EMERSON RADIO CORPORATION v. EMERSON QUIET KOOL CO. LTD. et al

Filing 55

OPINION. Signed by Judge Susan D. Wigenton on 03/05/2018. (ek)

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

EMERSON RADIO CORPORATION,
Plaintiff,
v.

Case No. 2:17-cv-5358 (SDW)(LDW)

EMERSON QUIET KOOL CO. LTD. and
HOME EASY LTD.,

OPINION

Defendants.
March 5, 2018

WIGENTON, District Judge.
Before the Court is Defendants Emerson Quiet Kool Co. Ltd. and Home Easy Ltd.’s
(collectively, “Defendants”) Motion to Dismiss Plaintiff’s Amended Complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). Jurisdiction is proper pursuant to 28 U.S.C. § 1331.
Venue is proper pursuant to 28 U.S.C. § 1391. This opinion is issued without oral argument
pursuant to Federal Rule of Civil Procedure 78. For the reasons stated herein, Defendants’ Motion
to Dismiss is DENIED.
I.

BACKGROUND & PROCEDURAL HISTORY
Plaintiff Emerson Radio Corporation (“Emerson Radio” or “Plaintiff”) brings the instant

action against Defendants Emerson Quiet Kool Co. Ltd. (“EQK”) and Home Easy Ltd. (“Home
Easy”) to prevent Defendants from infringing upon Emerson Radio’s trademarks. (Am. Compl. ¶
1, ECF No. 30.) Plaintiff is a provider of consumer household appliances bearing the EMERSON
mark, and is known for its high-quality consumer products, several of which have received

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accolades and market recognition. (Id. ¶¶ 4, 33.) Additionally, Plaintiff owns several U.S.
trademark registrations for the marks bearing the name EMERSON and EMERSON (with G-Clef
Design) (collectively, the “Emerson Radio Marks”). 1 (Id. ¶¶ 19, 25-26.) Plaintiff alleges that the
Emerson Radio Marks have been in continuous and uninterrupted use in United States commerce
since the early 1900s. (Id. ¶ 25.)
Defendant EQK is a provider of consumer products, including window and wall room air
conditioning units and dehumidifiers (“EQK Goods”). (Id. ¶ 8.) Defendants EQK and Home Easy
operate together from the same address, and Home Easy provides warranty services for EQK
Goods. (Id. ¶¶ 9-10.) Defendants recently began selling and marketing a line of air conditioning
products using the mark EMERSON QUIET KOOL, for which Defendants own a U.S. trademark
registration. (Id. ¶¶ 1, 49-57.) Plaintiff alleges that prior to 2017, the marks EMERSON QUIET
KOOL and QUIET KOOL had lengthy periods of non-use and abandonment. (Id. ¶ 57.)
In May 2017, Defendants launched the EQK Goods on the domain emersonquietkool.com
and under the mark EMERSON QUIET KOOL. (Id. ¶¶ 37, 40.) The EQK website contained a
number of historical images that displayed the Emerson Radio name, until July 2017 when Plaintiff
sent a cease and desist letter to Defendants. (Id. ¶¶ 41-45.) Plaintiff alleges that it has no
relationship or affiliation with either Defendant and did not consent to the display of images of
Plaintiff’s products or the use of its name and brand on the EQK website. (Id. ¶ 47.) Plaintiff
further alleges that Defendants’ misrepresentation about its history, reputation and association with
Emerson Radio has caused consumer confusion and harmed Plaintiff’s goodwill. (Id. ¶¶ 66-80.)
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From 1953 to 1980, Plaintiff’s predecessors sold air conditioners under the mark QUIET KOOL
by EMERSON RADIO. (Am. Compl. ¶ 22.) In 1960, Emerson Radio’s predecessors became a
division of National Union Electric Corp. (Id. ¶ 23.) In 1984, Emerson Radio acquired the
Emerson Radio Marks and their related goodwill through an assignment and merger. (Id. ¶¶ 2324.)
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On July 21, 2017, Plaintiff filed suit in this Court. (ECF No. 1.) On July 28, 2017, Plaintiff
filed a motion for a preliminary injunction. 2 (ECF No. 8) On September 19, 2017, Plaintiff filed
an Amended Complaint alleging Trademark Infringement under 15 U.S.C. § 1114 (Count I);
Trademark Infringement, Unfair Competition and False Designation of Origin under 15 U.S.C. §
1125(a)(1)(A) (Count II); False Advertising under 15 U.S.C. § 1125(a)(1)(B) (Count III); violation
of the Anticybersquatting Consumer Protection Act under 15 U.S.C. § 1125(d) (Count IV);
Trademark Infringement under N.J. Stat. Ann. § 56:3-13.16 (Count V); State Trademark Dilution
under N.J. Stat. Ann. § 56:13-20 (Count VI); False Designation of Origin under N.J. Stat. Ann. §
56:8-2 (Count VII); Trademark Infringement under New Jersey Common Law (Count VIII);
Unfair Competition and False Designation of Origin under New Jersey Common Law (Count IX);
and seeking Cancellation of Registration No. 4,688,893 (Count X). (See generally Am. Compl.)
On October 31, 2017, Defendants filed the instant Motion to Dismiss the Amended Complaint.3
(ECF No. 44.)
II.

