United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY United States District Judge
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.
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,
www.arielinvestments.com, 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.
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:
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.
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.
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:
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,
www.arielcapitaladvisors.com, 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.
The trademark dispute
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.
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
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
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.
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.
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.
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 www.arielcapitaladvisors.com 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
www.arielcapitaladvisors.com domain name, and attorney's
fees and costs.
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.
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
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.
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.
Waiver of claims based on certain marks
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.
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.
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.
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.
the Court overrules Ariel Capital's contention that Ariel
Investments' claims are limited to only ...