1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.310 Page 1 of 23
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`
`SOUTHERN DISTRICT OF CALIFORNIA
`
`
`
`UNIVERSAL PROTECTION SERVICE,
`LP d/b/a ALLIED UNIVERSAL
`SECURITY SERVICES; and
`UNIVERSAL PROTECTION
`SECURITY SYSTEMS, LP,
`
`Plaintiffs,
`
` Case No.: 22-cv-1352-JES-KSC
`
`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION TO
`DISMISS
`
`[ECF No. 15]
`
`v.
`
`COASTAL FIRE AND INTEGRATION
`SYSTEMS, INC; DENNIS DON
`STOVER, JR.; GARY HUTCHESON;
`and DOES 1-5, inclusive,
`
`Defendants.
`
`On October 25, 2022, Defendants filed a motion to dismiss counts 1, 2, and 8 of
`
`Plaintiffs’ First Amended Complaint (“FAC”). ECF No. 15. On November 15, 2022,
`
`Plaintiffs filed an opposition. ECF No. 17. On November 22, 2022, Defendants filed a
`
`reply. ECF No. 21. The matter was taken under submission. After due consideration and
`
`for the reasons discussed below, the motion to dismiss is GRANTED IN PART and
`
`DENIED IN PART.
`
`//
`
`1
`
`22-cv-1352-JES-KSC
`
`

`

`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.311 Page 2 of 23
`
`
`
`I.
`
`BACKGROUND
`
`On September 8, 2022, Plaintiffs Universal Protection Service LP, doing business
`
`as Allied Universal Security Services, and Universal Protection Security Systems, LP
`
`(collectively, “Allied Universal”) instituted this lawsuit against Defendants Coastal Fire
`
`and Integration Systems, Inc. (“Coastal Fire”), Don Stover, Jr. (“Stover”), and Gary
`
`Hutcheson (“Hutcheson”). ECF No. 1. On October 4, 2022, Allied Universal filed their
`
`FAC, the operative complaint, alleging facts as follows. ECF No. 14 (“FAC”).
`
`Allied Universal is a security services company operating in North America. FAC
`
`¶ 13. Part of the services that it provides through one of its divisions is electronic access
`
`control, video surveillance, fire/life safety, alarm monitoring, emergency
`
`communications, and hosted/managed services. Id. ¶ 17. In building up its brand, Allied
`
`Universal owns several trademarks, including the following six trademarks:
`
`• No. 5,136,006: the mark Allied Universal, filed May 6, 2016 and issued
`February 7, 2017; (id. ¶ 20)
`
`• No. 5,302,678: the mark Allied Universal and Design as shown below, filed
`on June 24, 2016 and issued October 3, 2017; (id. ¶ 21)
`
`
`
`• No. 5,136,112: the mark Allied Universal Security Services, filed on May
`26, 2016 and issued February 7, 2017; (id. ¶ 22)
`
`• No. 5,150,269: the mark “Allied Universal Security Services and Design as
`shown below, filed on June 30, 2016 and issued February 28, 2017; (id. ¶
`23)
`
`
`
`2
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.312 Page 3 of 23
`
`
`
`• No. 5,146,530: the mark Allied Universal there for you and Design as shown
`below, filed on July 18, 2016 and issued February 21, 2017; (id. ¶ 24)
`
`
`
`• No. 5,136,162: the mark Allied Universal Security Systems, filed on May
`31, 2016 and issued on February 7, 2017 (id. ¶ 25).
`
`In addition, Allied Universal owns several copyrights. One of its divisions uses
`
`computer-assisted drafting (AutoCAD) to prepare engineering designs of its services.
`
`Id. ¶ 56. To facilitate this, Allied Universal developed custom AutoCAD templates,
`
`which are drawings that contained components unique to Allied Universal. Two of these
`
`templates are at issue here and are copyrighted:
`
`• 2017 Technical Drawing; (id. ¶ 33, Exh. A)
`
`• 2021 Technical Drawing (id. ¶ 34, Exh. B).
`
`In addition, Allied Universal developed Quote Builder, which it used to prepare and
`
`present estimates and generate proposal of its designs and services, and is also
`
`copyrighted:
`
`• Quote Builder (id. ¶ 35, Exh. C).
`
`On May 30, 2014, Allied Universal acquired City-Wide Electronic Systems, Inc.