LEGAL STANDARD
Federal Rule of Civil Procedure (“Rule”) 8(a)(2) requires a complaint to set forth a “short

and plain statement of the claim showing that a pleader is entitled to relief.” This short and plain
statement must “give the defendant fair notice of what the . . . claim is and the grounds upon which
it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The pleading standard under Rule

2

While the motion was pending, Defendants filed a Motion to Dismiss the Complaint. (ECF No.
23.) On September 25, 2017, after hearing oral argument, this Court denied Plaintiff’s motion for
a preliminary injunction, and entered an Order withdrawing Defendants’ motion to dismiss, in
light of Plaintiff’s filing of its Amended Complaint. (ECF Nos. 33-35.)
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Plaintiff filed its opposition on December 4, 2017, and Defendants replied on December 18, 2017.
(ECF Nos. 47, 50.)
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8 requires “more than an unadorned, the defendant-unlawfully-harmed-me-accusation.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009).
In considering a motion to dismiss under Rule 12(b)(6), a court must “accept all factual
allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine
whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.”
Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings
Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)) (internal quotation marks omitted); Dillin v. Constr. &
Turnaround Servs., LLC, No. 14-8124, 2015 U.S. Dist. LEXIS 124873, at *7-8 (D.N.J. Sept. 18,
2015). “[A] complaint attacked by a . . . motion to dismiss does not need detailed factual
allegations.” Twombly, 550 U.S. at 555. But, conclusory or bare-bones allegations will not do.
See Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”). Iqbal held, “to survive a motion to dismiss, a
complaint must contain sufficient factual matter . . . to state a claim to relief that is plausible on its
face. Id. at 678 (internal citations omitted); see also Fowler v. UPMC Shadyside, 578 F.3d 203,
210-11 (3d Cir. 2009) (discussing the standard).
III.

DISCUSSION
Defendants seek dismissal of Plaintiff’s claims based on a 1983 assignment, which

Defendants attach for the first time in their reply brief. 4 (ECF No. 50-1 ¶ 2.) Defendants make a
global argument that “the assignment precludes Plaintiff from enforcing any rights against
Defendants” related to the “marks EMERSON QUIET KOOL and QUIET KOOL, the Emerson

