Yaros et al v. Kimberly Clark Corporation
Filing
37
ORDER Denying 33 Defendant's Motion to Dismiss the Second Amended Complaint. The Court denies Defendant's motion to dismiss the second amended complaint. The hearing set for 8/10/2018 shall be vacated. Signed by Judge Gonzalo P. Curiel on 8/6/2018. (rmc)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
SOUTHERN DISTRICT OF CALIFORNIA
10
11
12
13
ANDREW YAROS, an individual; DUO,
LLC, a Delaware Limited Liability
Company d/b/a Trio Hygiene Systems,
LLC.,
Case No.: 17cv1159-GPC(BGS)
ORDER DENYING DEFENDANT’S
MOTION TO DISMISS THE
SECOND AMENDED COMPLAINT
Plaintiff,
14
15
v.
16
KIMBERLY CLARK CORPORATION,
Delaware Corporation,
17
18
19
20
21
22
23
24
25
26
27
28
[Dkt. No. 33.]
Defendant.
Before the Court is Defendant’s motion to dismiss the second amended complaint
for failure to state a claim. (Dkt. No. 33.) Plaintiffs filed an opposition on July 12, 2018,
and a reply was filed on July 23, 2018. (Dkt. Nos. 34, 36.) Based on the reasoning
below, the Court DENIES Defendant’s motion to dismiss.
Background
On June 9, 2017, Plaintiffs Andrew Yaros (“Yaros”) and Duo, LLC (collectively
“Plaintiffs”) filed a complaint against Defendant Kimberly Clark Corporation
(“Defendant”) for trademark infringement of Plaintiff’s registered mark, “Better
Together” and related state law causes of action. (Dkt. No. 1, Compl.) On October 10,
1
17cv1159-GPC(BGS)
1
2017, Plaintiffs filed a first amended complaint (“FAC”). (Dkt. No. 7, FAC.) Pursuant
2
to the Court’s order granting Defendant’s motion to dismiss with leave to amend,
3
Plaintiffs filed a second amended complaint (“SAC”). (Dkt. Nos. 28, 29.)
4
Plaintiff Yaros is the sole owner of Duo, LLC dba Trio Hygiene Systems, LLC.
5
(Dkt. No. 29, SAC ¶ 5.) In 2009, Yaros developed a prototype of a combination
6
wipe/toilet paper dispensing system. (Id. ¶ 7.) “The Dispensing System consists of a
7
delivery system and a canister which contains wipes. The canister is inserted into the
8
twist and lock portion of the Dispensing System.” (Id.)
9
Yaros created the mark “Better Together” during 2009 and the mark was licensed
10
to Duo, LLC with a licensing date of December 1, 2011. (Id. ¶ 8.) On June 7, 2013,
11
Yaros filed a federal application for a registered trademark asserting a date of first use of
12
December 2, 2011. (Id.) On January 14, 2014, the United States Patent and Trademark
13
Office (“USPTO”) granted Yaros registration number 4,466,177, serial number 85-
14
954,310 for the words and mark “Better Together” for “disposable wipes impregnated
15
with cleansing chemicals or compounds for personal hygiene; wipes impregnated with a
16
cleaning preparation; and wipes impregnated with a skin cleanser, in Class 3 . . . .” (Id.;
17
Dkt. No. 29-1, Ex. C.) According to the SAC, no later than February 2013, Plaintiffs
18
distributed and offered for sale disposable wipes throughout the country accompanied
19
with the mark “BETTER TOGETHER HYGIENE SYSTEMS™,” on its canister labels
20
and on the installation instructions. (Dkt. No. 29, SAC ¶ 8.)
21
In June 2013, at the International World of Wipes Conference, Uday Raval
22
(“Raval”), a Senior Research Scientist at Kimberly Clark Professional Division, stopped
23
by Duo LLC’s booth and signed up to receive a sample of the Trio starter set. (Id. ¶
24
8.13.) Plaintiffs believe that Defendant started using the phrase “Better Together” in its
25
marketing literature shortly after the conference. (Id.) In July 2013, Yaros provided
26
Raval with a starter set. (Id.) Plaintiffs allege that Defendant has been wrongfully using
27
their trademark “Better Together” and the wrongful use is likely to cause public
28
2
17cv1159-GPC(BGS)
1
confusion, mistake, and deception concerning the identity and origin of Plaintiffs’ goods.
