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CFA Institute v. American Society of Pension Professionals & Actuaries

United States District Court, W.D. Virginia, Charlottesville Division

October 24, 2019

CFA Institute, a Virginia Non-Stock Corporation, Plaintiff,
American Society of Pension Professionals & Actuaries, et al., Defendants.



         Judge Norman K. Moon This matter is before the Court on Plaintiff CFA Institute's Motion to Dismiss Defendant American Society of Pension Professionals & Actuaries' (“ASPPA”) Counterclaim for Cancellation by Restriction under Section 18 of the Lanham Act, 15 U.S.C. § 1068 (“Section 18”). Dkt. 39. Plaintiff initiated this action against Defendants alleging, inter alia, trademark infringement and unfair competition relating to the parties' respective financial advisor certification programs. Dkt. 1. Defendants brought the present Counterclaim in its Answer to Plaintiff's Complaint. Dkt. 35. For the reasons stated herein, the Court will grant Plaintiff's Motion to Dismiss Defendant's Counterclaim.

         I. Facts as Alleged

         The parties to this dispute are organizations in the business of certifying, training, and providing a network for financial advisors. Dkt. 1, ¶ 10; Dkt. 35 at 12. Plaintiff, the CFA Institute, is a non-stock corporation based in Charlottesville, Virginia, and caters to financial advisors generally, rather than industry-specific advisors as the Defendants do. Id. Plaintiff claims a worldwide membership of 147, 000. Dkt. 1, ¶ 10. In addition to services offered to its members, such as networking events and seminars, it also provides a training and certification program: the “Chartered Financial Analyst” program, or the “CFA Program.” Dkt. 1, ¶ 27. Plaintiff federally trademarked “CFA” on June 6, 1972, for “association services-namely, the promotion of interest and professional standards in the field of financial analysts.” Dkt. 1, ¶ 15. The USPTO deemed this registration incontestable in 1977. Id. It has since received incontestable trademark registrations for CFA for “educational services, ” printed financial publications, and “financial analysis services” (referred to collectively herein as “CFA Marks”). Dkt. 1 at 3-8.

         To earn Plaintiff's CFA certification, investment professionals must have at least four years of relevant experience and complete a self-study course followed by three six-hour examinations. Dkt. 1, ¶¶ 27-28. Plaintiff claims the CFA Program is comparable to a post-graduate degree in “scope and depth.” Id. Those who pass the examination become a CFA Institute member and may use the professional designation “Chartered Financial Analyst” or “CFA.” Dkt. 1, ¶ 29. CFAs are then bound by the CFA Institute's codes of ethics and professional conduct, and they must pay annual dues to Plaintiff to maintain their certification. Id. Plaintiff claims “investors and financial professionals recognize the CFA Marks as the definitive standard for measuring competence and integrity in the fields of portfolio management and investment analysis.” Dkt. 1, ¶ 28.

         The named Defendants are three of five subsidiary organizations under the umbrella of the American Retirement Association (“ARA”). Dkt. 35 at 12. The ARA trains, educates, and offers membership services for those providing financial advice to employers on retirement plans offered to their employees. Id. The ARA claims a worldwide membership of 14, 000. Id.

         One of the ARA's subsidiaries named in the Complaint is the National Association of Plan Advisors (“NAPA”), which offered a “Plan Financial Consulting” or “Qualified Plan Financial Consultant” certification until 2016, when it was replaced by the “Certified Plan Fiduciary Advisor” or “CPFA” certification. Dkt. 35 at 6, 12. Defendants allege that this new certification corresponded with the U.S. Department of Labor broadening the definition of a “fiduciary” under the Employee Retirement Income Security Act of 1974.[1] Dkt. 35 at 12. The CPFA credential can be earned by candidates who pass a three-hour multiple-choice test. CPFAs must complete continuing education to maintain the credential. Dkt. 35 at 5.

