Case3:07-cv-03983-JSW Document40 Filed12/19/07 Page1 of 16
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`JONATHAN BROWNING, INC.,
`Plaintiff,
`
` v.
`VENETIAN CASINO RESORT, LLC; LAS
`VEGAS SANDS, LLC; LAS VEGAS SANDS
`CORPORATION; and DOES 1-100,
`Defendants.
`
` /
`
`No. C 07-3983 JSW
`ORDER DENYING IN PART AND
`GRANTING IN PART
`DEFENDANTS’ MOTION TO
`DISMISS
`
`Now before the Court are motions to dismiss filed by Defendant Venetian Casino
`Resort, LLC (the “Venetian”), Las Vegas Sands LLC, and Las Vegas Sands Corporation.
`Having considered the parties’ pleadings, relevant legal authority, and the record in this case,
`the Court DENIES IN PART and GRANTS IN PART the Defendants’ motion to dismiss.
`BACKGROUND
`Jonathan Browning, Inc. (“Browning”) is a California corporation with its principal
`place of business in San Francisco. (Compl. ¶ 5.) Browning designs, produces, and sells high-
`end decorative interior lighting fixtures, known as sconces, through exclusive showrooms
`throughout the United States. (Id.) The Venetian owns hospitality properties worldwide. The
`Venetian Casino Resort and the Las Vegas Sands are limited liability companies. The Las
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`United States District Court
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`Vegas Sands Corporation is a Nevada corporation. All three defendants have their principal
`places of business in Nevada. (Id. ¶¶ 6-8.)
`This action arises from the Venetian’s alleged unauthorized reproduction and display of
`thousands of Browning’s sconces in its Las Vegas Casino Resort. According to the complaint,
`around April 20, 2006, the Venetian’s Los Angeles-based interior designer, KNA Interior
`Design, purchased ten of Browning’s sconces from the Los Angeles showroom David
`Sutherland Inc. (Id. ¶ 18.) Ms. Pauco, a KNA Interior Design employee, contacted Browning
`at its San Francisco office and requested a bid for over 11,000 sconces for use in the Venetian
`resort renovation project. (Id.) On or about September 7, 2006, Browning submitted a bid to
`the Venetian offering to provide 11,368 sconces. (Id. ¶ 21.) Browning was able to offer a
`competitive price because it had discovered a Chinese manufacturing company, Diamond Life
`Lighting Manufacturing (H.K.) Ltd. (“Diamond Life”), which could meet Browning’s standards
`for high quality and price goals. (Id. ¶ 20.) Shortly thereafter, the Venetian rejected
`Browning’s bid as being “out of the ballpark” and discontinued negotiations with Browning.
`(Id. ¶ 22.) Browning asked the Venetian and KNA Interior Design what light fixtures were
`chosen over Browning’s work. (Id. ¶ 23.) Those requests for information were denied. (Id.)
`On or about May 21, 2007, Mr. Browning, co-owner of Jonathan Browning, Inc.,
`received a telephone call from a designer at a San Francisco-based interior firm, who at the time
`was a guest at the Venetian Casino Resort in Las Vegas. (Id. ¶ 24.) The designer called to
`congratulate Mr. Browning on having his sconces installed at the Venetian property. (Id.)
`Approximately ten days later, Mr. Browning visited the same Venetian Resort in Las Vegas.
`(Id. ¶ 25.) He was astonished to find nearly identical, unauthorized copies of his sconces on the
`walls of the Venetian’s renovated rooms and corridors. (Id. ¶ 26.) Browning alleges that the
`Venetian used deceptive and unfair practices to identify and enter into a contract with Diamond
`Life to produce more than thirteen thousand nearly identical copies of the sconces without
`Browning’s knowledge or permission. (Id. ¶ 32.) Because various Venetian properties are
`either undergoing construction or renovation, Browning believes that the Venetian plans to
`reproduce and display additional infringing copies of his works in those properties. (Id. ¶ 37.)
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`Browning asserts that the Venetian’s actions have violated the Copyright Act as well as various
`state laws. (Id. ¶ 17.)
