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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION ANGIES LIST, INC., Plaintiff, v. SERVICEMAGIC, INC., Defendant. ) ) ) ) ) ) ) ) )

Cause No.: 1:12-cv-755-SEB-TAB

DEFENDANT SERVICEMAGIC, INC.S ANSWER, AFFIRMATIVE DEFENSES AND COUNTERCLAIMS Defendant ServiceMagic, Inc. (ServiceMagic), through counsel, answers Plaintiff Angies List, Inc.s (Angies List) Complaint as follows: ServiceMagic restates the titles utilized in Angies List Complaint for ease of reference, but does not admit any assertion expressed or implied by such titles. ServiceMagic denies each and every allegation stated in the Complaint that is not expressly admitted herein. THE PARTIES 1. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 1 of the Complaint and, therefore, denies such allegations. 2. ServiceMagic admits the allegations of paragraph 2 of the Complaint. JURISDICTION AND VENUE 3. ServiceMagic admits that Angies List purports to assert subject matter

jurisdiction on various grounds, but otherwise denies the allegations contained in paragraph 3 of the Complaint.

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4.

ServiceMagic admits that Angies List purports to assert personal jurisdiction

over Defendant on various grounds, but otherwise denies the allegations contained in paragraph 4 of the Complaint. 5. 6. ServiceMagic denies the allegations of paragraph 5 of the Complaint. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 6 of the Complaint and, therefore, denies such allegations. 7. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 7 of the Complaint and, therefore, denies such allegations. 8. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 8 of the Complaint and, therefore, denies such allegations. 9. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 9 of the Complaint and, therefore, denies such allegations. 10. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 10 of the Complaint and, therefore, denies such allegations. ANGIES LISTS TRADEMARKS 11. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 11 of the Complaint and, therefore, denies such allegations. 12. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 12 of the Complaint and, therefore, denies such allegations. 13. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 13 of the Complaint and, therefore, denies such allegations. 14. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 14 of the Complaint and, therefore, denies such allegations.
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15.

ServiceMagic admits that Exhibit A appears to be a copy of certain United States

trademark registrations, lacks sufficient information and knowledge to admit or deny Angies Lists allegations regarding usage of the mark and therefore denies such allegations, and denies the remaining allegations contained in paragraph 15 of the Complaint. 16. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 16 of the Complaint and, therefore, denies such allegations. 17. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 17 of the Complaint and, therefore, denies such allegations. 18. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 18 of the Complaint and, therefore, denies such allegations. 19. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 19 of the Complaint and, therefore, denies such allegations. 20. ServiceMagic denies the allegations of paragraph 20 of the Complaint. THE PRESENT DISPUTE 21. ServiceMagic is without sufficient information and knowledge to admit or deny

the allegations of paragraph 21 of the Complaint and, therefore, denies such allegations. 22. ServiceMagic admits that it is a competitor of Angies List and operates a

website to help homeowners find reliable contractors/service providers, but denies the remaining allegations of paragraph 22 of the Complaint. 23. ServiceMagic admits that it has purchased sponsored links from Google, but

ServiceMagic denies the remaining allegations of paragraph 23 of the Complaint. 24. ServiceMagic admits that it has purchased sponsored links from Google, but

denies the remaining allegations of paragraph 24 of the Complaint.

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25.

ServiceMagic admits that Exhibit B appears to be a copy of an undated

webscreen that appears to include a sponsored link purchased by ServiceMagic, but otherwise denies the allegations of paragraph 25 of the Complaint. 26. ServiceMagic admits that Exhibit C appears to be a copy of a webscreen printed

on April 24, 2012 that appears to include a sponsored link purchased by ServiceMagic, but otherwise denies the allegations of paragraph 26 of the Complaint. 27. ServiceMagic admits that Exhibit D appears to be a copy of an undated

webscreen that appears to include a sponsored link purchased by ServiceMagic, but otherwise denies the allegations of paragraph 27 of the Complaint. 28. 29. ServiceMagic denies the allegations of paragraph 28 of the Complaint. ServiceMagic admits that Exhibit E appears to be a copy of an undated

webscreen that appears to show a page from ServiceMagics website, but otherwise denies the allegations of paragraph 29 of the Complaint. 30. ServiceMagic admits that Exhibit F appears to be a copy of an undated

webscreen that appears to show a page from Angies Lists website, but otherwise denies the allegations of paragraph 30 of the Complaint. 31. ServiceMagic denies it has committed any misconduct, but otherwise is without

sufficient information and knowledge to admit or deny the allegations of paragraph 31 of the Complaint and, therefore, denies such allegations.

