1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

____________________________________ ) GUANTANAMERA CIGAR CO., ) ) Plaintiff, ) ) v. ) Civil Action No. 08-0721 (RCL) ) CORPORACION HABANOS, S.A., ) ) Defendant. ) ____________________________________)

MEMORANDUM OPINION This matter comes before the Court on the de fendant’s Motion [54] to Dismiss Counts IV, V, VI of the Second Amended Complaint. Upon consideration of de fendant’s Motion [54], plaintiff’s Response [61] thereto, de fendant’s Reply [66] brief, the applicable law, and the entire record herein, the Court concludes that the de fendant’s motion will be GRANTED. The Court's reasoning is set forth below. BACKGROUND This case came before the Court for a de novo review of an Order issued by the Trademark Trial and Appeal Board (“TTA B”) on February 29, 2008, denying plaintiff Guantanamera Cigar Company’s application for a U.S. trademark. The application was opposed by defendant Corporacion Habanos, S.A.. U ltimately, the TTAB found plaintiff’s mark geographically deceptively misdescriptive and de nied registration of plaintiff’s mark. 86 U.S.P.Q.2d 1473, 1479 (T.T.A.B. 2008). After the TTAB’ s ruling plaintiff filed this civil suit in this Court. On May 12, 2009 plaintiff filed its Sec ond Amended Complaint [25]. The Second2 Amended Complaint alleged three new counts claiming defendant is engaging in and has engaged in infringing activity—t hese are the counts now opposed by defendant. (Second Am. Compl. ¶¶ 67-89.) The claims are (1) Count IV, Unfair Competition Under 15 U.S.C. §1125(a)(1)(A), (2) Count V, Dilution by Tarnishm ent Under 15 U.S.C. §1125(c), and (3) Count VI, Common Law Trademar k Infringement. ( Id. ) Plaintiff voluntarily withdrew Count V without objection by defendant on September 24, 2009. ( See Pl.’s Resp. to Def.’s Mot. to Dismiss Counts IV, V, VI at 2.) Plaintiff alleges that defendant (1) “l aunched an advertising campaign for its ‘GUANTANAMERA’ products,” k nowingly advertising under the same “mark in cigar publications which are distributed and sold in the United States,” a nd (2) advertised its ‘GUANTANAMERA’ brand cigars in the European Cigar Cult Journal which is distributed and circulated through the United States. ( See Pl.’s Resp. to Def.’s Mot. to Dismiss Counts IV, V, VI at 3-4.) Further, plaintiff a lleges that defendant’s products are sold on several websites that claim they will deliver “anywhere in the worl d,” including the United States, thus causing confusion between defendant’s ‘GUANT ANAMERA’ products and plaintiff’s
‘GUANTANAMERA’ products. ( See Second Am. Compl. ¶ 52; see also Def.’s Mot. to Dismiss Counts IV, V, VI at 4 (noting that plaintiff’s products are referenced on these websites as well).) Defendant argues that plaintiff ha s failed to provide sufficient ev idence to prove that defendant used its products in U.S. commerce. ( See Def.’s Mot. to Dismiss Counts IV, V, VI at 2.) DISCUSSION “When considering a motion under Rule 12(b)(6 ), this Court will di smiss a claim if the plaintiff fails to plead ‘enough facts to state a cl aim for relief that is plausible on its face.’” Zelaya v. UNICCO Service Co. , 587 F.Supp.2d 277, 282 (D.D.C. 2008) (Lamberth, C.J.)3 ( quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007)); ( see also Def.’s Mot. to Dismiss Counts IV, V, VI at 6.) “A claim has faci al plausibility when the plaintiff pleads factual content that allows the court to draw the reasona ble inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal , 129 S. Ct. 1937, 1949 (2009) ( citing Twombly , 550 U.S. at 556). The Court must construe the counts in the light most favorable to the plaintiff. See Twombly , 550 U.S. at 555 (explaining that the court must assume that all of plaintiff’s allegations are true even if this is unlikely). However, a pl aintiff needs more than “a sheer possibility that a defendant has acted unlawfully.” Iqbal , 129 S. Ct. at 1950. “Dismissal under Rule 12(b)(6) is proper when, taking the material allegations of the complaint as admitted, and construing them in plaintiff['s] favor, the court finds th at the plaintiff[] has failed to allege all the material elements of [his] cause of action.” Weyrick v. New Republic, Inc. , 235 F.3d 617, 623 (D.C. Cir. 2001) (internal citations omitted). For multiple