Aviva USA Corporation et al v. Vazirani et al

Filing 237

ORDER that Aviva's 177 Motion for Summary Judgment is denied in part and granted in part. Aviva's Motion for Summary Judgment is granted solely to the extent it requests summary judgment on the part of Counterclaimants' Countercla im No. 2 that alleges that Aviva's Trade Dress "is not inherently distinctive and has not acquired secondary meaning." Aviva's Motion for Summary Judgment is denied in all other respects. Dismissing Counterclaimants' Coun terclaims, except for the part of Counterclaim No. 2 on which Aviva is granted summary judgment, as set forth herein. Counterclaimants to take nothing on their Counterclaims. Granting the Vazirani Defendants' 174 , 175 Motions for Summary J udgment and the Regan Defendants' 191 Joinder in the Vazirani Defendants' Motions for Summary Judgment. The Clerk of the Court shall therefore enter judgment for all Defendants on the claims in Plaintiffs' Complaint. Denying as mo ot the Regan Defendants' 172 Motion for Summary Judgment. Denying as moot the Vazirani Defendants' 228 Motion to Strike Portions of Aviva's Reply in Support of its Motion for Summary Judgment. Granting Aviva's 186 Motion to Seal Document Offered in Support of Motion for Summary Judgment. The Clerk of the Court shall file under seal the exhibit lodged at Doc. 187. Signed by Judge James A Teilborg on 10/2/12.(DMT)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Aviva USA Corporation, an Iowa) corporation; and Aviva Brands Limited, a) ) United Kingdom limited company, ) ) Plaintiffs, ) ) vs. ) ) Anil Vazirani, an individual; Vazirani &) Associates Financial, LLC, an Arizona) limited liability company; Secured) Financial Solutions, LLC, an Arizona) limited liability company; James Regan, an) individual; and Regan & Associates, LLC,) an Arizona Limited liability Company ) ) ) Defendants. __________________________________) ) Anil Vazirani, an individual; Vazirani &) Associates Financial, LLC, an Arizona) limited liability company; and Secured) Financial Solutions, LLC, an Arizona) ) limited liability company, ) ) Counterclaimants, ) Aviva USA Corporation, an Iowa) corporation; and Aviva Brands Limited, a) ) United Kingdom limited company, ) ) Counterdefendants. ) No. CV 11-0369-PHX-JAT ORDER 26 27 Pending before the Court are the parties’ cross-motions for summary judgment. 28 Plaintiffs and counterdefendants Aviva USA Corporation (“AUSA”) and Aviva Brands 1 Limited (“ABL”, and together with AUSA, “Aviva”) have moved for summary judgment on 2 their federal and state trademark infringement and unfair competition claims and on their 3 cybersquatting claim. Defendants Anil Vazirani, Vazirani & Associates Financial, LLC 4 (“VAF”), Secured Financial Solutions, LLC (“SFS,” and together with Mr. Vazirani and 5 VAF, the “Vazirani Defendants” or “Counterclaimants”), James Regan, and Regan & 6 Associates, LLC (collectively, the “Regan Defendants,” and together with the Vazirani 7 Defendants, the “Defendants”) have also moved for summary judgment on those claims, in 8 addition to Aviva’s state law racketeering claim. Aviva also filed a motion to seal certain 9 evidence submitted with its motion for summary judgment. The Court now rules on the 10 motions. 11 I. BACKGROUND 12 Aviva is one of the largest insurance companies in the world and serves customers in 13 the life insurance and annuity sector. Though the Vazirani Defendants once sold Aviva’s life 14 insurance and annuity products, and related services, under an agreement with certain 15 affiliates of Aviva, that relationship has been terminated. Defendants now offer those 16 services in competition with Aviva. Defendant Anil Vazirani, Aviva, and other related 17 parties are presently engaged in a series of legal disputes arising out of the termination of the 18 contractual relationship between Mr. Vazirani and Aviva. In the present lawsuit, Aviva 19 alleges that Defendants have infringed Aviva’s trademarks and committed acts of 20 racketeering against Aviva. 21 A. Aviva’s Marks 22 ABL owns U.S. Trademark Registration No. 2,773,101 for the mark AVIVA as used 23 in connection with life insurance underwriting and related services. According to Aviva, 24 AUSA and its affiliates have, with ABL’s authorization, used the AVIVA mark in interstate 25 commerce since at least 2006 to identify AUSA and its affiliates as the source of a variety 26 of life insurance and annuity products, and related services, sold by AUSA’s affiliates, and 27 to distinguish those products and services from those sold by others. Aviva also asserts that, 28 since at least November 2006, AUSA and its affiliates have used in commerce a trade dress -2- 1 consisting of (1) a yellow, blue, and green color scheme; (2) the appearance of a ray of light 2 emanating from the yellow background; and (3) the use of a serif, all-capitals font for the 3 AVIVA mark (the “Trade Dress”), to identify AUSA and its affiliates as the source of their 4 life insurance and annuity products and related services, and to distinguish those products 5 and services from those sold by others. Aviva also displays a graphic to the left of the 6 AVIVA mark consisting of a blue, almost-square shaped object, joined at the top with, and 7 separated at the bottom from, a green, almost-rectangular shaped object. Aviva alleges that 8 AUSA has expended great effort and expense to develop and maintain the goodwill 9 associated with the AVIVA mark and the Trade Dress (collectively, “Aviva’s Marks”). As 10 they appear on AUSA’s website, Aviva’s Marks look like this: 11 12 13 14 15 B. Mr. Vazirani’s Relationship with Aviva 16 Anil Vazirani is an independent life insurance and annuity sales agent. As an 17 independent agent, Vazirani requires the authorization of any carrier whose life insurance or 18 annuity products he wishes to sell. Vazirani’s company, Defendant VAF, operates as an 19 independent marketing organization, or “IMO.” Defendant SFS conducts marketing and 20 other activities for VAF. In early 2009, AUSA terminated Vazirani’s authorization to sell 21 the life insurance and annuity products of Aviva’s issuing affiliates. The termination had the 22 effect not only of barring Vazirani from selling products issued by AUSA’s issuing 23 subsidiaries, and thus from earning commissions on the sale of those products, but also of 24 barring Vazirani’s IMO, VAF, from earning any income on the sale of such products by an 25 agent. As stated by the Vazirani Defendants, now that they are no longer associated with 26 Aviva, they offer similar services in competition with Aviva. Doc. 174 at 3. 27 In the time since his contract with Aviva was terminated, Mr. Vazirani initiated four 28 lawsuits. The first, filed in Maricopa County Superior Court on April 13, 2009, asserted -3- 1 claims by Mr. Vazirani and SFS against certain IMO’s and others, whom Mr. Vazirani 2 alleged were involved in his termination. One of the IMO’s sued in that action was Creative 3 Marketing, an AUSA subsidiary. The second, filed in the U.S. District Court for the District 4 of Kansas on October 9, 2009, asserted claims by Vazirani and SFS against Mark Heitz, a 5 former employee of AUSA, whom Mr. Vazirani alleged was involved in his termination. 6 The third and fourth lawsuits, in which Mr. Vazirani again alleged wrongful conduct in 7 connection with his termination, were filed on January 27, 2011 in Maricopa County 8 Superior Court and on January 28, 2011 in the District of Kansas, respectively. Mr. Vazirani 9 did not name AUSA or ABL as a defendants in any of the suits. 10 On July 28, 2010, when only the first two suits were being litigated, Mr. Vazirani’s 11 counsel sent an email to counsel for Defendants in those suits. At least one of the attorneys 12 who received the letter apparently also represented AUSA at the time. Doc. 182. The email, 13 in its entirety, stated the following: 14 Counsel, 15 As you know, we have received disclosure documents from all the defendants as well as from Aviva in the related Heitz litigation pending in Wichita, Kansas[.] 16 17 18 19 20 21 22 23 24 25 26 27 28 The e-mails totally belie Aviva’s claim that Mr. Vazirani was terminated as part of its decision to focus on key core groups. Rather, it is clear that the named defendants’ wrongful actions caused Aviva to terminate Mr. Vazirani’s contract and the contracts of his downline producers. Among other evidence, there is an e-mail from Mike Tripses of CMIC expressing his intent to cause Mr. Vazirani’s contracts to be terminated not just with Aviva, but with all insurance carriers that Mr. Vazirani does business with. Unlike most agents, Mr. Vazirani holds a Series 65 Securities License and carries the LUTCF designation and is a Qualified Financial Advisor through Kaplan Financial. According to Mr. Tripses, Mr. Vazirani’s offense was that he had reported to Aviva instances where competing insurance agents had provided securities and investment advice that they were not licensed to provide. Mr. Tripses is currently the Chairman of the Board of Directors of the National Association for Fixed Annuities (“NAFA”). In that high profile position, one would hope that Mr. Tripses would not be advocating the mass termination of an industry leading, “half [sic] of fame” minority agent and business owner for asking that Aviva hold all agents to the rule that they not provide securities advice without proper licensure. It is particular unseemly given NAFA’s ongoing fight against Rule 151A. There are several e-mails from Advisors Excel talking about “setting up” Anil for termination and expressing satisfaction in their successful efforts to -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 convince Aviva to terminate Mr. Vazirani and Phil Wasserman, both of whose downline agent Advisors Excel subsequently targeted for recruitment. As for Ronald Shurts, there is an e-mail from Mr. Shurts telling Aviva to “TERMINATE THAT . . . IDIOT.” There are numerous e-mails from Aviva’ [sic] representatives that Aviva terminated Mr. Vazirani at the behest of the named Defendants and without any legitimate business justification for doing so. In light of Mr. Tripses’ threat, we plan to send a letter to all of the insurance carriers that Mr. Vazirani does business with that includes various nonconfidential disclosure documents that demonstrate that it is not Mr. Vazirani who has engaged in misconduct, but these defendants. We have also retained a PR firm to publicize the injustices suffered by Mr. Vazirani at the hand of your clients and Aviva. Prior to taking these actions, we wanted to give your clients the opportunity to discuss a fair and equitable settlement with Mr. Vazirani and/or to participate in an early mediation. If we don’t hear from you by close of business Monday, August 3, 2010, we will be left with no choice but to take the actions outlined above. Regards, David G. Bray . . . Doc. 182 at 76 (emphases in original). The