Opinion
No. C20-108-LTS
2021-05-18
WEEMS INDUSTRIES, INC. d/b/a Legacy Manufacturing Company, Plaintiff, v. TEKNOR APEX COMPANY, Defendant.
Daniel P. Kresowik, Brian J. Laurenzo, Andrew Joseph Morgan, Dennis P. Ogden, Brick Gentry PC, West Des Moines, IA, for Plaintiff Weems Industries, Inc. Spencer S. Cady, Nyemaster Goode, Des Moines, IA, Cheryl L. Farine, Dan Hudak, Michael Willis Vary, Hudak Shunk & Farine Co. LPA, Tallmadge, OH, for Defendant.
Daniel P. Kresowik, Brian J. Laurenzo, Andrew Joseph Morgan, Dennis P. Ogden, Brick Gentry PC, West Des Moines, IA, for Plaintiff Weems Industries, Inc.
Spencer S. Cady, Nyemaster Goode, Des Moines, IA, Cheryl L. Farine, Dan Hudak, Michael Willis Vary, Hudak Shunk & Farine Co. LPA, Tallmadge, OH, for Defendant.
ORDER ON DEFENDANT'S MOTION TO DISMISS
Leonard T. Strand, Chief Judge
I. INTRODUCTION
This case is before me on a motion (Doc. 29) to dismiss filed by defendant Teknor Apex Company (Teknor). Teknor argues that the amended complaint (Doc. 21) filed by plaintiff Weems Industries, Inc. (Weems), should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). Alternatively, Teknor argues that Weems should be ordered under Rule 12(e) to provide a more definite statement regarding which of Teknor's products infringe on its trademark. Weems has filed a resistance (Doc. 30) and Teknor has replied (Doc. 31). Oral argument is not necessary. See Local Rule 7(c).
II. BACKGROUND
Weems is an Iowa corporation that manufactures and sells hose products through its subsidiary, Legacy Manufacturing Company. In 2007, Weems began producing some of its hose products, specifically compressed air hoses, in the color chartreuse. Chartreuse is not a natural by-product of the hose-manufacturing process, nor is it the natural color of materials needed to produce them. Additionally, producing a hose in chartreuse is no less expensive than production in any other color. Weems expanded its use of the color chartreuse to other products, including water hoses, beginning in 2009.
These alleged facts are drawn from the amended complaint (Doc. 21).
The color "chartreuse" is associated with Chartreuse liqueur and is defined as "a variable color averaging a brilliant yellow green." Merriam Webster's Collegiate Dictionary at 193 (10th ed. 1993).
Weems asserts that it has invested substantial time, effort and millions of dollars to develop, distinguish, promote and market its chartreuse-colored hoses. It has marketed them under the trademark "FlexZilla®" and has referred to its chartreuse color as "ZillaGreen™." It has also used the slogan, "If it's not ZillaGreen,™ it's not FlexZilla.®" Thus, chartreuse has become Weems’ signature color and customers associate it with Weems’ products.
In September 2017, Weems registered the color chartreuse as a trademark of the exterior body of certain water hoses. See Registration No. 5,293,921 (‘921 Registration or chartreuse trademark). Weems’ depicted the chartreuse mark with the following drawing:
The ‘921 Registration was not Weems’ first to register the color chartreuse as a trademark. The registration identifies three prior registrations. Registration Numbers 4,797,112 and 4,797,113 – for chartreuse-colored water hoses with a black or green stripe – were registered on the Supplemental Register in 2015. Registration Number 4,827,169 – for chartreuse-colored compressed air hoses – was registered on the Principal Register in 2015 as well. All three of those registrations reference Registration Number 3,765,628 as a prior registration. That registration claimed a trademark in chartreuse – defined as Pantone 389C – as applied to the entire body of compressed air hoses. Weems owned that trademark from March 2010 until October 2016.
The registration lists the first day of use in commerce as May 1, 2009. Id.
Teknor is a Delaware corporation that also produces and sells hoses. In July 2018, Weems sent a letter to Teknor regarding possible infringement of its chartreuse trademark. Teknor responded by denying that any of its products, or planned products, would infringe on Weems’ trademark. However, Teknor proceeded to produce, market and sell at least two types of water hoses – its NexFlex and Zero-G Pro models – that Weems claims are confusingly similar to its chartreuse hoses. In response to the parties’ disagreement regarding infringement, Teknor filed a petition to cancel Weems’ ‘921 Registration in March 2020.
Weems filed a complaint in this court on November 13, 2020, alleging that Teknor is liable for trademark infringement and unfair competition. Doc. 1. It seeks (1) an injunction prohibiting Teknor from producing hoses in chartreuse or any other color likely to be confused with chartreuse, (2) an order pursuant to 15 U.S.C. § 1116(a) directing Teknor to file a written report under oath specifying the steps it has taken to comply with the injunction, (3) an order pursuant to 15 U.S.C. § 1118 requiring Teknor to destroy all infringing products and marketing materials, (4) monetary remedies in the form of damages from lost sales and goodwill as well as Teknor's profits derived from its infringing products, (5) attorney's fees and costs and (6) any other relief the court deems just and necessary. Id. Teknor responded by filing a motion (Doc. 13) to dismiss for failure to state a claim. Weems then filed its amended complaint (Doc. 21), asserting the same claims, and Teknor filed its present motion (Doc. 29) to dismiss.
