Arizona Board of Regents v. Sportswear Inc

[4] 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON [6] 7 THE ARIZONA BOARD OF REGENTS ON BEHALF OF THE NO. 2:21-CV-0135-TOR 8 UNIVERSITY OF ARIZONA; THE ARIZONA BOARD OF REGENTS ORDER DENYING DEFENDANTS’ 9 ON BEHALF OF ARIZONA STATE MOTION TO DISMISS OR, IN THE UNIVERSITY; THE REGENTS OF ALTERNATIVE, MOTION TO 10 THE UNIVERSITY OF STRIKE CALIFORNIA ON BEHALF OF 11 THE UNIVERSITY OF CALIFORNIA, BERKELEY; THE 12 REGENTS OF THE UNIVERSITY OF CALIFORNIA ON BEHALF OF 13 THE UNIVERSITY OF CALIFORNIA, LOS ANGELES; 14 THE REGENTS OF THE UNIVERSITY OF COLORADO ON 15 BEHALF OF THE UNIVERSITY OF COLORADO BOULDER; 16 UNIVERSITY OF OREGON; OREGON STATE UNIVERSITY; 17 THE UNIVERSITY OF SOUTHERN CALIFORNIA; THE BOARD OF 18 TRUSTEES OF THE LELAND STANFORD JR. UNIVERSITY; 19 UNIVERSITY OF UTAH; UNIVERSITY OF WASHINGTON; 20 AND WASHINGTON STATE UNIVERSITY, [1] Plaintiffs, [2] v. [3] SPORTSWEAR INC. d/b/a PREP 4 SPORTSWEAR and VINTAGE BRAND, LLC, [5] Defendants. [6] 7 BEFORE THE COURT is Defendants’ Motion to Dismiss or, in the 8 alternative, Motion to Strike for a More Definite Statement (ECF No. 25). This 9 matter was submitted for consideration without oral argument. The Court has 10 reviewed the record and files herein and is fully informed. For the reasons 11 discussed below, Defendants’ Motion to Dismiss or, in the alternative, Motion to 12 Strike (ECF No. 25) is DENIED. 13 BACKGROUND 14 This matter arises out of Defendants’ alleged impermissible use of Plaintiffs’ 15 trademarks and trade dress on merchandise sold on Defendants’ websites. 16 Plaintiffs are universities that comprise the Pacific-12 Conference (“Pac-12”). 17 ECF No. 23 at 7, ¶ 19. The organization was originally established in 1959 under 18 the name Athletic Association of Western Universities and had only four university 19 members. Id. at ¶ 20. Since then, it has expanded to a twelve-university 20 membership and is known colloquially as the Pac-12. Id. Each of the twelve 1 universities owns and uses trademarks and trade dress in connection with their 2 respective institutions. Id. at ¶ 24. Some of the marks are federally registered 3 while others are associated with their institutions through historical use. ECF Nos. 4 23 at 8–46, ¶¶ 25–218; 23-1–23-12. 5 The Pac-12 is one of five athletic conferences that compete in the National 6 Collegiate Athletic Association (“NCAA”). ECF No. 23 at 8, ¶¶ 21–22. The Pac7 12 teams have won numerous NCAA championship titles over several decades. Id. 8 at ¶ 22. The Pac-12 sporting events are shown on its own television network but 9 also on ESPN and FOX. Id. at ¶ 23. 10 Defendants sell and distribute sports and team merchandise on their 11 websites, both of which are believed to be owned and operated by Chad 12 Hartvigson, who operates out of a single office location in Seattle, Washington. Id. 13 at 46, ¶ 220. The websites offer various “apparel stores” that are categorized by 14 school mascot or geographic location. Id. at 47, ¶ 225; at 50, ¶ 231. The apparel 15 stores display merchandise options with the relevant school colors and branding. 16 See, e.g., id. at ¶ 234. Defendants do not have licensing rights to use Plaintiffs’ 17 trademarks or trade dress. Id. at 51, ¶ 236. Plaintiffs allege Defendants use color 18 schemes and logos on their merchandise that are confusingly similar to Plaintiffs’ 19 own protected marks and trade dress. Id. at ¶ 238; see also id. at 52–58. [20] 1 Plaintiffs filed the First Amended Complaint (“FAC”) on January 14, 2022. 2 ECF No. 23. In the present motion, Defendants seek dismissal of the FAC or, in 3 the alternative, move the Court to Strike the FAC and require Plaintiffs to provide 4 a more definite statement. ECF No. 25. 5 DISCUSSION 6 I. Motion to Dismiss 7 A motion to dismiss for failure to state a claim “tests the legal sufficiency” 8 of the plaintiff’s claims. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To 9 withstand dismissal, a complaint must contain “enough facts to state a claim to 10 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 , 570 11 (2007). “A claim has facial plausibility when the plaintiff pleads factual content 12 that allows the court to draw the reasonable inference that the defendant is liable 13 for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation 14 omitted). This requires the plaintiff to provide “more than labels and conclusions, 15 and a formulaic recitation of the elements.” Twombly, 550 U.S. at 555 . While a 16 plaintiff need not establish a probability of success on the merits, he or she must 17 demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” 18 Iqbal, 556 U.S. at 678 . 