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Ariel Investments, LLC v. Ariel Capital Advisors LLC

United States District Court, N.D. Illinois, Eastern Division

January 21, 2017



          MATTHEW F. KENNELLY United States District Judge

         Ariel Investments, LLC has sued Ariel Capital Advisors LLC alleging trademark infringement, unfair competition, and cybersquatting in violation of the Lanham Act, and unfair trade practices in violation of the Illinois Deceptive Trade Practices Act (IDTPA) and Illinois common law. Ariel Investments has moved for summary judgment on its trademark infringement and unfair competition claims. Ariel Capital has cross-moved for summary judgment on all of Ariel Investments' claims. For the reasons stated below, the Court grants summary judgment in favor of Ariel Capital on Ariel Investments' cybersquatting claim but otherwise denies both parties' motions for summary judgment.


         I. Ariel Investments

         Ariel Investments was founded in January 1983 by John Rogers under the name Ariel Capital Management, Inc. Ariel Investments is an investment management firm that operates in all fifty states. The company provides investment management services and also offers products such as separate accounts and mutual funds to institutional and individual investors. Ariel Investments acquires individual clients through its website,, and by referrals from potential clients' financial advisors, such as Schwab, Fidelity, or other broker-dealers. Ariel Investments launched its first public-facing separate account, Ariel Small Cap Fund, in September 1983. It launched its first mutual fund, the Ariel Fund, in November 1986. Rogers has stated that he launched Ariel Investments with $150, 000 from family and friends and that he got his first multi-million dollar account after eighteen months. In 2008, the company changed its name to Ariel Investments, LLC. Today, Ariel Investments has over 300, 000 mutual fund shareholders across the country.

         In June 1983, Ariel Investments applied to the United States Patent and Trademark Office (USPTO) to register the trademark ARIEL. Its application stated that it had been using the ARIEL name since January 1983 and had been using it in interstate commerce since March 1983. The USPTO granted registration of the ARIEL trademark to Ariel Investments in July 1984. Over the following years, Ariel Investments registered eight additional trademarks with the USPTO: ARIEL APPRECIATION FUND, ARIEL FUND, ARIEL INVESTMENTS, ARIEL FOCUS FUND, ARIEL'S ABCS OF MONEY, ARIEL DISCOVERY FUND, ARIEL INTERNATIONAL FUND, and ARIEL GLOBAL FUND. These nine marks are referred to collectively as the Ariel Marks. Five of these marks-ARIEL, ARIEL INVESTMENTS, ARIEL FUND, ARIEL FOCUS FUND, and ARIEL APPRECIATION FUND-have become incontestable under 15 U.S.C. § 1115(b). Ariel Investments' current logo contains the words ARIEL INVESTMENTS and an image of a turtle holding a trophy cup:

         Ariel Investments uses the Ariel Marks to advertise and promote its financial services in numerous publications in print as well as online. It spends, on average, more than $1.3 million per year in advertising. Officers of Ariel Investments have also contributed to various television programs, and Rogers writes a regular column in Forbes Magazine.

         II. Ariel Capital

         Ariel Capital is a financial services firm founded in 2014 by Christopher Bray. Bray has worked in the financial services industry since the early 1990s and knew of Rogers before founding Ariel Capital. Ariel Investments also sent Bray promotional emails around July 2010, while Bray still worked for another company.

         Bray indicates that he named Ariel Capital after his daughter, Ariel, and the ministry for which he and his wife have worked for several years. Bray further states that the company name is intended to invoke the Hebrew meaning of the word, namely "lion of God." Bray initially wanted to use the name Ariel Wealth Advisors. He performed a Google search for this name, however, and discovered that it was already in use by a company in New Jersey. Bray says that he cannot recall whether, during that Google search, he also noticed any other financial services firms using the name Ariel. Ariel Capital's current logo contains the words Ariel Capital Advisors, LLC and an image of the head of a lion:

         Ariel Capital has offices in Florida and Ohio. It is a boutique private wealth management firm offering investment management services as well as tax, retirement, and estate planning services. The company advertises its services on its website,, and in advertisements in Florida and Ohio publications. Ariel Capital has clients in over ten states, which it finds primarily on a word-of-mouth or referral basis. The company requires of its clients a minimum account of $1 million, though it may choose to accept clients with smaller portfolios. Ariel Capital does not invest in mutual funds and focuses only on individual, as opposed to institutional, clients.

