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Edible International, LLC v. Google, LLC

United States District Court, D. Connecticut

July 13, 2018

EDIBLE INTERNATIONAL, LLC et al, Plaintiff,
v.
GOOGLE, LLC, Defendants.

          RULING ON MOTION TO COMPEL ARBITRATION, OR IN THE ALTERNATIVE TO TRANSFER VENUE

          MICHAEL P. SHEA, U.S.D.J.

         Plaintiffs Edible International, LLC and Edible IP, LLC bring suit against defendant Google, LLC, based on the latter's alleged “repeated and intentional placement of advertisements for [plaintiff's] competitors in prominent locations” throughout its search results. (ECF No. 1 at 1). These placements, the plaintiffs allege, are “likely to cause confusion as to whether [plaintiffs'] products and services are affiliated with, originate from, and/or are endorsed by these competitors.” (Id.) The plaintiffs allege the following claims against the defendant based upon these allegations: (1) trademark infringement in violation of 15 U.S.C. § 1114 of the Lanham Act (count one); (2) false designation of origin in violation of 15 U.S.C. § 1125(a) of the Lanham Act (count two); (3) dilution in violation of 15 U.S.C. § 1125(c) of the Lanham Act (count three); (4) common law unfair competition (count four); and (5) violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a, et seq. (“CUTPA”). (Id. at 14-15.) The defendant has filed a “Motion to compel arbitration and dismiss this action pursuant to Rule 12(b)(6), or in the alternative transfer it to the Northern District of California” (ECF No. 28), averring that the parties' contract compelled the plaintiffs to arbitrate their claims or alternatively to litigate them in the Northern District of California. For the reasons set forth below, the defendant's motion is granted in part and denied in part. I grant the defendant's motion to compel arbitration with respect to all of the plaintiff's claims. I decline to dismiss the matter, however, and instead stay it pending the results of the arbitration. In light of this disposition, I deny without prejudice the defendant's motion to transfer venue. If the parties move to reopen this case following the completion of the arbitration, the defendant may refile its motion to transfer venue.

         I. Background

         The following recitation of the facts is taken from the plaintiff's complaint, along with the exhibits attached to the parties' briefs. Plaintiff Edible International is the “franchisor of stores offering fresh cut fruit products, and is best known for its artistically-designed fresh fruit products evocative of floral designs and its dipped fruit products.” (ECF No. 1 at ¶ 9.) Plaintiff Edible IP “is the owner and licensor of, among other things, the various trademarks, trade dress, domain names, copyrights, and other intellectual property used and associated with the . . . [Edible Arrangements] business and brand . . . .” (Id. at ¶ 10.) The defendant operates, amongst other things, the “Google AdWords program, ” which “permits and encourages merchants and brand owners to buy keywords that will trigger advertisements when Google users search for the keyword term.” (Id. at ¶ 38.) The defendant also operates a “Knowledge Graph” program, which “enables [users] to search for things, people or places that Google knows about . . . and instantly get information that's relevant to [his or her] query . . . .” (Id. at ¶¶ 40-41 (internal quotation marks omitted)).

         The plaintiffs contend that the defendant “has prioritized increasing its bottom line and exploiting the value of the [a mark possessed by the plaintiffs] for its own financial benefit over providing relevant, responsive, and non-misleading information to consumers looking for Edible Arrangements and its products on the Internet.” (ECF No. 1 at ¶ 42.) In particular, plaintiffs contend that the defendant exploits their mark “through various means, including without limitation its Adwords programs, its marketing and ‘sale' of [plaintiffs'] valuable trademarks as keywords to [plaintiffs'] direct competitors, the algorithms it uses to display competitive ‘product listing ads' to those looking for Edible Arrangements, its manipulation of the Knowledge Graph technology, and its means of displaying the [plaintiffs' mark] in prominent proximity to advertisements for competitors' products.” (Id. at ¶ 43.)

         At some point before 2014, plaintiff Edible International, Inc. opened an advertising account with the defendant. (ECF No. 30, Declaration of Bright Y. Kellogg (“Kellogg Decl.”) at ¶ 6.) “As a condition of participating in [the defendant's] advertising services, an advertiser is first required to accept the Terms And Conditions, ” which is “accomplished by clicking ‘yes' on an interactive window that appears on [the defendant's] website . . . .” (Kellogg Decl. At ¶ 4.) Although “[t]he advertiser is given an opportunity to review the Terms And Conditions before clicking ‘yes,' . . . the advertiser will not be able to use [the Defendant's] services until after the Terms And Conditions have been agreed to.” (Id. at ¶ 5.) The plaintiffs agreed to the defendant's updated Terms And Conditions, which were issued on September 8, 2017. (Id. at ¶ 6.) Those Terms and Conditions include a clause providing for the arbitration of disputes, which provides in relevant part as follows:

         A. Arbitration of Disputes. Google, Customer, and Advertiser agree to arbitrate all disputes and claims between Google . . . and Advertiser that arise out of or relate in any way to the Programs or these Terms. This agreement to arbitrate . . . is intended to be broadly interpreted and includes, for example:

1. claims brought under any legal theory;
2. claims that arose before . . . Advertiser first accepted any version of these Terms containing an arbitration provision;
3. claims that may arise after the termination of . . . Advertiser's Use of the Programs;
4. claims brought by or against Google, Google affiliates that provide the Programs to . . . Advertiser, Google, parent companies, and the respective officers, directors, employees, agents, predecessors, successors, and assigns of these entities; and
5. claims brought by or against . . . Advertiser, the respective affiliates and parent companies of . . . Advertiser, and the respective officers, directors, employees, agents, predecessors, successors, and assigns of these entities

(Id., Exhibit A at 5.) The terms and conditions define “Programs” as “Google's advertising programs and services (i) that are accessible through the account(s) given to Customer in connection with these Terms or (ii) that incorporate by reference these Terms.” (Id. at 1.) The Terms and Conditions also contain a forum selection clause providing as follows:

(a) ALL CLAIMS ARISING OUT OF OR RELATING TO THESE TERMS OR THE PROGRAMS WILL BE GOVERNED BY CALIFORNIA LAW, EXCLUDING CALIFORNIA'S CONFLICT OF LAWS RULES, EXCEPT TO THE EXTENT THAT CALIFORNIA LAW IS CONTRARY TO OR PREEMPTED BY FEDERAL LAW. (b) EXCEPT AS PROVIDED IN SECTION 13, ALL CLAIMS ARISING OUT OF OR RELATING TO THESE TERMS OR THE PROGRAMS WILL BE LITIGATED EXCLUSIVELY IN THE FEDERAL OR STATE ...

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