The Scooter Store, Inc. et al v. Spinlife.com, LLC
Filing
152
ORDER granting 143 Motion for Summary Judgment; denying 144 Motion for Reconsideration. Signed by Judge Algenon L. Marbley on 9/28/2012. (cw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
THE SCOOTER STORE, INC., et al.,
Plaintiffs,
v.
SPINLIFE.COM, LLC,
Defendant.
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Case No. 2:10-cv-18
JUDGE ALGENON L. MARBLEY
Magistrate Judge Deavers
OPINION AND ORDER
I. INTRODUCTION
This matter is before the Court on two motions. First is Plaintiffs’ The Scooter Store,
Inc. and The Scooter Store, Ltd. (“collectively “TSS”) Motion for Reconsideration of the Court’s
December 21, 2011 Opinion and Order granting, in part, Defendant/Counterclaimant,
SpinLife.com, LLC’s (“SpinLife”) Motion for Partial Summary Judgment. (Dkt. 144.) TSS
asserts that the new evidence provided in the report of its expert, Dr. Robert Leonard, which TSS
disclosed after briefing had concluded on SpinLife’s motion for partial summary judgment,
warrants reconsideration of certain of the Court’s determinations. Second is SpinLife’s Motion
for Summary Judgment with respect to TSS’s sole remaining claim for trademark dilution based
on Texas Business & Commerce Code § 16.29. (Dkt. 143.)
The Court finds that, under Fed. R. Civ. P. 59(e), the new record evidence submitted
through Dr. Leonard’s expert report fails to warrant reconsideration of the Court’s prior Opinion
and Order on partial summary judgment. TSS’s evidence still fails to create a genuine issue of
material fact as to whether SpinLife’s alleged uses of the three-word phrase “the scooter store”
creates a likelihood of confusion necessary to support its affirmative claims for trademark
infringement, unfair competition, unjust enrichment and misappropriation. TSS’s Motion for
Reconsideration is therefore DENIED.
Further, the Court finds, that TSS has failed to provide any evidence in support of its sole
remaining claim for dilution under Tex. Bus. & Com. Code § 16.29. SpinLife’s motion for
summary judgment with respect to TSS’s claim is GRANTED.
II. BACKGROUND
A. Factual Background
The facts relevant to this motion are described in greater detail in the Court’s prior
Opinion and Order on partial summary judgment. See Scooter Store, Inc. v. SpinLife.com, LLC,
No. 10-cv-0018, 2011 WL 6415516, *1–3 (S.D. Ohio, Dec. 21, 2011). TSS’s allegations are
based on SpinLife’s purchases of Google AdWords, and use of “metadata” phrases on its
website. Google, like most Internet search engines, engages in advertising sales in which it
auctions search keywords to advertisers. TSS alleges that SpinLife purchased the phrase “the
scooter store” and other combinations using those words, such as “scooter store,” “my scooter
store” and “your scooter store,” from Google AdWords as part of a plan to confuse TSS’s
customers. TSS also complains that SpinLife placed the term “the scooter store” in so-called
“meta tags” on its website, www.spinlife.com, which could cause internet users searching for
TSS to be directed to SpinLife’s website instead of TSS’s. These actions, TSS contends,
constitute trademark infringement and unfair competition.
SpinLife counterclaimed, alleging, inter alia, fraud on the part of TSS in connection with
its trademark applications and anticompetitive motivations behind TSS’s lawsuit. In 2005, the
United States Department of Justice (“DOJ”) alleged that TSS had engaged in improper business
-2-
practices related to Medicare and its beneficiaries. TSS settled with the DOJ in 2007. Following
the settlement, TSS expanded its services in the retail sales market. After the expansion, it
approached SpinLife about acquiring the company, but no agreement was ever reached. In 2009,
TSS again contacted SpinLife and indicated that it believed that SpinLife was violating its
trademark rights. SpinLife alleges that TSS is using litigation to eliminate competition and
obtain a monopoly through the unjustified expansion of their trademarks. Further, SpinLife
alleges that TSS aims to use the costs of litigation to drive SpinLife out of the retail sales market
for power mobility devices.
B. Procedural History
TSS’s Amended Complaint asserts the following claims: (1) Federal Unfair Competition;
(2) State Unfair Competition (based on Texas law); (3) State Dilution (based on Texas law); (4)
Federal Trademark Infringement; (5) State Trademark Infringement (based on Texas law); and
(6) Unjust Enrichment and Misappropriation. SpinLife filed its Counterclaim, asserting: (1) a
Sherman Act violation and (2) Ohio Unfair Competition. SpinLife also requests (3) a
declaratory judgment of non-infringement of Trademark Registration Nos. 2,710,502; 2,714,979;
2,912,774; and 3,017,227 under the Lanham Act; (4) a declaratory judgment that U.S.
Registration Nos. 2,710,502; 2,714,979; 2,912,774; and 3,017,227 are invalid; (5) a declaratory
judgment that purchase of “The,” “Scooter” and “Store” keywords and related phrases does not
infringe Trademark Registration Nos. 2,710,502; 2,714,979; 2,912,774; and 3,017,227; and (6) a
declaratory judgment that Registration Nos. 2,710,502; 2,714,979; 2,912,774; and 3,017,227 are
unenforceable.
On April 18, 2011, the Court granted, in part, TSS’s motion to dismiss, and dismissed
Counts Four and Six of SpinLife’s Counterclaim (seeking invalidation of TSS’s trademarks due
3
to fraud in its trademark applications in the USPTO). On May 19, 2011, SpinLife filed a motion
for partial summary judgment to establish that TSS has no trademark or any other rights in the
unregistered, generic phrase, “scooter store,” or other phrases containing “scooter store” such as
“my scooter store,” “mobility scooter store,” “your scooter store,” “the scooter big store,”
“SpinLife scooter store,” etc. (Dkt. 99.) SpinLife’s partial summary judgment motion was ripe
for determination on August 11, 2011, when SpinLife filed its Reply brief. On August 31, the
parties jointly moved to extend the deadlines including expert disclosures, which the Magistrate
Judge granted. (Dkt. 127.) On October 31, 2011, pursuant to the Court’s extended expert
disclosure deadlines and Fed. R. Civ. P. 26(a)(2), TSS disclosed its expert witnesses to SpinLife.
