IP Law Daily, TRADEMARK—D.N.J.: Democratic Party of NJ gets another try at pleading impersonation claims, (Oct 5, 2022)

By Anne H. Gibson, J.D., LL.M.

Political organization did not provide enough facts in its allegations; all but one claim dismissed without prejudice so that amendments can be made.

The Democratic Party of NJ must revise its allegations if it wants to pursue its case against two New Jersey residents accused of impersonating it on mailers and a website, the federal district court in Newark, New Jersey has held. A motion to dismiss filed by James Devine and Lisa McCormick, owners and operators of “NJDEMS.COM” and “New Jersey Democratic Party A NJ Nonprofit Corporation,” was granted in part and denied in part, because the Democratic Party of NJ had failed to allege sufficient facts to support most of its claims. Although it was successful in adequately pleading that the individuals had acted with the bad faith intent to profit from the mark in registering the NJDEMS.COM domain name as part of its cybersquatting claim, it did not provide sufficient facts as to its mark acquiring secondary meaning, a necessary element of that and several other claims. The dismissals were granted without prejudice, so that an amended complaint could be filed (Democratic Party of NJ, Inc. v. Devine, October 4, 2022, Vazquez, J.).

The Democratic Party of NJ, organized as the New Jersey Democratic State Committee, is the sole statewide committee authorized to represent the Democratic Party in New Jersey under state law. It operates a website, NJDEMS.org. As part of its normal operations, the political organization endorses candidates and sends out mailers, as well as provides information on its website. In October 2021, Devine and McCormick, who are domestic partners, operated their website and sent out mailers endorsing candidates that read “Paid for by NJDEMS.COM” and “New Jersey Democratic Party” at the bottom. The candidates on the mailers were not endorsed by the Democratic Party of NJ. The political organization then filed suit again Devine and McCormick, alleging (1) civil conspiracy, (2) violation of the Anticybersquatting Consumer Protection Act (ACPA), (3) unfair competition under the Lanham Act, New Jersey statutory law, and New Jersey common law, and (4) violation of New Jersey’s corporate name statute. The individuals filed a motion to dismiss.

First Amendment grounds to dismiss. Devine and McCormick first argued that the claims should be dismissed because they were barred by the First Amendment, because their actions and speech were political in nature. The court, however, stated that “under the Lanham Act, neither political nor commercial speech will ‘fall under the auspices of the First Amendment’ where use of the plaintiff’s mark is likely to cause significant consumer confusion.” The court cited prior cases in which a defendant attempted to trick consumers into the belief that its message was coming from someone else, and stated that this type of use of someone else’s mark “is ‘precisely the use’ that is reserved by the Lanham Act to the owner of a mark because permitting such use would cause confusion and allow for appropriation.” The individuals’ First Amendment argument thus failed.

Motion to strike. The holders of NJDEMS.COM also moved to strike the Democratic Party of NJ’s claims because they were “redundant, immaterial, impertinent, or scandalous…” However, the court found that they failed to allege that the relevant portions of the political organization’s brief had “no possible relation” to the controversy, or that they caused “unfair prejudice,” and thus the burden for a motion to strike was not met.

Unfair competition. The court then turned to Devine and McCormick’s motion to dismiss, first examining the unfair competition claims. In order to state a claim under the Lanham Act, the court stated, the plaintiff must allege sufficient facts to support the following four points: “(1) the mark at issue is valid and legally protectable; (2) the mark is owned by the plaintiff; (3) the defendant used the mark in commerce or in connection with any goods or services or container for goods; and (4) this ‘use’ was in a manner likely to create confusion concerning the origin of the goods or services.”

In this case, the mark in question is not federally registered, and thus proof of secondary meaning is needed. Secondary meaning is present when the consuming public associates the mark not just with the relevant services, but with the underlying organization itself. The court found that, although the Democratic Party of NJ alleged facts to support some aspects of this claim, it did not allege sufficient facts related to the scope, duration, and continuity of its own use of “NJDEMS,” or regarding the existence of secondary meaning at the time that Devine and McCormick used the marks “NJDEMS” and “New Jersey Democratic Party.” Thus, the unfair competition claims under the Lanham Act were dismissed. Because the elements of the state statutory and common law claims are the same as under the Lanham Act, these too failed and were dismissed.

Cybersquatting. Cybersquatting under ACPA occurs when someone registers, in bad faith, an internet domain name that is so similar to an existing mark that it causes confusion. The court stated that a plaintiff must allege that: (1) its mark was distinctive or famous and entitled to protection at the time the domain name was registered; (2) the defendant’s domain name is “identical or confusingly similar to” the plaintiff’s mark; and (3) the defendant registered the domain name with the bad faith intent to profit from the mark. The court found that although the Democratic Party of NJ had stated sufficient facts to allege that NJDEMS.COM was identical to NJDEMS.org (as courts generally ignore the extensions) and that Devine and McCormick had registered the name in bad faith, it had not adequately pled that the mark was distinctive, as it had not shown secondary meaning. Thus, this claim too was dismissed.

Corporate name statute. New Jersey law makes it a violation for a nonprofit’s name to be “the same as, or confusingly similar to, the corporate name of any domestic corporation.” The court found that the Democratic Party of NJ had stated sufficient facts to allege that “New Jersey Democratic Party A NJ Nonprofit Corporation” was confusingly similar to its own name. The motion to dismiss on this count was denied.

Civil conspiracy. The Democratic Party of NJ also alleged that Devine and McCormick had engaged in civil conspiracy with underlying unlawful acts under New Jersey law. The court dismissed this claim as well. Although it found that the political organization had adequately pleaded that the individuals were (1) a combination of two or more persons, who (2) had a real agreement with a common design, and (3) that they had engaged in an unlawful act, namely fraud, it had failed to allege facts to support that (4) it had incurred special damages as a result. Thus, this claim was also dismissed.

The motion to dismiss was thus denied as to the Democratic Party of NJ’s claim of a violation of the corporate name statute. The motion was granted as to the other claims without prejudice, allowing the political organization to file an amended pleading within 30 days.

The Case is No. 2:22-cv-01268-JMV-AME.

Attorneys: Matthew I.W. Baker (Genova Burns LLC) for The Democratic Party of NJ, Inc. Desha Jackson (Desha Jackson Law Group, LLC) for James Devine and Lisa McCormick.

Companies: The Democratic Party of NJ, Inc.

Cases: Trademark TechnologyInternet NewJerseyNews