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Trade West, Inc. v. Oriental Trading Co., Inc.

United States District Court, D. Hawaii

March 30, 2017

TRADE WEST, INC., Plaintiff,
v.
ORIENTAL TRADING COMPANY, INC., Defendant.

          ORDER GRANTING IN PART, DENYING IN PART DEFENDANT'S MOTION TO DISMISS AND STRIKE PLAINTIFF TRADE WEST, INC.'S COMPLAINT

          LESLIE E. KOBAYASHI UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendant Oriental Trading Company, Inc.'s (“OTC”) Partial Motion to Dismiss and to Strike Plaintiff Trade West, Inc's Complaint (“Motion”), filed on October 31, 2016. [Dkt. no. 27.] Plaintiff Trade West, Inc. (“Trade West”) filed its memorandum in opposition on January 23, 2017, and OTC filed its reply on January 30, 2017. [Dkt. nos. 32, 33.] On February 9, 2017, Plaintiff filed notice of its intent to rely on uncited authorities. [Dkt. no. 36.] This matter came on for hearing on February 13, 2017. At the hearing, the Court granted Trade West leave to file additional exhibits, and Trade West did so on February 14, 2017. [Dkt. no. 38.] On February 27, 2017, OTC filed its response to Trade West's supplemental filing. [Dkt. no. 39.]

         After careful consideration of the Motion, supporting and opposing memoranda, the arguments of counsel, and the relevant legal authority, OTC's Motion is HEREBY GRANTED IN PART AND DENIED IN PART for the reasons set forth below.

         BACKGROUND

         This lawsuit follows a previous case between the parties regarding similar copyright and trademark infringement claims. [CV 05-00149 LEK-KJM.] ¶ 2007, the parties settled and United States District Judge David Alan Ezra filed an Order of Dismissal on July 24, 2007.[1] [Id., dkt. nos. 71 (Settlement Agreement, filed under seal), 72.]

         Trade West now claims that OTC has again infringed on Trade West's registered trademark and copyrighted designs by “displaying, distributing, offering for sale and selling artificial flower leis and artificial flower hair clips, ” and that these activities constitute a breach of the 2007 Settlement Agreement. [Complaint for Breach of Settlement and for Infringement (“Complaint”), filed 8/26/16 (dkt. no. 1), at ¶¶ 4, 33.]

         The Complaint alleges the following claims: trademark infringement and counterfeiting of hibiscus and fern design, in violation of 15 U.S.C. § 1114 (“Count I”); unfair competition by false designation of origin and by trademark and trade dress infringement, in violation of 15 U.S.C. § 1125 (“Count II”); deceptive trade practices, in violation of Haw. Rev. Stat. § 481A-3 (“Count III”); common law unfair competition, palming off, trademark infringement (“Count IV”); unfair competition and practices, in violation of Haw. Rev. Stat. § 480-2 (“Count V”); copyright infringement (“Count VI”); breach of contract (“Count VII”); and a claim for punitive damages (“Count VIII”).

         Trade West prays for the following relief: various forms of injunctive relief; general, special, statutory, treble, and punitive damages; attorneys' fees and costs; and any other appropriate relief.

         In the instant Motion, OTC argues that: 1) Trade West fails to state a claim for copyright infringement because OTC's products and Trade West's copyrights are not substantially similar; 2) Trade West lacks standing to sue for breach of contract; and 3) the portions of Trade West's breach of contract claim based on copyright infringement are preempted by the federal Copyright Act. OTC urges this Court to: 1) dismiss Trade West's copyright infringement claim (Count VI) with prejudice; 2) dismiss Trade West's breach of contract claim (Count VII); and 3) if it does not dismiss Trade West's breach of contract claim, strike from the claim any references to Trade West's copyright infringement claims or Trade West's copyrights and OTC's alleged use thereof. The Motion is DENIED as to Count VI, and GRANTED insofar as Count VII is DISMISSED WITHOUT PREJUDICE, with leave to amend by April 28, 2017.

