Nat'l Prods., Inc. v. Arkon Res., Inc.

• Decision Date: 14 February 2018
• Docket Number: NO. C15–1553–JPD,C15–1553–JPD
• Citation: 294 F.Supp.3d 1042
• Parties: NATIONAL PRODUCTS, INC., Plaintiff, v. ARKON RESOURCES, INC., Defendant.
• Court: U.S. District Court — Western District of Washington

294 F.Supp.3d 1042

NATIONAL PRODUCTS, INC., Plaintiff,

v.ARKON RESOURCES, INC., Defendant.

NO. C15–1553–JPD

United States District Court, W.D. Washington, at Seattle.

Signed February 14, 2018

Guinevere L. Jobson, Fenwick & West, San Francisco, CA, Elizabeth Hagan, Ewa M. Davison, Jeffrey A. Ware, Jessica M. Kaempf, David K Tellekson, Fenwick & West, Seattle, WA, for Plaintiff.

A. Eric Bjorgum, Marc A. Karish, Karish & Bjorgum, PC, Pasadena, CA, James Erik Breitenbucher, Fox Rothschild LLP, Jayson W. Sowers, Seattle, WA, for Defendant.

ORDER ON THE PARTIES' POST–TRIAL MOTIONS

JAMES P. DONOHUE, Chief United States Magistrate Judge

I. INTRODUCTION AND SUMMARY CONCLUSION

This matter comes before the Court on several post-trial motions filed by both parties, plaintiff National Products, Inc. ("NPI") and defendant Arkon Resources, Inc. ("Arkon"), following a five-day jury trial for trade dress infringement. Dkts. 182, 186, 188, 190, 196. The Court, having considered the parties' motions, all submissions filed in support of and opposition to the motions, the governing law, and the balance of the record, hereby ORDERS as follows: NPI's renewed Rule 50(b) motion for judgment as a matter of law that Arkon violated the Washington Consumer Protection Act (Dkt. 182) is DENIED; Arkon's unopposed motion to seal several exhibits (Dkt. 188) is GRANTED; Arkon's renewed Rule 50(b) motion for judgment as a matter of law (Dkt. 186) is DENIED; Arkon's motion for a new trial as to damages or remittitur (Dkt. 190) is DENIED, conditional upon NPI accepting a remittitur reducing the damages award from $193,598 to $167,239.55; and Arkon's motion to alter or amend the judgment (Dkt. 196) is DENIED.

II. DISCUSSION

A. NPI's Renewed Motion under Rule 50(b) for Judgment as a Matter of Law that Arkon Violated the Washington Consumer Protection Act

1. Background

The Court conducted a jury trial in this matter from December 4, 2017 to December 8, 2017, on NPI's claims against Arkon for infringement of NPI's federally registered trademark¹ in violation of the Lanham Act, 15 U.S.C. § 1114(1), as well as the Washington Consumer Protection Act ("WCPA"). NPI's trade dress is the hourglass shaped design of a mounting arm, which is used to attach a cell phone (or similar device) to a base in the interior of a vehicle. Arkon denied NPI's claims, arguing that NPI's trade dress was invalid as functional, as lacking secondary meaning, and as generic. Alternatively, if the jury found that NPI's trade dress was valid, Arkon argued that there was no infringement.

On December 8, 2017, the jury returned a verdict in NPI's favor on its trade dress infringement claim, finding that NPI's trade dress was valid, and infringed, and that the infringement was "deliberate or willful." However, the jury found in favor of Arkon on NPI's WCPA claim. The jury awarded NPI money damages in the amount of $193,598. Dkt. 177 (jury verdict). The Court entered judgment on December 11, 2017. Dkt. 179.

During the trial, NPI moved for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(a)(1) that Arkon had infringed NPI's hourglass shape trade dress, that this infringement was willful, and that Arkon's conduct violated the WCPA. Dkt. 169. NPI argued that the infringement took place in Washington, and that Arkon's conduct automatically satisfied four of the five elements necessary to establish a violation of the WCPA pursuant to Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co. , 105 Wash.2d 778, 780, 719 P.2d 531 (1986). With respect to the fifth and final element of the Hangman Ridge test, NPI argued that Arkon has not presented evidence of "usual or unforeseen circumstances" as required to show that the infringement did not satisfy the remaining "public interest" prong of the Hangman Ridge test. The Court denied NPI's Rule 50(a) motion on the record on December 7, 2017. Dkt. 170; Dkt. 195 (Karish Decl.), Ex. A (Trial Tr. 12/07/17).

Following the jury's verdict, NPI timely filed the instant renewed motion for judgment as a matter of law under Fed. R. Civ. P. 50(b). Dkt. 182. NPI argues that although the jury found in favor of Arkon on NPI's WCPA claim, Dkt. 177, this finding is incorrect as a matter of law because Washington law mandates that trademark infringement is a violation of the WCPA absent evidence of "unforeseen or unusual circumstances." See Nordstrom, Inc. v. Tampourlos , 107 Wash.2d 735, 740–42, 733 P.2d 208 (1987). NPI asserts that there was no evidence of "unforeseen or unusual circumstances" presented at trial, and the jury's finding that Arkon's infringement was willful establishes that it was of the kind that necessarily establishes a violation of the WCPA. Dkt. 182. Arkon responds that a finding of trademark infringement does not mandate a finding that the WCPA has been violated, and therefore the Court should not disturb the jury's reasonable finding as to NPI's WCPA claim. Dkt. 194.

