Case 1:12-cv-00755-SEB-TAB Document 15 Filed 08/29/12 Page 1 of 12 PageID #: 76

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION ANGIES LIST, INC., Plaintiff/Counterclaim Defendant, v. SERVICEMAGIC, INC., Defendant/Counterclaim Plaintiff. ANGIES LISTS ANSWER TO SERVICEMAGICS COUNTERCLAIMS Plaintiff/Counterclaim Defendant, Angies List, Inc. (Angies List), by counsel, for its Answer to the Counterclaims of Defendant/Counterclaim Plaintiff, ServiceMagic, Inc. (ServiceMagic), states as follows: THE PARTIES 1. ServiceMagic is a Delaware corporation with its principal place of business in Case No. 1:12-cv-755-SEB-TAB

Golden, Colorado. ANSWER: Counterclaims. Angies List admits the allegations of paragraph 1 of ServiceMagics

2.

Angies List is a Delaware corporation with its principal place of business in

Indianapolis, Indiana. ANSWER: Counterclaims. Angies List admits the allegations of paragraph 2 of ServiceMagics

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JURISDICTION AND VENUE 1. This Court has subject matter jurisdiction pursuant to 28 U.S.C. 1331 and

1338, because it arises under the Lanham Act, 15 U.S.C. 1125. This Court has supplemental jurisdiction over the related state court claims under 28 U.S.C. 1367. ANSWER: Angies List admits that the Court generally has subject matter jurisdiction

over Lanham Act actions under 15 U.S.C. 1125, 28 U.S.C. 1331, and 1338(a) and that the Court generally has supplemental jurisdiction over state court claims under 28 U.S.C. 1367, but denies that ServiceMagic has any valid claims against Angies List.

2.

This Court has personal jurisdiction over Angies List because it maintains its

principal place of business in this district, because it does business in this district, because it has committed statutory torts within this district, because it has sufficient contacts to subject it to personal jurisdiction in this district, and because it voluntarily filed this action in this Court. ANSWER: Angies List admits that the Court generally has personal jurisdiction over

Angies List because it maintains its principal business in this district, does business in this district, has sufficient contacts in this district, and voluntarily filed this action in this Court, but Angies List denies that it has committed statutory torts within this district.

3.

Venue is proper in this Court under 28 U.S.C. 1391 because Angies List

maintains its principal place of business and resides in this district, and because a substantial part of the events or omissions giving rise to the claims occurred in this district. ANSWER: Angies List admits the allegations contained in paragraph 3 of

ServiceMagics Counterclaims.

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ALLEGATIONS COMMON TO ALL COUNTS 4. ServiceMagic, operating since 1999, is a leading national website connecting

customers to screened and approved local home improvement, home maintenance and home repair service professionals, drawing millions of different visitors to its website monthly. It charges no subscription fees or other fees to consumers for its services. ANSWER: Angies List is without knowledge or information sufficient to form a

belief as to the truth or accuracy of the allegations contained in paragraph 4 of ServiceMagics Counterclaims and therefore denies the same.

5.

To join the ServiceMagic network, home improvement professionals must pass a

rigorous screening process. Professionals in the ServiceMagic network pay a modest enrollment fee, and for consumer leads according to a fixed schedule. ANSWER: Angies List is without knowledge or information sufficient to form a

belief as to the truth or accuracy of the allegations contained in paragraph 5 of ServiceMagics Counterclaims and therefore denies the same.

6.

ServiceMagic matches contractors with consumers who request assistance based Contractors cannot bid for consumer leads and cannot obtain

on a variety of factors.

ServiceMagic leads by paying more than other contractors. ANSWER: Angies List is without knowledge or information sufficient to form a

belief as to the truth or accuracy of the allegations contained in the first sentence of paragraph 6 of ServiceMagics Counterclaims and therefore denies the same. Angies List further denies the allegations contained in the second sentence of paragraph 6 of ServiceMagics Counterclaims.

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7.

Consumers have no obligation to contact or hire any of the ServiceMagic network ServiceMagic and its professional network

contractors that ServiceMagic refers to them.

contractors from time to time also offers special deals to its consumer members for home improvement repairs, maintenance and improvements. ANSWER: Angies List is without knowledge or information sufficient to form a

belief as to the truth or accuracy of the allegations contained in paragraph 7 of ServiceMagics Counterclaims and therefore denies the same.

8.

ServiceMagic also provides free contractor ratings and reviews from consumers

who have been referred to a particular contractor from the ServiceMagic network. ANSWER: Angies List is without knowledge or information sufficient to form a

belief as to the truth or accuracy of the allegations contained in paragraph 8 of ServiceMagics Counterclaims and therefore denies the same.

9.

ServiceMagic is the owner of an incontestable United States federal trademark

registration No. 2727527 for the trademark SERVICEMAGIC in International Class 35 for use in connection with website services linking consumers to businesses in the fields of home improvement, home maintenance and home repair. A true and correct copy of this registration is attached as Exhibit 1. ANSWER: Angies List admits that Exhibit 1 appears to be a copy of a United States

federal trademark registration, but is without knowledge or information sufficient to form a belief as to the truth or accuracy of the remaining allegations contained in paragraph 9 of ServiceMagics Counterclaims and therefore denies the same.

