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AJB Enterprises, LLC v. BackJoy Orthotics, LLC

United States District Court, D. Connecticut

December 16, 2016

AJB ENTERPRISES, LLC, Plaintiff,
v.
BACKJOY ORTHOTICS, LLC, Defendant.

          RULING ON MOTION TO DISMISS

          VICTOR A. BOLDEN, UNITED STATES DISTRICT JUDGE

         Plaintiff, AJB Enterprises, LLC d/b/a Body Back Company (“AJB”), brought this action against Defendant, BackJoy Orthotics, LLC (“BackJoy”), alleging federal and state claims of unfair competition, trade dress infringement, breach of contract and unjust enrichment. Compl., ECF No. 1. BackJoy has moved to dismiss all counts for failure to state a claim under Rule 12(b)(6). Def. Mot. to Dismiss, ECF No. 22. For the reasons outlined below, BackJoy's Motion to Dismiss is GRANTED, and AJB's claims are dismissed without prejudice.

         I. FACTUAL BACKGROUND[1]

         AJB is in the business of manufacturing and selling massage and fitness products, including back massagers. Compl. at ¶ 2. AJB is the successor in interest to a company named Body Back Company, Inc. (“Body Back”), created and owned by Paul Nash.[2] Id. Paul Nash designed an S-shaped cane massager, and since around 1996, that massager was sold to the public by Body Back and now AJB under the name “Trigger Point Massager.” Id. Body Back was awarded a patent for that design; however, the patent has since expired. Id. at ¶ 9.

         BackJoy markets chiropractic and related products, id. at ¶ 3, and entered into discussions with Paul Nash regarding the possibility of selling a version of the Trigger Point Massager to retailers, such as Bed Bath & Beyond. Id. at ¶ 21. In November 2013, the parties entered into a non-disclosure agreement in which Body Back agreed to disclose relevant confidential information related to its product, and BackJoy agreed to maintain the confidentiality of that information and cease all use of the information upon Body Back's written request. Id. at ¶ 23; Confidentiality Agreement, Compl. Ex. D, ECF No. 1-5.

         In 2014, the parties considered entering into a licensing agreement permitting BackJoy to sell the S-shaped cane massager product in exchange for royalty payments to Body Back. Draft Agreement, Compl. Ex. G, ECF No. 1-8. The draft agreement provided that BackJoy would pay Body Back “royalties in the amount offive [sic] percent (5%) of Net Sales” as the “sole compensation” for its services. Id. at § 3. Body Back did not object to this 5% compensation arrangement, but it did object to several other terms in the proposed agreement and suggested several revisions. Sep.-Oct. 2014 E-mails, Compl. Ex. H, ECF No. 1-9. The original draft consulting agreement was never signed, and BackJoy told Body Back that it would work on a revised agreement incorporating Body Back's concerns. Id.; Draft Agreement at 5; Compl. at ¶ 34.

         In the meantime, Body Back provided BackJoy with the information needed to make the proposed cane massager. Id. at ¶¶ 26-27. Body Back also set up production at an injection molding facility to enable test marketing of the product, and the parties conducted successful sales of the product at Bed Bath & Beyond. Id. at ¶¶ 27-28. Discussions regarding the consulting agreement continued by e-mail, and BackJoy represented to Body Back that it would be sending along an updated consulting agreement for review and signature, indicating that it did not “see any issues really” with Body Back's revisions and that it would “back date the sales of course for the fee” to compensate Body Back for the work performed so far. Sep.-Oct. 2014 Emails at 2-3. However, BackJoy never provided a revised draft agreement. Instead, in December 2016, BackJoy informed Body Back that the fee structure of the agreement no longer worked, and that an alternate “consulting” arrangement for past and ongoing work would be preferable. Compl. at ¶¶ 28, 37; Dec. 2016 E-mails, Compl. Ex. J, ECF No. 1-11. BackJoy continued selling the cane massager product through Bed Bath & Beyond, and the parties were never able to agree on a written contract providing compensation to Body Back in connection with the product. Compl. at ¶¶ 35, 39.

