There’s no such thing as “leasing real estate in violation of the Lanham Act”

Wakefern Food Corp. v. Marchese, 2021 WL 3783259, No. 2:20-cv-15949-WJM-MF (D.N.J. Aug. 26,
2021)

Always
something new in trademark! Wakefern, the largest retailer-owned supermarket
coop in the US, sued Marchese for attempting “to lease commercial real estate
in violation of the Lanham Act … and New Jersey common law.” 

Wakefern
operates approximately 353 supermarkets under various brands such as ShopRite and
Fairway Market across several states, and has a registration for ShopRite.

Marchese
formed defendant Family Markets for the stated purpose of carrying out a retail
supermarket business. I
n mid-2020, Marchese allegedly contacted Wakefern about the possibility of
joining the Wakefern cooperative. He allegedly told Wakefern’s representative
that he owned both Family Markets and a number of “Foodtown” supermarket
locations across New Jersey, including a specific Foodtown location in
Plainsboro. Wakefield told Marchese to submit a summary of his qualifications
in writing, but he didn’t follow up. The supposed Plainsboro location was allegedly vacant.

“Marchese
also contacted a real estate broker to inquire about a listing of a vacant
50,000 square foot supermarket in Middlesex, New Jersey.” He allegedly informed
the broker “that he was interested in leasing the vacant space, that he was the
owner/operator of an active supermarket business in Family Markets, that he had
an ownership interest in several members of the Wakefern cooperative, including
four ShopRite® supermarkets in New Jersey, and that he had started the process
of becoming a Wakefern member himself.” Afterwards, the broker contacted
Wakefern and was told that Marchese wasn’t a member and had no
Wakefern/ShopRite affiliation.

Perhaps
overreacting, Wakefern sued for trademark infringement and false advertising in
violation of the Lanham Act and violation of state unfair competition law,
which is coextensive and thus disappears from our story.

Trademark
infringement: This just wasn’t use in commerce. Whether confined to the §1114
definition of “use in commerce” or using some other broader standard for §1127,
Marchese’s statement didn’t qualify:

Plaintiff is correct that Marchese’s conduct in invoking
Wakefern and the ShopRite® brand may have been an affirmative act ultimately
designed to achieve some sort of commercial benefit (i.e. the acquisition of
commercial space from which to operate a supermarket). However, there are no
allegations that Defendant has ever offered, distributed, possessed, sold, or
advertised any goods or services of any kind bearing or imitating Plaintiff’s
marks, or even had the capacity to do so. Nor are there any allegations that,
had Marchese been successful in securing the vacant commercial property, he
would have engaged in any infringing conduct in the actual operation of a
supermarket. Indeed, Plaintiff’s allegations suggest that Marchese made false
representations to the broker in order to take advantage of the broker’s
services rather than to sell or promote his own. Moreover, Plaintiff has not
cited any case, and the Court is aware of none, in which a single, private
business conversation, without any corresponding dissemination or marketing to
the broader purchasing public, has been found to constitute a “use in commerce”
for purposes of trademark infringement.

False
advertising: Not commercial advertising or promotion. There was no organized
campaign to penetrate the market alleged; there was also no targeting of a
class of potential purchasers. “Marchese’s allegedly false statements regarding
his relationship with Wakefern were made in the context of a private
conversation with a targeted individual acting in his capacity as a broker
rather than shared more broadly to a class of potential supermarket consumers.
Such isolated, private statements, particularly to non-consumers, do not
constitute the sort of dissemination to the relevant purchasing public
necessary to state a false advertising claim under Section 43(a) of the Lanham
Act.” Wakefield did allege that Marchese engaged in “similar conduct with
respect to multiple Westside Market stores in New York City.” But there were no
other details. “Regardless, even assuming Plaintiff intended to allege that
Marchese has continued to claim a relationship with Wakefern to various real
estate brokers in order to obtain a commercial lease to operate a supermarket,
Plaintiff’s claim would fail: such statements would still be discrete
communications targeted to specific non-consumers rather than promotions or
advertisements disseminated to a segment of the purchasing public.”

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