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7/28/2019 Dismissal Sensible Foods v World Gourmet
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UnitedStatesDistrictCourt
Fo
rtheNorthernDistrictofCalifornia
I N THE UNI TED STATES DI STRI CT COURT
FOR THE NORTHERN DI STRI CT OF CALI FORNI A
SENSI BLE FOODS, LLC,
Pl ai nt i f f ,
v.
WORLD GOURMET, I NC. ; HAI N GOURMET,I NC. ; HAI N CELESTI AL GROUP, I NC. ;WORLD GOURMET MARKETI NG, LLC; ANDSENSI BLE SNACKS, I NC. ,
Def endants.
)))))
))))))))
Case No. 11- 2819 SC
ORDER GRANTI NG I N PART ANDDENYI NG I N PART DEFENDANTS'MOTI ON TO DI SMI SS
I. INTRODUCTION
Pl ai nt i f f Sensi bl e Foods, LLC ( "Pl ai nt i f f ") br i ngs t hi s act i o
agai nst Def endant s Wor l d Gour met , I nc. ( "Wor l d Gour met " ) , Hai n
Gour met , I nc. ( "Hai n Gour met ") , Hai n Cel est i al Gr oup, I nc. , ( "Hai n
Cel est i al " ) , Wor l d Gour met Market i ng, LLC ( "WGM") , and Sensi bl e
Snacks, I nc. ( "Sensi bl e Snacks") ( col l ect i vel y, "Def endant s") . EC
No. 1 ( "Compl . " ) . Now bef or e t he Cour t i s Def endant s' Mot i on t o
Di smi ss Pl ai nt i f f ' s Compl ai nt pur suant t o Rul e 12( b) ( 6) of t he
Feder al Rul es of Ci vi l Pr ocedur e. ECF No. 14 ( "Mot . ") . Thi s
Mot i on i s f ul l y br i ef ed. ECF Nos. 22 ( "Opp' n") 1, 23 ( "Repl y") .
1 The Cour t not es t hat Pl ai nt i f f f i l ed i t s Opposi t i on seven daysaf t er t he deadl i ne set f or t h i n Ci vi l Local Rul e 7- 3. The Cour twi l l not t ol er at e f ut ur e f ai l ur es t o compl y wi t h t he Local Rul es.
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For t he reasons set f or t h bel ow, t he Cour t GRANTS I N PART and
DENI ES I N PART Def endant s' Mot i on.
II. BACKGROUND
As i t must on a 12( b) ( 6) mot i on t o di smi ss, t he Cour t t akes
al l wel l - pl eaded f act ual al l egat i ons i n t he Compl ai nt as t r ue.
Pl ai nt i f f i s engaged i n t he devel opment and sal e of a f ul l l i ne of
or gani c, heal t h, and nat ur al dr i ed f r ui t and veget abl e snacks and
r el at ed goods. Compl . 1. Pl ai nt i f f has cont i nuousl y used i t s
domai n name www. sensi bl ef oods. com si nce Oct ober 1998 and owns
var i ous word and desi gn marks f or "Sensi bl e Foods" as wel l as mark
f or "Snacks Made Sensi bl e, " "Snacki ng Has Never Been More
Sensi bl e, " and "Snacki ng Has Never Been So Sensi bl e" ( col l ect i vel y
"Sensi bl e Foods Mar ks") . I d. 19- 27. Si nce 1997, Pl ai nt i f f has
spent si gni f i cant sums and devot ed si gni f i cant r esour ces pr omot i ng
i t s Sensi bl e Foods Mar ks wor l dwi de. I d. 38.
I n March 2005, WGM f i l ed wi t h t he Uni t ed St ates Pat ent and
Tr ademar k Of f i ce ( "PTO") an appl i cat i on f or a mar k f or prot ei n-
based nut r i ent - dense snack bars and soy- based f ood bars, among
ot her t hi ngs. I d. 41. I n J anuar y 2007, t he Commi ssi oner f or
Tr ademar ks provi ded Wor l d Gourmet wi t h a r egi st r at i on number f or
t he mar k "Sensi bl e Por t i ons" i n connect i on wi t h t he appl i cat i on.
I d. 53.
I n J une 2007, WGM f i l ed wi t h t he PTO an appl i cat i on f or t he
mar k "Sensi bl e Snacks" i n connect i on wi t h goods subst ant i al l y
si mi l ar t o Pl ai nt i f f ' s. I d. 54. I n a l et t er t o WGM r ef usi ng
Any document s f i l ed af t er t he appl i cabl e deadl i nes wi t hout l eave ot he Cour t hencef or t h wi l l not be consi der ed.
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r egi st r at i on, t he exami ni ng t r ademar k at t or ney f ound t hat t he
"Sensi bl e Snacks" mar k so r esembl ed the Pl ai nt i f f ' s r egi st er ed mar
"as t o be l i kel y t o cause conf usi on, t o cause mi st ake or t o
decei ve. " I d. 55. Def endant s di d not chal l enge t he exami ni ng
at t or ney' s f i ndi ngs. I d. 64.
Pl ai nt i f f al l eges that Def endant s i nst ead "sl owl y, wi l l f ul l y,
i ncr ement al l y, and mal i ci ousl y changed I nf r i ngi ng Wor ks . . .
mi schi evousl y cr eepi ng cl oser and cl oser t hr ough pr ogr essi ve
encr oachment t o Pl ai nt i f f ' s t r ade dr ess, packagi ng, channel s of
di st r i but i on, publ i cat i on, as wel l as i t s [ Sensi bl e Foods Mar ks] . "
I d. 65. Pl ai nt i f f al l eges that consumer s, busi nesses, and ot her
member s of t he publ i c have conf used Pl ai nt i f f ' s and Def endant s'
pr oduct s, t o t he det r i ment of Pl ai nt i f f ' s busi ness, and pr ovi des
numerous exampl es of al l eged conf usi on, i ncl udi ng many emai l s
al l egedl y sent t o Pl ai nt i f f i nst ead of Def endant s and char ges
al l egedl y bi l l ed t o Pl ai nt i f f i nst ead of Def endant s. I d. 86-
114.
WGM has r egi st ered t he domai n names www. sensi bl epor t i ons. com,
www. soycr i sps. com, and www. wgourmet . com. I d. 80- 82. The publ i
i s r edi r ect ed to www. sensi bl epor t i ons. com when ei t her
www. soycr i sps. com or www. wgour met . com i s ent er ed i nt o an i nt er net
br owser . I d. 80- 81. Pl ai nt i f f s al l ege t hat Def endant s' domai n
name i s conf usi ngl y si mi l ar t o Pl ai nt i f f ' s. I d. 82.
