Franklin v. X Gear 101, LLC et al
Filing
59
MEMORANDUM DECISION AND ORDER re: ORDER ADOPTING REPORT AND RECOMMENDATIONS for 56 Report and Recommendations. Magistrate Judge Gorenstein's Report and Recommendation is ADOPTED in full. Defendants Godaddy, Inc., Godaddy.com, LLC, and In stagram, LLC's motion to dismiss all claims asserted against them is GRANTED. X Gear and Tydlacka's motion to dismiss for lack of personal jurisdiction is DENIED. Their motion to dismiss Counts One, Five, and Six for failure to state a cl aim is granted. Their motion to dismiss Counts Two, Three, and Four is denied. The Clerk of Court is directed to close the motions at ECF Nos. 15, 34, and 44. (Signed by Judge George B. Daniels on 8/28/2018) (sac) Transmission to Docket Assistant Clerk for processing.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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JAQUAN FRANKLIN,
Plaintiff,
-againstX GEAR 101, LLC, JOSHUA TYDLACKA,
GODADDY, INC.,GODADDY.COM, LLC, and
INSTAGRAM, LLC,
Defendants.
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GEORGE B. DANIELS, United States District Judge:
Prose Plaintiff Jaquan Franklin brings this action against X Gear 101, LLC ("X Gear"), X
Gear's alleged owner, Joshua Tydlacka (collectively, "X Gear Defendants"), Godaddy, Inc. and
Godaddy.com, LLC, and Instagram, LLC (collectively, "Publishing Defendants"), alleging that
Defendants infringed Plaintiffs copyright and trademark in a certain logo (the "ORIGINAL
WORK Logo") by advertising and selling goods, or publishing images bearing a substantially
identical logo without Plaintiffs consent. (Comp!., ECF No. 1.) Publishing Defendants have
moved to dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil
Procedure ("FRCP") 12(b)(6). (Mot. to Dismiss, ECF No. 15; Mot. to Dismiss, ECF No. 34.). X
Gear Defendants have also moved to dismiss the complaint for lack of personal jurisdiction
pursuant to FRCP l 2(b )(2) and for failure to state a claim pursuant to FRCP l 2(b )(6). (Mot. to
Dismiss, ECF No. 44; Mem. of Law in Support, ECF No. 45.)
This Court referred this case to Magistrate Judge Gabriel W. Gorenstein. (Order, ECF No.
3.) Before this Court is Magistrate Judge Gorenstein's July 23, 2018 Report and Recommendation
("Report"), recommending that Publishing Defendants' motion to dismiss be granted, that X Gear
Defendants' jurisdictional 12(b)(2) motion be denied, and X Gear Defendants' 12(b)(6) motion to
dismiss be granted as to Counts One, Five, and Six of the complaint, but denied as to Counts Two,
Three, and Four. (Report, ECF No. 56, at 45.) In his Report, Magistrate Judge Gorenstein advised
the parties that failure to file timely objections to the Report would constitute a waiver of those
objections on appeal. (Id. at 7-8); see also 28 U.S.C. § 636(b)(l); Fed. R. Civ. P. 72(b). X Gear
Defendants filed objections. (Objections, ECF No. 57.)
Having reviewed the unobjected to portions of the Report for clear error and the objected
to portions de nova, this Court ADOPTS Magistrate Judge Gorenstein's Report in full. Publishing
Defendants' motion to dismiss is GRANTED. X Gear Defendants' motion to dismiss for lack of
personal jurisdiction is DENIED. X Gear Defendants' motion to dismiss for failure to state a claim
is granted as to Counts One, Five, and Six of the complaint, but denied as to Counts Two, Three,
and Four.
I.
LEGAL STANDARDS
This Court "may accept, reject, or modify, in whole or m part, the findings or
recommendations" set forth within a magistrate judge's report. 28 U.S.C. § 636(b)(l). Portions
of the magistrate judge's report to which objections are properly filed are reviewed de novo. 28
U.S.C. § 636(b)(l). Portions ofa magistrate judge's report to which no objections have been made
are reviewed for clear error. Azkour v. Haouzi, No. 11 Civ. 5780 (RJS), 2017 WL 3016942, at *4
(S.D.N.Y. July 17, 2017). Clear error is present only when "upon review of the entire record, [the
court is] left with the definite and firm conviction that a mistake has been committed." United
States v. Snow, 462 F.3d 55, 72 (2d Cir. 2006) (citation omitted).