(See Dkt. 134.)
In its December 21, 2011 Opinion and Order, the Court granted, in part, SpinLife’s
motion for partial summary judgment. The Court ruled that “[t]he phrases ‘the scooter store,’
‘scooter store,’ and other such phrases containing ‘scooter store’ are generic, and Plaintiff TSS
has no trademark rights in the use of these phrases.” (Dkt. 140 at 26.) The Court ruled that
“SpinLife’s alleged use of the generic terms ‘the,’ ‘scooter’ and ‘store,’ and combinations of the
same do not infringe [TSS]’s trademark rights in U.S. Registration Nos. 2,710,502; 2,714,979;
2,912,774; and 3,017,227.” (Id.) As a result of its findings the Court dismissed all of TSS’s
affirmative claims against SpinLife except for the trademark dilution claim brought under Texas
state law. (Id); (see also Compl. ¶¶ 104-05.)
On January 6, 2012, SpinLife filed a motion for summary judgment on TSS’s remaining
claim of trademark dilution. On January 9, 2012, TSS filed a motion requesting reconsideration
of the Court’s decision on summary judgment to dismiss its claims with respect to SpinLife’s
alleged uses of the phrase “the scooter store.” TSS attached to its motion, and for the first time
4
on the record, the study of data and opinions rendered by Dr. Leonard. Both SpinLife’s motion
for summary judgment and TSS’s motion for reconsideration are now fully-briefed and ripe for
determination.
III. STANDARD OF REVIEW
The Federal Rules of Civil Procedure do not expressly provide for “motions for
reconsideration.” Rodriguez v. Tennessee Laborers Health & Welfare Fund, 89 F. App’x 949,
959 (6th Cir. 2004). Under Rule 59(e), however, a party may “motion to alter or amend a
judgment” with “28 days after the entry of the judgment.” Fed. R. Civ. P. 59(e). The Sixth
Circuit has held that “[a] Court may grant a Rule 59(e) motion to alter or amend if there is: (1) a
clear error of law; (2) newly discovered evidence; (3) an intervening change in controlling law;
or (4) a need to prevent manifest injustice.” ACLU of Ky. v. McCreary County, 607 F.3d 439,
450 (6th Cir. 2010) (citing Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th Cir. 2005)).
Additionally, Rule 60(b) provides that “[o]n motion and just terms, the court may relieve
a party or its legal representative from a final judgment, order, or proceeding” for reasons
including “mistake, inadvertence, surprise, or excusable neglect . . . . newly discovered evidence
that, with reasonable diligence, could not have been discovered.” Fed. R. Civ. P. 60(b). Motions
for reconsideration are not intended as an opportunity “to re-litigate issues previously considered
by the court or to present evidence that could have been raised earlier.” Keymarket of Ohio, LLC
v. Keller, Case No. 08-cv-325, 2010 U.S. Dist. LEXIS 17933, *7-8 (S.D. Ohio 2010).
Summary judgment is appropriate if “the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). Summary judgment on a claim or issue “will not lie if the . . . evidence is such that a
reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby,
5
Inc., 477 U.S. 242, 248 (1986). In considering a motion for summary judgment, a court must
construe the evidence in the light most favorable to the non-moving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The movant has the burden of
establishing that there is no genuine issue of material fact to be tried by the factfinder. Celotex
Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12
F.3d 1382, 1388-89 (6th Cir. 1993). The non-movant must then come forward with specific
facts, supported by the evidence in the record, upon which a reasonable jury could find in its
favor. See Anderson v. Liberty Lobby, 477 U.S. 242, 252 (1986).
IV. LAW AND ANALYSIS
A. TSS’s Motion for Reconsideration
1. Requirements for Reconsideration Under Rule 59(e)
TSS requests the Court reconsider its prior decision on partial summary judgment for the
following reasons: (1) TSS had no notice that any issues regarding its federally-registered
trademarks were before the Court, and thus TSS did not have sufficient opportunity to brief fully
the issue; (2) the record was not fully developed at the time of the briefing was completed on
SpinLife’s motion for partial summary judgment; and (3) SpinLife failed to submit sufficient
evidence to meet its burden of proving that “THE SCOOTER STORE” is a generic term. (Dkt.
144, at 1-2.) TSS’s request for reconsideration is limited, apparently, to the Court’s rulings made
with respect to the full three-word phrase, “the scooter store.” SpinLife argues that TSS’s
motion is ambiguous in the scope of its request for reconsideration. SpinLife contends that the
Court’s determinations of genericness and grants of summary judgment were appropriate, even
in light of TSS’s expert report of Dr. Leonard.
6
Although TSS does not bring its motion to reconsider under any express legal provision,
the Court will treat TSS’s motion as a request to alter judgment under Rule 59(e). TSS’s request
is timely, having been brought within 28 days of the Court’s December 21, 2011 Order. See Fed.
R. Civ. P. 59(e).
In its December 21, 2011 Order, the Court determined that “[t]he phrases ‘the scooter
store,’ ‘scooter store,’ and other such phrases containing ‘scooter store’ are generic, and Plaintiff
TSS has no trademark rights in the use of these phrases,” and, thus, “SpinLife’s alleged use of
the generic terms ‘the,’ ‘scooter’ and ‘store,’ and combinations of the same do not infringe
[TSS]’s trademark rights in U.S. Registration Nos. 2,710,502; 2,714,979; 2,912,774; and
3,017,227.” (Dkt. 140 at 26.) Pursuant to these determinations, the Court granted SpinLife
summary judgment, dismissing all of TSS’s claims that rely on a theory of TSS having
trademark rights to the generic phrases. (Id.)
