Lovetap. LLC v. CVS Health Corporation et al
Filing
24
ORDER denying 19 Motion to Dismiss for Failure to State a Claim. Signed by Judge Thomas W. Thrash, Jr on 7/31/2017. (ss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
LOVETAP, LLC,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:16-CV-3530-TWT
CVS HEALTH CORPORATION, et
al.,
Defendants.
OPINION AND ORDER
This is a trademark infringement action. It is before the Court on the Defendants
CVS Health Corporation, CVS Pharmacy, Inc., and MinuteClinic, LLC’s (collectively
“CVS”)
Motion to Dismiss [Doc. 19-1]. For the reasons stated below, the
Defendants’ Motion to Dismiss [Doc. 19-1] is DENIED.
I. Background
In 2012, the Plaintiff Lovetap, LLC’s founder and sole employee, Anna Tucker,
began developing the software application called “Life”, and eventually published the
Life app through Lovetap in 2013.1 The Life app allows users to log, keep track of,
1
Compl. ¶ 11.
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and analyze virtually all matters relating to their personal health and wellness, such
as symptoms, mood, weight, nutrition, sleep, sex, fitness, medication, general health,
menstrual cycles, fertility, ovulation, and pregnancy. The Life app also allows users
to setup and create reminders for prescription refills, daily reminders for medication,
daily reminders for vitamins, physician appointments, self-exams, menstrual days,
fertility windows, and ovulation.2 The app is currently offered for sale through the
Apple App Store and sold in over 150 countries, including the United States.3 Since
it was published, the app has grown quickly in popularity, and is now consistently one
of the top 10 most downloaded apps in the U.S. App Store’s Health & Fitness
Category.4
On September 3, 2013, Lovetap filed a U.S. federal trademark application for
a geometric heart design as its primary logo (the “Lovetap Mark”), an example of
which is shown below:5
2
Id. at ¶ 12.
3
Id. at ¶ 13.
4
Id. at ¶ 14.
5
Id. at ¶¶ 15-16.
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The trademark application stated that it was for “Computer application software for
mobile phones, namely, software for tracking and predicting menstrual cycles,
ovulation, fertility, and women's health and wellness issues” in Class 9. The Lovetap
Mark eventually registered on October 21, 2014.6
CVS, which operates a retail and health care business, initiated a rebranding of
its corporate identity in 2014.7 The result was a heart-shaped design as the companies’
logo, an example of which is included below:8
6
Id. at ¶ 16.
7
Id. at ¶ 21.
8
Id. at ¶ 23. More examples of the Defendants’ use of their heart-shaped
logo are included in the Complaint and Exhibit A to the Defendants’ Motion to
Dismiss [Doc. 19-2].
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Since September 2014, CVS has applied for federal registration of twenty-six
trademarks that include the geometric heart design of the CVS logo (the “CVS
Trademarks”).9 Since then, eleven of those applications have registered, the earliest
of which did so on June 21, 2016.10
On September 20, 2016, Lovetap filed this action against CVS alleging
trademark infringement under federal and state law, and that CVS’ use of the CVS
logo dilutes the Lovetap Mark pursuant to Georgia’s dilution statute, O.C.G.A. § 101-451(b). The Defendants now move to dismiss Lovetap’s state law dilution claim.
II. Legal Standard
A complaint should be dismissed under Rule 12(b)(6) only where it appears that
the facts alleged fail to state a “plausible” claim for relief.11 A complaint may survive
a motion to dismiss for failure to state a claim, however, even if it is “improbable” that
a plaintiff would be able to prove those facts; even if the possibility of recovery is
extremely “remote and unlikely.”12 In ruling on a motion to dismiss, the court must
accept the facts pleaded in the complaint as true and construe them in the light most
9
Id. at ¶ 29.
10
Copies of the registration certificates are included in Exhibit A to the
Defendants’ Motion to Dismiss [Doc. 19-2].
11
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Fed. R. Civ. P. 12(b)(6).
12
Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007).
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favorable to the plaintiff.13 Generally, notice pleading is all that is required for a valid
complaint.14 Under notice pleading, the plaintiff need only give the defendant fair
notice of the plaintiff’s claim and the grounds upon which it rests.15
III. Discussion
The entirety of the Defendants’ argument for dismissal rests on § 1125(c)(6) of
the Trademark Dilution Revision Act, which states that “[t]he ownership by a person
of a valid registration…on the principal register under this chapter shall be a complete
bar to” a state law dilution claim.16 Lovetap, on the other hand, argues that because it
is challenging the validity of the Defendants’ trademark registration, dismissal would
be inappropriate at this time. The Defendants, meanwhile, argue that allowing the
Plaintiff’s dilution claim to move forward simply because it has challenged the
validity of the registration would undermine the purpose of § 1125(c)(6). Thus, the
13
See Quality Foods de Centro America, S.A. v. Latin American
Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994-95 (11th Cir. 1983); see also
Sanjuan v. American Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir.
