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Treasury Management Services, Inc. v. Wall Street Systems Delaware, Inc.

United States District Court, D. Delaware

May 5, 2017

TREASURY MANAGEMENT SERVICES, INC. Plaintiff,
v.
WALL STREET SYSTEMS DELAWARE, INC. and IT2 TREASURY SOLUTIONS, INC. Defendants.

          MEMORANDUM

         At Wilmington this 5th day of May, 2017, having reviewed the papers submitted in connection with defendants' motion to dismiss (D.I. 8), the court issues its decision as follows:

         1. Background.

         Treasury Management Services, Inc. ("plaintiff") is a Texas corporation with a principal place of business in Houston, Texas. (D.I. 1 at ¶ 3) Plaintiff is an investment fund manager and administrator. (D.I 1, ex. C) Wall Street Systems Delaware, Inc. ("WSS") and IT2 Treasury Solutions ("IT2") (collectively, "defendants") are Delaware corporations with a principal place of business in New York City, New York. (D.I. 1 at¶¶ 5-6) WSS develops "treasury management software systems... to help automate the administration of corporate treasury departments." (D.I. 9 at 3) IT2 is a subsidiary of WSS and develops electronic treasury management systems. (D.I. 1, ex. D & E)

         2. On April 20, 2016, plaintiff filed an action against defendants, alleging that defendants: (1) infringed on a registered trademark in violation of 15 U.S.C. § 1114(1)(a); (2) falsely designated its products and services as originating from, connected with, or endorsed by plaintiff in violation of 15 U.S.C. § 1125(a); (3) diluted its trademark in violation of 15 U.S.C. § 1125(c); (4) diluted its trademark in violation of 6 Del. C. § 3313; (5) engaged in unfair competition in violation of 6 Del. C. § 2531; and (6) infringed on its trademark and engaged in unfair competition in violation of Delaware common law. (D.I. 1) Plaintiff also seeks to recover attorney:, fees. (D.I. 1 at ¶ 53) Defendants have moved to dismiss for failure to state a claim for relief under Federal Rules of Civil Procedure 12(b)(6). (D.I. 8) The court has jurisdiction pursuant to 15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1331, 1338, and 1367

         3. TMS.

         Plaintiff began using the mark "TMS" in January 1993. (D.I. 1 at ¶ 15) On May 30, 2006, plaintiff applied to the United States Patent and Trademark Office ("USPTO") for the trademark "TMS." USPTO TSDR Case Viewer #78896326, Document 14 "TEAS Plus New Application" (May 30, 2006). The mark was published for opposition on December 13, 2006. Id., Document 11 "Notice of Publication" (Dec. 13, 2006). On May 20, 2007, "TMS" was issued on the Principal Register in international class 036 for "currency exchange and advice; electronic transfer of money; equity capital investment; financial forecasting; financial information in the nature of rates of exchange; foreign exchange information services; investment advice; investment management; monetary exchange." (D.I. 1, ex. A) The "TMS" "mark consists of standard characters without claim to any particular font, style, size, or color." (Id.)

         4. TMS TRADE.

         Plaintiff began using the mark "TMS TRADE" in January 1993. (D.I. 1 at ¶ 15) On May 30, 2006, plaintiff applied to the USPTO for the trademark "TMS TRADE." USPTO TSDR Case Viewer #78896257, Document 16 "TEAS Plus New Application" (May 30, 2006). The mark was published for opposition on January 3, 2007. Id., Document 11 "Notice of Publication" (Jan. 3, 2007). On April 10, 2007, "TMS TRADE" was issued on the Principal Register in international class 036 for "currency exchange and advice; electronic transfer of money; equity capital investment; financial forecasting; financial information in the nature of rates of exchange; foreign exchange information services; investment advice; investment management; monetary exchange." (D.I. 1, ex. B) The "TMS TRADE" "mark consists of standard characters without claim to any particular font, style, size, or color." (Id.)

         5. Plaintiffs Use.

         Plaintiff has used the marks "TMS" and "TMS TRADE" (collectively, "TMS Marks") "substantially, continuously, and extensively in U.S. commerce since at least January 1993." (D.I. 1 at¶ 15) Plaintiff uses the TMS Marks for its "on-line services, point-of-sale services and ecommerce." (Id. at ¶ 18) The TMS Marks appear prominently on plaintiff's website. (Id., ex. C) On August 23, 2013, plaintiff "filed Combined Declarations of Use and Incontestability under Sections 8 & 15" for the TMS Marks, and on September 10, 2013, the USPTO "issued Notices of Acceptance and Acknowledgement" for the TMS Marks.[1] (Id. at 16)

         6. WSS and IT2's use.

         Plaintiff alleges that defendants have used and continue to use "the TMS Marks in connection with their financial, investment, and monetary services." (D.I. 1 at ¶ 19) The WSS website describes "The IT2 TMS" which is a "Fully Integrated TMS." (D.I. 1, ex. D at 2) The IT2 website (http://www.it2tms.com) states that "IT2 has been at the forefront of the development of the Treasury Management System (TMS) since the beginning" and employs the "TMS" acronym extensively. (D.I. 1, ex. E at 2) According to plaintiff, as early as October 2014, "[d]efendants had knowledge of the TMS Marks" and, despite this knowledge, they continued "to willfully infringe on the TMS Marks." (Id. at ¶¶ 20-21) Plaintiff alleges that defendants "allow[] . . . customers and clients to log-into [their] system and use [their] financial services related to the infringing TMS Marks regardless of the customer or client's location." (Id. at ¶ 22 (emphasis added)) Further, plaintiff contends that "customers or clients of [d]efendants have utilized [defendants' financial services related to the infringing TMS Marks." (Id. at ¶ 23 (emphasis added))

         7. Standard of Review.

         A motion filed under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint's factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 545 (internal quotation marks omitted) (interpreting Fed.R.Civ.P. 8(a)). Consistent with the Supreme Court's rulings in Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Third Circuit requires a three-part analysis when reviewing a Rule 12(b)(6) motion. Connelly v. Lane Const. Corp., 809 F.3d 780, 787 (3d. Cir. 2016). In the first step, the court "must tak[e] note of the elements a plaintiff must plead to state a claim." Next, the court "should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth." Lastly, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Id. (citations omitted).

         8. Under Twombly and Iqbal, the complaint must sufficiently show that the pleader has a plausible claim. McDermott v. Clondalkin Grp., 2016 WL 2893844, at *3 (3d Cir. May 18, 2016). Although "an exposition of [the] legal argument" is unnecessary, Skinner v. Switzer,562 U.S. 521 (2011), a complaint should provide reasonable notice under the circumstances. Id. at 530. A filed pleading must be "to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, " such that "the factual contents have evidentiary support, or if so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery." Anderson v. Bd. of Sch. Directors of Millcreek Twp. Sch. Dist, 574 F.App'x 169, 174 (3d Cir. 2014) (quoting Fed.R.Civ.P. 11(b)). So long as plaintiffs do not use "boilerplate and conclusory allegations" and "accompany their legal theory with factual allegations that make their theoretically viable claim plausible, " the Third Circuit has held "pleading upon information and belief ...


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