is no evidence that any of the invited discussions of settlement or mediation ever took place. C. The Defendants’ Website and “Blast Emails” Instead, Mr. Vazirani, along with Mr. Regan and others, implemented a plan to apparently make good on Mr. Vazirani’s intention to “publicize the injustices suffered by Mr. Vazirani.” Id. This plan primarily involved developing a website that Mr. Vazirani used to criticize Aviva and its business practices (“the Website”). A heading was included on the Website that appeared on each page and read: “AVIVA Uncovered The Sad Truth About Aviva’s Business Practices.” Doc. 188-1 at 142-52. The heading also incorporates some elements of Aviva’s Trade Dress: 24 25 26 27 The Website includes several different sections, including “Anil’s Background,” 28 -5- 1 which introduces Mr. Vazirani, his history with Aviva, and his concerns about Aviva, and 2 also includes a photograph of Mr. Vazirani; “Anil’s Case Against Aviva,” which details the 3 lawsuits initiated by Mr. Vazirani in connection with the termination of his agreement with 4 Aviva; “The Illinois Complaint Against Mark Heitz,” which links to a news release about a 5 case alleging deceptive marketing practices against Mr. Heitz and also links to a related 6 complaint filed in that case; “Aviva’s Class Action Settlement,” which links to a complaint 7 in a case filed against Aviva alleging that Aviva deceptively marketed to elderly people; 8 “Newsroom,” which contains no content, but is reserved for “[n]ews releases and related 9 stories” that might appear in that section in the future; and “Tell us your story about Aviva,” 10 which allows visitors to the site to send a message to the operators of the Website, 11 presumably to share their own experiences dealing with Aviva. Doc. 188-1 at 142-52. An 12 alternate version of the Website also includes sections entitled “Anil’s Legal Filings & 13 Supporting Emails,” which links to the complaints filed in his lawsuits and various emails 14 at issue in those lawsuits; “The Washburn University/Sigma Pi Epsilon Connection,” wherein 15 Mr. Vazirani alleges a connection between some of the people involved in his lawsuits and 16 a fraternity to which they apparently all belonged; and “Complaint Implicating Aviva in a 17 Ponzi Scheme,” which links to a complaint in the case alleging deceptive marketing 18 practices to elderly people and also to an “FBI report that also connects Aviva to the Ponzi 19 scheme.” Id. 20 Defendants also registered fourteen domain names in connection with the Website, 21 each of which referenced Aviva. Those domain names are insideaviva.com, aviva- 22 exposed.com, 23 avivacomplaints.com, avivaplcsucks.com, avivasucksusa.com, anilvaziranivsaviva.com, 24 anilvsaviva.com, avivavsanilvazirani.com, avivavsanil.com, aviva-problems.com, and aviva- 25 litigation.com. Doc. 42 at ¶¶ 31-61. Some of these domain names were registered with false 26 names and contact information. Furthermore, Defendants also sent out a series of “blast 27 emails” to hundreds of thousands of life insurance and annuity sales agents and stockbrokers, 28 providing a link to the Website. Doc. 178 at ¶ 3.13. Those emails appear to have all stated, avivauncovered.com, aviva-uncovered.com, -6- aviva-lawsuit.com, 1 in their entirety, the following: “A detailed summary making a case against Aviva . . . 2 http://www.aviva-uncovered.com.” E.g., Doc. 179 at 13. 3 D. Aviva’s Racketeering Allegations 4 In addition to the claims based on trademark infringement, Aviva also alleges that 5 Defendants’ conduct constitutes racketeering. Specifically, Aviva contends that Defendants 6 are “participating in, operating and/or controlling a criminal enterprise . . . targeting Aviva 7 with a campaign of cyber-terrorism in an effort to extort money from Aviva, unfairly 8 compete with Aviva, and otherwise commercially harm Aviva.” Doc. 42 at ¶ 1. That alleged 9 “smear campaign” allegedly consists of the Website, “[t]he ostensible purpose [of which] has 10 been to air the Vazirani Defendants’ grievances towards Aviva and its associates over the 11 termination of their commercial relationship with the Vazirani Defendants,” id. at ¶¶ 1, 4, and 12 the blast e-mails “directed at Aviva’s agents, potential agents, and consumers, which 13 disparaged Aviva . . . [and] asserted that Aviva had been implicated in a Ponzi scheme. . . .” 14 Id. at ¶ 56. In the amended complaint, Aviva also alleges that the publication of the Website 15 and blast e-mails “have damaged Aviva and will continue to damage Aviva, causing injury 16 to Aviva’s reputation and goodwill.” Id. at ¶¶ 98, 108, 124. Aviva further contends that the 17 Website and blast e-mails are the fruits of a criminal enterprise directed by Defendants and 18 that, by publishing the Website and e-mails, Defendants have engaged in a “pattern of 19 racketeering activity” that consists of three predicate acts—“[e]xtortion, forgery, and wire 20 fraud.” Id. at ¶¶ 5, 20-63. The extortion allegation arises from the email sent by Mr. 21 Vazirani’s attorney, in which he describes Mr. Vazirani’s intention, in the absence of an 22 equitable settlement or mediation, to publicize negative information about Aviva. The 23 forgery and wire fraud allegations arise from the use of false contact information to register 24 some of the domain names. 25 E. Aviva’s Claims 26 Aviva subsequently brought suit in this Court, claiming trademark infringement, 27 cybersquatting, common law unfair competition, and racketeering under both federal and 28 state law. This Court granted Defendants’ motion for judgment on the pleadings on Aviva’s -7- 1 federal racketeering claim (Doc. 169). Currently pending before the Court are the parties’ 2 motions for summary judgment. Aviva moved for summary judgment on its trademark 3 infringement, cybersquatting, and unfair competition claims (Doc. 177). The Vazirani 4 Defendants also moved for summary judgment on those claims, in addition to Aviva’s state 5 law racketeering claim (Docs. 174 & 175). The Regan Defendants moved for summary 6 judgment on all claims, arguing that Aviva has failed to meet its burden on damages (Doc. 7 172). The Court now rules on the motions. 8 II. LEGAL STANDARD FOR SUMMARY JUDGMENT 9 Summary judgment is appropriate when “the movant shows that there is no genuine 10 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 11 FED. R. CIV. P. 56(a). “A party asserting that a fact cannot be or is genuinely disputed must 12 support that assertion by . . . citing to particular parts of materials in the record, including 13 depositions, documents, electronically stored information, affidavits, or declarations, 14 stipulations . . . admissions, interrogatory answers, or other materials,” or by “showing that 15 materials cited do not establish the absence or presence of a genuine dispute, or that an 16 adverse party cannot produce admissible evidence to support the fact.” Id. 56(c)(1)(A)&(B). 17 Thus, summary judgment is mandated “against a party who fails to make a showing 18 sufficient to establish the existence of an element essential to that party’s case, and on which 19 that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 20 (1986). 21 Initially, the movant bears the burden of pointing out to the Court the basis for the 22 motion and the elements of the causes of action upon which the non-movant will be unable 23 to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the non- 24 movant to establish the existence of material fact. Id. The non-movant “must do more than 25 simply show that there is some metaphysical doubt as to the material facts” by “com[ing] 26 forward with ‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec. 27 Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986) (quoting FED.R.CIV.P. 56(e) 28 (1963) (amended 2010)). A dispute about a fact is “genuine” if the evidence is such that a -8- 1 reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, 2 Inc., 477 U.S. 242, 248 (1986). The non-movant’s bare assertions, standing alone, are 3 insufficient to create a material issue of fact and defeat a motion for summary judgment. Id. 4 at 247–48. However, in the summary judgment context, the Court construes all disputed 5 facts in the light most favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 6 1072, 1075 (9th Cir. 2004).1 7 8 9 10 11 12 13 14 15 1 In the Order dated January 10, 2012 (Doc. 101), this Court granted in part and denied in part Aviva’s motion for spoliation sanctions. Specifically, the Court granted Aviva’s request for adverse inference instructions as follows: “If Plaintiffs believe that Defendants’ spoliation affects their ability to dispute summary judgment, Plaintiffs may propose an appropriate adverse inference in response to any motion for summary judgment. If Plaintiffs propose inferences in response to a summary judgment motion, they must specify how Defendants’ spoliation has prevented them from disputing specific facts, the discovery they have undertaken to obtain those facts, and how an inference in their favor would prevent summary judgment as a matter of law.” Doc. 101 at 13. 16 17 18 19 20 21 22 23 24 25 26 27 28 Aviva has only raised the possibility of applying an adverse inference in its Reply to its own motion for summary judgment (Doc. 224), which improperly deprived Defendants of any opportunity to respond. See Schwartz v. Upper Deck Co., 183 F.R.D. 672, 682 (S.D. Cal. 1999) (“It is well accepted that raising of new issues and submission of new facts in [a] reply brief is improper”). Furthermore, Aviva does not propose an adverse inference that would prevent the Court from granting summary judgment against Aviva, but rather only asks for an inference that would “fill[] any gaps the Court otherwise might be inclined to find” in considering and granting summary judgment in favor of Aviva. Plaintiffs therefore have not proposed any adverse inferences in accordance with the Court’s instructions. Moreover, the only evidence to which Aviva suggests that the Court should apply an adverse inference relates to Aviva’s request for Defendants to produce text messages and emails regarding their “anti-Aviva campaign.” Doc. 224 at 21. The Court, however, finds that such evidence, even if it were available, could not change the outcome of the Court’s analysis with respect to Aviva’s motion for summary judgment. Accordingly, the Court will not apply any adverse inferences in deciding the pending motions for summary judgment. Further, Defendants’ motion to strike Aviva’s arguments regarding an adverse inference (Doc. 228) is denied as moot. Oral argument on this issue would not have aided the Court’s decisional process. See LRCiv 7.2(f). -9- 1 III. AVIVA’S LANHAM ACT INFRINGEMENT CLAIMS 2 A. 3 “Before [trademark] infringement can be shown, the trademark holder must 4 demonstrate that it owns a valid mark, and thus a protectable interest.” KP Permanent Make- 5 Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 602 (9th Cir. 2005). Here, Aviva claims 6 to have a protectable interest in its AVIVA mark, which its predecessor, Grey Panthers 7 Limited, registered with the U.S. Patent and Trademark Office on Oct. 14, 2003. Doc. 180 8 at 10. Aviva also claims to have a protectable interest in its Trade Dress, “which [Aviva 9 USA] and its affiliates have used continuously and substantially exclusively since at least 10 Trademark Validity November 2006 to identify and distinguish their products and services.” Doc. 177 at 12. 