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Yeti Coolers, LLC v. Imagen Brands, LLC

United States District Court, W.D. Texas, Austin Division

May 18, 2017

YETI COOLERS, LLC, Plaintiff
v.
IMAGEN BRANDS, LLC, d/b/a CROWN PRODUCTS, and EBSCO INDUSTRIES, INC., Defendants.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before the Court is Defendants' Motion to Dismiss Pursuant to Rule 12(b)(6) and the responsive pleadings thereto. (Dkt. 8). Having reviewed the pleadings and the applicable law, the Court issues the following order.

         BACKGROUND

         Plaintiff YETI Coolers, LLC, (“Plaintiff”) is a Delaware corporation with its principal place of business in Austin, Texas. Plaintiff engages in the development, manufacture, and sale of premium, heavy-duty insulated drinkware. Defendants Imagen Brands, LLC, and Ebsco Industries, Inc., (collectively, “Defendants”) are entities organized under the laws of Alabama and Delaware, respectively, with principal places of business in Alabama.

         Plaintiff brought suit against Defendants on November 23, 2016. Plaintiff's Complaint asserts six causes of action against Defendants arising from the Defendants' sale of stainless steel insulated drinkware. Specifically, these claims are: (i) state and federal trade dress dilution; (ii) federal and common law trade dress infringement; (iii) federal and common law unfair competition; (iv) common law misappropriation; and (v) unjust enrichment. Plaintiff premises its claims on its allegation that Defendants have unlawfully copied the design and trade dress of its 30-ounce and 20-ounce stainless steel tumblers.

         Defendants filed the instant motion to dismiss pursuant to Rule 12(b)(6) on October 4, 2016. Defendants assert that Plaintiff has failed to state a claim upon which relief may be granted because: (1) Plaintiff has not adequately identified any protectable trade dress; (2) Plaintiff has pleaded insufficient facts to establish that its trade dress has acquired secondary meaning or that there is a likelihood of confusion between Plaintiff's and Defendants' products; (3) Plaintiff has not adequately alleged claims for false designation of origin, unfair competition, or unjust enrichment; (4) Plaintiff has pleaded insufficient facts to support its common law misappropriation claim; and (5) Plaintiff has not alleged facts sufficient to demonstrate that its trade dress is famous.

         LEGAL STANDARD

         When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6) the complaint must be liberally construed in favor of the plaintiff and all facts pleaded therein must be taken as true. Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). Although Federal Rule of Civil Procedure 8 mandates only that a pleading contain a “short and plain statement of the claim showing that the pleader is entitled to relief, ” this standard demands more than unadorned accusations, “labels and conclusions, ” “a formulaic recitation of the elements of a cause of action, ” or “naked assertion[s]” devoid of “further factual enhancement.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court must initially identify pleadings that are no more than legal conclusions not entitled to the assumption of truth, then assume the veracity of well-pleaded factual allegations and determine whether those allegations plausibly give rise to an entitlement to relief. If not, the complaint has alleged-but it has not show[n]-that the pleader is entitled to relief. Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Throughout this process, the court “must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

         DISCUSSION

         A. Trade Dress Infringement

         The Lanham Act provides a cause of action for trade dress infringement. 15 U.S.C. § 1125(1). “‘Trade dress refers to the total image and overall appearance of a product and may include features such as the size, shape, color, color combinations, textures, graphics, and even sales techniques that characterize a particular product.'” Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 251 (5th Cir. 2010) (quoting Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 536 (5th Cir. 1998)).

         To succeed on an infringement or unfair competition claim under the Lanham Act, a plaintiff must establish two elements. First, the plaintiff must establish “that the mark or trade dress, as the case may be, qualifies for protection.” Pebble Beach, 155 F.3d at 536. To qualify for legal protection, the trade dress must be inherently distinctive or have achieved secondary meaning in the public's mind; that is, it must have “come through use to be uniquely associated with a specific source.” Id. (internal quotations and citations omitted). Trade dress, moreover, is only entitled to legal protection if it is non-functional. Id. Second, the plaintiff must show that the defendant's use of the trade dress creates “a likelihood of confusion in the minds of potential customers as to the source, affiliation, or sponsorship” of the defendant's product or service. Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 478 (5th Cir. 2008) (internal quotations and citations omitted). “An identical test applies to claims for trademark infringement, unfair competition, and unjust enrichment under Texas common law.” Primesource Building Products, Inc. v. Hillman Group, Inc., No. 3:14-CV-2521-B, 2015 WL 11120882, at *3 (N.D. Tex. March 31, 2015) (citing Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 235 n.7 (5th Cir. 2010); KLN Steel Prods., 278 S.W.3d at 440)).