19 When analyzing whether a claim has been stated, the Court may consider the 20 “complaint, materials incorporated into the complaint by reference, and matters of 1 which the court may take judicial notice.” Metzler Inv. GMBH v. Corinthian 2 Colleges, Inc., 540 F.3d 1049, 1061 (9th Cir. 2008) (citing Tellabs, Inc. v. Makor 3 Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). A complaint must contain “a 4 short and plain statement of the claim showing that the pleader is entitled to relief.” 5 Fed. R. Civ. P. 8(a)(2). A plaintiff’s “allegations of material fact are taken as true 6 and construed in the light most favorable to the plaintiff[,]” however “conclusory 7 allegations of law and unwarranted inferences are insufficient to defeat a motion to 8 dismiss for failure to state a claim.” In re Stac Elecs. Sec. Litig., 89 F.3d 1399 , 9 1403 (9th Cir. 1996) (citation and brackets omitted). 10 In assessing whether Rule 8(a)(2) has been satisfied, a court must first 11 identify the elements of the plaintiff’s claim(s) and then determine whether those 12 elements could be proven on the facts pled. The court may disregard allegations 13 that are contradicted by matters properly subject to judicial notice or by exhibit. 14 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The court 15 may also disregard conclusory allegations and arguments which are not supported 16 by reasonable deductions and inferences. Id. 17 The Court “does not require detailed factual allegations, but it demands 18 more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, [19] 556 U.S. at 662 . “To survive a motion to dismiss, a complaint must contain 20 sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible 1 on its face.’” Id. at 678 (citation omitted). A claim may be dismissed only if “it 2 appears beyond doubt that the plaintiff can prove no set of facts in support of his 3 claim which would entitle him to relief.” Navarro, 250 F.3d at 732 . 4 A. Motion to Dismiss 5 Defendants move to dismiss the FAC in its entirety. ECF No. 23. 6 Defendants’ motion is premised on four theories: Plaintiffs use “multi-level” 7 defined terms that prevent Defendants from framing a responsive pleading; 8 Plaintiffs fail to identify each mark that is allegedly infringed upon by each 9 Defendant, and therefore, fail to put Defendants on notice of the claims alleged 10 against them; Plaintiffs are improperly joined because their claims do not arise 11 from the same transaction or occurrence; and Plaintiffs fail to sufficiently plead a 12 claim for dilution. ECF Nos. 25, 29. 13 First, a review of the FAC reveals Plaintiffs’ defined terms are not so 14 ambiguous or vague that Defendants lack a sufficient basis to frame their 15 responsive pleadings. In fact, Defendants’ own motion demonstrates Defendants 16 have a firm grasp on the marks at issue and the types of claims being alleged. Not 17 only do they comprehensively describe Plaintiffs’ terms, Defendants explicitly 18 acknowledge they have “numerous affirmative defenses” that will be used against 19 each Plaintiff. ECF No. 25 at 13–16; at 24. The fact that Defendants must “sift 20 through” and cross-reference various paragraphs to “piece together” the 1 representative marks is not grounds for dismissal. ECF No. 25 at 14. Moreover, as 2 a seller of sports logo wear, Defendants can hardly claim to be unfamiliar with 3 Plaintiffs’ various marks and color schemes or the products on which they appear. 4 The Court finds Plaintiffs’ defined terms are sufficient to put Defendants on notice 5 of the claims alleged against them and that Defendants’ have adequate information 6 to frame responsive pleadings. 7 Next, Plaintiffs’ failure to provide an exhaustive list of every mark 8 potentially at issue in each claim is similarly insufficient for dismissal at the 9 pleading stage. The FAC identifies many of Plaintiffs’ marks, even providing 10 pictorial examples of how some of the marks are used on certain merchandise. 