OPINION AND ORDER
I. INTRODUCTION
This mаtter is before the Court of Defendant Hollander Home Fashions Corp.’s (“Hollander”) Motion to Dismiss Plaintiffs Complaint. For the reasons stated herein, Defendant’s Motion to Dismiss is DENIED.
II. FACTS
On October 7, 2003 Plaintiff Official Pil-lotex (“OP”) purchased out of bankruptcy all of the intellectual property assets of Pillotex Corporation, 1 Fieldcrest Cannon, Inc. (“Fieldcrest”), and all of their subsidiaries. These assets included six ROYAL VELVET trademarks (the “ROYAL VELVET marks”) and two VELVET TOUCH trademarks (the ‘VELVET TOUCH marks”). 2 Plaintiff paid $128 million in exchange for these marks and other assets. Plaintiff alleges that there is significant goodwill and other intangible value *747 associated with these marks because Pillo-tеx Corporation and Fieldcrest employed them in commerce for the past forty years.
After acquiring these trademarks, Plaintiff entered into an exclusive license agreement with The Millwork Trading Co., Ltd. d/b/a Li & Fung USA (“Li & Fung”) to market and sell products bearing these marks. Less than two months after the execution of this license agreement, Plaintiff successfully began to market and distribute products bearing the six ROYAJL VELVET marks. Plaintiff and Li & Fung, however, were unable to put products bearing the VELVET TOUCH marks back into the market “before certain papers were due at the United States Patent and Trademark Office” (“USPTO”). As a result, the VELVET TOUCH registrations were сancelled. In October of 2004, immediately following the VELVET TOUCH marks’ cancellations, Plaintiff filed intent-to-use applications seeking to re-register the two VELVET TOUCH marks which it acquired from Fieldcrest. To date, Plaintiff has not reintroduced products bearing the VELVET TOUCH marks into the stream of commerce.
Plaintiff alleges that Defendant has advertised and sold bedding products bearing the VELVET TOUCH marks in question at Wal-Mart stores throughout the United States. Plaintiff asserts that Defendant’s sale of products containing the VELVET TOUCH marks infringes on Plaintiffs rights in these marks. It sent Defendant a cease and desist letter requesting that Defendant halt the marketing and sale of products bearing the VELVET TOUCH symbol. Defendant did not cease such activities.
Defendant retorts that it has sold bedding products bearing the VELVET TOUCH mark since 1989 and has developed extensive goodwill in association with this mark. On February 7, 2006, Defendant filed an application to register its VELVET TOUCH mark with the USPTO based on its use of the mark. It alleges that its rights in these marks are paramount to any which Plaintiff purports to possess.
In its complaint, Plaintiff states three claims for relief. In Count I, Plaintiff alleges that Defendant’s sale of products containing the VELVET TOUCH mark violates Section 1125(a) of the Lanham Act by creating a false designation of origin. 3 In Count II, Plaintiff further assеrts that Defendant’s actions violated the Ohio Deceptive Trade Practices Act, O.R.C. § 4165.01 et seq. In Count III, Plaintiff claims that Defendant allegedly infringing actions constituted violations of Ohio state common law trademark infringement, unfair competition, and passing off.
Plaintiff states that this Court has subject matter jurisdiction over Count I under 28 U.S.C. §§ 1331 and 1338(a). The federal question jurisdiction statute, 28 U.S.C. § 1331, states that “the district courts shall have original jurisdiction of all civil *748 actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1388(a) states, in relevant part, that “the district courts shall have original jurisdiction of any civil action arising under any Act of Congress rеlating to patents, plant variety protection, copyrights and trademarks.” Plaintiff contends that this Court has jurisdiction over Plaintiffs state law claims, which are contained in Counts II and II of the complaint, under 28 U.S.C. §§ 1367(a) and 1338(b). The supplemental jurisdiction statute, 28 U.S.C. § 1367(a), states, in relevant part, that “... the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1338(b) states that “the district courts shall have original jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under the copyright, patent, plant variety protection or trademark laws.”
III. Standard of Review
A. Fed. R. Civ. Pro. 12(b)(1)
Before determining whether a plaintiff has failed to state a claim upon which relief may be granted, the Court must first decide whether it has subject matter jurisdiction.
City of Heath, Ohio v. Ashland Oil, Inc.,
“When subject matter jurisdiction is challenged under Rule 12(b)(1), ... the plaintiff has the burden of proving jurisdiction in order to survive the motion.”
