Gold Crest, LLC v. Project Light, LLC

• Decision Date: 10 March 2021
• Docket Number: Case No. 5:19-cv-2921
• Parties: GOLD CREST, LLC, Plaintiff, v. PROJECT LIGHT, LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

525 F.Supp.3d 826

GOLD CREST, LLC, Plaintiff,

v.PROJECT LIGHT, LLC, et al., Defendants.

Case No. 5:19-cv-2921

United States District Court, N.D. Ohio, Eastern Division.

Signed March 10, 2021

Konrad L. Trope, Law Office of Konrad L. Trope, Beverly Hills, CA, David A. Bernstein, Jay R. Campbell, Tucker Ellis, Cleveland, OH, Kyriacos S. Tsircou, Tsircou Intellectual Property Law, Los Angeles, CA, for Plaintiff.

David A. Welling, Choken Welling, Laura J. Gentilcore, Ray L. Weber, Renner, Kenner, Greive, Bobak, Taylor & Weber, Akron, OH, John D. Gugliotta, Law Office of John D. Gugliotta, Fairlawn, OH, for Defendants Project Light, LLC, Prospetto Light, LLC, Prospetto Lighting, LLC, Sam Avny.

Laura J. Gentilcore, Ray L. Weber, Renner, Kenner, Greive, Bobak, Taylor & Weber, Akron, OH, for Defendant Does.

Does, Pro Se.

MEMORANDUM OPINION AND ORDER

SARA LIOI, UNITED STATES DISTRICT JUDGE

This matter is before the Court on defendants' motion to dismiss plaintiff Gold Crest's ("Gold Crest") first amended complaint ("amended complaint") (Doc. No. 67 ["Am. Compl."]) pursuant to Fed. R. Civ. P. 12(b)(6). (Doc. No. 90. ["Mot."]; Doc. No. 90-1 (Memorandum in Support ["Mem."]).) Gold Crest opposed defendants' motion (Doc. No. 96 ["Opp'n"]), and defendants replied (Doc. No. 98 ["Reply"]). For the reasons that follow, defendants' motion is granted in part and denied in part.

I. Background

Gold Crest is the owner of the two design patents attached to the amended complaint—Design Patent No. US D769,512 (" ‘512 D. Patent") (Doc. No. 67-1) and Design Patent No. US D787,735 (" ‘735 D. Patent") (Doc. No. 67-2) (collectively, the "Design Patents").¹ (Am. Compl. ¶ 5.) The ‘512 D. Patent was registered by the United States Patent and Trademark Office ("USPTO") on October 16, 2016, and the ‘735 D. Patent was registered on May 23, 2017. Both remain in effect. (Id. ¶ 20.) The Design Patents depict a desk lamp with drawings, and the claim in each is for "the ornamental design for a light assembly as shown and described." (‘512 D. Patent at 451² ; ‘735 D. Patent at 458.) Gold Crest alleges that it has a reputation for high quality products and has made a substantial investment in advertising and promoting the products depicted in the Design Patents and has earned "residual goodwill and reputation" for being the sole source of these products. (Am. Compl. ¶ 21.)

Gold Crest asserts claims against four named defendants and ten John Does³ concerning the Design Patents. Three of the defendants are Ohio limited liability companies that sell lamps and lighting products, including products that allegedly infringe the Design Patents: (1) Project Light, LLC⁴ ("Project Light") with its principal place of business at 4976 Hudson Drive, Stow, Ohio; (2) Prospetto Lighting, LLC ("Prospetto Lighting") with its principal place of business at 4976 Hudson Drive, Stow, Ohio; and (3) Prospetto Light, LLC ("Prospetto Light") with its principal place of business at 1970 Miller Parkway, Streetsboro, Ohio. (Id. ¶¶ 6–8.) Plaintiff collectively refers to these three defendants as the "Corporate Defendants" and alleges that they share the same web address—www.projectlightinc.com—where their products are marketed and presented as coming from a single source. (Id. ¶¶ 9, 15-16.)

The fourth named defendant is an individual—Sam Avny ("Avny"). Gold Crest makes several factual allegations concerning Avny's relationship with the Corporate Defendants and attaches supporting documents to the amended complaint. (See id. ¶ 10; Doc. No. 67-3; id. ¶ 11; Doc. No. 67-4.) Gold Crest claims upon information and belief that Avny is the Managing Member of Project Light, Prospetto Light, and Prospetto Lighting, and an "officer and a guiding force behind the activities" of the Corporate Defendants at all times material to the amended complaint. (Id. ¶¶ 12–14.)

