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Icon Health & Fitness, Inc. v. Kelley

United States District Court, W.D. Texas, Austin Division

December 27, 2017

ICON HEALTH & FITNESS, INC.
v.
RICHARD KELLEY

          THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE.

          REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          ANDREW W. AUSTIN UNITED STATES MAGISTRATE JUDGE.

         Before the Court are Defendants' Motion to Dismiss Claims 1 Through 6 of Plaintiff's Complaint Under Rule 12(b)(6) (Dkt. No. 11); and Plaintiff's Memorandum in Opposition (Dkt. No. 14). The District Court referred the above motion to the undersigned Magistrate Judge for report and recommendation pursuant to 28 U.S.C. §636(b)(1)(A), Fed.R.Civ.P. 72, and Rule 1(c) of Appendix C of the Local Rules.

         I. GENERAL BACKGROUND

         Plaintiff Icon Health & Fitness, Inc. (Icon) brings this suit against Richard Kelley asserting claims for federal and Texas trademark infringement, federal trademark dilution, Texas common law palming off, Lanham Act unfair competition/false designation of origin, and violations of the Anticybersquatting Consumer Protection Act (ACPA).

         Icon is the owner of four registrations in the word mark, IFIT, and a registration for the domain name, www.ifit.com. According to Icon, it began using the IFIT mark in 1996 or 1997 to market a line of fitness products. A couple years later, Icon also began using the domain name www.ifit.com to provide video and audio workouts to be used with the IFIT products, which it registered in 2001. Icon then submitted its first registration for the IFIT mark in 2002. Since that time, Icon alleges that it has consistently used and marketed the IFIT brand and website, submitting three additional registrations to expand the brand to products and services including, for example, fitness and exercise equipment, mobile apps, and bands and clips. Icon claims that it has invested resources to promote the mark through a variety of marketing initiatives across TV channels, social media, Internet ads, and email listservs. Icon's products bearing the IFIT mark are sold in a number of large retailers across the United States, including Walmart, Sears, and Academy Sports, and are sold through online retailers, such as Walmart.com and Amazon.com, as well as its own website.

         In 2005, Kelley, an author and entrepreneur, registered the domain names www.iFitCoach.com and www.iFitnessCoach.com to promote and sell his fitness and nutrition books. In 2016, Kelley was contacted by a representative of Icon, who offered to purchase the domain names. Kelley refused, saying that the websites were being revamped, but that he intended to continue using them to promote his books. He also noted that Apple was in the business of buying domain names similar to his. In early 2017, Kelley also submitted a registration for the domain name www.iFitCoachPlus.com. Kelley hired an attorney, who exchanged a number of emails with Icon's respresentative, and ultimately offered to sell the iFitCoach domain for $200, 000. The negotiations ended in April, and Icon filed suit alleging various trademark and unfair competition claims. Kelley now moves to dismiss Icon's claims.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss an action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P.12(b)(6). In deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim, “[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable to the [nonmovant].” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal quotation marks omitted), cert. denied, 552 U.S. 1182 (2008). The Supreme Court has explained that a complaint must contain sufficient factual matter “to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the [nonmovant] pleads factual content that allows the court to draw the reasonable inference that the [movant] is liable for the misconduct alleged.” Id. The court generally is not to look beyond the pleadings in deciding a motion to dismiss. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).

         III. ANALYSIS

         Kelley has challenged each of Icon's claims, arguing that Icon has failed to adequately plead its causes of action. First, Kelley argues that Icon's claim under the Anti-Cybersquatting Act fails because Icon has not sufficiently pled the element of confusing similarity. Similarly, Kelley contends that the facts alleged do not support a finding of a likelihood of confusion for Icon's federal and Texas trademark infringement claims. Next, Kelley asserts that Icon has not alleged a misleading statement as required for its false advertising claim. Kelley then challenges Icon's trademark dilution claim because Icon has not pled ownership in a famous mark. Finally, Kelley argues that both Icon's assertion of secondary meaning and likelihood of confusion for its Texas common law palming off claim are not adequately pled.

         A. Likelihood of Confusion

         First, Kelley moves to dismiss Icon's claims for cybersquatting and Texas and federal trademark infringement. For each of these claims, Kelley solely contends that Icon has not pled a likelihood of confusion.[1] Courts look to eight “digits of confusion” to determine whether there is a likelihood of confusion. Bd. of Supervisors for La. State Univ. Ag. & Mech. College v. Smack Apparel, Co., 550F.3d 465, 478 (5th Cir. 2008); cf. Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 193 (5th Cir. 1998) (noting that the determination for likelihood of confusion is the same under federal and Texas law). These include:

(1) the type of mark allegedly infringed, (2) the similarity between the two marks, (3) the similarity of the products or services, (4) the identity of retail outlets and purchasers, (5) the identity of the advertising media used, (6) the defendant's intent, . . . (7) any evidence of actual ...

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