Summary
granting defendant's motion to dismiss plaintiff's trademark infringement claim, holding that defendant's purchase of plaintiff's trademark as a keyword ad trigger does not lead to customer confusion
Summary of this case from Acad. of Motion Picture Arts v. GoDaddy.Com, Inc.Opinion
Case No. CV 12-09315 DDP (AJWx)
11-12-2013
INFOSTREAM GROUP INC, a Nevada Corporation, Plaintiff, v. AVID LIFE MEDIA INC.,a foreign corporation, et al., Defendants.
ORDER GRANTING DEFENDANTS' MOTION
TO DISMISS
[Dkt. No. 30]
Presently before the court is Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint. Having considered the submissions of the parties, the court grants the motion and adopts the following order.
I. Background
A. The parties and their business operations
Plaintiff Infostream Group Inc. ("Infostream") owns and operates several "sugar daddy dating," websites, which seek to match "generous benefactors willing to pamper and offer financial assistance or gifts to younger attractive partners in return for their friendship or companionship." (Second Amended Complaint ("SAC") ¶ 13.) Plaintiff owns and operates, among other sites, SeekingMillionaire.com, WhatsYourPrice.com, and SeekingArrangement.com. (SAC ¶ 15.)
Defendant Avid Life Media also operates dating websites, including EstablishedMen.com, ArrangementFinders.com, and CougarLife.com, as well as AshleyMadison.com, which facilitates extramarital affairs. (SAC ¶¶ 29-30). Defendant Established Men operates sugar daddy websites such as EstablishedMen.com, ArrangementFinders.com, and, formerly, ArrangementSeekers.com. (SAC ¶¶ 31-32).
This order refers to Defendants collectively as "Avid."
Infostream owns the registered trademarks "Seeking Arrangement," "Mutually Beneficial Relationships," "Seeking Millionaire," and "What's Your Price" in the United States. (Id. ¶¶ 21-25.) Infostream alleges that it has continuously used its registered trademarks to promote and advertise its online dating goods and services, and that its continuous efforts in advertising attract unsolicited media coverage and attention. (Id. ¶¶ 17, 18, 26-28.) Infostream alleges that the consumers have recognized and associated these trademarks with the products and services it provides. (Id. ¶¶ 19, 20, 28)
B. Prior litigation
In 2010, Infostream sued Defendants (collectively, "Avid") in the United States District Court for the Central District of California for, among other things, trademark infringement, dilution, and unfair competition based on Avid's alleged use of Infostream's "Seeking Arrangement" and "Mutually Beneficial Relationships" marks. (See generally No. CV 10-05166 VBF (FMO)). Avid filed counterclaims for cancellation of trademark and a separate action against Infostream in Canada for breach of contract. (SAC ¶ 40). The parties ultimately dismissed all claims against each other, pursuant to a written settlement agreement (the "Agreement").
Under the Agreement, Avid agreed to discontinue using the terms "'Arrangement Seekers' (or an iteration or confusing similar combination of the words 'arrangement' and 'seek') and 'Mutually Beneficial Relationship' in any manner." (Settlement Agreement ¶ 2.) The term "using" included, but was not limited to, imitating, copying, keyword stuffing, or advertising (e.g., through Google Adwords), with the prohibited terms. (Id. ¶ 4; SAC ¶ 41.) The Parties expressly agreed that "(1) the name 'Arrangement Finders' shall serve as a suitable alternative which does not infringe upon the Seeking Arrangement Mark; and (2) the term 'Mutually Beneficial Arrangements' shall serve as a suitable alternative which does not infringe upon the Mutually Beneficial Relationships Mark." (Settlement Agreement ¶ 4 (emphasis in original).)
C. The current dispute
As explained in this court's earlier order, advertisers pay to have their advertising displays linked to certain search terms or keywords. When users search for those linked terms, the search engine may display a sponsored advertisement alongside the search results. For example, pizza purveyors Dominos and Pizza Hut might pay a search engine for the keywords "pizza delivery." A user search for the term "pizza delivery" might then yield advertisements for Domino's or Pizza Hut, or both. If a user proceeds to click on one of the ads and access an advertiser's site ("click through"), the sponsoring advertiser pays the search engine an additional per-click fee. These advertising arrangements are often known as "Adwords" systems.
