Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 1 of 8 Page ID #:130
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`Present: The
`Honorable
`
`A. HOWARD MATZ, U.S. DISTRICT JUDGE
`
`S. Eagle
`Deputy Clerk
`Attorneys NOT Present for Plaintiffs:
`
`Not Reported
`Tape No.
`Court Reporter / Recorder
`Attorneys NOT Present for Defendants:
`
`Proceedings:
`
`IN CHAMBERS (No Proceedings Held)
`
`On October 29, 2008, Basevi, Inc. (“Basevi”) filed a Complaint against The Acorn
`Company (“Acorn”). The Complaint alleges claims of copyright infringement, unfair
`competition in violation of California Business and Professions Code § 17200, and
`imitation of trade dress. On January 5, 2009, Defendant filed a motion to dismiss the
`Complaint, or require a more definite statement of the claims. The Court took the motion
`under submission on February 6, 2009. For the reasons stated below, the Court DENIES
`the motion in part and GRANTS it in part. Specifically, it denies the motion as to the
`copyright claim, dismisses the unfair competition claim with prejudice, and dismisses the
`trade dress claim without prejudice.
`
`I.
`
`ALLEGATIONS OF THE COMPLAINT
`
`Plaintiff Basevi is a California corporation, and Defendant Acorn is a Pennsylvania
`Corporation. Plaintiff alleges that in 1947, Cromo N.B. (“Cromo”), an Italian
`corporation, and one Adolfo Simeone, created artwork that depicts religious figures.
`Cromo acquired all rights to the work. The work was published in 1947, and Cromo
`subsequently registered it with the United States Copyright Office, “complying in all
`respects with the registration and deposit requirements of the [Federal Copyright Act of
`1976, as amended 17 U.S.C. § 101, et seq.]” Compl. ¶¶ 3, 10. In 1963, Cromo created
`two pieces of art with one Mario Bianchi, acquired all rights to those works, and
`published them in 1963. As with the earlier work, Cromo subsequently registered the
`works with the United States Copyright Office, “complying in all respects with the
`registration and deposit requirements of the [Federal Copyright Act of 1976, as amended
`17 U.S.C. § 101, et seq.]” Compl. ¶¶ 3, 15. Plaintiff attaches to the Complaint copies of
`three “registration reports” listing the copyright registration numbers and stating that the
`CIVIL MINUTES - GENERAL
`CV-90 (06/04)
`Page 1 of 8
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 2 of 8 Page ID #:131
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`works are “Reg. under GATT/URAA restoration.” Compl., Exhs. A, B. Copies of each
`work are attached to the registration reports. Id.
`
`Cromo allegedly assigned its rights in the works to Plaintiff Basevi for licensing
`throughout North America. Basevi in turn licensed the right to manufacture and sell the
`art to an entity called San Francis Imports.1
`
`Plaintiff alleges that “Defendants [sic] through its employees copied Plaintiff’s
`artwork and caused to be manufactured and offered for sale to the public Prayer Cards
`with Plaintiff’s copyrighted artwork.” Compl. ¶ 19. Attached to the Complaint are
`reproductions of five of the allegedly infringing Prayer Cards. Compl., Exh. C.
`
`The Complaint alleges claims for copyright infringement, unfair competition, and
`imitation of trade dress. Plaintiff moves to dismiss all three claims for failure to state a
`cause of action, or for a more definite statement. See Fed. R. Civ. Pro. 12(b)(6), 12(e).
`
`II.
`
`LEGAL STANDARDS
`
`A. Motion to Dismiss
`
`On a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil
`Procedure for failure to state a claim, the allegations of the complaint must be accepted as
`true and are to be construed in the light most favorable to the nonmoving party. Wyler
`Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). A Rule
`12(b)(6) motion tests the legal sufficiency of the claims asserted in the complaint. Thus,
`if the complaint states a claim under any legal theory, even if the plaintiff erroneously
`relies on a different legal theory, the complaint should not be dismissed. Haddock v. Bd.
`of Dental Examiners, 777 F.2d 462, 464 (9th Cir. 1985).
`
`Federal Rule of Civil Procedure 8(a)(2) requires
`
`only “a short and plain statement of the claim showing that the
`
`1 The Complaint mistakenly refers to San Francis Imports as “Plaintiff.” Compl. ¶
`
`CIVIL MINUTES - GENERAL
`
`Page 2 of 8
`
`17.
