Urban Group Exercise Consultants, Ltd. v. Dick's Sporting Goods, Inc., No. 1:2012cv03599 - Document 34 (S.D.N.Y. 2013)
Court Description: OPINION: "[W]here a plaintiff is on notice of deficiencies in an initial pleading and has had the opportunity to cure them by a first amendment, dismissal with prejudice is proper when a complaint previously has been amended." Dietrich v. B auer, 76 F. Supp. 2d 312, 351 (S.D.N.Y. 1999) (quoting J.S. Serv. Ctr. Corp. v. Gen. Elec. Tech. Servs. Co., 937 F. Supp. 216, 225 (S.D.N.Y. 1996) (quotation marks omitted)). Accordingly, and upon the conclusions set forth above, the motion of DSG is granted and the SAC is dismissed with prejudice, with costs granted to the Defendant. (Signed by Judge Robert W. Sweet on 3/8/2013) (ft) Modified on 3/8/2013 (ft).
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK --------------- ----------X URBAN GROUP EXERCISE CONSULTANTS, LTD. , Plaintiff, 12 Civ. 3599 against OPINION DICK'S SPORTING GOODS, INC., Defendant. - - - - -----X A P PEA RAN C E S: At for Plaintiff JACOBSON & COLFIN, P.C. 60 Madison Avenue, Suite 1026 New York, NY 10010 By: Bruce E. Colfin, Esq. At for Defendant GREENBERG TRAURIG, LLP 200 Park Avenue Florham Park, NJ 07932 By: Michael A. Nicodema, Esq. Sweet, D.J. Defendant Dick's Sporting Goods, Inc. (aDSG" or the aDefendant") has moved under Fed. R. Civ. P. 12(b) (6) ("Rule 12(b) (6)") to dismiss the Second Amended Complaint ("SAC") of plaintiff Urban Group Exercise Consultants, Ltd. "Plaintiff"). ("UGEC" or the Based upon the conclusions set forth below, the motion is granted and the SAC is dismissed with prejudice. Prior Proceedings 1 On May 7, 2012, plaintiff UGEC filed a complaint alleging that defendant DSG's s called the aJump Trainer" e of an exercise trampoline (i) infringed upon the unregistered trade dress used by UGEC in its own exercise trampoline product called the aUrban Rebounder" in violation Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) i and (ii) diluted UGEC's registered trademark in violation of Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c), and New York's anti-dilution statute, N.Y. Gen. Bus. Law § 360-1. Plaintiff subsequently filed an 1 The facts underlying this action are set forth in Exercise Consultants Ltd. v. Dick's 12 Civ. 3599 (RWS), 2012 WL 3240442, S.D.N.Y. Aug. (the "August 7 Opinion"), familiarity with which is assumed. amended complaint on June 21, 2012 ("FAC") , asserting the same causes of action as the initial complaint. See Dkt. No.6. DSG moved to dismiss the FAC, and the August 7 Opinion granted DSG's motion to dismiss the FAC for failure to state a claim for federal trade dress infringement and trade dress dilution, and declined to exercise supplemental jurisdiction over the state law dilution claim. The August 7 Opinion granted UGEC leave to replead its claims a third time. UGEC filed the SAC on August 24, 2012. The SAC asserted the same causes of action as the previous two complaints, and contained the following allegations: ¢ "Over the last twelve years, Berns [UGEC's chairman and CEO] has spent millions of dollars annually in advertisement expenses on national cable networks such as Home and Garden Television (HGTV), Oxygen, the Hallmark Channel, Style, and the Game Show Network, as well as broadcast networks such as WRNN, WNBC, and WCBS." SAC ~ 20. ¢ "Typically Berns spends approximately one hundred thousand dollars ($100,000) per month to purchase advertising to promote the Urban Rebounder. He allocates roughly six thousand five hundred dollars ($6,500) per thirty minutes of airtime on the abovementioned networks." Id. , 21. ¢ "From 2006 through 2008, Berns increased his global advertising expenditures to four hundred thousand dollars ($400,000) monthly, amounting to 2 an average of $4.8 million spent annually in this timeframe. Id. ~ 22. 1I ¢ "Since 2008, Berns has spent approximately $2.4 million annually in his global advertising expenses for the Urban Rebounder. Id. ~ 23. 