Int'l Council of Shopping Ctrs., Inc. v. Reconcre, LLC

INTERNATIONAL COUNCIL OF SHOPPING CENTERS, INC., Plaintiff, v. RECONCRE, LLC, Defendant.

Civil Action No.: 20-2551 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

January 14, 2021

Re Document Nos.: 3, 12

MEMORANDUM OPINION

DENYING PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION AND DENYING DEFENDANT'S MOTION TO DISMISS

I. INTRODUCTION

The organizer of a prominent retail real estate conference has brought suit against a small commercial real estate firm in Washington, D.C. The conference organizer, International Council of Shopping Centers, Inc. ("ICSC"), alleges that the real estate firm, RECONCRE, LLC, uses logos that infringe on the trademark associated with its conference. ICSC asks the Court to preliminarily enjoin RECONCRE from using its name or logos while the suit plays out. See Pl.'s Mot. Prelim. Inj. ("Pl.'s Mot."), ECF No. 3. RECONCRE asserts that ICSC has not pleaded a claim and requests dismissal of the complaint. See Def.'s Mot. Dismiss ("Def.'s Mot."), ECF No. 12. For the following reasons, the Court denies both motions.

II. BACKGROUND

ICSC is a trade group that represents the interests of the retail real estate and shopping industry. Compl. ¶¶ 1, 6, ECF No. 1. Every year, it holds a conference in Las Vegas called "RECon." Id. ¶ 7. The conference attracts more than 30,000 attendees who include real estate brokers, developers, and retailers. Id. RECon's primary purpose is to facilitate deal making, but it also offers seminars on various topics such as commercial lease negotiation and advising commercial real estate clients. Id. Since 2008, ICSC has promoted RECon with the logo below:

Image materials not available for display.

Id. ¶ 10. The logo appears on ICSC's website, on conference signage and brochures, and in advertisements. Id. ¶ 12. ICSC registered the RECon logo as a trademark in 2009. Id. ¶ 11; see also id. Ex. A, ECF No. 1-1 (registration certificate).

Commercial real estate professional Wesley Neal founded RECONCRE in 2019. Compl. ¶¶ 16, 22; Neal Decl. ¶¶ 1-2, ECF No. 13-1. RECONCRE advises clients on buying, selling, and leasing small commercial properties in the Washington, D.C. metropolitan area. See Compl. ¶ 17; Neal Decl. ¶¶ 2, 7-8. The firm's primary logo (the one found on its website and most of its promotional materials) looks like this:

Image materials not available for display.

Compl. ¶ 19. RECONCRE also uses the following variations of its logo on some fliers linked to its website:

Image materials not available for display.

Id.; see also Neal Decl. ¶ 9. Before Neal started RECONCRE, he was a member of ICSC for several years and attended RECon once. Compl. ¶ 22; Campbell Decl. ¶ 40, ECF No. 3-1.

ICSC became aware of RECONCRE in April 2020. See Campbell Decl. ¶ 43; see also Compl. ¶ 23. According to ICSC, it "received an email from a third party commenting on the similarity of the ICSC's RECon logo and [RECONCRE's] RECON marks." Compl. ¶ 23. The third party remarked: "[N]umerous people have asked us if RECON DC is part of your organization." Id. When ICSC's general counsel asked for more information, however, the third party said it "prefer[red] to not get involved beyond bringing this matter to your attention." Pl.'s Mot., Ex. V, at 2, ECF No. 3-23; see also Compl. ¶ 23. ICSC quickly sent a cease-and-desist letter to RECONCRE, asserting that the firm's logos infringed on its RECon mark. Compl. ¶ 24. The next month, ICSC sent a second cease-and-desist letter demanding that RECONCRE stop using its infringing logos. Compl. ¶ 25. RECONCRE refused. Id.

ICSC filed suit in September 2020. See Compl. Along with its complaint, it filed a motion for a preliminary injunction barring RECONCRE from using the allegedly infringing logos. See Pl.'s Mot; see also Def.'s Opp'n Mot. Prelim. Inj. ("Def.'s Opp'n"), ECF No. 13. RECONCRE countered with a motion to dismiss. See Def.'s Mot; see also Pl.'s Opp'n Mot. Dismiss ("Pl.'s Opp'n"), ECF No. 16; Def.'s Reply Supp. Mot. Dismiss ("Def.'s Reply"), ECF No. 17. Today, the Court resolves both motions.

