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Shelters v. 4Semo.Com, Inc.

United States District Court, S.D. Illinois

February 24, 2014

SOUTHERN ILLINOIS STORM SHELTERS, Plaintiff/Counterclaim Defendant,
v.
4SEMO.COM, INC., Defendant/Counterclaimant,
v.
INGOLDSBY EXCAVATING, INC., Additional Counterclaim Defendant.

MEMORANDUM and ORDER

DAVID R. HERNDON, Chief District Judge.

Introduction and Background

Now before the Court is defendant/counterclaimant 4Semo.com, Inc.'s motion to dismiss plaintiff's amended complaint (Doc. 36). 4Semo.com argues that plaintiff's amended complaint should be dismissed in its entirety pursuant to Federal Rules of Civil Procedure 10(b) and 12(b)(6) for failure to state a claim. Plaintiff opposes the motion (Doc. 43). Based on the following, the Court DENIES the motion.

On July 2, 2013, plaintiff, Southern Illinois Storm Shelters, Inc., filed an amended complaint for trademark infringement, unfair competition, cybersquatting, deceptive trade practices and intentional tortious interference with contractual relations against 4Semo.com, Inc. (Doc. 34). The amended complaint contains seven counts: Count I - Federal Unfair Competition Violation of Section 43(a) of the Lanham Act; Count II - Federal Trademark Infringement Violation of Section 43(a) of the Lanham Act; Count III - Cybersquatting in Violation of the Anti-Cybersquatting Consumer Protection Act; Count IV - Violation of the Illinois Uniform Deceptive Trade Practices Act; Count V - Violation of Illinois Trademark Registration and Protection Act and Common Law; Count VI - Violation of the Common Law of Unfair Competition and Count VII - Common Law Intentional Tortious Interference with Contractual Relations. Plaintiff is in the business of designing, manufacturing and selling fiberglass storm shelters and above ground metal safe rooms. Defendant is in the business of providing general contracting work and is also a dealer of storm shelters. Plaintiff alleges that, despite knowledge of plaintiff's extensive use and substantial common law rights in the marks "Southern Illinois Storm Shelters" and "Lifesaver Storm Shelters, " defendant has attempted to register and use confusingly similar or identical terms and domain names in connection with similar services in competition with plaintiff and in violation of plaintiff's intellectual property rights. Plaintiff's lawsuit stems from defendant's infringement of the marks through defendant's website, related advertisements and on products not manufactured by the plaintiff and defendant's purchase of domain names identical or related to the marks.

On October 28, 2013, defendant filed an amended counterclaim against plaintiff and Ingoldsby Excavating, Inc. (Doc. 55). The amended counterclaim contains twelve counts: Count I - Trademark Infringement; Count II - Trademark Dilution; Count III - Violation of the Lanham Act, 15 U.S.C. § 1225, et seq., For False Advertising, False Endorsement, and/or Unfair Competition; Count IV - Common Law Unfair Competition; Count V - Violation of Illinois Uniform Deceptive Trade Practices Act; Count VI - Violation of Illinois State Trademark Registration and Protection Act/Common Law Trademark Infringement; Count VII - Misappropriation of Time and Investment; Count VIII - Breach of Contract; Count IX - Unjust Enrichment; Count X - Civil Conspiracy; Count XI - Fraud and Count XII - Cybersquatting in Violation of the Anti-Cybersquatting Consumer Protection Act. 4Semo.com alleges that it conceived, created and developed the LifeSaver Storm Shelters mark at its own cost and on its own initiative to indicate the retail source of the shelters it sold and installed. 4Semo.com also alleges that plaintiff, as a supplier to 4Semo.com, learned of 4Semo.com's marks from 4Semo.com and eventually asked 4Semo.com if it could use the 4Semo.com marks in Southern Illinois and 4Semo.com agreed to that limited use. 4Semo.com also alleges that plaintiff and Ingoldsby Excavating moved beyond the approved use and that plaintiff had started using the marks when selling to their other dealers and had purported to license their other dealers to the marks.

On July 19, 2013, defendant filed the motion to dismiss stating that plaintiff filed this action "as a tactical, preemptive maneuver, designed to derail 4SEMO's proper registration of 4SEMO's Lifesaver Storm Shelters trademark with the United States Patent and Trademark Office." (Doc. 37, ps. 1-2). Defendant moves to dismiss plaintiff's amended complaint in its entirety. Plaintiff opposes the motion. As the motion is ripe, the Court addresses the merits.

