The opinion of the court was delivered by: Jenkins, District Judge.
ORDER GRANTING SUMMARY
Before the Court is defendants Teresa Halton and Peter Halton's
("Defendants") Motion to Dismiss the Complaint or, in the Alternative
Motion for Summary Judgment. This motion requires the Court to consider
whether plaintiff Gary Fong, Inc.'s ("Plaintiff") Complaint is barred by
the doctrine of res judicata. The Court hereby GRANTS Defendants' motion
for summary judgment because Plaintiff should have raised the current
causes of action for false designation of origin and common law trademark
infringement with respect to the domain name "storybook.com" in a
previously litigated action.
Plaintiff filed its Second Amended Complaint ("SAC") in a prior
action, Gary Fong, Inc. v. Teresa C. Halton and Peter C. Halton, CV
98-9034 ABC and CV 98-7769 ABC, on March 28, 2000 in the Central District
of California. The SAC asserted the following claims against Defendant
1) a claim seeking the cancellation of a trademark
2) a claim for violation of the Lanham Act,
15 U.S.C. § 1125 (a);
3) a claim alleging a breach of fiduciary duty;
4) a claim for breach of an oral agreement; and
5) a claim for copyright infringement.
Plaintiff also asserted the Lanham Act claim against Defendant Peter
Halton. This previous suit dealt with both Defendants' alleged
infringement of Plaintiff's service mark, "Storybook Studio." The parties
submitted a joint pretrial order on June 29, 2000. The court signed the
Pretrial Order on July 10, 2000. The Pretrial Order asserted the same
claims as the SAC.
On August 10, 2000 the court asked for briefing on Defendants'
objections to Plaintiff's injunctive and declaratory relief requests.
Both parties filed briefs on this issue. The relevant motion for
resolution was Plaintiff's motion to amend the Pretrial Order to clarify
Plaintiff was seeking to hold Defendants liable for infringing not only
the "Storybook Studio" service mark, but also the "Storybook" service
mark. Plaintiff argued the claim regarding the "Storybook" service mark
was disclosed in the Pretrial Order by its breach of fiduciary duty
claim. Specifically, Plaintiff asserted Defendants were on notice of a
service mark claim regarding "Storybook" because the fiduciary duty claim
relied on Defendants' registration of the "storybook.com" website.
The court disagreed stating,
[e]ven viewed in the most liberal sense possible, the
statement that "Defendants' registration of the domain
name storybook.com" violated T. Halton's fiduciary
duty to Plaintiff fails to encompass the legal theory
that Defendants infringed on Plaintiff's service mark
in violation of federal law. Furthermore, the PTO
[Pretrial Order] expressly asserts a claim for service
mark infringement that did not list "Storybook" as a