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MGA Entertainment, Inc. v. Dynacraft BSC, Inc.

United States District Court, C.D. California

May 30, 2018

MGA Entertainment, Inc., et al., Plaintiff,
v.
Dynacraft BSC, Inc., et al., Defendants.

          ORDER GRANTING IN PART DEFENDANT'S MOTION TO DISMISS COUNTS 1, 3, 4, 7, 8, 11, AND 12 [35]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         On November 10, 2017, Plaintiffs MGA Entertainment, Inc. and The Little Tikes Company (collectively “MGA”) filed this action against Defendants Dynacraft BSC, Inc. (“Dynacraft”); Freshdeals2112; Honeydukessweetshop; TheHouse; Theroyalflush, and DOES 1-10 (collectively “Defendants”) for various federal and California trademark infringement claims. (See generally Compl., ECF No. 1.) MGA identifies four of the defendants (Freshdeals2112; Honeydukessweetshop; TheHouse; and Theroyalflush) by their URL, and eBay merchant name because it has not yet discovered the true identity of these defendants (hereinafter the “Ebay Defendants”).

         On November 13, 2017, MGA filed a First Amended Complaint (“FAC”). (FAC, ECF No. 6.) On January 8, 2018, Dynacraft moved to dismiss MGA's FAC (ECF No. 14), and MGA conceded that there were deficiencies with its FAC. (ECF No. 27.) The Court granted Dynacraft's Motion to Dismiss, with leave to amend, on January 16, 2018. (ECF No. 28.) On February 9, 2018, Plaintiffs filed a Second Amended Complaint (“SAC”). (ECF No. 32.) Before the Court is Dynacraft's Motion to Dismiss MGA's SAC. (Mot., ECF No. 35.) For the reasons below, the Court GRANTS IN PART Dynacraft's Motion to Dismiss, with leave to amend, as set forth below.[1]

         II. FACTUAL BACKGROUND

         MGA's claims arise from Dynacraft's manufacturing of its “Disney Princess Preschool Carriage.” (SAC ¶ 27.) MGA asserts valid, registered trademarks, which remain in full force and effect-U.S. Registration No. 1, 438, 168 for the words COZY COUPE for “ride-on toys” (the “Cozy Coupe Mark”) and U.S. Registration Nos. 4, 688, 321 and 4, 824, 946 (collectively, the “Design Marks”):

(Image Omitted)

(Image Omitted)

“The mark consists of a stylized face on the front of a child's riding vehicle including a pair of eyes located partially above the upper front surface of the vehicle body. The broken line outlining is to show the position or placement of the mark on the goods. The outlining and the shape of the vehicle are not claimed as part of the mark.”

“The color(s) red and yellow is/are claimed as a feature of the mark. The mark consists of a three-dimensional configuration of a child's riding vehicle consisting of a red body of the vehicle and a yellow roof with four yellow pillars supporting the roof. [The mark excludes the features shown in dotted lines].”

         (SAC Ex. 1, ECF No. 32-1.)

         Dynacraft manufactures and distributes the infringing product, the Disney Princess Preschool Carriage, pictured below left, which is a non-motorized, smaller version of Dynacraft's motorized Princess Carriage sold previously, pictured below right.

         (Image Omitted)

         (Mot. 5.) Dynacraft's product is not a Cozy Coupe product and has no association with MGA's Cozy Coupe products. (Opp'n 1, ECF No. 38.)

         MGA alleges that Dynacraft intentionally manufactured its Disney Princess Preschool Carriage to look confusingly similar to MGA's Cozy Coupe products. (SAC ¶ 27.) Defendants also arranged for advertisements on the internet applying MGA's Cozy Coupe Mark to Dynacraft products. (Id.) MGA further alleges that Dynacraft conspired with www.walmart.com, www.ebay.com, toysrus.com, Ebay Defendants, and Doe Defendants 1-10, to produce a product that could be confused for the Cozy Coupe. (SAC ¶¶ 27-32.)

         MGA's alleges claims for: Trademark Counterfeiting, 15 U.S.C. § 1114 (Count 1); False Designation of Origin, 15 U.S.C. § 1125(a) (Count 2); False or Misleading Description or Misrepresentation of Fact, 15 U.S.C. § 1125(a) (Count 3); Federal Trademark Dilution, 15 U.S.C. § 1125(c) (Count 4); Federal Unfair Competition, 15 U.S.C. § 1125(c) (Count 5); State Unfair Competition, California Business & Professional Code § 17200 et. seq. (Count 6); State False and Misleading Statements, California Business & Professional Code § 17500 (Count 7); State Law Trademark Dilution, California Business & Professional Code § 14247 (Count 8); Common Law Trade Dress Infringement (Count 9); Common Law “Passing Off” (Count 10); Civil Conspiracy (Count 11); and Conspiracy to Commit Trademark Counterfeiting, 18 U.S.C. § 2320, 15 U.S.C. § 1114, 1125(a), and 1125(c), and 18 U.S.C. § 371 (Count 12). (See generally SAC.)

         Dynacraft now moves to dismiss counts 1, 3, 4, 7, 8, 11, and 12, on several grounds. (See Mot.)

         III. LEGAL STANDARD

         A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable legal theory or insufficient facts pleaded to support an otherwise cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To survive a motion to dismiss, a complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)-a short and plain statement of the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual “allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). That is, the complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         The determination whether a complaint satisfies the plausibility standard is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. A court is generally limited to the pleadings and must construe all “factual allegations set forth in the complaint . . . as true and . . . in the light most favorable” to the plaintiff. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). But a court need not blindly accept conclusory allegations, unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

         Plaintiffs pleading fraud must do so with heightened particularity. See Fed. R. Civ. P. 9(b). Federal Rule of Civil Procedure 9(b) establishes that an allegation of “fraud or mistake must state with particularity the circumstances constituting fraud.” The “circumstances” required by Rule 9(b) are the “who, what, when, when, where, and how” of the fraudulent activity. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011). In addition, the allegation “must set forth what is false or misleading about a statement, and why it is false.” Id. This heightened pleading standard ensures that “allegations of fraud are specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985).

         When a district court grants a motion to dismiss, it should provide leave to amend unless it is clear that the complaint could not be saved by any amendment. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Leave to amend, however, “is properly denied . . . if amendment would be futile.” Carrico v. City & Cnty. of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011).

         IV. ...


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