Milo & Gabby, LLC et al v. Amazon.com, Inc

Filing 13

ORDER granting 8 Motion to Dismiss for Failure to State a Claim in Part by Judge Ricardo S Martinez.(MKB)

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 MILO & GABBY, LLC and KAREN KELLER, an individual, 11 Plaintiffs, 12 v. CASE NO. C13-1932 RSM ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 13 AMAZON.COM, INC., 14 Defendant. 15 16 17 I. INTRODUCTION This matter is before the Court upon Defendant’s Motion to Dismiss, In Part pursuant to 18 Fed. R. Civ. P. 12(b)(6). Dkt. # 8. Defendant Amzon.com, Inc. (“Amazon”) asks the Court to 19 dismiss Plaintiffs’ claims for unfair competition, right of publicity, trademark counterfeiting, and 20 indirect patent and copyright infringement. Having considered the parties’ memoranda and the 21 relevant law, the Court grants Amazon’s motion to dismiss Claims III, V, and VII of the 22 Complaint with leave to amend. Plaintiffs’ request for relief seeking redress for inducement, 23 willful, or contributory infringement is stricken, and Plaintiffs are ordered to show cause why 24 FAC System, LLC should not be joined as a necessary party. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 1 1 II. BACKGROUND 2 Plaintiffs make the following factual allegations. Plaintiff Milo & Gabby, LLC is a 3 Washington State limited liability company that designs and sells animal-shaped pillow cases, 4 among other accessories and bedding products. Plaintiff Karen Keller and her husband are the 5 founders and product designers of Milo & Gabby, LLC (“Milo & Gabby”). Dkt. #1, ¶ 7. The 6 couple’s four children and two family pets inspired the Kellers to create the Cozy Companion 7 Pillowcases product line for Milo & Gabby. The line consists of eight animal shaped pillowcases 8 that function as a combination of a pillow and a stuffed animal. 9 Plaintiffs are the authors and owners of various U.S. Copyrights and U.S. Design Patents. 10 On September 11, 2007, the Milo & Gabby design mark was registered with the U.S. Patent and 11 Trademark Office and was assigned U.S. Trademark Registration Number 3291697. Id. at ¶ 8. In 12 addition, Milo & Gabby’s website and marketing images are protected by valid U.S. copyrights. 13 Id. at ¶ 10. 14 Over the past five years, Milo & Gabby has designed, sold, and distributed their products 15 to retailers and e-tailers throughout the United States and internationally. Id. at ¶ 11. During this 16 time, Milo & Gabby’s animal-themed children’s accessories have seen commercial success. Id. 17 In 2012, Milo & Gabby entered into an exclusive license arrangement in Asia, and since then the 18 company has made promising gains. Id. Milo & Gabby aims to further expand its operations by 19 entering into license agreements throughout North America. Id. at ¶ 12. However, Milo & Gabby 20 claims these efforts were halted when Amazon.com allegedly began selling direct knock-off 21 copies of Milo & Gabby’s Cozy Companion Products. Id. at ¶ 13. 22 23 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 2 1 Defendant Amazon is a company that operates a widely used internet service retail website at 2 http://www.amazon.com. Amazon enables third-party vendors to sell and distribute a variety of 3 products to the public while Amazon “fulfills” the orders through amazon.com.1 4 On October 24, 2013, Plaintiffs Milo & Gabby, LLC and Karen Keller (collectively, “Plaintiffs”) 5 filed the instant lawsuit alleging that Amazon was using Plaintiffs’ intellectual property to 6 wrongfully market, sell, and distribute inferior-quality knockoffs of Plaintiffs’ animal-shaped 7 pillowcases on the amazon.com website.2 8 Amazon filed the instant Motion to Dismiss and moves to dismiss Counts III, V, and VII 9 of Plaintiffs’ Complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). Amazon 10 also moves to dismiss Count I pursuant to Rule 12(b)(6) to the extent that Count I purports to 11 state a claim of patent infringement pursuant to either 35 U.S.C. § 271(b) or (c), or, in the 12 alternative, to strike Plaintiffs’ requests for related injunctive and exceptional relief. Similarly, 13 Amazon requests dismissal of Count II to the extent it purports to state a claim of indirect 14 copyright infringement or, alternatively, to strike Plaintiffs’ request for related injunctive relief. 