Carson Optical, Inc. et al v. Prym Consumer USA, Inc.
Filing
94
ORDER re 80 82 : see attached Memorandum and Order for details. Ordered by Magistrate Judge Arlene R. Lindsay on 3/28/2014. c/ecf (Johnston, Linda)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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CARSON OPTICAL, INC. and LEADING
EXTREME OPTIMIST INDUSTRIES, LTD.,
Plaintiffs,
MEMORANDUM AND
ORDER
CV 11-3677 (ARL)
-againstPRYM CONSUMER USA, INC. and
JO-ANN STORES, INC.,
Defendants.
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LINDSAY, Magistrate Judge:
Plaintiff Carson Optical, Inc. (“Carson Optical” or “Carson”), a New York corporation
that markets and sells optical products, and plaintiff Leading Extreme Optimist Industries, Ltd.
(“Leading’), a Hong Kong company that manufactures optical products (collectively “plaintiffs”),
commenced this action on July 29, 2011 against defendant Prym Consumer USA, Inc. (“Prym”),
a manufacturer of magnification products, and commenced an action on January 6, 2012 against
defendant Jo-Ann Stores, Inc., a retailer of Prym’s products (“Jo-Ann Stores”) (collectively
“defendants”), alleging patent infringement under 35 U.S.C. § 271 et seq., trade dress
infringement under the Lanham Act, 15 U.S.C. § 1125(a), and state law claims for unfair
competition and tortious interference with prospective business relations in connection with four
of plaintiff Carson Optical’s design patents. All of the claims relate to magnifiers that were sold
by Prym to Jo-Ann Stores, and then sold at retail by Jo-Ann Stores.
By order dated March 9, 2012, the district court consolidated the two actions. On
November 27, 2012, the parties consented to the undersigned’s jurisdiction pursuant to 28 U.S.C.
§ 636. Defendants each filed motions for partial judgment on the pleadings pursuant to Fed. R.
Civ. P. 12(c), and by Memorandum and Order dated March 25, 2013, the Court granted
defendants’ motions and granted plaintiffs leave to replead. Plaintiffs filed their second amended
consolidated complaint on April 16, 2013. Before the Court are each defendants’ partial motions
to dismiss the second amended consolidated complaint pursuant to Fed. R. Civ. P. 12(b)(6). For
the reasons set forth below, defendants’ motions are granted.
BACKGROUND
For purposes of this decision, the Court accepts as true the factual allegations set forth in
the second amended consolidated complaint against defendants and documents attached thereto.
Carson Optical markets and sells optical products throughout the country to retailers, including
until recently, Jo-Ann Stores. (Second Am. Consol. Compl. ¶¶ 2, 32.) At issue in this case are
three1 of Carson Optical’s design patents, to wit, U.S. Patent Nos. D495,726 S (“the ‘726
Patent”), D563,779 S (“the ‘779 Patent’), and D508,063 S (“the ‘063 Patent”), which were issued
by the United States Patent and Trademark Office. (Id. at. ¶¶ 10-21.) The commercial
embodiment of the ‘726 Patent is a product that bears the trademark RimFree. (Id. at. ¶ 13.) The
commercial embodiment of the ‘779 Patent is a product that bears the trademark Attach-A-Mag.
(Id. at. ¶ 17.) The commercial embodiment of the ‘063 Patent is a product that bears the
trademark Attach-a-Mag. (Id. at. ¶ 21.)
The designs of certain of Carson Optical’s products, such as the SureGrip2 and the Clip &
1
Although plaintiffs reference a ‘437 Patent in the second amended consolidated
complaint, (id. at. ¶ 42), plaintiffs do not assert any facts with respect to this patent.
2
In September 1998, Carson adopted an ornamental design and overall appearance for a
magnifier, which has been marketed and sold under the trademark SureGrip. (Id. at. ¶¶ 22-25.)
Since that time, Carson has marketed, promoted and sold magnifiers comprising the design,
which have become a marketing success. (Id.)
2
Flip3, are not protected by design patents but have been marketed, promoted and sold under their
trademarks. (Id. at. ¶¶ 22-31.) The SureGrip™ and the Clip & Flip™ products have been a
commercial success. (Id.) Carson Optical has also developed written materials, including
packaging materials which describe the features and benefits of its Clip & Flip™ magnifier, and
owns the copyright in the written marketing materials. (Id. at. ¶¶ 30-31.)
According to Carson Optical, Prym secured a manufacturer to copy and reproduce Carson
Optical’s products, and Jo-Ann Stores conspired with Prym to accomplish this. (Id. at. ¶¶ 33-34.)
Specifically, plaintiffs allege that defendants imported, offered for sale and sold (i) a magnifier
that infringes the ‘726 Patent; (ii) a product that infringes the ‘779 Patent; (iii) a product that
infringes the ‘063 Patent; (iv) a magnifier that is a copy of Carson Optical’s SureGrip™
magnifier and infringes Carson’s trade dress rights; and (v) a copy of Carson Optical’s Clip &
Flip™ magnifier. (Id. at. ¶¶ 35-39.) In addition, plaintiffs aver that Prym copied portions of
Carson Optical’s written marketing materials associated with the Clip & Flip™ magnifier. (Id.
at. ¶ 40.) Because of Prym’s alleged infringement, plaintiffs maintain that Prym displaced
Carson Optical as a supplier to Jo-Ann Stores. (Id. at. ¶ 41.) Jo-Ann’s alleged infringement
eliminated Carson Optical as its supplier. (Id. at. ¶ 42.)
Plaintiffs commenced the instant action against defendants, alleging (i) infringement of
the design patents; (ii) infringement of trade dress; and (iii) common law claims for unfair
competition. In addition, plaintiffs allege against defendant Prym a common law claim for
tortious interference with prospective business relations. Defendants now seek to dismiss
3
In October 1998, Carson adopted a design for a magnifier that is currently sold under the
trademark Clip & Flip, and since that time has marketed, promoted and sold the magnifier, which
has become a commercial success. (Id. at. ¶¶ 26-29.)
3
plaintiffs’ common law tort claims and trade dress infringement claim, specifically Counts Seven
and Nine in the second amended consolidated complaint against Jo-Ann Stores4 and Counts
Seven, Eight and Ten in the second amended consolidated complaint against Prym.
DISCUSSION
(A)
Legal Standard for Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)
In reviewing a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Court must
accept “as true all allegations in the complaint and draw all reasonable inferences in favor of the
non-moving party.” Matson v. Bd. of Educ. of the City Sch. Dist. of N.Y., 631 F.3d 57, 63 (2d
Cir. 2011) (internal quotation marks and citation omitted). However, “the tenet that a court must
accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.
Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “In order to survive a
motion to dismiss under 12(b)(6), a complaint must allege a plausible set of facts sufficient ‘to
raise a right to relief above the speculative level’.” Operating Local 649 Annuity Trust Fund v.
Smith Barney Fund Mgmt. LLC, 595 F.3d 86, 91 (2d Cir. 2010) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)); see Ruston v. Town Bd. for the Town of Skaneateles, 610
F.3d 55, 59 (2d Cir. 2009) (“When there are well-pleaded factual allegations, a court should
assume their veracity and then determine whether they plausibly give rise to an entitlement to
relief”). “A pleading that offers ‘labels and conclusions’ or a ‘formulaic recitation of the
elements of a cause of action will not do.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S.
4
Defendant Jo-Ann Stores joins in and incorporates by reference defendant Prym’s
motion papers.
4
at 557). “The plausibility standard is not akin to a probability requirement, but it asks for more
than a sheer possibility that a defendant acted unlawfully.” Id. at 678. That is, “[a] claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Twombly, 550 U.S.
at 570. Determining plausibility is “a context-specific task that requires the reviewing court to
draw on its judicial experience and common sense.” Id. at 679.
For the purposes of a Rule 12(b)(6) motion, “a district court may consider the facts
alleged in the complaint, documents attached to the complaint as exhibits, and documents
incorporated by reference in the complaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104,
111 (2d Cir. 2010). A district court may also consider “matters of which judicial notice may be
taken or . . . documents either in plaintiffs’ possession or of which plaintiffs had knowledge and
relied on in bringing suit.” Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)
(internal quotation marks and citation omitted).
(B)
Plaintiffs’ Common Law Claims
Plaintiffs assert a common law claim for unfair competition against defendant Prym
(Count Eight) and defendant Jo-Ann Stores (Count Nine) and a common law claim for tortious
interference with prospective business relations against defendant Prym (Count Ten). With
respect to defendant Prym, plaintiffs assert that Prym has engaged in conduct constituting
common law unfair competition by:
a.
b.
c.
Copying and reproducing Carson’s products, including the RimFree,™ the
distinctive elements of the SureGrip™ magnifier and the Clip & Flip™ magnifier
in order to cause confusion, and the Attach-A-Mag™ product;
Providing knock-offs of Carson’s products to Jo-Ann Stores;
Securing of Jo-Ann Stores as a customer by importing, offering for sale, and
5
d.
e.
f.
selling products that infringe Carson and Leading’s intellectual property rights;
Copying portions of Carson’s written marketing materials associated with the Clip
& Flip™ magnifier;
Systematically infringing Carson’s and other’s intellectual property rights,
including the ‘726 Patent, and thereby unfairly competing with Carson; and/or
Displacing Carson as a supplier to Jo-Ann Stores by illegally copying Carson’s
product(s).
(Second Am. Consol. Compl., ¶¶ 93, 116.) With respect to defendant Jo-Ann Stores, plaintiffs
assert that Jo-Ann Stores has engaged in conduct constituting common law unfair competition
by:
a.
b.
c.
d.
e.
f.
g.
