Eclipse Aesthetics LLC v. RegenLab USA LLC
Filing
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Memorandum Opinion and Order denying 37 Motion to Dismiss for Failure to State a Claim filed by RegenLab SA. (Ordered by Chief Judge Barbara M.G. Lynn on 8/10/2016) (ndt) Modified text on 8/11/2016 (ran).
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ECLIPSE AESTHETICS LLC,
Plaintiff,
v.
REGENLAB USA, LLC,
EDWARD VON HORNSTEIN,
Individually, and
REGENLAB SA,
Defendants.
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Civil Action No. 3:15-cv-03748-M
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant RegenLab SA’s Motion to Dismiss Pursuant to Federal
Rule of Civil Procedure 12(b)(6) [Docket Entry #37]. For the reasons set forth below, the
Motion to Dismiss is denied.
I.
BACKGROUND
The following facts are taken from Plaintiff’s First Amended Complaint for Lanham Act
Violation (“Complaint”) [Docket Entry #28].1 Plaintiff Eclipse Aesthetics LLC, a Texas limited
liability company, is a privately-held distributor of aesthetic equipment and cosmetic supplies for
use by physicians. Since June 2013, Plaintiff has been selling the Eclipse PRP, a kit that allows
a physician to collect a patient’s blood and separate platelet rich plasma (PRP), which can then
be reinjected into the patient’s body to aid in the healing process. Eclipse PRP is a distinctive
mark that has become stronger over time with its continued use.
1
In its recitation of the facts, the Court accepts all well-pleaded facts in the Complaint as true, and views them
in the light most favorable to Plaintiff. See Sonnier v. State Farm Mut. Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir. 2007);
In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007).
1
Defendant RegenLab USA, LLC (“RegenLab USA”) is a Delaware limited liability
company with its principal place of business in New York, and is Plaintiff’s direct competitor in
the medical device business. Defendant RegenLab SA (“RegenLab SA”) is a Swiss company
with a regional office in New York. Defendant Edward von Hornstein is an employee of both
RegenLab USA and RegenLab SA. Although there are several Defendants, the instant Motion to
Dismiss is brought by Defendant RegenLab SA, and seeks dismissal of the contributory
infringement claim brought against it.
In early 2013, RegenLab SA formed RegenLab USA to compete directly with Plaintiff,
its former distributor, in the United States. On July 7, 2014, Plaintiff filed a lawsuit in Texas
state court against RegenLab USA for tortious interference and business disparagement in
connection with RegenLab USA’s alleged unfair competition with Plaintiff.2 Plaintiff alleges
that, in retaliation for its decision to file the state court action, RegenLab USA began using the
Eclipse PRP mark in commerce without Plaintiff’s consent. Specifically, Plaintiff alleges that
RegenLab USA, through its employee von Hornstein, purchased the Eclipse PRP mark as an
Adword from Google, and then used its competitor’s mark in the text of a sponsored Google
advertisement (the “Sponsored Google Ad”) in a way that suggested the link would take the
consumer to the Eclipse website. Instead of linking the consumer to Eclipse’s website, however,
Eclipse customers and potential customers who searched for Eclipse PRP in the Google search
bar were misdirected to RegenLab USA’s website. Plaintiff alleges the use of the words
“Eclipse PRP” in the name of the web link leading to RegenLab USA’s website, and the
2
After Plaintiff amended its petition to add RegenLab SA, von Hornstein, and other individuals as parties,
Defendants removed the state court action to federal court, where it was reassigned to this Court. See Eclipse Aesthetics
LLC v. RegenLab USA, LLC, et al., Civil Action No. 3-16-cv-01448-M. Pending in the removed case are Plaintiff’s
Motion to Remand and Defendants’ Motion to Consolidate.
2
appearance of the mark adjacent to the term “regenlabusa.com” in the Google Sponsored Ad, are
likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or
association of Eclipse with Defendant RegenLab USA in the minds of potential consumers.
Plaintiff alleges causes of action against RegenLab USA for direct trademark
infringement, common law trademark infringement, and unfair competition under Texas law.3 In
addition, Plaintiff alleges a cause of action against RegenLab SA for contributory trademark
infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). RegenLab SA moves
to dismiss the contributory infringement claim pursuant to Federal Rule of Civil Procedure
12(b)(6).
II.
LEGAL STANDARD
To defeat a Rule 12(b)(6) motion to dismiss, a plaintiff must plead “enough facts to state
a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). “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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “The plausibility
standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility
that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). The “[f]actual
allegations must be enough to raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even if doubtful in fact)[.]”