III. ANALYSIS

This case is in an unusual posture: ICSC's motion for a preliminary injunction and RECONCRE's motion to dismiss are pending before the Court at the same time. Although the preliminary injunction motion was filed earlier, the Court addresses the motion to dismiss first because dismissal would moot the need for a preliminary injunction. Accepting the facts in the complaint as true, however, the Court holds that ICSC has stated plausible claims. The Court then denies ICSC's motion for a preliminary injunction. The divergent outcomes are a functionof the different burden associated with each motion. ICSC pleads enough facts to satisfy the low plausibility standard that governs motions to dismiss, but it fails to meet the much heavier burden of clearly showing that it is entitled to a preliminary injunction.

A. RECONCRE's Motion to Dismiss

RECONCRE moves to dismiss ICSC's complaint for failure to state a claim. Def.'s Mot; see also Fed. R. Civ. P. 12(b)(6). "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.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility requires the plaintiff to "plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a plaintiff's complaint; it does not require a court to 'assess the truth of what is asserted or determine whether a plaintiff has any evidence to back up what is in the complaint.'" Herron v. Fannie Mae, 861 F.3d 160, 173 (D.C. Cir. 2017) (quoting Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002)). Accordingly, a court entertaining a motion to dismiss "assumes the truth of all well-pleaded factual allegations in the complaint and construes reasonable inferences from those allegations in the plaintiff's favor but is not required to accept the plaintiff's legal conclusions as correct." Sissel v. U.S. Dep't of Health & Human Servs., 760 F.3d 1, 4 (D.C. Cir. 2014) (citations omitted). It may not look beyond the complaint except in a few narrow circumstances. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997).

ICSC brings four claims in its complaint: trademark infringement and false designation of origin under the Lanham Act, and trademark infringement and unfair competition under D.C. common law. Compl. ¶¶ 31-55. Each of these claims require ICSC to prove the same threeelements: "(1) that it owns a valid trademark, (2) that its trademark is distinctive or has acquired a secondary meaning, and (3) that there is a substantial likelihood of confusion between the plaintiff's mark and the alleged infringer's mark." AARP v. Sycle, 991 F. Supp. 2d 224, 229 (D.D.C. 2013) (quoting Globalaw Ltd. v. Carmon & Carmon Law Off., 452 F. Supp. 2d 1, 26 (D.D.C. 2006)); see also id. n.2. RECONCRE challenges the sufficiency of ICSC's pleading only as to likelihood of confusion, see Def.'s Mot. at 5, so the Court will limit its motion-to-dismiss analysis to that third element. See Cohen v. Bd. of Trustees of the Univ. of the D.C., 819 F.3d 476, 481 (D.C. Cir. 2016) ("All federal courts are in agreement that the burden is on the moving party to prove that no legally cognizable claim for relief exists." (quoting 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed. 2015)).

For a plaintiff to establish a likelihood of confusion between two marks, he must show that "an appreciable number of ordinary prudent consumers are likely to be misled, or simply confused, as to the source of the goods in question." Malarkey-Taylor Assocs., Inc. v. Cellular Telecomms. Indus. Ass'n, 929 F. Supp. 473, 476-77 (D.D.C. 1996) (quoting Sears, Roebuck & Co. v. Sears Fin. Network, 576 F. Supp. 857, 861 (D.D.C. 1983)). An alleged infringer's mark does not need to be identical to the plaintiff's mark for it to confuse consumers. See Am. Ass'n for Advancement of Sci. v. Hearst Corp., 498 F. Supp. 244, 258 (D.D.C. 1980). Nor does a plaintiff need to present evidence of actual consumer confusion, though such evidence "is substantial proof of the fact of likelihood of confusion." Id.

Courts in this district consider the eight Polaroid factors in assessing likelihood of confusion: (i) the strength of the plaintiff's mark; (ii) the degree of similarity between the two marks; (iii) the proximity of the parties' products; (iv) the likelihood that the prior user will bridge the gap between its market and the second user's market; (v) evidence of actualconfusion; (vi) the defendant's intent; (vii) the quality of the defendant's product; and (viii) the sophistication of customers in the relevant market. Malarkey-Taylor Assocs., 929 F. Supp. at 477 (citing Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961)). None of the factors is "individually determinative." Globalaw Ltd., 452 F. Supp. 2d at 48. Indeed, the fact-intensive nature of the balancing inquiry "ordinarily does not lend itself to a motion to dismiss." Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402, 412 (S.D.N.Y. 2006); see also 6 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 32:121.75 ("McCarthy on Trademarks") (5th ed. 2020) ("Because all a plaintiff need do is allege a plausible claim that confusion between the marks is likely, it will be the unusual trademark infringement case where a Rule 12(b)(6) motion is appropriate.").

ICSC has asserted facts that, if true, would make consumer confusion plausible. For starters, it has alleged facts suggesting that its RECon mark may be strong. "The strength of a mark refers to its distinctiveness or its tendency to identify the goods sold under the mark as emanating from a certain source." Nat'l Info. Cor...