SMITH v. DIRECTOR'S CHOICE, LLP

Filing 125

OPINION. Signed by Judge Jerome B. Simandle on 7/11/2017. (dmr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

RUSS SMITH,

HONORABLE JEROME B. SIMANDLE
Plaintiff,
Civil Action
No. 15-00081 (JBS/AMD)

v.
DIRECTOR’S CHOICE, LLP

OPINION
Defendant.

APPEARANCES:
Mr. Russ Smith
P.O. Box 597
Moorestown, NJ 08057
Plaintiff Pro Se
Matthew A. Kaplan, Esq.
ABBOTT BUSHLOW & SCHECHNER LLP
70-11 Fresh Pond Road
Ridgewood, NJ 11385
Attorney for Defendant
SIMANDLE, District Judge:
I.

INTRODUCTION
This case involves a dispute between pro se plaintiff Russ

Smith and Director’s Choice, LLP (“Director’s Choice”) over
Smith’s registration and use of the domain name
<directorschoice.com>. Smith brings claims against Director’s
Choice under the Anti-Cybersquatting Consumer Protection Act
(“ACPA”), 15 U.S.C. § 1114(2)(D)(v), challenging an arbitration
panel’s decision that Director’s Choice should own the domain
name. Director’s Choice, in turn, brings counterclaims against

Smith and third party claims against HELP.org under the ACPA and
the Lanham Act. Presently before the Court are motions by Smith
to dismiss the counterclaims against him [Docket Item 71] and to
supplement the briefing on that motion [Docket Item 106]. For
the reasons that follow, the Court will deny both motions.
II.

BACKGROUND1
Plaintiff/Counterclaim Defendant Russ Smith operates a

variety of business entities that develop web sites that
generate income through the display of advertisements. (Third
Amended Complaint ¶ 1.) These entities regularly buy and sell
both web sites and domain names. (Id.) On March 7, 2000, a nowdissolved business entity operated by Smith registered the
domain name <directorschoice.com> (“domain name”). (Id. ¶ 4.)
The domain name registration was at some point transferred to
HELP.org, LLC (“HELP.org”), of which Smith is the owner. The
domain name is currently owned by Smith and operates as a movie
review web site. (Id. ¶ 23.)

1

The Court accepts as true for the purposes of the instant
motions the following facts as alleged in the Third Amended
Complaint and the Answer and Counterclaims [Docket Items 69 and
70]. The Court also considers certain of the exhibits attached
to Smith’s motion to dismiss [Docket Item 71] that are either
“integral to or explicitly relied upon in the complaint” or
matters of public record. Schmidt v. Skolas, 770 F.3d 241, 249
(3d Cir. 2014); In re Burlington Coat Factory Sec. Litig., 114
F.3d 1410, 1426 (3d Cir. 1997). The Court may consider these
documents on a motion to dismiss without converting the motion
to one for summary judgment. Schmidt, 770 F.3d at 249.
2 

Defendant/Counterclaim Plaintiff Director’s Choice is a
Texas-based company that operates performance opportunities,
concert events, and travel for music education programs across
the country. (Counterclaim and Third Party Complaint ¶¶ 10-12,
15.) The company was created in 1996 and began hosting concerts
and organizing music education travel in 1997. (Id.) Its
clientele refer to the company and/or its services as
“Director’s Choice,” and the company “developed a widespread
reputation and enjoys a high degree of recognition in the
relevant marketplace and with the general public” using that
name. (Id. ¶¶ 16-17.)
In 2002, Director’s Choice contacted Smith for the first
time to inquire about purchasing the domain name. (Id. ¶ 29.)
Over the next twelve years, Director’s Choice agents and
employees intermittently contacted Smith via email seeking to
purchase the domain name. (Id. ¶¶ 29-35.) Director’s Choice
registered the domain name <directorschoicetourandtravel.com> in
October, 2005 and began operating a website to market and sell
its services at that name at least as early as April, 2006. (Id.
¶¶ 14-15.)
On July 14, 2014, Director’s Choice filed two trademark
applications with the United States Patent and Trademark Office
(“USPTO”): the first for the mark DIRECTOR’S CHOICE for
“arranging travel tours for music organizations; organization of
3 