`Now before the Court is the Venetian’s motion to dismiss Browning’s complaint in its
`entirety under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction,
`Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, Federal Rule of Civil
`Procedure12(b)(3) for improper venue or alternatively to transfer venue under 28 U.S.C.
`§ 1406(a) or § 1404(a). The Venetian also moves to strike the declarations of Marco Heithaus
`and Thomas S. Hixson. The Venetian also moves to dismiss count ten for implied contract,
`counts nine and eleven for implied in law and quasi-contract/unjust enrichment, and counts six
`and seven for unfair competition under California Business and Professions Code § 17200
`arguing both that the state law claims independently fail to state a cause of action and because
`they are preempted by copyright law. Finally, the Venetian moves to dismiss all claims against
`the Las Vegas Sands LLC and the Las Vegas Sands Corporation for failure to state a claim
`against them.
`
`A.
`
`ANALYSIS
`The Northern District Has Subject Matter Jurisdiction Over Browning’s Claims.
`The Venetian asserts that Browning has failed to satisfy the jurisdictional prerequisites
`necessary to initiate a copyright infringement action. When a defendant moves to dismiss a
`complaint for lack of subject matter jurisdiction, the plaintiff bears the burden of proving that
`the court has jurisdiction to decide the claim. Thornhill Publ’n Co. v. General Tel. & Elecs.
`Corp., 594 F.2d 730, 733 (9th Cir. 1979). The Copyright Act states in relevant part that:
`[W]here the deposit, application, and fee required for registration have been
`delivered to the Copyright Office in proper form, and registration has been
`refused, the applicant is entitled to institute an action for infringement if
`notice thereof, with a copy of the complaint, is served on the Register of
`Copyrights . . .[T]he Register’s failure to become a party shall not deprive the
`court of jurisdiction to determine the issue.
`
`17 U.S.C.§ 411(a). “Registration is not a prerequisite to a valid copyright, although it is a
`prerequisite to a suit.” S.O.S., Inc. v. Payday Inc., 886 F.2d 1081, 1085 (9th Cir. 1989) (citing
`17 U.S.C. §§ 408 (a), 411). Because the Copyright Act is silent regarding the pleading
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`requirements for registration compliance, allegations of copyright infringement “must satisfy
`only the minimal notice-pleading requirements of Federal Rule of Civil Procedure 8.” Arista
`Records LLC v. Greubel, 453 F. Supp. 2d. 961, 964 (N.D. Tex. 2006); see also Stewart v.
`Wachowski, 2004 WL 2980783, *5 n.32 (C.D. Cal. 2004) (“[A]llegations of copyright
`infringement are governed by Rule 8(a) rather than Rule 9(b).”). Browning alleges that it
`satisfied the statutory preconditions to sue under 17 U.S.C. § 411(a). Browning applied for and
`was refused a copyright for its designs. Marco Heithaus, co-owner of Jonathan Browning, Inc.,
`provided a declaration indicating that Browning took action to register its designs and that a
`rejection letter was received. The Venetian submitted evidentiary objections to Mr. Heithius’
`declaration based on lack of personal knowledge, hearsay, relevancy, and the best evidence
`rule. Mr. Heithius made a sworn declaration, based on his personal knowledge, that Browning
`complied with the registration requirement. The declaration is offered to prove that the
`application, deposit, and fee were delivered to the Copyright Office and is not offered to prove
`the contents of the items delivered. The Court finds that Mr. Heithaus has the requisite personal
`knowledge and familiarity with his organization’s records to make such a declaration. The
`Court overrules the Venetian’s evidentiary objections and DENIES the motion to strike.
`Accordingly, the Court finds that Browning has adequately alleged that it complied with the
`pre-registration requirements under 17 U.S.C. § 411(a). The Court has subject matter
`jurisdiction over Browning’s copyright infringement claim.
`B.
`The Court Has Personal Jurisdiction Over the Venetian.
`The Venetian asserts that this Court does not have personal jurisdiction over it.