1994) (noting that at the pleading stage, the plaintiff “receives the benefit of
imagination”).
14
See Lombard’s, Inc. v. Prince Mfg., Inc., 753 F.2d 974, 975 (11th Cir.
1985), cert. denied, 474 U.S. 1082 (1986).
15
See Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Twombly, 550
U.S. at 555).
16
15 U.S.C. § 1125(c)(6).
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only question before the Court at this time is whether Lovetap’s state law dilution
claim is subject to dismissal despite the fact that Lovetap is challenging the validity
of, and seeks to cancel, the Defendants’ federal trademark registrations. The Court
holds that it is not.
The Court begins with the language of the statute. Section 1125(c)(6) provides
an affirmative defense which bars all state law dilution claims if a trademark is
federally registered. But the statute states that only “valid registration[s]” enjoy this
protection. “It is the duty of the court to give effect, if possible, to every clause and
word of a statute, avoiding, if it may be, any construction which implies that the
legislature was ignorant of the meaning of the language it employed.”17 The Court will
not presume that Congress includes extraneous verbiage in the laws that it enacts; each
word and phrase is considered to be the result of a deliberate policy choice. The
validity of a trademark must, therefore, hold at least some value in determining the
availability of § 1125(c)(6) as a defense. This means that a successful challenge to a
trademark registration’s validity would vitiate the Defendants’ reliance upon §
1125(c)(6).18
17
Inhabitants of Montclair Twp. v. Ramsdell, 107 U.S. 147, 152 (1883).
18
15 U.S.C. § 1115(b) states that the validity of a registration shall become
“incontestable,” and the registration itself shall become “conclusive evidence of the
validity of the registered mark” if it meets certain conditions, including continual use
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All that remains is to define validity in the context of the statute. Lovetap
suggests that “valid” means only those registrations that are “not subject to
cancellation.”19 Not only does the Court find this to be the only reasonable
interpretation of the statutory language, but it has also enjoyed the consistent support
of other federal courts.20 After all, courts must not only presume that Congress
intended for each word to have meaning, but also that it “intended the ordinary
meaning of the words it used…”21 And nothing could be more plain, given its context,
than that the word “valid” means a registration that meets all of the law’s
requirements, that bears up to scrutiny, and would survive someone challenging it.
for a period of five consecutive years. Since this provision does not apply to the
trademarks at issue here, the Court’s Opinion does not address the effect of this
section on the Court’s holding.
19
Pl.’s Resp. to Defs.’ Mot. to Dismiss, at 3.
20
See Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 635 n.4 (9th Cir. 2008)
(“...if Mattel can succeed in obtaining that cancellation, the bar to state unfair
competition actions found in 15 U.S.C. §1125(c)(6) will be inapplicable.”); Jet, Inc.
v. Sewage Aeration Systems, 165 F.3d 419, 424 (6th Cir. 1999) (“However, Jet has
sought to add a count for cancellation of SAS’s federal trademark registration. If Jet
were successful on that claim, SAS would lose its affirmative defense...”); Viacom
Inc. v. Ingram Enterprises, Inc., 141 F.3d 886, 891 n.8 (8th Cir. 1998) (holding that
though § 1125(c)(6) “provides a ‘complete bar’ to state law dilution claims, Viacom
could block this defense, for example, by establishing that Ingram does not own a
‘valid registration.’”).
21
Gonzalez v. McNary, 980 F.2d 1418, 1420 (11th Cir. 1993).
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The Defendants do not expressly offer a contrary definition, but instead rely on
“practical effect” and “congressional intent” to argue that Lovetap’s challenge should
still be subject to the § 1125(c)(6) defense.22 The Defendants argue that it was
Congress’ intent to “(i) incentivize federal registration of marks, and (ii) prevent states
from regulating the use of federally registered marks...”23 The Defendants contend that
the only way to achieve this intent, and thus the only proper interpretation of the
statute, is to provide a sort of super defense in which a defendant must merely show
that the trademarks are registered to avoid all dilution claims, regardless of whether
those registrations are valid or not. This would of course render the word “valid”
completely superfluous, which as discussed above, is a non-starter in statutory
interpretation.
Perhaps realizing this, the Defendants attempt to give meaning to the word
“valid” by distinguishing between different types of invalidity. For example, the
Defendants argue that the following would be situations where a challenge to validity
of a registration would not be subject to a § 1125(c)(6) defense:
(i) when a registration has not been timely renewed but has not yet been
formally declared abandoned by the Trademark Office,
22
Defs.’ Reply to Mot. to Dismiss, at 5 [Doc. 21].
