K & K Promotions, Inc. v. Walt Disney Studios Motion Pictures

• Decision Date: 23 September 2021
• Docket Number: 2:20-CV-1753 JCM (NJK)
• Parties: K AND K PRODUCTIONS, INC., Plaintiffs, v. WALT DISNEY STUDIOS MOTION PICTURES, et al., Defendants.
• Court: U.S. District Court — District of Nevada

K AND K PRODUCTIONS, INC., Plaintiffs, v. WALT DISNEY STUDIOS MOTION PICTURES, et al., Defendants.

No. 2:20-CV-1753 JCM (NJK)

United States District Court, D. Nevada

September 23, 2021

ORDER

Presently before the court is defendants Walt Disney Studios Motion Pictures Group, PIXAR, and Disney Store USA, LLC's (collectively “Disney”) motion to dismiss. (ECF No. 23). Plaintiff K and K Promotions, Inc. (“K&K”) responded in opposition to Disney's motion to dismiss (ECF No. 27) to which Disney replied (ECF No. 28).

Also before the court is K&K's motion for leave to file a second amended complaint (ECF No. 41). Disney responded in opposition to K&K's motion for leave to file a second amended complaint (ECF No. 44) to which K&K replied (ECF No. 45).

Also before the court is K&K's motion to seal its motion for leave to file a second amended complaint (ECF No. 39).

I. BACKGROUND

Evel Knievel was a motorcycle daredevil beginning in the 1960's and into the early 1980's. (Am. Compl., ECF No. 18 ¶¶ 16, 24). He set multiple world records and captivated audiences with his death-defying jumps and spectacular falls like his failed jump over the fountain at Caesars Palace in 1967. (Id. ¶ 21). “America's premier stuntman” gained famed for his “iconic wardrobe: a white jumpsuit embellished only by star-spangled red, white, and blue patriotic insignia with a matching white cape and helmet and a motorcycle adorned by red, white, and blue colors.” (Id. ¶ 20).

“In 1973, Ideal Toys released the Evel Knievel Stunt Cycle, a toy which features a doll of Evel Knievel in his signature…jumpsuit and matching helmet.” (Id. ¶ 26). Additionally, the toy came with a red “energizer”, which wound up the toy to be released. (Id.).

K&K owns intellectual property and publicity rights for Evel Knievel, which includes trademarks, copyrights for audio/visual works, right to publicity, existing licenses contracts, and common law rights. (Id. ¶¶ 13-15).

Disney released the long-awaited Toy Story 4 in June 2019 featuring a new character alongside the usual cast of toys called Duke Caboom. (Id. ¶ 38). Duke Caboom rides a Canadian-flag-colored motorcycle and dresses in a white jumpsuit, helmet, and cape with Canadian insignia. (Id. ¶ 41). Duke Caboom is first introduced in Toy Story 4 by “Bo Peep” to the film's protagonist, “Woody”. (Id. ¶ 40). Woody and Bo Peep seek to enlist Duke Caboom's help in rescuing a runaway toy name “Forky, ” who is being held hostage by “Gabby Gabby, ” the film's antagonist. (Id.). Woody and Bo Peep need Duke Caboom to jump over an aisle in an antique store to do so, but Duke Caboom has insecurities about his stuntman abilities. (Id. ¶¶ 43-44).

Duke Caboom explains the source of his insecurity by flashing back to a 70s era scene where a child is playing with his Duke Caboom doll while watching the commercial advertisement for the “Duke Caboom Stunt Cycle.” (Id. ¶ 45). However, the toy could not perform as advertised in the commercial and Duke Caboom states, “[the child] threw me away!” (Id. ¶ 46). Bo Peep cheers Duke Caboom up by reminding him that they “need the only toy who can crash us onto Gabby's cabinet! Any duke Caboom toy can land. But you are the only one that can crash the way you do.” (Id. ¶ 47). Later, Woody and Duke board Duke Caboom's motorcycle together in preparation for jumping the antique store's aisle to which Woody successfully lands, but Duke does not. (Id. ¶¶ 48, 50). In the final stunt, Duke Caboom is encouraged to jump 40 feet across an amusement park and through lights fabricated to look like a ring of fire. (Id. ¶ 51). Once again, Duke Caboom fails and falls onto the floor. (Id.).

