Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03327/USCOURTS-cand-3_05-cv-03327-1/pdf.json

Parties Involved:
Astrology.com
Defendant
David Fox
Plaintiff
Kelli Fox
Plaintiff
Ivillage, Inc.
Defendant
Knowledgeweb, Inc.
Defendant

Document Text:

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

KELLI FOX and DAVID FOX,

Plaintiffs,

 v.

iVILLAGE, a Delaware corporation,

KNOWLEDGEWEB, INC., a California

corporation, d/b/a Astrology.com,

and DOES 1-100,

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

No. C-05-3327 SC

ORDER GRANTING

DEFENDANTS' MOTION TO

DISMISS 

I. INTRODUCTION

Kelli Fox and David Fox ("Plaintiffs" or "Foxes") brought

this action against iVillage, Inc., KnowledgeWeb, Inc., and Does

1-100, (collectively "Defendants"), alleging, inter alia,

trademark infringement, breach of contract and cybersquatting. 

Presently before the Court is Defendants' motion to dismiss

Plaintiffs' claims pursuant to Federal Rule of Civil Procedure

("FRCP") 12(b)(1). The Court, having reviewed the parties'

submissions, hereby GRANTS Defendants' motion and DISMISSES the

case for want of jurisdiction. 

//

//

//
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 The Kelli Fox mark, for purposes of this order, means the

Kelli Fox mark, the "likeness of Kelly Fox, any logo incorporating

the name and likeness of Kelli Fox and any stylized versions

thereof." Danzer Decl., Ex. B at 4. 

-2-

II. BACKGROUND

The Foxes, who are astrologers and run their own on-line

astrology business, signed Service Mark and Marketing Agreements

("Agreements") with Defendants, allowing Defendants to use the

Kelli Fox mark as "Astrology Marks" or "Reserved Marks."1

Complaint at 3-4 ("Compl."), Declaration of Aaron L. Danzer in

Support of Motion to Dismiss the Complaint, Ex. B, at 2, 4

("Danzer Decl."). The Agreements define "Astrology Marks" as the

Kelli Fox mark when used in the "Field of Interest" ("FI") and

"Reserved Marks" as the Kelli Fox mark when used "outside the

Field of Interest." Danzer Decl., Ex. B at 2. The FI, as defined

by the Agreements, means "the field of on-line information

services directed primarily toward women and the field of on-line

astrological information services." Id.

The Foxes worked for Defendants from 1999, the year the

agreements were signed, until 2003, a period the Agreements define

as "the term of employment by the Founders [viz., the Foxes] by

the Company [viz., iVillage and KnowledgeWeb] as set forth" in an

employment agreement incorporated by reference. Id. at 4. 

The Agreements' Compensation Section states:

During the Employment Period, the Company shall have a

royalty-free right and license to use the Reserved Marks. 

After the Employment Period, the Company agrees to pay the

Founders a 5% royalty on gross revenues derived from goods

and services employing the Reserved Marks, which goods or

services are produced or authorized by the Company, less any

returns.
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -3-

Id. 

After Plaintiffs left Defendants' employ, Defendants

allegedly used the Kelli Fox mark for products and services

outside the FI, including "psychic services" and the use of the

Kelli Fox mark as if she were still employed by Defendants. 

Compl. at 4. The Foxes assert that Defendants have made a

"substantial financial gain without royalty payments to the

Foxes." Id. at 6. 

The Foxes filed a Complaint alleging breach of contract,

trademark infringement and dilution, false advertising,

cybersquatting, violation of the right of publicity, and unfair

competition. Id. at 16. 

Defendants contend that the Court lacks jurisdiction over the

case because Plaintiffs' claims truly arise under state law. 

Defendants' Memorandum in Support of Motion to Dismiss at 16-19

("Defs.' Mem."). 

III. LEGAL STANDARD

The Federal Courts have "original jurisdiction over all civil

actions arising under the Constitution, laws or treaties of the

United States." 28 U.S.C. § 1331. The Federal Courts have

supplemental jurisdiction over state law claims if the claims are

"so related" to the federal claims that they "form part of the

same case or controversy." 28 U.S.C. § 1367. 