"Prose complaints are held to less stringent standards than those drafted by lawyers, even
following Twombly and Iqbal." Thomas v. Westchester Cty., No. 12 Civ. 6718 (CS), 2013 WL
3357171, at *2 (S.D.N.Y. July 3, 2013); see also Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009).
While courts read prose complaints "to raise the strongest arguments that they suggest," Pabon v.
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Wright, 459 F.3d 241, 248 (2d Cir. 2006) (citation omitted and internal quotation marks), pro se
plaintiffs '·cannot withstand a motion to dismiss unless their pleadings contain factual allegations
sufficient to raise a 'right to relief above the speculative level."' Jackson v. NYS Dep 't of Labor,
709 F. Supp. 2d 218,224 (S.D.N.Y. 2010) (citing Twombly, 550 U.S. at 555). Dismissal is justified
where ·'the complaint lacks an allegation regarding an element necessary to obtain relief," and the
'·duty to liberally construe a plaintiff's complaint [is not] the equivalent of a duty to re-write it."
Geldzahler v. NY. Med Coll., 663 F. Supp. 2d 379,387 (S.D.N.Y. 2009) (citations and internal
alterations omitted); see also Sharma v. D 'Silva, 157 F. Supp. 3d 293, 300 (S.D.N.Y. 2016).
"To survive a motion to dismiss [for failure to state a claim], a complaint must contain
sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."'
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell At!. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). The plaintiff must demonstrate "more than a sheer possibility that a defendant has
acted unlawfully"; stating a facially plausible claim requires pleading facts that enable the court
·'to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal,
556 U.S. at 678. When the plaintiff is proceeding prose, the court must "construe [the] complaint
liberally and interpret it to raise the strongest arguments that [it] suggest[ s]." Chavis v. Chappius,
618 F.3d 162, 170 (2d Cir. 2010) (citation and internal quotation marks omitted).
To survive a motion to dismiss for lack of personal jurisdiction, plaintiff bears the burden
of demonstrating that the court has jurisdiction over the defendant(s).
See Whitaker v. Am.
Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001 ). Where "a court [has chosen] not to conduct a
full-blown evidentiary hearing on the motion, the plaintiff need make only a prima facie showing
of jurisdiction through its own affidavits and supporting materials.'' Bank Brussels Lambert v.
Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999) (citation and internal quotation
marks omitted). In deciding a l 2(b )(2) motion, courts may consider affidavits and supporting
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materials submitted by plaintiff, including plaintiffs opposition to the motion. See College Essay
Optimizer, LLC v. Edswell, Inc., No. 14 Civ. 8586 (LAK), 2015 WL 5729681, at *2 (S.D.N.Y.
Sept. 30, 2015) (citing Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001 )). "Any
materials presented by the plaintiff should be construed in the light most favorable to the plaintiff
and all doubts resolved in [her] favor." Wang v. Tavernier, No. 13 Civ. 42976 (PGG), 2014 WL
11353150, at *3 (S.D.N.Y. Sept. 26, 2014) (citation and internal quotation marks committed).
II.
TYDLACKA AND X GEAR'S 12(8)(2) MOTION IS DENIED
X Gear Defendants' motion to dismiss for lack of personal jurisdiction is denied because
exercising jurisdiction over both Defendants is permitted by New York's long-arm statute and
comports with due process.
"In diversity or federal question cases, personal jurisdiction is determined in accordance
with the law of the forum in which the federal court sits." Minnie Rose LLC v. Yu, 169 F. Supp.
3d 504,512 (S.D.N.Y. 2016) (citing Whitaker, 261 F.3d at 208). In determining whether specific
personal jurisdiction exist, "district courts must conduct a two-part analysis, looking first to the
state's long-arm statue and then analyzing whether jurisdiction comports with federal due
process." 1 Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32, 37
(2d Cir. 2001 ).
Under Section 302(a)(l) of New York's long-arm statute, a court in New York may
exercise jurisdiction over an out-of-state defendant "if (1) [thej defendant 'transacts any business
within the state' and (2) the 'cause of action arises from' that business transaction." Grand v.
