Seeno v. Discovery Builders, Inc.

Background

Albert D. Seeno, Jr. and Albert D. Seeno Construction Co. sued Discovery Builders, Inc., Discovery Realty, Inc., and Seeno Homes, Inc. under the Lanham Act, the federal trademark law. Plaintiffs asserted trademark-infringement claims and false-designation-of-origin claims involving three marks: the registered “Seeno Homes” mark, the unregistered “Seenohomes Building since 1938” mark, and the unregistered “Albert D. Seeno Construction Co.” mark.

Plaintiffs alleged that defendants used the marks on the discoveryhomes.com website and on social-media accounts. They also alleged that defendants used the seenohomes.com website to redirect users to discoveryhomes.com and that some online content blurred the distinction between the plaintiffs and the defendant companies.

Defendants moved to dismiss on three grounds: that plaintiffs had not pleaded statutory standing under the Lanham Act, that plaintiffs improperly treated the three defendant companies as one group, and that plaintiffs had not pleaded enough facts to state their claims. The court applied the standard for a motion to dismiss for failure to state a claim, under which the complaint must contain enough factual detail to make the claim plausible.

Standing

The court rejected defendants’ arguments that plaintiffs had not pleaded statutory standing. For the registered “Seeno Homes” mark, the court held that plaintiffs’ allegation that Seeno Construction owned the mark and that it had been registered was sufficient at this stage.

For the two unregistered marks, the court explained that ownership generally depends on priority of use and continued use. The court found sufficient plaintiffs’ allegations that Seeno Construction had used the “Seenohomes Building since 1938” mark since at least 2008, that the “Albert D. Seeno Construction Co.” mark had been used by both plaintiffs since at least 1960, and that defendants began using the marks later. The court also declined to require plaintiffs to plead inherent distinctiveness, associated services, or particular commercial use to establish statutory standing at this stage.

Improper Grouping of Defendants

The court agreed with defendants that the complaint improperly lumped the three companies together. Although plaintiffs alleged that each defendant was the agent, employee, or alter ego of the others, the court found that the supporting facts were too limited. Common ownership and allegations that all three companies infringed the marks did not establish the alleged agency, employment, or alter-ego relationships.

Without those theories, the complaint did not adequately identify which defendant was responsible for which conduct. The court noted, for example, that Discovery Realty and Discovery Builders did not appear in the identified social-media accounts or posts, while the ADSCC mark did not appear in those accounts. The court held that plaintiffs needed to specify which defendant allegedly infringed which mark and how.

Disposition

The court GRANTS defendants’ motion to dismiss with leave to amend. Plaintiffs may file an amended complaint by March 12, 2024. Because the court dismissed on the improper-grouping ground, it found it unnecessary to address defendants’ remaining arguments concerning failure to state a claim and acquiescence.