23
Id. at 3 (quoting H.R. Rep. No. 112-647 (2012)).
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(ii) when a court has enjoined a registered mark from use but the
registration has not been cancelled, either because the plaintiff failed to
seek cancellation or because the Trademark Office was not directed to
cancel the registration, or
(iii) when a foreign registration that serves as a basis for U.S. registration
under Sections 44 and 66 of the Lanham Act is not renewed, and the U.S.
registration becomes invalid as a result, but no notice is provided to the
Trademark Office.24
The Defendants contrast these situations with the present case, which they say is
barred by the super defense § 1125(c)(6).
But the Defendants offer little in the way of support for why these examples are
any different than the present case. There is certainly nothing in the language of the
statute that makes a distinction between different types of validity. The registrations
in all of these cases are potentially invalid, and they would all require adjudication on
the merits of the validity challenge before determining whether § 1125(c)(6) applied
or not. The Defendants give no other reason to treat those situations differently than
their assurance that “Congress certainly would not have intended such active but
invalid federal registrations [as their examples above] to serve as a basis for the
preemption set forth in § 1125(c)(6).”25 In other words, the Defendants advocate for
a much more complicated reading of the statute with no more support than their own
24
Id. at 5.
25
Id.
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certainty that they are right. But as Ockham would say, it is the simpler explanation
that is usually the correct one.
Not only is it simpler to give a broad reading to the word “valid,” but this also
coincides with a much simpler explanation of Congress’ intent than the one the
Defendants offer. The likely purpose of § 1125(c)(6) is not to provide a “super
defense” barring all dilution claims, but to preempt the use of dilution claims against
valid trademarks. In a dilution claim, a plaintiff is essentially arguing that a
defendant’s use of the defendant’s trademark, even if valid and in an area completely
unrelated to the plaintiff’s activities, is so pervasive that it saps the usefulness of the
plaintiff’s trademark. Importantly, a trademark does not have to be infringing to dilute.
Absent the defense of § 1125 (c)(6), therefore, dilution claims could apply to a junior
trademark even if it is validly held.
As stated above, the Defendants argued that Congress enacted § 1125(c)(6) to
“(i) incentivize federal registration of marks, and (ii) prevent states from regulating
the use of federally registered marks...”26 In one sense, this is partially true, but it is
incomplete. The language of the statute is clear that Congress’ intent27 was to prevent
states from regulating the use of valid federally registered marks. In order to
26
Id. at 3 (quoting H.R. Rep. No. 112-647 (2012)).
27
Or at least what Congress actually enacted into law.
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“incentivize federal registration of marks,”28 Congress wanted to prevent holders of
valid registrations from being subject to potential liability for dilution. That does
not mean that Congress intended to give this defense to invalid registrations. Thus,
notwithstanding the fact that “congressional intent” is found primarily in the language
of a statute and not speculation as to the collective intentions of 535 individuals, the
Defendants’ arguments based on intent do not hold much merit on their own terms
either.
Nor do the Defendants’ concerns over the “practical effect” of the Plaintiff’s
interpretation convince the Court that it is incorrect. The Defendants argue that the
Court’s holding today “eviscerates the protections afforded by the statute...”29In one
sense, it is true that the Court’s interpretation means the Defendants cannot escape
liability in the face of a challenge to their registration by merely pointing to their
registration. But as discussed above, the statute never gave the Defendants that
procedural advantage anyway. The Defendants may understandably be upset by this,
but the Court is just the messenger here. Should they wish to enjoy such an advantage,
they may always lobby Congress to change the law.
28
Id.
29
Defs.’ Mot. to Dismiss, at 6.
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The Court’s ruling today does not mean, however, that a plaintiff can merely
plead for cancellation and make it to discovery with no support whatsoever. This is
not an either/or situation. If a plaintiff’s cancellation claim is baseless, or if a plaintiff
cannot plead sufficient facts to support its allegations, a defendant can always file a
motion to dismiss that claim. Perhaps tellingly, the Defendants have not done so here.
Congress was clear, through the language it enacted into law, that it intended
for § 1125(c)(6) to provide a complete bar to state dilution claims against valid
registrations. The inclusion of “valid,” based upon the plain meaning of the word,
necessarily means that § 1125(c)(6) does not apply to those federal registrations that
are invalid. As such, the Court finds that when there is a question as to the validity of
a federally registered trademark, and a plaintiff seeks to cancel that trademark with a
well-pleaded complaint, § 1125(c)(6) does not mandate immediate dismissal of a
plaintiff’s related state claim for dilution.
IV. Conclusion
For the reasons stated above, the Defendants’ Motion to Dismiss [Doc. 19-1]
is DENIED.
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SO ORDERED, this 31 day of July, 2017.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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