`“Personal jurisdiction over an out-of-state defendant is appropriate if the relevant state’s long-
`arm statute permits the assertion of jurisdiction without violating federal due process.” 3D
`Systems, Inc. v. Aarotech Laboratories, Inc., 160 F.3d 1373, 1376-77 (1998); cf.,
`Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004). Because
`California’s long-arm statute “is co-extensive with federal due process requirements, the
`jurisdictional analysis” under California law and federal due process is the same.
`Schwarzenegger, 374 F.3d at 801; 3D Systems, 160 F.3d at 1377. Due process requires that a
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`defendant have “minimum contacts with the forum state such that the exercise of personal
`jurisdiction does not offend traditional notions of fair play and substantial justice.” Decker
`Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 839 (9th Cir. 1986) (citing International
`Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Minimum contacts encompasses two types
`of jurisdiction: general and specific.
`1.
`This Court does not have general jurisdiction over the Venetian.
`The Venetian asserts that this District does not have general jurisdiction over it. If the
`defendant has “substantial” or “continuous or systematic” contacts with the forum state, the
`defendant is subject to general jurisdiction. Id. (quoting Data Disc, Inc. v. Systems Technology
`Associates, 557 F.2d 1280, 1287 (9th Cir. 1977)). The standard for general jurisdiction is high
`and requires that the contacts in the forum “approximate physical presence.” Tuazon v. R.J.
`Reynolds Tobacco Co., 42 F.3d 1163, 1169 (9th Cir. 2006). Browning argues that the
`Venetian’s advertising and marketing scheme in California, the Venetian’s website, and the
`large percentage of Californian customers are sufficient contacts to establish general
`jurisdiction over the Venetian. (Compl. ¶ 6.) These contacts do not approximate physical
`presence in this district and do not meet the high standard of general jurisdiction. See Cubbage
`v. Merchant, 744 F.2d 665, 667-68 (9th Cir. 1984) (finding no general jurisdiction over out-of-
`state doctors where 26% of their patients were California residents, they were reimbursed
`through the State of California medical insurance program, and they advertised in the California
`yellow pages); see also Congoleum Corp. v. DLW Aktiengesellschaft, 729 F.2d 1240, 1242-43
`(9th Cir. 1984) (a foreign corporation’s sales and marketing efforts, order solicitation through
`trade shows and the mail, and attending trade shows and meetings in the state were insufficient
`contacts to establish general jurisdiction). Meanwhile, there is no dispute that the Venetian’s
`principal place of business is Nevada. (Br. at 5.) The Venetian maintains that it does not own
`any property, has no bank accounts, pays no taxes, has no offices, employees or agents and has
`no registered agent for service of process in California. (See Declaration of Franklin H. Levy,
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`¶¶ 4-9.) Thus, the Venetian’s contacts are not sufficient for Browning to meet its prima facie
`burden of showing that general jurisdiction is proper over the Venetian in this district.1
`2.
`This Court has specific jurisdiction over the Venetian.
`Browning asserts that specific jurisdiction exists over the Venetian as a result of conduct
`allegedly directed at Browning and within this forum. Specific jurisdiction exists where “(1)
`the defendant has performed some act or consummated some transaction within the forum or
`otherwise purposefully availed himself of the privileges of conducting activities in the forum,
`(2) the claim arises out of or results from the defendant’s forum-related activities, and (3) the
`exercise of jurisdiction is reasonable.” Bancroft & Masters Inc. v. Augusta National Inc., 223
`F.3d 1082, 1086 (9th Cir. 2000). If the plaintiff satisfies the first two prongs, the burden shifts
`to the defendant to present a “compelling case” that the exercise of jurisdiction would be
`unreasonable. Fred Martin Motor Co., 374 F.3d at 802 (citing Burger King v. Rudzewicz, 471
`U.S. 462, 476-78 (1985)).
`Browning’s claims center on the Venetian’s unauthorized reproduction of Browning’s
`sconce designs. Because there are tort claims involved, the Court can analyze the first prong
`through the Calder effects test. Id.; see also Doe v. Unocal Corp., 248 F.3d 915, 924 (9th Cir.