11 Though in their Counterclaims, Counterclaimants alleged that Aviva’s Trade Dress 12 “is not inherently distinctive and has not acquired secondary meaning,” Doc. 50 at ¶ 14, the 13 Counterclaimants have not offered any arguments in their summary judgment briefing 14 contesting the protectability of Aviva’s Trade Dress. Nor have Counterclaimants contested 15 the protectability of the AVIVA mark. Aviva moved for summary judgment in its favor on 16 this part of Counterclaim No. 2. Therefore, summary judgment is granted in favor of Aviva 17 on the part of Counterclaim No. 2 that alleges that Aviva’s Trade Dress “is not inherently 18 distinctive and has not acquired secondary meaning.” The Court will discuss the remainder 19 of the Counterclaims in greater detail below. 20 B. Commercial Use 21 Aviva has alleged that Defendants have violated sections 32 and 43(a) of the federal 22 Lanham Act by unlawfully using Aviva’s Marks. Section 32 creates liability for any 23 person’s use of a registered mark, without the consent of the registrant, “in connection with 24 the sale, offering for sale, distribution, or advertising of any goods or services on or in 25 connection with which such use is likely to cause confusion, or to cause mistake, or to 26 deceive.” 15 U.S.C. § 1114. Similarly, section 43(a) prohibits any person from using “in 27 connection with any goods or services . . . any word, term, name, symbol, or device, or any 28 combination thereof” that is likely to cause confusion or mistake as to the origin of the goods - 10 - 1 or services. Id. § 1125(a). By requiring that infringement occur in connection with (the sale 2 of) any goods or services, infringement claims brought under either of these sections are 3 subject to a commercial use requirement. See Bosley Med. Inst. v. Kremer, 403 F.3d 672, 4 676 (9th Cir. 2005) (commercial use requirement applies to § 32 claims); Utah Lighthouse 5 Ministry v. Found. for Apologetic Info. and Research, 527 F.3d 1045, 1051-53 (10th Cir. 6 2008) (commercial use requirement also applies to § 43(a) claims). Thus, a use that does not 7 meet this requirement, i.e., a noncommercial use, cannot create liability under sections 32 and 8 43(a) of the Lanham Act. See Bosley, 403 F.3d at 676; see also Utah Lighthouse Ministry, 9 527 F.3d at 1054 (“Unless there is a competing good or service labeled or associated with 10 the plaintiff’s trademark, the concerns of the Lanham Act are not invoked.”). 11 This commercial use requirement comports with the primary purpose of the Lanham 12 Act, which is to “protect consumers who have formed particular associations with a mark 13 from buying a competing product using the same or substantially similar mark and to allow 14 the mark holder to distinguish his product from that of his rivals.” Bosley, 403 F.3d at 676. 15 The commercial use requirement also ensures that the Lanham Act’s prohibitions on speech 16 are consistent with the First Amendment: “As a matter of First Amendment law, commercial 17 speech may be regulated in ways that would be impermissible if the same regulation were 18 applied to noncommercial expressions.” Id. at 677 (citing Florida Bar v. Went For It, Inc., 19 515 U.S. 618, 623 (1995)). Further, the Ninth Circuit has stated that “[t]he First Amendment 20 may offer little protection for a competitor who labels its commercial good with a 21 confusingly similar mark, but trademark rights do not entitle the owner to quash an 22 unauthorized use of the mark by another who is communicating ideas or expressing points 23 of view.” Id. (quoting Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 900 (9th Cir. 2002)). 24 The distinction between commercial and noncommercial use is particularly important 25 in the context of consumer or editorial criticism and commentary. See 135 Cong. Rec. 26 H1207, H1217 (daily ed. April 13, 1989) (statement of Rep. Kastenmeier) (“[T]he proposed 27 change in section 43(a) should not be read in any way to limit political speech, consumer or 28 editorial comment, parodies, satires, or other constitutionally protected material. . . . The - 11 - 1 section is narrowly drafted to encompass only clearly false and misleading commercial 2 speech.”). Even though a trademark holder will almost never consent to the use of its mark 3 in conjunction with commentary that is critical of the trademark holder or its products and 4 services, the trademark holder also cannot seek the protections of the Lanham Act to stop 5 such critical use when it does not occur in connection with the sale of goods or services. See 6 Bosley, 403 F.3d at 679 (“The Lanham Act, expressly enacted to be applied in commercial 7 contexts, does not prohibit all unauthorized uses of a trademark.”). As the Ninth Circuit 8 stated, a plaintiff in such instances “cannot use the Lanham Act either as a shield from [a 9 defendant’s] criticism, or as a sword to shut [a defendant] up.” Id. at 680. On the other hand, 10 when the criticism and unauthorized use of the mark do occur in connection with the sale of 11 goods or services, the mark holder may pursue and potentially succeed on a Lanham Act 12 infringement claim. See Sunlight Saunas, Inc. v. Sundance Sauna, Inc., 427 F. Supp. 2d 13 1032, 1056-58 (D. Kan. 2007) (“[T]he Court cannot find as a matter of law that defendants’ 14 website speech, including the chosen domain name, is ‘noncommercial’ speech. Although 15 the speakers on the website were anonymous or disguised, they were direct competitors of 16 Sunlight and defendants had no apparent reason to disparage Sunlight products except to 17 promote their own.”); cf. HER, Inc. v. RE/MAX First Choice, LLC, 468 F. Supp. 2d 964, 975, 18 978-79 (S.D. Ohio 2007) (finding that the plaintiffs were likely to succeed on their § 32 19 claim where the defendants had “criticized the [p]laintiffs, but only in conjunction with 20 commercially related speech” because the defendants were “in direct business competition 21 with the [p]laintiffs” and their “use of the trademarks and tradenames [was] directly related 22 to [the defendants’] business”). 23 In Bosley, the Ninth Circuit addressed this distinction between commercial and 24 noncommercial use in the context of a “cybergripe” website. The plaintiff, Bosley Medical 25 Institute (“Bosley Medical”), was a provider of various surgical hair transplantation, 26 restoration, and replacement services. Bosley, 403 F.3d at 674. Bosley Medical also owned 27 the registered mark “Bosley Medical.” Id. The defendant, Kremer, was a “dissatisfied 28 former patient” of Bosley Medical who had attempted to sue Bosley Medical for medical - 12 - 1 malpractice. Id. at 675. After that suit was dismissed, Kremer purchased the domain name 2 www.BosleyMedical.com. Id. Kremer posted on the website associated with that domain 3 name content that was critical of Bosley Medical, which the court summarized as follows: 4 9 Kremer began to use www.BosleyMedical.com in 2001. His site summarizes the Los Angeles County District Attorney's 1996 investigative findings about Bosley, and allows visitors to view the entire document. It also contains other information that is highly critical of Bosley. Kremer earns no revenue from the website and no goods or services are sold on the website. There are no links to any of Bosley’s competitors’ websites. BosleyMedical.com does link to Kremer’s sister site, BosleyMedicalViolations.com, which links to a newsgroup entitled alt.baldspot, which in turn contains advertisements for companies that compete with Bosley. BosleyMedical.com also contained a link to the Public Citizen website. Public Citizen is the organization that represents Kremer in this case. 10 Id. In addition, prior to creating the website, Kremer delivered to Bosley Medical a letter 11 warning Bosley Medical of Kremer’s intention to spread critical information about the 12 company over the internet and also offering the company’s president the opportunity to 13 “discuss this” with Kremer.2 Id. 5 6 7 8 14 In finding that Kremer’s site was not commercial, the Ninth Circuit rejected three of 15 Bosley Medical’s arguments that the site satisfied the “in connection with the sale of goods 16 or services” requirement. First, the court rejected Bosley Medical’s contention that “a mark 17 used in an otherwise noncommercial website or as a domain name for an otherwise 18 noncommercial website is nonetheless used in connection with goods and services where a 19 user can click on a link available on that website to reach a commercial site.” Bosley, 403 20 F.3d at 677. Finding that Bosley Medical’s assertion was “unfounded,” the court stated: 21 22 Kremer’s website contains no commercial links, but rather contains links to a discussion group, which in turn contains advertising. This roundabout path to the advertising of others is too attenuated to render Kremer’s site commercial. 