3
At the inception of this lawsuit, Plaintiff filed a motion for preliminary injunction seeking to enjoin RegenLab
USA from disseminating the Sponsored Google Ad. Following RegenLab USA’s voluntary suspension of the Sponsored
Google Ad, and pursuant to the parties’ agreement, the Court entered a preliminary injunction enjoining RegenLab USA
from running the Sponsored Google Ad, as well as any similar Google Ad that would place any form of the word
“Eclipse” in a hyperlink to the www.regenlabusa.com website. See Agreed Order for Preliminary Injunction (Docket
Entry #25).
3
Twombly, 550 U.S. at 555 (internal citations omitted).
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
Although “the pleading standard Rule 8 announces does not require ‘detailed factual
allegations,’” it does require more than “‘labels and conclusions.’” Iqbal, 556 U.S. at 678
(quoting Twombly, 550 U.S. at 555). Further, “a formulaic recitation of the elements of a cause
of action will not do.” Twombly, 550 U.S. at 555.
In ruling on a motion to dismiss under Rule 12(b)(6), the Court generally cannot look
beyond the pleadings. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). The pleadings
include the complaint and any documents attached to it. Collins v. Morgan Stanley Dean Witter,
224 F.3d 496, 498–99 (5th Cir. 2000). If documents are referred to in the plaintiff’s complaint
and are central to the plaintiff’s claims, but not attached, a defendant can attach them to a motion
to dismiss and they will be considered. Id.
III.
ANALYSIS
A.
Contributory Trademark Infringement
Plaintiff contends that RegenLab SA is liable for contributory trademark infringement
under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), because it knew or should have
known of RegenLab USA’s alleged unlawful use of the Sponsored Google Ad but permitted the
violation to continue.
The Lanham Act identifies several forms of conduct that constitute actionable trademark
infringement. See 15 U.S.C. §§ 1114(1)(a) & 1125(a). The Supreme Court has determined that
liability for trademark infringement can extend “beyond those who actually mislabel goods with
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the mark of another.” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 853 (1982). In
Inwood, a drug manufacturer sold generic versions of a certain brand-name drug in identically
colored pill capsules, with the knowledge that pharmacists would place the pills in brand-name
packaging. There, the Supreme Court explained:
Even if a manufacturer does not directly control others in the chain of
distribution, it can be held responsible for their infringing acts under certain
circumstances. Thus, if a manufacturer or distributor intentionally induces
another to infringe a trademark, or if it continues to supply its product to one
whom it knows or has reason to know is engaging in trademark infringement, the
manufacturer or distributor is contributorially responsible for any harm done as a
result of the deceit.
Id. at 853–54; see also Rolex Watch USA, Inc. v. Meece, 158 F.3d 816, 828-29 (5th Cir. 1998)
(applying Inwood and finding district court did not commit clear error in rejecting claim of
contributory trademark infringement where evidence failed to demonstrate that defendant knew
or should have known of the alleged infringing conduct). The doctrine of contributory
trademark infringement has been extended from the factual context in which it first arose into
other settings, including where the accused contributory infringer provides services rather than
manufacturing goods. See Tiffany, Inc. v. eBay Inc., 600 F.3d 93, 104 (2d Cir. 2010) (applying
Inwood in case where defendant eBay was the operator of an on-line marketplace, and affirming
district court’s holding that eBay was not liable for contributory trademark infringement with
respect to counterfeit Tiffany goods sold by others on eBay since it did not know or have reason
to know of the infringement). More recently, the Tenth Circuit has extended the doctrine of
contributory trademark infringement and the holding in Inwood to a factual setting more
analogous to that presented here. See 1-800 Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229
(10th Cir. 2013). In 1-800 Contacts, the plaintiff “discovered that Lens.com [and affiliates] had
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purchased sponsored advertisements from Google, and other search engines, for Plaintiff’s
Marks to trigger advertising and/or a link to the Lens.com Websites.” Id. at 1237. Although it
affirmed the district court’s decision to grant summary judgment in favor of Lens.com on direct
trademark infringement claims, the Tenth Circuit applied the Inwood test concerning
contributory infringement, and found that a rational juror could have found that Lens.com knew
that at least one of its affiliates was using the plaintiff’s mark in the web advertisements, but did
not make reasonable efforts to stop the practice. Id. at 1252.4
B.
RegenLab SA’s Motion to Dismiss
RegenLab SA moves to dismiss the contributory trademark infringement claim for failure
to state a claim under Federal Rule of Civil Procedure 12(b)(6). RegenLab SA argues that it did
not know or have reason to know of the alleged direct trademark infringement by RegenLab
USA, and it did not continue or authorize the continuance of the dissemination of the Sponsored
Google Ad after learning about the alleged infringement.
