Macia v. Microsoft Corp., 2:00-CV-299.

• Decision Date: 21 June 2001
• Docket Number: No. 2:00-CV-299.,2:00-CV-299.
• Citation: 152 F.Supp.2d 535
• Parties: Harland A. MACIA, III, d/b/a Catamount Software, Plaintiff, v. MICROSOFT CORPORATION, Intuit, Inc., and Meca Software, LLC, Defendants.
• Court: U.S. District Court — District of Vermont

Page 535

152 F.Supp.2d 535

Harland A. MACIA, III, d/b/a Catamount Software, Plaintiff, v. MICROSOFT CORPORATION, Intuit, Inc., and Meca Software, LLC, Defendants.

No. 2:00-CV-299.

United States District Court, D. Vermont.

June 21, 2001.

COPYRIGHT MATERIAL OMITTED

David Seth Putter, Putter & Edson, LLP, Montpelier, VT, Markus Brakhan, Esq., The Law Office of Markus Brakhan, Burlington, VT, for Harland A Macia, III, d/b/a Catamount Software.

John T Sartore, Paul, Frank & Collins, Burlington, VT, John Thomas Brown, Esq., Demetra Merikas, Esq., Pattishall, McAuliffe, Newbury, Hilliard & Geraldson, Chicago, IL, Linda Norman, Esq., Microsoft Corporation USA, Redmond, WA, for Microsoft Corporation.

Walter Edmond Judge, Jr., Esq., Eric Andrew Poehlmann, Esq., Downs, Rachlin & Martin, P.C., Burlington, VT, for Intuit, Inc.

Shapleigh Smith, Jr., Esq., Dinse, Knapp & McAndrew, P.C., Burlington, VT, for Meca Software, LLC.

OPINION AND ORDER

SESSIONS, District Judge.

In this case asserting trademark infringement and unfair competition claims under the Lanham Act and related state law, Defendant Intuit, Inc. ("Intuit") has moved to dismiss the counts asserted against it for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons that follow, Intuit's motion is granted in part and denied in part.

I. Factual Background

The following facts are derived from the Amended Complaint and taken as true for purposes of this motion to dismiss. Plaintiff Harland A. Macia, III, doing business as Catamount Software ("Catamount"), is a developer and marketer of computer software with a principal place of business in Essex, Vermont. Intuit is a developer and marketer of computer software incorporated under the laws of Delaware, having a principal place of business in Mountain View, California.

Catamount has developed particular expertise in programming for handheld computers, and offers software for sale from its Vermont headquarters, available online at www.catamount.com. Using the name "PocketMoney," Catamount developed and released an accounting program for handheld computers. It sold its first copy of "PocketMoney" in June, 1994. PocketMoney allows a user to track and manage various cash, bank and credit card account transactions.

Catamount applied for registration of the mark "PocketMoney" in the United States, Vermont, Japan, Switzerland and the European Union. The mark has been granted registration in Vermont, Switzerland, and the European Union. Catamount has used the mark "PocketMoney" continuously in interstate and international commerce for more than six years.

Intuit filed an Intent to Use ("ITU") application for the mark "Pocket Money" on February 7, 1995. An ITU applicant must verify that it has a bona fide intention to use the mark in commerce on or in connection with goods or services listed in the application. See 15 U.S.C.A. § 1051(b); 37 C.F.R. § 2.34(a)(2)(i) (2001). Between 1996 and 1999 Intuit sought and was granted several extensions of its ITU application by the United States Patent & Trademark Office ("PTO").

Catamount wrote Intuit a letter dated January 30, 1998, asserting its trademark rights. After several communications between the parties, Intuit represented that it would abandon its application. On February 17, 1998 Catamount filed its application for trademark registration with the PTO. On April 2, 1998, Intuit obtained its third extension of its application. Catamount protested, and Intuit again represented that it would abandon its application. But on September 3, 1998, Intuit obtained its fourth extension.

On November 17, 1998 the PTO denied approval of the Catamount application, finding that the Intuit application was a "Prior Pending Mark." The PTO, at Catamount's request, suspended its application, pending resolution of the Intuit ITU application. Intuit obtained yet another extension in March 1999, but continued to tell Catamount that it would abandon its application. On July 19, 1999, Intuit filed an "explicit abandonment" of its Pocket Money application.

The Catamount application for registration was approved for publication on February 3, 2000. As of the filing of this action, Catamount had not perfected the registration of its trademark in the United States.

