Opinion
Civil No. 3:01CV808 (AVC)
March 28, 2002
RULING ON THE DEFENDANTS' MOTIONS TO DISMISS
This is an action for damages and equitable relief in connection with the marketing and sale of software for a national youth football organization. It is brought pursuant to the Connecticut Uniform Trade Secrets Act ("CUTSA"), Conn. Gen Stat. §§ 35-51 et seq., the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen. Stat. § 42-110a et seq., the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), and common law tenets concerning breach of contract and tortious interference with business expectancies.
Conn. Gen. Stat. § 35-51(d) defines trade secret as "information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list that: (1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
Section 42-110b(a) of the Connecticut General Statutes provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce."
Section 1125(a)(1)(B) of Title 15 of the United States Code provides that:
Any person who . . . uses in commerce . . . any false designation of origin, false or misleading description of fact, or false or misleading representation of fact . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.15 U.S.C. § 1125(a)(1)(B).
The defendants, Jon Butler, Neil D. Dryburgh, John C. Trimbach, Troy A. Benson, Benson/Trimbach, Inc. ("B/T"), Interactive Planet, Inc. ("Interactive") and Frontline Interactive, LLC ("Frontline") have filed the within motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) arguing that the court lacks personal jurisdiction over them. The defendant Pop Warner Little Scholars ("PWLS") does not contest personal jurisdiction. In addition, the defendant, Butler has filed the within motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(5) and 4(m) arguing that proper service was not effected on him and therefore, dismissal of the complaint against him is warranted. Finally, the defendants filed the within motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) arguing that the complaint fails to state a cause of action under CUTPA and the Lanham Act.
The issues presented are: 1) whether the causes of action against Butler should be dismissed without prejudice based upon the plaintiff's failure to serve him with the summons and complaint within 120 days after the filing of the complaint; 2) whether the court has personal jurisdiction over Butler, Dryburgh, Trimbach, Benson, B/T, Interactive, and Frontline; and 3) whether the complaint alleges facts with sufficient particularity to state causes of action under CUTPA and the Lanham Act.
For the reasons set forth herein, the motion to dismiss for insufficient service of process on Butler is GRANTED; the motion to dismiss for lack of personal jurisdiction is GRANTED as to Dryburgh, Trimbach, Benson, B/T, Interactive and Frontline; and the motion for failure to state a cause of action is DENIED as to the CUTPA and Lanham Act causes of action.
FACTS
Examination of the complaint and the affidavit of one William Brown, one of the members of the plaintiff, Dreamcatcher Software Development, LLC ("Dreamcatcher"), discloses the following facts:
Dreamcatcher is a Connecticut limited liability company with its principal place of business in Avon, Connecticut. The defendant, PWLS, is a Pennsylvania corporation with its principal place of business in Langhorne, Pennsylvania, PWLS is the national Pop Warner youth football organization. The defendant, Butler, an individual residing in Newtown, Pennsylvania, is PWLS' executive director. The defendant, Dryburgh, an individual residing in Marlborough, Massachusetts, is a consultant to PWLS. The defendant, Trimbach, an individual residing in North Attleboro, Massachusetts, is a consultant to PWLS. The defendant, Benson, an individual residing in Methuen, Massachusetts, is a consultant to PWLS. The defendant, B/T, is a Massachusetts corporation owned by Benson and Trimbach. Its principal place of business is in North Attleboro, Massachusetts. B/T is a consultant to PWLS. The defendant, Interactive, is a Georgia corporation with its principal place of business in Atlanta, Georgia. Interactive is a consultant to PWLS. The defendant, Frontline, is a Massachusetts limited liability company owned and managed by Benson and Trimbach. Its principal place of business is in North Attleboro, Massachusetts. Frontline is a consultant to PWLS.
William Brown, one of Dreamcatcher's members, developed a software program (the "Program") that enables local youth football leagues associated with the national Pop Warner organization to automate a variety of administrative tasks that they performed manually. The plaintiff formed Dreamcatcher to own and market the Program to the various Pop Warner leagues across the country.
In the Summer of 1999, Brown tested the Program with the Central Connecticut Pop Warner football conference. Brown requested permission to demonstrate the Program to PWLS' National Director of Football, one Ron Dilatush. After viewing Brown's presentation, Dilatush suggested that Dreamcatcher pursue the matter further with PWLS.