TSS’s first basis for reconsideration, that it was “not provided notice that ‘THE
SCOOTER STORE’ was under attack,” (Dkt. 144 ¶ 9), is misguided. The Court’s ruling was
limited to alleged use of the phrases by SpinLife in its retail sale of durable medical supplies
through the internet, by purchasing internet “Adwords” and using the phrases in website
metadata.1 The Court made no ruling with respect to TSS’s federal trademark registrations of the
mark “THE SCOOTER STORE” used in connection with “insurance claims processing for
others; maintenance and repair services for wheelchairs, power chairs, lift chairs and motorized
scooters; delivery of wheelchairs, power chairs, lift chairs and motorized scooters.” (See TSS’s
1
With respect to this count, the Court ruled that, “[d]efendant’s requested relief for a declaratory judgment in
Counts three and five of [SpinLife’s] Amended Counterclaim is hereby GRANTED in part. SpinLife’s alleged use
of the generic terms ‘the,’ ‘scooter’ and ‘store,’ and combinations of the same do not infringe Plaintiff’s trademark
rights in U.S. Registration Nos. 2,710,502; 2,714,979; 2,912,774; and 3,017,227.” (Dkt. 140, at 26.)
7
FAC ¶ 17.) The Court determined that the simple phrases containing “scooter” and “store,” over
which TSS is attempting to claim trademark rights, are generic and not protected under TSS’s
limited “THE SCOOTER STORE” trademarks.
Second, TSS argues the Court’s particular rulings that: (1) the phrase “the scooter store”
is generic, and (2) SpinLife’s alleged uses of the phrase “the scooter store” in internet Adword
purchases and website metadata do not infringe TSS’s “The SCOOTER Store” trademarks,
should be amended because of new material evidence discovered since briefing concluded on the
motion for partial summary judgment. Specifically, TSS has now provided the expert report of
Dr. Robert Leonard. (Dkt. 144-1.) TSS submits that Dr. Leonard’s analysis and conclusions
establish a genuine issue of material fact that the consumer public associates the phrase “the
scooter store” with TSS, and that the phrase meets the standards under the Lanham Act for
nongenericness. (Dkt. 144 ¶ 22.) Hence, argues TSS, the Court should find that Dr. Leonard’s
report creates a genuine issue of material fact to whether SpinLife’s alleged uses of the phrase
“the scooter store” infringe TSS’s trademark rights.
To constitute “newly discovered evidence” warranting reconsideration under Rule 59(e),
the evidence must have been previously unavailable. See Gencorp, Inc. v. American Int’l
Underwriters, 178 F.3d 804, 834 (6th Cir. 1999). TSS’s newly-submitted expert opinion of Dr.
Leonard was actually unavailable to it prior to the completion of briefing on SpinLife’s motion
for summary judgment. TSS is not at fault for having failed to obtain Dr. Leonard’s report
before briefing concluded, given the Magistrate Judge’s order granting parties an extension on
time to disclose experts.
8
SpinLife argues that since TSS had Dr. Leonard’s report as of October 28, 2011, it should
have supplemented its briefing. While the Court agrees that TSS was negligent in failing to
move to supplement its briefing with the evidence from the report, the Court also finds some
merit in TSS’s argument that it had inadequate notice of a need to defend the nongenericness of
the three-word phrase “the scooter store” prior to the Court’s ruling. SpinLife’s initial request
for partial summary judgment arguably did not extend to that full phrase. (See Motion for Partial
Summary Judgment, Dkt. 99, at 1.) TSS’s failure to supplement its briefing on partial summary
judgment with the evidence of Dr. Leonard’s expert report is excusable, at least with respect to
the full phrase “the scooter store.” Thus, if Dr. Leonard’s report is sufficient to create a material
issue of genuine fact on issues decided in SpinLife’s motion, under Rule 59(e) the Court will
amend its prior decision based on the new evidence brought before it.
2. Whether Dr. Leonard’s Report Creates any Genuine Issue of Material Fact
TSS claims that the opinions rendered by Dr. Leonard establish a genuine issue of
material fact as to whether the public associates “the scooter store” with TSS’s business, and
whether it otherwise meets the standards under the Lanham Act with respect to nongeneric terms
and phrases. (See Dkt. 144 ¶ 22.) SpinLife contends that the LexisNexis searches conducted by
Dr. Leonard and survey results of various news articles prove nothing in regard to the
genericness of the phrase “the scooter store,” and are of no relevance. SpinLife attacks Dr.
Leonard’s analysis and methodology, arguing that his conclusions do not create any genuine
issues of material fact of the genericness of the phrase “the scooter store,” or the possibility that
SpinLife’s actions create a likelihood of consumer confusion between SpinLife’s goods and
services and that of TSS’s.
9
In its prior decision on partial summary judgment, this Court found that the purchasing of
another’s trademarked phrases as Adwords and/or use of such phrases in website metadata may
give rise to an actionable claim of trademark infringement under the Lanham Act. See Scooter
Store, 2011 WL 6415516 at *4 (rejecting SpinLife’s claim that “it should be awarded summary
judgment because Adwords are not actionable”).
The Court then turned to the application of the “consumer confusion” test for trademark
infringement under the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a). The Sixth Circuit has held
that “the ‘touchstone of liability [under the Lanham Act] is whether the defendant’s use of the
disputed mark is likely to cause confusion among consumers regarding the origin of the goods
offered by the parties.’” Allard Enters., Inc. v. Advanced Programming Res., Inc., 146 F.3d 350,
355 (6th Cir. 1998) (quoting Daddy’s Junky Music Stores, Inc. v. Big Daddy’s Family Music
Ctr., 109 F.3d 275, 280 (6th Cir. 1997)). The “consumer confusion” analysis asks first whether
the plaintiff’s mark is protectable, “and if so, whether there is a likelihood of confusion as a
result of would-be infringer’s use of the mark.” See Tumblebus, Inc. v. Cranmer, 399 F.3d 754,
762 n. 10 (6th Cir. 2005).
A trademark’s distinctiveness at any given time falls into one of five categories, in
ascending order of strength: “generic, descriptive, suggestive, and fanciful or arbitrary.”
Therma–Scan, Inc. v. Thermoscan, Inc., 295 F.3d 623, 631 (6th Cir. 2002) (internal citations
omitted). The three categories termed suggestive, fanciful, and arbitrary “are inherently
distinctive and are protectable so long as the putative owner has actually used the mark.”
Tumblebus, 399 F.3d at 762 n. 10. A mark that is “merely descriptive,” while “not ‘inherently
distinctive’ . . . can become protectable by developing a secondary meaning.” Id. Generic
10
marks, however, receive no trademark protection under any circumstances. See id. at 761; see
also Bath & Body Works, Inc., v. Luzier Personalized Cosmetics, 76 F.3d 743, 747 (6th Cir.