travel” and the second for the mark DIRECTOR’S CHOICE TOUR &
TRAVEL for “arranging travel tours for music organizations;
organization of travel.” (Id. ¶ 18.) The DIRECTOR’S CHOICE TOUR
& TRAVEL mark matured to registration on February 24, 2015. (Id.
¶ 19.) Smith filed a notice of opposition with the Trademark
Trial and Appeal Board (“TTAB”) to the DIRECTOR’S CHOICE mark;
the TTAB has suspended proceedings regarding that mark pending a
determination in this case. (Id. ¶¶ 20-21.)
Smith placed the domain name up for sale for $45,000 in
August, 2014; Director’s Choice filed a complaint regarding the
domain name on November 18, 2014 against HELP.org pursuant to
the Internet Corporation for Assigned Names and Numbers’
(“ICANN”) Uniform Domain Name Dispute Resolution Policy (“UDRP”)
with the National Arbitration Forum. (Id. ¶ 36.) On December 22,
2014, a three-member administrative panel with the National
Arbitration Forum (“NAF”) agreed with Director’s Choice that
HELP.org did not have any rights or legitimate interests in the
disputed domain name and ordered the transfer of the domain name
from HELP.org to Director’s Choice. (Id. ¶ 37.) Smith alleges
that Director’s Choice made false statements and withheld
material information before the arbitration panel. (Third Am.
Compl. ¶ 25.) Shortly thereafter, Smith posted a website at the
disputed domain name purporting to offer movie reviews.
(Counterclaims ¶¶ 38-41.)
4 

On December 25, 2014, HELP.org filed a use-based trademark
application with the USPTO for the mark “Director’s Choice” for
“entertainment services, namely, providing on-line reviews of
movies.” (Id. ¶ 42.) Director’s Choice alleges that HELP.org
made false claims to the USPTO as part of its trademark
application and that the Trademark Examiner allowed the
application (Registration No. 4,821,299 (“the ‘299
Registration”)) to mature to registration on September 29, 2015
based on those representations. (Id. ¶¶ 43-44.)
Also around the same time, on January 7, 2015, Smith filed
a two-count Complaint [Docket Item 1] against Director’s Choice
under the ACPA, 15 U.S.C. § 1114(2)(D)(iv) and (v),2 arguing that
his use of the domain name is lawful, and that Defendant made
materially false statements to the UDRP panel which caused the
panel to order the domain name transferred to Defendant. Smith
challenges the decision of the UDRP panel and seeks a
declaration of his lawful use of the domain name (Count One),
and a declaration that the Defendant made materially false
statements to the UDRP panel (Count Two). He asks this Court to
enjoin the transfer of the domain name to Director’s Choice, and
for an award of compensatory damages in the amount of $2,300 and
statutory damages between $1,000 and $100,000. (Third Am. Compl.

2

The Complaint was subsequently amended on February 6, 2015
[Docket Item 7] and September 15, 2016 [Docket Item 69].
5 

¶¶ 39-31.)3 Director’s Choice filed a six-count Counterclaim
against Smith and Third Party Complaint against HELP.org,
alleging, inter alia, that Smith and HELP.org violated the ACPA,
15 U.S.C. § 1125(d), infringed on Director’s Choice’s trademark,
and violated the Lanham Act, 15 U.S.C. § 1125(a), and seeking a
declaration that Smith’s trademark “Director’s Choice” is
invalid and unenforceable. (Counterclaims ¶¶ 49-96.)
After the filing of this action, on December 31, 2015,
Smith dissolved HELP.org and assigned its rights and goodwill in
the “Director’s Choice” trademark to himself individually,
allegedly hours after Director’s Choice filed its Amended Answer
to the First Amended Complaint, Counterclaims and Third Party
Complaint. (Counterclaims ¶¶ 46-48.)
Smith filed the instant motion to dismiss Director’s
Choice’s counterclaims with prejudice [Docket Item 71], which
Director’s Choice opposes [Docket Item 74]. Smith later filed a
motion to supplement his motion to dismiss [Docket Item 106],
which Director’s Choice also opposes [Docket Item 116].4 Both
motions are now fully briefed, and the Court will decide them
without holding oral argument pursuant to Fed. R. Civ. P. 78.

