LOUIS L. STANTON, District Judge.
Plaintiffs sue defendant for patent infringement under 35 U.S.C. § 271, trademark infringement and unfair competition under 15 U.S.C. § 1125(a), trademark dilution under 15 U.S.C. § 1125(c), trademark dilution under New York General Business Law section 360-l, and violations of New York common law.
Defendant moves under Fed.R.Civ.P. 12(b)(6) to dismiss counts III and V of the amended complaint, the federal and state trademark dilution claims.
The federal dilution statute protects "the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness" against another's "use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury." Trademark Dilution Revision Act of 2006, 15 U.S.C. § 1125(c)(1) (2006) ("TDRA"). Defendant argues that plaintiffs have not pled that their marks are "famous," and thus the marks are not protected under the federal statute.
The New York dilution statute, N.Y. Gen. Bus. Law § 360-l (McKinney 2011 Supp.), provides:
Defendant asserts that because plaintiffs seek patent-like protection under that statute, their claims are preempted by federal patent law. The crux of defendant's argument is that since federal patent law provides the exclusive remedy to an inventor who seeks to prevent others from copying her invention's design, state law cannot serve as an alternative means for inventors to enjoin others from copying their patented or potentially patentable designs.
The following allegations from the amended complaint are accepted as true, as they must be on this motion to dismiss. See Rescuecom Corp. v. Google Inc., 562 F.3d 123, 127 (2d Cir.2009).
"Plaintiff Luv N' care is one of the leading baby product companies in the world today." Am. Compl. ¶ 18. Its affiliate, plaintiff Admar International, "is the owner of various United States Trademark Applications and Registrations, under which trademarks Luv n' care sells goods throughout the United States under exclusive rights from Admar." Id. ¶ 19. Products sold under those trademarks include children's no-spill drinking cups, baby bottles, and pacifiers.
Plaintiffs "have generated hundreds of millions of dollars in revenue from the sale of goods under their trademarks," id. ¶ 20,
According to the amended complaint,
The amended complaint makes those same allegations that their design and appearance are the trademarks and trade dress of each of plaintiffs' "Gripper-Pal" Bottle, "Brites Pacifier," "Fruit Pacifier," "Sports Pacifier," "Sculptured Pacifier," "Sports Pacifinder," "Pacifinder & Pacifier," "Hard and Soft Teething Keys," and "Food Storage Bowls with Feeding Spoon." See id. ¶¶ 28-44.
Defendant is a nationwide distributor of baby products, whose products are sold under other brand names.
Plaintiffs allege that defendant has infringed on their products' trademarks and trade dress by selling "unauthorized knock-offs," id. ¶ 102, which look similar to plaintiffs' products, and are thus "deceptive and confusing" to consumers. Defendants allegedly infringed on Admar's trade dress for the following products: the "Gripper Cup," the "Flip-it" cup, the "Hard Spout" cup, the "Grip n' sip" cup, the "Brites Pacifier," the "Sport Pacifier," the "Fruit Pacifier," the "Sculptured Pacifier," the "Sports Pacifinder," the "Pacifinder & Pacifier," the "Gripper-Pal" baby bottle, "Teething Keys," and "Food Storage Bowls with Feeding Spoon."
Plaintiffs further allege that, by selling allegedly infringing products, defendant has diluted plaintiffs' trademarks and trade dress:
In addition to their trademark and trade dress claims, plaintiffs allege design patent infringement — for design patents which Luv N' care owns for a drinking cup and a drinking cup top — and New York State common-law claims for unfair competition, tortious interference with prospective business relations, and contributory infringement. Those claims are not in issue in the present application.
"When reviewing a motion to dismiss, a court must accept as true all of the factual allegations set out in plaintiff's complaint, draw inferences from those allegations in the light most favorable to plaintiff, and construe the complaint liberally." Rescuecom, 562 F.3d at 127 (internal quotation marks omitted). "To survive a motion to dismiss, a 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, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
In their amended complaint, plaintiffs allege, "These marks and trade dress qualify as famous trademarks under the meaning of the Federal Trademark Dilution Act of 1995, Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c)." Am. Compl. ¶ 139. However, § 1125(c) was amended in 2006, (the Trademark Dilution Revision Act) which is its current version ("TDRA").
Defendants argue that the claim should be dismissed, since it was brought under the wrong statute. Plaintiffs say that the error was merely clerical, and the court should construe the claim as brought under the TDRA.