`
`(“City-wide”), another security services company. Id. ¶ 40. At that time, Defendant
`
`Stover was City-wide’s President and Defendant Hutcheson was a System Engineer at
`
`City-wide. Id. ¶ 41. After the acquisition, Stover continued to serve as Executive Vice
`
`President at Allied Universal until June 1, 2020 and Hutcheson in Systems Estimating
`
`and Engineering until November 2020. Id. ¶¶ 42-43. Allied Universal alleges that during
`
`their employment, both defendants executed agreements that prohibited them from
`
`disclosing confidential information and required them to return Allied Universal’s
`
`property upon termination. Id. ¶¶ 44-48, Exhs. D, E.
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`3
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.313 Page 4 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`Allied Universal alleges that after the sale and during defendants’ subsequent
`
`employment, Stover and Hutcheson directly competed with Allied Universal through
`
`their own company. Id. at ¶ 50. On June 13, 2014, Allied Universal alleges that Stover’s
`
`wife established and incorporated One-Eight, Inc., which later changed its name to
`
`Coastal Fire and Integration Systems, the other named defendant in this lawsuit.
`
`Id. ¶¶ 49, 51. Allied Universal alleges that Stover and Coastal Fire recruited Hutcheson
`
`and other employees to perform “side work” for them of the exact or similar nature of
`
`what they did for Allied Universal. Id. ¶ 53-55. Specifically, Allied Universal alleges
`
`that in June 2022, it received a request for bid from an apartment complex in Los Angeles
`
`that was looking to install a security system. Id. ¶ 59. Allied Universal alleges that
`
`Coastal Fire had previously provided services for the same client and during the course of
`
`that work, prepared and submitted an AutoCAD design. Id. ¶ 60. Allied Universal states
`
`that when it received the June 2022 bid materials, the previous design from Coastal Fire
`
`(hereinafter, “Coastal Fire design drawing”) was included in the materials and bore the
`
`initials “GWH,” which stood for Defendant Hutcheson. Id. ¶ 61. Allied Universal alleges
`
`that the Coastal Fire design drawing infringes on its copyrighted 2017 and 2021
`
`Technical Drawings, and that text on the design drawing infringes on its trademarks.
`
`Based on the facts above, Allied Universal alleges nine causes of action including
`
`trademark infringement, copyright infringement, violation of the Computer Fraud and
`
`Abuse Act, unfair competition, and various breaches of contractual obligations. Id. at
`
`21
`
`¶¶ 73-138.
`
`II. LEGAL STANDARDS
`
`A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to
`
`state a claim tests the legal sufficiency of a plaintiff’s claim. Navarro v. Block, 250 F.3d
`
`729, 732 (9th Cir. 2001). When considering the motion, the court must accept as true all
`
`well-pleaded factual allegations in the complaint. Bell Atlantic Corp. v. Twombly, 556
`
`U.S. 544, 555 (2007). The court need not accept as true legal conclusions cast as factual
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`4
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.314 Page 5 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`allegations. Id.; Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[t]hreadbare recitals of the
`
`elements of a cause of action, supported by mere conclusory statements” are insufficient).
`
`A complaint must “state a claim for relief that is plausible on its face.” Twombly,
`
`550 U.S. at 570. To survive a motion to dismiss, a complaint must include non-
`
`conclusory factual content. Id. at 555; Iqbal, 556 U.S. at 679. The facts and the
`
`reasonable inferences drawn from those facts must show a plausible—not just a
`
`possible—claim for relief. Twombly, 550 U.S. at 556; Iqbal, 557 U.S. at 679; Moss v.
`
`U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009). The focus is on the complaint, as
`
`opposed to any new facts alleged in, for example, the opposition to a defendant’s motion
`
`to dismiss. See Schneider v. California Dep’t of Corrections, 151 F.3d 1194, 1197 n.1
`
`(9th Cir. 1998), reversed and remanded on other grounds as stated in 345 F.3d 716 (9th
`
`Cir. 2003). “Determining whether a complaint states a plausible claim for relief [is] ... a
`
`context-specific task that requires the reviewing court to draw on its judicial experience
`
`and common sense.” Iqbal, 557 U.S. at 679. The “mere possibility of misconduct” or
`
`“unadorned, the defendant-unlawfully-harmed me accusation[s]” fall short of meeting
`
`this plausibility standard. Id.; see also Moss, 572 F.3d at 969.