2
(Id. ¶ 10.)
3
The SAC alleges three causes of action under the Lanham Act for (1) trademark
4
infringement, 15 U.S.C. § 1114; (2) false designation of origin, 15 U.S.C. § 1125(a); (3)
5
false description of goods, 15 U.S.C. § 1125(a). It also asserts three state law causes for
6
(1) unfair competition in violation of California Business and Professions Code section
7
17200; (2) unfair competition under California Business and Professions Code section
8
17500; and (3) unfair competition under California Business and Professions Code
9
sections 14245 and 14250.
10
11
12
Discussion
A.
Federal Rule of Civil Procedure 12(b)(b)
Federal Rule of Civil Procedure (“Rule”) 12(b)(6) permits dismissal for “failure to
13
state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal
14
under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or
15
sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police
16
Dep=t., 901 F.2d 696, 699 (9th Cir. 1990). Under Rule 8(a)(2), the plaintiff is required
17
only to set forth a Ashort and plain statement of the claim showing that the pleader is
18
entitled to relief,@ and Agive the defendant fair notice of what the . . . claim is and the
19
grounds upon which it rests.@ Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
20
A complaint may survive a motion to dismiss only if, taking all well-pleaded factual
21
allegations as true, it contains enough facts to Astate a claim to relief that is plausible on
22
its face.@ Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at
23
570). “A claim has facial plausibility when the plaintiff pleads factual content that allows
24
the court to draw the reasonable inference that the defendant is liable for the misconduct
25
alleged.” Id. “Threadbare recitals of the elements of a cause of action, supported by
26
mere conclusory statements, do not suffice.” Id. “In sum, for a complaint to survive a
27
motion to dismiss, the non-conclusory factual content, and reasonable inferences from
28
that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.”
3
17cv1159-GPC(BGS)
1
Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted). In
2
reviewing a Rule 12(b)(6) motion, the Court accepts as true all facts alleged in the
3
complaint, and draws all reasonable inferences in favor of the plaintiff. al-Kidd v.
4
Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009).
5
B.
6
Non-Trademark Use
As a threshold issue, Defendant argues that dismissal is appropriate at the pleading
7
stage based on the exhibits attached to the SAC because it has never used “Better
8
Together” as a source identifier by adopting packaging or advertising similar to Plaintiffs
9
or by persuading the consumer that its products are associated with Plaintiffs in any way;
10
therefore, trademark law does not even apply. Plaintiffs argue that the cases Defendant
11
cites in support are distinguishable.
12
In support of its argument, Defendant cites to the Sixth Circuit cases of Hensley
13
Mfg. v. ProPride, Inc., 579 F.3d 603, 610-11 (6th Cir. 2009) and Interactive Prods. Corp.
14
v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 695 (6th Cir. 2003). In Hensley, the
15
Sixth Circuit affirmed the district court’s dismissal on a motion to dismiss. Hensley
16
Mfg., 579 F.3d at 614. The plaintiff and the defendant manufactured and sold trailer
17
hitchers for RVs designed by the well-known Jim Hensley. Id. at 606. The plaintiff had
18
purchased the trailer hitch business of Jim Hensley who was an inventor and designer of
19
trailer hitches and sold trailer hitches under the name of “Hensley Arrow” or “Arrow”.
20
Id. at 607. The plaintiff also registered a trademark in the name “Hensley.” Id. A former
21
employee of the plaintiff left and formed ProPride, the defendant. Id. Hensley also split
22
with the plaintiff, designed a new trailer hitch and licensed the design to ProPride. Id.
23
ProPride marketed its hitch as “ProPride Pivot Point Projection Hitch” or “3P Hitch.” Id.
24
The plaintiff filed suit claiming that the defendant’s use of Jim Hensley’s name in its
25
advertising material is likely to confuse consumers and infringes on its registered
26
“Hensley” trademark. Id.
