United States District Court, W.D. Virginia, Charlottesville Division
ROTHY'S, INC. Plaintiff,
JKM TECHNOLOGIES, LLC, et al.. Defendants.
Michael F. Urbanski Chief United States District Judge.
Rothy's, Inc. ("Rothy's") manufacturers and
markets a ballet flat shoe named The Flat. Defendant JKM
Technologies, LLC d/b/a OESH Shoes ("JKM")
manufacturers and markets a competing ballet flat shoe named
the Dream Flat. Rothy's filed suit, alleging patent
infringement and Lanham Act violations against defendants JKM
and Dr. Casey '' Kerrigan (collectively,
"Defendants"), based on perceived similarities
between The Flat and the Dream Flat.
matter comes before the court on Defendants' Motion to
Dismiss Pursuant to Rule 12(B)(6) (the "Motion"),
ECF No. 19. Defendants ask the court to dismiss Kerrigan in
toto, and dismiss the Lanham Act claims from
Rothy's Complaint (the "Complaint" or
"Compl."), ECF No. 1. For the reasons discussed
below, the Motion will be GRANTED with
respect to Kerrigan, and DENIED with respect
to the Lanham Act claims.
Rothy's Inc. manufacturers a ballet flat shoe named the
Flat ("The Flat").The Flat "has a distinctive
shape and design such that it is recognized by consumers of
footwear." Compl. ¶ 12. The Flat is "designed
and seamlessly manufactured from recycled bottles using a
proprietary 3D knitting process." Id. ¶ 9.
This combination of features constitutes the trade dress of
The Flat. To that end, Rothy's alleges that the shape and
ornamental design of The Flat is nonfunctional. Id.
Flat "quickly gained success in the market, selling more
than $40 million dollars of product, and earn[ed] a
reputation with consumers for its design, the comfortable fit
and lightweight and extremely attractive aesthetic."
Id. ¶ 11. The Flat has also received
substantial media attention. Id. ¶ 14.
March 20, 2018, Defendants, or someone acting on their
behalf, purchased a pair of The Flat, where it was shipped to
JKM's headquarters. Id. ¶ 19. Defendants
began reviewing, researching, and copying The Flat.
Id. ¶ 20. Around June 2018, Defendants began
marketing a competing flat called the Dream Flat ("The
Dream Flat"). The "shape, design and look [of The
Dream Flat] ... is virtually identical to Rothy's The
Flat product." Id. ¶ 21. Additionally, the
look of The Dream Flat causes confusion among consumers.
Id. ¶¶ 22-23. Defendants have profited
from sale of The Dream Flat. Id.
Motion to Dismiss
move under Federal Rule of Civil Procedure 12(b)(6) to
dismiss all claims against Kerrigan and all Lanham Act claims
against both Defendants.
12(b)(6) permits a dismissal when a plaintiff fails "to
state a claim upon which relief can be granted."
Fed.R.Civ.P. 12(b)(6). To survive a Rule 12(b)(6) motion to
dismiss, a complaint must contain sufficient "facts to
state a claim to relief that is plausible on its face."
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). The complaint's "[f]actual allegations must
be enough to raise a right to relief above the speculative
level." Id. at 555.
must construe factual allegations in the nonmoving
party's favor and will treat them as true, but is
"not so bound with respect to [a complaint's] legal
conclusions." Dist. 28. United Mine Workers of Am.,
Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085 (4th
Cir. 1979). Indeed, a court will accept neither "legal
conclusions drawn from the facts" nor "unwarranted
inferences, unreasonable conclusions, or arguments."
E. Shore Mkts., Inc. v. J.D. Assocs. Ltd.
P'ship, 213 F.3d 175, .180 (4th Cir. 2000). Further,
"[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Only after a claim is stated adequately may it then
"be supported by showing any set of facts consistent
with the allegations in the complaint."
Twombly, 550 U.S. at 563.
adjudicating a motion to dismiss, "a court evaluates the
complaint in its entirety, as well as documents attached or
incorporated into the complaint." E.I. du Pont de
Nemours & Co. v. Kolon Indus.. Inc., 637 F.3d 435,
448 (4th Cir. 2011). A court cannot stray from these
documents on Rule 12(b)(6). "[I]f it does, it converts
the motion into one for summary judgment." Id.
