Judge: Peter A. Hernandez, Case: 22PSCV00901, Date: 2023-12-05 Tentative Ruling

Case Number: 22PSCV00901    Hearing Date: December 5, 2023    Dept: K

Plaintiff/Cross-Defendant Miri P. Ryu’s Demurrer to First Amended Cross-Complaint is SUSTAINED.

Background[1]  

Case No. 22PSCV00901

Miri alleges as follows: Miri owns the trademark known as “Teehee Kids” (“Mark”). TSI, Bok, TJ International and Taijin have used and are using the Mark in commerce to sell children’s socks in the United States and internationally via online services such as Amazon.com without Miri’s consent.

On August 22, 2022, Miri filed a complaint, asserting causes of action against TSI, Bok, TJ International, Taijin and DOES 1-100 for:

1.                  Trademark Infringement Under 15 U.S.C. § 1114(1)

2.                  False Designation of Origin Under 15 U.S.C. § 1125(a)

3.                  Unfair Competition Under Bus. & Prof. Code §§ 17200 et seq.

4.                  Common Law Trademark Infringement

5.                  Common Law Unfair Competition

On September 8, 2022, the court related Case No. 22PSCV00901 to Case No. 21PSCV00336; Case No. 21PSCV00336 was designated the lead case.

On July 19, 2023, TSI filed a First Amended Cross-Complaint, asserting causes of action against Miri and Roes 1-50 for:

1.                  Cancellation of Registration for Non-Use and Abandonment

2.                  Cancellation of Registration for Fraud

3.                  Declaratory Judgment

4.                  Declaratory Judgment

5.                  Common Law Unfair Competition

6.                  Unfair Business Practices (Business & Professions Code Section 17200, et seq.)

A Case Management Conference is set for December 5, 2023.

Legal Standard

A demurrer may be made on grounds that the pleading, inter alia, does not state facts sufficient to constitute a cause of action and/or is uncertain. (Code Civ. Proc., § 430.10, subds. (e) and (f).)

When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905 [citations omitted].) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) “[A] demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction placed on an instrument pleaded therein, or facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [citations omitted].)

Discussion

Miri demurs, pursuant to Code of Civil Procedure § 430.10, subdivision (e), to the entirety of TSI’s FACC, on the basis that it fails to state facts sufficient to constitute a cause of action. Miri also demurs, pursuant to subdivision (f), to the third, fourth and sixth causes of action in TSI’s FACC, on the basis of uncertainty.

Request for Judicial Notice

The court rules on Miri’s Request for Judicial Notice (“RJN”) as follows:

1.      Granted as to Exhibit 1 (i.e., SAC filed in Case No. 22PSCV00134);

2.      Granted as to Exhibit 2 (i.e., FACC filed in Case No. 21PSCV00336) and DENIED as to Exhibit 3 (i.e., email string dated between February 4, 2021-April 8, 2021).

Evidentiary Objection

TSI’s evidentiary objection to Exhibit 3 in Miri’s RJN is denied as moot.

Merits

First Cause of Action (i.e., for Cancellation of Registration for Non-Use)

Miri contends that TSI is judicially estopped from alleging actual abandonment on the basis that it has purportedly alleged use of the trademark in the cross-complaint and in prior proceedings.

Judicial estoppel “prohibits a party from taking inconsistent positions in the same or different judicial proceedings.” (M. Perez Co., Inc. v. Base Camp Condominiums Assn. No. One (2003) 111 Cal.App.4th 456, 463.) The five requirements for the application of judicial estoppel are: “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (The Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 842).

Miri fails to address the above requirements for the application of judicial estoppel, focusing only on what she claims are inconsistent positions TSI has taken in the instant FACC, the SAC in Case No. 22PSCV00134 and the FACC in Case No. 21PSCV00336. Without delving into whether or not Miri’s argument is correct, the court notes that Miri has not addressed, at a minimum, the third requirement set forth above. The court, then, overrules Miri’s demurrer to the first cause of action on the basis of judicial estoppel.