27
The district court held the allegations in the complaint did not show that the
28
defendant’s use of the “Hensley” name creates a likelihood of confusion as to the source
4
17cv1159-GPC(BGS)
1
of its products. Id. at 610. The complaint did not claim that the defendant used the
2
trademark “Hensley” as the name of its product but that defendant’s used Hensley’s name
3
in connection with advertising its “3P Hitch” product. Id. at 611. The print advertising
4
specifically states that Hensley is “no longer affiliated with Hensley Mfg., Inc.” Id. at
5
611. The advertisements clearly identified the defendant was the source of the product
6
and there was no confusion as to the source of the product. Id.
7
In addition, the Sixth Circuit held that fair use defense applied as a matter of law.
8
Id. at 612. The defendant’s advertisements did not use the name “Hensley” in the
9
trademark sense; Jim Hensley’s name was used only to identify him as a designer of
10
trailer hitches, describe his relationship to the defendant, and tell the story behind his
11
success. Id. The court explained that the fair use defense applied as a matter of law
12
because the complaint and attached exhibits showed the defendant used Jim Hensley’s
13
name descriptively, and the plaintiff did not allege facts from which any inference of bad
14
faith could be drawn. Id.
15
In Interactive, the Sixth Circuit concluded, on review of district court’s grant of
16
summary judgment, that it was not necessary for the district court to analyze the eight
17
factors traditionally used to determine likelihood of confusion because the case did not
18
involve two source-signifying marks. 326 F.3d at 698. Because the defendant’s product
19
trademark was not similar to plaintiff’s product trademark and the challenge was not the
20
use of the trademark but the presence of the plaintiff’s trademark in the URL post-domain
21
path of the web page, trademark law did not apply. Id. at 695. The court concluded, “[i]f
22
defendants are only using [plaintiff's] trademark in a ‘non-trademark’ way-that is, in a
23
way that does not identify the source of a product-then trademark and false designation of
24
origin laws do not apply.” Id. at 695. Interactive considered an issue of first impression
25
of “whether the presence of another’s trademark in the post-domain path1 of a URL
26
27
The Sixth Circuit explained that “[a] post-domain path (e.g., /desks/floor/laptraveler/dkfl-lt.htm)
merely shows how a website's data is organized within the host computer's files.” Id. at 691
1
28
5
17cv1159-GPC(BGS)
1
violates trademark law.” Id. at 696. Because the court concluded that post-domain paths
2
do not typically signify source, “it was unnecessary for the district court to examine the
3
eight factors traditionally used to determine likelihood of confusion between two source-
4
signifying marks. Id.
5
These two Sixth Circuit cases are distinct and not applicable to the facts of this
6
case. Here, the SAC alleges that Defendant’s “Better Together” is likely to cause
7
confusion, mistake and deception to the public concerning the identity and origin of
8
plaintiffs’ goods. (Dkt. No. 29, SAC ¶ 10.) Defendant maintains a website where it sells
9
flushable wipes and toilet paper and uses the phrase “Better Together” to promote the
10
sale of both the flushable wipes and toilet paper together. (Id. 11(A).) Plaintiff also sell
11
the flushable wipes as well as the dispensing system for the wipes and toilet paper. (Id. ¶
12
11(B).) Defendant is using the trademark to sell products similar to Plaintiffs’ products.
13
(Id.) Defendant intentionally copied Plaintiffs’ mark and used it for its own purposes.
14
(Id. ¶ 11(C).)
15
Here, the products, combination toilet paper and flushable wipes, are similar and
16
the phrase used by both parties are identical. Defendant argues that the exhibits show
17
that it never used “Better Together” as a source-identifier. The Court disagrees. As
18
discussed in more detail below, while some of the documents attached to the SAC may
19
show Defendant did not use “Better Together” as a source-identifier, one document,
20
Exhibit L, from Defendant’s website plausibly shows that Defendant may have used
21
“Better Together” as a source-identifier. (See Dkt. No. 29-1, SAC, Ex. L at 522.) The
22
Court DENIES Defendant’s motion to dismiss as a matter of law based solely on its
23
argument that it did not use “Better Together” as a source-identifier. Plaintiffs have
24
plausibly alleged that Defendant is using “Better Together” as a source-identifying mark.
25
26
27
28
2
Page numbers are based on the CM/ECF pagination.
6
17cv1159-GPC(BGS)
1
C.
