A federal judge from the Eastern District of Louisiana has denied sporting goods manufacturer L.A. Gear’s bid to dismiss the claim of another sporting goods manufacturer, which claimed that L.A. Gear had violated its trademarks.
Plaintiff Athletic Training Innovations, LLC manufactures the Katapult, a specialist training shoe designed to target the calf muscle in order to improve various athletic skills such as sprinting and jumping. L.A. Gear manufactured and sold a popular brand of shoes in the 1980s and 1990s, but since 1998 the defendant only licenses its brand to other shoe manufactures. At the center of this dispute is the L.A. Gear Catapult, a high-top basketball shoe, which has not been sold or actively marketed by the defendant or its licensees since 2004. Nevertheless, in 2009, L.A. Gear obtained a renewal of its trademark for the Catapult.
On May 5, 2010, the defendant issued a cease-and-desist letter to the plaintiff, informing them that it owned the Catapult trademark and that the use of the name Katapult was likely to confuse customers. On the same day the defendant sent similar cease-and-desist letters to the plaintiff’s largest customers. In response to these letters, the plaintiff’s customers cancelled their orders for the Katapult. The plaintiff sued, alleging that L.A. Gear “had (1) engaged in unfair competition as defined by the Lanham Act and Louisiana Unfair Trade Practices Act (2) abandoned its trademark for the Catapult (3) procured the Catapult trademark through false statements and (4) intentionally interfered with the plaintiff’s contractual relations with its customers.” Furthermore, the plaintiff sought a declaratory judgment that it has not infringed the defendant’s trademark and seeks an injunction pursuant to 15 U.S.C. § 1126, which would prevent the defendant from contacting its customers.
L.A. Gear countered with a motion to dismiss on two separate grounds: that the court lacks personal jurisdiction, pursuant to Rule 12(b)(2), and that the plaintiff has failed to state a claim for which relief may be granted, pursuant to Rule 12(b)(6)
On the first point, the court found that the exercise of jurisdiction over the defendant will not “violate traditional notions of fair play or substantive justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945).
Turning to the alternative argument, the failure to state a claim, the court found that the plaintiff “has not merely pled the formulaic elements of unfair competition but rather has ‘give[n] the defendant fair notice of what the . . . claim is and the grounds upon which it rests.’ Twombly, 550 U.S. at 555. The plaintiff has alleged that the defendant sent cease-and-desist letters to the plaintiff’s customers, which stated that the plaintiff was infringing the Catapult trademark by using the Katapult name, which would confuse customers. The plaintiff has further argued that the Katapult shoe could not be confused with the Catapult as they are aimed at very different markets so as not to be in competition with each other. Finally, the plaintiff argues that the defendant has not marketed the Catapult since 2004, which shows presumptive abandonment of their Catapult trademark. While not taking a position on the merits of the plaintiff’s claims, it is clear that they are plausible and provide more than enough notice to the defendant of what the grounds of the dispute are.
“Second, the defendant argues that even if the plaintiff has alleged bad faith or falsity it has not pled the elements of unfair competition under the Lanham Act, 15 U.S.C. § 1125(a), which requires: (1) a false or misleading statement of fact; (2) the statement actually deceived or is likely to deceive a substantial segment of the intended audience; (3) the deception is material in that it is likely to influence purchasing decisions; (4) the defendant caused the statement to enter into interstate commerce; and (5) the statement resulted in actual or probable injury to the plaintiff. The plaintiff asserts that it has satisfied all of the above elements by pleading that the defendant has asserted ownership of a trademark that it abandoned in addition to claiming that the Katapult trademark was likely to confuse customers. The plaintiff argues that both of these statements were false or misleading and in fact deceived the plaintiff’s customers, who cancelled their orders as a result of these misstatements. Since the defendant’s communications clearly entered interstate commerce, the court finds that the plaintiff has stated a viable claim for unfair competition under the Lanham Act.
