Empower Federal Credit Union v. Empower Annuity Insurance Company of America
5:23-cv-00941
N.D.N.Y.Aug 2, 2024Background
- Empower Federal Credit Union (Plaintiff) sued Empower Annuity Insurance Company of America (Defendant) for federal and state trademark infringement and related claims over the use of "Empower"-formative marks in financial services.
- Both companies offer financial services but operate in slightly different markets: Plaintiff operates locally in New York as a credit union, while Defendant provides national retirement, investment, and related financial services.
- Each party claims ownership over various "Empower" trademarks; Plaintiff's relevant trademarks are incontestable and have been used since at least 2007, while Defendant began using "Empower" branding in 2014 and expanded in 2022.
- Both parties allege customer confusion and assert overlapping claims and counterclaims, including motions to dismiss for failure to state a claim and motions to strike affirmative defenses.
- The case is before the court on various Rule 12 motions, including partial dismissals and attacks on the sufficiency of affirmative defenses and counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Unfair competition - palming off | Alleged Defendant's use confuses/deceives customers with marks | No facts show Defendant marketed as Plaintiff or passed off Plaintiff's services | Dismissed palming off claim |
| Unfair competition - misappropriation | Defendant misappropriated goodwill for its own advantage | No direct reference to misappropriation, no exploitation of Plaintiff's efforts | Denied dismissal; Plaintiff sufficiently alleged misappropriation & bad faith |
| Special damages requirement | Not required for trademark-based unfair competition claims | Failure to allege special damages | Denied dismissal; special damages not required |
| Statute of limitations (NY GBL claims) | Continuing tort, claims timely for recent acts; progressive encroachment | Conduct began >3 years ago, so time-barred | Denied dismissal as to timeliness; possibly limits damages, not claims |
| GBL § 360-l dilution preemption | Preemption applies only to registered marks; challenging validity | Preemption bars claims even against registered, but valid, marks | Denied dismissal; can proceed where validity is contested or marks are unregistered |
| Public harm—Deceptive trade/false adv. | Defendant's actions harm public, e.g., customer info mishap | Only ordinary confusion, not broad public harm | Dismissed § 349 and § 350 claims—no broad public harm alleged |
| Trademark cancellation (abandonment/fraud) | Defense fails on abandonment (marks in use) and fraud not pled | Power FCU is true owner; alleged non-use and false representations | Cancellation claim for Word Mark survives (abandonment); Fraud/intent-to-use dismissed |
| Affirmative defenses—motions to strike | Defenses duplicative or insufficient; rely on inadmissible evidence | Defenses sufficient; factual disputes preclude striking | Majority of defenses survived except equitable estoppel (stricken); leave to amend |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (sets plausibility standard for pleadings under Fed. R. Civ. P. 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions incomplaints not entitled to presumption of truth)
- ITC Ltd. v. Punchgini, Inc., 850 N.Y.S.2d 366 (2007) (New York recognizes unfair competition via palming off or misappropriation)
- Tri-Star Pictures, Inc. v. Unger, 14 F. Supp. 2d 339 (S.D.N.Y. 1998) (unfair competition requires likelihood of confusion and bad faith)
- Gruner + Jahr USA Pub. v. Meredith Corp., 991 F.2d 1072 (2d Cir. 1993) (incontestable trademarks may only be cancelled on limited grounds)
- Republic of Turk. v. Christie’s Inc., 62 F.4th 64 (2d Cir. 2023) (sets standard for laches defense)