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In Fitzpatrick, the plaintiff did not dispute the date on which he first discovered the defendants' involvement in the alleged trademark infringement, which was outside of the applicable limitations period.
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07 Civ. 2933 (SAS).
August 14, 2007
Plaintiff (Pro Se): Basil Fitzpatrick, Flushing, New York.
For Defendants: Marc S. Reiner, Esq., Dorsey Whitney LLP, New York, New York.
OPINION AND ORDER
I. INTRODUCTION
Basil Fitzpatrick, sole proprietor of Artemis Records, proceeding pro se, brings suit under section 1125 of Title 15 of the United States Code ("Lanham Act"), against SONY BMG Music Entertainment and Red Distribution, LLC (collectively, the "Red Defendants"), and Sheridan Square Entertainment, Inc., Danny Goldberg, and Sheridan Square Entertainment, LLC. Fitzpatrick alleges that the Red Defendants infringed on his common law intellectual property rights in the trademark, "ARTEMIS RECORDS," by, inter alia, "creating a false designation of origin, intensifying reverse confusion, expanding the unauthorized use of the mark, and proliferating a false market perception on a national and international scale." He seeks an award of twenty million dollars against the Red Defendants, as well as compensation for current, past and future use of the mark.
SONY BMG Music Entertainment and Red Distribution, LLC, are sued incorrectly herein as "Sony-BMG Music Entertainment, Inc." and "Red Distribution, Inc."
Complaint ("Compl.") at 10-11, ¶¶ 3, 6.
The Red Defendants now move to dismiss all claims against them based on the doctrine of laches. For the reasons stated below, the Red Defendants' motion is granted, and the claims against them are dismissed.
II. FACTS
The following factual allegations, taken from the Complaint, are accepted as true for purposes of this motion.
Basil Fitzpatrick is the sole proprietor of a music business which engages in "[the soliciting of] bands and artists, product development, performing, producing, recording, distributing promotional materials [and] advertising[,]" and which operated under the name "ARTEMIS RECORDS." Since 1996, Fitzpatrick has operated a web page for this business entitled "The Artemis Records Homepage." In June of 1999, Fitzpatrick became aware that Goldberg, then CEO of Sheridan Square Entertainment, LLC, was using the name "ARTEMIS RECORDS" for his "new independent label which was in the very early stage of development[,]" and that Goldberg had applied for a trademark on the name ARTEMIS RECORDS in February of 1999. Fitzpatrick and Goldberg disputed which party held the rights to the ARTEMIS RECORDS mark, and the dispute led to litigation, which culminated in a trial before Judge Harold Baer, Jr. of this Court, on June 26, 2000. The parties reached a settlement the day of trial.
Id. at 2, ¶ 1.
See id. at 2, ¶ 5.
See id. at 2, ¶ 1.
Id. at 2, ¶ 2.
See id. at 3-4, ¶¶ 3-6.
See id. at 4, ¶ 7.
Under the terms of the settlement, Fitzpatrick would discontinue his use of the ARTEMIS RECORDS name and allow Goldberg to use the mark. In exchange, Fitzpatrick would receive compensation of $125,000 within ten days. Fitzpatrick complied with the settlement agreement and stopped using the ARTEMIS RECORDS name, but he never received the agreed-upon compensation. As a result, Fitzpatrick resumed using the ARTEMIS RECORDS name on September 15, 2000. Since 1999, Fitzpatrick's endeavors in the music industry have been severely hampered by the "magnified existence of reverse confusion" stemming from Goldberg's continued use of the ARTEMIS RECORDS name for his independent label.
See id.
See id.
See id. at 5-6, ¶¶ 10-11.
See id. at 6, ¶¶ 11-12.
Id. at 6-7, ¶¶ 12-14.
