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American Customer Satisfaction Index, LLC v. Foresee Results, Inc.

United States District Court, E.D. Michigan, Southern Division

July 25, 2019

AMERICAN CUSTOMER SATISFACTION INDEX, LLC, Plaintiff,
v.
FORESEE RESULTS, INC., Defendant.

         OPINION AND ORDER FINDING DEFENDANT'S MOTION TO DISMISS [#11] MOOT, GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS AMENDED COMPLAINT [#20], DENYING PLAINTIFF'S MOTION TO STRIKE [#16], DENYING WITHOUT PREJUDICE PLAINTIFF'S MOTION TO DISMISS COUNTER-COMPLAINT [#25], REQUIRING DEFENDANT TO FILE AN AMENDED COUNTER-COMPLAINT AND CANCELING HEARING

          GERSHWIN A. DRAIN U.S. DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiff American Customer Satisfaction Index, LLC (ACSI) filed the instant action against Defendant ForeSee Results Inc. (ForeSee) alleging federal trademark infringement under 15 U.S.C. § 1114, Count I; federal unfair competition under 15 U.S.C. § 1125, Count II; state unfair competition in violation of Mich. Comp. Laws §429.42, [1] Count III; common law trademark infringement, Count IV; common law unfair competition, Count V; and breach of contract, Count VI.

         Presently before the Court are the following motions: (1) Defendant's Motion to Dismiss Amended Complaint, (2) Plaintiff's Motion to Strike or to Disqualify Counsel and (3) Plaintiff's Motion to Dismiss Counter-Complaint. These matters are fully briefed and upon review of the parties' submissions, the Court finds that oral argument will not aid in the resolution of these matters. Accordingly, the Court will resolve the parties' present motions on the briefs. See E.D. Mich. L.R. 7.1(f)(2). The hearing set for August 5, 2019 is hereby canceled.

         For the reasons that follow, the Court will grant in part and deny in part Defendant's Motion to Dismiss Amended Complaint, deny Plaintiff's Motion to Strike or to Disqualify Counsel and deny without prejudice Plaintiff's Motion to Dismiss Counter-Complaint.

         II. FACTUAL BACKGROUND

         ACSI is a company that produces the American Consumer Satisfaction Index (the “Index”), which is an economic indicator that measures the satisfaction of consumers for companies across many sectors in the U.S. economy. See Am. Compl. ¶ 14. ACSI has developed proprietary survey questions, survey methodology, and survey analytic methodology, the results of which are used to produce an ACSI score. Id., ¶ 17. Companies utilize this score to gauge customer satisfaction performance. Id. Plaintiff's proprietary survey and methodology enables subscribers to assess competitiveness, identify key factors driving consumer satisfaction and predict future profitability. Id., ¶ 18.

         Initially, ACSI was owned by the University of Michigan (Michigan), which was the registrant of two trademarks bearing the ACSI name and logo. Id., ¶¶ 29, 31. However, in 2008, ACSI was spun off from Michigan and became a private entity. Id., ¶ 29. Prior to the spinoff, Michigan had granted several licenses to various companies, including Defendant, allowing those companies to use ACSI marks.

         Plaintiff maintains that when ACSI was spun off into a private entity, Michigan granted ACSI an exclusive license to police, enforce, and manage the ACSI marks to grant sublicenses. Id., ¶ 30. In 2008, Michigan sent Defendant notice that ACSI was spun off from Michigan. Id., ¶ 44. In the notice, Michigan informed ForeSee that it had assigned ForeSee's license agreement to ACSI, including any future amendments. Id., ¶ 45. ForeSee acknowledged the assignment. Id., ¶ 46.

         In 2012, ACSI and ForeSee entered into a Limited Trademark Sublicense Agreement. Id., ¶ 47, Ex. C. The Sublicense Agreement permitted “continued use of the Marks by [ForeSee] effective upon, and subsequent to, expiration of [ForeSee's] agreement with Michigan[.]” Id., Ex. C, ¶ D. The Sublicense Agreement noted that Plaintiff was granted an “exclusive license . . . with the right to sublicense, under Michigan's rights in the Marks[.]” Id., Ex. C, ¶ C. In August of 2013, Defendant elected to voluntarily terminate its license to use the ACSI marks. See Am. Compl., ¶ 55.

         Despite voluntarily terminating its license, ForeSee continued to use the ACSI marks, used the ACSI name as part of its own product names, and continued to claim use of the ACSI methodology. Id., ¶¶ 59-60. As a result of ForeSee's improper use of the ACSI name and marks, many ForeSee customers have purchased ForeSee products and services with the false belief that ForeSee is affiliated with ACSI and applies ACSI methodology. Id., ¶ 66.

         III. LAW & ANALYSIS

         A. Defendant's Motion to Dismiss Amended Complaint

         1. Standard of Review

         Federal Rule of Civil Procedure 12(b)(6) allows the court to make an assessment as to whether the plaintiff has stated a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957). Even though the complaint need not contain “detailed” factual allegations, its “factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true.” Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quoting Bell Atlantic, 550 U.S. at 555).

         The court must construe the complaint in favor of the plaintiff, accept the allegations of the complaint as true, and determine whether plaintiff's factual allegations present plausible claims. To survive a Rule 12(b)(6) motion to dismiss, plaintiff's pleading for relief must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (citations and quotations omitted). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. The plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'- ‘that the pleader is entitled to relief.'” Id. at 1950.

         The district court generally reviews only the allegations set forth in the complaint in determining on whether to grant a Rule 12(b)(6) motion to dismiss, however “matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001). Documents attached to a defendant's “motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim.” Id.

         2. Collateral Estoppel

         ForeSee's main argument in support of dismissal is that Plaintiff's claims are barred by the doctrine of collateral estoppel. ForeSee relies on a prior suit filed by ACSI against Genesys Telecommunications Labs alleging trademark infringement. See American Customer Satisfaction Index, LLC v. Genesys Telecommunications Labs, Inc., 17-cv-12554 (Genesys litigation).

         In the Genesys case, the defendant argued that ACSI did not have standing to bring a federal trademark infringement claim because ACSI is not a “registrant” within the meaning of the Act. Ultimately, the Genesys court agreed with the defendant and concluded that “the term registrant is not defined to include an exclusive licensee, then exclusive licensee does not have standing . . . to bring an infringement claim under the Lanham Act.” See Def.'s Mot. to Dism., Ex. 2 at p. 49. The Genesys court further held that “[e]ven if an exclusive licensee could conceivably have standing to bring an infringement claim, . . . the license agreement here is not an exclusive license.” Id. Thus, ForeSee argues that ...


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