Miri also contends that TSI’s allegations of Miri’s use of the trademark set forth in the FACC indicate there was no abandonment. A mark shall be deemed to be ‘abandoned’ if either of the following occurs: (1) When its use has been discontinued with intent not to resume such use. . . (2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark . . .” (15 U.S.C.A. § 1127).

TSI has alleged, in relevant part, that “Cross-Defendant has not continuously carried apparel associated with the TEEHEE KIDS Mark and that it was not until sometime in 2021 that Cross-Defendant purported to carry apparel associated with the TEEHEE KIDS Mark” (FACC, ¶ 10) and that “Cross-Defendant abandoned the TEEHEE Kids Mark for apparel because she discontinued use of that Mark with an intent not to resume selling, offering for sale, shipping, transporting, advertising, promoting or otherwise using that MARK in the United States in interstate commerce” (Id., ¶ 11). The foregoing allegations, however, are made on information and belief. “[W]here factual allegations are based on information and belief, the plaintiff must allege information that lead[s] [the plaintiff] to believe that the allegations are true.” (Brown v. USA Taekwondo (2019) 40 Cal.App.5th 1077, 1106 [internal quotations and citation omitted].) TSI has not alleged any such information that leads it to believe that the allegations set forth in Paragraphs 9 and 10 are true. Further, TSI appears to concede that Miri was, in fact, using the trademark in 2021 (and, as subsequently set forth in the fifth cause of action, “is currently using the trade names and/or brands ‘Teehee Socks’ and ‘Teehee Kids’”). (Id., ¶¶ 10 and 39).

Miri’s demurrer to the first cause of action is sustained on this basis.

Second Cause of Action (i.e., for Cancellation of Registration for Fraud)

Miri contends that TSI’s second cause of action fails because TSI has not alleged damages.

“Any person who shall procure registration in the Patent and Trademark Office of a ‘mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof.” (15 U.S.C.A. § 1120 [emphasis added]).

TSI has not alleged any damages in its second cause of action. TSI has only alleged, with respect to its first cause of action (the allegations of which are incorporated into the second cause of action), that it is “likely to be damaged . .  .,” which infers that there are no existing damages (FACC, ¶ 13). Miri’s demurrer to the second cause of action is sustained on this basis.

Third and Fourth Causes of Action (i.e., for Declaratory Judgment)

The elements of a cause of action for declaratory relief are: (1) a person interested under a written instrument or a contract; or (2) a person who desires a declaration of his or her rights or duties; (3) with respect to another; or (4) in respect to, in, over or upon property; and (5) an actual controversy. (Code Civ. Proc., § 1060.)

TSI alleges that there is an “actual case and controversy” between TSI and Miri “as to their respective rights and responsibilities with respect to the TEEHEE KIDS Mark and U.S. Trademark Application No. 87446748.” (FACC, ¶¶ 26 and 31). TSI has not alleged ultimate facts to show a legal right to the Teehee Kids trademark. Miri’s demurrer to the third and fourth causes of action is sustained on this basis.

Fifth Cause of Action (i.e., for Common Law Unfair Competition)

“The common law tort of unfair competition is generally thought to be synonymous with the act of ‘passing off’ one's goods as those of another. The tort developed as an equitable remedy against the wrongful exploitation of trade names and common law trademarks that were not otherwise entitled to legal protection.” (Bank of the West v, Superior Court (1992) 2 Cal.4th 1254, 1263).

TSI has not alleged facts showing that it is entitled to use of the trademark. Miri’s demurrer to the fifth cause of action is sustained.

Sixth Cause of Action (i.e., for Unfair Business Practices [Business and Professions Code Section 17200, et seq.])

“To bring a UCL claim, a plaintiff must show either an (1) unlawful, unfair, or fraudulent business act or practice, or (2) unfair, deceptive, untrue or misleading advertising.” (Lippitt v. Raymond James Financial Services, Inc. (2003) 340 F.3d 1033, 1043 [internal citations and quotation omitted].)

TSI’s allegations are conclusory and factually devoid. Miri’s demurrer to the sixth cause of action is sustained.