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COUNT I Trademark Infringement Under 15 U.S.C. 1114(1) 32. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 31 as if fully set forth herein below. 33. ServiceMagic admits that its limited use of Angies List name was made without

Angies Lists consent, but denies that any consent was required for such use, and denies the remaining allegations of paragraph 33 of the Complaint. 34. 35. 36. 37. ServiceMagic denies the allegations of paragraph 34 of the Complaint. ServiceMagic denies the allegations of paragraph 35 of the Complaint. ServiceMagic denies the allegations of paragraph 36 of the Complaint. ServiceMagic denies the allegations of paragraph 37 of the Complaint. COUNT II Unfair Competition Under 15 U.S.C. 1125(a) 38. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 37 as if fully set forth herein below. 39. 40. 41. 42. ServiceMagic denies the allegations of paragraph 39 of the Complaint. ServiceMagic denies the allegations of paragraph 40 of the Complaint. ServiceMagic denies the allegations of paragraph 41 of the Complaint. ServiceMagic denies the allegations of paragraph 42 of the Complaint. COUNT III Trademark Disparagement Under 15 U.S.C. 1125(a) 43. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 42 as if fully set forth herein below. 44. ServiceMagic denies the allegations of paragraph 44 of the Complaint. 5

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45.

ServiceMagic admits that it conducts its business in interstate commerce, but

otherwise denies the allegations of paragraph 45 of the Complaint. 46. ServiceMagic admits that it operates its website to promote its services, but

otherwise denies the allegations of paragraph 46 of the Complaint. 47. 48. ServiceMagic denies the allegations of paragraph 47 of the Complaint. ServiceMagic denies the allegations of paragraph 48 of the Complaint. COUNT IV Trademark Dilution Under 15 U.S.C. 1125(c) 49. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 48 as if fully set forth herein below. 50. ServiceMagic denies the allegations of paragraph 50 of the Complaint, and

specifically denies that Angies Lists mark is a famous mark. 51. 52. ServiceMagic denies the allegations of paragraph 51 of the Complaint. ServiceMagic denies the allegations of paragraph 52 of the Complaint. COUNT V Trademark Dilution Under Ind. Code 24-2-1-13.5 53. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 52 as if fully set forth herein below. 54. 55. 56. ServiceMagic denies the allegations of paragraph 54 of the Complaint. ServiceMagic denies the allegations of paragraph 55 of the Complaint. ServiceMagic denies the allegations of paragraph 56 of the Complaint.

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COUNT VI Common Law Unfair Competition 57. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 56 as if fully set forth herein below. 58. 59. 60. 61. ServiceMagic denies the allegations of paragraph 58 of the Complaint. ServiceMagic denies the allegations of paragraph 59 of the Complaint. ServiceMagic denies the allegations of paragraph 60 of the Complaint. ServiceMagic denies the allegations of paragraph 61 of the Complaint. COUNT VII Tortious Interference 62. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 61 as if fully set forth herein below. 63. 64. 65. ServiceMagic denies the allegations of paragraph 63 of the Complaint. ServiceMagic denies the allegations of paragraph 64 of the Complaint. ServiceMagic denies the allegations of paragraph 65 of the Complaint. COUNT VIII Unjust Enrichment 66. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 65 as if fully set forth herein below. 67. 68. ServiceMagic denies the allegations of paragraph 67 of the Complaint. ServiceMagic denies the allegations of paragraph 68 of the Complaint.

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COUNT IX Request for Preliminary Injunctive Relief 69. ServiceMagic incorporates and restates its foregoing responses in paragraphs 1

through 68 as if fully set forth herein below. 70. 71. 72. ServiceMagic denies the allegations of paragraph 70 of the Complaint. ServiceMagic denies the allegations of paragraph 71 of the Complaint. ServiceMagic denies the allegations of paragraph 72 of the Complaint. AFFIRMATIVE DEFENSES ServiceMagic, while reserving its right to assert all other applicable defenses as this action proceeds, asserts the following affirmative defenses to Angies Lists Complaint: First Affirmative Defense (Failure To State A Claim For Relief) 73. The Complaint, and each and every claim set forth therein, fails to state facts

sufficient to constitute a valid claim upon which relief can be granted as against ServiceMagic. Second Affirmative Defense (Waiver) 74. Angies List has engaged in conduct and activities sufficient to constitute a

waiver and/or a release of any and all claims that Angies List may have or may have had against ServiceMagic arising from the transactions and occurrences set forth in the Complaint. Third Affirmative Defense (Estoppel) 75. Angies Lists claims are barred by the doctrine of estoppel. Fourth Affirmative Defense (Laches) 76. Angies Lists claims are barred by the doctrine of laches.

