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Smith v. Director's Choice, LLP

United States District Court, D. New Jersey

July 11, 2017

RUSS SMITH, Plaintiff,
v.
DIRECTOR'S CHOICE, LLP Defendant.

          Mr. Russ Smith, Plaintiff Pro Se

          Matthew A. Kaplan, Esq. ABBOTT BUSHLOW & SCHECHNER LLP Attorney for Defendant

          OPINION

          JEROME B. SIMANDLE U.S. District Judge

         I. INTRODUCTION

         This case involves a dispute between pro se plaintiff Russ Smith and Director's Choice, LLP (“Director's Choice”) over Smith's registration and use of the domain name <directorschoice.com>. Smith brings claims against Director's Choice under the Anti-Cybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1114(2)(D)(v), challenging an arbitration panel's decision that Director's Choice should own the domain name. Director's Choice, in turn, brings counterclaims against Smith and third party claims against HELP.org under the ACPA and the Lanham Act. Presently before the Court are motions by Smith to dismiss the counterclaims against him [Docket Item 71] and to supplement the briefing on that motion [Docket Item 106]. For the reasons that follow, the Court will deny both motions.

         II. BACKGROUND[1]

         Plaintiff/Counterclaim Defendant Russ Smith operates a variety of business entities that develop web sites that generate income through the display of advertisements. (Third Amended Complaint ¶ 1.) These entities regularly buy and sell both web sites and domain names. (Id.) On March 7, 2000, a now-dissolved business entity operated by Smith registered the domain name <directorschoice.com> (“domain name”). (Id. ¶ 4.) The domain name registration was at some point transferred to HELP.org, LLC (“HELP.org”), of which Smith is the owner. The domain name is currently owned by Smith and operates as a movie review web site. (Id. ¶ 23.)

         Defendant/Counterclaim Plaintiff Director's Choice is a Texas-based company that operates performance opportunities, concert events, and travel for music education programs across the country. (Counterclaim and Third Party Complaint ¶¶ 10-12, 15.) The company was created in 1996 and began hosting concerts and organizing music education travel in 1997. (Id.) Its clientele refer to the company and/or its services as “Director's Choice, ” and the company “developed a widespread reputation and enjoys a high degree of recognition in the relevant marketplace and with the general public” using that name. (Id. ¶¶ 16-17.)

         In 2002, Director's Choice contacted Smith for the first time to inquire about purchasing the domain name. (Id. ¶ 29.) Over the next twelve years, Director's Choice agents and employees intermittently contacted Smith via email seeking to purchase the domain name. (Id. ¶¶ 29-35.) Director's Choice registered the domain name <directorschoicetourandtravel.com> in October, 2005 and began operating a website to market and sell its services at that name at least as early as April, 2006. (Id. ¶¶ 14-15.)

         On July 14, 2014, Director's Choice filed two trademark applications with the United States Patent and Trademark Office (“USPTO”): the first for the mark DIRECTOR'S CHOICE for “arranging travel tours for music organizations; organization of travel” and the second for the mark DIRECTOR'S CHOICE TOUR & TRAVEL for “arranging travel tours for music organizations; organization of travel.” (Id. ¶ 18.) The DIRECTOR'S CHOICE TOUR & TRAVEL mark matured to registration on February 24, 2015. (Id. ¶ 19.) Smith filed a notice of opposition with the Trademark Trial and Appeal Board (“TTAB”) to the DIRECTOR'S CHOICE mark; the TTAB has suspended proceedings regarding that mark pending a determination in this case. (Id. ¶¶ 20-21.)

         Smith placed the domain name up for sale for $45, 000 in August, 2014; Director's Choice filed a complaint regarding the domain name on November 18, 2014 against HELP.org pursuant to the Internet Corporation for Assigned Names and Numbers' (“ICANN”) Uniform Domain Name Dispute Resolution Policy (“UDRP”) with the National Arbitration Forum. (Id. ¶ 36.) On December 22, 2014, a three-member administrative panel with the National Arbitration Forum (“NAF”) agreed with Director's Choice that HELP.org did not have any rights or legitimate interests in the disputed domain name and ordered the transfer of the domain name from HELP.org to Director's Choice. (Id. ¶ 37.) Smith alleges that Director's Choice made false statements and withheld material information before the arbitration panel. (Third Am. Compl. ¶ 25.) Shortly thereafter, Smith posted a website at the disputed domain name purporting to offer movie reviews. (Counterclaims ¶¶ 38-41.)

         On December 25, 2014, HELP.org filed a use-based trademark application with the USPTO for the mark “Director's Choice” for “entertainment services, namely, providing on-line reviews of movies.” (Id. ¶ 42.) Director's Choice alleges that HELP.org made false claims to the USPTO as part of its trademark application and that the Trademark Examiner allowed the application (Registration No. 4, 821, 299 (“the ‘299 Registration”)) to mature to registration on September 29, 2015 based on those representations. (Id. ¶¶ 43-44.)

         Also around the same time, on January 7, 2015, Smith filed a two-count Complaint [Docket Item 1] against Director's Choice under the ACPA, 15 U.S.C. § 1114(2)(D)(iv) and (v), [2] arguing that his use of the domain name is lawful, and that Defendant made materially false statements to the UDRP panel which caused the panel to order the domain name transferred to Defendant. Smith challenges the decision of the UDRP panel and seeks a declaration of his lawful use of the domain name (Count One), and a declaration that the Defendant made materially false statements to the UDRP panel (Count Two). He asks this Court to enjoin the transfer of the domain name to Director's Choice, and for an award of compensatory damages in the amount of $2, 300 and statutory damages between $1, 000 and $100, 000. (Third Am. Compl. ¶¶ 39-31.)[3] Director's Choice filed a six-count Counterclaim against Smith and Third Party Complaint against HELP.org, alleging, inter alia, that Smith and HELP.org violated the ACPA, 15 U.S.C. § 1125(d), infringed on Director's Choice's trademark, and violated the Lanham Act, 15 U.S.C. § 1125(a), and seeking a declaration that Smith's trademark “Director's Choice” is invalid and unenforceable. (Counterclaims ¶¶ 49-96.)

         After the filing of this action, on December 31, 2015, Smith dissolved HELP.org and assigned its rights and goodwill in the “Director's Choice” trademark to himself individually, allegedly hours after Director's Choice filed its Amended Answer to the First Amended Complaint, Counterclaims and Third Party Complaint. (Counterclaims ¶¶ 46-48.)

         Smith filed the instant motion to dismiss Director's Choice's counterclaims with prejudice [Docket Item 71], which Director's Choice opposes [Docket Item 74]. Smith later filed a motion to supplement his motion to dismiss [Docket Item 106], which Director's Choice also opposes [Docket Item 116].[4] Both motions are now fully briefed, and the Court will decide them without holding oral argument pursuant to Fed.R.Civ.P. 78.

         III. STANDARD OF REVIEW

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When considering a motion to dismiss counterclaims for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6), a court must accept all well-pleaded allegations in the counterclaims as true and view them in the light most favorable to the nonmoving party. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). Courts apply the same standard to counterclaims as they do to complaints in ruling on a Rule 12(b)(6) motion. Tyco Fire Prods. LP v. Victaulic Co., 777 F.Supp.2d 893, 898 (E.D. Pa. 2011). A motion to dismiss may be granted only if a court concludes that the movant has failed to set forth ...


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