Digital Dream Labs, LLC. v. Living Tech. (Shenzhen) Co.

Decision Date28 February 2022
Docket Number2:20-CV-01500-CCW
Citation587 F.Supp.3d 305
Parties DIGITAL DREAM LABS, LLC., Plaintiff, v. LIVING TECHNOLOGY (SHENZHEN) CO., Defendant.
CourtU.S. District Court — Western District of Pennsylvania

587 F.Supp.3d 305

DIGITAL DREAM LABS, LLC., Plaintiff,
v.
LIVING TECHNOLOGY (SHENZHEN) CO., Defendant.

2:20-CV-01500-CCW

United States District Court, W.D. Pennsylvania.

Signed February 28, 2022


David G. Oberdick, Kate E. McCarthy, Meyer, Unkovic & Scott LLP, Pittsburgh, PA, for Plaintiff.

Cecilia R. Dickson, Christian D. Ehret, Kent E. Baldauf, Jr., The Webb Law Firm, Pittsburgh, PA, for Defendant.

MEMORANDUM OPINION

CHRISTY CRISWELL WIEGAND, United States District Judge

Before the Court is Defendant Living Technology (Shenzhen) Co.’s (doing business as "Living.AI") (hereinafter, "Living.AI") Motion to Dismiss Plaintiff Digital Dream Labs, LLC's ("DDL") Second Amended Complaint. See ECF No. 29. For the reasons that follow, Living.AI's Motion will be GRANTED in part and DENIED in part.

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I. Background

A. Procedural History

This is a case about dueling interactive desktop robots. DDL's Second Amended Complaint contains three counts against Living.AI: (1) copyright infringement, (2) trademark infringement, and (3) trade dress infringement. See generally , ECF No. 27. Living.AI filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). See ECF No. 29. This Court has federal question jurisdiction under 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, and 1338(a).

B. The Second Amended Complaint's Factual Allegations

1. DDL's Intellectual Property Assets in VECTOR and COZMO

According to the Second Amended Complaint, DDL is a technology education company that sells and markets interactive robots, including VECTOR and COZMO. ECF No. 27 ¶¶ 5, 14. DDL acquired registered patents and trademarks for VECTOR and COZMO in 2019 when it acquired the intellectual property assets of another robotics company, Anki, Inc. Id. ¶¶ 15, 16. In particular, DDL acquired rights to all trademarks of VECTOR and COZMO.1 Id. ¶ 20. During this case, DDL applied for and received two copyright registrations—one for VECTOR and one for COZMO—covering the "three-dimensional sculpture and audiovisual work" of each robot, with an official registration date of November 13, 2020 (together, the "Robot Copyrights2 ").3

DDL contends that these two Robot Copyrights—one for COZMO and one for VECTOR—"cover the totality of [each robot's] three-dimensional sculptures and audiovisual works."4 DDL describes the three-dimensional sculptural work protected by the Robot Copyrights as being comprised of non-functional elements, including "the distinctive shape, respective sizes, orientations and structure of the head, face, and eyes of each robot." Id. ¶ 24. DDL describes the audiovisual work protected by the Robot Copyrights as sets of images, graphics, animations, and sounds. Id.

2. The COZMO, VECTOR, and EMO Robots

COZMO was introduced into the United States market by Anki in 2016, and VECTOR was introduced into the United States market in 2018. Id. ¶ 17. Living.AI

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markets a robotic desk companion named EMO. Id. ¶ 6.

On September 1, 2020, DDL became aware that Living.AI was marketing its EMO robot for release in the United States on social media platforms. Some platforms indicated that "VECTOR® and EMO are friends," and Living.AI uploaded a pre-launch marketing video to YouTube, which included a segment where VECTOR is placed next to EMO and EMO reacts. Id. ¶¶ 27–28; see also , id. ¶ 58 (contending on social media that "Emo can recognize Vector and Cozmo and they can be friends!"). DDL asserts that Living.AI created a false association between Living.AI's robot EMO and DDL's robots, by intentionally and knowingly including of segments of various marketing videos substantially similar to those used to promote COZMO to target current DDL customers and misrepresent a direct affiliation between EMO and VECTOR and COZMO. Id. ¶¶ 34–35.

On September 18, 2020, DDL's counsel sent a Notice of Infringement of Intellectual Property Rights to Living.AI asserting that the design, animations, graphics, and sound effects of EMO violated DDL's intellectual property rights. Id. ¶¶ 31; see also , ECF No. 27–9.

DDL has filed several notices and complaints of infringement with social media companies requesting that infringing content be removed, including Living.AI's Indiegogo global launch page and Kickstarter Page, see ECF No. 2 ¶¶ 29–30 (listing links that have been removed), ¶¶ 54–56 (describing content and takedown of Indiegogo page), ¶¶ 57, 64–65 (describing content and takedown of Kickstarter page). However, DDL alleges that Living.AI continues to create new social media posts and other Internet-based storefronts with infringing content. Id. ¶ 29.

