Tireboots by Universal Canvas, Inc. v. Tiresocks, Inc.
| Docket Number | 20-cv-7404 |
| Decision Date | 08 December 2021 |
| Parties | Tireboots by Universal Canvas, Inc., Plaintiff, v. Tiresocks, Inc., et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff Tireboots by Universal Canvas, Inc., a family-owned business sues its competitors Defendants Tiresocks, Inc. and Tiresocks International, Inc., claiming that Defendants intentionally misdirected customers searching for Universal Canvas' website to their own website. Tiresocks, Inc. (hereinafter Tiresocks) has counterclaimed and asserted affirmative defenses. [16]. Universal Canvas now moves to dismiss the counterclaims and strike the affirmative defenses. [31]. For the reasons explained below, this Court grants in part and denies in part Universal Canvas' motion.
Tiresocks is a family-owned business based in Denver. [16] ¶ 11. Tiresocks offers a wide range of surface protection and safety products for use in construction and heavy machinery industries. Id. ¶ 12. It also offers reliable services to support the products. Id. Over the last nineteen years, Tiresocks has become well known in these industries for producing high-quality materials and services. Id. ¶ 14.
Tiresocks advertises, promotes, and sells its products, and services through its website and distributor partners under the following trademarks: TIRESOCKS, TIRESOCKS, Inc., TS, and SAFETYPADS. Id. ¶ 14. Tiresocks owns a number of trademark registrations for its marks. Id. ¶ 17. During the course of its business, Tiresocks developed a unique alphanumerical designation system for numbering its parts and products; that system (which Tiresocks calls "Part Numbers") incorporates the TS mark. Id. ¶ 20. Tiresocks has used Part Numbers throughout its marketing materials including in its yearly product catalogs. Id. Tiresocks has also created a number of photographs of its products and services and published these photographs in its yearly product catalogs and on its website. Id. ¶ 23. The following is an example of such a photograph:
Plaintiff/Counter-Defendant Universal Canvas directly competes with Tiresocks in producing surface and floor protection equipment targeted at the construction and heavy machinery industries. Id. ¶ 24. Universal Canvas advertises and sells its products through its website and through its product catalog, which is available on its website. Id. ¶ 25. Tiresocks alleges that Universal Canvas has used, is using, and has copied Tiresocks' photograph, marks, and Part Numbers without authorization. Id. ¶ 27. For instance, in its 2019-2020 product catalog, Universal Canvas utilized Tiresocks' Part Numbers, including the exact numeric designations and incorporating the TS mark, to sell Universal Canvas' own products. Id. ¶ 28. Tiresocks also claims that Universal Canvas used the SAFETY PADS mark in its product catalog and the TIRESOCKS mark on its website-all without authorization. Id. ¶¶ 31, 33.
Based upon this alleged conduct, Tiresocks brings counterclaims against Universal Canvas for: federal trademark infringement (Count I); false designation of origin, palming off, and false advertising under 15 U.S.C. § 1125(a) (Count II); violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Count III); violation of the Illinois Uniform Deceptive Trade Practices Act (Count IV); unfair competition (Count V); and common law trademark infringement and unfair competition (Count VI). [16] ¶¶ 47-81.
Universal Canvas has moved to dismiss Tiresocks' counterclaims under Federal Rule of Civil Procedure 12(b)(6) and to strike Tiresocks' affirmative defenses under Rule 12(f). [31].
A motion to dismiss tests the sufficiency of a counterclaim, not the merits of the case. Gunn v. Cont'l Cas. Co., 968 F.3d 802, 806 (7th Cir. 2020). To survive a motion to dismiss under Rule 12(b)(6), the counterclaim “must provide enough factual information to state a claim to relief that is plausible on its face and raise a right to relief above the speculative level.” Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quoting Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014)); see also Fed. R. Civ. P. 8(a)(2) (). A court deciding a Rule 12(b)(6) motion accepts the well-pleaded factual allegations as true and draws all permissible inferences in the pleading party's favor. Degroot v. Client Servs., Inc., 977 F.3d 656, 659 (7th Cir. 2020).
Dismissal for failure to state a claim is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007). Deciding the plausibility of the claim is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Bilek v. Fed. Ins. Co., 8 F.4th 581, 586-87 (7th Cir. 2021) (quoting W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670, 676 (7th Cir. 2016)).