1996).
Hence, the Court’s threshold question is whether the phrase “the scooter store” is generic.
See Scooter Store, 2011 WL 6415516 at *5–7. Only if the phrase “the scooter store,” by itself, is
not generic does the Court proceed to the question of whether a reasonable jury could find that
SpinLife’s use of the phrase creates a likelihood of confusion with TSS’s trademarked goods or
services. See Scooter Store, 2011 WL 6415516 at *9 (holding, “if a term is found to be generic,
a court need not even reach the issue of the likelihood of confusion for no trademark protection
exists” (quoting Barrios v. Amer. Thermal Instruments, Inc., 712 F. Supp. 611, 614 (S.D. Ohio
1988)). The test for genericness is “whether the public perceives the term primarily as the
designation of the article,” and this is usually a question of fact. Id. at *6 (quoting Bath & Body
Works, 76 F.3d at 747–78).
It is well-established that “if a trademark has been registered, there is a presumption that
term is not generic and the defendant must overcome the presumption.” Bath & Body Works, 76
F.3d at 748. Registrations for a mark, however, only serve as “prima facie evidence of [the]
registrant’s exclusive rights to use the mark” for those “goods or services specified in the
registration.” See Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1190 (6th Cir. 1988) (emphasis
added); 15 U.S.C. §§ 1057(b),2 1115(a);3 see also Gameologist Group, LLC v. Scientific Games
2
(b) Certificate as prima facie evidence:
A certificate of registration of a mark upon the principal register provided by this chapter shall be
prima facie evidence of the validity of the registered mark and of the registration of the mark, of
the owner’s ownership of the mark, and of the owner’s exclusive right to use the registered mark
11
Intern., Inc., 838 F. Supp. 2d 141 (S. D. N. Y. 2011). TSS currently owns four registered
trademarks for the mark THE SCOOTER STORE, used “in connection with ‘insurance claims
processing for others; maintenance and repair services for wheelchairs, power chairs, lift chairs
and motorized scooters; delivery of wheelchairs, power chairs, lift chairs and motorized
scooters.’” See Scooter Store, 2011 WL 6415516 at *2. Critically, TSS did not specify retail
sales in connection with the mark’s registration.
In Gameologist Group, as here, the plaintiff claimed trademark infringement under the
Lanham Act for the defendant’s use of the plaintiff’s registered mark with regard to goods and
services not specified in the plaintiff’s registration of the mark. See id. at 153 (“The plaintiff has
obtained federal registration protection for its mark for “entertainment in the nature of online
three dice casino games” and for “casino games and equipment therefor . . . [h]owever, the
plaintiff claims that the defendants infringed its mark by using the word ‘bling’ in connection
with lottery tickets, and the plaintiff owns no registrations for its mark for lottery tickets.”). The
district court explained that the “presumption of an exclusive right to use a registered mark
extends only to the goods and services noted in a registration certificate,” and thus “the plaintiff
is not entitled to a presumption of an exclusive right to use the ‘BLING BLING 2002’ mark for
in commerce on or in connection with the goods or services specified in the certificate, subject to
any conditions or limitations stated in the certificate.
15 U.S.C. §§ 1057(b) (emphasis added).
3
15 U.S.C. § 1115(a) states, in relevant part:
Any registration issued under the [Lanham Act], or of a mark registered on the principal register
provided by this chapter and owned by a party to an action shall be admissible in evidence and
shall be prima facie evidence of the validity of the registered mark and of the registration of the
mark, of the registrant’s ownership of the mark, and of the registrant's exclusive right to use the
registered mark in commerce on or in connection with the goods or services specified in the
registration . . .
12
lottery tickets.” Id. (concluding, “[b]ecause the plaintiff’s registrations do not provide
presumptive or conclusive evidence of the mark’s validity, the plaintiff has the burden of proving
that its mark is a valid trademark”) (citations omitted). Since TSS did not specify retail of
scooters in its registration of “THE SCOOTER STORE” mark – the class of goods and services
for which SpinLife allegedly uses or used the mark – it does not enjoy a presumption of
trademark protection over its “THE SCOOTER STORE” mark for the retail sale of scooters. See
Scooter Store, 2011 WL 6415516, at *7.
This Court determined, in its December 21, 2011 Opinion and Order, that “‘the scooter
store’ and its constituent parts, ‘scooter’ and ‘store,’ are all generic terms[,]” id. at *9, because
“the USPTO has already determined that the term ‘the scooter store’ is generic in the area of
retail sales,” id. at *6,4 and because in TSS’s opposition to SpinLife’s partial summary judgment
motion, “the only affirmative evidence TSS provide[d] to show that ‘the scooter store’ or
4
As stated previously, a USPTO examiner found TSS’s proposed mark for “THE SCOOTER STORE” to be a
generic mark for retail sales. The examiner’s report reasons as follows:
[T]he proposed mark appears to be generic as applied to the services and, therefore, incapable of
identifying the applicant's services and distinguishing them from those of others. Case law holds
that the term “store” is generic for retail services, and that, where an applicant combines the
generic name of goods, such as “liquor” and the generic term “store,” the resulting mark “liquor
store,” is generic for retail services selling those goods. The term “scooter” appears to be generic
for motorized scooters such as those sold by the applicant. The applicant has merely added the
generic term SCOOTER to the generic term STORE, resulting in the generic mark THE
SCOOTER STORE.
Id. (quoting USPTO Action, Ref. No. T-5778, Exh. C to SpinLife’s Motion for Partial Summary Judgment, Dkt. 993, at 1.); see also Frehling Enters. v. Int’l Select Group, Inc., 192 F.3d 1330, 1335 (11th Cir. 1999) (“Generic marks
are the weakest and not entitled to protection—they refer to a class of which an individual service is a member (e.g.,
‘liquor store’ used in connection with the sale of liquor).”).
The Court stated that “the considered determination by the PTO examiner, through multiple rounds of TSS’s
applications, that the mark ‘scooter store’ by itself is generic should be given ‘appropriate consideration and due
weight.’” Id. at *8 (quoting GenDerm Corp. v. Ferndale Lab., 32 U.S.P.Q.2D (BNA) 1567, at * 15 (E.D. Mich.
