Monster, Inc. v. Dolby Labs. Licensing Corp.

• Decision Date: 29 January 2013
• Docket Number: Case No. 12–cv–2488–YGR.
• Citation: 920 F.Supp.2d 1066
• Parties: MONSTER, INC., Plaintiff, v. DOLBY LABORATORIES LICENSING CORP., Defendant.
• Court: U.S. District Court — Eastern District of California

920 F.Supp.2d 1066

MONSTER, INC., Plaintiff,

v.DOLBY LABORATORIES LICENSING CORP., Defendant.

Case No. 12–cv–2488–YGR.

United States District Court,

N.D. California.

Jan. 29, 2013.

Alfredo Antonio Perez De Alejo, Robert P. Watkins, III, New York, NY, Douglas E. Lumish, Gabriel S. Gross, Redwood Shores, CA, Michelle Lee Landry, Kasowtiz, Benson, Torres & Friedman, San Francisco, CA, for Plaintiff.

George Riley, San Francisco, CA, Carlos Manuel Lazatin, Los Angeles, CA, for Defendant.

Order Denying Motion of Monster, Inc. for Summary Judgment And Granting Motion of Dolby Laboratories Licensing Corporation For Partial Summary Judgment

YVONNE GONZALEZ ROGERS, District Judge.

Plaintiff Monster, Inc. (“Monster”) filed its operative amended complaint for declaratory relief September 4, 2012 (“FAC,” Dkt. No. 42) seeking a judicial declaration that the Monster Headphone Mark does not infringe any trademark rights of Defendant Dolby Laboratories Licensing Corporation (“Dolby”) in its Dolby Headphone Mark. Monster's FAC alleges entitlement to declaratory relief on the following grounds: ( i ) no likelihood of confusion exists and therefore no trademark infringement under federal law, 15 U.S.C. § 1114, and California law, California Business & Professions Code § 14245 et seq.; ( ii ) no unfair competition occurred; and ( iii ) abandonment and cancellation of federal registration under 15 U.S.C. § 1119. ¹ Dolby filed its answer to the FAC on September 18, 2012. (“Dolby's Answer,” Dkt. No. 52). Dolby's answer to the FAC raises affirmative defenses including licensee estoppel.

Dolby filed its counterclaim on April 9, 2012 (“Cross–Complaint,” Dkt. No. 12). The Cross–Complaint alleges claims for federal trademark infringement, 15 U.S.C. § 1114 et seq., federal unfair competition, 15 U.S.C. § 1125; and California Unfair Competition, Cal. Business & Professions Code § 17200. Monster's answer to the Cross–Complaint (Dkt. No. 15) raises an affirmative defense that “Dolby's claims are barred because the use of headphones as a design element in a mark used in connection with consumer electronics products is not a protectable element of a mark because it is generic and/or aesthetically functional.”

The Court held a hearing on December 18, 2012. Attorneys Gabriel Gross and Douglas E. Lumish of Kasowitz, Benson, Torres & Friedman LLP appeared for Monster. Attorney George A. Riley of O'Melveny & Myers LLP appeared for Dolby.

Having carefully considered the arguments of the parties, the papers submitted, the evidence presented, and the pleadings in this action, and for the reasons set forth below, the Court hereby Denies Monster's Motion for Summary Judgment and Grants Dolby's Motion for Partial Summary Judgment.

I. Monster's Motion for Summary JudgmentA. Standards Applicable to the Motion

Monster moves for summary judgment on the grounds that no evidence supports Dolby's claims of likelihood of confusion and therefore the Cross–Complaint should be dismissed. Because of the “intensely factual nature of trademark disputes,” summary judgment is generally disfavored in trademark cases and should be granted “sparingly.” Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1202 (9th Cir.2012) quoting Interstellar Starship Servs., Ltd. v. Epix Inc., 184 F.3d 1107, 1109 (9th Cir.1999). Despite this disfavor, “summary judgment may be entered when no genuine issue of material fact exists.” Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625, 629–30 (9th Cir.2005)citing Thane Int'l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901–02 (9th Cir.2002).

Here, Monster's motion seeks judgment on Dolby's Cross–Complaint, as to which Dolby would ultimately bear the burden of proof at trial. Thus, a grant of summary judgment on the cross-complaint in Monster's favor only requires that Monster identify a lack of evidence supporting likelihood of confusion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Cohn v. Petsmart, Inc., 281 F.3d 837, 842 (9th Cir.2002).² Dolby must then respond with “sufficient evidence to permit a rational trier of fact to find that confusion is ‘probable,’ not merely ‘possible.’ ” M2 Software, Inc. v. Madacy Entm't, 421 F.3d 1073, 1084 (9th Cir.2005) citing Murray v. CNBC, 86 F.3d 858, 861 (9th Cir.1996); see also Cohn, 281 F.3d at 842;Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Management, Inc., 618 F.3d 1025, 1031 (9th Cir.2010).

