UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORK

_____________________N

09-CV-2626 (JFB)(ETB)_____________________

RAGRANCE

COM

Plaintiff,

VERSUS

ARFUMS

ET AL

Defendants.

___________________

MEMORANDUM AND ORDER

December 8, 2009___________________

OSEPH

IANCO

District Judge:Plaintiff FragranceNet.com, Inc.(hereinafter, “plaintiff” or “FragranceNet”)brings this action against defendants LesParfums, Inc., Les Perfumes, Inc.,UltraFragrances, Inc., Ultra Fragrances, Inc.,and UltraFragrances.com (collectively,“defendants”), alleging that defendants’ use of plaintiff’s trademarks constitutes trademark infringement, trademark dilution, passing off,and unfair competition in violation of theLanham Act, 15 U.S.C. § 1114, 1125(a) &1125(c). Plaintiff also brings pendent stateclaims, including: common law trademark infringement, state law dilution, injury tobusiness reputation, unfair competition, unfairand deceptive practices, misappropriation, andunjust enrichment.Presently before the Court is defendants’motion to dismiss the complaint under Rule12(b)(6) of the Federal Rules of CivilProcedure. Specifically, defendants contendthat plaintiff’s registered trademarks –namely, “FRAGRANCENET” and“FRAGRANCENET.COM” – are notprotectable as a matter of law under thetrademark laws because the marks are generic.For the reasons set forth below, the Courtdenies defendants’ motion to dismiss.Although the Second Circuit has in rarecircumstances (in the context of publicationtitles) held that the question of whether atrademark is generic could be decided at themotion to dismiss stage, this case is not one of those extraordinary circumstances. Thedetermination of whether“FRAGRANCENET” and“FRAGRANCENET.COM” are generic

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marks will require a fact-specific inquiry thatis inappropriate at the motion to dismiss stage.Plaintiff alleges that its trademarks areregistered and, thus, there is a presumptionthat the mark is not generic. There isabsolutely nothing in the pleadings toconclude, as a matter of law, that defendantshave overcome this presumption. In short,plaintiff has asserted plausible claims underthe trademark laws that survive a motion todismiss. Moreover, the Court declines toconvert the motion to dismiss into a motionfor summary judgment because defendantshave submitted no evidence outside thepleadings for the Court to consider and, in anyevent, plaintiff is entitled to conduct discoverybefore making its presentation of evidence inresponse to any potential summary judgmentmotion. Accordingly, the motion is denied inits entirety.I.

ACKGROUND

A. FactsThe following facts are taken from thecomplaint (“Compl.”), which the Courtassumes to be true for the purposes of deciding this motion. The Court construes thefacts in the light most favorable to plaintiff,the non-moving party.

See, e.g.

Leibowitz v.Cornell Univ.

, 584 F.3d 487, 492 (2d Cir.2009).Plaintiff FragranceNet is a Delawarecorporation with its principal place of business in Hauppauge, NY. (Compl. ¶ 7.)Since January 1997, plaintiff has owned andoperated an online retail store that sellsperfume and related products atwww.fragrancenet.com. (Compl. ¶¶ 2, 13.)Plaintiff’s trademarks, FRAGRANCENETand FRAGRANCENET.COM, are registered,and plaintiff has used those marks inconnection with its sale and marketing of perfume and related products online sinceJanuary 27, 1997. (Compl. ¶¶ 14, 15.)Plaintiff has sold millions of dollars of merchandise through its website, whichaccepts orders directly from customers.(Compl. ¶ 16.) Over the past twelve years of operation, plaintiff has established areputation for high-quality retail sales andcustomer services under its marks. (Compl. ¶17.) There is customer recognition of thesemarks, and the marks have acquired asubstantial level of goodwill. (

Id.