In the Fall of 1999, Brown sought a meeting with PWLS. PWLS responded by having Dryburgh, one of its consultants, contact Brown. Dryburgh telephoned Brown and told him that PWLS was interested in the Program. Brown told Dryburgh that he was planning to attend the week-long Pop Warner national championships that December in Florida and he would be able to give PWLS a private showing at that time. During this telephone conversation, Dryburgh asked Brown for the Program's source code, which Brown refused to provide. Brown also spoke telephonically with Butler, PWLS' executive director, to make arrangements for the private showing.
Prior to the December 1999 national championships, Dryburgh telephoned Brown and again asked for the Program's source code. Dryburgh told Brown that PWLS was developing a web site and he needed to know the code so that the developer could determine if they could integrate the Program onto the web site and thus allow Dreamcatcher to sell the Program to customers through the web site. Because Brown regarded the source code as a trade secret, he refused to disclose it to Dryburgh.
In December 1999, Brown met with Butler and Dryburgh at the national championships in Florida and showed the Program to them. Dryburgh told Brown that the Program looked great and again asked for the source code. Brown refused once again and explained that it was unnecessary for him to see the source code.
After the showing at the national championships, PWLS invited Brown to meet at the PWLS offices in Langhorne, Pennsylvania. Prior to this meeting, Brown forwarded a confidentiality, nondisclosure Agreement (the "Agreement") to PWLS. The terms of the Agreement were negotiated by Brown, Butler, and Dryburgh. Some of the negotiations took place over the telephone while Brown was in Connecticut and Butler and Dryburgh were outside Connecticut. Brown had already signed the Agreement on Dreamcatcher's behalf and made it clear to Butler that Brown would not show the Program to anyone at PWLS before they signed the Agreement.
On January 24, 2000, Butler signed the Agreement on behalf of PWLS. The Agreement imposed a variety of obligations on PWLS as well as "its Directors, Officers, Contractors, Consultants, Volunteers and Employees." In addition, the Agreement provided that "any dispute, claim or action that arises, or may arise from a breach of this agreement shall be brought in federal district court in Connecticut, or, if federal jurisdiction is lacking, in a Connecticut state court."
On February 8, 2000, at PWLS' offices in Pennsylvania, Brown demonstrated the Program to a number of PWLS officials using a laptop computer. After viewing the Program, the PWLS representatives promised Brown the cooperation and support he had sought. Specifically, PWLS promised to furnish Dreamcatcher with information concerning its local leagues, conferences and officials so that Dreamcatcher could more easily identify its potential customers. Also, PWLS promised to share with Dreamcatcher all information relating to changes in any of its required forms or reports. In addition, the PWLS representatives gave Brown permission to use the Pop Warner name in the Program. After this meeting, Brown, through Dreamcatcher, began to market and generate sales of the Program.
In March or April 2000, at Butler's direction, PWLS asked Dreamcatcher to send it two laptop computers loaded with the Program, which the parties had agreed to at the February 8, 2000 meeting.
On May 10, 2000, Brown sent the two laptop computers loaded with the Program to PWLS. Along with the laptops, Brown sent a printed version of a software licence agreement, which granted the software user permission to use the software, subject to certain limitations. In addition, a user of the software must agree to the terms of the software license in order to use the software. Shortly thereafter, Dilatush telephoned Brown and said that he and Dryburgh needed the Program's access code. Brown thus learned that PWLS, at Butler's direction, had sent one of the laptops loaded with the Program to Dryburgh in Massachusetts. Brown questioned why they had given Dryburgh this laptop when he had not signed the Agreement. Butler telephoned Brown and told him that Dryburgh was employed by PWLS and therefore was covered by the Agreement. As a result, Brown provided Dilatush and Dryburgh with the access code.
PWLS then delivered a laptop loaded with the Program to Benson and Trimbach. Benson and Trimbach were developing PWLS' web site, individually, and through their companies B/T and Frontline, and their consultant, Interactive. PWLS' purpose in delivering the laptop loaded with the Program to Benson and Trimbach was to allow them access to Dreamcatcher's confidential and proprietary information. Benson and Trimbach, B/T, Interactive, and Frontline used Dreamcatcher's confidential and proprietary information to develop a functionally equivalent application that they integrated on to the PWLS web site.
