Opinion
FBTCV166061241S
04-25-2017
NRT New England, LLC dba Coldwell Banker Residential Brokerage v. Salvatore B. Longo
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Edward T. Krumeich, J.
Defendant Salvatore R. Longo has moved to strike the Third and Fourth Counts of the complaint against him by plaintiff NRT New England LLC d/b/a Coldwell Banker Residential Brokerage (" NRT"), which allege respectively violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and common-law trademark infringement. For the reasons stated below, the motion to strike is granted.
The Standards for Deciding a Motion to Strike
" The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). " [A] motion to strike challenges the legal sufficiency of a pleading and, consequently, requires no factual findings by the trial court . . . [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency . . . Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, [the court notes] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged . . . It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted . . . Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 309 Conn. 342, 350, 71 A.3d 480 (2013). " If any facts provable under the express and implied allegations in the plaintiff's complaint support a cause of action . . . the complaint is not vulnerable to a motion to strike." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991). On the other hand, " [a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013).
The Third Count Fails to State a Claim Under Section 43(a) of the Lanham Act
In Count Three NRT alleges that Salvatore Longo, a licensed real estate broker, copied its form commercial real estate listing agreement, deleted its trade mark " Coldwell Banker, " and substituted his own name, without NRT's consent. NRT alleges that Salvatore Longo violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), which prohibits a " false designation of origin" that is " likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association . . . or as to the origin" of " goods, services, or commercial activities." 15 U.S.C. § 1125(a)(1)(A). See Universal Furniture Intern'l, Inc. v. Collezione, 618 F.3d 417, 438 (4th Cir. 2010).
NRT has attempted to state a " reverse passing off" claim against Salvatore Longo based on his copying its form commercial listing agreement: " The type of false designation of origin at issue here is a 'reverse passing off, ' which occurs when a 'producer misrepresents someone else's goods or services as his own.' Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 28 n. 1, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003). A reverse passing off claim requires the plaintiff to prove four elements: '(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.' Syngenta Seeds, Inc. v. Delta Cotton Coop., Inc., 457 F.3d 1269, 1277 (Fed.Cir. 2006)." Universal, 618 F.3d at 438.
Trying to fit NRT's claim into a " reverse passing off" violation of the Lanham Act requires a good deal of conceptual banging of a square peg into a round hole: it is possible, but when you are done you are left with something that simply will not pass as a violation of 15 U.S.C. § 1125(a). The Lanham Act provides a remedy for a person who used goods or services in commerce with " a false designation of origin." See Dastar, 539 U.S. at 29. The commercial real estate listing agreement is not alleged to be copyrighted or copyrightable; commercial listing agreement contents are governed by statute, C.G.S. § 20-325a, and are not typically thought of as protected original works but as generic contracts typically subject to copying. NRT points to its trademark " Coldwell Banker" as the intellectual property to be protected. However, plaintiff specifically alleges that " the Defendant has been using [the listing agreements] . . . as his own Agreement with the COLDWELL BANKER mark erased and/or deleted from Longo's Agreement and substituted with his own name without a written consent, agreement, oral consent or license from the Plaintiff." In other words, NRT alleges that Salvatore Longo has NOT been using its trademark name. Given the alleged non-use of the mark in the listing agreement, merely using the form contract created by NRT in his own business without the mark would not allege " that origin of the work was falsely designated by the defendant . . ." Universal, 618 F.3d at 438.
Plaintiff appending to its brief copies of the Coldwell Banker listing agreement with defendants and the agreement copied by Mr. Longo. Copies of these agreements were not appended as exhibits to the complaint so they cannot be considered on this motion. However, the Court takes as true the allegation that Mr. Longo copied the listing agreement originated by NRT, merely substituting his name for Coldwell Banker, which satisfied the element " that the work at issue originated with the plaintiff . . ." Universal, 618 F.3d at 438. The Court also did not consider statements in the brief about the form agreement being " unique" or " carefully crafted with specific language for real estate services offered by Coldwell Bankers" because these facts were not alleged in the complaint. See Mercer v. Cosley, 110 Conn.App. 283, 292, 955 A.2d 550 (2008) (" speaking" motion to strike improper).
In Dastar the Supreme Court cautioned against attempts to " stretch" the Lanham Act as a backdoor stratagem to get intellectual property protection for works not otherwise protected:
The dictionary definition of " origin" is " [t]he fact or process of coming into being from a source, " and " [t]hat from which anything primarily proceeds; source." Webster's New International Dictionary 1720-21 (2d ed. 1949). And the dictionary definition of " goods" (as relevant here) is " [w]ares, merchandise." Id., at 1079. We think the most natural understanding of the " origin" of " goods" --the source of wares--is the producer of the tangible product sold in the marketplace, in this case the physical Campaigns videotape sold by Dastar. The concept might be stretched (as it was under the original version of § 43(a))5 to include not only the actual producer, but also the trademark owner who commissioned or assumed responsibility for (" stood behind") production of the physical product. But as used in the Lanham Act, the phrase " origin of goods" is in our view incapable of connoting the person or entity that originated the ideas or communications that " goods" embody or contain. Such an extension would not only stretch the text, but it would be out of accord with the history and purpose of the Lanham Act and inconsistent with precedent. Id. at 31-32.