1994) (additional citations omitted).
13
‘scooter store’ is not a generic phrase, apart from statements about the amount [TSS] spends on
advertising its products, [was] the results from a database search in the BYU Corpora.” Id. at
*8.5 The BYU Corpora results, alone, were insufficient to create a triable issue that “scooter
store” or “the scooter store” is a nongeneric phrase. While the Court acknowledged the BYU
Corpora data “is in the category of ‘[e]vidence of consumer recognition,’ which can be ‘relevant
to assessing the strength of the mark,’” id. (quoting Citizens Banking Corp. v. Citizens Fin.
Group, Inc., 320 F. App’x 341, 347 (6th Cir. 2009)), it found that “a mere nine instances of the
term ‘scooter store’ referring to TSS from one data search” does not create doubt as to whether
the term is actually generic sufficient to satisfy TSS’s burden to raise a genuine issue of material
fact. Id.
Since TSS had provided insufficient evidence to create a triable issue fact as to whether
“the scooter store” was not a generic phrase in the context of retail sales, there was no need for
the Court to “proceed to the question of whether its use of the terms creates a likelihood of
confusion with TSS’s products or service.” Id. at *10 (holding, “TSS’s infringement and unfair
competition claims based on ‘likelihood of confusion’ fail as a matter of law because SpinLife’s
Adword purchases and metadata uses are of generic terms”).
On this Motion, TSS discloses a new expert report from Dr. Leonard which provides
evidence suggesting that a majority of market-wide references to “the scooter store” are for
TSS’s goods and services. Dr. Leonard has performed his own LexisNexis database research
and analysis of the consumer public’s association of the phrase “(The) Scooter Store.” His report
5
The BYU Corpora evidence “consists of database search for the terms ‘scooter store’ in a single online ‘corpus’ of
entries from various books and magazines. The search produced a mere nine resulting entries, all of which TSS
alleges “have to do with” its company.” Id.
14
states “the data indicate, with a high degree of certainty, that the predominant usage of (The)
Scooter Store is as a composite phrase to refer to [TSS’s] The Scooter Store.” (Leonard Report,
Dkt. 144-1, p. 5.)6 Dr. Leonard concludes, based on these results, that “the mark The Scooter
Store is not generic,” and rather, “depending on how it is being used, can be either descriptive
(e.g., for a store selling mobility products), suggestive (e.g., delivery of wheelchairs), or arbitrary
(e.g., for providing extended warranties).” (Id. at p. 6.) He “further conclude[s] that when the
mark is being used, as we see from LexisNexis, the vast majority of the public identifies the
Texas-based The Scooter Store as the source of those goods and services,” thus, “the primary
significance of the term is as a brand indentifying [TSS’s] company.” (Id.)
Since Dr. Leonard’s conclusions regarding consumer recognition and perception of
“(The) Scooter Store” are based solely on his LexisNexis database search, they are of dubious
methodological integrity and, thus, insufficient to create a genuine issue of material fact
necessary to defeat summary judgment. Even if the conclusions had more substantial support,
however, they suffer from the same limited relevance as the BYU Corpora data analysis which
this Court already found insufficient to defeat summary judgment. Dr. Leonard’s report adds
little, if anything, of probative value to answer the ultimate question of whether SpinLife’s usage
of the mark creates consumer confusion over the goods and services offered by the Plaintiffs and
Defendant.
6
Dr. Leonard addresses the heightened distinctiveness of the composite, three-word phrase, opining that “[a]lthough
‘scooter’ may describe a class or group of things, when it is placed before another class or group of things, it is used
adjectivally, not nominally, in the same way that ‘container’ is used adjectively in the brand ‘The Container Store.’”
(Leonard Report, p. 5.)
15
To determine whether there is a likelihood of confusion, federal courts in the Sixth
Circuit consider the following factors (the “Frisch’s factors,” see):
(1) strength of plaintiff’s mark; (2) relatedness of the goods; (3) similarity of the
marks; (4) evidence of actual confusion; (5) marketing of channels used; (6)
degree of purchaser care; (7) defendant’s intent in selecting the mark; and (8)
likelihood of expansion in selecting the mark.
Frisch’s Restaurants, Inc. v. Elby’s Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th Cir.
1982). The Court’s application of these eight factors is a flexible exercise, see id., and “[n]ot all
of these factors will be relevant in every case.” Id. (citations omitted). This Court has held that
“[t]o resist summary judgment on the issue of likelihood of confusion, the non-moving party
must establish . . . that there are genuine factual disputes concerning those of the Frisch’s factors
which may be material in the context of the specific case.” Id. (quoting Homeowners Group,
Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1107 (6th Cir. 1991)). In every case,
however, “‘the ultimate question remains whether relevant consumers are likely to believe that
the products or services offered by the parties are affiliated in some way.’” Id. (quoting Therma–
Scan, 295 F.3d at 630.)
Consideration of the Frisch’s factors leads the Court to conclude that the additional
evidence in Dr. Leonard’s report is legally insufficient to raise a genuine issue that SpinLife’s
alleged uses of “the scooter store” create a likelihood of consumer confusion with respect to
TSS’s products to infringe TSS’s trademark rights.
First, on the question of the strength of the mark, which “focuses on the distinctiveness of
a mark and its recognition among the public,” Therma–Scan, 295 F.3d at 631, Dr. Leonard
concludes that in the retail sale of mobile products, the composite mark “(The) Scooter Store is
at most “descriptive.” (Leonard Report, at 6.) Thus, even by the definition of TSS’s own
16
expert, the mark’s strength is weak, and in a category which entitles it to protection only if it has
acquired secondary meaning. See Scooter Store, 2011 WL 6415516, at *13 (stating that a
“merely descriptive” can only command trademark protection if “it has acquired secondary
meaning”). Dr. Leonard’s report does not provide evidence that the term “The Scooter Store”
has indeed acquired a secondary meaning. Moreover, Dr. Leonard’s methods and analysis are
far from entirely sound. His conclusion, for example, that “when the [(The Scooter Store] mark
is being used . . . the vast majority of the public identifies the Texas based [TSS] The Scooter
Store as the source of those goods and services,” does not necessarily follow from the
LexisNexis search data which is Dr. Leonard’s sole factual basis.