`2001). The effects test requires the defendant to have (1) committed an intentional act, (2)
`expressly aimed at the forum state, and (3) caused harm that the defendant knows is likely to be
`suffered in the forum state. Bancroft & Masters Inc., 223 F.3d at 1087.
`The Venetian acted intentionally when it contacted Browning in San Francisco, and
`solicited and then rejected a bid for over eleven thousand sconces. (Compl. ¶12.) The
`Venetian’s actions were expressly aimed at California because the Venetian knew that
`Browning was a California company. See Bancroft & Masters Inc., 223 F.3d at 1087 (The
`“express aiming” requirement is met when “the defendant knows the plaintiff to be a resident of
`the form state.”). Finally, the Venetian knew its actions of reproducing the sconces would be
`
`1 On August 2, 2007, the Venetian filed an evidentiary objection and a motion to
`strike Thomas S. Hixson’s declaration on the basis of authentication, relevancy, and hearsay.
`Because the Court finds that the contacts at issue in the declaration do not constitute general
`jurisdiction over the Venetian, even if admissible as evidence, the Court finds that it does not
`need to rule on the Venetian’s motion to strike.
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`felt in the California, as Browning creates its designs in California. (Compl. ¶13.) Browning
`has demonstrated that the Venetian purposefully availed itself under the Calder effects test.
`The second prong requires that the Venetian’s contacts must “give rise to the current
`suit,” which is measured by a “but for” causation test. Bancroft & Masters Inc., 223 F.3d at
`1088. Browning must show that “but for” the Venetian’s forum related contacts, the alleged
`injury would not have occurred. This requirement is met here. But for the Venetian soliciting
`and rejecting Browning’s bid, which resulted in the Venetian identifying and contracting with
`Browning’s manufacturer to reproduce Browning’s sconce designs, Browning would not have
`been harmed. The Venetian’s contacts with Browning properly give rise to the current suit.
`Accordingly, the Court concludes Browning has set forth a prima facie showing of personal
`jurisdiction over the Venetian.
`Under the third prong, the Venetian must demonstrate that exercising jurisdiction would
`be unreasonable. To that end, the Court considers the following factors: (1) the extent of the
`defendant’s purposeful interjection into the forum state; (2) the burden on the defendant in
`defending in the forum; (3) the extent of the conflict with the sovereignty of the defendant’s
`state; (4) the forum state’s interest in adjudicating the dispute; (5) the most efficient judicial
`resolution of the controversy; (6) the importance of the forum to the plaintiff’s interest in
`convenient and effective relief; and (7) the existence of an alternative forum. Id. (citing Burger
`King Corp., 471 U.S. at 476.
`First, because “purposeful interjection is analogous to the purposeful direction analysis,”
`the Court finds this factor neutral. Sinatra v. National Enquirer Inc., 854 F.2d 1191, 1199 (9th
`Cir. 1988); citing Corporate Inv. Business Brokers v. Melcher, 824 F.2d 786, 790 (9th Cir.
`1987) (“Ninth Circuit cases give the ‘purposeful interjection’ no weight once it is shown that
`the defendant purposefully directed its activities to the forum state.”). Second, the Venetian
`does not make a strong showing that the burden to defend in California would be substantial.
`Nevada is geographically located near California and “with the advances in transportation and
`telecommunications and the increasing interstate practice of law, any burden is substantially
`less than in days past.” Menken v. EMM, 2007 U.S. App. LEXIS 22327 (9th Cir. 2007)
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`(citation omitted). Thus, this factor weighs in favor of Browning. Third, conflict with the
`sovereignty of a defendant’s state bears no weight here because this case does not involve a
`foreign state, which presents a higher sovereignty barrier than that between two states such as
`California and Nevada. See Insurance Co. of North America v. Marina Salina Cruz, 649 F.2d
`1266, 1272 (9th Cir. 1981). Fourth, because neither party disputes that California maintains a
`strong interest in providing redress for its residents, who were harmed by an out-of-state
`defendant, this factor favors Browning. Fifth, because both California and Nevada have
`witnesses and evidence, it is unclear which forum has an efficiency advantage. This factor is
`neutral. Sixth, although maintenance of a suit outside California may be inconvenient and
`costly for Browning, this factor is not given as much weight and is also neutral. Seventh,
`Browning implicitly concedes that suit could have been brought in Nevada. This factor favors
`the Venetian. Balancing these factors, the Venetian has not made a “compelling case” that the
`exercise of jurisdiction would be unreasonable. See Fred Martin Motor Co., 374 F.3d at 802.
