Opinion
Civil No. 99-00617 HG
November 14, 2001
On July 13, 2001, Plaintiff Cosmos Jewelry, Ltd. filed a Motion for Reconsideration of Court's August 16, 2000 Order Granting Summary Judgment to Defendants on Plaintiff's Lanham Act Claim for Trade Dress Infringement. Plaintiff Cosmos Jewelry, Ltd. claims that the Ninth Circuit Court of Appeals case Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252 (9th Cir. 2001), effectively overrules this Court's holding that Plaintiff's plumeria jewelry is functional for purposes of its trade dress claim. Plaintiff claims the holding in Clicks Billiards, Inc. v. Sixshooters. Inc. requires a finding that Plaintiff's plumeria jewelry is non-functional thereby requiring reinstatement of Plaintiff's Lanham Act claim for Trade Dress Infringement.
The Court GRANTS Plaintiff Cosmos Jewelry, Ltd.'s Motion for Reconsideration of Court's August 16, 2000 Order Granting Summary Judgment to Defendants on Plaintiff's Lanham Act Claim for Trade Dress Infringement.
BACKGROUND AND PROCEDURAL HISTORY
The parties each maintain jewelry businesses in the Honolulu area and create and market jewelry throughout the Hawaiian islands. Both parties sell a line of gold jewelry that is patterned after the plumeria blossom.
On March 23, 1999, Plaintiffs Cosmos Jewelry, Ltd. ("Cosmos") and Denny Wong ("Wong") (collectively "Plaintiffs") filed a Complaint alleging certain violations of state and federal laws related to the alleged copying of Plaintiffs' protected interest in the plumeria line of jewelry. On January 14, 2000, Plaintiffs filed a First Amended Complaint. Count I of the First Amended Complaint alleged Defendants Hung's Jewelry, Inc. and Hung Tien Lu (collectively "Defendants") violated the Copyright Act of 1976, 17 U.S.C. § 101, et seq. Count II alleged Defendants committed trade dress infringement and unfair competition in violation of Section 43(a)(1)(A) of the Lanham Act; Count III alleged Defendants violated Hawaii's Deceptive Trade Practices Act, Hawaii Revised Statutes § 481A, et seq.; and Count IV alleged Defendants intentionally or negligently interfered with Plaintiff's prospective economic advantage or opportunity in violation of state law.
On April 14, 2000, Defendants filed a Motion for Summary Judgment arguing for dismissal of each of Plaintiff's four claims.
On May 2, 2000, Plaintiffs filed a Motion for Summary Judgment Adjudication. The motion asked the Court to find certain facts relevant to each of Plaintiffs' four counts to be undisputed. Additionally, the motion sought partial summary judgment of Plaintiffs' first claim relating to copyright infringement.
On August 16, 2000, this Court entered an Order Denying Plaintiffs' Motion for Summary Judgment Adjudication and Granting, in Part, and Denying, in Part, Defendants' Motion for Summary Judgment. The Court dismissed Count I for copyright infringement as to Plaintiff Cosmos, finding Plaintiff Cosmos lacked standing to sue for copyright infringement. Count I, however, remained as to Plaintiff Wong. Count II for trade dress infringement was dismissed as to both Plaintiffs Cosmos and Wong. Count II was dismissed based on the Court's finding that Plaintiffs' jewelry was functional. Count III for state law deceptive trade practices remained to be tried as to both Plaintiffs Cosmos and Wong. Count IV for state law interference with an economic advantage was dismissed as to both Plaintiffs Cosmos and Wong.
On August 15, 2000, the day before the Court's August 16, 2000 Order, Plaintiffs were granted leave to file a Second Amended Complaint by the magistrate judge. The August 15, 2000 Second Amended Complaint names Plaintiff Cosmos as the only Plaintiff. Denny Wong is no longer a named plaintiff. On November 29, 2000, Defendants brought a second motion for summary judgment seeking dismissal of Plaintiff Cosmos' Second Amended Complaint. On March 14, 2001, this Court issued an Order Granting in Part, and Denying in Part, Defendants' Motion for Summary Judgment. The Court dismissed Counts II and IV because they were the same claims dismissed by the August 16, 2000 Order. The only remaining claims at issue are Count I alleging copyright infringement and Count III for state law deceptive trade practices as to Plaintiff Cosmos.
On November 29, 2000, this Court upheld the magistrate judge's order granting leave to file Second Amended Complaint.
On July 13, 2001, Plaintiff Cosmos filed a Motion for Reconsideration of Court's August 16, 2000 Order Granting Summary Judgment to Defendants on Plaintiff's Lanham Act Claim for Trade Dress Infringement. Plaintiff Cosmos is only seeking reconsideration of this Court's dismissal of Count II for trade dress infringement. Plaintiff Cosmos is not seeking reconsideration for this Court's dismissal of Count IV for state law interference with an economic advantage.