The USPTO Trademark Trial and Appeal Board has held that even overwhelming
results from these sorts of LexisNexis searches, without more, say nothing about the
extent to which consumers associate the term with the plaintiff’s business vis-à-vis any
other. As the Board reasoned in In re Greenliant Systems, Ltd.:
Applicant contends that “48 of 52 hits on an internet search of the term
NANDRIVE (representing 92.3% of the hits) were references to Applicant, and
that 132 of 132 references found in a LexisNexis search of the term NANDRIVE
were to applicant (which represents 100% of the references found) . . . [and] is
strong evidence that the public regards the term NANDRIVE as a trademark for
Applicant's goods.” We disagree.
First, as indicated above, because applicant may be the only user of the compound
term NANDRIVE, its internet and Lexis/Nexis hits are going to be heavily
skewed to articles referencing applicant. Second, it is not clear to us how
consumers will perceive the term NANDRIVE as used in the articles.
97 U.S.P.Q.2d 1078, 1084 (T.T.A.B. 2010) (finding, accordingly, “that the term
NANDRIVE is generic when used in connection with ‘electronic integrated circuits’”). Thus, as
a matter of established trademark law, the relevance of Dr. Leonard’s report is significantly
17
undercut by his methodological flaws, so similar to those in In re Greenliant Systems, Ltd..7 See
also Career Agents Network, Inc. v. www. careeragentsnetwork.biz, Case No. 09–CV–12269–
DT, 2010 WL 743053, at *14 (E.D. Mich. 2010) (“Under Lanham Act jurisprudence, it is
irrelevant whether customers would be confused as to the origin of the websites, unless there is
confusion as to the origin of the respective products.”).
In short, Dr. Leonard’s report does nothing to overcome this Court’s previous finding on
the first Frisch’s factor, that TSS’s trademark is simply too weak for the infringement claim to
survive Defendant’s Motion for Summary Judgment. For retail sales, the service for which
Defendant uses the mark, there is still no evidence the mark is anything more than “merely
descriptive.” Thus, further examination of the other Frisch factors is unnecessary. See Scooter
Store, 2011 WL 6415516, at *9, (holding, “because the Court finds that the disputed terms are
generic, they are not protectable and cannot infringe TSS’s “THE SCOOTER STORE” mark
based on creating consumer confusion”). In fact, Dr. Leonard’s report actually reinforces the
Court’s prior finding that the mark is not entitled to trademark protection. Since Dr. Leonard
describes the mark as descriptive (though not “generic” as this Court previously found) it could
only be protectable if it had acquired a secondary meaning. See Bath & Body Works, 76 F.3d at
748. There is no evidence in the record that “The Scooter Store” mark has acquired such a
7
As this Court noted in Safe Auto, “courts generally hold that flaws in survey methodology go to the evidentiary
weight of the survey rather than its admissibility,” 2009 WL 3150328 at *2 (quoting Leelanau Wine Cellars, Ltd. v.
Black & Red, Inc., 452 F. Supp. 2d 772, 778 (W.D. Mich. 2006)), however, as affirmed by the Sixth Circuit,
“[w]here a survey presented on the issue of actual confusion reflects methodological errors, a court may choose to
limit the importance it accords the study in its likelihood of confusion analysis.” Leelanau Wine Cellars, Ltd. v.
Black & Red, Inc., 502 F.3d 504, 518 (6th Cir. 2007); see also Ashland Oil, Inc. v. Olymco, Inc., 1995 WL 499466,
at *4 (6th Cir., Aug. 21, 1995) (“It is the trial court’s responsibility to determine the probative value of a consumer
survey, and it is appropriate for the trial court to accord little or no weight to a defective survey.”).
18
secondary meaning. Therefore, whether the mark is generic or descriptive, it is not protectable
as a matter of law in the Sixth Circuit.
Although it is not necessary to review the other seven factors, having reaffirmed the
generic or merely descriptive nature of the contested mark, it is worth noting that TSS has
presented no evidence whatsoever with respect to the fourth Frisch factor, “evidence of actual
confusion.” The Sixth Circuit has said that evidence of actual confusion is “undoubtedly the best
evidence of likelihood of confusion.” Daddy’s Junky Music Stores, 109 F.3d at 283. Evidence of
actual consumer confusion would be highly relevant in this case, where TSS’s central allegation
is that SpinLife’s actions cause internet consumers looking for TSS to be unknowingly and
unintentionally misdirected to SpinLife’s online scooter business instead. TSS offers no
explanation as to why it has failed to produce evidence of the primary harm it alleges.
In conclusion, the limited relevance and probative value of TSS’s new evidence in Dr.
Leonard’s report is not sufficient for TSS to create a genuine issue of material fact as to whether
the composite phrase, “the scooter store,” is not generic or descriptive for the retail sale of
scooters, as found both the USPTO and this Court have previously found.
B. SpinLife’s Motion for Summary Judgment on TSS’s State Anti-Dilution Claim
SpinLife renews its motion for summary judgment on TSS’s remaining claim under
Texas state law for trademark dilution. TSS alleges that SpinLife’s purchasing of the disputed
Adword phrases containing “scooter” and “store” and uses of metadata containing the same
dilute the distinctive quality of TSS’s registered trademarks in violation of the Texas Business &
Commerce Code § 16.29. (See FAC, ¶¶ 104–05.) In its December 21, 2011 Opinion and Order,
the Court denied SpinLife’s initial request for summary judgment on this claim because
19
“SpinLife did not address the ‘likelihood of dilution’ alleged by TSS.” See Scooter Store, 2011
WL 6415516, at *14. SpinLife argues that TSS’s dilution claim must fail for two reasons: (1)
the phrase “the scooter store” does not appear anywhere on SpinLife’s website, or as an ad
heading or in metadata, and thus the alleged violating conduct has ceased; and (2) TSS cannot
prove that its marks are distinctive, as required for succeeding on its claim under § 16.29.
Texas’s anti-dilution statute states, in pertinent part:
A person may bring an action to enjoin an act likely to injure a business
reputation or to dilute the distinctive quality of a mark registered under this
chapter or Title 15, U.S.C., or a mark or trade name valid at common law,
regardless of whether there is competition between the parties or confusion as to
the source of goods or services.
