United States District Court, S.D. New York
MEMORANDUM AND ORDER
P. KEVIN CASTEL, District Judge.
Plaintiffs Car-Freshner Corporation and Julius Samann Ltd. move to dismiss the Amended Counterclaims (the "Counterclaims") of defendant D&J Distributing and Manufacturing, Inc. d/b/a Exotica Fresheners Co. ("D&J") pursuant to Rule 12(b)(6), Fed.R.Civ.P. (Docket # 27.) The parties manufacture and sell tree-shaped air fresheners that are commonly used in automobiles. Plaintiffs sell air fresheners in the shape of fir trees, while D&J's air fresheners are in the shape of fattened palm trees. The packaging included in the parties' trade dress prominently features the color yellow.
Plaintiffs allege that D&J has unlawfully copied the designs of their tree-shaped product lines and their packaging's trade dress, and argue that D&J's counterclaims are "retaliatory" and "demonstrably false, incoherent, or irrelevant." (Pl. Mem. at 2.) The parties' respective claims and counterclaims assert infringement and dilution of trademark and trade dress under the Lanham Act and New York law.
For the reasons explained, the plaintiffs' motion to dismiss D&J's counterclaims is granted as to the alleged violation of New York General Business Law section 349, but denied in all other respects.
This action commenced on January 22, 2014, when plaintiffs filed a complaint alleging that D&J infringed their trademarks and trade dress under the Lanham Act, 15 U.S.C. §§ 1114 & 1125, and violated New York's General Business Law and common law. (Docket # 1.) Plaintiffs manufacture and sell "Little Trees" brand air fresheners, which are designed in the shape of a fir tree. (Compl't ¶¶ 7-8.) D&J manufactures and distributes "Exotica" brand air fresheners designed in the shape of a palm tree. (Compl't ¶ 36.) According to the plaintiffs, D&J's products copy the plaintiffs' distinctive packaging, color shades and product names. (Compl't ¶¶ 27-40.) By way of one example, plaintiffs sell a product in the shape of a fir tree featuring an American flag design under the name "Vanilla Pride"; D&J sells a product in the shape of a palm tree featuring an American flag design under the name "Flag Vanilla." (Compl't ¶ 37.) The "Exotica" and "Little Trees" air fresheners are sold in a trade dress that prominently features the color yellow in its packaging. (Compl't ¶ 36.)
D&J filed an Answer and Counterclaim on February 13, 2014. (Docket # 9.) On April 4, 2014, it filed an Amended Answer & Amended Counterclaims. (Docket # 21.) In its Counterclaims, D&J contends that it has registered several uncontestable "Exotica" trademarks, and also owns common law trademarks for its products' designs and packaging. (Counterclaims ¶¶ 6-7.) It attaches as an exhibit evidence of its "Exotica" trademark registrations. (Counterclaims Ex. A.) D&J asserts four counterclaims: 1.) infringement of trademark and trade dress, and unfair competition, under the Lanham Act, 15 U.S.C. § 1125; 2.) deceptive trade practices in violation of New York General Business Law section 349; 3.) trade dress dilution under New York General Business Law section 360- l ; and 4.) unfair competition under New York common law. (Counterclaim ¶¶ 1-53.) These four counterclaims mirror the causes of action asserted in the plaintiffs' Complaint. (Compl't ¶¶ 47-66.)
Plaintiffs filed their motion to dismiss the counterclaims on May 12, 2014. (Docket # 27.) They assert that they have engaged in a series of disputes with D&J since 1995, including plaintiffs' allegedly successful demands that D&J alter its packaging, and a 2011 lawsuit in the Northern District of New York, Car-Freshner Corp., et al. v. D & J Distributing & Manufacturing Inc., 11 Civ. 617 (N.D.N.Y.) (NAM), which ended in a consent judgment wherein D&J agreed to alter certain marks. (Pl. Mem. at 3-4; Compl't ¶¶ 28-34.) According to the plaintiffs, during that prior litigation, D&J was already in the process of altering its packaging to a design similar to that of the plaintiffs. (Compl't ¶ 37.)
RULE 12(b)(6) STANDARD.
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain 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 US. 544, 570 (2007)). "[L]abels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.'" Id . (quoting Twombly , 550 U.S. at 555). A plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . Hence, although "detailed factual allegations'" are not necessary in order to state a claim, id. (quoting Twombly , 550 U.S. at 555), in order to satisfy Rule 8, Fed. R. Civ. P., a complaint must still set forth "sufficient information to permit the defendant to have a fair understanding of what the plaintiff is complaining about and to know whether there is a legal basis for recovery." Kittat v. Kornstein , 230 F.3d 531, 541 (2d Cir. 2000). There is no heightened pleading requirement for a Lanham Act claim. See, e.g., Wellnx Life Sciences Inc. v. Iovate Health Servs. Research Inc. , 516 F.Supp.2d 270, 283 n.2 (S.D.N.Y. 2007) (collecting cases).
"In adjudicating a motion to dismiss, a court may consider only the complaint, any written instrument attached to the complaint as an exhibit, any statements or documents incorporated in it by reference, and any document upon which the complaint heavily relies." In re Thelen LLP , 736 F.3d 213, 219 (2d Cir. 2013). If a motion to dismiss relies on "matters outside the pleadings, " the Court may convert a motion to dismiss into a motion for summary judgment under Rule 56, Fed.R.Civ.P. See Rule 12(d), Fed. R. Civ. P.; Parada v. Banco Industrial De Venezuela, C.A. , 753 F.3d 62, 67-68 (2d Cir. 2014).
I. The Counterclaims Adequately Identify the Disputed Marks and Trade Dress.
Plaintiffs argue that D&J's counterclaims should be dismissed because D&J has not adequately alleged the existence and ownership of its trade dress or trademarks. To state a trademark infringement claim, a plaintiff must allege that "(1) it has a valid mark that is entitled to protection under the Lanham Act; and that (2) the defendant used the mark, (3) in commerce, (4) in connection with the sale... or advertising of goods or services, ' (5) without the plaintiff's consent." 1-800 Contacts, Inc. v. WhenU.Com, Inc. , 414 F.3d 400, 407 (2d Cir. 2005) (quoting 15 U.S.C. § 1114(1)(a)). When a plaintiff alleges that trade dress has been infringed under the Lanham Act, the plaintiff must "articulate the ...