Converting a motion to dismiss into a motion for summary
judgment "is not appropriate where the parties have not
had an opportunity for reasonable discovery."
pleads all counts in the Complaint against both Kerrigan, in
her personal capacity, and JKM. Kerrigan moves to dismiss all
claims against her. Kerrigan argues that Rothy's fails to
plead any facts sufficient to pierce the corporate veil and
establish personal liability against her.
corporation exists as a legal entity separate and distinct
from its corporate shareholders." Cancun Adventure
Tours, Inc. v. Underwater Designer Co., 862 F.2d 1044,
1047 (4th Cir. 1988). Usually, then, "each
shareholder's responsibility for the acts of a
corporation is limited to the shareholder's investment in
that corporation." Id. Under most
circumstances, a corporation's shareholders may be held
liable for the corporation's debts only through veil
piercing. See C.F. Trust, Inc. v. First Flight L.P.,
266 Va. 3, 9-10, 580 S.E.2d 806, 809 (2003).
"Traditional veil piercing permits a court to render an
individual liable in a judgment against a business entity in
which the individual has an interest, when the entity 'is
in fact a mere instrumentality or alter ego of [the
individual].'" Sky Cable, LLC v. DIRECTV,
Inc., 886 F.3d 375, 385 (4th Cir. 2018) (alteration in
original) (quoting Netjets Aviation, Inc. v. LHC
Commc'ns, LLC, 537 F.3d 168, 176 (2d Cir. 2008)).
But a court's decision to pierce the corporate veil
"is an extraordinary act to be taken only when necessary
to promote justice." C.F. Trust, 266 Va. at 10,
580 S.E.2d at 809.
the Fourth Circuit has also held that, in trademark
infringement and unfair trade practices cases, "[a]
corporate official may be held personally liable for tortious
conduct committed by him, though committed primarily for the
benefit of the corporation." Polo Fashions, Inc. v.
Craftex, Inc., 816 F.2d 145, 149 (4th Cir. 1987);
see also Farm Fresh Direct Direct By a Cut Above LLC v.
Downey, Civ. No. ELH-17-1760, 2017 WL 4865481, at *5 (D.
Md. Oct. 26, 2017) ("Moreover, when an individual
defendant who is otherwise protected by an organization's
limited liability shield commits a tort or violates die
Lanham Act, she may be held individually liable.").
the Polo Fashions rubric, courts have denied motions
to dismiss against corporate shareholders and officers in
Lanham Act cases were the plaintiffs alleged, for instance,
that the individual defendant: (1) was "president and
principal stockholder" of the corporation and
"participated" in infringement, Polo
Fashions, 816 F.2d at 147, 150; (2) "unfairly
appropriated the success and reputation of [the plaintiff] as
well as the trademark [at issue] and parlayed them into
business for [the corporation]," Gorby v.
Weiner, Civ. No. TDC-13-3276, 2014 WL 4825962, at *6-7
(D. Md. Sept. 23, 2014); (3) "personally participated in
the selection of the [offending company] name" and
"authorized and approved .. . counsel [to] file a
trademark registration application," Planet Techs.,
Inc. v. Planit Tech. Grp., LLC, 735 F.Supp.2d 397, 405
(D. Md. 2010) (internal quotations omitted); and (4) "is
the resident agent and incorporator" of the corporation,
"filed its articles of organization to create a name
confusingly similar to" plaintiff "for the purpose
of selling [products] in competition with plaintiff,"
and "participated in alleged violations of the Lanham
Act," even though the "allegations as to [the
individual defendant] border on thin," Fresh Farm
Direct, 2017 WL 4865481, at *6-7 (internal quotations
and citations omitted). The common thread throughout these
cases is that the plaintiff levies some particularized
allegations against the individual defendant-that is, the
individual defendant undertook some particular action
vis-a-vis the underlying Lanham Act claims.
assume that Rothy's can only reach Kerrigan through veil
piercing. See Mem. Supp. Defs.' Mot. Dismiss Pursuant
Rule 12(b)(6) ("MTD Br."), ECF No. 20, at 6-7.