`
`III. DISCUSSION
`
`In the instant motion, Defendants move to dismiss three causes of action: (1) first
`
`cause of action for trademark infringement; (2) second cause of action under the
`
`Computer Fraud and Abuse Act; and (3) eighth cause of action for copyright
`
`infringement. The Court will address each of these in turn.
`
`A. Trademark Infringement
`
`In the first cause of action, Plaintiffs allege that Defendants used its registered
`
`trademarks without permission. FAC ¶¶ 73-84. In order to state a claim for trademark
`
`infringement, a plaintiff must show that (1) it has a valid, protectable trademark, and (2)
`
`that the defendant is using the mark in a way that is likely to cause consumer confusion.
`
`Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir.
`
`28
`
`2011).
`
`5
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.315 Page 6 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`As to the first part of this test, Defendants do not appear to contest that Plaintiffs
`
`have valid marks. Indeed, Plaintiffs’ FAC includes detailed allegations regarding each of
`
`its six marks and provides registration information, numbers, and dates for each of the
`
`trademarks. FAC ¶¶ 20-25. Registration of a trademark with the United States Patent and
`
`Trademark Office endows it with a rebuttable presumption of validity. 15 U.S.C. §
`
`1115(a) (registration is “prima facie evidence of the validity of the registered mark . . . ,
`
`of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the
`
`registered mark in commerce); KP Permanent Make-Up, Inc. v. Lasting Impression I,
`
`Inc., 408 F.3d 596, 604 (9th Cir. 2005). Rather, Defendants argue that Plaintiffs have
`
`10
`
`failed to allege “use” of the marks and that there was any likelihood of consumer
`
`11
`
`confusion.
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`i.
`
`Defendants’ Use of the Marks
`
`Plaintiffs’ allegation of trademark infringement center around the following
`
`General Disclaimer text that was on the Coastal Fire design drawing:
`
`
`
`FAC at 69. As shown above, the text includes the terms “Allied Universal” and “Allied
`
`Universal Security Systems.” Thus, Plaintiffs argue in their opposition that the use of
`
`these terms in this disclaimer breaches their “Allied Universal Word Marks,” which are
`
`defined to include the “Allied Universal” and “Allied Universal Security Systems”
`
`marks. ECF No. 17 at 10-11.
`
`Defendants repeatedly state in their motion to dismiss and reply brief that there are
`
`three trademarks at issue and that the disclaimer shown above does not use of these
`
`trademarks. ECF No. 15-1 at 11-14. In these references, Defendants appear to be
`
`6
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.316 Page 7 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`referring to the design trademarks only. Id. at 15-1 at 12 (citing the FAC ¶¶ 6, 8, 11, 12,
`
`which contain allegations related to the design trademarks). Plaintiffs respond that
`
`Defendants inexplicably are limiting their discussion of the trademarks to the design
`
`trademarks and wholly ignoring the word trademarks. ECF No. 17 at 11-12. In the reply
`
`brief, Defendants continue to only reference three trademarks. ECF No. 21 at 4-5.
`
`A review of the FAC shows that it does include both word trademarks (see FAC ¶¶
`
`20, 22, 25) and design trademarks (see FAC ¶¶ 21, 23, 24). A word trademark versus a
`
`design trademark differs in that a word trademark has no design elements. Pom
`
`Wonderful LLC v. Hubbard, 775 F.3d 1118, 1128 (9th Cir. 2014); Monster Energy Co. v.
`
`BeastUp LLC, 395 F. Supp. 3d 1334, 1355 (E.D. Cal. 2019). For example, Plaintiffs have
`
`alleged that they own a word trademark in “Allied Universal,” and the registration is for a
`
`“standard character mark” that consists of “standard characters without claim to any
`
`13
`
`particular font style, size, or color.”1 FAC ¶ 20; see
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`https://tsdr.uspto.gov/#caseNumber=5,136,006&caseSearchType=US_APPLICATION&
`
`caseType=DEFAULT&searchType=statusSearch (last visited June 1, 2023). In contrast,
`
`Plaintiffs also have alleged that they own a design trademark in the mark Allied
`
`Universal and design. FAC ¶ 21. This trademark registration is for an “illustration
`
`drawing which includes words/letters/numbers” and is described as consisting of “the
`
`word ‘ALLIED’ on top of ‘UNIVERSAL’ with an arc design to the left of the ‘A’ in
`
`‘ALLIED’ and the ‘U’ in ‘UNIVERSAL’ and going through ‘ALLIED.’” See
`
`https://tsdr.uspto.gov/#caseNumber=5,302,678&caseSearchType=US_APPLICATION&
`
`caseType=DEFAULT&searchType=statusSearch (last visited June 1, 2023).