Infostream alleges that Avid uses Infostream's "Mutually Beneficial Relationships" mark to promote Avid's arrangementfinders.com website. (Id. ¶ 61-62.) Infostream further alleges that Avid purchases pay-per-click advertisements using Infostream's "Seeking Millionaire" trademark on search engines such as Google.com, Yahoo.com, and Bing.com. (Id. ¶ 68.) According to the SAC, a search of the term "Seeking Millionaire" on those search engines will display paid advertisements for Avid's sites CougarLife.com and EstablishedMen.com. (Id. ¶ 68, Ex. E.) Infostream further alleges that clicking on the advertisement for the CougarLife.com website displays language that is confusingly similar to Infostream's "Mutually Beneficial Relationships" mark. (Id. ¶ 68.) Specifically, Infostream alleges that a page on the cougarlife.com site uses the confusingly similar phrase "[a] cougar relationship can be a mutually beneficial one . . . ." (Id. ¶ 68, Ex. F.)
The SAC also alleges that a search for "whatsyourprice.com" yields pay-per-click advertisements for Avid's arrangementfinders.com site. (Id. ¶ 69, Ex. G.) Infostream further claims that the advertisements for ArrangementFinders.com use the term "mutually beneficial arrangements," which is allegedly similar to Infostream's trademark "Mutually Beneficial Relationships." (Id. ¶ 69.)
Further, Infostream alleges that Avid uses the "Seeking Arrangement" and "Mutually Beneficial Relationships" marks in its marketing. (Id. ¶¶ 44, 45, 47-50, 55, 56, Exs. A-D.) For example, arragementfinders.com claims that it is a "site where men and women find discreet, mutually beneficial relationships." (Id. Ex. A.) Establishedmen.com also uses the phrases "mutually beneficial relationships" and "mutually beneficial relationship" on its site to promote Avid's business. (Id. ¶ 45, Ex. B.) Infostream further alleges that Avid uses the "Seeking Arrangement" and "Mutually Beneficial Relationships" marks as meta-tags in its HTML programming to drive search engine traffic to its websites. (Id. ¶¶ 47-50.) In addition, Infostream alleges that Avid uses the "Seeking Arrangement" and "Mutually Beneficial Relationships" marks in pay-per-click advertising on Google, Yahoo, and Bing. (Id. ¶¶ 52-56, Exs. C-D.) Infostream alleges that, because the nature of goods and services provided and the advertising venues used by the Parties are similar, its less sophisticated consumers are likely to be confused by Avid's use of Infostream's marks. (Id. ¶¶ 71-74.) The SAC alleges causes of action for (1) Federal Trademark Infringement, (2) Federal False Designations and Descriptions; (3) Federal Trademark Dilution, (4) California Common Law Trademark Infringement, (5) California Dilution of Famous Marks, and (6) California Unfair Business Practices.
II. Legal Standard
A complaint will survive a motion to dismiss when it contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include "detailed factual allegations," it must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. Conclusory allegations or allegations that are no more than a statement of a legal conclusion "are not entitled to the assumption of truth." Id. at 679. In other words, a pleading that merely offers "labels and conclusions," a "formulaic recitation of the elements," or "naked assertions" will not be sufficient to state a claim upon which relief can be granted. Id. at 678 (citations and internal quotation marks omitted).
"When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id. at 679. Plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly, 550 U.S. at 555. "Determining whether a complaint states a plausible claim for relief" is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.
III. Discussion
A. "Mutually Beneficial Relationships" and "Seeking Arrangement" Claims
As an initial matter, Avid argues, and Infostream does not dispute, that all of Infostream's claims regarding its "Mutually Beneficial Relationships" and "Seeking Arrangement" marks are the same as those brought as counterclaims in a related action, Avid Life Media Inc. v. Inforstream Group Inc., Case No. CV 12-09315-DDP (AJW). (See Amended Counterclaim ¶¶ 45-64, 66-70.) The court agrees with both parties that such claims are better addressed in the first-filed related action. Infostream's "Mutually Beneficial Relationships" and "Seeking Arrangement" claims are, therefore, stricken. Fed. R. Civ. P. 12(f).
B. "WhatsYourPrice.com" and "Seeking Millionaire" claims
As explained in this court's earlier order granting Avid's Motion to Dismiss Infostream's First Amended Complaint, a trademark Plaintiff must show that Defendants' use of Plaintiff's marks creates a likelihood of consumer confusion. Murray v. Cable Nat'l Broad Co., 86 F.3d 858, 859 (9th Cir. 1996); Playboy Enters. V. Netscape. Commc'ns Corp., 354 F.3d 1020, 1024 n.10 (9th Cir. 2004) (California trademark claims are "substantially congruent" with federal claims.). "A likelihood of confusion exists when a consumer viewing a service mark is likely to purchase the services under the mistaken belief that the services are, or [are] associated with, the services of another provider." Murray, 86 F.3d at 861. Courts may determine likelihood of confusion as a matter of law on either a motion to dismiss or summary judgment. Id. at 860-61.