2
Likelihood of Confusion3
Defendant next seeks dismissal of the Lanham Act causes of action arguing that as
3
a matter of law, Plaintiffs cannot demonstrate that the use of “Better Together” is likely
4
to cause consumer confusion. Plaintiffs oppose asserting that on a motion to dismiss they
5
do not have to prove that there is likely to be consumer confusion but only requires them
6
to plausibly allege facts to support likelihood of consumer confusion.
7
The first three causes of action in the SAC assert trademark infringement pursuant
8
to 15 U.S.C. § 1114, false designation of origin pursuant to 15 U.S.C. § 1125, and false
9
description of goods pursuant to 15 U.S.C. § 1125. (Dkt. No. 29, SAC ¶¶ 9-19.)
A trademark is “any word, name, symbol, or device . . . used by a person . . . to
10
11
identify and distinguish his or her goods, including a unique product, from those
12
manufactured or sold by others and to indicate the source of the goods, even if that source
13
is unknown.” 15 U.S.C. § 1127. The Lanham Act provides “national protection of
14
trademarks in order to secure to the owner of the mark the goodwill of his business and to
15
protect the ability of consumers to distinguish among competing producers.” Park ‘N
16
Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 198 (1985).
17
18
19
20
21
22
23
24
25
26
27
28
3
As part of its initial threshold argument that dismissal is appropriate at this stage, Defendant also
argues that the SAC is deficient because the attached exhibits show that the accused communications
clearly identify Defendant’s own Cottonelle® mark and therefore there is no likelihood of consumer
confusion. Plaintiffs disagree. It is well-established that the presence of a prominent housemark may
negate the likelihood of confusion even if the marks are similar. See Cohn v. Petsmart, 281 F.3d 837,
842 (9th Cir. 2002) (summary judgment in favor of defendant where there no confusion where
distinctive house mark displayed and accused mark used as “tagline”); Walter v. Mattel, Inc., 210 F.3d
1108, 1111 (9th Cir. 2000) (after bench trial, the court explained there was no confusion in light of
dissimilarity between products and defendant's prominently displayed house mark); Lindy Pen Co. v.
Bic Pen Corp., 725 F.3d 1240, 1245 (9th Cir. 1984) (after bench trial court held that similarity of
identical marks negated by prominent display of house marks on products). However, binding Ninth
Circuit authority considers the prominence of a house mark as one of the factors the court considers in
determining a likelihood of consumer confusion under AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 34849 (9th Cir. 1979) which has been considered on summary judgment or at trial. Therefore, Ninth Circuit
precedent does not support Defendant’s argument seeking dismissal at the pleading stage.
7
17cv1159-GPC(BGS)
1
Trademark infringement under 15 U.S.C. § 1114 and false designation of origin
2
and false description of goods under 15 U.S.C. § 1125(a) require a showing that the
3
“public is likely to be deceived or confused by the similarity of the marks.” Century 21
4
Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1178 (9th Cir. 1988) (quoting New West
5
Corp. v. NYM Co. of California, 595 F.2d 1194, 1201 (9th Cir. 1979)); Slep-Tone Entm’t
6
Corp. v. Wired for Sound Karaoke and DJ Servs., LLC, 845 F.3d 1246, 1249 (9th Cir.
7
2017) (same). “The confusion must be probable, not simply a possibility.” Murray v.
8
Cable Nat’l Broadcasting Co., 86 F.3d 858, 860 (9th Cir. 1996) (internal quotation marks
9
omitted).
10
“The test for likelihood of confusion is whether a ‘reasonably prudent consumer’
11
in the marketplace is likely to be confused as to the origin of the good or service bearing
12
one of the marks.” Entrepreneur Medica, Inc. v. Smith, 279 F.3d 1135, 1140 (9th Cir.
13
2002). To determine whether a defendant’s use of a mark is likely to confuse consumers,
14
courts look to the eight Sleekcraft factors: “(1) strength of the mark; (2) proximity of the
15
goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing
16
channels used; (6) degree of care likely to be exercised by the consumer; (7) defendant’s
17
intent in selecting the mark; and (8) likelihood of expansion of the product lines.” AMF
18
Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979) abrogated on other grounds
19
by Mattel, Inc. v. Walking Mountain Prod., 353 F.3d 792, 810 n.19 (9th Cir. 2003).
