The opinion of the court was delivered by: MARK FILIP, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs, Gil Gold ("Gold") and Tamir Levy ("Levy"),
individually and d/b/a/ Gold & Levy (collectively, "Plaintiffs"
or "Gold & Levy"), filed a Second Amended Complaint ("Complaint")
on April 21, 2005, against Golden G.T., LLC ("Golden G.T." or
"Defendant"), AER Services, Inc. ("AER Services"), and Shlomoh
Ben-David ("Ben-David") (collectively, "Defendants"). (D.E.
58.)*fn1 The Complaint alleged the following claims against
Defendants: violations of the Lanham Act for trademark
infringement (Count I) and false designation of origin (Count II)
under 5 U.S.C. § 1125(a); violation of the Illinois Uniform
Deceptive Trade Practices Act, 815 ILCS 510/2 ("UDTPA"), and
Illinois Consumer Fraud and Deceptive Business Practices Act,
815 ILCS 505/10(a) ("CFDBPA") (Count III); breach of
contract/rescission (Count IV); and design patent infringement
under 35 U.S.C. § 271 (Count V).
The case is before the Court on Golden G.T.'s motion to dismiss
Count III of the Plaintiffs' Complaint (which implicates only Golden G.T.) on the
grounds that (1) Gold & Levy failed to state a claim upon which
relief can be granted, see Fed.R.Civ.P. 12(b)(6), and (2)
Gold & Levy failed to plead its claim with the requisite
particularity, see Fed.R.Civ.P. 9(b). (D.E. 62.) For the
reasons stated below, the Court respectfully denies the motion to
Gold & Levy have been in the business of developing, designing,
marketing, manufacturing, importing, and selling various
houseware products throughout the world since 1996. (D.E. 58 ¶¶
5, 10.) In 2001, Gold & Levy developed a unique cereal dispenser
designed for home use, and determined that the United States
market was their best product launch opportunity. (Id. ¶ 18.)
In 2002, Gold & Levy incorporated under the name Golden G.T.,
Ltd., (Id. ¶ 11), and in January 2003, they displayed their
cereal dispenser at trade shows in the United States bearing the
EASY MORNING trademark, including in Chicago. (Id. ¶ 20.)
According to the Complaint, Gold & Levy met defendant Ben-David
at a San Francisco, California trade show around May 2003 and
discussed launching a U.S. business to market the cereal
dispenser. (Id. ¶¶ 23, 24.) In June 2003, Plaintiffs entered
into a written agreement ("Agreement") with AER Services which
was operated by Ben-David, its majority owner to "initiate the
development of a new corporation for the distribution of cookware
and home goods." (Id. ¶¶ 7-8, 26.) To gain the goodwill
connected with Gold & Levy's past experience, the new company
purported to be associated with Golden G.T. Gold & Levy gave
Defendants permission to use their website and the domain name,
www.goldengt.com; the new company also used existing Gold & Levy marketing documents to publish its
own marketing brochures which touted the "exceptional
international reputation" of Gold, Levy, and Golden G.T., so as
to help sell products for the new company. (Id. at ¶¶ 34, 35.)
Gold & Levy worked hard to launch the EASY MORNING cereal
dispenser and watched sales grow from zero to approximately $1
million from October 2003 to April 2004. (Id. ¶ 37.) According
to the Complaint, Defendants' response to the success of the EASY
MORNING cereal dispenser was to demand that the terms of the
agreement with Gold & Levy be changed. (Id. ¶ 38.) When Gold &
Levy refused, the Complaint states that Defendants initiated
actions to "force plaintiffs out of the company." (Id. ¶ 39.)
Defendants discontinued Gold & Levy's salary payments and
threatened to charge them with, inter alia, "criminal trespass
proceedings." (Id.) Thereafter, Defendants recognized a
potential conflict in ownership of the trade name Golden G.T. and
re-branded the cereal dispenser under the new company name
"Zevro." (Id.) Defendants, however, continued to use the EASY
MORNING trademark which Plaintiffs "have spent a considerable
amount of money" establishing "on or in connection with . . .
goods in interstate commerce and within the State of Illinois."
