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Bobbleheads.Com, LLC v. Wright Brothers, Inc.

United States District Court, S.D. California

May 8, 2017

BOBBLEHEADS.COM, LLC, a Georgia limited liability company, Plaintiff,
WRIGHT BROTHERS, INC., a California corporation; COREY WRIGHT, an individual; and Y WRIGHT, an individual, Defendants.


          Hon. Janis L. Sammartino, United States District Judge

         Presently before the Court is Defendants Wright Brothers, Inc.'s, Corey Wright's, and Casey Wright's Motion to Dismiss First Amended Complaint, (“MTD, ” ECF No. 28). Also before the Court are Plaintiff, LLC's Response in Opposition to, (“Opp'n, ” ECF No. 34), and Defendants' Reply in Support of, (“Reply, ” ECF No. 36), Defendants' MTD. The Court vacated the hearing on the motion and took the matter under submission pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 37.) After considering the parties' arguments and the law, the Court GRANTS IN PART and DENIES IN PART Defendants' MTD.


         Plaintiff designs, markets, distributes, and sells bobbleheads. (FAC ¶ 14, ECF No. 18.) One such bobblehead is known as the Hillary Clinton Striped Prison Pantsuit Bobblehead (the “ Work”), which Plaintiff published on August 13, 2015. (Id. ¶ 15.) Plaintiff filed an application for the registration of the complete Work (the “Full Clinton” registration) on September 2, 2016 with the United States Copyright Office. (Id.; see also Id. Exs. 1, 2.) Additionally, Plaintiff filed an application covering just the head of the Work (the “Clinton Head” registration) on or about May 13, 2016. (Id.; see also Id. Ex. 3.) The following is a photocopied image of the complete Work:

         (Image Omitted)


         Plaintiff argues that Defendants have reproduced, prepared derivative works, and distribute or have distributed unauthorized copies of the Work to the public by selling two of their own bobbleheads (“Defendant Work 1” and “Defendant Work 2”). (Id. ¶ 16.) A side-by-side comparison of the Work and Defendant Work 1 and Defendant Work 2 is reproduced below:

         (Image Omitted)


         On September 7, 2016, Plaintiff notified Defendants of the alleged infringement and asked Defendants to cease and desist from manufacturing Defendant Work 1. (Id. ¶ 17.) Plaintiff sent a follow-up letter on September 21, 2016, and, after some communication between the parties, Defendants took steps to make it appear that they had temporarily discontinued the sale of Defendant Work 1. (Id. ¶ 18.) During the parties' communications, Plaintiff sent notices to numerous online service providers, indicating that Defendants' infringing work was being advertised and sold on the service providers' respective sites and demanding that these advertisements be taken down pursuant to the Digital Millennium Copyright Act (“DMCA”). (Id. ¶ 19.) Plaintiff alleges that Defendants shifted their advertising and sales to other platforms and outlets to avoid the impact of these DMCA notices. (Id.)

         In addition to copyright infringement, Plaintiff alleges that Defendants have engaged in false advertising. (Id. ¶ 20.) Specifically, Plaintiff alleges that Defendants falsely advertised in various media that their products were sponsored or otherwise affiliated with the Trump/Pence Presidential campaign (using the Trump/Pence campaign logo on websites and other advertisements; indicating that a copyright for their website was owned by or affiliated with Trump; and stating in their advertisements that Defendants' bobbleheads were “The official bobble head doll of the 2016 Donald Trump Presidential campaign”). (Id.) Plaintiff alleges that neither Trump nor the Trump/Pence campaign authorized the sale of or had any association with Defendants' works. (Id.)

         Furthermore, Plaintiff alleges that Defendants falsely advertised the sale of Defendant Work 2 but, when consumers actually ordered Defendant Work 2, Defendants actually shipped Defendant Work 1. (Id. ¶ 22.) Plaintiff alleges this based on its own order of Defendant Work 2, where it instead received Defendant Work 1. (Id. ¶ 22; see also Id. Ex. 4 (Order Form), Ex. 5 (product received).) In addition to false advertising, Plaintiff alleges that the practice of advertising Defendant Work 2 instead of Defendant Work 1, but still sending Defendant Work 1, was an attempt to avoid further infringement of the Work, since Defendant Work 1 looks more similar to the Work.[1] (Id. ¶ 21.)

