ABSTRACT
The Northern District of Illinois denied a defendant's motion to dismiss for failure to state a claim based on the affirmative defenses of statutory fair use (often called "classic fair use") and nominative fair use (referred to as "normative fair use" in this decision). The court held that both of the defendant's fair-use defenses were likely to be legally insufficient, and, in any event, the defendant's defenses were too fact specific to decide via a motion to dismiss.
CASE SUMMARY
FACTS
Plaintiffs DeVry Inc. and its subsidiary, Global Education International, Inc. (collectively "Plaintiffs"), own and operate medical and veterinary schools using the name and marks ROSS and ROSS UNIVERSITY. In 2007, defendant University of Medicine and Health Sciences-St. Kitts ("UMHS") formed its medical school. Plaintiffs' complaint alleged trademark infringement based on UMHS's use of the ROSS and ROSS UNIVERSITY trademarks, including, but not limited to, UMHS's use of the phrase "UMHS-Founded by Dr. Robert Ross" in a logo on letterhead, a sign at the entrance to UMHS's campus reading "Founded by Dr. Robert Ross," and references to "Dr. Robert Ross, founder and former owner of Ross University School of Medicine" in UMHS's promotional brochures.
UMHS filed a motion to dismiss for failure to state a claim, contending that all of Plaintiffs' trademark- infringement allegations fail based on fair-use affirmative defenses.
ANALYSIS
UMHS argued that because every allegedly infringing use of Plaintiffs' trademark was subject to a fair-use affirmative defense, Plaintiffs had pled themselves into an "impenetrable defense," because Plaintiffs would have to contradict the allegations in the complaint to prevail. According to UMHS, the first category of alleged infringement, the use of the phrase "Founded by Dr. Robert Ross" on UMHS's letterhead and a sign at the entrance to UMHS's campus, were descriptive uses and therefore protected by the Lanham Act's statutory fair-use defense, 15 U.S.C. ยง 1115(b)(4). The second category of alleged infringement, statements by UMHS that Dr. Robert Ross is the founder and former owner of Ross University, are nominative fair uses of Plaintiffs' marks, UMHS argued.
Before examining UMHS's fair-use defenses in detail, the court noted from the outset that UMHS's "impenetrable defense" argument was flawed because it was based on two faulty presumptions: (1) that the examples of infringement alleged in the complaint were exhaustive of UMHS's unlawful activity; and (2) that all of the allegations fell neatly into two applicable fair-use defenses. Accordingly, even if the court were to accept UMHS's fair-use defenses, they would not warrant dismissal of the complaint at the motion-to-dismiss stage.
Turning to UMHS's statutory fair-use defense, the court noted that whether use of a trademark is descriptive or "otherwise than as a mark" is too fact specific a determination to make at the motion-to-dismiss stage. Moreover, the court disagreed with UMHS's argument that use of the phrase "Founded by Dr. Ross" below its logo was clearly "informational" and "descriptive," noting Plaintiffs' argument that use of a short phrase (not even a full sentence) referencing Dr. Robert Ross and Ross University in connection with UMHS's services was part of a coordinated campaign to use the phrase as a source identifier, and was not merely for informational purposes.
Addressing UMHS's nominative fair-use defense, the court noted that the Seventh Circuit has not explicitly adopted the defense, an equitable doctrine that allows use of another's trademark where: (1) the product or service in question is not readily identifiable without use of the other party's trademark; (2) only so much of the mark is used as is reasonably necessary to identify the product or service; and (3) the user of the other party's mark does nothing that might suggest sponsorship or endorsement by the trademark owner. Even if it were to apply the nominative fair-use test, however, the court explained that UMHS, at the least, would not satisfy the second and third prongs of the test because UMHS refers to "Ross University" at least four times in the first hundred words of its website, on its brochures, and in letters sent to prospective students. The court refused to make a factual determination on the issue at the motion-to-dismiss stage.
CONCLUSION
This decision suggest that it may be difficult to succeed on a Rule 12(b)(6) motion to dismiss for failure to state a claim based on fair-use arguments, as such issues involve factual disputes that may be improper for resolution at such an early stage of the proceeding. The decision is also instructive in its holding that the claims stated by a plaintiff are not necessarily limited by the examples of allegedly infringing uses set out in its complaint.
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