20
The Ninth Circuit in Sleekcraft explained, “[w]hen the goods produced by the
21
alleged infringer compete for sales with those of the trademark owner, infringement
22
usually will be found if the marks are sufficiently similar that confusion can be expected.
23
When the goods are related, but not competitive, several other factors are added to the
24
calculus. If the goods are totally unrelated, there can be no infringement because
25
confusion is unlikely.” Id. at 348.
26
Under Sleekcraft, when goods are not related, dismissal is appropriate at the
27
pleading stage. See id.; see also Murray, 86 F.3d at 860-61 (affirming district court
28
dismissal concluding no likelihood of confusion as a matter of law because the parties’
8
17cv1159-GPC(BGS)
1
services were unrelated); Robinson v. Hunger Free America, Inc., 18cv42-LJO, BAM,
2
2018 WL 1305722, at *3 (E.D. Cal. Mar. 13, 2018) (granting motion to dismiss because
3
types of goods were dissimilar and design of “Hunger Free America” were different).
4
While likelihood of confusion can be decided as a matter of law, “[w]hether confusion is
5
likely is a factual determination woven into the law” that courts “routinely treat . . . as [an
6
issue] of fact.” Parts.com, LLC v. Yahoo! Inc., 996 F. Supp. 2d 933, 936 (S.D. Cal.
7
2013) (quoting Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1356 (9 Cir. 1985)).
8
In Murray, the Ninth Circuit affirmed the district court’s Rule 12(b)(6) dismissal
9
concluding that the parties’ services were unrelated and thus, there was no likelihood of
10
confusion. 86 F.3d at 861. The plaintiff’s trademark for “America Speaks” was used for
11
his “man-on-the-street” market research business for use in television commercial
12
advertising while the defendant CNBC provided a talk-show television program entitled
13
“America’s Talking” to cable television viewers and also conducted interactive national
14
polling surveys where viewers were allowed to respond to questions by calling telephone
15
numbers and the results were occasionally distributed to the news media. Id. at 859, 861.
16
Based on the allegations in the complaint, the court held that both parties’ services were
17
not related and there was no allegation that they shared any of the same customers. Id. at
18
861. Therefore, as a matter of law, there was no likelihood of confusion. Id.
19
In Toho Co., Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 790-91 (9th Cir. 1981),
20
the Ninth Circuit affirmed the dismissal of the complaint concluding that the goods were
21
unrelated as a matter of law and therefore, because consumers would not likely be
22
confused as to the source or sponsorship of the garbage bags. Id. at 791. The plaintiff,
23
the owner of the “Godzilla” name which was used to promote movies and merchandise
24
sued the defendant, Sears, alleging that its garbage bags in boxes noting that it is a Sears
25
product and the word “Bagzilla” violated its trademark. Id. at 789. The Ninth Circuit
26
held that the goods were unrelated as a matter of law: “Sears sells garbage bags. Toho
27
produces or sponsors only literary works and toys. Sears uses “BAGZILLA” instead of
28
9
17cv1159-GPC(BGS)
1
“GODZILLA” and puts the Sears name prominently on the package. . . [and] the
2
marketing channels are different.” Id. at 790.
3
Moreover, in Mintz v. Subaru of America, Inc., 716 Fed. App’x 618, 621 (9th Cir.
4
2017), the Ninth Circuit affirmed the dismissal of the complaint and held that the designs
5
and phrases of the two parties’ phrases were facially dissimilar and that they could not
6
plausibly create a likelihood of confusion. The plaintiff’s phrase “A World of Love, for
7
You and Those You Love” includes a design with a hand that is circumscribed by a heart
8
and includes an entire body while the defendant’s phrase, “Share the Love” includes a
9
design with a hand that radiates blue beams and is not connected to a body. Id. at 621.
10
Finally, in Robinson, the district court concluded that the plaintiff failed to allege
11
facts showing a plausible likelihood of confusing with the defendant’s use of “Hunger
12
Free America.” Robinson, 2018 WL 1305722, at *4. The district court noted that the
13
marks were not similar as the plaintiff’s “Hunger Free America” is in “green lettering
14
with black and white outlining, below a background of farm rows and vegetables” while
15
the defendant’s “Hunger Free America” has a red slash through the word “Hunger.” Id.
