Manley v. Boat/U.S., Inc.

75 F. Supp. 3d 848, 2014 U.S. Dist. LEXIS 171837, 2014 WL 7054062
District Court, N.D. Illinois·Decided December 12, 2014·No. Case No. 13 CV 5551·Published·Cited by 8 cases

Opinion

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, Jr., United States District Judge

This matter is before the Court on a motion to dismiss [35] pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by Plaintiff/Counter-Defendant Chicago Marine Towing. Counter-Defendant seeks to dismiss Count I (breach of contract) and Counts III through IX (trademark infringement, dilution, and unfair competition under state and federal law) of the first amended counterclaim filed by Defendant/Counter-Plaintiff Boat/U.S., Inc. For the reasons set forth below, the Court grants the motion to dismiss [35] with respect to Count IX for trademark dilution under the Illinois Trademark Registration and Protection Act, 765 ILSC 1036/65 and denies the motion with respect to all of the other counts.

[851] I. Factual Background1

Plaintiff/Counter-Defendant John J. Manley d/b/a/ Chicago Marine Towing (“Chicago Marine”) is an Illinois business that provides marine towing and salvage services to boats on Lake Michigan and its tributary waters. Defendant/Counter-Plaintiff Boat/U.S., Inc. (“Boat U.S.”) is a Virginia corporation that provides water towing services, 24-hours dispatch services, and insurance coverage for recreational boaters. Boat U.S. has provided boating services since 1966 and has more than half a million members. [34], Am. Counterclaim at ¶ 4. It owns multiple registrations for trademarks, including “Boa-tU.S.” and “TowBoatU.S.” Id. at ¶5. Boat U.S. contends that these marks are “famous” within the meaning of the Lan-ham Act and are widely recognized by the general consuming public. See id. at ¶¶ 7, 37.

In February 2009, Chicago Marine entered into a license/service agreement (the “Agreement”) with Boat U.S. Under the Agreement, Chicago Marine was a Boat U.S.-authorized towing company, with an area of exclusive operation in and around specified ports on Lake Michigan. Chicago Marine also was licensed and authorized to display the Boat U.S. trademarks on its vessels to show its affiliation with Boat U.S., while the Agreement was in effect. Id. at ¶ 10. Chicago Marine agreed to cease all use of the trademarks upon termination of the Agreement for any reason. Id. at ¶ 12.

Boat U.S. alleges that, while the Agreement was in force, Chicago Marine displayed the Boat U.S. trademarks — including “BoatU.S.” “TowBoatU.S.,” “www. TowBoatUS.com,” “Boat USA,” and “the design of a Buoy” — on its motor vehicles, boats, website, signage, letterhead, paperwork, and clothing to promote its affiliation with Boat U.S. See id. at ¶ 11. On July 23, 2012, Boat U.S. terminated the Agreement due to Chicago Marine’s purported breaches of four items in the Agreement. Boat U.S. alleges that after the termination, Chicago Marine continued to display the trademarks on its motor vehicle, boats, website, signage, letterhead, paperwork and clothing to falsely and improperly suggest an authorized affiliation with Boat U.S. Id. at ¶ 15. Boat U.S. asserts eight counts that relate to the alleged unauthorized use of the trademarks: breach of contract (Count I); trademark infringement under the Lanham Act, 15 U.S.C. § 1114 (Count III) and under common law (Count VI); trademark dilution under 15 U.S.C. § 1125(c) (Count IV) and under the Illinois Trademark Registration and Protection Act, 765 ILCS 1036/65 (Count IX); false designation of origin under 15 U.S.C. § 1125(a) (Count V); unfair competition (Count VII); and (6) a violation of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count VIII). Boat U.S. also alleges that Chicago Marine breached the implied covenant of good faith and fair dealing by acting inappropriately during a July 2012 salvage operation that resulted in termination of the Agreement (Count II).

The alleged circumstances of Boat U.S.’s termination of the Agreement are set forth fully in a previous memorandum opinion. See Manley v. Boat/U.S. Inc., 2014 WL 1647117, at *1-2 (N.D.Ill. Apr. 23, 2014). They need not be repeated here for pur[852] poses of deciding the instant motion. In short, Boat U.S. terminated the Agreement after it received complaints about Chicago Marine’s actions during a July 1, 2012 salvage operation to assist a boat that had run aground. Chicago Marine subsequently filed suit against Boat U.S. for wrongful termination. Chicago Marine also asserted defamation claims against Boat U.S. and against the company that replaced Chicago Marine after Boat U.S terminated the Agreement. Defendants filed motions to dismiss the complaint, which the Court denied. See Manley, 2014 WL 1647117, at *6. Boat U.S. filed an answer and counterclaim thereafter [24], followed by its first amended answer and counterclaim [34], which is at issue now.

II. Legal Standard

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Manley v. Boat/U.S., Inc., 75 F. Supp. 3d 848, 2014 U.S. Dist. LEXIS 171837, 2014 WL 7054062 (N.D. Ill. 2014).

75 F. Supp. 3d 848 (Manley v. Boat/U.S., Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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