Catamount's Amended Complaint brings ten counts against three Defendants: Microsoft Corporation, Meca Software, LLC, and Intuit. Four of the ten counts are asserted against Intuit: Counts II, V, IX and X. Count II alleges infringement by Intuit of Catamount's unregistered trademark "PocketMoney." Specifically it claims that Intuit's use of the term "Pocket Money" in its requests for extensions of its application for trademark registration was a violation of Section 32 of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A). In Count V Catamount alleges that the same conduct violated Section 2530 of Title 9 of the Vermont Statutes Annotated.

Count IX asserts a claim against Intuit for slander of title under Vermont common law. Specifically it charges that Intuit knowingly, willfully and maliciously made false representations to the PTO that it had the right to register the trademark "Pocket Money" and a bona fide intent to use the mark.

Count X asserts a promissory estoppel claim under Vermont common law against Intuit. Catamount charges that Intuit promised to abandon its application and failed to honor its promises, and that Catamount relied on those promises to its detriment.

II. Discussion

A. Standard

A complaint will 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 [its] claim which would entitle [it] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). "[B]ald assertions and conclusions of law will not suffice to state a claim," but a district court "must accept as true all of the factual allegations set out in plaintiff's complaint, draw inferences from those allegations in the light most favorable to plaintiff, and construe the complaint liberally." Tarshis v. Riese Org., 211 F.3d 30, 35 (2d Cir.2000).

B. Lanham Act: "Use in Commerce"

Section 1125(a)(1)(A) of Title 15 of the United States Code authorizes a civil action against any person who

in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, ... which ... 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.

15 U.S.C. § 1125(a)(1)(A). Section 1127 defines "use in commerce" as "the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark." 15 U.S.C. § 1127. In connection with goods, a mark will be considered in use in commerce if it is placed on the goods or their containers or on documents associated with the goods or their sale, and the goods are sold or transported in commerce. Id.

The Lanham Act was "intended to make actionable the deceptive and misleading use of marks and to protect persons engaged in ... commerce against unfair competition." Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 767-68, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). As the statutory language indicates, "the central inquiry [in a Lanham Act infringement claim] is whether the use of a marking is likely to cause consumer confusion." Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1038 (2d Cir. 1992) (emphasis supplied). See also Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir.2000) (trademark infringement claim requires proof that use is likely to confuse consumers); Polymer Tech. Corp. v. Mimran, 37 F.3d 74, 80 (2d Cir.1994) (consumer confusion is hallmark of any trademark infringement claim).

The Amended Complaint does not allege that Intuit made any use in commerce of PocketMoney or any similar mark. The only alleged use of the mark is Intuit's filing of an ITU trademark application. Unless and until Intuit uses the mark in the course of trade, to identify actual goods for sale or transport, it cannot be subject to suit for trademark infringement under § 1125(a). See, e.g., Kusek v. Family Circle, Inc., 894 F.Supp. 522, 532 (D.Mass.1995) (mere registration does not amount to "use" of mark); Cognotec Servs. Ltd. v. Morgan Guar. Trust Co. of N.Y., 862 F.Supp. 45, 50-51 (S.D.N.Y. 1994) (bank's internal distribution of allegedly infringing materials failed to state claim of Lanham Act violation where no materials were disseminated "in commerce"); Tubeco, Inc. v. Crippen Pipe Fabrication Corp., 402 F.Supp. 838, 847-48 (E.D.N.Y.1975) (because Lanham Act was directed against false representations of goods in interstate commerce, motion to dismiss granted where no sales of goods in commerce took place), aff'd, 538 F.2d 314 (2d Cir.1976).

Because Catamount has failed to allege that Intuit used PocketMoney or any similar term in commerce, Count II of its Amended Complaint must be dismissed.

C. Trademark infringement claim under Vermont law

Catamount has also asserted a trademark infringement claim against Intuit under Vermont law. Section 2530(1) of Title 9, Vermont Statutes Annotated, provides that "[s]ubject to the provisions of section 2532 of this title, no person shall knowingly and wilfully ... [f]alsely make, counterfeit, imitate, sell, offer for sale, or in any way utter or circulate any trademark which has been registered in accordance with the provisions of this subchapter." Vt. Stat. Ann. tit. 9, § 2530(1) (1993) (emphasis supplied).

Catamount alleges that by submitting extension requests to the PTO it imitated and uttered a Vermont-registered trademark. Assuming for the sake of argument that the elements of a trademark infringement claim under Vermont law do not include a "use...