Defendants characterize Kerrigan as "a shareholder of
JKM, and argue that the "Complaint fails to assert
any recognizable grounds to hold Dr. Kerrigan
individually liable under any legal theory alleged in the
Complaint." Id. at 7.
Polo Holdings, Defendants are incorrect. Rothy's
can plead a claim against Kerrigan personally if it makes
particularized allegations that Kerrigan engaged in tortious
acts meant to benefit JKM.
problem, however, is that Rothy's does not plead
particularized facts regarding Kerrigan's actions. All
relevant facts in the Complaint (other than facts relating to
Kerrigan and jurisdiction) are pled as to
"Defendants." The Complaint does not contain a
single specific allegation as to Kerrigan. Rothy's
failure to plead specific allegations as to Kerrigan takes
the Complaint out of the ambit of Polo Fashions, In
other words, Rothy's fails to state a claim against
not to say that Rothy's will be unable to state a viable
claim against Kerrigan, however. The court will grant the
Motion as to Kerrigan without prejudice. Rothy's is free
to replead the allegations against Kerrigan, as long as the
amended pleadings are consistent with Federal Rule of Civil
Lanham Act Claims
claims that Defendants have infringed upon Rothy's trade
dress, in violation of the Lanham Act. Rothy's also
claims that Defendants have engaged in unfair competition and
false designation, also in violation of the Lanham Act. Both
Lanham Act claims are predicated upon Section 43(a) of the
Lanham Act. See Compl. ¶¶ 52, 57; 15 U.S.C. §
trade dress of a product consists of its 'total image and
overall appearance,' including its 'size, shape,
color or color combinations, texture, graphics, or even
particular sales techniques."' Ashley Furniture
Indus., Inc. v. SanGiacomo NA. Ltd., 187 F.3d 363, 368
(4th Cir. 1999) (quoting Two Pesos, Inc. v. Taco Cabana.
Inc., 505 U.S. 763, 764 n.1. (1992)). "In
evaluating a trade dress claim, a court must not focus on
individual elements, 'but rather on the overall visual
impression that the combination and arrangement of those
elements create." Sleep Sci. Partners v.
Lieberman, No. 09-04200 CW, 2010 WL 1881770, at *3 (N.D.
Cal. May 10, 2010) (quoting Clicks Billiards, Inc. v.
Sixshooters, Inc., 251 F.3d 1252, 1259 (9th Cir. 2001)).
In other words, "[t]rade dress is the composite tapestry
of visual effects." Id. In order to prove a
claim for trade dress infringement under the Lanham Act, a
plaintiff must show that "(1) its trade dress is
primarily non-functional; (2) the alleged infringement
creates a likelihood of confusion; and, (3) the trade dress
either (a) is inherently distinctive, or (b) has acquired a
Lance Mfg., LLC v. Voortman Cookies Ltd., 617
F.Supp.2d 424, 432 (W.D. N.C. 2009). (quoting Ashley
Furniture, 187 F.3d at 368).
Satisfaction of Pleading Requirements
first argue that Rothy's has not pled sufficient facts to
identify the purported trade dress.
Supreme Court has not specified what facts are sufficient at
the pleading stage to identify the alleged trade dress.
Nonetheless, "[t]he purpose of trade dress protection is
to 'secure the owner of the trade dress the goodwill of
his or her business and to protect the ability of consumers
to distinguish among competing products.'"
Coach. Inc. v. Farmers Mkt. & Auction, 881
F.Supp.2d 695, 702 (D. Md. 2012) (quoting 74 Am. Jur. 2d
Trademarks & Tradenames § 36 (2012)).
Additionally, determining whether a plaintiff has established
a trade dress "involves an inherently factual review
rarely resolved at the motion to dismiss stage."
Stat Ltd. v. Beard Head, Inc., 60 F.Supp.3d 634, 638
& n.1. (E.D. Va. 2014). A Lanham Act plaintiffs complaint