Between 1999 and 2006, the Red Defendants distributed Goldberg's ARTEMIS RECORDS products pursuant to a "joint venture[,]" which was entered into before the Red Defendants had verified "the authenticity of ownership of Goldberg's new independent label. . . ." Fitzpatrick claims that this distribution arrangement resulted in further infringement of Fitzpatrick's common law intellectual property rights, intensified reverse confusion, and "further [expansion of] the unauthorized use of the [ARTEMIS RECORDS] mark. . . ." Fitzpatrick bases his trademark infringement claims against the Red Defendants on these distribution activities, of which he first became aware over six years ago, at the trial before Judge Baer, on June 26, 1999. The instant suit was filed on April 12, 2007.
Id. at 10-11, ¶¶ 1-6.
Id. at 10-11, ¶¶ 3, 6.
See id. at 10-11, ¶¶ 1-6.
See id. at 10, ¶ 1.
III. LEGAL STANDARDS
A. Rule 12(b)(6) — Motion to Dismiss
"Federal Rule of Civil Procedure 8(a)(2) requires . . . 'a short and plain statement of the claim showing that the pleader is entitled to relief.'" When deciding a defendant's motion to dismiss under Rule 12(b)(6), the court must "accept as true all of the factual allegations contained in the complaint" and "draw all reasonable inferences in plaintiff's favor."
Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007) (quoting Fed.R.Civ.P. 8(a)(2)).
Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964 (2007).
Ofori-Tenkorang v. American Int'l Group, Inc., 460 F.3d 296, 298 (2d Cir. 2006).
Nevertheless, to survive a 12(b)(6) motion to dismiss, the allegations in the complaint must meet the standard of "plausibility." Although the complaint need not provide "detailed factual allegations," it must "amplify a claim with some factual allegations . . . to render the claim plausible." The test is no longer whether there is "no set of facts" that plaintiff could prove "which would entitle him to relief." Rather, the complaint must provide "the grounds upon which [the plaintiff's] claim rests through factual allegations sufficient 'to raise a right to relief above the speculative level.'"
See Bell Atlantic, 127 S. Ct. at 1970.
Id. at 1964. See also ATSI Commc'ns v. Shaar Fund, Ltd., ___ F.3d ___, No. 05-5132, 2007 WL 1989336, at *5 n. 2 (2d Cir. July 11, 2007) (applying the standard of plausibility outside Twombly's anti-trust context).
Iqbal v. Hasty, ___ F.3d ___, No. 05-5732, 2007 WL 1717803, at *11 (2d Cir. June 14, 2007) (emphasis in original) (holding that the plaintiff's complaint adequately alleged the personal involvement of the Attorney General because it was plausible that officials of the Department of Justice would be aware of policies concerning individuals arrested after 9/11).
Bell Atlantic, 127 S. Ct. at 1969 (quoting Conley v. Gibson, 355 U.S. 45-46 (1957)) ("[t]he phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard").
ATSI Commc'ns, 2007 WL 1989336, at *5 (quoting Bell Atlantic, 127 S. Ct. at 1965).
Although the court must take the plaintiff's allegations as true, "the claim may still fail as a matter of law . . . if the claim is not legally feasible." In addition, "bald assertions and conclusions of law will not suffice." However, a pro se plaintiff is entitled to have his pleadings held to "less stringent standards than formal pleadings drafted by lawyers." Accordingly, a pro se plaintiff's papers should be interpreted "to raise the strongest arguments that they suggest."
In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 457 F. Supp. 2d 455, 459 (S.D.N.Y. 2006) (citing Allaire Corp. v. Okumus, 433 F.3d 248, 250 (2d Cir. 2006)).
Law Offices of Curtis V. Trinko, L.L.P. v. Bell Atlantic Corp., 309 F.3d 71, 74 (2d Cir. 2002) (quotation omitted).
Haines v. Kerner, 404 U.S. 519, 520 (1972).
McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999) (quotation marks and citation omitted).