The Dastar Court noted the special risk from extending the Lanham Act to " communicative products": " 'In general, unless an intellectual property right such as a patent or copyright protects an item, it will be subject to copying.' . . . [A]llowing a cause of action under § 43(a) for that representation [i.e. that defendant was the originator of a copied work] would create a species of mutant copyright law that limits the public's " federal right to 'copy and to use' " expired copyrights . . ." Protection of generic works like a listing agreement would stretch the Lanham Act even further and open the door to claims such as this where the gravamen of the complaint is the copying of a form contract as if it were protected intellectual property rather than the passing off of goods or services of another as one's own, which is the proper scope of a false " origin" claim under 15 U.S.C. § 1125(a)(1)(A).
Exactly what are the " goods" NRT is seeking to protect? The listing agreement Salvatore Longo is alleged to have copied is not a tangible good offered for sale, as NRT conceded in its brief. Compare, General Universal Systems, Inc. v. Lee, 379 F.3d 131, (5th Cir. 2004) (" [plaintiff] has not accused [defendant] of taking tangible copies of its software, removing its trademarks, and selling them as its own"). NRT tries to get around this obvious problem by noting " services" may also be passed off in violation of the Lanham Act. See e.g., Gensler v. Strabala, 764 F.3d 735, (7th Cir. 2014). However, the services alleged were those provided by NRT to its customers and the brokerage services provided by Salvatore Longo to his customers; that they were the same type of services using the same form listing agreement even if to the same customers does not violate Section 43(a) of the Lanham Act without some allegation of " passing off." There is no allegation Mr. Longo has been passing himself off as Coldwell Banker or that his services were passed off as those of Coldwell Banker. This is unlike Gensler where it was alleged an architect was passing off designs by others of five buildings as his own designs. Id. at 737. Thus, NRT has not alleged " that origin of the work was falsely designated by the defendant . . ." Universal, 618 F.3d at 438.
Of course, if plaintiff had merely alleged that Mr. Longo was " passing himself off" as Coldwell Banker would not suffice to withstand a motion to strike without allegation of subsidiary facts to substantiate that conclusion. Mora v. Aetna Life & Cas. Ins. Co., 13 Conn.App. 208, 211, 535 A.2d 390 (1988) (" [a] motion to strike is properly granted where a plaintiff's complaint alleges legal conclusions unsupported by facts").
Even if the form listing agreements could be construed to be a protected " product" or " service, " NRT cannot be held to be the " producer" of the listing agreements adapted and used by Salvatore Longo or of the services provided by him pursuant to the agreements. At best, NRT, the alleged author of the listing agreement, is like the designer whose designs are copied into the products allegedly passed off who have been held not to have a " reverse passing off" claim under the Lanham Act. See e.g., Dastar, 539 U.S. at 37 (the phrase " origin of goods" only " refers to the producer of the tangible goods that are offered for sale, and not to the author of any idea, concept, or communication embodied in those goods"); Raucci v. The Candy & Toy Factory, 145 F.Supp.3d 440, 451 (E.D.Pa. 2015) (" [p]roducer refers to the manufacturer of the goods that reach the marketplace, not to the author of a concept or the creator of a prototype").
Plaintiff also has not alleged any facts to establish the required " customer confusion" element of a Lanham Act claim. See e.g., Bladeroom Group, Ltd. v. Facebook, Inc., 2017 WL 1233555 *7-8 (N.D.Cal. 2017). " While there is no bright line test to determine the likelihood of consumer confusion, recovery under the Lanham Act requires, at a minimum, that confusion, mistake or deception be likely, not merely possible." Universal, 618 F.3d at 438. " . . . [T]he Lanham Act only applies in circumstances involving a 'commercial transaction' in which 'the trademark is being used to confuse potential customers.' . . . Indeed, 'the Lanham Act seeks to prevent consumer confusion that enables a seller to pass off his goods as the goods of another . . . Trademark infringement protects only against mistaken purchasing decisions and not against confusing generally.' " Bladeroom, 2017 WL 1233555 *7 (citation omitted; emphasis in original). None of the seven factors listed in Fortres Grand Corp. v. Warner Bros. Entertainment, Inc., 763 F.3d 696, (7th Cir. 2014), apply here.
