Coral Resorts LLC vs. Naert and DuBois, LLC

5/23/2018 Coral Resorts LLC vs. Naert and DuBois, LLC

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'.('-.1 ;"I THE UNITED STATESDISTRICTRj :t :', ; . cq; rOR THE DITCT O OT CAROLINA

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lD JUL - I P 2:

No. 9:133RG

ORDER

Ths ar s for h Co o Dfas' oo o sss psa o ra

Rl o C Pror 1)6) (Dk. No 16 6) or rasos s foh lo h Cor

s h oo.

Bkoud

Pafs aao shar loprs o Hlo Ha Isa oh Caoa

h opra fo shar rsos Po OCa Is ks Cora R a Cora as

Dk No a 93) Plafs ark rsos oly r h a "Coral

Rsos. a 1) Dfs o o Ha Isa aoys a hr la f

a 3) Dfas as o o hr pray pra aras as sha gao

a ) Ths as ass ro Dfas agy propr pas of a Googl

AWors a ohr arh Eg arkg srs. ( a 6 ) Plaffs ag

1 The Fouth Circuit has povided a useful summary o this sevce:

Googe opeates one of the word's ost popua Inteet search engnespogs tht enblendvduls to nd webstes ad onlne content, generay throgh the use of "keword seach.Wen n Inteet user entes a wod o phrsethe keywod o keywords-into Googes sechengine Google retus a resuts st of i o webstes tht the seach engne has deteined toe elevant based on a propietay goth


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ha hy on o ono h foong aks Coa Rsos "Coa Rf Coal s

"slan Ls Po OCll and "o san Dop Copny an ha

Dfnans poply phas hs aks fo Googls AWos an oh ss o

lk o h 's bs (!d. a 2) Panffs ass fo ass of aon aans

Dfnans n h An Copan as Dsgnaon of Ognfa Cop n

oaton of C 12a) )A) as Asg oao of C

12a) )B) Mak fg olo of C Co 3916 an

nno Dfas ha o o dsss h An Copan Dk o. 6 26)

Planffs ha l a spos Dk os 2 28) a Dnans ha a ply D No

29)

Legal Standard

R 2b)6) of h al Rs of C Po ps h dsssa of an aon f

h opa fals o sa a la po hh lf n gan h a oo ss h

In addition to the natual ist of esults pouced by te keywod seach, Googe's seach engine

aso dispays pai avetisements known as "Sponsoe Links with the nata esuts of annteet search Googles AdWods adveising patfo peits a sponso to "pchasekeywods that tigge the appeaance of the sponsos avertiseent nd ik wen the keywo isenteed as a search ter n othe wos an avetise puchases te ight to have his a andaccompanying ink isplayed with the seach esuts o a keywo o combination of worseevant to the avertises bsiness Most sponsos averising with Google pay on a costpeclick basis eaning that the aveise pays wheneve a use o Googles seach engine ccks onthe sponsoed ik

Google isplays up to tee sponsored links in a ghighte box mediatey above te natalseach esults an it also dispays sponsoed inks to the ight o the search esults but sepaatedby a verical ine s this suggests oe than one sponso can pchase the sae keywo andhave a ink ispaye when a seach fo hat keywo is condcte Wobe adveises puchasethe esire keywods though an auction whee advetises bi copetitively against each othe

o page position on the seach esults page Genealy speaking uses o the nteet areappaently oe ikey to click on as that appea highe up on the seach esuts page.Accodingly an advetise wil ty to outbid its copetitors o the top positions in ode toaxiize the nbe of cicks on the advetises text as Fo the avetise oe cics yeincease web ac which eans moe potentia website saes Googe n tn benets byplacing the most eevant as in the ost esiable locations, which increases the likeihoo o ahigh cicktough ate an eas to incease advetising evenue

Rosea one Ltd v. Google, Inc 676 3d 44, 50-51 (4th Ci 202).

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legal sufieny of the omplaint and "does not esolve ontests sounding the fats the meits

of the laim o the apliability of defenses Ou inquiy then is limited to whethe the

allegations onstitte a sho d plain statement of te laim showing that the pleade is

entitled to elef Rpbcan Pa f N v Man 980 F2d 943 92 (4th Ci 992)

(quotation maks ad itation oied) In a Rle 12(b)(6) motion the Co is obligated to

assme the tt of al fats aegd in the olaint and the existene of ny fat that be

poved onsistent with the ompaints alegations Sh nc v. JD. oc Ld

Ph 213 F3d 17 180 (4th Ci 2000) oweve whie the Cou ust aept the fas in a

ight most favoabe to the nonmoving pay t need not aept as ue waated infeenes

ueasonabe onusions o guments !d.

o suvive a otion to dismiss te ompaint ust state enoug fats to state a a to

elief that is plausible on its fae Be ! p wb 0 S 44 70 (2007)

Although te equiement of pausibity does not ipose a pobabity eqiement at ths stge

te ompaint ust sow moe thn a "see possibility hat a defendnt has ated unlawy

hcof Iqba 6 US 662 678 (2009) A omlaint has faia plasibiity whee te

pleadng "allows the ou to daw the easonable infeene at the defendnt is iable fo he

msondt aleged !

