Moroccanoil, Inc. v. Groupon, Inc.
Decision Date | 05 October 2017 |
Docket Number | Case No. CV 15–08078–AB (MRWx) |
Citation | 278 F.Supp.3d 1157 |
Court | U.S. District Court — Central District of California |
Parties | MOROCCANOIL, INC., Plaintiff, v. GROUPON, INC., et al., Defendants. |
Evan Pitchford, Eric Steven Engel, Heather Lynn Laird, Conkle Kremer and Engel PLC, Santa Monica, CA, for Plaintiff.
Laura L. Chapman, Toni Qiu, Sheppard Mullin Richter and Hampton LLP, San Francisco, CA, Deborah Ann Gubernick, J. Randall Boyer, Scott P. Shaw, Call and Jensen PC, Newport Beach, CA, Rom Bar–Nissim, Fox Rothschild LLP, Shanen Reid Prout, Law Office of Shanen R. Prout, Los Angeles, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART MOROCCANOIL'S MOTION, and DENYING GROUPON'S MOTION
Before the Court are Motions for Partial Summary Judgment filed by Plaintiff Moroccanoil, Inc. ("Moroccanoil") and Defendant Groupon, Inc. ("Groupon"). (Dkt. Nos. 168, 175.) Oppositions and replies, along with voluminous evidence, were filed with both Motions. The Court heard oral argument on September 22, 2017. For the following reasons the Court GRANTS in part and DENIES in part Moroccanoil's Motion, and DENIES Groupon's Motion.
Moroccanoil is the exclusive United States distributor of a hair oil referred to herein as Moroccanoil Treatment, and owns several trademarks it uses in connection with marketing its Moroccanoil Treatment. See First Amended Complaint ("FAC") ¶¶ 3, 4, 15. Moroccanoil alleges that between August and October 2015, Groupon sold, through its e-commerce marketplace, counterfeit Moroccanoil Treatment in packaging bearing Moroccanoil's trademarks and that used trade dress nearly identical to Moroccanoil's trade dress. FAC ¶¶ 21–22. Based on these allegations, Moroccanoil sued Groupon for (1) federal trademark infringement and counterfeiting, 15 U.S.C. § 1114 ; (2) federal false designation of original and unfair competition, 15 U.S.C. § 1125(a) ; (3) unfair competition and false advertising, Cal. Bus. & Prof. Code §§ 17200, 17500 ; and (4) common law unfair competition and conspiracy.
Moroccanoil also sued the individuals and business who supplied the counterfeit products. Those claims were all resolved by consent judgments and permanent injunctions.
Moroccanoil now moves for summary adjudication that "Groupon infringed Moroccanoil's trademark rights under 15 U.S.C. §§ 1114 and 1125(a) and violated Cal. Bus. & Prof. Code § 17200 et seq. , (1) by selling non-genuine Moroccanoil Treatment products bearing those trademarks, which products are materially different than the Moroccanoil Treatment products that are authorized by Moroccanoil, Inc. for sale in the United States, (2) by knowingly selling such materially different products, and (3) by selling Moroccanoil Treatment products that are counterfeit." Mot. 7:10–18. Thus, Moroccanoil is moving for summary adjudication as to Groupon's liability for its first three causes of action.
Groupon moves for summary adjudication as to Moroccanoil's claims for monetary relief on numerous grounds and for injunctive relief on the ground that it is moot.
A motion for summary judgment must be granted when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the initial burden of identifying the elements of the claim or defense and evidence that it believes demonstrates the absence of an issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the nonmoving party will have the burden of proof at trial, the movant can prevail merely by pointing out that there is an absence of evidence to support the nonmoving party's case. Id. The nonmoving party then "must set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 248, 106 S.Ct. 2505.
"Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ " Matsushita , 475 U.S. at 587, 106 S.Ct. 1348. The Court must draw all reasonable inferences in the nonmoving party's favor. In re Oracle Corp. Sec. Litig. , 627 F.3d 376, 387 (9th Cir. 2010) (citing Anderson, 477 U.S. at 255, 106 S.Ct. 2505 ). Nevertheless, inferences are not drawn out of thin air, and it is the nonmoving party's obligation to produce a factual predicate from which the inference may be drawn. Richards v. Nielsen Freight Lines, 602 F.Supp. 1224, 1244–45 (E.D. Cal. 1985), aff'd, 810 F.2d 898 (9th Cir. 1987). "[M]ere disagreement or the bald assertion that a genuine issue of material fact exists" does not preclude summary judgment. Harper v. Wallingford , 877 F.2d 728, 731 (9th Cir. 1989).