A Federal Court may examine the question of subject matter

jurisdiction sua sponte. See Steel Company v. Citizens for a

Better Environment, 523 U.S. 83, 94 (1998). Federal Courts must

normally determine issues of subject matter jurisdiction before
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -4-

considering a case on its merits. Id. When a court lacks

jurisdiction, the "only function remaining to the court is that of

announcing the fact and dismissing the cause." Id., quoting Ex

parte McCardle, 7 Wall. 506, 514 (1868). 

"In our notice pleading regime...the district court looks

past the surface allegations to make its own assessment of what

law the claim arises under." International Armor Limousine

Company v. Moloney Coachbuilders Inc., 272 F.3d 912, 915 (7th Cir.

2001). 

IV. DISCUSSION

This case presents a state law contract dispute, not one

involving a substantive question of federal law. Though

Plaintiffs have tried to frame the issues as if they implicated

questions of federal law, the "mere existence of [a] protected

tradename and attendant symbol..does not provide a basis for

federal jurisdiction." Postal Instant Press v. Clark, 741 F.2d

256, 257 (9th Cir. 1984). The fact that Plaintiffs' claims for

unauthorized use of the Kelli Fox mark is governed by a contract

covering the rights and uses of the Kelli Fox mark compels the

Court to dismiss this case. 

The Lanham Act "establishes marketplace rules governing the

conduct of parties not otherwise limited." Silverstar

Enterprises, Inc. v. Aday, 537 F. Supp. 236, 242 (N.D.N.Y. 1982)

(emphasis added). If a contract is in place, it governs:

[T]he Lanham Act is not intended to interfere with the

contractual agreement between a mark's owner and his

licensee. In licensor-licensee cases where a contract

governs the rights to a mark, it is the contract and not the

Lanham Act which determines the rights of the parties. 
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -5-

Moog Controls v. Moog, Inc., 923 F. Supp. 427, 431 (W.D.N.Y.

1996). 

Courts will generally dismiss actions "which fundamentally

assert contract claims and only incidentally involve" patents,

copyrights or trademarks. Silverstar, 537 F.Supp. at 241.

In the instant case, the parties have a contract that

addresses the use of the Kelli Fox mark. Plaintiffs' federal

claims are based on the idea of Defendants' allegedly

impermissible use of the mark. If Defendants' use of the mark was

permitted by the Agreements, there has been no improper use of the

mark as would sustain the federal claims. 

The strongest indication of this is found in the Agreements

themselves. The Marketing Agreement contemplates and allows

Defendants' use of the mark outside the FI, viz., the Reserved

Marks. Danzer Decl., Ex. B at 4. As stated above, "[a]fter the

Employment Period, the Company agrees to pay the Founders a 5%

royalty on gross revenues derived from goods and services

employing the Reserved Marks, which goods or services are produced

or authorized by the Company, less any returns." Id. Because the

Marketing Agreement grants Defendants the use of the marks outside

the FI, Plaintiffs cannot now claim that Defendants misused their

mark by using it outside the FI. 

Plaintiffs concede that they are owed money for this use. 

"The Companies have refused to pay the Foxes the 5% royalty on

gross revenues derived from goods and services using the KELLI FOX

[sic] mark and her name and likeness outside the agreed upon Field

of Interest." Compl. at 7. Plaintiffs cannot have it both ways. 
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -6-

More specifically, Plaintiffs cannot assert that the same use

constitutes infringement and also obligates the payment of

royalties under the Agreements. Though Plaintiffs may be

displeased by the uses to which the mark has been put, their

displeasure is not actionable in federal court.

In sum, the Agreements govern, the Lanham Act's authority

over use of the mark is displaced, and the case fails for want of

jurisdiction. 

The Court will now more specifically address Plaintiffs'

federal claims.