Because plaintiffs cite the correct subsection of the statute, i.e., 15 U.S.C. § 1125(c), the mislabeling appears to be merely a typographical error, and the federal dilution claim will be taken as brought under the TDRA.
Defendant claims that plaintiffs fail to plead that their trademarks are famous under the TDRA, 15 U.S.C. § 1125(c)(2), which provides:
Courts applying those factors have determined that marks such as NIKE and Mattel's HOT WHEELS are famous under the TDRA. See Nike, Inc. v. Nikepal Int'l, Inc., No. 2:05-CV-1468-GEB-JFM, 2007 WL 2782030, at *5-6 (E.D.Cal. Sept. 18, 2007) (mark famous because Nike "had spent in excess of a billion dollars for promotion of NIKE products in the United States," sales of NIKE products had earned at least $1 billion per year, "recognition of the success of NIKE has been recorded by various publications in surveys and articles," and "the NIKE mark is registered on the PTO's principal register"); Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 635 (9th Cir.2008) ("Here, a reasonable trier of fact could conclude that the HOT WHEELS mark is famous: it has been in use for over thirty-seven years; 350 million dollars have been expended in advertising the mark; three billion HOT WHEELS units have been sold since the inception of the mark; and HOT WHEELS are sold in all fifty states and throughout the world.").
In this case, plaintiffs do not plead enough facts to support the assertion that their marks are similarly famous.
They plead no facts regarding their advertising and publicity of the marks of the particular products in suit, nor do they plead that their marks are registered. See 15 U.S.C. 1125(c)(2)(A)(i), (iv).
Plaintiffs' allegation that they "have generated hundreds of millions of dollars in revenue from the sale of goods under their trademarks," Am. Compl. ¶ 20, refers generally to "goods under their trademarks" as a whole, not the "amount, volume, and geographic extent of sales of goods or services offered under the" marks in suit, 15 U.S.C. § 1125(c)(2)(A)(ii), which in this case are "appearance and design" of the cups, pacifiers, teething rings, and food containers which plaintiffs claim defendant has diluted. Thus, that allegation does not support plaintiffs' argument that those marks are famous.
The more general allegations that plaintiffs products' "designs, trademarks and/or trade dress have all become widely known throughout the United States and worldwide, and associated with Plaintiffs," id. ¶ 23, and "Plaintiffs' products are among the most popular and well known products in their industry, and their line of products is famous throughout the country and world," id. ¶ 24, are conclusions, lacking factual references to the trademarks and trade dress in suit, and therefore do not support the allegation that the marks in suit are famous. See Iqbal, 129 S.Ct. at 1949, quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ("A pleading that offers `labels and conclusions' or a `formulaic recitation of the elements of a cause of action will not do.'").
At best, plaintiffs plead fame among baby product consumers. However, as courts have noted, the inclusion in the TDRA of the phrase "widely recognized by
Even under the TDRA's predecessor, the Federal Trademark Dilution Act of 1995 ("FTDA"), which did not include the requirement that the mark be widely recognized by the general consuming public, the Court of Appeals recognized that niche fame would not suffice:
TCPIP Holding Co. v. Haar Commc'ns, Inc., 244 F.3d 88, 99 (2d Cir.2001).
In Board of Regents, the University of Texas ("UT") sued KST Electronics for diluting its longhorn silhouette logo ("LSL"). The court granted summary judgment
550 F.Supp.2d at 678.
In Heller Inc. v. Design Within Reach, Inc., No. 09 Civ.1909(JGK), 2009 WL 2486054, at *4 (S.D.N.Y. Aug. 14, 2009), the Court dismissed the plaintiff's claim under the TDRA that its trademark for a "Bellini Chair" had been diluted, because the allegation that the "trademark is well known to the `relevant public interested in contemporary furniture'" pled only niche fame.
Like the plaintiffs in Board of Regents and Heller, plaintiffs in this case have not
Plaintiffs attempt to distinguish the trademark in Heller, which "was well known only in the contemporary furniture niche of the population," Pls.' Mem. Opp. 11, from the marks in this case, "which have acquired nationwide and international recognition by baby product consumers, a large segment of the population," id. Even so, the standard for fame under the TDRA is whether a mark is recognized not merely by "a large segment of the population," but by the "general consuming public of the United States."
Plaintiffs have not sufficiently pled that the particular trademarks and trade dress involved in this suit are famous, and therefore their amended complaint does not state a claim for dilution under the TDRA. They may replead their federal dilution claim by filing a second amended complaint within 30 days from this opinion and order.
