Global Mfg. Group, LLC v. Gadget Universe.Com

• Decision Date: 01 February 2006
• Docket Number: No. 04-CV-2581LAB(NLS).,04-CV-2581LAB(NLS).
• Citation: 417 F.Supp.2d 1161
• Parties: GLOBAL MANUFACTURE GROUP, LLC, Plaintiff, v. GADGET UNIVERSE.COM, E.S. Buys, et al. Defendants.
• Court: U.S. District Court — Southern District of California

417 F.Supp.2d 1161

GLOBAL MANUFACTURE GROUP, LLC, Plaintiff, v. GADGET UNIVERSE.COM, E.S. Buys, et al. Defendants.

No. 04-CV-2581LAB(NLS).

United States District Court, S.D. California.

February 1, 2006.

COPYRIGHT MATERIAL OMITTED

John E. Engel, Law Offices of John E. Engel, Vista, CA, for Plaintiff.

Robert J. Lauson, Lauson and Associates, Manhattan Beach, CA, for Defendants.

ORDER GRANTING DEFENDANT GADGET UNIVERSE.COM'S MOTION FOR SUMMARY JUDGMENT OF TRADE DRESS CLAIM

Larry Alan BURNS, District Judge.

Defendant Gadget Universe.Com (Gadget) filed a motion for summary judgment in this intellectual property case involving a personal transport system for pedestrians. The electric scooter is the equivalent of a personal, portable moving sidewalk in that it allows the rider to travel at speeds three times faster than foot traffic and the rider stands upright. This motion concerns the trade dress claim brought pursuant to the Trademark Act of 1946 (Lanham Act). 15 U.S.C. §§ 1051-1127. Trade dress refers to the overall appearance of the product design, rather than its mechanics or a specific logo. Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 209-10, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000). Defendant Skymall, Inc., a distributor for Gadget, initially joined the motion, but then withdrew its joinder. Plaintiff Global Manufacture Group, LLC (GMG) requested oral argument, but the Court ordered the matter submitted on the briefs. For the reasons stated below, the Court grants the motion.

Factual Background¹

Plaintiff GMG named ten defendants in this action to protect its intellectual property rights in its motorized scooter, known as the "Q Electric Chariot" or the "Q." The name Q is based upon the name of the scientist in the James Bond movies "who creates all of 007's cool gadgets." Def.'s Ex. C at 25.²

The upright motorized scooter concept for pedestrians entered the market with wide spread public attention in 2001 when Dean Kamen of Segway LLC introduced its Segway® Human Transporter product. Def.'s Ex. A at 6, 9, 13-19 (listing worldwide media coverage, including a events such as a Segway Fest and Segway Polo; use by postal carriers and firefighters; and use at airports, zoos, and theme parks); Def.'s Ex. G at 81-83 (The New Atlantis, Summer 2004). Designed as an alternative to the traditional wheelchair, the Segway scooter operates on a battery rather than fuel, and enables a single rider to travel up to 12 miles per hour on sidewalks. The Segway design has only two wheels, and its gyroscope technology enables the rider to stand up and not lose his balance. Segway describes its "Independence IBOTO Mobility System" as "a self-balancing mobility device that enables users to climb stairs and negotiate sand, rocks, and curbs." Def.'s Ex. A at 7. That scooter sells for $5,000.

James Wang, the president and owner of Plaintiff GMG, admired the Segway product, and decided to create a simplified, less expensive product. Wang Decl. ¶ 4; see Def.'s Ex. G at 74 (BBC News interview with Wang dated Jan. 12, 2004) ("`When we saw the Segway, we thought it was not a bad idea,' said Mr. Wang, who decided there was room for a cheaper and simpler type of device."). In 2003, he developed his competing upright scooter. The first public disclosure of the "Q Electric Chariot" occurred in October 2003, when Wal-Mart carried the product on its website; however, the major advertising campaign began in January 2004, when Plaintiff exhibited the scooter at several trade shows. Def.'s Ex. F (2d Supp'l Resp. to Interrog. No. 13). The Q scooter was different than the Segway because it had four wheels for stability and did not have the gyroscope balancing system. Def.'s Ex. E at 7 (Supp'l Interrog. Resp. No. 6); Wang Depo. at 107 (Def.'s Ex. 3). It sells for approximately $1,000, and is carried at store fronts, such as Target and Pep Boys, and on the Internet. See Def.'s Exs. B & C; Wang Depo. at 259 (Def.'s Ex. 3); see also Def.'s Ex. 7 (June 2004 Popular Science magazine referred to Plaintiffs Q scooter as the "Poor Man's Segway"). Wang maintains that the scooter has a unique steering system which the rider can operate either by turning the handle bar for sharp turns or by leaning your body weight into the desired direction for a more gradual turn. The Q Electric Chariot also differs from the Segway because it can be converted to carry cargo by attaching a cargo rack to the motorized scooter.

