Opinion
3:21-cv-00173-YY
11-24-2021
CLOUD 9 COMICS LLC, an Oregon limited liability company, Plaintiff, v. CLOUD 9 COMICS AND MORE LLC, a Missouri limited liability company; and PAUL GUBANY, an individual, Defendants.
FINDINGS AND RECOMMENDATIONS
Youlee Yim You, United States Magistrate Judge
FINDINGS
Plaintiff Cloud 9 Comics LLC brings this action against defendants Cloud 9 Comics and More LLC and Paul Gubany asserting a claim for common law trademark infringement and violations of Section 43(a) of the Lanham Act, see 15 U.S.C. § 1125(a)(1)(A) (false designation of origin), and the Oregon Unlawful Trade Practices Act (“UTPA”), see ORS 646.608 (unfair trade practices). Am. Compl., ECF 11.
This court has federal question jurisdiction over the federal law claims pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367(a).
Defendants have filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. Mot., ECF 13. For the reasons discussed below, defendants' motion to dismiss should be GRANTED as to plaintiff's UTPA claim and otherwise DENIED.
The court finds this matter suitable for decision without oral argument under LR 7-1(d)(1).
I. Rule 12(b)(6) Standards
To state a claim for relief, a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED.R.CIV.P. 8(a)(2). This standard “does not require ‘detailed factual allegations, '” but does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555).
A Rule 12(b)(6) motion tests whether there is a cognizable legal theory or sufficient facts to support a cognizable legal theory. Taylor v. Yee, 780 F.3d 928, 935 (9th Cir. 2015). To survive a Rule 12(b)(6) motion, “the complaint must allege ‘enough facts to state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). In evaluating a motion to dismiss, the court must accept all well-pleaded material facts alleged in the complaint as true and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012).
II. Case Background
The parties agree that they are both in the comic book business and operate under the names “Cloud 9 Comics” (plaintiff) and “Cloud 9 Comics and More” (defendant). Am. Compl. 1, ECF 11. The parties also agree that on December 18, 2020, counsel for defendants wrote a letter to plaintiff “informing Plaintiff of Gubany's status as senior user of the ‘Cloud 9 Comics and More' mark[, ]” Mot. 4, ECF 13, and stating that “the substantial overlap in name and in the kinds of good sold creates a significant likelihood of consumer confusion.” Am. Compl. 9, ECF 11; Mot. 4, ECF 13 (stating that the letter referred to “actual consumer confusion”). Plaintiff adds (and defendants do not dispute) that the letter from defendants' counsel “demand[ed] that [plaintiff] cease using the mark CLOUD 9 COMICS, ” and alleged that plaintiff's “continued use of its mark CLOUD 9 COMICS violated Section 43(a) of the Lanham Act and Missouri and Oregon trademark laws and constituted a deceptive business practice and unfair competition under Missouri and Oregon law.” Am. Compl. 9, ECF 11.
On February 1, 2021, plaintiff filed the current action against defendants asserting that defendants “are unlawfully advertising and selling products and services under a confusingly similar name to Cloud 9's trademark[.]” Id. at 2. Plaintiff also alleges the following:
Over the past 13 years, [plaintiff] has developed a reputation as a trusted buyer and seller of comic books under the distinctive mark, CLOUD 9 COMICS.... Since 2008, the managing member of [CLOUD 9 COMICS], Ken Dyber, has continuously engaged in the purchase and sale of comics using the distinctive mark CLOUD 9 COMICS....Dyber has continuously engaged in this business nationwide, operating exhibition and sales booths at major comic conventions since 2011 . . . [and] appearing annually, using the CLOUD 9 COMICS mark, in the Overstreet Price Guide since 2009. Mr. Dyber, using the CLOUD 9 COMICS mark, has reported sales data for 10 years to GP Analysis, an Australia-based database used throughout the world for the valuation of collectables, including comic books, and is the first-listed comics dealer and consignment business at GPAnalysis.com. [Plaintiff] has continuously operated fully interactive retail online store under the CLOUD 9 COMICS mark since 2009 at www.cloudninecomics.com . . . Since March 2015, [plaintiff] has also continuously operated a physical store under the CLOUD 9 COMICS mark . . . [in] Portland, Oregon.Id. at 2-4. Plaintiff further alleges (and defendants agree) that “Cloud 9 Comics and More LLC is owned and/or controlled by Defendant Paul Gubany, ” and “Defendants have asserted that they have continuously engaged in commerce nationwide using ‘Cloud 9 Comics and More' since 2004[.]” Id. at 4.