" In considering the plausibility of such an allegation of confusion we look to the applicable test for likelihood of confusion. In this circuit, we employ a seven-factor test:
Plaintiff has failed to allege facts to demonstrate that a substantial number of consumers were likely to be misled by the listing agreement as to the origin of the services to be provided by Mr. Longo. The Complaint alleges that the mark " Coldwell Banker" carries a reputation in the real estate industry as to the source of services and " in the minds of customers as a source of high quality services." There is nothing alleged about the face or content of the copied listing agreement that allegedly link Mr. Longo to Coldwell Banker or is alleged to be so unique that consumers would become confused and make that assumption; he is alleged to have erased all references to Coldwell Banker in the modified form agreement. Without that mark, NRT has not alleged anything about the use or the copied contents of the listing agreement that would link NRT's mark to the listing agreement so that a customer would think that Mr. Salvatore was connected to Coldwell Banker. Further, the customers who enter into listing agreements with Mr. Longo, who are the " consumers" of his services, presumably know he is their broker, not Coldwell Banker. The Complaint appears to have studiously avoided identifying any customers who entered into a listing agreement with Mr. Longo using its form, but if they were his family members who are defendants in this action there is no allegation the customers who signed the agreement were misled as to with whom they were dealing. Nor is there any allegation that the public was misled to NRT's detriment. NRT appears to argue that any broker who replaced it on expiration of its listing agreement would be exposed to Lanham Act liability because of the strength of its trademark, even though the broker was not using the mark and the customers who signed the listing agreement would have been aware that the new broker was not NRT, but Mr. Longo who had replaced NRT when the Coldwell Banker listing agreement had expired. Merely using a " cut and paste" version of Coldwell Banker's listing agreement was not " reverse passing off" in violation of the Lanham Act.
In its brief NRT argues that its on-site signage went down replaced by signs with Mr. Longo's name as listing agent. The brief also recites that defendant used the listing agreement to market the property beginning the date the NRT listing expired and that this confused the persons with whom Mr. Longo dealt as agent, including the ultimate purchaser. This is not alleged in the complaint and does not state Mr. Longo was passing himself off as Coldwell Banker. Without more, that Mr. Longo offered brokerage services to " his limited liability company" and " his nephew" using copied agreements, as defendant argues in his brief, would not suffice to support a Lanham Act claim for the reasons stated above.
Plaintiff in its brief accused Mr. Longo of having " plagiarized the services offered by Coldwell Banker . . ." It is unclear whether this refers to the content of the copied listing agreement or whether the complaint is that Mr. Longo was holding himself out as performing the same services. In Dastar the Supreme Court cautioned against reading Section 43(a) of the Lanham Act as creating a cause of action for plagiarism. 539 U.S. at 36. Boiled down to essentials, the gravamen of the Third Count is that Mr. Longo copied and used the form listing agreement, which would be plagiarism if it was a protected work, which it is not.
Nor has NRT alleged facts showing that it has been damaged by the " reverse passing off" alleged. " [T]he injury must be a trademark loss--which is to say, it must come from a misrepresentation of the goods' [or services'] origin." Bretford Manufacturing, Inc. v. Smith System Manufacturing Corp., 419 F.3d 576, 580 (7th Cir. 2005). Although the Complaint incorporates other allegations into the Third and Fourth Counts that NRT was not paid its earned commission on a certain sale by defendants, including Salvatore Longo, there are no allegations that link those allegations to the listing agreement allegedly copied by Salvatore Longo. NRT alleges that it is owed a commission in connection with the sale of certain real property by defendants, including Mr. Longo, but there are no facts alleged that the alleged " reverse passing off" related to the copied listing agreement was a substantial factor in that loss or indeed caused any injury to NRT except an unspecified and unsubstantiated " injury to the reputation of Plaintiff . . ." Without such facts NRT has not alleged " that the plaintiff was harmed by the defendant's false designation of origin." Universal, 618 F.3d at 438.
The Third Count must be stricken for failure to state a claim under Section 43(a) of the Lanham Act.
The Fourth Count Fails to State for Common-Law Trademark Infringement
In The Mohegan Tribe of Indians of Conn. v. The Mohegan Tribe and Nation, Inc., 255 Conn. 358, 375-76, 769 A.2d 34 (2001), the Supreme Court indicated that a passing off claim or a reverse passing off claim may be actionable at common law. If so, the common-law claim for trademark infringement would of necessity involve the actual use of the protected mark to pass off the goods or services as the defendant's own. See generally 12 Conn. Prac., Unfair Trade Practices § 4.10 (2016 ed.) (" trademark law has traditionally protected only against use of a mark on competing goods and services"). There are no such allegations in the Fourth Count, which must be stricken.
" We note that a defendant's use of a generic term may be actionable under common-law principles of unfair competition when, for example, that defendant uses a generic term in a manner that constitutes a misrepresentation of the source of the defendant's product or service. See, e.g., Forschner Group, Inc. v. Arrow Trading Co., 30 F.3d 348, 357 (2d Cir. 1994)." 255 Conn. at 376 n.32.
Conclusion
The motion to strike the Third and Fourth Counts of the Complaint is granted.
Because the Court has stricken the Third Count it need not reach defendant's motion to strike the claims for damages under 15 U.S.C. § 1117.
[1] the degree of similarity between the marks in appearance and suggestion; [2] the similarity of the products for which the name is used; [3] the area and manner of concurrent use; [4] the degree of care likely to be exercised by consumers; [5] the strength [or " distinctiveness" ] of the complainant's mark; [6] actual confusion; and [7] an intent on the part of the alleged infringer to palm off his products as those of another."