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Landmark Signs, Inc. v. ICU Outdoor Advertising, LLC

United States District Court, N.D. Indiana, South Bend Division

March 30, 2017

LANDMARK SIGNS, INC., Plaintiff
v.
ICU OUTDOOR ADVERTISING, LLC, LAWRENCE M. YURKO, Defendants

          OPINION AND ORDER

          Robert L. Miller, Jr. Judge United States District Court

         Landmark Signs, Inc. brought suit against ICU Outdoor Advertising and Lawrence Yurko (collectively referred to as “ICU” for purposes of this order) alleging various violations of federal and state law, including claims of unfair competition under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) and (B), (Counts 1 and 2), breach of fiduciary duty (Count 3), unfair competition and tortious interference with a business relationship under Indiana law (Count 4); tortious interference with a prospective economic advantage (Count 5); deceptive trade practices under Illinois law (Count 6); trademark infringement in violation of 15 U.S.C. § 1114 (Count 7), and trademark infringement under Illinois and Indiana law (Count 8). ICU moved to dismiss the unfair competition claims asserted in Counts 1 and 2 under Fed.R.Civ.P. 12(b)(6), and contends that the remaining claims should be dismissed for lack of subject matter jurisdiction. For the following reasons, the court denies the motion.

         I. Standard of Review

         When considering a Rule 12(b)(6) motion to dismiss, the court construes the complaint “in the light most favorable to the nonmoving party, accept[s] well-pleaded facts as true, and draw[s] all inferences” in the nonmoving party's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). But Fed.R.Civ.P. 8(a)(2) “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. at 678 (quoting Bell Atlantic v. Twombly, 550 U.S. at 570); see also Morrison v. YTB Int'l, Inc., 649 F.3d 533, 538 (7th Cir. 2011); Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). A claim is plausible if “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678 (citing Bell Atlantic v. Twombly, 550 U.S. at 556); Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013). “[L]egal conclusions or conclusory allegations that merely recite a claim's elements” are not entitled to any presumption of truth. Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012). See also Ashcroft v. Iqbal, 556 U.S. at 678 (“Threadbare recital of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Twombly and Iqbal “require the plaintiff to ‘provid[e] some specific facts' to support the legal claims asserted in the compliant.” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011)(quoting Brooks, 578 F.3d at 581)). The plaintiff “must give enough details about the subject-matter of the case to present a story that holds together.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). The plaintiff “may elaborate on his factual allegations so long as the new elaborations are consistent with the pleadings.” Geinosky v. City of Chicago, 675 F.3d 743, 751 n.1 (7th Cir. 2012); see Chavez v. Illinois State Police, 21 F.3d 612, 650 (7th Cir. 2001).

         II. Discussion

         Briefly summarized, the complaint alleges that Mr. Yurko was employed by Landmark Signs when he (and another Landmark employee, Jerry Lefere) formed a competing business (ICU Outdoor Advertising, LLC), used Landmark Sign's trademarks and images of its facilities, employees, and signs to solicit business for ICU Outdoor Advertising, without Landmark's consent, and falsely represented that those facilities, employees, and signs belonged to ICU, to the detriment of Landmark. Although Landmark asserted three claims under the Lanham Act - two for unfair competition in violation 15 U.S.C. §§ 1125(a)(1)(A) and (B) (Counts 1 and 2), and one for trademark infringement in violation of 15 U.S.C. § 1114 (Count 7) - ICU moved to dismiss only the unfair competition claims, contending that Landmark hasn't pleaded sufficient facts to state a plausible claim under either § 1125(a)(1)(A) or § 1125(a)(1)(B). The court, accordingly, limits its discussion to those claims.

         The Lanham Act was designed to prevent unfair competition and to protect against fraud “by the use of reproductions, copies, counterfeits, or colorable imitations of registered trademarks.” 15 U.S.C. § 1127; Packman v. Chicago Tribune Co., 267 F.3d 628, 638 (7th Cir. 2001); Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 461 (7th Cir. 2000). In Counts 1 and 2 of its complaint, Landmark alleges that ICU violated the Act's prohibitions against unfair competition, 15 U.S.C. §§ 1125(a)(1)(A) and (B).[1]

         To state a plausible claim under § 1125(a)(1)(A) for false designation of origin, false or misleading description of fact, or false or misleading representation of fact, Landmark must allege facts, which if true, would show: “(1) that the work at issue originated with the plaintiff; (2) that origin of the work was falsely designated by the defendant; (3) that the false designation of origin was likely to cause consumer confusion; and (4) that the plaintiff was harmed by the defendant's false designation of origin.”[2] Syngenta Seeds, Inc. v. Delta Cotton Co-op., Inc., 457 F.3d 1269, 1277 (Fed. Cir. 2006).

         The elements of a false advertising claim under § 1125(a)(1)(B) are similar. Landmark must show that ICU: “(1) made a false or misleading statement, (2) that actually deceives or is likely to deceive a substantial segment of the advertisement's audience, (3) on a subject material to the decision to purchase the goods, (4) touting goods entering interstate commerce, (5) and that results in actual or probable injury to the plaintiff.” B. Sanfield, Inc. v. Finlay Fine Jewelry Corp., 168 F.3d 967, 971 (7th Cir. 1999).

         ICU contends that Landmark only provided a “threadbare recital of the elements” in its complaint, and didn't allege any facts from which the court could infer that ICU made any false representations to consumers regarding the origin of the products and services referenced in its promotional materials or provided to customers, or that consumers would likely be confused by the statements it made. The court disagrees.

         Landmark devoted more than 88 paragraphs to the facts in this case, and attached 62 exhibits to support those facts. It alleges that:

• Landmark has been designing, fabricating, installing, and repairing illuminated and non-illuminated signs throughout the United States for over thirty years. (Cmplt. ¶ 7).
• It has marketed, advertised, and sold its products and services in connection with the trademark “Landmark” since October 1983, and in connection with the trademarks “Landmark Sign, ” “Landmark Sign Group, ” and a stylized “Landmark Sign Group” since March 1, 1999 (collectively the “Landmark Trademarks”). (Cmplt. ¶ 9; Exhibit A).
• Landmark has expended, and continues to expend, significant time, energy, and money designing, fabricating, installing, and maintaining signs identified by the Landmark Trademarks, advertising the Landmark Trademarks, and ...

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