`CV-90 (06/04)
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 3 of 8 Page ID #:132
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`pleader is entitled to relief,” in order to “give the defendant fair
`notice of what the . . . claim is and the grounds upon which it
`rests[.]” . . . While a complaint attacked by a Rule 12(b)(6)
`motion to dismiss does not need detailed factual allegations . . .,
`a plaintiff’s obligation to provide the “grounds” of his
`“entitle[ment] to relief” requires more than labels and
`conclusions, and a formulaic recitation of the elements of a
`cause of action will not do . . . . Factual allegations must be
`enough to raise a right to relief above the speculative level . . . .
`
`Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007) (internal citations
`omitted).
`
`“Generally, a district court may not consider any material beyond the pleadings in
`ruling on a Rule 12(b)(6) motion. . . . However, material which is properly submitted as
`part of the complaint may be considered” on a motion to dismiss. Hal Roach Studios,
`Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations
`omitted). “The district court will not accept as true pleading allegations that are
`contradicted by facts that can be judicially noticed or by other allegations or exhibits
`attached to or incorporated in the pleading.” 5C Wright & Miller, Fed. Prac. & Pro. §
`1363 (3d ed. 2004).
`
`Where a motion to dismiss is granted, a district court should provide leave to
`amend unless it is clear that the complaint could not be saved by any amendment.
`Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008)
`(citation omitted).
`
`B. Motion for a More Definite Statement
`
`Fed. R. Civ. P. 12(e) provides that
`
`A party may move for a more definite statement of a pleading to which a
`responsive pleading is allowed but which is so vague or ambiguous that the
`party cannot reasonably prepare a response. The motion must be made
`before filing a responsive pleading and must point out the defects
`
`CV-90 (06/04)
`
`CIVIL MINUTES - GENERAL
`
`Page 3 of 8
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 4 of 8 Page ID #:133
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`complained of and the details desired.
`
`In light of the liberal pleading permitted by Fed. R. Civ. P. 8(a), motions for a more
`definite statement are viewed with disfavor and are rarely granted. 2 Moore’s Federal
`Practice (3rd ed.) § 12.36[1]. Ordinarily, a motion for a more definite statement should
`not be granted “unless the defendant literally cannot frame a responsive pleading.”
`Bureerong v. Uvawas, 922 F. Supp. 1450, 1461 (C.D. Cal. 1996). The motion is not a
`substitute for discovery; if the detail sought “is obtainable through discovery, the motion
`should be denied.” Beery v. Hitachi Home Elecs. (Am.), Inc., 157 F.R.D. 477, 480 (C.D.
`Cal. 1993).
`
`III. DISCUSSION
`
`A.
`
`The Copyright Infringement Claim is Sufficiently Pled
`
`Defendant first contends that Plaintiff has failed to allege facts sufficient to support
`its claim for copyright infringement.
`
`In order to prevail on a copyright claim, the Plaintiff must prove “(1) ownership of
`a valid copyright, and (2) copying of constituent elements of the work that are original.”
`Feist Publ’ns, Inc v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991) (citation omitted).
`Defendant contends that the facts alleged in Plaintiff’s Complaint fail to establish that
`Plaintiff owns a valid copyright and, assuming that Plaintiff does own a valid copyright,
`that Plaintiff has taken the proper steps to enforce it.
`
`Defendant asserts that because the subject artwork was created and published
`before 1964, its copyright required renewal to remain in effect beyond the then-
`applicable initial 28-year term. Further, because there is no record of renewal attached to
`the Complaint, or with the U.S. Copyright Office, all of the artwork fell into the public
`domain by the year 1991. Thus, if Plaintiff holds a valid copyright, it must be pursuant to
`the Uruguay Round Agreements Act (“URAA”), which amended the Copyright Act of
`1976 to restore copyright protection for certain works of foreign origin that fell into the
`public domain in the United States. Under the URAA, copyright may be restored if (1)
`the work is protected under 17 U.S.C. § 104A(a); (2) the work is not in the public domain
`in its source country (in this case Italy); (3) the work is in the public domain in the United
`
`CV-90 (06/04)
`
`CIVIL MINUTES - GENERAL
`
`Page 4 of 8
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 5 of 8 Page ID #:134
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`States due to, among other things, noncompliance with formalities imposed by the United
`States; (4) at least one author or rightholder was a national or domiciliary of an eligible
`country at the time the work was created; and (5) if the work was published it must have
`been first published in an eligible country, and not published in the United States during
`the 30-day period following publication in the eligible country. 17 U.S.C. § 104A(h).