On July 24, 2001, Defendants filed a Memorandum in Opposition to Plaintiff's Motion for Reconsideration of Court's August 16, 2000 Order Granting Summary Judgment to Defendants on Plaintiff's Lanham Act Claim for Trade Dress Infringement.
On August 3, 2001, Plaintiff Cosmos filed a Reply to Defendants' Opposition to Plaintiff's Motion for Reconsideration of the Court's August 16, 2000 Order Granting Summary Judgment to Defendants on Plaintiff's Lanham Act Claim for Trade Dress Infringement.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 60(b) ("Rule 60(b)") provides, in relevant part, the following:
On Motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceedings for the following reasons: . . . (6) any other reason justifying relief from the operation of the judgment." Fed.R.Civ.P. 60 (b).
The disposition of a motion for reconsideration is within the discretion of the district court and will not be reversed absent an abuse of discretion. Plotkin v. Pacific Tel. Tel. Co., 688 F.2d 1291, 1292 (9th Cir. 1982) (citations omitted). There is a "compelling interest in the finality of judgments which should not lightly be disregarded."Rodgers v. Watt, 722 F.2d 456, 459 (9th Cir. 1983) (citations omitted).
It is well settled in the Ninth Circuit that a successful motion for reconsideration must accomplish two goals. First, a motion for reconsideration must demonstrate some reason why the court should reconsider its prior decision. Second, a motion for reconsideration must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision. Great Hawaiian Financial Corp. v. Aiu, 116 F.R.D. 612, 616 (D. Haw. 1987) (citations omitted), rev'd on other grounds, 863 F.2d 617 (9th Cir. 1988). Courts have established only three grounds justifying reconsideration: (1) an intervening change in controlling law; (2) the discovery of new evidence not previously available; and (3) the need to correct clear or manifest error in law or fact, to prevent manifest injustice. Id. The District of Hawaii has implemented these standards in Local Rule 60.1.
ANALYSIS
Plaintiff Cosmos wants this Court to reconsider the August 16, 2000 dismissal of Count II of its First Amended Complaint for Trade Dress Infringement pursuant to the Lanham Act. Plaintiff Cosmos contends the Court's reasoning used in the August 16, 2000 Order regarding Count II has effectively been overruled by Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252 (9th Cir. 2001). Plaintiff Cosmos argues the Court's finding regarding the functionality of the plumeria jewelry is no longer correct after Clicks Billiards, Inc. v. Sixshooters, Inc.
The Court construes Plaintiff Cosmos' motion for reconsideration as also seeking reconsideration of this Court's March 14, 2001 Order Granting in Part, and Denying in Part, Defendants' Motion for Summary Judgment. In the March 14, 2001 Order, this Court dismissed Plaintiff Cosmos' Count II for trade dress infringement because it was the same claim dismissed by the August 16, 2000 order.
I. August 16, 2000 Order
In this Court's August 16, 2000 Order, the Court found summary judgment appropriate as to Plaintiffs Cosmos and Wong's claim of trade dress infringement.
To recover for a trade dress infringement in violation of the Lanham Act, 15 U.S.C. § 1125 (a), Plaintiff Cosmos must show that the design of the plumeria line of jewelry is (1) inherently distinctive or has acquired a secondary meaning, (2) that its line of jewelry is likely to be confused with Defendants' by the consuming public and (3) the design is non-functional. See International Jensen v. Metrosound U.S.A., Inc., 4 F.3d 819, 823 (9th Cir. 1993)
The Court found that genuine issues of material fact existed as to whether Plaintiff's plumeria design had acquired a secondary meaning and whether Defendants' design would likely cause confusion. Although Plaintiff presented triable issues as to two of the three required elements for a trade dress infringement claim, the Court found the design of the jewelry was functional and, as a result, not protected by the Lanham Act. (August 16, 2000 Order at 18.)
In determining that Plaintiff's jewelry was functional, the Court utilized the aesthetic functionality rule announced in Pagliero v. Wallace China, Co., 198 F.2d 339 (9th Cir. 1952), noting that if Plaintiff's display was intended to be aesthetically pleasing in a way that enhances the marketability of the jewelry, then the specific attributes of the plumeria flower are functional and not protected under the Lanham Act.
In Pagliero, the Ninth Circuit held that a defendant cannot be enjoined from using particular floral designs on hotel china because designs on china are essential to their function of being aesthetically pleasing. China is purchased in large part for its design, therefore, the plaintiff had not established that the trade dress in question is non-functional.See id. at 343-44. (August 16, 2000 Order at 25.)
