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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA CASE NO: 10-CV-60524-ZLOCH/ROSENBAUM PLASTICASE, INC., a Foreign corporation
) ) Plaintiff ) ) vs. ) ) INVICTA WATCH COMPANY ) OF AMERICA, INC., ) a Florida corporation ) ) Defendant ) _____________________________ / DEFENDANT’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS COUNTS III AND IV OF THE AMENDED COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b) (6) Defendant, Invicta Watch Company of America, Inc. (“Invicta”) previously requested that this Court dismiss newly added Counts III and IV for false designation of origin and Florida common law unfair competition, respectively, pursuant to Fed. R. Civ. Pro. 12(b) (6). [D.E. 47]. In its recently filed opposition to said motion to dismiss, Plaintiff Plasticase, Inc. (“Plasticase”) asserts that its pleadings allege “passing off,” not trade dress infringement. [D.E. 49]. As will be shown herein, the pleadings are legally and factually insufficient to support unfair competition causes of action for passing off, reverse passing off, or trade dress infringement. I.
LEGAL STANDARD FOR DECIDING A 12(b)(6) MOTION It should first be noted that a complaint attacked by a Rule 12(b)(6) motion must
contain sufficient factual allegations to show that the plaintiff is plausibly entitled to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). A claim has facial
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plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. In this instance, there are insufficient facts to draw an inference of liability. Paragraphs 24 and 56 of the Amended Complaint make approximately the same representation: “Invicta displayed and offered for sale Plasticase’s NANUK model 905 and 915 cases. Invicta then sold to clients … who placed orders as a result of such offers for sale, knockoff versions of Plasticase’s NANUK model 905 and 915 cases.” As an initial matter, the amended complaint is devoid of any further evidence or support for this bald assertion that “Invicta displayed and offered for sale the NANUK cases.” There is nothing in the amended complaint to indicate that Invicta ever used the NANUK cases in advertising. There are no exhibits showing Invicta advertising that displays NANUK cases. Plaintiff’s assertion may arise from a strained reading of the Declaration of Abraham Lalo1 in support of Defendant’s Motion for Partial Summary Judgment [D.E. 23-3]. However, the premise is incorrect and there is nothing in the amended complaint to support this assertion and make it plausible. The Supreme Court clarified its ruling in Bell Atlantic, establishing that “[s]pecific facts are not necessary; the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89 (2007) Even in light of Plasticase’s explanation of its intended cause of action, the amended complaint still fails to give Invicta fair notice of what is claimed. Invicta
1
The Lalo Declaration describes an industry trend to package watches in similar impact resistant, waterproof cases and it lists examples of such cases and suppliers from whom Invicta ordered samples. The Declaration states that Invicta pre-sold watches with such cases. There is nothing in the Lalo Declaration to support the incorrect inference drawn by Plasticase that NANUK cases were used by Invicta in advertising or offers for sale, and, beyond a bald assertion, Plasticase has not offered facts regarding any such use.
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has interpreted Counts III and IV as trade dress infringement claims because there is no allegation of improper use of a mark. In its opposition to Invicta’s motion to dismiss, Plaintiff asserts that the vague allegations set forth in Counts III and IV of its amended complaint are claims for passing off. Even with this clarification by Plaintiff, it will be shown that the facts as alleged by Plaintiff are more suitable (although equally insufficient) to a reverse passing off theory. The Amended Complaint, Counts III and IV, cannot survive a 12(b)(6) challenge under Bell Atlantic and its progeny. II. UNFAIR COMPETITION/FALSE DESIGNATION OF ORIGIN The Lanham Act 15 U.S.C. §1125(a)(1) is the source of several related causes of action. These can be divided into two types of prohibited activities: (1) false advertising of goods and services (1125(a)(1)(B)) and (2) passing off/ reverse passing off (1125(a)(1)(A)). ATIF S. Debs v A.P. Sakis Mediopoulos, 1991 U.S. Dist. LEXIS 19864 (N.D. Ga. 1991) at *18 (internal citations omitted). Section 1125 (a) also includes trade dress infringement. Bretford Mfg., Inc. v. Smith System Mfg. Corp., 419 F.3d 576, 578 (7th Cir. 2005). In its opposition to Invicta’s motion to dismiss, Plasticase argues that Counts III and IV of its amended complaint present a case for passing off, and not trade dress infringement, as Invicta has asserted in its motion to dismiss. In actuality, Plaintiff’s case is closer to an action for reverse passing off. However, under either theory, the amended complaint fails to state a cause of action upon which relief can be granted. “Passing off or palming off occurs when a firm puts someone else’s trademark on its own (usually inferior) goods”. Bretford 419 F.3d at 580. “Reverse passing off or misappropriation is selling someone else’s goods under your own mark.” Id. quoting