Schwarz, No. 15 Civ. 8779 (KMW), 2016 WL 2733133, at *3 (S.D.N.Y. May 10, 2016)
Plaintiff neither sufficiently alleges nor argues in his opposition papers that this Court has general
jurisdiction over X Gear Defendants. (See generally Comp!.; Opp'n, ECF No. 49.)
1
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(alterations omitted) (quoting N.Y. C.P.L.R. § 302(a)(l )). A non-resident defendant "'transacts
business' in New York when she 'purposefully avails herself to the privilege of conducting
activities within New York, thus invoking the benefits and protections of its laws."' Grand, 2016
WL 2733133, at *3 (quoting CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986)).
··[T]ransacting business requires only a minimal quantity of activity, provided that it is of the right
nature and quality." Agency Rent A Car Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d
Cir. 1996). A single transaction may suffice for personal jurisdiction under Section 302(a)(1 ),
even when the defendant is not physically present in the forum state. Bank Brussels, 171 F.3d at
787.
When personal jurisdiction is alleged primarily on the basis of an out-of-state defendant's
website, New York courts frame the judicial inquiry by placing a website on a "spectrum of
interactivity." On one end of the spectrum are '·passive" websites, which simply allow users to
view information. Such websites have "been analogized to an advertisement in a nationallyavailable magazine or newspaper, and does not without more justify the exercise of jurisdiction
over the defendant." Citigroup Inc. v. City Holding Co., 97 F. Supp. 2d 549,565 (S.D.N.Y. 2000).
At the other end are "interactive" websites, which sell goods, and services through the website.
··where an 'interactive' website is not only available but also purposefully directs activity into a
forum state-for example, by making sales of goods or services to New York residents-those
activities can be sufficient to trigger jurisdiction under section 302(a)(l)." Alibaba Grp. Holding
Ltd v. Alibabacoin Found, No. 18 Civ. 2896 (]PO), 2018 WL 2022626, at *4 (S.D.N.Y. Apr. 30,
2018) ( citations omitted). "When a website falls in the middle ground, a court must evaluate the
website's level of contact and interactivity with New York residents." Edswell, Inc., 2015 WL
5729681, at *4.
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A.
First Prong of New York's Long-Arm Statute
Here, Plaintiff sufficiently alleges X Gear Defendants conduct business transactions with
New York residents through an interactive website.
Plaintiff alleges that both Defendants
advertise and sell products from "an extensive catalogue of clothing items bearing an almost
identical logo" as the ORIGINAL WORK Logo through their website www.xgearlOl.com.
(Opp'n, ECF No. ECF No. 49, at 2.) Plaintiff also specifically alleges that both Defendants sell
and ship these articles of clothing to consumers in New York City, which results in "recurring
revenue and fees." (Opp'n at 2-3.)
X Gear Defendants object that Plaintiff fails to allege that X Gear '"targeted' its website
at New York residents."
(Objections at 8.)
While mere allegations of the existence of an
interactive website is insufficient to confer jurisdiction, Plaintiffs allegations go beyond the
website itself to allege direct sales to and solicitation of business from New York. See Edswell,
Inc., 2015 WL 5729681, at *6. Courts have found this type of allegation to suffice for a prima
facie showing of jurisdiction. See, e.g., Student Advantage, Inc. v. Int'! Student Exch. Cards, Inc.,
No. 00 Civ. 1971 (AGS), 2000 WL 1290585, at *4 (S.D.N.Y. Sept. 13, 2000); City of New York
v. Cyco.Net, Inc., 383 F. Supp. 2d 526, 542 (S.D.N.Y. 2005).
As such, exercise of personal jurisdiction over X Gear Defendants is proper based on their
interactive website that specifically targets New York.
8.
Second Prong of New York's Long-Arm Statute
Plaintiff also alleges that his claims arise out of X Gear Defendants' contacts with New
York. Plaintiff alleges that X Gear Defendants infringed Plaintiffs trademark and copyright in
the ORIGINAL WORK Logo by selling and shipping articles of clothing bearing a substantially
identical logo directly to consumers in New York City through their website. (Comp!. ,i,i 22, 31;
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Opp'n at 2.) Plaintiff further alleges that such activity '·has already caused instances of actual
confusion in the marketplace." (Comp!.
,r 32.)