III. Oregon UTPA Claim
Defendants argue that plaintiff's claim under the Oregon UTPA should be dismissed because plaintiff “lacks consumer standing” and “fails to allege willfulness.” Mot. 12-13, ECF 13. Plaintiff “does not oppose dismissal of the Second Claim for Relief for violation of the Oregon Unlawful Trade Practices Act.” Pl.'s Opp. 2 n.1, ECF 17. Therefore, this claim should be dismissed.
IV. Trademark Infringement and False Designation of Origin Claims
Defendants also argue that plaintiff's claims for common law trademark infringement and false designation of origin under Section 43(a) Lanham Act should be dismissed because they fail to meet the heightened pleading standard under Rule 9(b) for claims that “sound in fraud, ” Mot. 5, ECF 13, and because plaintiff has failed to allege facts demonstrating that “Plaintiff is the owner of the Cloud 9 mark, ” or that “consumer confusion is probable and not merely possible.” Id. at 11.
A. Applicability of Rule 9(b)
Federal Rule of Civil Procedure 9(b) establishes a heightened pleading standard and provides: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” FED.R.CIV.P. 9(b). Rule 9(b) may also apply “[i]n cases where fraud is not a necessary element of a claim, ” but a plaintiff nonetheless “allege[s] in the complaint that the defendant has engaged in fraudulent conduct . . . [or] allege[s] a unified course of fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of a claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir. 2003). In such cases, “the claim is said to be ‘grounded in fraud' or to ‘sound in fraud,' and the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b).” Id.
The Ninth Circuit “has never established that 9(b) applies to trademark infringement claims[, ]” and “the majority of district court decisions reject the applicability of 9(b) to § 1114 trademark infringement claims.” Julian Bakery, Inc. v. Healthsource Int'l, Inc., No. 16CV2594-JAH (KSC), 2018 WL 1524499, at *3 (S.D. Cal. Mar. 28, 2018) (listing cases). Further, the Ninth Circuit “has not established that Rule 9(b) applies to false designation of origin” claims arising under Section 43 of the Lanham Act. Pac. Office Automation, Inc. v. Tracy, No. 3:17-CV-01484-HZ, 2018 WL 847245, at *2 (D. Or. Feb. 10, 2018). In contrast to trademark infringement claims, however, see Julian Bakery, 2018 WL 1524499, at *3, “there is an abundance of relevant and persuasive case law standing for the proposition that Rule 9(b) should be applied to Section 43 claims when they are ‘grounded in fraud.'” Id. at *4 (citing cases). Thus, “where a Section 43 Lanham Act claim sounds in fraud, the heightened pleading standard of 9(b) is appropriate.” Id.
Here, plaintiff asserts a claim for common law trademark infringement and not for trademark infringement under § 1114 of the Lanham Act; however, “[t]he tests for infringement of a federally registered mark under § 32(1), 15 U.S.C. § 1114(1), infringement of a common law trademark, unfair competition under § 43(a), 15 U.S.C. § 1125(a), and common law unfair competition involving trademarks are the same.” Vinh-Sanh Trading Corp. v. SFTC, Inc., No. 19-CV-04315-CRB, 2021 WL 3037706, at *8 (N.D. Cal. July 19, 2021) (citing Silberstein v. Fox Ent. Grp., Inc., 732 Fed.Appx. 517, 518 (9th Cir. 2018)).
In Julian Bakery, the court noted that it had “only found a single instance where the heightened [Rule] 9(b) standard was applied to an infringement claim in the Ninth Circuit.” Id. (citing Sparrow Inc. v. Lora, No. CV 14-01188-MWF(JCX), 2014 WL 12561587, at *1 (C.D. Cal. Aug. 5, 2014)). The court further noted that the plaintiff's trademark infringement claim in Sparrow unlike the plaintiff's claim in Julian Bakery-was based on allegations that the defendant had “marketed goods by falsely representing his affiliation with [the plaintiff].” Id.