On October 17, 2000, PWLS sent a letter to Dreamcatcher stating that they did not authorize Dreamcatcher to use the name "Pop Warner" in the name of their program and on the forms and reports generated from the Program.
In March 2001, PWLS, by way of e-mail and/or telephone communications, told Dreamcatcher's potential customers that: 1) Dreamcatcher lacked the requisite licensing from Microsoft to market the Program; 2) Dreamcatcher was illegally using a National Football League sound-bite in the Program; 3) the Program could not be used in conjunction with the web; 4) the Program was a non-sanctioned product; and 4) Dreamcatcher was not PWLS' vendor of choice. The complaint alleges that these statements were false and that the defendants either knew the statements were false or made the statements with reckless disregard of whether the statements were true or false. PWLS told potential customers not to buy the Program and that PWLS would be requiring its conferences and leagues to purchase the functionally equivalent, web-based application that it was developing. In addition, Butler sent messages to persons associated with PWLS' affiliates in Connecticut that dealt with Dreamcatcher's software.
The complaint alleges that PWLS was successful in its intent to eliminate their competition and as a result, the defendants severely damaged Dreamcatcher's business. On May 8, 2001, Dreamcatcher filed the complaint in this matter naming PWLS, Butler, Dryburgh, Trimbach, Benson, B/T, Interactive, and Frontline as defendants.
On July 17, 2001, the defendants filed the within motion to dismiss.
STANDARD
"When a defendant challenges personal jurisdiction in a motion to dismiss, the plaintiff bears the burden of showing through actual proof that the court has jurisdiction over the defendant." Divicino v. Polaris Indus., 129 F. Supp.2d 425, 428 (D. Conn. 2001) (citing Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566-67 (2d Cir. 1996)). "Where there has been no discovery conducted, plaintiff need only assert 'facts constituting a prima facie showing of personal jurisdiction' to defeat a motion to dismiss." Dan-Dee Int'l, Ltd. v. Kmart Corp., No. CIV 99-11689, 2000 WL 1346865, at *2 (S.D.N.Y. Sept. 19, 2000) (quoting PDK Labs Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997)); see also United States Surgical Corp. v. Imagyn Med. Techs., Inc., 25 F. Supp.2d 40, 44 (D. Conn. 1998) (noting that the prima facie case of personal jurisdiction over a foreign defendant is established by showing that there is a statutory basis for exercising jurisdiction and that the exercise of jurisdiction over the foreign defendant satisfies due process).
With regard to a motion to dismiss for lack of personal jurisdiction, "[i]n the absence of an evidentiary hearing or a trial on the merits, all pleadings and affidavits are construed in the light most favorable to the plaintiff." Sherman Assocs. v. Kals, 899 F. Supp. 868, 870 (D. Conn. 1995); see also Beacon Enters., Inc. v. Menzies, 715 F.2d 757, 768 (2d Cir. 1983); Divicino, 129 F. Supp.2d at 428. In addition, "[r]egardless of the controverting evidence put forth by the defendant, the court must resolve all doubts in the plaintiff's favor." United States Surgical Corp., 25 F. Supp.2d at 44 (citing A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993)); see also Divicino, 129 F. Supp.2d at 428.
"In diversity cases a challenge to the court's jurisdiction over a non resident defendant requires a two step inquiry: (1) whether personal jurisdiction is appropriate under the forum state's long-arm statute and (2) whether the exercise of jurisdiction comports with due process."Sherman Assocs. v. Kals, 899 F. Supp. 868, 870 (D. Conn. 1995) (citingGreene v. Sha-Na-Na, 637 F. Supp. 591, 595 (D. Conn. 1986)).
"When deciding a motion to dismiss under Rule 12(b)(6), the court is required to accept as true all factual allegations in the complaint and must construe any well pleaded factual allegations in the plaintiff's favor." Connecticut v. Physician's Health Servs. of CT. Inc., 103 F. Supp.2d 495, 500 (D. Conn. 2000) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). "In addition, the court must draw inferences in the light most favorable to the plaintiff." Physician's Health Servs. of CT, Inc., 103 F. Supp.2d at 500. "Dismissal is not warranted unless 'it appears beyond doubt that the plaintiff can prove no set of facts in support of the claims which would entitle [it] to relief.'" Id. (quotingConley v. Gibson, 355 U.S. 41, 45-46 (1957)). "The motion must therefore be decided solely on the facts alleged." Id. at 501 (citing Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985)).