11 See, e.g., ECF No. 23 at 10, ¶ 32. The FAC also provides screenshots of the 12 infringing marks as they appear on Defendants’ websites as well as comparative 13 examples of Plaintiffs’ actual marks and the marks being used by Defendants. Id. 14 at 48–50; at 52–58. The facts and allegations in the FAC are more than sufficient 15 to put each Defendant on notice of how it is infringing on Plaintiffs’ various marks, 16 regardless of whether Plaintiff identifies each specific mark potentially at issue. In 17 any event, the merits of Plaintiffs’ claims are not presently before the Court; any 18 remaining questions or confusion Defendants may have regarding the specific 19 marks can easily be ascertained through discovery. 20 As to Defendants’ third theory, Plaintiffs are not improperly joined. Rule 1 20(a) permits plaintiffs to join in one action if their claims arise out of the same 2 transaction or occurrence and relate to common questions of law or fact. Fed. R. 3 Civ. P. 20(a). Taking the claims and facts as true, the alleged infringements arise 4 out of the same transaction or occurrence, specifically Defendants’ impermissible 5 use of Plaintiffs’ marks or similar marks on merchandise sold from two websites, 6 which are owned and operated by the same individual. See generally, ECF No. 23. 7 Plaintiffs’ claims also involve the same questions of law and fact. The facts allege 8 Defendants impermissibly used Plaintiffs’ marks on their websites and sold 9 merchandise bearing marks that were confusingly similar to Plaintiffs’ marks, and 10 the claims all arise under the Lanham Act or parallel state laws. Id. As it currently 11 stands, the FAC and its attachments is nearly 200 pages in length; the Court fails to 12 see how severing each Plaintiff and their claims could possibly provide any further 13 clarity regarding the claims asserted against Defendants. 14 Finally, the FAC sufficiently pleads a claim for trademark dilution. 15 Defendants’ argument that Plaintiffs’ marks are not famous or relate only to a 16 “niche market” is unpersuasive. ECF No. 25 at 25–27. In determining whether the 17 “famousness” element is met in a dilution claim, courts look to (1) the duration, 18 extent, and geographic reach of advertising and publicity of the mark, either by the 19 owner or third parties; (2) the amount, volume, and geographic extent of sales of 20 goods or services offered under the mark; (3) the extent of actual recognition of the 1 mark; and (4) whether the mark was registered on the principal register. Aegis 2 Software, Inc. v. 22nd Dist. Agric. Ass'n, 255 F. Supp. 3d 1005, 1009 (S.D. Cal. 3 2017). 4 First, the FAC alleges the marks at issue are used in national broadcasts on 5 the Pac-12’s own television channel, ESPN, and FOX. ECF No. 23 at 8, ¶ 23. 6 Second, the FAC claims the Pac-12 garnered $530 million in gross revenue in 7 2018–2019, which includes sales of branded merchandise and apparel, indicating a 8 high volume and broad geographic scope of sales. Id. Next, the FAC implies 9 extensive actual recognition of the marks due to the notoriety of Plaintiffs’ athletic 10 programs, famous alumni, and strong alumni networks. See, e.g., id. at 23, 9, ¶ 26– 11 27; at 12, ¶ 42–43; at 15, ¶ 58–59; at 18, ¶ 74–75. Finally, the FAC contains an 12 extensive exhibit list that includes the U.S. Registration Numbers for numerous 13 marks at issue. ECF Nos. 23-1–23-12. At the pleading stage, Plaintiffs have met 14 the famousness element for a dilution claim. 15 Based on the foregoing, the Court finds the FAC meets the minimum 16 pleading requirements at this stage of the litigation. Defendants’ Motion to 17 Dismiss is denied. Defendants’ alternative Motion to Strike for a More Definite 18 Statement is denied for the same reasons. 19 B. Overlength Brief 20 In their Reply, Defendants request that the Court strike Plaintiffs’ overlength 1|| brief. ECF No. 29 at 7. The Court is not inclined to do so. However, Plaintiffs are 2 || reminded to consult the Local Rules for all formatting requirements and seek leave 3|| of Court to exceed the page limitations. 4|| ACCORDINGLY, IT IS HEREBY ORDERED: 5 Defendants’ Motion to Dismiss or, in the alternative, Motion to Strike for a 6|| More Definite Statement (ECF No. 25) is DENIED. 7 The District Court Executive is directed to enter this Order and furnish copies to counsel. 9 DATED May 5, 2022. ae 0 Kee 11 WOE THOMAS O. RICE <= United States District Judge [20] ORDER DENYING DEFENDANTS’ MOTION TO DISMISS OR, IN THE