SnoWizard, Inc. v. Robinson et al

Filing 24

ORDER AND REASONS denying defendants' 11 Motion to Dismiss Case; denying defendants' 13 Motion for Sanctions. Signed by Judge Ivan L.R. Lemelle. (ijg, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SNOWIZARD, INC.

CIVIL ACTION

VERSUS

NO. 11-515

RON ROBINSON D/B/A RAGGS SNO-CONE
SUPPLIES, JULIE K. DOTY D/B/A
RAGGS SNO-CONE SUPPLIES, RAGGS
SUPPLY LP D/B/A RAGGS SNO-CONE
SUPPLIES, & LOTY MANAGEMENT, LLC

SECTION “B”(2)

ORDER AND REASONS
Before the Court is Defendants’ Motion to Dismiss Under Rule
12(B)(6) (Rec. Doc. No. 11) and Defendants’ Motion for Sanctions
Under Rule 11 (Rec. Doc. No. 13), both of which are opposed.
Doc. Nos. 14 and 15).

(Rec.

For the following reasons,

IT IS ORDERED that Defendants’ Motion to Dismiss (Rec. Doc.
No. 11) and Defendant’s Motion for Sanctions (Rec. Doc. No. 13) are
DENIED.
This

case

arises

from

trademark

infringement,

unfair

competition, trademark dilution, and defamation allegedly incurred
by

the

Plaintiff

through

the

Defendants’

sale

counterfeit products bearing the name “SNOWIZARD.”

of

allegedly

(Rec. Doc. No.

1, at ¶ 22). Plaintiff claims to have used the trademark SNOWIZARD
in interstate commerce and in connection with its products since
1945.

Id. at ¶ 9. Additionally, Plaintiff claims to have acquired

a Certificate of Registration for the trademark SNOWIZARD for use
on and in connection with “food flavorings” on June 2, 2009.
at

¶

10.

Plaintiff

also

asserts

that

it

packages

Id.

snowball

flavoring concentrates in quart- and gallon-sized plastic bottles
with tamper-evident, sealed caps that include printed product
labels bearing the SNOWIZARD trademark and complying with Food and
Drug Administration food labeling regulations.

Id. at ¶ 19.

Plaintiff alleges that Defendants Robinson, Doty, and Raggs SnoCone Supply (collectively referred to as “Raggs”) had, at all
pertinent times, actual and constructive knowledge of SnoWizard’s
use and ownership of the trademark SNOWIZARD in connection with
food flavorings.

Id. at ¶ 16.

Plaintiff further asserts that

Defendants are in the business of distributing, selling, and
reselling

snowball

products,

including

snowball

flavoring

concentrates, and since about 1991 has purchased snowball flavoring
concentrates from Plaintiff for resale to snowball vendors. Id. at
¶ 17, and ¶ 18.
Pertinent to these asserted facts, Plaintiff claims that in or
about May 2010 it received a complaint from a snowball vendor
regarding six bottles of SnoWizard flavoring concentrates that the
vendor allegedly purchased from Raggs.

Id. at ¶ 20.

The vendor

complained to Plaintiff that the flavoring concentrates vendor
allegedly purchased from Raggs did not match flavor names on the
labels.

Id.

Upon Plaintiff’s receipt and inspection of the six

bottles of flavoring concentrates, it reached the conclusion that
Raggs had repackaged flavoring concentrates in quart- and halfgallon sized plastic bottles that lacked tamper-evident, sealed

2

caps.

Id. at ¶ 21.

Instead, the bottles were sealed with clear

packaging tape and lacked the disclosures required by the FDA food
labeling regulations – mandates that Plaintiff claims to follow
stringently.

Id.

Further, the labels on the bottles contained

“misspellings of SnoWizard flavor names, display[ed] inferior
quality and generally drab appearances, and show[ed] flavor names
that did not match the flavoring concentrates contained in the
bottles.”

Id.

Along with these characteristics, the bottles’

labels also displayed the SNOWIZARD trademark.

Id.

From these allegations, Plaintiff claims that Raggs’s use of
allegedly counterfeit labels bearing the trademark of SNOWIZARD in
commerce was “likely to injure SnoWizard’s business reputation, to
dilute the distinctive quality of SnoWizard’s trademark, and to
tarnish the reputation of the mark.”

Id. at ¶ 22.

Plaintiff

further alleges that Raggs’s use of counterfeit labels “was likely
to cause confusion and mistake among snowball vendor consumers; was
likely to deceive snowball vendor consumers as to the origin,
sponsorship, and approval of Raggs’s commercial activities by
SnoWizard; and misrepresented the nature, characteristics, and
qualities of Raggs’s and SnoWizard’s commercial activities.”

Id.

Thus, Plaintiff demanded that Raggs cease and desist selling
repackaged SnoWizard flavoring concentrates and destroy counterfeit
labels.

Id. at ¶ 23.

Plaintiff claims that thereafter Raggs told vendor customers

3

that Raggs no longer sold Plaintiff’s products because Raggs
experienced problems with Plaintiff’s ability to supply and deliver
products timely.

Id. at ¶ 24.

As a result of Raggs’s alleged actions, Plaintiff claims to
have suffered damages and has been deprived of substantial gains
and profits.

Id. at ¶ 26. Therefore, Plaintiff levies four counts

against Raggs in its complaint: (i) federal trademark infringement
in violation of 15 U.S.C. § 1114, (ii) violation of federal unfair
competition pursuant to 15 U.S.C. § 1125(a), (iii) federal dilution
of

trademark

in

violation

of

15

U.S.C.

§

1125(c),

and

(iv)

defamation in violation of La. C.C. art. 2315 and “the state common
law of defamation.”

Id. at ¶¶ 29-41.

