Free Order - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 The parties will be directed to brief the following issues. 19 Plaintiffs' first cause of action is a federal unfair competition claim. Plaintiffs believe 20 Defendants' actions "are likely to cause confusion or mistake or will deceive customers in 21 interstate commerce as to the affiliation, connection, or association between Defendants' 22 mark and Meritage's Hancock trademarks." (Doc. 159) There can be no claim for unfair 23 competition when there is "no confusion about the ultimate source of the goods." MJ & 24 Partners Restaurant Ltd. P'ship v. Zadikoff, 10 F. Supp. 2d 922, 928 (N.D. Ill. 1998). Thus, 25 when a trademark owner has allowed another individual to use his mark, a licensee may not 26 bring an unfair competition claim against that third party. See id. When the trademark 27 owner has authorized another party to use the mark, the public is not confused about the 28
Case 2:04-cv-00384-ROS Document 474 Filed 04/20/2007 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) Plaintiffs, ) ) v. ) ) ) Ricky Lee Hancock, et al., ) ) Defendants. ) ) ) AND RELATED COUNTERCLAIMS ) ) ) Meritage Homes Corporation, et al.,

No. CV 04-0384-PHX-ROS ORDER

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source of the goods because the trademark owner remains the source of the goods. In this case, Greg Hancock is the owner of the Hancock trademarks. Plaintiffs' unfair competition claim may fail if the confusion they are alleging is that consumers will believe Greg Hancock (the owner of the Hancock marks) is connected to the marks being used by Rick and Greg Hancock. The Hancocks' actions could not result in actionable confusion as Greg Hancock is connected with the mark being used by the Hancocks. See Twentieth Century Fox Film Corp. v. Marvel Enters., Inc., 277 F.3d 253 (2d Cir. 2002) (holding district court properly dismissed unfair competition claim against owner of mark brought by licensee because owner of mark was source of product). Plaintiffs will be directed to address the applicability of MJ & Partners, Marvel Enters., and the cases cited therein, to the facts in this case. Given that Greg Hancock is the source of the competing businesses, Plaintiffs must set forth how the public has been confused regarding the ultimate source of the goods. Plaintiffs have also brought an unfair competition claim based on Arizona law. The supplemental briefing should address whether the Arizona-based unfair competition claim can survive if the federal unfair competition claim is dismissed. See Taylor v. Quebedeaux, 617 P.2d 23, 24 (Ariz. 1980) ("The gravamen of the case before us is unfair competition and the essence of unfair competition is confusion of the public."). Accordingly, IT IS ORDERED Plaintiffs shall submit a supplemental brief no longer than ten pages in length setting forth why the federal unfair competition claim should not be dismissed and whether the Arizona unfair competition claim survives dismissal of the federal claim. This supplemental brief shall be submitted no later than April 27, 2007. IT IS FURTHER ORDERED Defendants' responses shall be no longer than ten pages and are due May 2, 2007. Defendants shall not raise the issue of subject matter jurisdiction in the response. IT IS FURTHER ORDERED Plaintiffs may file a reply, no longer than five pages, by May 4, 2007.

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IT IS FURTHER ORDERED the parties are on notice that these page limits and deadlines are firm. Requests for additional pages or additional time will be denied absent the most compelling of circumstances. DATED this 20th day of April, 2007.

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