16
Also, the types of goods as well the consumer they targeted were dissimilar. Id. The
17
plaintiff's consumers would encounter the mark when purchasing a t-shirt but the
18
defendant’s consumers would encounter the mark when utilizing hunger-relief programs
19
or engaging in an anti-hunger program sponsored by the defendant. Id. The court
20
concluded that the goods or services that both offer are not related or sold to the same
21
class of purchasers, and have dissimilar uses and functions; therefore, the allegations did
22
not demonstrate that a customer would likely be confused. Id.
23
These cases, cited by Defendant, demonstrate that a complaint asserting trademark
24
infringement concerning products that are unrelated in the type of goods and services, in
25
the mark design, and/or market to different consumers may be dismissed as a matter of
26
law on a motion to dismiss. In contrast, in this case, the goods, combination toilet paper
27
and flushable wipes, are related, (id. ¶ 11(A)), the phrase, “Better Together” used by both
28
parties are identical, (id. ¶¶ 8. 8.13), and both parties market and advertise to the general
10
17cv1159-GPC(BGS)
1
public, (id. ¶¶ 8.10, 10). The Court cannot conclude as a matter of law that there would
2
be no likelihood of confusion as the products are related, the phrase used by both parties
3
are identical and they market to the same consumers. Accordingly, the Court DENIES
4
Defendant’s motion to dismiss the three Lanham Act causes of action.
5
Defendant also moves to dismiss the SAC arguing that Plaintiffs have failed to
6
demonstrate the Sleekcraft factors. It conducts an in-depth analysis as to each of the
7
Sleekcraft factors to demonstrate that Plaintiffs have failed to show that its use of “Better
8
Together” is likely to cause consumer confusion. (Dkt. No. 33-1 at 20-26.) As the Court
9
noted in its prior order, Defendant improperly asks the Court to make a factual
10
determination based on the allegations in the SAC whether there is a likelihood of
11
consumer confusion which is not proper on a Rule 12(b)(6) motion to dismiss. (See Dkt.
12
No. 28 at 6 n.2.) On a motion to dismiss, the Court determines whether the SAC alleges
13
a cause of action for trademark infringement, false designation of origin and false
14
description of goods under Rule 8’s pleading standard. Under Rule 8, Plaintiffs need
15
only provide a “short and plain statement of the claim showing that the pleader is entitled
16
to relief.” Fed. R. Civ. P. 8; see Stanislaus Custodial Deputy Sheriffs' Ass'n v. Deputy
17
Sherif's Ass'n, No. CV F 09-1988 LJO SMS, 2010 WL 2218813, at *10 n. 3 (E.D. Cal.
18
June 1, 2010) (on a motion to dismiss, the district court concluded that it “cannot make
19
the factual conclusion at this stage of the proceedings that there was not a likelihood of
20
confusion.”). A plaintiff, “is not required to prove the likelihood of confusion at the
21
pleading stage.” Visual Changes Skin Care Int'l, Inc. v. Neways, Inc., No. CV F 08–0959
22
LJO DLB, 2008 WL 4723603, at *4 (E.D. Cal. Oct. 24, 2008).
23
Throughout its argument, Defendant makes merits based conclusions without the
24
benefit of full discovery and at this stage, it is improper for the Court to weigh the factual
25
allegations to determine whether the Sleekcraft factors have been met. See Mastro’s
26
Restaurants LLC v. Dominick Grp LLC, No. CV 11-1996-PHX-PGR, 2012 WL
27
2091535, at *6 (D. Az. June 11, 2012) (court does not weigh evidence concerning
28
11
17cv1159-GPC(BGS)
1
Sleekcraft factors on motion to dismiss). Accordingly, the Court declines to consider
2
Defendant’s merit based arguments.
3
D.
4
Fair Use Defense
Defendant also argues that the trademark claims fail because Plaintiffs have not
5
sufficiently alleged facts that Defendant’s alleged use of the common and descriptive
6
phrase “Better Together” was not a permissible “fair use” under 15 U.S.C. § 1115(b)(4).