I n August 2010, Pl ai nt i f f met wi t h t he CEO of Hai n Cel est i al ,
who st at ed t hat he woul d not gi ve- up use of t he "Sensi bl e Por t i ons
mark but woul d "modi f y, addr ess or di scont i nue use t he of t he t erm
' sensi bl e snacks. ' " I d. 70.
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On August 16, 2010, Pl ai nt i f f and Hai n Cel est i al si gned a
Conf i dent i al i t y Agr eement pr ovi di ng t hat each par t y woul d r ef r ai n
f r om di scl osi ng cer t ai n conf i dent i al i nf or mat i on wi t hout t he
ot her ' s appr oval . I d. 116, Conf i dent i al i t y Agr eement at 1. 2 Th
par t i es ent er ed i nt o t he Conf i dent i al i t y Agr eement because t hey
were consi der i ng a busi ness ar r angement t hr ough whi ch Hai n
Cel est i al woul d pur chase Pl ai nt i f f . Compl . 126. The
cont empl at ed sal e never occur r ed, and Pl ai nt i f f now al l eges t hat
Def endant s i mpr oper l y di scl osed cer t ai n conf i dent i al i nf or mat i on i
vi ol at i on of t he agr eement . I d. 122.
On J une 9, 2011, Pl ai nt i f f f i l ed t hi s acti on, asser t i ng
si xt een cl ai ms: ( 1) br each of cont r act , ( 2) br each of i mpl i ed
cont r act agai nst Hai n Cel est i al ; ( 3) br each of i mpl i ed covenant of
good f ai t h and f ai r deal i ng agai nst Hai n Cel est i al ; ( 4) st at e
t r ademar k i nf r i ngement , Cal . Bus. & Pr of . Code 14200 et seq. ; ( 5
cont r i but or y i nf r i ngement ; ( 6) unf ai r compet i t i on, Cal . Bus. &
Pr of . Code 17200 et seq. ; ( 7) decept i ve t r ade pr act i ces, Cal .
Bus. & Pr of . Code 17500 et seq. ; ( 8) f al se adver t i si ng, Cal . Bus
& Pr of . Code 17500 et seq. ; ( 9) f eder al t r ademar k i nf r i ngement ,
15 U. S. C. 1051 et seq. ( Lanham Act ) ; ( 10) r ever se conf usi on, 15
U. S. C. 1114 et seq. ( Lanham Act ) ; ( 11) cancel l at i on of f eder al
t r ademar k r egi st r at i on ( Lanham Act ) ; ( 12) cyber pi r acy, 15 U. S. C.
1025( d) et seq. ( Lanham Act ) ; ( 13) f al se adver t i si ng,
mi sr epr esent at i on, and unf ai r compet i t i on, 15 U. S. C. 1125( a) et
2 I n t he Compl ai nt , Pl ai nt i f f r ef er enced t he Conf i dent i al i t yAgr eement and i dent i f i ed i t as an at t achment , but f ai l ed t oact ual l y f i l e t he document wi t h t he Cour t . Pl ai nt i f f l at er r e-f i l ed t he Compl ai nt wi t h t he mi ssi ng at t achment . ECF No. 12- 1( "Conf i dent i al i t y Agr eement ") .
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seq. ( Lanham Act ) ; ( 14) st at e cyber pi r acy, Cal . Bus. & Pr of . Code
17525, et seq. ; ( 15) t r ademark i nf r i ngement ( common l aw) ; and (16)
unj ust enr i chment . I d. 115- 209.
Def endant s f i l ed t he i nst ant Mot i on t o Di smi ss Pl ai nt i f f ' s
Compl ai nt on August 31, 2011. They make several argument s i n f avo
of di smi ssal . Fi rst , t hey argue t hat Pl ai nt i f f ' s t hi rd, f ourt h,
and f our t eent h cl ai ms f ai l t o st at e a cl ai m upon whi ch r el i ef can
be gr ant ed. Second, t hey ar gue t hat Pl ai nt i f f ' s equi t abl e and
Lanham Act cl ai ms ( cl ai ms 4- 5, 9- 10, 12- 13, 15- 16) ar e bar r ed by
l aches. They pr oceed t o argue t hat t he cour t may not r et ai n
j ur i sdi ct i on over Pl ai nt i f f ' s admi ni st r at i ve cl ai m f or t r ademar k
cancel l at i on ( cl ai m 11) once t he Lanham Act cl ai m i s di smi ssed, an
t hat t he Cour t shoul d decl i ne t o exer ci se suppl ement al j ur i sdi ct i o
over Pl ai nt i f f ' s st at e l aw cl ai ms ( cl ai ms 1- 2, 6- 8) once al l
f eder al cl ai ms ar e di smi ssed. As a l ast al t er nat i ve, Def endant s
argue t hat cl ai ms 1- 2 and 4- 16 shoul d be di smi ssed because
Pl ai nt i f f has f ai l ed t o pl ead suf f i ci ent f acts t o stat e a pl ausi bl
cl ai m.
III. LEGAL STANDARD
A mot i on t o di smi ss under Feder al Rul e of Ci vi l Pr ocedur e
12( b) ( 6) "t est s t he l egal suf f i ci ency of a cl ai m. " Navar r o v.
Bl ock, 250 F. 3d 729, 732 ( 9t h Ci r . 2001) . "Di smi ssal can be based
on t he l ack of a cogni zabl e l egal t heor y or t he absence of
suf f i ci ent f act s al l eged under a cogni zabl e l egal t heor y. "
Bal i st r er i v. Paci f i ca Pol i ce Dep' t , 901 F. 2d 696, 699 ( 9t h Ci r .
1988) . "When t her e ar e wel l - pl eaded f act ual al l egat i ons, a cour t
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shoul d assume thei r ver aci t y and t hen determi ne whether t hey
pl ausi bl y gi ve r i se t o an ent i t l ement t o r el i ef . " Ashcrof t v.