B. The Doctrine of Laches
The doctrine of laches is based on the maxim, " vigilantibus non dormientibus aequitas subvenit," meaning "equity aids the vigilant, not those who sleep on their rights." It is an equitable defense that "bars a plaintiff's equitable claim where he is guilty of unreasonable and inexcusable delay that has resulted in prejudice to the defendant." "A party asserting the defense of laches must establish that: (1) the plaintiff knew of the defendant's misconduct; (2) the plaintiff inexcusably delayed in taking action; and (3) the defendant was prejudiced by the delay."
Ivani Contracting Corp. v. City of New York, 103 F.3d 257, 259 (2d Cir. 1997).
Ikelionwu v. United States, 150 F.3d 233, 237 (2d Cir. 1998) (quotation omitted).
Id.
"'It is well established that the equitable defense of laches may be applied to cases brought under the Lanham Act.'" "Although laches is an equitable defense, employed instead of a statutory time-bar, analogous statutes of limitation remain an important determinant in the application of a laches defense." In evaluating whether the plaintiff's delay in taking action was sufficiently long to invoke laches in a Lanham Act suit, the Second Circuit has held that the six-year statute of limitations applicable to state-law fraud claims in New York is the appropriate measure. The six-year period begins to run once the plaintiff is aware of the facts underlying its cause of action. If the plaintiff fails to bring suit within the six-year statute of limitations, a presumption of laches will apply, and "'the burden [will be] on the complainant to aver and prove the circumstances making it inequitable to apply laches to his case.'"
United States v. Milstein, 401 F.3d 53, 63 (2d Cir. 2005) (quoting Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187, 193 (2d Cir. 1996)).
Conopco, Inc., 95 F.3d at 191.
See id. at 191-92.
See Deere Co. v. MTD Holdings Inc., No. 00 Civ. 5936, 2004 WL 324890, at *18 (S.D.N.Y. Feb. 19, 2004).
Conopco, Inc., 95 F.3d at 191 (quoting Leonick v. Jones Laughlin Steel Corp., 258 F.2d 48, 50 (2d Cir. 1958)).
In general, the defense of laches is not raised in a motion to dismiss. However, "in certain circumstances, when the defense of laches is clear on the face of the complaint, and where it is clear that the plaintiff can prove no set of facts to avoid the insuperable bar, a court may consider the defense on a motion to dismiss."
Lennon v. Seaman, 63 F. Supp. 2d 428, 439 (S.D.N.Y. 1999), aff'd mem., 48 Fed. Appx. 15 (2d Cir. 2002).
IV. DISCUSSION
The Red Defendants assert the doctrine of laches as an affirmative defense to Fitzpatrick's claims against them. According to the Complaint, Fitzpatrick first learned of the Red Defendants' involvement with Goldberg's ARTEMIS RECORDS label on June 26, 2000, when Goldberg testified in court that the Red Defendants were his distributors. Nearly seven years passed between that day and the filing of the Complaint. The Red Defendants claim that this delay has prejudiced them, primarily through their investment of resources to distribute music under Goldberg's ARTEMIS RECORDS trademark. They argue that because the six-year statute of limitations elapsed before Fitzpatrick filed suit, a presumption of laches is appropriate.
See Red Defendants' Memorandum of Law in Support of Motion to Dismiss ("Red Mem.") at 1.
See Compl. at 10, ¶ 1. The Complaint mistakenly lists the date of the trial as June 26, 1999. See id. Other sections of the Complaint, as well as the Affirmation of Plaintiff in Opposition to the Motion to Dismiss ("Pl. Opp."), state the correct date. See, e.g., Compl. at 4, ¶ 7.
See Red Mem. at 6.
See id. at 5.
