United States District Court, S.D. New York
THOMAS P. GRIESA, District Judge.
This case involves rival hair-removal businesses. Plaintiff Romeo & Juliette Laser Hair Removal, Inc. alleges that defendants Assara I, LLC and its principals used plaintiff's marks, purchased deceptive search-result advertisements through Google Inc., and posted fraudulent reviews to consumer websites to divert customers away from plaintiff's business to defendants' business. Plaintiff sued defendants asserting false designation of origin, unfair competition, trademark infringement, and other claims brought under the Lanham Act and New York law. Defendants have filed a motion to dismiss. For the following reasons, the Court will deny the motion in part and grant the motion in part.
On January 17, 2008, plaintiff served defendants with a complaint ("Original Complaint" or "OC") asserting five causes of action for trademark infringement and unfair competition. The Original Complaint survived cross motions for summary judgment. However, on April 1, 2009 plaintiff amended the Original Complaint ("First Amended Complaint" or "FAC") to include federal-law claims for unfair competition and state-law claims for defamation, unfair competition, and disparagement. In February of 2013, defendants filed a motion to dismiss the First Amended Complaint.
At a hearing on the motion to dismiss the First Amended Complaint, plaintiff indicated that it sought injunctive relief against defendants. However, plaintiff did not include a claim for injunctive relief in the First Amended Complaint. Consequently, the Court granted defendants' motion to dismiss, but sua sponte gave plaintiff leave to amend the complaint a second time. Plaintiff filed a second amended complaint ("Second Amended Complaint" or "SAC") on October 1, 2013. Defendants have moved to dismiss the Second Amended Complaint.
Plaintiff provides laser hair-removal services in the New York City area. Defendants operate a competing laser hair-removal business. Plaintiff uses the names and marks "Romeo & Juliette" and "Romeo & Juliette Laser" to advertise its services on the internet. Plaintiff claims that in 2007, defendants purchased the search phrase "Romeo & Juliette" from Google Inc. so that whenever the public searched for "Romeo & Juliette" a sponsored link to defendant Assara's website would appear. Plaintiff also claims that defendants used its name and mark "Romeo Juliette Laser" in hidden links and text on its websites in order to deceive the public into believing plaintiff sponsored defendants' hair-removal services. Finally, plaintiff alleges that defendants published defamatory statements about plaintiff and its services on public websites hosting customer reviews and evaluations.
Plaintiff asserts eleven counts in the Second Amended Complaint: (1) use of a false designation of origin or false and misleading representation of fact in violation of 15 U.S.C. § 1125(a)(1); (2) dilution of a famous mark in violation of 15 U.S.C. § 1125(c); (3) engaging in unfair business practices in violation of New York General Business Law § 349; (4) trademark infringement in violation of New York common law; (5) unfair competition in violation of 15 U.S.C. § 1125(a); (6) common law defamation; (7) unfair competition under New York State law; (8) common law disparagement; (9) making false, misleading, and defamatory statements concerning plaintiff's business in violation of the Lanham Act, 15 U.S.C. §§ 1116 and 1125; (10) making false and misleading statements about Plaintiff's business in violation of New York General Business Law § 349; and (11) "a claim for injunctive relief for under [sic] New York common law." Plaintiff seeks damages, fees, costs, and injunctive relief.
A. Whether Plaintiff Has Sufficiently Stated its Claims.
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must plead sufficient facts to state a claim for relief that is plausible on its face. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007); Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). The plaintiff must show "more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678. In deciding the motion, the court accepts as true all well-pleaded allegations contained in the complaint and draws all reasonable inferences in favor of the plaintiff. See Twombly , 550 U.S. at 555-56. However, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678.
1. Count One: False Designation of Origin in Violation of the Lanham Act; Counts Four, Five, Seven, and Nine: Trademark Infringement and Unfair Competition Under Federal and State Law.
Defendants argue that plaintiff has failed to state its claims under the Lanham Act and New York common law. The purpose of the Lanham Act is to "make actionable the deceptive and misleading use of marks' and to protect those engaged in commerce from unfair competition.'" Dastar Corp. v. Twentieth Century Fox Film Corp. , 539 U.S. 23, 28 (2003) (quoting 15 U.S.C. § 1127). A "false designation of origin" claim under Section 43(a) allows a plaintiff to recover where a defendant uses false or misleading representations of fact so as to cause confusion between the defendant's goods or services and the plaintiff's goods or services. See 15 U.S.C. § 1125(a). Claims under New York common law for trademark infringement and unfair competition mirror claims under the Lanham Act. Lorillard Tobacco Co. v. Jamelis Grocery, Inc. , 378 F.Supp.2d 448, 456 (S.D.N.Y. 2005).
Because of this similarity, courts use matching tests in analyzing claims for false designation of origin, trademark infringement, and unfair competition under the Lanham Act and New York common law. See, e.g., Richemont N. Am., Inc. v. Huang, No. 12-CV-4443, 2013 WL 5345814, at *5 n.15 (S.D.N.Y. Sept. 24, 2013). Each of these claims requires a plaintiff to show: (1) the existence of a valid mark that is entitled to protection; and (2) that the defendant's actions are likely to cause confusion with the plaintiff's mark. Morningside Grp. Ltd. v. Morningside Capital Grp., LLC , 182 F.3d 133, 137 (2d Cir. 1999). A claim for unfair competition under New York common law requires the plaintiff to satisfy an additional element and show that the defendant's conduct was in bad faith. Lorillard , 378 F.Supp.2d at 456.
A mark is "valid" if it is inherently distinctive, or if it has acquired some secondary meaning rendering the mark and the business synonymous in the eyes of the public. Time, Inc. v. Petersen Pub. Co. L.L.C. , 173 F.3d 113, 117 (2d Cir. 1999). With regard to whether the defendant's actions are likely to cause confusion, courts apply an eight factor, factually-intensive inquiry. Polaroid Corp. v. Polarad Elecs. Corp. , 287 F.2d 492, 495 (2d Cir. 1961). This lengthy factual analysis does not, of course, lend itself to review of a motion to dismiss. See The Name LLC v. Arias, No. 10-CV-3212, 2010 WL 4642456, at *5 (S.D.N.Y. Nov. 16, 2010). At this stage, courts confine their review to a more general analysis of whether a defendants' use of the plaintiff's marks is likely to cause confusion. See, e.g., Van Praagh v. Gratton, 993 F.Supp.2d 293, 303 (E.D.N.Y. 2014).
Here, plaintiff has alleged sufficient facts to show it held a valid mark entitled to protection. For many years, plaintiff offered laser hair-removal services under the mark "Romeo & Juliette Laser Hair Removal" and marketed its service using those terms. SAC ¶¶ 12-13. Plaintiff also made "considerable" investments in online advertisements using those terms. SAC ¶ 13. Taken together, these facts suggest that the terms "Romeo & Juliette Laser Hair Removal" were distinctive enough to warrant protection under the Lanham Act, or to render them synonymous with plaintiff's business in the eyes of the public. Thus, ...