Enea Embedded Technology, Inc et al v. Eneas Corporation et al

Filing 32

ORDER granting 13 Defendants' Motion to Dismiss without prejudice to Plaintiffs refiling should Defendants engage in a "commercial use" of the ENEA trademark. ORDER that Plaintiffs' Motion to Dismiss Defendants' counterclaims 29 is granted. ORDER that the Clerk of Court is directed to terminate this action. Signed by Judge G Murray Snow on 3/10/09.(TLJ)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WO IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Enea Embedded Technology, Inc.; Enea) ) AB, ) ) Plaintiffs, ) ) vs. ) Eneas Corporation; Enea Embedded) Technology, Inc.; Enea AB, Inc..; Enea,) Inc.; Maurice Amidei, an individual;) ) Anthony Amidei, an individual, ) ) Defendants. ) ) No. 08-CV-1595-PHX-GMS ORDER Pending before the Court is the Motion to Dismiss of Defendants Eneas Corporation, Maurice Amidei, and Anthony Amidei. (Dkt. # 13.) Defendants Enea Embedded Technology, Inc., Enea AB, Inc., and Enea, Inc. joined in the motion. (Dkt. # 14.) For the reasons set forth below, the Court grants Defendants' motion. BACKGROUND I. Facts Plaintiff Enea AB is a Swedish corporation formed in 1968 with its principal place of business in Stockholm, Sweden. Plaintiff Enea AB is the parent and owner of Enea Software, AB, which is the parent and owner of TekSci, Inc. TekSci, Inc., which is qualified to transact business in Arizona under the name Enea Embedded Technologies, Inc., is the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 parent and owner of Plaintiff Enea Embedded Technology, Inc. ("Enea Embedded"). Plaintiff Enea Embedded is a Texas corporation formed in 1993 with its principal place of business in San Jose, California. Plaintiff Enea Embedded maintains offices in Chandler and Phoenix, Arizona. Plaintiffs are in the business of developing and distributing network software and services for the global telecommunications industry. Notably, Plaintiffs' software has been embedded in nearly one billion electronic devices, including nearly half of the world's mobile phone handsets and base stations. Plaintiff Enea AB began selling its products and services in the United States, using the ENEA mark, in 1997. On September 9, 2003, the United States Patent and Trademark Office issued federal trademark registration No. 2,760,861 to Plaintiff Enea AB for the mark ENEA in connection with the manufacture, sale and marketing of electronic apparatus and instruments, technology education, and development/maintenance of computer programs and systems. The filing and priority date for the ENEA trademark registration is November 8, 2001. Defendant Eneas Corporation is a Texas corporation formed in 1993 with its principal place of business in Texas. Defendant Eneas Corporation is owned by Defendant Maurice Amidei, a resident of Houston, Texas. Defendants Enea Embedded Technology, Inc., Enea AB, Inc., and Enea Inc. are Oklahoma corporations owned by Defendant Anthony Amidei or Defendants Anthony and Maurice Amidei. Defendant Anthony Amidei is alleged to reside in Oklahoma. Although Plaintiffs generally allege that Defendants have used the ENEA trademark in connection with their services, they fail to allege what those services are in either their Complaint (Dkt. # 1) or their Response to Defendants' Motion to Dismiss (Dkt. # 29). In 2006, Plaintiffs began a global effort to align all Enea AB subsidiaries under the same name Enea, Inc. Consequently, Plaintiff Enea Embedded filed an application with the Texas Secretary of State requesting that its corporate name be changed to Enea, Inc. However, because Defendant Eneas Corporation had previously been incorporated in Texas in 1993 under a similar name, the Texas Secretary of State refused to grant the request unless -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant Eneas Corporation agreed to consent to the change. On October 6, 2006, counsel for Plaintiff Enea Embedded sent a letter to Defendants Eneas Corporation and Maurice Amidei requesting that Defendant Eneas Corporation consent to Plaintiff Enea Embedded's corporate name change. On January 31, 2007, Defendant Eneas Corporation, through Defendant Maurice Amidei, responded to Plaintiff Enea Embedded's consent request "inquir[ing] as to the consideration Defendant Eneas Corporation would receive for allowing the name change," and requesting detailed information about Plaintiff Enea Embedded's business and use of the ENEA mark in states other than Texas. (Dkt. # 1 26.) On March 27, 2007, Defendant Eneas Corporation, through Maurice Amidei, sent another letter addressed to Plaintiff Enea AB to its Sweden and Arizona offices. The letter granted consent to Plaintiff Enea Embedded's corporate name change in Texas but "`insist[ed] that [Plaintiffs'] companies immediately cease and desist from using the name Enea, Eneas, or similar names' until an agreement could be made regarding