         Prior to this action's commencement, Defendant ASPPA sought to register its CPFA mark with the U.S. Patent and Trade Office (U.S. Application No. 87103390). Dkt. 16 at 1. This mark was published in the Federal Register on August 15, 2017. See Notice of Publication, United States Patent and Trademark Office, Serial No. 87-103, 390 (July 26, 2017). Plaintiff subsequently filed a Notice of Opposition against ASPPA with the Trademark Trial and Appeal Board (“TTAB”), alleging that its CFA Marks were or would be damaged by the registration of the CPFA Mark. Dkt. 16, Ex. 2. ASPPA then filed a counterclaim-nearly identical to the counterclaim presently at issue-to restrict the registration of the CFA Marks to reflect that Plaintiff does not direct its goods and services specifically to professionals in the field of retirement financial planning at the employer level. See ASPPA Answer & Countercl., CFA Inst. v. Am. Soc'y of Pension Prof'ls & Actuaries, Opp'n No. 91239462 (T.T.A.B. 2018), Filing No. 5. ASPPA also alleged as an affirmative defense that there was no likelihood of confusion, because the two marks catered to distinct segments of financial planning. Id.

         While the TTAB proceedings progressed, Plaintiff filed an action in this Court, bringing the following claims: Federal Trademark Infringement pursuant to 15 U.S.C. § 1114; Federal Unfair Competition, False Designation of Origin, and False and Misleading Representations pursuant to 15 U.S.C. § 1125(a); Trademark Infringement and Unfair Competition under Va. Code §§ 59.1-92.12, 59.1-92.13; Trademark Infringement and Unfair Competition under Virginia Common Law; and Accounting under 15 U.S.C. § 1117. Dkt. 1. Shortly after, Plaintiff moved the TTAB to stay its proceedings pending this Court's disposition of the matter, which the TTAB granted. TTAB Order of Apr. 26, 2019, Opp'n No. 91239462, Filing No. 21. ASPPA filed a similar motion to stay this action, which U.S. Magistrate Judge Joel C. Hoppe denied. Dkt. 31.

         In this action, Plaintiff claims that Defendants' CPFA mark violates its CFA Marks in numerous ways. Plaintiff alleges that “[c]onsumers are likely to believe mistakenly that Defendants are affiliated or connected with, or otherwise authorized or sponsored by CFA Institute.” Dkt. 1, ¶ 49. In addition, Plaintiff alleges that the CPFA mark is “nearly identical to and confusingly similar to CFA Institute's CFA Marks in appearance, sound, meaning, and commercial impression.” Dkt. 1, ¶ 50. Finally, Plaintiff alleges that both the CFA Marks and Defendants' CPFA mark are “used in connection with goods and services used by professionals in the field of retirement financial planning.” Dkt. 1, ¶ 51.

         In their Answer to Plaintiff's Complaint, Defendants do not deny that they use the CPFA mark, that they publish this mark on their website and marketing materials, and that it is geared toward financial advisors targeting employer-level retirement planning. Dkt. 35, ¶¶ 8-10. However, Defendants allege that there is no likelihood of confusion because the markets Plaintiff and Defendants target are entirely distinct. Id. Specifically, Defendants claim that while Plaintiff advises on individual-level retirement planning, among other financial advising, Defendants advise on the employer level. Id. To this end, Defendants assert an Affirmative Defense that even if the Court finds that a likelihood of confusion exists, any such risk of confusion may be avoided by amending Defendants' CPFA mark to restrict it, pursuant to 15 U.S.C. § 1068, to services exclusively related to “retirement plan advisors who provide fiduciary advice to employers at the plan level.” Dkt. 35, ¶ 105.

         Defendants also bring a Counterclaim for Cancellation by Restriction pursuant to Section 18 of the Lanham Act to restrict Plaintiff's CFA Marks. Dkt. 35, ¶ 12; 15 U.S.C. § 1068. Specifically, Defendants seek to alter the trademark registrations of Plaintiff's CFA Marks to specifically exclude “fiduciary advice to employers at the plan level regarding retirement [planning].” This restriction would coincide with the restriction to Defendants' own CPFA mark suggested in their Affirmative Defense.

         Plaintiff now moves to dismiss Defendants' Counterclaim, alleging that Section 18 applies exclusively in TTAB proceedings. Dkt. 39. Even if such a claim does apply in federal court, Plaintiff argues, Defendants fail to plead allegations sufficient to withstand a motion to dismiss under Fed R. Civ. P. 12(b)(6). Id. The Court agrees with Plaintiff that Defendants' allegations are legally insufficient, regardless of whether a claim under Section 18 is cognizable in federal court.

         II. ...

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