Plaintiff seeks the following remedies: (i) preliminary and
permanent injunction of Defendants’ alleged use of counterfeit
products bearing Plaintiff’s trademark SNOWIZARD, (ii) an order
that Defendants identify all customers to whom they allegedly sold
products having counterfeit labels bearing Plaintiff’s trademark
SNOWIZARD along with an order that Defendants notify such customers
that the sale of such counterfeit products was not authorized by
Plaintiff, (iii) an order that Defendants report in writing under
oath

setting

Defendants

forth

have

in

detail

complied

the
the

with

manner

and

preliminary

form
and

in

which

permanent

injunctions within thirty days after service of the preliminary and
permanent

injunctions,

(iv)

an

4

order

requiring

Defendants

to

account for and pay over to Plaintiff all gains, profits, and
advantages realized by Defendants and an award for all damages that
Plaintiff has sustained as a result of the Defendants’ alleged
actions or alternatively an award of statutory damages, (v) an
award of three times the damages sustained by Plaintiff, together
with

reasonable

interest,

costs,

attorney’s
and

fees

expenses,

and
(vi)

prean

and

award

post-judgment
of

reasonable

attorney’s fees in connection with this matter, (vii) preliminary
and permanent injunction against Defendants’ alleged continuing
publication of allegedly false and defamatory statements against
Plaintiff, (viii) an order for Defendants to identify to the Court
and Plaintiff all customers to whom Defendants allegedly published
false and defamatory statements along with an order that Defendants
notify such customers in writing that such statements were false,
(ix) an award of damages to Plaintiff for injury to its business
reputation and for loss of business income in amounts to be proved
at trial, plus litigation expenses, court costs, and legal interest
incurred by Plaintiff as a result of the allegedly defamatory
statements made by Defendants, and (x) an award of such other and
further relief as this Court deems just and equitable in the
premises and all such relief to which Plaintiff is entitled.

Id.

at ¶ 42.
I.

Motion to Dismiss Under Rule 12(b)(6)
Through the introduction of new and additional evidence,

5

Defendants make a multi-pronged attack on Plaintiff’s Complaint.
Defendants first contend that the contents in the mislabeled
bottles of flavor concentrate are SNOWIZARD flavors and thus
genuine

SNOWIZARD

products.

(Rec.

Doc.

No.

11-1,

at

3-4).

According to Defendants, Plaintiff has failed to state a cause of
action for trademark infringement and unfair competition under the
Lanham Act because Defendants were licensees selling “genuine goods
bearing a true mark.”

Id. at 4.

Defendants point to the course of

conduct between the parties, beginning in 1991, in order to argue
that a licensing agreement existed between the parties and that
consumer confusion – a necessary element for trademark infringement
and

unfair

competition

Defendants’ actions.

–

did

not

and

Id. at 4-6, 7.

could

not

result

from

Defendants additionally

forward arguments that prescription and the equitable doctrine of
laches prohibit Plaintiff from bringing action.

Id. at 6, 7.

Defendants then argue that Plaintiff failed to state a claim
for trademark dilution under the Lanham Act because Plaintiff’s
mark is not “famous” within the meaning of the Act and Plaintiff
failed to plead that its mark is “famous.”

Id. at 8.

Further,

Defendants point to the plain language of the Trademark Dilution
Revision Act of 2006 to forward two arguments regarding the
applicability of the Act: first, Defendants’ use of Plaintiff’s
mark occurred before the mark became famous, so the Act does not
apply; second, Defendants began using Plaintiff’s mark in commerce

6

before the date of enactment of the Act, so the Act does not apply.
Id. at 9.

Defendants also argue that Plaintiff is not entitled to

“additional remedies” under the Act, and that Plaintiff’s demand
for injunctive relief under the Act is moot.

Id. at 7, 9.

Defendants then argue that Plaintiff failed to allege facts
necessary to plead an action for defamation under Louisiana law.
Id. at 9-10.

Defendants claim that the statement included in

Plaintiff’s Complaint is not defamatory because it was the truth.
Id.

Defendants further argue that Plaintiff failed to specify why

Louisiana law should apply to this case, and even if Louisiana law
applies, Plaintiff cannot establish the requisite elements to state
a prima facie case for defamation under Louisiana law.

Id. at 11-

12.
Finally,

Defendants

argue

that

Defendant

Ron

Robinson

transferred his interest in Raggs Sno-Cone Supplies to entities
controlled by Defendant Julie Doty in 2005.
Defendants

assert

that

defendant in this action.

Ron

Robinson

is

not

Id. at 11.
properly

Thus,
made

a

Id.

Plaintiff first objects to the Court’s potential consideration
of “unauthenticated and incompetent” evidence offered by Defendants
in their Memorandum in Support of Motion to Dismiss.

(Rec. Doc.

No. 14, at 1-2). Plaintiff claims that if the Court considers this
evidence, then the Court must treat Defendants’ motion to dismiss

7

as one for summary judgment.1
Plaintiff
trademark

argues

Id.

that

infringement

the

under

Complaint

claims

U.S.C.

15

states
1114(1)

and

§

for

unfair

competition under 15 U.S.C. § 1125(a). (Rec. Doc. No. 14, at 7-8).
In support of this contention, Plaintiff claims that Defendants’
argument lacks merit because the Complaint provides well-pleaded
allegations that the products sold by Defendants were not “genuine
goods bearing a true mark” due to Defendants’ repackaging of
snowball flavoring concentrates in “defective packages” bearing
counterfeit product labels.

Id. at 8-9.

Plaintiff next asserts that its Complaint states a claim for
dilution of trademark.

Id. at 12.

In support of this argument,

Plaintiff claims that SnoWizard’s trademark is indeed “famous”
within the meaning of the Trademark Dilution Revision Act of 2006.
Id.

at

13.

Defendants

Plaintiff
have

further

stopped

contends

diluting

that

Plaintiff’s

whether

or

not

trademark

is

irrelevant to Plaintiff’s right to injunctive and other relief
under the Lanham Act.

Id.

Plaintiff next states that its reference to common law in its
Complaint was to Texas common law, and further argues that it has
sufficiently pleaded a claim for defamation under either Texas or

1

Plaintiff states that if this Court considers the matters outside the
pleadings that Defendants presented in the memorandum in support of their
motion, that pursuant to Rule 12(d), Plaintiff be given a reasonable
opportunity to present all the material that is pertinent to the motion.
(Rec. Doc. No. 14, at 17).