Plaintiffs' `future and past right to use Enea, Eneas or similar names.'" (Dkt. # 1 29.) During the time period in which the parties were corresponding by mail, Defendants pursued registration of various corporate names containing the ENEA mark in various states. On November 13, 2006, shortly after the consent request, Defendant Maurice Amidei filed applications with the Oklahoma Secretary of State to register ENEA AB, INC., ENEA INC., and ENEA EMBEDDED TECHNOLOGY, INC. as corporate names in Oklahoma. On February 28, 2007, Defendant Anthony Amidei, filed applications with the Arizona Corporation Commission to register ENEA AB, INC., ENEA INC., and ENEA EMBEDDED TECHNOLOGY, INC. as corporate names in Arizona. Plaintiffs, however, do not allege that Defendants are conducting any form of business under these corporate names or are otherwise using the ENEA mark in connection with the offering of goods or services. In September of 2007, Plaintiff Enea Embedded requested that Defendants release the names registered with the Arizona Corporation Commission and requested that Defendants "disclose the circumstances under which Defendants would be willing to release the[] names." (Id. 31.) These requests were renewed by Plaintiff Enea Embedded by a letter -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 dated October 5, 2007. On January 2, 2008, having received no response from Defendants, Plaintiffs filed an application with the Arizona Corporation Commission for the corporate name ENEA EMBEDDED TECHNOLOGY, INC. This application was denied due to Defendants' existing Arizona registration of the same name. Plaintiffs also allege that in December of 2007, the Arizona Department of Economic Security ("ADES") mailed a letter, which was intended for Plaintiff Enea Embedded's parent company, Enea Embedded Technologies, Inc., but was mistakenly delivered to Defendants Anthony Amidei and Enea Embedded Technology, Inc. As a result, on April 4, 2008, Defendant Anthony Amidei sent a letter to Plaintiff Enea AB on behalf of an entity entitled ENEA EMBEDDED TECHNOLOGIES, INC., stating that "ADES had confused `my corporation' with Plaintiff Enea Embedded," and requesting "that Plaintiff Enea Embedded cease from doing business using the name Enea Embedded Technologies, Inc." (Id. 36.) On April 24, 2008, Plaintiff Enea AB responded demanding that Defendants "immediately cancel all corporate registrations using the ENEA mark, and cease all further use of the ENEA mark." (Id. 37.) II. Procedural History On August 27, 2008, Plaintiffs filed their Complaint against Defendants alleging statutory trademark infringement and unfair competition under the Lanham Act and common law unfair competition under Arizona law. (Id. 38-55.) On November 3, 2008, Defendants Maurice and Anthony Amidei and Eneas Corporation filed a motion to dismiss to which the remaining defendant corporations joined. (Dkt. ## 13, 14.) Defendants seek dismissal under Federal Rule of Civil Procedure 12(b) for lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, and failure to state a claim upon which relief can be granted. (See Dkt. # 13.) DISCUSSION In the Motion to Dismiss, Defendants present several different theories supporting dismissal of Plaintiffs' Complaint. Pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6), Defendants argue that Plaintiffs' suit must be dismissed for lack of federal subject -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 matter jurisdiction or alternatively because Plaintiffs have failed to state a federal claim upon which relief can be granted. (Dkt. # 13 at 3.) Because subject matter jurisdiction is lacking, the Court declines to address Plaintiffs alternative theories supporting dismissal. I. Federal Rule of Civil Procedure 12(b)(1) Standard of Review Federal courts are courts of limited jurisdiction and federal subject mater jurisdiction must exist at the time an action is commenced. See Morongo Band of Mission Indians v. Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988). Because of its import, lack of subject matter jurisdiction may be raised at any time by any party or by the court. See Fed. R. Civ. P. 12(h); Attorneys Trust v. Videotape Computer Prods., Inc., 93 F.3d 593, 594-95 (9th Cir. 1996). "A party invoking the federal court's jurisdiction has the burden of proving the actual existence of subject matter jurisdiction." Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996). "If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). "A Rule 12(b)(1) jurisdictional attack may be facial or factual." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); see Thornhill Publ'g Co. v. Gen. Tel. & Elecs., 594 F.2d 730, 733 (9th Cir. 1979). "In a facial attack, the challenger asserts that the allegations contained in the complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air for Everyone, 373 F.3d at 1039. Given the nature of a facial attack, a court is required to accept the allegations in the complaint as true and view them in the light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1988); see also Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). A court, however, need not "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Id. (quotation omitted). Plaintiffs assert that jurisdiction exists pursuant to 28 U.S.C. 1331. (Dkt. # 1 7.) Section 1331 grants subject matter jurisdiction in "all civil actions arising under the Constitution, laws, or treaties of the Untied States." Unless a complaint presents a plausible -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 assertion of a substantial federal right, however, a federal court does not have jurisdiction. See Bell v. Hood, 327 U.S. 678, 682-83 (1946) ("[A] suit may sometimes be dismissed for want of jurisdiction where the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous."); Hagans v. Lavine, 415 U.S. 528, 536-37 (1974) ("Over the years this Court has repeatedly held that the federal courts are without power to entertain claims otherwise within their jurisdiction if they are so attenuated and unsubstantial as to be absolutely devoid of merit . . . or no longer open to discussion."); see, e.g., Banga v. Am. Express Cards, No. 2:06-cv-0880-GEB-GGH-PS, 2007 WL 474182, at *3 (E.D. Cal. Feb. 9, 2007) (dismissing a complaint for lack of subject matter jurisdiction where the plaintiff's federal claim was outside the scope of the Lanham Act because the plaintiff failed to allege a deceptive commercial statement); Hancock Park Homeowners Ass'n Est. 1948 v. Hancock Park Home Owners Ass'n, No. CV 06-4584 SVW, 2006 WL 4532986, at *2 (C.D. Cal. Sept. 20, 2006) (dismissing a complaint for lack of subject matter jurisdiction where the plaintiff's alleged federal claim was outside the scope of the Lanham Act because the plaintiff failed to plead a commercial use of the plaintiff's trademark). II. Count I Federal Lanham Act Claims, 15 U.S.C. 1114(1), 1125(a) In the Complaint, Plaintiffs plead federal trademark infringement and unfair competition claims based on the allegation that "Defendants have fraudulently adopted and used Plaintiffs' federally registered ENEA mark in interstate commerce by registering the ENEA mark . . . via the business names Enea, Inc., Enea Embedded Technology, Inc., and Enea AB, Inc., as well as Eneas Corporation." (Dkt. # 1 41.) Plaintiffs further assert that "Defendants have . . . fraudulently adopted and used Plaintiffs' federally registered ENEA mark in interstate commerce and in connection with Defendants' services by corresponding with Plaintiffs using those names and offering to consent to Plaintiff Enea Embedded's name change to Enea, Inc. for consideration, declaring their exclusive use of those names in Arizona, and demanding that Plaintiffs cease from using those names." (Id. 42.) Plaintiffs -6- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 therefore conclude that they have "fully set forth their claim under the `cognizable legal theory' of trademark infringement, and at a level well above `plausible.'" (Dkt. # 29 at 16.) Defendants, however, "specifically deny they are engaged in any commerce which is in competition with plaintiffs, and allege that they have not caused plaintiffs any commercial or competitive injury." (Dkt. # 13 at 2.) Defendants argue that "[t]he Complaint alleges infringement merely by label and conclusion or a formulaic recitation of element[s] of a cause of action . . . assuming all the allegations in the Complaint are true." (Dkt. # 13 at 8.) For infringement of federally registered marks, the Lanham Act requires the accused use be "in connection with the sale, offering for sale, distribution or advertising of any goods or services" in a context that is likely to cause confusion, mistake or deception. 15 U.S.C. 1114(1). Similarly, for infringement of unregistered marks, the Lanham Act requires that the accused use be "on or in connection with any goods or services" and be likely to cause confusion, mistake or deception as to the affiliation, connection or association of the accused person with the plaintiff or as to the origin of the "goods, services or commercial activities" of the accused person. 15 U.S.C. 1125(a)(1)(A). In Bosley Med. Inst., Inc. v. Kremer, the Ninth Circuit, interpreting the language of 1114 and 1125(a), held that trademark infringement claims under the Lanham Act "are subject to a commercial use requirement." 