July 2003
(Issue No. 1: Decisions published June 16–30)

District Court Erred In Finding Composite Words Plus Design Mark Generic As A Matter of Law

Courtenay Communications Corporation v. Hall, et al. (2d Cir. June 24, 2003), 2003 U.S. App. LEXIS 12749

Court Opinion

Case Snapshot:

Trademark Issue:	Generic Marks
Case Overview:	Court reversed trial court's order granting Defendants' Rule 12(b)(6) Motion to Dismiss on the grounds that Plaintiff''s mark was generic as a matter of law.
Holding:	Genericness of composite mark is question of fact: Whether a composite mark is generic presents an issue of fact that cannot be resolved on the pleadings. Composite mark potentially protectable: A composite mark consisting of generic words in stylized form plus design might be entitled to trademark protection.
The Dispute:	Plaintiff's mark – generic as a matter of law? Plaintiff's composite mark: The mark is an unregistered composite mark, consisting of stylized words plus a design (see right). Plaintiff sued defendants for trademark infringement based on Defendants' use of IMARKETING NEWS on their web site. The decision quotes at length from the complaint, which states that Defendants have displayed "the mark of 'iMarketing News' ...." [p.3] None of the allegations specifically assert that the Defendants were using the mark in its stylized form with the design, or were instead simply using the words alone. Nonetheless, the opinion states that the "complaint is focused on [Defendant's] use of a nearly identical composite mark (i.e., words plus allegedly distinctive design elements) and not just the allegedly generic words alone." [p. 17, n. 5]. District court grants Defendants' Motion to Dismiss, finding as a matter of law on the pleadings that Plaintiff's mark was generic.
Procedural Posture:	Appeal of district court's order granting Defendants' Rule 12(b)(6) Motion to Dismiss.
Ruling:	Reversed

Key Points:

Genericness

Complaint sufficiently alleged a protectable mark.

• Allegations:
  • "[Plaintiff] established 'iMarketing News' as a trademark for its product;" that defendants' use of [Plaintiff's] mark injures "the reputation that Plaintiff and iMarketing News have established;" and "that 'iMarketing News' was associated with Plaintiff's publication." [p. 10]

Although imprecise, these allegations, viewed in a light most favorable to the plaintiff, are sufficient to allege that the mark is distinctive, either inherently (e.g., if it was found to be suggestive in the minds of the public) or otherwise (i.e., if it was found to be descriptive and to have acquired secondary meaning), rather than generic (i.e., if it were found to refer to a genus of products rather than a particular producer's product), and therefore protectable under trademark law.   [p. 11]

Whether a composite mark is generic presents an issue of fact that cannot be resolved on the pleadings.

• The district court erred when it did not treat Plaintiff's mark as a composite mark, consisting of the words plus the letter stylization and design element.

• Generic words in stylized form with design element might be protectable as composite mark: "[E]ven if the words 'iMarketing News' are generic, [Plaintiff] may nonetheless be entitled to trademark protection for its composite mark as a whole." [p. 13]

 [T]he district court erred as a matter of law when it held that if the words used in [the] mark are generic, the mark is necessarily unprotectable. Rather, the question of whether or not this composite mark is entitled to protection ultimately turns on whether it, as a whole, is distinctive.    [p. 16, footnote omitted]

• Classification of mark on spectrum of distinctiveness is a question of fact, which turns on how the purchasing public views the mark.

 The pleadings and documents necessarily relied upon by plaintiff's complaint, which were all that the district court could rightfully consider in deciding the motion to dismiss for failure to state a claim, ... are insufficient for determining the critical fact of how the public views the 'iMarketing News' mark.   [pp. 11-12]

Analysis

Even if composite mark protectable, it would still have very limited protection.

• A composite stylized generic words plus design mark has a very limited scope of protection. Another party that merely used the generic words alone, without also using a confusingly similar stylization and design, would not constitute infringement.

The complaint arguably did not sufficiently allege infringing use by Defendants.

• As noted in the Case Snapshot above, it is arguable that the complaint did not sufficiently allege infringing use by Defendants.
• The allegations quoted by the court do not clearly assert that Defendants were using not just the (generic) words, but also the stylization and design features of the composite mark.
• The complaint refers to Defendants' use of "the iMarketing News' mark" –– but this is ambiguous at best. It could simply mean that Defendants were using the generic words (but not with a confusingly similar stylization and design).
• Therefore, the court could have upheld the dismissal, but remanded with leave to amend for Plaintiff to sufficiently allege use by Defendants that infringed the alleged composite mark. That could possibly end the case at the pleading stage, sparing Defendant the expense of defending the action and bringing a summary judgment motion.