I qbal , 129 S. Ct . 1937, 1950 ( 2009) . However , " t he t enet t hat a
cour t must accept as t r ue al l of t he al l egat i ons cont ai ned i n a
compl ai nt i s i nappl i cabl e t o l egal concl usi ons. Thr eadbar e
r eci t al s of t he el ement s of a cause of act i on, suppor t ed by mer e
concl usor y st at ement s, do not suf f i ce. " I d. ( ci t i ng Bel l At l .
Corp. v. Twombl y, 550 U. S. 544, 555 ( 2007) ) . The al l egat i ons made
i n a compl ai nt must be bot h "suf f i ci ent l y det ai l ed t o gi ve f ai r
not i ce t o t he opposi ng par t y of t he nat ur e of t he cl ai m so t hat t h
par t y may ef f ect i vel y def end agai nst i t " and "suf f i ci ent l y
pl ausi bl e" such t hat "i t i s not unf ai r t o r equi r e t he opposi ng
par t y t o be subj ect ed t o t he expense of di scover y. " St ar r v. Baca
633 F. 3d 1191, 1204 ( 9t h Ci r . 2011) .
V. DISCUSSION
As a pr el i mi nar y mat t er , Pl ai nt i f f vol unt ar i l y wi t hdr aws i t s
f our t h cl ai m f or st at e t r ademar k i nf r i ngement , t wel f t h cl ai m f or
cyber pi r acy under t he Lanham Act , f our t eent h cl ai m f or st at e
cyber pi r acy, and si xt eent h cl ai m f or unj ust enr i chment . Opp' n at
2. Accor di ngl y, t hese cl ai ms ar e DI SMI SSED WI TH PREJ UDI CE.
A. Breach of the Implied Covenant of Good Faith (Claim 3)
The i mpl i ed covenant of good f ai t h and f ai r deal i ng prevent s
par t y t o a cont r act f r om unf ai r l y f r ust r at i ng t he ot her par t y' s
r i ght t o r ecei ve t he benef i t s of t he cont r act . Guz v. Becht el
Nat ' l , I nc. , 24 Cal . 4t h 317, 349 ( 2000) . To st at e a cl ai m f or
br each of t he i mpl i ed covenant of good f ai t h and f ai r deal i ng, a
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pl ai nt i f f must al l ege more than a mer e cont r act ual br each; he or
she must al l ege "a f ai l ur e or r ef usal t o di schar ge cont r act ual
r esponsi bi l i t i es, pr ompt ed not by an honest mi st ake, bad j udgment
or negl i gence but r at her by a consci ous and del i ber at e act , whi ch
unf ai r l y f r ust r ates t he agr eed common pur poses and di sappoi nt s t he
r easonabl e expect at i ons of t he ot her par t y t her eby depr i vi ng t hat
par t y of t he benef i t s of t he agr eement . " Careau & Co. v. Secur i t y
Paci f i c Busi ness Cr edi t , I nc. , 222 Cal . App. 3d 1371, 1395 ( Cal .
Ct . App. 1990) . I t i s wel l set t l ed t hat a cl ai m f or br each of t he
i mpl i ed covenant of good f ai t h and f ai r deal i ng cannot cont r adi ct
t he expr ess t er ms of t he cont r act . Thr i f t y Payl ess, I nc. v.
Mar i ner s Mi l e Gateway, LLC, 185 Cal . App. 4t h 1050, 1061 ( Cal . Ct .
App. 2010) .
Pl ai nt i f f al l eges t hat Hai n Cel est i al br eached t he covenant o
good f ai t h and f ai r deal i ng by t aki ng act i ons " whi ch dest r oyed
Pl ai nt i f f ' s r i ght s to recei ve t he f rui t s of t he Conf i dent i al i t y
Agr eement bet ween Pl ai nt i f f and Hai n C[ el est i al ] . " Compl . 130.
Pl ai nt i f f ' s onl y concret e al l egat i on of a "consci ous and
del i ber at e" act br eachi ng t he covenant i s t hat Hai n Cel est i al
pur chased pr oducts si mi l ar t o Pl ai nt i f f ' s f r om ot her i ndust r y
suppl i er s. I d. 131. Pl ai nt i f f t hus appear s t o be al l egi ng t hat
by decl i ni ng t o pur chase Pl ai nt i f f and i nst ead pur chasi ng pr oduct s
si mi l ar t o Pl ai nt i f f ' s pr oduct s f r om a t hi r d- par t y suppl i er , Hai n
Cel est i al depr i ved Pl ai nt i f f of t he benef i t s of t he Conf i dent i al i t
Agr eement .
Def endant s ar gue t hat Pl ai nt i f f f ai l s t o st at e a cl ai m f or
br each of t he i mpl i ed covenant wi t h r egar d t o t he Conf i dent i al i t y
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Agr eement because Pl ai nt i f f ' s al l egat i on cont r adi ct s t he expr ess
t er ms of t he agr eement , whi ch pr ovi des t hat nei t her par t y " [ i s]
under any l egal obl i gat i on of any ki nd what soever wi t h r espect t o
any t r ansact i on by vi r t ue of t hi s Agr eement , except f or t he mat t er
speci f i cal l y agr eed t o her ei n" and f ur t her st at es t hat each par t y
r eser ves t he r i ght " t o t er mi nat e di scussi ons and negot i at i ons wi t h
r espect t o any t r ansact i on at any t i me. " Conf i dent i al i t y Agr eemen
9. Moreover , Def endant s ar gue, t he pur pose of t he
Conf i dent i al i t y Agr eement i s t o pr eser ve t he conf i dent i al i t y of
exchanged mater i al , not t o f orce one part y t o pur chase pr oduct s
f r om t he ot her . Mot . at 10. Accor di ngl y, Hai n Cel est i al ' s
pur chasi ng pr oduct s f r om a t hi r d par t y suppl i er cannot f r ust r at e
t he pur pose of t he Conf i dent i al i t y Agr eement .
I n r esponse, Pl ai nt i f f ar gues t hat Def endant s mi sunder st and
t he Compl ai nt . Pl ai nt i f f cont ends t hat i t s br each of i mpl i ed
covenant cl ai m i s based not upon t he Conf i dent i al i t y Agr eement , bu
r at her upon an i mpl i ed cont r act t hat i s t he subj ect of Pl ai nt i f f ' s
second cl ai m. Def endant s repl y t hat t hi s ar gument mi sr epr esent s
t he Compl ai nt and at t empt s t o r ewr i t e Pl ai nt i f f ' s t hi r d cl ai m.