7
Plaintiffs contend the Court previously denied Defendant’s motion to dismiss on the fair
8
use defense and the issue should not be revisited. Plaintiffs alternatively argue that
9
“Better Together” is a federally registered mark and enjoys a strong presumption
10
trademark protection and that the validity of a trademark is a question of fact.
11
In its prior order, the Court denied the motion to dismiss on the fair use defense
12
relying on one picture of Defendant’s product that was presented in Defendant’s brief.
13
(Dkt. No. 28 at 8-9.) Plaintiffs had not attached or submitted any examples of
14
Defendant’s online advertising in the FAC or in their opposition papers. In fact, the
15
Court noted that Plaintiffs did not specify which of Defendant’s products were utilizing
16
their trademark and which product was likely to cause consumer confusion. (Dkt. No. 28
17
at 6.)
Now, in the SAC, Plaintiffs attach numerous pictures from Defendant’s online
18
19
advertising of its toilet paper and flushable cleansing cloths using the phrase “Better
20
Together.”4 (Dkt. No. 29, SAC, Exs. K-L at 35-59.) Relying on the exhibits attached to
21
the SAC, Defendant argues that the fair use defense applies as a matter of law. Because
22
Plaintiffs have provided pictures of Defendant’s alleged infringement of their trademark,
23
the Court finds it appropriate to reconsider its ruling on the fair use defense.
24
Fair use defense is an absolute defense to claims of trademark infringement,
25
trademark dilution and false designation of origin. JA Apparel Corp. v. Abboud, 682 F.
26
27
4
28
The Court may consider documents attached to the FAC when ruling on a motion to dismiss. Lee v.
City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).
12
17cv1159-GPC(BGS)
1
Supp. 2d 294, 309 (S.D.N.Y. 2010). The fair use defense “only comes into play once the
2
party alleging infringement has shown by a preponderance of the evidence that confusion
3
is likely.” KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 608-
4
09 (9th Cir. 2005) (citation omitted). It is an affirmative defense, where “the use of the
5
name, term, or device charged to be an infringement is a use, otherwise than as a mark . .
6
. of a term or device which is descriptive of and used fairly and in good faith only to
7
describe the goods or services of such party, or their geographic origin.” 15 U.S.C. §
8
1115(b)(4). Under the fair use defense, “[t]he use of a similar name by another to
9
truthfully describe his own product does not constitute a legal or moral wrong, even if its
10
effect be to cause the public to mistake the origin . . . of the product.” William R. Warner
11
& Co. v. Eli Lilly & Co., 265 U.S. 536, 529 (1924). This defense is codified in the
12
Lanham Act. Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., Inc., 618
13
F.3d 1025, 1039 (9th Cir. 2010).
14
“Thus, in order to determine whether the use of a term is ‘fair’ under this defense,
15
courts endeavor to assess whether the term is used (1) descriptively, (2) other than as a
16
mark, and (3) in good faith.” JA Apparel Corp., 682 F. Supp. 2d at 309 (citation
17
omitted). The “degree of customer confusion remains a factor in evaluating fair use.”
18
KP Permanent Make-Up, Inc., 408 F.3d at 609 (“Among the relevant factors for
19
consideration by the jury in determining the fairness of the use are the degree of likely
20
confusion, the strength of the trademark, the descriptive nature of the term for the product
21
or service being offered by KP and the availability of alternate descriptive terms, the
22
extent of the use of the term prior to the registration of the trademark, and any differences
23
among the times and contexts in which KP has used the term.”).
24
First, Defendant argues that the exhibits attached to the SAC show that its use of
25
the phrase “Better Together” is otherwise than as a mark. According to Defendant, the
26
website pictures demonstrate that it was using the “Better Together” to describe how its
27
product of toilet paper and wipes work better together and not used or indicate the source
28
of the product. For example, it cites to one picture from its website where the words
13
17cv1159-GPC(BGS)
1
“better together” is in small print in the body of the paragraph while “Cottonelle® Fresh
2
Care® Flushable Cleansing Cloths” is in larger print and prominent. (Dkt. No. 29-1,
3
SAC, Ex. K at 47.) Defendant claims that all the exhibits show that it highlighted and
4
featured only its own Cottonelle house mark thereby minimizing the consumer confusion.