Rogers v. Stratton Indus.,
B. Fed.R.Civ.P. 12(b)(6)
In considering a Rule 12(b)(6) motion to dismiss, this Court is limited to evaluating whether a plaintiffs complaint sets forth allegations sufficient to make out the elements of a cause of action.
Windsor v. The Tennessean,
*749 IV. LAW and ANALYSIS
A. Summary of the Arguments
Defendant moves to dismiss the complaint for three reasons. First, under Fed.R.Civ.P. 12(b)(1), Defendant contends that Plaintiff has not put forth enough evidence to show that this Court has subject matter jurisdiction over the allegations in the complaint. Second, Defendant alleges that Plaintiff does not have constitutional standing to bring this suit. Third, under Fed.R.Civ.P. 12(b)(6), Defendant asserts that Plaintiffs complaint fails to state a claim upon which relief may be granted.
1.) Defendant’s Arguments
a.) Subject Matter Jurisdiction
Behind all three of Defendant’s reasons, as stated in its original motion to dismiss, is its assertion that Plaintiff lacks enforceable rights in the VELVET TOUCH marks because the marks are no longer registered and Plaintiff has not used the marks in commerce.
The right to a particular mark grows out of the mark’s actual use.
4
See, e.g., Homeowners Group v. Home Mktg. Specialists,
Because Plaintiff neither has a valid registration for the marks nor alleges that it has used the marks in commerce, Defendant contends that Plaintiff has no enforceable rights in the VELVET TOUCH marks. Defendant alleges that because Plaintiff does not have any enforceable rights in the marks, Plaintiff does not have a claim that arises under the Lanham Act and as a result, subject matter jurisdiction over Count I is absent.
Moreover, Defendant contends that the Lanham Act is inapplicable because Plaintiff cannot make a
prima facie
cause for false designation of origin. A clаim for false designation of origin arising under Section 43(a) of the Lanham Act must contain two elements: (1) the false designation must have a substantial effect on interstate commerce; and (2) the false designation must create a likelihood of confusion.
Johnson v. Jones,
b.) Standing
Defendant also asks this Court to dismiss Plaintiffs complaint because Plaintiff
*750
does not have constitutional standing to bring a claim under the Lanham Act. In order to have constitutional standing, Article III of the Constitution dictates that a Plaintiff must show that: (1) he has suffered or will imminently suffer an injury; (2)the injury is fairly traceable to the defendant’s conduct; and (3) the court can redress the plaintiffs injury.
Lujan v. Defenders of Wildlife,
3.) Failure to State a Claim
Defendant further moves to dismiss the complaint for failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6). Defendant delineates two rationale as to why it alleges that Plaintiff has failed to state a claim under the Lanham Act. First, because Plaintiff does not use the VELVET TOUCH marks, Defendant contends that there cannot be a likelihood of confusion between Defendant’s and Plaintiffs marks. Consequently, Defendant asserts that Plaintiff fails to meet the second prong of the Johnson v. Jones criteria. Defendant thus argues that Plaintiff cannot sustain a claim for false designation of origin. Second, Defendant argues that because Plaintiffs complaint omits specific recitatiоns that Defendant’s use of the VELVET TOUCH marks “creates a likelihood of confusion” among consumers and “has a substantial effect on interstate commerce,” Plaintiff cannot state a cognizable claim under the Lanham Act. Finally, Plaintiff asserts that Plaintiff does not proffer any facts to prove that the VELVET TOUCH marks have a substantial effect on interstate commerce or that Defendant’s use of the marks is likely to create a substantial likelihood of confusion among consumers.
4.) State Law Claims
Finally, Defendant asserts that because this Court must dismiss Plaintiffs Lanham Act claim, it lacks subject matter jurisdiction over Plaintiffs remaining state law claims under either 28 U.S.C. §§ 1367(a) or 1338(b). Normally, even if a court dismisses all Plaintiffs federal claims, it still may exercise jurisdiction over pendent state law claims pursuant to 28 U.S.C. §§ 1367(a).
Arbaugh v. Y & H Corp.,
2.) Plaintiffs Arguments Regarding Subject Matter Jurisdiction, Standing, and Failure to State a Claim
Plaintiff asserts that it obtained enforceable rights in the VELVET TOUCH marks from Fieldcrest, and as a result, Defendant’s arguments fail — this Court has subject matter jurisdiction, Plaintiff has standing, and Plaintiff has stated claims upon which relief may be granted. The purpose of a trademark is to represent and protect the goodwill of a business.