The Cour t agrees wi t h Def endant s. The t hi r d cl ai m i n t he
Compl ai nt cl ear l y st at es t hat Def endant s "unf ai r l y f r ust r at ed t he
agr eed common pur pose of t he Conf i dent i al i t y Agreement " and
"depr i ved Pl ai nt i f f of t he benef i t s of t he Conf i dent i al i t y
Agr eement . " Compl . 131. Pl ai nt i f f cannot cr edi bl y cont end t hat
as wr i t t en, i t s t hi r d cl ai m i s pr emi sed upon a cont r act ot her t han
t he Conf i dent i al i t y Agr eement . The Cour t al so agr ees wi t h
Def endant s t hat Pl ai nt i f f f ai l s t o st at e a cl ai m wi t h r egar d t o t h
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Conf i dent i al i t y Agr eement because t he cl ear pur pose of t he
Agr eement i s t o pr eserve t he conf i dent i al i t y of exchanged mat er i al
not t o f or ce one par t y t o pur chase pr oduct s f r om t he ot her .
Accor di ngl y, t he Cour t DI SMI SSES Pl ai nt i f f ' s t hi r d cl ai m WI TH
LEAVE TO AMEND. I f Pl ai nt i f f means t o pr emi se i t s cl ai m on a
cont r act ot her t han t he Conf i dent i al i t y Agr eement , i t shal l make
t hi s cl ear i n i t s amended Compl ai nt , not l eave Def endant s t o guess
at t he under l yi ng basi s f or t he cl ai m.
B. Laches (Claims 4-5, 9-10, 12-13, 15-16)
Def endant s ar gue t hat Pl ai nt i f f ' s equi t abl e and Lanham Act
cl ai ms ( cl ai ms 4- 5, 9- 10, 12- 13, 15- 16) ar e bar r ed by l aches.
Laches bar s unt i mel y equi t abl e causes of act i on. "Laches i s an
equi t abl e t i me l i mi t at i on on a par t y' s r i ght t o br i ng sui t , r est i n
on t he maxi m t hat one who seeks t he hel p of a cour t of equi t y must
not sl eep on hi s ri ght s. " J ar r ow For mul as, I nc. v. Nut r i t i on Now,
I nc. , 304 F. 3d 829, 835 ( 9t h Ci r . 2002) ( i nt er nal ci t at i ons and
quot at i on mar ks omi t t ed) . I t i s wel l est abl i shed t hat l aches
"r equi r es pr oof of ( 1) l ack of di l i gence by t he par t y agai nst whom
t he def ense i s asser t ed, and ( 2) pr ej udi ce t o the par t y asser t i ng
t he def ense. " Br at t on v. Bet hl ehem St eel Corp. , 649 F. 2d 658, 666
( 9t h Ci r . Cal . 1980) ( quot i ng Cost el l o v. Uni t ed St at es, 365 U. S.
265, 282 ( 1961) ) ( emphasi s added) .
The Cour t decl i nes t o di smi ss Pl ai nt i f f ' s cl ai ms on t he basi s
of l aches because "a l aches det er mi nat i on i s i l l - sui t ed f or a
mot i on t o di smi ss f or f ai l ur e t o st at e a cl ai m. " I t al i a Mar i t t i ma
S. p. A. v. Seasi de Tr ansp. Ser vs. , LLC, C 10- 0803 PJ H, 2010 U. S.
Di st . LEXI S 92771, at *16 ( N. D. Cal . Sep. 7, 2010) . "Because t he
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appl i cat i on of l aches depends on a cl ose eval uat i on of al l t he
par t i cul ar f act s i n a case, i t i s sel dom suscept i bl e of r esol ut i on
by summary j udgment . " Couveau v. Amer i can Ai r l i nes, I nc. , 218 F. 3
1078, 1083 ( 9t h Ci r . 2000) . "At t he mot i on- t o- di smi ss phase, t he
obst acl e t o asser t i ng a successf ul l aches def ense i s even gr eat er
because t he def endant must r el y excl usi vel y upon t he f actual
al l egat i ons set f or t h i n t he compl ai nt . " Kour t i s v. Camer on, 419
F. 3d 989, 1000 ( 9t h Ci r . Cal . 2005) , abr ogat ed on ot her gr ounds i n
Tayl or v. St urgel l , 553 U. S. 880 ( 2008) .
I n t hei r Mot i on, Def endant s ask the Cour t t o make f actual
det ermi nat i ons concer ni ng when Pl ai nt i f f knew or shoul d have known
about t he al l eged i nf r i ngement , Pl ai nt i f f ' s di l i gence i n enf or ci ng
i t s r i ght s, and t he pr ej udi ce t o Def endant s caused by Pl ai nt i f f ' s
al l eged del ay. Mot . at 12- 13. I n Opposi t i on and Repl y, t he
par t i es rai se addi t i onal f act ual di sput es concer ni ng t he st r engt h
of Pl ai nt i f f ' s t rademark r i ght s, t he harm Pl ai nt i f f wi l l suf f er i f
r el i ef i s deni ed, whet her Def endant s act ed i n good f ai t h, and
whet her t he par t i es' pr oduct s are di st i nct , among ot her t hi ngs.
Opp' n at 13- 18; Repl y at 9- 14. Most of t he f act s rel evant t o t hes
i ssues ar e not set f or t h t he Compl ai nt . Fur t her , even i f t he Cour
wer e t o t ake not i ce of t he f act s set f or t h i n t he par t i es' r equest
f or j udi ci al not i ce, 3 i t i s premat ur e to det er mi ne whether such
3
Def endant s f i l ed a Request f or J udi ci al Not i ce, ECF No. 15( "Def s. ' RJ N") , r equest i ng t he Cour t t ake j udi ci al not i ce of t hef act s set f or t h i n t he exhi bi t s t o t he Decl ar at i on of Nat han B.Sabr i , ECF No. 17 ( "Sabr i Decl . ") . I n Opposi t i on, Pl ai nt i f f s al sof i l ed a Request f or J udi ci al Not i ce, ECF No. 22- 1 ( "Pl . ' s RJ N") ,r equest i ng t he Cour t t ake j udi ci al not i ce of t he f act s set f or t h it he exhi bi t s t o the Decl ar at i on of Davi d W. Baxes, ECF Nos. 22- 4( "Baxes Decl . " ) . Because r esol ut i on of Def endant s' l aches def ensei nappr opr i at e at t hi s st age, i t does not r ul e on t he RJ Ns, exceptas t o Pl ai nt i f f ' s Exhi bi t s 3( a) , 3( b) , and 5, as di scussed i nf r a.