23 2 24 25 26 27 28 The first page of Kremer’s letter stated the following: “Let me know if you want to discuss this. Once it is spread over the internet it will have a snowball effect and be too late to stop. M. Kremer [phone number]. P.S. I always follow through on my promises.” Bosley, 403 F.3d at 675. The second page, which was entitled “Courses of action against BMG,” included the following enumerated item: “1. Net web sites disclosing true operating nature of BMG. Letter 3/14/96 from LAC D.A. Negative testimonials from former clients. Links. Provide BMG competitors with this information.” Id. The letter did not mention any domain names or other references to the Internet. Id. - 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 At no time did Kremer’s BosleyMedical.com site offer for sale any product or service or contain paid advertisements from any other commercial entity. Id. at 678 (citing TMI, Inc. v. Maxwell, 368 F.3d 433, 435, 438 (5th Cir. 2004) (holding that the commercial use requirement is not satisfied where defendant’s site had no outside links)). The court also rejected the possibility that the link to Kremer’s lawyers included on the site could transform the site from noncommercial to commercial. Id. Second, the court found that there was no evidence that “Kremer created his website to enable an extortion scheme in an attempt to profit from registering BosleyMedical.com.” Id. Distinguishing the case from others in which a party had attempted to sell the domain name to the party owning the trademark, see, e.g., Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1325 (9th Cir. 1998), the court stated that “[t]he letter delivered by Kremer to [Bosley Medical’s] headquarters is a threat to expose negative information about [Bosley Medical] on the Internet, but it makes no reference whatsoever to ransoming [Bosley Medical’s] trademark or to Kremer’s use of the mark as a domain name.” Id. Thus, the court found that Kremer’s mere threat to publicly criticize Bosley Medical on his website, in the absence of an offer to sell the domain name to Bosley Medical, did not constitute a commercial use of Bosley Medical’s trademark. Finally, Bosley Medical’s third argument that the commercial use requirement was satisfied was that Kremer used the mark in connection with, and prevented users from obtaining, Bosley Medical’s goods and services. As noted by the Bosley court, the Fourth Circuit has endorsed the view that a parody website, though it has no commercial purpose and does not sell any goods or services, may nonetheless meet the Lanham Act’s commercial use requirement if it prevents users from obtaining the goods or services of the entity targeted by the parody. Bosley, 403 F.3d at 678-79 (citing People for the Ethical Treatment of Animals v. Doughney (“PETA”), 263 F.3d 359 (4th Cir. 2001)). Specifically, the PETA court stated that the defendant in that case “need not have actually sold goods or services,” but rather “need only have prevented users from obtaining or using PETA’s goods or services.” PETA, 263 F.3d at 365. The Ninth Circuit, however, disagreed with PETA’s “over- 28 - 14 - 1 expansive” approach: “The PETA approach would place most critical, otherwise protected 2 consumer commentary under the restrictions of the Lanham Act. . . . The PETA court’s 3 reading of the Lanham Act would encompass almost all uses of a registered trademark, even 4 when the mark is merely being used to identify the object of consumer criticism.” Bosley, 5 403 F.3d at 679. Thus, the Ninth Circuit rejected Bosley Medical’s third argument and 6 instead adopted a narrower view of the commercial use requirement: “Limiting the Lanham 7 Act to cases where a defendant is trying to profit from a plaintiff’s trademark is consistent 8 with the Supreme Court’s view that ‘[a trademark’s] function is simply to designate the 9 goods as the product of a particular trader and to protect his good will against the sale of 10 another’s product as his.’” Id. (quoting United Drug Co. v. Theodore Rectanus Co., 248 U.S. 11 90, 97 (1918)). The Court therefore affirmed the district court’s grant of summary judgment 12 in favor of Kremer on Bosley Medical’s Lanham Act claims. Id. at 682. 13 The undisputed facts of this case require a similar outcome. Much like the website 14 in Bosley, there is no evidence here that Defendants offered for sale any goods or services 15 on the Website. Nor did the Website contain any links to other sites that offered goods or 16 services for sale. Additionally, there is no evidence that any of Defendants ever attempted 17 to sell the Website or domain name to Aviva or any other party for profit. Based on the 18 Ninth Circuit’s decision in Bosley, these facts all strongly urge the conclusion that the 19 Website was noncommercial. 20 Nevertheless, Aviva argues that Defendants published the Website “in connection 21 with goods or services” because “it seeks to inflict commercial harm on Aviva” and because 22 the intention of the website was “to divert business from Aviva to [Vazirani].” Doc. 206 at 23 8. However, to the extent that Aviva suggests that the Website is commercial merely because 24 it prevented users from using or obtaining Aviva’s goods or services, that argument is 25 unavailing. As previously described, the Ninth Circuit rejected this reasoning in Bosley. See 26 Bosley, 403 F.3d at 679. Accordingly, this Court will not adopt the broad interpretation of 27 28 - 15 - 1 commercial use endorsed by the Fourth Circuit in PETA urged here by Aviva.3 2 Aviva further contends that the Website satisfies the Lanham Act’s commercial use 3 requirement because it was designed for “commercial gain.” Specifically, Aviva states that 4 [the Website] touts Vazirani’s financial accomplishments and credentials as a seller of products competing with products available through Aviva’s affiliates. It advertises Vazirani’s name in connection with those accomplishments. By doing so, it lets consumers know where to procure Vazirani’s financial services, because he is doing business under his name at anilvazirani.com. Vazirani’s purpose with the Website was to drive business to Vazirani and gain a commercial advantage at Aviva’s expense. The purpose is clear—to get his contracts with Aviva restored, and to extract payment, settlement, and other benefits from Aviva. This was the purpose behind the July 28, 2010 extortionate demand from Vazirani’s counsel. Vazirani admits he wants his contracts back and he want Aviva to pay him. 5 6 7 8 9 10 Doc. 206 at 8 (citations omitted). 11 First, there is no mention of Mr. Vazirani’s anilvazirani.com website on the Website. 12 Thus, the Website does not give any indication as to how to find that site, other than perhaps 13 through trial-and-error guessing of the domain name. The Court therefore does not find 14 credible Aviva’s claim that Mr. Vazirani intended to “drive business” to his other website. 15 Also, with regard to the July 28, 2010 “extortionate demand” letter, the Court views 16 this communication from Mr. Vazirani’s counsel to Aviva’s counsel as analogous to the 17 communications between Kremer and Bosley Medical. The July 28, 2010 letter stated, in 18 pertinent part, the following: 19 20 21 22 23 24 25 There are numerous e-mails from Aviva’ [sic] representatives that Aviva terminated Mr. Vazirani at the behest of the named Defendants and without any legitimate business justification for doing so. In light of Mr. Tripses’ threat, we plan to send a letter to all of the insurance carriers that Mr. Vazirani does business with that includes various nonconfidential disclosure documents that demonstrate that it is not Mr. Vazirani who has engaged in misconduct, but these defendants. We have also retained a PR firm to publicize the injustices suffered by Mr. Vazirani at the hands of your clients and Aviva. Prior to taking these actions, we wanted to give your clients the opportunity to discuss a fair and equitable settlement with Mr. Vazirani and/or to participate 26 3 27 28 In any event, the facts of this case are easily distinguishable from PETA insofar as the website at issue in that case “provide[d] links to more than 30 commercial operations offering goods and services.” PETA, 263 F.3d at 366. - 16 - 2 in an early mediation. If we don’t hear from you by the close of business Monday, August 3, 2010, we will be left with no choice but to take the actions outlined above. 3 Doc. 182 at 76. Clearly, the letter indicates no attempt to “ransom” Aviva’s trademarks or 4 to otherwise sell any of Aviva’s trademarks. Instead, as was the case in Bosley, the letter is 5 merely “a threat to expose negative information about [Aviva] . . .” Bosley, 403 F.3d at 678. 6 Though the letter does mention the possibility of “discuss[ing] a fair and equitable 7 settlement,” there is no evidence of any attempt by Mr. Vazirani to profit from any sale of 8 the trademarks. Rather, in the absence of any additional evidence showing otherwise, the 9 only reasonable interpretation of the letter is that Mr. Vazirani believed he had been injured 10 by Aviva and was seeking some sort of restitution, monetary or otherwise, for those injuries.4 11 In light of the fact that the defendant in Bosley had previously brought a medical malpractice 12 lawsuit against Bosley Medical and otherwise believed he had been wronged by the 13 company, it is highly unlikely that his desire to “discuss this” with Bosley Medical was any 14 different. See Bosley, 403 F.3d at 675. Thus, like Bosley, the facts here can be distinguished 15 from those cases where commercial use was found from an “attempt to sell the trademarks 16 themselves.” See Panavision Int’l, 141 F.3d at 1325; see also Intermatic v. Toeppen, 947 F. 17 Supp. 1227 (N.D. Ill. 1996). There is simply no evidence here that Mr. Vazirani, or any of 18 the Defendants, desired to sell Aviva’s trademarks, in any form, for profit. 1 19 Aviva also argues that it deems Mr. Vazirani to be a “competitor” and that the 20 Website somehow functions as promotion or advertising for goods or services that compete 21 with those sold by Aviva.5 However, having reviewed the entire content of the Website, the 22 23 24 25 26 27 28 4 Additional evidence in the record supports this conclusion. When pressed on this issue in his deposition, Mr. Vazirani stated that he “repeatedly asked for [his] contracts back and the loss of revenue suffered.” Doc. 188-1 at 23. Again, this is insufficient to demonstrate any intent by Mr. Vazirani to profit from any sale of the Aviva trademarks. 5 Though it is not clear that Mr. Vazirani directly competes with Aviva, Defendants state that Mr. Vazirani “now offers [life insurance and annuity products, and related services,] in competition with Aviva.” Doc. 174 at 3. For the purposes of this Order, the Court will therefore assume that Mr. Vazirani offers products and services that compete with - 17 - 1 Court concludes that only a small portion could even remotely be considered relevant to this 2 argument. Specifically, the following language was included in the “Anil’s Background” 3 section of the Website: 7 I’m Anil Vazirani and by any measure I’m one of the most successful financial advisers in America. I’m a “Top of the Table” member in the prestigious Million Dollar Round Table, I was a 2004 Hall of Fame Inductee into the Society of Senior Market Professionals, and I have been featured and interviewed in leading industry publications. I’ve been a member of the National Association of Insurance and Financial Advisors for nearly two decades. 