Shijin Vapor LLC v. Bolt USA, LLC

• Court: District Court, N.D. California
• Decided: June 8, 2022
• Docket: 4:20-cv-05238
• Status: Unknown

Opinion

1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA

5 SHIJIN VAPOR LLC, Case No. 20-cv-05238-PJH 6 Plaintiff,

7 v. ORDER RE MOTIONS FOR SUMMARY JUDGMENT 8 BOLT USA, LLC, Re: Dkt. Nos. 63, 64 9 Defendant. 10

11 12 Plaintiff’s motion for summary judgment (Dkt. 64) and defendant’s motion for 13 partial summary judgment (Dkt. 63) came on for hearing before this court on May 26, 14 2022. Plaintiff and counter-defendant Shijin Vapor LLC (“Shijin”) appeared through its 15 counsel, Ali Kamarei and Marisella Prada. Defendant and counter-complainant Bolt 16 USA, LLC (“Bolt”) appeared through its counsel, Michael Kowsari. Having read the 17 papers filed in conjunction with the motions and carefully considered the arguments and 18 relevant legal authority, and good cause appearing, the court hereby rules as follows. 19 BACKGROUND 20 Plaintiff Shijin is the manufacturer of e-liquids for use in electronic cigarettes, 21 vaporizers, and similar products. See Complaint (Dkt. 1), ¶ 7. Some of Shijin’s products 22 were marked with the name “Bolt.” Id., ¶ 27. 23 Defendant Bolt is also a manufacturer of e-liquids for use in electronic cigarettes, 24 vaporizers, and similar products. See Answer and Counterclaims (Dkt. 25), ¶ 9. Bolt 25 uses a similar “Bolt” mark on its products. Id. 26 In April 2020, Bolt filed for multiple trademarks on the word “Bolt” and on a stylized 27 “Bolt” logo. Dkt. 1, ¶¶ 23-24. In the trademark applications, Bolt claimed that it had been 1 See Dkt. 63, Ex. E. 2 Shijin sold some of its “Bolt”-marked products through a third-party distributor, 3 VaporDNA. See Dkt. 1, ¶¶ 30, 37. In May 2020, Bolt sent a cease and desist letter to 4 VaporDNA, claiming ownership of the “Bolt” trademark and directing VaporDNA to stop 5 selling the products. Id., ¶¶ 26-27. 6 Shijin alleges that, as a result of the cease and desist letter, “VaporDNA 7 terminated its business relationship with [Shijin] with regard to [Shijin]’s Bolt-marked 8 products.” Dkt. 1, ¶ 29. Shijin further alleges that Bolt’s trademark applications 9 contained false statements regarding its first use of the mark. Id., ¶¶ 35-36. 10 On July 30, 2020, Shijin filed this declaratory judgment suit, asserting four causes 11 of action: (1) Declaratory relief, seeking a judgment that it is the senior user of the “Bolt” 12 mark, and that Bolt’s trademark applications were filed fraudulently, 13 (2) Intentional interference with contractual relations, arising out of Shijin’s alleged contract with VaporDNA, 14 (3) Intentional interference with prospective economic relations, also arising out of Shijin’s economic relationship with VaporDNA, and 15 (4) Violation of Cal. Bus. & Prof. Code § 17200. 16 See Dkt. 1. 17 Bolt’s answer asserts three counterclaims: (1) Violation of the Lanham Act for false designation/unfair competition, 18 (2) Common law trademark infringement and unfair competition, and 19 (3) Violation of Cal. Bus. & Prof. Code § 17200. See Dkt. 25. 20 As mentioned above, both parties have filed a motion for summary judgment. 21 Shijin’s motion seeks summary judgment on all three counterclaims asserted by Bolt. 22 See Dkt. 64. Bolt’s motion seeks summary judgment on three of the four claims asserted 23 by Shijin – specifically, the second, third, and fourth causes of action. See Dkt. 63. 24 DISCUSSION 25 A. Legal standard 26 Summary judgment is proper where the pleadings, discovery, and affidavits show 27 1 judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those which may 2 affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 3 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a 4 reasonable jury to return a verdict for the nonmoving party. Id. “A ‘scintilla of evidence,’ 5 or evidence that is ‘merely colorable’ or ‘not significantly probative,’ is not sufficient to 6 present a genuine issue as to a material fact.” United Steelworkers of Am. v. Phelps 7 Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (citation omitted). 