15 III. DISCUSSION 16 A. Standard of Review 17 In considering a Rule 12(b)(6) motion to dismiss, the Court must determine whether the 18 plaintiff has alleged sufficient facts to state a claim for relief which is “plausible on its face.” 19 1 FAC System, LLC (“FAC System”) is one such third-party seller. Until recently, FAC System used 20 Amazon’s retail website amazon.com to offer animal-shaped pillowcases for sale. See Dkt. #1 at Ex. C. 22 Amazon urges this court to order that FAC System be joined as a necessary party under Fed. R. Civ. P. 21 19(a). Amazon contests Plaintiffs’ pursuit of a complaint against Amazon “despite exhibits to the complaint making clear that the seller of the pillowcases at issue is FAC System.” Dkt. #8, p.3 (citing Dkt. # 1, Ex. B at 1 (Screen 22 capture of allegedly infringing product on amazon.com noting that the product is “[s]old by FAC System LLC and 23 24 Fulfilled by Amazon”)). Amazon further argues that FAC should be joined as a necessary party because (1) complete relief cannot be accorded among the existing parties and (2) FAC System may have a legally protected interest in the subject of this action. Dkt. #8, n.1 (citing Shermoen v. United States, 982 F.2d 1312, 1317 (9th Cir. 1992) (discussing standard for joinder under Rule 19(a)); Fed. R. Civ. P. 19(a)(2) (“If a person has not been joined as required, the court must order that the person be made a party.”)). Plaintiffs failed to address this issue. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 3 1 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1951 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 2 U.S. 544, 570 (2007)). A claim is facially plausible if the plaintiff has pled “factual content that 3 allows the court to draw the reasonable inference that the defendant is liable for the misconduct 4 alleged.” Id. (citing Twombly, 550 U.S. 556). In making this assessment, the Court accepts all 5 facts alleged in the complaint as true, and makes all inferences in the light most favorable to the 6 non-moving party. Baker v. Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) 7 (internal citations omitted). The Court is not, however, bound to accept the plaintiff’s legal 8 conclusions. Iqbal, 129 S. Ct. at 1949-50. While detailed factual allegations are not necessary, 9 the plaintiff must provide more than “labels and conclusions” or a “formulaic recitation of the 10 elements of a cause of action.” Twombly, 550 U.S. at 555. 11 Under Fed. R. Civ. P. 12(b)(6), dismissal is proper where there is either a “lack of a 12 cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal 13 theory.” Butler v. Target Corp., 323 F. Supp. 2d 1052, 1055 (C.D. Cal. 2004) (quoting Balistreri 14 v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990)). The court must (1) construe the 15 complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual 16 allegations as true; and (3) determine whether the plaintiff can prove any set of facts to support a 17 claim that would merit relief. Id. (citing Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th 18 Cir. 1996)). Further, where a complaint’s state law claims are preempted by federal law, the 19 claims are subject to dismissal under Rule 12(b)(6). Id. (citing Falkowski v. Imation Corp., 309 20 F.3d 1123 (9th Cir. 2002). 21 B. Count III – Unfair Competition 22 Plaintiffs’ complaint alleges Amazon violated Washington’s Consumer Protection Act 23 (“CPA”). Specifically, Plaintiffs’ claim for unfair competition states: 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 4 1 2 3 4 Defendant Amazon violated RCW Chapter 19.86 due to its unfair methods of competition and unfair or deceptive acts or practices in the conduct of its trade or commerce. By offering for sale, selling, importing, and distributing actual products that include infringing materials, Amazon is directly liable for its own actions, as set forth above. Amazon has sold, imported, and delivered the Amazon knock-offs to consumers in this district. 5 Dkt. # 1, ¶ 33–34. