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Milo & Gabby, LLC v. Amazon.com, Inc.

United States District Court, W.D. Washington

April 11, 2014

MILO & GABBY, LLC and KAREN KELLER, an individual, Plaintiffs,
v.
AMAZON.COM, INC., Defendant

Page 1342

[Copyrighted Material Omitted]

Page 1343

For Milo & Gabby, LLC, Karen Keller, an individual, Plaintiffs: Philip P Mann, MANN LAW GROUP, SEATTLE, WA.

For Amazon.com Inc, Defendant: Nathan C Brunette, LEAD ATTORNEY, PRO HAC VICE, STOEL RIVES (OR), PORTLAND, OR; Brian C Park, Vanessa Soriano Power, STOEL RIVES (WA), SEATTLE, WA.

OPINION

Page 1344

RICARDO S. MARTINEZ, UNITED STATES DISTRICT JUDGE.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM IN PART

I. INTRODUCTION

This matter is before the Court upon Defendant's Motion to Dismiss, In Part pursuant to Fed.R.Civ.P. 12(b)(6). Dkt. # 8. Defendant Amzon.com, Inc. (" Amazon" ) asks the Court to dismiss Plaintiffs' claims for unfair competition, right of publicity, trademark counterfeiting, and indirect patent and copyright infringement. Having considered the parties' memoranda and the relevant law, the Court grants Amazon's motion to dismiss Claims III, V, and VII of the Complaint with leave to amend. Plaintiffs' request for relief seeking redress for inducement, willful, or contributory infringement is stricken, and Plaintiffs are ordered to show cause why FAC System, LLC should not be joined as a necessary party.

II. BACKGROUND

Plaintiffs make the following factual allegations. Plaintiff Milo & Gabby, LLC is a Washington State limited liability company that designs and sells animal-shaped pillow cases, among other accessories and bedding products. Plaintiff Karen Keller and her husband are the founders and product designers of Milo & Gabby, LLC (" Milo & Gabby" ). Dkt. #1, ¶ 7. The couple's four children and two family pets inspired the Kellers to create the Cozy Companion Pillowcases product line for Milo & Gabby. The line consists of eight animal shaped pillowcases that function as a combination of a pillow and a stuffed animal.

Plaintiffs are the authors and owners of various U.S. Copyrights and U.S. Design Patents. On September 11, 2007, the Milo & Gabbye design mark was registered with the U.S. Patent and Trademark Office and was assigned U.S. Trademark Registration Number 3291697. Id. at ¶ 8. In addition, Milo & Gabby's website and marketing images are protected by valid U.S. copyrights. Id. at ¶ 10.

Over the past five years, Milo & Gabby has designed, sold, and distributed their

Page 1345

products to retailers and e-tailers throughout the United States and internationally. Id. at ¶ 11. During this time, Milo & Gabby's animal-themed children's accessories have seen commercial success. Id. In 2012, Milo & Gabby entered into an exclusive license arrangement in Asia, and since then the company has made promising gains. Id. Milo & Gabby aims to further expand its operations by entering into license agreements throughout North America. Id. at ¶ 12. However, Milo & Gabby claims these efforts were halted when Amazon.com allegedly began selling direct knock-off copies of Milo & Gabby's Cozy Companion Products. Id. at ¶ 13. Defendant Amazon is a company that operates a widely used internet service retail website at http://www.amazon.com. Amazon enables third-party vendors to sell and distribute a variety of products to the public while Amazon " fulfills" the orders through amazon.com.[1] On October 24, 2013, Plaintiffs Milo & Gabby, LLC and Karen Keller (collectively, " Plaintiffs" ) filed the instant lawsuit alleging that Amazon was using Plaintiffs' intellectual property to wrongfully market, sell, and distribute inferior-quality knockoffs of Plaintiffs' animal-shaped pillowcases on the amazon.com website.[2]

Amazon filed the instant Motion to Dismiss and moves to dismiss Counts III, V, and VII of Plaintiffs' Complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Amazon also moves to dismiss Count I pursuant to Rule 12(b)(6) to the extent that Count I purports to state a claim of patent infringement pursuant to either 35 U.S.C. § 271(b) or (c), or, in the alternative, to strike Plaintiffs' requests for related injunctive and exceptional relief. Similarly, Amazon requests dismissal of Count II to the extent it purports to state a claim of indirect copyright infringement or, alternatively, to strike Plaintiffs' request for related injunctive relief.

III. DISCUSSION

A. Standard of Review

In considering a Rule 12(b)(6) motion to dismiss, the Court must determine whether the plaintiff has alleged sufficient facts to state a claim for relief which is " plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1951, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible if the plaintiff has pled " factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). In making this assessment, the Court accepts all facts alleged

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in the complaint as true, and makes all inferences in the light most favorable to the non-moving party. Barker v. Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (internal citations omitted). The Court is not, however, bound to accept the plaintiff's legal conclusions. Iqbal, 129 S.Ct. at 1949-50. While detailed factual allegations are not necessary, the plaintiff must provide more than " labels and conclusions" or a " formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555.

Under Fed.R.Civ.P. 12(b)(6), dismissal is proper where there is either a " lack of a cognizable legal theory" or " the absence of sufficient facts alleged under a cognizable legal theory." Butler v. Target Corp., 323 F.Supp.2d 1052, 1055 (C.D. Cal. 2004) (quoting Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990)). The court must (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether the plaintiff can prove any set of facts to support a claim that would merit relief. Id. (citing Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996)). Further, where a complaint's state law claims are preempted by federal law, the claims are subject to dismissal under Rule 12(b)(6). Id. (citing Falkowski v. Imation Corp., 309 F.3d 1123 (9th Cir. 2002).

B. Count III - Unfair Competition

Plaintiffs' complaint alleges Amazon violated Washington's Consumer Protection Act (" CPA" ). Specifically, Plaintiffs' claim for unfair competition states:

Defendant Amazon violated RCW Chapter 19.86 due to its unfair methods of competition and unfair or deceptive acts or practices in the conduct of its trade or commerce. By offering for sale, selling, importing, and distributing actual products that include infringing materials, Amazon is directly liable for its own actions, as set forth above. Amazon has sold, imported, and delivered the Amazon knock-offs to consumers in this district.

Dkt. # 1, ¶ 33-34

Amazon challenges Plaintiffs' unfair competition claim as insufficient under federal pleading requirements. Amazon first argues that paragraph 33 of the unfair competition claim amounts to nothing more than a formulaic and impermissible recitation of the elements of a CPA claim. Dkt. #8 at p. 6. Second, Amazon contends that Plaintiffs' use of the term " infringing" refers to--and incorporates by reference--Plaintiffs' two preceding causes of action for patent and copyright infringement. Id. Amazon also argues that the phrase " as set forth above" incorporates the first two claims by reference. Because the claim fails to articulate a basis for relief that is distinct from Plaintiffs' causes ...


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