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American Consumer Credit Counseling, Inc. v. American Consumer Credit, LLC

United States District Court, D. Massachusetts

April 27, 2017



          Indira Talwani United States District Judge.

         Plaintiff American Consumer Credit Counseling, Inc.'s Motion for Preliminary Injunction [#6] asks the court to enjoin Defendant American Consumer Credit, LLC's use of the marks: “American Consumer Credit”; “American”; “ACC”; and any other marks confusingly similar to Plaintiff's “American Consumer Credit Counseling” and “ACCC” marks. Although this is a close case, for the reasons that follow, Plaintiff's Motion for Preliminary Injunction [#6] is DENIED.

         I. Background[1]

         Plaintiff, a Massachusetts non-profit incorporated in 1992, provides confidential counseling regarding credit, debt, housing, bankruptcy, student loans, and financial education. Pl.'s Mem. Supp. Prelim. Inj. (“Pl.'s Mem. Supp.”) 9 [#7]. Plaintiff “has clients in every state, is authorized to do business in all 50 states, and is specifically licensed to provide debt management services in every state that requires such a license.” Id. at 9-10. Plaintiff has helped over 560, 000 people in its twenty year history, including 55, 000 in 2015 alone. Decl. Steven Trumble Supp. Pl.'s Mot. Prelim. Inj. (“Trumble Decl.”) ¶ 5 [#7-1]. Plaintiff owns Federal Registration Nos. 3, 253, 648 for “American Consumer Credit Counseling, ” and 2, 366, 063 for “ACCC.” Compl. ¶ 22 [#1]. Both registrations are for “credit and debt inquiry and consultation services, debt and credit counseling; debt repayment planning and scheduling; debt consolidation services; educational services, namely conducting seminars, workshops, and individual instruction in the field of credit, debt, and money management.” Id. Since 1992, Plaintiff has provided services in connection with these marks. Id.

         Defendant is a Florida limited liability corporation formed by Dana Micallef in 2013. Decl. Dana Micallef Supp. Def.'s Opp'n Pl.'s Mot. Prelim. Inj. (“Micallef Decl.”) ¶ 13 [#22]. Nine years prior to forming Defendant, Micallef began operating a business in Florida under the fictitious name American Consumer Credit. Id. ¶ 3. Micallef provided counseling and advice to consumers regarding timeshare obligations and “to consumers struggling with debt or facing problems with their credit, ” and referred customers to credit counseling agencies in exchange for a referral fee. Suppl. Decl. Dana Micallef Supp. Def.'s Opp'n Pl.'s Mot. Prelim. Inj. (“Suppl. Micallef Decl.”) ¶ 2 [#45].

         Beginning in 2007, Micallef adopted a second fictitious name - A Debt Consolidation Company - for providing “advice and counseling with respect to financial matters.” Id. ¶ 5. In 2009, Micallef started operating under a third fictitious name, AAA Debt Consolidation, and temporarily stopped operating his business under the name “American Consumer Credit” when that fictitious name expired. Id. ¶¶ 4-5.

         Between 2011 and 2012, Micallef operated under all three fictitious names, despite the 2009 expiration of the fictitious name registration for “American Consumer Credit.” Id. ¶¶ 5, 8. In 2012, Micallef also founded two non-profit corporations focused on assisting individuals with their timeshare obligations. Id. ¶ 9-10. Those companies were registered as Florida Resale Recovery, Inc., and American Consumer Services, Inc. Id. American Consumer Services, Inc., launched a website in August 2012 with the domain name “” Id. ¶ 11. The website featured the name “American Consumer Credit” and stated that “American Consumer Services” was a “subsidiary” of “American Consumer Credit.” Id. In early 2013, Micallef stopped operating these non-profit companies. Id. ¶ 12. The website was maintained through August 1, 2016, when the registration expired and the website was taken down. Id.

         Meanwhile, after learning that the domain name “” was unavailable, Micallef selected, and on January 7, 2013, registered, the name “” Def.'s Opp'n Mot. Prelim. Inj. (“Def.'s Opp'n”) 8 [#20]; Micallef Decl. ¶ 12 [#22]. Micallef formed Defendant two weeks later. Micallef Decl. ¶ 13. Defendant uses the domain and offers advice to families and individuals seeking to cancel their timeshare obligations. Def.'s Opp'n 5 [#20]. Defendant evaluates its clients' timeshare obligations, and determines the course of action for cancelling undesirable timeshare contracts. Id. at 7. Ancillary to the timeshare cancellation business, Defendant also offers information about protecting credit scores, avoiding bankruptcy, and managing debt. Id.