Under Rule 12(f), this Court may strike a party's “insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f); Delta Consulting Grp., Inc. v. R. Randle Constr., Inc., 554 F.3d 1133, 1141 (7th Cir. 2009). While motions to strike “are generally disfavored because of the likelihood that they may only serve to delay proceedings, ” when “striking portions of a pleading ‘remove[s] unnecessary clutter from the case,' the motion may ‘serve to expedite, not delay.'” Naylor v. Streamwood Behavioral Health Sys., No. 11 C 50375, 2012 WL 5499441, at *7 (N.D. Ill. Nov. 13, 2012) (quoting Heller Fin. Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989)).
An affirmative defense must satisfy three criteria to survive a motion to strike under Rule 12(f): (1) it must be properly pleaded as an affirmative defense; (2) it must be adequately pled under Rules 8 and 9; and (3) it must withstand a Rule 12(b)(6) challenge. Hughes v. Napleton's Holdings, LLC, No. 15 C 50137, 2016 WL 6624224, at *2 (N.D. Ill. Nov. 9, 2016); Renalds v. S.R.G. Rest. Grp., 119 F.Supp.2d 800, 802-03 (N.D. Ill. 2000).
Universal Canvas moves to dismiss Tiresocks' counterclaims, arguing that: (1) Tiresocks cannot claim trademark rights in the Part Numbers; (2) the nominative fair use doctrine bars Plaintiff's infringement claims based upon the TIRESOCKS mark; and (3) Tiresocks has failed to sufficiently allege both ownership of its photograph and Universal Canvas' use of the SAFETYPADS mark.
To prevail on trademark infringement and unfair competition claims, a plaintiff must establish two elements: (1) the mark at issue is protectable, and (2) the defendant's use of the mark is likely to cause confusion among consumers. Uncommon, LLC v. Spigen, Inc., 926 F.3d 409, 419 (7th Cir. 2019). With that standard in mind, this Court turns to Universal Canvas' arguments.
First, Universal Canvas argues that Tiresocks cannot claim protectable trademark rights in its TS Part Numbers because “[w]ords, letters, or numbers used solely as a designation of a particular style or model” or a product do not amount to a valid, protectable trademark. [31-3] at 3-7.
To be sure, as Universal Canvas points out, an “alphanumeric term that is used only to designate model, style, or grade (serving as a means to distinguish quality, size, or type)” is typically not protectable. Dwyer Instruments, Inc. v. Sensocon, Inc., 873 F.Supp.2d 1015, 1038 (N.D. Ind. 2012) (quoting In re Dana Corp., 12 U.S.P.Q.2d 1748, 1749 (1989); see also Atlas Elec. Devices Co. v. Q-Panel Lab Prod. Corp., No. 99 C 7654, 2001 WL 1914701, at *3 (N.D. Ill. Nov. 6, 2001).
A trademark, however, broadly includes:
any word, name, symbol, or device, or any combination thereof [used by any person] to identify and distinguish his or her goods, including a unique product, from those manufactured and sold by others and to indicate the source of the goods, even if that source is unknown.
15 U.S.C. § 1127. The law recognizes that the use of an alphanumeric term can become a protectible mark if it acquires secondary meaning. Atlas Elec. Devices, 2001 WL 1914701, at *3. That occurs when consumers uniquely associate a mark with a single maker. Uncommon, 926 F.3d at 424. Tiresocks claims that the Part Numbers, labeled in conjunction with the TS mark, have acquired a secondary meaning because consumers identify the unique alphameric designation system as designating Tiresocks as the source of the products. [16] ¶¶ 20-22. At the motion to dismiss stage, this Court must decline to dismiss the allegations concerning the Part Numbers because secondary meaning “is a question of fact.” Uncommon, 926 F.3d at 424.
Universal Canvas also claims that the doctrine of nominative fair use bars Tiresocks' infringement claims based upon the TIRESOCKS mark. [31-3] at 7-9. The Seventh Circuit has not yet addressed the doctrine of nominative fair use. Data Mgmt. Ass'n Int'l v. Enter. Warehousing Sols Inc., No. 20 C 04711, 2020 WL 7698368, at *2 n.1 (N.D. Ill.Dec. 28, 2020). The Ninth Circuit has explained that nominative fair use occurs when the alleged infringer uses the trademark holder's mark to “describe the trademark holder's product, even if the alleged infringer's ultimate goal is to describe his own product.” Slep-Tone Ent. Corp. v. Coyne, 41 F.Supp.3d 707, 717 (N.D. Ill. 2014) (quoting KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 328 F.3d 1061,...
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