8 Doc. 188-1 at Exhibit 4. Also, in the “Anil’s Case Against Aviva” section, the Website 9 stated the following: 4 5 6 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 For many years Aviva’s products were among those I used to build diversified portfolios for my clients. Admittedly, it was a mutually beneficial relationship. I underwrote Aviva’s products and was one of the company’s biggest producers. But then something inexplicably happened. On November 6, 2008, Aviva executive Jordan Canfield notified me that the company would cease doing business with me. Canfield first said it was due to concern about my “business practices” but in subsequence [sic] correspondence Aviva said they weren’t required to give me an explanation. Disparaging me for my business practices is a very slippery slope – there has never been a regulatory fine or judgment leveled against me. Id. To interpret these statements as advertising goods or services that compete with Aviva is not reasonable. The Website does not even identify any such goods or services. Rather, at most there is only an implication that, as an apparently successful financial adviser who formerly sold Aviva products, Mr. Vazirani might currently sell products that compete with Aviva’s products. The Website provides no contact information or any other information that would allow a visitor to the Website to determine whether Mr. Vazirani sells competing products and how the visitor might go about purchasing those products from him. Hence, in order to connect the Website to an offer from Mr. Vazirani to sell goods or services, a visitor to the Website must first interpret these statements to imply that Mr. Vazirani sells competing products, then leave the Website to research whether that is indeed true and how to actually contact Mr. Vazirani. Only after the visitor subsequently determines 26 27 28 Aviva’s, though the Court notes that there is no reference to any of those competing products or services on the Website. - 18 - 1 that Mr. Vazirani indeed sells products the visitor might want to purchase and reaches out 2 to Mr. Vazirani, assuming correct contact information could be found and doing so feasible, 3 could Mr. Vazirani offer any competing products to the visitor. To describe as attenuated this 4 path from the Website to any potential offers by Mr. Vazirani to sell competing products is 5 an understatement.6 And it is far more “roundabout” than the series of links from Kremer’s 6 site to commercial advertising in Bosley. See Bosley, 403 F.3d at 678. 7 In addition to Aviva’s argument that the Website promotes products that compete with 8 Aviva’s products, Aviva also argues that “gripe sites,” when operated by competitors, satisfy 9 the commercial use requirement. Aviva cites two cases to support this proposition: HER, Inc. 10 v. Re/Max First Choice, LLC, 468 F. Supp. 2d 964 (S.D. Ohio 2007) and Sunlight Saunas v. 11 Sundance Saunas, 427 F. Supp. 2d 1032 (D. Kan. 2006). These cases, however, can be 12 distinguished from the facts of this case. In HER, Inc., the defendants specifically directed 13 consumers to the defendants’ own website in emails that allegedly infringed the plaintiff’s 14 marks, and the allegedly infringing domain names routed visitors to the defendants’ website, 15 which provided real estate searching services that directly competed with similar services 16 provided on the plaintiff’s website. HER, Inc., 468 F. Supp. 2d at 968-71. Thus, that court 17 concluded that “the marks were used by the Defendants in connection with the sale of goods 18 and services.” Id. at 978 n.6. 19 20 21 22 23 24 25 26 27 28 6 There is also evidence that, because links to the Website were included in “blast emails” that were sent out to “an audience of hundreds of thousands of life insurance and annuity agents in the United States,” some visitors to the Website may already be familiar with Mr. Vazirani and the products and services that he sells. Doc. 178 at ¶ 3.13. However, Aviva also asserts that the emails were materially misleading in that they did not reveal that they were sent by Defendants. Id. at ¶ 3.13-3.14. Further, it is not clear whether these recipients would likely have any interest in purchasing products and services from Mr. Vazirani, or whether they themselves sell similar products and services in competition with Mr. Vazirani. Nevertheless, because the emails also did not contain any reference to any goods or services sold by Defendants, or any statements that could be considered to promote such goods or services, any connection between the emails, the Website, and any goods or services offered for sale by Defendants is at least as “roundabout” as the series of links described in Bosley. See Bosley, 403 F.3d at 678. - 19 - 1 Similarly, in Sunlight Saunas, the court found that the defendants “had no apparent 2 reason to disparage [the plaintiff’s] products except to promote their own.” Sunlight Saunas, 3 427 F. Supp. 2d at 1057. In support of that conclusion, the court cited to evidence that the 4 defendants’ website temporarily “included direct links to competitors [and] also stated that 5 ‘other companies offer the same products without the fraudulent claims.’” Id. Thus, the court 6 could not “find as a matter of law that [the] defendants’ website speech, including the chosen 7 domain name, [was] ‘noncommercial’ speech.” Id. 8 Here, in contrast, Defendants’ Website did not contain any direct links to sites 9 offering competing goods or services and did not promote any competing companies’ goods 10 or services. Nor did any of the domain names registered to Defendants route visitors to any 11 commercial websites or other sites that competed with Aviva. Rather, all of the domain 12 names routed visitors to Defendants’ Website, which had a noncommercial purpose—that 13 is, criticizing Aviva’s business practices. 14 In sum, Aviva’s attempts to argue that the Ninth Circuit’s reasoning in Bosley does 15 not apply to the facts of this case are unavailing. The Defendants’ use of Aviva’s trademarks 16 on the Website and in the domain names “is not in connection with a sale of goods or 17 services—it is in connection with the expression of [Defendants’] opinion about [Aviva’s] 18 goods and services.” Bosley, 403 at 679. Hence, to paraphrase the Ninth Circuit, 21 [t]he 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. . . . Any harm to [Aviva] arises not from a competitor’s sale of a similar product under [Aviva’s] mark, but from [Defendants’] criticism of [Aviva]. 22 Id. at 679-80. Accordingly, the Vazirani Defendants’ motion for summary judgment on 23 Aviva’s Lanham Act infringement claims is granted, and Aviva’s motion for summary 24 judgment on those claims is denied. 19 20 25 C. Likelihood of Confusion and Nominative Fair Use 26 Though the Court has found that Defendants’ uses of Aviva’s Marks do not satisfy the 27 Lanham Act’s commercial use requirement, the Court will nevertheless briefly address the 28 issue of likelihood of confusion because Aviva focused almost exclusively on this issue in - 20 - 1 its motion for summary judgment on its Lanham Act claims. Both sections 32 and 43(a) of 2 the Lanham Act require a showing that a defendant’s use of a trademark is “likely to cause 3 confusion” as to the origin of goods or services. The Ninth Circuit typically uses an eight- 4 factor test, known as the “Sleekcraft factors,” to assess whether a use of a mark is likely to 5 cause confusion.7 AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). Much 6 of Aviva’s motion for summary judgment on its sections 32 and 43(a) claims focuses on the 7 eight Sleekcraft factors. 8 The Ninth Circuit, however, has articulated a different test for cases involving 9 nominative use of a trademark, which occurs when a defendant uses a plaintiff’s mark to 10 refer to the plaintiff’s products, rather than to the defendant’s own products. See New Kids 11 on the Block v. News Am. Pub., Inc., 971 F.2d 302, 308 (9th Cir. 1992). That test addresses 12 the following three factors: 15 First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. 16 Id. The Ninth Circuit has further stated the following with regard to nominative use of a 17 trademark: 13 14 18 19 20 21 22 23 24 25 26 27 28 In cases in which the defendant raises a nominative use defense, the . . . threefactor [nominative use] test should be applied instead of the test for likelihood of confusion set forth in Sleekcraft. The three-factor test better evaluates the likelihood of confusion in nominative use cases. When a defendant uses a trademark nominally, the trademark will be identical to plaintiff’s mark, at least in terms of the words in question. Thus, application of the Sleekcraft test, which focuses on the similarity of the mark used by the plaintiff and the defendant, would lead to the incorrect conclusion that virtually all nominative uses are confusing. The three-factor test—with its requirement that the defendant use marks only when no descriptive substitute exists, use no more of the mark than necessary, and do nothing to suggest sponsorship or endorsement by the mark holder—better addresses concerns regarding the likelihood of confusion in nominative use cases. 7 The eight factors include: 1) strength of the mark; 2) proximity of the goods; 3) similarity of the marks; 4) evidence of actual confusion; 5) marketing channels used; 6) type of goods and the degree of care likely to be exercised by the purchaser; 7) defendant’s intent in selecting the mark; and 8) likelihood of expansion of the product lines. Sleekcraft, 599 F.2d at 348-49. - 21 - 1 2 3 Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th Cir. 2002); see also Mattel v. Walking Mountain Prods., 353 F.3d 792, 810 n.19 (9th Cir. 2003) (“The nominative fair use test replaces the traditional [Sleekcraft] analysis.”). 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Here, Defendants have raised a nominative fair use defense. Indeed, Defendant’s use of Aviva’s trademark and trade dress was undoubtedly a nominative use—that is, the mark was used to refer to Aviva and its products and services rather than Defendants and their products and services. As described above, the Website offers no goods or services for sale and references no goods or services other than those of Aviva. Thus, there is no evidence that Aviva’s marks were used in conjunction with any of Defendants’ goods or services. Moreover, the Website’s entire purpose is to criticize Aviva and its products, which typically necessitates the nominal use of the criticized party’s mark. See New Kids on the Block, 971 F.2d at 306 (“Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference or any other such purpose without using the mark.”). The Sleekcraft factors therefore are not applicable here. See Welles, 279 F.3d at 801. Furthermore, the Court finds that Defendants’ use of the mark and trade dress satisfy the three-factor nominative fair use test from New Kids on the Block. The first factor is easily met, for there is no clear way for Defendants to convey their criticism for a specific entity, Aviva, without naming that specific entity. There is simply no proper descriptive substitute. Cf. New Kids on the Block, 971 F.2d at 308 (“[O]ne might refer to ‘the two-time world champions’ or ‘the professional basketball team from Chicago,’ but it’s far simpler (and more likely to be understood) to refer to the Chicago Bulls.”). The third factor is also satisfied. With regard to potential infringement by both the domain names and the Website itself, the content of the Website must be considered under a likelihood of confusion analysis. See Lamparello v. Falwell, 420 F.3d 309, 316 (4th Cir. 2005) (“[A] court must evaluate an allegedly infringing domain name in conjunction with the content of the website identified by the domain name.”). As described above, the entire 28 - 22 - 1 website is concerned with criticizing Aviva and its business practices. Therefore, it is not 2 reasonable to conclude that Defendants have taken any actions that would suggest that Aviva 3 supports or endorses the Website or the associated domain names in any way. 4 The second factor provides a closer question, but is nonetheless also satisfied. On one 5 hand, Defendants did not merely refer to the name “Aviva” using plain text. Rather, 6 Defendants used a stylized blue font on a yellow background with rays of light in the 7 background to refer to Aviva. These additional stylizations are part of Aviva’s protected 8 Trade Dress. In certain cases, such distinctive stylizations might be considered more than 9 is permitted under the Ninth Circuit’s nominative fair use test. See New Kids on the Block, 10 971 F.2d at 308 n.7 (“Thus, a soft drink competitor would be entitled to compare its product 11 to Coca-Cola or Coke, but would not be entitled to use Coca-Cola’s distinctive lettering.”). 