Aristocrat Technologies, Inc. et al v. High Impact Design and Entertainment, S.A., No. 2:2007cv01033 - Document 56 (D. Nev. 2009)

Court Description: ORDER Denying 42 Motion to Dismiss. Denying 45 Motion to Dismiss. Signed by Judge Brian E. Sandoval on 6/22/09. (Copies have been distributed pursuant to the NEF - AXM)
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FILE'P E' NT:FIZII - r sgcEtw a ë' nk.ë. rlcq tl tltlhl sst. ' plz ul JsgFqsgtlyg 1 -- 2 jjj 2 J k ' gggj 3 CLEDq!ST Kt jj;a;:f! qtgl'cf g . t;q'r RlC;T 0FfçEV/hL' r . A FYt =- - = . .! .r,; = .. pgp! 4 . . . 5 6 UNITED STATES DISTRICT CO URT 7 DISTRICT OF NEVADA # ARISTOCRAT TECHNOLOG IES,lNC .,a 2:07-CW 01033-BES-LRL Nevada Corporation, 'and ARISTOCM T 9 TECHNO LOG IES AUSTIRALIA P'I'Y LIM ITED LTD.,an Australian corporation, O RDER 10 Plaintigs, 11 V. 12 HIG H IM PACT DESIGN & 13 ENTERTAINMENT,a Nevada cgrpgqation' , W ILLIAM RANDAL ADAM S,an Indlvldual' , 14 RAFAEL ACO STA ?an individual ='HIGH IM PACT DESIG N AND ENTERTAINM ENT, 15 S.A.,a Venezuelan Corporation , 16 Defendants. 17 18 19 Presently before the Courtis Defendants High lm pact Design & Entertainm ent of Nevada ('SHIDE Nevada'')andW illiam RandallAdams'(';Adams'')MotiontoDism issCase not Commenced within Three Years (R 2)filed Februal 17,2009. DefendantRafaelAcosta Aristocrat Technologies, Inc. et al v. High Impact Design and Entertainment, S.A. 20 21 22 23 Doc. 56 ('' Acosta'')filed anidenticalMotiontoDism issCasenotCommencedwithinThreeYears(M 5) on February 24, 2009. Plaintiffs Aristocrat Technologies, lnc. (' .ATI'') and Aristocrat TechnologiesAustralia(ii ATA'')(collectively''plaintifs''lfiledtheiroppositionstothesemotions (R 8,49)on March 9,2009. HIDE Nevada,Adams,and Acosta filed theirReply(#52)on 24 M arch 23,2009. 25 26 27 1.BACKG RO UND This m atterarises out of sale of gam ing m achines and the allegedly unauthorized registration ofthe Aristocrattradem ark in Venezuela. Plaintiffs are m anufacturers,Iicensors, 28 1 and worldwide distributorsofelectronicgam ing m achines,Plaintif'fsow ntradem ark rights and 2 registrations in the Aristocratword m ark and the Aristocratdesign m ark in the United States 3 and otherjurisdictionsthroughouttheworld.(Am.Compl.(#24),119).On oraboutDecember 4 11,2000,HIDE Nevadaagreedtopurchasevariouselectronicgam ingmachinesfrom ATI.Ld=. 5 $20.Overthecourseofthenexttwoyears,the partiesentered intoseveralagreementsunder 6 which HIDE Nevada agreed to lease and purchase ATl's gam ing m achines forplacem entin 7 various Iocations in Venezuela.Ld=.W 21-23.The agreements allegedly included provisions 8 stating thatA-rlretained allrigbts,title and interestin itstrademarks,and HIDE Nevada had no 9 such rights. 1 . 1. . 10 On oraboutJune 5,2003,withoutPlaintiffs'know ledge orconsent,Defendantsapplied l1 forregistration ofAristocrat'sdesign markand trade name inVenezuela.Ld=.$26, Plaintif'fs 12 believe thatHIDE Nevada,Acosta,and/orAdam sown,controland/ordirectHIDE Venezuela. 13 $=.$25. ln December2003,Plaintiis Iearned ofHIDE Venezuela's application to register . 14 Aristocrat's design m ark and trade name in Venezuela,and allegedly dem anded thatHIDE 15 Venezuela withdraw the application. $-uW 27-28. In response,Acosta explained thatHIDE . 16 Venezuela would assign the trademark and Iogo to Plaintiffs,and thatitwould be a m istake to 17 withdraw the filing because itwouid costthe partiestime and money. IJt.