Amarte USA Holdings, Inc. v. Kendo Holdings Inc. ( 2024 )

1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 AMARTE USA HOLDINGS, INC., Case No. 22-cv-08958-CRB 9 Plaintiff, ORDER DENYING MOTION FOR 10 v. JUDGMENT ON THE PLEADINGS 11 KENDO HOLDINGS INC., et al., 12 Defendants. 13 Plaintiff Amarte USA Holdings, Inc. (“Plaintiff”) sued Defendants for various 14 trademark infringement violations arising out of Defendants’ alleged sale of Marc Jacobs 15 Beauty EYE-CONIC eyeshadow. See Compl. (dkt. 1). During the litigation, the Court 16 granted Kendo leave to amend its answer to add a counterclaim for trademark cancellation. 17 See Order on Mot. to Amend (dkt. 96). Amarte now moves for judgment on the pleadings 18 on Kendo’s counterclaim. See Mot. (dkt. 125). 19 The Court finds the matter suitable for resolution without hearing oral argument, 20 pursuant to Civil Local Rule 7-1(b). Because Kendo plausibly states a claim for 21 cancellation of Amarte’s trademark registration, Amarte is not entitled to judgment on the 22 pleadings and the Court DENIES the motion. 23 I. BACKGROUND 24 A. The Litigation 25 Plaintiff Amarte USA Holdings, Inc. manufactures, advertises, markets, promotes, 26 distributes, and sells high-end skin care products, including an anti-wrinkle eye cream 27 bearing the mark EYECONIC. Compl. ¶¶ 15, 16, 17. Amarte asserts that it has common 1 cosmetics; eye creams.” Id. ¶¶ 15, 18, 19. Amarte also alleges that Defendants use or 2 have used an almost identical mark, EYE-CONIC, to sell their eye makeup palettes. Id. ¶¶ 3 18, 19. According to Amarte, Defendants’ use of the mark is likely to cause customer 4 confusion about whether Defendants’ makeup palettes originate from the same source as, 5 or are otherwise affiliated with, Amarte’s products. Id. ¶¶ 33, 34. 6 Amarte sued Defendants Kendo Holdings Inc., Marc Jacobs International, LLC, 7 Sephora USA, Inc., and The Neiman Marcus Group LLC (collectively, “Defendants”), for 8 violations of the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a), a violation of 9 California’s unfair competition statute, Cal. Bus. & Prof. Code § 17200, and for common 10 law trademark infringement and common law passing off and unfair competition. See 11 Compl. at 1. Both parties moved for summary judgment on Amarte’s claims. See Defs’ 12 MSJ (dkt. 91); Pl.’s MSJ (dkt. 106). Those motions are pending before this Court. 13 B. The Counterclaim 14 During the litigation, Kendo moved for leave to amend its answer to add a 15 counterclaim for cancellation of Amarte’s EYECONIC trademark registration based on 16 non-use. See Mot. to Amend (dkt. 81) at 3 (citing 15 U.S.C. §§ 1064, 1119). Under the 17 Lanham Act, a trademark registration can be cancelled “[a]t any time after the 3-year 18 period following the date of registration, if the registered mark has never been used in 19 commerce on or in connection with some or all of the goods or services recited in the 20 registration.” See 15 U.S.C. § 1064(6). 21 Amarte’s trademark registration for the EYECONIC mark is for “eye cosmetics; 22 eye creams.” Compl. ¶ 19. In its motion for leave to amend, Kendo argued that Amarte 23 has only used its EYECONIC mark in connection with one product, an eye cream, and has 24 never used it in connection with an eye cosmetic. See Mot. to Amend. Because Amarte 25 has not used its registered mark “in connection with some . . . of the goods or services 26 recited in the registration,” Kendo argued that Amarte’s trademark registration should be 27 cancelled. See 15 U.S.C. § 1064(6) (emphasis added). Amarte opposed the motion, 1 cosmetic, and even if not, its trademark registration should only be cancelled in part rather 2 than in entirety. See Opp’n to Mot. to Amend (dkt. 86). The Court granted Kendo leave to 3 amend to add the counterclaim, concluding that Kendo plausibly stated a claim for 4 cancellation of Amarte’s trademark registration. See Order on Mot. to Amend at 18, 21. 5 C. Pending Motion 6 After the Court granted leave, Kendo amended its answer to add the counterclaim, 7 see Amended Answer (dkt. 99), to which Amarte filed an answer, see Answer to 8 Counterclaim (dkt. 107). Amarte then moved for judgment on the pleadings on Kendo’s 9 counterclaim. See Mot. (dkt. 125). That motion is now fully briefed and pending before 10 the Court. See Opp’n to Mot. (dkt. 130); Reply (dkt. 132). 11 II. LEGAL STANDARD 12 “After the pleadings are closed—but early enough not to delay trial—a party may 13 move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). Judgment on the pleadings is 14 proper when the moving party “clearly establishes on the face of the pleadings that there is 15 no material issue of fact and that the moving party is entitled to judgment as a matter of 16 law.” Hal Roach Studios, Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1550 (9th Cir. 17 1990). A Rule 12(c) motion is “functionally identical to a Rule 12(b)(6) motion,” so the 18 same standard of review applies. Gregg v. Haw., Dep't of Pub. Safety, 870 F.3d 883, 887 19 (9th Cir. 2017) (quoting Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 20 (9th Cir. 2011)). 21 “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a 22 cognizable legal theory or sufficient facts to support a cognizable legal theory.” 