12 Here, however, the stylized logo and distinctive coloring were not used in a 13 commercial or competitive manner, but rather were used solely to identify Aviva as the 14 object of the Website’s criticism. 15 commentary within the logo, such that it read “Aviva Uncovered The Sad Truth About 16 Aviva’s Business Practices.” Doc. 188-1 at 144. The Court notes that the purpose of the 17 nominative fair use test is “to address the risk that nominative use of the mark will inspire 18 a mistaken belief on the part of consumers that the speaker is sponsored or endorsed by the 19 trademark holder.” Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1176 (9th Cir. 20 2010). Indeed, the Ninth Circuit specifically identified the second factor as “indirectly” 21 addressing the risk of such confusion: “Consumers may reasonably infer sponsorship or 22 endorsement if a company uses . . . ‘more’ of a mark than necessary.” Id. In light of that 23 purpose, the Court finds that the amount of Aviva’s trademark and trade dress used by 24 Defendants was reasonable. In other words, Defendants’ use of the more distinctive colors 25 and font, in light of the very obvious negative commentary directed toward Aviva that is 26 included in the logo, could not reasonably lead to such confusion. Therefore, Defendants 27 have satisfied all three factors of the nominative fair use test. Accordingly, Defendants’ use 28 was a nominative fair use, and there existed no likelihood of confusion. Further, Defendants embedded their own critical - 23 - 1 IV. AVIVA’S CYBERSQUATTING CLAIM 2 The Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), 3 was enacted to address the problem of “cybersquatting.” The Ninth Circuit has generally 4 described this practice as follows: 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Cybersquatting is the Internet version of a land grab. Cybersquatters register well-known brand names as Internet domain names in order to force the rightful owners of the marks to pay for the right to engage in electronic commerce under their own name. Interstellar Starship Services, Ltd. v. Tchou, 304 F.3d 936, 946 (9th Cir. 2002). The ACPA states that [a] person shall be liable in a civil action by the owner of a mark . . . if, without regard to the goods or services of the parties, that person (i) has a bad faith intent to profit from that mark . . . ; and (ii) registers, traffics in, or uses a domain name [that is confusingly similar to another’s mark or dilutes another’s famous mark]. 15 U.S.C. § 1125 (d)(1)(A). Defendants do not contest the second prong regarding the registration of confusingly similar domain names. However, Defendants argue that Aviva’s ACPA claim fails because Aviva cannot prove that Defendants had a bad faith intent to profit from the mark. Indeed, “[a] finding of ‘bad faith’ is an essential prerequisite to finding an ACPA violation.” Tchou, 304 F.3d at 946. The ACPA lists nine non-exhaustive factors to consider when determining whether a defendant had a bad faith intent to profit from use of a mark: (I) the trademark or other intellectual property rights of the person, if any, in the domain name; (II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person; (III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; (IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name; (V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site; 28 - 24 - 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 (VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct; (VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct; (VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and (IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of subsection (c) of this section. 15 U.S.C. § 1125(d)(1)(B)(I). As the Sixth Circuit has stated, “[t]hese factors attempt ‘to balance the property interests of trademark owners with the legitimate interests of Internet users and others who seek to make lawful uses of other’s marks, including for purposes such as comparative advertising, comment, criticism, parody, news reporting, fair use, etc.’” Lamparello, 420 F.3d at 319 (quoting H.R. Rep. No. 106-412, 1999 WL 970519, at *10) (emphasis provided by Lamparello court). To begin, the Court notes that there is no evidence in this case of traditional cybersquatting. That is, there is no evidence that Defendants have made any attempt to sell the registered domain names to Aviva for profit. Accordingly, the sixth factor favors Defendants. Furthermore, as discussed above, the Court has found that the undisputed evidence demonstrates that the Website was noncommercial and that its purpose was to criticize Aviva and to inform potential consumers about Mr. Vazirani’s concerns about Aviva’s business practices. Importantly, the legislative history for the ACPA states the following: Under the bill, the use of a domain name for purposes of comparative advertising, comment, criticism, parody, news reporting, etc., even where done for profit, would not alone satisfy the bad-faith intent requirement. The fact that a person may use a mark in a site in such a lawful manner may be an appropriate indication that the person’s registration or use of the domain name lacked the required element of bad-faith. - 25 - 1 S. Rep. No. 106-140, 1999 WL 594571, at *14. In accordance with this guidance, other 2 courts have placed great weight on these considerations in finding a lack of bad-faith intent. 3 See, e.g., TMI, Inc. v. Maxwell, 368 F.3d 433, 438-40 (5th Cir. 2004) (“[T]he site’s purpose 4 as a method to inform potential customers about a negative experience with the company is 5 key.”); Lucas Nursery & Landscaping, Inc. v. Grosse, 359 F.3d 806, 811 (6th Cir. 2004) 6 (“Perhaps most important to our conclusion are[] Grosse’s actions, which seem to have been 7 undertaken in the spirit of informing fellow consumers about the practices of a landscaping 8 company that she believed had performed inferior work on her yard.”). Thus, because the 9 Defendants used the domain names primarily for purposes of comment and criticism, and 10 further did not do so for profit, the Court finds that the fourth factor strongly favors 11 Defendants. 12 The fifth factor also favors Defendants. “This factor recognizes that one of the main 13 reasons cybersquatters use other people’s trademarks is to divert Internet users to their own 14 sites by creating confusion as to the source, sponsorship, affiliation, or endorsement of the 15 site.” S. Rep. No. 106-140, 1999 WL 594571, at *14. Thus, the factor requires the existence 16 of a likelihood of confusion as to these considerations. As discussed above, there is no 17 evidence that a likelihood of confusion exists with regard to the source of the material on the 18 Website. No reasonable jury could find that the criticism on the Website came from a source 19 other than Mr. Vazirani, and certainly not from Aviva itself. Aviva’s only evidence to the 20 contrary consists of users who experienced actual, but temporary, confusion over the source 21 of the Website prior to realizing that, because of the content of the Website, it did not 22 originate from Aviva. See, e.g., Doc. 179 at ¶ 25. Such fleeting confusion is not sufficient 23 to establish a likelihood of confusion.8 24 25 26 27 28 The first three factors, on the other hand, do not favor Defendants because there is no 8 In any event, the Court also notes that much, if not all, of Aviva’s evidence of any actual confusion consists of the inadmissible hearsay testimony of Paul McGillivray, as recounted in the declaration of Janet Sipes (Doc. 179). See, e.g., In re Sunset Bay Assocs., 944 F.2d 1503, 1514 (9th Cir. 1991) (noting that hearsay evidence cannot be introduced to defeat a summary judgment motion). - 26 - 1 evidence that Defendants had any rights in the domain names prior to registering the domain 2 names and creating the Website. 3 Defendants may not be related to any trademarks owned by the Defendants, legal names of 4 the Defendants, or goods or services previously sold by Defendants, the domain names 5 chosen by Defendants do relate to the criticism of Aviva. See Doc. 188-2 at 18-40; Doc. 6 188-5 at 108-145 (the domain names registered by Defendants included insideaviva.com, 7 aviva-exposed.com, avivauncovered.com, aviva-lawsuit.com, aviva-problems.com, aviva- 8 litigation.com, avivacomplaints.com, avivaplcsucks.com, avivasucksusa.com and others). 9 The legislative history of the ACPA recognizes such criticism as a valid objective that the 10 ACPA was not intended to punish. Therefore, these factors only minimally favor Aviva. However, though the domain names used by the 11 Similarly, the seventh factor also does not favor Defendants. This factor primarily 12 recognizes that “[f]alsification of contact information with the intent to evade identification 13 and service of process by trademark owners is . . . a common thread in cases of 14 cybersquatting.” S. Rep. No. 106-140, 1999 WL 594571, at *15. Here, while there is 15 evidence that Defendants provided false contact information with the registration of at least 16 some of the domain names, see, e.g., Doc. 188-2 at 21, there is no evidence that they did so 17 with the intent to evade identification or service of process by Aviva. Indeed, Mr. Vazirani 18 clearly identifies himself on the Website and takes credit for its content. Thus, while this 19 factor certainly doesn’t favor Defendants, it only minimally favors Aviva, if at all. 20 21 The eighth factor also does not favor Defendants. As is stated in the legislative history of the ACPA, 27 [t]his factor recognizes the increasingly common cybersquatting practice known as “warehousing,” in which a cybersquatter registers multiple domain names—sometimes hundred, even thousands—that mirror the trademarks of others. By sitting on these marks and not making the first move to offer to sell them to the mark owner, these cybersquatters have been largely successful in evading the case law developed under the Federal Trademark Dilution Act. This bill does not suggest that the mere registration of multiple domain names is an indication of bad faith, but allows a court to weigh the fact that a person has registered multiple domain names that infringe or dilute the trademarks of others as part of its consideration of whether the requisite bad-faith intent exists. 