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Amazon challenges Plaintiffs’ unfair competition claim as insufficient under federal pleading requirements. Amazon first argues that paragraph 33 of the unfair competition claim amounts to nothing more than a formulaic and impermissible recitation of the elements of a CPA claim. Dkt. #8 at p. 6. Second, Amazon contends that Plaintiffs’ use of the term “infringing” refers to—and incorporates by reference—Plaintiffs’ two preceding causes of action for patent and copyright infringement. Id. Amazon also argues that the phrase “as set forth above” incorporates the first two claims by reference. Because the claim fails to articulate a basis for relief that is distinct from Plaintiffs’ causes of action for patent and copyright infringement, Amazon contends that Plaintiffs’ unfair competition claim is preempted by federal patent and copyright law. Id. Washington’s CPA makes unlawful “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce . . ..” RCW 19.86.020 (2009). To sustain an unfair competition action under the CPA, a plaintiff must demonstrate (1) an unfair or deceptive act or practice (2) occurring in trade or commerce (3) that impacts the public interest (4) causing an injury to the plaintiff's business or property with (5) a causal link between the unfair or deceptive act and the injury suffered. Nat’l Products, Inc. v. GamberJohnson LLC, 699 F. Supp. 2d 1232, 1242 (W.D. Wash. 2010) (citing Dewitt Const. Inc. v. Charter Oak Fire Ins. Co., 307 F.3d 1127, 1132 (9th Cir. 2002)). 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 5 1 A CPA claim may be preempted by federal copyright law when the state claim 2 incorporates by reference and merely restates federal patent and copyright claims. See Litchfield 3 v. Spielberg, 736 F.2d 1352, 1358 (9th Cir. 1984) (holding that because the unfair competition 4 and misrepresentation claims are “restatements of the copyright infringement claims, they are 5 preempted by federal copyright law”); see also Blue Nile, Inc. v. Ice.com, Inc., 478 F. Supp. 2d 6 1240, 1247 (W.D. Wash. 2007) (“Plaintiff cannot both expressly rely on the copyright 7 allegations in all of its state law claims and assert that the state law claims are outside copyright's 8 subject matter for purposes of avoiding preemption.”) (emphasis in original). The same 9 reasoning also applies to preemption under patent law. G.S. Rasmussen & Associates, Inc. v. 10 Kalitta Flying Service, Inc., 958 F.2d 896, 904 (9th Cir. 1992) (patent law “establishes a zone of 11 preemption broader than that of copyright law: Even if Congress has left an area unprotected, the 12 fact that patent law could reach it preempts state-law protection.”) (citing Sears, Roebuck & Co. 13 v. Stiffel Co., 376 U.S. 225, 230–32 (1964)); Compco Corp. v. Day–Brite Lighting, Inc., 376 U.S. 14 234, 237–38 (1964). 15 The Ninth Circuit has adopted a two-part test to determine whether a state law claim is 16 preempted by the Copyright Act. The test requires the court to first determine whether the 17 “subject matter” of the state law claim falls within the subject matter of copyright as described in 18 17 U.S.C. §§ 1023 and 103.4 Second, if the subject matter prong has been met, the court must 19 20 21 22 23 24 3 § 102. Subject matter of copyright: In general (a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories: (1) literary works; (2) musical works, including any accompanying words; (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 6 1 determine whether the rights asserted under state law are equivalent to the rights contained in 17 2 U.S.C. § 106.5 Laws v. Sony Music Entertainment, Inc., 448 F.3d 1134, 1137–38 (9th Cir. 2006); 3 Downing v. Abercrombie & Fitch, 265 F.3d 994, 1003 (9th Cir. 2001). 4 Here, Plaintiffs seek to protect their photographs for use in marketing. It is undisputed 5 that these photographs are “pictorial works” that can be copyrighted. 17 U.S.C. § 102(a)(5). 6 Thus, the work that Plaintiffs seek to protect falls within the “subject matter” of the Copyright 7 Act, and satisfies the first prong of the preemption test. Whether the CPA claim states equivalent 8 rights as the copyright claim, however, is less clear. As drafted, the CPA claim lacks sufficient 9 factual allegations to state a CPA claim. Because the claim language “as set forth above” is 10 vague, it is unclear whether that language fully incorporates the copyright and patent 11 infringement claims by reference or whether the CPA claim attempts to incorporate factual 12 matter from the factual summary of the Complaint that might otherwise support a viable CPA 13 14 15 16 17 18 19 20 21 22 23 24 (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works. 4 § 103. Subject matter of copyright: Compilations and derivative works (a) The subject matter of copyright as specified by section 102 includes compilations and derivative works, but protection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully. (b) The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material. 