3

The domain name does not appear to have been transferred to
Director’s Choice.
4 Also pending before the Court are two motions for summary
judgment by Smith [Docket Items 83 & 91] which will not be
decided now.
6 

III. STANDARD OF REVIEW
When considering a motion to dismiss counterclaims for
failure to state a claim upon which relief can be granted under
Fed. R. Civ. P. 12(b)(6), a court must accept all well-pleaded
allegations in the counterclaims as true and view them in the
light most favorable to the nonmoving party. Phillips v. Cnty.
of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). Courts apply the
same standard to counterclaims as they do to complaints in
ruling on a Rule 12(b)(6) motion. Tyco Fire Prods. LP v.
Victaulic Co., 777 F. Supp. 2d 893, 898 (E.D. Pa. 2011). A
motion to dismiss may be granted only if a court concludes that
the movant has failed to set forth fair notice of what the claim
is and the grounds upon which it rests that make such a claim
plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007).
Although the court must accept as true all well-pleaded
factual allegations, it may disregard any legal conclusions in
the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice. Iqbal,
556 U.S. at 678.
In addition, the complaint must contain enough well-pleaded
facts to show that the claim is facially plausible. This “allows
7 

the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. “If the well-pleaded
facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged – but it
has not shown – that the pleader is entitled to relief.” Id. at
679 (internal quotation marks and citation omitted).
IV.

DISCUSSION
Director’s Choice’s Answer to the Third Amended Complaint

[Docket Item 70] asserts six counterclaims against Smith and
third party claims against HELP.org: violation of ACPA, 15
U.S.C. § 1125(d) (Count I); declaratory judgment that Smith’s
mark for “Director’s Choice” is invalid and unenforceable (Count
II); cancellation of that mark (Count III); trademark
infringement (Count IV); unfair competition in violation of the
Lanham Act, 15 U.S.C. § 1125(a) (Count V); and false designation
of origin in violation of the Lanham Act, 15 U.S.C. § 1125(a)
(Count VI). Smith asserts in the instant motion that all
counterclaims should be dismissed pursuant to Rule 12(b)(6) with
prejudice. The Court will address each of Smith’s points in
turn.
A. The arbitration agreement does not bar Director’s Choice
from asserting counterclaims or seeking additional
relief.
First, Smith argues that the counterclaims must be
dismissed because they are barred by Director’s Choice’s
8 

election to first file a domain name arbitration pursuant to the
URDP. In particular, Smith argues “[w]hen Director’s Choice, LLP
decided to file arbitration rather than a court case they waived
their rights to ask for damages, waived their right to amend the
complaint, and agreed to allow Smith to have a court review of
the decision if it was not favorable to him.” (Pl. Br. at ¶¶ 2228.) In other words, Smith contends that Director’s Choice
cannot “amend its complaint” and raise new claims or seek new
remedies in this action that were not asserted before the NAF
panel, and cannot seek judicial review of the panel’s decision
because it was favorable to them and thus is “moot.”
Smith’s position misreads the URDP. In the first instance,
the URDP does not prohibit Director’s Choice from ever seeking
judicial adjudication of its claims against him; the policy
explicitly allows “either you or the complainant” to “submit[]
the dispute to a court of competent jurisdiction for independent
resolution before such mandatory administrative proceeding is
commenced or after such proceeding is concluded.” (URDP [Exhibit
F to Pl. Br.] ¶ 4(k) (emphasis added).) Secondly, while the URDP
prohibits amendments to complaints and limits the remedies
available before an arbitration panel, it provides that “[a]ll
other disputes . . . regarding your domain name registration”
may be brought before a court. (URDP ¶ 5.) In other words, the
URDP does not prohibit a party from asserting new non-ICANN
9 

