PissedConsumer Defeats Trademark Claim…On a Motion to Dismiss!?–deVere v. Opinion Corp.

By Eric Goldman

deVere Group GmbH v. Opinion Corp., 2012 WL 2884986 (E.D.N.Y. July 13, 2012)

Here’s something you don’t see every day: a trademark infringement lawsuit defeated for lack of consumer confusion–on a 12b6 motion to dismiss. For several years, trademark academics have been discussing ways to create a “fast lane” for unmeritorious trademark cases. I don’t recall ever discussing the possibility of adjudicating likelihood of consumer confusion on a motion to dismiss (where the legal standard requires the judge to treat the plaintiffs’ allegations as true) because that was just too crazy–even though it does provide the desired “fast lane” without resorting to murky statutory issues like the “trademark use in commerce” requirement. Still, I can’t imagine this fast lane will survive appellate review, so we shouldn’t get too excited yet.

The plaintiff is a Swiss financial consulting company. The defendant in this case is PissedConsumer, a gripe site for consumer complaints. PissedConsumer has superseded Ripoff Report as the leading gripe site defendant, as I’ve blogged three other PissedConsumer cases in the past 7 months (Ascentive, Vo and Amerigas).

In the recent Amerigas ruling (not cited in this opinion), the court denied PissedConsumer’s 12b6 motion to dismiss the trademark claim. This court reaches the opposite conclusion. The uncited Vo ruling similarly granted PissedConsumer’s motion to dismiss for the trademark claim, but unlike this ruling, that was in state court and the trademark ruling was overshadowed by other aspects of the case (which is part of the reason I didn’t put 2+2 together when blogging that opinion). However, like the Vo court, the state court judge effectively gave no deference to the plaintiff’s allegations, which seems like it could be a problem if subsequently challenged.

Back to the deVere opinion. Running through a truncated likelihood of consumer confusion mutli-factor analysis, the court says PissedConsumer isn’t deVere’s competitor, there’s no chance PissedConsumer will “bridge the gap” to become a competitor, deVere didn’t allege bad faith and deVere didn’t allege actual consumer confusion. The court bypasses the remaining factors, something an appeals court probably won’t do. Instead, the court says that judicial precedent has held that gripe sites don’t create consumer confusion. Pointing to the Ascentive case, the court says:

there is no likelihood that a consumer visiting PissedConsumer.com would mistakenly believe that deVere sponsored or approved the contents of that website. The term “pissed” in the website name is clearly negative, as is the commentary on the website about deVere’s services – terms like “stole,” “WARNING,” “fraudsters,” and “scams” figure prominently.

To overcome this, the plaintiffs invoked the doctrinal crutch of initial interest confusion. The court doesn’t want to hear it:

The doctrine is not applicable here. PissedConsumer.com does not divert Internet users away from deVere’s website because deVere does not have a website that competes for business with PissedConsumer.com; Opinion Corp. provides a forum for customer criticism of businesses, while deVere provides financial services….Initial interest confusion does not arise “in circumstances where the products in question are used for substantially different purposes and therefore the merchants are not in close competitive proximity.” Big Star Entertainment, Inc. v. Next Big Star, Inc., 105 F. Supp. 2d 185, 209-10 (S.D.N.Y. 2000). Accordingly, deVere’s allegations “do not create any plausible inference of intentional deception”; there is no risk that a customer seeking deVere financial services would mistakenly visit and divert their business to PissedConsumer.com. Cintas, 601 F. Supp. 2d at 579.

On the one hand, deVere may have just failed to marshal the right allegations into its complaint, a fairly easy thing to correct. On the other hand, everything the court says is 100% correct, and kudos for this judge pulling the trigger early rather than letting a bogus trademark case fester at significant expense to both parties. In my opinion, this result is what should be happening. Sadly, I fear an appellate panel will unwind this judge’s bold move.

UPDATE: Rebecca sent some other recent examples of trademark claims failing on a motion to dismiss, including The Hangover II case, Forest River v. Heartland RV and Architectural Mailboxes v. Epoch.