March 15, 2023
By Yinfei Wu
Edited by Margaret A. Esquenet
Carl Sagan is known for, among other things, the neologism “extraordinary claims require extraordinary evidence.” Courts considering allegations of trademark dilution would likely agree. To prove fame sufficient to support a claim of trademark dilution brand owners are generally called upon to prove that the trademark has become a “household name” with “a strong national presence,” a “significant international presence,” and/or “market dominance.” At the early stages of litigation, however, whether the brand owner can ultimately succeed on the claim is not the concern. In many courts, including the Sixth Circuit, to survive a motion to dismiss for failure to state fame, it is sufficient for a trademark owner to plead sufficient facts to make a plausible claim that the asserted mark is famous.
This lower standard for motions to dismiss was considered by the Eastern District of Michigan, where plaintiff Druyan-Sagan Associates, Inc.’s (“DSA”) dilution claim survived a motion to dismiss for failure to state a claim, because its amended complaint contained sufficient facts that its CARL SAGAN and SAGAN marks were famous.
Since 1977, DSA has marketed, sold, and licensed the works by Dr. Carl Sagan, the “astronomer, cosmetologist, and astrophysicist” known for the COSMOS book and the accompanying television series that won three Primetime EMMY®Awards in 1981:
Defendant SaganWorks, Inc. (“SaganWorks”) is a software company that creates interactive virtual spaces or rooms and offers its services under the mark SAGANWORKS. It filed an application to register SAGANWORKS for software products and services in digital knowledge management on October 11, 2019. DSA registered the mark CARL SAGAN for publications, digital media, and provision of a website featuring information on science, with the U.S. Patent and Trademark Office on October 22, 2019. DSA filed an application for the mark SAGAN on July 16, 2020. However, DSA’s pending application for the SAGAN mark (covering software related goods and services), has been suspended pending the outcome of SaganWorks’ application for SAGANWORKS.
In light of the suspension, DSA opposed Defendant’s application for SAGANWORKS with the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office. Meanwhile, SaganWorks continued to use the SAGANWORKS and SAGAN marks for its software products and services, in its logo and as its product name, arguing that SAGAN was an acronym for “Spatially Accessible, Gallery of Archived kNowledge” and not Dr. Sagan.
Rather than waiting for the TTAB, DSA brought a district court action for trademark infringement, dilution, and violation of Michigan’s Consumer Protection Act, and the TTAB opposition was suspended. After DSA amended its complaint, SaganWorks moved to dismiss DSA’s trademark dilution claim under Fed. R. Civ. P. 12(b)(6), arguing that DSA failed to plead sufficient facts to establish the fame of the CARL SAGAN and SAGAN marks.
Rule 12(b)(6) provides for the dismissal of a case where a complaint fails to state a claim upon which relief can be granted. To survive a motion to dismiss under Rule 12(b)(6), the complaint must contain sufficient factual allegations that make the asserted claims plausible on their face. Courts are required to construe the complaint in a manner most favorable to the plaintiff and accept its allegations as true. Legal conclusions “couched as factual allegations” are insufficient to survive a Rule 12(b)(6) motion.
In its motion, SaganWorks cited three cases from the Sixth Circuit, which routinely dismissed trademark dilution claims for failure to sufficiently plead fame: Mike Vaughn Custom Sports, Inc. v. Piku, 15 F. Supp. 3d 735 (E.D. Mich. 2014), SDC Fin., LLC v. Bremer, No. 3:19-CV-00525, 2019 WL 4393543 (M.D. Tenn. Sep. 13, 2019), and Jonas on Front St., Inc. v. Ferndale on Rocks Enterprises, LLC, No. 17-13223, 2017 WL 11319707 (E.D. Mich. Dec. 1, 2017). But the court distinguished those decisions, holding that DSA pleaded sufficient facts regarding the fame of the asserted marks.
In Mike Vaughn Custom Sports, Inc.’s complaint for trade dress dilution, the plaintiff alleged only that it had developed a “famous brand identity, reputation, and sales distribution of its products internationally, including in the United States, Canada, South America, Europe and Asia, among other places.” Similarly, in SDC Fin., LLC, the plaintiff alleged only that it “has successfully operated a store in Nashville for three years and engaged in extensive advertising and promotion efforts, the audience for which is not disclosed.” In Jonas on Front St., Inc.’s complaint, while the plaintiff included more specific facts, namely, (1) that regional and national media outlets have reported on the plaintiff’s mark; (2) that tourism professionals from Canada came to see the mark; and (3) that the defendant and a local planning commissioner have openly discussed how well known the mark was, the court nonetheless did not find the pleading sufficient to survive a motion to dismiss.
In contrast, DSA dedicated ten paragraphs to fame (Compl. ¶¶ 14, 19, 20, 21, 22, 23, 25, 26, 27, 28), touching upon eight of the factors used to evaluate the fame of a mark under 15 U.S.C. § 1125 (extent of use, advertising, publicity, promotion, amount and volume of sales, geographic reach, and recognition). The court found that DSA’s case was closer to a Western District of Michigan case, Impulsaria, LLC v. United Distribution Grp., LLC, No. 1:11-CV-1220, 2012 WL 5178147 (W.D. Mich. Oct. 18, 2012), where the plaintiff survived a motion to dismiss a dilution claim by alleging that (1) it was the sole source of the dietary supplement sold under its brand name, (2) its trademark and trade dress have been in use for over five years, (3) it was one of the fastest growing dietary supplement providers in the United States in 2009, (4) between 2007 and 2010, it sold in excess of 2 million packages of its branded herbal supplement, and (5) its branded products accounted for an estimated 80% of the market share.
Finally, explaining that it “need not yet concern itself with DSA’s likelihood of success on the merits,” the court rejected SaganWorks’ arguments that DSA’s factual allegations all related to the fame of Carl Sagan the person and not the SAGAN marks, as such arguments are better suited for a summary judgment.
This case is Druyan-Sagan Associates, Inc. v. SaganWorks Inc., 2023 WL 416272 (E.D.Mich. January 25, 2023).
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