Cori et al v. Phyllis Schlafly's American Eagles et al
Filing
99
ORDER granting 77 Motion to Dismiss Counterclaims for Lack of Jurisdiction. The Clerk of the Court is directed to enter judgment accordingly at the close of the case. Signed by Judge David R. Herndon on 10/19/2017. (csd)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
EAGLE FORUM, an Illinois Not for
Profit Corporation
And
No. 3:16−cv–946-DRH-RJD
ANNE SCHLAFLY CORI, on behalf of
Eagle Forum, et al.,
Plaintiffs,
v.
PHYLLIS SCHLAFLY’S AMERICAN
EAGLES, a Virginia Not for Profit
Corporation,
Defendant.
MEMORANDUM AND ORDER
HERNDON, District Judge:
I.
Introduction
Now before the Court is a motion to dismiss counterclaims originally
submitted by the Defendant. (Doc. 68.) The Plaintiff has submitted the motion
and accompanying memorandum to dismiss these counterclaims. (Docs. 77, 78,
91.) The Defendant has responded in opposition. (Doc. 90.) For the reasons
below, the Court grants Plaintiff’s motion to dismiss all counterclaims.
II.
A. Motion to Dismiss Standard
Analysis
When ruling on a motion to dismiss for lack of subject matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(6), a court must accept the
complaint's well-pleaded factual allegations as true and draw reasonable
inferences from those allegations in plaintiff's favor. Transit Exp., Inc. v. Ettinger,
246 F.3d 1018, 1023 (7th Cir. 2001). The court must then determine “whether
relief is possible under any set of facts that could be established consistent with
the allegations.” Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir.
1992) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
A motion to dismiss tests the sufficiency of the complaint, not its merits.
Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A claim may be
dismissed only if it is beyond doubt that under no set of facts would a plaintiff's
allegations entitle them to relief. Travel All over the World, Inc. v. Kingdom of
Saudi Arabia, 73 F.3d 1423, 1429 (7th Cir. 1996). To survive a motion to
dismiss, “[c]omplaints need not plead facts and need not narrate events that
correspond to each aspect of the applicable legal rule.” Kolupa v. Roselle Park
Dist., 438 F.3d 713, 715 (7th Cir. 2006).
B. Motion to Dismiss Counts I and III
Cori argues that American Eagles do not have the requisite standing to
pursue trademark infringement claims under federal law since they are not the
actual rights holder and thus the action is prohibited.
Whether standing to sue for false designation of origin requires the plaintiff
to be the registrant is a matter of controversy between circuits. The 7th circuit has
chosen to allow mere license holders to sue for false designation, but only so far
as to “ensure that only the current owner of the mark can claim infringement.”
Specht v. Google Inc., 747 F.3d 929, 933 (7th Cir. 2014) (Stating only the owner
of a registered mark has standing to claim infringement; the registrant loses the
right upon transfer to an assignee).
Here, the issue is whether the Counter-Plaintiff holds a reasonable interest
based on their license because it is clear they cannot show proof of ownership.
The Counter-Plaintiff admits in their own complaint that they held at most a
license which was later extinguished by Ms. Schlafly herself in a public statement.
Since proof of ownership under the Lanham Act includes only the registrant or an
assignee, the Counter-Plaintiff clearly does not meet this requirement.
Beyond proof of ownership, a non-registrant may still pursue a claim for
false designation if they hold a reasonable interest in the trademark itself and may
be harmed by the defendant’s continued use through confusion in the
marketplace. As stated above, the Counter-Plaintiff claims to have held a license
from Ms. Schlafly before it was revoked just prior to her death. This revocation
would seem to destroy any claim by the Counter-Plaintiff to a reasonable interest
since barring the license; the organization is not the registrant to any mark within
the “family of marks”.
