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Aegis Software, Inc. v. 22nd District Agricultural Association

United States District Court, S.D. California

June 7, 2017

AEGIS SOFTWARE, INC. dba SAN DIEGO SPIRITS FESTIVAL and SAN DIEGO SPIRITS BOTTLE COMPETITION, Plaintiff,
v.
22nd DISTRICT AGRICULTURAL ASSOCIATION, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS [ECF NO. 28]

          Barry Ted Moskowitz, Chief Judge.

         On September 19, 2016, Plaintiff Aegis Software, Inc., filed a First Amended Complaint (“FAC or “Complaint”) against Defendant 22nd District Agricultural Association. (ECF No. 27.) On October 3, 2016, Defendant filed a motion to dismiss. (ECF No. 28.) For the reasons discussed below, Defendant's motion to dismiss is granted in part and denied in part.

         I. FACTUAL BACKGROUND

         Plaintiff Aegis Software hosts the “San Diego Spirits Festival” (“SDSF”), an annual specialty cocktail and spirits festival held in San Diego. (Compl. ¶¶ 8-10.) Plaintiff held its inaugural festival on June 5-7, 2009. (Compl. ¶ 13.) Given the event's success, Plaintiff decided to host the event on an annual basis and registered the fictitious business name “San Diego Spirits Festival” with the San Diego County Clerk. (Compl. ¶¶ 14-15.) In 2014, Plaintiff held its 6th annual SDSF which attracted “approximately 3800 attendees (a 35% increase from the prior year) and 80 ‘Spirit Brands' (a 23% increase from the prior year).” (Compl. ¶ 27.) Plaintiff alleges that ninety-five percent of the festival participants are headquartered outside of San Diego, with sixty-percent of those participants being located outside of California. (Compl. ¶ 41.)

         The SDSF is marketed each year through a variety of online, radio, television, and print medias, as well as through the marketing channels of each of the participants taking part in the event. (Compl. ¶¶ 30, 39.) Local news and media outlets have covered and promoted the SDSF, and the SDSF has been featured in various online publications associated with alcoholic beverages. (Compl. ¶¶ 30-31.) Travel publications catered to domestic and international travelers, including Fodor's Travel and Premier Traveler Magazine, have also featured the SDSF. (Compl. ¶¶ 35.e-g.) In 2013, Fodor's Travel recognized the SDSF as one of the “Best Cocktail Festivals in America.” (Compl. ¶ 36c.) Since 2013, the San Diego mayor has proclaimed a day in August each year as “San Diego Spirits Festival Day.” (Compl. ¶¶ 36.d-f.)

         In 2013, Plaintiff hosted its first annual “San Diego International Spirits Bottle Competition” (“Competition”). (Compl. ¶ 21.) The Competition takes place during the SDSF and features applicants from around the world that submit new spirits for competition and judging. (Compl. ¶¶ 22.) In 2013, the Competition featured 35 competitors, and in 2014 the Competition featured 86 competitors. (Compl. ¶¶ 26-27.) Plaintiff alleges that thirty percent of the Competition's participants are located in California, but outside of San Diego, fifty percent are located in the U.S., but outside of California, and twenty percent of the participants are located internationally. (Compl. ¶ 42.)

         Plaintiff further alleges that both the SDSF and Competition have attracted the attention of several celebrities including Dennis Rodman, Vince Neil, Ron Jeremy, and Cheech Marin. (Compl. ¶¶ 36.h-k.) The Competition has also attracted the attention of nationally recognized judges. (Compl. ¶¶ 36.m-o.)

         A. The SDSF Mark and Competition Mark

         On October 21, 2015, Plaintiff successfully registered the service mark “San Diego Spirits Festival” with the Secretary of State of California. (See Certificate of Registration of Service Mark, attached to Compl. as Ex. 14, ECF no. 1-2, pp. 39-44.) As discussed below, Plaintiff alleges in its Complaint that Defendant's actions infringed upon two of Plaintiff's marks: the San Diego Spirits Festival mark (“SDSF mark”) and the San Diego International Spirits Bottle Competition mark (“Competition mark”). (Compl. ¶ 97.) Neither mark is registered with the United States Patent and Trademark Office, nor has the Competition mark been registered in California.

         B. Alleged Infringement

         Defendant is a public association formed pursuant to the California Food and Agriculture Code for the express purpose of “[h]olding fairs, expositions, and exhibitions for the purpose of exhibiting all of the industries and industrial enterprises, resources and products of every kind or nature of the state with a view toward improving, exploiting, encouraging, and stimulating them.” Cal. Food & Agric. Code § 3951(a).

         In 2013, Defendant allegedly contacted Plaintiff to discuss a potential partnership. (Compl. ¶ 47.) Defendant was particularly interested in holding an annual event showcasing cocktails during the San Diego County Fair. (Compl. ¶ 48.) At a meeting with Defendant in July 2013, Alan and Elizabeth Edwards, the principals of the SDSF, allegedly shared important details relating to the business model and operational structure of the SDSF. (Compl. ¶ 51.) Following the July 2013 meeting, Plaintiff did not hear from Defendant again. (Compl. ¶ 54.) Plaintiff thereafter discovered that Defendant intended to hold a competing festival at the San Diego Country Fair in June 2015. (Compl. ¶¶ 54-55.) Defendant named its festival “Distilled: San Diego Spirit & Cocktail Festival, ” which includes a spirits competition named “Distilled: San Diego Spirit & Cocktail Competition.” (Compl. ¶ 55.)

         Plaintiff alleges that the SDSF has suffered as a direct result of Defendant's cocktail festival. (Compl. ¶ 94.) In 2015, the SDSF's number of attendees and participants decreased from the prior year to only 3500 attendees and 68 participating “Spirit Brands.” (Compl. ¶¶ 74-75.) Moreover, Plaintiff alleges that potential attendees and participants are routinely confused because of the similarity between the events' names, as well as Plaintiff's marks-the SDSF mark and the Competition mark-and Defendant's advertisements. (Compl. ¶¶ 56-58, 61-69.)

         Plaintiff's FAC alleges three causes of action: (1) federal dilution of a famous mark; (2) violation of federal unfair competition laws; (3) and state service mark infringement. ...


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