III. APPLICABLE STANDARDS
The Federal Rules of Civil Procedure authorize a pre-answer motion to dismiss for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). The Supreme Court has provided the following guidance in considering whether a pleading properly states a claim:
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." As the Court held in [ Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S. Ct. 1955, 167 L.Ed.2d 929 (2007) ], the pleading standard Rule 8 announces does not require "detailed factual allegations," but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. Id. , at 555, 127 S. Ct. 1955 (citing Papasan v. Allain , 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L.Ed.2d 209 (1986) ). A pleading that offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." 550 U.S. at 555, 127 S. Ct. 1955. Nor does a complaint suffice if it tenders "naked assertion[s]" devoid of "further factual enhancement." Id. , at 557, 127 S. Ct. 1955.
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id. , at 570, 127 S. Ct. 1955. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. , at 556, 127 S. Ct. 1955. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of ‘entitlement to relief.’ " Id. at 557, 127 S. Ct. 1955 (brackets omitted).
Ashcroft v. Iqbal , 556 U.S. 662, 677-78, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
Courts assess "plausibility" by " ‘draw[ing] on [their own] judicial experience and common sense.’ " Whitney v. Guys, Inc. , 700 F.3d 1118, 1128 (8th Cir. 2012) (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). Also, courts " ‘review the plausibility of the plaintiff's claim as a whole, not the plausibility of each individual allegation.’ " Id. (quoting Zoltek Corp. v. Structural Polymer Grp. , 592 F.3d 893, 896 n.4 (8th Cir. 2010) ). While factual "plausibility" is typically the focus of a Rule 12(b)(6) motion to dismiss, federal courts may dismiss a claim that lacks a cognizable legal theory. See, e.g., Somers v. Apple, Inc. , 729 F.3d 953, 959 (9th Cir. 2013) ; Ball v. Famiglio , 726 F.3d 448, 469 (3d Cir. 2013) ; Commonwealth Prop. Advocates, L.L.C. v. Mortg. Elec. Registration Sys., Inc. , 680 F.3d 1194, 1202 (10th Cir. 2011) ; accord Target Training Intern., Ltd. v. Lee , 1 F. Supp. 3d 927 (N.D. Iowa 2014).
In considering a Rule 12(b)(6) motion to dismiss, ordinarily the court "cannot consider matters outside the pleadings without converting the motion into a motion for summary judgment." McMahon v. Transamerica Life Ins. , No. C17-149-LTS, 2018 WL 3381406, at *2 n.2 (N.D. Iowa July 11, 2018) ; see Fed. R. Civ. P. 12(b)(6). On the other hand, when a copy of a "written instrument" is attached to a pleading, it is considered "a part of the pleading for all purposes," pursuant to Federal Rule of Civil Procedure 10(c). Thus, when the pleadings necessarily embrace certain documents, I may consider those documents without turning a motion to dismiss into a motion for summary judgment. Id. These documents include "exhibits attached to the complaint." Mattes v. ABC Plastics, Inc. , 323 F.3d 695, 697 n.4 (8th Cir. 2003).
When a complaint does not state a claim for relief that is plausible on its face, the court must consider whether it is appropriate to grant the pleader an opportunity to replead. The rules of procedure permit a party to respond to a motion to dismiss by amending the challenged pleading "as a matter of course" within 21 days. See Fed. R. Civ. P. 15(a)(1)(B). Thus, when a motion to dismiss highlights deficiencies in a pleading that can be cured by amendment, the pleader has an automatic opportunity to do so. When the pleader fails to take advantage of this opportunity, the question of whether to permit an amendment depends on considerations that include:
whether the pleader chose to stand on its original pleadings in the face of a motion to dismiss that identified the very deficiency upon which the court dismissed the complaint; reluctance to allow a pleader to change legal theories after a prior dismissal; whether the post-dismissal amendment suffers from the same legal or other deficiencies as the dismissed pleading; and whether the post-dismissal amendment is otherwise futile.
Meighan v. TransGuard Ins. Co. of Am. , 978 F. Supp. 2d 974, 982 (N.D. Iowa 2013).
Rule 12(e) allows a party to move for a more definite statement "of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response." Fed. R. Civ. P. 12(e). The motion must "point out the defects complained of and the details desired." Id.
IV. DISCUSSION
Weems asserts five claims for relief:
(1) trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1) ;
(2) common law trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a) ;
(3) unfair competition under the Lanham Act, 15 U.S.C. § 1125(a) ;
(4) unfair competition under Iowa common law; and
(5) unjust enrichment.
A common law trademark infringement claim may be brought under state or federal law. Dastar Corp. v. Twentieth Century Fox Film Corp. , 539 U.S. 23, 30, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003) (noting that § 1125(a) "create[ed] a federal cause of action for traditional trademark infringement of unregistered marks"). Although the trademark Weems seeks to protect from infringement is registered, it apparently brings a common law infringement under § 1125 as an alternative claim.