A. First Claim: Federal Trademark Infringement

Defendants contend that Plaintiffs cannot bring a claim

under 15 U.S.C. § 1125(a)(1)(a) because the Foxes do not have a

valid, protectible trademark interest in the Kelli Fox mark. 

Defs.' Mem. at 6. Specifically, Defendants contend that Plaintiff

has not used the mark in commerce. Id. at 7. 

Plaintiffs contend that they need not have rights to a valid

trademark to state a claim under § 1125(a)(1)(A). Plaintiffs'

Memorandum in Opposition to Motion to Dismiss at 3 ("Pls.' Mem.").

Plaintiffs have not stated a valid claim for relief under the

Lanham Act because Defendants' use of the mark was authorized. 

"The Supreme Court has made it clear that trademark infringement

law prevents only unauthorized uses of a trademark." Bosley

Medical Institute, Inc., et al. v. Kremer, 403 F.3d 672, 676 (9th

Cir. 2005).

As stated above, the use was authorized and therefore, as a

threshold matter, there can be no claim made under the Lanham Act. 
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -7-

 B. Fourth Claim: Trademark Dilution under 15 U.S.C.

 § 1125(c)(1)

Plaintiffs contend that Defendants' alleged misuse of the

Kelli Fox mark "in association with psychics and psychic goods and

services...dilutes, tarnishes and blurs the distinctive quality"

of the mark. Compl. at 10. 

Defendants contend that Plaintiffs do not own the Kelli Fox

mark and therefore their dilution claim cannot stand. Defs.' Mem.

at 9. 

As stated above, the use was authorized and therefore, as a

threshold matter, there can be no claim made under the Lanham Act. 

C. Sixth Claim: False Advertising Under 15 U.S.C. § 1125(a)

Plaintiffs have not stated a valid claim for relief under the

Lanham Act because Defendants' use of the mark was authorized. 

As stated above, the use was authorized and therefore, as a

threshold issue, there can be no claim made under the Lanham Act.

D. Eighth Claim: Cybersquatting

Plaintiffs allege that Defendants' use of the domain name

www.kellifox.com is "misleading because it is likely to deceive

the public into believing that Ms. Fox still works for the

[Defendants]." Compl. at 13. 

Defendants contend that because iVillage lawfully owns the

mark, it "surely is not a cybersquatter." Defs.' Mem. at 11. 

Among other elements of cybersquatting, a plaintiff must be

able to prove that a defendant had a "bad faith intent to profit

from the mark." 15 U.S.C. § 1125(d)(1)(A)(I). "Bad faith intent

described under subparagraph (A) shall not be found in any case in
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 Kelli Fox states that she "is an individual with a principle

place of residence in San Francisco, California." Compl. at 1. 

-8-

which the court determines that the person believed and had

reasonable grounds to believe that the use of the domain name was

a fair use or otherwise lawful." 15 U.S.C. § 1125(d)(1)(B)(ii). 

As stated above, use of the mark outside the FI was

authorized by the Agreements. Therefore, the Court finds that

there was no bad faith intent because Defendants believed and had

reasonable grounds to believe that the use of the name was lawful. 

Plaintiffs have not set forth valid claims arising under

federal law and therefore have failed to establish that this Court

has subject matter jurisdiction over the case. The Court also

notes that Because Kelli Fox and KnowledgeWeb, Inc. are citizens

of California, there jurisdiction based on diversity of the

parties.2

 

Because the Court lacks jurisdiction over the federal claims,

it lacks jurisdiction over the state claims as well. 

//

//

//

//

//

//

//

//

//

//
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -9-

V. CONCLUSION

The Court lacks subject matter jurisdiction over Plaintiffs'

federal claims and therefore it has no supplemental jurisdiction

over the state claims. There is also no jurisdiction based on

diversity of the parties. 

For the reasons stated above, the Court GRANTS Defendants'

motion under FRCP 12(b)(1). The Court DISMISSES Plaintiffs'

Complaint in its entirety, thereby DISMISSING Plaintiffs' case. 

IT IS SO ORDERED.

Dated: November 23, 2005

 

UNITED STATES DISTRICT JUDGE