United States District Court, C.D. California
SUGAR FACTORY, LLC, a Nevada limited liability company, Plaintiff,
GLOSSY POPS, LLC, a New York limited liability company; GLOSSY POPS SOURCING AND DESIGN, LLC, a New York limited liability company; GLOSSY POPS UK LIMITED, a United Kingdom private limited company; GLOSSY POPS ASIA LIMITED, a Hong Kong private limited company; PROJECT GROUP, LLC, a New York limited liability company; SHAUL SHAI HARARI, an individual; KELLY HARARI, an individual; PHILIPP SHCHEKIN, an individual; and DOES 1-50 inclusive, Defendants.
ORDER DENYING IN PART AND GRANTING IN PART
DEFENDANTS' MOTIONS TO DISMISS THE COMPLAINT [DKTS. 32,
D. PREGERSON, UNITED STATES DISTRICT JUDGE
before the court is Defendants Glossy Pops Sourcing and
Design, LLC (“Glossy Pops Sourcing”), Glossy Pops
UK Limited (“Glossy Pops UK”), Glossy Pops Asia
Limited (“Glossy Pops Asia”), Project Group, LLC
(“Project Group”), Shaul Shai Harari,
(“Shai Harari”), Kelly Harari (“Kelly
Harari”), and Philipp Shchekin (“Shchekin”)
(collectively Defendants)'s Motions to Dismiss for lack
of personal jurisdiction under Rule 12(b)(2). (Dkts. 32, 35.)
Additionally, Defendant Glossy Pops, LLC (“Glossy
Pops”) and the above-named Defendants collectively move
to dismiss Plaintiff's third and sixth claim for relief
for Trade Dilution under 15 U.S.C. § 1125(c) and
California Business and Professions Code § 14247 for
failure to state a claim under Rule 12(b)(6).
Factory, LLC (“Sugar Factory” or
“Plaintiff”) is a Nevada Limited Liability
Corporation with a principal place of business in Las Vegas,
Nevada. (Compl. ¶ 4.) Sugar Factory brings this action
against Glossy Pops, Glossy Pops Sourcing, and Project Group,
all New York Limited Liability Companies, Glossy Pops UK, a
United Kingdom Private Limited Company, Glossy Pops Asia, a
Hong Kong Limited Liability Company, Shai Harari, Kelly
Harari (“Harari Defendants”), and Philip Shchekin
(collectively “Defendants”). (Id.
Sugar Factory brand was founded by Steve and Charissa
Davidovici in 2008. (Id. ¶ 15.) Sugar Factory
is an “internationally renowned business operating
retail stores and restaurants throughout the United States
and in locations around the world.” (Id.
¶ 15.) Sugar Factory deals “primarily in the sale
of confections and other items, ” (id. ¶
16), and alleges that it “enjoys extensive and
pervasive media exposure, particularly on social
media.” (Id. ¶ 20.) At issue in this
case, is Sugar Factory's “Couture Pops®.”
Couture Pops® are Sugar Factory's “premier line
of products.” (Id. ¶ 21.) The Couture
Pops® are both a candy and a fashion accessory and are
made of an “intricately bejeweled handle, a rounded
lollipop on a stick that is inserted into the handle, and a
dome-like top that covers the head of the lollipop.”
(Id. ¶¶ 21, 22.) Couture Pops® also
“feature a charm (or charms) that is (or are) affixed
to the bottom of the handle.” (Id. ¶ 22.)
Factory owns the registration for the mark “COUTURE
POPS®” and owns trademark registrations for its
trade dress covering the “iconic, bejeweled Couture
Pop® handle, ” “the combination of the
bejeweled handle and a rounded head, ” and the
“combination of the Couture Pop® bejeweled handle,
rounded head, and dome-like cover.” (Id.
¶¶ 29-32.) Copies of Sugar Factory's
registrations are attached to the Complaint. (Compl., Exhs.
C-F.) The registrations show that Sugar Factory first used
Couture Pops® in 2009 and registered the mark and trade
dress in 2011. (Id.)
Factory alleges that in September of 2014, it began a
“business relationship” with the Harari
Defendants and their business, Defendant Project Group.
(Id. ¶ 36.) Initially, Sugar Factory contracted
with the “Harari Defendants to provide products for
Sugar Factory restaurants, ” and during this time
“the Harari Defendants became intimately familiar with
Sugar Factory's Trade Dress.” (Id. ¶
37.) From May 2015 to December 2017, “Sugar Factory
engaged the Harari Defendants to manufacture Couture
Pops®” using the confidential Trademarked Couture
Pop® design. (Id. ¶¶ 37-39.) Sugar
Factory alleges that the “Harari Defendants worked
closely with Sugar Factory, and were privy to the details of
Sugar Factory's business.” (Id. ¶
39.) During this time, “Sugar Factory began paying
[Defendant] Shchekin to do graphic design work, while he was
also employed by the Harari Defendants.” (Id.)
