ANDREW P. GORDON, District Judge.
Cybergun, S.A. and Jag Precision are competing sellers of airsoft guns—replica firearms that shoot plastic BBs instead of lead bullets. In 2010, Cybergun negotiated an intellectual property license with FN Herstal, S.A., a well-established firearm designer and manufacturer. The license made Cybergun the only airsoft seller authorized to manufacture and sell replicas of FN Herstal's popular firearm designs. In 2012, plaintiffs discovered Jag was selling unlicensed replicas of FN Herstal's designs, and filed this lawsuit alleging: (1) patent infringement, (2) copyright infringement, (3) trademark infringement, (4) trade dress infringement, (5) false designation, (6) deceptive trade practices, and (7) interference with business relations.
Jag has moved for summary judgment on all of plaintiffs' claims. (Dkt. #133.) Jag also seeks summary judgment on its counterclaim for patent invalidity, and its counterclaim for interference with prospective economic advantage, which relates to Cybergun's alleged interference with Jag's operations at a trade show. (Id.) Plaintiffs likewise moved for summary judgment on their claim of trade dress infringement (Dkt. #139) and on Jag's counterclaim of interference with prospective economic advantage (Dkt. #120).
Both Jag and plaintiffs have failed to establish that summary judgment is warranted on any of their claims or counterclaims, for the following reasons:
1. Jag's request for summary judgment on plaintiffs' patent and copyright infringement claims, and Jag's counterclaim for patent invalidity, are moot because I dismissed plaintiffs' patent and copyright claims.
2. There are triable issues as to elements of trade dress and trade mark infringement, including whether the asserted trade dress is nonfunctional, whether the marks and dress are distinctive, and whether Jag's products and marks are likely to confuse.
3. Given Cybergun's evidence that Jag knew it was selling replicas virtually identical to plaintiffs' designs, Jag has failed to meet its burden to establish a lack of triable issue regarding Cybergun's claims for false designation, deceptive practices, and interference with business relations.
4. There are triable issues as to whether Cybergun's interference at the trade show was improper and caused Jag harm.
Cybergun is the sole airsoft manufacturer licensed to manufacture and sell replicas of FN Herstal's firearm designs. FN Herstal and Cybergun are suing Jag for selling unlicensed airsoft replicas of FN Herstal's popular SCAR, M249, and P90 firearms.
In January, 2012, Jag and Cybergun were operating booths at the SHOT Show, a large gun trade show in Las Vegas.
Shortly after the TRO was signed, Cybergun met with SHOT Show organizers, requested that Jag's booth be closed, and told them:
Jag's evidence indicates it was not displaying any replicas covered by the TRO at the SHOT Show.
Eventually, plaintiffs obtained a preliminary injunction against Jag, which was affirmed on appeal.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."
If the moving party demonstrates the absence of any genuine issue of material fact, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial."
A party seeking to either support or refute the assertion of a fact in a summary judgment context must do so with admissible evidence.
I previously dismissed plaintiffs' copyright and patent infringement claims with prejudice.
As I explained in my previous order, while I declined to dismiss Jag's invalidity counterclaim, whether it will ultimately be successful is another matter.
To establish trademark infringement, plaintiffs must prove (1) their marks are valid, and (2) there is a likelihood consumers will confuse Jag's marks with plaintiffs' marks.
To be valid, a mark must be sufficiently distinctive. "[S]uggestive, arbitrary, and fanciful marks are `deemed inherently distinctive and are automatically entitled to protection because they naturally serve to identify a particular source of a product.'"
Jag argues all of plaintiffs' marks are invalid because they are not sufficiently distinctive, but provides substantive argument only as to plaintiffs' unregistered M249 mark. I therefore consider Jag's validity arguments directed to the M249 mark only. Jag argues plaintiffs cannot establish the M249 mark is distinctive because (1) plaintiffs have not conducted a survey or provided consumer testimony, and (2) plaintiffs have not always used the mark exclusively.
To determine the whether consumers are likely to confuse a defendant's mark with a plaintiff's, courts consider eight factors: (1) strength of the mark; (2) proximity of the goods in the market; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) the defendant's intent in selecting the mark; and (8) the likelihood of expansion of the product lines.
Jag relies on plaintiffs' scarce evidence of actual confusion to argue that there is no likelihood consumers will confuse Jag's products with plaintiffs' marks. Jag points out that plaintiffs have not conducted a survey nor provided any documentation proving consumers actually mixed up the parties' marks.
Jag provides only conclusory arguments in seeking summary judgment on plaintiffs' false designation and deceptive trade practices claims. Regarding the false designation claim, Jag argues there is no evidence any consumers relied on a false designation or that plaintiffs were harmed. But in support of this argument, Jag cites only to a disputed discovery response
As to plaintiffs' deceptive trade practices claim, I again find triable issues. Under Nevada Law, a defendant is liable for deceptive trade practices where it "[k]nowingly makes a false representation as to the source, sponsorship, approval or certification of goods."
To prove interference with prospective business relations under Nevada law, a plaintiff must establish: (1) a prospective contractual relationship existed between the plaintiff and a third party; (2) the defendant knew of this prospective relationship; (3) the defendant intended to harm the plaintiff by preventing the relationship; (4) the absence of privilege or justification by the defendant; and, (5) actual harm to the plaintiff as a result of the defendant's conduct.