claims, like the Director’s Choice counterclaims under the
Lanham Act, or seeking new relief unavailable in the prior
arbitration, like the cancellation of Smith’s trademark or a
declaration that it is unenforceable, in a separate action.
Nowhere does the URDP, or any other authority, require
Director’s Choice to “terminate” the arbitration proceeding and
request to vacate the arbitration panel’s decision in order to
assert other of its rights under federal law. Accordingly,
Director’s Choice’s counterclaims will not be dismissed on the
basis of its participation in the arbitration process.
B. Director’s Choice has standing to assert claims based on
the “Director’s Choice” company name.
Second, Smith contends that the counterclaims must be
dismissed because Director’s Choice does not have standing to
assert any claim based on the “Director’s Choice” company name.
Specifically, Smith contends that because the goods and services
provided by the company as described in the counterclaims “are
greatly expanded” and “not found in their application” before
the USPTO, because the company does not hold an “assumed name
certificate” in Texas, and because the company allegedly
improperly converted its corporate structure from a corporation
to a limited liability company, it cannot assert its interest in
the name “Director’s Choice” before this Court. (Pl. Br. at ¶¶
29-32; see also Pl. Reply Br. at ¶¶ 6-10.)

10 

First, the fact that Director’s Choice provided more
details about the goods and services it offers in these
counterclaims than it did in its USPTO trademark application
will not invalidate its standing to assert trademark claims
here.5 Trademark rights may adhere not only through federal
trademark registration but also through the common law; while
the scope of rights under federal trademark registration
“extends only so far as the goods or services noted in the
registration certificate,” common law trademark rights accrue
through adoption and actual use of the mark. See Natural
Footwear Ltd. v. Hart, Schaffner & Marx, 760 F.2d 1383, 1394-96
(3d Cir. 1985), cert. denied, 474 U.S. 920 (1985). In other
words, it does not harm Director’s Choice’s position that it is
entitled to exclusive use of the phrase “Director’s Choice”
because it has alleged more commercial activity in the
marketplace in connection with that name in the counterclaims
than it did in its USPTO application; in fact, it strengthens
the company’s position that it has a protectable interest in the
name “Director’s Choice.”
Second, Smith’s arguments about the form of Director’s
Choice’s name or corporate structure are immaterial to the

5

Moreover, Director’s Choice’s allegations are plainly not, as
Smith asserts, an improper attempt by Defendant-Counterclaim
Plaintiff to amend its trademark application before the USPTO in
violation of Trademark Rule 2.71(a).
11 

current dispute and are not cause to dismiss the counterclaims.
Smith argues that because “their assumed name certificate for
‘Director’s Choice’ expired . . . they no longer have the legal
authority to refer to themselves as ‘Director’s Choice.’” (Pl.
Br. at ¶ 32.)6 However, even assuming it is true that Director’s
Choice does not hold a current Texas Assumed Name Certificate,
that lapse does not negate its ability to assert trademark
claims. Smith has not explained, and the Court cannot otherwise
discern, how or why such a state filing would affect Director’s
Choice’s rights under federal or common trademark law. Likewise,
the Court will not dismiss Director’s Choice’s counterclaims on
the allegation that the company improperly converted its

6

Smith’s supplemental pleading to his motion to dismiss [Docket
Item 106] concern the assumed name registration of the name
“Directors Choice” (with no apostrophe) by an individual in
Texas, information from a “Directors Choice” website, and other
documents. The Court has not considered these documents because
they are not germane to the counterclaims and exceed the bounds
of the material a court may properly consider on a motion to
dismiss. See n.1, supra. Smith’s motion to supplement his motion
to dismiss will be denied. Moreover, this effort by Smith to add
new grounds for his fully briefed motion adds undue procedural
confusion and complexity. Plaintiff has amended his complaint
three times, each necessitating an Answer and Counterclaim or
other dismissal motion by Defendant. [See Docket Items 7, 29,
37, 49, 65, 69 & 70.] By seeking to add yet more evidence for
consideration in his latest motion to dismiss, he prolongs
resolution and actual joinder of issues so that the adjudication
can be conducted. This strategy also causes undue costs and
consumption of time for what has become, in the words of
Defendant’s counsel, “perpetual motion practice.” (Def. Br. at
2.) Under Rule 1, Fed. R. Civ. P., both parties have the duty to
conduct this litigation in a manner promoting its efficient
resolution.
12 

