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AMERIPAY v. AMERIPAY PAYROLL

September 16, 2005.

AMERIPAY LLC, Plaintiff,
v.
AMERIPAY PAYROLL, LTD., Defendant.



The opinion of the court was delivered by: RONALD GUZMAN, District Judge

MEMORANDUM OPINION AND ORDER

Ameripay LLC has sued Ameripay Payroll, Ltd., for cybersquatting pursuant to the Anticy bersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), and trademark infringement and unfair competition pursuant to the Lanham Trademark Act of 1946 ("Lanham Act"), 15 U.S.C. §§ 1114, 1125(a), as well as for violating New Jersey laws, prohibiting unfair competition and trademark infringement. Defendant has moved for summary judgment based on laches. For the reasons set forth below, the Court denies the motion.

FACTS*fn1

  Unless otherwise noted, the following facts are undisputed. Defendant Ameripay Payroll, Ltd. is an Illinois corporation located and doing business in Illinois. (Def.'s LR 56.1(a)(3) ¶ 4.) It provides payroll and tax-payment processing and services primarily to clients in Illinois and Wisconsin. (Id. ¶¶ 5, 35.) Plaintiff Ameripay LLC is a New Jersey corporation located in New Jersey that provides payroll-processing services primarily to clients with headquarters in New York and New Jersey. (Id. ¶¶ 1, 2.)

  In 1995, plaintiff adopted and first used the Ameripay mark in New Jersey. (Id. ¶ 3.) In August 1997, defendant began operating its business in Illinois using the name Ameripay Payroll, Ltd. (Id. ¶¶ 6, 9.)

  In July 1998, plaintiff first became aware of defendant when one of plaintiff's employees advised Paul Bultmeyer, Executive Director of Ameripay LLC, that he discovered defendant's name on a chamber of commerce listing under payroll services while searching the Internet. (Id. ¶ 12; Def.'s Ex. 2, Bultmeyer Dep. of 9/1/04 at 70.) On August 7, 1998, Bultmeyer sent defendant a cease-and-desist letter. (Def.'s LR 56.1(a)(3) ¶ 13.) The letter stated: "It has come to my attention that your firm is using `Ameripay' as a service mark for payroll processing services. . . . Your firm's use of this service mark is an infringement of my client's rights under this registration." (Id.; see Def.'s Ex. 1, Schurin Decl. Ex. 7, Letter from Bultmeyer to Sarowitz of 8/7/1998.)

  Bultmeyer testified that when defendant did not respond to his letter within a month or two, Bultmeyer called Steven Sarowitz, President of Ameripay Payroll, Ltd. (Def.'s LR 56.1(a)(3) ¶ 15.) He also testified that Sarowitz told him that defendant would respond to his demand before the end of the year, after consulting counsel. (Id. ¶ 16.) However, plaintiff now argues that Bultmeyer so testified because at the time, he did not have the benefit of a particular document, a facsimile cover sheet, to refresh his recollection. The document, dated August 17, 1998, contains Bultmeyer's handwritten statement that he spoke with defendant's principal Steve Sarowitz, and that Steve said he was willing to discontinue use of the mark but asked for some time to use up his current letterhead. (Pl.'s LR 56.1(b)(3)(A) ¶ 15.) The Court views these disputed facts in plaintiff's favor. Sarowitz then called plaintiff's principal, Arthur Piancentini. (Def.'s LR 56.1(a)(3) ¶ 17.) Sarowitz did not state that defendant would stop using the Ameripay mark, and Bultmeyer never withdrew the allegations in his August 7, 1998 letter. (Id.)*fn2

  In March 1999, defendant purchased the domain name ameripay.com from the previous registrant. (Id. ¶ 18.) The web site became active shortly thereafter. (Id. ¶ 19.)

  In October 1999, a law firm representing plaintiff sent defendant a letter demanding that defendant stop using the Ameripay mark. (Id. ¶ 20; see Def.'s Ex. 1, Schurin Decl. Ex. 9, Letter from Radin to Sarowitz of 10/21/1999.) In the letter, plaintiff stated, "if we do not receive a response to this letter indicating that you will comply with the above demands or if you are not willing to voluntarily proceed as requested, our clients will be forced to initiate suit against you for willful trademark infringement and for monetary damages and attorney's fees once our client has completed its plans to offer its services in Illinois." (Def.'s LR 56.1(a)(3) ¶ 20.) Defendant again called plaintiff's principal, Piancentini, and stated that defendant would not cease using the Ameripay mark. (Pl.'s LR 56.1(b)(3)(A) ¶ 22.) Defendant never complied with the letter. (Def.'s LR 56.1(a)(3) ¶ 22.)

  When plaintiff's counsel sent the October 1999 letter, plaintiff provided payroll services to a New Jersey client that had an office in Illinois, which required mailing checks to Illinois. (Id. ¶ 21; see Pl.'s LR 56.1(b)(3)(A) ¶ 21.) Further, plaintiff admits that it was not in fact prepared to bring suit against defendant because plaintiff and defendant were not competing at the time. (Def.'s LR 56.1(a)(3) ¶ 23.) Instead, plaintiff waited for defendant to be more directly competitive before bringing suit. (Id. ¶ 24.) Plaintiff did not contact defendant again until four years later upon service of plaintiff's Complaint in July 2003. (Id. ¶ 22.)

  DISCUSSION

  Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A "genuine issue of material fact exists only where `there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party,'" Dribeck Imps., Inc. v. G. Heileman Brewing Co., Inc., 883 F.2d 569, 573 (7th Cir. 1989) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). In considering such a motion, the court must view all inferences in the light most favorable to the nonmoving party. See Regner v. City of Chi., 789 F.2d 534, 536 (7th Cir. 1986). Although the district court's role on summary judgment is not to sift through the evidence and decide whom to believe, the court will enter summary judgment against a party who does not come forward with evidence that would reasonably permit a finder of fact to find in his or her favor on a material questions. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994).

  Defendant argues that plaintiff's claims are barred under the doctrine of laches. Plaintiff argues that: (1) laches does not bar its cybersquatting claim; (2) the doctrines of progressive encroachment and unclean hands prevent defendant from asserting laches as to the rest of plaintiff's claims; (3) even if the Court were to find that its claims for damages are barred by laches, the delay in bringing suit ...


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