The first four claims, though distinct causes of action, are essentially identical in this case. See Heaton Distrib. Co. v. Union Tank Car Co. , 387 F.2d 477, 483 (8th Cir. 1967) ; Com. Sav. Bank v. Hawkeye Fed. Sav. Bank , 592 N.W.2d 321, 327 (Iowa 1999). All four are based on the same substantive allegations and require Weems to prove the same two basic elements: (1) that it has a valid, protectable interest in its trademark, the color chartreuse, and (2) that Teknor's allegedly infringing hoses are similar enough in color to its own that they are likely to cause customer confusion regarding their source. See Hubbard Feeds, Inc. v. Animal Feed Supplement, Inc. , 182 F.3d 598, 601 (8th Cir. 1999) ; First Bank v. First Bank Sys., Inc. , 84 F.3d 1040, 1044–46 (8th Cir. 1996) ; Cmty. State Bank, Nat. Ass'n v. Cmty. State Bank , 758 N.W.2d 520, 525–27 (Iowa 2008).
The main difference between these claims lies in what is required to establish the first overarching element – that a mark is entitled to legal protection. Section 1114 protects only registered trademarks. If a plaintiff has a registered trademark, there is a rebuttable presumption that it is valid and protectable. 15 U.S.C. §§ 1057(b), 1115(a) ; Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc. , 908 F.3d 313, 323 (8th Cir. 2018).
For trademark infringement claims under § 1125, the plaintiff must show that its mark is protectable at common law. Generally, courts look to the principles "qualifying a mark for registration under § 2 of the Lanham Act ... in determining whether an unregistered mark is entitled to protection under [§ 1125 ]." Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (citations omitted). This requires showing, at a minimum, that a mark is (1) non-functional and (2) distinctive. Frosty Treats Inc. v. Sony Computer Ent. Am. Inc. , 426 F.3d 1001, 1004–07 (8th Cir. 2005) ; First Bank , 84 F.3d at 1044.
A general unfair competition claim under § 1125, or under Iowa law, also protects registered and common law trademarks against infringement. However, unfair competition offers broader protections because it may protect marks that cannot be registered, or recognized at common law, as trademarks. See Metric & Multistandard Components Corp. v. Metric's, Inc. , 635 F.2d 710, 714 (8th Cir. 1980) ; Motor Accessories Mfg. Co. v. Marshalltown Motor Material Mfg. Co. , 167 Iowa 202, 149 N.W. 184, 186 (1914). It also prohibits a broader range of unfair practices. See Dastar , 539 U.S. at 28–29, 123 S.Ct. 2041 ; Inwood Lab'ys, Inc. v. Ives Lab'ys, Inc. , 456 U.S. 844, 858, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) ; see also Iowa Health System v. Trinity Health Corp. , 177 F. Supp. 2d 897, 929 (N.D. Iowa 2001) (noting that "[t]he ‘doctrine of unfair competition’ under Iowa law is at least as broad" as unfair competition under the Lanham Act). A plaintiff need only show that its mark (1) is non-functional and (2) is inherently distinctive or, in the case of a mark that is descriptive or cannot be protected as a trademark, has acquired secondary meaning. See Metric , 635 F.2d at 714 ; Truck Equip. Serv. Co. v. Fruehauf Corp. , 536 F.2d 1210, 1217 (8th Cir. 1976) ; Marshalltown Motor , 149 N.W. at 186–87.
An unfair competition claim under Iowa law is different from the other three claims in one additional way, as in some circumstances a plaintiff must show wrongful intent. See Basic Chemicals, Inc. v. Benson , 251 N.W.2d 220, 231 (Iowa 1977) ; Iowa Auto Mkt. v. Auto Mkt. & Exch. , 197 Iowa 420, 197 N.W. 321, 323 (1924).
Weems’ fifth claim – unjust enrichment – is inseparable from its trademark infringement and unfair competition claims. Weems has alleged no other basis for finding that Teknor was unjustly enriched other than from benefits derived from its alleged infringement of the chartreuse trademark. It is important to note, however, that Weems alleges unjust enrichment not as an alternative cause of action to establish liability, but as equitable grounds for obtaining monetary relief under the Lanham Act in the form of disgorged profits. Thus, the unjust enrichment issue becomes relevant only if Weems has stated a valid trademark infringement or unfair competition claim. See B&B Hardware, Inc. v. Hargis Indus., Inc. , 912 F.3d 445, 454 (8th Cir. 2018). A. Weems’ Trademark Infringement and Unfair Competition Claims
Teknor raises two arguments against Weems’ trademark infringement and unfair competition claims. First, Teknor argues the court should dismiss Weems’ common law trademark infringement claim because Weems has failed to plausibly plead that chartreuse is protectable as a common law trademark. Specifically, Teknor argues that Weems has failed to allege sufficient facts to find that chartreuse is a non-functional feature or that it has acquired secondary meaning. Although Teknor directs this argument only at Weems’ common law infringement claim, the validity of Weems’ chartreuse trademark is, ultimately, relevant to all of Weems’ claims because Weems asserts that chartreuse is protectable at common law on the same grounds on which it was registered. See 15 U.S.C. § 1115(a) (registration of a trademark "shall not preclude another person from proving any legal or equitable defense or defect ... which might have been asserted if such mark had not been registered"); id. § 1119 ("In any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action."); see also Dymo Indus., Inc. v. Tapeprinter, Inc. , 326 F.2d 141, 143 (9th Cir. 1964) ("A registered trademark may be cancelled by direct attack as prescribed by the statute, and it may also be collaterally attacked in any action where the validity of the mark is properly in issue.").
