Zen Laboratory LLC v. Shenzhen Haitaifangyuan Dianzishangwuyouxiangongsi

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Zen Laboratory LLC, No. CV-25-03675-PHX-JJT

10 Plaintiff, ORDER

11 v.

12 Shenzhen Haitaifangyuan Dianzishangwuyouxiangongsi, 13 Defendant. 14 15 At issue is Defendant Shenzhen Haitaifangyuan Dianzishangwuyouxiangongsi’s 16 Motion to Dismiss Plaintiff’s First Amended Complaint (Doc. 17, Mot.), to which Plaintiff 17 Zen Laboratory LLC responded (Doc. 20, Resp.) and Defendant replied (Doc. 21, Reply). 18 I. BACKGROUND 19 At the heart of this matter are two products sold online as “Fidget Poppers Pack” 20 that contain small toys for children. Plaintiff uses the phrase “FIDGET POPPERS PACK” 21 (“Mark”) as an unregistered trademark. (FAC ¶ 10). The product is packaged in a blue, 22 geometric patterned box with the front-facing panel displaying the Mark in white, bold 23 lettering across a horizontal stripe above a graphic of three toys. (FAC ¶¶ 10–11.) The top- 24 facing panel is similar except it does not show the graphic. (FAC ¶ 11.) Plaintiff uses the 25 front and top panels as its unregistered trade dress (“Dress”) as depicted in the following 26 images from Plaintiff’s First Amended Complaint: 27 . . . 28 . . . 6 (FAC ¥ 11.) 7 Plaintiff adopted and has used the Mark and Dress since June 21, 2021. (FAC 4 18.) g Plaintiff also owns Copyright Registration Number VA0002321292 (‘292 Registration’) 9 consisting of the front panel of the Dress. (FAC 25—27.) Plaintiff sells its product on an 10 Amazon storefront and its own commercial website. (FAC § 9.) Plaintiff has spent millions of dollars to promote its Mark and Dress through Amazon, Google, video ads, and D sponsorships, sold hundreds of thousands of units, garnered over 16,000 Amazon reviews, 3 and received an average rating of 4.6 out of 5 stars. (FAC 9] 21-22.) 14 Defendant also sells a product on Amazon called “Fidget Poppers Pack” that comes 15 in a blue, geometric patterned box with the words “FIDGET POPPERS PACK” displayed 16 in white, bold lettering across a horizontal stripe on the front- and top-facing panels of the 7 package and features a graphic of several toys on the front panel as shown in the following 18 images from Plaintiffs First Amended Complaint: 19 TM 20 Bh Lal

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24! (FAC 4 29-30.) 25 Plaintiff sued Defendant on the following claims: (1) false designation of origin in violation of 15 U.S.C. § 1125(a); (2) trademark infringement under Arizona common law; 27 (3) unfair competition under Arizona common law; (4) copyright infringement in violation 28

