My Pillow, Inc. v. LMP Worldwide, Inc.

331 F.Supp.3d 920

MY PILLOW, INC., Plaintiff,

v.LMP WORLDWIDE, INC., Defendant.

Case No. 18-cv-0196 (WMW/SER)

United States District Court, D. Minnesota.

Signed September 6, 2018

David J. Simonelli, Simonelli IP, PLLC, Birmingham, MI, Laura L Myers, Lora Mitchell Friedemann, Fredrikson & Byron, PA, Mpls, MN, for Plaintiff.

Anthony Michael Palizzi, Miller, Canfield, Paddock and Stone, P.L.C, Detroit, MI, Matthew L. Woods, Peter N. Surdo, Robins Kaplan LLP, Mpls, MN, Michael C. Simoni, Miller, Canfield, Paddock and Stone, P.L.C, Troy, MI, for Defendant.

ORDER DENYING DEFENDANT'S MOTION TO TRANSFER AND GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

Wilhelmina M. Wright, United States District Judge

Plaintiff My Pillow, Inc., initiated this trademark-infringement lawsuit against Defendant LMP Worldwide, Inc. (LMP). Currently before the Court are LMP's motion to transfer the lawsuit to the United States District Court for the Eastern District of Michigan, (Dkt. 11), and LMP's motion to dismiss My Pillow's complaint for failure to state a claim, (Dkt. 18). For the reasons addressed below, the Court denies LMP's motion to transfer and grants in part and denies in part LMP's motion to dismiss the complaint.

BACKGROUND

My Pillow is a Minnesota-based company that manufactures and sells pillows. My Pillow has used the registered trademark "MYPILLOW" (the My Pillow mark) since 2009. LMP has used the registered trademark (the LMP mark) since 2007. In January 2012, My Pillow initiated a lawsuit against LMP in the United States District Court for the Eastern District of Michigan, alleging trademark infringement and unfair competition. The lawsuit was terminated when the parties signed a settlement agreement (the agreement), which establishes the terms under which each party can use the marks at issue. The agreement, which is governed by Michigan law, authorizes LMP to use the LMP mark. The agreement also contains the following provision: "The Parties agree that the [LMP mark], as used in the manner and form reflected in [the agreement], is not confusingly similar to and not likely to cause confusion with the My Pillow Mark." The agreement also prohibits LMP from using the My Pillow mark in connection with pillows and from making any "ad word" purchase¹ for the words "my" and "pillow," whether together or separate, unless accompanied by additional words.

My Pillow alleges that LMP's conduct in the subsequent years violated the agreement and infringed the My Pillow mark. First, My Pillow alleges that, despite the terms of the agreement, LMP purchased the prohibited ad words (i.e., "my," "pillow," and "mypillow" without the accompaniment of additional words). My Pillow notified LMP of this alleged breach of the agreement in December 2016 and, although LMP claimed that it then ceased purchasing the prohibited ad words, My Pillow alleges that LMP continued to purchase the prohibited ad words. Second, My Pillow alleges that an LMP employee used the My Pillow mark in connection with the My Pillow goods and made false representations about My Pillow in an email to a wholesale customer. Third, My Pillow alleges that LMP produced radio advertisements that aired in the state of Minnesota that were designed to cause confusion between My Pillow and LMP. On December 20, 2017, My Pillow notified LMP of these alleged breaches of the agreement, and on January 23, 2018, My Pillow terminated the agreement.

My Pillow subsequently initiated this lawsuit, asserting breach of contract (Count 1), trademark infringement in violation of the Lanham Act, 15 U.S.C. § 1114 (Count 2), unfair competition and false representation in violation of the Lanham Act, 15 U.S.C. § 1125(a) (Count 3), common-law trademark infringement and unfair competition (Count 4), unfair competition and false representation in violation of the Minnesota Deceptive Trade Practices Act, Minn. Stat. § 325D.44 (Count 5), and trademark cancellation (Count 6). Presently before the Court are LMP's motion to transfer the lawsuit to the Eastern District of Michigan and LMP's alternative motion to dismiss the complaint.