The Red Defendants' analysis, however, miscalculates the date on which the six-year period began to run. In addition to first learning of the Red Defendants' distribution activities on June 26, 2000, Fitzpatrick also reached a settlement with Goldberg that day. Pursuant to the settlement, Fitzpatrick granted Goldberg the rights to the ARTEMIS RECORDS name. Therefore, there was no trademark infringement by the Red Defendants — such that the six-year period would begin running — until Goldberg failed to abide by the terms of the agreement, thereby voiding the settlement. The earliest date on which Fitzpatrick could have known of the Red Defendants' infringement was July 6, 2000 — the deadline for Fitzpatrick to receive the $125,000 compensation that Goldberg never paid. The latest the realization could have occurred is September 15, 2000, the date Fitzpatrick resumed using the ARTEMIS RECORDS name. Under either set of facts, however, more than six years passed between the date Fitzpatrick knew, or should have known, of the infringement and the filing of his Complaint on April 12, 2007. Accordingly, despite the Red Defendants' miscalculation of the trigger date for the six-year period, Fitzpatrick has failed to file this action in a timely manner. Thus, a presumption of laches is appropriate.
See Compl. at 4, ¶ 7.
See id.
See id.
See id. at 6, ¶ 12.
In order to survive the motion to dismiss, Fitzpatrick must demonstrate why it would be inequitable for the Court to apply laches to bar his claim. Fitzpatrick, however, has offered no excuse or justification for why he did not bring this action against the Red Defendants more promptly. The only justification offered by Fitzpatrick is that in 2004 and 2005, he petitioned the Trademark Trial and Appeal Board ("TTAB") to cancel registration of the ARTEMIS RECORDS mark which had been granted to Goldberg earlier in 2004. The TTAB proceedings were finalized on March 1, 2007 — after the six-year period had run — and the instant litigation was filed approximately six weeks later. Fitzpatrick argues that he was justified in delaying the filing of the instant action, as a "'trademark owner is not bound to take on more than one infringer at a time[,]'" and that because he filed the instant action promptly upon the conclusion of the earlier litigation, laches should not bar his current claim.
See August 2, 2007 Letter from Fitzpatrick to the Court ("Pl. Surreply") at 2
See id. at 4.
Id. at 3 (quoting 6 McCarthy on Trademarks and Unfair Competition § 31:16).
See id. at 4.
Fitzpatrick's mere involvement in other trademark litigation, however, cannot justify his delay in bringing suit against the Red Defendants. Courts have long recognized that other litigation excuses a plaintiff's delay in bringing suit only when the new defendant is put on notice that the plaintiff intends to sue him when the earlier action terminates. Indeed, the very treatise Fitzpatrick cites in support of his "other litigation" justification states that "in the absence of notice to the alleged infringer that the patentee was delaying enforcement [of his rights] until the conclusion of the other litigation, that other litigation is no excuse." Fitzpatrick does not allege that he put the Red Defendants on notice of his intention to bring suit against them at the close of his litigation against Goldberg. Accordingly, his earlier litigation cannot excuse the nearly seven-year delay in the filing of this action.
See Jones v. Ceramco, Inc., 387 F. Supp. 940, 941 (E.D.N.Y. 1975) (citation omitted), aff'd, 526 F.2d 585 (2d Cir. 1975).
6 McCarthy on Trademarks and Unfair Competition § 31:16. Tellingly, Exhibit A to Pl. Surreply, which is a photocopy from the McCarthy treatise, omits the portion of section 31:16 which describes this limitation on the "other litigation" justification.
Fitzpatrick has not disproved — or even disputed — the date on which he first discovered the Red Defendants' involvement in the alleged trademark claim. He has also failed to dispute the alleged prejudice against the Red Defendants caused by his delay in bringing suit. Finally, Fitzpatrick has offered no reasonable excuse or justification for his failure to bring this suit more promptly. Because Fitzpatrick bears the burden of disproving the presumption of laches, and because he has not satisfied this burden, the claims against the Red Defendants must be dismissed pursuant to the doctrine of laches.
See supra note 38.
V. CONCLUSION
For the reasons stated above, the Red Defendants' motion to dismiss is granted and the Complaint is dismissed against the Red Defendants. The Clerk of the Court is directed to close this motion [Docket #2]. A conference with the remaining defendants is scheduled for August 21, 2007 at 4:00 p.m.
SO ORDERED: