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Haas Outdoors, Inc. v. Dryshod International, LLC

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

July 15, 2019

HAAS OUTDOORS, INC., Plaintiff,
v.
DRYSHOD INTERNATIONAL, LLC, and JAMES K. DONOHUE, Defendants. DRYSHOD INTERNATIONAL, LLC, and JAMES K. DONOHUE, Plaintiffs,
v.
HAAS OUTDOORS, INC.; TOXEY HAAS; and WILLIAM SUGG; Defendants.

          ORDER

          ROBERT PITMAN, UNITED STATES DISTRICT JUDGE.

         Before the Court is a motion to dismiss filed in the lead case, 1:18-CV-978-RP, by Defendants Dryshod International, LLC (“Dryshod”) and James Donohue (“Donohue”) (together, “Defendants”). (Dkt. 129). Plaintiff Haas Outdoors, Inc. (“Haas”) filed a response, (Dkt. 134), and Defendants replied, (Dkt. 136). Having considered the parties' briefs, the record, and the relevant law, the Court will grant the motion.

         I. BACKGROUND

         Haas alleges the following background facts. Haas is a relatively sizable outdoor-goods company that has designed and manufactured camouflage patterns, clothing, and accessories since 1986. (Am. Compl., Dkt. 126, at 3-4). Earlier in his career, Donohue founded a boot manufacturing company, Muck Boot Company (“Muck Boot”), that licensed Haas's “MOSSY OAK” patterns, including its “NEW BREAK-UP” pattern. (Id. at 5). Donohue set up distributor groups to sell his Muck Boot products, which included MOSSY OAK branded products. (Id.). Donohue left Muck boot in 2004, but when Muck Boot took its distribution in-house in 2017, its former distributors approached Donohue about creating a new set of boot products. (Id.). Setting out to do so, Donohue founded Dryshod and introduced several hunting boot models. (Id.). His distributors asked that the boots feature MOSSY OAK patterns. (Id.).

         Donohue then contacted Haas to negotiate a license to use MOSSY OAK patterns; he allegedly said that Dryshod boots would “have a better chance of achieving mass appeal” if they featured MOSSY OAK patterns. (Id. at 6). After several months of negotiations, however, Donohue decided not to license Haas's patterns and to instead use patterns that he designed himself. (Id.). Donohue called his design “MOBU” and has sought to register MOBU as a trademark. (Id. at 7). According to Haas, Donohue's choice to use MOBU is no accident: Haas customers and distributors, including Muck Boot, have colloquially referred to MOSSY OAK BREAK-UP patterns as “MOBU” for years. (Id. at 7). Defendants allegedly claim their MOBU mark stands for “My Own Break-Up.” (Id.).

         Haas, believing that the MOBU pattern infringes its copyrighted NEW BREAK-UP pattern and that the MOBU mark infringes its MOSSY OAK and BREAK-UP trademarks, sued Defendants in February 2018 in the Northern District of Mississippi. (Dkt. 1). The case has since been transferred to this district, (Dkts. 96, 97), and consolidated with Defendants' countersuit, (Dk. 111). In its action against Defendants, Haas asserts five causes of action: (1) copyright infringement in violation of 17 U.S.C. § 501; (2) trademark violation in violation of 15 U.S.C. § 1114; (3) trademark dilution in violation of 15 U.S.C. § 1125; (4) trademark infringement and dilution in violation of Texas and Mississippi law; and (5) trademark denial or cancellation under 15 U.S.C. § 1052(d). (Id. at 7-14). Defendants filed a motion to dismiss the first three of these claims against them under Federal Rule of Civil Procedure 12(b)(6). (Mot., Dkt. 129).

         II. LEGAL STANDARD

         Pursuant to Rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a 12(b)(6) motion, a “court accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). “To survive a Rule 12(b)(6) motion to dismiss, a complaint ‘does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief-including factual allegations that when assumed to be true ‘raise a right to relief above the speculative level.'” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That is, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. 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.” Id. “The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. A court ruling on a 12(b)(6) motion may rely on the complaint, its proper attachments, “documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008) (citations and internal quotation marks omitted). A court may also consider documents that a defendant attaches to a motion to dismiss “if they are referred to in the plaintiff's complaint and are central to her claim.” Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). But because the court reviews only the well-pleaded facts in the complaint, it may not consider new factual allegations made outside the complaint. Dorsey, 540 F.3d at 338. “[A] motion to dismiss under 12(b)(6) ‘is viewed with disfavor and is rarely granted.'” Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011) (quoting Harrington v. State Farm Fire & Cas. Co., 563 F.3d 141, 147 (5th Cir. 2009)).

         III. DISCUSSION

         Defendants' motion pertains to Haas's federal copyright-infringement claim, its federal trademark-infringement claim, and its federal trademark-dilution claim. (Mot., Dkt. 129, at 4; Reply, Dkt. 136). The Court will address each in turn.

         A. Copyright Infringement

         To prove copyright infringement, a plaintiff must establish “(1) ownership of a valid copyright; (2) factual copying; and (3) substantial similarity.” Nola Spice Designs, L.L.C. v. Haydel Enterprises, Inc., 783 F.3d 527, 549 (5th Cir. 2015) (quoting Armour v. Knowles, 512 F.3d 147, 152 (5th Cir. 2007)). Defendants contest only the final prong: substantial similarity. (Mot., Dkt. 129, at 5-16).

         To support a claim of copyright infringement, a purported copy “must bear a substantial similarity to the protected aspects of the original.” Peel & Co., Inc. v. The Rug Mkt., 238 F.3d 391, 398 (5th Cir. 2001). When a copyrighted work contains unprotectable elements, the first step is to “distinguish between protectable and unprotectable elements of the copyrighted work.” Nola Spice, 783 F.3d at 550. Afterward, the question is ...


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