corporate structure. It is not the role of this out-of-state
federal court to second-guess the actions of the Office of the
Secretary of State for the State of Texas, which is not a party.
Accordingly, because there is no reason to find, on the
face of the counterclaims, that Director’s Choice does not have
standing to assert claims based on the “Director’s Choice”
company name, the Court will not dismiss the counterclaims on
this basis.
C. Director’s Choice’s counterclaims are not barred by the
statute of limitations, laches, acquiescence, or
equitable estoppel.
Next, Smith raises in his Rule 12(b)(6) motion the
affirmative defenses of the statute of limitations, laches,
acquiescence, and equitable estoppel to Director’s Choice’s
counterclaims. Smith argues that Director’s Choice’s claims are
time-barred because “the disputed domain was registered in 2000,
2 years before Director’s Choice, LLP even existed” and
Director’s Choice waited too long to assert its right to the
domain name. (Pl. Br. at ¶ 35.) He also asserts that Director’s
Choice’s claims are barred by the equitable doctrines of
acquiescence and estoppel because, inter alia, Director’s Choice
knew that Smith had registered the disputed domain name but did
not try to register a trademark for “Director’s Choice” until
fourteen years later, because Smith relied on Director’s
Choice’s alleged representations that it was “no longer
13 

refer[ing] to itself as ‘Director’s Choice,’” and because
Director’s Choice “made no complaints, sent no cease and desist
notice, did not file a request for an injunction with this
Court, or even opposed the registration at the US Patent and
Trademark Office.” (Id. ¶¶ 40-47.)
In the first instance, Smith cannot, as a matter of law,
raise a statute of limitations or laches defense to the
counterclaims seeking invalidity and cancellation of the ‘299
Registration “Director’s Choice” mark, Counts II and III. “[T]he
language of the Lanham Act makes it clear that a claim for
cancellation of a mark based on fraudulent procurement and a
defense to an otherwise incontestable mark on a similar ground
may be asserted at any time.” Marshak v. Treadwell, 240 F.3d
184, 193 (3d Cir. 2001)(emphasis added).
Nor is it apparent from the face of Director’s Choice’s
counterclaims that Smith will prevail on the laches,
acquiescence, or equitable estoppel defenses he raises to the
remainder of the counterclaims. “On a Rule 12(b)(6) motion, an
affirmative defense . . . is appropriately considered only if it
presents an insuperable barrier to recovery by the plaintiff.”
Flight Sys., Inc. v. Elec. Data Sys. Corp., 112 F.3d 124, 127
(3d Cir. 1997). A motion to dismiss under Rule 12(b)(6) on
affirmative defense grounds should be granted only “where the
complaint facially shows noncompliance with the limitations
14 

period and the affirmative defense clearly appears on the face
of the complaint.” Oshiver v. Levin, Fishbein, Sedran & Berman,
38 F.3d 1380, 1384 n. 1 (3d Cir. 1994). If the bar is not
apparent on the face of the complaint, then it may not afford
the basis for dismissal. Schmidt, 770 F.3d at 249.
In order to prevail on the laches or acquiescence
affirmative defenses, Smith must show that Director’s Choice
inexcusably delayed asserting its rights in the name, and that
he was prejudiced by that delay. See Fox v. Millman, 45 A.3d
332, 341 (N.J. 2012) (“Laches is an equitable doctrine,
operating as an affirmative defense that precludes relief when
there is an unexplained and inexcusable delay in exercising a
right, which results in prejudice to another party.”); Covertech
Fabricating, Inc. v. TVM Building Prods., Inc., 855 F.3d 163,
175 (3d Cir. 2017) (“Relevant considerations [to the equitable
defense of acquiescence], required as elements in a number of
our sister Circuits, may include whether (1) the senior user
actively represented that it would not assert a right or a
claim; (2) the senior user’s delay between the active
representation and assertion of the right or claim was not
excusable; and (3) the delay caused the defendant undue
prejudice.” (internal punctuation omitted)). Because the Lanham
Act does not specify its own statute of limitations, the clock
by which “delay” is measured runs by reference to an analogous
15 