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1 of 15 U.S.C. § 501. Defendant now moves to dismiss Plaintiff’s claims for failure to state 2 a claim under Federal Rule of Civil Procedure 12(b)(6). 3 II. LEGAL STANDARD 4 Rule 12(b)(6) is designed to “test[] the legal sufficiency of a claim.” Navarro v. Block, 5 250 F.3d 729, 732 (9th Cir. 2001). This rule equally applies to counterclaims. A dismissal 6 under Rule 12(b)(6) for failure to state a claim can be based on either: (1) the lack of a 7 cognizable legal theory; or (2) the absence of sufficient factual allegations to support a 8 cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 9 1990). When analyzing a complaint for failure to state a claim, the well-pled factual 10 allegations are taken as true and construed in the light most favorable to the nonmoving 11 party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). A plaintiff must allege 12 “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 13 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff 14 pleads factual content that allows the court to draw the reasonable inference that the 15 defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 16 (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability 17 requirement,’ but it asks for more than a sheer possibility that a defendant has acted 18 unlawfully.” Id. 19 “While a complaint attacked by a Rule 12(b)(6) motion does not need detailed 20 factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief 21 requires more than labels and conclusions, and a formulaic recitation of the elements of a 22 cause of action will not do.” Twombly, 550 U.S. at 555 (cleaned up and citations omitted). 23 Legal conclusions couched as factual allegations are not entitled to the assumption of truth 24 and therefore are insufficient to defeat a motion to dismiss for failure to state a claim. Iqbal, 25 556 U.S. at 679–80. However, “a well-pleaded complaint may proceed even if it strikes a 26 savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote 27 and unlikely.’” Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 28 (1974)). 1 III. ANALYSIS 2 A. Trademark Infringement Claims 3 Plaintiff’s first claim arises under § 43(a) the Trademark Act of 1946 (“Lanham 4 Act”) (codified as amended at § 1125(a)), which prohibits uses of trademarks, trade names 5 and trade dress that are likely to cause confusion about the source of a product or service. 6 Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 676 (9th Cir. 2005) (citing § 1125(a)). 7 Plaintiff’s second and third claim assert violations of Arizona common law for trademark 8 infringement and unfair competition. While the second and third claims are denoted as 9 separate in the pleading, the state common law treats them as one and applies the same 10 standard as a federal trademark infringement claim under the Lanham Act. Fairway 11 Constructors, Inc. v. Ahern, 970 P.2d 954, 956 (Ariz. Ct. App. 1998) (noting that a common 12 law unfair competition claim includes a tort theory of trademark infringement); Carve 13 Design LLC v. Slingshop LLC, No. CV-25-03521-PHX-DWL, 2026 LX 296963, at *39 14 (D. Ariz. May 29, 2026) (“Common law trademark claims are substantially congruent to 15 claims made under the Lanham Act. . . . Courts thus address Arizona common law 16 trademark claims under the framework of federal law.”) (citation omitted) (collecting 17 cases). 18 “To state an infringement claim under § 1125(a)—whether it be a trademark claim 19 or a trade dress claim—a plaintiff must meet three basic elements: (1) distinctiveness, (2) 20 nonfunctionality, and (3) likelihood of confusion.” Kendall-Jackson Winery, Ltd. v. E. & 21 J. Gallo Winery, 150 F.3d 1042, 1046–47 (9th Cir. 1998). Defendant challenges only the 22 first element. (See Mot. at 4–9; Reply at 2–7.) 23 Distinctiveness is assessed on a spectrum of five categories in ascending order: “(1) 24 generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful.” Kendall-Jackson 25 Winery, 150 F.3d at 1047. The Ninth Circuit defines these points as follows:

26 Generic terms are those used by the public to refer generally to 27 the product rather than a particular brand of the product. Descriptive terms directly describe the quality or features of 28 the product. A suggestive mark conveys an impression of a 1 good but requires the exercise of some imagination and perception to reach a conclusion as to the product’s nature. 2 Arbitrary and fanciful marks have no intrinsic connection to 3 the product with which the mark is used; the former consists of words commonly used in the English language, whereas the 4 latter are wholly made-up terms. 5 6 Brookfield Commc’ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1058 (9th Cir. 1999) 7 (internal citations omitted). 8 At the least distinctive end of that spectrum, “[a] ‘generic’ term is one that refers, 9 or has come to be understood as referring, to the genus of which the particular product or 10 service is a species. It cannot become a trademark under any circumstances.” Filipino 11 Yellow Pages, Inc. v. Asian J. Publications, Inc., 198 F.3d 1143, 1147 (9th Cir. 1999). In 12 contrast, marks that are suggestive, arbitrary or fanciful “are deemed inherently 13 distinctive.” Kendall-Jackson Winery, 150 F.3d at 1047. “Marks that are descriptive fall in 14 the middle of these two extremes,” and while they are not inherently distinctive” they “can 15 acquire distinctiveness if the public comes to associate the mark with a specific source . . . 16 referred to as ‘secondary meaning.’” Id. Here, Defendant argues that the Mark is generic1 17 because it is “a straightforward revelation of what Plaintiff’s product is.” (Reply at 4.) 18 To determine whether a mark is generic, courts in the Ninth Circuit apply the “who- 19 are-you/what-are-you” test,” in which the former question would reveal the source of the 20 product and is not generic, and the latter would reveal the product’s purpose or use and is 21 generic. Filipino Yellow Pages, 198 F.3d at 1147 (“Under this test, if the primary 22 significance of the trademark is to describe the type of product rather than the producer, 23 the trademark is a generic term and cannot be a valid trademark.”) (citation modified). A 24 mark must be considered in its whole form, not as its parts. Id. (approving the “anti- 25 dissection rule” that prohibits evaluating the genericness of a trademark by its parts). 26 Defendant argues that the Mark answers what, not who, the product is (Reply at 3– 27 5), but the Court is not as sure. It is just as likely that the public can perceive the Mark as