8

Louisiana law.

Id. at 15-17.

Finally, Plaintiff requests that it be given leave to amend
its complaint “as may be necessary to state a claim for which
relief may be granted if this Court grants the defendants’ motion
in part or in whole.”
A.

Id. at 17.

Motion to Dismiss Standard2
When reviewing a motion to dismiss, courts must accept all

well-pleaded facts as true and view them in the light most favorable
to the non-moving party.

Baker v. Putnal, 75 F.3d 190, 196 (5th

Cir. 1996). However, "[f]actual allegations must be enough to raise
a right to relief above the speculative level."
Twombly, 550 U.S. 544, 555 (2007).
dismiss,

a

complaint

must

contain

Bell Atl. Corp. v.

" 'To survive a motion to
sufficient

factual

matter,

accepted as true, to state a claim to relief that is plausible on
its face.' "

Gonzales v. Kay, 577 F.3d 600, 603 (5th Cir. 2009)

(quoting Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)) (internal
quotation marks omitted). The Supreme Court in Iqbal explained that
Twombly promulgated a "two-pronged approach" to determine whether
a complaint states a plausible claim for relief.

Iqbal, 129 S.Ct.

at 1950. First, courts must identify those pleadings that, "because
they

are

no

more

than

assumption of truth."

Id.

conclusions,

are

not

entitled

to

the

Legal conclusions "must be supported by

2

Because the Court does not consider the evidence outside of the
pleadings offered by Defendants, it need not convert the instant motion to one
for summary judgment.

9

factual allegations."

Id.

"Threadbare recitals of the elements of

a cause of action, supported by mere conclusory statements, do not
suffice."

Id. at 1949.

Upon identifying the well-pleaded factual allegations, courts
then

"assume

their

veracity

and

then

determine

plausibly give rise to an entitlement to relief."

whether

they

Id. at 1950.

"A

claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged."

Id. at 1949.

This is a "context-specific task that requires the reviewing court
to draw on its judicial experience and common sense."
plaintiffs

must

"nudge[]

conceivable to plausible."
B.

their

claims

across

the

Id.

The

line

from

Twombly, 550 U.S. at 570.

Federal Trademark Infringement
Trademark law is designed to protect the public “from confusion

about a product’s source and, relatedly, to protect trademarkowners’ investment in the goodwill associated with their marks.”
ICEE Distrib., Inc. v. J&J Snack Foods Corp., 445 F.3d 841, 846 (5th
Cir. 2006).

The Lanham Act § 32(1), 15 U.S.C. § 1114 provides a

cause of action for infringement of a registered

trademark in

pertinent part as follows:
(1) Any person who shall, without the consent of registrant–
(a) use in commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered mark
in connection with the sale, offering for sale,
distribution, or advertising of any goods or
10

services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or
to deceive; or
(b) reproduce, counterfeit, copy, or colorably
imitate
a
registered
mark
and
apply
such
reproduction, counterfeit, copy, or colorable
limitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to
be used in commerce upon or in connection with the
sale,
offering
for
sale,
distribution,
or
advertising of goods or services on or in
connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive,
shall be liable in a civil action by the registrant for
the remedies hereinafter provided. Under subsection (b)
hereof, the registrant shall not be entitled to recover
profits or damages unless the acts have been committed
with knowledge that such imitation is intended to be used
to cause confusion, or to cause mistake, or to deceive.
The Fifth Circuit has fashioned a two-part test that a plaintiff
must satisfy in order to successfully assert an infringement claim
under the Lanham Act § 32(1).

Amazing Spaces, Inc. v. Metro Mini

Storage,

(5th

608

F.3d

225,

235

Cir.

2010)

(citing

Bd.

of

Supervisors for La. State Univ. Agric. and Mech. Coll. v. Smack
Apparel Co., 550 F.3d 465, 474 (5th Cir. 2008)).

First, the

plaintiff must “establish ownership in a legally protectible mark,
and second, . . . show infringement by demonstrating a likelihood
of confusion.”

Id. at 235-36 (citing Smack Apparel, 550 F.3d at

474).
The

parties

do

not

dispute

the

fact

that

Plaintiff

has

established ownership in a legally protectible mark, thus meeting
the first part of the Amazing Spaces test.

11

See 608 F.3d at 235-36.

In its Complaint, Plaintiff asserts that Defendants infringed upon
its

trademark

by

offering

for

sale

and

advertising

for

sale

defectively packaged snowball flavoring concentrates bearing the
registered mark SNOWIZARD.
defectively
deception

packaged

as

to

the

Plaintiff claims that the sale of such

goods

was

source

likely

of

to

cause

Defendants’

confusion

goods.

and

However,

Defendants argue that trademark law does not even apply in the
current proceeding. According to Defendants, the authorized resale
of “genuine goods bearing a true mark” does not give rise to
trademark

infringement;

thus,

products is not actionable.

the

repackaging

of

Plaintiff’s

Hence, the issue becomes whether

Defendants were authorized to use the trademark and whether the
repackaged products contained “genuine goods bearing a true mark.”
The Fifth Circuit has recognized as a general principle that
“trademark law does not apply to the sale of genuine goods bearing
a true mark, even if the sale is without the mark owner’s consent.”
Matrix Essentials, Inc. v. Emporium Drug Mart, Inc., of Lafayette,
988 F.2d 587, 590 (5th Cir. 1993) (quoting Shell Oil Co. v.
Commercial Petroleum, Inc., 928 F.2d 104, 107 (4th Cir. 1991)). The
court in Matrix determined that a purchaser can resell a mark
owner’s product without incurring liability under the Lanham Act for
trademark infringement or unfair competition.

See, e.g., A Touch

of Class Jewelry Co., Inc. v. J.C. Penney Co., Inc., 1999 WL 707723
(E.D. La. 1999).

