Monday, June 23, 2008

Court denies Texas International Property Associates' motion to dismiss Full Sail University’s lawsuit over the former's web directory website

On June 17, 2008, United States District Judge Joe Fish of the Northern District of Texas refused to dismiss a trademark infringement lawsuit brought by Full Sail, Inc. (“FSI”) against Dauben, Inc. (d/b/a Texas International Property Associates) (“TIPA” or “Dauben”) arising from Dauben’s registration of the domain name FULLSAILUNIVERSITY.COM and using it to feature a web directory page with multiple click-through links to other education institutions. See Full Sail Inc v. Dauben Inc et al, 2008 U.S. Dist. LEXIS 47278, Case No. 08-cv-00446 (N.D. Tex. June 17, 2008). For some background on Texas International Property Associates (a name that many large company’s dealing with cybersquatters and typosquatters readily recognize), read this article here (from The Dallas Morning News). For a previous post on the growing trademark infringement litigation over “click-through web directories,” click here.

FSI operates an educational institution in Winter Park, Florida, that specializes in careers in music, film, video games, design, animation, and the entertainment business. Since 1979, FSI has used the mark FULL SAIL in connection with its education services. FSI has registered the FULL SAIL mark for various goods and services including educational services; retail store services; film related textbooks, newspapers, newsletters and magazines; clothing items; and prerecorded films dealing with the operation of audio, video and digital media equipment. FSI has also filed several intent-to-use applications for the mark FULL SAIL UNIVERSITY for Retail store services and instructional manuals; Clothing items; Film related textbooks, newspapers, newsletters and magazines; and Motion pictures, video games, etc. On June 10, 2008, the PTO registered the mark FULL SAIL UNIVERSITY for educational services (although this was still a pending application for purposes of the court’s decision).

FSI filed its complaint against Dauben alleging federal trademark infringement under 15 U.S.C. § 1114, federal unfair competition under 15 U.S.C. § 1125(a), trademark dilution under 15 U.S.C. § 1125(c), cybersquatting under 15 U.S.C. § 1125(d), and related state law claims. FSI claims that consumers looking for FSI are misdirected to TIPA’s website and that TIPA is unfairly profiting from FSI’s name and reputation by using a name intended to cause confusion.

TIPA filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil Procedure 12(b)(1) and (b)(6). The court denied TIPA’s motion to dismiss on both grounds.

First, because determining the issue of federal question jurisdiction would require an investigation into the merits of FSI’s complaint of trademark infringement, unfair competition, dilution, and anti-cybersquatting provisions under the Lanham Act, the court assumed jurisdiction, turned its focus to whether FSI had stated a claim upon which relief can be granted, and denied TIPA’s motion to dismiss for lack of subject matter jurisdiction. See Montez v. Department of the Navy, 392 F.3d 147, 150 (5th Cir. 2004); Dell, Inc. v. This Old Store, Inc., 2007 U.S. Dist. LEXIS 73952, 2007 WL 2903845 at *1-2 (S.D. Tex. Oct. 3, 2007) (assuming subject matter jurisdiction in trademark dispute to decide the pending motion to dismiss for failure to state a claim).

Second, in arguing that FSI did not state a claim upon which relief could be granted, TIPA argued that FSI had not registered the FULL SAIL UNIVERSITY mark, but merely filed intent-to-use applications, which does not result in a vested property right that could be infringed upon and that TIPA’s prior use gave it priority over FSI’s later filed applications. The court rejected this argument noting that FSI’s claims of trademark infringement were also grounded in its federal registrations for the FULL SAIL mark.

TIPA attempted to argue that this mark alone would be insufficient to support a Lanham Act claim; however, the court noted that likelihood of confusion was the real issue and that “It is not a stretch for the court to envision a likelihood of confusion among consumers between the defendant's FULLSAILUNIVERSITY.COM website, which contains the plaintiff's mark, and the plaintiff's mark as it relates to educational services, and that is sufficient for the claim to survive at the 12(b)(6) stage.” The court also noted that arguments concerning the likelihood of confusion are premature because the necessary factual determination is inappropriate at the motion to dismiss stage.

The remainder of FSI’s were claims were found to have been properly pled with sufficient factual allegations that, if true, would support each of the claims, and therefore TIPA’s motion to dismiss such claims were denied.

1 comment:

Michael said...

Good Read...

I always find articles relating to the net very interesting because I do web design..

Thanks for the info