$28. Allegedly in 18 reliance onthese representations,Plaintiffs did nottake any action atthattime to oppose HIDE 19 Venezuela's application to registerthe Aristocratnam e and tradem ark in Venezuela. The 20 trademarkandtrade name registrationwasgrantedto HIDE Venezuela inJuly2004.Ld=.$2921 3O. 22 AfterHIDE Venezuelawasgranted the tradem arkand trade name registration,Plainti f'fs 23 requested thatthe Defendants assign the Aristocrattradem ark and trade nam e to them ,but ffsalsoallegethat,inMay2006,HIDE Venezuela 24 Defendants refusedto do so.11.$31.Plainti .- 25 asked the Servico Nacionallntegrado de Adm inistracion Tributaria ofVenezuela to order 26 Venezuelan custom sauthoritiesto restrictthe im pod ofPlaintiffs'products into Venezuela.Ld=. 27 %32.Additionally,PlaintissmaintainthatDefendantshavecontinuallyrefusedtopaythem the 28 moneyATIisdue underthe parties'various agreements.Ld-u$34. 2 1 PlaintiffsfiledsuitinthisCoud (#1)againstHIDE Venezuela onAugust3,2007alleging 2 breachofcontract,breach ofthe implied covenantofgoodfai thand fairdealing,fraud,unjust 3 enrichmentandrequestingdeclaratoryrelief.(Compl.(#1)W 24. .47).DuetoHlDEvenezuela's 4 failure to respond,the Coud Clerk entered defaultagainstiton M ay 27,2008. O n June 23, 5 2008,HIDE Venezuela filed a m otion to setaside the defaultwhich this Coud granted on 6 February 10,2009. (Order(R 1)12). ln addition,onAugust18,2008,Plaintifsfiled a First 7 Am ended Com plaintrenam ing HlDEvenezuela,and adding HIDE Nevada,Adam sandAcosta. 8 (Am.Compl.(#24)1). Defendantsfiled a motionto dism issthe Amended Complaintforlack 9 ofsubjectmatterjurisdictionwhichthisCourtdenied on February10,2009.(Order(#41)12). 10 Shodly afterthe Courtissued this O rder,Adam s,HIDE Nevada,and Acosta filed additional 11 Motions to Dismiss (#42,45). HIDE Venezuela filed an Answerto the FirstAmended 12 Complaint(M 4)on February24,2009. 13 14 II. LEGAL STANDARD In considering a m otion to dism iss forfailure to state a claim underFed.R.Civ.P. 15 12(b)(6),the courtm ustacceptastrue aIImaterialallegations inthe com plaintaswellasaIl 16 reasonable inferencesthatm ay be drawn from such allegations.LSO.Ltd.v.Stroh,205 F.3d 17 1146,115O (9th Cir.2000). The allegations ofthe compiaintalso mustbe construed in the 18 Iightmostfavorabletothe nonmovingparty.Shwarzv.UnitedStates,234 F.3d428,435 (9th 19 Cir.2000). The purpose ofa motion to dismiss underRule 12(b)(6) is to testthe legal 20 sufficiency ofthe com plaint.Navarro v.Block,250 F.3d 729,732 (9th Cir.2001). However, 21 there is a strong presum ption againstdism issing an action forfailure to state a claim . See 22 Gillicanv.Jamco Dev.Corn.,108 F.3d 246,249 (9th Cir.1997)(citation omitted).A plainti ff 23 m ustm ake sufficientfactualallegations to establish a plausible entitlementto relief. Bell 24 AtlanticCorD.v.Twom blv,127 S.Ct.1955,1965 (2007). 25 26 111. D ISC USS IO N Defendants HIDE Nevada,Adamsand Acosta ('ithe Moving Defendants' ')argue that 27 Plaintiffs'claim fortradem arkinfringem entunderthe Lanham Actwasnottim ely com m enced 28 andshouldtherefore bedismissed.(Def.'sMot.(R 2)1).Speci fically,the MovingDefendants 3 1 argue thatthe doctrine of Iaches should apply to bar Plaintiffs'claim s because there was 2 alm osta four-yeargap betweenthe date thatPlaintiffs Iearned ofthe Defendants'application 3 fortrademark registration in Venezuela and the date thatPlaintifs filed suit.l The M oving 4 Defendants argue thatthe analogous statute oflim itations underNevada Iaw is three years, 5 and because Plainti ffs waited m ore than fouryears to file suit,theirsui tshould be barred as 6 untimely. Ld-uat2-3. In response,Plaintiffs argue thatthe applicable statute oflimitations 7 periodisfouryearsandthereforetheirsuitwastimelyfiled.