DISCUSSION
I. SERVICE OF PROCESS
The defendants first argue that, as to Butler, the action should be dismissed without prejudice because he was not served with the summons and complaint within 120 days after the filing of the complaint pursuant to Fed.R.Civ.P. 4(m).
Dreamcatcher does not respond to this argument.
Federal Rule of Civil Procedure 4(m) provides that:
[i]f service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint, the court, upon motion or on its own initiative after notice to the plaintiff shall dismiss the action without prejudice as to that defendant or direct that service be effected within a specified time; provided that if the plaintiff shows good cause for the failure, the court shall extend the time for service for an appropriate period.
The complaint was filed on May 8, 2001. Therefore, Dreamcatcher was required to serve Butler by September 5, 2001. In Butler's affidavit, dated September 5, 2001, he states that "[a]s of today, I have not received service of process in this matter." Due to Dreamcatcher's failure to present any reasons for its failure to serve Butler within the 120 days allotted under Fed.R.Civ.P. 4(m), the court dismisses the action against Butler without prejudice.
II. PERSONAL JURISDICTION
A. Consent
Dryburgh, Trimbach, Benson, B/T, Interactive, and Frontline first argue that the court does not have personal jurisdiction over them based upon the Agreement between PWLS and Dreamcatcher. Specifically, they argue that they did not consent to personal jurisdiction because they were not parties to the Agreement.
Dreamcatcher argues that the Agreement provides for personal jurisdiction over Dryburgh, Trimbach, Benson, B/T, Interactive, and Frontline. Specifically, Dreamcatcher argues that because the Agreement between it and PWLS defines PWLS as "[PWLS], its Directors, Officers, Contractors, Consultants, Volunteers, and Employees" and because the Agreement provides that "any dispute, claim or action that arises, or may arise from a breach of this agreement shall be brought in federal district court in Connecticut, or, if federal jurisdiction is lacking, in a Connecticut state court," the court may exercise jurisdiction over PWLS' consultants.
"Connecticut case law is clear that the courts will uphold an agreement of the parties to submit to the jurisdiction of a particular tribunal."Phoenix Leasing, Inc. v. Kosinski, 707 A.2d 314, 316 (Conn.App. 1998) (citing United States Trust Co. v. Bohart, 197 Conn. 34, 41-42 (1985); Fairfield Lease Corp. v. Romano's Auto Serv., 495 A.2d 286 (Conn.App. 1985)). However, Dreamcatcher cites no authority for the proposition that a corporation can consent on behalf of its employees and consultants to personal jurisdiction over them. Therefore, the court concludes that the contract does not provide for personal jurisdiction over Dryburgh, Trimbach, Benson, B/T, Interactive, or Frontline.
The individual defendants next argue that they are not subject to personal jurisdiction pursuant to Conn. Gen. Stat. § 52-59b(a)(3). Specifically, they argue that the court does not have personal jurisdiction over them because: 1) they acted only in their official capacities for PWLS; 2) the economic injury to Dreamcatcher occurred outside Connecticut; 3) they do not derive substantial revenue from interstate or international commerce; and 4) such jurisdiction would offend due process.
Dreamcatcher responds that personal jurisdiction over the individual defendants is proper. Specifically, Dreamcatcher argues that: 1) personal jurisdiction is based upon the commission of torts outside Connecticut, not any transaction of business on PWLS' behalf, 2) Dreamcatcher's injury occurred in Connecticut; 3) the individual defendants derive substantial revenue from interstate commerce based upon their salaries earned through PWLS and/or PWLS' corporate consultants; and 4) due process is satisfied.
Section 52-59b(a)(3)(B) of the Connecticut General Statutes provides that: "As to a cause of action arising from any acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual . . . who in person or through an agent . . . (3) commits a tortious act outside the state causing injury to person or property within the state . . . if such person or agent . . . (B) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce."
Even assuming that Conn. Gen. Stat. § 52-59b(a)(3) is satisfied as to the individual defendants, the court concludes that the exercise of personal jurisdiction over the individual defendants does not comport with constitutional notions of due process. "In deciding a question of personal jurisdiction, district courts must conduct a two-part analysis, looking first to the state's long-arm statute and then analyzing whether jurisdiction comports with federal due process." Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32, 37 (2d Cir. 2001) (citing Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999)). "The due process test for personal jurisdiction has two related components: the 'minimum contacts' inquiry and the 'reasonableness' inquiry. The court must first determine whether the defendant has sufficient contacts with the forum state to justify the court's exercise of personal jurisdiction." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). "Minimum contacts requires that there be 'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Sherman Assocs. v. Kals, 899 F. Supp. 868, 871 (D. Conn. 1995) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). "In determining whether minimum contacts exist, the court considers 'the relationship among the defendant, the forum, and the litigation." Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 242 (2d Cir. 1999).