Disney promoted Toy Story 4 in Las Vegas and around the world with promotional materials that prominently featured Duke Caboom. (Id. ¶¶ 35-37, 52-55). Additionally, Disney manufactured and sold Duke Caboom merchandise including the “Disney Pixar Toy Story Stunt Racer Duke Caboom, ” which featured a Duke Caboom doll in a white jumpsuit with a cape and belt buckle adorned by a red Canadian insignia, and a matching helmet and motorcycle. (Id. ¶¶ 57-59). The toy also comes with a red “launcher.” (Id. ¶ 58). A similar toy was manufactured by Lego and Fisher-Price. (Id. ¶ 60). Duke Caboom merchandise is sold online and in retail stores in Nevada. (Id. ¶¶ 62-63).

Toy Story 4 actors, directors, and producers referenced the Evel Knievel inspiration for Duke Caboom in six separate interviews. (Id. ¶¶ 64-74). Consumers and critics quickly note the similarities between Evel Knievel and Duke Caboom. (Id. ¶¶ 75-89). K&K provides comparison photos between Evel Knievel, the original stunt cycle, Disney's Duke Caboom, and Disney's merchandise in its amended complaint. (Id. ¶¶ 20, 26-27, 31, 36, 42, 45, 58, 60, 89).

K&K brings claims under the Lanham Act, 15 U.S.C. § 1125, for false endorsement/false description, trade dress infringement, and trademark dilution. It also brings Nevada common law claims for trademark infringement/unfair competition, unjust enrichment, and a claim of right to publicity under NRS 597.770. Disney now moves to dismiss K&K's claims in full under Rule 12(b)(6) for failure to state a claim. (ECF No. 23).

II. LEGAL STANDARD

Federal Rule of Civil Procedure 8 requires every complaint to contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8. Although Rule 8 does not require detailed factual allegations, it does require more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). In other words, a complaint must have plausible factual allegations that cover “all the material elements necessary to sustain recovery under some viable legal theory.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007) (citation omitted) (emphasis in original); see also Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

The Supreme Court in Iqbal clarified the two-step approach to evaluate a complaint's legal sufficiency on a Rule 12(b)(6) motion to dismiss. First, the court must accept as true all well-pleaded factual allegations and draw all reasonable inferences in the plaintiff's favor. Iqbal, 556 U.S. at 678-79. Legal conclusions are not entitled to this assumption of truth. Id. Second, the court must consider whether the well-pleaded factual allegations state a plausible claim for relief. Id. at 679. A claim is facially plausible when the court can draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678. When the allegations have not crossed the line from conceivable to plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570; see also Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

If the court grants a Rule 12(b)(6) motion to dismiss, it should grant leave to amend unless the deficiencies cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Under Rule 15(a), the court should “freely” give leave to amend “when justice so requires, ” and absent “undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments . . . undue prejudice to the opposing party . . . futility of the amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962). The court should grant leave to amend “even if no request to amend the pleading was made.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (internal quotation marks omitted).

III. DISCUSSION

A. Lanham Act Claims and the Rogers Test

K&K brings three Lanham Act claims: trade dress infringement, false endorsement/false description, and trademark dilution regarding Toy Story 4, and its associated advertisements and merchandise. (ECF No. 18 ¶¶ 98-121). Because K&K alleges that Disney has used its protected intellectual property under the Lanham Act in an expressive work, the Rogers test applies. E.S.S v. Entertainment 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1100 (9th Cir. 2008) (adopting the Second Circuit's approach in Rogers for the intersection of trademark law and the First Amendment).

K&K argues that the application of the Rogers test does not apply to the work in question (ECF No. 27 at 17) but does not proffer sufficient evidence-even when drawing all inferences in its favor-that either a) the film Toy Story 4 should not be considered an expressive work or b) that the promotional advertising and merchandise related to the film, such as the Duke Caboom character, do not attach to the host expressive work when analyzing a trademark infringement claim within the Rogers framework.

It is axiomatic that a film is expressive. It is also well-established that advertising and the sale or licensing of consumer goods related to an expressive work like a film are incorporated into the same Rogers test analysis. Twentieth Century Fox TV v. Empire Distrib., Inc., 875 F.3d 1192, 1196-97 (9th Cir. 2017). Therefore, the Rogers test does indeed apply and guides the court's initial analysis of the Lanham Act claims here.

The Rogers test also properly applies at the motion to dismiss stage. Brown v. Electronic Arts, Inc., 724 F.3d 1235, 1247-48 (9th Cir. 2013) (district court properly dismissed Lanham Act claims under the Rogers test because plaintiff failed to allege sufficient facts to make out a plausible claim that survives the test); see also Gordon v. Drape Creative, Inc., 909 F.3d 257, 268 (9th Cir. 2018) (affirming dismissal with prejudice of Lanham Act claims as “the evidence was such that no reasonable jury could have found for the plaintiff on either prong of the Rogers test”); Dickinson v. Ryan Seacrest Enterprises, Inc., CV...