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Belstone Capital, LLC v. Bellstone Partners, LLC

United States District Court, E.D. California

March 27, 2017



         This trademark infringement case comes before the court on the motion to dismiss brought by defendants Bellstone Partners, LLC.[1] ECF No. 21. Plaintiff Belstone Capital, LLC opposes, ECF No. 26, and defendants replied, ECF No. 27. On January 13, 2017, the court held a motion hearing, at which Maurice Ross and Daniel Ballard appeared for plaintiff and Michael Thomas appeared for defendants. For the following reasons, the court GRANTS defendants' motion.


         Plaintiff is a corporate finance company specializing in technology development and capital formation with a principal place of business in New York. Compl. ¶¶ 9, 11, ECF No. 1. Defendants are companies involved in real estate lending and real estate development with principal places of business in California. Id. ¶¶ 8, 12-15. Plaintiff's and defendants' businesses and customers do not overlap. See Id . ¶¶ 10, 16. Defendants first began using the “Bellstone” trademark in June 2004, id. ¶ 37, and registered it as a word mark on August 3, 2010 with the U.S. Patent and Trademark Office (USPTO) in International Class (“IC”) 36 for “Lending consultant services, ” Registration Number 3828103 (the “-103 registration”), id. ¶¶ 5, 26. Plaintiff has been using the “Belstone” mark since at least 2010. Id. ¶ 37. Plaintiff currently has a pending application with the USPTO to register its Belstone mark, Serial Number 86973133. Id. ¶¶ 6, 31. During more than six years of concurrent use, there has been no marketplace confusion caused by the parties' use of their respective marks. Id.

         On April 20, 2016, plaintiff sent defendants a letter requesting that defendants enter into a co-existence, consent, and cross-license agreement whereby they would confirm that plaintiff and defendants could concurrently use their respective marks, and by agreement acknowledge that such use would not cause marketplace confusion among their respective customer bases or otherwise. Id. ¶ 20. Defendants rejected plaintiff's request, and instead demanded plaintiff cease and desist infringing defendants' mark. Id. ¶ 21. On May 6, 2016, defendants filed a new trademark registration application with the USTPO, seeking broader protection for their mark under IC 9 (computer software), 35 (business data analysis services in the field of real estate), 36 (capital investment in the field of real estate), and 42 (software for real estate investments). Id. ¶¶ 22-24. Defendants' Serial Number for this application is 87027088 (the “-088 application”). Id.

         Plaintiff alleges, however, that defendants cannot perform most of the services they list in their -088 application. Id. ¶ 25. Most of the services would require defendants to be registered as a real estate broker by the California Bureau of Real Estate. Id. Although the Managing Director for all three defendants, Robert B. Price IV, does have a real estate license, at least one defendant, Bellstone Partners, LLC, is not so licensed, and defendants without real estate licenses “may not lawfully provide lending consultant services for real estate development projects” under other parties' licenses. Id. ¶¶ 25, 56. Additionally, defendants' assertion in the application leading to their -103 registration, that they were using the “Bellstone” mark in interstate commerce for lending consulting services, was fraudulent because defendants provide their services under the trade name “Bellstone Partners, LLC, ” not “Bellstone” alone, and then only in Southern California and Sacramento, not in interstate commerce. Id. ¶ 26.

         On May 24, 2016, plaintiff filed the complaint in this court, seeking: (1) a declaration of non-infringement of defendants' trademark rights; (2) a declaration that defendants cannot register, via their -088 application, the “Bellstone” mark for services performed unlawfully; and (3) cancellation of defendants' -103 registration of the “Bellstone” mark because it was obtained fraudulently. See generally id.

         After the time for responding to the complaint was extended by stipulation, defendants filed a motion to dismiss on September 9, 2016. Plaintiff opposes each of defendants' contentions, Opp'n, ECF No. 26, and defendants have replied, Reply, ECF No. 27.


         Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” The motion may be granted only if the complaint “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Hartmann v. Cal. Dep't of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013). Although a complaint need contain only “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement “must contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than “an unadorned, the-defendant-unlawfully-harmed-me accusation” or “‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action.'” Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

         In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept its factual allegations as true. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). However, “‘conclusory allegations of law and unwarranted inferences' cannot defeat an otherwise proper motion to dismiss.” Schmier v. U.S. Court of Appeals for Ninth Circuit, 279 F.3d 817, 820 (9th Cir. 2002) (quoting Associated Gen. Contractors of Am. v. Metro. Water Dist. of S. California, 159 F.3d 1178, 1181 (9th Cir. 1998)).


         Defendants ask the court to take judicial notice of four public records they say are maintained on the USPTO website. See Defs.' Req. for J. Notice (“RJN”) Exs. A-D, ECF No. 21-2. Plaintiff also asks the court to take judicial notice of a public record maintained on the USPTO website. Pl.'s RJN Ex. 3, ECF No. 26-1. “A court may take judicial notice of ‘matters of public record' without converting a motion to dismiss into a motion for summary judgment, as long as the facts noticed are not subject to reasonable dispute.” Intri-Plex Techs., Inc. v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007) (changes, brackets, citations and quotations omitted). Accordingly, the court takes judicial notice of the marks' filings, though not the content of the documents themselves, because the filings are a matter of public record and their veracity is not in dispute.

         Plaintiff also asks the court to take judicial notice of two emails sent from defendants' counsel to plaintiff's counsel, Pl.'s RJN Ex. 1, and a letter sent from plaintiff's counsel to defendants' counsel, Pl.'s RJN Ex. 2. These two emails and the letter each are referenced in plaintiff's complaint. Compl. ¶¶ 20-21. In reviewing a motion to dismiss, the court may “consider documents in situations where the complaint necessarily relies upon a document or the contents of the document are alleged in a complaint, the document's authenticity is not in question and there are no disputed issues as to the document's relevance.” Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). In this case, the complaint only references the emails and letter, but does not necessarily rely upon them. Because the ...

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