Copying and reproducing Carson’s products, including the RimFree,™ the
distinctive elements of the SureGrip™ magnifier and the Clip & Flip™ magnifier
in order to cause confusion, and the Attach-A-Mag™ product;
Securing and selling to the consuming public a line of knock-off products;
Eliminating Carson as a long-time supplier by systematically copying Carson’s
products and violating its intellectual property rights in the process;
Selling products with marketing materials that contained copied portions of
Carson’s written marketing materials;
Systematically infringing Carson’s and other’s intellectual property rights,
including patent rights, trade dress rights and/or copyright rights, and thereby
unfairly harming Carson;
Even after ceasing its campaign of infringing activity refusing to continue its longtime supplier relationship with Carson; and/or
Pretending to fairly evaluate Carson as a supplier with no intention of continuing
its business relationship with Carson and misrepresenting to Carson that Carson
would be fairly evaluated when Jo-Ann knew that Carson would not be fairly
evaluated.
(Id. at ¶¶ 120, 128.)
Additionally, as to defendant Prym, plaintiffs allege that Prym engaged in dishonest,
unfair, and/or improper means to interfere with Carson’s prospective relations with Jo-Ann
Stores by engaging in the course of conduct enumerated above and by exerting unfair economic
pressure on Carson by pricing its goods at a predatory level for the specific purpose of ousting
Carson as Jo-Ann Store’s vendor. Plaintiffs assert that Prym’s predatory pricing was a result of
6
Prym’s (a) misappropriating Carson’s skills, efforts, and labor in designing and developing
unique magnifier designs and marketing materials, (b) misappropriating Carson’s goodwill by
knocking off Carson’s distinctive tradedress, and (c) using inferior materials in its goods with the
purpose of instead trading on Carson’s goodwill. (Id. at ¶¶ 132-33.)
Defendants argue, however, that plaintiffs’ state law claims are preempted by federal
patent law.
(1)
Preemption of Common Law Torts
“Federal Circuit law governs whether federal patent law preempts a state law claim.”
Ultra-Precision Mfg., Ltd. v. Ford Motor Co., 411 F.3d 1369, 1376 (Fed. Cir. 2005). A state law
claim is preempted if it “‘stands as an obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.’” Id. at 1377 (quoting Aronson v. Quick Point Pencil Co.,
440 U.S. 257, 262 (1979)). Federal patent law preempts a state law claim that “offer[s] patentlike protection to intellectual property inconsistent with the federal scheme.” Dow Chem. Co. v.
Exxon Corp., 139 F.3d 1470, 1475 (Fed. Cir. 1998). The preemption inquiry focuses on the
specific conduct underlying the state law claim. See Hunter Douglas, Inc. v. Harmonic Design,
Inc., 153 F.3d 1318 (Fed. Cir. 1998), overruled in part on other grounds by Midwest Ind. Inc. v.
Karavan Trailers, Inc., 175 F.3d 1356, 1360-61 (Fed. Cir. 1999) (en banc in part). In Hunter
Douglas, the Federal Circuit instructed:
[t]o determine whether these state law torts are in conflict with federal patent law
and accordingly preempted, we assess a defendant’s allegedly tortious conduct. If
a plaintiff bases its tort action on conduct that is protected or governed by federal
patent law, then the plaintiff may not invoke the state law remedy, which must be
preempted for conflict with federal patent law. Conversely, if the conduct is not
so protected or governed, then the remedy is not preempted. This approach,
which considers whether a state law tort, ‘as-applied,’ conflicts with federal patent
7
law, is consistent with that employed by the Supreme Court in cases involving
preemption of state unfair competition law.
153 F.3d at 1336. “To survive preemption, [plaintiffs] must plead conduct in violation of [state
law] that is separate and independent from its patent law claim.” Veto Pro Pac, LLC v. Custom
Leathercraft Mfg. Co., No. 3:08-cv-302 (VLB), 2009 WL 276369, at *2 (D. Conn. Feb. 5, 2009).
That is, patent law will not preempt state law claims if such claims “include additional elements
not found in the federal patent law cause of action and if they are not an impermissible attempt to
offer patent-like protection to a subject matter addressed by federal law.” Rodime PLC v.
Seagate Tech., Inc., 174 F.3d 1294, 1306 (Fed. Cir. 1999).
(a)
Unfair Competition
Under New York law, an unfair competition claim encompasses a broad range of unfair
practices. See American Footwear Corp. v. Gen’l Footwear Co., 609 F.2d 655, 662 (2d Cir.
1979). Although the law of unfair competition is “a broad and flexible doctrine” that has been
described as “a form of commercial immorality,” its reach is not without limits. Roy Export Co.
Establishment v. Columbia Broadcasting Sys., 672 F.2d 1095, 1105 (2d Cir. 1982). “[T]he
essence of an unfair competition claim is that the defendant has misappropriated the labors and
expenditures of another and has done so in bad faith.” Coca-Cola North America v. Crawley
Juice, Inc., Nos. 09 CV 3259 (JG)(RML), 09 CV 3260 (KAM)(RML), 09 CV 3279
(ERK)(RML), 2011 WL 1882845, at *6 (E.D.N.Y. May 17, 2011) (internal quotation marks and
citations omitted); see Luv n’ Care, Ltd. v. Mayborn USA, Inc., No. 11 Civ. 2460, 2012 WL
3095065, at *4 (S.D.N.Y. July 30, 2012) (“a plaintiff asserting an unfair competition claim under
New York common law must also show that defendant acted in bad faith”); see also Bongo
8
Apparel, Inc. v. Iconix Brand Group, Inc., 856 N.Y.S.2d 22, 2008 WL 41341 (N.Y. Sup. Ct.
2008) (“While there is no complete list of activities which constitute unfair competition under
New York law, the essence of an unfair competition claim is that one may not act in bad faith to
misappropriate the skill, expenditures, and labor of another”). However, “[n]ot every act, even
if taken in bad faith, constitutes unfair competition.” Computer Associates, Inc. v. Simple.com,
Inc., 621 F. Supp. 2d 45, 53 (E.D.N.Y. 2009) (holding that a plaintiff must show more than
commercial unfairness). “The tort is not all- encompassing . . . ; the New York Court of Appeals
in rejecting the notion that unfair competition is equivalent to the amorphous term commercial
unfairness has stated that misappropriation of another’s commercial advantage is a cornerstone of
the tort.” Id. (internal quotation marks and citations omitted); see Nationwide CATV Auditing
Servs., Inc. v. Cablevision Sys. Corp., No. 12-CV-3648 (SJF)(ETB), 2013 WL 1911434, at *10
(E.D.N.Y. May 7, 2013) (same). Notably, to act in “bad faith,” one must exploit some
“commercial advantage which belonged exclusively to [another].” LoPresti v. Mass. Mut. Life
Ins. Co., 820 N.Y.S.2d 275, 277 (2d Dep’t 2006). In this case, plaintiffs’ unfair competition and
tortious interference claims again fail due to the absence of allegations of additional tortious
conduct that is separate from the patent law cause of action. The tortious conduct proffered is
based upon allegations (i) of patent infringement, (ii) that defendants copied an unpatented
product; and (iii) of trade dress infringement.
(i)
Infringement of Plaintiff’s Design Patents
Plaintiffs’ allegations that defendants engaged in unfair competition by copying and
reproducing Carson’s products that were covered by the ‘726 Patent and the ‘779 patent,
including the RimFree™ and the Attach-a-Mag™ products, by systematically infringing
9
Carson’s and other’s intellectual property rights in order to unfairly compete with Carson,
without more, are preempted by federal patent law because they are predicated upon plaintiffs’
claims that Prym’s magnifiers infringed Carson’s design patents. Notably, these claims
essentially repeat the allegations plaintiffs made in their prior amended complaint against
defendant Jo-Ann Stores and in the second amended complaint against defendant Prym, which
the undersigned dismissed in its previous Memorandum and Order. The Second Circuit and the
Supreme Court have made clear that “states cannot, under the guise of regulating unfair
competition, grant what is in effect patent protection.” Flexitized, Inc. v. Nat’l Flexitized Corp.,
334 F.2d 774, 783 n.4 (2d Cir. 1964) (citing Sears Roebuck & Co. v. Stiffel Co., 376 U.S. 225,
231 (1964)); see Hunter Douglas, 153 F.3d at 1335 (“If a plaintiff bases its tort action on conduct
that is protected or governed by federal patent law, then the plaintiff may not invoke the state law
remedy, which must be preempted for conflict with federal patent law”); see also Sears, Roebuck
& Co. v. Stiffel Co., 376 U.S. 225, 231 (1964) (holding that state law claim for unfair competition
cannot be applied to “give protection of a kind that clashes with the objectives of the federal
patent laws”). “[T]o survive preemption, [plaintiffs] must plead conduct in violation of [state
law] that is separate and independent from its patent law claim.” Veto Pro Pac, LLC v. Custom
Leathercraft Mfg. Co., No. 3:08-cv-302 (VLB), 2009 WL 276369, at *2 (D. Conn. Feb. 5, 2009).
Plaintiffs have failed to do so.
Although plaintiffs argue that they have alleged “an abundance of facts” of wrongful
conduct beyond facts constituting patent infringement for their state law claims in the second
amended consolidated complaint, including fraud, misrepresentation, dishonesty and economic
pressure, (Pls. Mem. of Law in Opp., at 6-13), the factual allegations fail to describe tortious
10
conduct sufficient to establish the bad faith element for a cognizable claim. The bare assertions
against the respective defendants that:
(a)
Prym’s acts and conduct, alone and/or in combination were undertaken in
bad faith to misappropriate the skill, expenditures, and labor of Carson by
stealing Carson’s patented design features and distinctive trade dress and
creating knock-off replicas of Carson’s products. By unlawfully copying
Carson’s designs and trade dress, mass-producing the knock-off products,
and selling them to consumers, Prym has in bad faith exploited a
commercial advantage which belongs exclusively to Carson, (Second Am.