The two motions are focused on different issues so the Court will address them separately.
After reviewing Moroccanoil's Statement of Undisputed Facts, Groupon's Statement of Genuine Issues, and Moroccanoil's Response thereto, the Court finds that the following facts are not genuinely disputed.
Plaintiff Moroccanoil owns three Moroccanoil Trademarks that it uses in connection with its Moroccanoil brand hair and body care products, including a Moroccanoil Treatment hair care product featuring argan oil. (SUF 1–8.) All Moroccanoil Treatments bear at least one of the Moroccanoil Trademarks on the inner (bottle) and outer (box) packaging. (SUF 11, 28.) Moroccanoil Israel manufactures all of Moroccanoil's Moroccanoil Treatments for retail in 70 countries worldwide. (SUF 29–30.) Moroccanoil Israel customizes the packaging for each country by using specific language combinations, symbols, layouts, product instructions and information, and identification and contact information for the distributor to comply with each country's regulations and to appeal to consumers there. (SUF 31.)
Moroccanoil Treatment products authorized by Moroccanoil for sale in the United States ("U.S. Moroccanoil Treatment") are packaged in bottles and boxes specifically designed for use in the United States, and to comply with federal regulations and appeal to United States consumers. (SUF 35–37.) In particular, U.S. Moroccanoil Treatment products are in packaging with English as the primary language and either Spanish and/or French as the secondary language; they always express the net volume of their contents in fluid ounces to comply with U.S. law; the packaging identifies Moroccanoil as the distributor by name and address in California; include a toll-free U.S.number for consumers to contact Moroccanoil; and they bear a period-after-opening symbol to show the shelf-life of an opened product. (SUF 39, 42, 44, 46, 48.) All authentic Moroccanoil Treatments also include a matrix code on the inner packaging that is viewable through the outer packaging and scannable with a smartphone. (SUF 118.) Each unit has a unique matrix code that yields a unique alphanumeric sequence when scanned. (SUF 119, 120.)
Groupon is an online merchant that acquires products from third parties and re-sells them to consumers in the U.S. and elsewhere, including by using a "drop-ship" model whereby Groupon never takes possession of the good but instead he third-party ships them to the consumer. (SUF 50.) From August 21, 2015 until October 14, 2015, Groupon sold purported Moroccanoil Treatment products ("Groupon Treatment") to customers in the U.S. (SUF 52–54.) On August 22, 31, and September 9, Moroccanoil purchased three units of the Groupon Treatment, all of which were in packaging that bore Moroccanoil's Trademarks. (SUF 55–70, 116.) Each of the Groupon Treatment Moroccanoil purchased from Groupon had the same matrix code, thus indicating they are counterfeits. (SUF 122, 123.) Moroccanoil also had a forensic chemical laboratory test the contents of each of the three Groupon Treatments it purchased and determined they were not authentic. (SUF 129.)
The packaging of the Groupon Treatments Moroccanoil purchased also differed from the U.S. Moroccanoil Treatments in several ways, including: two of them had Spanish, not English, as the primary language and the other had Hebrew as the secondary language, which U.S. Moroccanoil Treatments never have (SUF 75–86); they did not display a toll-free United States customer service number, identify Moroccanoil as the distributor, and/or or provide distributor information in English (SUF 87–98); they did not state the net volume of the contents in fluid ounces (SUF 103–105); one did not include the period-after-opening symbol (SUF 107); and one includes a different ingredients in its ingredient list (SUF 109).
Groupon received a sample of a Groupon Treatment ("Sample Groupon Treatment") on September 16, 2015 and its packaging includes Moroccanoil Trademarks but its packaging differs from authentic Moroccanoil Treatments in most of the same ways as the three items Moroccanoil purchased. (SUF 71, 74, 77– 99–102; 106; 108; 110; 112.) The Sample Groupon Treatment was also leaking. Upon receipt of the Sample Groupon Treatment, Groupon was surprised that there was a language other than English on the packaging. (SUF 113.) Groupon received complaints from purchasers of the Groupon Treatment concerning, among other things, the authenticity of the item and noting that the packaging included unfamiliar languages. (SUF 115, Ex. 541.)
Moroccanoil seeks summary adjudication as to Groupon's liability for federal trademark infringement and unfair competition, and for unfair competition under § 17200 and California common law.1 "When trademark and unfair competition claims are based on the same infringing conduct, courts apply the same analysis to...
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