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A Court may look beyond the pleadings and “consider an undisputedly authentic document that
a defendant attaches as an exhibit to a motion to dismiss if the plaintiff’s claims are based on the
document.” Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir.
1993).
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Radio ‘G Klef’ mark (for air conditioners), and the associated good will.” 5 (ECF No. 44-1 at 9.)
However, the document only refers to the assignment of rights as it pertains to air conditioners,
(ECF No. 50-1 ¶ 2); it does not assign any rights as it pertains to EQK’s dehumidifiers, which are
also a basis for Plaintiff’s claims. (Am. Compl. ¶¶ 36-37, 68, 88, 120.) At this point in the
litigation, the Court must accept the allegations in the Complaint as true. See Phillips, 515 F. 3d
at 231. In doing so, this Court finds that Plaintiff has sufficiently pled that it is the rightful owner
of the EMERSON trademark and that it has the right to bring the instant infringement action.
Accordingly, Plaintiff’s claims must survive the instant motion to dismiss.
A. Trademark Infringement and Unfair Competition
To be successful on a trademark infringement or unfair competition claim under the
Lanham Act, Plaintiff must prove that: “(1) the mark [it seeks to protect] is valid and legally
protectable, (2) [the plaintiff] owns the mark, and (3) the defendant’s use of the mark is likely to
create confusion concerning the origin of goods or services associated with the mark.” Health &
Body Store, LLC v. Justbrand Ltd., 480 Fed. App’x. 136, 145 n.15 (3d Cir. 2012) (quoting E.T.
Browne Drug Co. v. Cococare Prods., Inc., 538 F.3d 185, 191 (3d Cir. 2008)) (internal quotations
omitted); see also A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 210 (3d
Cir. 2000) (“We measure federal trademark infringement, 15 U.S.C. § 1114, and federal unfair
competition, 15 U.S.C. § 1125(a)(1)(A), by identical standards.”). The pleading standards are the
same for trademark infringement and unfair competition claims under state and federal law, and

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This Court notes that the 1983 assignment is from National Union Electric Corp., a non-party, to
Defendant EQK. (ECF No. 50-1.) There is no evidence of an assignment of rights from Plaintiff
to Defendants.
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the parties do not dispute this fact. (ECF No. 44-1 at 19; ECF No. 47 at 4.) As such, the analysis
below applies to Counts I-II and V-IX. 6
Here, Plaintiff has sufficiently pled its claims for trademark infringement and unfair
competition. First, the Amended Complaint alleges Plaintiff has sold consumer goods and
appliances using the EMERSON mark for over 100 years. (Am. Compl. ¶¶ 1, 19.) Indeed, the
EMERSON brand was registered on January 25, 1916, and the Emerson “G Clef” mark was
registered in 1944. (Id. ¶¶ 20-21.) Thus, the EMERSON mark is valid and legally protectable.
Second, the Emerson Radio Marks are owned by Plaintiff as evident through their U.S. trademark
registrations. (Id. ¶¶ 26-28; Ex. A.) Third, the Amended Complaint alleges that Defendants have
wrongfully used the Emerson Radio Marks to market their air conditioners and dehumidifiers,
which has caused consumer confusion. (Id. ¶¶ 17, 69-70, 75-78.) Specifically, the Amended
Complaint alleges that Defendant EQK’s website has “displayed a number of historical images of
air conditioners . . . several of which clearly display the Emerson Radio name[,]” (id. ¶ 45), and
Defendants’ “marketing materials are false misrepresentations about Defendants’ history,
reputation and association with Emerson Radio[,]” (id. ¶ 66), which “confuse and deceive
consumers into believing that they are purchasing Emerson Radio Goods when they are actually
purchasing EQK Goods.” (Id. ¶ 67.) Further, Plaintiff alleges that consumer confusion has already
occurred in the marketplace because consumers have contacted Plaintiff to complain about “the
quality of the EQK Goods or seek[] replacement parts for newly purchased [EQK] products” that