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Fifth Affirmative Defense (Unclean Hands) 77. Angies Lists claims are barred by the doctrine of unclean hands. Sixth Affirmative Defense (Fair Use) 78. Any ServiceMagic use of Angies Lists marks was a fair use for lawful

comparative advertising purposes. Seventh Affirmative Defense (Acquiescence) 79. Angies List accepted, and has used, the same Google terms, conditions, policies

and usage agreements that permitted ServiceMagic to make the keyword purchases that are the subject of Angies Lists Complaint. Eighth Affirmative Defense (Authorization) 80. The keyword purchases about which Angies List complains were authorized

under the Google terms, conditions, policies and usage agreements to which both Angies List and ServiceMagic were parties. Ninth Affirmative Defense (Reservation of Defenses) 81. ServiceMagic presently has insufficient knowledge or information on which to

form a belief as to whether there may be additional, as yet unstated affirmative defenses. Thus, subject to discovery in this action, ServiceMagic expressly reserves its right to assert additional affirmative defenses.

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COUNTERCLAIMS For its counterclaims against Angies List, ServiceMagic states: THE PARTIES 1. ServiceMagic is a Delaware corporation with its principal place of business in

Golden, Colorado. 2. Angies List is a Delaware corporation with its principal place of business in

Indianapolis, Indiana. 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. 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. 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. 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

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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. 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. 6. ServiceMagic matches contractors with consumers who request assistance based

on a variety of factors. Contractors cannot bid for consumer leads and cannot obtain ServiceMagic leads by paying more than other contractors. 7. Consumers have no obligation to contact or hire any of the ServiceMagic ServiceMagic and its professional

network contractors that ServiceMagic refers to them.

network contractors from time to time also offers special deals to its consumer members for home improvement repairs, maintenance and improvements. 8. ServiceMagic also provides free contractor ratings and reviews from consumers

who have been referred to a particular contractor from the ServiceMagic network. 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. 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

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content relating to such goods and services. A true and correct copy of this registration is attached as Exhibit 2. 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. 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. 13. Angies List has purchased advertisements from Google that are generated in

response to consumers conducting a Google search of the trademark ServiceMagic. The advertisements generated by these keyword purchases include false and misleading statements such as Good Service Isnt MagicAngies 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. 14. Angies List has published advertisements on its website that use the

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

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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. 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 as if fully set forth herein below. 16. Angies Lists acts and conduct as set forth above have been undertaken without

the consent of ServiceMagic. 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. 18. Angies Lists acts and conduct as set forth above are likely to cause confusion

or to cause mistake or to deceive consumers. 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). 20. conduct. 21. ServiceMagic has been damaged as a result of Angies Lists unlawful conduct Angies List has unlawfully derived income and profits from its unlawful

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. 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.

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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 as if fully set forth herein below. 24. Angies Lists acts and conduct as set forth above constitute unlawful trademark

disparagement, in violation of 15 U.S.C. 1125. COUNT III Common Law Unfair Competition 25. ServiceMagic incorporates and restates its foregoing Counterclaim allegations in

paragraphs 1 through 26 as if fully set forth herein below. 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. 27. ServiceMagic is entitled to recover actual and punitive damages as a result of

Angies Lists willful and intentional unfair competition. COUNT IV Unjust Enrichment 28. ServiceMagic incorporates and restates its foregoing Counterclaim allegations in

paragraphs 1 through 33 as if fully set forth herein below. 29. Angies List has received value in the form of profits and additional business

opportunities from the unlawful acts and conduct set forth above. 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. 14

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WHEREFORE, ServiceMagic requests that this Court dismiss Angies Lists Complaint and each count therein with prejudice, enter judgment for ServiceMagic on each count of the Counterclaims, and award ServiceMagic its damages, injunctive relief, costs and attorneys fees, and such other relief as this Court may deem proper under the circumstances. Dated this 6th day of August, 2012. Respectfully submitted, /s/ Kathleen A. DeLaney Kathleen A. DeLaney (#18604-49) Christopher S. Stake (#27356-53) DELANEY & DELANEY LLC 3646 N. Washington Blvd. Indianapolis, IN 46205 Tel. 317.920.0400 Fax 317.920.0404 Stephen J. Horace, pro hac vice pending Alexander C. Clayden, pro hac vice pending LATHROP & GAGE LLP 950 17th Street, Suite 2400 Denver, CO 80202 Phone: 720.931.3200 Fax: 720.931.3201 Email: shorace@lathropgage.com aclayden@lathropgage.com Attorneys for Defendant

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CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of the foregoing was filed electronically on August 6, 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: Michael A. Wukmer George A. Gasper Bradley Stohry ICE MILLER LLP Michael.wukmer@icemiller.com George.gasper@icemiller.com Bradley.stohry@icemiller.com /s/ Kathleen A. DeLaney____________ Kathleen A. DeLaney

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