“Third, the defendant argues that the plaintiff has failed to plead with particularity any deceptive trade practice under the Louisiana Unfair Trade Practices Act. The plaintiff responds by reiterating its previous argument that the defendant’s allegation of rights to an abandoned trademark and allegation of likely consumer confusion through the use of the Katapult name were both in bad faith or false. The plaintiff asserts that these allegations are sufficient to state a claim under LUTPA. This court agrees with the plaintiff as it finds the complaint to contain sufficient facts to inform the defendant of the grounds that constitute the plaintiff’s LUTPA claim.
“Fourth, the defendant argues that since the plaintiff has not stated a claim under 15 U.S.C. § 1125 it is not entitled to an injunction under 15 U.S.C. § 1116. However, since this court has found that the plaintiff has stated a claim under § 1125, the plaintiff’s request for injunctive relief shall not be dismissed at this stage of the litigation.
“Fifth, the defendant argues that the plaintiff has not alleged the elements of a trademark abandonment claim since it failed to plead that the defendant had no intention of ever using the Catapult trademark again. The plaintiff responds by pointing out that under the Lanham Act, non-use of a trademark for three consecutive years is prima facie evidence of abandonment. Furthermore, the plaintiff argues that the defendant is confusing issues of what must be proven at trial with what must be pled. The court agrees that the defendant is confusing issue of proof with issues of pleading. The plaintiff is merely required to plead sufficient facts that if accepted as true would state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). Here the plaintiff has pled sufficient facts, which if true, would establish that the defendant has abandoned its Catapult trademark, including the claim that the defendant has no intent to reuse the Catapult trademark.
“Sixth, the defendant argues that the plaintiff cannot allege a claim for false procurement of a federal trademark registration because such a claim requires a showing that a defendant knowingly made a false statement to the Patent and Trademark Office regarding a material fact. The plaintiff responds by arguing that the defendant has again confused what must be proven at trial with what must be pled in order to state a claim for which relief may be granted. The plaintiff asserts that it has pled sufficient facts, which if assumed to be true, can support all of the elements of a false procurement claim, even if they did not specifically plead that the defendant knew its statements to the PTO were false. Id. The court agrees that Plaintiff is not required to plead the formulaic elements of a cause of action so long as it provides sufficient facts that if true would entitle it to the requested relief. Here, the plaintiff has provided enough facts to give the defendant notice of the basis of their claim. Moreover, if the plaintiff’s allegations are true that the defendant informed the PTO that it was continuously using the Catapult trademark when in fact it had not been used since 2004, then the plaintiff would be entitled to the requested relief, since a fact finder could infer the required mental state from the circumstances of the defendant’s statement.
“Finally, the defendant argues that the plaintiff cannot state a claim for intentional interference with its contractual relations because under Louisiana law such a claim only arises when a corporate officer intentionally causes her own corporation to breach the corporation’s contract with the complaining party – which does not apply in this case. The plaintiff responds by pointing out that both of the cases cited by the defendant address the limited question of when a corporate officer is personally liable for a corporation’s breach of contract, not the general elements of an intentional inference with contractual relations claim. The court agrees that the cases cited by the defendant do not support its argument.”
Athletic Training Innovations, LLC. V. L.A. Gear, INC; E.D. La.; CIVIL ACTION NO: 10-1524, 2010 U.S. Dist. LEXIS 114294; 10/18/10
Attorneys of Record: (for plaintiff) Kenneth L. Tolar, LEAD ATTORNEY, Kenneth L. Tolar, APLC, Metairie, LA; J. Douglas Sunseri, Nicaud & Sunseri, LLC, Metairie, LA. (for defendant) Alan Harry Goodman, LEAD ATTORNEY, Timothy Scott Mehok, Lemle & Kelleher, LLP (New Orleans), New Orleans, LA; Frank E. Merideth, Jr., Greenberg Traurig, LLP (Santa Monica), Santa Monica, CA.