`
`
`
`1 The Court takes judicial notice of the registrations of the trademarks at issue. Federal Rule of Civil
`Procedure 201 permits a court to take judicial notice on its own regarding any facts that is “not subject
`to reasonable dispute” where it “can be accurately and readily determined from sources whose accuracy
`cannot reasonably be questioned.” Fed. R. Civ. P 201(c)(1), (b)(2). Materials in the online files of the
`USPTO and other matters of public record are proper subjects of judicial notice. Reyn’s Pasta Bella,
`LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (“We may take judicial notice of court
`filings and other matters of public record.”) (citations omitted).
`
`7
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.317 Page 8 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`As plainly seen from the design disclaimer shown above, the disclaimer includes
`
`the terms “Allied Universal” and “Allied Universal Security Systems.” These are word
`
`trademarks that have been alleged by Plaintiffs. FAC ¶¶ 20, 25. Defendants’ motion and
`
`reply briefs do not give any argument as to why the FAC fails to allege “use” of these
`
`work marks. However, the disclaimer does not use the word mark “Allied Universal
`
`Security Services,” nor does the disclaimer include any use of the design marks alleged in
`
`the complaint. The complaint does not include any other factual allegations as to how
`
`Defendants may have infringed those trademarks, other than from the disclaimer in the
`
`Coastal Fire design drawing. Indeed, Plaintiffs only reference the above mentioned two
`
`word marks in their opposition brief as well. Thus, the Court finds that the complaint has
`
`only sufficiently alleged use of the two word marks “Allied Universal” and “Allied
`
`12
`
`Universal Security Systems.”
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`ii.
`
`Likelihood of Confusion
`
`“The test for likelihood of confusion is whether a ‘reasonably prudent consumer’
`
`in the marketplace is likely to be confused as to the origin of the good or service bearing
`
`one of the marks.” Entrepreneur Medica, Inc. v. Smith, 279 F.3d 1135, 1140 (9th Cir.
`
`2002). Likelihood of confusion is evaluated using an eight-part test that is
`
`“predominantly factual in nature.” Id. These factors, known as the Sleekcraft factors,
`
`include (1) the strength of the mark; (2) the relatedness or proximity of the goods or
`
`services; (3) the similarity of the marks; (4) the evidence of actual confusion; (5) the
`
`marketing channels used; (6) the type of goods and degree of care likely to be exercised
`
`by the purchaser; (7) the defendant’s intent in selecting the mark; and (8) the likelihood
`
`of expansion in product lines. See AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49
`
`24
`
`(9th Cir. 1979).
`
`25
`
`26
`
`27
`
`28
`
`This fact extensive inquiry is often not appropriate at the motion to dismiss stage.
`
`See, e.g., RCRV, Inc. v. Gracing Inc., No. CV 16-2829-R, 2016 WL 11000048, at *2
`
`(C.D. Cal. July 20, 2016) (“Many courts have held that the likelihood of consumer
`
`confusion is not appropriate to determine at the motion to dismiss stage.”); Lucent Techs.
`
`8
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.318 Page 9 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`v. Johnson, 2000 WL 1604055, at *2 (C.D. Cal. 2000) (“[T]he likelihood of confusion
`
`inquiry is a fact-intensive evaluation ill-suited for disposition on a motion to dismiss.”);
`
`Visual Changes Skin Care Int’l, Inc. v. Neways, Inc., No. CVF08-0959LJODLB, 2008
`
`WL 4723603, at *6 (E.D. Cal. Oct. 24, 2008). Courts have granted dismissal at the
`
`pleading stage on likelihood of confusion, but only in limited circumstances. Mastro’s
`
`Restaurants LLC v. Dominick Grp. LLC, No. CV 11-1996-PHX-PGR, 2012 WL
`
`2091535, at *7 (D. Ariz. June 11, 2012) (“A dismissal on the pleadings because a
`
`likelihood of confusion is impossible from the face of the Complaint is highly unusual,
`
`but not unheard of.”) (citing McCarthy on Trademarks and Unfair Competition §
`
`32:121.25). For example, dismissal may be granted where the parties’ goods are not
`
`related. Murray v. Cable Nat. Broad. Co., 86 F.3d 858, 861 (9th Cir. 1996), as amended
`
`(Aug. 6, 1996) (affirming district court’s dismissal where “the parties’ services are
`
`unrelated and there is no likelihood of confusion); Robinson v. Hunger Free Am., Inc.,
`
`No. 118CV00042LJOBAM, 2018 WL 1305722, at *4 (E.D. Cal. Mar. 13, 2018)
`
`(dismissing trademark infringement claim where the types of goods utilizing the mark
`
`were dissimilar). Dismissal may also be granted if the parties’ respective geographical
`
`locations prevent a finding of confusion, or where the defendant has specifically
`
`disclaimed any affiliation with the plaintiff’s goods and services. Mastro’s Restaurants
`
`LLC, 2012 WL 2091535, at *7 (collecting cases).