`The Court finds that exercising jurisdiction over the Venetian is reasonable.
`C.
`The Northern District of California is a Proper Venue.
`The Venetian argues that the Northern District of California is an improper venue. Civil
`actions arising under federal copyright laws may be brought “in the district in which the
`defendant or his agent resides or may be found.” 28 U.S.C. § 1400(a). The “may be found”
`clause has been interpreted to mean that a defendant is amenable to personal jurisdiction in a
`particular forum based on realistic “contacts” with that forum. A corporation resides in any
`jurisdictional district in which it is subject to personal jurisdiction. 28 U.S.C. § 1391(c). Here,
`the Venetian is a corporation that resides in this district because personal jurisdiction has been
`established based on the Venetian’s multiple contacts with Browning in California. Thus,
`venue is proper under 28 U.S.C. § 1400(a).
`The general venue statute states that venue is proper in a district if a “substantial part of
`the events or omissions giving rise to the claim occurred or a substantial part of the property
`that is the subject of the action is situated.” 28 U.S.C. § 1391(b)(2). The Venetian solicited a
`bid from Browning in this district, the sconces were designed in this district, the bid provided
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`for the Venetian to take title to the sconces here, and the financial injury from the Venetian’s
`conduct will be felt in this district where Browning resides. Thus, venue is also proper under 28
`U.S.C. § 1391(b).
`D.
`The Interests of Justice Do Not Favor Transfer to the District of Nevada.
`In the alternative, the Venetian argues that this action should be transferred to the
`District of Nevada. A district court has discretion to “adjudicate motions for transfer according
`to an ‘individualized, case-by-case consideration of convenience and fairness.’” Steward Org.,
`Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citation omitted). In order for a district court to
`transfer an action under 28 U.S.C. § 1404, the Court must find that: (1) the transferee court is
`one where the action “might have been brought,” and (2) that the convenience of the parties and
`witnesses and the interest of justice favor transfer. Hatch v. Reliance Ins. Co., 758 F.2d 409,
`414 (9th Cir. 1985). There is no dispute that Browning could have brought this action in the
`District of Nevada. Therefore, the Venetian has met its burden under the first part of the test.
`To determine whether the Venetian satisfied the second portion of the test, the Court
`considers the following factors: (1) Plaintiff’s choice of forum; (2) convenience of the parties
`and witnesses; (3) ease of access to sources of proof; (4) local interest in the controversy; (5)
`familiarity of each forum with applicable law; and (6) relative congestion in each forum.
`Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) (citing Gulf
`Oil Corp. v. Gilbert, 330 U.S. 501, 508-509 (1947)).
`Typically a court should give a plaintiff’s choice of forum great deference unless the
`defendant can show that other factors of convenience clearly outweigh the plaintiff’s choice of
`forum. Ellis v. Costco Wholesale Corp., 372 F. Supp. 2d 530, 537 (N.D. Cal. 2005) (“Where
`venue is governed by a more permissive standard, a plaintiff’s choice is entitled to greater
`deference as a matter of law.”) Browning is located in San Francisco and conducts its design
`work from its San Francisco office. Therefore, Browning’s choice of forum is favored.
`The Court also considers the relative convenience to all the parties and their witnesses.
`See Decker Coal Co., 805 F.2d at 483 (citing Gulf Oil Corp., 330 U.S. at 508). The Venetian
`argues that the District of Nevada is a more convenient forum because several employee
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`witnesses are located in Nevada. This inconvenience is given little weight as the Venetian will
`be able to compel their employees’ testimony at trial. See STX, Inc. v. Trik Stik, Inc., 708 F.
