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Alliance v. The American Policy Roundtable

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

July 23, 2019

HERITAGE ALLIANCE, Plaintiff,
v.
THE AMERICAN POLICY ROUNDTABLE, d/b/a OHIO ROUNDTABLE, Defendant.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE.

         Before the Court is are two motions to dismiss, one filed by Plaintiff Heritage Alliance (“Heritage”), (Dkt. 8), and the other filed by Defendant American Policy Roundtable (“APR”), (Dkt. 7). Having considered the parties' motions, the record, and the applicable law, the Court will grant both motions in part.

         I. BACKGROUND

         This is an intellectual-property dispute between two nonprofits that publish voter guides. (Am. Compl., Dkt. 6, at 4-5). Heritage alleges as follows. In late 2007, it registered the domain name www.ivoterguide.com and launched a website at that domain that publishes voting records, donations, endorsements, and candidate surveys. (Id. at 4). In September 2008, Heritage began using the trademarks iVoterGuide and iVoterGuide.com. (Id.). Today the guide covers federal elections in every state, statewide elections in eleven states, and state legislative elections in seven. (Id.). The iVoterGuide website has been used by over a million voters, evaluates over 4, 000 candidates, and has an email list numbering 100, 000 recipients. (Id.).

         APR, formed in 1980 to educate voters about elections, launched www.ivoters.com in 2003. (Id. at 5). The website provides an address-based candidate search and lists the “most watched” federal House and Senate races, along with links to candidate information for those races. (Id.). In March 2016, APR registered the domain name www.ivotersguide.com, which simply reroutes the user to www.ivoters.com. (Id.).

         In September 2018, APR sent a letter to Heritage explaining that they believed that Heritage's iVoterGuide mark infringed its iVoters mark. (N.D. Ohio Order, Dkt. 22-1, at 2). APR called Heritage to discuss the matter and later sent a formal cease-and-desist letter to Heritage in mid-October 2018. Heritage responded to that letter by suing APR in this Court on October 31, 2018, for cyberpiracy under 15 U.S.C. § 1125(d), alleging that www.ivotersguide.com was created simply to divert visitors from Heritage's website. (Orig. Compl., Dkt. 1).

         After Heritage served APR in January 2019, APR simultaneously filed a motion to dismiss in this action, (Dkt. 5), and a complaint in a separate action against Heritage for trademark infringement in the United States District Court for the Northern District of Ohio. (Dkt. 22-1). In response to APR's motion to dismiss, Heritage amended its complaint to add federal- and state-law claims for trademark infringement and unfair competition on March 22, 2019. (Dkt. 6).

         Before the Court now is APR's motion to dismiss Heritage's amended complaint under Federal Rule of Civil Procedure 12(b)(3) and 12(b)(6). (APR Mot., Dkt. 7). Not only does APR believe that Heritage has failed to state a claim, it also believes that venue is improper in this district under the first-to-file rule. (Id. at 1-2). Heritage, meanwhile, filed its own motion to dismiss, asking this Court to dismiss APR's action in the Northern District of Ohio or transfer it to this Court and consolidate the two cases. (Heritage Mot., Dkt. 8, at 6).

         II. DISCUSSION

         “Courts in the Fifth Circuit generally follow a ‘first-filed rule' in deciding which Court should maintain jurisdiction over claims that arise out of the same subject matter but are pressed in different suits.” Yeti Coolers, LLC v. Beavertail Prods., LLC, 1-15-CV-415 RP, 2015 WL 4759297, at *1 (W.D. Tex. Aug. 12, 2015) (quoting Igloo Prods. Corp. v. The Mounties, Inc., 735 F.Supp. 214, 217 (S.D. Tex. 1990)). Because the first-to-file rule implicates this Court's jurisdiction, it will resolve that issue first before proceeding to APR's motion to dismiss under Rule 12(b)(6).