         The purpose of the Lanham Act's protection “is ‘to secure to the owner of the [trade dress] the goodwill of his business and to protect the ability of consumers to distinguish among competing products.'” Eppendorf-Netheler-Hinz GMBH v. Ritter GMBH, 289 F.3d 351, 354-55 (5th Cir. 2002) (quoting Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 774 (1992)). A pro-competitive theory underlies the law: allowing the exclusive use of source-identifying trade dress benefits both consumers and producers. By identifying a single source of the product, the trade dress provides a quick way to assure consumers that the product “is made by the same producer as other similarly marked items that he or she liked (or disliked) in the past, ” thus reducing the costs associated with making purchasing decisions. Qualitex Co. v. Jacobson Prods. Co., Inc., 514 U.S. 159, 165 (1995). The law benefits producers by ensuring that they-rather than free-riding imitators-reap the financial rewards associated with making superior products. Id. “The law thereby encourage[s] the production of quality products . . . and simultaneously discourages those who hope to sell inferior products by capitalizing on a consumer's inability quickly to evaluate the quality of an item offered for sale.” Id. (internal quotations and citations omitted).

         At the same time, the Supreme Court has recognized that anti-competitive abuse of the Lanham Act could result from the overextension of the law's protection for product-design trade dress. See Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 214 (2000). The Court has stated that “[t]rade dress protection must subsist with the recognition that in many instances there is no prohibition against copying goods and products, ” and that such copying “will have salutary effects in many instances.” TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 29 (2001). Accordingly, “[w]hen trade dress is claimed for the design of a product itself . . . the courts are especially skeptical, wary of creating ‘back-door patents' which could deform competition and tilt the playing field in favor of the established firm over the brash new-comer.” 1 McCarthy on Trademarks and Unfair Competition § 7.64 (4th ed.).

         In this case, YETI alleges it has protectable product-design trade dress rights in:

the overall look and appearance of the [tumblers], including, but not limited to, the visual flow of the [tumblers]; the curves, tapers, and lines in the [tumblers]; the design, style, and appearance of these curves, tapers, and lines in the [tumblers]; the visual connection and relationship between the curves, tapers, and lines in the [tumblers]; the style, design, and appearance of design aspects of the [tumblers]; the design and appearance of the walls of the [tumblers]; the design and appearance of the rim of the [tumblers]; the design, appearance, and placement of the taper in the side wall of the [tumblers]; the design, appearance, and placement of the upper portion, mid portion, and bottom portion of the side wall of the 30 oz. tumbler; the design, appearance, and placement of the style line around the base of the [tumblers]; the design, appearance, and placement of the tab on the lid of the [tumblers]; the design, appearance, and placement of the drinking opening on the lid of the [tumblers]; the design, appearance, and placement of the top plane of the lid of the [tumblers]; the design, appearance, and placement of the side walls of the lid of the [tumblers]; the color contrast and color combinations of the [tumblers] and the tumbler lid on the [tumblers]; and the overall look and appearance of the tumbler and the tumbler with the tumbler lid that YETI uses in connection with the [tumblers].

(Compl., Dkt. 1, ¶¶ 13, 15).

         Plaintiff includes in its Complaint the following two photographs to exemplify its claimed trade dress.

         (Image Omitted)

         As an initial matter relevant to each of Plaintiff's claims, Defendants argue that Plaintiff has not sufficiently identified its trade dress but has instead claimed protection for elements of a generic product design. As to trade dress infringement specifically, Defendants assert that Plaintiff's Complaint lacks sufficient factual allegations to demonstrate that Plaintiff's products have acquired secondary meaning or distinctiveness. The Court considers each of Defendants' arguments in turn.

         1. ...


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