Yamaha Corp. of America v. ABC Intern. Traders, CV 86-7892-RSWL.

• Decision Date: 23 December 1988
• Docket Number: No. CV 86-7892-RSWL.,CV 86-7892-RSWL.
• Citation: 703 F. Supp. 1398
• Parties: YAMAHA CORPORATION OF AMERICA et al., Plaintiffs, v. ABC INTERNATIONAL TRADERS, CORP., et al., Defendant(s).
• Court: U.S. District Court — Central District of California

703 F. Supp. 1398

YAMAHA CORPORATION OF AMERICA et al., Plaintiffs, v. ABC INTERNATIONAL TRADERS, CORP., et al., Defendant(s).

No. CV 86-7892-RSWL.

United States District Court, C.D. California.

December 23, 1988.

Robert R. Thornton, Zobrist & McCullough, Los Angeles, Cal., Robert E. Wagner, Linda A. Kuczma, Wallenstein, Wagner, Hattis, Strampel & Aubel, Ltd., Chicago, Ill., for plaintiffs.

Larry C. Russ, Jeff Berke, Haines, Russ, McMurry & de Recat, John Carson, Gregory Wood, Nilsson, Robbins, Dalgarn, Berliner Carson & Wurst, Los Angeles, Cal., for defendant(s).

OPINION

LEW, District Judge.

Plaintiff Yamaha Corporation of America ("Yamaha-America") brought this action claiming that the importation and sale of Yamaha brand goods by defendant ABC International Traders Corporation ("ABC") violates various provisions of Federal and California law.¹ In this motion, ABC seeks summary judgment as to Counts III, IV, and V of Yamaha's first amended complaint. Count III alleges unfair trade practices actionable under California Business and Professions Code § 17200 and "common law." Count IV alleges dilution and injury to reputation pursuant to California Business and Professions Code § 14330. Count V alleges violations of the Tariff Act of 1930 § 526, 19 U.S.C. § 1526 and the Lanham Act § 42, 15 U.S.C. § 1124. A hearing was held on this matter October 17, 1988 at which time the Court heard argument and issued an order granting summary judgment to defendants on all three claims. The following shall constitute the Court's findings of fact and conclusions of law in support of that order.

I. FACTUAL BACKGROUND

Yamaha-Japan (formerly named Nippon Gakki Seizo Kabushiki Kaisha) is a Japanese corporation which manufactures, inter alia, electronic musical instruments and sound equipment. Yamaha-Japan affixes various of the trademarks at issue in this case to the equipment it produces. Plaintiff Yamaha-America is a California corporation wholly-owned by Yamaha-Japan. Until November 19, 1986, Yamaha-Japan was the registered owner of certain Yamaha trademarks as used on electronic musical instruments and sound equipment.² On that date, Yamaha-Japan assigned the Yamaha trademark registrations as used on electronic musical instruments and sound equipment to Yamaha-America. Yamaha-America is now the title holder to all of the U.S. registrations for the Yamaha trademarks as applied to electronic musical instruments and sound equipment.

Defendant ABC imports, distributes, advertises, warrants and provides support services for various brands of goods including genuine Yamaha brand electronic musical instruments and sound equipment.³ ABC's sale of and offer of services for genuine Yamaha brand goods is in direct competition with the sales and service provided by Yamaha-America. ABC uses the Yamaha trademarks in its advertisements for the genuine Yamaha brand goods it sells. ABC provides its own warranty and support services with respect to the various brands of goods which it distributes including Yamaha brand goods.

On December 28, 1987 Yamaha-America filed its First Amended Complaint. As noted above, Count III alleges unfair trade practices actionable under California Business and Professions Code § 17200 and "common law," Count IV alleges dilution and injury to reputation pursuant to California Business and Professions Code § 14330, and Count V alleges violations of the Tariff Act of 1930 § 526, 19 U.S.C. § 1526 and the Lanham Act § 42, 15 U.S.C. § 1124. The factual basis for each claim is ABC's alleged importation of goods bearing the Yamaha trademarks without the approval or sanction of Yamaha-America, the owner of those marks. The first Amended Complaint stated in pertinent part:

Notwithstanding YAMAHA's rights in its registered "Yamaha" Marks (sic), Defendants have been in the possession of, and have dealt in, advertised, offered for sale and sold in commerce, sound keyboards, digital synthesizers, FM tone generators, digital rhythm programmers, digital processor/reverbs, digital reverberators and 4 track recorders which were made by Nippon Gakki Seizo Kabushiki Kaisha and bearing marks identical or confusingly similar to one or more of plaintiffs' "Yamaha" marks, knowing that such goods were neither imported or placed in commerce by YAMAHA, the owner of the trademark registrations. (First Amended Complaint p. 13.) (emphasis added)

On August 26, 1988 ABC moved the Court for summary judgment as to the third, fourth and fifth claims for relief. The motion was timely opposed and the Court, after hearing oral argument, granted the motion in its entirety with findings of fact and conclusions of law to follow.

