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General Linen Service, Inc. v. General Linen Service Co., Inc.

United States District Court, D. New Hampshire

June 10, 2014

General Linen Service, Inc.
v.
General Linen Service Co., Inc. Opinion No. 2014 DNH 130

ORDER

LANDYA McCAFFERTY, District Judge.

General Linen Service, Inc. brings suit against General Linen Service Co., Inc., asserting various state law claims and a claim under the Computer Fraud and Abuse Act. Defendant asserts five counterclaims, seeking cancellation of the plaintiff's trademark (Counts I and II) and alleging claims for violation of the New Hampshire Consumer Protection Act, N.H. Rev. Stat. Ann. ch. 358-A (Count III), intentional interference with contractual relationships (Count IV), and "Unfair Competition and Deceptive Trade Practices under the Common Law and the Lanham Act" (Count V). Plaintiff moves to dismiss Counts I, II, III, and V of the counterclaims. Defendant objects.

Background[1]

Defendant, General Linen Service Co., Inc. is a company located in Somersworth, New Hampshire, which provides linen and uniform rental services to the healthcare, restaurant, and hospitality communities in New England. For purposes of this order, the court will refer to defendant as "GL Somersworth." Plaintiff, General Linen Service, Inc. is a company located in Newburyport, Massachusetts, which provides similar services in New England. The court will refer to plaintiff as "GL Newburyport."

On October 27, 2005, GL Newburyport filed a federal trademark application with the United States Patent and Trademark Office ("PTO"), Serial No. 78741710, for the mark "GENERAL LINEN SERVICE" used in connection with rental of table linens and uniforms ("GLS mark"). In the trademark application, GL Newburyport claimed that, to the best of its knowledge and belief, no other person, firm, corporation or association had the right to use the GLS mark in United States commerce, and that it had been using the mark in United States commerce since

On May 3, 2006, the PTO issued an "Office Action, " in which it refused to register the GLS mark because the mark was "merely descriptive" of GL Newburyport's services described in the trademark application. On October 2, 2006, GL Newburyport submitted a response to the Office Action. As part of its response, GL Newburyport included the sworn affidavit of its president, Diane Whitney Wallace, who stated that "the term GENERAL' has become distinctive of the goods and/or services through GL Newburyport's substantially exclusive and continuous use [of the term] in commerce for at least five years immediately before the date" of the affidavit.

On February 27, 2007, "the PTO granted registration for the [GLS mark] to GL Newburyport." On April 9, 2010, GL Newburyport sent a cease and desist letter to GL Somersworth based upon its claim of exclusive rights in the name GENERAL LINEN SERVICE. The letter asserted rights based on GL Newburyport's Federal Registration, and demanded that GL Somersworth cease and desist from using the GLS mark.

On October 24, 2012, GL Newburyport filed with the PTO an affidavit of continued use and incontestability of the GLS mark ("affidavit of continued use"). The affidavit stated that the mark was in continuous use for five consecutive years after the date of registration. The PTO subsequently granted incontestable status to the GLS mark.[2]

GL Somersworth alleges that GL Newburyport made intentional misrepresentations in the trademark application, the response to the Office Action, and the affidavit of continued use. GL Somersworth alleges that, despite GL Newburyport's representations to the contrary in its submissions to the PTO, GL Newburyport knew that its use of the GLS mark was not "substantially exclusive" and that it had not continuously used the mark for either the five years prior to the response to the Office Action or the five years prior to the affidavit of continued use. In addition, GL Somersworth alleges that the terms "General, " "Linen, " and "Service" do not qualify for trademark registration because the mark is too generic and/or has not gained any secondary meaning.

Standard of Review

In a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court accepts as true all factual allegations contained in the counterclaims. Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). In assessing counterclaims for purposes of a motion to dismiss, the court "separate[s] the factual allegations from the conclusory statements in order to analyze whether the former, if taken as true, set forth a plausible, not merely conceivable, case for relief." Juarez v. Select Portfolio Servicing, Inc. , 708 F.3d 269, 276 (1st Cir. 2013) (internal quotation marks omitted). "If the facts alleged in [the counterclaims] allow the court to draw the reasonable inference that the defendants are liable for the misconduct alleged, the claim has facial plausibility." Id . (internal quotation marks omitted).

Discussion

GL Somersworth alleges five counterclaims: Cancellation of GL Newburyport's Federal Trademark Registration on the Basis of Fraudulent Procurement (Count I); Cancellation of GL Newburyport's Federal Trademark Registration on the Basis of Genericness (Count II); Violation of the New Hampshire Consumer Protection Act (Count III); Intentional Interference with Contractual Relationships (Count IV); and "Unfair Competition and Deceptive Trade ...


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