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TWIT, LLC v. Twitter Inc.

United States District Court, N.D. California

May 30, 2018

TWIT, LLC, ET AL., Plaintiffs,
v.
TWITTER INC., Defendant.

          ORDER RE: MOTION TO DISMISS RE: DKT. NO. 17

          JACQUELINE SCOTT CORLEY UNITED STATES MAGISTRATE JUDGE

         Plaintiffs TWiT, LLC, and its founder, Leo Laporte bring this civil action against Twitter, Inc. alleging breach of contract and tort claims, as well as trademark infringement claims under the common law and the Lanham Act, 15 U.S.C. §§ 1114, 1125. Twitter has moved to dismiss Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim and as barred by the applicable statute of limitation. (Dkt. No. 17.) Having considered the parties' briefs and having had the benefit of oral argument on May 24, 2018, the Court GRANTS the motion to dismiss.[1] Plaintiffs have not plausibly alleged that they entered into a contract with Twitter, that Twitter defrauded Plaintiffs, or that Twitter is doing something that infringes on Plaintiffs' trademarks.

         BACKGROUND A. Complaint Allegations

         Since 2005 TWiT has distributed audio and video content over the internet in the form of hosted programs covering a broad range of topics. (Dkt. No. 1 at ¶ 7.) These programs are distributed to the public by TWiT via downloading or streaming from the internet (“netcasts”). (Id. at ¶ 7.) In addition to streaming live content, the TWiT website retains archives of its shows dating back numerous years which are available for download. (Id. at ¶ 8.)

         This audio and video content is provided under the TWIT trademark. Leo Laporte is the owner of the TWIT trademark and TWiT is the exclusive licensee. (Id. at ¶ 9.) The TWIT mark is registered on the U.S. Principal Register for use in connection with entertainment in the nature of visual and audio performances, and musical, variety, news and comedy shows (Registration No. 3, 217, 759). (Id. at ¶ 10.) The application for this registration was filed on May 15, 2006 and the Registration issued on March 13, 2007. (Id; Dkt. No. 1-1.) Since 2005, Plaintiffs have extensively advertised and promoted the TWIT mark, and invested substantial time, energy and resources to develop substantial consumer recognition of the mark. (Complaint at ¶ 11.)

         On March 6, 2007, Evan Williams, one of the co-founders of Twitter, appeared on TWiT's “net@night” program. (Id. at ¶ 12.) Mr. Laporte co-hosted the show. (Id.) Williams described Twitter as a text-based microblogging service. (Id. at ¶ 13) He “acknowledged that Twitter was aware of the conflict between their TWITTER brand and Plaintiffs' TWiT mark when they adopted TWITTER as their mark.” (Id. at ¶ 13.) Williams also “acknowledged the confusion which likely would arise from the use of TWITTER in the marketplace, as well as instances of actual confusion which already had arisen.” (Id.) Given this, Williams and Laporte, “on behalf of Twitter and TWiT, recognized and agreed to a basis for coexistence of the two marks, conditioned on each company continuing its own unique distribution platform.” (Id. at ¶ 14.)

         This “coexistence agreement” was honored by both TWiT and Twitter for years. (Id.) However, in 2009, news stories were published indicating that “Twitter was planning to expand its services to distribute video content under the TWITTER brand, contrary to the coexistence agreement.” (Id. at ¶ 15.) TWiT and Laporte were greatly concerned that this potential business model expansion would have a significant effect on TWiT's business. On June 4, 2009, Laporte sent a letter to Williams (who was then Twitter's CEO) to express his concern about Twitter's expansion beyond microblogging and into audio-video streaming. (Id. at ¶ 16; Dkt. No. 1-2.) The next day, Williams responded via email “[c]onsistent with the coexistence agreement” and advised Laporte that the news reports were not accurate. (Dkt. No. 1 at ¶ 17.) Williams responded: “Don't worry: We're not expanding to audio or video under the Twitter brand.” (Id.; Dkt. No. 1-3.)

         In reliance on this renewed promise and representation by Twitter regarding coexistence in separate business models, Laporte and TWiT continued forward with the use of the TWiT mark, and did not take steps otherwise available to protect their rights. (Id. at ¶ 18.) However, in May 2017, TWiT and Laporte became aware of Twitter's current plans to expand its use of the TWITTER mark in connection with the streaming and downloading of video content over the internet. (Id. at ¶ 19.) Twitter's use of the TWITER mark with these new products and services breaches its promise and agreement with TWiT and Laporte and creates a likelihood of confusion with the TWIT mark. (Id. at ¶ 20.)

         B. Procedural Background

         Plaintiffs TWiT and Laporte filed this action in January 2018, six months after sending a cease and desist letter to Twitter. (Id. at ¶ 21.) Plaintiffs allege 12 claims for relief: (1) breach of written contract; (2) breach of oral agreement; (3) breach of implied contract; (4) promissory estoppel; (5) false promise; (6) negligent misrepresentation; (7) intentional interference with prospective economic advantage; (8) intentional misrepresentation; (9) negligent interference with prospective economic advantage; (10) trademark infringement, in violation of the Lanham Act, 15 U.S.C. § 1114(1)(a); (11) unfair competition, in violation of the Lanham Act, 15 U.S.C. § 1125(a); and (12) common law trademark infringement.

         Twitter responded by filing the now pending motion to dismiss. (Dkt. No. 17.) Shortly after Twitter filed the motion to dismiss, Plaintiffs filed a motion to disqualify Durie Tangri LLP and its attorneys as counsel for Defendant Twitter. (Dkt. No. 25.) Both motions are fully briefed and came before the Court for hearing on May 24, 2018.

         JURISDICTION

         In federal court, subject matter jurisdiction may arise from either “federal question jurisdiction” or “diversity of citizenship” when the amount in controversy exceeds $75, 000. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). To properly allege diversity jurisdiction, a plaintiff must claim damages in excess of $75, 000 and each defendant must be a citizen of a different state from each plaintiff. See 28 U.S.C. § 1332; Diaz v. Davis (In re Digimarc Corp. Derivative Litig.), 549 F.3d 1223, 1234 (9th Cir. 2008). Here, as all parties are residents of California, there is no diversity jurisdiction. However, the Court has federal question jurisdiction under 28 U.S.C. § 1331 because Plaintiffs plead trademark infringement and unfair competition claims under the Lanham Act.

         DISCUSSION

         Plaintiffs' claims fall within four general categories: contract, tort, fraud, and the Lanham Act. Twitter insists that Plaintiffs have failed to plead facts suggesting entitlement to relief under any category of claims. Twitter also contends that the claims are all barred by the applicable statute of limitations.

         A. Plaintiffs' Contract Claims

         Plaintiffs allege four contract-related claims: (1) breach of written contract; (2) breach of oral agreement; (3) breach of implied contract, and (4) an alternative promissory estoppel claim. Twitter contends that each of these claims fails because Plaintiffs have not pled any ...


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