1231 Barrage, Inc. et al v. Automobile Dealers Assoc. of Greater Philadelphia et al

First MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.March 2, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA 1231 BARRAGE, INC., d/b/a Garage, and KQFH ATLANTIC, INC., d/b/a Garage, Plaintiffs, v. CIVIL ACTION NO. 2:17-CV-00863-GAM AUTOMOBILE DEALERS ASSOC. OF GREATER PHILADELPHIA, and ADAGP CHARITABLE FOUNDATION, d/b/a Auto Dealers CARing for Kids Foundation, and JOHN DOES 1-10, Defendants. ORDER AND NOW, this day of , 2017, upon consideration of the Motion of Defendants Automobile Association of Greater Philadelphia and the ADAGP Charitable Foundation, d/b/a Auto Dealers CARing for Kids Foundation, to Dismiss the trade dress claims contained in Count I, and Count IV in its entirety, of Plaintiffs' Complaint, pursuant to Fed. R. Civ. P. 12(b)(6), and Plaintiffs' response, it is hereby ORDERED that the Motion is GRANTED and the trade dress claims contained in Count I, and Count IV in its entirety, are hereby DISMISSED WITH PREJUDICE. BY THE COURT: The Honorable Gerald A. McHugh United States District Court Eastern District of Pennsylvania Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 1 of 13 FOX ROTHSCHILD LLP Joseph F. Posillico, Esquire Elizabeth G. Hodgson, Esquire I.D. Nos. 45189, 323374 2000 Market Street, 20th Floor Philadelphia, PA 19103 T: (215) 299-2000 F: (215) 299- 2150 jposillico _,foxrothsch ild.com ehodgson@foxrothschild.com Attorneys for the ADAGP Defendants IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA 1231 BARRAGE, INC., d/b/a Garage, and KQFH ATLANTIC, INC., d/b/a Garage, Plaintiffs, v. CIVIL ACTION NO. 2:17-CV-00863-GAM AUTOMOBILE DEALERS ASSOC. OF GREATER PHILADELPHIA, and ADAGP CHARITABLE FOUNDATION, d/b/a Auto Dealers CARing for Kids Foundation, and JOHN DOES 1-10, Defendants. MOTION OF THE ADAGP DEFENDANTS TO DISMISS THE TRADE DRESS CLAIMS CONTAINED IN COUNT I, AND COUNT IV IN ITS ENTIRETY, OF PLAINTIFFS' COMPLAINT Defendants Automobile Association of Greater Philadelphia and the ADAGP Charitable Foundation, d/b/a Auto Dealers CARing for Kids Foundation (the "ADAGP Defendants"), by and through their attorneys, Fox Rothschild LLP, hereby move to dismiss the trade dress claims contained in Count I, and to dismiss Count IV in its entirety, of the Complaint of Plaintiffs, with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6). Based on the legal arguments and authority set forth in the accompanying Brief, which is incorporated herein by reference, the trade dress Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 2 of 13 claims contained in Count I, and Count IV in its entirety, should be dismissed, with prejudice, because they fail to state a claim upon which relief may be granted. WHEREFORE, the ADAGP Defendants respectfully request that the Court enter an Order dismissing the trade dress claims contained in Count I, and dismissing Count IV in its entirety, with prejudice, and awarding any such further relief as the Court deems proper. Respectfully submitted, FOX ROTHSCHILD LLP Dated: March 2, 2017 By: /s/ Joseph F. Posillico Joseph F. Posillico, Esquire Elizabeth G. Hodgson, Esquire I.D. Nos. 45189, 323374 2000 Market Street, 20th Floor Philadelphia, PA 19103 T: (215) 299-2000 F: (215) 299-2150 Attorneys for the ADAGP Defendants Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 3 of 13 FOX ROTHSCHILD LLP Joseph F. Posillico, Esquire Elizabeth G. Hodgson, Esquire I.D. Nos. 45189, 323374 2000 Market Street, 20th Floor Philadelphia, PA 19103 T: (215) 299-2000 F: (215) 299- 2150 jposillico@foxrothschild.corn ehodgson@foxrothschild.com Attorneys for the ADAGP Defendants IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA 1231 BARRAGE, INC., d/b/a Garage, and KQFH ATLANTIC, INC., d/b/a Garage, Plaintiffs, v. CIVIL ACTION NO. 2:17-CV-00863-GAM AUTOMOBILE DEALERS ASSOC. OF GREATER PHILADELPHIA, and ADAGP