GLD, LLC v. Gold Presidents, LLC

GLD, LLC, Plaintiff, v. GOLD PRESIDENTS, LLC and DERRICK JAMES MCDOWELL, Defendant.

No. 20-21617-CIV-MORE

United States District Court, S.D. Florida, Miami Division

July 22, 2021

ORDER DENYING MOTION TO DISMISS

FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE

THIS CAUSE came before the Court upon Defendant's Motion to Dismiss (D.E. 28), filed on March 24, 2021.

THE COURT has considered the motion, the response, the reply pertinent portions of the record, and being otherwise fully advised in the premises, it is

ADJUDGED that the motion is DENIED.

Plaintiff GLD LLC, is a Delaware company with its principle place of business in Miami. It designs and sells luxury jewelry and fashion. The Defendant, Gold Presidents, largely does the same. Plaintiff brings six counts of various types of trademark infringement-three federal, three Florida-against Defendant because Gold Presidents offered a watch for sale that is nearly identical to a watch that GLD has offered for sale since May 2019. The allegedly infringing watch is no longer listed and the parties dispute whether a sale was ever completed.

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The Court dismissed Plaintiff's first complaint for failure to state a claim but held that the Court had personal jurisdiction over the corporate Defendant. Now, Plaintiff files its first amended complaint. Defendant moves to dismiss once again on Rule 12(b)(6) grounds, but Plaintiff has added sufficient factual details to survive a motion to dismiss.

Legal Standard

In order to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must plead sufficient facts to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). When ruling on such a motion, a court must view the complaint in a light most favorable to the plaintiff and accept the plaintiff's well-pleaded facts as true. See Twombly, 550 U.S. at 555-56. In order to establish a facially plausible claim, a plaintiff must show “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. In other words, Rule 12(b)(6) ensures that a plaintiff includes sufficient specific facts in its complaint that a court would find the allegations, when read in a light most favorable to the plaintiff, to be plausible-not merely possible.

Analysis

In its previous order, this Court noted that the complaint was devoid of specifics that would allow it to infer a plausible claim of trademark infringement even if it were to assume everything the complaint said was true. The Court noted “sales figures, consumer surveys, or advertising budgets” were notably absent. This time, Plaintiff has cured those defects. Below is an analysis of what a plaintiff must prove to make a prima facie case under each claim and how the Complaint does so.

A. Count I-- Federal Trade Dress Infringement under 15 U.S.C. § 1125(a)

Section 43(a) of the Lanham Act creates a federal cause of action for trade dress infringement. AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535 (11th Cir. 1986). “The term ‘trade dress' refers to the appearance of a product when that appearance is used to identify the producer.” Publications Int'l, Ltd. v. Landoll, Inc., 164 F.3d 337, 338 (7th Cir. 1998). “‘Trade [d]ress' involves the total image of a product and may include features such as size, shape, color ..., texture, graphics, or even particular sales techniques.” AmBrit, 812 F.2d at 1535 (internal quotation omitted).

In order to prevail on a claim for trade dress infringement pursuant to this statute, a Plaintiff must prove by a preponderance of the evidence that (1) the trade dress of the two products is confusingly similar; (2) that the features of the trade dress are primarily nonfunctional; and (3) that the trade dress is inherently distinctive or has acquired secondary meaning. Vital Pharm., Inc. v. Am. Body Bldg. Prod., LLC, 511 F.Supp.2d 1303, 1309-10 (S.D. Fla. 2007) (Middlebrooks, J.).

For analysis of similarity and nonfunctionality, readers are referred to this Court's opinion on Defendant's first motion to dismiss. GLD, LLC v. Gold Presidents, LLC, No. 20-21617-CIV, 2021 WL 148737 at *7-8 (S.D. Fla. Jan. 15, 2021). The First Amended Complaint does not change that analysis, and the analysis is incorporated here.