`
`Defendants argue that Plaintiffs have not sufficiently alleged likelihood of
`
`confusion, nor could they, since the apartment complex included the allegedly infringing
`
`Coastal Fire design drawing in a solicitation for a bid to Plaintiffs, clearly showing that
`
`the apartment complex did not select to give the business to Defendants and that they
`
`were not confusing Plaintiffs with Defendants. ECF No. 15-1 at 14; ECF No. 21 at 5.
`
`Plaintiffs counter that they sufficiently alleged that Defendants’ use was “confusingly
`
`similar in sound, appearance, and overall commercial impression” to its marks and the
`
`use was “likely to cause consumer confusion.” FAC ¶¶ 77-78. Further, Plaintiffs also
`
`argue that likelihood of confusion can also be established if a consumer may purchase a
`
`9
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.319 Page 10 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`defendant’s services under the mistaken belief that the defendant is associated with the
`
`trademark’s owner when they are not. ECF No. 17 at 12.
`
`Plaintiffs’ FAC includes the following allegations related to likelihood of
`
`confusion: that Defendants are using the trademarks in the disclaimer in connection with
`
`identical goods and services; that the disclaimer is “confusingly similar in sound,
`
`appearance, and overall commercial impression” to Plaintiffs’ marks; that the use is
`
`likely to cause consumer confusion; and that the use has caused Plaintiffs damage to their
`
`business, reputation and goodwill. FAC ¶¶ 76-81. The Court finds that these allegations
`
`as to likelihood of confusion are sufficient to survive a motion to dismiss. Defendants are
`
`alleged to have used the word trademarks in connection with the exact services that
`
`Plaintiffs provide, from the same consumer. Likelihood of confusion also encompasses
`
`the situation where a consumer is led to wrongly believe that the defendant is affiliated,
`
`endorsed by, or sponsored by the plaintiff through use of the plaintiff’s trademark. See
`
`KEMA, Inc. Koperwhats, No. C 09-1587 MMC, 2010 WL 11417911, at *3 (N.D. Cal.
`
`Sept. 1, 2010); Facebook, Inc. v. Power Ventures, Inc., 2009 WL 1299698 (N.D. Cal.
`
`May 11, 2009); see also Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1175-
`
`76 (9th Cir.2010) (noting false suggestion of sponsorship or endorsement by trademark
`
`holder “speaks directly to the risk of [consumer] confusion”). Moreover, the
`
`circumstances where courts in this district have found it appropriate to grant a motion to
`
`dismiss on likelihood of confusion (i.e., unrelated goods, dissimilar geographic regions,
`
`and express disclaimer of no relation) are not present here.
`
`Defendants’ arguments against likelihood of confusion are relevant to certain
`
`factors in the Sleekcraft inquiry, but are factual arguments not appropriate at this
`
`juncture. For example, Defendants argue that there was no actual confusion because the
`
`apartment complex did not give business to Defendants. Actual confusion is one of the
`
`Sleekcraft factors, but it is not dispositive or necessary. Network Automation, Inc. v.
`
`Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 2011) (“[A]ctual confusion
`
`is not necessary to a finding of likelihood of confusion under the Lanham Act.”) (quoting
`
`10
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.320 Page 11 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`Academy of Motion Picture Arts & Sciences v. Creative House Promotions, Inc., 944
`
`F.2d 1446, 1456 (9th Cir. 1991)); Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190,
`
`1216–17 (9th Cir. 2012) (noting that actionable confusion does not solely arise from
`
`confusion of consumers that could cause a direct loss of sale). Defendants also argue that
`
`the use of the disclaimer “erroneous” and an “inadvertent one-time error.” ECF No. 15-1
`
`at 14. Intent to use a mark to confuse consumers is a Sleekcraft factor but it is similarly
`
`not required to find trademark infringement. See Entrepreneur Media, Inc. v. Smith, 279
`
`F.3d 1135, 1148 (9th Cir. 2002) (noting that intent to confuse consumers is not required
`
`to find infringement but may be strong evidence of likelihood of confusion). Thus, while
`
`Defendants’ arguments are well-taken, they go to the factual-intensive inquiry of
`
`likelihood of confusion and are not sufficient to permit a dismissal at the motion to
`
`12
`
`dismiss stage.
