Shenzhen Big Mouth Technologies Co., Ltd. v. Factory Direct Wholesale, LLC

CourtDistrict Court, N.D. California
DecidedApril 5, 2022
Docket3:21-cv-09545
StatusUnknown

This text of Shenzhen Big Mouth Technologies Co., Ltd. v. Factory Direct Wholesale, LLC (Shenzhen Big Mouth Technologies Co., Ltd. v. Factory Direct Wholesale, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shenzhen Big Mouth Technologies Co., Ltd. v. Factory Direct Wholesale, LLC, (N.D. Cal. 2022).

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SHENZHEN BIG MOUTH 10 TECHNOLOGIES CO., LTD., et al., Case No. 21-cv-09545-RS

11 Plaintiffs, ORDER GRANTING MOTION TO 12 v. DISMISS AND GRANTING IN PART AND DENYING IN PART MOTION TO 13 FACTORY DIRECT WHOLESALE, LLC, STRIKE AFFIRMATIVE DEFENSES 14 Defendant.

15 16 I. INTRODUCTION 17 Plaintiffs Decai (Tony) Fu and Shenzhen Big Mouth Technologies Co., Ltd. (“Big 18 Mouth”) filed this lawsuit against Defendant Factory Direct Wholesale, LLC (“FDW”). Plaintiffs 19 aver their use of the domain name (“the domain name”) was not unlawful, and 20 seek to prevent the transfer of the domain name from Fu to FDW. FDW moves pursuant to 21 Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff Big Mouth from Count Two, which 22 avers that FDW engaged in reverse domain name hijacking in violation of 15 U.S.C. § 23 1114(2)(D)(iv). FDW argues that Big Mouth is not a real party in interest to that claim. For the 24 reasons described below, the motion to dismiss Big Mouth from Count Two is granted, as section 25 1114(2)(D)(iv) only allows the domain name registrant to sue, and Fu is the registrant. Further, 26 Plaintiffs bring a motion to strike nineteen of the twenty affirmative defenses in FDW’s answer. 27 The motion to strike is granted as to the Eighth Affirmative Defense, and denied as to the other 1 II. FACTUAL BACKGROUND 2 A. Factual Background1 3 Big Mouth is an office lighting and furniture business founded and operated by Fu. 4 Plaintiffs aver they have been using the term “BESTOFFICE” while selling products since 2012. 5 The domain name was originally registered in 2002 by a prior owner, and Fu acquired the domain 6 name on October 3, 2019 to expand his company’s business to online sales. Defendant FDW is 7 also an office furniture company and claims it has used the mark “BESTOFFICE” since 2013. 8 FDW became the record owner of the trademark term “BESTOFFICE,” for use in connection with 9 certain types of furniture, on the United States Patent and Trademark Office (“USPTO”) 10 Supplemental Register on September 9, 2014. On July 16, 2018, FDW filed an application for 11 trademark registration for “BESTOFFICE” on the USPTO Principal Register. The USPTO 12 examining attorney initially refused the application on the grounds that FDW’s “BESTOFFICE” 13 mark was merely descriptive and indicated that FDW could not claim acquired distinctiveness 14 based on its prior registration on the Supplemental Register, but FDW ultimately overcame the 15 refusal by establishing acquired distinctiveness through evidence of five years prior use.2 16 On November 3, 2021, FDW filed a domain dispute action against Fu under the Uniform 17 Domain Name Dispute Resolution Policy (“UDRP”) with Forum, an arbitration forum for domain 18 name disputes. The UDRP provides for an expedited arbitration process to resolve domain name 19 ownership disputes involving trademarks. See Petroliam Nasional Berhad v. GoDaddy.com, Inc., 20 737 F.3d 546, 548 n.1 (9th Cir. 2013); Rules For Uniform Domain Name Dispute Resolution 21

22 1 As this Court must “accept all factual allegations in the complaint as true” when evaluating a Rule 12(b)(6) motion to dismiss, Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005), all facts 23 in this section are taken from the Complaint, unless noted otherwise. 24 2 A term that is not inherently distinctive may have acquired distinctiveness if it has a “secondary meaning which occurs when, ‘in the minds of the public, the primary significance of a [mark] is to 25 identify the source of the product rather than the product itself.’” See Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 211 (2000) (quoting Inwood Laboratories, Inc. v. Ives 26 Laboratories, Inc., 456 U.S. 844, 851 n.11 (1982)). An applicant may establish acquired distinctiveness through proof of “substantially exclusive and continuous” use of a mark in 27 commerce for five years. 15 U.S.C. §1052(f). 1 Policy, Internet Corporation for Assigned Names and Numbers, 2 https://www.icann.org/resources/pages/udrp-rules-2015-03-11-en (last visited Mar. 27, 2022). In 3 its complaint filed with Forum, FDW sought to recover the domain name, asserting Fu’s domain 4 name infringed its rights in its “BESTOFFICE” trademark by using the domain name to pass itself 5 off as FDW and market and promote products that directly compete with FDW’s “BESTOFFICE” 6 brand products. Fu, the respondent in the UDRP proceeding, did not reply to the Written Notice of 7 the Complaint sent to him on November 4, 2021.3 See Declaration of Elizabeth Borland in Support 8 of Motion to Dismiss, Ex. 1, at pg. 2. On November 30, 2021, Forum entered a decision ordering 9 the domain name to be transferred from Fu to FDW. Id. The following day, Google, the domain 10 name registrar, informed Fu via email that it would implement Forum’s decision to transfer the 11 domain name to Defendant FDW. 12 In response, Plaintiffs filed this action on December 9, 2021, seeking to prevent or reverse 13 transfer of the domain name, as well as declaratory relief, under the Anticybersquatting Consumer 14 Protection Act (“ACPA”). The Complaint includes five claims for relief: (1) declaratory relief 15 pursuant to 28 U.S.C. § 2201 establishing Plaintiffs’ non-violation of the ACPA, 15 U.S.C. §§ 16 1114(2)(D)(v), 1125(d)(1); (2) reverse domain name hijacking by Defendant in violation of 15 17 U.S.C. § 1114(2)(D)(iv); (3) declaratory relief establishing Plaintiffs’ non-infringement of 18 trademarks through descriptive fair use of term “BESTOFFICE” under 15 U.S.C. § 1115(b)(4); 19 (4) declaratory relief for Plaintiffs’ non-infringement of trademarks based on ground that 20 Defendant lacks valid protectable trademark to term “BESTOFFICE” under 28 U.S.C. §§ 1051, 21 2201; and (5) cancellation of Defendant’s principal registration under 15 U.S.C. §§ 1064 and 22 1119. 23 Defendant filed a motion to dismiss one plaintiff, Big Mouth, from the reverse domain 24

25 3 The Court takes judicial notice of the Forum decision, Declaration of Elizabeth Borland in Support of Motion to Dismiss, Ex. 1. Plaintiffs do not dispute the authenticity of the Forum 26 decision, and rely on the decision in their Complaint. See Fed. R. Evid. 201

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Shenzhen Big Mouth Technologies Co., Ltd. v. Factory Direct Wholesale, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shenzhen-big-mouth-technologies-co-ltd-v-factory-direct-wholesale-llc-cand-2022.