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Roho, Inc. v. Marquis, 902 F.2d 356, 359 (5th Cir. 1990). By way of example, passing off would be applying the COKE trademark to a cola flavored beverage not produced by the Coca-Cola Company. Passing off occurs when the defendant sells a competing product under the plaintiff’s trademark or a colorable imitation thereof to trade off the consumer’s recognition of the plaintiff’s trademark and the goodwill associated therewith. Plasticase is not claiming that Invicta had similar plastic cases manufactured, and then sold or offered them for sale under Plasticase’s NANUK mark. Plaintiff’s suit, as it claims it to exist in its Opposition, is more akin to a reverse passing off cause of action. In reverse passing off, the competitor strips the plaintiff’s product of its mark and either re-brands it with its own mark or sells it in an unbranded state. See Walker Mfg., Inc. v. Hoffmann, Inc., 261 F. Supp.2d 1054, 1070 (S.D. Iowa 2003). An example of reverse passing off would be re-branding COKE with a PEPSI label. Plaintiff is claiming that Invicta sold the NANUK cases as part of its own finished product. A. PASSING OFF Plaintiff now claims that Counts III and IV of the First Amended Complaint “concern Defendant’s acts of ‘passing off’ Plasticase’s’ NANUK storage cases as its own.” [D.E. 43 at p. 3]. Plaintiff further argues that “a passing off claim requires a showing that the Defendant falsely represented that the plaintiff was the ‘source’ of the goods when it was not….” Id.
Since there is no mark identified in Plaintiff’s pleadings
and facts, the only way that the final product could be attributed to Plaintiff is if the mark at issue is the configuration of Plaintiff’s case. In other words, Plaintiff is arguing that the Invicta watch, in a case whose physical design is recognized by the public as a source indicator, falsely misleads the public into thinking that the enclosed watch originated
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with Plaintiff. This relates back to Invicta’s position that Plaintiff’s cause of action is for trade dress infringement. If the “mark” at issue is the appearance of the case, such that purchasers will think that the enclosed watch is a Plasticase product, then Counts III and IV allege trade dress infringement. Even if it is alleging “passing off,” Plaintiff has not alleged that the NANUK mark was wrongfully used. The unregistered mark, that is, the physical design of the case, must be shown to identify and distinguish the source. WalMart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 145 L. Ed. 2d 18, 123 S. Ct. 2041 (2003). Plaintiff must still show that its product design is either inherently distinctive or has acquired secondary meaning in order to show that it functions as a source indicator. Id. As set forth in the original motion, the pleading and facts are devoid of such allegations. There are no allegations or facts that the physical design of the case is a source indicator or that it is inherently distinctive or has obtained secondary meaning. The amended complaint is devoid of any allegation that the Invicta watches contained in storage cases were associated with Plasticase. There is no cause of action for passing off because Plaintiff has failed to show how Defendant represented that Plaintiff is the source of the watches enclosed in the cases. B.
REVERSE PASSING OFF
The facts as pleaded by Plaintiff are most relevant to a reverse passing off claim, where the defendant sells the plaintiff’s product as its own. Notwithstanding the foregoing, Plaintiff also fails to set forth a cause of action for reverse passing off. A seminal case in the law of reverse passing off is Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 123 S. Ct. 204, 156 L.Ed.2d 18 (2003). In Dastar, the Supreme Court held that a plaintiff must show that a misrepresentation or false designation led to
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confusion as to the origin of the final product and not just confusion as to the origin of underlying creative work. Dastar, 539 U.S. at 36. The Dastar case involved the alleged misappropriation of a previously copyrighted television series by Fox entitled “Crusade in Europe.” Dastar, without permission, included “Crusade in Europe” in in its entirety in a new series entitled “Campaigns in Europe.” The new series offered no attribution to the producer of “Crusade in Europe.” The Supreme Court held that the term “origin” in 1125(a) refers to the manufacturer or producer of the physical goods and not to the creator of underlying intellectual property. Id at 32. In other words “Campaigns in Europe” came from Dastar and Fox was not entitled to be credited. Dastar has been expanded beyond just copyright or intellectual property matters and has been applied in the case of physical goods in Bretford Mfg., Inc. v. Smith System Mfg. Corp., 419 F.3d at 576. The Bretford case involved allegations of both trade dress infringement and reverse palming off. Bretford had for many years been the sole source of tables having “V”-shaped