This differs from an allegation that defendants simply "do business" in New York, which
courts have found to be conclusory and insufficient for purposes of establishing personal
jurisdiction. See, e.g, Klutz v. Yagozzon, Inc., No. 16 Civ. 4538 (JSR), 2016 WL 5806902, at *2
(S.D.N.Y. Sept. 20, 2016) ("Plaintiff's conclusory allegation [that defendant did business in New
YorkJ is insufficient to establish personal jurisdiction."); TAGC Mgmt., LLC v. Lehman, 842 F.
Supp. 2d 575, 582 (S.D.N.Y. 2012) (finding plaintiffs' allegation that the "defendants conduct
business through an office located [in New York] to be insufficient to establish personal
jurisdiction). Thus, Plaintiff has adequately pled the second prong of New York's long-arm
statute.
C.
Constitutional Due Process
Exercising jurisdiction over X Gear Defendants also comports with due process because of
Defendants' minimum contacts with New York. Here, X Gear Defendants have minimum contacts
with New York because Plaintiff alleges that they purposefully advertised, sold, and shipped
infringing products directly to consumers within the state. (See Comp!. ,i,i 22, 31; Opp'n at 2.) X
Gear Defendants object that Plaintiff fails to indicate that either ''defendant targeted or 'expressly
aimed' their activities towards New York so as to establish the requisite minimum contacts with
New York." (Objections at 10.) However, Defendants' objections are clearly belied by the very
words of Plaintiffs complaint.
Exercising personal jurisdiction is reasonable, and, therefore, satisfies the second prong of
the due process analysis as well. If a defendant has sufficient minimum contacts, a court must then
determine whether the exercise of personal jurisdiction is "reasonable" under the Due Process
Clause. Chloe, 616 F.3d at 165 ("There are two components to the due process analysis ... (1)
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the minimum contacts inquiry and (2) the reasonableness inquiry."). The five factors that inform
whether exercising jurisdiction does not "offend traditional notions of fair play and substantial
justice" and is thus reasonable are:
( 1) the burden on the defendant, (2) the interests of the forum State, and (3) the
plaintiffs interest in obtaining relief ... (4) the interstate judicial system's interest
in obtaining the most efficient resolution of controversies; and (5) the shared
interest of the several States in furthering fundamental substantive social policies.
Id. at 164.
On balance, these factors support the exercise of personal jurisdiction. As to the first factor,
while X Gear Defendants protest that exercising jurisdiction would impose an enormous burden
on the out-of-state defendants "to litigate in a forum halfway across the country," (Objections at
10), this argument "would provide defendant[ s] only weak support, if any, because the
conveniences of modern communication and transportation ease what would have been a serious
burden only a few decades ago."
Bank Brussels Lambert, 305 F.3d at 129-30; see also
MacDermid, Inc. v. Deiter, 702 F.3d 725, 731 (2d Cir. 2012) (holding that burden due to travel on
foreign defendant insufficient to overcome its minimum contacts).
Second, New York has a
"manifest interest in providing effective means of redress for its residents," including Plaintiff.
Chloe 616 F .3d at 173 (citation and internal quotation marks omitted). Third, Plaintiff has an
interest adjudicating this matter in New York where he resides. (See Comp!. ,i 8.) The last two
factors are neutral.
As a result, exercising personal jurisdiction over X Gear Defendants 1s
consistent with New York's long-arm statute and constitutional due process. 2
2
X Gear Defendants object that, at minimum, Tydlacka should be dismissed from the case for lack of
jurisdiction because Plaintiff fails to demonstrate that Tydlacka was a ''primary actor[] in the transaction
in New York," as required by New York's long-arm statute. (Objections at 7.) However, Plaintiff does in
fact make this allegation by asserting that Tydlacka saw Plaintiffs ORIGINAL WORK Logo at a trade
show, incorporated X Gear, and began selling items bearing an almost identical logo to New York
consumers through X Gear's website. (Opp'n at 2.) In a similar vein, X Gear Defendants argue that
Defendant Tydlacka should be dismissed from the case because a corporate employee may be personally
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III.
COUNT I IS DISMISSED
The Report properly concluded that Count 1 of the complaint, for trademark infringement
under the Lanham Act, should be dismissed against all Defendants. Section 3 2( 1) of the Lanham
Act, 15 U.S.C. § 1114, "protects only registered trademarks," and Plaintiff fails to allege anywhere
in his complaint that he possesses a registered trademark in the ORINGIAL MARK Logo. (See
Report at 18-1 9.) Count 1 is, therefore, dismissed for fai 1ure to state a claim.