         II. STANDARD OF REVIEW

         When considering a motion to dismiss under Fed R. Civ. P. 12(b)(6), the Court must accept as true all factual allegations in the complaint and draw all possible inferences from those allegations in favor of the plaintiff. See York v. Ass'n of the Bar of the City of New York, 286 F.3d 122, 125 (2d Cir.), cert. denied, 537 U.S. 1089 (2002). The proper consideration is not whether the plaintiff ultimately will prevail, but whether the plaintiff has stated a claim upon which relief may be granted such that it should be entitled to offer evidence to support its claim. See id. (citation omitted). Although courts considering motions to dismiss under Rule 12(b)(6) generally “must limit [their] analysis to the four corners of the complaint, ” they may also consider documents that are “incorporated in the complaint by reference.” Kermanshah v. Kermanshah, 580 F.Supp.2d 247, 258 (S.D.N.Y. 2008).

         In reviewing a complaint under Rule 12(b)(6), the court applies “a ‘plausibility standard, '” which is guided by “two working principles.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the requirement that the Court accept as true the allegations in a complaint “is inapplicable to legal conclusions.” Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Although “detailed factual allegations” are not required, a complaint must offer more than “labels and conclusions, ” or “a formulaic recitation of the elements of a cause of action” or “naked assertions]” devoid of “further factual enhancement.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007). Second, to survive a motion to dismiss, the complaint must state a plausible claim for relief. Iqbal, 556 U.S. at 679. Determining whether the complaint states a plausible claim for relief is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Iqbal, 556 U.S. at 679).

         III. DISCUSSION

         AJB's Complaint includes six counts against BackJoy: (1) federal unfair competition and trade dress infringement; (2) unfair competition based on “multiple misrepresentations”; (3) unfair competition based on “confusion”; (4) unfair competition based on “disclosure of trade secrets”; (5) breach of contract; and (6) unjust enrichment. Compl. at ¶¶ 46-65. Each type of claim is addressed in turn.

         A. Trade Dress Infringement

         AJB argues that BackJoy infringed its trademark rights by diluting the trade dress of its Trigger Point Massager in violation of § 43 of the Lanham Act (15 U.S.C. § 1125). Compl. ¶¶ 46-55. Section 43 of the Lanham Act prohibits the use of “any word, term, name, symbol, or device, or any combination thereof that is “likely to cause confusion, or to cause mistake, or to deceive … as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities[.]” 15 U.S.C. § 1125(a)(1)(A). A product's trade dress is protected even where there is no registered trademark, and a trade dress “encompasses the overall design and appearance that make the product identifiable to consumers.” Nora Beverages, Inc. v. Perrier Grp. of Am., Inc., 269 F.3d 114, 118 (2d Cir. 2001).

         There are three core elements to a trade dress infringement claim: a plaintiff must allege that “(1) the claimed trade dress is non-functional; (2) the claimed trade dress has secondary meaning; and (3) there is a likelihood of confusion” between the products. Sherwood 48 Assocs. v. Sony Corp. of Am., 76 F.Appx. 389, 391 (2d Cir. 2003). A viable trade dress infringement claim also requires the plaintiff to “offer a ‘precise expression of the character and scope of the claimed trade dress.'” Id. (quoting Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 381 (2d Cir. 1997)) When the claimed trade dress goes beyond a product's packaging to encompass its design, “courts have been reluctant to extend trade dress protection[.]” Carson Optical, Inc. v. Prym Consumer USA, Inc., 11 F.Supp.3d 317, 340 (E.D.N.Y. 2014) (citing ID7D Co. v. Sears Holding Corp., No. 3:11-CV-1054 (VLB), 2012 WL 1247329, at *6 (D.Conn. Apr. 13, 2012)); see also Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 114 (2d Cir. 2001) (“We exercise particular caution, when extending protection to product designs” (citing Landscape Forms, 113 F.3d at 380 (2d Cir. 1997)).

         At the outset, the Court recognizes the limited Second Circuit case law on trade dress claims at the motion to dismiss stage. The vast majority of the Second Circuit cases referenced by the parties involved trade dress infringement claims that were permitted to proceed to later stages of litigation. See, e.g., Yurman,262 F.3d 373 (dismissing trade dress claim on Rule 50 motion); Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033 (2d Cir. 1992) (dismissing trade dress claim on motion for preliminary injunction); Louis Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108 (2d Cir. 2006) (dismissing trade dress claim on motion for preliminary injunction). Nonetheless, each of these cases provides the Court with guidance ...


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