28 S. Rep. No. 106-140, 1999 WL 594571, at *15-16 (emphasis added). While it is undisputed 22 23 24 25 26 - 27 - 1 that Defendants registered multiple domain names to host the Website, there is no evidence 2 of any desire to sell the domain names to Aviva, and thus no evidence that the Defendants 3 were “sitting on [the] marks” in anticipation of any sale. Further, there is no credible 4 evidence of any “warehousing” of domain names in this case because Defendants registered 5 a total of only fourteen domain names, all of which were related to Defendants’ hosting of 6 the Website. Thus, though this factor does not favor Defendants, like the seventh factor, it 7 only minimally favors Aviva, if at all. Finally, Aviva acknowledges that the ninth factor is inapplicable in this case because 8 9 “Aviva makes no dilution claim.” Doc. 177 at 22. This factor is therefore neutral. 10 After analyzing the relevant factors, the Court finds that Aviva has failed to establish 11 that Defendants acted with the required bad-faith intent to profit when they registered the 12 domain names. Importantly, because the Website was not commercial, it was used only to 13 criticize Aviva, and the Defendants never made any attempt to sell the domain names for 14 profit, Defendants’ actions do not fall within the scope of the ACPA. In other words, 15 Defendants’ “conduct is not the kind of harm that [the] ACPA was designed to prevent.” 16 TMI, 368 F.3d at 440. Therefore, the Court will grant Defendants’ motion for summary 17 judgment on Aviva’s ACPA claim and deny Aviva’s motion for summary judgment on that 18 claim. 19 V. AVIVA’S COMMON LAW UNFAIR COMPETITION CLAIM 20 Aviva has asserted a common law unfair competition claim against Defendants based 21 on the same conduct on which Aviva asserts its Lanham Act claims, i.e., trademark 22 infringement. The Arizona Supreme Court has stated that “the essence of unfair competition 23 is confusion of the public. If such confusion exists, the relevant inquiry is whether the name 24 taken by a defendant has previously come to indicate the plaintiff’s business.” Taylor v. 25 Quebedeaux, 126 Ariz. 515, 516, 617 P.2d 23, 24 (1980) (citations omitted). 26 Here, as described above, there is no likelihood of confusion of the public arising from 27 Defendants’ use of Aviva’s marks. Defendants’ use of any trademarks or trade dress owned 28 by Aviva was a nominative fair use that was not in connection with any goods or services. - 28 - 1 The use was noncommercial and directed solely at criticizing Aviva. Therefore, because 2 Aviva has failed to provide any evidence of a likelihood of confusion, the Court will grant 3 summary judgment in favor of Defendants on Aviva’s common law unfair competition claim 4 and deny Aviva’s motion for summary judgment on that claim. 5 VI. AVIVA’S RACKETEERING CLAIM 6 Defendants have also moved for summary judgment on Aviva’s state-law racketeering 7 claim brought under Arizona’s anti-racketeering statute (“AZRAC”). The Court previously 8 granted Defendants’ motion for judgment on the pleadings with regard to Aviva’s federal 9 racketeering claim. Doc. 169. The Court’s decision to grant that motion was based primarily 10 on Aviva’s failure to allege a “pattern of racketeering activity” as that phrase is defined under 11 the federal anti-racketeering statute (“RICO”). Id.; see also 18 U.S.C. §§ 1961(5). 12 AZRAC also requires evidence of a “pattern of racketeering activity.” A.R.S. §13- 13 2314.04(T)(3). Specifically, the statute states the following: 14 “Pattern of Racketeering Activity” means . . . : 15 (a) At least two acts of racketeering as defined in § 13-2301, subsection D, paragraph 4, subdivision (b), item (iv), (v), (vi), (vii), (viii), (ix), (x), (xiii), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxiv), or (xxvi) that meet the following requirements: 16 17 18 19 20 21 22 23 24 25 26 27 (i) The last act of racketeering activity that is alleged as the basis of the claim occurred within five years of a prior act of racketeering. (ii) The acts of racketeering that are alleged as the basis of the claim were related to each other or to a common external organizing principle, including the affairs of an enterprise. Acts of racketeering are related if they have the same or similar purposes, results, participants, victims, or methods of commission or are otherwise interrelated by distinguishing characteristics. (iii) The acts of racketeering that are alleged as the basis of the claim were continuous or exhibited the threat of being continuous. Id. AZRAC also contemplates a pattern of racketeering activity arising from “a single act of racketeering,” but only in limited circumstances that do not apply in this case. See A.R.S. § 13-2314.04(T)(3)(b). Furthermore, extortion, forgery, and fraud, all when committed for financial gain, are among the predicate acts that might constitute a pattern when at least two acts are committed. A.R.S. § 13-2301(D)(4)(iv), (ix), (xx). 28 - 29 - 1 The Arizona Court of Appeals concluded in Lifeflite Med. Air Transport, Inc. v. 2 Native Am. Air Servs., Inc. that the Arizona legislature intended that AZRAC’s definition of 3 “pattern of racketeering activity” should be interpreted in accordance with the U.S. Supreme 4 Court’s interpretation of that phrase in the federal statute. 7 P.3d 158, 151-53 (Ariz. Ct. App. 5 2000). With regard to the federal statute, the Supreme Court has stated that it was Congress’ 6 intent that a plaintiff, in order to demonstrate a pattern of racketeering activity, “must show 7 that the racketeering predicates are related, and that they amount to or pose a threat of 8 continued criminal activity.” H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 9 239 (1989) (emphasis in original). In that case, the Supreme Court went on to further 10 elaborate on “these two constituents of RICO’s pattern requirement”—relatedness and 11 continuity. Id. at 239-49. 12 The Lifeflite court considered the propriety of a lower court’s use of a jury instruction 13 regarding a plaintiff’s burden to establish a pattern of racketeering activity under Arizona 14 law. Lifeflite, 7 P.3d at 151. The instruction paraphrased the Supreme Court’s interpretation 15 of continuity from H.J. Inc. Id. (The instruction stated, in part, that “‘[c]ontinued unlawful 16 activity’ means a series of related acts extending over a substantial period of time or past 17 conduct that by its nature projects into the future with a threat of repetition. Acts extending 18 over a few weeks or months and threatening no future criminal conduct are not ‘continued 19 unlawful activity.’”); see H.J. Inc., 492 U.S. at 241-42. The court noted that AZRAC, as 20 amended by the Arizona legislature in 1993, “incorporates the Supreme Court’s definition 21 of related acts but does not expressly include the Court’s definition of continuing activity.” 22 Id. at 152. Nevertheless, the court further observed that “[t]he history of the amendments to 23 Arizona’s racketeering statute suggests a legislative awareness of the Supreme Court’s 24 definition of continuing activity and an intention to accept it implicitly, if not explicitly.” Id. 25 at 153. Thus, the court affirmed the lower court’s use of the instruction: “Because an 26 interpretation of the Arizona statute to include the federal definition of continued unlawful 27 activity is both reasonable and consistent with the apparent legislative intention in amending 28 the statute, we find that the jury instruction was a proper statement of law.” Id. - 30 - 1 In Aviva’s first amended complaint, Aviva alleged violations of both RICO and 2 AZRAC. Doc. 42 at 24-26. Both the RICO and the AZRAC claims were based on identical 3 alleged predicate acts of extortion, forgery, and wire fraud. Id. Defendants moved for 4 judgment on the pleadings with regard to only the RICO claim, and the Court granted that 5 motion. Doc. 169. In doing so, the Court held that the alleged acts of extortion, forgery, and 6 wire fraud did not meet RICO’s continuity requirement under the standard announced in H.J. 7 Inc. Based on the Arizona Court of Appeals’ holding in Lifeflite, under which this Court 8 must also apply the H.J. Inc. continuity standard to Aviva’s AZRAC claim, Aviva’s 9 allegations with respect to that claim are necessarily also insufficient because they involved 10 identical alleged predicate acts. 11 The conclusion is no different at the summary judgment stage. Aviva’s allegations 12 that Defendants engaged in a pattern of racketeering activity are simply not supported by the 13 evidence. In the Court’s Order of May 10, 2012, the Court held that Aviva had properly 14 alleged only one predicate act of extortion, and assumed that Aviva had sufficiently alleged 15 acts of wire fraud and forgery. As the Court discussed in that Order, even if the Court 16 assumes that Aviva can prove acts of extortion, forgery, and wire fraud, these acts together 17 do not constitute a pattern under the H.J. Inc. framework: 18 19 20 21 22 23 24 25 26 27 28 Even assuming here that the alleged acts of wire fraud and forgery constitute distinct predicate acts for purposes of RICO, those acts combined with the predicate act of extortion described above do not sufficiently establish a pattern of racketeering activity. Rather, this “collective conduct is in a sense a single episode having [a] singular purpose.” [Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1535 (9th Cir. 1992)]. That is, both the alleged wire fraud and forgery were simply steps taken to further the Defendant’s single alleged extortion scheme, which it targeted only at Plaintiffs. Moreover, the fact that all of the alleged predicate acts here occurred within less than a year further undermines a finding of closed-ended continuity. See, e.g., Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1418 ([3d] Cir. 1991) (“[A]n eight-month period of fraudulent activity directed at a single entity does not constitute a pattern, absent a threat of future criminal acts.”). With regard to a threat of future criminal conduct, the acts alleged in the amended complaint are clearly all “designed to bring about a single event”–the “paying off” of Defendants. See Sever, 978 F.2d at 1535-36. There is no suggestion of other potential victims or that Defendants will continue to commit acts of extortion, wire fraud, or forgery against Plaintiffs once the alleged objective is completed. In other words, there is no indication that the alleged “racketeering acts themselves include a specific threat of repetition - 31 - extending indefinitely into the future,” which would “supply the requisite threat of continuity.” See H.J. Inc., 492 U.S. at 242. 