Opinion
TH 00-0135-C-M/H
June 19, 2001
ORDER ON MOTIONS TO DISMISS AMENDED COMPLAINT
This matter is before the Court on Defendants America Online, Inc.'s ("America Online") and OneMain.com's ("OneMain") motions under FED. R. CIV. P. 12(b)(6) to dismiss the amended complaint of Plaintiffs Jan Eglen ("Eglen") and APBHN, Inc., d/b/a Hometown.net and Hometown.net, Inc. ("APBHN"). Plaintiffs allege they have trademark rights in the term "hometown," and that Defendants have infringed upon their rights. Defendants deny that Plaintiffs have any protectable interest in the term "hometown," and further deny that they have in any way infringed upon any rights that may exist. The parties have fully-briefed the motions, which are now ripe for ruling.
I. FACTUAL BACKGROUND
The facts, taken from Plaintiffs' amended complaint, are as follows: Plaintiffs do business under the name and style of Hometown.net and Hometown.net, Inc. Plaintiffs' Amended Complaint ¶ 1. Plaintiffs own and operate an internet service provider business known as "Hometown.net" in Terre Haute, Indiana. Id. ¶ 2. On December 30, 2000, Eglen, doing business as Hometown.net, filed an Application for Service Mark Registration claiming that since November 26, 1995, it has adopted and used "hometown.net" in connection with computer services, local community network providing resource information, and community events and services. Id. In addition, Plaintiffs registered the domain name "Hometown.net" with Network Solutions, Inc. ("NSI"), on November 28, 1995.
Plaintiffs have also registered the names "Hometown" and "Home Town" with Real Names Corporation, the internet name registration provider, so that when the keystrokes "Hometown" or "Home Town" are typed, Hometown.net is accessed on the internet. Id. Usage statistics provided by Real Names Corporation for the month of December 2000 reveal that Hometown.net was accessed 727 times by users typing in only "hometown" in the browser URL and 54 times when "home town" was used. Based upon the foregoing registrations and usage, Plaintiffs claim to be the owners of a common law trademark to "Hometown," "hometown," and "home town" by reason of being the first to use the mark in connection with computer services, local community network providing resource information, and community events and services throughout west central Indiana and the United States. Id. Plaintiffs also publish a daily news and information bulletin under the name "Hometown" or "Hometown.net," which is sent electronically to thousands of its customers and other readers throughout the United States. Id.
Defendants are corporations and businesses engaged in business as internet service providers and/or computer service companies that provide services throughout the United States, including in Terre Haute, west central Indiana, and the markets where Plaintiffs provide essentially the same services. Id. ¶ 3. Defendants conduct their business in the State of Indiana and do business over the internet at http://aol.com and http://OneMain.com. Id.
Since November 1995, Plaintiffs have owned, marketed, and distributed an internet service provider network which provides internet access and other services to customers for a fee under the names "Hometown" and "Hometown.net." Id. ¶ 4. Plaintiffs have expended substantial sums to advertise the names in connection with internet provider services and have used the names and marketed and distributed them as part of its internet services throughout the United States. The names "Hometown" and "Hometown.net" have gained secondary meaning with the relevant consuming public in the internet service area and in particular in west central Indiana. Id. Through Plaintiffs' extensive use, advertising, and marketing investment in the names, the mark "Hometown" has become associated with Plaintiffs' internet provider services. The mark has meaning and value as a mark suggestive or descriptive of the small town-or hometown-type of internet and computer services provided by Plaintiffs, including news and information publications which they provide. Id. Plaintiffs have never licensed or authorized the Defendants to use, copy, or appropriate "Hometown" or "Hometown.net" in connection with their businesses. Id.
Defendants, without authorization, assignment, or permission from Plaintiffs, have copied, appropriated, infringed, and otherwise taken from Plaintiffs their exclusive ownership interest, intellectual property rights, and the right to use the names "Hometown.net" and "Hometown" in connection with the design, operation, delivery, and marketing of the above internet services, particularly in those areas where Plaintiffs' services are looked upon by the consuming public as suggestive or descriptive of the small town — or hometown — type of internet services that Plaintiffs provide. Id. ¶ 5. AOL has for approximately one year published, marketed, and distributed such internet services under the name "hometown.aol." Id.
OneMain's representative negotiated with Plaintiffs regarding a possible purchase of their business and then, after determining not to purchase the business, began advertising in west central Indiana that it was, "Your Hometown (Inter) net" on the internet. Id. OneMain also placed advertisements in the Terre Haute newspaper, which refers to it as "hometown" in compound word situations, causing confusion among the consuming public as to who is the real "Hometown" internet service provider and has the proper use of the name "hometown." Id. Plaintiffs advised Defendants that their conduct amounted to a violation of the Lanham Act and Plaintiffs' intellectual property rights, but Defendants continue to operate their websites and to distribute and market their internet services. Id. ¶ 7.