Dsussio

Ae e eview of the aguents of ounsel d the appliabe law te Cou nds

that Defendants motion to dismiss mst be denied

Defendts asse that Plaintis laim fo flse designation of ogin nde SC

2(a)()(A mst be dismissed o state a laim fo false designation of oigin a plaintiff

must allege: () tt it possesses a mak (2) tat he [opposing pay] sed te mak; (3) that the

2 Deendants o n ress Plainiffs' caim o Fse Aversng n oaon f 15 USC 1125(a)I )B).

3


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[oposng ary's use of the ar occued n comerce (4 that he oosng ary] sed

the mar n connecton th the sae, offerng for sae dstruton, or adveisng of goods or

servces; and (5 tat the oosng ay used the ar in a anner lely o cose

consuers Lamparello v Falwell, 42 3d 39 33 (4th Cr 25 (qong PETA v

Doughney 263 3d 39, 364 (4th Cr 2

Defendants argue that Pants have not pasiy aeged the rst, second, trd and

fth elements of ths cause of acton Defendants assert that Plantffs canot sats the rst

eleent ecase the ars alegedly voated are not vad or regstered trademars Hoever,

an unegstered ar can e rotected y 5 USC. 2(a( (A f t od quafy for

regstraton as a tradear wo Pesos Inc v aco Caban Inc US 763 768 (992

Perini Corp v Pern Cnst nc, 9 2d 2, 24 (4t Cr. 99 Plantiffs ear the den

of shong hether a mar ould qali for regstraton, Schreber v Dunabn, 38 F Su 2d

587, 598 (ED Va 23, and ths can e a come analyss, see Perini Corp 9 F2d at 24-

25 Hoever Defendants ave not argued hether the alleged mars od a for

regstration and te Cou therefore not address t here. The Cou terefore nds that,

tang te alegatons of te Amended Comlant as true that Plants have satsed ths rst

eleent.

Defendants net asse that they have not used the alleged ars n coerce thin

the meaning of 5 USC 2(a((A In a silar case the Easte Distrct of Vrgna hed

that ooge used n coerce a tradear under ths satute hen t sold it as an Adord

eyord Gov' ps Ins Co v Google Inc 33 S 2d 7 (ED Va 24

Speccaly that cout held that oogle sed the trade EIC hen t aoed customers

to urchase adversng led to the tradear ! he Second Crcut reached the same

4


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conclon n Rso Corp. v Goo n 56 3d 3 d . 009) Hee, lan e

n he chae o he keywod and no Goole he elle. Nevehele, he o nd

hee ae eave eendan e chan e alleed ademak o lan n ode

o dec moe oenal clen o he own wee S d ns LLC K &

Svrn PC No v 40LTS)SN) 013 W 44597 a *3 SNY A 1 013)

ndn aoey chae o ademaked AdWod a "e n commece) cn CJ Prods

LLC Sny Psz LLC 09 S d 17 1 EN Y 011)) heeoe he o

nd h a e n commece whn he meann o 15 S. 115a))A)

eendan alo ae ha lan have no laly alleed a lkelhood o conon

and on o he nneaco e claed y e oh c o condcn ch an nqy

Ros Son Ld v oog nc 67 3d 4 153 4h . 01) aclly eendan

ae wh ome oce ha hee no chance o conme conon ecae he evce do

no ovela wh an eendan ae laye and he law m ad lan ell

mehae Indeed aea lan om he Amended omlan ha eendan ae eekn o

aac lan uhay come n ode ha hoe come may conde eann

eendan o ue lan k No 0 a 40) he eendan adveemen ha aea

on hee enne wee conan one o he ollown headlne a Red O Led To?

Scammed? T mehae Aoney HHI, S Red o on Hlon Head lad?) lan

e h amen y eeencn an exe adav o a oolo aached o he Amended

omlan wch o lan amen ha conon ca el om eenda

eac enne adven acce k No 01) In he nal aaly he o nd ha,

whle eendn men a o conon ae no who me ha he e a

heenly acal one whch moe aoaely deemned ae e ecod develoed

5


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ostta Sto F3d 53. Tng Pn alegon ue he Cou nd h

Pn have uen ed h eeen o he . Theeoe he Cout dene

Deendn oon o d Pn l o ae degnon o ogn unde 15 SC

1125))A)

Deendn o ague h Pn e w a u be ded Spe

Deendn gue h Pn unde SC Code 39-51 houd be ded

beue hee no hne o onon nd beue Deend dd no ue he k wh

nen o ue onon Thee aguen o hoe ed gn Pn e

degnon o ogn l nd e dened o he e eon dued bove

Fnl Deendn e h Pn hve ed o e ue o on o

njuon oweve "w]he he o njunve ee e ou epe ue o

on e nohng oe hn o o obe ee h n be wded one p

h peved on nohe ue o on Houscas Ho Hat a Ic v U p t of

Hat & ua Sv 515 F Su 2d 1 27 n MDC 27) Beue he Cou h

no ded n o Pn' ue o on doe no d he o njnve

ele

Coclusio

Fo he eon e oh bove he Co dene Deendn oon o d Dk

o 1 2)

AND IT IS SO ORDERD.

Rhd M G rgened Se Dt Cou Judge

Ju 21Cheon Souh Con

6

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Coral Resorts LLC vs. Naert and DuBois, LLC