Plaintiff alleges that in 2017, the Corporate Defendants displayed and offered for sale a desk lamp (shown in photographs) at the "HD Expo" in Las Vegas, Nevada that infringes the Design Patents. (See id. ¶¶ 22–25.) Gold Crest claims that the "Corporate Defendants were made aware of their infringing activity in August 2017," responded through an individual identified as Mitch Stanley, and a settlement offer was circulated but communications were terminated by Project Light. (Id. ¶ 26.) Then in March 2019, Gold Crest sent a cease and desist letter to Project Light concerning a desk lamp displayed for sale on Project Light's website that is pictured and listed as item "D63," which plaintiff claims infringes the Design Patents. (Id. ¶¶ 27–29.) Gold Crest claims that "[a]n ordinary observer familiar with the prior art would be deceived into thinking that the design of the infringing products was the same as" the Design Patents, and that the Corporate Defendants are aware of their infringing conduct but have continued that conduct through the present time. (Id. ¶¶ 30–33.) Based upon these factual allegations, Gold Crest asserts nine claims for relief.

In the First and Second Claims, Gold Crest alleges that the Corporate Defendants directly and indirectly infringed the ‘512 D. Patent and ‘735 D. Patent, respectively, in violation of 35 U.S.C. § 271. (Id. ¶¶ 34–54.) In its Third Claim, Gold Crest claims that the Corporate Defendants engaged in illegal passing off and misappropriation of trademarks, trade names, and/or trade dress of plaintiff in violation of 15 U.S.C. § 1125(a). (Id. ¶¶ 55-59.)

Gold Crest's remaining six claims are asserted against Avny, whom Gold Crest alleges is an officer or controlling member of the Corporate Defendants who willfully encouraged, assisted, induced, caused, or materially contributed to the Corporate Defendants' alleged infringement and unfair competition with respect to the Design Patents: Claim Four—personal liability for unfair competition under 15 U.S.C. § 1125 (id. ¶¶ 60–65); Claim Five—vicarious liability for unfair competition under 15 U.S.C. § 1125 (id. ¶¶ 66–70); Claim Six—personal liability for infringement of ‘512 D. Patent under 35 U.S.C. § 271 (id. ¶¶ 71–75); Claim Seven—vicarious liability for infringement of ‘512 D. Patent under 35 U.S.C. § 271 (id. ¶¶ 76–80); Claim Eight—personal liability for infringement of ‘735 D. Patent under 35 U.S.C. § 271 (id. ¶¶ 81–85); and Count Nine—vicarious liability for infringement of ‘735 D. Patent under 35 U.S.C. § 271 (id. ¶¶ 86–90). For relief, Gold Crest seeks injunctive relief,⁵ monetary relief, and attorney fees. (See id. at 446–48).

II. Standard of Review

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) challenges the sufficiency of the complaint tested against the notice pleading requirements of Fed. R. Civ. P. 8(a)(2), which provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" Although this standard is liberal, Rule 8 still requires a complaint to provide the defendant with "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L.Ed. 2d 929 (2007). Thus, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true," to state a plausible claim. 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 ); see also Ryan v. Blackwell , 979 F.3d 519, 524 (6th Cir. 2020) ("When determining whether [plaintiff's] complaint meets this standard ‘we accept as true its factual allegations and draw all reasonable inferences in his favor, but we disregard any legal conclusions.’ ") (quoting Rudd v. City of Norton Shores , 977 F.3d 503, 511 (6th Cir. 2020) ) (further citation omitted).

A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). Plausibility "is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.’ " Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ " Id. at 679, 129 S. Ct. 1937 (quoting Fed. R. Civ. P. 8(a)(2) (second alteration in original)). In such a case, the plaintiff has not "nudged [its] claims across the line from conceivable to plausible, [and the] complaint must be dismissed." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. " ‘The plausibility of an inference depends on a host of considerations, including common sense....’ " Ryan , 979 F.3d at 524 (quoting 16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B. , 727 F.3d 502, 504 (6th Cir. 2013) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 )).

While a complaint need not set down in detail all the particulars of a plaintiff's claim, " Rule 8 ... does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Iqbal , 556 U.S. at 678–79, 129 S.Ct. 1937 (stating that this standard requires "more than an unadorned, the-defendant-unlawfully-harmed-me accusation"). That said, "[t]he pleading standard is generally construed quite liberally." Ryan , 979 F.3d at 524 (citing Sam Han v. Univ. of Dayton , 541 F. App'x 622, 625 (6th Cir. 2013) ). But "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

III. Discussion

Gold Crest claims that defendants' alleged infringement of the Design Patents violates 35 U.S.C. § 271 and constitutes unfair competition under 15 U.S.C. § 1125. In the motion, defendants argue that the amended complaint fails to state a claim against the Corporate Defendants and Avny for infringement...