2. Legal Standard for Rule 50(b) Motions

The Court may grant NPI's renewed motion for judgment as a matter of law on its WCPA claim if it "finds that a reasonable jury would not have a legally sufficient evidentiary basis" to find for Arkon on this claim. See Fed. R. Civ. P. 50(a). The Court must view the evidence and draw all reasonable inferences in favor of the nonmoving party, Arkon, in whose favor the jury returned its verdict on this claim. Ostad v. Oregon Health Sci. Univ., 327 F.3d 876, 881 (9th Cir. 2003). The jury's verdict is upheld if substantial evidence supports the jury's conclusion, even if a contrary conclusion could have been reached. Harper v.City of Los Angeles , 533 F.3d 1010, 1021 (9th Cir. 2008). Granting a motion for judgment as a matter of law is proper if "the evidence permits only one reasonable conclusion, and the conclusion is contrary to that reached by the jury." Id. Judgment as a matter of law "is appropriate when the jury could have relied only on speculation to reach its verdict." Lakeside–Scott v. Multnomah Cnty., 556 F.3d 797, 802–03 (9th Cir. 2009).

A proper post-verdict Rule 50(b) motion is limited to the grounds asserted in the pre-deliberation Rule 50(a) motion. EEOC v. Go Daddy Software, Inc., 581 F.3d 951, 961–62 (9th Cir. 2009). Thus, a party cannot properly raise arguments in its post-trial motion under Rule 50(b) that it did not raise in its pre-verdict Rule 50(a) motion. Id. (citing Freund v. Nycomed Amersham, 347 F.3d 752, 761 (9th Cir. 2003) ).

3. NPI's Washington Consumer Protection Act Claim

The Washington Consumer Protection Act, or WCPA, provides that "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." RCW 19.86.020. The Washington Supreme Court has held that a plaintiff bears the burden of proving the following elements to establish a violation of the WCPA: (1) an unfair or deceptive practice; (2) occurring in trade or commerce; (3) affecting the public interest; (4) that injures the plaintiff in his or her business or property; and (5) a causal link between the unfair or deceptive act and the injury suffered. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co. , 105 Wash.2d 778, 719 P.2d 531, 535–39 (1986). See also Nordstrom, Inc., 107 Wash.2d at 739, 733 P.2d 208.

This Court has stated on numerous occasions that federal claims under the Lanham Act and state claims under the WCPA are "substantially congruous," and "the elements necessary to establish a likelihood of confusion for...statutory unfair competition claims in Washington are the same as for federal trademark infringement and unfair competition." Safeworks, LLC v. Teupen Am. , LLC , 717 F.Supp.2d 1181, 1192 (W.D. Wash. 2010) ("The elements necessary to establish a likelihood of confusion for common law and statutory unfair competition claims in Washington are the same as for federal trademark infringement and unfair competition."). However, in recent years this Court has been more careful to acknowledge the Washington Supreme Court's holding that these elements are not necessarily "the same," and that there will be exceptional circumstances where a party's conduct constitutes trademark infringement, but not necessarily deceptive or unfair competition under the WCPA.

In Nordstrom v. Tampourlos , the Washington Supreme Court stated that typically such "confusion of the public [resulting from trade name infringement], absent some unusual or unforeseen circumstances , will be sufficient to meet the public interest requirement of the Consumer Protection Act. This is not a per se rule, but rather a function of what we perceive as the overlapping nature of proof in both trade name infringement cases and Consumer Protection Act violations." Nordstrom , 107 Wash.2d at 743, 733 P.2d 208. In Seattle Endeavors, Inc. v. Mastro , the Washington Supreme Court concluded that because the mark at issue was weak and the infringement was inadvertent, the plaintiff in that case had failed to establish the elements of a WCPA claim. 123 Wash.2d 339, 868 P.2d 120 (1994). Thus, the Washington Supreme Court's holding in Seattle Endeavors reaffirms that trademark infringement does not constitute a per se violation of the WCPA.

In Experience Hendrix L.L.C. v. HendrixLicensing.com, Ltd ., this Court denied a motion for summary judgment on a WCPA claim, despite granting summary judgment on a trademark infringement claim, because "the Washington Supreme Court made clear that trademark infringement does not necessarily establish a violation of the CPA[.]" Case No. 2:09-cv-285-TSZ, 2010 WL 5463822, *2 (W.D. Wash. 2010) (citing Seattle Endeavors , 12 Wash.2d at 350, 121 P.2d 365 ). The Court also noted that its prior decision in Lahoti v. Vericheck, Inc. , 708 F.Supp.2d 1150, 1168 (W.D. Wash. 2010), aff'd , 636 F.3d 501 (9th Cir. 2011), was in accord, and "does not support a per se argument." Id. at *2. Specifically, this Court observed that "the Lahoti court did not simply rest on a finding of...