5 § 106. Exclusive rights in copyrighted works Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 7 1 claim.6 At best, the Complaint as a whole is ambiguous and as drafted, Plaintiffs’ CPA claim 2 asserts no new or different allegations to distinguish it from Plaintiffs’ patent or copyright 3 infringement claims. Therefore, the CPA claim asserts rights indistinguishable from those rights 4 expressly granted, and thus preempted, by the Copyright Act. Accordingly, Count III is 5 dismissed without prejudice. 6 C. Count V - Right of Publicity 7 Under RCW 63.60.050, a right of publicity claim accrues when: 8 9 10 11 12 13 Any person who uses or authorizes the use of a living or deceased individual's or personality's name, voice, signature, photograph, or likeness, on or in goods, merchandise, or products entered into commerce in this state, or for purposes of advertising products, merchandise, goods, or services, or for purposes of fund-raising or solicitation of donations, or if any person disseminates or publishes such advertisements in this state, without written or oral, express or implied consent of the owner of the right, has infringed such right. An infringement may occur under this section without regard to whether the use or activity is for profit or not for profit. 14 RCW 63.60.050 (2013). 15 Amazon asks the Court to dismiss Plaintiffs’ right of publicity claim for two reasons. 16 First, Amazon argues that Plaintiffs have not pled facts establishing standing to assert the claim. 17 Second, Amazon contends that under the Supremacy Clause of the U.S. Constitution, the 18 Copyright Act expressly preempts Plaintiffs’ state law claim because it is based solely on the 19 alleged infringement of copyrighted works—namely, Amazon’s reproduction and display of 20 photographs depicting Karen Keller’s young children. Dkt. # 8, p. 10. 21 22 23 24 6 The Court makes no determination at this time as to whether Plaintiffs’ factual allegations would be sufficient to survive the preemption analysis. As Amazon notes, to survive preemption, Plaintiffs’ CPA claim must contain an “extra element[]” that “makes the rights asserted qualitatively different from the rights protected under the Copyright Act.” Blue Nile, 478 F. Supp. 2d at 1249 (quotations and citations omitted). Plaintiffs have failed to squarely address this argument in the briefing. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 8 1 2 1. Standing The Complaint lacks a basis for inferring that Ms. Keller has standing to bring a right to 3 publicity claim on behalf of her children. Plaintiffs contend that the Complaint’s allegations of 4 misappropriated images depicting Ms. Keller’s “obviously minor” children should be sufficient 5 for purposes of inferring standing. Dkt. # 11, p. 5. The Court disagrees. 6 The rights granted under RCW 63.60.040(3) “may be exercised by a personal 7 representative, attorney-in-fact, parent of a minor child, or guardian, or as authorized by a court 8 of competent jurisdiction.” Here, the Complaint offers no factual basis demonstrating Ms. 9 Keller’s legal authority to serve as a personal representative for the children at issue. 10 Furthermore, Plaintiffs fail to assert basic essential facts, such as the number of children at issue, 11 their current ages, and when the photos at issue were taken. Accordingly, Plaintiffs’ right of 12 publicity claim, as drafted, is insufficient on its face. 13 14 2. Preemption Amazon contends that even if Plaintiffs’ standing defect were cured, Plaintiffs’ right of 15 publicity claim is preempted by the Copyright Act. The Complaint alleges that Amazon used 16 “the photograph and/or likeness of Plaintiff Keller’s children on goods, merchandise, or 17 products” without authorization. Dkt. # 1, ¶ 20. Here, the essence of Plaintiffs’ right of publicity 18 claim is that Amazon reproduced and distributed photographs of the Keller children without 19 authorization to do so. 20 Plaintiffs’ right of publicity claim replicates Plaintiffs’ copyright infringement claim. Six 21 different photographic images of children with Milo & Gabby pillows are the basis of the right of 22 publicity claim here. The same photos make up the marketing materials that form the basis of 23 Plaintiffs’ copyright infringement claim. These photographs of Ms. Keller’s children are 24 contained within the subject matter of copyright as “pictoral works.” 17 U.S.C. § 102(5). ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 9 1 Amazon characterizes Plaintiffs’ copyright infringement and right of publicity claims as 2 “duplicative and coextensive.” Dkt. # 8, p. 13. Plaintiffs insist that the publicity rights being 3 asserted by Ms. Keller’s children are not equivalent to any rights asserted under copyright. Dkt. 4 #11, p. 5. They argue that because the Keller children have no ownership interest in any of the 5 copyrights at issue, their right of publicity claim is altogether exempt from preemption. Id. 6 (“[A]ll the intellectual property rights (except the right-of-publicity claims) are owned by Milo & 7 Gabby and/or Ms. Keller. The right of-publicity claims are held by Ms. Keller’s children, who do 8 not have any ownership interest in the other intellectual property rights.”) In essence, Plaintiffs 9 assert a de-facto non-equivalency argument because “the children’s right to publicity claim 10 cannot be equivalent to a claim which they do not have.” Id. Plaintiffs’ argument misses the 11 mark. 12 Plaintiffs rely on Jules Jordan Video, Inc. v. 144942 Canada Inc., 617 F.3d 1146 (9th 13 Cir. 2010), the sole authority cited in Plaintiffs’ response brief, for the proposition that a state 14 right of publicity claim can be preempted only where the rights asserted by the plaintiff are 15 equivalent to the exclusive rights held by the copyright owner. Dkt. #11, p. 5. However, 16 Plaintiffs’ reliance is misplaced. The Ninth Circuit’s decision in Jules Jordan Video actually 17 supports Amazon’s argument. In Jules Jordan Video, an adult movie actor asserted a right-of18 publicity claim based on allegations that his “name, likeness, photograph and voice” appeared in 19 counterfeit films without his authorization. 617 F.3d at 1154. The Ninth Circuit found that “[t]he 20 essence of [the actor]’s claim is that the . . . defendants reproduced and distributed the [films] 21 without authorization” and held his claim preempted by the Copyright Act. Id. at 1155. Here, the 22 essence of Plaintiff Keller’s right of publicity claim is that Amazon reproduced and distributed 23 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 10 1 photographs of the children without authorization—a claim “under the Copyright Act” and thus 2 preempted by that Act. Id. 3 Plaintiffs attempt to distinguish the asserted publicity rights from the copyright claim by 4 arguing that the publicity rights are owned by Ms. Keller’s children, while the copyrights are 5 owned by Milo & Gabby and Ms. Keller. Dkt. #11, p. 5. But Amazon points to Baltimore 6 Orioles, Inc. v. Major League Baseball Players Ass’n, 805 F.2d 663 (7th Cir. 1986)—which 7 Plaintiffs have made no attempt to distinguish—where it made no difference for the preemption 8 analysis that a baseball club owned the copyrighted telecast encompassing individual players’ 9 alleged rights of publicity in their performances shown in the telecast. There, the Seventh Circuit 10 held that the players’ right-of-publicity claims were preempted because the claims fell within the 11 subject matter of copyright and were equivalent to the exclusive 17 U.S.C. § 106 right to 12 distribute the telecast held by the baseball club. See 805 F. 2d at 676–78. 13 Here, as in Baltimore Orioles, the factual allegations under Plaintiffs’ right of publicity 14 claim fall directly within the scope of federal copyright protection. The Complaint alleges that 15 Amazon misappropriated the Milo & Gabby photographs by reproducing and distributing their 16 copyrighted images without permission. Dkt. #1, ¶ 37–38. Such rights are exclusively reserved to 17 the copyright holder under federal law. 17 U.S.C.A. § 106; see also Baltimore Orioles, 805 F.2d 18 at 677–79 (7th Cir. 1986) (rejecting right of publicity claim as preempted by Copyright Act 19 where claim implicated only violation of a copyright holder’s rights to copyrighted subject 20 matter). Thus, Plaintiffs’ right of publicity claim is preempted. Because Plaintiffs’ right of 21 publicity claim is both insufficient on its face and preempted by the Copyright Act, Count V is 22 dismissed without prejudice. 23 D. Count VII - Trademark Counterfeiting 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 11 1 Amazon contends that the trademark counterfeiting claim under 15 U.S.C. § 11147 fails 2 because Plaintiffs have not plausibly alleged either (1) that Amazon reproduced Plaintiffs’ 3 registered trademark, and (2) that Amazon intentionally used the mark knowing that it was 4 counterfeit. Dkt. # 12, p. 14–16. 