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Upstate Plumbing Inc v. AAA Upstate Plumbing of Greenville, LLC

United States District Court, D. South Carolina, Greenville Division

March 26, 2018

Upstate Plumbing, Inc., Plaintiff,
v.
AAA Upstate Plumbing of Greenville, LLC, Defendant.

          OPINION AND ORDER

          Bruce Howe Hendricks United States District Judge

         This matter is before the Court on Defendant AAA Upstate Plumbing of Greenville, LLC's (“Defendant”) motion to dismiss the first amended complaint (ECF No. 10) for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 17.) For the reasons set forth in this order, Defendant's motion to dismiss is granted in part and denied in part.

         BACKGROUND

         Plaintiff Upstate Plumbing, Inc. (“Plaintiff”) has continuously provided plumbing services in Greenville, South Carolina, and surrounding areas under the service mark UPSTATE PLUMBING (“the mark”) since October 1992. (Am. Compl. ¶ 5, ECF No. 15.) According to the amended complaint, Plaintiff's use of the mark has been substantially exclusive for the duration of that period. (Id. ¶ 6.) Since 1992, Plaintiff has spent more than $250, 000 on promotions and advertisements for its services, and generated more than $25 million in revenue associated with services performed for residential and commercial customers, under the mark. (Id. ¶¶ 7-9.) It is alleged that residential and commercial customers identify and associate Plaintiff as the source of plumbing services provided under the mark, and that Plaintiff is the owner of all rights, title, and interest in the mark. (Id. ¶¶ 10-11.)

         Plaintiff filed an application to register its rights in the mark with the U.S. Patent and Trademark Office on April 28, 2016. (Id. ¶ 12.) The application was approved on December 6, 2016, and UPSTATE PLUMBING was added to the Principal Register as an identifier of the source of services provided under the mark pursuant to U.S. Trademark Registration Number 5, 095, 101 (“‘101 Registration”). (Id. ¶¶ 13-14; Ex. 1, ECF No. 10-1.)

         In addition, Plaintiff has, since January 1995, continuously provided plumbing services in Greenville, South Carolina, and surrounding areas under a stylized service mark (“the stylized mark”) consisting of a graphic with its business name and three stars arranged around the border of a circle, the letters “upi” superimposed over the circle, and an outline of the State of South Carolina superimposed where the hole would otherwise be in the aforementioned letter “p.”[1] (Id. ¶ 18.) According to Plaintiff, its use of the stylized mark has been substantially exclusive during that time period. (Id. ¶ 19.) Since 1995, [2] Plaintiff has spent more than $200, 000 advertising its services, and generated more than $21 million in revenue associated with services performed for residential and commercial customers, under the stylized mark. (Id. ¶¶ 20-22.) It is alleged that residential and commercial customers identify and associate Plaintiff as the source of plumbing services provided under the stylized mark, and that Plaintiff is the owner of all rights, title, and interest in the stylized mark. (Id. ¶¶ 23-24.)

         On April 28, 2016, Plaintiff filed an application to register its rights in the stylized mark with the U.S. Patent and Trademark Office. (Id. ¶ 25.) The application was approved on December 6, 2016, and the stylized mark was added to the Principal Register as an identifier of the source of services provided under the stylized mark pursuant to U.S. Trademark Registration Number 5, 095, 106 (“‘106 Registration”). (Id. ¶¶ 26-27; Ex. 2, ECF No. 10-2.) Hereinafter, the Court will refer to the mark and the stylized mark collectively as the “Asserted Service Marks.” Plaintiff advances causes of action for federal and common law trademark infringement, false designation of origin, and unfair trade practices in violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”), SC Code § 39-5-10, et seq. (Id. ¶¶ 33-66.) In general, Plaintiff alleges that Defendant misappropriated the mark by providing substantially identical plumbing services to residential and commercial customers in the Greenville, South Carolina area under the name “AAA UPSTATE PLUMBING of Greenville, LLC” (“the challenged mark”). (Id. ¶¶ 33-36.) Plaintiff avers that the words and images used by Defendant on business cards, signage, and service vehicles (“advertising materials”) in connection with goods and services associated with the Asserted Service Marks are likely to cause confusion among consumers as to the source or origin of the goods and services, and are likely to cause a false perception as to an affiliation between Plaintiff and Defendant. (Id. ¶¶ 37-41.) Moreover, Plaintiff asserts that Defendant intentionally incorporated the words “UPSTATE PLUMBING” into its advertising materials in order to benefit from the excellent reputation enjoyed by Plaintiff as a quality provider of plumbing services under the Asserted Service Marks, and in order to create confusion in the marketplace regarding services provided by Plaintiff and Defendant respectively. (Id. ¶ 42-43.)