         Plaintiff brings three claims against Defendants based on these allegations: (1) copyright infringement against Defendant Wright Brothers, Inc.; (2) copyright infringement against Defendant Casey Wright and Defendant Corey Wright; and (3) false advertising against all Defendants. (See generally id.) Plaintiff seeks injunctive relief, impoundment of all counterfeit and infringing copies of the Work, and general, special, actual, and statutory damages. (Id.)


         Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint “fail[s] to state a claim upon which relief can be granted, ” generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not require ‘detailed factual allegations, ' . . . it [does] demand more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). A complaint will not suffice “if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 677 (citing Twombly, 550 U.S. at 557).

         In order to survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled “allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 677 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. Facts “‘merely consistent with' a defendant's liability” fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true “legal conclusions” contained in the complaint. Id. This review requires context-specific analysis involving the Court's “judicial experience and common sense.” Id. at 678 (citation omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id.

         Where a complaint does not survive 12(b)(6) analysis, the Court will grant leave to amend unless it determines that no modified contention “consistent with the challenged pleading . . . [will] cure the deficiency.” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schriber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)).


         Defendants move to dismiss Plaintiff's FAC on two principal grounds with several sub-arguments in each: (I) Plaintiff's Lanham Act claim fails; and (II) Plaintiff has no basis to seek fees or statutory damages under the Copyright Act. (See generally MTD, ECF No. 28-1.) The Court addresses each argument in turn.

         I. Plaintiff's Lanham Act Claim

         Defendants move to dismiss Plaintiff's Lanham Act claim on various grounds: (A) Plaintiff's allegations supporting its false advertising claim under the Lanham Act must meet Rule 9(b)'s heightened pleading standard; (B) Plaintiff fails to allege false advertising under Rule 9(b); and (C) even if Plaintiff's allegations survive Rule 9(b), its Lanham Act claim still fails for other reasons. (See Id. at 12-23.[2]) The Court considers each argument in turn.

         A. Whether Rule 9(b) Applies to Plaintiff's Lanham Act Claim

         Defendants argue that while the Ninth Circuit has yet to decide whether Rule 9(b) applies to Lanham Act claims, several district courts in the Ninth Circuit have applied Rule 9(b) to false advertising claims brought under the Lanham Act because such claims are grounded in fraud. (MTD 11-13, ECF No. 28-1.) Plaintiff responds that other courts regularly apply Rule 8 to Lanham Act cases. (Opp'n 23, ECF No. 34.)

         As to this threshold matter, the Court agrees with the weight of authority that Rule 9(b) applies to Lanham Act claims that are grounded in fraud. Courts apply a heightened pleading standard to actions that sound in fraud pursuant to Rule 9(b). See Fed. R. Civ. P. 9(b) (“In alleging fraud . . . a party must state with particularity the circumstances constituting fraud or mistake.”); see also Vess v. Ciba-Geigy Corp., USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (“Averments of fraud must be accompanied by ‘the who, what, when, where, and how' of the misconduct charged.”). Rule 9(b) is not limited to claims for fraud itself; rather, it applies if a claim is “grounded in” or “sounds in” fraud. See, e.g., Vess, 317 F.3d at 1103-04 (“In cases where fraud is not a necessary element of a claim, a plaintiff may choose nonetheless to allege in the complaint that the defendant has engaged in fraudulent conduct and rely entirely on that course of conduct as the basis of a claim. In that event, the claim is said to be ‘grounded in fraud' or to ‘sound in fraud, ' and the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b).”). It thus follows that a false advertising claim under the Lanham Act that is “grounded in” or “sounds in” fraud must meet the heightened pleading standards of Rule 9(b). See, e.g., Seoul Laser Dieboard Sys. Co., Ltd. v. Serviform, S.r.l., 957 F.Supp.2d 1189, 1200 (S.D. Cal. 2013) ...

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