403 F.3d 672, 676 (9th Cir. 2005); see also Lamparello v. Falwell, 420 F.3d 309, 313 (4th Cir. 2005) ("To prevail under [ 1114(1) or 1125(a)], the trademark holder must prove: (1) that it possessed a mark; (2) that the opposing party used the mark; (3) that the opposing party's use of the mark occurred `in commerce'; (4) that the opposing party used the mark `in connection with the sale, offering for sale, distribution, or advertising' of goods or services; and (5) that the opposing party used the mark in a manner likely to confuse consumers."); Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 695 (6th Cir. 2003) ("If defendants are only using [plaintiff's] trademark in a `nontrademark' way that is, in a way that does not identify the source of a product then trademark infringement and false designation of origin laws do not apply."); New Kids on -7- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Block v. News Am. Publ'g, Inc., 971 F.2d 302, 307 (9th Cir. 1992) (holding that infringement laws "simply do not apply" to a "non-trademark use of a mark"). "The inclusion of [this] requirement[] in the Lanham Act serves the Act's purpose: `to secure the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.'" Bosley, 403 F.3d at 676 (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 774 (1992)).1 In Bosley, the Ninth Circuit was confronted with the issue of whether "the noncommercial use of a trademark as a domain name of a website . . . constitute[s] infringement under the Lanham Act." Id. at 674. The Court ultimately held that: The dangers that the Lanham Act was designed to address are simply not at issue in this case. The Lanham Act, expressly enacted to be applied in commercial contexts, does not prohibit all unauthorized uses of a trademark. [The defendant's] use of the [plaintiff's trademark] simply cannot mislead consumers into buying a competing product . . . . Id. at 679-80. The question before the Court, then, is whether Plaintiff's allegations, taken as true and viewed in the light most favorable to Plaintiff, are sufficient to satisfy the commercial 1 J. Thomas McCarthy notes: Perhaps the reason that it is argued that a non-trademark use of another's mark is not an infringement is that a non-trademark use is highly unlikely to cause actionable confusion. To be an infringement, there must be a likelihood of confusion over source, sponsorship, affiliation or approval. This happens when the potential buyer is confronted with two similar designations, both of which are used as marks. That is, the viewer is confronted with two similar designations which in context tell the viewer that they identify and distinguish a single source. Because defendant is an imitative free rider, each of the contesting designations is used to identify, not a single source, but two different sources. This causes confusion and deception in the viewer's mind. This is trademark infringement. 4 J. Thomas McCarthy, Trademarks and Unfair Competition 23:11.50 (4th ed. 2008). -8- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 use requirement of the Lanham Act; specifically, whether Defendants' alleged use of Plaintiffs' ENEA trademark was "in connection with the sale of goods or services" such that consumers may be misled in their purchasing decisions. This very issue was addressed in the context of registering business names in Hancock Park Homeowners Ass'n, 2006 WL 4532986, and Crown Realty & Development, Inc. v. Sandblom, No. CV 06-1442-PHX-JAT, 2007 WL 177842 (D. Ariz. Jan. 22, 2007). In Hancock Park, a clerical error led to the suspension of the plaintiff's corporate name HANCOCK PARK HOME OWNERS ASSOCIATION with the California Secretary of State. 2006 WL 4532986, at *1. Consequently, that corporate name, which also was also used by the plaintiff as a service mark, became available to the public for registration. Id. The defendant took advantage of the opportunity and registered the exact name that the plaintiff had used as its corporate name and service mark. Id. As a result, the plaintiff sued in federal court alleging federal question jurisdiction based on allegations that the defendant had violated 1125 of the Lanham Act. In dismissing the case for lack of subject matter jurisdiction, the court held that the defendant's conduct was "outside the scope of the Lanham Act" because the plaintiff failed to allege actions that "involve commercial transactions in any sense" necessary to satisfy the commercial use requirement set forth in Bosley. Id. at *2, *5. In Crown Realty, the plaintiff, Crown Realty & Development Co., was a Californiabased company that had major real estate holdings throughout the western states. Crown Realty, 2007 WL 177842, at *1. A subsidiary of the plaintiff purchased the defendant's home in connection with a development project. Id. Unhappy with the sale, the defendant registered CROWN REALTY & DEVELOPMENT CO, LLC as an Arizona limited liability company. Id. After the plaintiff demanded that the defendant stop using the registered name, the defendant responded by suggesting that she would consider selling the name to the plaintiff. Id. The plaintiff then sued in federal court, alleging that the defendant had violated 1114 and 1125 of the Lanham Act. In dismissing the case under Federal Rule of Civil Procedure 12(b)(6), the court held that the Lanham Act "does not offer protection