Standards

Rule 10(b) requires that a party limit its claims and defenses "as practicable to a single set of circumstances" and that "each claim founded on a separate transaction or occurrence... must be stated in a separate count or defense." Fed.R.Civ.P. 10(b); see Frederisksen v. City of Lockport, 384 F.3d 437, 438 (7th Cir. 2004). The purpose of Rule 10(b), in conjunction with Rule 8, is to "give defendants fair notice of the claims against them and the grounds supporting the claims." Stanard v. Nygren, 658 F.3d 792, 797 (7th Cir. 2011) (citations omitted). Accordingly, dismissal is appropriate where a complaint is so unintelligible that the defendant cannot reasonably be expected to be on notice of the plaintiff's claims. Id. at 798 ("[T]he issue is notice; where the lack of organization and basic coherence renders a complaint too confusing to determine the facts that constitute the alleged wrongful act, dismissal is an appropriate remedy."); 5C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1376 (3d ed. 1998) ("Rule 10(b) is designed to improve the intelligibility of pleadings.").

When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all facts alleged in the complaint and construes all reasonable inferences in favor of the plaintiff. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007)(citing Savory v. Lyons, 469 F.3d at 667, 670 (7th Cir. 2006)); accord Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). To state a claim upon which relief can be granted, a compliant must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that when "accepted as true... state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To determine whether a complaint meets this standard, the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 556 U.S. at 678.

Federal Rule of Civil Procedure 8(a)(2) imposes "two easy-to-clear hurdles" that a complaint must satisfy in order to survive a motion to dismiss pursuant to Federal Rule of Procedure 12(b)(6). Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008)(quoting EEOC v. Concentra Health Svcs., Inc., 496 F.3d 773, 776 (7th Cir. 2007)). First, a complaint must describe the plaintiff's claims and the grounds supporting them in "sufficient detail to give the defendants fair notice" of the claims alleged against them. This requires more than mere "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007).

Second, to survive a motion to dismiss, the court determines whether the well-pleaded allegations, if true, "plausibly suggest a right to relief, raising that possibility above a speculative level." See Iqbal 556 U.S. at 679; Concentra, 496 F.3d at 776. A claim has facial plausibility when the pleaded factual content allows the Court to draw a reasonable inference that the defendant is liable for the misconduct alleged. See Iqbal, 556 U.S. at 678. "The plausibility standard... asks for more than a sheer possibility that a defendant acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Iqbal, 556 U.S. at 678 (internal quotation marks omitted). "Plausibility' in this context does not imply that the district court should decide whose version to believe, or which version is more likely than not." Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). Rather, Twombly and Iqbal require "the plaintiff to provide some specific facts' to support the legal claims asserted in the complaint." McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)). Though the "degree of specificity required is not easily quantified, ... the plaintiff must give enough details about the subject-matter of the case to present a story that holds together.'" Id. (quoting Swanson, 614 F.3d at 404). If a complaint does not satisfy these two criteria, "the plaintiff pleads itself out of court." Concentra, 496 F.3d at 776. Accordingly, a motion to dismiss may be properly granted where the plaintiff does not allege a plausible entitlement to relief either by (1) failing to provide the defendant with notice of plausible claims against it or (2) asserting only speculative or conclusory allegations in the complaint.

Analysis

First, defendants argue that plaintiff's amended complaint fails to plead separate allegations as to wrongful activities to each phrase it claims as a mark. Instead, defendant maintains that plaintiff lumped them together as "the marks" and referred vaguely to the bunched phrase. The Court disagrees with defendant's assessment of plaintiff's amended complaint. In fact, plaintiff's amended complaint is intelligible and coherent. The amended complaint states all of its claims and allegations in separate numbered paragraphs. The amended complaint begins with sections setting forth the nature of the case, jurisdiction and venue and the parties. Thereafter, there is a section titled "Factual Background" which contains allegations that are "common to all claims." That portion of the amended complaint is eventually followed by the individual counts setting forth its claims against defendant. The amended complaint adequately puts defendant on notice as to its claims. Accordingly, dismissal pursuant to Rule 10(b) is not necessary and would only serve to further delay this case. The Court denies the motion on this basis. The Court turns now to address defendant's Rule 12(b)(6) arguments.

"Congress passed the Lanham Act in 1946 to federalize" existing common law protection of trademarks used in interstate commerce. CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660, 672 (7th Cir. 2001). Under the Lanham Act, a defendant is liable for ...


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