)The instant action arises out of defendants’ bidding on, purchasing, and usingcertain keywords, including plaintiff’strademarks, in Google’s AdWords program,with the knowledge that doing so would resultin defendants’ links appearing as “SponsoredLinks” when a consumer types“fragrancenet,” “fragrancenet.com” or othervariations of FragranceNet’s mark into anInternet keyword search on Google. (Compl. ¶ 3.) The AdWords Program by Googleallows advertisers to bid on particularkeywords that apply to their websites.(Compl. ¶ 19.) Advertisers may specifywhether keywords should be applied as a“broad match,” “phrase match,” “exactmatch,” or “negative match.” When anadvertiser bids on a “broad match,” its link will appear when a search is conducted forthat keyword, its plural forms, its synonyms,or phrases similar to the word. (Compl. ¶ 20.)When an advertiser bids on a “phrase match,”its link will appear when a user searches for aparticular phrase, even if that phrase is used incombination with other words. (Compl. ¶ 21.)An “exact match” will display the advertiser’slink only when the exact phrase bid on issearched on Google. (Compl. ¶ 22.) A“negative match” bid allows an advertiser toensure that its link does not appear when2

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certain terms are searched. (Compl. ¶ 23.)Sponsored Links appear on the top and rightside of the search results screen. (Compl. ¶¶18, 25.)According to plaintiff, defendants bid oncertain keywords, including plaintiff’strademarks, to cause their links to appear as“Sponsored Links” on Google when a searchfor “FRAGRANCENET” or“FRAGRANCENET.COM” is performed.(Compl. ¶¶ 18, 24, Ex. A.) As a result,defendants’ links would appear on the top andright side of the search results screen when asearch for plaintiff’s trademarks wasperformed. (Compl. ¶¶ 18, 24, Ex. A.)Plaintiff alleges that it demanded thatdefendants discontinue all further use of plaintiff’s marks and asked that defendantsbid on plaintiff’s marks as a “negative match”to prevent defendants’ links from appearing asresults when plaintiff’s marks are searched onGoogle. (Compl. ¶ 25.) According toplaintiff, defendants refused to do either andhave continued to use plaintiff’s trademarkswithout permission. Plaintiff further allegesthat defendants have generated substantialrevenue and benefits from this use. (Compl. ¶¶ 4, 26.) Plaintiff claims that this practicehas caused confusion among consumers andthat plaintiff has suffered irreparable harm asa result of defendants’ use of its trademarks.(Compl. ¶¶ 4, 31.)B. Procedural HistoryOn June 19, 2009, plaintiff filed theinstant complaint against defendants. Byletter dated September 3, 2009, defendantsindicated their intention to move for dismissalof the complaint for failure to state a cause of action upon which relief can be predicated.On September 30, 2009, defendants filed theirmotion to dismiss. Plaintiff filed oppositionpapers on October 30, 2009, and defendantsfiled their reply on November 6, 2009. Oralargument was heard on December 2, 2009.The Court has fully considered thesubmissions of the parties.II.

TANDARD OF

EVIEW

In reviewing a motion to dismiss pursuantto Federal Rule of Civil Procedure 12(b)(6),the Court must accept the factual allegationsset forth in the complaint as true and draw allreasonable inferences in favor of the plaintiff.

See Cleveland v. Caplaw Enters.

, 448 F.3d518, 521 (2d Cir. 2006);

Nechis v. Oxford Health Plans, Inc.

, 421 F.3d 96, 100 (2d Cir.2005). The plaintiff must satisfy “a flexible‘plausibility standard.’”

Iqbal v. Hasty

, 490F.3d 143, 157 (2d Cir. 2007),

rev’d on other grounds sub nom. Ashcroft v. Iqbal

, --- U.S.----, 129 S. Ct. 1937, 173 L. Ed. 2d 868(2009). “[O]nce a claim has been statedadequately, it may be supported by showingany set of facts consistent with the allegationsin the complaint.”

Bell Atl. Corp. v. Twombly

,550 U.S. 544, 563 (2007). The Court,therefore, does not require “heightened factpleading of specifics, but only enough facts tostate a claim to relief that is plausible on itsface.”

Id.

at 570.The Supreme Court recently clarified theappropriate pleading standard in

Ashcroft v. Iqbal

, setting forth a two-pronged approachfor courts deciding a motion to dismiss. ---U.S. ----, 129 S. Ct. 1937, 173 L. Ed. 2d 868(2009). The Court instructed district courts tofirst “identify[ ] pleadings that, because theyare no more than conclusions, are not entitledto the assumption of truth.” 129 S. Ct. at1950. Though “legal conclusions can providethe framework of a complaint, they must besupported by factual allegations.”

Id.

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