         In March 2014, Defendant purchased its first paid advertisement on Google. Suppl. Micallef Decl. ¶ 14 [#45]. In 2014 and 2015, Defendant added additional advertising campaigns. Id. In March 2016, Defendant retained Fill in the Blank to improve Defendant's search engine optimization strategy. Id. ¶ 15; Decl. Cory Hubbell Supp. Def.'s Opp'n Mot. Prelim. Inj. (“Hubbell Decl.”) ¶¶ 2, 4 [#44]. Since March 2016, Defendant has paid Fill in the Blank $65, 000 in fees, and has paid Google $1, 855, 620.11 in advertising fees. Suppl. Micallef Decl. ¶ 15 [#45]. Defendant is currently spending approximately $250, 000 per month for advertising on Google.


         II. Standard

         A preliminary injunction is an “extraordinary and drastic remedy . . . .” Munaf v. Geren, 553 U.S. 674, 689 (2008). A party seeking a preliminary injunction must show “(1) a likelihood of success on the merits, (2) a likelihood of irreparable harm absent interim relief, (3) a balance of equities in the plaintiff's favor, and (4) service of the public interest.” Arborjet, Inc. v. Rainbow Treecare Sci. Advancements, Inc., 794 F.3d 168, 171 (1st Cir. 2015); Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The likelihood of success on the merits and irreparable harm weigh heavily in the analysis and these factors are assessed in relation to one another. See W Holding Co., Inc. v. AIG Ins. Co., 748 F.3d 377, 383 (1st Cir. 2014); Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32 (1st Cir. 2011); Braintree Labs., Inc. v. Citigroup Glob. Mkts. Inc., 622 F.3d 36, 42-43 (1st Cir. 2010). “[W]hen the likelihood of success on the merits is great, a movant can show somewhat less in the way of irreparable harm and still garner preliminary injunctive relief.” E.E.O.C. v. Astra U.S.A. Inc., 94 F.3d 738, 743 (1st Cir. 1996). The burden of proof on all factors is on the movant. Esso Std. Oil Co. (Puerto Rico) v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006).

         A. Likelihood of Success on the Merits

         To succeed on a claim of trademark infringement, Plaintiff must demonstrate that it owns a protectable mark and that Defendant's use of that mark will likely cause consumer confusion. 15 U.S.C. § 1125; Borinquen Biscuit Corp. v. M.W. Trading Corp., 443 F.3d 112, 116 (1st Cir. 2006) (“Before a party can succeed in an infringement action, it must demonstrate that its mark merits protection and that the allegedly infringing use is likely to result in consumer confusion.”). Here, Plaintiff is able to show a slight likelihood of success on the merits.

         1. Eligibility for Trademark Protection

         Plaintiff can demonstrate that its marks “American Consumer Credit Counseling” and “ACCC” are registered. “Registration is ‘prima facia evidence of the validity of the registered mark.'” Borinquen Biscuit Corp., 443 F.3d at 117. (quoting 15 U.S.C. § 1115(a)).

         Defendant argues that Plaintiff's mark as a whole is generic[2] and therefore not entitled to protection. Generic terms “serve primarily to describe the products rather than identify their sources . . . .” Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 14 (1st Cir. 2008). Generic marks explain “what are you?” rather than answering the question “where do you come from?” Id. at 14.

         Plaintiff's registration of the marks creates a rebuttable presumption that the mark is not generic. Colt Defense LLC v. Bushmaster Firearms, Inc., 486 F.3d 701, 705 (1st Cir. 2007). This presumption may be overcome, however, where “an alleged infringer demonstrates genericness by a preponderance of the evidence.” Id.; see also Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985) (“[A] registered mark may be canceled at any time on the grounds that it has become generic.”).

         In evaluating a mark's generic-ness, the court must determine “the primary significance of the phrase to the relevant public, ” 15 U.S.C. § 1064(3); Colt Defense LLC, 486 F.3d at 709, considering evidence such as “(1) consumer surveys; (2) the use of the term in media publications; (3) use of the term by competitors in the industry; (4) purchaser testimony concerning the term; and (5) the plaintiff's use of the term, ” Boston Duck Tours, LP, 531 F.3d at 18. “The preferred form of proof includes direct evidence (such as consumer surveys) suggesting that the average purchaser actually regards the mark as ...

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