against the -9- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 type of behavior [the defendant] ha[d] exhibited [there]." Id. at *2. Because the plaintiff failed to plead allegations which would satisfy the commercial use requirement, the court dismissed the Lanham Act claims "without prejudice to [the] [p]laintiff refiling should [the defendant] begin using the company name to sell goods or services." Id. Other courts have reached similar conclusions. See, e.g., HQM, Ltd. v. Hatfield, 71 F. Supp. 2d 500, 504-09 (D. Md. 1999) (holding that a plaintiff failed to state cognizable claims of federal service mark infringement, federal unfair competition, common law unfair competition, and federal dilution based upon the defendant's alleged registration of the domain name HATFIELD.COM and alleged activation of the site for email purposes, because the plaintiff failed to plead a commercial use of the HATFIELD mark or that the mark was used in connection with any goods or services); CNA Fin. Corp. v. Brown, 922 F. Supp. 567, 573-75 (M.D. Fla. 1996) (holding that the plaintiff was not entitled to relief for claims of federal trademark infringement, federal unfair competition, and state law unfair competition where the plaintiff registered a corporation under the name CNA INSURANCE COMPANIES a name very similar to the plaintiff's CNA and INSURANCE FROM CNA service marks but failed to prove that the defendant or his company had ever offered any services using that name); Int'l, L.P. v. Toeppen, 945 F. Supp. 1296, 1303 (C.D. Cal. 1996) ("Registration of a trade[mark] as a domain name, without more, is not a commercial use of the trademark and therefore is not within the prohibitions of the Act."); see also 1 J. Thomas McCarthy, Trademarks and Unfair Competition 9.3 (4th ed. 2008) ("Since the basic issue is likelihood of confusion, it will be important to determine whether the corporate or business name at issue was known to the relevant class of buyers. . . . [I]f defendant's usage of the contested mark or name is as a corporate or business name, it is important whether defendant so uses its corporate name that customers would be aware of it. In some factual situations, defendant's corporate name is not before the public so as to cause confusion, while use of that name as a trademark is so used. In such cases, defendant may be enjoined from use of the name as a mark, but not from use as a corporate name.") (citing Sunbeam Furniture Corp. - 10 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. Sunbeam Corp., 191 F.2d 141 (9th Cir. 1951); Am. Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3 (5th Cir. 1974)). As in Bosley, Hancock Park Homeowners Ass'n, Crown Realty, and CNA, Defendants' alleged use of the ENEA mark "simply cannot mislead consumers into buying a competing product" as there is no allegation that Defendants' use of the mark is before the public in connection with goods or services. Plaintiffs' allegations center on Defendants' registration of ENEA AB, INC., ENEA INC., and ENEA EMBEDDED TECHNOLOGY, INC. as corporate names in both Oklahoma and Arizona. Plaintiffs point out that "Defendants . . . do not contest that [they] registered Plaintiffs' ENEA mark in Arizona, in the exact same corporate forms as those Plaintiffs do business under, making confusion inevitable." (Dkt. # 29 at 16.) Outside of the registrations, however, Plaintiff fails to allege that Defendants are operating any type of businesses or conducting any advertising under any of the registered names or otherwise using Plaintiffs' ENEA mark in connection with any goods or services. Thus, absent a commercial use of the ENEA mark, consumer confusion is rather unlikely a stark difference from the "inevitable" characterization of Plaintiffs. In the Complaint, Plaintiffs offer only the conclusory statements that Defendants' use of the ENEA mark was a "commercial use" and "is likely to cause confusion, mistake or deception among customers." (See Dkt. # 1 41-44.) The Court, however, need not "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren, 328 F.3d at 1139. The factual basis of Plaintiffs' claims simply does not support the legal conclusion of "commercial use," for there is no indication that Defendants have used the ENEA mark as their own identifying trademark in a manner within the scope of the Lanham Act. Because Plaintiffs have failed to allege any use of the ENEA mark "in connection with the sale, offering for sale, distribution or advertising of any goods or services," 15 U.S.C. 1114(1), or "on or in connection with any goods or services," id. 1125(a), Plaintiffs failed to plead a plausible assertion of a substantial federal right. See Bell, 327 U.S. at 682-83. Consequently, this Court does not have subject matter jurisdiction pursuant to 28 U.S.C. 1331. - 11 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This conclusion is unaffected by Plaintiffs' allegations