Merry Hull & Co. v. Hi-Line Co.,
Plaintiff relies on
Defiance Button Machine Co. v. C & C Metal Products Corp.,
The Lanham Act’s abandonment statute, 15 U.S.C. § 1127, states:
A mark shаll be deemed to be “abandoned” if either of the following occurs:
(1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 6 consecutive years shall be prima facie evidence of abandonment. “Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.
(2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on оr in connection with which it is used or otherwise to lose its significance as a mark. Purchaser motivation shall not be a test for determining abandonment under this paragraph.
Using this framework, the Second Circuit held that Defiance-NY did not intend to abandon its trademark and, as a result, could still enforce its rights in it against C *752 & C. Id. at 1060. (holding that a mark is preserved “so long as (a) the goodwill of the concern has not wholly dissipated, (b) the owner or its assignee retains the intent to produce or market within a reasonable time a product or service substantially the same in nature and quality as that with which the trademark has been assoсiated, and (c) such resumption of operations occurs within a reasonable time under the circumstances.”) The court found that De-fianee-NY’s actions evinced its intent to resume use of their mark because: (1) it explicitly reserved the rights to its intangible assets when it sold its physical assets to C & C; (2) immediately thereafter, it sought to sell its trademark and trade name; and (3) it sold its mark to a company that produced a substantially similar product. 7 Id. at 1060-61.
In the case sub judice, Plaintiff argues that it meets the three-prong test outlined in Defiance. Plaintiff purchased the intellectual property assets of Fieldcrest, which Plaintiff alleges had enforceable rights in the marks due to the fact that Fieldcrest had registrations for these marks and used them in commerce for over forty years. Upon receiving the assets, it immediately sought a licensee to supply products bearing the VELVET TOUCH mark. When the marks’ registration lapsed, Plaintiff immediately filed intent-to-use applications. Plaintiff further argues that it plans to introduce a similar bedding products to that of Fieldcrest bearing VELVET TOUCH mark as indicated by the fact that it has put out similar bedding products bearing the ROYAL VELVET marks. In summary, Plaintiff argues that it purchased enforceable trademarks rights from Fieldcrest, took actions which indicated that it had not abandoned these marks, and as a result, Plaintiff contends that it has retained enforceable rights in these marks. As a consequence of having enforceable rights in the VELVET TOUCH marks, Plaintiff urges this Court to reject Defendant’s arguments.
3.) Defendant’s Reply to Plaintiffs “Deñance ” Argument
Defendant retorts that it is not arguing that Plaintiff abandoned the VELVET TOUCH marks. Instead, for the first time in its reply brief, Defendant contends that Fieldcrest abandoned the marks. Defendant asks this Court to infer from the fact that Plaintiff did not specifically allege in its complaint that Fieldcrest used the mark, and from the fact that the mark was cancelled shortly after Plaintiffs purchase, that Fieldcrest abandoned the mark. Thus, Defendant asserts that Plaintiff has failed to show that Fieldcrest had enforceable rights in these marks. The burden of proving subject matter jurisdiction is on the Plaintiff.
Moir v. Greater Cleveland Regional Transit Authority,
*753 B. This Court Has Subject Matter Jurisdiction Over This Action
Both Parties misconstrue the meaning of subject matter jurisdiction as it applies under the Lanham Act. The Parties make a common mistake: “subject matter jurisdiction in federal-question cases is sometimes erroneously conflated with a plaintiffs need and ability to prove the defendant bound by the federal law asserted as the predicate for relief — a merits-related determination.”
Arbaugh v. Y & H Corp.,
This, however, is not always the case. The Supreme Court in
Arbaugh v. Y & H Corp.,
In Arbaugh, an employee of a restaurant that employed fourteen people brought suit against her employer for sexual harassment under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1). After the plaintiff won at trial, the defendant moved to dismiss the case for lack of subject matter jurisdiction because Title VII limits employers who can be sued under Title VII to those who employee fifteen or more persons. See 42 U.S.C. § 2000e(b). The Supreme Court found that in addition to Section 1331, 42 U.S.C. § 2000e-5(f)(3) 8 also specifically granted subject matter jurisdiction over Title VII claims to the federal courts. Given that Title VII itself presented a jurisdictional basis for the plaintiff to bring her action in federаl court, the Supreme Court found it necessary to decide whether the fifteen-or-more employee rule delineated in 42 U.S.C. § 2000e(b) was jurisdictional in nature or merely an element of the merits of the claim itself. Id. at 1238. The Court’s analysis turned on the Congressional intent of the requirement. Id. at 1238. It found that Congress could have expressly made the numerosity requirement jurisdictional in nature. Id. It did not. The Supreme Court held that “when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in *754 character.” Id. at 1245. Thus, the Supreme Court held that the numerosity requirement of Title VII is an element оf a plaintiffs claim and not a jurisdictional requirement. Id.