         It is alleged that Plaintiff regularly receives calls and inquiries from Defendant's customers seeking warranty service for plumbing services performed by Defendant under the challenged mark, and that Defendant's incorporation of the words “UPSTATE PLUMBING” into its advertising materials has caused multiple instances of actual confusion among Defendant's customers that Plaintiff is associated with or has endorsed Defendant. (Id. ¶¶ 44-45.) Plaintiff claims that Defendant's depiction of the challenged mark in connection with goods and services associated with the Asserted Service Marks has damaged Plaintiff by diverting customers and revenue from Plaintiff to Defendant, by damaging Plaintiff's reputation as a quality provider of plumbing services, and by confusing members of the public as to an affiliation between Plaintiff and Defendant. (Id. ¶ 48.) Moreover, Plaintiff contends that Defendant intentionally designed its advertising materials to mislead consumers into the belief that an affiliation exists between the two companies, and that Defendant did so with knowledge of the Asserted Service Marks. (Id. ¶¶ 53, 57.) Finally, Plaintiff asserts that Defendant's putative infringement and false designation of origin associated with the Asserted Service Marks “are continuing torts, repeated every day, that directly affect the public interest by intentionally confusing members of the public” regarding the nonexistent affiliation, and therefore constitute unfair trade practices in violation of SCUTPA. (Id. ¶¶ 63-64.)

         Plaintiff seeks the following remedies: (a) a declaration that Plaintiff is the exclusive owner of the Asserted Service Marks and that said marks are valid; (b) a finding that Defendant has infringed Plaintiff's Asserted Service Marks under 15 U.S.C. § 1114 and the common law; (c) a finding that Defendant has violated 15 U.S.C. § 1125(a) (false designation of origin); (d) a finding that Defendant has violated SCUTPA; (e) an injunction preventing Defendant from further depiction of “UPSTATE PLUMBING” in connection with goods and services associated with the Asserted Service Marks; (f) an order directing Defendant to deliver to Plaintiff for destruction all advertisements, materials, and products that include Defendant's depiction of “AAA UPSTATE PLUMBING of Greenville, LLC” in connection with goods and services associated with the Asserted Service Marks; (g) an award to Plaintiff of any profits obtained by Defendant associated with the acts alleged in the amended complaint; (h) an award to Plaintiff of damages caused by Defendant's alleged acts; (i) treble damages pursuant to 15 U.S.C. § 1117; (j) punitive damages for Defendant's alleged intentional acts; (k) costs, expenses, and attorneys' fees as permitted by 15 U.S.C. § 1117 and/or S.C. Code § 39-5-140; and (1) prejudgment interest. (ECF No. 10 at 12-13.)

         Plaintiff filed its amended complaint on May 9, 2017. (ECF No. 10.) On May 23, 2017, Defendant filed its motion to dismiss the amended complaint. (ECF No. 17.) Plaintiff responded on June 6, 2017 (ECF No. 18), and Defendant replied on June 12, 2017 (ECF No. 19). The matter is ripe for review and the Court now issues the following ruling.

         STANDARD OF REVIEW

         A plaintiff's complaint should set forth “a short and plain statement . . . showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 “does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. at 556). In considering a motion to dismiss under Rule 12(b)(6), a court “accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff . . . .” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009). A court should grant a Rule 12(b)(6) motion if, “after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint; importantly, a Rule 12(b)(6) motion does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Id. at 243 (internal modifications, quotation marks, and citation omitted).

         As previously noted, to survive a Rule 12(b)(6) motion to dismiss, a complaint must state “a plausible claim for relief.” Iqbal, 556 U.S. at 679 (emphasis added). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. at 678 (quoting Twombly, 550 U.S. at 557). Stated differently, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Still, Rule 12(b)(6) “does not countenance . . . dismissals based on a judge's disbelief of a complaint's factual allegations.” Colon Health Centers of Am., LLC v. Hazel, 733 ...


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