The product resold by the defendant in Matrix was

12

genuine but not resold with the mark owner’s consent.
F.2d at 592-93.

Matrix, 988

The plaintiff in Matrix “made no showing or

allegation that the products [were] counterfeit, or that [the
defendant] ha[d] tampered with them in any way.”

Id. at 590.

The

court found that merely reselling the genuine products without more
culpable conduct did not cause the consumer confusion required to
successfully assert a trademark infringement action.
In

regards

to

the

issue

before

this

Id.

Court,

Plaintiff

specifically alleges that Defendants used the SNOWIZARD trademark
while reselling defectively packaged goods.
30).

(Rec. Doc. No. 1, ¶

As noted by the court in Matrix, goods that are resold can

become defective and lose their “genuine” quality and lead to
consumer confusion.

988 F.2d at 590-91.

See Soweco, Inc. v. Shell

Oil Co., 617 F.2d 1178 (5th Cir. 1980) (defendant prohibited from
selling bulk oil under Shell trademarks because the distributor did
not observe the strict tank and line cleaning requirements that
Shell required of its authorized distributors); El Greco Leather
Products Co., Inc. v. Shoe World, Inc., 806 F.2 392 (2d Cir. 1986)
(shoes imported by defendant were not “genuine” because they had not
undergone the careful quality inspection required by plaintiff mark
owner); Adolph Coors Co. v. A. Genderson & Sons, Inc., 486 F.Supp.
131 (D. Colo. 1980) (Coors beer sold by the defendant distributor
was not “genuine” because defendant did not maintain the careful
refrigeration requirements in transporting and storing the beer as
13

mandated by Coors).
The court in Matrix stated that, “[t]he oil, shoes, and beer
from Shell, El Greco, and Coors all contained or could potentially
contain

a

latent

product

defect

due

to

the

unauthorized

distributor’s failure to observe the manufacturer and mark owner’s
rigorous quality control standards.”

988 F.2d at 591.

Because a

“consumer would not necessarily be aware of the defective condition”
caused by the failure of the reseller to adhere to the mark owner’s
rigorous quality control standards, the consumer “would therefore
be confused or deceived.”

Id.

Moreover, the Supreme Court addressed the issue of repackaging
goods

and

its

relationship

to

trademark

law

Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924).

long

ago

in

The question in

Coty was whether the defendant’s repackaging of the plaintiffmanufacturer’s products into smaller containers, which it then sold,
amounted to an infringement on the plaintiff’s trademark.
366-67.

Id. at

The Court found that such an action does not amount to

trademark infringement because “[t]he defendant of course by virtue
of its ownership had a right to compound or change what it bought,
to divide either the original or the modified product, and to sell
it so divided.”

Id. at 368.

However, this proposition does not

provide a “blank slate” for a purchaser to engage in repackaging
that is automatically immune from an action under trademark law.
Coty has been interpreted to require those who repackage goods and

14

sell them under the manufacturer’s mark to include notice that the
item has been repackaged.

See Farouk Systems Inc. v. Target Corp.,

Inc., 2008 WL 181130 (5th Cir. 2008); Brilliance Audio v. Haights
Cross Commc’ns, 474 F.3d 365 (6th Cir. 2007).

The language in Coty

makes this point explicit: “[i]f the defendant’s rebottling the
plaintiff’s [product] deteriorates it and the public is adequately
informed

who

does

the

bottling,

the

public,

plaintiff’s assistance, is likely to find out.”
369 (emphasis added).

with

or

without

Coty, 264 U.S. at

As explained by the Sixth Circuit, such

notice lets the consumer know that the purchaser has repackaged the
trademarked product; however, absent such notice, the public may
associate the trademark owner with a “product that is not of the
same quality as the original trademarked item.”

Brilliance Audio,

474 F.3d 365 at 370.
Due to the fact that goods can become defective by failure to
adhere to quality control standards and thus lose their “genuine”
quality, Plaintiff has asserted well-pleaded facts that raise a
triable issue that may entitle Plaintiff to relief under the
applicable law.

Plaintiff asserts that the labels affixed to the

repackaged bottles of flavor concentrate are counterfeit and render
the product in the containers defective, resulting in consumer
deception as to the source of Defendants’ goods.

(Rec. Doc. No. 1,

at ¶ 31). Plaintiff’s Complaint states with particularity the steps
that

Plaintiff

takes

to

ensure

15

the

quality

of

its

product.

Plaintiff packages its flavor concentrates in tamper-evident bottles
and complies with label requirements mandated by the FDA.
Doc. No. 1, at ¶ 19).

(Rec.

Plaintiff alleges that Defendant repackaged

flavor concentrates presumably manufactured by Plaintiff and sold
the repackaged goods in smaller-sized bottles that lacked tamperevident,

sealed

caps

and

the

FDA-required

food

labels.

The

materials before the Court are silent as to whether Defendants
affixed a notice that they had repackaged Plaintiff’s products along
with the labels bearing the SNOWIZARD mark. Thus, Plaintiff has met
the second part of the Amazing Spaces test by showing a possibility
of infringement through confusion.

See Amazing Spaces, 608 F.3d at

235-36.
C.

Federal Unfair Competition
In addition to providing a cause of action for trademark

infringement, the Lanham Act, 15 U.S.C. § 1125(a) also provides a
cause of action for unfair competition regardless of registration
of a mark.

In pertinent part, the Act states:

(a) Civil action
(1) Any person who, on or in connection with any
goods or services, or any container for goods, uses
in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false
designation
of
origin,
false
or
misleading
description of fact, or misleading representation
of fact, which–
(A) is likely to cause confusion, or to cause
mistake, or to deceive as to the affiliation,
connection, or association of such person with
another person, or as to the origin,
sponsorship, or approval of his or her goods,
16

services, or commercial activities by another
person, or
(B) in commercial advertising or promotion,
misrepresents the nature, characteristics,
qualities, or geographic origin of his or her
or another person’s goods, services, or
commercial activities, shall be liable in a
civil action by any person who believes that
he or she is or is likely to be damaged by
such act.
15 U.S.C. 1125(a). Unfair competition refers to situations in which
a “defendant pass[es] of his goods or services as those of the
plaintiff by virtue of substantial similarity between the two,”
leading to consumer confusion.