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evi dence i s suf f i ci ent t o r ai se a genui ne i ssue of mat er i al f act ,
l et al one wei gh t hat evi dence.
Accor di ngl y, t he Cour t f i nds t hat a det er mi nat i on on t he
adequacy of Def endant s' l aches def ense t o cl ai ms 4- 5, 9- 10, 12- 13,
and 15- 16 r equi r es f i ndi ngs of f act and i s i nappr opr i at e f or
r esol ut i on on a mot i on t o di smi ss.
C. Sufficiency of Factual Allegations
Def endant s ar gue t hat al l of Pl ai nt i f f ' s cl ai ms, except i t s
t hi r d cl ai m f or br each of t he covenant of good f ai t h and f ai r
deal i ng, shoul d be di smi ssed f or f ai l ur e t o pl ead suf f i ci ent
f act ual al l egat i ons i n suppor t of t hose cl ai ms. Pl ai nt i f f r espond
t hat i t has pl ed suf f i ci ent f act ual al l egat i ons t o suppor t each of
i t s cl ai ms. For t he r easons st at ed bel ow, t he Cour t agr ees wi t h
Def endant s as to Pl ai nt i f f ' s f i r st , second, f i f t h, ei ght h, and
t hi r t eent h cl ai ms. The Cour t agr ees wi t h Pl ai nt i f f as t o i t s
si xt h, sevent h, ni nt h, t ent h, el event h, and f i f t eent h cl ai ms.
1. Pl ai nt i f f ' s Fi r st Cl ai m f or Br each of Cont r act
Pl ai nt i f f ' s cl ai m f or br each of t he Conf i dent i al i t y Agr eement
i s a mer e r eci t at i on of t he el ement s of a br each of cont r act cl ai m
For exampl e, t he Compl ai nt st at es " Def endant s f ai l ed t o per f or m al
of t he condi t i ons, covenant s and pr omi ses r equi r ed of t hem under
t he conf i dent i al i t y agr eement s [ si c] , i ncl udi ng, but not l i mi t ed t
di scl osi ng al l or a por t i on of Pl ai nt i f f ' s Conf i dent i al I nf or mat i o
wi t hout t he expr ess or i mpl i ed consent of Pl ai nt i f f . " Compl .
122. Pl ai nt i f f pl eads no f act s r egar di ng, i nt er al i a, what
i nf or mat i on was al l egedl y di scl osed or how i t was di scl osed. 4 Suc
4 The Cour t r ecogni zes t hat t he i nf or mat i on al l egedl y di scl osed i spur por t edl y conf i dent i al i n nat ur e and does not suggest t hat
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"[ t ] hr eadbar e r eci t al s of t he el ement s of a cause of act i on" ar e
i nsuf f i ci ent t o st at e a cl ai m under I qbal . See 129 S. Ct . at 1950
Pl ai nt i f f ar gues t hat i t s al l egat i on t hat Def endant s br eached
t he cont r act by "di scl osi ng al l or a por t i on of Pl ai nt i f f ' s
Conf i dent i al I nf or mat i on" i s suf f i ci ent t o st at e a cl ai m, and
Pl ai nt i f f c i t es t o i t s RJ N. Ot her por t i ons of Pl ai nt i f f ' s
Opposi t i on suggest i t means t o al l ege t hat Hai n Cel est i al br eached
t he Conf i dent i al i t y Agr eement by conveyi ng cer t ai n i nf or mat i on t o
WGM and di scl osi ng t hat i nf or mat i on at a pr oceedi ng bef or e t he
Tr ademar ks Tr i al and Appeal Boar d ( "TTAB") . Opp' n at 19. I f t hi s
i s what Pl ai nt i f f means t o al l ege, t hen i t must say so i n t he
Compl ai nt . The f act ual al l egat i ons necessary t o suppor t a cl ai m
must be i n t he Compl ai nt , not i n an opposi t i on br i ef or a RJ N.
Because Pl ai nt i f f has f ai l ed t o pl ead suf f i ci ent f act s i n suppor t
of i t s f i r st cl ai m f or br each of cont r act , t he Cour t DI SMI SSES t he
cl ai m WI TH LEAVE TO AMEND.
The Cour t f ur t her not es t hat Pl ai nt i f f al l eges t hat i t ent er e
i nt o t he Conf i dent i al i t y Agr eement wi t h Hai n Cel est i al , and t he
t ext of t he Agr eement conf i r ms t hi s f act , but Pl ai nt i f f t hen
pr oceeds t o al l ege t hat al l Def endant s breached t he Agr eement and
t hat t her e may have i n f act been mul t i pl e agr eement s: " [ b] y f ai l i n
t o abi de by t he t er ms of t he Conf i dent i al i t y Agr eement , Def endant s
br eached t hose agr eement s. " Compl . 123. I f Pl ai nt i f f chooses t
f i l e an amended compl ai nt , i t shoul d cl ar i f y how many cont r act s ar
Pl ai nt i f f shoul d di scl ose i t s own conf i dent i al i nf or mat i on i n i t sCompl ai nt . Never t hel ess, Pl ai nt i f f shoul d at l east pr ovi de i ngeneral t er ms t he i nf ormat i on t o whi ch i t r ef er s and how Def endantal l egedl y di scl osed t hat i nf or mat i on.
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at i ssue, speci f y who t he par t i es t o t hose cont r act s ar e, and l i mi
al l egat i ons of br each t o those Def endant s who wer e act ual l y par t i e
t o t he cont r act s at i ssue.
2. Pl ai nt i f f ' s Second Cl ai m f or Br each of I mpl i edCont r act
Pl ai nt i f f ' s second cl ai m f or br each of i mpl i ed cont r act
l i kewi se f ai l s t o cl ear l y al l ege f acts suf f i ci ent t o put Def endant
on not i ce of t he nat ur e of t he cl ai m. Si mpl y put , i t i s uncl ear
f r om t he Compl ai nt , and f r om Pl ai nt i f f ' s Opposi t i on f or t hat
mat t er , exact l y what i mpl i ed cont r act Pl ai nt i f f cont ends exi st ed,
and whi ch Def endant s Pl ai nt i f f al l eges wer e par t i es t o sai d
cont r act .
