Bruce Kirby, Inc. v. Laserperformance (Europe) Ltd.

          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 ...