To the extent that Defendant is arguing that this Court lacks jurisdiction because Plaintiff cannot make a prima facie case for a Lanham Act violation, Plaintiffs argument is misdirected. If a plaintiff fails to make out the elements of his claim, the proper vehicle for dismissing the complaint is a 12(b)(6) motion; subject matter jurisdiction is irrelevant to the analysis. To the extent that Plaintiff is arguing that having enforceable rights in the trademark in question is a jurisdictional element of a Lanham Act claim, Arbaugh controls the issue.
Aside from Section 1331, Section 1338(a) also contains a jurisdictional basis for federal courts to hеar trademark infringement cases. Congress’ separate jurisdictional grant evinces its intent to provide a federal forum for intellectual property cases absent other factors that might impede a plaintiffs ability to sue in federal court, such as Section 1331’s previous amount-in-controversy requirement. See, e.g., id. at 1239. Defendant’s argument that Plaintiff must have enforceable rights in the VELVET TOUCH marks in order for this Court to have subject matter jurisdiction over this action is incorrect. Congress did not specifically create a statutory requirement that Plaintiff have enforceable rights in a mark in order for it to bring a suit under the Lanham Aсt. The fact that Defendant neglects to cite the statute that directly states that a Plaintiff must have these rights in order for a federal court to have jurisdiction illustrates this fact. Thus, subject matter jurisdiction is proper under Section 1331 alone. The Court realizes, however, that the common law requires that Plaintiff have enforceable rights to sustain a Lanham Act claim, and also that if a Plaintiff does not have such rights, his suit under 15 U.S.C.A. § 1125 would fail because he would not be able to prove injury and other elements contained in the statute. These, however, are not jurisdictional issues. There is no evidence that Congress intended fоr the “enforceable rights” requirement to be jurisdictional. Thus, under Arbaugh, this Court must this requirement as an element of the claim, rather than a jurisdictional prerequisite. Consequently, Defendant’s Motion to Dismiss for lack of subject matter jurisdiction is DENIED.
C. Plaintiff Has Stated a Claim Upon Which Relief May Be Granted
Defendant first argues that Defendant cannot survive a 12(b)(6) motion because it does not have enforceable rights in the VELVET TOUCH marks. This court, and Defendant itself, finds the Defiance case persuasive on the issue of whether enforceable rights in intangible intellectual property may be purchased out of bankruptcy. Furthermore, the Court finds merit in Plaintiffs afоrementioned argument that it has not abandoned the VELVET TOUCH marks it purchased from Fieldcrest. Thus, as Defendant correctly states it its reply brief, the issue turns on whether Fieldcrest had enforceable rights in the marks which it could sell to Plaintiff. Defendant argues that it did not.
Defendant urges this Court to infer from the fact that Fieldcrest became defunct and from the fact that the VELVET TOUCH marks’ registration lapsed, that Fieldcrest had not used/abandoned the marks. This Court, however, must view all facts in the light most favorable to the Plaintiff.
Conley,
Viewing the facts that Plaintiff alleges in its complaint through this lens, Plaintiff *755 has offered adequate support to show that Fieldcrest may have had enforceable rights in the VELVET TOUCH marks. First, Plaintiff paid a substantial sum of money to purchase these rights out of bankruptcy. It is unlikely that a sophisticated corporate entity would pay money for rights that were defunct. Moreover, it is unlikely that bankruptcy court would allow the sale of items with no value. Second, the registrations on the VELVET TOUCH marks were still valid at the time of purchase. Third, Plaintiff’s attempts to re-register the marks and have its licensee put products bearing the marks back into the stream of commerce show that Plaintiff purchased the marks with the belief that they would be saleable.