23 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive 24 a Rule 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is 25 plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is 26 facially plausible when a plaintiff pleads “factual content that allows the court to draw the 27 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 1 “accept factual allegations in the complaint as true and construe the pleadings in the light 2 most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 3 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, courts do not “accept as true allegations 4 that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” 5 In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 6 III. DISCUSSION 7 To state a claim for cancellation of a trademark registration, a party must 8 demonstrate that “(1) there is a valid ground why the trademark should not continue to be 9 registered and (2) the party petitioning for cancellation has standing.” Star-Kist Foods, 10 Inc. v. P.J. Rhodes & Co., 735 F.2d 346, 348 (9th Cir. 1984) (citation omitted). A 11 trademark may be cancelled, “at any time after the 3-year period following the date of 12 registration, if the registered mark has never been used in commerce on or in connection 13 with some or all of the goods or services recited in the registration.” 15 U.S.C. § 1064. 14 It is undisputed that Kendo has standing to assert its counterclaim and that more 15 than three years have lapsed since Amarte registered the EYECONIC trademark in 2013. 16 See Compl. ¶ 19; see also Order on Mot. to Amend at 18. The remaining issue, then, is 17 whether Kendo plausibly alleges that Amarte has only used its EYECONIC mark in 18 connection with “some” of the goods cited in the registration. 19 Amarte argues that Kendo fails to plausibly state a claim for cancellation because, 20 although it has only used the EYECONIC mark in connection with an eye cream, its eye 21 cream qualifies as both an “eye cream” and an “eye cosmetic.” See Mot. at 1–2. “Given 22 that the purpose of an eye cream is to improve facial appearance, and cosmetics are 23 defined as products to be applied to the face and body to improve appearance,” Amarte 24 contends that “it is clear that an eye cream is also an eye cosmetic.” Id. Amarte also asks 25 the Court to take judicial notice of several definitions of “cosmetics,” which it argues 26 demonstrate that its eye cream fits into the broad category of eye cosmetics. See id. at 2– 27 3; Req. for Judicial Notice (dkt. 126). Additionally, Amarte cites Tri-Star Marketing, LLC 1 product—sparkling wine—supported a trademark registration for both “wines” and 2 “sparkling wines.” 84 U.S.P.Q.2d 1912, 2007 WL 2460996, at *1 (T.T.A.B. 2007). 3 In its opposition, Kendo first argues that Amarte’s motion for judgment on the 4 pleadings is an impermissible motion for reconsideration. See Opp’n to Mot. at 9. Kendo 5 asserts that Amarte merely repackages the same arguments it made when opposing 6 Kendo’s motion for leave to amend and fails to follow the procedural requirements for a 7 motion for reconsideration. Id. It is true that this Court previously held that Kendo 8 plausibly alleged its counterclaim for trademark cancellation and therefore permitted 9 Kendo to amend its answer to add the counterclaim. See Order on Mot. to Amend at 18. 10 However, the Court uses its discretion to address Amarte’s motion on the merits, given that 11 this is Amarte’s first Rule 12 motion on the issue and that Amarte now asks the Court to 12 judicial notice of various evidence. See Req. for Judicial Notice. 13 Still, Amarte fails to demonstrate why the Court should change its conclusion on the 14 merits. Kendo alleges that Amarte has used its EYECONIC mark on an eye cream, but 15 never “in connection with any eye cosmetic,” the other good cited in the registration. See 16 Amended Answer at 16. Amarte agrees that it has only used the mark on one product, its 17 eye cream. Mot. at 2. Accordingly, Kendo alleges sufficient facts to plausibly state a 18 claim for cancellation of Amarte’s EYECONIC mark for non-use. See 15 U.S.C. § 1064. 19 The dispute that Amarte raises is one of material fact—whether Amarte’s eye cream 20 should be categorized as an eye cosmetic. Amarte asks the Court to take judicial notice of 21 several definitions, which in Amarte’s opinion, demonstrate than an eye cream is an eye 22 cosmetic. Mot. at 2–4. But while the Court can take judicial notice of the definitions from 23 Amarte, it cannot use the definitions to resolve reasonably disputed questions of material 24 fact. See Best Buy Stores, LLC, 859 F. Supp. 2d 1138, 1145–46 (E.D. Cal. 2012) 25 (“[W]hile courts may consider dictionary definitions when determining the ‘plain, 26 unambiguous, and common meanings of terms,’ . . . they may not judicially notice any 27 matter that is reasonably disputed.) (citation omitted). Here, reasonable jurors could 1 |} Amarte’s definitions to resolve that issue of fact. Although a factfinder may ultimately 2 || conclude that Amarte’s arguments have merit, this Court cannot make such a 3 || determination at the pleadings stage. In sum, Amarte has not “clearly establish{ed] on the 4 || face of the pleadings that there is no material issue of fact.” See Hal Roach Studios, 896 5 || F.2d at 1550.! 6 Because Kendo has plausibly stated “factual content that allows the court to draw 7 || the reasonable inference” that Amarte’s trademark registration is subject to cancellation for 8 |} non-use, Amarte is not entitled to judgment on the pleadings. See Iqbal, 556 U.S. at 678. 9 || Iv. CONCLUSION 10 The Court DENIES Amarte’s motion for judgment on the pleadings. 11 I2 IT ISSO ORDERED. 13 Dated: August 8, 2024 cf CHARLES R. BREYER 14 United States District Judge 15 Oo 16 17 18 19 20 21 22 23 24 25 760 Wa Amarte also asserts that a single product can support a trademark registration that lists 27 || both a broad and specific description of the product. See Mot. at 5-6. The Court need not reach this issue because even assuming that Amarte is correct as a general matter, there is 2g || still an issue of material fact as to whether Amarte’s eye cream supports both of the goods in its registration.