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Eagle Forum v. Phyllis Schlafly's American Eagles

United States District Court, S.D. Illinois

October 19, 2017

EAGLE FORUM, an Illinois Not for Profit Corporation
v.
PHYLLIS SCHLAFLY'S AMERICAN EAGLES, a Virginia Not for Profit Corporation, Defendant. And ANNE SCHLAFLY CORI, on behalf of Eagle Forum, et al., Plaintiffs,

          MEMORANDUM AND ORDER

          HERNDON, UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Now before the Court is a motion to dismiss counterclaims originally submitted by the Defendant. (Doc. 68.) The Plaintiff has submitted the motion and accompanying memorandum to dismiss these counterclaims. (Docs. 77, 78, 91.) The Defendant has responded in opposition. (Doc. 90.) For the reasons below, the Court grants Plaintiff's motion to dismiss all counterclaims.

         II. Analysis

         A. Motion to Dismiss Standard

         When ruling on a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(6), a court must accept the complaint's well-pleaded factual allegations as true and draw reasonable inferences from those allegations in plaintiff's favor. Transit Exp., Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir. 2001). The court must then determine “whether relief is possible under any set of facts that could be established consistent with the allegations.” Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir. 1992) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

         A motion to dismiss tests the sufficiency of the complaint, not its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A claim may be dismissed only if it is beyond doubt that under no set of facts would a plaintiff's allegations entitle them to relief. Travel All over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1429 (7th Cir. 1996). To survive a motion to dismiss, “[c]omplaints need not plead facts and need not narrate events that correspond to each aspect of the applicable legal rule.” Kolupa v. Roselle Park Dist., 438 F.3d 713, 715 (7th Cir. 2006).

         B. Motion to Dismiss Counts I and III

         Cori argues that American Eagles do not have the requisite standing to pursue trademark infringement claims under federal law since they are not the actual rights holder and thus the action is prohibited.

         Whether standing to sue for false designation of origin requires the plaintiff to be the registrant is a matter of controversy between circuits. The 7th circuit has chosen to allow mere license holders to sue for false designation, but only so far as to “ensure that only the current owner of the mark can claim infringement.” Specht v. Google Inc., 747 F.3d 929, 933 (7th Cir. 2014) (Stating only the owner of a registered mark has standing to claim infringement; the registrant loses the right upon transfer to an assignee).

         Here, the issue is whether the Counter-Plaintiff holds a reasonable interest based on their license because it is clear they cannot show proof of ownership. The Counter-Plaintiff admits in their own complaint that they held at most a license which was later extinguished by Ms. Schlafly herself in a public statement. Since proof of ownership under the Lanham Act includes only the registrant or an assignee, the Counter-Plaintiff clearly does not meet this requirement.

         Beyond proof of ownership, a non-registrant may still pursue a claim for false designation if they hold a reasonable interest in the trademark itself and may be harmed by the defendant's continued use through confusion in the marketplace. As stated above, the Counter-Plaintiff claims to have held a license from Ms. Schlafly before it was revoked just prior to her death. This revocation would seem to destroy any claim by the Counter-Plaintiff to a reasonable interest since barring the license; the organization is not the registrant to any mark within the “family of marks”.

         As stated above, when adjudicating a motion to dismiss, the motion should be granted only when the non-moving party cannot show any facts in support of their claim that would allow them to succeed. Roots Partnership v. Lands' End, Inc., 965 F.2d 1411, 1416 (7th Cir. 1992). With ample opportunity to present any evidence of their license from Ms. Schlafly or that Ms. Schlafly was in fact the registrant of the marks at issue, Counter-Plaintiffs have failed to provide the court with any meaningful evidence that their false designation or origin claims have any merit.

         Accordingly, since the Counter-Plaintiff has failed to provide any facts that would allow them ...


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