Here, plaintiff's claims do not ‘sound in fraud' and are not subject to Rule 9(b). While defendants cite language from the Amended Complaint in arguing that Rule 9(b) should apply, the cited sections largely echo the elements of the claims asserted and constitute references to legal standards more than factual allegations. For example, defendants take issue with plaintiff accusing them of “passing off” the “Cloud 9” mark and contend that such allegations “sound in fraud.” Mot. 14-15, ECF 13. Plaintiff, however, uses that term only once and only in the context of describing the order it seeks from the court as part of its prayer for relief. See Am. Compl. 14, ECF 11 (plaintiff “prays for . . . an order holding that Defendants have, by using Plaintiff's CLOUD 9 COMICS marks, infringed on Plaintiff's mark and engaged in false designation of origin, passing off, unfair competition, and deceptive trade practices”). Defendants also highlight plaintiff's reference to defendants “misrepresenting and falsely describing to customers the origin . . . of their goods or services, ” and “willfully intend[ing] to trade on the recognition of Plaintiff's . . . mark.” Mot. 14, ECF 13. Again, each phrase appears just once in the Amended Complaint and only as part of stating a claim for relief for common law trademark infringement and under Section 43(a) of the Lanham Act. See Am. Compl. 10-13, ECF 13.
Defendants also cite a number of cases that apply Rule 9(b) to false designation of origin claims, but those cases involve distinguishable facts and offer defendants faint support. In Pac. Off. Automation, the plaintiff, who was the defendants' former employer, made extensive allegations regarding a variety of “false and/or misleading representations” that defendants made “in sales negotiations, ” in “discussions with current or former customers of [the plaintiff]” and “with leading manufacturers, ” and all “for the purpose of misleading customers and potential customers . . . so that customers will enter into contractual relationships with Defendants instead of [the plaintiff].” No. 3:17-cv-01484, Compl. 3-4, ECF 1. The court thus held, in line with similar cases in the Ninth Circuit, that “Rule 9(b) applies to Plaintiff's claims.” 2018 WL 847245, at *3 (citing cases).
Presented with a similar circumstance, the court in Julian Bakery, applied Rule 9(b) to a false designation of origin claim based on the plaintiff's allegations that the defendant's CEO, a former business affiliate of the plaintiff, had started to sell a product that was “identical” to the plaintiff's product and had “misleadingly told” the plaintiff's customers that the product in question was made by the defendant. 2018 WL 1524499, at *4. The plaintiff further alleged that the defendant had “falsely informed” plaintiff's customers that the defendant's product had received positive media attention that the plaintiff had actually received. Id. at *2.
Consistent with these cases, the court in FerrisMfg. Corp. v. Carr, No. 14 C 04663, 2015 WL 279355, at *6 (N.D. Ill. Jan. 21, 2015), applied Rule 9(b) to the Section 43(a) claims asserted by the plaintiff based on the plaintiff's allegation that the defendants had “fraudulently concealed that they had misappropriated [the plaintiff's] confidential information and knowhow, ” misrepresented their product as “innovative” and “unique, ” and “fail[ed] to disclose” that their product was “based on or derived from” the plaintiff's product. Id. Given the numerous and pointed fraud allegations in cases cited by defendants and the absence of such allegations in the present action, defendants have not demonstrated that Rule 9(b) is warranted in this case.
Plaintiff's claims are more akin to those asserted in Lloyds Plumbing, Inc. v. Dutton Plumbing, Inc., No. CV 18-2353-GW(JCX), 2018 WL 6164327 (C.D. Cal. Aug. 20, 2018), where the court ruled that Rule 9(b) did not apply to the plaintiff's claims of trademark infringement and false designation of origin. Id. at *2. Much like the Amended Complaint in this case, the plaintiff's complaint in Lloyds Plumbing “generically use[d] the terms ‘false advertising' and ‘false representations' in a few instances.” Id. at *3. The court held that those references did not show the plaintiff had “plead[ed] a unified course of conduct ‘sounding in fraud, '” and did not render plaintiff's claims subject to Rule 9(b). Id. The court also noted the plaintiff's assertion that its false designation of origin claim was “essentially rooted in [the defendant's] use of the Mark in causing a likelihood of confusion, rather than false advertising.” Id. at n.1. This is arguably the crux of plaintiff's claims in this case. In fact, paragraph one of the Amended Complaint explains that plaintiff “brings this action because Defendants are unlawfully advertising and selling products and services under a confusingly similar name to Cloud 9's trademark, ” and the next paragraph alleges that defendants are “creating confusion in the marketplace and causing damage to Plaintiff's business” by engaging in online sales under the name “Cloud 9 Comics and More.” Am. Compl. 2, ECF 11.