Teknor has implied that this lawsuit is merely an attempt by Weems to avoid or delay cancellation proceedings before the USPTO. However, because this court has the power to cancel or rectify registered trademarks, there is little merit to that concern.
Second, Teknor argues the court should dismiss all of Weems’ trademark infringement and unfair competition claims because Weems has failed to identify a plausible infringing product. Teknor acknowledges that Weems has identified two hose models in the amended complaint but argues neither gives rise to a plausible infringement claim because they are not the same color as the color chartreuse depicted in the ‘921 Registration. Additionally, Weems’ claim that "at least" those two hoses infringe on the chartreuse mark is too vague to support a valid infringement or unfair competition claim. Thus, Teknor argues that even if Weems’ claims are not dismissed, Weems should be required to make a more definite statement regarding which of Teknor's hoses infringe the chartreuse mark.
1. Protection of Trademarks at Common Law
For a trademark to be protected at common law, a plaintiff must show that the mark is (1) non-functional and (2) distinctive. Frosty Treats , 426 F.3d at 1004–07.
Functionality in trademark law is not determined solely by asking whether a mark serves some functional purpose apart from identifying the source of a good or service. Id. at 1006–07. Rather, "a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article[,] ... if it affects the cost or quality of the article" or if it is "necessary to afford a competitor the means to compete effectively." Id. at 1007 (citations omitted). This requirement prevents trademark law from being used to undermine patent law by heading off attempts to monopolize useful product features under the guise of protecting a trademark. Id. A trademark's distinctiveness depends on its nature. Trademarks that are arbitrary, fanciful or suggestive are considered inherently distinctive and protectable. First Bank , 84 F.3d at 1045. Trademarks that are descriptive – those that "designate[ ] the characteristics, qualities, effects, or other features of the product" – are not distinctive but may become so if they acquire secondary meaning. Co-Rect Prod., Inc. v. Marvy! Advert. Photography, Inc. , 780 F.2d 1324, 1329 (8th Cir. 1985). Trademarks that are generic – "one[s] that refer[ ] to the common name or nature of an article" – can never be distinctive or protected as a trademark. Id. at 1329.
Color is recognized as a "symbol" or "device" that can be protected as a trademark when these basic legal requirements are met. Qualitex Co. v. Jacobson Prod. Co. , 514 U.S. 159, 162, 166, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995). The color cannot "serve[ ] primarily a utilitarian purpose." Master Distribs., Inc. v. Pako Corp. , 986 F.2d 219, 224 (8th Cir. 1993) ( In re Owens-Corning Fiberglas Corp. , 774 F.2d 1116, 1120 (Fed. Cir. 1985) ). Additionally, because color on its own, like a descriptive mark, cannot be inherently distinctive, the color must acquire secondary meaning to receive legal protection. See Qualitex , 514 U.S. at 163, 115 S.Ct. 1300 ; Wal-Mart Stores, Inc. v. Samara Bros. , 529 U.S. 205, 211–12, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000) ("[W]ith respect to at least one category of mark—colors—we have held that no mark can ever be inherently distinctive."). The color must "identif[y] and distinguish[ ] a particular brand" so strongly that, "over time, customers ... come to treat a particular color on a product or its packaging ... as signifying" that brand as its source. Qualitex , 514 U.S. at 163, 115 S.Ct. 1300 ; see also First Bank , 84 F.3d at 1045 (a mark acquires secondary meaning when, "through ‘long and exclusive use in the sale of the user's goods, the mark has become so associated in the public mind with such goods that the mark serves to identify the source of the goods and to distinguish them from those of others’ " (quoting Aromatique, Inc. v. Gold Seal, Inc. , 28 F.3d 863, 870 (8th Cir. 1994) )).
In considering whether Weems’ has plausibly pleaded that the color chartreuse is protectable as a common law trademark, I cannot overlook the fact that it has registered chartreuse as a trademark on the principal register. Although registered trademarks and common law (unregistered) trademarks may appear to be two distinct and separate categories, that is not the case. See Converse, Inc. v. Int'l Trade Comm'n Skechers U.S.A., Inc. , 909 F.3d 1110, 1115 (Fed. Cir. 2018). Trademarks are not created by federal law or the act of registration; they are created simply by using a source-distinguishing mark in commerce. See Matal v. Tam , ––– U.S. ––––, 137 S. Ct. 1744, 1751–53, 198 L.Ed.2d 366 (2017). Registering a mark "confers important legal rights and benefits on" the one who registers it, but it is possible only when a valid and protectable common law trademark already exists. Matal , 137 S. Ct. at 1752–53 ; see also Converse , 909 F.3d at 1115–16 ("[T]he Lanham Act does not create trademarks. While it may create some new substantive rights in trademarks, unless the trademarks pre-exist there is nothing to be registered." (quoting In re Deister Concentrator Co. , 289 F.2d 496, 501 (CCPA 1961) )). This is why one of the benefits registration confers is a rebuttable presumption that the registered trademark is valid. 15 U.S.C. §§ 1057(b), 1115(a). For these reasons, the fact that chartreuse is registered as a trademark on the principal register is sufficient on its own to allow the court to draw a reasonable inference that chartreuse is non-functional and had acquired secondary meaning by the time of its registration. Weems could have registered chartreuse as a trademark only if it had sufficiently proven to the USPTO that it was already protectable as a common law trademark on those grounds. And a common law trademark does not cease being so when it is registered. See McCarthy on Trademarks and Unfair Competition § 19:3 (5th ed.) ("When a trademark is registered, common law rights continue: they are not erased by federal registration."). Thus, Weems’ registration provides sufficient evidence at this stage to conclude Weems has plausibly pleaded that chartreuse is protectable as a common law trademark.