A plaintiff may recover an infringer's profits under the Lanham Act: (1) where the infringer is willful, or (2) as a measure of compensatory damage for the plaintiff's own losses.
Plaintiffs have moved for summary judgment that Jag infringed plaintiffs' trade dress rights. Jag has moved for summary judgment that it did not infringe. To prove trade dress infringement, plaintiffs must establish (1) that their design is distinctive, (2) their design is nonfunctional, and (3) "there is a likelihood of confusion that the consuming public will confuse [the plaintiff's] and the defendant's products."
Generally, a product design is distinctive trade dress only if it has acquired secondary meaning with consumers so that consumers associate the design with a single source.
But, on the other hand, viewing the evidence in a light most favorable to plaintiffs, they have similarly raised triable issues on this element. Plaintiffs have submitted evidence relevant to several of the factors I must consider when determining secondary meaning, including sales, advertising, length of use, and notoriety.
Plaintiffs assert that their products' overall configurations and designs constitute protectable trade dress. "The physical details and design of a product may be protected under the trademark laws only if they are nonfunctional."
Plaintiffs have provided evidence raising triable issues about whether their trade dress is nonfunctional. Plaintiffs have submitted evidence, including admissions by Jag's president, which indicate that their products' overall configurations and designs are desired because of their reputational value, not because their products' overall design is an "actual benefit that the customer wishes to purchase."
The same eight factors used to determine likelihood of confusion for trademarks are used to determine likelihood of confusion for trade dress. I find triable issues here for the same reasons I found triable issues regarding plaintiffs' trademark claims. Plaintiffs have provided evidence raising triable issues at least as to the strength of their mark, similarity of the marks, and Jag's intent in selecting the mark.
The parties have raised triable issues regarding whether plaintiffs' asserted trade dress is distinctive. Plaintiffs have further raised triable issues regarding whether their asserted trade dress is nonfunctional, and whether Jag's products are likely to confuse consumers. Therefore, summary judgment on the trade dress claims is not warranted for any party.
As explained above, to prove intentional interference with prospective business relations, a plaintiff must establish: (1) a prospective contractual relationship between the plaintiff and a third party; (2) the defendant's knowledge of this prospective relationship; (3) the defendant's intent to harm the plaintiff by preventing the relationship; (4) the absence of privilege or justification by the defendant; and, (5) actual harm to the plaintiff as a result of the defendant's conduct.
Cybergun moves to dismiss, or, alternatively, for summary judgment on Jag's counterclaim for interference with prospective economic advantage. Jag moves for summary judgment that Cybergun is liable for this claim. Triable issues preclude summary judgment for either party.
Cybergun argues for dismissal because Jag titled its counterclaim as a "negligence" claim, and Nevada does not recognize negligent interference claims. Jag responds that, although it misnamed its claim, it pleaded facts sufficient to support an intentional interference claim. The United Stated Supreme Court recently explained that the Federal Rules of Civil Procedure "do not countenance dismissal of a complaint for imperfect statement of [a] legal theory."
Jag's failure to explicitly state it was claiming "intentional" interference is irrelevant. It alleges facts that state a claim for intentional interference. Jag alleges Cybergun knew Jag had prospective customers at the SHOT show, that Cybergun took pictures of Jag's booth and thus knew no products on display violated the TRO,
Cybergun alternatively argues Jag cannot prove that (1) Cybergun's acts caused harm to Jag, (2) that Jag suffered any harm, or (3) that Cybergun's actions were unjustified.
Second, there is a triable issue regarding whether Jag was harmed by being removed from the SHOT Show. Jag was removed from a trade show in front of potential customers and competitors. If nothing else, Jag lost whatever sales it would have made during the remainder of the SHOT Show in 2012.
Finally, there are triable issues regarding whether Cybergun's actions were improper. The TRO prevented JAG from selling only SCAR replicas. Immediately after telling officials a TRO has been granted, Cybergun told SHOT Show personnel that Jag was selling "counterfeit" merchandise. Jag has provided evidence indicating it was not, in fact, displaying any merchandise covered by the TRO. A reasonable juror could find Cybergun misrepresented that the TRO covered merchandise Jag was displaying at the show. If a jury believes Cybergun knew Jag was not violating the TRO, a reasonable juror could find that Cybergun was not justified in making its representations to the SHOT Show personnel.
On the other hand, viewing the evidence in a light most favorable to Cybergun, it has raised triable issues as to these elements, precluding summary judgment for Jag. For example, a reasonable jury could find Jag was not actually harmed by being excluded from the SHOT Show, or that Cybergun did not intentionally mislead the SHOT Show organizers. Much depends on the weight given to the testimony of the witnesses, and credibility is for the jury to determine.
Therefore, neither party has established a lack of triable issues regarding Jag's intentional inference claim. I therefore deny both parties' motions for summary judgment on this claim.
IT IS THEREFORE ORDERED that Plaintiffs' motion for summary judgment on its trade dress claim (Dkt. #139) and motion to dismiss or alternatively for summary judgment on Defendant's counterclaim for business interference (Dkt. #120) are DENIED.
IT IS FURTHER ORDERED that Defendant's motion for summary judgment (Dkt. #133) is DENIED.