Consol. Compl. ¶ 94);
(b)
Prym showed its customers samples of Carson’s products and simply used
a computer to edit out the Carson logo on the photos. This constituted a
further cost-savings for Prym and is yet another example of bad faith
misappropriation to Carson’s detriment, (id. at ¶ 114);
(c)
Prym would not have been able to secure business for Jo-Ann had it not
misappropriated Carson’s skills, investments, and efforts in bad faith, (id. at ¶
115);
(d)
Jo-Ann’s acts and conduct, alone and/or in combination were undertaken in bad
faith to misappropriate the skill, expenditures, and labor of Carson by stealing
Carson’s patented design features and distinctive trade dress and creating knockoff replicas of Carson’s products. By unlawfully copying Carson’s designs and
trade dress, mass-producing the knock-off products, and selling them to
consumers, Jo-Ann has in bad faith exploited a commercial advantage which
belongs exclusively to Carson, (id. at ¶ 121);
(e)
By encouraging and facilitating Prym’s misappropriation of Carson’s skills,
investments, and efforts, Jo-Ann was able to share in Prym’s misappropriation by
earning a higher profit on the goods that it retailed for Prym. Jo-Ann knew or
should have known that it would not have been able to earn such a profit if it had
rightfully paid for Carson’s skills, investments, and efforts by buying from Carson
instead of misappropriating the same in bad faith in conjunction with Prym, (id.
at ¶ 127);
are conclusory, fail to identify specifically the alleged wrongful conduct undertaken by
defendants apart from patent infringement, constitute a boilerplate recitation of an unfair
competition cause of action, and thus are insufficient to establish a plausible claim of bad faith
11
misappropriation under New York law. See Twombly, 550 U.S. at 570 (holding that a
“plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will not do”)
(internal quotation marks and citations omitted); cf. Champion Labs., Inc. v. Parker-Hannifin
Corp., No. 1:10-CV-02371-OWW-DLB, 2011 WL 1883832, at *14 (E.D. Cal. May 17, 2011)
(dismissing unfair competition claim where allegations were “conclusory, incomplete” and failed
to plead facts to “appropriately identify with particularity the conduct undertaken by [defendant]
that violates unfair competition laws”).
Moreover, plaintiffs’ allegations of defendants’ bad faith premised on the unlawful
copying, misappropriating, knocking off, and stealing of Carson’s patented designs are
insufficient to transform the nature of these claims from patent infringement to an independent
common law claim of unfair competition. Cf. Medical Educ. Dev. Servs., Inc. v. Reed Elsevier
Group, PLC, No. 05 Civ. 8665 (GEL), 2008 WL 4449412, at *13 (S.D.N.Y. Sept. 30, 2008)
(“allegations of bad faith or ill-intent are insufficient to transform an otherwise equivalent claim
into one that is qualitatively different from a copyright infringement claim”)5. Rather, these
allegations amplify the scope of plaintiffs’ infringement claims by asserting a knowing and
willful patent infringement. See 35 U.S.C. § 284; Knorr-Bremse Systeme Fuer Nutzfahrzeuge
GmbH v. Dana Corp., 383 F.3d 1337, 1342-43 (Fed. Cir. 2004) (en banc) (“The concept of
5
“Although patent and copyright law function somewhat differently, courts considering
one have historically looked to the other for guidance where precedent is lacking.” Davis v.
Blige, 505 F.3d 90, 104 (2d Cir. 2007); see Sony Corp. v. Universal City Studios, Inc., 464 U.S.
417, 439 (1984) (recognizing the similarities between copyrights and patents, noting the “historic
kinship between patent and copyright law” and finding it appropriate to refer to cases by
analogy).
12
‘willful infringement’ is not simply a conduit for enhancement of damages; it is a statement that
patent infringement, like other civil wrongs, is disfavored, and intentional disregard of legal
rights warrants deterrence. Remedy for will infringement is found on 35 U.S.C. § 284”). As
made clear by the Second Circuit, “[a]n action will not be saved by preemption by elements such
as awareness or intent, which alter ‘the action’s scope but not its nature’.” National Basketball
Ass’n v. Motorola, Inc., 105 F.3d 841, 851 (2d Cir. 1997) (quoting Computer Assocs. Int’l v.
Altai, Inc., 982 F.2d 693, 717 (2d Cir. 1992)) (internal quotation marks and citation omitted); cf.
Gusler v. Fischer, 580 F. Supp. 2d 309, 316 (S.D.N.Y. 2008) (same)
Relying on Hall v. Bed, Bath & Beyond, Inc., 705 F.3d 1357 (Fed. Cir. 2013), plaintiffs
argue that federal preemption does not apply to the circumstances set forth in the pleadings
because the claims concern the bad faith misappropriation of Carson’s labor, skill and
expenditure and thus “principles of patent law preemption do not override potential causes of
action based on unfair commercial practices.” Id. at 1372. Plaintiff’s reliance on this case is
misplaced. In Hall, the plaintiff had filed an application for a design patent for a Tote Towel in
November 2008, thereafter began producing the towel, and while the patent application was
pending, contacted defendant in March 2009 to discuss whether defendant would provide retail
sales of the Tote Towel. Id. at 1361. At a business meeting, plaintiff left samples of the
packaged Tote Towel, which were marked “patent pending,” with defendant. Id. Defendant had
copies of the towel manufactured for retail sale. Id. The design patent was duly issued in July
2009, and plaintiff sued defendant for patent infringement, unfair competition under the Lanham
Act, and for misappropriations under New York law. Id. The Federal Circuit reversed the
district court’s dismissal of plaintiff’s claims for patent infringement, unfair competition and
13
misappropriation. Id.
Although for the period of time that the defendant copied plaintiff’s towel design before
the patent was issued, the plaintiff in Hall could not assert a cause of action for patent
infringement, the Federal Circuit found that New York law provided a potential cause of action
based on unfair commercial practices where plaintiff disclosed a proprietary product in the
course of their discussion of a business relationship:
state law cannot protect an unpatented utilitarian or design conception which has
been freely disclosed by its author to the public at large . . . . [but] all state
regulation of potentially patentable but unpatented subject matter is not ipso facto
pre-empted by the federal patent laws in the complex balance between the policy
of unencumbered movement of unpatented ideas, and principles of morality and
fairness that are within state authority.
Id. at 1371-72. Unlike the plaintiff in Hall, plaintiffs do not allege any period of time that Prym
misappropriated plaintiffs’ Attach-A-Mag™ or Rim Free™ products before they were patented.
To the contrary, the heart of plaintiffs’ claims is patent infringement – that Prym
misappropriated Carson’s labor, skill and expenditure “by stealing Carson’s patented design
features and distinctive trade dress and creating knock-off replicas of Carson’s products.”6
Nevertheless, plaintiffs argue under an alternative theory that defendants engaged in
unfair competition in violation of New York state law by “passing off” Carson’s products as its
own:
Prym saved money on presentation costs by showing potential customers (such as
Jo-Ann) computer edited samples of Carson products, which it tried to pass-off as
6
Notably there is no allegation in the second amended consolidated complaint that its Clip
and Flip™ or SureGrip™ magnifiers had a design patent pending when defendants allegedly
copied and reproduced these products. As discussed infra, inasmuch as plaintiffs base their
claims upon alleged conduct that falls within the ambit of patent infringement, their common law
claim is preempted.
14
its own. Thus, Prym misled Jo-Ann and others into believing that it was seeing
prototypes of Prym’s products when it really was not.
(Pls. Mem. in Opp. to Def. Prym at 7 n.1; Second Am. Consol. Compl. at ¶ 114.)7 Plaintiffs’
reliance on this alternative theory is misplaced.
“An unfair competition claim may also be predicated on a theory of passing off, the
essence of which is false representation of origin.” Integrative Nutrition, Inc. v. Academy of
Healing Nutrition, 476 F. Supp.2d 291, 297 (S.D.N.Y. 2007) (internal quotation marks and
citation omitted); see ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 476 (2007) (New York law has
“long recognized two theories of common-law unfair competition: palming [or passing] off and
misappropriation”) (internal quotation marks and citations omitted); see also Roche Diagnostics
GMBH v. Enzo Biochem, Inc., No. 04 Civ. 4046 (RJS), 2013 WL 6987614, at *7 (S.D.N.Y. Dec.
6, 2013) (same). Passing off refers to “the sale of the goods of one manufacturer as those of
another,” while misappropriation encompasses the principle that one may not in bad faith
“misappropriate the results of the skill, expenditures and labor of a competitor.” Id. “The
gravamen of an unfair competition claim for palming [or passing] off is that the labors and
expenditures of the plaintiffs have been misappropriated by the defendants, and are likely to
cause confusion among the purchasing public as to the origin of the product.” Gameologist
Group, LLC v. Scientific Games Int’l, Inc., 838 F. Supp. 2d 141, 166 (S.D.N.Y. 2011), aff’d 508
F. App’x 31 (2d Cir. 2013) (internal quotation marks and citations omitted). There are two types
of passing (or palming) off claims: (1) “passing off” in which case “the alleged infringer sells its
products as the plaintiff’s,” and (2) “reverse passing off” in which case “the alleged infringer
7
The second amended consolidated complaint does not state this argument directly but it
is addressed in the plaintiffs’ brief and can be inferred from the pleadings.
15
sells the plaintiff’s products as its own.” Integrative Nutrition, Inc., 476 F. Supp.2d at 297
(internal quotation marks and citations omitted).
