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Devere v. Plaintiff

July 13, 2012

DEVERE GROUP GMBH,
v.
PLAINTIFF, CORP. D/B/A PISSEDCONSUMER.COM, MICHAEL PODOLSKY, JOANNA SIMPSON AND ALEX SYROV, DEFENDANTS.



The opinion of the court was delivered by: Block, Senior District Judge:

MEMORANDUM AND ORDER OPINION

Plaintiff deVere Group GmbH ("deVere") brings this action for violation of the Lanham Act, 15 U.S.C. § 1051, et seq., against defendants Opinion Corp., Michael Podolsky, Joanna Simpson, and Alex Syrov (collectively, "defendants").*fn1 Defendants move to dismiss for failure to state a claim, pursuant to Federal Rule of Evidence 12(b)(6). For the following reasons, defendants' motion is granted.

I

For purposes of this motion the court must take as true all of the allegations of deVere's complaint, and must draw all inferences in deVere's favor. See Weixel v. Board of Educ., 287 F. 3d 138, 145 (2d Cir. 2002). The district court may also consider "documents attached to the complaint as an exhibit or incorporated in it by reference," "matters of which judicial notice may be taken, or. . . documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bringing suit." Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993). The following facts are presented accordingly.

DeVere is an international financial consulting company, organized under Swiss law, which works with individual investors, investment houses, and insurance companies in approximately 40 countries, including, according to a company website, the United States. DeVere operates a number of websites, including devere-group.com and devereandpartners.co.uk, which provide information for clients and potential clients about deVere financial services and investment opportunities. DeVere contends that it utilizes the following distinctive "trade names": deVere, deVere Group and deVere and Partners.*fn2

Compl. ¶ 3.4.

Opinion Corp. owns, operates, and maintains the website PissedConsumer.com, a complaint site which invites consumers to post reviews and criticism of businesses. Negative reviews are prominently displayed on the website. Opinion Corp. advertises PissedConsumer as a "premier consumer advocacy group," and as a review website which allows consumers to "make better choices" and provides an "empowering" and "unbiased" view of companies and products. Compl. ¶¶ 3.9, 3.10. The individual defendants are all officers of Opinion Corp.: Podolsky is the Chief Executive Officer, Simpson is the Marketing Director, and Syrov is the President.

Opinion Corp. creates "subdomains" for each of the companies reviewed on PissedConsumer. Complaints about deVere are posted on the subdomain deveregroup.pissedconsumer.com (the "deVere subdomain"). The deVere subdomain page contains a brief description of the company, followed by a section labeled "Devere Group Complaints and Reviews." Review headings include "Devere stole my pension" and "Devere Lies-Conmen-Fraudsters." The Google search engine displays the deVere subdomain among the top results when a search is performed for "deVere" or "deVere Group." DeVere attributes this high ranking to Opinion Corp's search engine optimization ("SEO") practices, through which Opinion Corp. makes the contents of PissedConsumer.com appear particularly relevant to the algorithms of search engines like Google.

II

DeVere asserts a claim for "trademark infringement, unfair competition. . . [and] false designation of origin" under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Compl. ¶4.8.*fn3

A. Standards Governing the Lanham Act

Section 43(a) of the Lanham Act is designed to "eliminate the confusion that is created in the marketplace by the sale of products [or services] bearing highly similar marks." Malletier v. Burlington Coat Factory Warehouse Corp., 426 F.3d 532, 539 (2d Cir. 2005). To establish liability under Section 43(a) of the Lanham Act, "a plaintiff must show (1) that it has a valid mark that is entitled to protection under the Act, and (2) that use of the defendant's mark infringes, or is likely to infringe, the mark of the plaintiff," meaning that use of the mark "creates a likelihood of confusion." Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503, 1508-09 (2d Cir. 1997).

For the first element, a mark is "valid" and entitled to protection when it is "distinctive" and links a product to its particular source. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 758 (1992). In addition, trademark protection is reserved to foreign companies "whose actual trade goes, attended by the use of its mark," into commerce "in the United States or in commerce which may lawfully be regulated by Congress." Buti v. Perosa, S.R.L., 139 F.3d 98, 105 (2d Cir. 1998) (internal quotation marks omitted); see ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 155 (2d Cir. 2007) ("The territoriality principle requires the use to be in the United States for the owner to assert priority rights to the mark under the Lanham Act.").

For the second element, "[l]ikelihood of confusion includes confusion of any kind, including confusion as to source, sponsorship, affiliation, connection, or identification. . . The public's belief that the mark's owner sponsored or otherwise approved the use of the trademark satisfies the confusion requirement." Star Industries, Inc. v. Bacardi & Co. Ltd., 412 F.3d 373, 383-84 (2d Cir. 2005) (internal citations and quotation marks omitted). "The crucial issue in an action for trademark infringement . . . is whether there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the ...


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