Sugar Factory alleges that it supplied the Harari Defendants
with the “Sugar Factory Trade Dress and Sugar Factory
confidential information (including a mold of the Couture
Pops® created at Sugary Factory's Expense).”
(Id.) Sugar Factory also alleges that Mr. Davidovici
communicated to Defendant Shai Harari, in confidence,
“his idea for a cosmetic line of Couture
Pops®” which were part of Mr. Davidovici's
“overall strategic vision for the future expansion of
the Couture Pops® brand.” (Id.
¶¶ 40, 41.)
Factory eventually terminated its agreement with the Harari
Defendants around approximately December 2017, ” after
the Harari Defendants failed to deliver a large quantity of
Couture Pops®. (Id. ¶¶ 45-46.) Sugar
Factory alleges that the Harari Defendants “refused to
return” the Couture Pop® mold. (Id.
¶¶ 45-46.) Further, Sugar Factory alleges that
“[n]ot more than ten months” later, the Harari
Defendants launched Defendant Glossy Pops. (Id.
¶ 48.) The business was allegedly “devoted to
selling one product- an exact copy of the Couture Pops®
called ‘Glossy Pops.'” (Id.) The
Complaint includes a side-by-side comparison of the
trademarked Couture Pops® design and the alleged
infringing Glossy Pop. (Id. ¶ 51.) Sugar
Factory alleges that Glossy Pop's products
“infringe Sugar Factory's trade dress by mimicking,
without authorization, the design and configuration, as well
as the shape, pattern color, texture, lay-out, size, and
overall presentation of” Couture Pops®.
(Id. ¶ 53.)
Factory also alleges that the Harari Defendants, who
“control the Glossy Pop Defendants, ” knowingly
manufacture and distribute Glossy Pops which “copy a
combination of several elements of the Sugar Factory's
Registered Trade Dress.” (Id. ¶¶ 1,
85-86.) Defendants have allegedly “blurred the sharp
focus and association in the minds of consumers of Sugar
Factory's famous trade dress” and consumers will
likely “associate Defendants' lesser quality goods
with Sugar Factory.” (Id. ¶¶ 58,
88.) Sugar Factory alleges that it “will suffer and is
suffering irreparable harm” from Defendants'
continuing infringement. (Id. ¶ 92.)
on these allegations, Plaintiff raises nine causes of action:
(1) False Designation of Origin and Unfair Competition, 15
U.S.C. § 1125(a)); (2) Trade Dress Infringement, 15
U.S.C. § 1114; (3) Trade Dress Dilution, 15 U.S.C.
§ 1125(c)); (4) Common Law Trademark Infringement and
Unfair Competition; (5) Statutory Unfair Competition, Cal.
Bus. & Prof. Code §§ 17200 et seq.;
(6) Statutory Trade Dress Dilution, Cal. Bus. & Prof.
Code § 14247; (7) Breach of Contract (8) Breach of
Implied Contract; and (9) Conversion.
now move to dismiss for lack of personal jurisdiction and
move to dismiss the third and sixth causes of action for
failure to state a claim. (Dkts. 32, 35.)
Motion to Dismiss under Rule 12(b)(2)
Rule of Civil Procedure 12(b)(2) provides that a court may
dismiss a suit for lack of personal jurisdiction.
See Fed. R. Civ. P. 12(b)(2). The plaintiff has the
burden of establishing that personal jurisdiction exists.
See Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.
1990). Where, as here, the motion is based on written
materials rather than an evidentiary hearing, “the
plaintiff need only make a prima facie showing of
jurisdictional facts.” Caruth v. International
Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir.
1977); Pebble Beach Co. v. Caddy, 453 F.3d 1151,
1154 (9th Cir. 2006). “Although the plaintiff cannot
simply rest on the bare allegations of its complaint,
uncontroverted allegations in the complaint must be taken as
true.” Schwarzenegger v. Fred Martin Motor
Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal
quotations and citation omitted). Conflicts between parties
over statements contained in affidavits must be resolved in
the plaintiff's favor. Id.
courts have the power to exercise personal jurisdiction to
the extent authorized by the law of the state in which they
sit. Fed.R.Civ.P. 4(k)(1)(A); Panavision Int'l, L.P.
v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). Because
California's long-arm statute authorizes personal
jurisdiction coextensive with the Due Process Clause of the
United States Constitution, see Cal. Civ. Code § 410.10,
this court may exercise personal jurisdiction over a
nonresident defendant when that defendant has “at least
‘minimum contacts' with the relevant forum such
that the exercise of jurisdiction ‘does not offend
traditional notions of fair play and substantial
justice.'” Schwarzenegger, 374 F.3d at
800-01 (citing Int'l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)). The contacts must be of such a quality
and nature that the defendants could reasonably expect to be
“haled into court there.” World-Wide
Volkswagen v. Woodson, 444 U.S. 286, 297 (1980).
Motion to Dismiss ...