Chevron Chemical Co. v. Voluntary

Purchasing Groups, Inc., 659 F.2d 695, 701 (5th Cir. 1981) (citing
Boston Prof’l Hockey Assoc’n v. Dallas Cap & Emblem Mfg. Co., 510
F.2d 1004, 1010 (5th Cir. 1975) (internal omissions and quotations
omitted).

An action for unfair competition applies to unregistered

marks when the “unregistered marks used by the plaintiff are so
associated with its goods that the use of the same or similar marks
by another company constitutes a representation that its goods come
from the same source.”

Boston Prof’l Hockey Assoc’n v. Dallas Cap

& Emblem Mfg. Co., 510 F.2d 1004, 1010 (5th Cir. 1975) (quoting
Joshua Meier Co. v. Albany Novelty Mfg. Co., 236 F.2d 144, 147 (2nd
Cir. 1956) (internal quotations omitted).

Thus, while broader than

the law of federal trademark infringement, the law of federal unfair
competition under the Lanham Act § 43(a), 15 U.S.C. § 1125(a),
shares similar elements – i.e., confusion – to an action for federal

17

trademark infringement.

For this reason, “the same facts which

would support an action for trademark infringement would also
support an action for unfair competition.”
1010.

See

Packaging

also

Corp.,

Kentucky

Fried

549

368,

F.2d

Chicken
386

Boston, 510 F.2d at
Corp.

(5th

Cir.

v.

Diversified

1977)

(“[B]oth

[actions] turn primarily on the likelihood of customer confusion.”).
As set forth above, Plaintiff has sufficiently stated a claim
for trademark infringement, particularly the element of confusion.
Accordingly, Plaintiff has adequately stated a claim for unfair
competition under the Lanham Act § 43(a), 15 U.S.C. § 1125(a).
D.

Defenses
Defendants claim at multiple points in their Memorandum in

Support of Dismissal Under Rule 12(b)(6) (Rec. Doc. No. 11-1) and
in their Reply Memorandum (Rec. Doc. No. 19) that Plaintiff’s
actions

brought

under

the

Lanham

Act

for

federal

trademark

infringement and federal unfair competition have either prescribed
and/or that the equitable doctrine of laches prevents Plaintiff from
bringing the current proceeding.
1.

Laches

“Laches is commonly defined as an inexcusable delay that
results in prejudice to the defendant.”

Conan Properties, Inc. v.

Conans Pizza, Inc., 752 F.2d 145, 153 (5th Cir. 1985).

“Laches

comprises three elements: (1) delay in asserting one’s trademark
rights, (2) lack of excuse for the delay, and (3) undue prejudice

18

to the alleged infringer caused by the delay.”

Westchester Media

v. PRL USA Holdings, Inc., 214 F.3d 658, 668 (5th Cir. 2000) (citing
Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 205 (5th Cir.
1998)).

In Westchester Media, the court found that laches did not

apply when an infringer registered a mark in 1975 for an “equestrian
sports and lifestyles” magazine and the harmed party did not
register its objections to the mark’s use until 1997.

Id.

Despite

the fact that the harmed party had a long familiarity – beginning
in 1975 – with the mark’s use, the court reasoned that the harmed
party did not learn of the particular infringement until June of
1997, and registered a cease and desist letter in September of 1997.
Id.

Thus, because the court found that the harmed party did not

delay in asserting its trademark rights, the infringer could not
establish any of the three elements above.

Id.

According to Plaintiff’s Complaint, Plaintiff did not learn of
the alleged infringement of its mark until May 2010. (Rec. Doc. No.
1, at ¶ 20-21).

Plaintiff claims that upon discovering the alleged

infringement, it demanded that Defendants cease and desist selling
any repackaged snowball flavoring concentrates manufactured by
Plaintiff.

Id. at ¶ 23.

Plaintiff then filed the current action

with this Court on March 3, 2011.

Defendants, however, allege that

Plaintiff knew of the alleged infringement beginning in 1991, when
the relationship between the parties began. Plaintiff acknowledges
on the face of the Complaint that it knew of Defendants’ resale of

19

its snowball flavoring concentrates since about 1991.
However,

no

materials

considered

by

the

Court

Id. at ¶ 18.

indicate

that

Plaintiff knew of Defendants’ repackaging of its snowball flavoring
concentrates until May 2010.

Therefore, Plaintiff’s well-pleaded

facts do not indicate the applicability of the equitable doctrine
of laches.
2.

Prescription

A federal four-year statute of limitations applies to cases
arising under federal law enacted after December 1, 1990. 28 U.S.C.
§ 1658 (“Except as otherwise provided by law, a civil action arising
under an Act of Congress enacted after the date of enactment of this
section may not be commenced later than 4 years after the cause of
action accrues.”).

Yet, because the operative elements of the

Lanham Act were in place before 1990, “[w]here there is need of a
statute of limitation in a suit based on the Federal Lanham Act,
courts will look to the relevant forum state statute which best
effectuates the federal policy at issue.”

6 McCarthy on Trademarks

and Unfair Competition § 31:23 (2011); see also Mary Kay, Inc. v.
Weber, 601 F.Supp.2d 839, 859-860 (N.D. Tex. 2009) (Texas four-year
statute of limitations applies to measure laches defense).

The law

of trademark infringement and unfair competition in Louisiana is
governed under the Unfair Trade Practices and Consumer Protection
Law, specifically La. Rev. Stat. Ann. § 51:222; see also La. Rev.
Stat. Ann. § 51:1405.

Louisiana imposes a one-year prescriptive

20

period, commencing “from the time of the transaction or act which
gave rise” to the private cause of action created under the Unfair
Trade Practices and Consumer Protection Law.

§ 51:1409(E).