CHARITABLE FOUNDATION, d/b/a Auto Dealers CARing for Kids Foundation, and JOHN DOES 1-10, Defendants. BRIEF OF THE ADAGP DEFENDANTS IN SUPPORT OF THEIR MOTION TO DISMISS THE TRADE DRESS CLAIMS CONTAINED IN COUNT I, AND COUNT VI IN ITS ENTIRETY, OF PLAINTIFFS' COMPLAINT Defendants Automobile Association of Greater Philadelphia and the ADAGP Charitable Foundation, d/b/a Auto Dealers CARing for Kids Foundation (the "ADAGP Defendants"), by and through their attorneys, Fox Rothschild LLP, hereby move to dismiss the trade dress claims contained in Count I, and to dismiss Count IV in its entirety, of the Complaint of Plaintiffs, 1231 Barrage Inc., d/b/a Garage, and KQFH Atlantic, Inc., d/b/a/ Garage (the "Plaintiffs"), with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6). As discussed more fully below, the Court should Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 4 of 13 dismiss the trade dress claims in Count I, and dismiss Count IV in its entirety, with prejudice, because they fail to state a claim upon which relief may be granted. I. INTRODUCTION Plaintiffs initiated this action on January 24, 2017, in the Court of Common Pleas of Philadelphia County at docket number 170103190 (the "Action"). In the Action, Plaintiffs allege the following purported claims against the ADAGP Defendants and John Does 1-10 (the "John Doe Defendants"): (1) violation of the Pennsylvania Trademark Act, 54 Pa. C.S.A. §§ 1101 et seq., and unfair competition under Pennsylvania common law (the "Infringement Claim")1; (2) commercial disparagement; (3) tortious interference with prospective commercial advantage; (4) civil conspiracy (the "Conspiracy Claim"); and violation of the Lanham Act, 15 U.S.C. §§ 1111 et seq. The ADAGP Defendants removed this action to the United States District Court for the Eastern District of Pennsylvania on February 23, 2017, and now move this Court to dismiss the trade dress claims contained in the Infringement Claim (Count 1)2, and the Conspiracy Claim (Count IV) in its entirety, with prejudice, because in each of these claims, Plaintiffs fail to state a claim for relief The trade dress claims in Plaintiffs' Infringement Claim are legally insufficient because Plaintiffs fail to sufficiently identify any non-functional, unique elements comprising its purported trade dress. In the Infringement Claim, Plaintiffs make allegations of both trademark and trade dress infringement under Pennsylvania law. 2 Although Plaintiffs' Infringement Claim includes allegations of both trademark and trade dress infringement, the ADAGP Defendants move this Court for dismissal of only the trade dress aspect of the Infringement Claim. 2 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 5 of 13 The Conspiracy Claim is legally insufficient because Plaintiffs admit that the purpose of the purported conspiracy between the ADAGP Defendants and the John Doe Defendants was to financially benefit the ADAGP Defendants, not specifically to injure Plaintiffs. Accordingly, as discussed more fully below, the Court should dismiss the trade dress claims of the Infringement Claim, and the Conspiracy Claim in its entirety, with prejudice. II. FACTUAL BACKGROUND ADAGP, among other things, owns, organizes, and operates the Philadelphia Auto Show (the "Auto Show") that takes place at Philadelphia Convention Center (the "Convention Center") each year.3 [Complaint, ¶ 4]. Plaintiffs allege that they own and operate two automotive-themed bar and restaurant establishments in the City of Philadelphia, under the name "Garage" (collectively, the "Plaintiffs' Bars"). [Complaint, ¶T 1-3]. Plaintiffs are not the owners of a registered trademark for the business name "Garage." [Complaint, 11119-20]. In 2016, the Auto Show included a bar and restaurant area inside of the Convention Center that used the designation "The Garage" (the "Auto Show Bar"). [Complaint, ¶ 9, 11, 33]. Plaintiffs allege that the Auto Show Bar infringed on Plaintiffs' purported Garage trademark and/or purported, but undefined, trade dress. [Complaint, vit 33-51]. III. STANDARD To survive a motion to dismiss, a plaintiff must allege facts sufficient to "raise a right to relief above the speculative level," presenting more than "labels and conclusions, and a formulaic recitation of the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A "complaint must contain sufficient factual matter, accepted as true, to `state a claim that is plausible on its face.' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting The Foundation, a separately incorporated entity, has no involvement in the Auto Show itself, but hosts a charity fundraising event called the Black Tie Tailgate each year on the night before the start of the Auto Show. 3 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 6 of 13 Twombly, 550 U.S. at 570). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly, 550 U.S. at 556); Goode v. Giorla, No. 13-6568, 2014 WL 2452214, at *1 n.2 (E.D. Pa. May 30, 2014) (citing Twombly, 550 U.S. at 556); Clark v. Progressive Advanced Ins. Co., No. 12-6174, 2013 WL 1787566, at *1 n.1 (E.D. Pa. Apr. 26, 2013) (recognizing that a complaint must plead facts demonstrating an entitlement to the relief sought). "[C]onclusory or 'bare-bones' allegations will no longer survive a motion to dismiss: threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). To avoid dismissal, "all civil complaints must now set out sufficient factual matter to show that the claim is facially plausible." Id. Allegations that are "no more than conclusions" are not entitled to the assumption of truth. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). IV. LEGAL ARGUMENT The Court should dismiss the trade dress claims of the Infringement Claim, and the Conspiracy Claim in its entirety, with prejudice, because, for each of these claims, Plaintiffs fail to state a claim for relief A. The Court Should Dismiss The Trade Dress Claims Of The Infringement Claim, With Prejudice, Because Plaintiffs Fail To Adequately State A Claim For Relief For Trade Dress Infringement. The Court should dismiss the trade dress claims of the Infringement Claim because Plaintiff fails to adequately plead a claim for relief. The principle inadequacy of Plaintiff's pleading is a failure to identify the components of a legally protectable trade dress. To state a claim for trade dress infringement, a plaintiff must allege that "(1) the allegedly infringing design is non-functional; (2) the design is inherently distinctive or has acquired secondary meaning; and (3) consumers are likely to confuse the source of the plaintiff's product 4 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 7 of 13 with that of the defendant's product." McNeil Nutritionals LLC v. Heartland Sweeteners LLC, 511 F.3d 350, 357 (3d Circ. 2007). Importantly, "[t]he party claiming trade dress protection . . . must [also] articulate [the] special elements of its trade dress." Sweet Street Desserts, Inc. v. Chudleigh's Ltd., 69 F.Supp.3d 530, 541 (E.D.Pa. 2014) (internal citation omitted) (emphasis added). "The test for common law trademark [and/or trade dress4] infringement and unfair competition is essentially the same as the test for infringement and unfair competition under the Lanham Act." Gideons Int'l, Inc. v. Gideon 300 Ministries, Inc., 94 F. Supp. 2d 566, 580 (E.D. Pa. 1999); see also Bijur Lubricating Corp. v. Devco Corp., 332 F. Supp. 2d 722, 727 (D.N.J. 2004) ("[I]n the Third Circuit the test for common law infringement and unfair competition is identical to the test for federal infringement and unfair competition.") (citations omitted); Rose Art Indus., Inc. v. Swanson, 235 F.3d 165, 171 (3d Cir. 2000) (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 765 n.1 (1992)) (noting that the Lanham act protects not only words and