5 As an initial matter, Plaintiffs contend that Amazon’s graphic reproduction of Milo & 6 Gabby’s registered word and design mark takes matters outside the pleadings and transforms this 7 motion into one for summary judgment. Dkt. # 11, p. 6 (addressing Amazon’s reliance on “new 8 evidence” not found in the pleadings “to show that an exact copy of Milo & Gabby’s registered 9 trademark does not appear on the exhibits . . . attached to the complaint”). By displaying the 10 mixed word and design mark in Amazon’s motion to dismiss, Plaintiffs claim that Amazon is 11 asking the Court to consider new evidence outside the pleadings. Id. Plaintiffs argue that, as a 12 consequence, Amazon’s motion is not properly presented under Fed. R. Civ. P. 12(b)(6) and 13 must be treated as a motion for summary judgment. Id. (citing Fed. R. Civ. P. 12(d)). Plaintiffs 14 request a full and fair opportunity to discover and present all material pertinent to Amazon’s 15 16 17 18 19 20 21 22 23 7 Title 15 U.S.C. § 1114(1) states as follows: (1) Any person who shall, without the consent of the registrant-(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or (b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action by the registrant for the remedies hereinafter provided. Under subsection (b) hereof, the registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive. 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 12 1 motion, and urge the Court to defer ruling on Amazon’s motion until adequate discovery has 2 been afforded. Id. (citing Fed. R. Civ. P. 56(d)). 3 Federal courts have long recognized procedures for considering documents outside the 4 pleadings when ruling on motions to dismiss. District courts may take judicial notice of key 5 documents mentioned in the pleadings where there is no factual dispute about the documents’ 6 authenticity or enforceability. Fed. R. Evid. 201(b) (a court “may judicially notice a fact that is 7 not subject to reasonable dispute because it (1) is generally known within the trial court’s 8 territorial jurisdiction; or (2) can be accurately and readily determined from sources whose 9 accuracy cannot reasonably be questioned”). In the Ninth Circuit, district courts may take 10 judicial notice of documents that the pleadings do not mention, provided the documents are 11 integral to the plaintiff’s claims. See, e.g., Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 12 1998) (holding that “a district court ruling on a motion to dismiss may consider a document the 13 authenticity of which is not contested, and upon which the plaintiff’s complaint necessarily 14 relies”). 15 It is well settled that documents attached to or incorporated by reference, such as 16 Plaintiffs’ own exhibits to the Complaint, are properly before the Court for consideration on a 17 Rule 12(b)(6) motion. U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (citing Van Buskirk v. 18 CNN, 284 F.3d 977, 980 (9th Cir. 2002); Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994)). 19 Here, Plaintiffs expressly base their claims on exhibits to the Complaint and have incorporated 20 those exhibits by reference throughout the Complaint. See Dkt. #1 at ¶¶ 10, 14, 16, 17-21, 23, 25, 21 26. 22 Further, the Complaint expressly identifies Milo & Gabby’s design mark as “protected by 23 U.S. Trademark Registration Number 3291697.” Dkt. # 1, ¶ 8. Federal Rule of Evidence 201 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 13 1 authorizes this Court to take judicial notice of such admission because it is “not subject to 2 reasonable dispute” in that it is “capable of accurate and ready determination by resort to sources 3 whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b); Singh v. Ashcroft, 393 4 F.3d 903, 905 (9th Cir. 2004). Thus, the Court may properly examine the nature and 5 characteristics of the protected mark without converting Defendant’s motion to dismiss into one 6 for summary judgment. 7 The Lanham Act defines a counterfeit mark as a spurious mark that is identical to, or 8 substantially indistinguishable from, a mark that is registered and in use. 15 U.S.C. § 1116 9 (d)(1)(B). Plaintiffs point to Exhibit C and Exhibit D to the Complaint in support of their 10 allegations that Amazon infringed the Milo & Gabby trademark. Dkt. # 1, ¶ 20. Neither exhibit, 11 however, depicts any such use of the Milo & Gabby mark. The photographs attached as Exhibit 12 D display the alleged knock-off products bearing the mark “DOOMAGIC,” but contain no mark 13 bearing even the slightest similarity to Plaintiffs’ registered mark. Similarly, a review of Exhibit 14 B revealed nothing resembling Plaintiffs’ registered mark. The protected mark is equally absent 15 from all other exhibits offered by Plaintiffs to support their allegations of Amazon’s misuse of 16 Milo & Gabby materials. 