8 Courts recognize two ways for a moving defendant to show the absence of 9 genuine dispute of material fact: (1) proffer evidence affirmatively negating any element 10 of the challenged claim and (2) identify the absence of evidence necessary for plaintiff to 11 substantiate such claim. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 12 1102 (9th Cir. 2000) (“In order to carry its burden of production, the moving party must 13 either produce evidence negating an essential element of the nonmoving party's claim or 14 defense or show that the nonmoving party does not have enough evidence of an 15 essential element to carry its ultimate burden of persuasion at trial.”) 16 “Once the moving party meets its initial burden, the nonmoving party must go 17 beyond the pleadings and, by its own affidavits or by the depositions, answers to 18 interrogatories, and admissions on file, come forth with specific facts to show that a 19 genuine issue of material fact exists.” Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 20 1993) (per curiam). “When the nonmoving party relies only on its own affidavits to 21 oppose summary judgment, it cannot rely on conclusory allegations unsupported by 22 factual data to create an issue of material fact.” Id. 23 The court must view the evidence in the light most favorable to the nonmoving 24 party: if evidence produced by the moving party conflicts with evidence produced by the 25 nonmoving party, the judge must assume the truth of the evidence set forth by the 26 nonmoving party with respect to that fact. See, e.g., Leslie v. Grupo ICA, 198 F.3d 1152, 27 1158 (9th Cir. 1999). However, when a non-moving party fails to produce evidence 1 Fire, 210 F.3d at 1103 (“If the nonmoving party fails to produce enough evidence to 2 create a genuine issue of material fact, the moving party wins the motion for summary 3 judgment.”) 4 B. Analysis 5 As an initial matter, at the hearing, the court stated on the record that Shijin’s 6 motion for summary judgment was DENIED. See Dkt. 70. Shijin’s motion sought 7 summary judgment on all three counterclaims asserted by Bolt: (1) violation of the 8 Lanham Act, (2) common law trademark infringement and unfair competition, and (3) 9 violation of section 17200. See Dkt. 64. 10 As stated at the hearing, the parties have conflicting evidence as to the date that 11 each of them first used the “Bolt” mark at issue. Critically, both parties allege to have first 12 used the mark during a narrow time period in early 2020, and neither party has presented 13 definitive evidence that overcomes the other party’s showing. See, e.g., Dkt. 64 at 8; Dkt. 14 66 at 7-10. And because the date of first use of the mark is unquestionably a material 15 fact as to all three counterclaims asserted by Bolt, the factual conflict precludes the entry 16 of summary judgment on those claims. See, e.g., One Indus., LLC v. Jim O’Neil Distrib., 17 Inc., 578 F.3d 1154, 1158 (9th Cir. 2009) (“It is a cardinal principle of federal trademark 18 law that the party who uses the mark first gets priority.”); see also Cleary v. News Corp., 19 30 F.3d 1255, 1262-63 (9th Cir. 1994) (“state common law claims of unfair competition 20 and actions pursuant to California Business and Professions Code § 17200 are 21 substantially congruent to claims made under the Lanham Act.”). Thus, as stated at the 22 hearing, Shijin’s motion for summary judgment (Dkt. 64) is DENIED in full. 23 At the hearing, the court took Bolt’s motion for partial summary judgment under 24 submission. See Dkt. 70. Bolt’s motion seeks summary judgment as to three of the four 25 claims asserted in Shijin’s complaint; specifically, the second cause of action for 26 intentional interference with contractual relations, the third cause of action for intentional 27 interference with prospective economic relations, and the fourth cause of action for 1 1. Intentional interference with contractual relations 2 The elements of a claim for intentional interference with contractual relations are: 3 (1) there was a contract between the plaintiff and a third party, (2) the defendant knew of 4 the contract, (3) through its actions, the defendant made performance of that contract 5 more difficult or prevented performance, (4) the defendant intended to disrupt 6 performance of the contract, (5) the plaintiff was harmed, and (6) the defendant’s actions 7 were a substantial factor in causing that harm. See CACI § 2201; PG&E v. Bear Stearns, 8 50 Cal.3d 1118, 1126 (1990). 