Plaintiffs’ unfair competition claim centers on the allegation that Prym showed potential
customers, including Jo-Ann Stores, samples of Carson’s products which it tried to pass off as its
own. As such the cause of action is principally a claim of “reverse passing off” – that is, a claim
that the defendant Prym misrepresented the plaintiffs’ work as its own. See Colour & Design v.
Untied States Vinyl Mfg. Corp., No. 08 Civ. 8332, 2005 WL 1337864, at *6 (S.D.N.Y. June 3,
2005) (holding that in a “reverse passing off case,” the alleged infringer sells the plaintiff’s
product as its own); cf. American Movie Classics Co. v. Turner Enter. Co., 922 F. Supp. 926, 934
(S.D.N.Y. 1996). A claim predicated on “reverse passing off,” however, is preempted by federal
law because the claim is essentially a claim for the unauthorized use of a patented product and
does not contain an extra element to qualitatively differentiate it from one of patent infringement.
See id.; cf. Stadt v. Fox News Network LLC, 719 F. Supp. 2d 312, 322 (S.D.N.Y. 2010);
Integrative Nutrition, Inc., 476 F. Supp.2d at 297
Likewise plaintiffs unfair competition premised on defendant Jo-Ann Store’s alleged
conveyance of commercially valuable pricing information to Prym, viz.
Jo-Ann prejudiced Carson its efforts to compete with Prym by wrongfully
disclosing Carson’s confidential pricing and sales information to Prym, before
telling Carson that it would fairly evaluate business pitches from Prym, Carson
and others. Jo-Ann’s Code of Business Conduct and Ethics forbids the
dissemination of unpublished financial or pricing information to persons outside
of Jo-Ann, such as Prym, (Second Am. Consol. Compl. ¶ 126.),
is insufficient to establish the requisite extra element to preclude preemption8. In their opposition
8
Plaintiffs’ claims of unfair competition based on the defendants’ alleged
misappropriation of plaintiffs’ goodwill by using Carson’s sales information in order to “knock
16
papers, plaintiffs argue:
Jo-Ann disclosed confidential Carson sales information to Prym that it should not
have disclosed so that Prym could pick the most profitable items to counterfeit.
Jo-Ann’s disclosure of this confidential information to Prym to the detriment of
Carson was a violation of Jo-Ann’s own Code of Business Conduct and Ethics,
which Carson relied upon in doing business with Jo-Ann. Thus, Jo-Ann’s own
conduct includes an element of misappropriation and dishonesty.
(Pls. Mem. in Opp. to Def. Jo-Ann Stores, at 6.)
Even assuming arguendo that Jo-Ann Stores conveyed confidential pricing information to
Prym which Prym subsequently used to determine which of Carson’s products it would sell as its
own, these allegations at most give rise to a claim of unfair competition involving “reverse
passing off. ” Colour & Design, 2005 WL 1337864, at *6 (holding that in a “reverse passing off
case,” infringer attempts to sell the plaintiff’s product as its own); cf. Medical Educ. Dev. Servs.,
Inc. v. Reed Elsevier Group, PLC, No. 05 Civ. 8665 (GEL), 2008 WL 4449412, at *13 (S.D.N.Y.
Sept. 30, 2008). As discussed above, such a claim is preempted because it is the functional
equivalent of plaintiffs’ patent infringement claims. Moreover, Jo-Ann Store’s alleged breach of
its own internal code of ethics not only fails to describe tortious conduct under New York state
law but such an allegation of dishonesty is insufficient to transform an otherwise equivalent
claim of patent infringement into a misappropriation claim that is qualitatively different.
Finally, plaintiffs’ allegation that Jo-Ann Stores unfairly competed by “refusing to
off” Carson’s patented products and sell them as their own, (Second Am. Consol. Compl. ¶¶ 99101, 116, 122-23, 128), is similarly unavailing because such a claim fails to establish a bad faith
misappropriation that is distinct from their patent infringement claims. Moreover, “under New
York’s unfair competition law, a defendant misappropriates a plaintiff’s goodwill, when it sells
its product through misleading the public into thinking that the product is sponsored by or
derived from plaintiff or plaintiff’s product,” as opposed to passing it off as their own. Bongo
Apparel, Inc., 2008 WL 41341, at *13.
17
continue its longtime supplier relationship with Carson” and “pretending to fairly evaluate
Carson as a supplier with no intention of continuing its business relationship,” (Second Am.
Consol. Compl. ¶ 120), again fails because there is no claim in the second amended consolidated
complaint that Jo-Ann Stores breached a contractual obligation to do business with Carson. As a
retailer, Jo-Ann Stores does not unfairly compete by declining to do business with Carson, a
wholesaler, nor are there any allegations in the complaint that would otherwise sustain such a
claim.
(ii)
Infringement of an Unpatented Product
Plaintiffs’ allegation that defendants engaged in unfair competition by copying and
reproducing the Clip & Flip™ magnifier is insufficient to sustain a common law claim. As
discussed in this Court’s prior Memorandum and Order, the complaint does not allege that this
product was protected by a patent. (Second Am. Consol. Compl. ¶¶ 26-30; Pls. Mem. in Opp. to
Def. Prym at 2.) As such, the product is in the public domain. As previously discussed both in
the prior and instant Memorandum and Orders, federal patent laws limit the states’ ability to
regulate unfair competition. State law is preempted when it enters “a field of regulation which
the patent laws have reserved to Congress.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489
U.S. 141, 167 (1989) (internal quotation marks and citation omitted). Thus, where state law
offers “patent-like protection for ideas deemed unprotected under the present federal scheme,
[state law] conflicts with the strong federal policy favoring free competition of ideas.” Id.
Consistent with the preemptive effect of federal patent law, the copying of a product that is not
patented that exists in the public domain is not actionable. In Sears, Roebuck & Co., 376 U.S.
225 (1964) and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964), the Supreme
18
Court explained that
when an article is unprotected by a patent or a copyright, state law may not forbid
others to copy that article. To forbid copying would interfere with the federal
policy . . . of allowing free access to copy whatever the federal patent and
copyright laws leave in the public domain.
Compco Corp., 376 U.S. at 237. Indeed, [a] state may not, through its law banning unfair
competition undermine federal patent rights by prohibiting the copying of an article that is
protected by neither a federal patent nor a federal copyright.” 20th Century Wear, Inc. v.
Sanmark-Stardust, Inc., 747 F.2d 81, 92 n.15 (2d Cir. 1984); cf. Gemveto Jewelry Co. v. Jeff
Cooper Inc., 800 F.2d 256, 259 (Fed. Cir. 1986) (vacating injunction predicated upon a state
unfair competition claim where the method of implementing the injunction was broader than
permissible “in view of the Sears and Compco decisions which hold that copying of the article
itself that is unprotected by the federal patent and copyright laws cannot be protected by state
law”). Accordingly, plaintiffs’ claim of unfair competition based on the allegation that
defendants copied an unpatented product of plaintiffs is preempted and cannot serve as a basis
for a cognizable claim under state law.9
(iii)
Trade Dress Infringement
Plaintiffs assert that the designs of the Clip & Flip™ and the SureGrip™ magnifiers
support their common law causes of action based on allegations that defendants infringed upon
the designs and protected trade dress affiliated with these products. Plaintiffs’ assertions are
9
Likewise, to the extent that plaintiffs rely on an allegation that defendants copied and
reproduced the product of plaintiffs identified as the SureGrip™ magnifier to support its
common law unfair competition claim, their reliance is misplaced. As with the Clip & Flip™
magnifier, there is no allegation in the complaint that it is protected by a patent, and therefore it
is preempted by federal patent law.
19
unavailing.
A species of a common law claim for unfair competition is trade dress infringement. See
Medisim Ltd. v. BestMed LLC, 910 F. Supp. 2d 591, 606 (S.D.N.Y. Nov. 28, 2012). A product’s
trade dress is its “total image and overall appearance . . . as defined by its overall composition
and design, including size, shape, color, texture and graphics.” Jeffrey Milstein, Inc. v. Greger,
Lawlor, Roth, Inc., 58 F.3d 27, 31 (2d Cir. 1995) (citations omitted). “In order to prevail in an
action for trade dress infringement in New York, a plaintiff must prove (1) that its trade dress is
distinctive or has acquired secondary meaning; and (2) that a likelihood of confusion exists
between its product and the defendant’s product.” Eyal R.D. Corp. v. Jewelex New York Ltd., 784
F. Supp. 2d 441, 448 (S.D.N.Y. 2011) (citations omitted). In addition, “a plaintiff must establish
that the trade dress is not functional.” Id. “The elements of unfair competition under New York
law closely parallel the elements of unfair competition under the Lanham Act.” Medisim Ltd.,
2012 WL 5954757, at *5; see Lyons Partnership, L.P. v. D & L Amusement & Enter., Inc., 702 F.
Supp. 2d 104, 115 (E.D.N.Y. 2010). “Both are directed at conduct by which a defendant has
misappropriated the labors and expenditures of another.” Lyons Partnership, L.P., 702 F. Supp.
2d at 115 (internal quotation marks and citations omitted). However, under New York law, “a
plaintiff must show either actual confusion in an action for damages or a likelihood of confusion
for equitable relief as well as make a showing of bad faith.” Id. (internal quotation marks and
citation omitted). In sum, a common law unfair competition claim under New York law “is
identical to a Lanham Act claim, save for the additional requirement that plaintiff show
defendant’s bad faith.” Heptagon Creations, Ltd. v. Core Group Marketing LLC, No. 11 Civ.
1794 (LTS) (AJP), 2011 WL 6600267, at *9 (S.D.N.Y. Dec. 22, 2011).