reasons th e Court finds that plaintiff has failed to plead enough factual content to find defendant is liable for the alleged misconduct. I. Count IV Count IV alleges that defendant’s ac tivities in the advertisement of its ‘GUANTANAMERA’ mark constitute unfair competiti on under the Lanham Act. Plaintiff has failed to provide sufficient evidence to prove tw o necessary elements; (1 ) “use in commerce” and (2) likelihood of confusion. In addition, plain tiff has not provided enough factual content to show defendant’s actions would produce substant ial effects on U.S. commerce to justify an extraterritorial application of the Lanham Act. a. Failure to Satisfy all Elements Plaintiff alleges that “[d]efendant’s a dvertising under the ‘GUANTANAMERA’ mark in cigar industry magazines with United States circulation constitutes unfair competition in4 violation of Section 43(a ) of the Lanham Act . . . .” (Second Am. Compl. ¶ 71.) Section 43(a), 15 U.S.C. §1125(a)(1)(A) makes it actionable wh en, “[a]ny person . . . uses in commerce any word, term, name . . . or false designation of or igin, false or misleading description of fact, or false or misleading representation of fact, which— (A) is likely to cause confusion . . . .” 15 U.S.C. §1125(a)(1)(A). Therefore, in order to m eet this threshold the defendant must have used the ‘GUANTANAMERA’ mark in commerce. See id. §1125(a)(1). As defined by §1127 of the Act, the word “commerce” means “all commerce which may lawfully be regulated by Congress.” Id. §1127. The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce— (1) on goods when— (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce, and (2) on services wh en it is used or displayed in the sale or advertising of services and th e services are rendered in co mmerce, or the services are rendered in more than one State or in the United States and a fo reign country and the person rendering the services is engaged in commerce in connection with the services. Id. §1127. Plaintiff must prove thatthe defendant (1) used a desi gnation or false designation of origin, (2) in interstate commerce, (3) in connection with goods or services, (4) the designation is likely to cause confusion, and (5) plaintiff al ready has been or is likely to be damaged. See 5 J.
T HOMAS M C C ARTHY , McCarthy on Trademarks and Unfair Competition § 27:13 (2009 ed.). Defendant argues that plainti ff has failed to plead two essential elements of its claim by (1) failing to allege any acts that constitute “use in commerce” and (2) failing to plead a likelihood of confusion. ( See Def.’s Mot. to Dismiss Counts IV , V, VI at 15; Def.’s Reply in Supp. of Def.’s Mot. to Dismi ss Counts IV, V, VI at 3.)5 i. Use in Commerce The crux of the argument revolves around whethe r plaintiff must prove more than mere advertising in foreign periodicals to constitute “use in commerce.” Plaintiff advances that “[a]ll that is required is that the infringing trademark is advertised in such a manner as to have an effect on United States commerce.” (Pl.’s Resp. to Def. ’s Mot. to Dismiss Count s IV, V, VI at 4.) However, many courts have held that advertis ing alone is not enough to constitute trademark infringement without the additi on of sales or transport of the trademark in commerce. See, e.g. , Buti v. Perosa, s.r.l. , 139 F.3d 98, 105 (2d Cir. 1998) (“[T]he mere advertising or promotion of a mark in the United States is insufficient to consti tute ‘use’ of the mark ‘in commerce,’ within the meaning of the Lanham Act.”); Int’l Bancorp, LLC v. Societe Des Bains de Mer , 329 F.3d 359, 364 (4th Cir. 2003) (“Because a mark is used in commerce only if it accompanies services rendered in commerce, i.e. , it is employed appurtenant to an es tablished business or trade that is in commerce, ‘mere advertising’ of that mark does not establish its protectibility . . . .”). Plaintiff does not claim that defendant so ld its ‘GUANTANAMERA’ products within the United States but instead claims that defendant’s advertisements, in foreign periodicals and its products appearance on websites, satisf ies a claim for unfair competition. ( See Pl.’s Resp. to Def.’s Mot. to Dismiss Counts IV, V, VI at 3- 4.) Plaintiff claims that “the infringement provision in section 32 explicitly co ntemplates the possibility that use of a