symbols, but also trade dress). Indeed, the sole distinction between the federal and state analyses is that the federal claims require an effect on interstate commerce. See Scott Fetzer Co. v. Gehring, 288 F. Supp. 2d 696, 703 (E.D. Pa. 2003). Therefore, pursuant to established law, the same substantive analysis applies to infringement claims arising under the Lanham Act as those arising under Pennsylvania common law. Id. Here, Plaintiffs formulaically recite the "magic words" of a potential trade dress claim but fail to identify with any level of specificity what constitutes the alleged "trade dress." In other words, Plaintiffs have failed to specify, as they are legally required to do, the unique and nonfunctional elements of their purported trade dress. Plaintiffs allege that their purported trade 4 "Trade dress is the overall look of a product or business." Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303,307 (3d Cir. 2014). Trade dress claims are a form of trademark claims. See 1 Trade Dress Protection § 10:9 (2d ed.). 5 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 8 of 13 dress is comprised of the following elements: "the provision of restaurant and/or tavern services under the name of 'Garage' and adorned with automotive ephemera, video games, pool tables, skee-ball machines, public access via large auto body garage doors, and alcohol advertisements in the specific sale of craft beers. . . ." [Complaint, ¶ 23]. None of the elements identified by Plaintiffs, however, comprises a legally protectable trade dress. First, the garage doors and "automotive ephemera" identified by Plaintiffs serve, at most, as functional components of Plaintiffs' Bars and therefore cannot comprise a legally protectable trade dress. [Complaint, ¶ 23]; McNeil Nutritionals, LLC, 511 F.3d at 357 (noting that "[a] functional feature is one that is essential to the use or purpose of the device," or a feature, "the exclusive use of which would put competitors at a significant non-reputation-related disadvantage") (internal citations and quotations omitted). Automotive-themed decor is a functional feature of Plaintiffs' Bars because it is essential to the operation of automotive-themed bars and restaurants, Plaintiffs Bar. See Sweet Street Desserts, Inc., 69 F.Supp.3d at 542 (concluding that a purported trade dress feature is functional when it "is substantially related to its value as a product or service . . . [and] part of the function served," and is non-functional when "incidental, arbitrary, or ornamental") (internal citation omitted). Garage doors are similarly functional as they foster the automotive-theme of Plaintiffs' Bars, allow patrons to enter and exit the establishments, and enable the establishments to offer indoor/outdoor dining to its patrons. See id.; McNeil Nutritionals, LLC, 511 F.3d at 357. Further, the automotive decor and the garage door identified by Plaintiff are not unique to Plaintiffs' Bars, and Plaintiffs do not and cannot make any such allegation. Second, video games, pool tables, skee-ball machines, and craft beer alcohol advertisements commonly appear in bar and restaurant establishments, and therefore cannot 6 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 9 of 13 constitute part of Plaintiffs' purported trade dress. Cf. McNeil Nutritionals LLC, at 357 (requiring that a trade dress be unique to merit legal protection). These are clearly functional aspects of any bar, restaurant or tavern service, and therefore cannot satisfy the requirement of identifying non-functional aspects of a purported to trade dress. Third, Plaintiffs allege that the designation "Garage" constitutes a trademark [see Complaint, 11120, 46-49]. However, this by itself cannot constitute legally protectable trade dress. See Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 307 (3d Cir. 2014) (noting that "[t]rade dress is the overall look of a