IV.
COUNT II IS DISMISSED AS TO PUBLISHING DEFENDANTS, BUT
NOT AS TO X GEAR DEFENDANTS
Plaintiff's second cause of action, for unfair competition and false designation of origin
under the Lanham Act, is dismissed with respect to Publishing Defendants. However, Count II
survives X Gear Defendants' motion to dismiss.
A.
Publishing Defendants
To state a claim for unfair competition and false designation of origin under the Lanham
Act, 15 U.S.C. § l 125(a), a plaintiff must establish "that it has a valid mark entitled to protection
and that defendant's use of it [in commerce] is likely to cause confusion." Gruner+ Jahr USA
Pub! ·g, a Div. of Gruner + Jahr Printing and Pub. Co. v. Meredith Corp., 991 F .2d 1072, 107 5
(2d Cir. 1993).
The Report determined properly that the complaint is devoid of any allegations regarding
the Publishing Defendants' use of Plaintiff's logo in commerce.
Here, the only allegations
regarding the two Defendants is that GoDaddy provides web hosting services to X Gear
liable for trademark or copyright infringement only if contributory or vicarious liability is pied
adequately. (Objections at 4-6.) However, this objection largely tracts X Gear Defendants' arguments
made in their motion to dismiss that were considered and rejected by Magistrate Judge Gorenstein in
issuing his Report. (See Mem. of Law in Support at 22-23); see Azkour v. Haouzi, No. 11 Civ. 5780
(RJS), 2017 WL 3016942, at *4 (S.D.N.Y. July 17, 2017) (noting that objections that simply rehash or
reiterate the original briefs to the magistrate judge do not suffice to invoke de novo review).
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Defendants and Instagram provides an application on which X Gear Defendants publish images of
the infringing logo. (Compl.
~~
33-35.) Absent any allegation concerning use of Plaintiffs logo
in commerce, Count II must be dismissed against Publishing Defendants.
B.
X Gear Defendants
As to X Gear Defendants, the Report concluded correctly that Plaintiff sufficiently alleges
that the use of Plaintiff's valid mark by both Defendants likely causes confusion among consumers.
X Gear Defendants object that Plaintiff fails to establish that his mark is valid and entitled to
protection because Plaintiff does not allege "that his logo is inherently distinctive or that it has
achieved a secondary meaning. Plaintiff merely pits the two designs side by side-which only
accentuates the differences in the two designs.'' (Objections at 14 (emphasis in original).)
Trademarks "are often classified in categories of generally increasing distinctiveness;
following the classic formulation set out by Judge Friendly, they may be (1) generic; (2)
descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful." Two Pesos, Inc. v. Taco Cabana, Inc.,
505 U.S. 763, 768 (1992) (citing Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9
(2d Cir. 1976)).
Marks that are arbitrary, fanciful, or suggestive are considered "inherently
distinctive" and are automatically entitled to protection under the Lanham Act. See Two Pesos,
505 U.S. at 768. Marks that are descriptive are entitled to protection only if they have acquired a
"secondary meaning'' in the marketplace. Id at 769.
While Plaintiff never uses the word "distinct" or "distinctive" in his complaint, an
examination of Plaintiffs logo demonstrates that Plaintiff's mark is inherently distinctive.
Plaintiffs logo is a cartoon depiction of a bear's head with doe eyes that are of different shape and
color, and two bandages crisscrossing to cover the bear's mouth. (See Compl.
~
31.) While
"[b ]asic geometric shapes, basic letters, and single colors are not protectable as inherently
distinctive ... stylized letters or shapes are not basic, and are protectable when original within the
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relevant market." Louis Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 116 (2d Cir.
2006). Thus, Plaintiff has sufficiently pied that his ORIGINAL WORK Logo is a valid mark
entitled to protection.
X Gear Defendants also object that Plaintiff fails to plead that Defendants' use of the mark
likely causes confusion among consumers.
In evaluating the likelihood of confusion, courts
consider the Polaroid factors. Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir.
1961 ). These factors include: (1) the strength of the mark, (2) the degree of similarity between the
two marks, (3) the competitive proximity of the products, (4) actual confusion, (5) the likelihood
the plaintiff will bridge the gap, (6) the defendant's good faith in adopting its mark, (7) the quality
of the defendant's products, and (8) the sophistication of the purchasers. Id.