1I ¢ "Despite the decrease annual expenditures, Plaintiff Urban Group increased its promotional efforts through international tradeshows, such as Club Industry, East Coast Alliance, IDEA® Fitness Conference, American Council on Exercise (ACE), and Aerobics and tness Association of America (AFAA) to promote and solicit use of the Urban Rebounder in gyms worldwide. These tradeshow expenses cover necessities such as booth space occupancy, production costs for the Urban Rebounder's tradeshow presentation, as well as costs special productions presented on televisions located at Plaintiff's tradeshow booths. Id. ~~ 24-25. II ¢ "Berns' fitness programming that advertises and promotes the Urban Rebounder is also translated six other languages: Japanese, Hebrew, It ian, Spanish, Thai and French (European French and Quebecois French)." Id. ~ 28. ¢ "Various nationwide research studies and consumer surveys have used the Urban Rebounder, such as rehabilitation experiments by Dr. Vijay Vad at Cornell Hospital Special Surgery and a New Mexico study by Dr. Len Kravitz on Low-Impact Exercise Alternatives, which was published in the American ColI of Sports Medicine and detailed on Berns' website, www.urbanrebounding.com/research.html#.112 Id. ~ 26. 2 It bears noting that whi PIa iff's website contains 13 links to what appear to be summaries of medical research studies, only one of those summaries identifies the "Urban Rebounder" product by name, and none show a picture of the product or describe the alleged trade dress in any way. 3 ¢ "Berns and the Urban Rebounder have been featured in global broadcasts and cable programming, ranging from several notable television networks such as NBC, CNBC, FitTV, QVC, CNN, NY1, Lifetime, Headline News, Home and Garden Television (HGTV) as well as appearances on The Today Show and The View." rd. ~ 27. ¢ The Urban Rebounder has also been advertised and depicted in such notable publications as Allure, Fit, Home and Garden, e Magazine, The New York Dai News, US Today, and Upscale Magazine, as depicted at www.urbanrebounding.com/media.html... rd. ~ 29. ¢ "Absent any solicitation from Berns, Consumer Products named the Urban Rebounder as one of the top 100 U.S. fitness products in 2008, same yea~ that the red outline stripe surrounding the Urban Rebounder's black jumping mat became s exclusive design." rd. ~ 31. The SAC has also alleged that UGEC has sold "millions of [Urban Rebounder] units worldwide," id. ~~ 32 33, and that the urban Rebounder is "found in over five thousand (5,000) gyms worldwide." rd. ~ 30. The instant motion was heard and marked submitted on October 17, 2012. 4 ly Applicable Standards The standard for a motion to dismiss pursuant to Rule 12(b) (6) was set forth in the August 7 Opinion, familiarity with which is assumed, and is applicable to the ant motion. The Allegations in the SAC Fail to Establish a Cause of Action for Federal Trade Dress Infringement For purposes the Lanham Act, a product's trade dress is defined as "the total image of a good as def by its overall composition and design, including size, shape, color, texture, and graphics." Louis Vuitton Malletier v. Bourke Inc., 454 F.3d 108, 115 (2d r. 2006) (quoting Coach Inc., 933 F.2d 162, 168 Leatherware Co. v. & --------------------------~~--~----- (2d r. 1991) ). Courts exercise "particular caution" in extending trade dress protection to product designs. Yurman Des Inc. v. PAJ ~-~~-------~~--------------~ Inc., 262 F.3d 101, 114 15 (2d r. 2001). "[A]lmost invariably, even the most unusual of product designs . is intended not to identify the source of the product, but to render the product itself more useful or more appealing." Id. at 115 (quoting Wal Mart Stores v. Samara Bros., 529 U.S. 205, 213 (2000)) (quotation marks omitted). August 7 Opinion, "trade dress As explained in the aims raise a potent risk 5 relief will impermissibly afford a level of protection that would hamper efforts to market competit goods . If August 7 Opinion at *7 (quoting Yurman Design, 262 F.3d at 114 15) . To plead a claim of trade dress infringement premised upon an unregistered product design (such as UGEC's the Urban Rebounder), a plaintiff must all that ,,( 1) t (2) the c claimed trade dress is non-funct sign of imed trade dress has secondary meaningi and (3) there is a likelihood of confusion between the plaintifffs good and Sherwood 48 Assocs. v. defendant's. It of Am., 76 Fed. Appx. 389, 391 ----------------------------~~--~~-------- (2d Cir. 2003) (citing Yurman Des , 262 F.3d at 115 16). Trade dress is considered to have attained a secondary meaning "when a consumer immediately associates the dress of the product with its source. 