Sierra International Machinery Inc v. Axel

District Court, E.D. California·Decided March 4, 2022·No. 1:21-cv-00723·Unknown

Opinion

SIERRA INTERNATIONAL Case No. 1: :21-cv-00723 MACHINERY, a California Corporation, ORDER DENYING MOTION TO DISMISS Plaintiff, (Doc. No. 6) v. JEREMY AXEL, an individual residing in Colorado; and DOES 1 TO 25, inclusive, Defendants. Jeremy Axel admits he has used the plaintiff’s trademarks on his website but only to advertise the plaintiff’s products. Because he asserts that this precludes liability, he urges the Court to grant his motion to dismiss. For the reasons set forth below, the Court DENIES the motion to dismiss. Plaintiff originally filed a complaint in the Superior Court of California, County of Kern, asserting Defendant violated federal and state laws for using Plaintiff’s federally registered trademarks on its website. (Doc. 1-1.) Plaintiff’s complaint contains four separate counts on which it seeks relief: (1) trademark infringement arising under Section 32 of the Lanham Act, 15 U.S.C. § 1114; (2) infringement of common law trademark rights; (3) unfair competition by infringement of common law rights; and (4) unfair competition under California Business & Professions Code, § 17200. Defendant removed the matter to this Court on August 21, 2020. (Doc. 1.) Plaintiff is the owner of two federally registered trademarks at issue in this case. U.S. Trademark Registration No. 4,343,540 corresponds to the word mark “SIERRA.” (Doc. 1-1 at ¶ 7, Exhibit A.) U.S. Trademark Registration No. 5,885,542 covers the stylized version of the word mark “SIERRA” which includes the red coloring and specific font. (Id., Exhibit B.) Plaintiff sells processing equipment to the scrap and recycling industries, also referred to by the parties as “recycling balers.” (Doc. 1-1 at ¶¶ 1, 7). Defendant owns a website, located at which advertises recycling balers and similar machinery sold by third parties. (Doc. 6 at 6.) Plaintiff’s trademarks appear at least twice on Defendant’s website. The stylized red version of SIERRA appears on a page that lists Defendant’s “Waste & Recycling Equipment Preferred Manufacturers” as shown by Exhibit C submitted with the complaint. (Doc. 1-1, Exhibit C.) The “Preferred Manufacturers” page lists seven other recycling equipment manufacturers. (Id.) Defendant’s website also contains the non-stylized version of the SIERRA word mark under the “Equipment Manufacturers” list. (Id., Exhibit D.) In addition, Plaintiff alleges that Defendant’s website incorporates the SIERRA mark in at least one of its website URLs and causes the SIERRA mark to be displayed in Google search results. (Id. at ¶ 11, Exhibit E.) Plaintiff contends Defendant’s website is written in a manner that causes his website to appear in a Google results list when searching for “Sierra Recycling Balers.” (Id. at ¶ 12, Exhibit F.) Defendant does not contest that he uses or has used the SIERRA marks. (Doc. 6 at 5.) Rather, Defendant argues that he only uses the marks for the purpose of advertising Plaintiff’s products. (Id.) According to Defendant, this use constitutes nominative fair use and therefore, falls outside the protections afforded by federal and common law trademark rights. (Id.) Defendant moved to dismiss the complaint primarily on this basis and argues that Plaintiff’s remaining claims collapse into the claim arising under the Lanham Act. (Id. at 6-8.

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