20
With respect to the Clip & Flip™ magnifier, although the second amended consolidated
complaint describes the design elements of the Clip & Flip™ , (Second Am. Consol. Compl. ¶¶
26-32), the complaint does not allege a claim for trade dress infringement in the design of this
product, and plaintiffs confirm in their opposition papers that “Count 7 has nothing to do with the
Clip & Flip™ [magnifier],” and that they have not asserted a Lanham Act claim with respect to
this product.10 (Pls. Mem. in Opp. to Def. Prym at 15 & n.1.)
With respect to the plaintiffs’ unfair competition claim that defendants infringed upon the
purported trade dress of the SureGrip™ product, plaintiffs’ conclusory allegation that defendants
copied and reproduced the distinctive elements of the SureGrip™ and sold “knock-off products,”
without proffering any facts to make that conclusion plausible, is insufficient to establish the bad
faith requirement for a cognizable claim under New York law. In any event, as discussed infra,
since plaintiffs have not adequately alleged a trade dress infringement claim under the Lanham
Act, their claim for common law unfair competition necessarily fails. See Heptagon Creations,
10
To the extent that plaintiffs assert that defendants sold and copied portions of “Carson’s
written marketing materials associated with the Clip & Flip™ magnifier” to support their
common law claims and to establish the “likelihood of confusion” element of their trade dress
infringement claim, (Second Am. Consol. Compl. ¶¶ 30-31, 93, 120), for the reasons stated
above, the second amended consolidated complaint asserts trade dress infringement only as to the
SureGrip™ product. Moreover, to the extent that plaintiffs may be seeking a claim of copyright
infringement in the marketing materials, see Eyal R.D. Corp., 784 F. Supp. 2d at 445 ([t]he
Copyright Act preempts a state law claim that protects ‘legal or equitable rights that are the
equivalent to any of the exclusive rights within the general scope of copyright as specified’”)
(quoting 17 U.S.C. § 301)), plaintiffs have again failed to allege any harms in their complaints
that are separate from the alleged copying of the materials, see Computer Assocs. Int’l, Inc, 982
F.2d at 716 (“[i]f an ‘extra element’ is required of or in addition to the acts of reproduction,
performance, distribution or display, in order to constitute a state-created cause of action, then
the right does not lie ‘within the general scope of copyright,’ and there is no preemption. The
extra element must change the nature of the action so that it is qualitatively different from a
copyright infringement claim”). Accordingly, such a claim would fall within the ambit of the
Copyright Act and be preempted.
21
Ltd. 2011 WL 6600267, at *9.
Accordingly, defendants’ motions to dismiss Counts Eight and Nine of the second
amended consolidated complaint are granted.
(b)
Tortious Interference with Prospective Business Relations
In order to prevail on a claim for tortious interference with prospective business relations
under New York law, a plaintiff must prove that “(1) it had a business relationship with a third
party; (2) the defendant knew of that relationship and intentionally interfered with it; (3) the
defendant acted solely out of malice, or used dishonest, unfair, or improper means; and (4) the
defendant’s interference caused injury to the relationship.” Carvel Corp. v. Noonan, 350 F.3d 6,
17 (2d Cir. 2003); see S & L Vitamins Inc. v. Australian Gold, Inc., 521 F. Supp. 2d 188, 217
(E.D.N.Y. 2007) (acknowledging that a key element of this claim is that plaintiff must allege that
a “defendant’s conduct was motivated solely by malice or to inflict injury by unlawful means,
beyond mere self-interest or other economic considerations”) (internal quotation marks and
citation omitted). As previously discussed, patent law will not preempt state law claims if such
claims “include additional elements not found in the federal patent law cause of action and if
they are not an impermissible attempt to offer patent-like protection to subject matter addressed
by federal law.” Rodime PLC, 174 F.3d at 1306. Tortious interference with prospective business
relations “requires proof that the defendant intentionally engaged in acts wrongful by some
measure other than the fact of the interference itself which are designed to disrupt an economic
relationship between the plaintiff and another.” Id. (citations omitted). “Wrongful means
includes physical violence, fraud, misrepresentation, civil suits, criminal prosecutions, and some
degree of economic pressure, but more than simple persuasion is required,” Meadow Ridge
22
Capital, LLC v. Levi, 920 N.Y.S.2d 242, 2010 WL 4668323, at *14 (N.Y. Sup. Ct. 2010), and is
demanding in this context because a plaintiffs’ “mere interest or expectation in establishing a
contractual relationship must be balanced against the competing interest of the interferer as well
as the broader policy of fostering healthy competition.” Catskill Dev., L.L.C. v. Park Place Enter.
Corp., 547 F.3d 115, 132 (2d Cir. 2008) (citations omitted). Thus, to qualify as wrongful means,
a defendant’s conduct must (1) “must amount to an independent crime or tort”; (2) “must have
been taken solely out of malice”; or (3) “amount to extreme and unfair economic pressure.”
Friedman v. Coldwater Creek, Inc., 551 F. Supp. 2d 164, 170 (S.D.N.Y. 2008), aff’d 321 F.
App’x 58 (2d Cir. 2009) (citation omitted). Here, plaintiffs’ claim of tortiouis interference with
business relations against defendant Prym is based on the same factual allegations as their
common law unfair competition claim and likewise fails.
Plaintiffs have not set forth any allegations either in the second amended consolidated
complaint or in their opposition papers that Prym’s conduct was motivated solely by malice or to
inflict injury beyond the prospect of economic gain. See Shared Communications Servs. of ESR,
Inc. v. Goldman Sachs & Co., 803 N.Y.S.2d 512, 513 (1st Dept. 2005) (holding plaintiff failed to
state a claim for tortious interference with prospective business relations where it “failed to
include the necessary allegation that defendant’s conduct was motivated solely by malic or to
inflict injury by unlawful means, beyond mere self-interest or other economic considerations”)
(citation omitted); Cerberus Capital Mgmt., L.P. v. Snelling & Snelling, Inc., No. 60045/2005,
2005 WL 4441899, at *7 (N.Y. Sup. Ct. Dec. 19, 2005) (holding “the complaint contains nothing
indicating the . . . defendants acted beyond mere self-interest or other economic considerations.
This is insufficient to support a claim for tortious interference with prospective business
23
relations”).
Rather, plaintiffs assert that the tortious interference claim is based on defendant Prym’s
wrongful means and exertion of unfair and improper economic pressure to interfere with
Carson’s relationship with Jo-Ann Stores. As to wrongful means, plaintiffs plead the following:
(1)
(2)
(3)
(4)
Upon information and belief, Jo-Ann asked Prym to provide it with a line of
knock-off products that “match up” precisely to Carson’s so that it could deceive
its customers into thinking that its supplier of magnifiers had not changed and so
that its customers would not become wary of the new products.
Prym was able to cut costs by failing to exercise control over its products.
Prym represented on its packaging that its magnifiers were able to achieve certain
multiples of magnification. Yet Prym continued to market and sell its products,
knowing that they did not even substantially meet the represented magnification
specifications. At times, the magnification produced by Prym’s products was
25% or more under what was represented by the product’s packaging. Prym knew
that the consuming public values magnifiers that are capable of achieving higher
magnification. Nonetheless, Prym misled the consuming public and used its
savings to displace Carson as Jo-Ann’s supplier.
Furthermore, at times, when Prym gave presentations to Jo-Ann and others, Prym
did not have a sample of its knock-off to show the customer. Instead, Prym
showed its customers samples of Carson’s products and simply used a computer
to edit out the Carson logo on the photos. This constituted further cost-savings for
Prym and is yet another example of bad faith misappropriation to Carson’s
detriment.
(Second Am. Consol. Compl. ¶¶ 98, 109, 110, 114; Pls. Mem. in Opp. to Def. Prym at 7.)
Plaintiffs’ allegations, however, fail to describe any wrongful conduct, viz. the fraud,
misrepresentation or dishonesty, that was directed against Jo-Ann Stores, the party with which
plaintiffs seek to have a relationship. See Carvel Corp., 3 N.Y.3d at 192 (“conduct constituting
tortious interference with business relations, is, by definition, conduct directed not at the plaintiff
itself, but a the party with which the plaintiff has or seeks to have a relationship”). To the
contrary, the second amended consolidated complaint is replete with allegations that Prym and
Jo-Ann Stores acted in concert and that “wrongful means” were undertaken by both defendants.
24
See Second Am. Consol. Compl. ¶¶ 124 (“Jo-Ann was aware of, approved of, and profited from
the bad faith means Prym used to knock-off Carson’s products”); id. at ¶ 127 (“[b]y encouraging
and facilitating Prym’s misappropriation of Carson’s skills, investments, and efforts, Jo-Ann was
able to share in Prym’s misappropriation by earning a higher profit”).
Likewise, plaintiffs’ assertion of tortious interference based on unfair economic pressure
is equally without merit because the second amended consolidated complaint does not allege
conduct directed at Jo-Ann Stores:
Prym exerted unfair economic pressure on Carson by pricing its goods at a
predatory level for the specific purpose of ousting Carson as Jo-Ann’s vendor.
Prym was only able to price its goods at its predatory level by misappropriating
Carson’s skills, efforts, and labor in designing and developing unique magnifier
designs and marketing materials, misappropriating Carson’s goodwill by knocking
off Carson’s distinctive tradedress, and using inferior materials in its goods with
the purpose of instead trading on Carson’s goodwill.
(Second Am. Consol. Compl. ¶ 133; Pls. Mem. in Opp. to Def. Prym at 7-8.) Moreover, such
allegations of predatory pricing by Prym are not plausible on their face. Predatory pricing occurs
when “a single firm, having a dominant share of the relevant market, cuts its prices in order to
force competitors out of the market, or perhaps to deter potential entrants from coming in.”
