United States District Court, W.D. North Carolina, Charlotte Division
Graham C. Mullen United State District Judge
THIS MATTER is before the Court on Defendants’ Motion to Dismiss Plaintiff’s Amended Complaint (Doc. No. 22), Plaintiff’s Response (Doc. No. 24), and Defendant’s Reply (Doc. No. 26). For the reasons stated herein, that motion is DENIED.
Plaintiff Cinebarre, LLC operates movie theaters across the United States. These theaters are based upon a “novel concept” in that they offer spacious seating, a variety of food prepared on site, and an eating surface positioned in front of the seating so that patrons may consume food and drink while viewing a movie. (See Amended Complaint (hereinafter “Complaint”), Doc. No. 15 at 3). The Complaint alleges that, since 2007, Plaintiff has marketed its movie theaters under the trademark “EAT. DRINK. WATCH MOVIES.”, which was registered as U.S. Trademark No. 3, 349, 828 on December 4, 2007. (See Exh. A to Compl., Doc. No. 15-1). It further alleges that the mark is widely recognized within the business community as the brand identifier for Plaintiff’s movie theaters, and that consumers have come to recognize the mark as being associated with Plaintiff.
As alleged in the Complaint, Defendants also operate movie theaters-which also serve food and drink to patrons while they watch movies-with one such location operating in Charlotte. Defendants use similar marks to brand their services, namely “SMG: EAT DRINK MOVIES” and “EAT DRINK MOVIES.” (Compl. at 5). Plaintiff alleges that Defendants began using these marks with full knowledge of Cinebarre’s mark, and that Defendants’ owner, Brian Schultz, directly modeled Defendants’ movie theaters after Cinebarre’s concept. (Id.) More specifically, the Complaint alleges that in 2002, Mr. Schultz contacted Plaintiff’s predecessor-in-interest expressing interest in operating a franchise. (Id.) Plaintiff’s predecessor-in-interest ended those discussions when it learned that Mr. Schultz had attempted to bribe one of its employees to allow him access to the kitchen so that he could take pictures; it concluded that the franchise overture was merely a ruse to learn more about its business model. (Id.)
Finally, the Complaint alleges that Defendants selected these “virtually identical” marks to cause confusion, mistake, and deception as to the source, origin, and authenticity of Defendants’ services and goods. (Compl. at 11). It also alleges that, when Defendants attempted to register the “EAT DRINK MOVIES” mark, the U.S. Patent and Trademark Office (“USPTO”) initially refused registration on the basis of likelihood of confusion with Plaintiff’s trademark. (Compl. at 6). Defendants began using these marks after March 2009.
Plaintiff’s Amended Complaint, filed June 5, 2014, alleges claims for (1) federal trademark infringement; (2) common law trademark infringement; (3) North Carolina Unfair and Deceptive Trade Practices; (4) common law unfair competition; (5) federal unfair competition/false advertising; (6) cancellation of U.S. Trademark Registration No. 4, 336, 460 (Defendants’ “EAT DRINK MOVIES” mark); and (7) cancellation of U.S. Trademark Registration No. 4, 204, 415 (Defendants’ “SMG: EAT DRINK MOVIES” mark).
II. LEGAL STANDARD
When faced with a Rule 12(b)(6) motion to dismiss, courts are instructed to “accept as true all well-pleaded allegations and . . . view the complaint in a light most favorable to the plaintiff.” Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). After “assum[ing] the veracity” of these factual allegations, the court is to “determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Thus, a “complaint may proceed even if it strikes a savvy judge that actual proof of [the facts alleged] is improbable, and ‘that a recovery is very remote and unlikely.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). However, the court “need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.” Eastern Shore Mkts., Inc. v. J.D. Assocs. LLP, 213 F.3d 175, 180 (4th Cir. 2000).
A. Trademark Infringement
The argument central to Defendants’ motion to dismiss is that the Complaint fails to “allege any specific facts explaining how a consumer could plausibly be confused as to the source or sponsorship of Cinebarre’s and Studio Movie Grill’s movie theaters . . . .” (Doc. No. 22-1 at 7). The elements of a claim for trademark infringement in the Fourth Circuit are as follows:
To prove trademark infringement, [the plaintiff] must show (1) that it owns a valid and protectable mark; (2) that [the defendant] uses a “re-production, counterfeit, copy, or colorable imitation” of that mark in commerce and without [the plaintiff’s] consent; and (3) that [the defendant’s] use is likely to cause confusion.
Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 259 (4th Cir. 2007) (quoting 15 U.S.C. § 1114(1)(a)). While Defendants expressly contest the first element,  ...