A similar concern about consumer confusion was key to the court's Rule 9(b) ruling in Rolex Watch U.S.A., Inc. v. Agarwal, No. CV1206400MMMMRWX, 2012 WL 12886444, at *4-5 (C.D. Cal. Dec. 17, 2012). In Rolex, the court declined to apply Rule 9(b) to the plaintiff's trademark infringement and false designation of origin claims despite the plaintiff's allegations that the defendant's actions were “false and misleading.” Id. at *4. The court explained:
It is clear from a review of the allegation that although Rolex uses the term ‘false and misleading,' it is not alleging a species of fraud; rather, it is alleging how defendants' use of the Rolex marks likely causes confusion among customers. This, of course, is a necessary element of a trademark infringement claim.Id. at *4.
Like the plaintiffs in Lloyds Plumbing and Rolex, plaintiff's claims in this action “do not rely on allegations of fraud or misrepresentation, but rather allegations of unauthorized use of [the plaintiff's] mark and a likelihood of customer confusion.” Id. at *5. Therefore, Rule 9(b) does not apply.
B. Rule 12(b)(6) Analysis
The elements of a claim for common law trademark infringement are the same as those for a false designation of origin claim under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). See Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1202 (9th Cir. 2012) (stating the “basic” elements of a “Lanham Act trademark claim” and applying them to both a common law trademark infringement and false designation of origin claim); Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008) (noting that claims for trademark infringement, false designation of origin, and unfair competition are “subject to the same test” and stating that “the critical determination” is “whether an alleged trademark infringer's use of a mark creates a likelihood that the consuming public will be confused as to who makes what product”). To assert a claim for either cause of action, a plaintiff must allege and prove “(1) that it has a protectable ownership interest in the mark; and (2) that the defendant's use of the mark is likely to cause consumer confusion.” Rearden, 683 F.3d at 1202-03 (citation omitted); see Levi Strauss & Co. v. Blue Bell Inc., 778 F.2d 1352, 1354 (9th Cir. 1985) (listing the same elements). The “core element of trademark infringement is the likelihood of confusion, i.e., whether the similarity of the marks is likely to confuse consumers about the source of the products.” Abercrombie & Fitch Co. v. Moose Creek, Inc., 486 F.3d 629, 633 (9th Cir. 2007) (citation omitted).
1. Allegation of Ownership
Again, defendants argue that the Amended Complaint “fails to allege plaintiff's ownership of the ‘Cloud 9 Comics' mark” and should therefore be dismissed. Mot. 8, ECF 13. The Amended Complaint, however, contains numerous averments of plaintiff's ownership, including the assertion that “[plaintiff's] trademark rights” have been violated by defendants “unlawfully” using the “Cloud 9” mark. Am. Compl. 2, ECF 11. The Amended Complaint also refers to “[plaintiff's] rights under common law to use the distinctive CLOUD 9 COMICS mark, ” and “[plaintiff's] lawful use of Plaintiff's CLOUD 9 COMICS mark.” Id. at 3. The Amended Complaint further states, “to protect its rights, [plaintiff] brings this action.” Id.
While these statements alone indicate sufficient allegation of ownership rights, plaintiff goes further by presenting information about its historical and current uses of the mark in commerce, including “operating exhibition and sales booths at major comic conventions, ” “continuously operat[ing] a fully interactive retail on-line store, ” and “operat[ing] a physical store”-all “under the CLOUD 9 COMICS mark[.]” Am. Compl. 3-4, ECF 11. Because it is well established that showing actual use of a given mark in commerce is essential to proving ownership of the mark, plaintiff's descriptions of its commercial activities reinforce the plausibility of its ownership claims. See Sengoku Works, Ltd. v. RMC Int'l, Ltd., 96 F.3d 1217, 1219 (9th Cir. 1996) (noting that “the party claiming ownership must have been the first to actually use the mark in the sale of goods or services”); cf. Robinson v. Hunger Free America, Inc., No. 118CV00042LJOBAM, 2018 WL 2563809, at *3 (E.D. Cal. June 4, 2018) (dismissing the plaintiff's trademark infringement claim where the plaintiff alleged ownership of a mark but had “not pled any facts that he actually used the mark” nor “specif[ied] what products or services he has sold” bearing the mark).
Thus, plaintiff alleges both a protectable ownership interest in the “Cloud 9” mark and provides specific examples of its use in commerce. Despite defendants' claim that “Plaintiff's hodgepodge of conflicting allegations and bare assertions mix into an unsatisfying stew of implausibility, ” Reply 5, ECF 18, the Amended Complaint actually alleges “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.