Defendant also moves to dismiss Plaintiffs Lanham Act claim pursuant to Fed.R.Civ.P. 12(b)(6) because Plaintiffs complaint omits both a recitation of, and any factual support of, the two elements necessary to sustain a false designation claim: (1) the alleged false designation had a substantial effect on interstate commerce; or (2) the alleged false designation created a likelihood of confusion among consumers. Defendant’s argument is without merit. First, a recitation of each element of a claim is not necessary in a notice pleading system. A plaintiffs allegations simply must put a defendant on notice abоut that of which plaintiff accuses him.
See, e.g., Gazette v. City of Pontiac,
Several facts in Plaintiffs complaint illustrate that the infringement of the VELVET TOUCH marks could have a substantial effect on interstate commerce. Fieldcrest, OP, and Hollander are also national companies, selling or having sold their products in multiple states. Defendant itself sells products bearing the VELVET TOUCH mark at Wal-Mart stores, a multi-national chain. The rights to this mark cost Plaintiff a substantial sum of money tо purchase, indicating that the worth of the mark, in interstate commerce and otherwise, has substantial monetary value. The Parties’ factual allegations indicate that consumers may likely be confused by Defendant’s use of the VELVET TOUCH mark. A likelihood of confusion exists when “relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way.”
Homeowners Group v. Home Mktg. Specialists,
D. Plaintiff Has Standing to Bring Suit
Defendant also argues that because Plaintiff does not have enforceable rights in the VELVET TOUCH marks, it cannot satisfy the first prong of the Lujan standing test, that Plaintiff suffer an actual or imminent injury. As the Court held above, Plaintiff has proffered enough evidence that Fieldcrest and OP had enforceable rights in the VELVET TOUCH marks to survive a motion to dismiss for failure to state a claim. If the Plaintiff has enforceable rights in the marks, Defendant’s sale of similar goods bearing the same mark could cause severe economic harm to Plaintiff, thus injuring it. For this reason, Plaintiff has satisfied its burden of showing that it has been personally injured. This Court, therefore, DENIES Defendant’s Motion to Dismiss for lack of standing.
E. Plaintiffs State Law Claims
Defendant alleges that because this Court does not have subject matter jurisdiction over Plaintiffs Lanham Act claim, that it does not have pendent jurisdiction over Plaintiffs state law claims. This Court has already held that it has subject matter jurisdiction over Plaintiffs Lanham Act claim. Thus, this argument in moot.
Defendant also argues that Plaintiffs state law claims should bе dismissed pursuant to Fed.R.Civ.P. 12(b)(6) for the same reasons as its Lanham Act claim should be dismissed. As discussed above, Plaintiff has sufficiently alleged the elements of a Lanham Act claim and has shown, for the purposes of this Motion to Dismiss, that it may have enforceable rights in the VELVET TOUCH marks. For the same reasons, Defendant’s Motion to Dismiss Plaintiffs state law claims for failure to state a claim is DENIED.
V. CONCLUSION
For the foregoing reason, Defendant’s Motion to Dismiss is DENIED.
IT IS SO ORDERED.
Notes
. OP and Pillotex Corporation are not related entities.
. U.S. registrations Nos. 996,164 and 2,197,-713 for the mark VELVET TOUCH.
. 15 U.S.C. § 1125(a) states that: "Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or dеvice, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which — (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, оr geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.”
. A valid trademark registration is prima fa-cie evidence of its use unless Defendant can show that Plaintiff abandoned the mark.
Homeowners,
. Handy’s made its initial purchase offer in December of 1982, but for various reasons, the salе could not be consummated until 1984.
. At the time of the Defiance decision, two years was the relevant time period.
. The Court’s decision, however, was “without prejudice to the injunctions being vacated upon the defendants' successfully shouldering the burden of showing that Defiance-NY has not resumed use of the mark and name in connection with sale of buttons and parts of substantially the same quality within a reasonable time.”
Defiance,
. “Each United States district court and each United States court of a place subject to the jurisdiction of the United States shall have jurisdiction of actions brought under this sub-chapter. Such an action may be brought in any judicial district in the State in which the unlawful employment practice is alleged to have been committed, in the judicial district in which the employment records relevant to such practice are maintained and administered, or in the judicial district in which the aggrieved person would have worked but for the alleged unlawful employment practice, but if the respondent is not found within any such district, such an action may be brought within the judicial district in which the respondent has his principal office. For purposes of sections 1404 and 1406 of Title 28, the judicial district in which the respondent has his principal office shall in all cases be considered a district in which the action might have been brought.”