`Supp. 1551, 1556 (N.D. Cal. 1998) (discounting the convenience to the defendant’s employees
`because they could be compelled to testify.) This factor does not favor transfer. Access to
`evidence may also favor transfer. Decker Coal Co., 805 F.2d at 843 (citing Gulf Oil Co., 330
`U.S. at 508). The Venetian argues that the alleged copies of the sconces are located in Las
`Vegas. Although this factor weighs in favor of transfer, the Court does not weigh it heavily.
`The local interest in having localized controversies decided at home is also considered. Id.
`California has a strong public interest in deciding controversies involving its citizens. Lockman
`Foundation v. Evangelical Alliance Mission, 930 F.2d 764, 771 (9th Cir. 1991) (finding that
`California has an interest in having its citizens compensated for torts committed against them.)
`Because Browning resides in the Northern District of California, California’s interest in
`protecting its citizens prevails. Thus, this factor favors Browning. Browning has brought
`California state law claims. The Northern District of California is more familiar with the
`relevant California state laws that govern the state claims. This factor does not favor transfer to
`the District of Nevada. Overall, the Venetian must make a strong showing of inconvenience to
`upset Browning’s choice of forum. The Court finds that the Venetian has failed to carry its
`heavy burden of establishing the inconvenience of litigating in this forum and DENIES its
`motion to transfer.
`E.
`Browning Has Not Stated a Claim For Breach of an Implied Contract.
`The Venetian moves to dismiss Browning’s tenth claim for implied contract for failure
`to state a cognizable legal theory or state a claim under Federal Rule of Civil Procedure
`12(b)(6). A motion to dismiss is proper under Rule12(b)(6) where the pleadings fail to state a
`claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss should
`not be granted unless it appears beyond a doubt that a plaintiff can show no set of facts
`supporting his or her claim. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also De La Cruz
`v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). A court may dismiss a complaint under Rule
`12(b)(6), based on the “lack of a cognizable legal theory” or based upon the “absence of
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`sufficient facts alleged under a cognizable legal theory.” Balestreri v. Pacifica Police Dep’t,
`901 F.2d 696, 699 (9th Cir. 1988).
`The complaint is construed in the light most favorable to the non-moving party and all
`material allegations in the complaint are taken to be true. Sanders v. Kennedy, 794 F.2d 478,
`481 (9th Cir. 1986). A court, however, is not required to accept legal conclusions cast in the
`form of factual allegations, if those conclusions cannot reasonably be drawn from the facts
`alleged. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (citing
`Papasan v. Allain, 478 U.S. 265, 286 (1986)). As a general rule, “a district court may not
`consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Branch v.
`Tunnell, 14 F.3d 449, 453 (9th Cir. 1994), overruled on other grounds by Galbraith v. County
`of Santa Clara, 307 F.3d 1119, 1121 (9th Cir. 2002).
`An implied contract (i.e. implied-in-fact contract) is an agreement that is manifested by
`the parties’ conduct “in light of the surrounding circumstances [and] their tacit understanding.”
`Moreno v. Los Angeles Child Care and Development Council, Inc., 963 F. Supp. 876, 879 (1997)
`(quoting Baltimore & Ohio R.R. v. United States, 261 U.S. 592, 597 (1923)); see also Cal. Civ.
`Code § 1621. In Grosso v. Miramax Film Corporation, the plaintiff alleged a breach of an
`implied contract claim against a film company for producing a movie that “stole the ideas and
`themes of his work.” 383 F.3d 965, 967 (9th Cir. 2004). The plaintiff sought compensation “not
`for the actual written script, but for the idea allegedly embodied in the script and shared with
`Miramax.” Id. The court held that the plaintiff had alleged an implied contract based on
`providing the company with an idea. Id. The court relied on Desny v.Wilder, in which the
`California Supreme Court held that the plaintiff was entitled to a trial because the defendant
`allegedly entered into an implied contract that began when the plaintiff telephoned the
`defendant’s office and pitched a movie idea to the defendant’s secretary. 46 Cal. 2d 736, 746
`(1956). The plaintiff later submitted a movie synopsis from which the defendant allegedly
`produced a film and failed to compensate the plaintiff. Id. Similarly, Browning relies on Desny
`and seeks compensation for its design ideas which were embodied in the sconces that the
`Venetian replicated. Browning alleges that the Venetian agreed to pay Browning for the value of
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`1 2 3 4 5 6 7 8 9
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`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
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`11
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`For the Northern District of California
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`United States District Court
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`sconce copies if it used Browning’s designs which were proposed in the bid. Thus, the Court
`finds that Browning’s claims are based on a cognizable legal theory.