28 1 Defendant does not expressly argue that the Dress is generic, so the Court will not evaluate it as such. 1 describing a pack of fidget toys or denoting a brand of children’s toys. At this stage with 2 only allegations before the Court, the “who-are-you/what-are-you” test is neither 3 dispositive nor helpful in determining the validity of the Mark. Nonetheless, the Court is 4 not without guidance from case law, and the Ninth Circuit has held that “[g]eneric terms 5 are those used by the public to refer generally to the product rather than a particular brand 6 of the product.” Brookfield Commc’ns, 174 F.3d at 1058. As applied here, the phrase 7 “fidget poppers pack” does not describe the entire genus of children’s toys like other 8 phrases found to be generic, such as the phrase “Filipino Yellow Pages” that described the 9 genus of phone directories or “Surgicenters” that described the genus of surgical centers. 10 See Filipino Yellow Pages, 198 F.3d at 1151 (affirming genericness finding); Surgicenters 11 of Am., Inc. v. Med. Dental Surgeries, Co., 601 F.2d 1011, 1020 (9th Cir. 1979) (same). In 12 reviewing the Mark as a composite and not as its parts and without the benefit of an 13 evidentiary record, the Court does conclude at this juncture that it is generic. 14 To Defendant’s credit, though, the line between generic and descriptive is thin here. 15 It may be that the public perceives the primary significance of the Mark as denoting the 16 goods and not the source. Without a developed record that includes, for example, evidence 17 of public perception, the Court must rely only on the allegations before it and not its own 18 assumption of public perception. See Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 718 F.2d 19 327, 330 (9th Cir. 1983), rev’d on other grounds, 469 U.S. 189 (1985) (“Without evidence 20 that to the consuming public the primary significance of the term is to denote the service 21 [the mark] offers and not its source, we are without a sufficient evidentiary basis to find 22 [the] mark generic.”). 23 Defendant next challenges whether the Mark and Dress have acquired secondary 24 meaning, which is required when a mark or dress are only descriptive and therefore are not 25 “inherently distinctive.” (Mot. at 6–9.) Secondary meaning is met when the public 26 associates the mark or dress with a particular source and “can be established in many ways, 27 including (but not limited to) direct consumer testimony; survey evidence; exclusivity, 28 manner, and length of use of a mark; amount and manner of advertising; amount of sales 1 and number of customers; established place in the market; and proof of intentional copying 2 by the defendant.” Filipino Yellow Pages, 198 F.3d at 1151. 3 Here, Plaintiff alleges that it has spent millions of dollars in marketing efforts, sold 4 “hundreds of thousands of units” bearing the Mark and Dress since 2021, and has accrued 5 thousands of customer reviews on one of the world’s leading marketplaces for goods, 6 Amazon. (FAC ¶¶ 19, 21–22.) The Court can infer from these facts that Plaintiff’s Mark 7 and Dress has penetrated the market for this genre of toy and has been disseminated to 8 some extent by virtue of extensive marketing efforts over a period of several years, which 9 ultimately supports Plaintiff’s claim that the purchasing public has formed some 10 association between the Mark, the Dress, and the product. Defendant argues that such 11 allegations “can only prove the strength of ZEN LABORATORY, the house brand of 12 Plaintiff” that is shown on the Amazon storefront product page and on the Dress of the 13 product, but it cannot prove the strength of the Mark. (Reply at 4.) But the pleading stage 14 is not the time to evaluate whether the public’s association is between the product and the 15 Mark or the product and Plaintiff’s house name. That step comes later after discovery runs 16 its course. 17 Plaintiff also alleges that Defendant purposely copied the exact Mark and 18 substantially similar Dress (FAC ¶ 49), and allegation of “deliberate copying is relevant to 19 a determination of secondary meaning.” Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 20 F.2d 837, 844 (9th Cir. 1987) (citing Transgo, Inc. v. Ajac Transmission Parts Corp., 768 21 F.2d 1001, 1016 (9th Cir. 1985) (“There is no logical reason for the precise copying save 22 an attempt to realize upon a secondary meaning that is in existence.”). Defendant argues 23 that such allegations are conclusory and insufficient to state a claim; only proof of 24 deliberate copying will support an inference of secondary meaning. (Reply at 6–7.) That 25 may be true where the claims must be proved up to some evidentiary threshold like at a 26 preliminary injunction stage or summary judgement stage, as in the cases cited by 27 Defendant. See Vision Sports, Inc. v. Melville Corp., 888 F.2d 609 (9th Cir. 1989) 28 (preliminary injunction); Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1256 1 (9th Cir. 2001) (summary judgment); Art Attacks Ink, LLC v. MGA Ent. Inc., 581 F.3d 2 1138, 1141 (9th Cir. 2009) (Rule 50(b) motion). At this stage, though, proof is not required, 3 just sufficiently alleged facts. Dean v. Cortes, No. 218CV02335CASJPRX, 2018 WL 4 3425016, at *6 (C.D. Cal. July 12, 2018) (“[C]ourts have determined that secondary 5 meaning need only be pled generally for purposes of defeating a motion to dismiss.”) 6 (finding that allegations of long-term use and deliberate copying were sufficient to state a 7 claim for trademark infringement). 8 Here, Plaintiff’s allegations are sufficient to establish that the Mark and Dress are 9 at least descriptive and have attained secondary meaning and meet the first element of a 10 § 1125(a)(1)(A) claim. Accordingly, Plaintiff’s trademark infringement claims asserted in 11 Counts One, Two, and Three may proceed as pled. 12 B. Copyright Infringement Claim 13 To plead a copyright infringement claim, a plaintiff must allege “(1) ownership of 14 the allegedly infringed work and (2) copying of the protected elements of the work by the 15 defendant.” Unicolors, Inc. v. Urban Outfitters, Inc., 853 F.3d 980, 984 (9th Cir. 2017). 16 Defendant does not challenge the first element; rather, it argues that Plaintiff’s claim fails 17 because it insufficiently alleges that Defendant copied the protected elements of the work. 18 The second element of a copyright infringement claim requires a plaintiff to “plead 19 facts plausibly showing either (1) that the two works in question are strikingly similar, or 20 (2) that the works are substantially similar and that Defendants had access to the Subject 21 Work.” Malibu Textiles, Inc. v. Label Lane Int’l, Inc., 922 F.3d 946, 952 (9th Cir. 2019) 22 (citation omitted). “Thus, a plaintiff must separately plead access only when alleging 23 substantial similarity, not when alleging striking similarity.” Id. (citation omitted). 24 No matter which theory of copyright infringement a claim is packaged in, courts in 25 this Circuit evaluate those claims under an extrinsic test and an intrinsic test. Id. At the 26 pleading stage, the Court need only consider the extrinsic test that is comprised of two 27 steps. Id. First, courts filter out the “unprotectable elements” of the work and evaluate 28 whether the remaining protectable elements show a range of expression broad enough to 1 warrant copyright protection. Id. Importantly, though, even if a work is comprised of 2 unprotectable elements, the combination of those elements “is eligible for copyright 3 protection only if those elements are numerous enough and their selection and arrangement 4 original enough that their combination constitutes an original work of authorship.” Satava 5 v. Lowry, 323 F.3d 805, 811 (9th Cir. 2003). Second, courts assess whether the elements 6 of the two works sufficiently share objective similarities. Malibu Textiles, 922 F.3d at 952– 7 53. 8 Defendant concedes that elements of its packaging “overlap” with Plaintiff’s 9 packaging, specifically the background color and white lettering, but those elements “are 10 not copyrightable elements per se.” (Mot. at 11.) Defendant argues that the only protectable 11 element of Plaintiff’s ‘292 Registration is the center graphic featuring three toys placed in 12 a line, which is dissimilar to the graphic Defendant uses. (Mot. at 11.) To be fair, the two 13 graphics are not exact replicas: Plaintiff’s graphic shows three different, blue-colored toys 14 outlined in white displayed neatly and linearly, while Defendant’s graphic shows at least 15 six toys in various colors stacked haphazardly on top of each other. (See FAC ¶ 35.) 