United States District Court, E.D. California
ORDER DENYING DEFENDANT'S MOTION TO DISMISS (DOC.
action is before the court on defendant John Gitmed's
September 26, 2016 motion to dismiss. (Doc. No. 35.) For the
following reasons, the court will deny defendant's
action proceeds on plaintiff Eli Lilly and Company's
February 8, 2016 complaint against defendants John Derek
Gitmed, Holly Gitmed, Felicia Gitmed, and Anthony Pollino,
Jr.(Doc. No. 1.) In the complaint, plaintiff
brings the following six claims: (i) trademark counterfeiting
in violation of § 32(1) of the Lanham Act 15 U.S.C.
§ 1114(1); (ii) trademark infringement in violation of
§ 32(1) of the Lanham Act, 15 U.S.C. § 1114(1);
(iii) false destination of origin in violation of §
43(a) of the Lanham Act, 1125(a); (iv) unfair competition in
violation of § 43(a) of the Lanham Act, 15 U.S.C. §
1125(a), (v) passing off and unfair competition in violation
of California common law; and (vi) unfair competition in
violation of the California Business & Professions Code
§§ 17200, et seq. (Id. at 11-15.)
Plaintiff seeks damages, restitution, prejudgment and
post-judgment interest, injunctive relief, and attorneys'
costs and fees. (Id. at 15-17.)
complaint alleges the following facts. Plaintiff Eli Lilly
and Company (“Lilly”) is a corporation
headquartered in Indiana that manufactures, distributes, and
markets pharmaceutical products, including a drug known as
Cialis® (“Cialis”) that has the generic name
tadalafil. (Id. at 4, ¶ 13.) Cialis has been
FDA-approved for the treatment of erectile dysfunction and
benign prostatic hyperplasia, or enlarged prostate, and is
only available by prescription. (Id. at 4-5,
¶¶ 14-15, 21.)
has exclusive rights to manufacture Cialis for distribution
in the United States. (Id. at 4, ¶ 14.) In the
United States, Lilly distributes Cialis only to authorized
wholesalers, who then distribute Cialis to pharmacies, who in
turn distribute the drug to patients. (Id. at 5,
¶ 18.) Lilly has acquired a number of federal trademarks
registered with the United States Patent and Trademark Office
(“PTO”) that are used in connection with sales
and promotion of Cialis, including the following: (i) Reg.
No. 2, 724, 589 for the word mark “Cialis”; (ii)
Reg. No. 2, 833, 222 for the Cialis tablet appearance; (iii)
Reg. No. 2, 833, 221 for the Cialis swirl design mark; (iv)
Reg. No. 1, 318, 867 for the “Lilly” word in
stylized letters mark; (v) Reg. No. 1, 226, 434 for the word
mark “Lilly”. (Id. at 4, ¶ 16.)
are California residents who worked with foreign and domestic
entities to produce and distribute counterfeit versions of
the drug Cialis throughout the United States. (Id.
at 3, 6-7, ¶¶ 6-9, 28.) To produce the counterfeit
drugs, defendant John Gitmed provided pictures of Cialis
tablets and packaging to suppliers who replicated Lilly's
Cialis trademarks. (Id. at 7, ¶ 31.) Suppliers
then shipped the goods into and within the United States to
various addresses controlled by defendants, including the
“California Confidence Company”
(“CCC”). (Id. at 7, ¶ 32.) After
receiving the shipments, defendants sold the counterfeit
Cialis in person and by U.S. mail to customers who responded
to their online advertisements. (Id. at 6, 8,
¶¶ 28, 34.) Plaintiff Lilly has not consented to,
sponsored, endorsed, or approved defendant's improper use
of its Cialis trademarks. (Id. at 10, ¶ 41.)
August 28, 2014, 2014, defendants were indicted by a grand
jury in the Eastern District of California for conspiracy to
traffic in counterfeit goods and commit mail fraud in
violation of 18 U.S.C. § 371, and trafficking in
counterfeit goods in violation of 18 U.S.C.§ 2320(a)(1).
(Id. at 9, ¶ 37) (see Case No. No.
1:14-cr-00189-AWI-BAM (E.D. Cal.)). Defendant John Gitmed
ultimately pled guilty to trafficking in counterfeit Cialis
in violation of 18 U.S.C. § 2320(a). (Id.) As
part of the plea agreement in his case, defendant John Gitmed
admitted that he had knowingly used counterfeits of plaintiff
s Cialis trademarks. (Id.)
unlawful activity has resulted in harm to plaintiff by
diminishing the value of Lilly's trademarks, interfering
with its ability to exercise control over the quality and
safety of its product, depriving it of its right to determine
the manner in which its image is presented to the general
public, and injuring its goodwill and business reputation.
(Id. at 10, ¶ 45.) Unless defendants are
enjoined from engaging in the infringing conduct described,
plaintiff will suffer irreparable injury and further damage.
(Id. at 10, ¶ 46.)
September 26, 2016, defendant John Gitmed filed the instant
motion to dismiss plaintiffs complaint. (Doc. No. 35.)
Plaintiff filed its opposition on October 28, 2016. (Doc. No.
37.) Defendant has not filed a reply.
purpose of a motion to dismiss pursuant to Rule 12(b)(6) is
to test the legal sufficiency of the complaint. N. Star
Int'l v. Ariz. Corp. Comm 'n, 720 F.2d 578, 581
(9th Cir. 1983). “Dismissal can be based on the lack of
a cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory.”
Balistreri v. Pacifica Police Dep t , 901 F.2d 696,
699 (9th Cir. 1990). A claim for relief 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).
Though Rule 8(a) does not require detailed factual
allegations, a plaintiff is required to allege “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); Ashcroft v. Iqbal, 556 U.S. 662,
677-78 (2009). “A claim has facial plausibility when
the pleaded factual content allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678.
determining whether a complaint states a claim on which
relief may be granted, the court accepts as true the
allegations in the complaint and construes the allegations in
the light most favorable to the plaintiff Hishon v. King
& Spalding, 467 U.S. 69, 73 (1984); Novak v.
United States, 795 F.3d 1012, 1017 (9th Cir. 2015). It
is inappropriate to assume that the plaintiff “can
prove facts that it has not alleged or that the defendants
have violated the . . . laws in ways that have not been
alleged.” Associated Gen. Contractors of Cal, Inc.
v. Cal State Council of Carpenters, 459 U.S. 519, 526
John Gitmed moves to dismiss the complaint on the basis that
plaintiff cannot allege damages as a matter of law, since the
court in his criminal case declined to impose a restitution
order against him. (Doc. No. 35 at 1.) In support of
his motion, defendant attaches the following: (i) a letter
from his counsel reporting on the status of the criminal
case, (Id. at 10-11); (ii) a portion of the docket
from defendant's criminal case, United States v.
Gitmed, No. 1:14-cr-189-AWI, (Id. at 10-12);
and (iii) a memorandum opinion from a criminal case in the
Eastern District of ...