(Id. ¶¶ 46, 53.)
The Complaint further alleges that the Golden G.T. acted
willfully and with reckless disregard by misrepresenting to the
public that "[s]ince 1996, ZEVRO has brought customers . . .
products for the home." (Id. ¶¶ 42, 72, 74.) Further,
Plaintiffs allege that Defendants distributed printed sales
literature indicating that Golden G.T. is the source of the EASY
MORNING cereal dispenser. (Id. ¶ 50.) These statements were
made in Golden G.T.'s "distribution of printed marketing
materials and its interactive web site, and [were] intended to
induce consumers and other purchasers to rely on those
representations in the purchase of [Golden G.T.'s] products."
(Id. ¶ 72.) Gold & Levy allege that together, Defendants' trade practices have caused actual confusion among consumers as to the
source of the cereal dispenser, (id. ¶ 59 (referencing print
ads, forms, and sales literature)), and are likely to "cause
confusion or mistake or deceive product buyers and consumers as
to the source and origin of their goods." (Id. ¶ 55; see also
id. ¶ 73 (discussing false implications that Defendant's goods
originate from and are sponsored by Gold & Levy).) The Complaint
further alleges that the goodwill associated with the EASY
MORNING mark will be diminished because the Plaintiffs are unable
to control the quality of goods supplied by the Defendant. (Id.
The purpose of the motion to dismiss under Rule 12(b)(6) is to
test the sufficiency of the complaint not to determine whether
the plaintiffs will ultimately prevail, but whether they are
entitled to present evidence supporting their claim. Gibson v.
City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). The court
must accept the plaintiff's allegations as true and draw all
reasonable inferences in the plaintiff's favor. Bressner v.
Ambroziak, 379 F.3d 478, 480 (7th Cir. 2004); accord Jang v.
A.M. Miller & Assocs., 122 F.3d 480, 483 (7th Cir. 1997). In
considering the motion, the court is generally limited to the
pleadings, which include the complaint, any exhibits attached
thereto, and any supporting briefs. Thompson v. Ill. Dept. of
Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). The court,
however, is "neither bound to the plaintiff's legal
characterization of the facts, nor required to ignore facts set
forth in the complaint that undermine the plaintiff's claims."
Avlon Indus. v. Robinson, No. 01 C 3615, 2003 WL 22025004, at
*1 (N.D. Ill. Aug. 27, 2003) (citing Scott v. O'Grady,
975 F.2d 366, 368 (7th Cir. 1992)). Only where "`it appears beyond doubt
that the plaintiff can prove no set of facts in support of his
claim which would entitle him to relief'" is dismissal for
failure to state a claim appropriate. Lee v. City of Chicago,
330 F.3d 456, 459 (7th Cir. 2003) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
Generally, a pleading need only contain a "short and plain
statement of the claim showing that the pleader is entitled to
relief," Fed.R.Civ.P. 8(a)(2), such that it provides fair
notice of the nature of the plaintiff's claim and the grounds
upon which it rests. See Leatherman v. Tarrant County Narcotics
Intelligence and Coordination Unit, 507 U.S. 163, 168 (1993);
accord Scott v. City of Chicago, 195 F.3d 950, 951 (7th Cir.
1999). A charge of fraud, however, must be pled with
particularity in federal court. See Fed.R.Civ.P. 9(b). The
Seventh Circuit instructs that the complaint must allege "`the
identity of the person making the misrepresentation, the time,
place, and content of the misrepresentation, and the method by
which the misrepresentation was communicated to the plaintiff.'"
Kennedy v. Venrock Assocs., 348 F.3d 584, 593 (7th Cir. 2003)
(quoting Sears v. Likens, 912 F.2d 889, 893 (7th Cir. 1990)).
In Count III of the Complaint, Gold & Levy allege that the
Defendants' unauthorized use of the EASY MORNING mark and false
representations made to consumers violate the Illinois Uniform
Deceptive Trade Practices Act ("UDTPA"), 815 ILCS 510/2.
Plaintiffs also allege that this misconduct likewise constitutes
a violation of ...