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LLC v. Wright Brothers, Inc.

United States District Court, S.D. California

May 8, 2017

PLAN P2 PROMOTIONS, LLC, a California limited liability company, Plaintiff,
v.
WRIGHT BROTHERS, INC., a California corporation; COREY WRIGHT, an individual; and Y WRIGHT, an individual, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS (ECF NO. 24)

          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. 24). Also before the Court are Plaintiff Plan P2 Promotions, LLC's (“PPP”) Response in Opposition to, (“Opp'n, ” ECF No. 30), and Defendants' Reply in Support of, (“Reply, ” ECF No. 32), 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. 33.) After considering the parties' arguments and the law, the Court GRANTS IN PART and DENIES IN PART Defendants' MTD.

         BACKGROUND

         Plaintiff PPP designs, markets, distributes, and sells bobbleheads. (FAC ¶ 14, ECF No. 15.) One such bobblehead is known as the Donald Trump Red Hat Bobblehead (the “PPP Work”), which Plaintiff published on October 27, 2015. (Id. ¶ 15.) Plaintiff filed an application for the registration of the PPP Work on October 19, 2016 with the United States Copyright Office. (Id.; see also Id. Exs. 1, 2.) The following is a photocopied image of the complete PPP Work:

         (Image Omitted)

(Id.)

         Plaintiff argues that Defendants have reproduced, prepared derivative works, and distribute or have distributed unauthorized copies of the PPP 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 PPP Work and Defendant Work 1 and Defendant Work 2 is reproduced below:

         (Image Omitted)

(Id.)

         On or around October 20, 2016, Plaintiff sent notices to internet service providers indicating that Defendants' infringing work was being advertised and sold on the service providers' respective sites, and demanding that those advertisements be taken down pursuant to the Digital Millennium Copyright Act (“DMCA”). (Id. ¶ 17.) 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. ¶ 18.) 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 bobblehead 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. ¶ 20.) Plaintiff alleges that this was in an effort to disguise the blatant copying of the PPP Work (since Plaintiff alleges that Defendant Work 1 looks more similar to its work than Defendant Work 2). (Id. ¶ 19.) Nevertheless, Plaintiff alleges that both of Defendants' works infringe its PPP Work. (Id.)

         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 PPP Work, and general, special, actual, and statutory damages. (Id.)

         LEGAL STANDARD

         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)).

         ANALYSIS

         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. 24-1.) 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 13-26.[1]) The Court considers each argument in turn.

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


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