The issue presented here is identical to that raised in Avid's earlier motion. The court's discussion here, therefore, draws heavily from its earlier order dismissing Infostream's FAC.
The parties appear to agree that the viability of all of Plaintiff's claims turns on the likelihood of confusion. (Mot. at 19, 22; Opp. at 13.)
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In AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), the Ninth Circuit provided a non-exhaustive list of eight factors relevant to likelihood of confusion: 1) strength of the mark, 2) proximity of the goods at issue, 3) similarity of the marks, 4) evidence of actual consumer confusion, 5) marketing channels used, 6) type of goods and degree of care likely to be exercised by the purchaser, 7) the defendant's intent in selecting the mark, and 8) the likelihood of product line expansion. Sleekcraft, 599 F.2d at 348-49. The court subsequently, and repeatedly, emphasized that the Sleekcraft factors are but guideposts, and should not be applied mechanically or by rote. See Network Automation Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1145-46 (9th Cir. 2011) (summarizing cases). The court has specifically recognized that emerging technologies, particularly the Internet, require a flexible approach to the inquiry into likelihood of confusion. Brookfield Commc'ns., Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1054 (9th Cir. 1999).
The Ninth Circuit addressed an advertising keyword dispute very similar to that here in Network Automation. In examining whether a preliminary injunction was properly entered in a keyword advertising dispute, the Network Automation court proceeded to weigh all eight Sleekcraft factors. Id. at 1149-53. The court further held, however, that "[i]n the keyword advertising context the likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context." Id. at 1153 (quotation and citation omitted). Though it declined to adopt an additional multi-factor test, the Network Automation court recognized that the appearance of particular ads and the surrounding visual context is important, in part, because clearly labeled or segregated ads might eliminate any potential consumer confusion. Id. at 1154 (citing Playboy, 354 F.3d at 1023, 1030.). The court therefore concluded that "the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page" is one of the "most relevant factors" to the likelihood of confusion analysis in an advertising keywords case. Id.
Infostream's SAC alleges that a search for its "Seeking Millionaire" or "What's Your Price" marks will display paid advertisements for Avid's sites, specifically CougarLife.com, EstablishedMen.com, or ArrangementFinders.com. (SAC ¶¶ 68-69.) Unlike the FAC, Infostream's SAC includes, as it must, allegations regarding the placement, appearance, and context of Defendant's advertisements. See Network Automation, 638 F.3d at 1153. The SAC alleges, for example, that when its mark "Seeking Millionaire" is searched on Bing.com, an advertisement for Avid's CougarLife.com is displayed "directly to the right of the search term result . . . differentiated . . . only by the word 'ads' appearing above the advertisements . . . ." (SAC ¶ 68.) The SAC also includes images of these search results, consistent with Infostream's description. (SAC Exs. E, G.)
The allegations of the SAC, though more complete than previous iterations, are nevertheless self-defeating. Even prior to its Network Automation decision, the Ninth Circuit recognized that internet consumers "fully expect to find some sites that aren't what they imagine based on a glance at the domain name or search engine summary. Outside the special case of . . . domains that actively claim affiliation with the trademark holder, consumers don't form any firm expectations about the sponsorship of a website until they've seen the landing page - if then." Toyota Motor Sales v. Tabari, 610 F.3d 1171, 1179 (9th Cir. 2010) (emphasis added). Network Automation further explained that clear labeling of an advertisement might eliminate any possibility of consumer confusion. Network Automation, 638 F.3d at 1153-54. Here, the SAC alleges that consumers searching for Infostream's trademarks saw Avid advertisements off to the side of actual search results under the heading "ads." Neither those ads nor the domain names of the sites advertised are alleged to have referenced any protected mark. Under such circumstances, "[i]n the age of FIOS, cable modems, DSL and T1 lines," Infostream cannot plausibly claim that Avid's mere use of keywords caused any consumer confusion. Tabari, 610 F.2d at 1179.
IV. Conclusion
For the reasons stated above, Defendants' Motion to Dismiss is GRANTED. All claims regarding Infostream's "Mutually Beneficial Relationships" and "Seeking Arrangement" marks are STRICKEN, and must be brought in the related action. All remaining claims are DISMISSED, with prejudice. IT IS SO ORDERED.
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DEAN D. PREGERSON
United States District Judge