9 Bolt primarily challenges element (1) – the existence of a contract between Shijin 10 and VaporDNA. Bolt argues that the only evidence of a contract produced during 11 discovery was a single sales invoice from April 2020. See Dkt. 63 at 11. Bolt argues that 12 Shijin may have had hopes of future purchases, but such hopes are not sufficient to 13 constitute a contract. Id. at 11-14. 14 Shijin’s opposition presents a new declaration from its own witness stating that 15 “[i]n mid to late 2017, Shijin Vapor, LLC and Vapor DNA entered into an oral agreement 16 for Vapor DNA’s long-term purchases of tobacco products from Shijin.” Dkt. 65, Ex. 2, 17 ¶ 3. The declaration also attaches a second sales invoice from Shijin to VaporDNA, 18 dated November 2017. Id., ¶ 9. 19 Bolt challenges the new declaration as a conclusory, self-serving declaration that 20 cannot be sufficient to defeat summary judgment. Dkt. 67 at 6-10. Bolt further argues 21 that this new information should have been provided in response to Bolt’s interrogatory 22 seeking “all facts and circumstances” regarding the existence of a contract. Id. at 3. Bolt 23 argues that Shijin’s interrogatory response was boilerplate, and stated only that 24 “responding party was entered into a contract with VaporDNA and pursuant to that 25 contract there was an ongoing relationship between VaporDNA and responding party.” 26 See Dkt. 63, Ex. D. 27 The new declaration submitted by Shijin does not suffice to create a triable issue 1 1054, 1061 (9th Cir. 2002) (“this court has refused to find a ‘genuine issue’ where the 2 only evidence presented is ‘uncorroborated and self-serving’ testimony.”); FTC v. 3 Publishing Clearing House, 104 F.3d 1168, 1171 (“A conclusory, self-serving affidavit, 4 lacking detailed facts and any supporting evidence, is insufficient to create a genuine 5 issue of material fact.”). Shijin’s declaration relies on broad, conclusory assertions that it 6 “entered into an oral agreement for Vapor DNA’s long-term purchases of tobacco 7 products from Shijin” and that “Vapor DNA would place orders from Shijin for quantities 8 and types/flavors of products and resell them on its website,” rather than providing 9 specific facts regarding purchases and the parties’ ongoing obligations under the alleged 10 contract. 11 Putting aside the self-serving declaration, the only evidence of a contractual 12 relationship between Shijin and VaporDNA is one invoice in November 2017 and a 13 second invoice in April 2020. See Dkt. 63, Ex. A; Dkt. 65, Ex. 1. 14 Shijin’s showing is insufficient to create a genuine issue of material fact regarding 15 the existence of a contract at the time that the cease and desist letter was sent. Shijin’s 16 evidence shows only that it sold products to VaporDNA on two separate occasions, more 17 than two years apart. Shijin was given the opportunity in discovery to produce all 18 evidence supporting the existence of a contract, an essential element of this cause of 19 action, but it has not identified any evidence, other than a self-serving declaration, that 20 indicates an ongoing agreement between Shijin and VaporDNA at the time of the cease 21 and desist letter. Thus, the court GRANTS Bolt’s motion for summary judgment as to 22 Shijin’s second cause of action for intentional interference with contractual relations. 