Limo Hosting, Inc et al v. Fiks

Filing 51

ORDER by Magistrate Judge Bernard Zimmerman granting in part and denying in part 31 Motion to Dismiss (bzsec, COURT STAFF) (Filed on 12/18/2008)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 All parties have consented to my jurisdiction, for all proceedings including entry of final judgment, pursuant to 28 U.S.C. § 636(c). 15 U.S.C. § 1114 (1)(a) creates civil liability in anyone who makes use in commerce of "any reproduction, counterfeit, copy, or colorable imitation of a registered mark" in connection with the sale of goods where such use "is likely 1
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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

LIMO HOSTING, INC., a Florida corporation, OLEG GRIDNEV, an individual, Plaintiff(s), v. MIKAIL FIKS (aka "Mike Fiks") d/b/a "FIXEDSITES.COM", an individual, and DOES 1-10. Defendant(s).

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No.

C 08-2474 BZ

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT FIKS' MOTION TO DISMISS

Defendant Fiks moves to dismiss the first and second causes of action in plaintiffs' amended complaint ("complaint")1, which allege statutory trademark infringement in violation of the Lanham Act, 15 U.S.C. § 11142, and common

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law trademark infringement, respectively.3

Defendant asserts

that the mark "Limo Hosting" is a generic mark registered on the supplemental register, which entitles plaintiffs to no presumption of validity regarding plaintiffs' exclusive right to use the mark in commerce and that plaintiffs have not alleged any facts suggesting that the mark has acquired "secondary meaning." Taking the allegations of the complaint as true, plaintiffs have adequately alleged that their mark has acquired secondary meaning through many years of exclusive use and advertising via the use of meta tags and search engine optimization of web sites. 16.) (See Pl.'s Amend. Compl. ¶¶ 14-

Plaintiffs have also alleged that their customers have

been confused about the source of materials bearing the mark and that one of their customers asked plaintiffs whether they had authorized the use of the mark to defendant. Amend. Compl. ¶¶ 17-18.) (See Pl.'s

Because plaintiffs have alleged

sufficient facts to plead secondary meaning, defendant's /// ///

to cause confusion, or to cause mistake, or to deceive." Plaintiffs' mark is listed on the supplemental register. Registration of a mark on the supplemental register confers no substantive trademark rights beyond those under common law; therefore, plaintiffs' substantive trademark rights are only those available under the common law. See Creagri, Inc. v. Usana Health Scis., 2005 U.S. Dist. LEXIS 43196 *9 (N.D. Cal. January 26, 2005) (citing In re American Fertility Society, 188 F.3d 1341, 1343 (Fed. Cir. 1999)); see also J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:36 (4th ed. 1999) ("Supplemental registration confers no substantive trademark rights beyond those under common law."). 2
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motion to dismiss plaintiffs' trademark claims is DENIED.4 Defendant next argues that the complaint fails to state a claim for trade dress infringement. To state a claim for

trade dress infringement under the Lanham Act, plaintiffs must allege facts that demonstrate that their trade dress is (1) non-functional, (2) distinctive, and (3) is likely to be confused with defendant's product by members of the consuming public. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d

1252, 1258 (9th Cir. 2001); Nova Wines, Inc. v. Adler Fels Winery LLC, 467 F.Supp.2d 965, 975 (N.D. Cal. 2006). The

Supreme Court has held that trade dress is "distinctive and capable of being protected if it either (1) is inherently distinctive or (2) has acquired distinctiveness through secondary meaning." Two Pesos, Inv. v. Taco Cabana, Inc., 505

U.S. 763, 769 (1992) (emphasis in original). Defendant asserts that plaintiffs' complaint is deficient because it fails to adequately plead how plaintiffs' trade dress is non-functional as well as how it is either inherently distinctive or has achieved secondary meaning. "A product feature is functional if it is essential to the product's use or if it affects the cost and quality of the product." Rachel v. Banana Republic, 831 F.2d 1503, 1506 (9th

Defendant's argument that plaintiffs failed to "explain if or how [defendants] supposedly used [p]laintiffs' trademark in commerce" is misguided. (Def.'s Mot. to Dismiss p.3.) The complaint alleges that defendant copied plaintiffs' website, and therefore their marks, and used the copied materials to do business on a commercial website. (See Pl.'s First Amend. Compl. ¶¶ 23, 29, 30, 34, 45.) This is sufficient. See Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 677 (9th Cir. 2005). 3

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Cir. 1987).

Functional features are the "actual benefit" that

a consumer wishes to purchase, as distinguished from an assurance that a particular entity made, sponsored, or endorsed a product. Rachel, 831 F.2d at 1506. "In

determining functionality, a product's trade dress must be analyzed as a whole." First Brands Corp. v. Fred Meyer, Inc., Inquiry "is not directed

809 F.2d 1378, 1381 (9th Cir. 1987).

at whether the individual elements are functional but whether the whole collection of elements taken together are functional." International Jensen v. Metrosound U.S.A., 4 Unique arrangements of "purely

F.3d 819, 823 (9th Cir. 1993).

functional features" are a functional design not entitled to section 1125(a) protection. Rachel, 831 F.2d at 1506. Vision Sports, Inc.

Functionality is a question of fact.

v. Melville Corp., 888 F.2d 609, 614 (9th Cir. 1989) (citing Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 514 (9th Cir. 1989)). Factors to consider include whether: (1) a particular

design yields a utilitarian advantage; (2) alternative designs are available to avoid hindering competition; and (3) the design achieves economics in manufacture or use. International Jensen, 4 F.3d at 823. Here, the complaint lacks non-functionality factual allegations. In the complaint, plaintiffs state in conclusory

fashion that they use a "unique combination of color, print type and layout in marketing materials" that is non-functional and that the trade dress is non-functional because "it is unique and it has been the subject of wide and intensive advertisement, and/or a combination of both." 4 (Amd. Compl. ¶¶

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94, 95.)

Missing are factual allegations of non-functionality

addressing such factors as utilitarian advantage, availability of alternative designs, and economies in manufacture or use. No picture of the trade dress is attached. Accordingly,

defendant's motion to dismiss plaintiffs' fourth cause of action is GRANTED. Finally, defendant argues that plaintiffs fail to state a claim for copyright infringement because they fail to allege when the infringement occurred. However, plaintiffs allege

that the infringement occurred sometime prior to July 2007, and that defendant continues to infringe.5 Amend. Compl. ¶¶ 29, 33.) (See e.g., Pl.'s

Defendant's motion to dismiss

plaintiffs' sixth cause of action is DENIED.6 Defendant shall answer by January 7, 2009. Dated: December 17, 2008

Bernard Zimmerman United States District Judge

G:\BZALL\-BZCASES\LIMO HOSTING V. FIKS\12(B)(6)FAC.FINAL RULING.10.17.08.WPD

Defendant's argument that plaintiffs' descriptions of the copyrights are insufficiently pled also fails. Plaintiffs allege the identities of their copyrights, and also allege which websites they believe were infringed and which copyrighted sales pitches were allegedly infringed. These facts are sufficient to state a cognizable claim of copyright infringement. Defendant's request for sanctions is DENIED. To the extent that any party has unnecessarily multiplied these proceedings, it is defendant who has done so with the filing of such a specious sanctions motion. 5
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