Likelihood of
confusion is a fact-intensive analysis that ordinarily does not lend itself to a motion to dismiss.
Scotch & Soda B. V v. Scotch and Iron LLC, No. 17 Civ. 4561 (ALC), 2018 WL 2224997, at *3
(S.D.N.Y. May 15, 2018). Hence, motions to dismiss for failure to plead this element are generally
granted '·only if no reasonable factfinder could find a likelihood of confusion on any set of facts
that plaintiff could prove." Id. (citation and internal quotation marks omitted).
Here, Plaintiffs ORIGINAL WORK Logo is inherently distinctive, for the reasons stated
earlier. Plaintiff alleges that X Gear Defendants' logo "is a substantial identical replication and
copy of plaintiff's ORIGINAL WORK Logo." (See Compl. ~,\ 31.) X Gear Defendants also
allegedly market and sell their products at trade shows, online, and through various media
platforms, such as Instagram, just like Plaintiff. (Id.
il~
18, 21-23, 35; Opp'n at 2.) As a result of
X Gear Defendant's conduct, Plaintiff further alleges that there is a likelihood of confusion in the
marketplace and instances of actual confusion. (Compl.
~~
4, 32.) These allegations suffice to
survive a motion to dismiss. See, e.g., Canon U.S.A., Inc. v. F&E Trading LLC, No. 15 Civ. 6015
(DRH)(A YS), 2017 WL 4357339, at *6 (E.D.N.Y. Sept. 29, 2017) (finding plaintiff's allegations
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that Defendants' bad faith and intentional marketing and sale of a product with the infringing logo
were intended to, and are likely to, cause confusion to be sufficient).
X Gear Defendants object that the Report did not consider all of the Polaroid factors in
reaching its conclusion oflikelihood of confusion. (Objections at 15.) However, at the motion to
dismiss stage, courts are not required to address all of the factors in order to find adequate pleading
of a likelihood of confusion. See World Trade Ctrs. Ass 'n, Inc. v. Port Auth. of N. Y. & NJ, No.
15 Civ. 7411 (L TS), 2016 WL 8292208, at *2 (S.D.N.Y. Dec. 15, 2016). With respect to the first
two Polaroid factors, Defendants also object that the Report merely "reasserted that Plaintiff's
mark is 'inherently distinctive' and pointed to Plaintiff's allegations about the popularity in his
design-without acknowledging the differences between the two marks or the irrelevance of those
allegations to the analysis." (Objections at 15.) Yet, the degree of a mark's distinctiveness is
relevant to assessing the strength of the mark. See Lopez v. Gap, Inc., 883 F. Supp. 2d 400, 430
(S.D.N .Y.2012). Furthermore, while the Report may not have explicitly discussed the differences
between the two marks, the marks undoubtedly share many more similarities than differences.
Both marks are cartoon depictions of a bear head with an asymmetrically rounded face, large doe
eyes of different colors, with the left iris in a lighter shade than the right, rounded ears, and a guitarpick nose. (See Comp!.~ 31.)
Defendants also object that the Report improperly credited Plaintiff's allegation that he has
encountered X Gear's products online and at trade shows as being sut1icient to show that the
products proximately compete with each other. However, aside from citing to a Second Circuit
case in which the circuit actually affirmed the district court's finding of competitiveness, X Gear
Defendants provide no basis or support for this objection. (See Objection at 14~ 15 .)
X Gear Defendants also argue that Plaintiff's second cause of action fails because it is
duplicative of his copyright infringement claim. (Objections at 11.) They argue that Plaintiff fails
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to identify any trademark outside of Plaintiffs protected copyright. (Id.) However, Plaintiff
alleges that he has a copyright and trademark in his ORIGINAL WORK Logo, (Opp'n at 5), and
that X Gear Defendants have infringed his mark by selling clothing bear a replica logo, which has
caused confusion among consumers as to the source of the products. (Compl. ,, 38--47.); see
Ward v. Andrews McMeel Pub., LLC, 963 F. Supp. 2d 222, 236 (S.D.N.Y. 2013) ("[C]ourts have
consistently held that a product's different qualities can be protected simultaneously, or
successively, by more than one of the statutory means for protection of intellectual property.")