As stated above, when adjudicating a motion to dismiss, the motion should
be granted only when the non-moving party cannot show any facts in support of
their claim that would allow them to succeed. Roots Partnership v. Lands’ End,
Inc., 965 F.2d 1411, 1416 (7th Cir. 1992). With ample opportunity to present any
evidence of their license from Ms. Schlafly or that Ms. Schlafly was in fact the
registrant of the marks at issue, Counter-Plaintiffs have failed to provide the court
with any meaningful evidence that their false designation or origin claims have any
merit.
Accordingly, since the Counter-Plaintiff has failed to provide any facts that
would allow them to succeed, these claims are dismissed.
C. Motion to Dismiss Count II
Cori argues that American Eagles have failed to make an acceptable
argument as to why a mark, accepted and registered by the Patent and
Trademark Office, should be canceled.
In order to succeed in the cancellation of a registered mark, the plaintiff
must show they are or will be damaged by the continued registration of the mark.
Standing for this claim does not require a showing of actual damages, only
sufficient facts to support a belief of likely damage. 15 USC § 1064.
Claims for cancellation require different grounds if the mark has been
registered for more or less than 5 years. 15 USC § 1064(1). If the mark has been
registered for 5 years or fewer, any grounds may be stated for cancellation,
including
traditional
arguments
such
as
likelihood
of
confusion,
false
identification, or that the mark is merely descriptive.
If the mark has been registered for more than 5 years, the only arguments
that can suffice cancellation are that the mark is now generic, the mark is
functional, the mark has been abandoned, there was fraud in the registration, the
mark comprises obscenity, the mark falsely suggests connections to person or
institutions, the mark misrepresents goods or services, or the mark is not
controlled by the registrant.
Here, the mark (reg. 2475317) was registered by the Eagle Forum, an entity
now controlled by Anne Schlafly Cori, in 2001. Since more than 5 years have
passed since the registration, the mark can only be contested by one of the
arguments listed above. The Counter-Plaintiffs pay lip service to this argument,
making only the barest assertion that they will be harmed by the continuing
registration of the mark because it is being used against them and preventing
their use of the name Phyllis Schlafly’s American Eagles. While this is the bare
minimum requirement to suffice a pleading, it does not include any facts in
support of the claim, nor does it mention any of the acceptable arguments to
cancel an established mark.
Even assuming the Counter-Plaintiff would make the correct arguments,
they will not succeed on any of the available arguments. The mark is not generic
or functional, it has not been abandoned, no apparent fraud was committed in the
registration, the mark is not obscene, it does not falsely suggest a connection with
Ms. Schlafly, since she was the one to register the mark when she was in control
of the organization, it does not misrepresent the services provided by the
organization, and has remained under the control of the Eagle Forum
organization through its entire existence.
Therefore, this claim is dismissed.
D. Motion to Dismiss Count IV
Here, Cori argues Counter-Plaintiffs have sought a remedy for violation of a
right of publicity under common law that no longer exists.
Illinois statute 765 ILCS 1075/60 specifically replaced common law
remedies for right of publicity for claims taking place after 1999. The statute
recognizes an individuals’ right to control whether and how their identity is used
for commercial purposes and allows the transfer of these rights upon death to
those authorized representatives, recipients of written transfer, or any person who
possesses an interest in those rights. ILCS 1075/20. To succeed on a right of
publicity statutory claim, the plaintiff must show an appropriation of one’s name
or likeness, without consent, and for the commercial benefit of another. Leopold
v. Levin, 45 Ill.2d 434, 444 (1970).
In the event of the death of the rights holder, the rights descend or may be
transferred by written document, including will or trust, or by intestate
succession to an individual’s spouse, parents, children, and grandchildren. 765
ILCS 1075/15. In the event no transfer occurs before the death of the rights
holder, each person with an interest in the rights must act in good faith towards
any other person with an interest. 765 ILCS 1075/20.
Since both Anne Schlafly Cori and her brother John Schlafly hold equal
interests in Ms. Schlafly’s right of publicity and exist on opposite sides of this
case, Counter-Plaintiffs cannot show the original plaintiffs do not have a right to
use Ms. Schlafly’s image or that the use is without the consent of a rights holder.