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10.

ServiceMagic is the owner of United States federal trademark registration No.

3465899 for the composite trademark SERVICEMAGIC.COM in International Class 35 for use in connection with Providing online directory information services in the fields of home improvement, home maintenance and home repair services, as well as commercial informational content relating to such goods and services. A true and correct copy of this registration is attached as Exhibit 2. ANSWER: Angies List admits that Exhibit 2 appears to be a copy of a United States

federal trademark registration, but is without knowledge or information sufficient to form a belief as to the truth or accuracy of the remaining allegations contained in paragraph 10 of ServiceMagics Counterclaims and therefore denies the same.

11.

ServiceMagic is the owner of United States federal trademark registration No.

3470656 for the composite trademark SERVICEMAGIC in International Classes 16 and 35 for use in connection with Printed classified directories, and Providing online directory information services in the fields of home improvement, home maintenance and home repair; operating online marketplaces for buyers and sellers of home improvement, home maintenance and home repair services, as well as commercial informational content relating to such goods and services. A true and correct copy of this registration is attached as Exhibit 3. ANSWER: Angies List admits that Exhibit 3 appears to be a copy of a United States

federal trademark registration, but is without knowledge or information sufficient to form a belief as to the truth or accuracy of the remaining allegations contained in paragraph 11 of ServiceMagics Counterclaims and therefore denies the same.

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12.

Angies List is a competitor of ServiceMagic and operates a paid-subscription

based website that facilitates sharing of its members reviews of service providers. ANSWER: Angies List admits the allegations contained in paragraph 12 of

ServiceMagics Counterclaims.

13.

Angies List has purchased advertisements from Google that are generated in The

response to consumers conducting a Google search of the trademark ServiceMagic.

advertisements generated by these keyword purchases include false and misleading statements such as Good Service Isnt Magic-Angies List has Verified Reviews and Dont be Sold to the Highest Bidder Be in Control of Who You Hire! Copies of two such Angies List keyword ads generated by a servicemagic Google search are attached as Exhibit 4. ANSWER: Angies List admits that, for a very limited period of time, believed to be

only a few weeks, Angies List purchased the term ServiceMagic as a keyword from Google. Angies List began doing this in response to similar conduct by ServiceMagic related to the ANGIES LIST mark. However, once Angies Lists senior management became aware of Angies Lists purchase of the term ServiceMagic as a keyword from Google, this practice immediately ceased. Angies List further admits that Exhibit 4 appears to be a copy of an undated screenshot of search results from an internet search engine and an undated screenshot from a cellphone showing search results from a search engine, but otherwise denies the allegations contained in paragraph 13 of ServiceMagics Counterclaims, including the allegations that any Angies Lists advertisements contained false or misleading statements.

14.

Angies List has published advertisements on its website that use the

ServiceMagic mark, and make numerous false and misleading statements of fact concerning

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ServiceMagic. These statements include: Dont be sold to the highest bidder! ServiceMagic sells your phone number to contractors of their choosing. Angies List thinks you should be in control of hiring. In addition, the advertising includes these false or misleading purported advantages of Angies List over ServiceMagic: VERIFIED Ratings & Reviews, Companies dont pay to be listed, Exclusive Member Deals, and YOU choose your contractor. A sample of one such online comparative advertisement is attached as Exhibit 5. ANSWER: Angies List admits that Exhibit 5 appears to be a copy of an undated

screenshot from a cellphone showing a webpage that appeared on Angies Lists website for very limited time, but otherwise denies the allegations contained in paragraph 14 of ServiceMagics Counterclaims, including the allegations that any Angies Lists advertisements contained false or misleading statements.

COUNT I Unfair Competition Under 15 U.S.C. 1125(a) 15. ServiceMagic incorporates and restates its foregoing Counterclaim allegations in

paragraphs 1 through 16 (sic) as if fully set forth herein below. ANSWER: Angies List restates its answers to paragraphs 1-14 of the Counterclaim as

if fully set forth herein.

16.

Angies Lists acts and conduct as set forth above have been undertaken without

the consent of ServiceMagic. ANSWER: Angies List admits that no explicit consent was obtained from

ServiceMagic, but denies the remaining allegations and inferences in paragraph 16 of ServiceMagics Counterclaims.

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17.

Angies Lists acts and conduct as set forth above constitute unfair competition

and false and misleading descriptions or representations of fact, which misrepresent the nature, characteristics, and qualities of the respective parties goods, services or commercial activities, in violation of 15 U.S.C. 1125. ANSWER: Angies List denies the allegations contained in paragraph 17 of

ServiceMagics Counterclaims.

18.

Angies Lists acts and conduct as set forth above are likely to cause confusion or

to cause mistake or to deceive consumers. ANSWER: Angies List denies the allegations contained in paragraph 18 of

ServiceMagics Counterclaims.

19.