3. The COZMO, VECTOR, and EMO Robots

DDL alleges that EMO's head, face, eye designs, sounds, animations, and graphics directly infringe on the Robot Copyrights. Id. ¶ 36. In doing so, DDL provides examples comparing EMO's facial animations, graphics and eye shape when EMO shows certain emotions or reacts to humans with the corresponding feature of COZMO and VECTOR. Id. ¶ 37 (describing response to question on weather), ¶¶ 47–48 (comparing sounds), ¶ 49 (alleging that Living.AI altered its marketing video to avoid the direct infringement of the Sound Copyrights), ¶ 50 (comparing animations), ¶ 51 (asserting that the sounds are direct copies in a lower tone), ¶ 52 (comparing facial expression graphics), ¶ 61 (comparing animations); see also , ECF No. 40-1 (providing updated chart).

4. Public Reaction to EMO and Association with DDL

DDL contends that even after Living.AI was notified of infringement, when confronted with questions about the affiliation between VECTOR and EMO, Living.AI has created and promoted a false connection and/or sponsorship by identifying VECTOR and EMO as "friends." Id. ¶¶ 32–33. DDL asserts that there are multiple references to "VECTOR[ ] and EMO are friends" throughout Living.AI's social media accounts, and the YouTube video directly infringed on the VECTOR Trademark. Id. ¶ 33.

Further, DDL highlights several social media posts and video responses from individuals, including technology reviewers, that have commented on the similarities between VECTOR, COZMO, and EMO, id. ¶ 66, assumed that EMO was an updated version of VECTOR and COZMO, id. ¶ 38, or otherwise attributed EMO to DDL, id. ¶¶ 44, 66. See also , id. ¶¶ 83–93; ECF No. 27-12 (social media posts).

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DDL contends that it suffered a "severe decline" in sales before and after the EMO Kickstarter launch and the search term "EMO" is now one of the top ten most searched terms on the DDL website. Id. ¶¶ 83, 89.

Following the removal of Living.AI's Indiegogo and Kickstarter pages, DDL discovered that EMO was being advertised on third party sites for the "bargain basement price" of $19.99, and that Living.AI continued to seek other avenues to begin selling EMO in the United States.5 ECF No. 27 ¶¶ 84–85. At the time of the Second Amended Complaint, Living.AI's website at https://www.living.ai offered EMO for sale directly, at a price which DDL notes seemed to fluctuate between $229.00 and $169.99. Id. ¶ 88. Further, DDL alleges that Living.AI has used the email list of Kickstarter users who originally pledged to solicit sales directly from potential customers by directing them to reorder EMO directly through their website (https://www.living.ai ). Id. ¶¶ 87–88.

5. Trade Dress

Finally, because DDL also brings a claim of trade dress infringement, the Second Amended Complaint sets out what DDL considers to be VECTOR's and COZMO's distinctive trade dress. The Court will address the specifics of the trade dress claim Section III.C below but briefly highlights the Second Amended Complaint's content here. DDL asserts that the trade dress, "both individually for certain components and collectively" comprises (i) non-functional design elements of the robots, such as the shape, respective size, orientation and design of the robot heads, face and eyes, (ii) sounds/voices, (iii) facial and eye images, graphics and animations, (iv) robot motions, and (v) the design of robot cube accessories." Id. ¶¶ 68, 69, 71 (noting that "[a]s further detail, but without limitation, examples of a portion of the various facial and eye images, graphics, and animations included in the VECTOR® and COZMO® trade dress are shown in the deposits for the [ ] [Robot] Copyrights"), 77 (characterizing such distinctive features as non-functional). DDL also contends that the COZMO and VECTOR robots’ cube accessories are "distinctively associated with DDL and each has [a] unique set of three symbols that are recognized by the robots and thereby provide direction," and have been featured in EMO promotional videos. Id. ¶¶ 72–74. DDL alleges that EMO "is [a] confusing and substantially similar imitation of both VECTOR and COZMO's trade dress," which "has caused and is likely to cause confusion, deception, and mistake by falsely associating Living.AI's EMO robot with DDL." See id. ¶¶ 79–82.

II. Standard of Review

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a claim. In reviewing a motion to dismiss, the court accepts as true a complaint's factual allegations and views them in the light most favorable to the plaintiff. See Phillips v. Cty. of Allegheny , 515 F.3d 224, 228 (3d. Cir. 2008). Although a complaint need not contain detailed factual allegations to survive a motion to dismiss, it cannot rest on mere labels and conclusions. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That is, "a formulaic recitation of the elements of a cause of action will not do." Id. Accordingly, "[f]actual allegations must be enough to

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raise a right to relief above the speculative level," id. , and be "sufficient ... to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). "The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than the...

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