Swimwear v. Maya Swimwear Llc

789 F.Supp.2d 506

MAYA SWIMWEAR, CORP. and Carolina Dinardi, Plaintiffs,

v.MAYA SWIMWEAR, LLC, David McKinney, and Todd Ford, Defendants.

Civ. No. 11–059–SLR.

United States District Court, D. Delaware.

June 8, 2011.

Neil Lapinski, Esquire, and Theodore Kittila, Esquire, of Elliot Greenleaf, Wilmington, DE, for Plaintiff.David E. Wilks, Esquire, of Wilks, Lukoff & Bracegirdle, LLC, Wilmington, DE, for Defendant.

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge.I. INTRODUCTION

Carolina Dinardi (“Dinardi”) and Maya Swimwear Corp. (“Maya Agentina”) (collectively “plaintiffs”) filed this action against David McKinney (“McKinney”), Todd Ford (“Ford”), and Maya Swimwear LLC (“Maya USA”) (collectively “defendants”), on January 15, 2011. (D.I. 1) Plaintiffs design, manufacture, and distribute an exclusive line of bikinis under the “Maya” brand name. (D.I. 8 at 1–2, 7–8) Defendants sell genuine, prior year Maya brand bikinis via their website.¹ (D.I. 20 at ¶¶ 10) In their second amended complaint, plaintiffs allege that defendants improperly use plaintiffs' “Maya” trademark in connection with the sale of bikinis in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114, and that said use of the mark misdescribes the bikinis and falsely designates their origin in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). (D.I. 14 at ¶¶ 37–40) In addition to the § 43(a) claims, plaintiffs allege that defendants are tortiously interfering with a contractual relationship by harassing Christina Pinto (“Pinto”), a former employee of defendants who now works for plaintiffs. ( Id. at ¶¶ 41–52) Currently pending before the court is plaintiffs' motion for a preliminary injunction based on its trademark and false advertising claims, and defendants' motion to dismiss for failure to state a claim. (D.I. 8; D.I. 16) The court held a hearing addressing plaintiffs' motion on April 11, 2011. For the following reasons, the court grants-in-part and denies-in-part both motions.

II. BACKGROUNDA. The Parties and Contested Use of The Mark

Dinardi is the owner of Maya Argentina, a Florida corporation with its principal place of business in Buenos Aires, Argentina. (D.I. 8 ¶¶ 2–3) McKinney and Ford are both owners of Maya USA, a Delaware corporation with its principal place of business in Florida. (D.I. 20 at 3)

Dinardi began selling Maya bikinis in the United States in 2002. (D.I. 8 at ¶ ¶ 8–11) She had initially used Joe Market USA LLC to import Maya bikinis into the United States from Argentina. ( Id. at ¶ 13) In September 2003, Ford and McKinney traveled to Argentina to present a business proposal. ( Id. at ¶ 16) Dinardi, Ford, and McKinney thereafter reached an agreement and signed a letter of intent (“LOI”) for the exclusive sale and distribution of Maya bikinis in the United States. ( Id.)

The LOI had a two-year term and provided for automatic two-year extensions if sales goals were met. (D.I. 8, ex. A at 2) The exclusivity period commenced October 1, 2003, and defendants were to sell 6,000 units within the first 9 months, 15,000 units within 18 months, and 25,000 units within 24 months. ( Id.) While Maya USA was allowed to use and promote the brand, Maya Argentina retained complete creative control of the brand's image. ( Id. at 3)

On April 20, 2004, Dinardi filed for registration of the Maya trademark on the principal register of the United States Patent and Trademark Office. Said registration issued on October 9, 2007 with registration number 3306450. (D.I. 8 at ¶ 18)

Defendants set up a website, www. buymaya. com, to help with the marketing, promotion and sales of Maya bikinis. (D.I. 20 at 9–10) www. buymaya. com was connected with www. mayaswimwear. com to create a larger online presence, and rank higher in search ratings. ( Id.)

