Flamagas, S.A. v. Shenzhen Yocan Technology, Ltd. et al

Filing 26

MEMORANDUM OPINION AND ORDER denying 19 MOTION to DISMISS for Failure to State a Claim. Signed by U.S. District Judge Lawrence L. Piersol on 1/18/2023. (CLR)

Case 4:22-cv-04035-LLP Document 26 Filed 01/18/23 Page 1 of 5 PageID #: 130

UNITED STATES DISTRICT COURT

DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION

FLAMAGAS,S.A.,

4:22-CV-4035-LLP

Plaintiff,
MEMORANDUM OPINION AND ORDER
DENYING MOTION TO DISMISS

vs.

SHENZHEN YOCAN TECHNOLOGY LTD.,

and DAKOTA IMPORT,LLC d/b/a YOCAN
USA,
Defendants.

Pending before the Court is Defendant, Dakota Import, LLC d/b/a/ Yocan USA's Motion
to Dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the complaint filed by
Plaintiff, Flamagas, S.A. For the following reasons, the Motion to Dismiss is denied.
BACKGROUND

Plaintiffis a manufacturer ofthe "Clipper Lighter," which it alleges is a reusable, refillable

lighter with a famously and inherently distinctive trade dress known to the consuming public and

throughout the lighter industry as the "Jet Flame" trade dress. (Doc. 1,

9, 10). On March 4,

2022,PlaintiffFlamagas, S.A.,filed a complaint against Defendants Shenzhen Yocan Technology,

Ltd. and Dakota Import, LLC d/b/a Yocan USA. (Doc. 1). Plaintiff alleges that Defendant
Shenzhen Yocan Technology Ltd. began selling a vaporizer to United States consumers through
Yocan USA which bears a trade dress with a striking resemblance to its Jet Flame Trade Dress.

(Doc. 1, T| 21). Plaintiff alleges that Defendants' use in commerce of its trade dress for goods that
are directly competitive with, highly similar, or identical to the goods offered by Plaintiff without
its consent is likely to confuse or deceive the public into believing that the goods are licensed,

franchised, sponsored, authorized or otherwise approved by Flamagas. (Doc. 1, ^ 48). In its

complaint. Plaintiff alleges the following claims against Defendants: 1) Count I - federal trade
dress infringement under the Lanham Act, 15 U.S.C. § 1125(a); 2) Count II - federal unfair
competition and false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a); 3) Count

Case 4:22-cv-04035-LLP Document 26 Filed 01/18/23 Page 2 of 5 PageID #: 131

Ill - South Dakota Deceptive Trade Practices Act; 4) Count IV - common law trade dress
infringement; and 5)Count V - common law unfair competition. (Doc. 1).

Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1) creates a federal cause of action

for trade dress infringement. The trade dress of a product is the "total image of a product, the
overall impression created, not the individual features." Insty*Bit, Inc. v. Poly-Tech. Indus., Inc.,

95 F.3d 663, 667 (8th Cir. 1996)(citation omitted). A trade dress is entitled to protection under
section 43(a) of the Lanham Act if:(1) it is inherently distinctive or has acquired distinctiveness

through secondary meaning;(2)it is primarily nonfunctional; and(3)its imitation would result in
a likelihood of confusion in consumers' minds as to the source of the product. Id. Likelihood of

confusion is also a required element for Plaintiffs unfair competition and false designation of
origin claim alleged in Count 11 under the Lanham Act, as well as Plaintiffs deceptive trade
practices, common law trade dress infringement, and unfair competition claims alleged in Counts
111, IV and V. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 781 (1992)(Stevens, J.,

concurring)("Whether we call the violation infringement, unfair competition, or false designation
of origin, the test is identical—is there a likelihood ofconfusion?").
Defendants have moved under Rule 12(b)(6) of the Federal Rules of Civil Procedure to

dismiss Plaintiffs complaint in its entirety arguing that based on the facts alleged,the Court should
rule as a matter of law that there can be no likelihood ofconfusion as to the source ofthe YOCAN

vaporizer. (Doc. 20 at 89-90). Defendants provide that attached to Plaintiffs complaint is a
screenshot from Yocan USA's website displaying an image of the YOCAN vaporizer. (Doc. 20

at 87). Defendants argue that the Court should, based on this image, find that the YOCAN name

is prominently displayed on the side of the vaporizer and conclude as a matter of law that based
on this fact, there can no likelihood of confusion. (Doc. 20 at 90)(citing Bose Corp. v. Linear

Design Lags, Inc.,467 F.2d 304(2d Cir. 1972)). Defendants also argue that the Court should find
that based on the illustration of the Clipper Lighter in Plaintiffs complaint, and the YOCAN

vaporizer attached as an exhibit to Plaintiffs complaint,that"when taken as a whole,"the products
are not physically similar in any manner that is likely to cause consumer confusion." (Doc. 20 at
91)(citing Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1046(2d Cir. 1992)).