II. RULE 12(B)(6) STANDARD
Under FED. R. CIV. P. 12(b)(6), a claim is subject to dismissal for "failure to state a claim upon which relief may be granted." United States v. Clark County, Indiana, 113 F. Supp.2d 1286, 1290 (S.D.Ind. 2000). When considering a motion under this rule, the Court must examine the sufficiency of plaintiff's complaint, not the merits of the lawsuit. Id. The Court shall accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff. Id. Dismissal under Rule 12(b)(6) is proper only if the plaintiff could prove no set of facts in support of his claims that would entitle him to relief. Chavez v. Illinois State Police, 2001 WL 543707, *28 (7th Cir. May 23, 2001), citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Veazey v. Communications Cable of Chi., Inc., 194 F.3d 850, 854 (7th Cir. 1999). "[I]f it is possible to hypothesize a set of facts, consistent with the complaint, that would entitle the plaintiff to relief, dismissal under Rule 12(b)(6) is inappropriate." Id., citing Veazey, 194 F.3d at 854 (citing Graehling v. Vill. of Lombard, Ill., 58 F.3d 295, 297 (7th Cir. 1995)).
Where the parties submit material outside of the pleadings, the Court is normally obligated to either not consider the extraneous submissions in ruling on the motion or to convert the motion to one for summary judgment and provide the parties with an opportunity to submit supplementary materials. Jacobs v. City of Chicago, 215 F.3d 758, 765 (7th Cir. 2000), citing Carter v. Stanton, 405 U.S. 669, 671 (1972).
There are some documents, however, that the Court can consider without having to convert the motion to one for summary judgment. See, e.g., Menominee Indian Tribe of Wisconsin v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998) ("Judicial notice of historical documents, documents contained in the public record and reports of administrative bodies is proper" on motion to dismiss), cert. denied 526 U.S. 1066 (1999); Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 430 (7th Cir. 1993) ("[A] plaintiff is under no obligation to attach to her complaint documents upon which her action is based, but [a] defendant may introduce certain pertinent documents if the plaintiff failed to do so. . . . Documents that [a] defendant attaches to [a] motion to dismiss are considered part of [the] pleadings if they are referred to in plaintiff's complaint and are central to her claim.").
III. DISCUSSION
A. PLAINTIFFS ABANDONED THEIR CLAIMS UNDER §§ 1114 AND 1125(c)
Plaintiffs initially pled claims under three different sections of the Lanham Act, including 15 U.S.C. § 1114, 1125(c), and 1125(a). Defendants moved to dismiss the claim under § 1114, which pertains to infringement of registered marks, because Plaintiffs did not claim to own a registered mark. Defendants also sought dismissal of the claim under § 1125(c), which involves dilution of famous marks, because Plaintiffs had not alleged that their mark was famous within the meaning of the Act. Plaintiffs did not respond to either of these arguments in their response brief. As a result, they have abandoned those claims and the Court GRANTS Defendants' motions with respect to those claims. See Gillespie v. City of Indianapolis, 13 F. Supp.2d 811, 826 (S.D.Ind. 1998), aff'd. 185 F.3d 693 (7th Cir. 1999), cert. denied, 528 U.S. 1116 (2000) (holding plaintiff abandoned claims by failing to respond to defendant's arguments in motion to dismiss), citing Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir. 1996) (plaintiff abandoned claim after failing to respond to argument in motion for summary judgment).
In their amended complaint, Plaintiffs also vaguely referred to their rights under state law. Defendants moved to dismiss any such claim under state law, and Plaintiffs did not respond. Accordingly, they have similarly abandoned any state law claims.
B. PLAINTIFFS' CLAIM UNDER § 1125(a)
That leaves Plaintiffs' claims under § 1125(a), which prohibits infringement of unregistered marks.
In a trademark infringement action, the plaintiff must demonstrate: (1) the validity of its trademark; and (2) the infringement of that mark. Platinum Home Mortgage Corp. v. Platinum Financial Group, Inc., 149 F.3d 722, 726 (7th Cir. 1998), citing Echo Travel, Inc. v. Travel Associates, Inc., 870 F.2d 1264, 1266 (7th Cir. 1989). The validity of a mark pertains to whether a "word, term, name, symbol or device" is entitled to protection by focusing on whether that mark specifically identifies and distinguishes one company's goods or services from those of its competitors. Id. "The infringement of a mark concerns whether the actions of a subsequent user of a substantially similar or identical mark causes a likelihood of confusion among consumers as to the source of those specific goods or services." Id. "When the identifying `word, term, name, symbol or device' claimed as a trade name or mark is not registered with the United States Patent and Trademark Office, the burden is on the claimant . . . to establish that it is entitled to protection." Id.
Marks are classified into five categories of increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Mil-Mar Shoe Co., Inc. v. Shonac Corp.,75 F.3d 1153, 1156 (7th Cir. 1996). In general, the level of trademark protection available accords with the distinctiveness of the mark. As a result, generic terms receive no trademark protection, and descriptive marks are protected only if they have achieved "secondary meaning" in the relevant community. Id. Suggestive, arbitrary, and fanciful marks are deemed inherently distinctive, and thus entitled to full protection. Id.