Angies Lists acts and conduct as set forth above are a knowing and willful

violation of ServiceMagics rights under 15 U.S.C. 1125(a). ANSWER: Angies List denies the allegations contained in paragraph 19 of

ServiceMagics Counterclaims.

20.

Angies List has unlawfully derived income and profits from its unlawful conduct. Angies List denies the allegations contained in paragraph 20 of

ANSWER:

ServiceMagics Counterclaims.

21.

ServiceMagic has been damaged as a result of Angies Lists unlawful conduct in

an amount to be proven at trial, in ways that include lost customers and diminution of the value of the ServiceMagic mark and business.

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ANSWER:

Angies List denies the allegations contained in paragraph 21 of

ServiceMagics Counterclaims.

22.

As a result of Angies List willful misconduct, this is an exceptional case under

15 U.S.C. 1117(a) for which ServiceMagic should be awarded its reasonable attorneys fees. ANSWER: Angies List denies the allegations contained in paragraph 22 of

ServiceMagics Counterclaims.

COUNT II Trademark Disparagement Under 15 U.S.C. 1125(a) 23. ServiceMagic incorporates and restates its foregoing Counterclaim allegations in

paragraphs 1 through 24 (sic) as if fully set forth herein below. ANSWER: Angies List restates its answers to paragraphs 1-22 of the Counterclaim as

if fully set forth herein.

24.

Angies Lists acts and conduct as set forth above constitute unlawful trademark

disparagement, in violation of 15 U.S.C. 1125. ANSWER: Angies List denies the allegations contained in paragraph 24 of

ServiceMagics Counterclaims.

COUNT III Common Law Unfair Competition 25. ServiceMagic incorporates and restates its foregoing Counterclaim allegations in

paragraphs 1 through 26 (sic) as if fully set forth herein below. ANSWER: Angies List restates its answers to paragraphs 1-24 of the Counterclaim as

if fully set forth herein.

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26.

Angies Lists acts and conduct as set forth above constitute unfair competition as

a result of misrepresentations regarding the nature, characteristics, and qualities of the respective parties goods, services or commercial activities. ANSWER: Angies List denies the allegations contained in paragraph 26 of

ServiceMagics Counterclaims.

27.

ServiceMagic is entitled to recover actual and punitive damages as a result of

Angies Lists willful and intentional unfair competition. ANSWER: Angies List denies the allegations contained in paragraph 27 of

ServiceMagics Counterclaims.

COUNT IV Unjust Enrichment 28. ServiceMagic incorporates and restates its foregoing Counterclaim allegations in

paragraphs 1 through 33 (sic) as if fully set forth herein below. ANSWER: Angies List restates its answers to paragraphs 1-27 of the Counterclaim as

if fully set forth herein.

29.

Angies List has received value in the form of profits and additional business

opportunities from the unlawful acts and conduct set forth above. ANSWER: Angies List denies the allegations contained in paragraph 29 of

ServiceMagics Counterclaims.

30.

It would be unjust for Angies List to retain the benefit of the value and benefits

received as a result of its misconduct, and all such value and benefits should be disgorged and returned to ServiceMagic. - 10 -

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ANSWER:

Angies List denies the allegations contained in paragraph 30 of

ServiceMagics Counterclaims.

AFFIRMATIVE AND OTHER DEFENSES 1. ServiceMagic has failed to state a claim against Angies List upon which relief

may be granted. 2. unclean hands. 3. ServiceMagics claims are barred, in whole or in part, by the doctrines of laches, ServiceMagics claims are barred, in whole or in part, by ServiceMagics own

waiver and estoppel. 4. ServiceMagics claims, if any, are subject to a set-off of the amounts that

ServiceMagic owes to Angies List. 5. Angies Lists use of the terms SERVICEMAGIC, SERVICE, and/or

MAGIC in the text of advertisements is protected by the doctrine of fair use. 6. Angies List has long since ceased any acts or conduct that ServiceMagic alleges

to have violated ServiceMagics rights. Angies List also hereby reserves the right to raise additional defenses as discovery progresses. WHEREFORE, Angies List respectfully requests that this Court deny ServiceMagics Counterclaims, that the Court enter judgment against ServiceMagic in favor of Angies List, that this Court award Angies List appropriate damages, plus its costs and attorneys fees, and other appropriate relief.

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Respectfully submitted, ICE MILLER LLP

s/ George A. Gasper Michael A. Wukmer George A. Gasper Bradley M. Stohry Attorneys for Plaintiff/Counterclaim Defendant, Angies List, Inc. ICE MILLER LLP One American Square Suite 2900 Indianapolis, Indiana 46282-0200 (317) 236-2100 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing was filed electronically on August 29, 2012. Notice of this filing will be sent to the following parties by operation of the Courts electronic filing system. Parties may access this filing through the Courts system: Kathleen A. DeLaney Christopher S. Stake DELANEY & DELANEY LLC kathleen@delaneylaw.net cstake@delaneylaw.net Stephen J. Horace Alexander C. Clayden LATHOP & GAGE LLP aclayden@lathropgage.com shorace@lathropgage.com

s/George A. Gasper George A. Gasper

I\2909525.4

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