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Hoffman v. Impact Confections

February 14, 2008

CARL EDWARD HOFFMAN, PLAINTIFF,
v.
IMPACT CONFECTIONS, INC., A COLORADO CORPORATION; AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

Defendant Impact Confections, Inc. ("Defendant" or "Impact") has filed a motion for summary judgment. Plaintiff did not file an opposition. For the reasons set forth below, Defendant's motion is GRANTED.

I. ALLEGATIONS OF THE COMPLAINT

On March 28, 2001, Plaintiff Carl Edward Hoffman ("Plaintiff" or "Hoffman") and Glade Thibodo established Ollie Pop Bubble Gum Company as a California general partnership (the "Ollie Pop Partnership"). (First Am. Compl. ¶ 8.) On or about June 11, 2001, the Ollie Pop Partnership formed a California corporation, Ollie Pop Bubble Gum Co., Inc. ("Ollie Pop"). (Id. at ¶ 9.) Hoffman was President and Chief Operating Officer of Ollie Pop. (Id.)

In early 2003, Hoffman came up with the concept of marketing novelty gum and candy "which was designed to combine the popularity of NASCAR and its drivers with the lure of the chew tobacco favored by many of NASCAR's fans by providing a gum or candy in an original new packaging intended to appeal to all ages." (Id. at ¶ 11.) Hoffman contemplated two different packaging options, both of which would be marketed and sold under the mark "Pit Crew Chew." (Id. at ¶ 12.) The first packaging option was a pouch containing gum or candy. (Id.) The second packaging option was a plastic container shaped like a tire and wheel that would also contain gum or candy. (Id.) The products were to be licensed by NASCAR and bear NASCAR's logos. In addition, the products were to be endorsed by at least one NASCAR driver and would display the driver's image and/or his car and/or associated number. (Id.)

Hoffman designed both packages and began working with Motorsports Management, Inc. ("Motorsports") to establish a relationship between Ollie Pop and NASCAR. (Id. at ¶ 13.) Hoffman also entered into discussions with Joe Gibbs Racing to have one of its drivers endorse the product. (Id. at ¶ 14.) Through Joe Gibbs Racing and Motorsports, Hoffman was able to obtain the promise of an endorsement from Tony Stewart. (Id. at ¶ 15.) In 2003, Hoffman entered into negotiations with Impact regarding the marketing and selling of "Pit Crew Chew" products. (Id. at ¶ 16.)

On or about May 12, 2003, Ollie Pop and Impact entered into a written non-disclosure agreement ("Non-Disclosure Agreement"). (Ex. A to First Am. Compl.) As part of his discussions with Impact, Hoffman allegedly disclosed confidential information and materials to Impact, including, but not limited to, the idea/concept of marketing and selling a NASCAR and NASCAR driver endorsed bubble gum, the idea/concept of providing gum and/or candy in a package which would appeal to NASCAR fans' noted fondness for "chew," and the specific drawings of both the pouch and wheel to be marketed and sold. (Id. at ¶ 18.) Hoffman also introduced Impact employees to Motorsports employees.

In July of 2003, Impact submitted an application for a license to NASCAR seeking to market and sell "Pit Crew Chew" products with the NASCAR logos in place. (Id. at ¶ 20.) Following Impact's submission of the licensing application to NASCAR, Chris Biby (of Motorsports) informed Impact and Ollie Pop that NASCAR was indeed interested in licensing the "Pit Crew Chew" products. (Id. at ¶ 21.) By August 2003, Dale Earnhardt, Jr. was interested in endorsing "Pit Crew Chew" products. (Id. at ¶ 22.)

About the beginning of September 2003, Impact abruptly ended its relationship with Ollie Pop and Hoffman. (Id. at ¶ 24.) With the failure to launch "Pit Crew Chew" products, Ollie Pop encountered financial difficulties. (Id. at ¶ 25.) On September 4, 2004, the Ollie Pop Partnership formally dissolved itself and withdrew from Ollie Pop. (Id.) Ollie Pop granted Hoffman all right, title, and interest in and to and all intellectual property rights related to the "Pit Crew Chew" mark and products, all rights of Ollie Pop under the Non-Disclosure Agreement, and all patent and copyright rights relating to the tire and wheel design and artwork. (Id. at ¶ 26.)

In 2005, Hoffman obtained copyright registrations for the two-dimensional artwork on Ollie Pop's candy wheel design. (Exs. B, C, and D to First Am. Compl.)

In 2005, Hoffman learned that Impact had launched its own product, "Champion Chew." (Id. at ¶ 27.) The product consisted of gum enclosed in a tire and wheel and was designed to bear a resemblance to "chew" tobacco. (Id. at ¶ 28.) "Champion Chew" was licensed by NASCAR and was endorsed by one of NASCAR's drivers. (Id.)

Hoffman's First Amended Complaint asserts the following claims: (1) misappropriation of trade secrets; (2) intentional interference with economic relationships; (3) negligent interference with economic relationships; (4) breach of contract; (5) breach of implied contract; (6) copyright infringement; (7) quantum meruit; (8) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200 and California common law; (9) constructive trust/accounting; and (10) injunctive relief.

II. STANDARD

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. ...


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