Defendants argue its vaporizer is distinct from the Clipper Lighter in the following ways: 1)it is a
vaporizer, not a cigarette lighter; 2)it does not have a "set of circular gears surrounded by a semi-

Case 4:22-cv-04035-LLP Document 26 Filed 01/18/23 Page 3 of 5 PageID #: 132

circular barrier," 3)it does not have a "rectangular extension on one side;" and 4)has other distinct
elements that further differentiate it from the Clipper Lighter. (Doc. 20 at 91-93).
STANDARD OF REVIEW

"To survive a motion to dismiss, 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 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court

assessing such a motion must accept all factual allegations in the complaint as true and draw all
inferences in favor ofthe nonmovant. Blankenship v. USA Truck, Inc.,601 F.3d 852,853(8th Cir.

2010); Brooks v. Midwest Heart Group, 655 P.3d 796, 799 (8th Cir. 2011). Courts consider
"plausibility" by "'draw[ing] on [their own]judicial experience and common sense.'" Whitney v.
Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012)(quoting Iqbal, 556 U.S. at 679). Also, courts
must " 'review the plausibility of the plaintiffs claim as a whole, not the plausibility of each
individual allegation.'" Id. (quoting Zoltek Corp. v. Structural Polymer Grp., 592 F.3d 893, 896
n. 4(8th Cir. 2010)).

In considering a 12(b)(6) motion to dismiss, courts primarily look to the complaint and
"'matters incorporated by reference or integral to the claim,items subject to judicial notice, matters

of public record, orders, items appearing in the record of the case, and exhibits attached to the

complaint whose authenticity is unquestioned;' without converting the motion into one for
summary judgment." Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 931 n. 3 (8th Cir.
2012)(quoting 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure §
1357(3d ed. 2004)).
DISCUSSION

Defendants move to dismiss Plaintiffs complaint in its entirety on the basis that no
likelihood of confusion exists based on a side-by-side comparison of the Clipper Lighter and the
YOCAN vaporizer.

The Court does not find any basis upon which to rule as a matter oflaw that under the facts

alleged, the YOCAN vaporizer is not likely to cause consumer confusion. Courts in this circuit
have consistently stated that likelihood of confusion is a factual question. See ConAgra, Inc. v.

Case 4:22-cv-04035-LLP Document 26 Filed 01/18/23 Page 4 of 5 PageID #: 133

George A. Hormel & Co.,990 F.2d 368, 371 (8th Cir. 1993); SquirtCo. v. Seven-Up Co.,628 F.2d
1086, 1090-91 (8th Cir. 1980)("Likelihood of confusion is a finding of fact.").

There are six different factors a court may take into consideration in determining whether

a likelihood of confusion exists:(1)the strength of the trade dress;(2)the similarity between the
parties' trade dress; (3) the competitive proximity of the parties' products; (4) the alleged
infringer's intent to confuse;(5)evidence ofactual confusion; and(6)the degree ofcare reasonably
expected of potential customers. Children's Factory, Inc. v. Benee 's Toys, Inc., 160 F.3d 489,494
(8th Cir. 1998)(citing Co-Rect Prod., Inc. v. Marvy! Adver. Photography, Inc., 780 F.2d 1324,
1330(8th Cir. 1985)). The Eighth Circuit has stated that these factors are "not entirely separable,"
Kemp V. Bumble Bee Seafoods, Inc., 398 F.3d 1049, 1054(8th Cir. 2005), and that no single factor
is controlling in the analysis. Community of Christ Copyright Corp. v. Devon Park Restoration
Branch of Jesus Christ's Church, 634 F.3d 1005, 1009 (8th Cir. 2011)("Under SquirtCo. [v.

Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980)], no one factor controls, and because the

inquiry is inherently case-speeific, different factors may be entitled to more weight in different
cases."). The Eighth Circuit Court of Appeals has specifically stated that it "is in inappropriate to
conduct a side-by-side comparison of the elements of two products' trade dress," as Defendant
asks the Court to do on this motion to dismiss,"without reference to the senior mark's strength or

the market conditions under which likely consumers would see the marks." Kemp, 398 F.3d at

1054. It is therefore inappropriate for the Court at this stage to weigh the facts alleged and rule as
a matter oflaw based on a side-by-side comparison ofthe products that no likelihood of confusion
exists.

The fact that the YOCAN brand may be prominently displayed on the vaporizer does not

alter the Court's conelusion. The Eighth Cireuit has stated that the display of the manufacturer's

name on a product is not always determinative of the confusion issue. Vitek Sys., Inc. v. Abbott
Labs., 675 F.2d 190, 193 (8th Cir. 1982)(citing Fisher Stoves, Inc. v. All Nighter Stove Works,
626 F.2d 193, 195 (1st Cir. 1980)). The facts ofthis case are distinguishable from those involving

high-priced, single-purchase articles where "there is hardly likelihood of confusion or palming off
when the name ofthe manufacturer is clearly displayed." Id.

Accordingly, it is hereby ORDERED that Defendant's Motion to Dismiss (Doc. 19) is
DENIED.

Case 4:22-cv-04035-LLP Document 26 Filed 01/18/23 Page 5 of 5 PageID #: 134

Dated this

day of January, 2023.
BY THE COURT:

Urn
Qmm. Urutvi.—■
Jawrence L. Piersol
ATTEST:
MATTHEW W. THEL

United States District Judge