5
Second, Defendant contends it is using the phrase in a primary, descriptive sense as the
6
exhibits show the “better together” is used to describe how its products “clean better
7
together.” Many of the exhibits show that “Better Together” is used under the product
8
description which highlights the descriptive purpose of its use.
9
Plaintiffs dispute Defendant’s characterization of how “Better Together” is
10
presented on the websites. For example, they argue that in one document, the font size of
11
“Better Together” and “Cottonelle” are the same. (See Dkt. No. 29-1, SAC, Ex. K at 35.)
12
In the phrase, “Cottonelle® Toilet Paper and Flushable Cleansing Cloths-Better
13
Together”, the large blue font are the same for Cottonelle® and “Better Together” while
14
the rest of the advertisement is in small gray font. (Id.) The last words the consumer
15
reads is “Better Together” which may attract a customer’s attention to associate
16
Cottonelle® with their mark.
17
A review of the exhibits of the online advertising of Defendant’s product, the
18
Court agrees with Defendant that many of the exhibits demonstrate Defendant’s use of
19
“Better Together” is descriptive as they are used to describe how toilet paper and
20
Cottonelle’s flushable wipes are better together and are not prominent in the ads. (Dkt.
21
No. 29-1, SAC Ex. K at 36-40, 45, 47, 48, 50.) However, Defendant fails to address one
22
exhibit, (see Dkt. No. 29-1, Ex. L at 52), where it appears that Defendant’s use of “Better
23
Together” takes it “outside of the realm of descriptive, non-trademark use.” See JA
24
Apparel Corp., 682 F. Supp. 2d at 313-14 (certain uses of trademark not descriptive as
25
the words “Joseph Abboud” is similarly eye-catching as the plaintiff’s trademark and
26
grabs the viewer’s attention). Exhibit L presents the following words on Defendant’s
27
website in all white text with a dark background and are next to a picture of Cottonelle’s
28
toilet paper and Cottonelle’s flushable wipes:
14
17cv1159-GPC(BGS)
1
2
The Cottonelle®
Care Routine
3
Better
Together.
4
5
6
7
8
9
10
As depicted, “Better Together” is in larger bold font below “The Cottonelle Care
Routine” which is in smaller bold font. This plausibly shows that Defendant is not using
“Better Together” in a descriptive way as the words are used to capture the consumer’s
attention by using an attention-grabbing phrase.
Therefore, the Court cannot conclude as a matter of law that the fair use defense
11
12
13
applies because Plaintiffs have plausibly alleged that Defendant’s use of “Better
Together” was not used descriptively and other than as a mark.
The fair use defense also requires an inquiry into the subjective good faith of the
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
alleged infringer. Lenz v. Universal Music Corp., 815 F.3d 1145, 1154 (9th Cir. 2015)
(jury question whether defendant’s actions were sufficient to form a subject good faith
belief about the video’s fair use); Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand
Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010) (noting there was merit to defendant’s
fair use defense in the context of a motion for summary judgment, but that ultimately,
“the question of fair use . . . should be resolved by a jury”). Defendant’s argument on
good faith is undercut by Exhibit L. Thus, the Court concludes that the fair use defense
does not bar Plaintiffs’ Lanham Act claims, and DENIES Defendant’s motion to dismiss
on this claim.
E.
Fourth, Fifth and Sixth Causes of Action – State Law Unfair Competition
Causes of Action
Defendant summarily argues that all state law claims fail for the same reasons as
the federal claims. In response, Plaintiffs argue that the state laws claims should not be
dismissed for the same reasons the federal claims should not be dismissed. Here, the
15
17cv1159-GPC(BGS)
1
state law unfair competition causes of action are based on the same allegations as the
2
Lanham Act claims. (Dkt. No. 29, SAC ¶¶ 20-28.) Therefore, because the Court denies
3
the motion to dismiss on the Lanham Act claims, and because the parties have not
4
adequately addressed each of the state law claims, the Court DENIES Defendant’s
5
motion to dismiss the state law claims.
6
7
8
9
10
Conclusion
Based on the above, the Court DENIES Defendant’s motion to dismiss the second
amended complaint. The hearing set for August 10, 2018 shall be vacated.
IT IS SO ORDERED.
Dated: August 6, 2018
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
16
17cv1159-GPC(BGS)
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?