         A. First to File

         Under the first-to-file rule, “federal courts may decline to hear a case when an earlier-filed case pending in a different federal court raises similar issues.” Hart v. Donostia LLC, 290 F.Supp.3d 627, 630 (W.D. Tex. 2018) (citing Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999)). The rule, which rests on principles of comity and sound judicial administration, is principally concerned with avoiding duplicative waste, rulings which trench on sister courts' authority, and piecemeal resolution of issues. Cadle, 174 F.3d at 603. “The rule does not require the cases to be identical.” Int'l Fid. Ins. Co. v. Sweet Little Mexico Corp., 665 F.3d 671, 678 (5th Cir. 2011). “The crucial inquiry is one of substantial overlap.” Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997) (citation omitted). If two actions substantially overlap on substantive issues, the cases “would be required to be consolidated in the jurisdiction first seized of the issues.” Id. (quoting Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 408 n.6 (5th Cir. 1971)).

         Factors relevant to substantial overlap include whether “the core issue” in each case is the same and whether “much of the proof adduced . . . would likely be identical.” Sweet Little Mexico Corp., 665 F.3d at 678. Courts also consider the extent to which the cases involve the same parties. See Save Power, 121 F.3d at 950-51. “Where the overlap between two suits is less than complete, the judgment is made case by case, based on such factors as the extent of overlap, the likelihood of conflict, the comparative advantage and the interest of each forum in resolving the dispute.” Sweet Little Mexico Corp., 665 F.3d at 678.

         APR admits that Heritage's trademark claim substantially overlaps with its own. (APR Mem., Dkt. 7-1, at 18). But APR argues that its suit is the first-filed of the two because Heritage's original complaint-filed four months before APR's action-asserted no claims for trademark infringement or unfair competition, which first appear in the amended complaint that Heritage filed after APR began its Ohio suit. (Id. at 17). APR's theory is that Heritage's action could be first-filed based only on the cyberpiracy claim in its original complaint and that Heritage suit is not first-filed because its cyberpiracy claim does not substantially overlap with the trademark claims in APR's complaint. The question is whether APR's theory is correct.

         But by admitting that its trademark claim substantially overlaps with Heritage's, APR concedes the question, for Heritage's trademark-infringement and cyberpiracy claims arise out of the same allegations and depend upon the resolution of common legal issues. As APR points out, both its trademark claim and Heritage's will “consider the issues of priority, distinctiveness, and the many factors related to a likelihood of confusion analysis.” (Id. at 17). Both will consider evidence relevant to those issues, such as “use in commerce, similarity of the marks, [and] similarity of the goods and services at issue.” (Id. at 17-18).

         These examples of overlap between the parties' trademark claims also happen to be areas of overlap with Heritage's cyberpiracy claim, which is likewise a Lanham Act claim alleging that APR has used Heritage's iVoterGuide mark illegally. (Compare Orig. Pet., Dkt. 1, at 5 (alleging that APR intended to profit off of the iVoterGuide mark by creating www.ivotersguide.com), with Am. Compl., Dkt. 6, at 8-9 (alleging that APR infringed Heritage's iVoterGuide mark by using it in the sale of APR's own services, which include diverting traffic to its main website through www.ivotersguide.com)). Heritage's cyberpiracy and trademark claims will both require proof that the iVoterGuide mark is a “distinctive . . . mark entitled to protection.” Tex. Int'l Prop. Assoc. v. Hoerbiger Holding AG, 624 F.Supp.2d 582, 587 (N.D. Tex. 2009) (citation omitted) (listing the elements of an Anticybersquatting Consumer Protection Act (ACPA) claim); see also Xtreme Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 227 (5th Cir. 2009) (considering distinctiveness in analyzing the likelihood of confusion between two marks). Both claims will examine APR's intent in its alleged use of the iVoterGuide mark. See Tex. Int'l Prop. Assoc., 624 F.Supp.2d at 587 (identifying a defendant's “bad faith intent to profit” from use of the plaintiff's mark as an ACPA-claim element); Xtreme Lashes, 576 F.3d at 227 (listing a defendant's intent as one of the digits of confusion). And both claims will examine the similarity between www.ivotersguide.com and the iVoterGuide mark. See Tex. Int'l Prop. Assoc., 624 F.Supp.2d at 587 (listing whether a defendant's domain name is “identical or confusingly similar” to the plaintiff's mark as another ACPA-claim element); Xtreme Lashes, 576 F.3d at 227 (listing a mark similarity as one of the digits of confusion). The parties to each action are the same, much of the evidence will be the same, and the core issues-which party's mark has priority, and whether the marks are confusingly similar-are the same. See Sweet Little Mexico Corp., 665 F.3d at 678; Save ...


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