In Louisiana, the “burden of proof generally rests on the party
asserting prescription.” Carriere v. Jackson Hewitt Tax Serv. Inc.,
750 F.Supp.2d 694, 702 (E.D. La 2010) (citing Eastin v. Entergy
Corp., 2003-C-1030 (La. 2/6/04); 865 So.2d 49, 54).

“However, if

prescription is evident on the face of the pleadings [] . . . , the
burden shifts to the plaintiff to show that the action has not
prescribed.” Eastin v. Entergy Corp., 2003-C-1030 (La. 2/6/04); 865
So.2d 49, 54.
In the current proceeding, Plaintiff maintains that it first
learned that Defendants allegedly infringed on its trademark and
engaged

in

unfair

competition

by

defectively

snowball flavoring concentrates in May 2010.
¶ 20-21).

repackaging

its

(Rec. Doc. No. 1, at

Plaintiff, after issuing a cease and desist letter to

Defendants, filed the current action with this Court on March 3,
2011.

Therefore, from the face of the pleadings, Plaintiff has

satisfied its requirement to file suit within one year “from the
time of the transaction or act which gave rise” to the private cause
of action.

La. Rev. Stat. Ann. § 51:1409(E).

Defendants simply

provide conclusory statements that Plaintiff’s cause of action has
prescribed without carrying their burden of proof to show that
Plaintiff knew of Defendants’ actions before May 2010.

21

Because

prescription is not evident from the face of the pleadings or any
materials considered by the Court for the purposes of deciding this
Motion to Dismiss Under Rule 12(b)(6), Plaintiff’s well-pleaded
facts state a claim for which it may be entitled to relief.
E.

Federal Dilution of Trademark
Section 43(c) of the Lanham Act provides a cause of action for

trademark “dilution by tarnishment” and is reproduced in pertinent
part below:
(c) Dilution by blurring; dilution by tarnishment
(1) Injunctive relief
Subject to the principles of equity, the owner
of a famous mark that is distinctive,
inherently
or
through
acquired
distinctiveness, shall be entitled to an
injunction against another person who, at any
time after the owner’s mark has become famous,
commences use of a mark or trade name in
commerce that is likely to cause dilution by
blurring or dilution by tarnishment of the
famous mark, regardless of the presence or
absence of actual or likely confusion, of
competition, or of actual economic injury.
15 U.S.C. § 1125(c)(1) (emphasis added).

A mark is famous for

purposes of paragraph (1) “if it is recognized by the general
consuming public of the United States as a designation of source of
the goods or services of the mark’s owner.”

§ 1125(c)(2)(A).

The

Lanham Act § 43(c) allows the court to consider “all relevant
factors” to determine

if a mark has the requisite degree of

recognition, including: (i) the duration, extent, and geographic
reach of advertising and publicity of the mark, whether advertised
22

or publicized by the owner or third parties, (ii) the amount,
volume, and geographic extent of sales of goods or services offered
under the mark, (iii) the extent of actual recognition of the mark,
and (iv) whether the mark was registered under the Act of March 3,
1881, or the Act of February 20, 1905, or on the principal register.
§ 1125(c)(2)(A)(i)-(iv).
“Dilution by tarnishment” is defined, for purposes of paragraph
(1) as “association arising from the similarity between a mark or
trade name and a famous mark that harms the reputation of the famous
mark.”

§ 1125(c)(2)(C).

Section 43(c) of the Lanham Act also provides a cause of action
for

“dilution

by

blurring.”

See

15

U.S.C.

§

1125(c)(1).

“[D]ilution by blurring is association arising from the similarity
between a mark or trade name and a famous mark that impairs the
distinctiveness of the famous mark.”
quotations omitted).

§ 1125(c)(2)(B) (internal

The Lanham Act § 43(c) allows the court to

consider all relevant factors to determine “whether a mark or trade
name is likely to cause dilution by blurring,” including the
following six factors: (i) the degree of similarity between the mark
or trade name and the famous mark, (ii) the degree of inherent or
acquired distinctiveness of the famous mark, (iii) the extent to
which the owner of the famous mark is engaging in substantially
exclusive use of the mark, (iv) the degree of recognition of the
famous mark, (v) whether the user of the mark or trade name intended

23

to create an association with the famous mark, and (vi) any actual
association between the mark or trade name and the famous mark.

15

U.S.C. § 1125(c)(2)(B)(i)-(vi).
Finally, in an action brought under the Lanham Act § 43(c), the
owner of a famous mark is entitled to additional remedies, other
than injunctive relief, if “the mark or trade name that is likely
to cause dilution by blurring or dilution by tarnishment was first
used in commerce by the person against whom the injunction is sought
after October 6, 2006.” 15 U.S.C. § 1125(c)(5)(A) (emphasis added).
Accepting Plaintiff’s well-pleaded facts as true, the Complaint
contains sufficient factual matter to raise the claim of federal
trademark dilution above the speculative level; the reasonable
inference, based off the facts presented, is that Plaintiff’s
products and mark had been in commerce long enough to have become
famous and possess distinction by the time that Defendants commenced
use of Plaintiff’s products in commerce.

Specifically, Plaintiff

alleges that because of its exclusive use of the SNOWIZARD mark,
“the

mark

has

acquired

a

high

degree

of

distinctiveness

and

secondary meaning and has become famous among distributors of
snowball

products,

snowball

vendors,

and

confectioners,

who

associate the mark with the high-quality products” manufactured and
sold by Plaintiff.

(Rec. Doc. No. 1, at ¶ 12).

See Iqbal, 129

S.Ct. 1937, 1949 (2009); Twombly, 550 U.S. 544, 570 (2007); Culliver
v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007); True v. Robles, 571

24

F.3d 412, 417 (5th Cir. 2009). Further, based off Plaintiff’s wellpleaded facts, Defendants’ actions lead to the inference from the
Complaint that dilution by tarnishment and blurring has possibly
occurred because of the quality of the labels and the misspellings
thereon.

See Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d

477, 489 (5th Cir. 2004); Shreveport La. Hayride Co., L.L.C. v.
Kent, 2009 WL 1371712 (W.D. La. 2009); Dallas Cowboys Football Club,
Ltd. v. America’s Team Properties, Inc., 616 F.Supp.2d 622, 642-43
(N.D. Tex. 2009).
Defendants’ arguments that injunctive relief is frivolous and
that Plaintiff failed to establish in its Complaint that the
SNOWIZARD mark is famous both fail.

The language of the statute

allows for injunctive relief “regardless of the presence or absence
of actual or likely confusion, of competition, or of actual economic
injury.” § 1125(c)(1). Also, Plaintiff has alleged facts that tend
to show that the mark was famous within the meaning of the statute
by the time Defendants first used the mark in commerce.

Plaintiff

has thus sufficiently pleaded a claim for which Plaintiff may obtain
injunctive relief.
Additionally,

Plaintiff

may

be

entitled

remedies” under 15 U.S.C. § 1125(c)(5)(A).

to

“additional

Additional remedies are

only available if “the mark or trade name that is likely to cause
dilution by blurring or dilution by tarnishment was first used in
commerce by the person against whom the injunction is sought after

25

October 6, 2006.” § 1125(c)(5)(A). Section 1125(c) applies to both
registered and unregistered marks. Plaintiff’s claim for additional
remedies

under

§

1125(c)(5)(A)

may

apply

here

because

while

Plaintiff admits in its Complaint that Defendants first began using
SnoWizard flavoring concentrates in 1991, Plaintiff also alleges
that it presently has no means of ascertaining the full extent of
Raggs’s dilution of the SNOWIZARD mark. (Rec. Doc. No. 1, at ¶ 27).
Plaintiff has therefore plausibly alleged that Defendants first
began offering defectively repackaged bottles of snowball flavoring
concentrates bearing the SNOWIZARD mark for resale after October 6,
2006.

For this reason, Plaintiff has stated a claim for which

additional

remedies

may

be

available

under

federal

trademark

dilution.
F.

Defamation
Under Louisiana law, the prima facie case of defamation has

four elements: (1) a false and defamatory statement concerning
another; (2) an unprivileged publication to a third party; (3) fault
(negligence or greater) on the part of the publisher; and (4)
resulting

injury.

Trentecosta

10/21/97); 703 So.2d 552, 559.

v.

Beck,

96-2388,

p.

10

(La.

Thus, the plaintiff in a defamation

action “must prove that the defendant, with actual malice or other
fault, published a false statement with defamatory words which
caused plaintiff damages.”

Sassone v. Elder, 626 So.2d 345, 350

(La. 1993). If a plaintiff fails to establish even one of the above

26

elements of the prima facie case, the whole cause of action fails.
Costello v. Hardy, 03-1146 p. 13 (La. 1/21/04) 864 So.2d 129, 139.
Louisiana defines a defamatory statement as one that “tends to harm
the

reputation

of

another

so

as

to

lower

the

person

in

the

estimation of the community, deter others from associating or
dealing with the person, or otherwise expose the person to contempt
or ridicule.”

Mitchell v. Villien, 08-1470, p. 6 (La. App. 4 Cir.

8/26/09); 19 So.3d 557, 562.
very

nature

tend

to

When the defamatory words “by their

injure

one’s

personal

or

professional

reputation, even without considering extrinsic facts or surrounding
circumstances, [the words] are considered defamatory

per se.”

Brungardt v. Summit, 08-0577, p. 8 (La. App. 4 Cir. 4-8-09); 7 So.3d
879, 885 (quoting Costello, 03-1146 at p. 13-14; 864 So.2d at 140).
“If publication of words that are defamatory per se is proven, the
elements of falsity, malice, fault, and injury are presumed, but
they can be rebutted.”

Id. at pp. 8-9; 885.

The law of defamation in Texas is similar to that of Louisiana.
In Texas, where Defendants reside, in order to establish a cause of
action, a plaintiff must prove that: (1) the defendant published a
statement of fact, (2) the statement was defamatory, (3) the
statement

was

false,

(4)

the

defendant

acted

negligently

in

publishing the false and defamatory statement, and (5) the plaintiff
suffered damages as a result.

Brown v. Swett & Crawford of Texas,

Inc., 178 S.W.3d 373, 382 (Tex. App. 2005).
27

A statement is

defamatory per se if it “cause[s] injury to a person’s office,
business, profession, or calling. . . .”
S.W.3d 380, 384 (Tex. App. 2005).

Moore v. Waldrop, 166

If the statement is defamatory

per se, damages are presumed and the plaintiff does not have to
establish “independent proof of damage to the plaintiff’s reputation
or mental anguish. . . .”

Id.

Without reaching the issue of which law will govern this claim,
Plaintiff has adequately stated a valid claim for defamation under
both Louisiana law and Texas law.

Plaintiff’s Complaint alleges

that Defendants made false statements to Defendants’ snowball vendor
customers that Defendants no longer carried Plaintiff’s products
because Plaintiff “was having problems supplying and delivering
products timely.”

(Rec. Doc. No. 1, at ¶ 41).

Plaintiff’s

Complaint further alleges that such defamatory statements were made
with knowledge of their falsity and with reckless disregard for the
truth.

Id.

Plaintiff alleges that such actions tended to and tend

to harm Plaintiff’s business reputation, to lower the public’s
estimation of Plaintiff, to deter others from associating or dealing
with Plaintiff, and to expose Plaintiff to contempt and ridicule.
Id. Plaintiff has sufficiently alleged that such statements violate
Louisiana law and the “state common law of defamation,” which
Plaintiff claims to incorporate Texas law.
Defendants’ argument that Plaintiff did not establish a claim
for defamation fails for three reasons. First, the defense of truth

28

and the argument that Plaintiff has not established falsity both
fail.

Plaintiff’s Complaint states that Defendant cancelled all

orders of flavoring concentrate from Plaintiff after Plaintiff
demanded that Defendant cease and desist selling any repackaged
SnoWizard flavoring concentrates and destroy all counterfeit labels.
(Rec. Doc. No. 1, at ¶ 23).
to

snowball

vendor

Defendants claim their statements made

customers

was

truthful

because

Defendants

cancelled the orders referenced above because of an alleged delay
in shipment.