(Pl.'sOpp'n (> 8)4-5).Plaintiffs 8 fudherargue thateven ifthe three-yearstatute ofIim itations period is applied,theirsuitis not 9 barred by the doctrine of Iaches given thatthe Moving Defendants have notshown either 10 unreasonable delayorprejudice.1J-.at7-8. 11 ''Laches isanequitable tim e Iim i tation on a pady's rightto bring suit.''Jarrow Form ulas. 12 Inc.v.Nutrition Now.Inc.,304 F.3d 829,835(9thCir.2002).Itiswellestablished thatlaches 13 isa valid defense to Lanham Actclaim s.U-, .(ci tationsomitted).A padyasserting lachesmust . 14 show thatitsufered prejudiceasaresultofthe plaintiff'sunreasonable delayinfilingsuit.Ld-u 15 Specifically,the Ninth Circuithas applied Iaches to bartradem ark infringem entclaim swhere 16 thetrademark holder''knowingl y allowed the infringing markto be used withoutobjectionfor 17 a Iengthy period oftim e.'' Brookfield Com m unications.lnc.v.W est Coast Entedainm ent 18 Corn.,174 F.3d 1036,1061(9thCir.1999). 19 W hile Iaches and the statute ofIim itations are distinctdefenses,ifthe plaintifffiled a 20 Lanham Actclaim w ithin the analogous Iim itations period understate Iaw ,couds strongly 21 presum e thatIaches is inapplicable. Reno AirRacinc Ass'n.Inc.v.M ccord,452 F.3d 1126, 22 1138-39 (9th Cir.2006). Ifthe plaintif filed suitoutside the analogous period,couds have 23 often presumedthatlachesisapplicable.Ld=.at1139.Because the Lanham Actcontainsno 24 explicit statute of Iimitation, courts S'borrow''the analogous state time period. Ld-. In 25 determ ining the presum ption forIaches,the lim itations period runsfrom the tim e the plaintif'f 26 27 lAccordingto Plaintiffs'Amended Complaint,PlaintiffsI earnedofHIDE Venezuel a'sapplicationtoregister the Aristocratdesignm arkand trade name inVenezuei a in December2003.OnJuly30 2004,HIDE Venezuel a 28 wasgrantedthetrademarkandtradenameregistrationfortheAristocratdesignmarkinlenezuela.(Am.compl. (#18)$$27-30).Plaintiffsfiled suitinthisCourtonAugust3,2007. 4 1 knew orshould have known abouthis cause ofaction. $-. . 2 As noted above,the M oving Defendants argue thatthe Courtshould look to NRS 3 j11.190(3)todetermine the presumptionforIachesinthiscase. (Defs.'Mot.(#42)2).NRS 4 j11.19O(3)providesforathree-yearstatute oflimitationsforactionsinvolvingfraud,and the 5 Moving Defendants rely on Reno Airto supporttheirposition thatthe three-yearstatute of 6 Iim itations should apply. In Reno Air,as here,the Plainti ffall eged tradem ark infringement 7 under15 U.S.C.j1114(1)(a)aswellas unfaircompeti tion under15 U.S.C.j1125(a). Reno 8 Air,452 F.3d at1129.The Defendantasseded thatthe doctrine ofIaches should applyto bar 9 the Plaintiff's claim ,and the coud specifically noted thatthe parties in thatcase had agreed 10 thatthe three-year Iimitation period in NRS jl1.190(3) should apply to determine the 11 presumptionforIaches,Ld-.at1139. Notably,asPlaintiffsinthis case pointout,the courtin 12 Reno Airdid notspeci fically hold thatthe applicable statute oflim itations fora Lanham Act 13 claim is three years underNRS jl1.19043). Ld=. Rather,the Reno Aircourtaccepted the 14 padies'understandingwithoutdiscussion,and undedook i tsanalysisofthe Iaches issue based 15 on the factthatthe padies agreed thatthe three-yearperiod should apply. ( #. -. . 