mark in connection with the advertising of goods might give rise to liability, notwithstandi ng that the section 45 definition of ‘use in commerce’ provides that adve rtising of goods is insufficient use to acquire trademark rights.” (Pl.’s Resp. to Def.’s Mot. to Dismiss Counts IV, V, VI at 5.) Defendant, however, maintains that “cases are uniform and clear that advertis ing of a foreign mark does not constitute use in commerce, even for service marks, and even when the alleged infringer6 specifically targets a U.S. audience, unless accomp anied by sales or transport of the trademark in commerce.” (Def.’s Mot. to Dismiss Counts IV, V, VI at 16.) The Court agrees with defendant that case law dictates that more than mere adve rtising is needed to constitute unfair competition. The Lanham Act specifically states that when goods are at issue the goods must be “sold or transported in commerce.” See 15 U.S.C. §1127. Plaintiff essen tially relies on three cases to argue that defendant’s limited advertisements cons titute “use in commerce.” All these cases can be differentiated from the facts here. See New West Corp. v. NYM Co., Inc. , 595 F.2d 1194, 1199 (1979) (relying on the “transported in comm erce” prong to hold that placing the mark “on the displays associated with [t he] proposed publication [of the ma gazine, which] consists of the 430,000 solicitations maile d to perspective [ sic ] customers in California with the ‘New West’ logo prominently displayed inside and out” constitutes “transported in commerce”); Chance v. Pace-Tel Teletrac, Inc. , 242 F.3d 1151, 1159-60 (9th Cir. 2001) (involving a service mark which 15 U.S.C. § 1127 specifically states advertis ing can constitute “use in commerce”); Sterling Drug, Inc. v. Bayer AG , 14 F.3d 733 (2d Cir. 1994) (describ ing a massive advertising campaign with events that all occurred in the Un ited States). Although there may be extreme circumstances where advertising could reach such a level as to constitute “use in commerce” this Court does not need to addre ss this issue at this time. Again, plaintiff has not alleged th at defendant sold cigars in the United States, only that a foreign advertisement can be obtained in the United States. Plaintiff cannot rely on single instances of advertisements to make a claim for unfair competition as this does not reach facial plausibility that defendant is launching an adve rtising campaign aimed at U.S. consumers. In fact, the advertisement is in a European magazi ne in the German language. (Def.’s Reply in Supp. of Def.’s Mot. to Dismiss Counts IV, V, VI at5.) Even viewing the facts in the light most7 favorable to plaintiff, plaintiff has not demonstrated that the defe ndant could be responsible for a Lanham Act violation as its factua l allegations are wholly inade quate. Plaintiff has not shown that defendant’s ‘GUANTANAMERA’ products were used in commerce in the United States. Advertising in a German magazine does not constitute “use in commerce.” Third party use of defendant’s ‘GUANTANAMERA’ mark is also insufficient. Re lying on a website where both products can be purchased does not satisfy the thre shold requirement of “facial plausibility.” Plaintiff has failed to allege all the material elements of its caus e of action; therefore, the count should be dismissed under Rule 12(b)(6 ). Cf. Weyrick , 235 F.3d at 623. ii. Likely to Cause Confusion Further, plaintiff has failed to plead facts su fficient to prove that confusion is likely from defendant’s activities. In recent years, the tre nd has been towards requiring a demonstration of at least a minimum of credibility to survive a motion to dismiss. See Tooley v. Apolitano , No. 07- 5080, slip op. at 8 (D.C. Cir. Nov. 17, 2009) (findi ng the facts were “patently insubstantial” warranting dismissal); see also Iqbal , 129 S. Ct. at 1950 (ruling you need more than “a sheer possibility that a defendant has acte d unlawfully”). Plaintiff relies on Sterling where the court states that [e]ven though Bayer AG did not sell an y aspirin under the ‘Bayer’ mark in the United States, there were sufficient competitive possi bilities between the tw o companies to support Judge Ward's finding that the proximity of produ cts factor favored Sterling's claim of likely confusion.” 