Virgin Atl. Airways Ltd. v. British Airways PLC, 257 F.3d 256, 266 (2d Cir. 2001) (internal
quotation marks and citation omitted). To establish predatory pricing, a plaintiff must prove:
“(1) that the prices complained of are below an appropriate measure of its rival’s costs, and (2)
that the predatory rival has a dangerous probability of recouping its investment through a below
cost pricing scheme.” Id. (internal quotation marks and citation omitted). “Because of the
difficulty inherent in distinguishing procompetitive prices from predatory conduct, courts often
approach predatory pricing claims with caution.” Affinity LLC v. GfK Mediamark Research &
25
Intelligence, LLC, No. 12 Civ. 1728 (RJS), 2013 WL 1189317, at *3 (S.D.N.Y. Mar. 25, 2013)
(citation omitted). The second amended consolidated complaint alleges not that Prym had a
dominant market share, but instead that Carson had the dominant market share, see Second Am.
Consol. Compl. ¶ 2 (“Carson is the largest distributor of magnifiers in the United States”). To
the extent that Prym’s pricing practices resulted in lower prices being charged, “[t]his is not
antitrust injury; indeed, cutting prices in order to increase business often is the very essence of
competition.” Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 338 (1990) (internal
quotation marks and citation omitted).
In sum, plaintiffs have not pleaded conduct in violation of state law that is separate from
their federal patent law claims. The claim for tortious interference with prospective business
relations is based on the identical set of transactional facts as the unfair competition claim, and
for the same reasons discussed above, is preempted by federal patent law. Accordingly,
defendant Prym’s motion to dismiss Count Ten of the second amended consolidated complaint is
granted.
(C)
Plaintiffs’ Claim for Trade Dress Infringement
Section 43(a) of the Lanham Act provides:
[a]ny person who, on or in connection with any goods or services, or any
container for goods, uses in commerce any word, term, name, symbol, or device,
or any combination thereof, or any false designation of origin, false or misleading
description of fact, or false or misleading representation of fact, which [] is likely
to cause confusion, or to cause mistake, or to deceive as to the affiliation,
connection, or association of such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services, or commercial activities by
another person [] shall be liable in a civil action by any person who believes he or
she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(A). This protection extends to a product’s trade dress which
26
“encompasses the overall design and appearance that make the product identifiable to
consumers.” Nora Beverages, Inc. v. Perrier Group of Am., Inc., 269 F.3d 114, 118 (2d Cir.
2001). “To plead a claim of trade dress infringement involving the appearance of a product, [a
plaintiff] must allege that (1) the claimed trade dress is non-functional; (2) the claimed trade
dress has secondary meaning; and (3) there is a likelihood of confusion between the plaintiff’s
good and the defendant’s.” Sherwood 48 Assocs. v. Sony Corp. of Am., 76 F. App’x 389, 391 (2d
Cir. 2003) (citation omitted). “A plaintiff must also offer a precise expression of the character
and scope of the claimed trade dress,”id. (internal quotation marks and citation omitted), and
articulate the “elements of their product design with specificity to be afforded trade dress
protection,” Shevy Custom Wigs, Inc. v. Aggie Wigs., No. 06 Civ. 1657 (JG), 2006 WL 3335008,
at *4 (E.D.N.Y. Nov. 17, 2006). The Second Circuit has cautioned that in analyzing trade dress
claims, “courts must not lose sight of the underlying purpose of the Lanham Act, which is
protecting consumers and manufacturers from deceptive representations of affiliation and
origin.” Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 375 (2d Cir. 1997). In
doing so, the Court has explained that the trade dress “analysis requires courts to balance the
policy of protecting consumers from confusion against that in favor of free competition. Id. at
377, 380; see ID7D Co. v. Sears Holding Corp., No. 3:11cv1054(VLB), 2012 WL 1247329, at
*6 (D. Conn. Apr. 13, 2012) (same).
“[C]ourts have been reluctant to extend trade dress protection to a product’s design (as
opposed to its packaging) and to an entire line of products (as opposed to a single product).”
ID7D Co., 2012 WL 1247329, at *6 (internal quotation marks and citations omitted). The
Second Circuit explained:
27
The policy of protecting competition is at least as strongly implicated when . . .
product designs or configurations are claimed as trade dress. While trademarking
a generic term would create a monopoly in a necessary word or phrase, granting
trade dress protection to an ordinary product design would create a monopoly in
the goods themselves. For this reason, courts have exercised particular caution
when extending protection to product designs.
Landscape Forms, Inc.,113 F.3d at 380 (internal quotation marks and citation omitted). Thus,
“trade dress protection for product design . . . entails greater risk of impinging on ideas as
compared with protection of packaging or labeling.” Yurman Design, Inc. v. PAJ, Inc., 262 F.3d
101, 116 (2d Cir. 2001). Here, plaintiffs’ claimed trade dress seeks protection for a product
design, to wit, “an ornamental design and ornamental appearance of a magnifier, which has been
marketed and sold under the trademark Suregrip.” (Second Am. Consol. Compl. ¶ 22.)
(1)
Functionality
Plaintiffs bear the burden of proving the alleged trade dress is non-functional, 15 U.S.C. §
1125(a)(3), and there is a “statutory presumption that features are deemed functional until proved
otherwise by the party seeking trade dress protection,” TrafFix Devices, Inc. v. Marketing
Displays, Inc., 532 U.S. 23, 29 (2001). “[T]rade dress is functional, and thus not protectable,
when it is essential to the use or purpose of the article,” Cartier, Inc. v. Sardell Jewelry, Inc., 294
F. App’x 615, 620 (2d Cir. 2008) (citation omitted), or “if it affects the cost or quality of the
article,” Yurman Design, Inc., 262 F.3d at 116. Moreover, a trade dress claim based on “[a]
product design is functional when certain features of the design are essential to effective
competition in a particular market.” Cartier, Inc., 294 F. App’x at 620 (internal quotation
marks and citation omitted); see also ID7D Co., 2012 WL 1247329, at *6 (“in cases involving an
aesthetic feature, the dress is also functional if the right to use it exclusively would put
competitors at a significant non-reputation-related disadvantage. Thus, the non-functionality
requirement protects competition even at the cost of potential consumer confusion”). That is,
28
“the absence of alternative constructions performing the same function . . . renders the feature
functional.” Brandir Int’l, Inc. v. Cascade Pacific Lumber Co., 834 F.2d 1142, 1148 (2d Cir.
1987).
The Second Circuit has stressed that the “test of non-functionality in trade dress claims
that are based on product design is even more critical than in trade dress claims based on
packaging, because a monopoly right in the design of the product itself is more likely to preclude
competition,” and “[a]s with the overbreadth element, rigorous application of the requirement of
non-functionality is necessary to avoid undermining the carefully circumscribed statutory
regimes for the protection of useful and ornamental designs under federal patent and copyright
law.” Yurman Design, Inc., 262 F.3d at 116 (internal quotation marks and citations omitted).
The Court’s concern in this regard reflects the Supreme Court’s insistence that “[c]onsumers
should not be deprived of the benefits of competition with regard to the utilitarian and esthetic
purposes that product design ordinarily serves by a rule of law that facilitates plausible threats of
suit against new entrants based upon alleged inherent distinctiveness.” Wal-Mart Stores v.
Samara Bros., Inc., 529 U.S. 205, 213 (2000). Where, as here, the asserted trade dress extends to
the “overall look” of the combination of features comprising a product, the court must evaluate
the functionality of those features taken together. See Jeffrey Milstein, Inc., 58 F.3d at 32.
Plaintiffs plead that the non-functional and distinctive elements of the SureGrip™ are:
a.
b.
c.
d.
the size, placement, and oval-shape of the label on the magnifier’s handle;
the color scheme of the magnifier in which the magnifier rim and the label on the
handle are somewhat lighter in color than the handle, which is a motif that is
incorporated into many of Carson’s magnifier and strengthens its brand;
the positioning of a smaller magnifying lens at the top of the handle surrounded by
a lighter color than the remainder of the handle; and
the distinctive ledge on the rim of the magnifying lens.
(Second Am. Consol. Compl. ¶ 23.) Plaintiffs allege:
29
the above-enumerated elements are non-functional because the failure of a
competitor to incorporate these elements into a functionally similar product would
not put it at a competitive disadvantage other than the fact that a consumer would
not associate the product with Carson. The above enumerated elements perform
no function in SureGrip except to associate the SureGrip with Carson.
Additionally, the above enumerated elements are non-functional because:
a.
b.
c.
d.
even if a competitor wanted to inscribe its brand on the handle of the magnifier, it
need not do so on an oval background placed at that particular location on the
handle;
there is no legitimate competitive reason to adopt the light-dark color scheme
exhibited by the SureGrip and to use that color scheme for the oval label on the
handle as well;
there is no legitimate competitive reason to incorporate the light-dark color
scheme around the portion of the handle containing the secondary lens; and
the distinctive ledge on the rim of the magnifying lens gives Carson no nonreputation related advantage in the marketplace.
(Id. at ¶ 24.)