In applying the rule announced in Pagliero, this Court did recognize that the holding in Pagliero had been criticized and limited but found it still applicable to the facts in the instant action. (August 16, 2000 Order at 25.) This Court distinguished several Ninth Circuit cases which had limited the holding in Pagliero noting the factual similarity betweenPagliero and the instant action.
This Court found Plaintiff Cosmos' jewelry was intended only to be aesthetically pleasing, therefore, functional under Pagliero.
II. Clicks Billiards, Inc. v. Sixshooters, Inc .
The Ninth Circuit Court of Appeals decided Clicks Billiards, Inc. v. Sixshooters, Inc. on June 1, 2001, after this Court's August 16, 2000 Order. The Court in Clicks Billiards, Inc. addressed the issue of functionality in trade dress claims. Plaintiff Clicks Billiards, Inc. filed suit against Sixshooters, Inc. alleging trade dress violations under the Lanham Act. See Clicks Billiards, Inc., 251 F.3d at 1256. Plaintiff Clicks Billiards, Inc. operated a number of billiard establishments in the Southwest. See id. Clicks Billiards, Inc. alleged that its billiard establishments' decor and layout collectively constituted trade dress. Clicks Billiards, Inc. accused Sixshooters, Inc. of infringing its trade dress by using a similar layout and decor for its billiard establishments. See id. at 1256-57. In order to prove trade dress infringement, Clicks Billiards, Inc. had to prove its claimed trade dress was non-functional. See id. at 1258. In addressing the functionality element, the Court held that "trade dress cannot be both `functional and purely aesthetic.'" Id. at 1260. The Court also noted that the Ninth Circuit has not "adopted the `aesthetic functionality' theory, that is, the notion that a purely aesthetic feature can be functional." Id. (citations omitted).
III. Application of Clicks Billiards, Inc. v. Sixshooters, Inc .
Plaintiff Cosmos argues that the language in Clicks Billiards, Inc. effectively overrules the reasoning used by this Court to dismiss its Count II. As noted above, this Court applied the "aesthetic functionality" rule announced in Pagliero v. Wallace China, Co., 198 F.2d 339 (9th Cir. 1952) finding Plaintiff's jewelry design was motivated by aesthetic considerations thus making the jewelry functional. (August 16, 2000 Order at 26.)
While the Ninth Circuit in Clicks Billiards, Inc. does not mentionPagliero, the court did state that "[n]or has this circuit adopted the `aesthetic functionality' theory, that is, the notion that a purely aesthetic feature can be functional ." Defendants argue the ruling inClicks Billiards, Inc. is limited to trade dress cases involving decor of a restaurant or product packaging rather than trade dress cases involving product design. The Court in Clicks Billiards, Inc. did not explicitly limit its holding to trade dress cases involving decor of a restaurant or product packaging.
In support of its argument, Defendants rely on Supreme Court caseWal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000). InWal-Mart Stores, Inc. the Court noted that trade dress originally only included packaging of a product, but has been expanded by courts to also include a product's design. See Wal-Mart Stores, Inc., 529 U.S. at 209. The Court also noted that a decor of a restaurant probably did not constitute product design, but is more like product packaging. See id. at 215. The Court did make a distinction between product packaging trade dress and product design trade dress. The distinction was made with respect to whether the trade dress is inherently distinctive or has acquired a secondary meaning. The Court held that if the trade dress involves product design, a party may only establish a protectable right by a showing the product design has acquired a secondary meaning. See id. A showing of inherent distinctiveness is no longer enough for product design trade dress. See id. While the Court in Wal-Mart Stores, Inc. did make a distinction between product design trade dress and product packaging trade dress, the Court did not discuss the element of functionality.
The holding in Clicks Billiards, Inc. makes this Court's decision to enter summary judgment on Plaintiff's trade dress infringement claim inappropriate. A genuine issue of material fact exists as to whether Plaintiff's plumeria design is nonfunctional.
CONCLUSION
In accordance with the foregoing, Plaintiff Cosmos Jewelry, Ltd.'s Motion for Reconsideration of Court's August 16, 2000 Order Granting Summary Judgment to Defendants on Plaintiffs Lanham Act Claim for Trade Dress Infringement is GRANTED. The Court's order of March 14, 2001 discussing Plaintiff Cosmos' Count II for trade dress infringement is also reversed.
Count II for trade dress infringement is hereby REINSTATED.
The following Counts remain to be tried:
Count I as to Plaintiff Cosmos;
Count II as to Plaintiff Cosmos; and
Count III as to Plaintiff Cosmos.