(Rec. Doc. No. 11-1, at 11).

Thus, at this stage in

the proceedings, Plaintiff’s well-pleaded facts have sufficiently
alleged that the statements were false and were made with knowledge
of their falsity.
Second,

Defendants’

argument

that

Plaintiff

failed

to

adequately allege fault on the part of Defendants in making the
statements fails.
Defendants

In its Complaint, Plaintiff clearly alleges that

published

the

allegedly

defamatory

statements

with

reckless disregard for the truth, with knowledge of their falsity,
and with malice.
allegations

as

Therefore, accepting the Plaintiff’s well-pleaded
true,

Plaintiff

has

sufficiently

alleged

that

Defendants made the allegedly defamatory statements while possessing
a culpable mental state of greater than negligence.
Third, despite Defendants’ argument, the injury component is
sufficiently established in Plaintiff’s complaint. Plaintiff claims
that its business reputation has been injured, along with the

29

public’s

estimation

statements.

of

Plaintiff,

as

a

result

of

Defendants’

The prima facie cases for defamation in both Louisiana

and Texas only require that a plaintiff allege injury or damages.
In fact, based off the Complaint, Plaintiff has pleaded a case in
which injury or damages may be presumed because the allegedly
defamatory statements were of such nature to seemingly damage or
cause injury to Plaintiff’s reputation.

See Brungardt, 08-0577, p.

8; 7 So.3d at 885; Moore, 166 S.W.3d at 384.
Plaintiff’s Complaint asserts more than conclusory statements
of

fact

regarding

its

claim

of

defamation

and

sufficiently

establishes the requisite elements for an action in defamation.
Therefore,

Plaintiff’s

Complaint

contains

“sufficient

factual

matter, accepted as true,” to state a plausible claim for defamation
under both Louisiana law and Texas common law as required by Iqbal,
129 S.Ct. at 1949.
G.

Improper Defendant
Defendants assert that Defendant Ron Robinson no longer owns or

manages Raggs and has not done either since he transferred all of
his interest in Raggs Sno-Cone Supplies in 2005.

Defendants thus

claim that Robinson is not properly made a defendant in this action.
However,

Defendants

provide

no

support

for

this

assertion.

Accordingly, at this time in the proceedings, we find dismissal of
Defendant Ron Robinson inappropriate.

30

H.

Conclusion
Plaintiff’s Complaint contains more than “naked assertion[s]

devoid of further factual enhancement.”
In

fact,

Plaintiff’s

Complaint

states

Iqbal, 129 S.Ct. at 1949.
a

claim

to

relief

for

trademark infringement, unfair competition, dilution of trademark,
and defamation.

These claims are plausible on their face.

Twombly, 550 U.S. at 557.
factual

content

that

See

Further, Plaintiff’s Complaint “pleads

allows

the

court

to

draw

the

reasonable

inference that the [D]efendant[s] [are] liable for the misconduct
alleged.”

Iqbal, 129 S.Ct. at 1949.

Accordingly, Defendants’

Motion to Dismiss is denied.
II.

Motion for Sanctions Under Rule 11
Defendants seek sanctions against Plaintiff pursuant to Fed. R.

Civ. P. 11.

Defendants’ claims to sanctions are based off what

Defendants claim to be a frivolous lawsuit brought by Plaintiff that
contains groundless, bad-faith, and harassing claims.

(Rec. Doc.

No. 13, at 1).
Plaintiff responds to Defendants’ Memorandum in Support of
Motion for Sanctions Under Rule 11 by stating that Defendants’
Motion and Memorandum are devoid of merit their face and are
presented

for

improper

purposes.

(Rec.

Doc.

No.

15,

at

1).

Therefore, Plaintiff claims that it is entitled to an award of the
reasonable attorney fees incurred for the motion.
Fed.

R.

Civ.

P.

11(c)(1)

allows
31

the

court

to

impose

an

appropriate sanction on an attorney if the court determines that
such attorney violated Rule 11(b).

Fed. R. Civ. P. 11(b) imposes

four duties on an attorney in regards to pleadings.

Under Rule

11(b), “[b]y presenting to the court a pleading . . .” an attorney
“. . . certifies that to the best of the [attorney’s] knowledge,
information, and belief, formed after an inquiry reasonable under
the circumstances” that the pleading (1) “is not being presented for
any improper purpose, such as to harass, cause unnecessary delay, or
needlessly increase the cost of litigation”; (2) “the claims . . .
and other legal contentions are warranted by existing law . . .”;
(3)

the

factual

contentions

have

evidentiary

support

or,

if

specifically so identified, will likely have evidentiary support
after

a

reasonable

discovery”;

and

(4)

opportunity
“the

for

denials

of

further
factual

investigation

or

contentions

are

warranted on the evidence or, if specifically so identified, are
reasonably based on belief or a lack of information.”

Fed. R. Civ.

P. 11(b)(1)-(5).
No indication in the record, or extrapolation of the facts
therefrom, exists to show that Plaintiff filed a frivolous lawsuit
with bad-faith or harassing claims. Contrarily, Plaintiff’s lawsuit
is anything but frivolous or baseless.

Where, as here, the Court

has examined all elements of a plaintiff’s Complaint and determines
that the plaintiff has alleged sufficient facts to survive a motion
to dismiss under Rule 12(b)(6), a defendant’s motion for sanctions

32

under Rule 11 must be denied.

See, e.g., Health Net, Inc. v.

Wooley, 534 F.3d 487, 497 (5th Cir. 2008).
Additionally, although Plaintiff correctly asserts that an
award for sanctions to the prevailing party in a Rule 11 motion is
permitted under Fed. R. Civ. P.

11(c)(2), the Court does not find

that such sanctions are warranted at this time.

New Orleans, Louisiana, this 8th day of July, 2011.

United States District Judge

33