Hylete, Inc. v. Hybrid Athletics, LLC
| Decision Date | 21 May 2020 |
| Docket Number | Case No.: 3:19-cv-02494-WQH-AGS |
| Parties | HYLETE, INC., a Delaware corporation, Plaintiff, v. HYBRID ATHLETICS, LLC, a Connecticut limited liability company; and ROBERT ORLANDO, an individual, Defendants. |
| Court | U.S. District Court — Southern District of California |
The matters pending before the Court are the Motion to File Documents Under Seal filed by Defendants Hybrid Athletics, LLC and Robert Orlando (ECF No. 15); the Motion to Dismiss and the Motion to Strike filed by Defendants Hybrid Athletics, LLC and Robert Orlando (ECF No. 17); and the Motion to File Documents Under Seal filed by Plaintiff Hylete, Inc. (ECF No. 19).
Plaintiff brings the following six causes of action: (1) fraudulent procurement of U.S. Trademark Registration No. 4,609,469 ("'469 Registration") against Defendant HA; (2) cancellation of the '469 Registration (fraud) against Defendant HA; (3) violation of Lanham Act 15 U.S.C. § 1125(a) (false advertising) against Defendants HA and Orlando; (4) violation of California Unfair Competition Law, Business and Professional Code § 17200 () against Defendants HA and Orlando; (5) violation of Connecticut Unfair Trade Practices Act (unfair methods of competition and unfair/deceptive acts or practices) against Defendants HA and Orlando; and (6) tortious interference with prospective economic advantage against Defendants HA and Orlando. See id. at 18-27. Plaintiff seeks injunctive relief, declaratory relief, lost profits, disgorgement of Defendants' profits, compensatory damages, treble damages, punitive and exemplary damages, costs, attorney's fees, and "other and further relief as the Court deems appropriate." See id. at 27-28.
On February 18, 2020, Defendants filed a Motion to File Documents Under Seal. (ECF No. 15). On the same day, Defendants filed a Motion to Dismiss all six of Plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6) and a Motion to Strike Plaintiff's fourth, fifth, and sixth claims pursuant to California's Anti-SLAPP Statute, Cal. Civ. Proc. Code § 425.16. (ECF No. 17). On March 9, 2020, Plaintiff filed a Motion to File Documents Under Seal. (ECF No. 19). On the same day, Plaintiff filed a Responsein opposition to Defendants' Motion to Dismiss and Motion to Strike. (ECF No. 21). On March 16, 2020, Defendants filed a Reply. (ECF No. 22).
Plaintiff "is a performance apparel company specializing in sales of apparel, footwear, gear, and accessories for individuals who are involved in active or 'fitness' lifestyles." (ECF No. 1 at 3-4). Defendant "Orlando is the sole owner and member of [Defendant] HA" and is "responsible for all aspects of [Defendant] HA's business and controls 100% of the business." Id. at 2.
Plaintiff "promotes, advertises, offers for sale and sells products to its consumers in the United States, including consumers who participate in functional fitness, cross-training and CrossFit" through "its HYLETE brand, and its registered trademarks" "as well as other marks which [Plaintiff] owns and uses (the 'Hylete Marks') ...." Id. at 4 (emphasis in original). Plaintiff "has expended significant time and resources in building a successful brand with an excellent reputation and goodwill in the industry." Id. at 5. "As a result of [Plaintiff]'s efforts, [Plaintiff] and its product have become known in the industry for, among other things, high quality performance apparel and excellent customer service." Id.
After Plaintiff was formed in March 2012, Plaintiff "reached out to numerous microinfluencers to help build awareness for [Plaintiff]'s brand." Id. "One such microinfluencer was [Defendant] Orlando." Id. In April 2012, Plaintiff "sent [Defendant] Orlando mockups of the Hylete Logo Mark and Hylete Word Mark and asked [Defendant] Orlando if he would be interested in a co-promotion agreement." Id. Defendant "Orlando declined [Plaintiff]'s offer ...." Id.