In support of its Motion, RegenLab SA relies on the Declaration of Max Kunz, its Chief
Financial Officer, to argue that “[c]ontrary to Plaintiff’s baseless allegations, [it] played no role
or any part whatsoever, in the creation, development, approval, and/or dissemination of the
Sponsored Google Ad.” Def.’s Br. 10 [Docket Entry #38]. Again relying on Kunz’s
Declaration, RegenLab SA contends that it “did not exercise any control over or counsel
RegenLab USA LLC with respect to the Sponsored Google Ad nor was [it] aware of the [Ad]
until [it] received a copy of the complaint in this action.” Id. RegenLab SA also relies on the
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The Tenth Circuit remanded the contributory trademark infringement claim to the district court, finding
genuine issues of material fact remained regarding whether Lens.com had taken sufficient action to preclude the affiliate
from including its competitor’s mark in the copy. 1-800 Contacts, 722 F.3d at 1257.
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deposition testimony of von Hornstein to argue that the “Sponsored Google Ad was generated by
Edward von Hornstein acting on behalf of RegenLab USA LLC and not RegenLab SA.” Id.
In response, Plaintiff argues that the Court should ignore the “self-serving declarations
and related deposition testimony referenced in RegenLab SA’s Motion to Dismiss as such are
irrelevant to the standard applicable to determine a motion pursuant to Fed. R. Civ. P. 12(b)(6).”
Pl.’s Resp. 2 [Docket Entry 40]. The Court agrees.
In ruling on a motion to dismiss under Rule 12(b)(6), the Court generally cannot look
beyond the pleadings. Spivey, 197 F.3d at 774. The pleadings include the complaint and any
documents attached to it. Collins, 224 F.3d at 498–99; see also Causey v. Sewell CadillacChevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004) (documents are “considered part of the
pleadings if they are referred to in the plaintiff’s complaint and are central to her claims.”). If
documents are referred to in the plaintiff’s complaint and are central to the plaintiff’s claims, but
not attached, a defendant can attach them to a motion to dismiss and they will be considered.
Collins, 224 F.3d at 498–99.
The Declaration of Max Kunz and von Hornstein’s deposition testimony were not
attached to, referred to, cited in, or central to the Complaint. Thus, the declarations and
deposition testimony cannot properly be considered by the Court in ruling on RegenLab SA’s
Motion to Dismiss. In addition to relying on documents outside the pleadings, RegenLab SA’s
argument fails to take into account that on a motion to dismiss, the Court must accept all wellpleaded facts in the Complaint as true, and view them in the light most favorable to Plaintiff.
See Sonnier v. State Farm Mut. Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir. 2007); In re Katrina
Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007).
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In further response to the Motion to Dismiss, Plaintiff contends that it “has properly
plead a claim for contributory trademark infringement against RegenLab SA, located in
Switzerland, based on RegenLab SA’s alleged conduct in assisting its U.S. subsidiary, RegenLab
USA LLC, in misdirecting web searches [and based on] the subsidiary’s admitted activities
involving a Google advertisement that used the Eclipse name in a hyperlink to the RegenLab
USA website which is maintained in Switzerland.” Pl.’s Resp. 1 [Docket Entry #40].
In the Complaint, Plaintiff alleges as follows:
[RegenLab SA] is subject to liability for contributory infringement under Section
1125(a) on the basis that, on information and belief, the RegenLab USA LLC
website is registered to [RegenLab SA], and is administered by [RegenLab SA]
from a location in Switzerland, Mr. von Hornstein reports to senior executives of
[RegenLab SA], and [RegenLab SA] knew or should have known of the infringing
Google Ad prior to the filing of this lawsuit, and failed to stop the infringing
conduct.
Compl. ¶ 17 (emphasis added). Based on these allegations, the Court concludes that Plaintiff has
stated a plausible claim for contributory trademark infringement against RegenLab SA. See
Inwood., 456 U.S. at 853-54; 1-800 Contacts, 722 F.3d at 1252. When viewed in the light most
favorable to Plaintiff, the allegations in paragraph 17 give rise to a plausible inference that
RegenLaw SA knowingly contributed to RegenLab USA’s alleged trademark infringement and
failed to stop the infringing conduct, or should have known of the infringing conduct and failed
to stop the infringing conduct. These allegations suffice for the purposes of the present Motion
to Dismiss. See Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556) (“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.”). Accordingly, Defendant
RegenLab SA’s Motion to Dismiss Plaintiff’s contributory infringement claim is denied.
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IV.
CONCLUSION
For the reasons stated above, Defendant RegenLab SA’s Motion to Dismiss Pursuant to
Federal Rule of Civil Procedure 12(b)(6) is hereby DENIED.
SO ORDERED.
August 10, 2016.
_________________________________
BARBARA M. G. LYNN
CHIEF JUDGE
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