United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
J. Hale, Judge
Onsite Truck and Trailer Service accuses its former
employees, Defendants Tyler Bratcher and Ryan Farris, of
unfair competition and trademark infringement arising out of
their use of the term “on-site” in advertising
for their new company, Defendant Precision Diesel Repair.
(Docket No. 1) Defendants have moved to dismiss, or in the
alternative for summary judgment, arguing that they make fair
use of the term and thus cannot be held liable. (D.N. 11;
see D.N. 11-1) For the reasons explained below, the
Court finds that Onsite's complaint states a plausible
claim for relief and that consideration of the fair-use
defense at this stage would be premature. Defendants'
motion to dismiss will therefore be denied.
following facts are set forth in the complaint and accepted
as true for purposes of the present motion. See Keys v.
Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012). Onsite
provides roadside assistance and repair services for trucks
and other vehicles in Kentucky and surrounding states. (D.N.
1, PageID # 3) From at least February 1, 2006, to the
present, it has used the service mark ONSITE® “to
identify and distinguish its services from those provided by
others and to indicate the source of those services”;
the mark is recognized “throughout the United States in
connection with Onsite's goods and services.”
(Id., PageID # 4) The ONSITE® mark was
registered with the U.S. Patent and Trademark Office on
January 27, 2015. (Id., PageID # 3)
and Farris are former Onsite employees. (Id., PageID
# 4) Bratcher held a position of trust at the company and
“was able to learn how Onsite developed its market and
service[d] its customers.” (Id.) When Bratcher
left Onsite, Farris soon followed, and the two formed
Precision Diesel Repair (PDR), which directly competes with
Onsite. (Id., PageID # 4-5) Defendants use
“sponsored link ads” in advertising for PDR.
(Id., PageID # 5) These ads “are triggered by
the entry of certain keywords” that are
“purchase[d]” by the advertiser and entered by
computer users. (Id., PageID # 5-6) They allow an
advertiser “to bypass the search engine's usual
relevancy factors and prominently display that
advertiser's caption and text along with an accompanying
link to a website specified by the advertiser.”
(Id., PageID # 5) PDR's ads on Google, Bing, and
similar search sites prominently feature the term
“on-site” or “on site” and include a
link to the PDR website. (Id., PageID # 6-8) As a
result, consumers seeking the services that Onsite and PDR
provide “are likely to believe that Defendants'
services are Onsite's services, or originate from Onsite,
or that Defendants' services are endorsed, sponsored by
or approved by Onsite, or that there is some affiliation or
connection between Defendants and Onsite”
(id., PageID # 8), and Onsite loses business to PDR.
(Id., PageID # 8-9)
alleges that Defendants use the term “on-site” to
take advantage of the reputation and goodwill associated with
the ONSITE® mark. (Id., PageID # 9) It asserts
claims of trademark infringement and unfair competition under
the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a), as
well as common-law unfair competition. (Id., PageID
# 10-13) Defendants have moved to dismiss all of Onsite's
claims. (D.N. 11) In the alternative, they ask the Court to
enter summary judgment in their favor. (Id.)
survive a motion to dismiss for failure to state a claim,
“a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570
(2007)). A claim is plausible on its face
“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.
Factual allegations are essential; “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice, ” and the
Court need not accept such statements as true. Id. A
complaint whose “well-pleaded facts do not permit the
court to infer more than the mere possibility of
misconduct” does not satisfy the pleading requirements
of Rule 8 and will not withstand a motion to dismiss.
Id. at 679.
plaintiff states a claim of trademark infringement under the
Lanham Act by “alleg[ing] facts establishing that: (1)
it owns the registered trademark; (2) the defendant used the
mark in commerce; and (3) the use was likely to cause
confusion.” Hensley Mfg. v. ProPride, Inc.,
579 F.3d 603, 609 (6th Cir. 2009) (citing 15 U.S.C. §
1114(1)). Defendants do not dispute that Onsite's
complaint satisfies these elements. However, they maintain
that they are protected by the doctrine of fair use because
they used Onsite's mark only in a descriptive sense and
in good faith. (See, e.g., D.N. 11-1, PageID #
80-82) They rely on Hensley as authority for
disposing of an infringement case at the motion-to-dismiss
stage on the basis of fair use. (See D.N. 11-1,
PageID # 84)
Hensley, the Sixth Circuit affirmed the dismissal of
the plaintiff's complaint for failure to state a claim.
579 F.3d at 614. Hensley Manufacturing, a company that
manufactured trailer hitches, sued its competitor ProPride
and Jim Hensley, who designed hitches for ProPride after
leaving the company that bore his name. Id. at 606.
Hensley Manufacturing alleged that ProPride infringed on its
registered trademark in the name “Hensley” by
using Jim Hensley's name to advertise ProPride products.
Id.The Sixth Circuit first found that Hensley
Manufacturing failed to state a plausible claim of trademark
infringement because (1) the complaint contained only a
conclusory allegation that ProPride's use of
Hensley's name “create[d] ‘a strong
likelihood of confusion in the marketplace as to the source
of origin and sponsorship of the goods of the Plaintiff and
the Defendant'”; and (2) the advertisements
attached as exhibits to the complaint demonstrated that
ProPride's use of Hensley's name did not create a
likelihood of confusion. Id. at 611.
court further held that even if Hensley Manufacturing's
complaint adequately alleged likelihood of confusion,
ProPride would be protected by the doctrine of fair use.
Id. At 611-12. “Under [that] doctrine, ”
the court explained, “the holder of a trademark
cannot prevent others from using the word that forms
the trademark in its primary or descriptive
sense.” Id. At 612 (quoting Herman Miller,
Inc. v. Palazzetti Imports & Exports, Inc., 270 F.3d
298, 319 (6th Cir. 2001)).
Rather, “[t]he only right of exclusion that trademark
law creates in a descriptive word is in the secondary, new,
trademark meaning of the word that plaintiff has created. The
original, descriptive primary meaning is always available for
use by others to describe their goods, in the interest of
Id. (alteration in original) (quoting Herman
Miller, 270 F.3d at 319). Defendants quote these
passages repeatedly in support of their motion to dismiss,
arguing that Onsite's claim is barred because they have
engaged in fair ...