14 F.3d at 742. There is no such proximity of the products in this case. Plaintiff relies on the argument that one Germ an-language ad in a European journal and a Canadian website that references both parties’ products suffice to create a likelihood of confusion. ( See Def.’s Reply in Supp. Of Def.’s Mot. to Dismiss Counts IV, V, VI at 3.) Although there are other websites that offe r both plaintiff’s ‘GUANTANAMERA’ branded8 products and defendant’s ‘GUANT ANAMERA’ branded products this does not constitute unfair competition by defendant. As an example, the website www.absolutecigars.com clearly states where each cigar is made, creating no confusi on as to whose product it is. Plaintiff has ultimately failed to plead any fact s to show a plausibility of a likelihood of confusion between the products, a necessary element of both the “u nfair competition” and “trademark infringement” claims. As of 2002 defendant “held registrati ons or applications for ‘GUANTANAMERA’ in over 75 countries throughout the world, and [defe ndant] produced extensive evidence regarding its world-wide sales (excluding the U.S. because of the embargo) . . . .” (Def.’s Mot. to Dismiss Counts IV, V, VI at 3.) Th erefore, defendant’s products would likely be found on foreign websites. The customer should know whos e product they are buying. Although there is potential that some sales are being made in the United States , potentially with defendant’s knowledge, there are not enough sales to show a substantial effect on United States commerce. In addition, the websites were not created or run by defendant. Theref ore, another essential element of a section 43 claim, demonstrating a likelihood of confusi on, has not been met, justifying dismissal under Rule 12(b)(6). b. Extraterritorial Applicability Plaintiff’s argument also fails because th e Court does not yet ha ve the authority to interfere. To apply the Lanham Act to a forei gn entity the Court would need to determine if there was even a “substantial effect” on United States commer ce. “Though Congress did not intend the Lanham Act to be used as a sword to eviscerate completely a foreign corporation’s foreign trademark, it did intend the Act to be used as a shield against foreign uses that have significant trademark-impairing effect on American commerce.” Sterling Drug , 14 F.3d at 746. It is true that a “United States District Court has jurisdiction to award relief to an American9 corporation against acts of trade-mark infri ngement and unfair competition consummated in a foreign country by a citizen and re sident of the United States.” See Steele v. Bulova Watch Co.,
Inc. , 344 U.S. 280, 281, 285 (1952) (discussing how the Court must view all the activities as a whole to see if they “fall within the jurisdictiona l scope of the Lanham Act” ). In each case, the question that must be addressed, however, is “‘whether Congress intended to make the law applicable’ to the facts of this case.” See id. at 281, 285-86 (noting both parties were either a United States citizen or corporation—no forei gn entities were involv ed even though some activities occurred in a foreign nation) (internal citation omitted). When looking at the extraterrito rial application of the Lanha m Act as applied to “foreign activities of foreign defendants in American cour ts,” plaintiff even stated, the Lanham Act is appropriate “only if the comp lained of activities have a substantialeffect on United States commerce, viewed in light of the purposes of the Lanham Act.” See Cecil McBee v. Delica Co., Ltd. , 417 F.3d 107, 110 (1st Cir. 2005) (emphasis added). Although the Supreme Court has not yet ruled on when the Lanham Act is applicable to foreign entities, the First Circuit did rely on the Supreme Court’s interpretation of the Sherma n Act’s applicability, fi nding extraterritorial application is appropriate when the actions were “meant to produce and did in fact produce some substantial effect in the United States.” See id. at 119 ( quoting Hartford Fire Ins. Co. v. California , 509 U.S. 764, 796 (1993)) (emphasis added). Plaintiff relies on Sterling Drug, Inc. v. Bayer AG , 14 F.3d 733 (2d Cir. 1994) to argue that advertisements are sufficient to constitute infringement—satisfying both the “use in commerce” and the likely confusion standards—in th e U.S. even if the defendant did not