As to Dryburgh, Dreamcatcher claims the following contacts between Dryburgh, Connecticut, and this action: 1) Dryburgh telephoned Brown in Connecticut to set up a meeting with Dreamcatcher; 2) Dryburgh telephoned Brown in Connecticut to obtain the source code for the program; 3) Dryburgh, along with Butler, negotiated the terms of the Agreement with Brown while Brown was in Connecticut and Dryburgh and Butler were outside Connecticut; and 4) "[Brown] had merits-relevant communications of one sort or another with Butler, Dryburgh, Benson and Trimbach, as well as with [B/T]. I made telephone calls to certain of these defendants from Connecticut. They made calls to me in Connecticut. I had e-mail exchanges with some of these defendants, where I would send and/or receive messages in Connecticut. These communications also included mailings, either from me in Connecticut or to me (Dreamcatcher) in Connecticut." The court concludes that these limited telephone and mail communications are insufficient to establish that Dryburgh purposefully availed himself of the privilege of conducting activities in Connecticut. See Marczeski v. Kamba, 99cv2479, 2001 WL 237204, at *4 (D. Conn. Feb. 23, 2001); Harris v. Wells, 832 F. Supp. 31, 35 (D. Conn. 1993) (concluding that due process was not satisfied based upon "some telephone calls" between the defendant and the plaintiff in Connecticut).
As to both Benson and Trimbach, Dreamcatcher claims the following contacts between them, Connecticut, and this action: 1) "[Brown] had merits-relevant communications of one sort or another with Butler, Dryburgh, Benson and Trimbach, as well as with [B/T]. I made telephone calls to certain of these defendants from Connecticut. They made calls to me in Connecticut. I had e-mail exchanges with some of these defendants, where I would send and/or receive messages in Connecticut. These communications also included mailings, either from me in Connecticut or to me (Dreamcatcher) in Connecticut." Dreamcatcher does not provide any more details as to the specific contacts that Brown had with either Benson or Trimbach. The court concludes that these limited telephone, mail, and/or e-mail communications between either Benson or Trimbach and Brown are insufficient to establish that either defendant purposefully availed himself of the privilege of conducting activities in Connecticut. See Marczeski v. Kamba, 99cv2479, 2001 WL 237204, at *4 (D. Conn. Feb. 23, 2001); Harris v. Wells, 832 F. Supp. 31, 35 (D. Conn. 1993) (concluding that due process was not satisfied based upon "some telephone calls" between the defendant and the plaintiff in Connecticut).
Therefore, the court concludes that there is no personal jurisdiction over Dryburgh, Benson, or Trimbach.
C. Conn. Gen. Stat. § 33-929(f)
The defendants next argue that the court does not have personal jurisdiction over B/T, Interactive, or Frontline, consultants to PWLS, pursuant to Conn. Gen. Stat. § 33-929(f). Specifically, the defendants argue that: 1) the software licence agreement was not made or performed within Connecticut; 2) these corporate defendants were not parties to the software licence agreement; and 3) the exercise of personal jurisdiction over them would offend due process.
Dreamcatcher responds that the corporate defendants were parties to the software licence agreement based upon their knowledge and use of the software, the software licence agreement contemplated performance by Dreamcatcher in Connecticut, and due process is satisfied as to these corporate defendants.
Section 33-929(f)(1) of Connecticut General Statutes provides that "[e]very foreign corporation shall be subject to suit in this state, whether by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising . . . (1) Out of any contract made in this state or to be performed in this state."
