Tempur-Pedic Int'l Inc. v. Angel Beds LLC

• Decision Date: 06 November 2012
• Docket Number: Civil Action No. 4:12–472.
• Citation: 902 F.Supp.2d 958
• Parties: TEMPUR–PEDIC INT'L INC., et. al, Plaintiffs, v. ANGEL BEDS LLC et. al., Defendants.
• Court: U.S. District Court — Southern District of Texas

902 F.Supp.2d 958

TEMPUR–PEDIC INT'L INC., et. al, Plaintiffs,

v.ANGEL BEDS LLC et. al., Defendants.

Civil Action No. 4:12–472.

United States District Court,

S.D. Texas,

Houston Division.

Nov. 6, 2012.

Stephen G. Schortgen, KL Gates LLP, Dallas, TX, for Plaintiffs.

Joseph Roger Williams, Jr., Andrews Kurth, Austin, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

VANESSA D. GILMORE, District Judge.

Pending before the Court is Defendants Angel Beds, LLC, the Merrick Group, LLC, the Merrick Group Capital 1, LTD, and Philip A. Krim's (“Defendants”) Motion to Dismiss and Motion for a More Definite Statement (Instrument No. 9). After a careful review of the pleadings; the motion, responses, and replies; the record; and the applicable law, the Court DENIES Defendants' Motion to Dismiss and Motion for a More Definite Statement (Instrument No. 9).

I.

A.

This is a trademark infringement case. Defendant Angel Beds (“Angel Beds”) and Plaintiff Tempur–Pedic (“Tempur–Pedic”) are competitors selling mattresses, pillows, and other bedding-related products.¹ AngelBeds uses comparative advertising to show shoppers that its products provide features and quality comparable to Tempur–Pedic. Tempur–Pedic claims that these advertising practices infringe and dilute the value of their trademarks. Tempur–Pedic brings suit to enjoin further use of their trademark and to recoup the financial losses it has incurred as a result of the alleged advertising practices.

B.

Tempur–Pedic is involved in the research, development, manufacture, supply, and sale of premium mattresses, pillows, and other comfort products. Tempur–Pedic products are made from TEMPUR Material, a type of viscoelastic, temperature sensitive, and pressure relieving foam that is proprietary to Tempur–Pedic and a valuable, highly confidential trade secret. (Instrument No. 1, at 4). Tempur–Pedic owns various registered and unregistered marks used in connection with the worldwide promotion, distribution, and marketing of Tempur–Pedic products. See (Instrument No. 1, at 7).

Tempur–Pedic maintains a commercial web site at the URL www. tempurpedic. com. Tempur–Pedic uses the Tempur–Pedic Marks to advertise and sell Tempur–Pedic products to consumers directly through its www. tempurpedic. com web site. Tempur–Pedic uses the Tempur–Pedic Marks elsewhere on the Internet to promote Tempur–Pedic products to consumers. In order to preserve the integrity of the Tempur–Pedic brand, Tempur–Pedic generally prohibits its authorized retailers from selling Tempur–Pedic products over the Internet. See (Instrument No. 1, at 8).

According to Plaintiffs, Defendants own and operate multiple commercial websites that sell mattresses and other ancillary products, including but not limited to www. angelbeds. com, www. tempurpedic- comparison. com, and www. mattress- find. com. Tempur–Pedic claims that Defendants use the Tempur–Pedic Marks in a bold and facially improper fashion. Plaintiffs assert that Defendants' improper use of Tempur–Pedic's marks is intended to cause both initial consumer confusion and actual consumer confusion in order to drive consumers to Defendants' websites, where Defendants sell products with names that are confusingly similar to the product names used by Plaintiffs. See (Instrument No. 1, at 8–9).

In 2005, Tempur–Pedic filed a civil lawsuit against Angel Beds, LLC, d/b/a www. angelbeds. com, styled Tempur World, LLC, et al. v. Angelbeds.com, Civil Action No. 1:06–CV–00455–SS, in the United States District Court for the Western District of Texas, Austin Division (“the 2005 Infringement Lawsuit”). The 2005 Infringement Lawsuit was based upon, among other acts, Angel Bed's use of the Tempur–Pedic Mark as part of the domain name www. tempurpedic. angelbeds. com to mislead consumers and to make false and misleading commercial advertising claims relating to the Tempur–Pedic Marks and Tempur–Pedic products in violation of the Lanham Act, 15 U.S.C. § 1125(a), (b), and (c). (Instrument No. 1, at 9).