While the existence of a registration, and the evidence of validity it provides, are most evidently relevant to cases involving claims based on registered trademarks, nothing in the Lanham Act prohibits a registration from being submitted as prima facie evidence of validity in any case brought under its provisions. See 15 U.S.C. § 1115(a) ("Any registration ... owned by a party to an action shall be admissible in evidence and shall be prima facie evidence of the validity of the registered mark." (emphasis added)); see also Aromatique , 28 F.3d at 869 (finding that owner of registered trademarks, who brought claims under both §§ 1114 and 1125, was "entitled to the presumption that the marks are valid").
The "content" of the presumption created by the registration of a trademark depends on how the USPTO registered the mark. ZW USA, Inc. v. PWD Sys., LLC , 889 F.3d 441, 449 (8th Cir. 2018). Because a color can be protected and registered as a trademark only if its owner shows that it has acquired secondary meaning, Wal-Mart , 529 U.S. at 211, 120 S.Ct. 1339, the presumption created by its registration is that it has acquired secondary meaning, not that it is inherently distinctive. Aromatique , 28 F.3d at 870 ; see also Sturgis Motorcycle Rally , 908 F.3d at 322 (noting that when a trademark is registered on the basis that it has acquired secondary meaning, it is essentially an admission that the mark is not inherently distinctive).
This does not mean that registration on the principal register is sufficient to plausibly allege the existence of a common law trademark in every case. For example, because a registered mark's presumption of validity applies only prospectively from the time of registration, a plaintiff alleging infringement prior to registration must point to other facts justifying an inference that the mark was protectable at common law during that time. See Aromatique , 28 F.3d at 870 ; see also Converse , 909 F.3d at 1117 (a registered mark's presumption of validity does not "appl[y] to infringement that began before registration"); PaperCutter, Inc. v. Fay's Drug Co. , 900 F.2d 558, 564 (2d Cir. 1990). ("To qualify for trademark protection, an owner of a descriptive mark must demonstrate that the mark had acquired secondary meaning before its competitor commenced use of the mark."). The same is true when a trademark is protectable under common law on different grounds than those upon which it was registered. Reliance on Weems’ registration at this stage of the case also does not mean that Teknor is unable to show that Weems’ trademark is not valid or protectable. Much of the information Teknor has provided on this issue would require me to look beyond the four corners of Weems’ amended complaint, thus converting Teknor's motion into a motion for summary judgment. See McMahon , 2018 WL 3381406, at *2 n.2. The record is not yet complete enough to take that course of action. See GeigTech E. Bay LLC v. Lutron Elecs. Co. , 352 F. Supp. 3d 265, 282 (S.D.N.Y. 2018) (explaining that issues such as secondary meaning require a "vigorous evidentiary" analysis that is not "amenable to determination on a motion to dismiss"). Moreover, the issue under Rule 12(b)(6) is whether a plaintiff has alleged sufficient facts, accepted as true, to state a plausible claim for relief. Whether a defendant will be able to raise a defense that may prevail over those facts is, in most instances, irrelevant, as a plaintiff is not required to disprove an affirmative defense in order to state a valid claim. See Gomez v. Toledo , 446 U.S. 635, 640, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980). Thus, whether Weems’ chartreuse trademark is valid and protectable is a factual issue that it is not appropriate to resolve via a motion to dismiss. See Solid 21, Inc. v. Breitling USA, Inc. , 512 F. App'x 685, 686 (9th Cir. 2013) (unpublished); GeigTech , 352 F. Supp. 3d at 282.
This was the case in a different action involving Weems’ registered trademark in chartreuse-colored air hoses. See Weems Indus., Inc. v. Plews, Inc. , No. 16-CV-109-LRR, 2017 WL 1364599, at *4–7 (N.D. Iowa Apr. 13, 2017). In that case, the alleged infringement began before the trademark was registered, so this court considered specific allegations regarding functionality and secondary meaning to determine whether Weems had plausibly pleaded that its mark was protectable at common law. Id. at *2–7. In this case, the alleged infringement began after Weems’ trademark was registered. Doc. 21 at 3–5; see Converse , 909 F.3d at 1117 ("For infringement in the period after registration, the Lanham Act entitles the owner of the registered mark to a presumption that the mark is valid, including that it has acquired secondary meaning." (citations omitted)).