Even assuming that Dreamcatcher could establish that the corporate defendants are subject to jurisdiction under this statute, the court concludes that due process has not been met. See Bowman v. Grolsche Bierbrouwerij B.V., 474 F. Supp. 725, 732 (D. Conn. 1979) (evaluating personal jurisdiction over corporate defendants under the predecessor statute to Conn. Gen. Stat. § 33-929(f)(1) and reviewing whether due process was satisfied based upon the defendant's "performance, if any, under the contract, and . . . other contacts with the forum that bear some relationship to the litigation"). Here, Dreamcatcher relies solely on Benson and Trimbach's contacts with Connecticut in connection with this litigation to satisfy due process at to B/T, Frontline, and Interactive. However, as indicated above, such contacts by Benson and Trimbach do not meet the minimum contacts element of due process. Therefore, the court concludes that it does not have personal jurisdiction over B/T, Interactive, and Frontline.
Dreamcatcher's allegations as to Benson and Trimbach's contacts with Connecticut are as follows: "[Brown] had merits-relevant communications of one sort or another with Butler, Dryburgh, Benson and Trimbach, as well as with [B/T]. I made telephone calls to certain of these defendants from Connecticut. They made calls to me in Connecticut. I had e-mail exchanges with some of these defendants, where I would send and/or receive messages in Connecticut. These communications also included mailings, either from me in Connecticut or to me (Dreamcatcher) in Connecticut."
III. FAILURE TO STATE A CAUSE OF ACTION
A. CUTPA
The remaining defendant, PWLS, argues that the complaint fails to state a cause of action under CUTPA. Specifically, PWLS argues that: 1) the complaint fails to allege that it engages in trade or commerce and 2) even if the complaint alleges that it engages in trade or commerce, because its primary business is not software development and marketing, the complaint fails to state a cause of action under CUTPA.
Dreamcatcher responds that the complaint properly alleges that PWLS engages in trade or commerce and that PWLS' software business is a secondary business, not merely incidental to its primary business.
CUTPA provides that "[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." Conn. Gen. Stat. § 42-110b(a). "Trade" or "commerce" is defined as "the advertising, sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value in this state." Conn. Gen. Stat. § 42-110a(4). "[A] CUTPA violation may not arise out of conduct that is merely incidental to one's trade or commerce."Cornerstone Realty, Inc. v. Dresser Rand Co., 993 F. Supp. 107, 112-13 (D. Conn. 1998) (concluding that the plaintiff failed to state a cause of action under CUTPA because the cause of action did not arise out of the defendant's primary business, but rather was incidental to the primary business).
The court concludes that because the complaint alleges that PWLS entered the software business, not merely that the software business is incidental to PWLS' primary business, the complaint states a cause of action under CUTPA.
B. The Lanham Act
PWLS argues that the complaint fails to state a cause of action under the Lanham Act because the complaint: 1) "is void of any facts to support an inference that the alleged statements are 'commercial speech'"; 2) "fails to allege any facts to establish that the statements relate solely to the economic interests of Pop Warner, Butler or their audience"; and 3) "is void of any facts to establish that [PWLS] and Butler are [Dreamcatcher's] commercial competitors for purposes of the Lanham Act.
Dreamcatcher responds that the complaint arguably alleges commercial speech by PWLS and that the complaint sufficiently alleges that PWLS is Dreamcatcher's competitor.
Section 1125(a)(1)(B) of Title 15 of the United States Code provides that: "Any person who . . . uses in commerce . . . any false designation of origin, false or misleading description of fact, or false or misleading representation of fact . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act." 15 U.S.C. § 1125(a)(1)(B).
In order for representations to constitute "commercial advertising or promotion" under Section 43(a)(1)(B), they must be: (1) commercial speech; (2) by a defendant who is in commercial competition with plaintiff; (3) for the purpose of influencing consumers to buy defendant's goods or services. While the representations need not be made in a "classic advertising campaign," but may consist instead of more informal types of "promotion," the representations (4) must be disseminated sufficiently to the relevant purchasing public to constitute 'advertising' or "promotion" within that industry.Gordon Breach Sci. Publishers S.A. v. Am. Inst. of Physics, 859 F. Supp. 1521, 1535-36 (S.D.N.Y. 1994).
The complaint alleges that PWLS and Dreamcatcher are competitors as to the software programs for PWLS leagues. The complaint also alleges that PWLS communicated with potential Dreamcatcher customers as to Dreamcatcher's program and PWLS' requirement that its leagues purchase its web based program for 2001. The court concludes that, based upon the allegations in the complaint, a cause of action under the Lanham Act has been stated.
CONCLUSION
For the reasons stated above, the defendants' motion to dismiss (document no. 14) is GRANTED in part.
IT IS SO ORDERED.