Tex. Bus. & Com. Code § 16.29 (2012).8
Texas courts have described “trademark dilution” as “the gradual ‘whittling away’ of a
party’s distinctive mark through unauthorized use by another.” Horseshoe Bay Resort Sales Co.
v. Lake Lyndon B. Johnson Improvement Corp., 53 S.W.3d 799, 812 (Tex. App. Ct. 2001). The
owner of a “distinctive mark” may obtain relief under the Texas anti-dilution statute if the
defendant’s actions cause a “likelihood of dilution” due to either of the following: “1) ‘blurring,’
a diminution in the uniqueness and individuality of the mark, or 2) ‘tarnishment,’ an injury
resulting from another’s use of the mark in a manner that tarnishes or appropriates the goodwill
and reputation associated with the plaintiff’s mark.” Exxon Corp. v. Oxxford Clothes, Inc., 109
F.3d 1070, 1081 (5th Cir. 1997). The two theories, “[t]arnishment and dilution of
distinctiveness, although conceptually distinct, both undermine the selling power of a mark, the
8
Section 16.29 states further, that, “[a]n injunction sought under this section shall be obtained pursuant to
Rule 680 et seq. of the Texas Rules of Civil Procedure.” Tex. Bus. & Com. Code § 16.29.
20
latter by disturbing the conditioned association of the mark with the prior user and the former by
displacing positive with negative associations.” V Secret Catalogue, Inc. v. Moseley, 605 F.3d
382, 386 n. 3 (6th Cir. 2010) (citations omitted).
The “Texas anti-dilution law requires [only] that the plaintiff establish ‘an act likely to
injure a business reputation or to dilute the distinctive quality of a mark.’” Scott Fetzer Co. v.
House of Vacuums Inc., 381 F.3d 477, 489 n. 9 (5th Cir. 2004) (quoting Tex. Bus. & Com. Code
§ 16.29) (emphasis added). A showing of actual dilution is not necessary. As the language of
the statute implies, however, the law does not provide for an award of damages. Hence, relief
for trademark dilution under Texas law is limited to an injunction to remedy ongoing harm to the
plaintiff’s marks. See id. at 1081 (“Under section 16.29, a plaintiff may seek an injunction to
remedy ongoing dilution of a protected trademark even if it is not in business competition with
the defendant(s) and irrespective of the existence vel non of any likelihood of consumer
confusion.”).
1. SpinLife’s Voluntary Cessation of its Use of the Challenged Phrase
SpinLife argues that TSS’s requested injunctive relief is no longer necessary or possible.
SpinLife acknowledges that when it launched its website in January, 2000, the phrase “the
scooter store” appeared on the website in reference to SpinLife’s scooter product line. (See
Motion, Dkt. 143, p. 4.) Relying on sworn affidavits and deposition testimony of its CEO, Lisa
Stein, SpinLife claims that it “ended the phrase’s appearance on its website in the mid-2000s—
well before this lawsuit was filed—and the phrase has not appeared on its website since that
time.” (Id) (emphasis in the original); (Motion Exh. A, Stein Aff., Dkt. 143-1, ¶ 5) (“‘The
scooter store’ does not appear anywhere on SpinLife’s website and we have no intentions of
21
using ‘the scooter store’ on SpinLife’s website in the future.”). In addition, SpinLife states that
the phrase “the scooter store” has not appeared as a heading in SpinLife ads, or as a metatag
related to SpinLife’s website, since early 2009. (See Motion, p. 3.)
TSS insists that although SpinLife may have ceased its use of the phrase “the scooter
store” on its website and in search engines, TSS is nevertheless entitled to an injunction to ensure
that SpinLife will not resume its use of “the scooter store” on its website in the future. (See TSS
Opp., Dkt. 149, pp. 2–3.) TSS claims that Ms. Stein’s deposition testimony is insufficient to
provide the Court with a firm statement about when SpinLife ceased use of “the scooter store,”
and SpinLife’s efforts in this litigation evidence its intention to resume use of “the scooter store”
in the future. TSS insists that for the purposes of this motion, the Court may “make a reasonable
inference that SpinLife’s use of TSS’s THE SCOOTER STORE trademarks will recur.” (Id. at
p. 4.)9
Neither party has deigned to file the relevant, relied-upon portions of Ms. Stein’s
deposition transcript on the record. Nevertheless, TSS does not dispute SpinLife’s assertion that
it no longer uses, or permits the use of, the phrase “the scooter store” either in search database
Adwords associated with SpinLife or within metadata. An injunction to prevent any potential
“likelihood of dilution” could only serve to prevent prospective harm in the event that SpinLife
resumes using the contested phrase it has already once voluntarily agreed to cease using.
The fact that an injunction would be purely preventative in nature does not preclude the
claim as a matter of law. Prospective injunctive relief is appropriate in some cases, even where
the defendant has ended the conduct complained of. See Friends of the Earth, Inc. v. Laidlaw
9
The Court notes that, in its opposition, TSS apparently acquiesces to limiting the scope of its dilution claim to
22
Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 (2000) (holding, “[i]t is well settled that a
defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its
power to determine the legality of the practice”). It is not difficult for a company to make
changes to its website. Should TSS manage to prove a likelihood of dilution, an injunction
would serve to ensure that its offending use of “the scooter store” conduct would not be repeated.
2. Whether TSS has Shown Provided Evidence to Support a Claim of Dilution
Secondly, SpinLife argues that TSS has failed to provide any evidence that its registered
trademark for THE SCOOTER STORE is particularly “distinctive” in nature—a required
prerequisite for proving anti-dilution claims. The Texas statute, like other state anti-dilution
laws, is “‘designed to protect only strong, well-recognized marks.’” Exxon Corp., 109 F.3d at
1082 n. 14 (quoting Accuride International, Inc. v. Accuride Corp., 871 F.2d 1531, 1539 (9th
Cir. 1989) (citations omitted)). To prove a likelihood of dilution, plaintiffs must show a
heightened degree of distinctiveness than that required for a mark’s protection under the Lanham
Act’s “likelihood of confusion” analysis. See Advantage Rent-A-Car v. Enterprise Rent-A-Car,
238 F.3d 378, 381 (5th Cir. 2001) (holding, “a somewhat stricter standard is to be applied in
determining ‘strength’ in [a] dilution analysis than in [a] likelihood of confusion analysis”).