Plaintiffs allege that, by copying plaintiffs' products, defendant violates New York's dilution statute, N.Y. Gen. Bus. Law § 360-l.
Defendant argues that plaintiffs' section 360-l claim is preempted by federal patent law, since plaintiffs invoke the statute to gain patent-like protection (prohibition against making, using, or selling) for their designs. Indeed, two of plaintiffs' designs now benefit from federal patent protections, and in other counts of their amended complaint plaintiffs seek to enforce rights under their patents in this suit.
In Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 152, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989), the Supreme Court held that "state regulation of intellectual property must yield to the extent that it clashes with the balance struck by Congress in our patent laws." That holding was based on the principle that
Id. at 150-51, 109 S.Ct. 971 (brackets in Bonito Boats).
The Court noted that not all state regulation of potentially patentable designs is prohibited: "... States may place limited regulations on the circumstances in which such designs are used in order to prevent consumer confusion as to source." Id. at 154, 109 S.Ct. 971.
However, as this Court stated in Escada AG v. Limited, Inc., 810 F.Supp. 571, 574 (S.D.N.Y.1993), "one cannot argue that the New York dilution statute serves that purpose in this case, for the statute does not require any showing of consumer confusion as to the source of goods or services," and held that the "New York dilution statute as applied to potentially patentable designs goes beyond the limited regulation permitted by Bonito Boats," reasoning that if the statute could be applied to enjoin a defendant from "making, using or selling" a design mimicking a plaintiff's, then "a would-be inventor in New York would not have to meet the rigorous standards for obtaining a patent and his right to exclude copiers would not be confined to a design patent's 14 year limit."
Plaintiffs argue that Bonito Boats should not apply here, since the design in that case was a boat hull that (although originally potentially patentable, 489 U.S. at 158 n. *, 109 S.Ct. 971) had become "unpatented and unpatentable," id. at 159, 109 S.Ct. 971, by its unrestricted sales on the public market, whereas plaintiffs' designs are either patented or their patentability has not been determined.
Put over-simplistically, the underlying concepts in Bonito Boats are that potentially patentable designs must either be protected by federal patents, or open to the public to use, and that the federal patent system is the exclusive source for patent-like protection of patentable designs:
Id. at 161-62, 109 S.Ct. 971.
Affording potentially patentable designs patent-like protection under state laws would impair the uniformity and exclusivity of federal patent laws. Thus, plaintiffs cannot invoke section 360-1 to enjoin defendant from making, using, or selling products that dilute plaintiffs' potentially patentable designs, whether actually patented or not.
That does not mean that the New York statute serves no purpose. It can be used to enjoin the manufacture, sale, or use of products that dilute a trade name, trademark, or trade dress that is not potentially patentable. See, e.g., Merriam-Webster, Inc. v. Random House, Inc., 35 F.3d 65, 73 (2d Cir.1994) (suit under New York dilution statute to enjoin manufacture, sale, and distribution of dictionaries with similar book jackets).
Even potentially patentable designs and can be protected in other ways. As stated in Escada, 810 F.Supp. at 574, in Bonito Boats
In passing the FTDA, and later the TDRA, Congress sought to provide a federal remedy for trademark dilution, without preempting state dilution statutes. See H.R.Rep. No. 104-374, at 4 (1995) ("It is important that H.R. 1295 would not preempt existing state dilution statutes."); H.R.Rep. No. 109-23, at 8 (2005), 2006 U.S.C.C.A.N. 1091, 1097 (section 2 of TDRA "would protect trade dress or product configuration and it would not preempt state remedies for dilution"). But where the application of state dilution law would usurp the function of federal patent law, the state dilution law must give way. See E. Am. Trio Prods, v. Tang Elec., 97 F.Supp.2d 395, 424 n. 199 (S.D.N.Y.2000) ("To the extent that New York's antidilution statute is designed to prevent defendants from making, using, or selling phone designs that allegedly mimic Eastern's design,
Plaintiffs' claim under section 360-l is therefore preempted by federal patent law to the extent that plaintiffs invoke the statute to enjoin the manufacture, use, or sale of products diluting plaintiffs' potentially patentable designs.
Defendant's motion to dismiss (Dkt. No. 16) is granted to the extent that count III of the amended complaint is dismissed with leave to replead, and count V of the amended complaint is dismissed to the extent that it pertains to potentially patentable designs. Plaintiffs may replead count III by filing a second amended complaint within 30 days from this opinion and order.
So ordered.