The Compl ai nt appear s t o al l ege t hat one or mor e Def endant s5
br eached an i mpl i ed cont r act by mi susi ng Pl ai nt i f f ' s conf i dent i al
i nf or mat i on wi t hout compensat i ng Pl ai nt i f f . Pl ai nt i f f ' s Compl ai nt
st at es:
Def endant s' [ si c] under st ood t hat i t [ si c] was not t ouse [ Pl ai nt i f f ' s conf i dent i al i nf or mat i on] f or anypur pose other t han t he Per mi t t ed Pur poses of t he[ Conf i dent i al i t y Agr eement ] and t hat any ot her usewoul d r equi r e Pl ai nt i f f ' s per mi ssi on and t hatPl ai nt i f f woul d expect compensat i on f or any ot her use,t her eby cr eat i ng an i mpl i ed cont r act . Uponi nf or mat i on and bel i ef , Def endant s' [ si c] usedPl ai nt i f f ' s i nf or mat i on wi t hout compensat i ng Pl ai nt i f ff or such use a br each of t hat i mpl i ed cont r act .
Compl . 127. As wi t h i t s br each of cont r act cl ai m, Pl ai nt i f f has
5 The headi ng beneat h "Second Cause of Act i on" i n t he Compl ai ntst at es t hat t he cl ai m i s agai nst Hai n Cel est i al . The al l egat i onst hat f ol l ow, however , i nt er changeabl y name "Hai n C[ el est i al ] " and"Def endants. " See Compl . 125- 128.
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not al l eged any f act s as t o how Def endant s mi sused i t s conf i dent i a
i nf or mat i on.
Mor eover , i n i t s Opposi t i on Pl ai nt i f f appear s t o change i t s
t heor y as t o what i mpl i ed cont r act al l egedl y exi st ed. Pl ai nt i f f
ar gues t hat Pl ai nt i f f and Hai n Cel est i al agr eed t hat , whi l e
pot ent i al sal e negot i at i ons wer e ongoi ng, Pl ai nt i f f agr eed t o
suspend i t s opposi t i on pr oceedi ngs bef ore t he TTAB i n exchange f or
Hai n Cel est i al agr eei ng t o di scont i nue t he use of t he phr ase
"sensi bl e snacks" i n connect i on wi t h i t s pr oduct s. Opp' n at 5- 6.
Thi s t heor y i s ent i r el y di f f er ent f r om t hat set f or t h i n t he
Compl ai nt . I f Pl ai nt i f f cannot pi n down what i mpl i ed cont r act
Def endant s al l egedl y vi ol at ed, Def endant s cert ai nl y l ack adequat e
not i ce t o pr epar e a def ense t o Pl ai nt i f f ' s cl ai m.
Accor di ngl y, Pl ai nt i f f ' s second cl ai m f or br each of i mpl i ed
cont r act i s DI SMI SSED WI TH LEAVE TO AMEND.
3. Pl ai nt i f f ' s Fi f t h Cl ai m f or Cont r i but oryI nf r i ngement
A cl ai m f or cont r i but or y i nf r i ngement r equi r es a showi ng t hat
a def endant " i nt ent i onal l y i nduc[ ed] or encour age[ d] di r ect
i nf r i ngement . " MDY I ndus. , LLC v. Bl i zzar d Ent m' t , I nc. , Nos. 09-
15932, 09- 16044, 2011 U. S. App. LEXI S 3428, at *10 ( 9t h Ci r . Feb.
17 2011) . Def endant s ar gue t hat Pl ai nt i f f ' s f i f t h cl ai m f or
cont r i but or y i nf r i ngement shoul d be di smi ssed because Pl ai nt i f f ha
f ai l ed t o pl ead f act ual al l egat i ons of i nt ent i onal i nducement .
Pl ai nt i f f r esponds t hat wi t hout di scover y i t i s unabl e t o
di f f er ent i at e among t he par t i es.
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The Cour t agr ees wi t h Def endant s. Pl ai nt i f f ' s response i s
besi de t he poi nt . Regar dl ess of whet her Pl ai nt i f f can
di f f er ent i at e among t he par t i es, Pl ai nt i f f has f ai l ed t o pl ead
f act s suppor t i ng t he cl ai m t hat any Def endant i nduced or encour age
anot her to i nf r i nge. Pl ai nt i f f ' s al l egat i ons under l yi ng t hi s cl ai
mer el y reci t e l egal concl usi ons such as: "Def endant s have
cont r i but ed, ai ded and/ or encour aged ot her Def endant s and Does 1- 2
t o i nf r i nge . . . . " Compl . 140. I qbal r equi r es Pl ai nt i f f t o
pr ovi de f act ual al l egat i ons suppor t i ng t hese concl usi ons i n or der
t o st at e a pl ausi bl e cl ai m. 129 S. Ct . at 1950. Pl ai nt i f f ' s f i f t
cl ai m i s DI SMI SSED WI TH LEAVE TO AMEND.
4. Pl ai nt i f f ' s Fal se Adver t i si ng Cl ai msPl ai nt i f f ' s ei ght h and t hi r t eent h cl ai ms al l ege f al se
adver t i si ng under Cal i f or ni a and f eder al l aw, r espect i vel y. Fal se
adver t i si ng under sect i on 17500 of t he Cal i f or ni a Busi ness and
Pr of essi ons Code i s a cl ai m soundi ng i n f r aud. I n r e Tobacco I I
Cases, 46 Cal . 4t h 298, 312 n. 8 ( 2009) . Accor di ngl y, i t i s subj ec
t o t he hei ght ened pl eadi ng r equi r ement s f or f r aud cl ai ms under
Feder al Rul e of Ci vi l Pr ocedur e 9( b) . I n or der t o st at e a cl ai m,
Pl ai nt i f f must al l ege f act s i dent i f yi ng speci f i c al l egedl y f al se
st at ement s, i ncl udi ng f act s showi ng how t he st atement s wer e
mi sl eadi ng. See Chua v. Bar r at t Amer i can, No. 09cv105- L( WVG) , 201
U. S. Di st . LEXI S 25298, at *9- 10 ( S. D. Cal . Mar . 17, 2010) .
Si mi l ar l y, t o st at e a f eder al cl ai m f or f al se adver t i si ng under t h
Lanham Act, Pl ai nt i f f must i dent i f y "f al se st at ement s of f act" i n
adver t i sement s t hat Def endant s made about t hei r own or anot her ' s
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pr oduct . Ri ce v. Fox Br oad. Co. , 330 F. 3d 1170, 1180 ( 9t h Ci r .