For example, the registration of trademark that is inherently distinctive creates a presumption that the mark is inherently distinctive only, not that it has become so by acquiring secondary meaning. ZW USA , 889 F.3d at 449 ; see also Zobmondo Ent., LLC v. Falls Media, LLC , 602 F.3d 1108, 1113–14 & n.7 (9th Cir. 2010) (noting that the owner of a registered mark "is not entitled to a presumption of secondary meaning unless the PTO required proof of secondary meaning as part of the application for registration of the mark"). If a registered, inherently distinctive trademark is found to be invalid because it is descriptive, the owner may show that the mark is still protectable at common law because it has acquired secondary meaning.
In short, the fact that Weems was able to register chartreuse as a trademark on the principal register is sufficient to find that it has plausibly pleaded that the trademark is protectable under the Lanham Act not only as a registered trademark, but also as a common law trademark, since the time of registration. Teknor's motion to dismiss Count II on these grounds will be denied.
2. Has Weems Identified an Infringing Product?
Teknor argues that Weems’ trademark infringement and unfair competition claims must be dismissed because Weems has failed to identify a plausible infringing product. Weems claims that at least two of Teknor's hose models, the NexFlex and Zero-G Pro, use a color that is too similar to chartreuse. It provided the following pictures with its amended complaint: The only information Weems’ provides regarding what "chartreuse" looks like is the drawing from its ‘921 Registration:
Teknor argues that neither of the accused products Weems has identified supports an infringement or unfair competition claim for two reasons. First, Teknor argues that neither of the hoses can plausibly be considered the same color as "chartreuse." Teknor asserts its hoses are "perceptibly different colors" from Weems’ hoses, and each other, and refers to the Pantone Color System for support. According to Teknor, its hoses are Pantone 387C and Pantone 802C, while Weems’ are Pantone 389C.
The Pantone Color System is a commercial system that identifies, and numerically categorizes, specific shades of color. See www.pantone.com/color-systems/pantone-color-systems-explained. The Pantone system can be, and often is, used to identify color trademarks and their scope. See Clam Corp. v. Innovative Outdoor Sols., Inc. , No. CIV 08-5895 DSD/AJB, 2008 WL 5244845, at *1 (D. Minn. Dec. 15, 2008) (noting that plaintiff registered Pantone 285C, a shade of blue, as a trademark); Olay Co. v. Cococare Prod., Inc. , No. 81 CIV. 4102, 1983 WL 62351, at *23 (S.D.N.Y. Apr. 19, 1983) (granting an injunction specifying that defendant's product must be "a discernibly different pink" that is "at least 40% different in terms of [Pantone Matching System] tones"). However, nothing in the Lanham Act requires color trademarks to identify a specific shade using an official color matching system; a description, or generic name, of the shade is often sufficient. See 37 C.F.R. § 2.52(b)(1) ; Trademark Manual of Examination Procedure § 807.07(a)(i), 2018 WL 6255078.
Teknor accurately points out that Weems described chartreuse as Pantone 389C in a previous registration that has since been cancelled. See Registration Number 3,765,628. In communications with Teknor before this lawsuit, however, Weems asserted that chartreuse is actually closer to Pantone 374C. See Doc. 29-12.
Second, Teknor argues that Weems’ trademark protects only one color, chartreuse, and that Weems, as a matter of law, cannot claim that two differently colored hoses are both chartreuse. If Weems’ chartreuse is not limited to the specific shade in the ‘921 Registration, Teknor argues, Weems would effectively have a single trademark impermissibly covering multiple colors. Teknor asserts this would allow Weems to monopolize many, if not all, shades of yellow and green and would render chartreuse a phantom trademark.
Both of these arguments are flawed. Weems need not show that Teknor's hoses are identical in color to its own for its infringement and unfair competition claims to succeed. Infringement occurs whenever use of another's mark is likely to cause customer confusion. Lovely Skin, Inc. v. Ishtar Skin Care Prod., LLC , 745 F.3d 877, 887 (8th Cir. 2014) ; see also Minnesota Min. & Mfg. Co. v. Rauh Rubber, Inc. , 130 F.3d 1305, 1308 (8th Cir. 1997) ("[A] likelihood of consumer confusion ... is the ‘hallmark of any trademark infringement claim.’ " (quoting Polymer Technology Corp. v. Mimran , 37 F.3d 74, 80 (2d Cir. 1994) )). How similar the infringing mark is to the owner's is just one of several factors used to determine whether there is a likelihood of confusion, and the owner need show only that "the total effect conveyed by the two marks is confusingly similar." Sensient Techs. Corp. v. SensoryEffects Flavor Co. , 613 F.3d 754, 764 (8th Cir. 2010).
Thus, while Teknor is correct that one asserting trademark rights in a color must specify a particular shade, that does not mean that only that precise shade is protected. See Master Distribs , 986 F.2d at 223. A color trademark does not, and cannot, "monopolize [a color] ‘in all of its shades,’ " id. at 223, but it does protect its owner from another's use of any similar shade that, when used on identical goods or in similar ways, is likely to cause an ordinary customer to be confused or misled as to the difference between the products or their sources. See Qualitex , 514 U.S. at 167, 115 S.Ct. 1300 ; Luigino's, Inc. v. Stouffer Corp. , 170 F.3d 827, 830 (8th Cir. 1999). While distinguishing between shades can be a difficult task in some cases, courts have recognized that it "is no more difficult or subtle than deciding likelihood of confusion where word marks are involved." Id. (quoting In re Owens–Corning Fiberglas Corp. , 774 F.2d 1116, 1123 (Fed. Cir. 1985) ). Thus, where the colors of Teknor's and Weems’ hoses fall within the Pantone system is not dispositive on the issue of infringement. The question is whether a "reasonably prudent customer would be likely to be confused as to source, sponsorship, affiliation or approval" because Teknor's hoses are too close in color to chartreuse. 1 McCarthy on Trademarks and Unfair Competition § 7:45.70 (5th ed.).