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Because Plaintiffs have plausibly pled both elements of a trademark infringement
`
`claim—that they have valid, protectable trademarks and there is likelihood of
`
`confusion—on its word trademarks “Allied Universal” and “Allied Universal Security
`
`Systems,” Defendants’ motion to dismiss is DENIED as to this claim on those marks.
`
`The motion to dismiss the trademark infringement claim as to the three design trademarks
`
`and the word trademark for “Allied Universal Security Services” is GRANTED because
`
`the FAC fails to allege use of these marks by Defendants.
`
`B. Violation of Computer Fraud and Abuse Act
`
`In the second cause of action, Plaintiffs alleged that Defendants have violated
`
`various provisions of the Federal Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. §
`
`1030. This statute was originally enacted to “enhance the government’s ability to
`
`prosecute computer crimes” and is designed to “target hackers who accessed computers
`
`to steal information or to disrupt or destroy computer functionality, as well as criminals
`
`who possessed the capacity to access and control high technology processes vital to our
`
`everyday lives.” LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1130 (9th Cir. 2009).
`
`The CFAA is primarily a criminal statute, but includes a private civil cause of action:
`
`11
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.321 Page 12 of 23
`
`
`
`“Any person who suffers damage or loss by reason of a violation of this section may
`
`maintain a civil action against the violator to obtain compensatory damages and
`
`injunctive relief or other equitable relief.” 18 U.S.C. § 1030(g). Specifically, Plaintiffs
`
`alleged violations of the followings subsections:
`
`18 U.S.C. § 1030(a)(2)(C): “whoever . . . intentionally accesses a computer
`without authorization or exceeds authorized access, and thereby obtains . . .
`(C) information from any protected computer;”
`
`18 U.S.C. § 1030(a)(4): “whoever . . . knowingly and with intent to defraud,
`accesses a protected computer without authorization, or exceeds authorized
`access, and by means of such conduct furthers the intended fraud and obtains
`anything of value, unless the object of the fraud and the thing obtained
`consists only of the use of the computer and the value of such use is not
`more than $5,000 in any 1-year period;”
`
`18 U.S.C. § 1030(a)(5)(C): “whoever . . . intentionally accesses a protected
`computer without authorization, and as a result of such conduct, causes
`damage and loss.”
`
`FAC ¶¶ 86-89. In addition, in order to establish civil liability, the conduct must
`
`also “involve[] 1 of the factors set forth in subclauses (I), (II), (III), (IV), or (V) of
`
`subsection (c)(4)(A)(i).” 18 U.S.C. § 1030(g). The factor that has been alleged by
`
`Plaintiffs in the FAC is in 18 U.S.C. § 1030(c)(4)(A)(i)(I), requiring “loss to 1 or
`
`more persons during any 1-year period . . . aggregating at least $5,000 in value.
`
`FAC ¶ 91.
`
`i.
`
`Protected Computer
`
`The violations alleged by Plaintiffs all require accessing a “protected
`
`computer.” The CFAA defines the term “protected computer” as follows:
`
`“a computer . . . which is used in or affecting interstate or foreign commerce or
`communication, including a computer located outside the United States that is
`used in a manner that affects interstate or foreign commerce or communication
`of the United States.”
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`12
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.322 Page 13 of 23
`
`
`
`18 U.S.C. § 1030(e)(2)(B).2 Plaintiffs allege in the FAC that Defendants violated the
`
`CFAA by accessing “a computer used for interstate commerce or communication” and
`
`that the Allied Universal computer system accessed by Defendants “is a ‘protected
`
`computer’ as the term is used in 18 U.S.C. § 1030(e)(2).” FAC ¶¶ 86, 90. Defendants
`
`argue that the FAC fails to allege any facts to support this contention. ECF No. 15-1 at
`
`16.