Beyond that, the Counter-Plaintiffs failed to cite to the correct statute for their
sought remedy and should not be rewarded for their lack of diligence.
Therefore, this claim is dismissed.
E. Motion to Dismiss Count V
Here, Cori argues that American Eagles lack the required standing to bring
suit for trademark infringement under Illinois law.
The Illinois trademark statute generally follows the same requirements as
the federal version, making specific note that “the registrant” is the party from
whom consent is required and the party who may recover damages from cases of
infringement. 765 ILCS 1036/60. In addition, the remedies section lists only the
“owner of the mark” as the party able to proceed by suit to enjoin infringement.
765 ILCS 1036/70.
Just as with the Lanham Act, the “registrant” includes the person to whom
the mark is registered, their legal representatives, successors, or assigns. It does
not include licensees at any point nor is there reference to a license anywhere in
the statute.
As stated above, the Counter-Plaintiffs have at most made the argument
they held an exclusive license to the family of marks, never claiming ownership.
Since the state statute is even more clear about what parties have standing to sue
than the Lanham Act and the Counter-Plaintiff clearly does not meet the
requirement, this claim is dismissed.
F. Motion to Dismiss Counts VI and VII
Finally, Cori argues American Eagles’ have not made sufficient arguments
to support a declaratory judgement on either the validity and effect of their license
or the rights of publicity and trademark of Phyllis Schlafly.
As stated above, once a mark has been registered for more than 5 years,
likelihood of confusion is no longer an acceptable argument for cancellation and
thus most of Counter-Plaintiff’s argument can be disregarded. 15 USC § 1064(5).
In addition, as mere license holders; Counter-Plaintiffs would not have standing to
pursue this claim even if it was allowed.
However, Counter-Plaintiff finally alleges the correct issues when they
question the control of the mark by the Plaintiffs and the ownership rights the
Plaintiff holds in the mark. The second part of this can be easily disposed of since
Eagle Forum is the registrant for trademark reg. 2475317 and is also the listed
registrant on the original filing.
Thus the only remaining argument is that Plaintiffs have failed to exercise
control over the mark as Counter-Plaintiffs allege third party use has created
confusion amongst consumers as to the origin and ownership of the mark.
However, this allegation begins and ends in a single sentence and is never
expounded upon again by the Counter-Plaintiffs, who chose instead to devote the
majority of their argument to an issue which, by matter of law, they may not cite
as a reason to cancel the mark. Therefore, since the Counter-Plaintiff has not
provided any facts in support of the only allegation that could conceivably cancel
the mark, it must therefore fail.
The Counter-Plaintiff puts forward an argument that because Ms. Schlafly
was never a citizen of Illinois, nor did she expire in the state, the Illinois laws on
publicity should not apply and instead, the laws of her home state of Missouri
should. This change would have dramatic effect since Illinois recognizes postmortem rights of publicity while Missouri does not. See Memphis Dev. Found. V.
Factors Etc., Inc., 616 F.2d 956 (6th Cir. 1980). However, the fact that Ms.
Schlafly’s businesses were based in Illinois and had a national reach largely
preclude this issue.
The issue of how to handle Ms. Schlafly’s rights of publicity is clearly
governed by Illinois state law, 765 ILCS 1075/15 and 765 ILCS 1075/20. The
rights under Illinois law descend just like traditional property and all Ms.
Schlafly’s heirs would have equal interest and equal right to use her image in
commerce. As such, Ms. Cori and her organizations hold equal right to use the
imagery as does Mr. Schlafly and the Counter-Plaintiff has not made a sufficient
showing as to why this is not the case.
Based on this, these counts are dismissed.
G. Conclusion
Therefore, for the foregoing reasons the Court GRANTS the Plaintiff’s
motion to dismiss (Doc. 77). The Defendant’s counterclaims are DISMISSED
with prejudice. The Clerk of the Court is directed to enter judgment accordingly
at the close of the case.
IT IS SO ORDERED.
Judge Herndon
2017.10.19
16:12:40 -05'00'
UNITED STATES DISTRICT JUDGE
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