See 37 C.F.R. § 2.52 (stating that an application's "drawing must show only one mark" and that the applicant must show and name the color that serves as a trademark); Regal Jewelry Co. v. Kingsbridge Int'l, Inc. , 999 F. Supp. 477, 488 (S.D.N.Y. 1998) (declining to recognize trademark rights in a color when plaintiff did not use the color with sufficient consistency). But see T-Mobile US, Inc. v. AIO Wireless LLC , 991 F. Supp. 2d 888, 910 (S.D. Tex. 2014) (finding that "modest variations in shades of magenta due to different advertising or promotional materials" did not prevent T-Mobile's magenta from acquiring trademark protection).
Based on this controlling standard, I find that Weems has pleaded facts sufficient to give rise to a plausible claim that the Teknor hoses it has identified infringe its chartreuse trademark. Chartreuse, as noted above, is a mixture of yellow and green, and Weems has identified at least two of Teknor's hoses that fall reasonably on the yellow-green spectrum of colors. While the ultimate fact-finder may find the shades Teknor uses too dissimilar to be likely to cause customer confusion, that is a factual issue which is inappropriate to address in a motion to dismiss. See Dryer v. Nat'l Football League , 689 F. Supp. 2d 1113, 1122 (D. Minn. 2010). The allegedly infringing shades are not so different from Weems’ chartreuse to make an inference that they are confusingly similar unreasonable at this stage of the case.
Teknor argues in the alternative that the court should require Weems to provide a more definite statement regarding which of its products infringe the chartreuse trademark. Teknor argues that Weems’ claim that "at least" two of its hoses, those discussed above, violate the trademark is too vague. Teknor contends that it cannot adequately defend itself unless Weems (1) identifies each and every product it believes infringes the chartreuse trademark or (2) sets limiting parameters for what shades it considers to be chartreuse.
Neither action is necessary at this time. This court has recognized that motions for a more definite statement "are generally disfavored ‘[b]ecause of the liberal notice-pleading standard governing federal pleadings and the availability of extensive discovery.’ " NuStar Farms, LLC v. Lizza , No. 20-CV-4003-CJW-MAR, 2020 WL 2465263, at *4 (N.D. Iowa May 12, 2020) (citations omitted). As discussed above, Weems has plausibly alleged that two of Teknor's hoses are likely to cause customer confusion. There is no reason to believe that the possibility of Weems claiming that other hose models also infringe the chartreuse mark after discovery would prejudice Teknor's ability to present a defense. Teknor's alternative motion for a more definite statement will be denied.
B. Unjust Enrichment
As noted above, Weems alleges unjust enrichment not as a cause of action, but as an equitable basis for obtaining a monetary award under the Lanham Act. This raises the question of what Weems must plead for its unjust enrichment claim – i.e., a claim for an accounting of profits – to survive a motion to dismiss under Rule 12(b)(6).
The Lanham Act allows a trademark owner whose rights are violated to recover "(1) [the] defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action." 15 U.S.C. § 1117(a). However, these monetary remedies are subject to the principles of equity, id. , and they are available only when injunctive relief is insufficient to "satisfy the equities of the case." Minn. Pet Breeders, Inc. v. Schell & Kampeter, Inc. , 41 F.3d 1242, 1247 (8th Cir. 1994). Thus, the Eighth Circuit has held that a plaintiff must show that monetary relief is necessary and equitable based on (1) unjust enrichment, (2) actual damages or (3) deterrence of a willful infringer. Id.
The Eighth Circuit noted in 2017 that "[w]hether a Lanham Act plaintiff must prove willful infringement to recover money damages is an open question in this circuit after the Lanham Act amendments in 1999." Martinizing Int'l, LLC v. BC Cleaners, LLC , 855 F.3d 847, 852 (8th Cir. 2017). However, the Supreme Court resolved the circuit split by holding that the willfulness of the infringement is an important factor to consider in granting monetary relief under the Lanham Act but is not a precondition for it. Romag Fasteners, Inc. v. Fossil, Inc. , ––– U.S. ––––, 140 S. Ct. 1492, 1497, 206 L.Ed.2d 672 (2020). Thus, willful infringement is not an element Weems must allege to state plausible grounds for an accounting of profits.