1t Sports Traveler, Inc. v. Advance ine Publishers 1998). Inc., 25 F. Supp. 2d 154, 164 (S.D.N.Y. Courts may consider a number of factors to determine whether a trade dress has acquired secondary meaning, including: (i) plaintiff's advertis expendituresi (ii) consumer surveys linking the trade dress to a particular sourcei succeSSi (iv) unsolicited media coverage; (iii) sales (v) attempts to agiarize the trade dressi and (vi) the length and exclusivity 6 of the use. Id. t to show secondary It is particularly diffi meaning for a color or color combination, s "color marks by their very nature are not generally distinctive." Inc. v. Columbia Cosmetics Mana ., -------.! . Inc., 65 F.3d 1063, 1070 (2d ----------------~~--- Cir. 1995). As set forth below, the SAC does not contain allegat sufficient to plead the existence of secondary meaning the alleged trade dress, so UGEC's infringement claim Is. (i) tures sing As a threshold matter, the re to adverti s alleged in SAC or promotional activity prior to 2008 are irrelevant, the alleged trade dress has the Urban Rebounder only since 2008. SAC ~~ 11. used on Thus, the SAC's allegation that "[o]ver the twelve years, Berns has spent millions of dollars annually advertisement expenses on national cable networks. [and] broadcast networks," SAC ~ 20, is irrelevant to the extent that it speaks about pre-2008 same is true expenditures. the allegation that "[f]rom 2006 to 2008, Berns increased his global advertising expenditures to hundred thousand dollars ($400,000) to an average of $4.8 million spent annually monthly, amount in this time ff SAC ~ 22. 7 While the allegation that "[s]ince 2008, Berns has spent approximately $2.4 million annually in his global advertising expenses for the Urban Rebounder," SAC ~ 23, does address the period of time relevant to this action, that allegation is not supportive of a finding of secondary meaning, because there is no contention that any of those advertisements or promotions stressed or emphasized the alleged trade dress. See Braun Inc. v. Dynamics Corp. of Am., (Fed. Cir. 1992) 975 F.2d 815, 826-27 (citing Am. Footwear Corp. v. Gen. Footwear Co., 609 F.2d 655,663 (2d Cir. 1979)) (finding that $5.5 million in advertising expenditures were irrelevant to the issue of secondary meaning since the plaintiff "did not proffer evidence establishing that the advertising effectively created secondary meaning" in the alleged trade dress); Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1383 First Brands (9th Cir. 1987) (quoting Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 800 (9th Cir. 1970)) (" [A] large expenditure of money does not in itself create legally protectable rights. The test of secondary meaning is the effectiveness of the efforts to create it.") (internal quotation marks and citation omitted) . In addition, advertising expenditures directed to the functional aspects of the Urban Rebounder product does not 8 provide cogent evidence of secondary meaning. promotes the functional advant call attention to the des "Advertis of a product and does not leged to be non-funct provides little if any of secondary meaning. II Inc. v. Hergo Ergonomic Support Sys., Inc., No. 94 Civ. 2732, 1996 WL 143903, at *8 (S.D.N.Y. Mar. 29, 1996). no allegation that Here, referenced advertising and promotional materials emphasized any non-functional aspects Rebounder, such as Urban leged trade dress. In opposit one example of " is to the instant motion, UGEC identified ising" which it claims serves to "focus the viewers on the stripe . . to serve as a source identifier for JB Berns, the creator of