United States District Court, D. Connecticut
ORDER GRANTING MOTION TO DISMISS
Jeffrey Alker Meyer, United States District Judge
Plaintiff
Global Sailing Limited (GSL) has filed this lawsuit against
five defendants for breach of contract, for violations of the
Lanham Act, and for violations of the Connecticut Unfair
Trade Practices Act (CUTPA). Defendants have moved to dismiss
the Lanham Act and CUTPA claims. For the reasons set forth
below, I will grant the motion to dismiss.
Background
The
somewhat convoluted facts of this case are set forth at
length in my earlier ruling on the parties' cross-motions
for summary judgment as to a related action filed in 2013
(“the 2013 action”). See Bruce Kirby, Inc. v.
Laserperformance (Europe) Ltd., No. 3:13-cv-00297;
Bruce Kirby, Inc. v. Laserperformance (Europe) Ltd.,
2016 WL 4275576, at *1 (D. Conn. 2016). The 2013 action
principally involved claims by Bruce Kirby and his eponymous
company, Bruce Kirby, Inc., against certain companies that
build and sell sailboats that he designed. The instant suit
filed by GSL has been consolidated with the 2013 action.
In
1969, Bruce Kirby designed a small sailboat that became very
popular for racing competitions. During the early 1980s,
Bruce Kirby and his company entered into an agreement, called
the “Head Agreement, ” with two international
sailing bodies to regulate the manufacture, sale, and
registration of sailboats using the Bruce Kirby sailboat
design and sold under the brand name “Laser.”
Kirby and his company likewise entered into contracts called
“Builder Agreements” with sailboat builders to
build the sailboats in conformity with the Head Agreement.
The successors in interest to two of the Builder Agreements
with Kirby and his company were Laserperformance (Europe)
Limited (“LPE”) and Quarter Moon, Inc.
(“QMI”).
The
parties got into a dispute about payment of royalties, and
Kirby and his company purported to terminate the Builder
Agreements with LPI and QMI in 2012. Then Kirby and his
company filed the 2013 action for breach of contract, for
infringement and counterfeiting of the BRUCE KIRBY®
trademark under the Lanham Act, for unfair trade practices
under CUTPA, and for misappropriation of the name and
likeness of Bruce Kirby.
Kirby
and his company's claims in the 2013 action were
complicated by uncertainty about whether they had standing to
maintain their claims. This arose from the fact that in 2008,
Bruce Kirby and his company sold to GSL his interest in the
Kirby Sailboat design as well as all contract rights under
the Head Agreement and Builder Agreements. In a prior ruling,
I concluded that this sale transferred to GSL all of
Kirby's and his company's contractual rights and
intellectual property rights relating to the design of the
Kirby Sailboat, subject to GSL's later licensing back of
the intellectual property rights to Kirby and his company.
See Bruce Kirby, Inc. v. Laserperformance (Europe)
Ltd., 2016 WL 4275576, at *3-*6.[1] This led me to conclude that
Kirby did not have standing to assert claims for rights that
he had sold to GSL, and I granted summary judgment against
Kirby and his company for lack of standing. Id. at
*7.
Following
a motion for clarification, I ruled that-apart from the
transfer of intellectual property rights relating to the
Kirby Sailboat-Kirby and his company had not sold
the BRUCE KIRBY® trademark to GSL. Doc. #312 at 3-4. This
in turn led me to advise the parties in the 2013 action that
I would now reconsider my grant of summary judgment as to the
non-contract based claims relating to the BRUCE KIRBY®
trademark. By simultaneous filing today, I am issuing a
supplemental ruling on the motion by LPE and QMI for summary
judgment. This supplemental ruling concludes in large part
that genuine fact issues remain as to the Kirby
plaintiffs' claims for a violation of the Lanham Act and
for misappropriation of likeness against QMI.
GSL was
named as a counterclaim defendant in the 2013 action. After I
ruled that the Kirby plaintiffs did not have standing to
allege their contractual causes of action arising from the
Builder Agreements, GSL sought leave to amend its pleading to
allege these contractual causes of action against LPE and
QMI. I denied that motion as untimely, Doc. #312 at 2-3, and
GSL then followed with the instant lawsuit (which has now
been consolidated with the 2013 action).
The
instant lawsuit names five defendants: LPE, QMI,
Laserperformance LLC (“LP”), Farzad Rastegar, and
Dory Ventures LLC (“Dory”). Rastegar and Dory are
alleged to control and dictate the building and sales
activities of LPE, LP, and QMI.
The
instant lawsuit includes eight counts that collectively
allege three kinds of claims: contract claims for breach of
the Builder Agreements, intellectual property claims for
violation of the Lanham Act, and unfair trade practice claims
in violation of CUTPA. Specifically, Claim I alleges a breach
of contract claim against LPE, and Claim II alleges a breach
of contract claim against QMI. These contract claims are not
at issue in the pending motion to dismiss.
Claims
III, IV, and V allege violations of the Lanham Act by all
five defendants (all based on actions by LP, LPE, and QMI
that were allegedly controlled by Rastegar and Dory). The
amended complaint alleges in relevant part that “LP is
assisting LPE selling Kirby Sailboats in the United States,
which is outside the territories originally authorized in the
Builders Agreement, ” and that “LP was never
authorized to sell Kirby Sailboats anywhere in the world at
any time, ” and “LPE has never been authorized to
sell Kirby Sailboats in the United States.” Doc. #327
at 11 (¶ 41). The amended complaint further alleges that
“LPE and QMI are building, selling, and/or
manufacturing Kirby Sailboats, as well as using components,
each despite having no authorization to do so.”
Ibid. (¶ 42).
In
addition, the amended complaint alleges that “the Kirby
Sailboats being built by LP, LPE and/or QMI since the
termination of the Builders Agreement are not properly
licensed, ” and that “LP, LPE and QMI, actively
and repeatedly misrepresent to the public that the boats
being sold are properly licensed Kirby Sailboats when they
are not, thereby deceiving the public.” Ibid.
(¶ 43). On this basis, the amended complaint alleges
that “LP, LPE and QMI are making false designation of
origin and/or descriptions of fact which are ‘likely to
cause confusion, or to cause mistake, or to deceive as to the
affiliation, connection or association . . . or as to the
origin, sponsorship, or approval of . . . goods, services or
commercial activities . . .'” and that
“[t]hese actions violate Section 43A of the Lanham
Act.” Ibid. (¶¶ 43 &
44).[2]
Claims
V, VI, and VII allege CUTPA violations by all five
defendants. The CUTPA claims are alleged in skeletal form and
largely based on the same factual ...