23 2. Intentional interference with prospective economic relations 24 The elements of a claim for intentional interference with prospective economic 25 relations are: (1) plaintiff and a third party were “in an economic relationship that probably 26 would have resulted in an economic benefit” to plaintiff, (2) defendant knew of the 27 relationship, (3) defendant engaged in wrongful conduct, (4) by engaging in the conduct, 1 relationship was disrupted, (6) plaintiff was harmed, and (7) defendant’s conduct was a 2 substantial factor in causing the harm. See CACI § 2202. 3 Bolt challenges element (3), arguing that it did not engage in any “wrongful 4 conduct,” and that Shijin cannot raise a triable issue of fact on that element. Dkt. 63 at 5 14-17. Shijin argues that the wrongful conduct consists of Bolt’s misrepresentation to the 6 Patent and Trademark Office regarding its date of first use. See Dkt. 65 at 10-11. Bolt 7 responds by providing authority stating that the date of first use is immaterial to the 8 validity of a trademark registration so long as the mark was in use at the time of the 9 application. See Pony Express Courier Corp. of America v. Pony Express Delivery 10 Service, 872 F.2d 317, 319 (9th Cir. 1989) (“The claim of a date of first use is not a 11 material allegation as long as the first use in fact preceded the application date.”); see 12 also Teeter-Totter, LLC v. Palm Bay Int’l, Inc., 344 F.Supp.3d 1100, 1109 (N.D. Cal. 13 2018) (citing Pony Express). Bolt argues that, even if its use of the mark did not date 14 back to February 2018, it was indisputably using the mark at the time of the trademark 15 application date, and thus the mark is presumed valid. 16 The authority cited by Bolt does indeed hold that an inaccurate date of first use in 17 a trademark application does not render a trademark invalid as long as the mark was in 18 use at the time of the application. See Pony Express, 872 F.3d at 319. Thus, because 19 Shijin’s third cause of action is predicated on Bolt’s representations made in its trademark 20 application, and because those representations are not considered to be “wrongful” under 21 governing authority, Bolt’s motion for summary judgment is GRANTED as to Shijin’s third 22 cause of action for intentional interference with prospective economic relations. 23 3. Violation of section 17200 24 As to the fourth cause of action for violation of section 17200, Bolt argues that it is 25 derivative of the second and third causes of action. See Dkt. 63 at 17 (citing Cel-Tech 26 Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 165 (1999) 27 (section 17200 “borrows violations of other laws and treats them as unlawful practices 1 nominally disputes the characterization of the claim as “derivative,” its opposition does 2 not identify any additional conduct for the court to consider as part of this claim. See Dkt. 3 65 at 11-12. 4 Thus, because the court has granted summary judgment as to Shijin’s second and 5 third causes of action, and because Shijin identifies no additional conduct that has been 6 adequately alleged in connection with its section 17200 claim, the court GRANTS Bolt’s 7 motion for summary judgment as to Shijin’s fourth cause of action for violation of section 8 17200. 9 CONCLUSION 10 For the foregoing reasons, Shijin’s motion for summary judgment (Dkt. 64) is 11 DENIED, and Bolt’s motion for partial summary judgment (Dkt. 63) is GRANTED. 12 What remains in this case are: (1) a single cause of action asserted by Shijin 13 against Bolt, for declaratory relief regarding use of the “Bolt” mark, and (2) three causes 14 of action asserted by Bolt against Shijin related to alleged trademark infringement. 15 As stated at the hearing, the parties are re-referred to Magistrate Judge Hixson for 16 a further settlement conference. The parties will be advised of the date, time, place, and 17 method of appearance by notice from the assigned judge. 18 IT IS SO ORDERED. 19 Dated: June 8, 2022 20 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 21 United States District Judge

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