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Trademark Infringement under 15 U.S.C. § 1114 (Count I); Trademark Infringement, Unfair
Competition and False Designation of Origin under 15 U.S.C. § 1125(a)(1)(A) (Count II);
Trademark Infringement under N.J. Stat. Ann. § 56:3-13.16 (Count V); State Trademark Dilution
under N.J. Stat. Ann. § 56:13-20 (Count VI); False Designation of Origin under N.J. Stat. Ann. §
56:8-2 (Count VII); Trademark Infringement under New Jersey Common Law (Count VIII); and
Unfair Competition and False Designation of Origin under New Jersey Common Law (Count IX).
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Plaintiff does not make. (Id. ¶¶ 68-69.) Thus, Plaintiff sufficiently pled its claims for trademark
infringement and unfair competition. Accordingly, Defendants’ motion to dismiss Counts I-II and
V-IX is denied.
B. False Advertising under 15 U.S.C. § 1125(a)(1)(B) (Count III)
As an initial matter, Defendants argue that Plaintiff lacks standing to bring a claim under
15 U.S.C. § 1125(a) because Plaintiff is not a competitor. (ECF No. 44-1 at 12-13.) However,
Defendants’ assertion is without merit as the Supreme Court has held that a plaintiff need not be a
direct competitor to pursue a false advertising claim. Lexmark Int’l, Inc. v. Static Control
Components, Inc., 134 S. Ct. 1377, 1392 (2014) (“It is thus a mistake to infer that because the
Lanham Act treats false advertising as a form of unfair competition, it can protect only the falseadvertiser’s direct competitors.”). Thus, Plaintiff may assert its false advertising claim. 7
To state a Lanham Act claim for false advertising under 15 U.S.C. § 1125(a)(1)(B), a
plaintiff must plead:
1) that the defendant has made false or misleading statements as to
his own product or another’s, 2) that there is actual deception or a
tendency to deceive a substantial portion of the intended audience,
3) that the deception is material in that it is likely to influence
purchasing decisions 4) that the advertised goods traveled in
interstate commerce, and 5) that there is a likelihood of injury to the
plaintiff in terms of declining sales, loss of good will, etc.
Larry Pitt & Assocs. v. Lundy Law LLP, No. 13-2398, 2018 U.S. Dist. LEXIS 25906, at *10 (E.D.
Pa. Feb. 15, 2018).

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This Court also finds that Plaintiff has Article III standing. To show Article III standing, a
plaintiff bears the burden of establishing the following: (1) “an injury-in-fact,” (2) “a causal
connection between the injury and the conduct complained of;” and (3) a likelihood “that the injury
will be redressed by a favorable decision.” See Lujan v. Defenders of Wildlife, 504 U.S. 555, 56061 (1992). Here, Plaintiff alleges in detail that it owns the Emerson Radio Marks, and that
Defendants’ use of Plaintiff’s marks in advertising their EQK products has caused consumer
confusion and harm to Plaintiff’s reputation and goodwill. (Am. Compl. ¶¶ 20-21, 89, 100-07.)
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Here, in support of its false advertising claim, Plaintiff alleges (1) that Defendants have
displayed images of Plaintiff’s “classic products” on the EQK website, thereby suggesting to
consumers that Defendants’ products are somehow affiliated with Plaintiff’s brand; (2) Plaintiff
has no relationship or affiliation with either Defendant, and the association with Plaintiff’s brand
has already deceived, and will continue to deceive, a substantial portion of consumers; (3)
Defendants’ reference to Plaintiff’s brand on their website would likely influence consumers’
purchasing decisions because of the goodwill associated with Plaintiff’s brand; (4) Defendants’
products have already traveled in interstate commerce; and (5) Defendants’ acts have caused
Plaintiff to “suffer irreparable harm in the nature of loss of control over its reputation and loss of
consumer good will.” (Am. Compl. ¶¶ 36-47, 87-95, 108-16.) Defendants do not argue that
Plaintiff has failed to sufficiently plead its false advertising claim. Thus, Defendants’ motion to
dismiss Count III is denied.
C. Violation of the Anticybersquatting Consumer Protection Act under 15 U.S.C. §
1125(d) (Count IV)
To state a claim under the Anticybersquating Consumer Protection Act (“ACPA”), 15
U.S.C. § 1125(d), a plaintiff must allege: “(1) the plaintiff’s mark is distinctive or famous; (2) the
defendant’s domain name is identical or confusingly similar to plaintiff’s mark; and (3) the
defendant registered his domain name with the bad faith intent to profit from it.” Am. Diabetes
Ass’n v. Friskney Family Tr., LLC, 177 F. Supp. 3d 855, 880 (E.D. Pa. 2016) (citing Louis Vuitton
Malletier & Oakley, Inc. v. Veit, 211 F. Supp. 2d 567, 582 (E.D. Pa. 2002)).
Here, the Amended Complaint alleges (1) the Emerson Radio Marks are distinctive, (Am.
Compl. ¶¶ 25-26, 122); (2) the “Defendants’ domain name [emersonquietkool.com] expressly
contains Emerson Radio’s EMERSON trademark and is therefore confusingly similar” to
Plaintiff’s mark, (id. ¶ 121); and (3) Defendants intentionally set out to trade on the reputation and
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goodwill of the Emerson Radio brand, (id. ¶¶ 125-26). Thus, Plaintiff has sufficiently stated a
claim under the ACPA. Defendants do not argue that Plaintiff has failed to sufficiently plead this
cause of action. Thus, Defendants’ motion to dismiss Count IV is denied.
D. Cancellation of Registration No. 4,688,893 (Count X)
To adequately plead Cancellation of Registration for likelihood of confusion under 15
U.S.C. § 1119, Plaintiff must show that Defendants’ marks:
so resembles a mark registered in the Patent and Trademark Office,
or a mark or trade name previously used in the United States by
another and not abandoned, as to be likely, when used on or in
connection with the goods of the applicant, to cause confusion, or to
cause mistake, or to deceive.
15 U.S.C. § 1052(d). 8