         DISCUSSION

         I. Scope of Documents Considered

          At the outset, this Court must determine whether it is necessary to convert the instant Motion into a motion for summary judgment. As a general rule, this Court's scope of review in considering a motion to dismiss is limited to the allegations in the complaint. See Daniels-Hall v. Nat'l Educ. Ass'n., 629 F.3d 992, 998 (9th Cir. 2010). “[A] court may consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.” Id. (citations and internal quotation marks omitted). Ordinarily, consideration of other materials requires the district court to convert a motion to dismiss to a motion for summary judgment. Yamalov v. Bank of Am. Corp., CV. No. 10-00590 DAE-BMK, 2011 WL 1875901, at *7 n.7 (D. Hawai`i May 16, 2011) (citing Parrino v. FHP, Inc., 146 F.3d 699, 706 n.4 (9th Cir. 1998)).[2]

         The Motion includes: two of Trade West's copyright registrations with the United States Copyright Office, VA 244 981 (artificial hibiscus flower lei) and VA 244 983 (artificial hibiscus hair clip); [Motion, Decl. of Robert Siffring in Supp. of Motion (“Siffring Decl.”), Exhs. A-B;] photographs of OTC's item numbers 34/1528 (artificial hibiscus lei) and 34/1526 (artificial hibiscus hair clip); [Motion, Decl. of Andrea Pallios Roberts in Supp. of Motion (“Roberts Decl.”) at ¶¶ 2-3, Exhs. 1-2;] excerpts from various books, encyclopedias, and guides; [id., Exhs. 3-11;] and printouts from various websites; [id., Exhs. 12-15]. OTC argues that Exhibits 3-15 depict how the hibiscus flower appears in nature.

         OTC filed a request for judicial notice in support of the Motion (“RJN”) on October 31, 2016. [Dkt. no. 28.] OTC first asks this Court to take judicial notice, pursuant to Fed.R.Evid. 201(b), of Exhibits A and B to the Siffring Declaration and Exhibits 1-15 to the Roberts Declaration. However, as previously noted, a court may consider exhibits attached to a motion to dismiss under certain circumstances. Judicial notice is unnecessary in such instances. After reviewing Exhibits A and B and Exhibits 1-15 and comparing them to the allegations in the Complaint, this Court FINDS that the Complaint refers to Trade West's copyright registration for VA 244 981 and VA 244 983 (Exhibits A-B); [Complaint at ¶¶ 22, 29;] and OTC item numbers 34/1528 (artificial hibiscus lei) and 34/1526 (artificial hibiscus hair clip) (Exhibits 1-2); [id. at ¶¶ 4, 6, 29]. Each document is also central to Trade West's claims. Further, Trade West's memorandum in opposition did not raise any challenges to the authenticity of these exhibits. This Court therefore CONCLUDES that it can consider Exhibits A and B to the Siffring Declaration and Exhibits 1 and 2 to the Roberts Declaration without converting the Motion into a motion for summary judgment, and DENIES AS MOOT OTC's RJN as to these exhibits.

         Exhibits 3-15 to the Roberts Declaration are pictures of hibiscus flowers found in encyclopedias, books, and websites. These pictures depict how the flowers appear in nature. Trade West's memorandum in opposition did not raise any challenges to the authenticity of Exhibits 3-15.

         Rule 201(b) states: “The court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” This district court has recognized that courts may take judicial notice of plant life. See Coyle v. Gardner, 298 F.Supp. 609, 618 (D. Hawai`i 1969) (taking judicial notice that a plumeria is a plant which “will often sprout from itself if a branch is just thrown on the ground, and which requires no ‘cultivation'”). This Court FINDS that the appearance of hibiscus flowers as they appear in nature is a fact that is subject to judicial notice pursuant to both Rule 201(a) and (b). This Court therefore GRANTS OTC's RJN insofar as it will take judicial notice - for purposes of the instant Motion only - of Exhibits 3-15 to the Roberts Declaration.

         OTC's RJN also asks this Court to take judicial notice, pursuant to Rule 201(b), of the information on the CV 05-00149 docket. Trade West also asks this Court to take judicial notice of the proceedings in CV 05-00149. [Mem. in Opp. at 2.]

A court may take judicial notice of the existence of matters of public record, such as a prior order or decision, but not the truth of the facts cited therein. See Lee v. City of Los Angeles, 250 F.3d 668, 689-690 (9th Cir. 2001); see also Interstate Natural Gas Co. v. S. Cal. Gas Co., 2009 F.2d 380, 385 (9th Cir. 1953) (holding a ...

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