First Service Networks Incorporated v. First Service Maintenance Group Incorporated
Filing
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ORDER that Plaintiff's 47 Motion to Dismiss Defendant's counterclaims is granted with respect to claim VII and denied with respect to the remaining counterclaims. Signed by Judge David G Campbell on 11/21/2012.(LFIG)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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First Service Networks, Inc.,
Plaintiff,
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ORDER
v.
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No. CV-11-01897-PHX-DGC
First Service Maintenance Group, Inc.,
Defendant.
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Before the Court is First Service Networks, Inc.’s (“FSN” or “Plaintiff”) motion to
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dismiss counterclaims IV, V, VI, VII, and VIII for failure to state a claim. Doc. 47. First
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Service Maintenance Group, Inc. (“FSMG” or “Defendant”) filed a response (Doc. 53)
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and Plaintiff filed a reply (Doc. 57). No party has requested oral argument. For the
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reasons that follow, the Court will deny in part and grant in part Plaintiff’s motion to
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dismiss the counterclaims.
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I.
Background.
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On September 27, 2011, FSN filed suit against FSMG for trademark infringement,
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unfair competition, unjust enrichment, and anticybersquatting. Doc. 1. The claims are
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based on U.S. Trademarks 2,737,643 and 2,942,344 which are both owned by FSN. Id.
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¶ 12. In its answer to the complaint, FSMG raised multiple counterclaims, five of which
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assert that the registered trademarks are invalid (Counterclaims IV-VIII). Doc. 45 at 13-
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16. Plaintiff moves to dismiss each of the counterclaims that assert that the trademarks
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are invalid. Doc. 47.
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II.
Legal Standard.
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A defendant’s counterclaims are held to the same pleading standard as a plaintiff’s
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complaint. Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). When analyzing a
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complaint or counterclaim for failure to state a claim to relief under Rule 12(b)(6), the
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well-pled factual allegations are taken as true and construed in the light most favorable to
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the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal
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conclusions couched as factual allegations are not entitled to the assumption of truth,
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Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and they are insufficient to defeat a motion
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to dismiss for failure to state a claim, In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th
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Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the complaint must plead “enough facts
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to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
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U.S. 544, 570 (2007).
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III.
Analysis.
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Defendant consents to dismissal of counterclaim VII with prejudice. Doc. 53 at 7,
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n. 2. Defendant also concedes that the marks are incontestable pursuant to 15 U.S.C.
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§ 1065, and that their validity can no longer be challenged as “merely descriptive.”
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Doc. 53 at 7, n. 1; 15; see Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1135 (9th
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Cir. 2006); Park’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189 (1985). Defendant
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maintains, however, that the marks are generic.
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counterclaim for which FSN has requested dismissal also asserts genericness as grounds
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for invalidity.”) (emphasis removed).
Doc. 53 at 4 (“However, each
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Trademarks generally identify the source of goods or services, but generic marks
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“refer[] to the genus of which the particular product is a species” and therefore are not
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source-identifying. Park’N Fly, Inc., 469 U.S. at 194. “To determine whether a term [is]
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generic, we look to whether consumers understand the word to refer only to a particular
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producer’s goods or whether the consumer understands the word to refer to the goods
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themselves . . . Whether a mark is generic is a question of fact.” Yellow Cab Co. v.
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Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 929 (9th Cir. 2005).
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An otherwise
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incontestable mark may be challenged on the ground that it has become generic. 15
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U.S.C. § 1064(3); 15 U.S.C. § 1115(b).
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Because the classification of a mark as generic is based on how the purchasing
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public for the particular service or good perceives the mark, FSMG argues that their
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allegations that the marks are generic present questions of fact that must be resolved by a
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fact finder. Doc. 53 at 8. FSN counters that merely asserting the marks are generic,
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without additional allegations, fails the pleading standard in Twombly. Doc. 57 at 4.
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FSMG alleges that “‘first service’ and/or ‘1st service’ are not associated by the
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public with any particular source” and that “numerous entities offer services that they
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describe as ‘first service’ and/or ‘1st service.’” Doc. 45 ¶¶ 7-8. They also allege that
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FSN’s marks are generic names “for all or a portion of the services recited in the
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registration, namely, technical facilities management services,” and that “purchaser[s] of
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services offered under [the marks] . . . understand that such designation does not refer to
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a specific, exclusive source of the services but instead refers to a service name and
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category.” Id. ¶¶ 9-10, 32.
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Accepting these allegations as true, as the Court must on a motion to dismiss, the
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Court finds them sufficient to support FSMG’s counterclaims. If the general public and
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specific consumers believe the marks are generic names for the kinds of services that
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both FSN and FSMG provide, as FSMG has alleged, then FSMG will succeed in its
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claims.
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IT IS ORDERED that Plaintiff’s motion to dismiss Defendant’s counterclaims
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(Doc. 47) is granted with respect to claim VII and denied with respect to the remaining
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counterclaims.
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Dated this 21st day of November, 2012.
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