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Unicolors v. Macy's, Inc.

United States District Court, C.D. California

March 6, 2015

UNICOLORS, INC
v.
MACY'S, INC., et al.

CIVIL MINUTES - GENERAL

R. GARY KLAUSNER, District Judge.

Proceedings: (IN CHAMBERS) Order re: Motion to Dismiss Pursuant to Rule 12(b)(6) and Rule 12(b)(7) (DE 59); Joinders Therein (DEs 89, 97, 99, 112, 115); Urban Outfitters' Motion to Dismiss Pursuant to Rule 12(b)(6) (DE 108)

I. INTRODUCTION

On November 5, 2014, Unicolors, Inc. ("Unicolors" or "Plaintiff") filed a Complaint against Macy's, Inc. and approximately sixty-four other retailers ("Downstream Retailers" or "Defendants") for (1) Copyright Infringement and (2) Vicarious and/or Contributory Copyright Infringement. Plaintiff alleges that Downstream Retailers purchased, sold, manufactured, imported, and/or distributed products featuring a design which was allegedly identical to, or substantially similar to, a design in which Plaintiff holds a U.S. copyright. Unicolors seeks injunctive and compensatory relief including unjust enrichment, attorneys' fees, and punitive damages.

On December 15, 2014, twenty-seven of the defendants in the instant action ("Moving Defendants") filed the present Motion to Dismiss pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) and Rule 12(b)(7). Eleven additional Defendants have joined in this Motion. On January 29, 2015, intervener Urban Outfitters, Inc. ("Urban") filed its own Motion to Dismiss pursuant to Rule 12(b)(6).[1] For the following reasons, the Court DENIES Moving Defendants' and Urban's Motions to Dismiss.

II. FACTUAL BACKGROUND

Plaintiff owns a U.S. copyright in a two-dimensional textile design (the "Subject Design"). Plaintiff, which exclusively owns the rights to the Subject Design, offered it for sale prior to the allegedly infringing acts of Defendants.

On February 10, 2014, Plaintiff filed a lawsuit against Urban, Century 21, [2] and Does 1 through 10 for Infringement and Vicarious and/or Contributory Infringement of its copyright in the Subject Design. Does 6 through 10 included "parties not yet identified who have infringed Plaintiff's copyrights, have contributed to the infringement of Plaintiff's copyrights, or have engaged in one or more of the wrongful practices alleged...." (Compl., ¶ 8, Unicolors, Inc. v. Urban, Inc., No. 14-CV-1029-SJO (VBK) (" Unicolors I "), DE 1.)[3] Urban did not disclose its customers in its Rule 26 disclosures or in its Notice of Interested Parties. The parties to Unicolors I scheduled May 28, 2014 as the last day to amend the pleadings and November 24, 2014 as the discovery cut-off date.

On April 29, 2014, in its first set of interrogatories in Unicolors I, Plaintiff requested that Urban identify all stores to which it sold allegedly infringing products. On July 30, 2014, Urban produced 484 documents including invoices which identified 45 "downstream" retailers. Urban produced the rest by September 30, 2014. Plaintiff did not seek to amend its complaint. Instead it filed the present lawsuit (" Unicolors II ") against sixty-five Downstream Retailers on November 5, 2014.

Plaintiff alleges that Downstream Retailers and certain Doe Defendants "were purchasing, marketing, distributing, and/or selling for profit garments that bore a textile print that was substantially similar to, and copied from, the Subject Design." It alleges that Downstream Retailers obtained the product from Urban. (Compl., ¶ 73.)

Unicolors I was resolved on February 26, 2015, when a jury returned a verdict in favor of Plaintiff.

III. JUDICIAL STANDARD

A. Claim Splitting

A court may grant a Rule 12(b)(6) motion to dismiss if the complaint has failed to state a claim for which relief may be granted. FED. R. CIV. P. 12(b)(6). "Under Twombly, the relevant question is whether, assuming the factual allegations are true, the plaintiff has stated a ground for relief that is plausible." Ashcroft v. Iqbal, 556 U.S. 662, 696 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A complaint must contain enough factual allegations to state a claim that is plausible on its face in order to survive a motion to dismiss. Iqbal, 556 U.S. at 663. A claim is facially plausible if the plaintiff alleges enough facts to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. Courts have discretion to dismiss a duplicative complaint with prejudice to prevent a plaintiff from "fragmenting a single cause of action and litigating piecemeal the issues which could have been resolved in one action." Adams v. Cal. Dept. of Health Servs., 487 F.3d 684, 694 (9th Cir. 2007), overruled ...


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