Since mid-2004, Gadget has offered a Rietti Civic Mover Electric Scooter for sale on Internet websites for $700. Pl.'s Ex. 6b; Wang Decl. ¶ 14, 15. Like the plaintiffs Q, the Rietti has two large front wheels and two smaller back wheels to provide stability. Id.

In June 2005, the PTO issued a utility patent on the Q Electric Chariot on its seven claims regarding the steering method and the conversion to a cargo rack. Def.'s Ex. P (Patent No. 6,907,949 at 8:35 to 14). A few weeks later, in July 2005, the PTO issued a design patent for the ornamental design. Pl.'s Ex. 1 (Design Patent No. 507,206).

In this action, GMG alleges that defendants have infringed upon Plaintiffs intellectual property rights in the Q electric chariot. This motion, however, concerns only GMG's second cause of action for trade dress infringement, and is brought only by Defendant Global. Compl. ¶ 28-32; 15 U.S.C. § 1125(a)(3).

Discussion

A party is entitled to summary judgment if the record shows that there is no genuine issue of material fact. Fed. R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

"[T]rade dress may be protected if it is nonfunctional and has acquired secondary meaning and if its imitation creates a likelihood of consumer confusion." Fuddruckers, Inc. v. Doe's B.R. Others, Inc., 826 F.2d 837, 842. (9th Cir.1987), cited with approval in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769-70, 773-74, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). Plaintiff bears the burden of proving three elements of its trade dress infringement claim: (1) non-functionality; (2) secondary meaning; and (3) likelihood of confusion. Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1005 (9th Cir.1998). Because Plaintiff GMG bears the burden of proof on these elements, it must go beyond its own affidavits, arid designate the "specific facts" in interrogatories, depositions, and the other evidence produced in discovery showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. A dispute about a material fact is "genuine" "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ("Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.").

"[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 252, 106 S.Ct. 2505 (summary judgment standard evaluates "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law."). Conversely, "[i]f the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50, 106 S.Ct. 2505 (citations omitted).

I. Trade Dress

"The Lanham Act was intended to make `actionable the deceptive and misleading use of marks' and `to protect persons engaged in ... commerce against unfair competition.'" Two Pesos, 505 U.S. at 765, 112 S.Ct. 2753 (quoting 15 U.S.C. § 1127) (footnote omitted). "[T]he Lanham Act provides a remedy for a broad range of deceptive marking, packaging and marketing of goods or services in commerce." Fuddruckers, 826 F.2d at 841.

Courts long assumed that the definition of marks in the statute was broad enough to protect symbols, packaging, and the "dressing" of a product. Wal-Mart, 529 U.S. at 209, 120 S.Ct. 1339 ("we conclude likewise" that "trade dress constitutes a `symbol' or `device' for purposes" of § 42(a) of the Lanham Act). "`The "trade dress" of a product is essentially its total image and overall appearance.'" Two Pesos, 505 U.S. at 765 n. 1, 112 S.Ct. 2753 (quoting Blue Bell Bio-Medical v. Gin-Bad, Inc., 864 F.2d 1253, 1256 (5th Cir. 1989)). "It `involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.'" Id. (quoting John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir.1983)). Trade dress refers to the visual aspects of a product relating to its design or style. Leatherman Tool Group, Inc. v. Cooper Indus., Inc., 199 F.3d 1009, 1011 n. 3 (9th Cir. 1999) (trade dress may be defined as "entire design" or "overall appearance" of a product because "the basic connotation is `what the product looks like, viewed as a whole.'"); First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1381-82 (9th Cir.1987) (trade dress of yellow, F-style shaped one gallon jug containers of antifreeze); Fabrica, Inc. v. El Dorado Corp., 697 F.2d 890, 894-95 (9th Cir.1983) & appendix A (trade dress is "the total effect of the [] package on the eye and mind of an ordinary consumer," and protected plaintiff's tri-fold display folders for packaging carpet samples).

Courts traditionally protected the trade dress concept under the unfair competition provision of the Lanham Act. E.g., Vuitton Et Fils S.A. v. J. Young Enter., 644 F.2d 769, 772 (9th Cir.1981) (protecting physical details and design of a product); AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir.1979). "Protection of trade dress, no less than of trademarks, serves the Act's purpose to `secure to the owner of the mark the goodwill of...