II. DISCUSSION

Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The burden of proving these elements falls on the moving party but the adverse party, in order to evade summary judgment, must provide the Court with some evidence that a genuine issue of fact does exist. Rule 56 states in pertinent part, "When a motion for summary judgment is made ... an adverse party may not rest upon the mere allegations or denials of his pleading, but his response by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." Interpreting this requirement, the Supreme Court, in Celotex v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986), held that the moving party is entitled to summary judgment when the non-moving party fails to make a sufficient showing on an essential element of his case with respect to which he will bear the burden of proof at trial.

It is the opinion of this Court that Yamaha-America has failed to make a sufficient showing on several elements of its claims against ABC.

COUNT III—ALLEGING UNFAIR BUSINESS PRACTICES IN VIOLATION OF CALIFORNIA BUSINESS AND PROFESSIONS CODE SEC. 17200 ET SEQ.

California Business and Professions Code § 17200 et seq. establishes a remedy for the broad tort of "unfair competition." Specifically, the statute makes actionable any "unlawful, unfair or fraudulent business practice" and any "unfair, deceptive or misleading advertising" practice. Yamaha has alleged that ABC has violated that statute by, 1) selling non-Yamaha goods that are labeled with the Yamaha name and trademark, 2) using the Yamaha name and trademark in offering "warranty" services to dealers and 3) misappropriating Yamaha's good will by engaging in those practices.

ABC contends that it has not violated § 17200 because it is selling genuine Yamaha goods and identifying them as such. They note that selling genuine Yamaha goods under the Yamaha trademark is not in any way false or misleading and thus is not actionable under Section 17200. ABC further argues that it does not hint or imply that it is an approved or authorized dealer of Yamaha products and that it places notices on all of the Yamaha goods they sell and all of the advertisements they produce that state that the goods are imported and distributed by ABC and not by Yamaha itself. ABC has provided declarations and samples of their advertising that support these contentions.

Yamaha-America has responded to the claims put forth by ABC by first stating that ABC's contention that it sells only genuine Yamaha products is not supported by any evidence. They note that ABC has steadfastly refused to produce documents which support their claim that the products they sell are genuine. Thus, they argue that at the very least there is an issue of fact surrounding the genuineness of the products sold by ABC. Second, Yamaha states that the critical determination to be made in this case is whether or not the sale of products and services bearing the Yamaha trademark is likely to cause confusion as to source or sponsorship. They argue that the very existence of the marks is likely to cause the purchaser of the product to believe that he or she is buying an "authorized" Yamaha product. Thus, they conclude, at the very least, there is a genuine issue of fact as to consumer confusion.

Yamaha-America is mistaken as to each contention. There is no triable issue of fact as to either the genuineness of the goods sold by ABC or the possibility of customer confusion. First, Yamaha alleged in its complaint that ABC was selling goods made by Yamaha-Japan. (Paragraph 13—Yamaha-Japan is then referred to as Nippon-Gakki.) This constitutes a judicial admission by Yamaha-America that the products sold by ABC are genuine Yamahas. Thus, Yamaha-America may not now claim that the issue of the genuineness of the products sold by ABC is disputed. "Statements made in pleadings may be admitted against the pleader as evidence in the form of judicial admissions ..." Janich Bros Inc. v. The American Distilling Co. 570 F.2d 848 (9th Cir.1977) (citations omitted). Plaintiffs' may not now controvert these previously admitted facts. Jurado v. Eleven-Fifty Corp, 813 F.2d 1406, 1410 (9th Cir.1987), Foster v. Arcata Associates, 772 F.2d 1453, 1462 (9th Cir.1985), cert. denied, 475 U.S. 1048, 106 S.Ct. 1267, 89 L.Ed.2d 576 (1986). Thus, the Court can accept as uncontroverted ABC's claim that the products they import are genuine.⁴

Second, Yamaha has not met its burden of establishing that a genuine issue of fact exists as to the consumer confusion as to source or sponsorship. ABC has submitted to the Court evidence that it disclaims any connection to Yamaha-Japan other than purveyor of its products. ABC does not state that it is officially sponsored or approved by Yamaha-Japan or Yamaha-America or that it can supply the purchaser with a Yamaha warranty or authorized service or training. More importantly, Yamaha-America has submitted no evidence that the sales of Yamaha...