         III. The trademark dispute

         Ariel Investments claims that Ariel Capital's use of the word Ariel in connection with its financial services infringes the Ariel Marks. Specifically, Ariel Investments asserts that, given the overlap in services offered by the two companies, an individual investor might conclude that Ariel Capital is sponsored by or otherwise affiliated with Ariel Investments.

         Ariel Investments contends that there have been a number of instances where individuals have confused or mistakenly associated the two companies. In March 2015, an unidentified caller contacted Phyllis Brady, a human relations representative for Ariel Investments, and attempted to check references for a job candidate the caller was considering. The caller allegedly stated that someone at Ariel Capital had told her that Ariel Investments and Ariel Capital were related companies.

         That same month, Mareilé Cusack, Ariel Investments' general counsel, received a phone call from a woman asking about a piece of real estate in Naples, Florida. Specifically, the woman stated that the real estate was listed under the name Ariel, she performed a Google search to determine whom this referred to, and she came up with Ariel Investments' contact information. Cusack told the woman that Ariel Investments did not own or lease any property in Naples.

         In April 2015, Chris Squittieri, an employee at Ariel Capital, attended a meeting of chartered financial analysts (CFAs) in Naples. While there, Squittieri was approached by Justin Land, another CFA, who asked Squittieri whether there was any affiliation between Ariel Capital and Ariel Investments.

         In February 2016, an unidentified caller contacted Marcie Rebardo, an employee at Ariel Capital, asking to speak with Cheryl Hagen and asking, "Isn't this Ariel Investments?" The phone number was later connected to the cell phone of Daniel Boone, the owner of a digital publication on the financial industry. Boone has since indicated that he was attempting to contact Cheryl Cargie, an employee of Ariel Investments, to discuss an upcoming article and to determine whether Ariel Investments wanted to advertise in his publication. Boone stated that he mistakenly found Ariel Capital's number after performing a Google search for Ariel Investments.

         In May 2016, Monica Schandel, a client of Ariel Capital, also allegedly confused the two firms. Schandel owns Blue Oceans Financial Planning, LLC and employs Ariel Capital to provide investment management services. Counsel for Ariel Investments contacted Schandel to subpoena company records regarding its relationship with Ariel Capital. Schandel wrote a letter in response to the request, in which she stated that she has one joint client with Ariel Investments. Ariel Investments says that Schandel has a joint client not with Ariel Investments, but with Ariel Capital. Further, during her deposition in June 2016, Schandel appeared to confuse the two companies. When asked the location of Ariel Investments' headquarters and whether she knew any of its employees, Schandel responded with Naples, Florida and by naming Bray and Squittieri, two employees of Ariel Capital. Later during her deposition, Schandel testified that she was a little confused about the names but that Ariel Capital was the company with which she has a relationship.

         Ariel Investments filed this suit against Ariel Capital in April 2015. Ariel Investments alleges in count 1 that Ariel Capital's name constitutes deliberate infringement of the Ariel Marks in violation of section 32 of the Lanham Act, 15 U.S.C. § 1114. In count 2, Ariel Investments alleges that Ariel Capital has engaged in unfair competition in violation of section 43 of the Lanham Act, 15 U.S.C. § 1125(a). Ariel Investments alleges in count 3 that Ariel Capital has engaged in unfair competition and deceptive trade practices in violation of the IDTPA, 815 ILCS 510/1-510/7. In count 4, Ariel Investments alleges that Ariel Capital has engaged in trade name infringement and unfair competition in violation of Illinois common law. Finally, Ariel Investments alleges in count 5 that Ariel Capital's use of the domain name constitutes cybersquatting in violation of 15 U.S.C. § 1125(d). Ariel Investments requests declaratory and injunctive relief, disgorgement of Ariel Capital's profits, an award of statutory and punitive damages, transfer of the domain name, and attorney's fees and costs.