16 Assuming that the only protectable element of the ‘292 Registration is the center graphic, 17 the Court agrees with Plaintiff that the combination of the graphic with other unprotected 18 but concededly “overlapping” elements, including the background pattern and color, the 19 center stripe, the font and color of the words, and arrangement of all these elements are 20 numerous and original enough to state a claim for copyright infringement. (See Resp. at 21 13.) And there are many objective similarities between the combination of these elements, 22 including the gradient of blue color across a geometric background pattern, the placement, 23 sizing, font and color of the exact same words across the top half of the work, and the use 24 of a center stripe that sets off a portion of the words. And while some details of the two 25 graphics differ, they do share the same centered placement and bear the same cube and 26 star-like toy. 27 Defendant argues that Plaintiff’s copyright infringement claim is pled only under a 28 “substantially similar” theory and must allege access. (Mot. at 10.) There is no doubt that 1 Plaintiff expressly asserted that theory in its pleading. (FAC ¶¶ 32, 44–47, 73.) But Plaintiff 2 argues that it implicitly pled a “strikingly similar” theory of infringement by alleging 3 “various descriptions of Defendants’ copying of the various elements of the copyrighted 4 packaging and through its side-by-side comparison of the Infringing Product to Plaintiff’s 5 copyright.” (Resp. at 16 n.1.) If the Court credits Plaintiff’s argument, then Plaintiff would 6 not be required to sufficiently allege access. But the Court need not address this issue 7 because Plaintiff alleges facts to support the access element. 8 “To prove access, a plaintiff must show a reasonable possibility, not merely a bare 9 possibility, that an alleged infringer had the chance to view the protected work.” When, as 10 here, there are no facts supporting direct evidence of access, “circumstantial evidence can 11 be used to prove access either by (1) establishing a chain of events linking the plaintiff’s 12 work and the defendant’s access, or (2) showing that the plaintiff’s work has been widely 13 disseminated.” Art Attacks Ink, 581 F.3d at 1143. 14 Plaintiff alleges that it displayed the content of its ‘292 Registration on its product 15 page on Amazon and was generally available to any Amazon user (FAC ¶¶ 28, 34, 43, 73), 16 and Defendant released its infringing product sometime after Plaintiff started marketing on 17 Amazon (FAC ¶¶ 50, 72). Defendant argues that these allegations suggest online 18 availability but not access, and “[t]he fact that a work is online does not by itself make it 19 likely the Defendant saw or encountered it.” (Mot. at 12). Plaintiff contends that Defendant 20 must have found Plaintiff’s Amazon listing because Defendant eventually used Amazon to 21 sell the infringing product. But Plaintiff’s reasoning puts the cart before the horse; it alleges 22 no chain of events before the time Defendant began selling its product on Amazon that 23 explains how Defendant discovered and copied Plaintiff’s product. 24 Plaintiff alternatively argues that its allegations demonstrate its product was widely 25 disseminated. (Resp. at 15–16.) Defendant does not reply to this argument. (See Reply at 26 8–11.) Allegations supporting wide dissemination of a product can establish the access 27 element. Art Attacks Ink, 581 F.3d at 1143. Here, Plaintiff alleges that it spent millions of 28 dollars on its marketing efforts and sold hundreds of thousands of units of its product, and 1 || that activity led to at least 16,000 customers giving it a generally positive star rating and 2|| reviews on Amazon. (FAC 9§ 19, 21-22). While the number of units sold may support a || finding of wide dissemination, “there is ultimately no ‘bright-line rule’ where some number of units distributed always equals—or does not equal—access.” Ambrosetti v. Oregon || Cath. Press, 151 F.Ath 1211, 1222 (9th Cir. 2025). Still, the magnitude of Plaintiff's sales, 6 || customer interaction, and millions of dollars’ worth in marketing expenditures over five 7\| years exceeds that which has been accepted in this Circuit under a “widespread 8 || dissemination” theory of access; the allegations are sufficient here to plead wide 9|| dissemination. Compare L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 848 (9th Cir. 2012) (local sale of 50,000 yards of fabric over four-year period was sufficient) 11 || with Rice v. Fox Broad. Co., 330 F.3d 1170, 1178 (9th Cir. 2003) (17,000 units sold was || insufficient) and Art Attacks Ink, 581 F.3d at 1144 (2,000 units sold annually was 13 || insufficient). 14 Plaintiff sufficiently pleads that it owned the ‘292 Registration and that Defendant 15 || copied that work under a “substantially similar” theory of infringement. Accordingly, |} Count Four survives. 17 IT IS ORDERED denying Defendant’s Motion to Dismiss Plaintiffs First 18 || Amended Complaint (Doc. 17). 19 Dated this 24th day of June, 2026. CN i.

Unifgd State#District Judge 22 23 24 25 26 27 28

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