). Therefore, if a person wants to contact Harry Smith, an America Online subscriber, the user would send an e-mail message to "harrysmith@aol.com". The computer would read "aol.com", translate this into the corresponding numeric IP address, and deliver the message to the America Online computer, which would then deliver the message to Harry Smith.

The domain name also functions as a "World Wide Web" address, if preceded by the letters www (i.e., www.aol.com). Web sites are pages of electronic information that a company, organization, or person wants to advertise to Internet users. Entities and people such as Sports Illustrated, Duke University, the National Basketball Association, and certain individual politicians have web sites that allow Internet users to look up information.

In December of 1994, Juno Online registered the domain name "juno.com" with Network Solutions, Inc. ("NSI") and, subsequently, began providing free e-mail service to customers on April 22, 1996. Those who use Juno Online's e-mail service are given their own user name to use together with Juno Online's domain name (e.g., harrysmith@juno.com). According to Juno Online, its service has been quite popular, with 250,000 new accounts having been opened in January of 1997 alone. Juno Online currently services more than one out of every twenty United States e-mail addresses. Since July 5, 1995, Juno Online has also been using the World Wide Web address "www. juno.com" and, currently, its web page is "visited" thousands of times a day. By virtue of a government contract with the National Science Foundation, NSI is the exclusive registrar of Internet domain names. Therefore, once Juno Online registered the domain name "juno.com" with NSI, no other business or person could obtain that address.

NSI's general policy is to register a specific domain name to the first person or entity to apply for registration. However, in 1995, NSI instituted a "Domain Name Dispute Policy" that allows a third party to challenge a registrant's domain name, despite the "first come, first serve" general rule. According to the policy, to challenge a domain name, the third party must notify the registrant that the use of the domain name violates the third party's intellectual property rights. The third party must also file with NSI a certified copy of a trademark registration indicating that the third party owns a trademark that is the same as the contested domain name. If the domain name registrant cannot produce a similar trademark registration, NSI's policy requires it to suspend the use of the domain name until the issue is resolved. However, if either the registrant or third party files suit against the other before the suspension takes effect, NSI allows the registrant to continue using the domain name and leaves it for the court to decide which party should be allowed to use the domain name.²

In July, 1995, D.E. Shaw & Co., L.P., an affiliate of Juno Online, began applying for federal service mark and trademark protection for the word "Juno", as well as for various designs, slogans, and phone numbers related to "Juno". Juno Lighting sent a letter to Juno Online in June of 1996 stating their opposition to the Juno Online trademark applications. Juno Lighting also sent a letter to NSI on August 28, 1996 requesting that NSI cancel Juno Online's domain name "juno.com".

After NSI received Juno Lighting's letter, pursuant to its dispute policy, NSI sent Juno Online a letter dated September 19, 1996, stating that, unless Juno Online transferred the domain name "juno.com" to Juno Lighting or filed a declaratory judgment action in federal court by October 26, 1996, NSI would suspend the operation of the domain name "juno.com". In response, Juno Online filed this action in the Eastern District of Virginia, naming Juno Lighting and NSI as defendants. However, after NSI agreed not to suspend the use of "juno.com" until the case has been resolved, Juno Online agreed voluntarily to dismiss NSI from the suit and the case was transferred to the Northern District of Illinois. Subsequently, Juno Lighting obtained, by registering with NSI, the domain name "juno-online.com". According to Juno Lighting, this was done in order to prevent others from obtaining the name, thus allowing Juno Lighting to transfer the domain name to Juno Online to help resolve this dispute.

In Count I of the amended complaint, plaintiff seeks a declaration that its use of the domain name "juno.com" does not infringe or dilute Juno Lighting's trademark. In Count II, labeled "trademark misuse," Juno Online seeks a declaration that defendant misused the Juno Lighting trademarks, as well as injunctive relief, monetary damages, and a cancellation of Juno Lighting's trademark registration. Count III alleges a Lanham Act violation arising from Juno Lighting's registration of the domain name "juno-online.com". Count IV speaks in state unfair competition and deceptive trade practices law. Defendant has counterclaimed for trademark infringement and dilution, unfair competition, and violations of Illinois state law. Juno Lighting now moves to dismiss Counts II, III, and IV of plaintiff's amended complaint and to strike all claims for monetary relief. For the following reasons, the court grants defendant's motion.

II. STANDARD

In ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must accept "the well-pleaded allegations in the complaint as true and draw[] all reasonable inferences in favor of the plaintiff." Porter v. DiBlasio, 93 F.3d 301, 305 (7th Cir.1996) (citing Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1429 (7th Cir.1996)). Dismissal is only appropriate if there is no set of facts that, if proven true, would entitle plaintiff to relief. Id. (citing Travel All Over, 73 F.3d at 1429-30). Where the court considers evidence outside the pleadings, as the court has in deciding the motion to dismiss Count II, the motion is treated as a motion for summary judgment. FED. R. CIV. P. 12(B). Summary judgment will be granted only if, viewing the facts and inferences in the light most favorable to the non-moving party, the party moving for summary judgment proves the absence of a genuine issue of material fact and establishes its right to judgment as a matter of law. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

III. TRADEMARK MISUSE

In Count II, plaintiff has asserted a claim for trademark misuse, arguing that Juno Lighting misused its trademark by attempting to put Juno Online out of business. Pl.'s Mem. in Opposition at 6-7. According to plaintiff, Juno Lighting not only tried to have NSI cancel Juno Online's domain name, but it also tried to confuse the public and "extract concessions" from plaintiff by obtaining the domain name "juno-online.com". Defendant, however, has pointed out that trademark misuse is not...