A generic term is one that is commonly used to name or designate a kind of goods. Id. "Unlike a trademark, which identifies the source of a product, a generic term merely specifies the type, or genus, of thing into which common linguistic usage consigns that product." Id., citing Gimix, Inc. v. JS A Group, Inc., 699 F.2d 901, 905 (7th Cir. 1983). On the other hand, a descriptive mark is one that merely describes the ingredients, qualities, or characteristics of an article of trade or service. Such marks are generally not protectable as trademarks, "both because they are poor means of distinguishing one source of services from another and because they are often necessary to the description of all goods or services of a similar nature." Id., citing Liquid Controls Corp. v. Liquid Control Corp., 802 F.2d 934, 936 (7th Cir. 1986). As such, descriptive marks are only protectable where the holder can establish that the mark has acquired "secondary meaning" in the collective consciousness of the relevant community. Id. Finally, if a mark stands for an idea which requires some operation of the imagination to connect it with the goods, it is suggestive. If the mark imparts information directly it is descriptive. See Platinum Home Mortgage Corp., 149 F.3d at 727.
Plaintiffs' primary claim appears to be that the term "hometown" has become associated with their internet business and has meaning and value as a mark suggestive or descriptive of the small town or hometown nature of Eglen's internet provider business. See Plaintiffs'Amended Complaint ¶ 4. Plaintiffs also allege that the term "hometown" has acquired secondary meaning in the area of west central Indiana where they provide their services. Id. Defendants counter that the term "homteown" is generic and therefore entitled to no protection whatsoever. In support of Defendants' position, AOL has attached several exhibits to its Motion to Dismiss showing that other internet companies use the word "hometown" in connection with their services.
Although the exhibits were attached to AOL's motion, OneMain.com has adopted and incorporated by reference AOL's motion and supporting brief.
Both parties refer to and dispute the significance of the documents attached to AOL's motion.
Defendants invite the Court to take judicial notice of the exhibits, which include several printouts of different websites. The Seventh Circuit has cautioned, however, that "[w]hile `documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to his claim,' this is a narrow exception aimed at cases interpreting, for example, a contract. It is not intended to grant litigants a license to ignore the distinction between motions to dismiss and motions for summary judgment . . ." Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998), citing Wright v. Associated Ins. Cos., Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). In this matter, the Court declines to take judicial notice of Defendants' exhibits. Because the Court is faced with documents outside the pleadings on these motions to dismiss under Rule 12(b)(6), it must either convert the motions into motions for summary judgment under Rule 56 and proceed in accordance with the latter rule, or exclude the documents attached to the motion to dismiss and continue under Rule 12. Levenstein, 164 F.3d at 347. The Court, in its discretion, will not consider the documents attached to AOL's motion and will not convert the pending motions into motions for summary judgment.
The Court also has determined that, while Plaintiffs are on notice that the Court could convert Defendants' motions to motions for summary judgment, to do so at this time — without giving Plaintiffs an opportunity to present additional evidence — would unfairly surprise Plaintiffs. "Every party is charged with awareness of the Federal Rules of Civil Procedure. Every party is therefore on notice that a district court may convert a 12(b)(6) motion to dismiss into a Rule 56 motion for summary judgment. The Federal Rules of Civil Procedure require the district court, however, to give the parties a reasonable opportunity to present all material made pertinent to such motion by Rule 56. `If a motion under Rule 12(b)(6) is thus converted into a summary judgment motion, the amendment insures that both parties shall be given a reasonable opportunity to submit affidavits and extraneous proofs to avoid taking a party by surprise through the conversion of the motion into a motion for summary judgment.'" Gray Corp. v. National Union Fire Ins. Co. of Pittsburgh, 94 F.3d 363, 366-367 (7th Cir. 1996), citing FED. R. CIV. P. advisory committee's note (emphasis added).
In reviewing the sufficiency of Plaintiffs' complaint, the Court must not examine the merits of the lawsuit. In fact, dismissal under Rule 12(b)(6) is proper only if Plaintiffs could prove no set of facts in support of their claims that would entitle them to relief. After reviewing the amended complaint, the Court concludes that Plaintiffs have alleged sufficient facts to state a claim upon which relief can be granted. They have alleged that because of their extensive use of the term "hometown," the mark has become associated with their internet provider services and has meaning and value as a mark suggestive or descriptive of the small town — or hometown — type of internet services they provide. It remains to be seen whether Plaintiffs can actually establish that their mark is descriptive or suggestive, or whether they can show, if necessary, that the mark has obtained secondary meaning. But it is not proper at this stage for the Court to determine that factual matter. Instead, it is sufficient that Plaintiffs have alleged they have a mark that is entitled to protection. Plaintiffs also have alleged that Defendants have infringed that mark by using the word "hometown" in connection with similar services in the west central Indiana area. This is also sufficient to state a claim for infringement. At this stage, dismissal under Rule 12(b)(6) is inappropriate.
IV. CONCLUSION
Plaintiffs have abandoned their claims under state law and under 15 U.S.C. § 1114 and 1125(c).
Accordingly, the Court GRANTS Defendants' motions to dismiss those claims. Plaintiffs have, however, stated a claim upon which relief can be granted under § 1125(a). The Court thus DENIES Defendants' motions to dismiss that claim.
IT IS SO ORDERED.