Plaintiff's brand"-a "promotional video" found on Berns' personal ite. Plaintiff's Oppos ion and Memorandum of Law In Opposition to Defendant's Mot to Dismiss the Second Amended Complaint Under Fed. R. Civ. P. 12(b) (6) ("Pl. Mem. Opp.") at 8. single promotional video is insuffic meaning alleged trade dress. on Berns' personal website rather than website. focused on However, this to establish secondary First, the video is posted Urban Rebounder Second, the video is not a promotion or advertisement Urban Rebounder, but himself, as well as his numerous f 9 r promotes Berns s-related products (of which the Urban Rebounder is only one example). Third, the SAC has not alleged that the video has ever been disseminated or publicized beyond Berns' personal website, nor has the SAC identified how many consumers have ever viewed the video. Finally-and most significantly-the video does not mention, emphasize or call attention to the Urban Rebounder's alleged trade dress. (iiJ Consumer Surveys Consumer surveys that demonstrate consumer recognition of the alleged trade dress are highly relevant to the secondary meaning analysis. See, e.g., Jef Milstein Inc. v. ------~--------~~~---~--~~~~~~ Lawlor, Roth, Inc., 58 F.3d 27, 34 (2d Cir. 1995)). The SAC has referred to purported "consumer surveys" that are posted to UGEC's website, SAC ~ 26; however, these documents are not actually consumer surveys, but rather medical research studies focused solely on the salutary effects of rebounding exercises. Such studies, which make no mention whatsoever of the Urban Rebounder's alleged trade dress, do not support a finding of secondary meaning. 10 (iii) Sales Success The SAC units," SAC ~ alleged that UGEC has sold "millions of 33, and that the Urban Rebounder is "found in over five thousand (5,000) gyms worldwide," id. ~ 30, but has not identified how many of the units sold actually bear the alleged trade dress, as opposed to the blue and llow color scheme found on Urban Rebound models produced 11. While UGEC to 2008, see id. ~ submitted an affidavit from Berns which identifies the total number of Urban Rebounder units bearing alleged trade ss sold by Plaintiff s revenues derived from such sales, see 2008, as well as fidavit of Jeffrey Berns in Opposition to Defendant's Motion to Dismiss the Second Amended Compl ("Berns Affidavit"), contents of the Berns Affidavit may not be considered in ruling on the instant motion, as a pIa additional iff may not supplement a deficient pleading through ts contained in aff ts. 3 See Goodman v. Port 3 Moreover, even if, arguendo, the allegations in the Berns Affidavit were fit for consi ion on the instant motion, they would still not provide a sufficient basis for a finding of secondary meaning. Substantial sales of a product, if (as here) unaccompanied by a concomitant effort on the seller's part to assoc the product's trade dress with the source of the product rather than the product itself, do not establish that a product's trade dress has acquired secondary meaning. See Braun, 975 F.2d at 827 (large consumer demand for the pI iff's product does not permit a finding of secondary 11 Authori 2012) of N.Y. and N.J., 850 F. Supp. 2d 363, 380 (S.D.N.Y. ("memoranda and supporting affidavits in opposition to a motion to dismiss cannot be used to cure a (citations omitt (i v) fective complaint") ). Unsolici ted a Covera SAC has leged that the Urban Rebounder has been featured in television broadcasts "on several notable television networks . 11 FAC ~ 27. However, the SAC does not state whether these broadcasts occurred before or trade dress was adopted in 2008. Since er the red stripe broadcasts may have occurred prior to the adoption of the red-stripe trade dress, this all ion does not support a finding of secondary meaning. The SAC has also alleged that the Urban Rebounder has been "advertised and depicted in [various] notable publications 11 FAC ~ 29. However, nine of the ten media articles referenced in the SAC are dated 2005 and earlier, see Dick's Sporting Goods, Inc,'s Motion and Memorandum of Law to Dismiss Plaintiff's Second Amended Complaint Under Fed. R. Civ. P. meaning, because strong market demand for a product usually indicates product desirability not secondary meaning} (citation omitted) . 