Lokai Holdings LLC v. Twin Tiger USA LLC

306 F. Supp. 3d 629
CourtDistrict Court, S.D. Illinois
DecidedFebruary 6, 2018
Docket15–CV–9363 (ALC)
StatusPublished
Cited by31 cases

This text of 306 F. Supp. 3d 629 (Lokai Holdings LLC v. Twin Tiger USA LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lokai Holdings LLC v. Twin Tiger USA LLC, 306 F. Supp. 3d 629 (S.D. Ill. 2018).

Opinion

ANDREW L. CARTER, JR., United States District Judge:

Lokai Holdings LLC ("Lokai," "Plaintiff," or "Counter-Defendant") brings this action for trade dress infringement, unfair competition, and false advertising against Defendants Twin Tiger USA LLC, Twin Tiger World Markets Ltd., Rory Coppock, and Troy Coppock (collectively, "Defendants," "Twin Tiger," or "Counter-Plaintiffs"). Twin Tiger, in turn, has asserted various affirmative defenses and counterclaims, alleging that Lokai has engaged in false advertising and unfair competition and has tortiously interfered with Twin Tiger's contractual and business relationships. Before the Court are Lokai's motions to dismiss certain counterclaims and to strike an affirmative defense. Specifically, *636Lokai seeks to dismiss Twin Tiger's false advertising, unfair competition, tortious interference, and attorney's fees claims under Fed. R. Civ. P. 12(b)(6) and to strike Twin Tiger's second affirmative defense of unclean hands under Fed. R. Civ. P. 12(f). For the reasons that follow, Lokai's motion to dismiss is GRANTED, and its motion to strike is also GRANTED.

BACKGROUND

Lokai is a socially responsible lifestyle brand company that sells bracelets. Sixth Amended Complaint ("SAC") ¶ 11. Lokai's beaded bracelets "have featured the same distinctive trade dress which includes substantially spherical silicone beads of substantially the same size and color integrated with each other at opposite poles with a single pair of contrasting colored beads diametrically opposed to each other." Id. ¶ 12. According to Lokai, the contrasting beads of its bracelets are intended to represent balance and the cycle of life with the dark bead filled with mud from the Dead Sea, the lowest point on earth, and the light colored bead filled with water from Mount Everest, the highest point on earth. Id. ¶ 13.

The Complaint alleges that in 2015 Twin Tiger began selling "unauthorized imitations" of Lokai's bracelets, marketing them as Life Bracelets. Id. ¶¶ 21-22. On that basis, Lokai filed suit on November 30, 2015. Lokai asserts claims for unfair competition and false advertising under the Trademark Act, California law, and the common law against Twin Tiger, alleging that they have infringed on its trade dress by selling confusingly similar bracelets and engaged in unfair competition and false advertising by making false claims in their promotional efforts that their bracelets contain "earth from below sea level" and "water from the mountains." After numerous amendments, Lokai filed its Sixth Amended Complaint on June 5, 2017.

Twin Tiger responded by filing on June 7, 2017 its Answer, Affirmative Defenses, and Counterclaims (the "Answer," "Affirmative Defenses," and "Counterclaims"). The first set of counterclaims that Lokai seeks to dismiss are the false advertising and unfair competition counterclaims (3rd, 4th, 5th, and 6th Counterclaims) under the Lanham Act, California law, and New York law. All four counterclaims rely on the same alleged conduct: (1) Lokai has failed to disclose that the water inserted in its bracelets does not permanently remain there, Counterclaims ¶¶ 20-23; and (2) Lokai has failed to disclose that it compensates various celebrities and influencers in exchange for their efforts to promote Lokai and its products. Counterclaims ¶¶ 28-31.

The second set of counterclaims consists of tortious interference claims: intentional interference with contractual relations (7th Counterclaim), intentional interference with prospective economic relations (8th Counterclaim), and negligent interference with prospective economic relations (9th Counterclaim). The conduct that forms the basis of these claims is that Lokai sent letters to Twin Tiger's customers, including Rue 21 and Five Below, requesting that they cease selling Twin Tiger's bracelets and threatening litigation based on infringement of Lokai's intellectual property rights. Counterclaims ¶¶ 74-75, 81-82, 87-89.

The last counterclaim is a claim for attorney's fees pursuant to 35 U.S.C. § 285 (1st Counterclaim). Counterclaims ¶¶ 1-11. In its Second Amended Complaint, Lokai asserted a claim for design patent infringement under 35 U.S.C. § 271, but this cause of action was voluntarily dropped by Lokai and dismissed with prejudice. See Stipulation and Order, ECF No. 155. Twin Tiger *637alleges that Lokai committed fraud in obtaining a patent and that Lokai's founder Steven Izen committed perjury during the course of discovery in this case, and therefore Twin Tiger is entitled to an award of reasonable attorney's fees. Redundantly, Twin Tiger's prayer for relief includes a request for an award of attorney's fees as the prevailing party with respect to Lokai's patent infringement claim.

STANDARD OF REVIEW

To survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible "when the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). A sufficiently pleaded complaint must provide "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id.

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Bluebook (online)
306 F. Supp. 3d 629, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lokai-holdings-llc-v-twin-tiger-usa-llc-ilsd-2018.