legs. Smith designed a similar, competing table, which it was entitled to do because the Bretford design was not subject to any patent or copyright registrations. Bretford accused Smith of trade dress infringement for the “V” design table legs. It also accused Smith of reverse passing off. In facts similar to the allegations as stated by Plaintiff in this case, a prospective customer asked to see a sample of the new Smith table. Due to difficulties with its metal fabricator for the V-shaped leg assemblies, Smith was unable to produce one of its tables for viewing. Instead, Smith created a sample table by attaching the V-shaped leg assembly from a Bretford table to a Smith manufactured table top. The customer placed the order based on this display table. The tables ultimately supplied to the customer by
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Smith included legs manufactured for Smith not taken from Bretford tables. Relying on Dastar, the Seventh Circuit ruled in Smith’s favor, reasoning that liability for reverse passing off, like any other form of trademark or trade dress infringement, must be based on a misrepresentation of the origin of the goods. Bretford, 419 F.3d at 580. Smith had the right to incorporate the subassemblies or components of others into its final product provided that it manufactured the finished product as a whole and did not mislead anyone about who put the table together. Id. at 581. Smith was properly named as the origin of the end-product table. Thus, liability for reverse passing off is precluded when the product which the defendant incorporated does not become the defendant’s entire product but merely a component of the entire product. The Seventh Circuit acknowledged that “[n]o one makes a product from scratch.” Bretford, 419 F.3d at 580. False designation of origin does not occur each time a product manufacturer incorporates a component of another into its final product. In this case, Plasticase alleges that Invicta incorporated Plasticase cases into the final product of Invicta watches. The goods at issue in this action are watches. The storage case is merely part of the presentation of the watch. It is a component of the final tangible product sold in the marketplace. The final product (the watch) originates with Invicta. Therefore, Plaintiff cannot make out a case for “false designation of origin.” The “origin” pertains to the final product and Invicta is the entity responsible for the final product.2
2
Assuming arguendo, even if Invicta had displayed its watches in NANUK cases in advertising (which it did not do) and then made the final watch sales in the similar boxes it had manufactured, under Dastar and Bretford, the pleadings and facts are still insufficient to survive a motion under 12(b)(6) because there are insufficient allegations to support a false designation of origin.
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Plaintiff is unable to make out any type of claim for false designation of origin under Section 1125(a), either for passing off or reverse passing off, because it has not alleged sufficient facts to support a false designation of origin. III.
CONCLUSION In conclusion, Counts III and IV of the amended complaint are Plaintiff’s attempt
to recapture damages unavailable under patent law. The relevant injury under 15 U.S.C. §1125(a) is a trademark injury3 and cannot be used to enlarge the scope of patent protection. Counts III and IV are not legally or factually sufficient and should be dismissed pursuant to Fed. Rule Civ. P. 12(b)(6). Respectfully submitted,
Dated: September 23, 2010
/s/ Robert M. Schwartz Robert M. Schwartz, Esq. Florida Bar No. 304018 Robert M. Schwartz, P.A. 2445 Hollywood Boulevard Hollywood, Florida 33020 Telephone: (954) 924-0707 Facsimile: (954) 924-0717 Email: litigation@patentmiami.com Attorneys for Defendant, Invicta Watch Company of America, Inc.
3
The injury under §1125(a) must be a trademark loss,which is to say, it must come from a misrepresentation of the origin of the goods. Bretford, 419 F.3d at 580; see also Dastar, 539 U.S. at 30.
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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 23rd day of September, 2010, I electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on all counsel of record identified on the attached Service List in the manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel or parties who are not authorized to receive electronically Notices of Electronic Filing. /s/ Robert M. Schwartz _____________ ROBERT M. SCHWARTZ, ESQUIRE Florida Bar No. 304018 Robert M. Schwartz, P.A. Attorney for Defendant 2445 Hollywood Boulevard Hollywood, Florida 33020 Telephone: (954) 924-0707 Facsimile: (954) 924-0717 Email: litigation@patentmiami.com
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PLASTICASE, INC. V. INVICTA WATCH COMPANY OF AMERICA, INC. CASE NO: 10-CV-60524-ZLOCH/ROSENBAUM
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Geoffrey Lottenberg Ury Fischer Lott & Friedland 355 Alhambra Circle Suite 1100 PO Drawer 141098 Coral Gables, FL 33134-1098 Tel: 305-448-7089 Fax: 305-446-6191 Email: glottenberg@lfiplaw.com Email: ufischer@lfiplaw.com
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