         In its answer, Ariel Capital asserts both affirmative defenses and counterclaims. Ariel Capital first argues, in defense to a claim of trademark infringement, that the registration for the ARIEL mark must be cancelled because it was procured by Ariel Investments' fraud on the USPTO. In its second affirmative defense, Ariel Capital alleges that Ariel Investments has abandoned the ARIEL and ARIEL INVESTMENTS marks due to naked licensing and a failure to police the marks. Ariel Capital also has asserted a five-count counterclaim, two counts of which this Court dismissed in a prior order. See Ariel Invs., LLC v. Ariel Capital Advisors, LLC, No. 15 C 3717, 2016 WL 2851570 (N.D. Ill. May 16, 2016). In the remaining counts of its counterclaim, Ariel Capital asserts that (1) the word Ariel is merely a descriptive term that cannot be trademarked under section 2(e)(1) of the Lanham Act; (2) the word Ariel is a generic term that cannot be trademarked under 15 U.S.C. § 1064(3); and (3) Ariel Investments has abandoned the ARIEL mark and therefore its registration must be cancelled. Ariel Capital requests declaratory and injunctive relief.


         Ariel Investments has moved for partial summary judgment. It contends that it is entitled to summary judgment on counts 1 and 2 of its complaint because its trademarks are incontestable and otherwise valid and it has demonstrated a likelihood of confusion between the Ariel Marks and Ariel Capital's name. Ariel Capital has cross-moved for summary judgment.

         Ariel Capital argues first that Ariel Investments has essentially waived its right to bring claims based on seven of the nine Ariel Marks, leaving only the claims based on the ARIEL mark and the ARIEL INVESTMENTS mark. Ariel Capital then argues that it is entitled to summary judgment on counts 1 and 2 for two reasons: the ARIEL mark's registration must be cancelled due to fraud by Ariel Investments, and there is no likelihood of confusion between the ARIEL INVESTMENTS mark and Ariel Capital's name. Ariel Capital further argues that, because claims under Illinois law rely on the same standard as the Lanham Act, the Court should grant summary judgment in favor of Ariel Capital on counts 3 and 4. Finally, Ariel Capital argues that it is entitled to summary judgment on count 5 because Ariel Investments cannot establish the elements of cybersquatting.

         Summary judgment is appropriate when the evidence provided shows that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Sorensen v. WD-40 Co., 792 F.3d 712, 722 (7th Cir. 2015). Facts are viewed in the light most favorable to the non-moving party. See Georgia-Pacific Consumer Prods. LP v. Kimberly-Clark Corp., 647 F.3d 723, 727 (7th Cir. 2011). Summary judgment is appropriate where no reasonable juror could return a verdict in favor of the non-moving party. Sorensen, 792 F.3d at 722.

         I. Waiver of claims based on certain marks

         Ariel Investments' complaint charges Ariel Capital with infringing all nine of the trademarks referred to as the Ariel Marks. Ariel Capital argues that Ariel Investments, through its own admissions, has since narrowed its case to only two trademarks: the ARIEL mark and the ARIEL INVESTMENTS mark. Def.'s Mem. in Supp. of Mot. for Summ. J. at 5-6.

         In making this argument, Ariel Capital points to two statements by Ariel Investments. In response to a discovery request, Ariel Investments stated, "Ariel Capital insists on discovery relating to Ariel Investments' use of animal illustrations not at issue in this case. Only the ARIEL and ARIEL INVESTMENTS marks are at issue in this case." Pl.'s Resp. to Def.'s Mot. to Compel Produc. of Docs. at 6. This statement, however, was made in response to Ariel Capital's request for discovery of animal imagery. Ariel Investments was only indicating that the images themselves are not at issue. Ariel Investments was not attempting to limit the scope of its claims.

         Ariel Capital also points to Ariel Investments' motion to dismiss Ariel Capital's counterclaims. In the background section of that brief, Ariel Investments referred only to the ARIEL and ARIEL INVESTMENTS marks, indicating that those two marks have become incontestable under the Lanham Act. Pl.'s Mem. in Supp. of Mot. to Dismiss Def.'s Countercls. at 1-2. But Ariel Investments did not thereby disclaim its allegations based on the other seven marks. The fact that Ariel Investments, at times, chose to refer to one or two marks does not amount to a relinquishment of claims brought based on the other marks.

         Ariel Capital relies on Green v. Travis, No. 00 C 2230, 2000 WL 1409828 (N.D. Ill. Sept. 26, 2000), a case in which this Court found that plaintiffs were estopped from bringing a claim of fiduciary duty. Id. at *2. In Green, however, the Court noted that plaintiffs had "said they were making no such claim and disavowed any intention to raise such a claim in the future." Id. That is not the case here.

         In sum, the Court overrules Ariel Capital's contention that Ariel Investments' claims are limited to only ...

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