`
`
`
`The Court agrees that the FAC only contains conclusory statements as to how the
`
`computer that Defendants allegedly used to violate the CFAA are “protected computers.”
`
`See Connelly v. Blacksexfinder Corp., No. SACV1501255CJCJCGX, 2017 WL
`
`11635875, at *2 (C.D. Cal. Sept. 12, 2017) (finding that the allegation that “Plaintiffs’
`
`computers are protected computers . . . in that they are used in and affect interstate
`
`commerce and communication” was too conclusory and insufficient to satisfy Rule 8)
`
`(citing Ashcroft, 556 U.S. at 662). Even looking beyond these specific allegations
`
`regarding how the computer may qualify as “protected,” a review of the other factual
`
`allegations in the FAC fails to reveal any other facts that the Court may use to infer that
`
`the computer was used in interstate commerce. See, e.g., Merritt Hawkins & Assocs., LLC
`
`v. Gresham, 948 F. Supp. 2d 671, 674 (N.D. Tex. 2013) (courts may reasonably infer
`
`from other factual allegations that the accessed computer was used in interstate
`
`commerce, and is therefore “protected”).
`
`ii.
`
`18 U.S.C. §§ 1030(a)(2)(C), (a)(4)
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`
`
`These two sections both require a showing that Defendants accessed the protected
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`computer “without authorization” or “exceeds authorized access.” 18 U.S.C.
`
`§§ 1030(a)(2)(C), (a)(4). In a series of two cases, the Ninth Circuit has established the
`
`
`
`2 18 U.S.C. § 1030(e)(2) also includes additional definitions of a “protected computer” to includes
`computers exclusively for the use of financial institutions, the United States Government, or as part of a
`voting system, but the section alleged by Plaintiffs in the FAC relate to interstate commerce. FAC ¶ 86;
`see 18 U.S.C. § 1030(e)(2)(A), (C).
`
`13
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.323 Page 14 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`bounds of what “without authorization” and “exceeds authorized access” means under
`
`these sections.
`
`First, in Brekka, the defendant was employed by plaintiff and was alleged to have
`
`emailed himself company documents during the course of his employment, and after his
`
`employment ended, alleged to have continued to access plaintiff’s computer systems. 581
`
`F.3d at 1129-31. The Brekka plaintiff sued under 18 U.S.C. §§ 1030(a)(2), (a)(4). The
`
`Ninth Circuit held that a person accesses a computer “without authorization” under the
`
`CFAA where a person “accesses a computer without any permission at all,” whereas a
`
`person “exceeds authorized access” where the person “has permission to access the
`
`computer, but accesses information on the computer that the person is not entitled to
`
`access.” Id. at 1133. Applying these definitions, the court found that if it could be shown
`
`factually that Brekka accessed plaintiff’s computers after his employment ended, this
`
`would have satisfied the requirement that he accessed the computers “without”
`
`authorization. Id. at 1136. In contrast, however, Brekka emailing himself company
`
`documents while he was employed did not “exceed” authorization because he was
`
`authorized to access the company’s computers and the documents during his
`
`employment, and so was not actionable under sections (a)(2) and (a)(4). Id. at 1135.
`
`18
`
`
`
`The employee and employer in Brekka did not have a written employment
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`agreement, and the company did not have any employee guidelines that would have
`
`explicitly prohibited the employee from emailing himself company documents to
`
`personal computers. Id. at 1129. The Ninth Circuit next addressed what it means to
`
`“exceed authorized access” in a situation where the defendant did violate guidelines by
`
`his access. United States v. Nosal, 676 F.3d 854 (9th Cir. 2012) (en banc). In Nosal, the
`
`defendant, after leaving the company, convinced his former colleagues who were still
`
`current employees to use “their log-in credentials to download source lists, names and
`
`contact information from a confidential database on the company’s computer” and share
`
`the documents with Nosal. Id. at 856. The employees were authorized to access the
`
`information but the company had a policy that prohibited them from disclosing
`
`14
`
`22-cv-1352-JES-KSC
`
`

`

`Case 3:22-cv-01352-JES-KSC Document 26 Filed 06/15/23 PageID.324 Page 15 of 23
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`confidential information. Id. Nosal was charged with violation of 18 U.S.C. § 1030(a)(4)
`
`for aiding and abetting the current employees in “exceeding” their authorized access. Id.
`
`Nosal argued that “exceeds authorized access” referred to “someone who’s authorized to
`
`access only certain data or fil