Defendants still insist that plaintiff must “plead facts demonstrating that, through its use in commerce, [it] had won the race to the marketplace such that it owns the exclusive right to use a particular mark.” Mot. 2, ECF 13 (citing Keane v. Fox Television Stations, Inc., 297 F.Supp.2d 921, 935 (S.D. Tex. 2004), aff'd, 129 Fed.Appx. 874 (5th Cir. 2005)). Defendants also rely on a headnote in a case from the Northern District of Georgia that states, “a plaintiff must as a threshold matter allege that its use of the mark predates the defendant's potentially confusing mark.” Mot. 8, ECF 13 (citing Se. Clinical Nutrition Centers, Inc. v. Mayo Found. for Med. Educ. & Rsch., 135 F.Supp.3d 1267, 1270 (N.D.Ga. 2013)). That pleading standard, however, is not definitively supported by Ninth Circuit case law and was specifically rejected by at least one court for sound reason. In Springboards to Educ., Inc. v. Fams. in Sch., No. CV 17-8348-MWF (EX), 2018 WL 5263062 (C.D. Cal. Apr. 26, 2018), the defendant asserted its ‘senior' ownership rights as part of its motion for judgment on the pleadings as to the plaintiff's trademark infringement and false designation of origin claims. Id. at *1. The court, in turn, was “unpersuaded by [the defendant's] arguments regarding priority of use as a matter of law[, ]” and explained:
The Ninth Circuit does not require a trademark infringement plaintiff to affirmatively allege that the defendant did not begin publicly using the allegedly infringing mark(s) in the relevant territory before the plaintiff began using the allegedly infringed mark(s). It would be improper, at this stage of the litigation, for the Court to assume the truth of the extraneous prior-use-related content that [defendant] has presented and to rely upon that content to undermine [the plaintiff's] well-pled claims.Id. The court therefore denied the defendant's motion. Id.
Here, in a similar vein, defendants contest the sufficiency of plaintiff's ownership allegations while also asserting the merits of their own claims to ownership of the Cloud 9 mark. See Mot., ECF 13. As defendants concede, however, “[w]hen deciding a motion to dismiss, courts consider only whether the facts alleged in the complaint show that the plaintiff is entitled to relief.” Reply 3, ECF 18 (emphasis in original) (citing Iqbal, 556 U.S. at 678). Thus, to the extent defendants implicitly seek consideration of allegations not asserted by plaintiffs that tend to support defendants' ownership claims, such efforts are both misplaced and unpersuasive. See Springboards, 2018 WL 5263062, at *2.
Defendants also contend that plaintiff essentially concedes a number of material issues that favor defendants' ownership claim. However, defendants' characterizations of plaintiff's allegations are not, in all instances, supported by the Amended Complaint. The following comparisons are illustrative (with defendants referring to the Amended Complaint as the “FAC”):
• Defendants: “The FAC alleges that Defendants began using the name ‘Cloud 9 Comics and More' as early as 2004. FAC ¶ 13.” Reply 4 Amended Complaint ¶ 13: “Defendants' current eBay account name does not establish that Defendants have used ‘Cloud 9 Comics and More' continuously since 2004.” Am. Compl. 8 (emphasis added).
• Defendants: “Plaintiff alleges that Defendants have ‘operated under their name[] . . . for a decade[.]' FAC ¶ 15.” Mot. 9 (ellipsis and brackets in original). Amended Complaint ¶ 15: “Even if [defendant's counsel's] assertion is true, Plaintiff and Defendants have operated under their names without any controversy or claim for a decade.” Am. Compl. 9 (emphasis added).
• Defendants: “The FAC affirmatively alleges that Defendants used the name Cloud 9 Comics and More in commerce at least as early as 2011-four years before Plaintiff's formation and first alleged use [in 2015].” Reply 2. Amended Complaint ¶ 4: “Since 2008, the managing member of Cloud 9 [Comics], Ken Dyber, has continuously engaged in the purchase and sale of comics using the distinctive mark CLOUD 9 COMICS.” Am. Compl. 3 (emphasis added).
