Papa John’s Int’l, Inc. v. Rezko, __ F. Supp.2d __, 2006 WL 1843121 (N.D. Ill. June 29, 2006) (Moran, J.).
In partially granting Rezko’s Motion to Dismiss, Judge Moran looked at notice pleading standards across a variety of intellectual property and addressed the individual defendant’s personal liability for the acts of his company.
Judge Moran agreed with defendants that the complaint lacked factual support for its trademark infringement claims (specifically failing to explain the likelihood of confusion), but found that the complaint met the notice standard, citing Judge Easterbrook’s recent Seventh Circuit opinion (Simpson v. Nickel, __ F.3d __, 2006 WL 1585445 (7th Cir. 2006)) reaffirming that complaints should not be dismissed because they are conclusory and that complaints need only allege the "bare minimum facts" necessary for notice. Accordingly, it was enough that plaintiff alleged that defendants used plaintiff’s marks and other confusingly similar marks to continue operating a pizza business. Plaintiff’s conclusory statements that defendants continued selling pizza using ingredients not supplied, and therefore not quality-controlled, by plaintiff was also sufficient for plaintiff’s trademark dilution claim.
Judge Moran dismissed plaintiff’s copyright claim, however, because it only alleged that defendants "ma[de] unauthorized use" of the marks, without any explanation of what those uses were. This conclusory statement did not allow Judge Moran to determine whether plaintiff was alleging that defendants made derivative works from plaintiff’s copyrighted materials, used ideas from the materials, which would not be an infringement, or just kept possession of copyrighted materials, which would be a contract claim.
On the final notice pleading issue, Judge Moran discussed in detail the tension between notice pleading and the Seventh Circuit’s requirement that plaintiff must identify "concrete secrets" in trade secret misappropriation claims. The court found that plaintiff’s "vague and conclusory" allegations of the misappropriation of plaintiff’s "Papa John’s System" were sufficient, although it noted that plaintiff would need to specifically identify the secrets at issue eventually and encourage plaintiff, in a footnote, to amend the complaint to further identify the secrets.
Finally, Judge Moran refused to dismiss the individual defendant from the case. Although corporate officers are generally not personally liable for the actions of their employers, in this case the individual defendant had signed contracts which, among other things, included the individual defendant’s personal guarantee of the company’s debts.