state law cause of action. Santana Prods., Inc. v. Bobrick
Washroom Equip., Inc., 401 F.3d 123, 135 (3d Cir. 2005) (citing
Wilson v. Garcia, 471 U.S. 261, 266-67 (1985)).7 “Once use
becomes infringing, the relevant date for quantifying the
‘delay’ is when the trademark owner either knew or should have
known of the existence of a provable claim of infringement, and
an owner’s claim does not ripen until the defendant’s
infringement is sufficiently far-reaching to create a likelihood
of confusion.” Covertech, 855 F.3d at 175-76.
Here, Smith’s position that Director’s Choice is barred
from asserting its rights in the disputed domain name because it
“delayed 14 years to file any complaint at all or make any
notification of trademark claims” (Pl. Br. at ¶ 46) runs counter
to the allegations in the counterclaims, which this Court must
accept as true for the purposes of this motion: Director’s
Choice alleges that it took steps to protect its right in the
name “Director’s Choice,” i.e. filed its URDP arbitration,
shortly after it filed its USPTO trademark applications (or, in
other words, had “a provable claim of infringement”), and that
Smith’s use of the disputed domain name only became “infringing”

7

A state law claim is analogous where it matches “the essence of
the claim in the pending case.” Id. Here, Director’s Choice’s
claims are properly characterized as akin to fraud claims. New
Jersey applies a six year limitations period to fraud claims.
N.J.S.A. § 2A:14-1.
16 

when he posted a movie review website in December, 2014 (or, in
other words, when Director’s Choice’s claim ripened by Smith’s
“sufficiently far-reaching” infringement). (Counterclaims ¶¶ 18,
38-41.) Because an unreasonable or inexcusable delay more than
six years after the accrual of Director’s Choice’s claim is not
apparent on the four corners of the counterclaims, to dismiss
them at this stage of the litigation would be inappropriate.
Nor can Smith prove, at the motion to dismiss stage, his
equitable estoppel affirmative defense. “Equitable estoppel is
an equitable doctrine providing that ‘one may, by voluntary
conduct, be precluded from taking such a course of action that
would work injustice and wrong to one who with good reason and
in good faith relied upon such conduct.’” Cardillo v. Bloomfield
206 Corp., 988 A.2d 136, 140 (N.J. App. Div. 2010) (citing
Summer Cottagers’ Ass’n of Cape May v. City of Cape May, 117
A.2d 585, 590 (N.J. 1955)). Under New Jersey law,
[t]o establish a claim of equitable estoppel, the
claiming party must show that the alleged conduct was
done, or representation was made, intentionally or under
such circumstances that it was both natural and probable
that it would induce action. Further, the conduct must
be relied on, and the relying party must so act as to
change his or her position to his or her detriment.

Miller v. Miller, 478 A.2d 351, 355 (N.J. 1984). Here, it is not
apparent from the face of the counterclaims that Director’s
Choice intentionally misled Smith to believe that they were

17 

planning to abandon their claim to the “Director’s Choice” name
and not enforce their interest in it. While facts sufficient to
prove this affirmative defense might be adduced through
discovery, the Court cannot dismiss Director’s Choice’s claims
on this basis now.
D. Director’s Choice’s pleadings satisfy Rules 8(a) and
9(b).
Finally, Smith argues that Director’s Choice’s pleadings
are too vague to satisfy Rule 8(a), which requires that all
pleadings contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ.
P.8(a).
First, Smith asserts that the counterclaims “make vague
references to terms such as ‘renewal’ and ‘re-registration’ and
appear to use them interchangeably even though they mean
different things and must be defined further to understand what
is meant.” (Pl. Br. at ¶ 37.) The Court disagrees that
Director’s Choice’s use of this terminology is too vague to set
forth “fair notice of what the . . . claim is and the grounds
upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). The allegations which Smith challenges assert
that “Upon information and belief, after being contacted by
Director’s Choice about purchasing the Disputed Domain name in
2002, Smith, or a business entity operated by Smith, re-