B. Establishing Likelihood of Confusion

“The test for likelihood of confusion is whether a ‘reasonably prudent consumer’ in the marketplace is likely to be confused as to the origin of the good or service bearing one of the marks.” Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129 (1998). In determining whether to grant summary judgment on the question of likelihood of confusion, courts look to the factors set forth in the Ninth Circuit's decision in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979)abrogated on other grounds by Mattel, Inc. v. Walking Mountain Productions, 353 F.3d 792 (9th Cir.2003) ( “Sleekcraft ”). Those factors include: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines. Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1199 (9th Cir.2012) citing Sleekcraft, 599 F.2d at 348–49.

A party need not demonstrate that every factor favors it in order to prevail. Surfvivor Media 406 F.3d at 631. That some factors may favor the non-moving party does not necessarily mean that a triable issue of fact exists as to likelihood of confusion. Chesebrough–Pond's, Inc. v. Faberge, Inc., 666 F.2d 393, 398–99 (9th Cir.1982). Some Sleekcraft factors bear more heavily on the analysis than others, and the relative weight may vary depending on the nature of the case. See M2 Software, Inc. v. Madacy Entm't, 421 F.3d 1073, 1076, 1080 (9th Cir.2005); Brookfield, 174 F.3d at 1054. Depending upon the specific facts at issue, likelihood of confusion can be established based solely on two or three factors where there is a strong enough showing. See Lindy Pen Co., Inc. v. Bic Pen Corp., 796 F.2d 254, 257 (9th Cir.1986) (finding district court's conclusion of no likelihood of confusion was “clearly erroneous” where two key factors favored the plaintiff, even though five other factors did not); Park 'N Fly, Inc. v. Dollar Park & Fly, Inc., 782 F.2d 1508, 1509 (9th Cir.1986) (finding likelihood of confusion based upon strength of showing on two factors—similarity of the marks and convergent marketing channels—despite lack of evidence on other factors).

Courts have noted three general types of proof of likelihood of confusion: (1) survey evidence; (2) instances of actual confusion; and (3) inferences arising from the characteristics of the marks themselves and their use in the relevant marketplace context. See Dr. Seuss Enterprises, L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1404 (9th Cir.1997.) “In a close case amounting to a tie, doubts are resolved in favor of the senior user.” Id.

Monster argues that its survey evidence here, and the lack of survey evidence supporting Dolby's contentions, strongly favors a summary finding of no likelihood of confusion. Undoubtedly, survey evidence is “often the most persuasive” evidence concerning likelihood of confusion. Cairns, 24 F.Supp.2d at 1041. Moreover, a trier of fact may be entitled to presume that one party's failure to conduct a survey concedes that the survey evidence would be unfavorable to it. Id. However, survey evidence is not required to show likelihood of confusion. Midwestern Pet Foods, Inc. v. Societe des Produits Nestle S.A., 685 F.3d 1046, 1054 (Fed.Cir.2012); Cairns v. Franklin Mint Co., 24 F.Supp.2d 1013, 1041 (C.D.Cal.1998). The existence (or non-existence) of such evidence does not allow the Court to forego an analysis of the Sleekcraft factors.

C. Analysis of Sleekcraft Factors

For purposes of this motion, the parties do not dispute the impact of four of the eight factors on the Court's analysis. Thus, with respect to proximity of the goods in the marketplace, marketing channels used, and likelihood of expansion into overlapping areas (factors 2, 5, and 8, above), the parties concede, for purposes of this motion, that these factors favor a finding of likelihood of confusion. While the evidence of expansion concerns Monster, rather than Dolby, it is the question of future expansion of product lines into the same markets, rather than who is planning to expand, that is the focus of this factor. Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1394 (9th Cir.1993) quoting Sleekcraft, 599 F.2d at 354 (“a strong possibility that either party may expand his business to compete with the other will weigh in favor of finding that the present use is infringing.”) Likewise, the parties agree that the record does not contain any evidence of actual confusion (factor 4 above), a factor weighing against likelihood of confusion. Four of the eight Sleekcraft factors remain. The Court addresses each in turn.

1. Similarity of the Marks

The “similarity of the marks” factor considers the marks in their entirety, as they appear in the marketplace. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1206 (9th Cir.2000). The inquiry focuses on the overall impression created by the mark, rather than the individual features. adidas-Am., Inc. v. Payless Shoesource, Inc., 546 F.Supp.2d 1029, 1052 (D.Or.2008) citing Exxon Corp. v. Texas Motor Exch. of Houston, Inc., 628 F.2d 500, 505 (5th Cir.1980). Similarities between the marks are weighted more heavily than differences. GoTo.com, 202 F.3d at 1206.

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