16 By contrast,Plaintiffs in this case argue thatthe Courtshould Iook to the four-year 17 statute ofIimitations in NRS 11.19042)foractions involving deceptive trade practices in 18 violation ofNRS 5598.0903 to 598.0999. (Pl.'s Opp'n (#48)4). They argue thatboth the 19 Lanham Act and Nevada's deceptive trade practices statute are ''designed to prevent 20 consum erconfusionanddeception inthe m arketplacewith respecttothesource,sponsorship, 21 approval,aliliation,connection,orassociation ofgoods and services' 'andtherefore Nevada's 22 four-yearstatute oflim i tations fordeceptive trade practices is the m ostclosely analogous. 23 l. i at5. This Coud agrees. A review ofthe Lanham Actprovisions regarding trademark 24 infringem entand Nevada's deceptive trade practices statute revealsthatthe two are indeed 25 analogous and appearto address sim ilar wrongs including the false or deceptive use of 26 another's m ark orproduct.z Therefore, the Courtw illapply the four-yearIim itations period to 27 28 aI ncompari son.NRS j11.190(3)addressesmoregeneralclaimsregardingfraud ormistake. 5 1 determ ine w hetherlaches is applicable in this case. 2 According to the Ninth Circuit,the Iim itations period runs from the time the plaintiff 3 ''knew orshould have know n about...his cause ofaction.'' Jarrow ,3O4 F.3d at838. l'This 4 principle isgrounded inthe factthatlaches penalizesinexcusable dilatorybehavior.''Ld=.ln 5 this case, it is not clear from the Am ended Com plaint w hen Plaintiffs discovered that 6 Defendantshad been im properlyusingthe m arkorwhen Plaintiffs knew ofshould have known 7 abouttheircause ofaction. However,even accepting the Moving Defendants'assertion that 8 Plaintiffs discovered the offending use in Decem ber2003,the suitwas filed on August3, 9 2007,w ithin the four-yearstatute ofIim itations period. Based on the foregoing,the C ourtw ill 10 presum e that laches is inapplicable. 11 Even though the Courthas presum ed thatPiaintifrs suitwas tim ely filed,Iaches m ay 12 stillapply ifthe Moving Defendants can show they susered prejudice as a resultofthe 13 Plaintifrs unreasonable delay in filing suit, See Jarrow ,304 F.3d at835. In this case,there 14 is no evidence thatPlainti ffs knew ofDefendants'alleged infringementuntilDecem ber2003, 15 when Plaintiffs discovered thatDefendants had applied in Venezuela to registerAristocrat's 16 trade name and design mark. (Am . Compl. (#24) $27). ln response to Plaintiffs' 17 com m unicationsregarding thisapplication,Defendants allegedly represented thattheywould 18 assignthetrademarkto Plaintif'fsonceitwasgranted.Ld-.$28.TheVenezuelangovernment 19 did not grant the registration untilJuly 30,2004,and Plaintiffs appearto have becom e 20 com pletely aware ofthe infringementin M ay 2006,when the Venezuelan governm entbegan 21 to restrictthe im portofPlaintifrs products into Venezuela.Ld-.11$30-32. Piainti ffsthen filed 22 suit in August 2007. These facts indicate that any purported delay in filing sui t was not 23 unreasonable as Plaintiffs were allegedly given assurances by Defendants thatthey would 24 assign the tradem ark once itwas registered. Addi tionally,the M oving Defendants have not 25 shownanyprejudice asa resultofthe allegeddelay.Basedonthe foregoing,theCoudfinds 26 thatthe Moving Defendantshave notshown thatthe doctrine ofIachesappliesto barPlaintiffs' 27 com plaintand theirm otionsto dism iss are therefore denied. 28 6 IV. CO NCLUSIO N IT IS HEREBY O RDERED thatHIDE Nevada's and Adam s'M otion to Dism iss Case notCommenced within Three Years (M 2)is DENIED. IT IS FURTHER ORDERED thatAcosta's M otion to Dism iss Case notCom menced withinThree Years (#45)is DENIED. DATED:This 22nd day ofJune,2009. U TED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 ')p ' - 7