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M.Shanken Communications, Inc. v. Cigar500.com

July 7, 2008

M.SHANKEN COMMUNICATIONS, INC., PLAINTIFF,
v.
CIGAR500.COM, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, District Judge

OPINION AND ORDER

The plaintiff, M. Shanken Communications, Inc., brings this action against Cigar500.com, Inc. ("Cigar500" or "the Company"), Anthony Masciangelo, and Monique Masciangelo (collectively, "the defendants") for copyright infringement under 17 U.S.C. § 501, et seq. (the "Copyright Act"). The plaintiff also asserts claims of trademark infringement, unfair competition, and trademark dilution under 15 U.S.C. §§ 1114, 1116, 1125(a) & 1125(c)(collectively, the "Lanham Act claims"), and defamation. The plaintiff alleges that the defendants infringed upon the plaintiff's trademarks and copyrights pertaining to the magazine Cigar Aficionado, through their operation of an online retailing website. The plaintiff seeks to recover damages and to enjoin the defendants from further infringing or otherwise violating the plaintiff's rights in its protected marks and material.

The defendants move to dismiss all claims against them pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. They also move to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that the plaintiff has failed to state claims upon which relief can be granted.

I.

Unless otherwise stated, the following facts are accepted as true for the purposes of these motions.

The plaintiff is a New York corporation with its principal place of business in the Southern District of New York. (Compl. ¶ 5.) The plaintiff is in the magazine-publishing business, and has published several magazines, including Cigar Aficionado, a source of information for cigar smokers, in which it owns several trademarks and copyrights. (Id.)

Cigar500 is a Canadian corporation with its principal place of business in Woodbridge, Ontario, Canada which operates an Internet website at www.cigar500.com. (Id. ¶ 6.) Cigar500.com is an online source of cigars, including Cuban cigars, as well as related products. (Id.; Declaration of Anthony Masciangelo, Jan. 10, 2008 ("AM Decl.") ¶ 9.) The defendants assert that Cigar500 does not have an office, bank account, or other property in New York, maintain a phone listing in New York, have agents or employees located in New York, or specifically target New York residents in its advertising or public relations. (AM Decl. ¶ 11.) Cigar500 does business internationally and the website specifically guarantees delivery of authentic Cuban cigars to residents in the United States. (Compl. ¶ 33.)

Mr. Masciangelo is a principal of Cigar500 and resides and works in Canada. (Compl. ¶ 7.) Mr. Masciangelo founded Cigar500 in February 2006 and is currently a 51% shareholder in the Company. (AM Decl. ¶¶ 3, 9.) He is also listed as the "Administrative Contact" and "Technical Contact" for the Cigar500.com domain name. (Compl. ¶ 2.)

Ms. Masciangelo resides in Canada and is listed as the registrant for the Cigar500.com domain name. (Compl. ¶ 8.) The plaintiff also alleges that. Ms. Masciangelo is a principal of Cigar500. (Id.) However, in her responsive affidavit, Ms. Masciangelo asserts that she is not a principal, shareholder, or employee of Cigar500.com. (Declaration of Monique Masciangelo, Jan. 11, 2008 ("MM Decl.") ¶ 2.) Ms. Masciangelo confirms that in January 2006 her credit card was used to secure the registration of the domain name Cigar500.com. (Id. ¶ 4.)

In the spring of 2007, Mr. Masciangelo engaged in several telephone discussions with the plaintiff, on behalf of Cigar500, regarding placing advertisements in Cigar Aficionado. (AM Decl. ¶ 17.) Following these conversations, Cigar500 entered into a written contract with the plaintiff for the placement of nine advertisements in Cigar Aficionado during 2007 and 2008. (Id.) Cigar500's first advertisement ran in the July/August 2007 edition of Cigar Aficionado. (Id. ¶ 19.)

The alleged copyright and trademark violations relate to the defendants' use of the "Cigar Aficionado" mark, as well as portions of the May/June 2007 issue of Cigar Aficionado (collectively, the "Work") on their website. (Compl. ¶ 10.)*fn1

The front cover of the Work bears an artistic rendering of two palm trees against a blue sky, with the caption "Cuba Tomorrow" and, as a trademark, a stylized version of the words "Cigar Aficionado." (Id. ¶ 12.) Page 128 of the Work lists several Cuban cigars alongside a Cigar Aficionado "rating" of each cigar on a scale of 1-100 and a brief narrative or "tasting note" describing the particular cigar. (Id. ¶ 13.)

In July 2007, Cigar500 launched a promotion on its website in which it prominently displayed the Work and the "Cigar Aficionado" marks. (Id. ¶ 22, Exs. E, F.) The Cigar500.com homepage is divided into several "frames." (Id. ¶ 24.) On the top left of the homepage, the frame is headed with a salutation saying "Welcome Cigar Aficionado Readers!" (Compl. Ex. E.) The top frame on the right side of the homepage contains a photographic image of the cover of the Work, under the words "ON SALE! The 6 Cuban Cigars Cigar Aficionado Rated 91 or Better! Click Here to ORDER NOW!" (Id. ¶¶ 11-12, Exs. E, F.) If the user clicks on the "Order Now" text they are brought to a web page that contains another image of the Work. At the top of this page is a heading, which states: "RATED 91 OR BETTER BY CIGAR AFICIONADO. 6 AUTHENTIC CUBAN CIGARS. The 6 Cubans that Cigar Aficionado calls 'Outstanding' showcase the best that Cuba has to offer." (Id. ¶¶ 25-27, Ex. F.) Beneath this heading is an image of six cigars, alongside verbatim copies of the "ratings" and "tasting notes" from page 128 of the Work, complete with prices and a link to purchase the cigars in question. (Id.) The plaintiff commenced this action on August 17, 2007.

The plaintiff has alleged five causes of action against the defendants, including a claim for copyright infringement based on the defendants' use of the Work on their website (Compl. ¶¶ 44-55.); trademark infringement and unfair competition under the Lanham Act based on the defendants' use of the plaintiffs' "Cigar Aficionado" marks (Compl. ¶¶ 56-73.); trademark dilution (Compl. ¶¶ 74-80.); and defamation (Compl. ¶¶ 81-90.)

II.

A.

The defendants move to dismiss the complaint for lack of personal jurisdiction ...


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