actually sell its products in the U.S. ( See Pl.’s Resp. to Def.’s Mot. to Di smiss Counts IV, V, VI at 7-8.) However, even if plaintiff’s argument were corr ect and it was true that advertising alone is10 sufficient to constitute “use in commerce,” Sterling Drug specifically states that the court may issue injunctions for extraterritori al actions “to prohibit only those foreign uses of the mark . . . that are likely to have significant trademark-impairing effects on United States commerce.” Sterling , 14. F.3d. at 747. The court found “significan t” effects to include the aggregated activities of “obtaining federal registration for the ‘Bayer’ mark for i ndustrial and agricultural chemicals and related products,” advertising these products in trade journals, renaming Rhinechem to ‘Bayer USA Inc.,’ “conduct[ing] a corporate ‘image’ campaign, placing a total of 67 advertisements in the Wall Street Journal , Forbes , Fortune , Business Week , and the ‘Business World’ section of the Sunday New York Times ,” sponsor[ing] internati onal medical symposia in the United States—freely using its name, s ponsoring theater, opera, concert, and dance performances, and erecting billboards with the word “Bayer” on them, am ong other activities. Id. at 738 (finding that “defendants began to make extensive use of the ‘Bayer’ name and mark”). Defendant has not engaged in the ex tensive use of the ‘GUANTANAMERA’ mark and comes nowhere near the activities in Sterling Drug . In fact, plaintiff fails to provide evidence of any activity on the part of defendant other than advertising its brand of cigars in a foreign magazine. There was no “substantial effect” on commerce in the United States to justify this Court interfering with a foreign entity’s use of the mark. c. Contributory Infringement Plaintiff’s argument that defendant’s products can be found by U.S. citizens on various websites is not enough to show contributory infringement of the ‘GUANTANAMERA’ mark. On various websites plaintiff pr ovides evidence that entering th rough the site a customer can click on links that take you to ‘HABANOS UNIQUE SINCE 1492’ a nd then a few further links will allow a customer to purchase de fendant’s ‘GUANTANAM ERA’ products. ( See Pl.’s Resp.11 to Def.’s Mot. to Dismiss Counts IV, V, VI at 10-14.) These accusations alone do not indicate contributory infringement. Contri butory infringement holds a manuf acturer or distributor liable for the infringing activities of othe rs if they (1) intentionally i nduce another to infringe, or (2) continue to supply its products to someone who they know or have reason to know may be engaging is trademark infringement. See Inwood Lab, Inc. v. Ives Lab, Inc. , 456 U.S. 844, 853- 54 (1982). Plaintiff has not pleaded adequate facts to demonstr ate factual plausibility to satisfy either of the above requirements. d. Advertising other Various ‘HABANOS’ Products The Court agrees with defendant that the discussion concerning de fendant’s registered mark ‘HABANOS UNICOS DESDE 1492’ is irreleva nt to plaintiff’s claim of trademark infringement of its ‘ GUANTANAMERA’ mark. ( See Def.’s Reply in Supp. of Def.’s Mot. to Dismiss Counts IV, V, VI at 10-13.) II. Count V Count V was voluntarily dism issed by plaintiff [62] on Se ptember 24, 2009. Therefore, this Count will not be addressed. III. Count VI The only difference in plaintiff’s pleadings fo r Count VI and Count IV is that plaintiff argues under Count VI that defenda nt engaged in unfair competiti on in violation of common law principles protecting trademarks and under Count IV plaintiff argues defe ndant violated Section 43(a) of the Lanham Act. (Second Am. Compl. ¶¶ 67-74, 82-89.) Plaintiff admits that the common law infringement claim has the same elements of the unfair competition claim. ( See Pl.’s Resp. to Def.’s Mot. to Dismiss Counts IV, V, IV at 18.) Therefore, for the same reasons12 stated under Count IV, plaintiff’s Count VI fails to state a cause of action and must be dismissed under Rule 12(b)(6). CONCLUSION For the above stated reasons, defendant’s Motion will be GRANTED. In addition to the voluntarily dismissed Count V, Count IV and VI will be dismissed by the Court for failure to state a cause of action. Signed by Royce C. Lamberth, United St ates District Judge, on December 10, 2009.