This is sufficient to support a reasonable inference that the SureGrip™ magnifier’s trade
dress is non-functional. The second amended consolidated complaint contains allegations that
the SureGrip’s™ distinctive combination of design features on its handle and rim is not essential
to the purpose of a magnifier as it performs no function except to associate this product with
Carson. The second amended consolidated complaint also asserts that having to employ a
different appearance and a different arrangement of (i) shape, color scheme, and inscription on a
magnifier’s handle; (ii) a smaller magnifying lens on the handle; or (iii) rim ledge would not put
competitors in the optical market at a competitive disadvantage. That is, effective competition in
the substantial market for magnifiers would not require the use of essentially the same dark/light
color scheme, the oval shaped label placement on the magnifier’s handle or the rim ledge as
found on the SureGrip™. See Landscape Forms, Inc., 70 F.3d at 254 (“in order for a court to
find a product design functional, it must first find that certain features of the design are essential
to effective competition in a particular market”). The second amended consolidated complaint
30
further avers that the SureGrip™ trade dress would not prevent others from creating alternative,
competitive designs, noting that “even if a competitor wanted to inscribe its brand on the handle
of the magnifier, it need not do so on an oval background placed at that particular location on the
handle.” (Second Am. Consol. Compl. ¶ 24.) Finally, an inference can be made that the
distinctive ledge on the rim does not affect the quality or cost of the magnifier as the plaintiffs
allege that the distinctive ledge gives Carson no non-reputation related advantage. See
Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1006 (2d Cir. 1995).
Nevertheless, there are fatal defects in plaintiffs’ trade dress claim. As will be discussed
infra, the eligibility of the SureGrip™ magnifier’s design for trade dress protection falls on
plaintiffs’ failure to sufficiently plead (i) that the trade dress of the SureGrip™ magnifier has
acquired secondary meaning in the marketplace; (ii) that there is a likelihood of consumer
confusion; and (iii) a precise description of how the trade dress design elements are distinctive.
(2)
Secondary Meaning
“A product’s [unregistered] trade dress is protected under the Lanham Act if it is not
functional and if it is either inherently distinctive or has acquired secondary meaning in the
marketplace.” Nora Beverages, Inc., 269 F.3d at 119; Blumenthal Distributing, Inc. v. Executive
Chair, Inc., No. CV-10-1280, 2010 WL 5980151, at *7 (E.D.N.Y. Nov. 9, 2010) (“To merit legal
protection, a product’s trade dress must be both sufficiently distinctive to distinguish its mark
from those of others and nonfunctional.”). In a trade dress claim premised on a particular
product design (as opposed to product packaging or labeling), as in this case, plaintiffs “must
make the additional showing that its design has acquired secondary meaning in the marketplace
by which it is identified with its producer or source.” Blumenthal Distributing, Inc., 2010 WL
5980151, at *7 (internal quotation marks and citation omitted); see Yurman Design, Inc., 262
31
F.3d at 116 (holding a product has acquired secondary meaning when “in the minds of the public,
the primary significance of the [dress] is to identify the source of the product rather than the
product itself”) (internal quotation marks and citation omitted); see also Urban Group Exercise
Consultants, Ltd. v. Dick’s Sporting Goods, Inc., No. 12 Civ. 3599, 2013 WL 866867, at *3
(S.D.N.Y. Mar. 8, 2013) (“[t]rade dress is considered to have attained secondary meaning when a
consumer immediately associates the dress of the product with its source”) (internal quotation
marks and citation omitted). To determine whether secondary meaning has attached, the court
considers the following factors: “(1) advertising expenditures, (2) consumer studies linking the
mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to
plagiarize the mark, and (6) the length and exclusivity of the mark’s use.” Cartier, Inc., 294 F.
App’x at 618 (internal quotation marks and citations omitted). “[N]o single factor is
determinative, and every element need not be proved.” L. & J.G. Stickley, Inc. v. Canal Dover
Furniture Co., 79 F.3d 258, 263 (2d Cir. 1996) (internal quotation marks and alterations and
citation omitted).
Plaintiffs aver that their trade dress has acquired secondary meaning in the relevant
market because:
a.
b.
c.
d.
Since September 1998, Carson has continuously, exclusively, and extensively
marketed, promoted and sold well over a million magnifiers comprising the
ornamental design and overall appearance illustrated in Exhibit F throughout the
United States, and the market has come to associate the above numerated and nonfunctional distinctive elements of the SureGrip with Carson and the high quality
of products;
during the same time, Carson has expended substantial amounts of time, efforts,
and money advertising SureGrip, including advertisements in various periodicals,
such as Drug Store News, Craft and Needlework Age, Crafttrends Magazine, and
Photo Trade news, and the distribution of videos discussing the SureGrip’s
features and quality;
the SureGrip has been a sales and marketing success for Carson and has captured
a more-than-expected market share;
the SureGrip has been featured in numerous periodicals;
32
e.
f.
g.
h.
consumers give SureGrip excellent reviews, earning SureGrip, by way of
example, a 4.6 out of 5 star customer rating on amazon.com, a 4.7 out of 5 rating
on opticsplanet.com, a 5 out of 5 rating on officedepot.com, a 4.3 out of 5 rating
on bhphotovideo.com;
upon information and belief, if shown a magnifier with the above numerated nonfunctional and distinctive elements of the SureGrip, the average consumer would
associate the product as coming from a single source, known for its high quality;
Carson has incorporated the light-dark color scheme for the SureGrip into many
of its other magnifier products to further strengthen this feature’s association in
the mind of the consumer with Carson; and
upon information and belief, Prym and Jo-Ann plagiarized the SureGrip with the
specific intent to confuse the consuming public because the SureGrip has been
marketed in Jo-Ann’s stores for a long time and because the market would not
have reacted well if it knew that Jo-Ann had changed its supplier.
(Second Am. Consol. Compl. ¶ 25.)
Plaintiffs have failed to allege facts that would support a plausible inference that their
trade dress acquired secondary meaning. First, with respect to advertising expenditures, although
plaintiffs assert in conclusory fashion that they expended substantial amounts of time, effort and
money to advertise in various listed periodicals, “that allegation is not supportive of a finding of
secondary meaning because there is no contention that any of those advertisements . . . stressed
or emphasized the alleged trade dress.” Dick’s Sporting Goods, Inc., 2013 WL 866867, at *3;
see Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 826-27 (Fed. Cir. 1992) (finding as
irrelevant to secondary meaning, $5.5 million in advertising expenditures because plaintiff “did
not proffer evidence establishing that the advertising effectively created secondary meaning” in
the alleged trade dress) (citations omitted). Likewise, plaintiffs’ cursory reference to consumer
surveys “based upon information and belief” the average consumer “would” associate the
enumerated feature as coming from a single source is speculative and insufficient to support an
inference of secondary meaning. Next, the second amended consolidated complaint does not
plead that the SureGrip has received unsolicited media coverage, but instead alleges the SureGrip
has been featured in numerous periodicals and has received excellent consumer reviews, and
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Carson expended substantial amounts of money to advertise SureGrip in various periodicals.
Moreover, plaintiffs’ blanket assertion that SureGrip has been a sales and marketing success, has
sold over a million magnifiers and has captured a more-than-expected market share, without any
details of plaintiffs’ efforts to associate the SureGrip™’s trade dress with Carson, fails to
support an inference of consumer identification with the alleged trade dress. See Dick’s
Sporting Goods, Inc., 2013 WL 866867, at *4 (“ [s]ubstantial sales of a product, if . . .
unaccompanied by a concomitant effort on the seller’s part to associate the product’s trade dress
with the source of the product rather than the product itself, do not establish that a product’s trade
dress has acquired secondary meaning”) (citing Braun Inc., 975 F.2d at 827 (“large consumer
demand for the plaintiff’s product does not permit a finding of secondary meaning, because
strong market demand for a product usually indicates product desirability not secondary
meaning”)); see also Heptagon Creations, Ltd., 2011 WL 6600267, at *8 (finding plaintiff failed
to allege secondary meaning where plaintiff alleged its products had been featured in magazines,
but the complaint contained no allegations as to plaintiff’s “advertising expenditures or consumer
surveys linking the [claimed trade dress] to a particular source”). Further, the second amended
consolidated complaint does not allege any facts of attempts to plagiarize the trade dress, but
rather avers generally that “upon information and belief, defendants plagiarized the SureGrip™
and “Carson has been forced to enforce its trademarks and tradedress against others in the past
who have also sought to trade on Carson’s goodwill.” (Second Am. Consol. Compl. ¶ 85.) Such
assertions, without more, fail to provide a sufficient basis for secondary meaning. Finally, while
the second amended consolidated complaint alleges that Carson has continuously and exclusively
sold the SureGrip since 1998 and that the market has come to associate the distinctive elements
of the SureGrip with Carson, there are no specific facts alleged to support this conclusory claim.
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In sum, absent from the pleadings are facts concerning actual consumer surveys,
unsolicited media coverage or specific attempts to plagiarize the trade dress at issue which would
support an inference that the trade dress of the SureGrip™ acquired secondary meaning. In
addition, plaintiffs’ general and cursory allegations that Carson has sold, marketed and promoted
the SureGrip™ trade dress design since 1998, has spent substantial sums of money advertising
the product design and that these designs have been a sales and marketing success, with no
factual enhancement linking the claimed trade dress to Carson, fail to support an inference that
SureGrip™ has acquired secondary meaning. See, e.g., Eyal R. D. Corp., 784 F. Supp. 2d at 445,
448 (holding plaintiff failed to plead secondary meaning in its trade dress despite alleging its
“exclusive and widespread use” of the trade dress; it “has acquired enormous value and
recognition in the United States”; its “trade dress is well known to the consuming public” and
within the trade “as the exclusive and unique source” identifier); Urban Group Exercise
Consultants, Ltd. v. Dick’s Sporting Goods, Inc., No. 12 Civ. 3599 (RWS), 2012 WL 3240442,
at *7 (S.D.N.Y. Aug. 7, 2012) (holding that while the complaint alleged facts describing the
amount of time plaintiffs used the alleged trade dress, amount of sales relating the product to the
trade dress and the coverage by the media, because the complaint “fail[ed] to allege facts relating
to [p]laintiff’s advertising expenditures, consumer surveys, marketing coverage or prior attempts
to plagiarize [p]laintiff’s trade dress, [p]laintiff has failed to adequately allege its trade dress to
have acquired a secondary meaning”).