2003) ( i nt er nal quot at i on omi t t ed) .
Def endant s ar gue t hat Pl ai nt i f f ' s f al se adver t i si ng cl ai ms
shoul d be di smi ssed because Pl ai nt i f f has f ai l ed t o i dent i f y any
al l egedl y f al se st atement s made by Def endant s. Mot . at 19.
Pl ai nt i f f ar gues t hat i t has suf f i ci ent l y pl ed i t s cl ai ms because
i t has al l eged t hat Def endant s have used t r ademar ks t hat i nf r i nge
t he Sensi bl e Food Mar ks i n publ i c adver t i si ng. Opp' n at 21. The
Cour t agr ees wi t h Def endant s. Pl ai nt i f f s have f ai l ed t o st at e a
cl ai m f or f al se adver t i si ng under Cal i f or ni a or f eder al l aw becaus
t hey have not i dent i f i ed any al l egedl y f al se st at ement s made by
Def endant s. Accor di ngl y, Pl ai nt i f f ' s ei ght h and t hi r t eent h cl ai ms
ar e DI SMI SSED WI TH LEAVE TO AMEND.
5. Pl ai nt i f f ' s Remai ni ng Cl ai msDef endant s ar gue t hat al l of Pl ai nt i f f ' s r emai ni ng cl ai ms
shoul d be di smi ssed f or l ack of speci f i ci t y because Pl ai nt i f f of t e
f ai l s t o i dent i f y whi ch Def endant i s al l eged t o have commi t t ed
whi ch wr ongf ul act . Mot . at 15. Pl ai nt i f f r esponds t hat wi t hout
di scover y i t cannot be expect ed t o di f f er ent i at e among t he act i ons
of r el at ed cor por at e ent i t i es t hat have used t hei r own names i n
conf usi ng f ashi on i n t he mar ket pl ace. Opp' n at 19. Def endant s
r epl y t hat "Pl ai nt i f f ' s bl ur r i ng of t he l i nes goes wel l beyond wha
i t needs di scover y t o cl ar i f y. " Repl y at 15.
The Cour t agrees wi t h Pl ai nt i f f . The Cour t has not ed above
t hat Pl ai nt i f f shoul d cl ar i f y i n any amended compl ai nt whi ch
par t i es i t al l egedl y had cont r act ual agr eement s wi t h and whi ch
par t i es al l egedl y br eached t hose cont r act s. Ot her t han t hose
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par t i cul ar i nst ances, however , t he Cour t f i nds t hat Pl ai nt i f f s'
l ack of pr eci si on i n pl eadi ng i s not so egr egi ous as t o war r ant
di smi ssal of t he Compl ai nt i n i t s ent i r et y, and i n f act, i s qui t e
under st andabl e gi ven t he i nt er r el at i onshi p of Def endant s and t he
of t en conf usi ng f ashi on i n whi ch Def endant s have i nt er mi ngl ed t hei
names i n t he market pl ace.
Pl ai nt i f f al l eges, and Def endant s do not deny, t hat Hai n
Cel est i al , Hai n Gour met , and WGM ar e af f i l i at ed ent i t i es. See
Compl . 5, 8- 9. As t o t he r emai ni ng t wo named def endants,
Def endant s st at e: "The Compl ai nt names Wor l d Gour met , I nc. and
Sensi bl e Snacks, I nc. as def endant s. Counsel ' s cur r ent
under st andi ng i s t hat nei t her of t hese ar e act ual l egal ent i t i es. "
Mot . at 1 n. 1. However , pr i nt ed webpages f r om WGM' s websi t e,
www. sensi bl epor t i ons. com, 6 di spl ay t he t ext "Wor l d Gour met , I nc.
Al l Ri ght s Reser ved" or "copyr i ght Wor l d Gour met , I nc. " Pl . ' s RJ N
Ex. 3( a) , ( b) . 7 Anot her pr i nt ed page f r om www. sensi bl epor t i ons. com
st at es t hat "Sensi bl e Snacks, I nc. " i s t he manuf act ur er of Sensi bl
Por t i ons. Pl . ' s RJ N Ex. 5. Def endant s even acknowl edge t he
conf usi ng nat ur e of t he r el at i onshi ps among t he var i ous ent i t i es,
not i ng t hat t he i ssue "may be addr essed i n a subsequent mot i on i f
necessar y. " I d.
I f one t hi ng i s cl ear f rom t hi s morass, i t i s that Pl ai nt i f f
6 Def endants admi t t hat WGM uses t he I nternet domai n namewww. sensi bl eport i ons. com. Repl y at 2- 3.
7 Def endant s do not oppose Pl ai nt i f f ' s RJ N wi t h r egar d t o exhi bi t s3( a) , 3( b) , and 5. Because t hese exhi bi t s ar e publ i c document s arcapabl e of accur ate and r eady det er mi nat i on by resor t t o sour ceswhose accur acy cannot r easonabl y be quest i oned, t he Cour t GRANTSPl ai nt i f f ' s Request wi t h r egar d t o t hese exhi bi t s onl y.
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cannot be expect ed t o unwi nd t he pr eci se l egal r el at i onshi ps
bet ween af f i l i at ed ent i t i es t hat have oper at ed under var i ous names
and speci f y pr eci sel y whi ch ent i t y engaged i n ever y par t i cul ar
act . 8 See, e. g. , Marsegl i a v. J P Morgan Chase Bank, 750 F. Supp.