18 

registered the Disputed Domain Name at least three (3) times”
and “Upon information and belief, Smith had full knowledge of
Director’s Choice’s prior rights in its DIRECTOR’S CHOICE Marks
when he renewed the registration for the Disputed Domain Name.”
(Counterclaims ¶¶ 35 & 54.) The precise mechanism by which Smith
continued his control over the disputed domain name (whether by
renewal or re-registration) does not change the crux of
Director’s Choice’s claim in these allegations: that Smith knew
that Director’s Choice had rights to the disputed domain name,
and ignored them. These allegations are sufficient to withstand
a Rule 12(b)(6) motion.
Smith also argues that Counts II and III of the
counterclaims, regarding the validity and enforceability of the
‘299 Registration, are insufficiently plead because “[i]t is
unclear what actions Director’s Choice, LLP claims are fraud or
why it would be considered fraud or be material to the
registrability of the mark.” (Pl. Br. at ¶ 54.)
To the contrary, these counts sufficiently allege
fraudulent procurement of a trademark and seek appropriate
relief. As these claims sound in fraud, the counterclaims must
satisfy Rule 9(b), Fed. R. Civ. P., which requires that “a
plaintiff alleging fraud must state the circumstances of the
alleged fraud with sufficient particularity to place the
defendant on notice of the ‘precise misconduct with which [it
19 

is] charged.’” Frederico v. Home Depot, 507 F.3d 188, 200 (3d
Cir. 2007) (quoting Lum v. Bank of Amer., 361 F.3d 217-223-24
(3d Cir. 2004)). “To satisfy this standard, the plaintiff must
plead or allege the date, time and place of the alleged fraud or
otherwise inject precision or some measure of substantiation
into a fraud allegation.” Id.
“The Lanham Act provides that a third party may petition
for cancellation of a registered trademark if the registration
was procured by fraud.” Covertech, 855 F.3d at 174 (citing 15
U.S.C. §§ 1064(3), 1120. To succeed on such a claim, a plaintiff
must show, by clear and convincing evidence, that “the applicant
or registrant knowingly ma[de] a false, material representation
with the intent to deceive the PTO” and that “the registrant
actually knew or believed that someone else had a right to the
mark.” Id. (citing In re Bose Corp., 580 F.3d 1240, 1245 (Fed.
Cir. 2009) and Marshak, 240 F.3d at 196).
Here, Director’s Choice has averred the required elements
of a fraudulent procurement claim with the required level of
specificity. The counterclaims allege that HELP.org and Smith
filed the ‘299 Registration application with the USPTO after the
arbitration panel had already determined that HELP.org had no
rights or legitimate interests in the disputed domain name and
ordered transfer to Director’s Choice, or in other words when
HELP.org and Smith “actually knew . . . that someone else had a
20 

right to the mark.” (Counterclaims ¶¶ 37-43.) Director’s Choice
has identified particular representations made in the ‘299
Registration application that it avers are false and material:
the “date of the first use of the mark” and the “date of first
use in commerce.” (Id. ¶¶ 61-67.) It further explains how those
dates are false, because, inter alia, HELP.org did not exist or
the website at the disputed domain name was “almost completely
blank . . . without any original content” at those particular
times. (Id. ¶ 66) Director’s Choice also alleges, as it must,
that HELP.org and Smith “had full knowledge and belief that its
representations were false when made to the USPTO,” that it
“intended to induce the Trademark Examiner to rely upon the
false representations so as to further HELP.org, LLC’s ultimate
goal of procuring the registration,” and that the Trademark
Examiner relied upon these representations in issuing the 299
Registration. (Id. ¶¶ 68-70.)8 In other words, Director’s Choice
has plead the “who, what, where, when, and how” of its
fraudulent procurement claim with enough “particularly” to
withstand a motion to dismiss.

8

Because Rule 9(b), Fed. R. Civ. P. allows that “intent,
knowledge, and other conditions of a person’s mind may be
alleged generally,” these allegations are sufficient without
further detail.
21 

V.

CONCLUSION
The accompanying Order will be entered.

July 11, 2017
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge

22