`
`Defendant acknowledges that the “registration reports” attached to the Complaint
`state that the works at issue in this suit are “Reg. under GATT/URAA restoration.” But it
`contends that Plaintiff’s Complaint must allege explicitly that the registrations comply
`with each and every provision of 17 U.S.C. § 104A(h). For example, Defendant argues,
`the Complaint must specifically allege that the works are not in the public domain in
`Italy, and that they are in the public domain in the United States due to noncompliance
`with the formalities of U.S. copyright law.2
`
`Defendant also contends that the pleadings are inadequate because they fail to
`allege that Plaintiff complied with the notice provisions of 17 U.S.C. § 104A. That
`statute provides that the owner of a restored copyright can enforce its copyright against a
`“reliance party” only after it gives the party constructive or actual notice of its intent to
`enforce the copyright. 17 U.S.C. § 104A(d)(2). Stated generally, a “reliance party” is
`basically one who was engaging in acts that did not violate any copyright prior to the
`time that a source country became “eligible” under the URAA, but whose acts would
`have violated a copyright if the work had not fallen into the public domain in the first
`place. See 17 U.S.C. § 104A(h)(4); Troll Co. v. Uneeda Doll Co., 483 F.3d 150, 156-60
`(2d Cir. 2007). After a copyright holder gives notice to a reliance party, the reliance
`party has twelve months in which to sell any existing copies of the work. 17 U.S.C. §
`104A(d)(2). Defendant asserts that it is a reliance party — though it does not explain
`why — and contends that the Complaint must therefore allege that Plaintiff provided
`proper notice of its intent to enforce its restored copyright.
`
`2 Defendant also contends that “Plaintiff’s Complaint specifically alleges
`otherwise, claiming that the registrations were in compliance ‘in all respects’ with the
`Copyright Act of 1976.” But the Complaint actually alleges that the registrations
`complied with “the Federal Copyright Act of 1976, as amended, 17 U.S.C. § 101, et seq.”
`Compl. ¶ 3 (emphasis added).
`CV-90 (06/04)
`
`CIVIL MINUTES - GENERAL
`
`Page 5 of 8
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 6 of 8 Page ID #:135
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`The Court is not persuaded that the Complaint’s copyright infringement claims are
`pled inadequately. Although there has been some confusion and controversy in the
`federal courts concerning the general applicability of the Supreme Court’s decision in
`Twombly, supra, several district courts in this Circuit have applied Twombly in the
`copyright context. But very few have even implied, and none has held, that Twombly
`modifies the Circuit’s rule that a valid copyright infringement claim must allege only the
`basic elements of infringement. Compare Fractional Villas v. Tahoe Clubhouse, No. CV
`08-1396, 2009 WL 160936 (S.D. Cal. Jan. 22, 2009) (denying motion to dismiss where
`plaintiff alleged it was owner of valid copyright, defendants copied protected elements of
`work, and defendants used the work on their website); Proline Concerte Tools, Inc. v.
`Dennis, No. CV 07-2310, 2008 WL 927883 (S.D. Cal. April 4, 2008) (denying motion to
`dismiss where complaint alleged ownership of registered copyright in compliance with 17
`U.S.C. §§ 101, et seq., and alleged that infringement was ongoing); Atlantic Recording
`Corporation v. Serrano, No. 07-CV-1824, 2007 WL 4612921 (S.D Cal. Dec. 28, 2007)
`(denying motion to dismiss where plaintiff attached exhibits to complaint specifically
`alleging ownership of or exclusive rights to partial list of allegedly infringed copyrighted
`recordings, and alleged time and place of infringement) with Cutler v. Enzymes, Inc., No.
`C 08-04650, 2009 WL 482291 (N.D. Cal. Feb. 25, 2009) (rejecting heightened pleading
`standard but granting motion to dismiss where complaint did not allege what acts during
`what period of time constituted infringement); New Name, Inc. v. Walt Disney Co., No.
`CV 07-5034, 2007 WL 5061697 (C.D. Cal. Dec. 3, 2007) (granting motion to dismiss
`where allegations were speculative and a “formulaic recitation of the elements” of
`infringement) (Anderson, J.).
`
`In this case, the Complaint meets Twombly’s standards and adequately pleads
`copyright infringement. Plaintiff specifically identified the copyrighted artworks;
`attached exhibits showing the copyright registration numbers of the works and noting that
`the restored copyrights were granted under the URAA; alleged that Defendant has sold
`prayer cards with the copyrighted artwork; and attached images of five of the allegedly
`infringing cards. These allegations are sufficient to “raise a right to relief above the
`speculative level.” Whether the copyrights were properly granted under the URAA,
`whether Defendant is a “reliance party,” and whether Plaintiff gave proper notice to
`Defendant, are all questions that the parties will be able to answer through discovery
`without undue burden or expense. In any event, the answers to those questions do not
`need to be alleged in order for the copyright claim to withstand Defendant’s motion. The
`
`CV-90 (06/04)
`
`CIVIL MINUTES - GENERAL
`
`Page 6 of 8
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 7 of 8 Page ID #:136
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`Court therefore denies the motion to dismiss the copyright infringement claim.