TSS argues that because its registered trademarks enjoy a presumption of inherent
distinctiveness, the burden is on SpinLife to prove that the mark is not distinctive, which it has
no done. (Dlt. 149, at pp. 5–6.) Although TSS is correct that, for the purposes of standard
trademark distinctiveness under the Lanham Act, a registered, incontestable trademark “is
presumed to be at least descriptive with secondary meaning, and therefore a relatively strong
SpinLife’s use of the full phrase, “the scooter store,” alone.
23
mark.” Wynn Oil Co. v. American Way Serv. Corp., 943 F.2d 595, 600 (6th Cir. 1991), “[t]he
law governing dilution is independent from the law attendant to claims of trademark
infringement.” AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 801 (6th Cir. 2004).
The Sixth Circuit has expressly held that “a finding that the mark was distinctive does not
address the degree of distinctiveness, which is part of the test for determining whether the use of
a junior mark causes dilution.” Id. at 802; see also Deere & Co. v. MTD Products, Inc., 41 F.3d
39, 42 (2d Cir. 1994) (holding, to prevail on dilution claim under New York law “a plaintiff must
prove, first, that its trademark either is of truly distinctive quality or has acquired secondary
meaning”) (citation omitted). SpinLife’s failure to adduce any specific evidence of THE
SCOOTER STORE’s distinctive quality in support of its claim of a likelihood of dilution augurs
against TSS’s ability to prove the claim, as a matter of law.
TSS has also failed to provide any evidence that SpinLife’s alleged uses of “the scooter
store” could support a finding of trademark dilution under either the “tarnishment” or “blurring”
theory of recovery. First, “blurring involves a diminution in the uniqueness or individuality of a
mark because of its use on unrelated goods.” Scott Fetzer Co., 381 F.3d at 489 (emphasis
added) (citing Westchester Media v. PRL USA Holdings, Inc., 214 F.3d 658, 670 n. 12 (5th Cir.
2000); 4 McCarthy on Trademarks and Unfair Competition § 24:68). The challenged uses of its
trademarks at issue in TSS’s claim are SpinLife’s prior internet Adword purchases and metadata
tags of the phrase “the scooter store” embedded in websites.
There is no possibility of SpinLife’s uses “blurring” TSS’s marks, as blurring can only
result from the defendant’s unauthorized use of the mark “on unrelated goods.” See id.; see also
Pebble Beach Co. v. Tour 18 I, Ltd., 942 F. Supp. 1513, 1567 (S.D. Tex. 1996) (“Dilution by
24
blurring occurs when customers or prospective customers . . . see the plaintiff’s mark used on a
plethora of different goods and services.”) (citations omitted). There is no allegation by TSS that
SpinLife has used its marks on any unrelated goods—only that SpinLife used the phrase “the
scooter store” in hidden places within websites and search engines to attract customers. As
customers cannot “see the plaintiff’s mark” at all from SpinLife’s challenged uses of the phrase,
Pebble Beach Co. v. Tour 18 I, Ltd., 942 F. Supp. at 1567, “blurring” is not an available theory
of recovery to TSS for dilution.
TSS, similarly, has failed to provide any evidence of trademark dilution from SpinLife’s
actions through “tarnishing” of its registered marks. Actionable trademark dilution from
“tarnishing occurs when a trademark is ‘linked to products of shoddy quality, or is portrayed in
an unwholesome or unsavory context,’ with the result that ‘the public will associate the lack of
quality or lack of prestige in the defendant’s goods with the plaintiff’s unrelated goods.’” Id.
(emphasis added) (quoting Hormel Foods Corp. v. Jim Henson Productions, 73 F.3d 497, 507
(2d Cir. 1996)) (additional citations omitted). Tarnishing, like blurring, generally requires a
showing that SpinLife used TSS’s mark on its own goods, which is not alleged here. See John
Paul Mitchell Systems and Ultimate Salon Services, Inc. v. Randalls Fod Markets, Inc., et al, 17
S.W.3d 721, 736-737 (Ct. App. Tx. 2000) (holding, “both forms of dilution . . . require that the
defendant use the plaintiff’s trademark on the defendant’s own goods”).
Even if, arguendo, SpinLife’s actions could support a claim of dilution, TSS has failed
even to make an argument that the evidence on record establishes dilution. TSS does not address
the required elements for proving dilution through either “blurring” or “tarnishing.”
In sum, even if some meaningful injunctive relief is obtainable by TSS through its anti-dilution
25
claim, and even if TSS has provided sufficient evidence showing that its mark for THE
SCOOTER STORE is highly distinctive, its claim for dilution fails because neither theory of
recovery is applicable to TSS’s challenged uses of its mark by SpinLife. As the non-movant,
TSS must “come forward with specific facts, supported by the evidence in the record, upon
which a reasonable jury could find in its favor.” See Anderson v. Liberty Lobby, 477 U.S. 242,
252 (1986). TSS has failed to provide such specific facts in support of its dilution claim, and as
such that claim must fail as a matter of law.
V. CONCLUSION
TSS’s asserted grounds for amending the Court’s December 21, 2011 Opinion and Order
fail to warrant reconsideration of the Court’s decisions rendered therein. TSS’s Motion for
Reconsideration is DENIED, and the Court’s rulings in its December 21, 2011 Opinion and
Order granting SpinLife’s motion for partial summary judgment, in part, remain unchanged. The
Court makes no determination regarding the validity of TSS’s registered trademarks of THE
SCOOTER STORE, but finds that TSS’ has failed to create any genuine issue of material fact
sufficient to proceed on its asserted claims of trademark infringement in this lawsuit for
SpinLife’s alleged uses of the composite phrase, “the scooter store,” in internet Adwords and
website metadata.
SpinLife’s Motion for Summary Judgment on TSS’s Remaining Claim for Trademark
Dilution based on Texas Business & Commerce Code § 16.29 is hereby GRANTED. TSS’s
26
sole remaining claim against SpinLife, for trademark dilution under Texas state law, is
DISMISSED.
IT IS SO ORDERED.
s/Algenon L. Marbley
ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
DATED: September 28, 2012
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