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Emerson Radio Corp. v. Emerson Quiet Kool Co. Ltd.

United States District Court, D. New Jersey

March 5, 2018

EMERSON RADIO CORPORATION, Plaintiff,
v.
EMERSON QUIET KOOL CO. LTD. and HOME EASY LTD., Defendants.

          OPINION

          WIGENTON, District Judge.

         Before the Court is Defendants Emerson Quiet Kool Co. Ltd. and Home Easy Ltd.'s (collectively, “Defendants”) Motion to Dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Jurisdiction is proper pursuant to 28 U.S.C. § 1331. Venue is proper pursuant to 28 U.S.C. § 1391. This opinion is issued without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated herein, Defendants' Motion to Dismiss is DENIED.

         I. BACKGROUND & PROCEDURAL HISTORY

         Plaintiff Emerson Radio Corporation (“Emerson Radio” or “Plaintiff”) brings the instant action against Defendants Emerson Quiet Kool Co. Ltd. (“EQK”) and Home Easy Ltd. (“Home Easy”) to prevent Defendants from infringing upon Emerson Radio's trademarks. (Am. Compl. ¶ 1, ECF No. 30.) Plaintiff is a provider of consumer household appliances bearing the EMERSON mark, and is known for its high-quality consumer products, several of which have received accolades and market recognition. (Id. ¶¶ 4, 33.) Additionally, Plaintiff owns several U.S. trademark registrations for the marks bearing the name EMERSON and EMERSON (with G-Clef Design) (collectively, the “Emerson Radio Marks”).[1] (Id. ¶¶ 19, 25-26.) Plaintiff alleges that the Emerson Radio Marks have been in continuous and uninterrupted use in United States commerce since the early 1900s. (Id. ¶ 25.)

         Defendant EQK is a provider of consumer products, including window and wall room air conditioning units and dehumidifiers (“EQK Goods”). (Id. ¶ 8.) Defendants EQK and Home Easy operate together from the same address, and Home Easy provides warranty services for EQK Goods. (Id. ¶¶ 9-10.) Defendants recently began selling and marketing a line of air conditioning products using the mark EMERSON QUIET KOOL, for which Defendants own a U.S. trademark registration. (Id. ¶¶ 1, 49-57.) Plaintiff alleges that prior to 2017, the marks EMERSON QUIET KOOL and QUIET KOOL had lengthy periods of non-use and abandonment. (Id. ¶ 57.)

         In May 2017, Defendants launched the EQK Goods on the domain emersonquietkool.com and under the mark EMERSON QUIET KOOL. (Id. ¶¶ 37, 40.) The EQK website contained a number of historical images that displayed the Emerson Radio name, until July 2017 when Plaintiff sent a cease and desist letter to Defendants. (Id. ¶¶ 41-45.) Plaintiff alleges that it has no relationship or affiliation with either Defendant and did not consent to the display of images of Plaintiff's products or the use of its name and brand on the EQK website. (Id. ¶ 47.) Plaintiff further alleges that Defendants' misrepresentation about its history, reputation and association with Emerson Radio has caused consumer confusion and harmed Plaintiff's goodwill. (Id. ¶¶ 66-80.)

         On July 21, 2017, Plaintiff filed suit in this Court. (ECF No. 1.) On July 28, 2017, Plaintiff filed a motion for a preliminary injunction.[2] (ECF No. 8) On September 19, 2017, Plaintiff filed an Amended Complaint alleging Trademark Infringement under 15 U.S.C. § 1114 (Count I); Trademark Infringement, Unfair Competition and False Designation of Origin under 15 U.S.C. § 1125(a)(1)(A) (Count II); False Advertising under 15 U.S.C. § 1125(a)(1)(B) (Count III); violation of the Anticybersquatting Consumer Protection Act under 15 U.S.C. § 1125(d) (Count IV); Trademark Infringement under N.J. Stat. Ann. § 56:3-13.16 (Count V); State Trademark Dilution under N.J. Stat. Ann. § 56:13-20 (Count VI); False Designation of Origin under N.J. Stat. Ann. § 56:8-2 (Count VII); Trademark Infringement under New Jersey Common Law (Count VIII); Unfair Competition and False Designation of Origin under New Jersey Common Law (Count IX); and seeking Cancellation of Registration No. 4, 688, 893 (Count X). (See generally Am. Compl.) On October 31, 2017, Defendants filed the instant Motion to Dismiss the Amended Complaint.[3](ECF No. 44.)

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure (“Rule”) 8(a)(2) requires a complaint to set forth a “short and plain statement of the claim showing that a pleader is entitled to relief.” This short and plain statement must “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The pleading standard under Rule 8 requires “more than an unadorned, the defendant-unlawfully-harmed-me-accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In considering a motion to dismiss under Rule 12(b)(6), a court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)) (internal quotation marks omitted); Dillin v. Constr. & Turnaround Servs., LLC, No. 14-8124, 2015 U.S. Dist. LEXIS 124873, at *7-8 (D.N.J. Sept. 18, 2015). “[A] complaint attacked by a . . . motion to dismiss does not need detailed factual allegations.” Twombly, 550 U.S. at 555. But, conclusory or bare-bones allegations will not do. See Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Iqbal held, “to survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to state a claim to relief that is plausible on its face. Id. at 678 (internal citations omitted); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (discussing the standard).

         III. DISCUSSION

         Defendants seek dismissal of Plaintiff's claims based on a 1983 assignment, which Defendants attach for the first time in their reply brief.[4] (ECF No. 50-1 ¶ 2.) Defendants make a global argument that “the assignment precludes Plaintiff from enforcing any rights against Defendants” related to the “marks EMERSON QUIET KOOL and QUIET KOOL, the Emerson Radio ‘G Klef' mark (for air conditioners), and the associated good will.”[5] (ECF No. 44-1 at 9.) However, the document only refers to the assignment of rights as it pertains to air conditioners, (ECF No. 50-1 ¶ 2); it does not assign any rights as it pertains to EQK's dehumidifiers, which are also a basis for Plaintiff's claims. (Am. Compl. ¶¶ 36-37, 68, 88, 120.) At this point in the litigation, the Court must accept the allegations in the Complaint as true. See Phillips, 515 F.3d at 231. In doing so, this Court finds that Plaintiff has sufficiently pled that it is the rightful owner of the EMERSON trademark and that it has the right to bring the instant infringement action. Accordingly, Plaintiff's claims must survive the instant motion to dismiss.

         A. Trademark Infringement and Unfair Competition

         To be successful on a trademark infringement or unfair competition claim under the Lanham Act, Plaintiff must prove that: “(1) the mark [it seeks to protect] is valid and legally protectable, (2) [the plaintiff] owns the mark, and (3) the defendant's use of the mark is likely to create confusion concerning the origin of goods or services associated with the mark.” Health & Body Store, LLC v. Justbrand Ltd., 480 Fed. App'x. 136, 145 n.15 (3d Cir. 2012) (quoting E.T. Browne Drug Co. v. Cococare Prods., Inc., 538 F.3d 185, 191 (3d Cir. 2008)) (internal quotations omitted); see also A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000) (“We measure federal trademark infringement, 15 U.S.C. § 1114, and federal unfair competition, 15 U.S.C. § 1125(a)(1)(A), by identical standards.”). The pleading standards are the same ...


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