(citation and internal quotation marks omitted). Plain ti ff also alleges that Defendants not only
copied his logo, but that they have falsely represented themselves as the creator and owner of the
logo, which has resulted in consumer confusion. (Comp!. ,, 39--41. ); see Webber v. Geffen
Records, Inc., 63 F. Supp. 2d 458, 463 (S.D.N.Y. 1999) ("[To allege a separate trademark
infringement claim], ltlhe [plaintiffl must make a greater showing that the designation of origin
was false, was harmful, and stemmed from some affirmative act whereby [defendant] falsely
represented itself as the owner.").
V.
COUNT III IS DISMISSED AS TO PUBLISHING DEFENDANTS, BUT
NOT AS TO X GEAR DEFENDANTS
The Report properly concluded that Count III of the complaint, for common law trademark
infringement and unfair competition, should be dismissed as to Publishing Defendants, but not as
to X Gear Defendants for the same reasons as those stated above. "The elements necessary to
prevail on causes of action for trademark infringement and unfair competition under New York
common law mirror the Lanham Act claims." Kaplan, Inc. v. Yun, 16 F. Supp. 3d 341, 351
(S.D.N.Y. 2014) (citation and internal quotation marks omitted). A party asserting a claim for
unfair competition under New York common law must also allege bad faith on the part of the
defendant. See Empresa Cubana de! Tabaco v. Culbro Corp., 399 F.3d 462, 485 (2d Cir. 2005).
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Plaintiff adequately pleads "bad faith" by alleging that X Gear Defendants' infringement was
intentional. See C=Holdings B. V v. Asiarim Corp., 992 F. Supp. 2d 223, 244 (S.D.N.Y. 2013)
('·Bad faith is presumed where the defendant intentionally copied the plaintiffs mark.") (citation
and internal quotation marks omitted). Plaintiff alleges that Defendant Tydlacka saw Plaintiffs
product at a trade show in Texas, formed X Gear, and began selling and offering for sale clothing
items bearing an almost identical image and design to that of Plaintiff's logo. (Opp'n at 2; see
Comp!.~~ 3, 47.) Thus, Publishing Defendants' motion to dismiss is granted with respect to Count
III of the complaint, while X Gear Defendants' motion to dismiss that claim is denied.
X Gear Defendants object that Plaintiffs common law trademark infringement claims are
preempted by his federal copyright claim (Count IV). (Objections at 12-13.) The analysis for
determining preemption is similar to that for duplication. See Webber, 63 F. Supp. 2d at 462-64.
As such, Plaintiffs common-law trademark infringement and unfair competition claims are not
preempted because Plaintiff alleges likelihood of confusion, in addition to the mere copying of
Plaintiffs logo by Defendants, which resulted from Defendants' active deception of the public.
See Wolstenholme v. Hirst, 271 F. Supp. 3d 625, 642 (S.D.N.Y. 2017) (noting that an allegation
that "the use of the plaintiffs trademark on the goods or an active deception to customers through
words or deeds that the product came from the plaintiff' suffices to survive preemption).
VI.
CLAIM IV IS DISMISSED AS TO PUBLISHING DEFENDANTS, BUT NOT AS
TO X GEAR DEFENDANTS
The Report properly concluded that Count IV for copyright infringement should be
dismissed with respect to Publishing Defendants because Plaintiff fails to allege intentional
inducement. The basis for Plaintiff's claims against Publishing Defendants' stems solely from the
Defendants' alleged inducement of X Gear Defendants to infringe Plaintiff's rights in his logo.
(See Compl.
~ii
34-35 ("[T]here [sic] acts are inducing the infringement as they have reason to
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know of Plaintiffs right in said copyright since Plaintiff has provided it with a Notice of
Infringement.").) Yet, a claim for inducement requires a showing of intent to promote infringing
uses. Arista Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d 398, 425 (S.D.N.Y. 2011) (citing
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd, 545 U.S. 913, 937 (2005)). Plaintiff does
not allege intentional inducement by Publishing Defendants anywhere in the complaint.
On the other hand, Plaintiff adequately alleges that X Gear Defendants actually copied
Plaintiff's logo, and Plaintiff's logo and Defendants' infringing logo are substantially similar. To
state a claim for copyright infringement, plaintiff must allege that "( 1) the defendant has actually
copied the plaintiff's work; and (2) the copying is illegal because a substantial similarity exists
between the defendant's work and protectable elements of plaintiff's."
Peter F. Gaito
Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 63 (2d Cir. 2010 (quoting Hamil Am. Inc.
v. GFI, 193 F.3d 92, 992 (2d Cir. 1999)). Copying may be established circumstantially by showing
that ·'(1) the defendant had access to the copyrighted work and (2) that defendant's work is
substantially similar to the plaintiff's copyrightable material." Sofie! Inc. v. Dragon Med and Sci.
Commc 'ns, Inc., 118 F.3d 955,963 (2d Cir. 1997) (quoting Comp. Assocs. Int 'l, Inc. v. Altai, Inc.,
982 F.2d 693, 701 (2d Cir. 1992)) (internal quotation marks omitted). Here, Plaintiff alleges that
after seeing Plaintiff's clothing products and logo at a trade show in lfouston, Texas, Defendant
Tydlacka formed X Gear, and began selling clothing items ''under an almost identical image and
design to that of Plaintiff's ORIGINAL WORK® Logo." (Opp'n at 2; see Comp!.~~ 31, 37
(allegations of substantial similarity).)
X Gear Defendants argue that Plaintiff's allegations of "actual copying" are conclusory
and that Plaintiff's allegation that Defendant Tydlacka saw Plaintiff's products at the trade show
arc mere conjecture or speculation.
(Objections at 17.) Plaintiff's allegations of substantial
similarity are not conclusory, but rather based on, among other allegations, a side-by-side
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comparison of Plaintiff's and Defendant's logo, which demonstrates the extent of similarity
between the two logos. (See Compl. 131.); see Folio Impressions, Inc. v. Byer Cal., 937 F.2d 759,
766 (2d Cir. 1991) (in determining substantial similarity "what is required is only a visual
comparison of the works").
X Gear Defendants contend that, in determining the substantial similarity between the two
logos, the Report incorrectly applied the "ordinary observer test" rather than the "discerning
observer test." (Objections 17-18.) Defendants argue that the "discerning observer test" should
apply simply because Plaintiff alleges that Defendants "copie[ d] constituent elements" of his logo,
without articulating why this particular allegation would lead to the application of the discerning
observer test. (Id at 18.) Even if the discerning observer test applied, "a 'more discerning'
observer, considering only protectible elements of [the logos], would consider them] . . .
substantially similar not only in shape, layout, and overall appearance, but in the particular
expression of their concepts." Blue Ribbon Pet Prods., Inc. v. RolfC Hagen (USA) Corp., 66 F.
Supp. 2d 454, 461 (E.D.N.Y. 1999).
Thus, Plaintiff has adequately pled copyright infringement against X Gear Defendants.
VII.
COUNTS FIVE AND SIX ARE DISMISSED
The Report correctly concluded that Plaintiff's Fifth and Sixth Counts for unjust
enrichment and conversion, respectively, should be dismissed as to Publishing Defendants because
they are barred by the Communications Decency Act, 47 U.S.C. § 230(c)(l), which provides
broad-based immunity to defendants who are providers of interactive computer services from
certain state law claims. (Report 38-40.) The Report also properly determined that these counts
should be dismissed against X Gear Defendants because the Copyright Act preempts these state
law claims, which are based purely on allegations of unlawful copying. (Id. at 40-43.) The Report
also found correctly that they should be dismissed for failure to state a claim. (Id. at 41-44.)
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Plaintiff fails to allege any relationship between himself and Defendants, let alone one that could
have caused reliance or inducement. (Id. at 42.) Additionally, conversion claims cannot lie for
trademarks, which are intangible intellectual property. (Id. at 44.)
VIII.
CONCLUSION
Magistrate Judge Gorenstein's Report and Recommendation 1s ADOPTED in full.
Defendants Godaddy, Inc., Godaddy.com, LLC, and Instagram, LLC's motion to dismiss all
claims asserted against them is GRANTED.
X Gear and Tydlacka's motion to dismiss for lack of personal jurisdiction is DENIED.
Their motion to dismiss Counts One, Five, and Six for failure to state a claim is granted. Their
motion to dismiss Counts Two, Three, and Four is denied.
The Clerk of Court is directed to close the motions at ECF Nos. 15, 34, and 44.
Dated: New York, New York
August 28, 2018
SO ORDERED.
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