ANALYSIS

I. LMP's Motion to Transfer

"For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought ...." 28 U.S.C. § 1404(a). Section 1404(a) was enacted to address "problems arising where, despite the propriety of the plaintiff's venue selection, the chosen forum [is] an inconvenient one." In re Apple, Inc. , 602 F.3d 909, 912 (8th Cir. 2010) (per curiam) (internal quotation marks omitted). When deciding a motion to transfer, the district court considers the convenience of the parties, the convenience of the witnesses, and the interests of justice. Terra Int'l, Inc. v. Miss. Chem. Corp. , 119 F.3d 688, 691 (8th Cir. 1997). In doing so, the court evaluates the particular circumstances of the case in consideration of all relevant factors. Id. Because transfer motions "should not be freely granted," In re Nine Mile Ltd. , 692 F.2d 56, 61 (8th Cir. 1982) (per curiam), abrogated on other grounds by Mo. Hous. Dev. Comm'n v. Brice , 919 F.2d 1306 (8th Cir. 1990), the moving party bears the heavy burden of demonstrating why a transfer is warranted and, in doing so, must establish that the relevant factors weigh strongly in favor of granting the motion, Austin v. Nestle USA, Inc. , 677 F.Supp.2d 1134, 1137 (D. Minn. 2009).

LMP asserts that this lawsuit should be transferred because Michigan is a more convenient forum for the parties and witnesses and because transferring the lawsuit serves the interests of justice. Neither party disputes that My Pillow could have brought the lawsuit in the Eastern District of Michigan.

A. Convenience for the Parties

The convenience of each venue for the parties is the first factor considered under Section 1404(a). Huggins v. Stryker Corp. , 932 F.Supp.2d 972, 982 (D. Minn. 2013). This factor includes the travel expenses that each party would incur for airfare, meals, lodging, and loss of productivity if required to litigate in an out-of-state forum. Oien v. Thompson , 824 F.Supp.2d 898, 903 (D. Minn. 2010) (citing In re Apple , 602 F.3d at 913 ). When each party prefers to litigate in its home forum and the moving party "has not presented convincing evidence that its financial position makes it incapable of litigating in Minnesota," this factor is neutral. Bae Sys. Land & Armaments L.P. v. Ibis Tek, LLC , 124 F.Supp.3d 878, 885 (D. Minn. 2015) (internal quotation marks omitted).

LMP argues that this factor favors transfer because of the inconvenience and greater expense of litigating in Minnesota. LMP is based in Michigan, and its employees and records are located there. Requiring its employees to travel to Minnesota for litigation, LMP argues, would cripple its business operations and impose considerable financial hardship. Moreover, at least one of LMP's witnesses is an hourly employee who would be financially burdened by taking time away from work to travel to Minnesota to testify.

My Pillow, which is based in Minnesota and maintains its records here, counters that transfer would simply shift the inconvenience of out-of-state litigation from LMP to My Pillow. See Van Dusen v. Barrack , 376 U.S. 612, 645-46, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (" Section 1404(a) provides for transfer to a more convenient forum, not to a forum likely to prove equally convenient or inconvenient."). A transfer of venue "should not be granted if the effect is simply to shift the inconvenience to the party resisting the transfer." Huggins , 932 F.Supp.2d at 982 (internal quotation marks omitted). My Pillow does not refute LMP's argument that My Pillow is a larger company that is better able to absorb the expense of out-of-state litigation. But, although it is undisputedly a smaller company, LMP has not demonstrated that it is financially incapable of litigating in Minnesota.

In short, because the inconvenience to LMP of litigating in Minnesota would be only slightly greater than the inconvenience to My Pillow of litigating in Michigan, this factor only slightly favors transfer.

B. Convenience of the Witnesses

LMP argues that, because essential non-party witnesses are located in Michigan, the convenience-of-the-witnesses factor favors transfer. My Pillow counters that LMP's non-party witnesses are not essential and, because there are also non-party witnesses in Minnesota, this factor does not favor transfer.

Witness convenience is "often considered the most important factor in the transfer analysis." Austin , 677 F.Supp.2d at 1138. The focus of this factor is the inconvenience to non-party witnesses as "it is generally assumed that witnesses within the control of the party calling them, such as employees, will appear voluntarily in a foreign forum."² Bae Sys. Land & Armaments L.P. , 124 F.Supp.3d at 885-86 (internal quotation marks omitted). This factor does not pose "a contest between the parties as to which of them can present a longer list of possible witnesses located in the respective districts." Nelson v. Master Lease Corp. , 759 F.Supp. 1397, 1402 (D. Minn. 1991). Rather, the party seeking the transfer must clearly identify the essential witnesses to be called and provide a general statement of what their testimony will cover. Id.

Here, each party intends to call non-party witnesses; but neither party explains the significance of the testimony of each of these witnesses. LMP intends to call employees of the Michigan-based production company and marketing company that worked on the radio advertisement referenced in the complaint. LMP argues that those employees and their companies will be burdened by travel to Minnesota. My Pillow intends to call radio-station employees from Minnesota to testify about the radio advertisement. But neither party explains how this non-party testimony is relevant, much less essential, to the...