12 12(b) (6) ("Def's Mem."), Ex. B, so se articles-which could not have possibly focused on the red-stripe trade dress instituted in 2008-are completely inapposite to the secondary meaning analysis. 4 Cf. s Traveler, 25 F. Supp. 2d at 164 (advertising and promotional efforts did not support a finding of secondary meaning where the plaintiff did not show that the "focus of dress") ; 1383 s promotional activities was on the [alleged] trade ------------------~------------~~~------ (9th Cir. 1987) , 809 F.2d 1378, (extensive advertising and promotional efforts cannot establish secondary meaning where the plaintiff "did not attempt to engender consumer identification with" the alleged trade dress) . The sole article referenced in the SAC that does not predate the alleged trade dress-a Consumer Reports article from November 2008 naming the Urban Rebounder as one of its "100 Top Products"-is likewise not evidence of secondary meaning because it shows a trampoline product bearing a blue and yellow color scheme. See Def's Mem., Ex. B. These articles are expressly referenced the SAC, see SAC ~ 29, so their content may be considered on the instant motion even though the articles themselves were not attached to the SAC. , Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006) (for purposes of a Rule 12(b) (6) motion the complaint is deemed to include any documents incorporated in it by reference) . 4 13 (v) Attempts to gia ze the Trade Dress The SAC has not alleged any competitive product (other than DSG!s Jump Trainer product) which has a jumping mat bearing a red stripe. Furthermore, of the 24 mini trampolines shown for sale on a retail website referenced in the SAC, the Urban Rebounder is the only one which features a red stripe on the jumping mat. See SAC ~ 17. Accordingly, this factor militates against a finding of secondary meaning. See Ergotron, 1996 WL 143903, at *9. (vi) Length and Exclusivity of Use The SAC has alleged that the alleged trade dress began to appear on the urban Rebounder only in 2008, so at most it has been utilized for a period five years. While secondary meaning has been found when the continuous trade dress usage occurred over a five-year period, see Landscape Forms, Inc. v. Columbia Cascade Co., 117 F. Supp. 2d 360, 366-67 (S.D.N.Y. 2000), that finding was based not only upon the length of usage, but also the presence of other significant supporting factors such as advertising highlighting the trade dress at issue. id. See Here, the other factors in the secondary meaning analysis militate against a finding of secondary meaning, see supra, so 14 the mere fact that the alleged trade dress has been in continuous use for five years is not sufficient to outweigh the factors militating against a finding of secondary meaning. The Allegations in the SAC Fail to Establish a Cause of Action for Federal Trade Dress Dilution To state a claim against DSG for trademark dilution under federal law, UGEC must allege that dress is famous, commerce, (1) the alleged trade (2) DSG is making use of the trade dress in (3) DSG's use of the trade dress began after the trade dress became famous, and (4) DSG's use of the trade dress is likely to cause dilution. 15 U.S.C. § 1125(c) i Burbe Ltd. v. ------~~------- Euro Moda, Inc., No. 08 Civ. 5781, 2009 WL 1675080, at *10 (S.D.N.Y. June 10, 2009). The term "famous" is defined by statute to mean "widely recognized by the general consuming public of the United States as a signation of source of the goods or services of the mark's owner." 