(3)
Likelihood of Confusion
“The likelihood-of-confusion inquiry turns on whether numerous ordinary prudent
purchasers are likely to be misled or confused as to the source of the product in question because
of the entrance into the marketplace” of the mark or dress of defendant. Playtex Prods., Inc. v.
35
Georgia-Pacific Corp., 390 F.3d 158, 161 (2d Cir. 2004), superseded on other grounds by
statute as recognized in Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97, 108 (2d
Cir. 2009); see Conte v. Newsday, Inc., No. 06-CV-4859 (JFB)(ETB), 2013 WL 978711, at *20
(E.D.N.Y. Mar 13, 2013) (same). There must be a “probability of confusion, not a mere
possibility.” Id. (citation omitted). Courts apply the factors set forth in Polaroid Corp. v.
Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961), in order to assess the likelihood of
confusion: “(1) the strength of the plaintiff’s mark or dress; (2) the similarity between the two
marks or dresses; (3) the proximity of the products in the marketplace; (4) the likelihood that the
prior owner will bridge the gap between the products; (5) evidence of actual confusion; (6) the
defendant’s bad faith; (7) the quality of defendant’s product; and (8) the sophistication of the
relevant consumer group.” Blumenthal Distributing, Inc., 2010 WL 5980151, at *10 (citations
omitted); see Playtex Prods., Inc., 390 F.3d at 162. “The Polaroid factors are not an exhaustive
list of relevant considerations, and must not be applied mechanically. Rather, a court should
focus on the ultimate question of whether consumers are likely to be confused.” Id. (internal
quotation marks and citation omitted).
Plaintiffs have failed to plead facts regarding likelihood of confusion that would state a
claim to relief that is plausible on its face. See Iqbal, 556 U.S. at 677. As to defendant Prym,
plaintiffs’ allege:
Prym’s copying of the ornamental design and overall appearance of Carson’s
SureGrip™ magnifier was intended to cause, and is likely to cause confusion,
mistake, or deception as to the affiliation, connection, or association of the
products with Carson, or as to the origin, sponsorship, or approval of the products
by Carson, and constitute a false or misleading representation as to the source or
sponsorship of the products or a false designation of origin, all in violation of
Section 42(a0 of the Lanham Act, 15 U.S.C. § 1125(a).
(Second Am. Consol. Compl. ¶ 83.) As to defendant Jo-Ann Stores, plaintiffs allege:
36
Jo-Ann’s marketing, offering for sale and sale of a product that copied the
ornamental design and overall appearance of Carson’s SureGrip™ magnifier was
intended to cause, and is likely to cause confusion, mistake, or deception as ot the
affiliation, connection, or association of the products with Carson, or as to the
origin, sponsorship, or approval of the products by Carson, and constitute a false
or misleading representation as to the source or sponsorship of the products or a
false designation of origin, all in violation of Section 42(a) of the Lanham Act, 15
U.S.C. § 1125(a).
(Id. at ¶ 84.). Notably, the foregoing allegations are legal conclusions and merely track the text
of 15 U.S.C. § 1125(a).
Moreover, the additional allegations are essentially a formulaic recitation of the Polaroid
factors. That is, the conclusory allegations that defendants’ marketing and sale of a knock-off of
Carson’s SureGrip was likely to cause confusion because (a) the “distinctive and non-functional
aspects of the SureGrip enumerated above are strongly associated with Carson by the relevant
market;” (b) the knock-off “incorporates all of the above enumerated distinctive and nonfunctional aspects of the SureGrip identically or nearly identically;” (c) knock-offs “are highly
proximate products in the marketplace; indeed [defendants] conspired to use its knock-off to
eliminate Carson’s SureGrip from Jo-Ann’s stores and to confuse Carson’s customers who used
to buy through Jo-Ann’s stores;” (d) defendants “acted in bad faith to misappropriate Carson’s
goodwill in the marketplace by intentionally copying the SureGrip so that Jo-Ann’s customers
would not be able to tell that a supplier switch had been made;” (e) “Carson’s products are of
high quality and this quality has allowed Carson to become the largest magnifier marketer in the
United States;” (f) “Carson has been forced to enforce its trademarks and tradedress against other
in the past who have also sought to trade on Carson’s goodwill;” and (g) “due to the relatively
low-price of the SureGrip, the relevant customer will spend little time on the purchase and will
be more likely confused simply by seeing that the product he or she is buying incorporates the
distinctive and non-functional aspects of the SureGrip enumerated above,” (id. a ¶ 85), are at best
37
“naked assertion[s] devoid of factual enhancement,” Iqbal, 556 U.S. at 677, and as such do not
allow the Court to draw the reasonable inference that there is a likelihood of confusion.
(4)
Precise Expression of the Character and Scope of the Claimed Trade Dress
As this element suggests, plaintiffs must articulate “the specific elements which comprise
its distinct dress.” Landscape Forms, 113 F.3d at 381; see Shevy Custom Wigs, Inc., 2006 WL
3335008, at *4 (plaintiffs must plead the “elements of their product design with specificity to be
afforded trade dress protection). “Laudatory” descriptions without specificity “fail to indicate
what unique combination of features makes the trade dress . . . likely to be perceived by
consumers as bearing the stamp of their maker.” Landscape Forms, 113 F.3d at 381-82; see
Shevy Custom Wigs, Inc., 2006 WL 3335008, at *5 (holding “sweeping descriptions . . . in fact
denote categories of features, not the features themselves”); see also Elements/Jill Schwartz, Inc.
v. Gloriosa Co., No. 01 Civ. 904, 2002 WL 1492197, at *6 (S.D.N.Y. July 15, 2002) (concluding
description of trade dress to be so general that “plaintiff seeks protection for the idea . . . as
opposed to any particular design configuration employing these elements”). Additionally, it is
insufficient to merely provide a “laundry list of the elements that constitute a . . . design.”
National Lighting, 601 F. Supp. 2d at 562. Rather the plaintiff must provide “a description of
which of plaintiff’s trade dress design elements are distinctive and how they are distinctive.”
Id.; see Shevy Custom Wigs, Inc., 2006 WL 3335008, at *5 (same); see also R.F.M.A.S., Inc. v.
Mimi So, 619 F. Supp. 2d 39, 77 (S.D.N.Y. 2009) (examining cases and concluding that “a
plaintiff must provide a sufficiently specific articulation of the . . . distinctive elements of the
product[‘s] trade dress rather than sweeping, overly general descriptions that essentially corner
the market on an idea”). Although plaintiffs articulate a description of the design elements that
comprise the purported trade dress for the SureGrip™ magnifier, namely the use of a light-dark
38
color scheme and the general layout and spatial relationship of various elements appearing on
the handle of the magnifier (the size, placement, and oval-shape of the label and the positioning
of a smaller magnifying lens) and a distinctive ledge on the rim of the magnifying lens, plaintiffs
have failed to explain how the asserted trade dress elements for the SureGrip™ magnifier are
distinctive. Thus, plaintiffs have failed to aver the requisite precise expression of the character
and scope of the claimed trade dress for their magnifier.
Accordingly, given that plaintiffs have not adequately alleged a trade dress claim under
the Lanham Act, defendants’ motions to dismiss Count Seven of the second amended
consolidated complaint are granted.
(D)
Leave to Replead
Plaintiffs seek leave to replead if any of the claims are dismissed. Rule 15(a) provides
that leave to file an amended complaint should be granted “freely . . . when justice so requires.”
Fed. R. Civ. P. 15(a)(2); see Foman v. Davis, 371 U.S. 178, 182 (1962). However, the “futility
of amendment” is a valid basis for denying leave to amend. Foman, 371 U.S. at 182; Williams v.
Citigroup, 659 F.3d 208, 214 (2d Cir. 2011) (“[l]eave to amend need not be granted . . . where
the proposed amendment would be futil[e]”) (internal quotation marks and citations omitted);
Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008) (same). “Leave to amend may
also be denied where previous amendments have not cured the complaint’s deficiencies.” Garcia
v. Paylock, No. 13-CV-2868 (KAM), 2014 WL 298593, at *8 (E.D.N.Y. Jan. 28, 2014) (citations
omitted); see Ariel (UK) Ltd. v. Reuters Grp., PLC, 277 F. App’x 43, 45-46 (2d Cir. 2008).
In the instant matter, the claims on which the defendants’ motions to dismiss are granted
are insufficient as a matter of law, and plaintiffs have failed to show how the legal deficiencies
can be cured after having been previously granted leave to amend the complaint to address the
39
very same issues raised in defendants’ earlier Rule 12(c) motions. See Goodrich v. Long Island
R.R. Co., 654 F.3d 190, 200 (2d Cir. 2011) (“without any showing that the deficiencies in the
complaint could be cured, we must conclude that repleading would be futile”). See DeJesus v.
Sears, Roebuck & Co., 87 F.3d 65, 72 (2d Cir. 1996) (observing the Second Circuit has “upheld
decisions to dismiss a complaint without leave to replead when a party has been given ample
prior opportunity to allege a claim”) (collecting cases). Accordingly, plaintiffs’ request for leave
to replead is denied.
CONCLUSION
Based on the foregoing, defendants’ partial motions to dismiss the second amended
consolidated complaint to Fed. R. Civ. P. 12(b) is granted. Plaintiff’s request for leave to replead
is denied.
Dated: Central Islip, New York
March 28, 2014
SO ORDERED:
_________/s/______________
ARLENE R. LINDSAY
United States Magistrate Judge
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