Defendant "Orlando accused [Plaintiff] of copying [Defendants'] marks." Id. Plaintiff "refuted [Defendant] Orlando's accusations and specifically explained to [Defendant] Orlando why the Hylete Marks were not confusingly similar to [Defendant] Orlando's or [Defendant] HA's marks, and that [Plaintiff] did not steal any marks from [Defendant] HA or [Defendant] Orlando." Id. "For years after this exchange, neither [Defendant] disputed [Plaintiff]'s representations." Id.
"When [Defendants] declined [Plaintiff]'s offer in ... April 2012, [Defendant] Orlando's popularity in the CrossFit community was rapidly declining." Id. at 5-6. "Subsequent to [Defendants] declining [Plaintiff]'s offer ..., [Plaintiff] started to become very successful." Id. at 6. "Upon realizing that he had missed out on a lucrative co-promotion opportunity with [Plaintiff] ..., [Defendant] Orlando became angry." Id.
"For example, beginning in ... 2013 and continuing to the present time, [Defendants] have told (and directed [Defendant] HA's employees to tell) [Plaintiff]'s customers and [Plaintiff]'s potential customers that [Plaintiff] stole and/or copied [Defendant] HA's trademarks, to boycott [Plaintiff] and to not buy [Plaintiff]'s products." Id. "Beginning in ... 2013 and continuing for several years thereafter, [Defendants] posted statements on social media stating that [Plaintiff] stole and/or copied [Defendant] HA's trademarks, and directing readers to boycott [Plaintiff] and not buy [Plaintiff]'s products." Id. at 7. "Beginning in ... 2013 and continuing until at least 2018, [Defendants] told (and directed [Defendants] HA's employees to tell) [Plaintiff]'s customers in Connecticut that [Plaintiff]stole and/or copied [Defendant] HA's trademarks, to boycott [Plaintiff] and to not buy [Plaintiff]'s products." Id.
"During a CrossFit event in 2013, [Defendants] told CrossFit that [Plaintiff] stole and/or copied [Defendant] HA's trademarks and told CrossFit to ban [Plaintiff] from all CrossFit events." Id. at 6-7. "CrossFit subsequently banned [Plaintiff] from all CrossFit events." Id. at 7. Defendant "Orlando indicated that he was happy to see [Plaintiff] suffer as a result of [Plaintiff] being banned from CrossFit events and that it 'felt good.'" Id.
"On January 30, 2013, [Plaintiff] filed its application to register is [Hylete Logo] [M]ark ... for use on ... '[a]thletic apparel, namely, shirts, pants, shorts, jackets, footwear, hats and caps.'" Id. at 5. "On October 16, 2013, [Defendant] HA filed a Notice of Opposition to [Plaintiff]'s application." Id. Defendants "coordinated with CrossFit to oppose [Plaintiff]'s application to register [Plaintiff]'s Logo Mark based on [Defendant] HA's fraudulent 'H' logo trademark application." Id. at 7.
"In 2015, [Defendants] coordinated with CrossFit to interfere with [Plaintiff]'s fundraising efforts by falsely telling a potential [Plaintiff] investor that [Plaintiff] engaged in 'flagrant theft' of [Defendant] HA's trademarks." Id. "The potential investor did not ultimately invest in [Plaintiff]." Id. Defendant "Orlando and CrossFit made similar statements to other potential investors in [Plaintiff]." Id.
Defendants "have alleged that CrossFit is and was at all relevant times [Defendants'] attorneys." Id.
Defendants' "statements that [Plaintiff] stole and/or copied [Defendant] HA's trademarks were false, misleading and injurious." Id. First, Defendant HA "had no valid protectable trademark rights in the purported HA trademarks." Id.
[Defendant] Orlando ... conceded in a recent deposition that he copied the 'Hybrid' mark from someone else, that the purported HYBRID ATHLETICS mark merely described [Defendant] HA's services, that the purported HYBRID ATHLETICS mark is generic for [Defendant] HA's services, and that numerous third parties have used and are using the identical marks or similar marks and, that for over ten years, [Defendant] HA failed to police any such third party uses.
Id. at 7-8 (emphasis...
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