15 U.S.C. § 1125(c) (2) (A). The plaintiff's mark must be "truly famous before a court will afford the owner of the mark the vast protections of" federal anti-dilution law. ----------~--------------~ , 391 F.3d 439, 449 (2d Cir. 2004). Only marks that enjoy such broad renown so as to at least 15 approach (if not attain) the status "household names" may qualify as famous marks under federal law. Friesland Brands, B.V. v. Vietnam Nat'l Milk Co., 228 F. Supp. 2d 399, 412 (S.D.N.Y. 2002) i see also Luv Nt Care, Ltd. v. Regent Baby Prods. Corp., 841 F. Supp. 2d 753, 757 (S.D.N.Y. 2012) (finding that marks such as NIKE and HOT WHEELS are sufficiently famous to support a federal trademark dilution claim); Nat'l Distillers Prods. Co., LLC v. Refreshment Brands, Inc., 198 F. Supp. 2d 474, 486 (S.D.N.Y. 2002) (noting that the Lanham Act's prohibition against trademark dilution is "only intended to protect truly famous marks, such as DUPONT, BUICK and KODAK") As set forth above and in the August 7 Opinion, see August 7 Opinion, at *8, UGEC's allegations in the SAC regarding its overall sales, advertising expenses, and third party recognition of its "Urban Rebounder" brand cannot support a finding that the alleged trade dress is "widely recognized by the general consuming public of the United States." 1125(c) (2) (A). 15 U.S.C. First, allegations of extensive overall sales and advertising for a product line are insufficient to unilaterally support an assertion that the trade dress of those products has achieved the widespread renown necessary to establish fame. Luv Nt Care, Ltd., 841 F. Supp. 2d at 757; SMJ Group, 2006 WL 2516519, at *4. 16 § Moreover, to the extent that UGEC's allegations refer to sales, advertising expenditures, or product usage in countries other than the United States, see SAC ~~ 22-23 the amount of Berns' global advertising expenditures) i (noting 30 (noting that Urban Rebounder is licensed for use in over 5,000 gyms "worldwide"); 32 (noting that the Urban Rebounder retails in 17 countries other than the U.S.) i 33 (noting that the Urban Rebounder "has sold millions of units worldwide"), these allegations are irrelevant to the fame analysis, because the term "famous" is defined by statute to mean "widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner." 15 U.S.C. § 1125(c) (2) (A) (emphasis added). Further, the allegation that the Urban Rebounder is "licensed for use and found in over five thousand (5,000) gyms worldwide," SAC ~ 30, fails to specify if those products bear the alleged red-stripe trade dress (as opposed to the previous blue and yellow color scheme). However, even if this allegation is understood to mean that several hundred thousand gym-goers in the United States have used an Urban Rebounder trampoline bearing t alleged trade dress, this allegation is still insufficient to establish that the 17 leged trade dress is \\wide zed by the general consuming public of the United States," 15 U.S.C. § 1125(c) (2) (A), a group that numbers well over 200 million people. s Since the SAC has not alleged establish a \\ s sufficient to ficient level of public give rise to a 1 dilution claim, see 2516519, at *4, tion" in order to since the SAC does not allegation that ----~ leged trade dress acqui , 2006 WL the required fame before DSG began selling the accused Jump Trainer product, see Burberry, 2009 WL 1675080, at *10, the federal dilution claim will be dismissed. Supplemental Jurisdiction Over the State Law Dilution Claim is Declined For the reasons stated in the August 7 Opinion, see August 7 Opinion, at *9, supplemental jurisdiction over UGEC's state law dilution claim is declined. 5 See Consumer Expenditures-2011 , Bureau of Labor Statistics, 25, 2012, ://www.bls.gov/news.release/cesan.nrO.htm. 18 Conclusion " [W]here a plaintiff is on notice of deficiencies in an initial pleading and has had the opportunity to cure them by a first amendment/ dismissal with prejudice is proper when a complaint previously has been amended. F. Supp. 2d 312/ 351 (S.D.N.Y. 1999) Dietrich v. Bauer/ 76 (quoting J.S. Servo Ctr. _ _- A_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ (S.D.N.Y. 1996) 1I / 937 F. Supp. 216/ 225 (quotation marks omitted)). Accordingly/ and upon the conclusions set forth above/ the motion of DSG is granted and the SAC is dismissed with prejudice/ with costs granted to the Defendant. New York, NY March ~ , 2013 ROBERT W. SWEET U.S.D.J. 19
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