Defendants failed to meet the sales goals as set fourth in the LOI; nevertheless, Dinardi continued the business relationship with them in order to sell and market Maya bikinis. (D.I. 8 at ¶ 19) Sales continued to decline, yet the relationship continued through 2010 when, according to plaintiffs, Ford and McKinney failed to book a booth at the Miami Trade Show ( Id. at ¶¶ 27–28)

On October 13, 2010, Dinardi sent Maya USA a letter memo officially severing ties to defendants and ending any and all business relations with them. ( Id. at ¶ 31) Despite this letter, defendants continued to sell Maya bikinis via their www. buymaya. com website. ( Id. at ¶ 32) Consequently, plaintiffs sent a copy of the letter to Ford and McKinney directly on December 17, 2010. ( Id. at ¶ 33) Defendants continued to operate their website and, on December 31, 2010, plaintiffs sent a copy of the letter to Network Solutions, plaintiffs' web host. ( Id. at ¶ 34) Network Solutions took down the website from January 11, 2011 to January 19, 2011, but it is now fully operational. ( Id. at ¶ 35)

Defendants use the Maya trademark with its stylized font and “Mayan” symbols at the top of their website. The logo has an orange hue to it, and is the largest text on the website. Similarly, plaintiffs display the logo in the same font and in the same relative position at the top of their website. Plaintiffs' version of the logo is white against a black background, and the “Mayan” symbols are on the far right of the screen at the same level as the Maya logo.

Image 1 (2.46" X .54") Available for Offline Print

Defendants' use of the mark

Image 2 (2.67" X .55") Available for Offline Print

Plaintiffs' use of the mark

Nowhere on the site do defendants disclaim an association with Maya Agentina or do anything to imply that they are not the official Maya swimwear company.

B. Christina Pinto

Christina Pinto, a former personal assistant to Ford, was terminated by defendants in 2010, and began working for plaintiffs in early 2011. (D.I. 14 ¶ ¶ 41–42) Pinto had not signed a non-compete or confidentiality agreement with defendants prior to her termination, nor did she have a written contract of employment. ( Id. at ¶¶ 44–46) Defendants sent plaintiffs a letter demanding that they terminate Pinto, and cease using any and all customer lists and marketing materials that they obtained from her. (D.I. 14, ex. A) They also demanded that plaintiffs cease contact with any clients obtained from said customer lists. ( Id., ex. B)

III. STANDARD OF REVIEWA. Preliminary Injunction

Traditional rules of equity apply to requests for injunctive relief. See eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). “The decision to grant or deny ... injunctive relief is an act of equitable discretion by the district court.” Id. The grant of a preliminary injunction is considered an “extraordinary remedy” that should be granted only in “limited circumstances.” See Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir.2004) (citation omitted).

The moving party for injunctive relief must establish: “(1) a likelihood of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief.” Id. (citation omitted). The burden lies with the movant to establish every element in its favor or the grant of a preliminary injunction is inappropriate. See P.C. Yonkers, Inc. v. Celebrations, the Party and Seasonal Superstore, LLC, 428 F.3d 504, 508 (3d Cir.2005). If either or both of the fundamental requirements—likelihood of success on the merits and probability of irreparable harm if relief is not granted—are absent, an injunction cannot issue. See McKeesport Hosp. v. Accreditation Council for Graduate Med. Educ., 24 F.3d 519, 523 (3d Cir.1994).

B. Motion to Dismiss for Failure to State a Claim

In reviewing a motion filed under Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff. See Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007); Christopher v. Harbury, 536 U.S. 403, 406, 122 S.Ct. 2179, 153 L.Ed.2d 413 (2002). A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (interpreting Fed.R.Civ.P. 8(a)) (internal quotations omitted). A complaint does not need detailed factual allegations; however, “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 1964–65 (alteration in original) (citation omitted). The “[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true.” Id. at 1959. “[D]etermining whether a complaint states a plausible claim is context-specific, requiring the reviewing court to draw on its experience and common sense.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).

“In reviewing a motion to dismiss, ‘[c]ourts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record.’ ” Collins & Aikman Corp. v. Stockman, Civ. No. 07–265–SLR–LPS, 2010 WL 184074 at *3 (D.Del. Jan. 19, 2010) ( quoting Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993)). “Certain additional materials may also be considered without converting a motion to dismiss into a motion for summary judgment (which generally cannot be ruled upon without providing a plaintiff a reasonable opportunity for discovery).” Id. “For instance, ‘a court may consider an undisputedly authentic document...