`
`B.
`
`The Unfair Competition Claim is Preempted
`
`The Complaint’s second claim alleges that “[t]his action for unfair competition is a
`substantial and related claim to Defendant’s infringement of copyrights,” and goes on
`restate the essential elements of Plaintiff’s copyright claim. Compl. ¶¶ 30-32. Although
`the claim does not cite the relevant California law, it is apparent that it is based upon
`California Business and Professions Code § 17200, et seq.
`
`Defendant argues that this state law claim is preempted by the federal law claim.
`Plaintiff offers no substantive response to this argument, and the Court finds that the
`claim is preempted under Kodadek v. MTV Networks, Inc., 152 F.3d 1209 (9th Cir. 1998).
`As in Kodadek, the rights asserted here under state law are equivalent to the rights
`protected by the Copyright Act, and the work in question is within the subject matter of
`the Copyright Act. The Court therefore dismisses the claim for unfair competition with
`prejudice.
`
`C.
`
`The Trade Dress Claim is Vague and Ambiguous
`
`Plaintiff’s final claim alleges that Defendant has willfully attempted to imitate the
`particular dress, design, and combination of features of its copyrighted works. The claim
`does not, however, specify its basis in law. Defendant argues that “as currently pled, the
`Defendant has not even been put on notice of what ‘trade dress’ is at issue, and the
`Defendant cannot formulate a rational response to the claim.” Mot. at 15. Defendant
`goes on to argue that if the claim is in fact based on the section 43(a) of the Lanham Act,
`it must be dismissed pursuant to the Supreme Court’s holding in Dastar v. Twentieth
`Century Fox Film Corp. that a federal trade dress claim cannot be alleged when it is
`merely a surrogate for a copyright claim. 539 U.S. 23, 28 (2003). Moreover, Defendant
`argues, even if the claim were valid under Dastar, Plaintiff fails to allege that the trade
`dress is non-functional, and has secondary meaning. See Wal-Mart Stores, Inc. v.
`Samara Bros., Inc., 529 U.S. 205 (2000). As with Defendant’s challenge to Plaintiff’s
`second claim, Plaintiff fails to offer a substantive reply to these arguments.
`
`The Court finds that the “claim” for imitation of trade dress is so vague and
`
`CV-90 (06/04)
`
`CIVIL MINUTES - GENERAL
`
`Page 7 of 8
`
`

`
`Case 2:08-cv-07145-AHM-AGR Document 13 Filed 03/19/09 Page 8 of 8 Page ID #:137
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Case No. CV 08-7145 AHM (JTLx)
`Title
` BASEVI, INC. v. THE ACORN COMPANY
`
`Date March 19, 2009
`
`ambiguous that the Defendant cannot reasonably prepare a response. It therefore
`dismisses the claim without prejudice. If Plaintiff wishes to attempt to cure these defects
`via an amended complaint, it must file such amended complaint by not later than April 6,
`2009. The Court cautions Plaintiff that it should not waste the time and resources of the
`parties or of the Court if it concludes, as appears likely, that a federal trade dress claim
`pled with greater specificity will not be viable under Dastar and Wal-Mart.
`
`D.
`
`Sanctions are Not Warranted
`
`The Court denies Defendant’s request for sanctions. Although it may be irritating
`to Defendant that Plaintiff’s attorney told him he would amend the Complaint and then
`failed to do so, it was not improper for Plaintiff’s attorney to oppose the motion to
`dismiss once he concluded that he had a reasonable basis to do so. As this Order makes
`clear, Plaintiff’s opposition was not baseless. However permissible it might be for
`Plaintiff’s attorney to seek “a quick settlement,” the Court will not hesitate to impose
`sanctions if warranted.
`
`IV. CONCLUSION
`
`For the reasons stated above, the Court DENIES the motion in part and GRANTS
`it in part.3 Specifically, it denies the motion to dismiss the first claim for copyright
`infringement, dismisses with prejudice the claim for unfair competition, and dismisses
`without prejudice the claim for imitation of trade dress.
`
`Initials of Preparer
`
`se
`
`:
`
`3 Docket No. 8.
`CV-90 (06/04)
`
`CIVIL MINUTES - GENERAL
`
`Page 8 of 8