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Morton & Bassett, LLC v. Organic Spices, Inc.

United States District Court, N.D. California

April 21, 2017



          HAYWOOD S. GILLIAM, JR. United States District Judge.

         Pending before the Court is the motion for summary judgment, Dkt. No. 66 (“Mot.”), filed on October 28, 2016 by Defendant and Counterclaimant Organic Spices, Inc. (“Spicely”). Plaintiff and Counterclaim-Defendant Morton Bassett, L.P. (“Morton”) timely filed its opposition on November 18, 2016.[1] Dkt. No. 70 (“Opp.”). Spicely filed its reply on November 28, 2016. Dkt. No. 73 (“Reply”). The Court finds that this matter is appropriate for disposition without oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b). For the reasons described below, the Court DENIES the motion.

         I. FACTS

         Morton has been producing and selling premium spices since 1986. Dkt. No. 70-3, Gothelf Decl. ¶ 2. The company sells its products throughout the United States in a wide array of grocery stores, supermarkets, and retails outlets. Id. ¶¶ 2, 13. The company employs two similar versions of its asserted trade dress. Id. ¶¶ 5-6; Dkt. No. 62 (“SAC”) ¶ 14. The original product line consists of the following elements: (1) “[a] contemporary, clean round clear glass container through which the enclosed product is easily seen;” (2) “[a] solid color plastic cap;” (3) “[o]paque white (and occasionally colored) lettering in a clean, modern style font either decaled or embossed onto the clear glass container with no opaque labelling;” (4) “[t]he name of the spice is displayed in all capital letters;” and (5) “[t]he name of the spice is displayed in the largest letters [of the asserted trade dress] for added emphasis.” Gothelf Decl. ¶ 5; SAC ¶ 14. The “100% organic” product line shares these elements, and contains the following additional elements: (1) “[t]he top of the glass container has a white (or occasionally black) decaled or embossed band with the words “100% ORGANIC” in all capital, reverse lettering;” and (2) “[a] circle is displayed in the middle of the bottle.”[2] Gothelf Decl. ¶ 6; SAC ¶ 14. This case poses the issue of whether Spicely, a competing spice seller, has infringed on Morton's asserted trade dress.[3]


         Summary judgment is proper when a “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And a dispute is “genuine” if there is evidence in the record sufficient for a reasonable trier of fact to decide in favor of the nonmoving party. Id. But in deciding if a dispute is genuine, the court must view the inferences reasonably drawn from the materials in the record in the light most favorable to the nonmoving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986), and “may not weigh the evidence or make credibility determinations, ” Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997), overruled on other grounds by Shakur v. Schriro, 514 F.3d 878, 884-85 (9th Cir. 2008). “Summary judgment is improper where divergent ultimate inferences may reasonably be drawn from the undisputed facts.” Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir. 2014) (internal quotation marks omitted); see also Int'l Union of Bricklayers & Allied Craftsman Local Union No. 20, AFL-CIO v. Martin Jaska, Inc., 752 F.2d 1401, 1405 (9th Cir. 1985) (“Even where the basic facts are stipulated, if the parties dispute what inferences should be drawn from them, summary judgment is improper.”). If a court finds that there is no genuine dispute of material fact as to only a single claim or defense or as to part of a claim or defense, it may enter partial summary judgment. See Fed. R. Civ. P. 56(a).

         With respect to summary judgment procedure, the moving party always bears both the ultimate burden of persuasion and the initial burden of producing those portions of the pleadings, discovery, and affidavits that show the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party will not bear the burden of proof on an issue at trial, it “must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). Where the moving party will bear the burden of proof on an issue at trial, it must also show that any reasonable trier of fact would have to find in its favor. See Celotex, 477 U.S. at 325. In either case, the movant “may not require the nonmoving party to produce evidence supporting its claim or defense simply by saying that the nonmoving party has no such evidence.” Nissan Fire, 210 F.3d at 1105. “If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial.” Id. at 1102-03.

         “If, however, a moving party carries its burden of production, the nonmoving party must produce evidence to support its claim or defense.” Id. at 1103. In doing so, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec., 475 U.S. at 586. A nonmoving party must also “identify with reasonable particularity the evidence that precludes summary judgment, ” because the duty of the courts is not to “scour the record in search of a genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quoting Richards v. Combined Ins. Co. of Am., 55 F.3d 247, 251 (7th Cir. 1995)). If a nonmoving party fails to produce evidence that supports its claim or defense, courts must enter summary judgment in favor of the moving party. Celotex, 477 U.S. at 323.


