687 F. App'x 429
6th Cir.2017Background
- In 2013 Exacta Systems developed an historical-horse-race gambling platform (the “System”) that displays anonymized, computer-generated brief replays of historical races after wagers are placed, and shows a short caption listing "Location: [TRACK NAME] Date: Race Number: ID:".
- Many historical races used by the System were run at racetracks owned by the plaintiffs (Track Owners), who hold common-law and federal trademark rights in their track names.
- Plaintiffs sued Exacta and Kentucky Downs alleging Lanham Act trademark infringement and unfair competition, claiming the brief display of track names would lead consumers to believe the tracks provided or endorsed the replays.
- Defendants moved to dismiss under Rule 12(b)(6); the district court dismissed, holding the use was a non-trademark use (and alternatively that fair use applied).
- The Sixth Circuit reviewed de novo and affirmed dismissal, concluding the System’s display of track names was descriptive, non-source-identifying, and unlikely to cause consumer confusion; plaintiffs’ allegations of confusion were conclusory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants’ display of track names was a "trademark use" subject to Lanham Act liability | The brief display of track names in the replay could make consumers believe the tracks provided/verified the video, thus a trademark use likely to cause confusion | The display is descriptive (preceded by "Location:"), the replay is generic and not a product of the tracks, so the use does not identify source and is non-trademark use | Held: Non-trademark use; plaintiffs failed to plead facts showing source-identifying use or likelihood of confusion |
| Whether dismissal on the pleadings was appropriate given likelihood-of-confusion usually a fact question | Alleged likelihood of confusion and harm to goodwill; dismissal premature | Plaintiffs pleaded only conclusory allegations without factual support; Hensley and Interactive Prods. require pleading specific facts to support confusion | Held: Dismissal proper—conclusory allegations insufficient |
| Whether defendants’ advertising constituted infringement by using track names | Plaintiffs argued advertising trades on track goodwill | Defendants’ brochure did not reference plaintiffs and highlighted Exacta and Gaming Laboratories International certification; screenshot track names not owned by plaintiffs | Held: Advertising did not support plaintiffs’ claim |
| Whether unfair competition claim survives given Lanham Act analysis | Plaintiffs contended common-law unfair competition independent | Defendants argued same likelihood-of-confusion standard applies | Held: Foreclosed—because no likelihood of confusion, unfair competition claim fails |
Key Cases Cited
- Daddy’s Junky Music Stores, Inc. v. Big Daddy’s Family Music Ctr., 109 F.3d 275 (6th Cir.) (sets out eight-factor likelihood-of-confusion test)
- Hensley Mfg. v. ProPride, Inc., 579 F.3d 603 (6th Cir.) (use in advertising may be non-trademark use where it does not identify source)
- Interactive Prods. Corp. v. a2z Mobile Office Sols., Inc., 326 F.3d 687 (6th Cir.) (distinguishes trademark use from non-trademark descriptive uses)
- Prestonettes, Inc. v. Coty, 264 U.S. 359 (U.S.) (trademark law does not prevent truthful descriptive use)
- Groeneveld Transp. Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494 (6th Cir.) (likelihood-of-confusion protects informational integrity in the marketplace)
- Champions Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111 (6th Cir.) (likelihood of confusion central to unfair competition claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility pleading standard)