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Gail Green Licensing & Design Limited v. Accord

October 5, 2006

GAIL GREEN LICENSING & DESIGN LIMITED, AND GAIL GREEN, PLAINTIFFS,
v.
ACCORD, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Gail Green Licensing & Design Limited ("GGLDL") and Gail Green, individually, bring the present three-count Amended Complaint against multiple defendants alleging copyright infringement under Count I. In Count II, Plaintiffs allege both false association and false advertising under the Lanham Trademark Act. In Count III, Plaintiffs bring a common law breach of contract claim. Defendants Cecelia Stein Sternberg ("Sternberg"), Accord, Inc. ("Accord"), the Yankee Candle Company ("Yankee Candle"), International Concept Entertainment Group ("ICE Group"), and Buyseasons, Inc. ("Buyseasons") move to dismiss Counts II and III of Plaintiffs' Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court grants in part and denies in part Defendants' motion.

LEGAL STANDARDS

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of a complaint, not the factual sufficiency. Szabo v. Bridgeport Mach., Inc., 249 F.3d 672, 675-76 (7th Cir. 2001); see also Cler v. Illinois Educ. Ass'n, 423 F.3d 726, 729 (7th Cir. 2005) (motion to dismiss challenges complaint's sufficiency). The Court will only grant a motion to dismiss if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Centers v. Mortgage, Inc., 398 F.3d 930, 933 (7th Cir. 2005) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). The Court must assume the truth of the facts alleged in the pleadings, construe the allegations liberally, and view them in the light most favorable to the plaintiff. Centers, 398 F.3d at 333.

Under the liberal federal notice pleading standards, a complaint need only include "a short and plain statement of the claim showing that the pleader is entitled to relief."

Fed.R.Civ.P. 8(a)(2). This statement must "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley, 355 U.S. at 47.

BACKGROUND

GGLDL, an Illinois corporation with its principal place of business in Lake County, Illinois, is engaged in the business of developing, acquiring, selling, licensing, and arranging the manufacture, distribution, marketing, and sale of a variety of copyrighted creative works and two and three-dimensional commercial products using copyrighted creative works. (R. 75-1; Am. Compl. ¶¶ 1, 2.) Plaintiff Green -- a professionally trained artist, designer, and illustrator -- creates and markets original, copyrighted illustrations, designs, drawings, and other artwork for sale or license in the United States and abroad. (Id. ¶ 4.) The creative works at issue include "six separate, original sets of unpublished Works, including but not limited to the individual images, characters and combinations of images, characters and words." (Id. ¶ 40.)

Defendant Sternberg is the owner and director of numerous business entities controlled by Accord, Pet Frenzy, and Compass Marketing. (Id. ¶¶ 7, 8.) GGLDL alleges that Accord, Sternberg, and various Sternberg businesses are involved in the production, marketing, and sales of products such as clothing and accessories for pets. (Id. ¶ 9.) Buyseasons is a Wisconsin corporation that purchases, distributes, and resells clothing and accessories for pets. (Id. ¶¶ 12, 13.) Yankee Candle is a Massachusetts company that purchases distributes, and resells clothing and accessories for pets. (Id. ¶¶ 20, 21). ICE Group, a Nevada company, is in the business of purchasing, distributing, and reselling clothing and accessories for pets. (Id. ¶¶ 28, 29.)

GGLDL alleges that in March of 2002, Sternberg sought to inspect and copy for consideration a number of GGLDL's unpublished works. (Id. ¶ 42.) Before providing the material to Sternberg, GGLDL, Sternberg, and Compass Marketing, the predecessor to Accord, entered into a Non-Disclosure and Confidentiality Agreement. (Id. ¶¶42,64.) GGLDL then provided Sternberg with originals or copies of the works at issue, but Sternberg did not purchase or license these works from GGLDL. (Id. ¶¶ 44-46, 65.) In 2005, Plaintiffs discovered that Accord was allegedly copying, using, producing, distributing, and selling these unpublished works without authorization. (Id. ¶ 48.)

ANALYSIS

I. Lanham Trademark Act Claim - Count II

The Lanham Act established a federal cause of action for trademark infringement in order to protect consumer confidence in the quality and source of goods and businesses' goodwill in their products. CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660, 672 (7th Cir. 2001). "Trademark law is designed to reduce the costs customers incur in learning who makes the product, and this also helps sellers obtain rewards from producing goods of consistent quality, for consumers will find it easier to find and buy goods with which they have been satisfied in the past." Bretford Mfg., Inc. v. Smith Sys. Mfg. Corp., 419 F.3d 576, 579 (7th Cir. 2005). The Lanham Act protects trademarks from interference by state legislation, prevents unfair competition, and protects against fraudulent "use of reproductions, copies, counterfeits, or colorable imitations of registered marks." CAE, Inc., 267 F.3d at 672 (citing 15 U.S.C. ยง 1127). A plaintiff may bring a Lanham Act claim under two theories of liability: (1) false representations regarding the origin, endorsement, or association of goods or services through the wrongful use of another's distinctive mark, name, trade dress, or other device ("false association"); and (2) false representations ...


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