         Morton asserted five claims in the operative complaint. SAC ¶¶ 36-58. Later, Morton abandoned two of these claims. See Opp. at 21 n.8 (“Morton Bassett . . . is abandoning its claims for infringement under Cal. Bus. & Prof. Code § 14245 (Second Claim) and federal false advertising (Fifth Claim).”). Therefore, only three claims are still at issue: trade dress and false designation of origin in violation of 15 U.S.C. § 1125(A) (First Claim); common-law passing off and unfair competition (Third Claim); and violation of California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq. (Fourth Claim). See SAC ¶¶ 36-38, 43-50. The Court addresses these claims below.

         A. Trade Dress and False Designation of Origin

         Section 43(a) of the Lanham Act proscribes infringement of an unregistered trade dress.[4]Wal-Mart Stores, Inc. v. Samara Bros. Inc., 529 U.S. 205, 209 (2000); see also 15 U.S.C. § 1125(a). Trade dress is “the ‘total image of a product, ' including features such as size, shape, color, texture, and graphics.” Millennium Labs., Inc. v. Ameritox, Ltd., 817 F.3d 1123, 1126 (9th Cir. 2016) (quoting Disc Golf Ass'n v. Champion Discs, Inc., 158 F.3d 1002, 1005 n. 3 (9th Cir. 1998)). The elements of a trade dress claim are “(1) that [the plaintiff's] claimed dress is nonfunctional; (2) that [the plaintiff's] claimed dress serves a source-identifying role either because it is inherently distinctive or has acquired secondary meaning; and (3) that the defendant's product or service creates a likelihood of consumer confusion.” Id. at 1127 n.1 (internal quotation marks omitted). In assessing these elements, the court must “focus not on the individual elements, but rather on the overall visual impression that the combination and arrangement of those elements create.” See Id. at 1130 (emphasis in original) (quoting Clicks Billiards, Inc. v. Sixshooters Inc., 251 F.3d 1252, 1256 (9th Cir. Ariz. 2001)).

         Here, Spicely argues that Morton does not have protectable trade dress because its package design is functional, generic, and has not acquired secondary meaning. Mot. at 11-21

         i. Functionality

          “[T]rade dress protection cannot be asserted for any functional features of a product.” Millennium Labs, 817 F.3d at 1126.[5] However, the Ninth Circuit has cautioned that “functional elements that are separately unprotectable can be protected together as part of a trade dress.” Id. at 1130 (quoting Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 842 (9th Cir. 1987)). Functionality is typically “an intensely factual issue.” See Millennium Labs, 817 F.3d at 1119. The Ninth Circuit uses a two-step test to determine whether trade dress is functional. Id. at 1128-31.

         a. Step One

         Step One is guided by the Supreme Court's teaching “that ‘a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.'” See Id. at 1127-28 (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n. 10 (1982)). Under Step One, courts assess four functionality factors:

(1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design, and (4) whether the particular design results from a comparatively simple or inexpensive method of manufacture. No one factor is dispositive; all should be weighed collectively.

Id. at 1130 (quoting Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1006 (9th Cir. 1998)). If the claimed trade dress is held to be functional under Step One, the inquiry ceases. Id. at 1129.

         As to the first factor, whether the design yields a utilitarian advantage, a reasonable jury might conclude that the trade dress is “merely aesthetic, not functional, ” see Millennium Labs, 817 F.3d at 1130, because it does not affect the “actual benefit” (i.e., spices) that consumers seek to purchase, see Fiji Water Co., LLC v. Fiji Mineral Water USA, LLC, 741 F.Supp.2d 1165, 1174 (C.D. Cal. 2010) (finding that “taken together, ” design elements of Fiji's water bottle, such as shape of bottle and lettering, raindrop, and hibiscus flower used on label, were “purely aesthetic”).[6] Just as the court in Fiji Water found that “[c]onsumers do not buy bottled water consumer benefit. Although Congress does not want consumers to be confused about a product's source, it also does not want to restrict the availability and use of functional features that enhance based on how its packaging looks, but rather based on how the water tastes or how much it costs, ” see Id. at 1174, a reasonable jury might conclude here that consumers buy spices based not upon their packaging, but rather upon their quality and price. At a minimum, Morton has raised a dispute of material fact as to whether its trade dress, instead of impacting the product's quality or price, or constituting what customers actually seek to buy, has instead functioned to identify that a particular entity (i.e., Morton) was the product's source. See Id. at 1173 (citing Leatherman Tool Grp., Inc. v. Cooper Indus., Inc., 199 F.3d 1009 (9th Cir. 1999)). For example, Morton's CEO since 1986 states in his declaration that the trade dress has been “one of the most important features of our brand, ” and has attached advertising, marketing, and media materials emphasizing the trade dress. See Gothelf Decl. ¶¶ 11, 14; id. Ex. A (company webpage, nearly half of which is comprised of color photo of three containers); id. ...

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