17 Here, Plaintiffs fail to present plausible factual support for trademark counterfeiting 18 beyond bare recitation of the reproduction element of the claim. As Amazon points out, Plaintiffs 19 cannot sustain a claim for trademark counterfeiting based upon exhibits that do not show any 20 reproduction of Plaintiff’s registered mark. To survive a motion to dismiss, a complaint’s 21 “[f]actual allegations must be enough to raise a right to relief above the speculative level.” 22 Twombly, 550 U.S. at 555. The Complaint’s allegations concerning unauthorized use of 23 Plaintiffs’ trademark do not meet this standard. 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 14 1 But even if Plaintiffs had presented sufficient factual support for trademark reproduction, 2 Amazon maintains that Plaintiffs’ trademark counterfeiting claim would nonetheless fail because 3 it lacks any supporting allegations that Amazon either intentionally used the registered mark 4 knowing it was counterfeit, or was willfully blind to such use. Dkt. # 8, p. 15. Further, Amazon 5 argues that “intent” must be pled with specificity. 6 As to the issue of whether intent must be plead with specificity, Plaintiffs argue that 7 Amazon has confused “fraud or mistake,” which must be pled with specificity, with “intent, 8 knowledge, and other conditions of a person’s mind,” which may be alleged generally. Dkt. # 11 9 (citing Fed. R. Civ. P. 9(b)). Plaintiffs also insist that their trademark counterfeiting claim has 10 been adequately alleged because the Complaint asserts that Amazon violated Plaintiffs’ 11 intellectual property rights “with full knowledge of those rights.” Dkt. # 1, ¶¶ 16, 17. 12 Here, the bare factual allegations supporting Plaintiffs’ trademark counterfeiting claim 13 establish neither counterfeiting nor intent. Rather, Plaintiffs simply provide a formulaic recitation 14 of the elements establishing liability under 15 U.S.C. § 1114.8 Plaintiffs have offered no 15 plausible, factual basis for their allegations, and thus supply no more than mere “labels and 16 conclusions.” Twombly, 550 U.S. at 555. Further, Plaintiffs offer no factual basis to support the 17 18 8 19 20 21 22 23 24 The relevant statutory language provides: (1) Any person who shall, without the consent of the registrant— (a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or (b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action by the registrant for the remedies hereinafter provided. Under subsection (b) hereof, the registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive. 15 U.S.C. § 1114 (1)(a)-(b). ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 15 1 intent and knowledge element of trademark counterfeiting. Accordingly, Plaintiffs’ trademark 2 counterfeiting claim and corresponding remedies are dismissed without prejudice. 3 E. Prayer for Relief 4 Plaintiffs’ Prayer for Relief seeks to enjoin Amazon’s “infringement, inducement, and 5 contributory infringement.” Dkt. #1, ¶ L. Construing the requested relief as a claim for indirect 6 and willful infringement, Amazon urges the Court to dismiss Count I to the extent Plaintiffs are 7 trying to allege induced or contributory patent infringement under 35 U.S.C. § 271(b) and (c). 8 Amazon alternatively asks that the Court strike portions of Plaintiffs’ Prayer for Relief based on 9 any claim for induced, contributory, or willful patent infringement. Namely, Amazon requests 10 that the Court strike Prayer paragraphs (C) (seeking enhanced damages), (D) (seeking a finding 11 that case is “exceptional” under 35 U.S.C. § 285), and (L) (seeking injunctive relief related to 12 induced and contributory infringement). 13 Similarly, Amazon seeks dismissal of Count II to the extent Plaintiffs assert indirect 14 copyright infringement. In the alternative, Amazon asks the Court to strike Plaintiffs’ request for 15 injunctive relief against indirect copyright infringement. 16 1. Indirect and Willful Patent Infringement 17 A claim for indirect patent infringement requires a plaintiff to plead facts showing the 18 defendant had knowledge of the patents at issue, as well as “knowledge that the induced acts 19 constitute patent infringement.” Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2068 20 (2011). 