Here, Plaintiff has sufficiently pleaded that Defendants’ EMERSON

QUIET KOOL mark is substantially identical to Plaintiff’s Emerson Radio Marks and the
continued use of Defendants’ mark is likely to cause consumer confusion. (Am. Compl. ¶¶ 25-28,
66-80, 167-75.) Thus, Defendants’ motion to dismiss Count V is denied.
E. Laches
Generally, courts in this circuit “will not rely on an affirmative defense . . . to trigger
dismissal of a complaint under Rule 12(b)(6).” Connolly v. Mitsui O.S.K. Lines (Am.), Inc., No.
04-5127, 2007 U.S. Dist. LEXIS 86490, at *14 (D.N.J. Nov. 21, 2007) (quoting Victaulic Co. v.
Tieman, 499 F.3d 227, 234 n.4 (3d Cir. 2007)). “Only where an affirmative defense appears

8

Defendants argue that Plaintiff’s cancellation of registration is based on abandonment. But,
Plaintiff argues that it seeks cancellation of registration based on likelihood of confusion.
Notwithstanding, this Court finds that Plaintiff has also asserted a prima facie case for
abandonment by alleging that the EMERSON QUIET KOOL and QUIET KOOL marks were not
in use for over fifteen (15) years. (Am. Compl. ¶¶ 56, 63-64); see Koninkijke Philips Elecs. N.V.
v. Hunt Control Sys., No. 11-3684, 2016 U.S. Dist. LEXIS 84299, at *31 (D.N.J June 29, 2016)
(citing 15 U.S.C. § 1127) (“[T]o adequately plead a claim for abandonment, a party must show
either (1) at least three consecutive years of nonuse of a trademark, or (2) a period of nonuse of
less than three years combined with proof of intent to not resume use.”).
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unanswered on the face of the complaint is it an appropriate ground for a motion to dismiss.” Id.
Moreover, “when the defense of laches depends on disputed facts, it is inappropriate to make a
determination on a motion to dismiss.” Kaufhold v. Caiafa, 872 F. Supp. 2d 374, 380 (D.N.J.
2012). Here, Defendants argue their affirmative defense of laches warrants dismissal of Plaintiff’s
claims. (ECF No. 44-1 at 14-16.) However, several factual disputes exist between the parties,
including whether Defendants’ predecessors ceased using the EMERSON QUIET KOOL mark
for a period of time prior to its relaunch in May 2017. (Am. Compl. ¶¶ 49-65; ECF No. 47 at 20.)
Thus, at this stage in the litigation, Defendants’ motion to dismiss based on the defense of laches
must be denied.
IV.

CONCLUSION
For the reasons set forth above, Defendant’s Motion to Dismiss is DENIED.

appropriate order follows.
s/ Susan D. Wigenton
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE

Orig:
cc:

Clerk
Leda D. Wettre, U.S.M.J.
Parties

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An