that: (1) Defendants used Plaintiffs' mark in their correspondence with Plaintiffs; and (2) ADES mistakenly mailed a letter to Defendants Anthony Amidei and Enea Embedded Technology, Inc., which was intended to be delivered to Plaintiff Enea Embedded's parent company. See Bosley, 403 F.3d at 676 (citing Prestonettes, Inc. v. Coty, 264 U.S. 359, 368 (1924)) ("The Supreme Court has made it clear that trademark infringement law prevents only unauthorized used of a trademark in connection with a commercial transaction in which the trademark is being used to confuse potential consumers."). In neither circumstance was the ENEA mark being used by Defendants to confuse potential consumers. Nor does the allegation that Defendants inquired into the consideration that Plaintiffs would be willing to offer for consent to Plaintiff Enea Embedded's desired corporate name change in Texas satisfy the commercial use requirement. Even if the inquiry was considered a commercial act, is was not a commercial use of the ENEA mark within the scope of the Lanham Act.2 See Bosley, 403 F.3d at 679-80. The inquiry into consideration was not directed at Defendants' potential consumers, but rather was directed at the owners and users of the ENEA mark. III. Count II State Law Unfair Competition Plaintiffs assert subject matter jurisdiction over their state law unfair competition claim pursuant to 28 U.S.C. 1338. Section 1338 grants the district court "original Alternatively, even if Defendants' inquiry into the consideration that Plaintiffs would pay for consent to the corporate name change in Texas could be construed as a commercial use of the ENEA mark such that subject matter jurisdiction would exist, Plaintiffs' federal claims must nevertheless be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. See Murray v. Cable Nat'l Broad. Co., 86 F.3d 858, (9th Cir. 1996) (holding that a district court may decide whether a likelihood of confusion exists on the face of the pleadings and dismiss a complaint "[if] the court determines . . . that the goods are unrelated and confusion is unlikely"); AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir. 1979) ("If the goods are totally unrelated, there can be no infringement because confusion is unlikely."). Defendants' alleged offer to sell consent to a corporate name change to Plaintiffs simply could not result in the confusion of the very owners of the trademark in question. - 12 - 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under . . . trademark law[]." Because Plaintiffs' Complaint failed to plead a substantial and related claim under trademark law, however, 1338 is not triggered and the Court has no choice but to dismiss Plaintiffs' state law unfair competition claim as well. See Herman Family Revocable Trust v. Teddy Bear, 254 F.3d 802, 806 (9th Cir. 2001) ("This requirement that the supplemental state-law claims be dismissed where the district court had no underlying original jurisdiction must be distinguished from the district court's discretionary authority to retain jurisdiction over state-law claims where it has dismissed on the merits federal claims over which it did have original jurisdiction."). IV. Defendants' Counterclaim In the Motion to Dismiss, Defendants present what they refer to as a counterclaim: [Defendants] are entitled to and pray for: (a) a permanent injunction enjoining plaintiffs from using the name Eneas or Enea for commercial or corporation purposes; (b) an order for the plaintiffs to account for any profits derived by using the corporation name including Eneas or Enea during the previous two years; (c) such other relief as is just and proper. (Dkt. # 13 at 15-16.) In response, Plaintiffs move to dismiss Defendants' "counterclaim" for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Dkt. # 29 at 18). In reply, Defendants state that they "intend to either amend their counterclaim[] or dismiss same[.]" (Dkt. # 31 at 19.) To the extent that Defendants have plead any counterclaims, they are dismissed for failure to plead any cognizable legal theory or the factual basis for their claims. CONCLUSION Because Plaintiffs failed to plead a commercial use of the ENEA trademark by Defendants, the Complaint fails to present a plausible assertion of a substantial federal right and this Court, therefore, does not have jurisdiction over the action. IT IS THEREFORE ORDERED that Defendants' Motion to Dismiss (Dkt. # 13), pursuant to Federal Rule 12(b)(1), is GRANTED WITHOUT PREJUDICE to Plaintiffs refiling should Defendants engage in a "commercial use" of the ENEA trademark. - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IT IS FURTHER ORDERED that Plaintiffs' Motion to Dismiss Defendants' counterclaims (Dkt. # 29) is GRANTED. IT IS FURTHER ORDERED that the Clerk of the Court is directed to terminate this action. DATED this 10th day of March, 2009. - 14 -

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