1 2 6 Further, as the amended complaint itself demonstrates, Defendants’ alleged acts of wire fraud and forgery, which related to the Tranche 1 and Tranche 2 Domain Names, were not allegedly repeated with the Tranche 3 and Tranche 4 Domain Names, further indicating that these acts have not “become a regular way of conducting business” for the Defendants. See [Ticor Title Ins. Co. v. Florida, 937 F.2d, 447, 450 (9th Cir. 1991)]. Thus, the alleged acts “[do] not pose a threat of continuity,” see Sever, 978 F.2d at 1536, and Plaintiffs have failed to allege a pattern of racketeering activity under RICO. 7 Doc. 169 at 8-9 (footnotes omitted). Aviva has not pointed to any evidence in its summary 8 judgment briefing that would alter the Court’s conclusion that Aviva has not met the 9 continuity requirement that applies under both RICO and AZRAC. Accordingly, the Court 3 4 5 10 will grant Defendants’ motion for summary judgment on Aviva’s AZRAC claim. 11 VII. AVIVA’S CLAIMS FOR DAMAGES 12 Because the Court has granted summary judgment in favor of Defendants on all of 13 Aviva’s remaining claims, the Court need not reach the issue of whether Aviva has met its 14 burden with respect to damages. Therefore, the Regan Defendants’ motion for summary 15 judgment is denied as moot. 16 VIII. THE COUNTERCLAIMS 17 Counterclaimants assert claims of: (1) Non-Infringement of § 32 of the Lanham Act, 18 15 U.S.C. § 1114 (Counterclaim No. 1) Doc. 50 at 10, ¶¶ 8-12; (2) Non-Infringement of 19 Alleged Trade Dress Rights and Unfair Competition (Counterclaim No. 2) Id. at 11, ¶¶ 13- 20 17; and (3) Lack of Federal Cyberpiracy, Violations of § 43(d) of the Lanham Act and the 21 Anti-Cyber Squatting Protection Act, 15 U.S.C. § 1125(d) (Counterclaim No. 3) Id. at 11-12, 22 ¶¶ 18-22. 23 As relief, Counterclaimants request the following judicial declarations: (1) that 24 counterclaimants have not infringed counterdefendants’ trademark rights or violated § 32 of 25 the Lanham Act, 15 U.S.C. § 1114; (2) that counterdefendants alleged trade dress rights are 26 not protectable; (3) that counterclaimants have not infringed counterdefendants’ trademark 27 rights in connection with counterdefendants’ alleged trade dress rights and have not violated 28 § 43(a) of the Lanham Act, 15 U.S.C. § 1125 (a); and (4) that counterclaimants have not - 32 - 1 infringed upon counterdefendants’ trademark rights, have not violated § 43(b) of the Lanham 2 Act. and have not violated the Anti-Cyber Squatting Protection Act, 15 U.S.C. § 1125(d). (Id. 3 at 12, ¶¶ C-F). 4 As discussed more fully in section III(A) above, Aviva is entitled to summary 5 judgment on the part of Counterclaim No. 2 that seeks a declaration that counterdefendants’ 6 alleged trade dress rights are not protectable. With regard to the remainder of the requested 7 declaratory relief, the Counterclaimants have failed to establish that they are entitled to the 8 declarations requested because such declarations are based on allegations that are entirely 9 duplicative of Aviva’s claims against Counterclaimants. 10 Aviva previously requested that all of the Counterclaims be dismissed because such 11 Counterclaims were redundant of Counterclaimants’ denials and affirmative defenses. The 12 Court denied Aviva’s request to dismiss the Counterclaims without prejudice. Doc. 101. The 13 Court found that a challenge to the Counterclaims was premature because Aviva failed to 14 show that there was no doubt that the Counterclaims would be rendered moot by the 15 adjudication of the main action. Id. The Court has now determined that, with the exception 16 of the part of Counterclaim No. 2, on which Aviva is entitled to summary judgment, the 17 remainder of the Counterclaims are duplicative of the claims alleged in Plaintiffs’ Amended 18 Complaint. 19 Counterclaimants have failed to show that they are entitled to declaratory relief in 20 addition to receiving summary judgment in their favor on the claims in Plaintiffs’ Complaint. 21 The “Declaratory Judgment Act provides courts with discretion to either grant or dismiss a 22 counterclaim for declaratory judgment.” Doc. 101 (internal citation and quotation omitted). 23 Counterclaimants have failed to show the necessity of declaratory judgment on their 24 Counterclaims. 25 Counterclaims. Moreover, because declaratory judgment is the only relief sought on the 26 Counterclaims, the Counterclaims (Counterclaim No. 1, the remaining part of Counterclaim 27 No. 2, and Counterclaim No. 3) will be dismissed. 28 IX. Accordingly, the Court will not enter declaratory judgments on the AVIVA’S MOTION TO SEAL - 33 - 1 Aviva has filed a motion to seal a four-page exhibit attached to the declaration of 2 Chris Jones, which Aviva has filed in support of its motion for summary judgment. A party 3 seeking to seal a document attached to a dispositive motion must overcome a “strong 4 presumption in favor of access” and meet a “compelling reasons” standard. Kamakana v. 5 City & Cty. of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006). That is, “the party must 6 articulate compelling reasons supported by specific factual findings that outweigh the general 7 history of access and the public policies favoring disclosure, such as the public interest in 8 understanding the judicial process.” Id. (citations and punctuation omitted). It is then a 9 court’s duty to balance the competing interests of the public and the party seeking to seal the 10 record. Id. at 1179. If a court decides to grant the motion to seal, it must “base its decision 11 on a compelling reason and articulate the factual basis for its ruling, without relying on 12 hypothesis or conjecture.” Id. (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 13 1995)). 14 Compelling reasons to seal a judicial record typically will exist when such court files 15 might become “a vehicle for improper purposes, such as the use of records to gratify private 16 spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. 17 (citing Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). However, “[t]he mere 18 fact that the production of records may lead to a litigant’s embarrassment, incrimination, or 19 exposure to further litigation will not, without more, compel the court to seal its records.” 20 Id. (citation omitted). 21 Aviva states that the exhibit it seeks to seal “contains specific information relating to 22 Aviva USA Corporation’s (“AUSA’s”) marketing and advertising budget and actual 23 expenditures, including detailed breakdowns of AUSA’s marketing and advertising efforts.” 24 Doc. 186 at 2. Aviva further argues that this information is “protectable trade secret 25 information” that Aviva does not make publicly available and that could jeopardize Aviva’s 26 competitive standing if Aviva’s competitors were to acquire it. Id. at 2-3. 27 The Court’s review of the exhibit indicates that it does indeed contain information 28 related to budgeted and actual expenditures in various marketing-related categories over a - 34 - 1 time range spanning several years. Furthermore, the information does not appear to be a type 2 that a business would typically make public or choose to reveal to competitors. 3 On the other hand, it is not immediately apparent how a competitor might use the 4 information in the exhibit to competitively injure Aviva. In its motion, Aviva only generally 5 states that competitive injury will arise from a competitor’s decision, based upon seeing the 6 information in this exhibit, to simply spend more on a particular category than Aviva spends, 7 thereby putting Aviva at a competitive disadvantage. Though the Court acknowledges that 8 there is some plausibility to this theory, it nevertheless does involve some conjecture. Thus, 9 while Aviva has to some degree provided a factual basis for the Court to seal this exhibit, it 10 has left some doubt as to how compelling these reasons are. 11 However, because the Court finds that the public interest in this exhibit will not 12 interfere with the public’s interest in understanding the judicial process, the Court will grant 13 Aviva’s motion. Of particular importance is that, though this exhibit was attached to a 14 dispositive motion for summary judgment, the Court’s analysis and resolution of the parties’ 15 motions for summary judgment did not address the information in this exhibit. Thus, 16 permitting this exhibit to be sealed will not interfere with the “public interest in 17 understanding the judicial process.” Kamakana, 447 F.3d at 1179 (citations omitted). 18 Further, the material that Aviva seeks to seal represents a very small portion of the total 19 amount of evidence submitted to this Court in connection with the summary judgment 20 motions—only four out of several hundred pages. Finally, while perhaps not a very strong 21 factor, the Court notes that Aviva’s motion is unopposed by Defendants. 22 Accordingly, the Court finds that Aviva has stated reasons that are sufficiently 23 compelling, if only barely, to grant its motion to seal. Thus, the Court will permit the four- 24 page Exhibit F to the declaration of Chris Jones to be sealed. 25 X. CONCLUSION 26 Accordingly, 27 IT IS ORDERED that Aviva’s Motion for Summary Judgment (Doc. 177) is denied 28 in part and granted in part as follows: - 35 - 1 Aviva’s Motion for Summary Judgment is granted solely to the extent it requests 2 summary judgment on the part of Counterclaimants’ Counterclaim No. 2 that alleges that 3 Aviva’s Trade Dress “is not inherently distinctive and has not acquired secondary meaning.” 4 Aviva’s Motion for Summary Judgment is denied in all other respects. 5 IT IS FURTHER ORDERED dismissing Counterclaimants’ Counterclaims, except 6 for the part of Counterclaim No. 2 on which Aviva is granted summary judgment, as set forth 7 herein. Counterclaimants to take nothing on their Counterclaims. 8 IT IS FURTHER ORDERED granting the Vazirani Defendants’ Motions for 9 Summary Judgment (Docs. 174 and 175) and the Regan Defendants’ Joinder in the Vazirani 10 Defendants’ Motions for Summary Judgment (Doc. 191). The Clerk of the Court shall 11 therefore enter judgment for all Defendants on the claims in Plaintiffs’ Complaint. IT IS FURTHER ORDERED denying as moot the Regan Defendants’ Motion for 12 13 Summary Judgment (Doc. 172). 14 IT IS FURTHER ORDERED denying as moot the Vazirani Defendants’ Motion to 15 Strike Portions of Aviva’s Reply in Support of its Motion for Summary Judgment (Doc. 16 228). 17 IT IS FURTHER ORDERED granting Aviva’s Motion to Seal Document Offered 18 in Support of Motion for Summary Judgment (Doc. 186). The Clerk of the Court shall file 19 under seal the exhibit lodged at Doc. 187. 20 DATED this 2nd day of October, 2012. 21 22 23 24 25 26 27 28 - 36 -

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