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Parks, Millican & Mann, LLC v. Figures Toy Co.

United States District Court, E.D. Virginia, Norfolk Division

November 29, 2017

PARKS, MILLICAN & MANN, LLC, Plaintiff,
v.
FIGURES TOY COMPANY, and RING OF HONOR WRESTLING ENTERTAINMENT, LLC, Defendants.

          MEMORANDUM OPINION

          ROBERT G. DOUMAR UNITED STATES DISTRICT JUDGE

         This matter came before the Court upon the motions to dismiss filed by Figures Toy Company ("Figures"), and by Ring of Honor Wrestling Entertainment, LLC ("ROH") (collectively "Defendants"). ECF Nos. 27, 39. Immediately following the hearing held November 27, 2017, this Court granted those motions in part and denied those motions in part. ECF No. 46. This Memorandum Opinion sets forth the Court's reasoning behind its November 27, 2017 Order.

         I. PROCEDURAL AND FACTUAL HISTORY

         A. Procedural History

         Parks, Millican & Mann, LLC ("Plaintiff) filed its Complaint against Figures on September 2, 2016. ECF No. 1. On November 15, 2016, Plaintiff filed an Amended Complaint against Figures and Ring of Honor Wrestling Entertainment, LLC. ECF No. 6. On December 1, 2016, Figures filed a Motion to Dismiss, ECF No. 11, which Plaintiff opposed, ECF No. 15. Following a hearing, this Court ordered that Plaintiff and Figures file supplemental briefs regarding whether the Copyright Act preempts Count III, breach of contract and ordered that Plaintiff file a second amended complaint by May 2, 2017. ECF No. 17. Plaintiff and Figures filed their supplemental briefs on April 18, 2017. ECF Nos. 19, 20.

         Plaintiff filed its Second Amendment Complaint on May 2, 2017. ECF No. 21. Figures moved to dismiss the Second Amended Complaint on May 17, 2017. ECF Nos. 27-29. Plaintiff opposed the motion on May 31, 2017, ECF No. 32, and Figures replied on June 9, 2017, ECF No. 38. After being served and appearing in the case, on June 15, 2017, ROH moved to dismiss the Second Amended Complaint. ECF No. 39. Plaintiff opposed that motion on June 28, 2017, ECF No. 42, and ROH replied on July 5, 2017, ECF No. 43.

         On November 27, 2017, this Court held a hearing concerning Defendants' motions to dismiss. Immediately following that hearing, the Court issued a brief order granting Defendants' motions in part and denying them in part. ECF No. 46.

         B. Facts Alleged in the Second Amended Complaint

         According to Plaintiffs Second Amended Complaint, [1] Ring of Honor Wrestling Entertainment is a "form of fighting/wrestling competition that 'incorporates wrestling, mixed martial arts and high-flying'" and is "broadcast on television, pay-per-view, and at live events." ECF No. 21, at 1. Plaintiff is the designer and creator of ROH championship belts, which are custom-designed and custom-crafted belts given to the winners of ROH wrestling matches; each belt costs approximately $1, 000. Id. at 2, 4. ROH commissioned Plaintiff to design and craft these championship belts, including but not limited to the three following belts:

• The 2012 World Tag Team Championship Belt, for which PMM holds a U.S. copyright registration (the "Registered Tag Team Belt"). ECF No. 21-1.
The 2012 World Heavyweight Championship Belt, for which PMM applied for copyright registration in August 2016 (the "Unregistered Heavyweight Belt"). ECF No. 21-2.
The 2012 6 Man Style TV Wrestling Championship Belt, for which PMM applied for copyright registration in August 2016 (the "Unregistered 6 Man Style Belt"). ECF No. 21-3.

         Plaintiff also notes it "has not sold or licensed its design or product . . . other than providing the original championship belts to ROH." ECF No. 21¶16.

         According to Plaintiff, ROH recognized a potential demand for replicas of the championship belts and approached Plaintiff about manufacturing and selling such replica belts through an agreement with Figures, a company that manufactures and sells collectible action figures, toys, and merchandise based on sports and entertainment properties. ECF No. 21 at 2. Figures and Plaintiff began negotiating an agreement concerning the production and design of the replicas but "never came to a final resolution of the terms of such a deal." Id. According to Plaintiff, it "provided the designs for each championship belt to Figures so that Figures could set up production and obtain accurate cost estimates for the production runs." Id. ¶ 24. Then, "without consultation with [Plaintiff] and while [Plaintiff] and Figures were still negotiating, " Figures instead entered into a licensing agreement with ROH to produce the replica belts with Plaintiffs designs. Id. ¶19. The agreement was announced on October 28, 2014. Id. ¶ 37.

         Figures and ROH next began, pursuant to the terms of their agreement, manufacturing and selling full-size championship belts, rings, and action figure belts. Id. ¶ 34. According to Plaintiff, the production of these items involved the use of Plaintiff s designs without Plaintiffs authorization or approval. Id. ¶ 39. In addition, Plaintiff advises that in June 2015 Plaintiff discovered that Figures and ROH had removed Plaintiffs copyright notice from the belts and replaced it with a copyright notice for ROH. Id. ¶ 43. According to Plaintiff, Figures has now sold more than $60, 000 of copyright merchandise and holds approximately $100, 000 or more of full-size replica championship belts in its warehouse that infringe on Plaintiffs copyrighted designs. Id.¶ 55.

         Plaintiff alleges six counts[2] in its Second Amended Complaint: Intentional Violation of Copyright (Count I), ECF No. 21¶¶ 58-61, Breach of Contract (Count III), id ¶¶ 62-68, Tortious Interference with Contract/Business Expectancy (Count IV), id. ¶¶ 69-77, Business Conspiracy Under Va. Code Ann. § 18.2-500 (Count V), id. ¶ 78-81, Fraudulent Inducement (Count VI), id ¶¶ 82-91, Violation of the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. § 1202 (Count VII), Id. ¶¶ 92-99. In addition to damages, Plaintiff asks the Court to enjoin Defendants from selling or distributing any replicas that do not prominently display Plaintiffs copyright notice. Id. ¶¶ 100-105.

         II. LEGAL STANDARD

         The function of a motion to dismiss under Rule 12(b)(6) is to test "the sufficiency of a complaint." Occupy Columbia v. Haley. 738 F.3d 107, 116 (4th Cir. 2013). "[I]mportantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin. 980 F.2d 943, 952 (4th Cir. 1992). "To survive such a motion, the complaint must contain facts sufficient 'to raise a right to relief above the speculative level' and 'state a claim to relief that is plausible on its face.'" Haley, 738 F.3d at 116. When reviewing the legal sufficiency of a complaint, the Court must accept "all well-pleaded allegations in the plaintiffs complaint as true" and draw "all reasonable factual inferences from those facts in the plaintiffs favor." Edwards v. City of Goldsboro. 178 F.3d 231, 244 (4th Cir. 1999). Legal conclusions, on the other hand, are not entitled to the assumption of truth if they are not supported by factual allegations. Ashcroft v. Iqbal. 556 U.S. 662, 678 (2009).

         III. ...


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