In 2006, Tempur–Pedic and Angel Beds entered into a written settlement agreement (“Settlement Agreement”) in an effort to resolve Tempur–Pedic's claims in the 2005 Infringement Lawsuit. In the Settlement Agreement, Angel Beds agreed to, inter alia, (1) cease all use of the www. tempurpedic. angelbeds. com URL, (2) cease all use of the registered mark “Tempur–Pedic” and substantially-similar variations in keyword metatags and description metatags, and (3) cease all use of the registered mark “Tempur–Pedic” and substantially similar variations in title tags except that Angelbeds may use the phrase, “Compare Angelbeds Mattresses to Tempur–Pedic Mattresses” or a substantially-similar equivalent phrase in which ‘Angelbeds' precedes the Tempur–Pedic Mark and the Tempur–Pedic Mark is used no more than once in its Title Tag. Additionally, Angel Beds agreed that it will not use Tempur–Pedic's trademarks except in truthful, comparative statements. (Instrument No. 1, at 9).

According to Plaintiffs, in 2008, Angel Beds began using Tempur–Pedic's trademarks on its websites in a manner that violated both the express terms of the Settlement Agreement and also Tempur–Pedic's trademark rights under the Lanham Act and Texas common law. In 2008, for example, Defendants registered the domain name www. tempurpedic comparison. com. Defendants used this website, whose name is confusingly similar to Plaintiffs' website, to place misleading and confusing ads that redirect consumers to www. angelbeds. com. See (Instrument No. 1, at 10). Moreover, from June 2008 until at least September 2011, Angel Beds, without Tempur–Pedic's knowledge or consent, began using numerous trademarks owned by Plaintiffs in a link block on its website in violation of Tempur–Pedic's trademark rights under the Lanham Act and Texas common law and in direct violation of Angel Beds' agreement to only use the Tempur–Pedic Marks in “truthful, comparative statements.” Id.

Additionally, the Plaintiff alleges that by June 2008, Angel Beds renamed its products and began using Tempur–Pedic's product nomenclature in bad faith, causing the relevant public to be confused, mistaken, and deceived into wrongfully attributing source, sponsorship, approval and/or authorization of Defendants' goods, services, and business operations to Tempur–Pedic. See (Instrument No. 1, at 11).

In 2011, when Plaintiffs learned of Defendants' misconduct, Tempur–Pedic provided Defendants with written notice of its intellectual property rights, Defendants' infringement of the Tempur–Pedic Marks, and the unfair practices which had come to Tempur–Pedic's attention. Written notice was provided to Angel Beds on at least three separate occasions in 2011. Although Defendants agreed to change certain aspects of their websites after receiving these notices, Plaintiffs claim that Defendants continue to impermissibly use the Tempur–Pedic Marks in a manner that violates both the Settlement Agreement and state and federal trademark laws. See (Instrument No. 1, at 12).

C.

On February 16, 2012, Plaintiff filed suit in the United States District Court in and for the Southern District of Texas. In the Complaint, Plaintiffs sue the Defendants for (1) trademark infringement under Section 32 of the Lanham Act, (2) unfair competition under Section 43 of the Lanham Act, (3) trademark dilution under Section 43 of the Lanham Act, (4) unfair competition under Texas law, (5) trademark dilution under Texas law, (6) cyber-squatting under Section 32 of the Lanham Act, and (7) breach of contract under Texas law. See (Instrument No. 1).

On May 1, 2012, Defendants filed the instant Motion to Dismiss and Motion for a More Definite Statement. See (Instrument No. 9). In the Motion to Dismiss, Defendants move to dismiss count two—the count regarding unfair competition under the Lanham Act—and count seven—the breach of contract count—pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, on the basis that the count two and count seven fail to state a claim upon which relief can be granted. See (Instrument No. 9, at 11). In the Motion for a More Definite Statement, Defendants argue that count two, the count regarding unfair competition under the Lanham Act, does not precisely describe the nature of the marks Defendant is alleged to have infringed and therefore Defendants cannot reasonably prepare a responsive pleading. See (Instrument No. 9, at 12). Defendants further contend that count three, the count regarding trademark dilution under the Lanham Act, does not adequately detail the dilutive acts Defendants are alleged to have committed and therefore Defendants cannot properly prepare an answer responsive to this allegation. See (Instrument No. 9, at 11–12).

On May 22, 2012, Plaintiffs filed a Response to Defendants' Motion to Dismiss and Motion for a More Definite Statement. See (Instrument No. 11). In the Response, Plaintiffs contend that the Motion to Dismiss should be denied because the Complaint sufficiently articulates a claim regarding both count two, the count regarding unfair competition under the Lanham Act, and count seven, the breach of contract count. See (Instrument No. 11, at 10–22). In the Response, the Plaintiffs further argue that the Defendants' Motion for a More Definite should be denied because the allegations contained in count two and count seven sufficiently describe the basis for Plaintiffs' claims and provide the Defendants with adequate information to formulate a response to the Complaint. See (Instrument No. 11, at 22–24). On May 31, 2012, the Defendants filed a Reply to the Plaintiffs' Response wherein they contend, inter alia, that the Plaintiffs have not articulated a claim of false advertising under section 43(a) of the Lanham Act, the Plaintiffs have not stated a claim for breach of contract, and the trademark dilution claim requires re-pleading. See (Instrument No. 15).

II.

Under Rule 8 of the Federal Rules of Civil Procedure, a pleading must...