In short, while there is little question that “[t]he basic rule of trademark ownership . . . is priority of use, ” Mot. 8, ECF 13 (citation omitted), it is also clear that the ultimate question of plaintiff's ownership of the Cloud 9 mark is a fact- and proof-intensive inquiry that is not always suitable for a motion to dismiss. At this stage of the proceedings, under Rule 12(b)(6), plaintiff is only required to plausibly allege “a protectable ownership interest in the mark, ” Rearden, 683 F.3d at 1202, to satisfy the first element of both its common law trademark infringement and false designation of origin claims, and plaintiff has done so here.
2. Allegation of Likelihood of Confusion
Defendants also argue that the Amended Complaint “fails to allege likelihood of confusion.” Mot. 11, ECF 13. Again, however, the Amended Complaint clearly alleges that defendants “are trading on Cloud 9's reputation and goodwill by engaging in the online sale of goods under the name ‘Cloud 9 Comics and More,' creating confusion in the marketplace and causing damage to Plaintiff's business.” Am. Compl. 2, ECF 11 (emphasis added). Plaintiff further alleges that “Defendants' use in commerce of the CLOUD 9 COMICS mark . . . after plaintiff acquired enforceable trademark rights within the relevant territory, is likely to cause confusion, or to cause mistake[.]” Id. at 10, ECF 11 (emphasis added).
Despite these allegations, defendants argue that plaintiff failed to address the so-called Sleekcraft factors for determining a likelihood of confusion and insist that the Amended Complaint fails to satisfy them. Mot. 11-12, ECF 13. Under AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), courts are to weigh the following factors in considering the likelihood of confusion stemming from a defendant's contested use of a given mark: “1) the strength of the mark; 2) proximity of the goods; 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) likelihood of expansion of the product lines.” Id. at 348-49. However, it is the similarity of the marks, the relatedness of the goods, and the use of a common marketing channel, that constitute “the controlling troika in the Sleekcraft analysis.” GoTo.com Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000). Further, “the importance of each Sleekcraft factor will vary in each case, ” Stone Brewing Co., LLC v. MillerCoors LLC, No. 318CV00331BENJMA, 2019 WL 1383273, at *3 (S.D. Cal. Mar. 26, 2019) (citing Brookfield, 174 F.3d at 1055 n.16), and a “plaintiff need not satisfy all the Sleekcraft factors.” Id. (citing Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1125 (9th Cir. 2014)).
Here, in considering (1) the similarity of the marks (“Cloud 9 Comics” vs. “Cloud 9 Comics and More”), (2) the proximity of the goods (plaintiff sells comic books, and defendants sell comic books and “more”), and (3) the marketing channels used (plaintiff uses an Internet platform and other channels and alleges that defendants sell through eBay), the likelihood of consumer confusions seems quite clear. Afterall, “the more similar the marks in terms of appearance, sound, and meaning, the greater the likelihood of confusion.” Brookfield, 174 F.3d at 1054. Plaintiff's Amended Complaint adequately shows that “the danger presented is that the public will mistakenly assume there is an association between the producers of the related goods, though no such association exists.” Sleekcraft, 599 F.2d at 350.
Where the potential for confusion is much less apparent than it is in this case, Sleekcraft can prompt courts to engage in extensive analyses of each factor. However, here, in light of the parties' overlapping names and similar businesses, as well as plaintiff's long-standing, nationwide, commercial use of the mark, “Cloud 9 Comics, ” there is no question that the Amended Complaint plausibly and adequately alleges “the defendant's use of the mark is likely to cause consumer confusion.” Rearden, 683 F.3d at 1202-03. Although defendants contest both the duration and type of commercial uses alleged by plaintiff, plaintiff's allegations are entitled to a presumption of truth on a motion to dismiss, and must be viewed in the light most favorable to plaintiff. Wilson, 668 F.3d at 1140. Plaintiff has therefore satisfied the second element of its claim for common law trademark infringement and false designation of origin, and defendants
motion to dismiss plaintiff's claims for common law infringement and false designation of origin fails. See Lloyds Plumbing, 2018 WL 6164327, at *7 (applying the Sleekcraft “trinity factors, ” noting “nearly identical marks” used in connection with “similar services” that were both marketed on the Internet, and denying defendants motion to dismiss for failure to plead confusion).
RECOMMENDATIONS
Defendants' motion to dismiss (ECF 13) should be GRANTED as to plaintiff's claim for unfair trade practices under the Oregon UTPA, and DENIED as to plaintiff's common law trademark infringement claim and false designation of origin claim under 43(a) of the Lanham Act.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Wednesday, October 20, 2021. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.