product or business"); McNeil Nutritionals, LLC, 511 F.3d at 375 (noting that trade dress is comprised of a combination of elements). Thus, the trade dress claims of Plaintiffs' Infringement Claim are legally insufficient because Plaintiffs fail to identify any non-functional, unique elements comprising their purported trade dress. Accordingly, Plaintiffs fail to state a claim for relief, and the Court should dismiss the trade dress claims of the Infringement Claim, with prejudice. B. The Court Should Dismiss The Conspiracy Claim In Its Entirety, With Prejudice, Because Plaintiffs Fail To State A Claim For Relief For Civil Conspiracy. The Court should dismiss the Conspiracy Claim in its entirety, with prejudice, because Plaintiff fails to state a claim for relief by failing to plead the requisite elements of civil conspiracy. 7 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 10 of 13 Under Pennsylvania law, to state a claim for civil conspiracy, Plaintiff must plead the following four elements: (1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done in pursuance of the common purpose; (3) actual legal damage; and (4) malice or intent to injure, found only when the sole purpose of the conspiracy is to cause harm to the party who has been injured. Fleet Nat. Bank v. Boyle, No. Civ.A. 04CV1277LDD, 2005 WL 2455673, at *8, *18 (E.D. Pa. Sept. 12, 2005) (internal citations omitted) Here, Plaintiffs fail to make the crucial allegation that the sole purpose of the alleged conspiracy between the ADAGP Defendants and the John Doe Defendants was to harm Plaintiffs. Instead, Plaintiffs claim that the purpose of the purported conspiracy was to financially profit the ADAGP Defendants and/or the John Doe Defendants. [See Complaint, ¶ 64]. In other words, Plaintiffs claim that the sole purpose of the alleged conspiracy was to financially benefit the ADAGP Defendants and the John Doe Defendants, not to injure Plaintiffs. [Id.]. Accordingly, Plaintiff's Civil Conspiracy Claim is legally insufficient, and the Court should dismiss the Conspiracy Claim in its entirety, with prejudice. 8 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 11 of 13 V. CONCLUSION For the foregoing reasons, the Court should enter an Order dismissing with prejudice the trade dress claims in Count I, and dismissing Count IV in its entirety, of Plaintiffs' Complaint. Dated: March 2, 2017 Respectfully submitted, FOX ROTHSCHILD LLP By: /s/ Joseph F. Posillico Joseph F. Posillico, Esquire Elizabeth G. Hodgson, Esquire I.D. Nos. 45189, 323374 2000 Market Street, 20th Floor Philadelphia, PA 19103 T: (215) 299-2000 F: (215) 299-2150 Attorneys for the ADAGP Defendants 9 Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 12 of 13 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA 1231 BARRAGE, INC., d/b/a Garage, and KQFH ATLANTIC, INC., d/b/a Garage, Plaintiffs, v. CIVIL ACTION NO. 2:17-CV-00863-GAM AUTOMOBILE DEALERS ASSOC. OF GREATER PHILADELPHIA, and ADAGP CHARITABLE FOUNDATION, d/b/a Auto Dealers CARing for Kids Foundation, and JOHN DOES 1-10, Defendants. CERTIFICATE OF SERVICE I, Elizabeth G. Hodgson, Esquire, certify that on March 2, 2017, I served a true and correct copy of the foregoing Motion Of The ADAGP Defendants To Dismiss The Trade Dress Claims Contained In Count I, And Count IV In Its Entirety, Of Plaintiffs' Complaint, with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6), and the accompanying Brief, upon the following counsel of record by the Court's CM/ECF system and U.S. First Class Mail: J. Conor Corcoran, Esquire Law Office of J. Conor Corcoran, P.C. 1500 John F. Kennedy Boulevard Suite 620 Philadelphia, PA 19102 (215) 735-1175 conor@jccesq.com Attorneys for Plaintiffs 1231 Barrage, Inc., d/b/a Garage and KQFH Atlantic, Inc., d/b/a/ Garage /s/ Elizabeth G. Hodgson Elizabeth G. Hodgson, Esquire Case 2:17-cv-00863-GAM Document 6 Filed 03/02/17 Page 13 of 13