`The Venetian also asserts that Browning has not stated sufficient facts to support an
`implied contract claim. “The law will not imply a promise to pay for an idea from the mere fact
`that the idea has been conveyed, is valuable, and has been used for profit; this is true even
`though the conveyance has been made with the hope or expectation that some obligation will
`ensue.” Desny, 46 Cal. 2d at 738-39. “To establish a Desny claim for breach of implied-in-fact
`contract, the plaintiff must show that the plaintiff prepared the work, disclosed the work to the
`offeree for sale, and did so under circumstances from which it could be concluded that the
`offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and
`the reasonable value of work.” Grosso, 383 F.3d at 965 (citing Faris v. Enberg, 97 Cal. App. 3d
`309, 318 (1979)). Moreover, a contract is “effective only between the contracting parties; it does
`not withdraw the idea from general circulation.” Rokos v. Peck, 182 Cal. App. 3d 604, 614
`(1986). Although a disclosed idea may be “widely known, the idea may be protected by an
`express contract providing that it will be paid for regardless of its lack of novelty.” Id.
`Despite the existence of a cognizable legal theory, Browning does not allege facts
`sufficient to support a claim that an implied contract existed between the parties. Browning’s
`design ideas had been conveyed to the Venetian and to the general public prior to submitting its
`bid to the Venetian. Browning’s work was profiled in numerous design magazines and
`newspapers and commissioned by famous institutions. (Compl. ¶ 15.) Browning described in
`various publications his creative design processes for his signature lighting collection. (Id. ¶ 16.)
`Browning’s sconces were also displayed for sale in ten exclusive showrooms throughout the
`United States. (Id. ¶ 5.) Based on these facts, the Court cannot conclude that the Venetian
`accepted to pay for Browning’s widely disclosed sconce ideas. See Grosso, 383 F.3d at 965.
`Browning’s bid to the Venetian cannot establish a Desny claim. The Venetian also did not
`expressly agree to pay for the design ideas because it rejected the bid and discontinued
`negotiations with Browning. Accordingly, the Court GRANTS the motion to dismiss
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`1 2 3 4 5 6 7 8 9
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`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
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`12
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`For the Northern District of California
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`United States District Court
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`Case3:07-cv-03983-JSW Document40 Filed12/19/07 Page13 of 16
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`Browning’s implied contract claim for failure to make out a claim upon which relief may be
`granted.
`F.
`Browning Has Not Stated a Quasi-Contract Claim.
`Browning also moves to dismiss count nine for quasi-contract for failure to state a claim.
`In the past, the legal basis for recovery under a theory of quasi-contract was that ideas were
`considered property rights. See Weitzenkorn v. Sol Lesser, 40 Cal. 2d 778, 794-95 (1953).
`However, the Desny court found that “California does not now accord individual property type
`protection to abstract ideas.” Desny, 46 Cal. 2d at 732. Thus, the Court finds that Browning has
`not stated a legal basis to recover under a theory of quasi-contract/unjust enrichment. A quasi-
`contract (i.e. an implied-in-law contract) is an obligation imposed by law “for reasons of
`justice.” Weitzenkorn v. Sol Lesser, 40 Cal. 2d 778, 794 (1953) (citation omitted). Quasi-
`contracts are used by the courts to prevent unjust enrichment where recovery “is based upon a
`benefit accepted or derived for which the law implies an obligation to pay.” Id. As such, the
`Court dismisses count eleven as duplicative.
` G.
`Quasi-Contract/Unjust Enrichment Claim is Also Preempted by Copyright Law.
`The Venetian also moves to dismiss the state law claims of quasi-contract and unfair
`competition on the basis that the Federal Copyright Act preempts th