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Guantanamera Cigar Co. v. Corporacion Habanos

December 10, 2009

GUANTANAMERA CIGAR CO., PLAINTIFF,
v.
CORPORACION HABANOS, S.A., DEFENDANT.



The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge

MEMORANDUM OPINION

This matter comes before the Court on the defendant's Motion [54] to Dismiss Counts IV, V, VI of the Second Amended Complaint. Upon consideration of defendant's Motion [54], plaintiff's Response [61] thereto, defendant's Reply [66] brief, the applicable law, and the entire record herein, the Court concludes that the defendant's motion will be GRANTED. The Court's reasoning is set forth below.

BACKGROUND

This case came before the Court for a de novo review of an Order issued by the Trademark Trial and Appeal Board ("TTAB") on February 29, 2008, denying plaintiff Guantanamera Cigar Company's application for a U.S. trademark. The application was opposed by defendant Corporacion Habanos, S.A.. Ultimately, the TTAB found plaintiff's mark geographically deceptively misdescriptive and denied registration of plaintiff's mark. 86 U.S.P.Q.2d 1473, 1479 (T.T.A.B. 2008). After the TTAB's ruling plaintiff filed this civil suit in this Court.

On May 12, 2009 plaintiff filed its Second Amended Complaint [25]. The Second Amended Complaint alleged three new counts claiming defendant is engaging in and has engaged in infringing activity-these are the counts now opposed by defendant. (Second Am. Compl. ¶¶ 67-89.) The claims are (1) Count IV, Unfair Competition Under 15 U.S.C. §1125(a)(1)(A), (2) Count V, Dilution by Tarnishment Under 15 U.S.C. §1125(c), and (3) Count VI, Common Law Trademark Infringement. (Id.) Plaintiff voluntarily withdrew Count V without objection by defendant on September 24, 2009. (See Pl.'s Resp. to Def.'s Mot. to Dismiss Counts IV, V, VI at 2.)

Plaintiff alleges that defendant (1) "launched an advertising campaign for its 'GUANTANAMERA' products," knowingly advertising under the same "mark in cigar publications which are distributed and sold in the United States," and (2) advertised its 'GUANTANAMERA' brand cigars in the European Cigar Cult Journal which is distributed and circulated through the United States. (See Pl.'s Resp. to Def.'s Mot. to Dismiss Counts IV, V, VI at 3-4.) Further, plaintiff alleges that defendant's products are sold on several websites that claim they will deliver "anywhere in the world," including the United States, thus causing confusion between defendant's 'GUANTANAMERA' products and plaintiff's 'GUANTANAMERA' products. (See Second Am. Compl. ¶ 52; see also Def.'s Mot. to Dismiss Counts IV, V, VI at 4 (noting that plaintiff's products are referenced on these websites as well).) Defendant argues that plaintiff has failed to provide sufficient evidence to prove that defendant used its products in U.S. commerce. (See Def.'s Mot. to Dismiss Counts IV, V, VI at 2.)

DISCUSSION

"When considering a motion under Rule 12(b)(6), this Court will dismiss a claim if the plaintiff fails to plead 'enough facts to state a claim for relief that is plausible on its face.'" Zelaya v. UNICCO Service Co., 587 F.Supp.2d 277, 282 (D.D.C. 2008) (Lamberth, C.J.) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); (see also Def.'s Mot. to Dismiss Counts IV, V, VI at 6.) "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." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556). The Court must construe the counts in the light most favorable to the plaintiff. See Twombly, 550 U.S. at 555 (explaining that the court must assume that all of plaintiff's allegations are true even if this is unlikely). However, a plaintiff needs more than "a sheer possibility that a defendant has acted unlawfully." Iqbal, 129 S.Ct. at 1950. "Dismissal under Rule 12(b)(6) is proper when, taking the material allegations of the complaint as admitted, and construing them in plaintiff['s] favor, the court finds that the plaintiff[] has failed to allege all the material elements of [his] cause of action." Weyrick v. New Republic, Inc., 235 F.3d 617, 623 (D.C. Cir. 2001) (internal citations omitted). For multiple reasons the Court finds that plaintiff has failed to plead enough factual content to find defendant is liable for the alleged misconduct.

I. Count IV

Count IV alleges that defendant's activities in the advertisement of its 'GUANTANAMERA' mark constitute unfair competition under the Lanham Act. Plaintiff has failed to provide sufficient evidence to prove two necessary elements; (1) "use in commerce" and (2) likelihood of confusion. In addition, plaintiff has not provided enough factual content to show defendant's actions would produce substantial effects on U.S. commerce to justify an extraterritorial application of the Lanham Act.

a. Failure to Satisfy all Elements

Plaintiff alleges that "[d]efendant's advertising under the 'GUANTANAMERA' mark in cigar industry magazines with United States circulation constitutes unfair competition in violation of Section 43(a) of the Lanham Act . . . ." (Second Am. Compl. ¶ 71.) Section 43(a), 15 U.S.C. §1125(a)(1)(A) makes it actionable when, "[a]ny person . . . uses in commerce any word, term, name . . . or false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which-(A) is likely to cause confusion . . . ." 15 U.S.C. §1125(a)(1)(A). Therefore, in order to meet this threshold the defendant must have used the 'GUANTANAMERA' mark in commerce. See id. §1125(a)(1). As defined by §1127 of the Act, the word "commerce" means "all commerce which may lawfully be regulated by Congress." Id. §1127. The term "use in commerce" means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce- (1) on goods when- (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce, and (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

Id. §1127. Plaintiff must prove that the defendant (1) used a designation or false designation of origin, (2) in interstate commerce, (3) in connection with goods or services, (4) the designation is likely to cause confusion, and (5) plaintiff already has been or is likely to be damaged. See 5 J. THOMAS MCCARTHY, McCarthy on Trademarks and Unfair Competition § 27:13 (2009 ed.).

Defendant argues that plaintiff has failed to plead two essential elements of its claim by (1) failing to allege any acts that constitute "use in commerce" and (2) failing to plead a likelihood of confusion. (See Def.'s Mot. to Dismiss Counts IV, V, VI at 15; ...


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