Plaintiff's newly adduced allegations do, however, affect inherent distinctiveness/secondary meaning. Secondary meaning is acquired when “in the minds of the public, the primary significance of a product feature ... is to identify the source of the product rather than the product itself.” See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 851, n.11 (1982). Under the Lanham Act, federal trademark protection is available only to “distinctive” marks-“marks that serve the purpose of identifying the source of ... goods or services.” Welding Servs., Inc. v. Forman, 509 F.3d 1351, 1357 (11th Cir. 2007) (emphasis added) (citations omitted). A mark can be “distinctive” in one of two ways: It can be “inherently” distinctive, or it can “acquire” distinctiveness over time. Royal Palm Properties, LLC v. Pink Palm Properties, LLC, 950 F.3d 776, 782 (11th Cir. 2020). Here, the Court will focus on acquired distinctiveness (i.e., secondary meaning) because the Supreme Court has noted that design, like color, is not inherently distinctive. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 212 (2000). Whether a product has established secondary meaning is a question of fact. FN Herstal SA v. Clyde Armory Inc., 838 F.3d 1071, 1084 (11th Cir. 2016) (emphasis added).

For evidence that a product has attained secondary meaning the Eleventh Circuit looks to: 1) the length and manner of the product's use; 2) the nature and extent of advertising and promotion; 3) the efforts made by plaintiff to promote a conscious connection in the public's mind between the trade dress and plaintiff's business; and 4) the extent to which the public actually identifies the name with plaintiffs goods and services. Conagra, Inc. v. Singleton, 743 F.2d 1508, 1513 (11th Cir. 1984). GLD alleges that the watch at issue has attained secondary meaning via $300, 000 spent in advertising, over one million “highly engaged” Instagram followers, over $2, 000, 000 in every state and 50 countries, media attention, and celebrity endorsements.^[1]

a. Length and Manner

The Plaintiff has only used the design at issue for seven months, but “[t]here is no fixed rule as to the length of time a symbol must be in use before it can achieve secondary meaning, ” FN Herstal SA, 838 F.3d at 1084 (quoting McCarthy on Trademarks § 15:54). The Court acknowledges, though, that this is not Plaintiff's strongest argument.

ORDER

b. Nature and Extent of Advertising and Promotion/Connection Between Trade Dress and Business

Put simply, Plaintiff does enough to make a plausible case that its advertising efforts and celebrity endorsements have created secondary meaning. Whether or not they actually do so is the quintessential fact-specific inquiry best left for summary judgment and, if necessary, a jury. Vital Pharms., Inc. v. Monster Energy Co., 472 F.Supp.3d 1237 (S.D. Fla. 2020) (holding that a Plaintiff could survive summary judgment based on evidence of a $1.7 million advertising campaign and wide social media reach).

c. Intentional Copying

Proof of intentional copying, while not dispositive, is probative evidence of secondary meaning. FN Herstal SA, 838 F.3d 1071, 1086 (11th Cir. 2016) (citing Brooks Shoe Mfg. Co. v. Suave Shoe Corp., 716 F.2d 854, 860 (11th Cir. 1983)). It may, for example, indicate a desire for a competitor to capitalize on the goodwill customers already bear to plaintiff. In addition to the nearly identical aesthetic design of the watches, Plaintiff also points out that Defendant's marketing campaign is also a carbon copy of Plaintiff's.

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There are identical coupon codes indicating the company's displeasure with the year 2020 (understandable, of course, in light of a global pandemic, surge in unemployment, and bitterly contested presidential election), identical discount amounts, and nearly identical imagery of a champaign bottle wrapped in jewelry.

The Court need not decide at this stage whether these allegations are ultimately true or whether they are enough to convince a fact-finder by the preponderance of the evidence that the GLD Alpha Era watch has attained secondary meaning. Plaintiff survives the motion to dismiss here because it alleges the exact type of specific, factual evidence that courts and jurors look at when trying to answer the above question.^[2]

B. Count II: False Designation of Origin under 15 U.S.C. § 1125(a) and Unfair Competition

Plaintiff also brings a claim for false designation of origin and, in the same count, a claim for unfair competition under the same statute. To establish a prima facie case under section 43(a), “a plaintiff must show (1) that the plaintiff had enforceable ... rights in the mark or name, and (2) that the defendant made unauthorized use of it ‘such that consumers were likely to confuse the two.'” Custom Mfg. & Eng'g, Inc. v. Midway Servs., Inc., 508 F.3d 641, 647 (11th Cir. 2007). This Count now survives the motion to dismiss.

Plaintiff does not allege a registered trademark, and “common-law trademark rights are appropriated only through actual prior use in commerce.” Planetary Motion, Inc. v Techsplosion, Inc., 261 F.3d 1188, 1193-94 (11th Cir. 2001) (internal quotation and citation omitted). “[T]he use of a mark in commerce ... must be sufficient to establish ownership rights for a...