2d 1171, 1175 ( r ef usi ng t o di smi ss compl ai nt f or f ai l ur e t o speci f
whi ch of t hr ee def endant s - - al l af f i l i at es of J P Mor gan Chase Ban
- - al l egedl y engaged i n whi ch wr ongf ul act s) . 9
The al l egat i ons made i n a compl ai nt must be bot h "suf f i ci ent l
det ai l ed t o gi ve f ai r not i ce t o t he opposi ng par t y of t he nat ur e o
t he cl ai m so t hat t he par t y may ef f ect i vel y def end agai nst i t " and
"suf f i ci ent l y pl ausi bl e" such t hat " i t i s not unf ai r t o r equi r e t h
8 Def endant s compl ai n speci f i cal l y t hat : ( 1) Pl ai nt i f f al l eges t ha"Def endant s" br eached a cont r act and an al l eged i mpl i ed cont r act twhi ch onl y Hai n Cel est i al was al l egedl y a par t y; ( 2) Pl ai nt i f fr ef er s at var i ous t i mes t o a t r ademar k appl i cat i on al l egedl y f i l edby WGM as " Def endant s' appl i cat i on"; ( 3) Pl ai nt i f f al l eges t hat"Def endants" exhi bi t ed at a t r ade show under t he "Wor l d Gour metMar ket i ng" name i n 2008, pr i or t o the dat e t hat Hai n Cel est i alal l egedl y acqui r ed WGM; and ( 4) Pl ai nt i f f al l eges t hat "Def endant sr egi st er ed t he domai n name www. sensi bl eport i ons. com, whi l e i t i s
l egal l y i mpossi bl e f or mul t i pl e ent i t i es t o r egi st er a si ngl edomai n name. Mot . at 17. The Cour t has addr essed t he l ack ofspeci f i ci t y r egar di ng t he cont r act cl ai ms supr a. The r est of t heenumer at ed i nst ances ar e ei t her t ypogr aphi cal er r or s, whi chDef endant s shal l f i x i n any amended compl ai nt , or i nst ances wher edi scover y i s necessar y to al l ow Pl ai nt i f f t o pi npoi nt pr eci sel ywhi ch Def endant s wer e i nvol ved. Def endant s cannot cr edi bl y cont ent hat such t r i vi al i t i es ser i ousl y i mpai r t hei r abi l i t y t o mount adef ense i n t hi s act i on.
9 The cases Def endant s r el y on i nvol ved much more def i ci entcompl ai nt s, as wel l as mul t i pl e def endant s who wer e not r el at edent i t i es. For i nst ance, i n Page v. St anl ey, No. CV 11- 02255 CAS
( SS) , 2011 U. S. Di st . LEXI S 91358, at *5 (C. D. Cal . Aug. 16, 2011)t he cour t di smi ssed a pr i soner ' s pr o se compl ai nt t hat was"conf usi ng and nonsensi cal " and f ai l ed t o speci f y t he i nci dentgi vi ng r i se t o each cl ai m or whi ch of si x l aw enf or cement of f i cer swas al l egedl y i nvol ved i n each i nci dent . I n Fuj i kawa v. OneWestBank, FSB, Ci v. No. 11- 00151 HG- KSC, 2011 U. S. Di st . LEXI S 79817,at *2, *7- 8 ( D. Haw. J ul y 21, 2011) , t he cour t di smi ssed a mor t gagf r aud compl ai nt cont ai ni ng a "ser i es of vague f act ual al l egat i ons"wher e pl ai nt i f f ' s counsel had f i l ed numer ous near l y i dent i calcompl ai nt s i n ot her act i ons.
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opposi ng par t y t o be subj ect ed t o t he expense of di scover y. " St ar
v. Baca, 633 F. 3d 1191, 1204 ( 9t h Ci r . 2011) . Except f or t he
def i ci enci es speci f i cal l y di scussed supr a, Pl ai nt i f f ' s occasi onal
f ai l ur e t o di st i ngui sh among Def endant s i n t he i nst ant Compl ai nt
does not depr i ve Def endant s of t he f ai r not i ce necessar y t o def end
agai nst i t , and i t i s not unf ai r t o subj ect Def endant s t o di scover
t o al l ow Pl ai nt i f f t o cur e t he conf usi on.
Def endant s' Mot i on i s t her ef or e deni ed wi t h r espect t o
Pl ai nt i f f ' s s i xt h, sevent h, ni nt h, t ent h, el event h, and f i f t eent h
cl ai ms.
V. CONCLUSION
For t he f or egoi ng r easons, t he Cour t GRANTS I N PART AND DENI E
I N PART t he mot i on by Def endants Wor l d Gour met , I nc. , Hai n Gour met
I nc. , Hai n Cel est i al Gr oup, I nc. , Wor l d Gour met Mar ket i ng, LLC, an
Sensi bl e Snacks, I nc. t o di smi ss Pl ai nt i f f Sensi bl e Foods, LLC' s
Compl ai nt , and r ul es as f ol l ows:
Pl ai nt i f f ' s f our t h cl ai m f or st at e t r ademar k i nf r i ngement ,t wel f t h cl ai m f or cyber pi r acy under t he Lanham Act , f our t eent
cl ai m f or st at e cyber pi r acy, and si xt eent h cl ai m f or unj ust
enr i chment ar e DI SMI SSED WI TH PREJ UDI CE.
Pl ai nt i f f ' s f i rst cl ai m f or breach of cont ract , second cl ai mf or br each of i mpl i ed cont r act , t hi r d cl ai m f or br each of
i mpl i ed covenant of good f ai t h and f ai r deal i ng, f i f t h cl ai m
f or cont r i but or y t r ademar k i nf r i ngement , ei ght h cl ai m f or
f al se adver t i si ng i n vi ol at i on of sect i on 17500 of
Cal i f or ni a' s Busi ness and Pr of essi ons Code, and t hi r t eent h
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cl ai m f or f al se adver t i si ng under t he Lanham Act ar e DI SMI SSE
WI TH LEAVE TO AMEND.
Pl ai nt i f f ' s s i xt h cl ai m f or unf ai r compet i t i on under sect i on17200 of Cal i f or ni a' s Busi ness and Pr of essi ons Code, sevent h
cl ai m f or decept i ve t r ade pr act i ces under sect i on 17500 of
Cal i f or ni a' s Busi ness and Pr of essi ons Code, ni nt h cl ai m f or
f eder al t r ademar k i nf r i ngement under t he Lanham Act , t ent h
cl ai m f or r ever se conf usi on under t he Lanham Act , el event h
cl ai m f or cancel l at i on of f eder al t r ademar k regi st r at i on unde
t he Lanham Act , and f i f t eent h cl ai m f or common l aw t r ademark
i nf r i ngement r emai n undi st ur bed.
Pl ai nt i f f i s gr ant ed t hi r t y ( 30) days l eave t o f i l e an amende
compl ai nt . I f Pl ai nt i f f f ai l s t o f i l e an amended compl ai nt wi t hi n
t hi s t i me f r ame, i t s f i r st , second, t hi r d, f i f t h, ei ght h, and
t hi r t eent h cl ai ms are di smi ssed WI TH PREJ UDI CE.
I T I S SO ORDERED.
Dat ed: November 3, 2011UNI TED STATES DI STRI CT J UDGE
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