For an accounting of profits under the Lanham Act due to unjust enrichment, the Eighth Circuit has not adopted any particular test. However, Eighth Circuit case law makes it clear that a plaintiff must show, at the very least, that the defendant derived a benefit attributable to its unauthorized use of the plaintiff's mark. See Masters v. UHS of Delaware, Inc. , 631 F.3d 464, 473–74 (8th Cir. 2011) ; Fruehauf , 536 F.2d at 1222 ; see also Sammons v. Colonial Press , 126 F.2d 341, 345 (1st Cir. 1942) ("[I]t [is] unconscionable for an infringer to retain a benefit which he had received by the appropriation and use of the plaintiff's property right; and to prevent unjust enrichment the infringer was treated as a trustee ex maleficio of his ill gotten gains."). This can be shown through evidence of the infringer's intent to obtain a benefit through use of another's mark, actual customer confusion due to the infringement, diverted sales, or the infringer's revenue and profits during the time of infringement, but no specific type of evidence is required. See Romag Fasteners, Inc. v. Fossil, Inc. , ––– U.S. ––––, 140 S. Ct. 1492, 1497, 206 L.Ed.2d 672 (2020) ; Safeway Transit LLC v. Disc. Party Bus, Inc. , 954 F.3d 1171, 1179–80 (8th Cir. 2020) ; Masters , 631 F.3d at 473–74.
Teknor argues that Weems’ unjust enrichment claim must be dismissed because Weems relies only on conclusory allegations that it has sustained actual harm, or lost benefits, due to Teknor's alleged infringement. This argument misapplies the unjust enrichment standard. The theory of unjust enrichment is based not on returning a benefit the plaintiff has lost but on removing benefits the defendant has obtained through unfair use of the plaintiff's trademark. See Burger King Corp. v. Weaver , 169 F.3d 1310, 1321 (11th Cir. 1999) ("[T]he focus of a lost profits accounting for trademark infringement is not on the trademark owner, but on the infringer.... An accounting for profits ... further[s] the congressional purpose by making infringement unprofitable, and is justified because it deprives the defendant of unjust enrichment and provides a deterrent to similar activity in the future."); Maier Brewing Co. v. Fleischmann Distilling Corp. , 390 F.2d 117, 122–23 (9th Cir. 1968) (explaining why awarding profits under an unjust enrichment theory is necessary to further the Lanham Act's purpose of making trademark infringement "unprofitable"). Thus, a plaintiff is not required to show actual damages, or a lost benefit, to disgorge profits from an infringer on the basis of unjust enrichment. See Minn. Pet Breeders , 41 F.3d at 1246–47 ; see also Burger King , 169 F.3d at 1321 ("[T]he law in this Circuit is well settled that a plaintiff need not demonstrate actual damage to obtain an award reflecting an infringer's profits under § 35 of the Lanham Act, 15 U.S.C.A. § 1117." (alteration in original) (citation omitted)); Maltina Corp. v. Cawy Bottling Co. , 613 F.2d 582, 584–85 (5th Cir. 1980) (finding that because a trademark is a property right, "an accounting [of profits] is proper even if the defendant and plaintiff are not in direct competition, and the defendants’ infringement has not diverted sales from the plaintiff"); Maier Brewing , 390 F.2d at 123 ("It seems scarcely equitable ... for an infringer to reap the benefits of a trade-mark he has stolen, force the registrant to the expense and delay of litigation, and then escape payment of damages on the theory that the registrant suffered no loss. To impose on the infringer nothing more serious than an injunction when he is caught is a tacit invitation to other infringement." (quoting Admiral Corp. v. Price Vacuum Stores, Inc. , 141 F. Supp. 796, 801 (E.D. Pa. 1956) )).
This must be distinguished from instances when an accounting of profits is used as the remedy for actual damages. Maltina , 613 F.2d at 584–85 (noting that courts find an accounting of profits proper in two circumstances: (1) as "a means of compensating a markholder for loss or diverted sales" and (2) "as redress for the defendant's unjust enrichment and as a deterrent to further infringement"). When a plaintiff seeks to recover actual damages, it must "prove both actual damages and a causal link between defendant's violation and those damages." Rhone-Poulenc Rorer Pharms., Inc. v. Marion Merrell Dow, Inc. , 93 F.3d 511, 515 (8th Cir. 1996). This often requires proof of actual customer confusion or diverted sales, but not always. See Masters , 631 F.3d at 472. When actual damage and causation have been proven, the infringer's profits may act as a proxy in measuring the amount of damages. See Lawn Managers, Inc. v. Progressive Lawn Managers, Inc. , 959 F.3d 903, 913 (8th Cir.), cert. denied , ––– U.S. ––––, 141 S. Ct. 819, 208 L.Ed.2d 400 (2020) (awarding portion of infringer's profits as a damages award to the extent causation was shown); see also George Basch Co. v. Blue Coral, Inc. , 968 F.2d 1532, 1539 (2d Cir. 1992) ("Historically, an award of defendant's profits has also served as a rough proxy measure of plaintiff's damages.").
As discussed above, Weems has stated plausible trademark infringement and unfair competition claims against Teknor. Weems further alleges that Teknor has obtained profits from selling infringing products. At this stage of the case, this is sufficient to find it plausible that Teknor has been unjustly enriched by infringing on Weems’ chartreuse trademark. This finding is further supported by the fact that an award of profits usually should not be considered until after the court has determined whether an injunction is necessary, and sufficient, to protect a plaintiff's trademark. See Minn. Pet Breeders , 41 F.3d at 1247. Teknor's motion to dismiss Weems’ unjust enrichment claim will be denied.
V. CONCLUSION
For the reasons stated herein, Teknor's motion (Doc. 29) to dismiss, or for a more definite statement, is denied in its entirety.