21 To state a claim for willful patent infringement, Plaintiffs must provide factual matter to 22 support the conclusion that Amazon had knowledge of the patents-in-suit. Gustafson, Inc. v. 23 Intersystems Indus. Prods., Inc., 897 F.3d 508, 511 (Fed. Cir. 1990) (“[A] party cannot be found 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 16 1 to have ‘willfully’ infringed a patent of which the party had no knowledge.”); Pacing Techs., 2 LLC v. Garmin Int’l, Inc., No. 12-cv-1067, 2013 U.S. Dist. LEXIS 15728, at *10 (S.D. Cal. Feb. 3 5, 2013) (to survive a motion to dismiss willful patent infringement claim, a complaint must 4 plead more than bare allegation of actual knowledge). 5 Amazon contends that Plaintiffs have not pled a single fact supporting indirect or willful 6 patent infringement by Amazon and thus are not entitled to the relief requested as to those causes 7 of action. Dkt. # 8. Plaintiffs, on the other hand, insist they have properly pled their allegations of 8 Amazon’s indirect and willful infringement of their patent rights as alternative theories of 9 recovery under the pleading rules. 10 Rule 8(d)(2) allows a party to “set out 2 or more statements of a claim or defense 11 alternatively or hypothetically, either in a single count or defense or in separate ones.” Fed. R. 12 Civ. P. 8(d)(2). If a party makes alternative statements, “the pleading is sufficient if any one of 13 them is sufficient.” Id. However, pursuit of alternate relief does not relieve plaintiffs of their 14 obligation to plead sufficient factual allegations in support of that request. Garcia v. M-F Athletic 15 Co., No. 11-2430, 2012 WL 531008, at *2 (E.D. Cal. Feb. 17, 2012) (although plaintiffs are 16 allowed to plead in the alternative, on a motion to dismiss the plaintiff must allege facts that 17 “plausibly suggest an entitlement to relief” (quoting Iqbal, 556 U.S. at 680)). 18 Plaintiffs point to paragraphs 13, 16, 17, 18, and 21 of the Complaint to defend against 19 the motion to dismiss. However, those paragraphs contain no factual allegations addressing the 20 requisite elements to support claims for indirect and willful patent infringement, such as 21 Amazons’ knowledge of the patents at issue or Amazon’s inducement of infringement by a third 22 party. 23 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 17 1 2. 2 Indirect Copyright Infringement To state a claim for indirect copyright infringement, a plaintiff must plead facts showing 3 that the defendant caused a third party’s infringement or distributed a work with the intent to 4 foster infringement by third parties. See Flava Works, Inc. v. Clavio, No. 11 C 05100, 2012 WL 5 2459146, at *2 (N.D. Ill. June 27, 2012). Here, Plaintiffs make no mention of a third party in 6 their Complaint from which the Court can infer inducement. Furthermore, the Complaint 7 contains no allegations that Amazon directed or influenced any third party to infringe upon the 8 federal copyright or patent rights held by the Plaintiffs. 9 In sum, Plaintiffs have offered insufficient factual support for their alternate theories of 10 recovery based on indirect or willful patent infringement and indirect copyright infringement. 11 Accordingly, those portions of Plaintiffs’ Prayer for Relief are stricken as follows: Paragraph C 12 of the Complaint is STRICKEN IN PART as to the words “and increased or enhanced damages”; 13 Paragraph D of the Complaint is STRICKEN; and Paragraph L of the Complaint is STRICKEN 14 IN PART as to the words “inducement and contributory infringement.” 15 IV. CONCLUSION 16 Having considered the motion, the response and reply thereto, and the remainder of the 17 record the Court hereby finds and ORDERS: 18 (1) Defendant’s Motion to Dismiss, In Part (Dkt. # 8) is GRANTED; 19 (2) Counts III, V, and VII of the Complaint are dismissed without prejudice and with 20 leave to amend; 21 (3) Paragraph C of the Complaint is STRICKEN IN PART as to the words “and 22 increased or enhanced damages”; 23 (4) Paragraph D of the Complaint is STRICKEN; 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 18 1 2 3 (5) Paragraph L of the Complaint is STRICKEN IN PART as to the words “inducement and contributory infringement”; (6) Plaintiffs are ORDERED to SHOW CAUSE within twenty one (21) days why FAC 4 System, LLC should not be joined as a necessary party. Defendant is permitted to file 5 a response brief within fourteen (14) days of Plaintiffs’ Response to Order to Show 6 Cause. 7 8 9 10 11 Dated this 11th day of April 2014. A RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART 19