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Jenny Yoo Collection, Inc. v. Essense of Australia, Inc.

United States District Court, D. Kansas

June 27, 2019

JENNY YOO COLLECTION, INC., Plaintiff,
v.
ESSENSE OF AUSTRALIA, INC. Defendants.

          MEMORANDUM AND ORDER

          JULIE A. ROBINSON CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Jenny Yoo Collection Inc.'s (“JY”) Motion for Reconsideration (Doc. 76) of the Court's April 8, 2019 Memorandum and Order dismissing JY's claims for trade dress infringement in violation of the Lanham Act (Count I) and trade dress infringement and unfair competition under New York common law (Count II).[1] The motion is fully briefed, and the Court is prepared to rule. For the reasons set forth below, the Court grants JY's motion and reconsiders dismissal of Counts I and II of JY's Amended Complaint.

         I. Procedural and Factual Background

         The Court assumes the reader is familiar with both the order of dismissal that precipitates the matter before the Court and the procedural history of this case.[2] The Court reiterates the relevant facts from JY's Amended Complaint as needed to frame its discussion of the present matter.

         In its Amended Complaint, JY expanded the description of the allegedly infringed trade dress to:

JY's trade dress, as shown in the drawings herein below, includes, as a special feature, front and back panels of fabric that overlay the full length of the skirt ending just above the bottom hemline. The panels are stitched into the waist seam and naturally hang down the skirt of the dress. The panels seamlessly blend with the dress, regardless of whether the panels are hanging in their natural position or raised over the bodice to create the different configurations of the dress. When the panels are in the hanging position as an overlay of the skirt, they layer over the full length of the entire skirt and seamlessly blend with the natural and gentle soft folds, creating the illusion, unique when introduced by JY, that the panels and skirt are integrated. Furthermore, if the wearer chooses to style the dress into alternate necklines by raising one or more of the panels upwards and over the bodice into different configurations of the dress, the panels once again seamlessly blend into the bodice of the dress. This creates the illusion that the panels smoothly blend uninterrupted into the bodice, skirt and/or entire dress to create a singular, integrated look. The concept of “seamless blending” means that from the point of view of an ordinary observer, it will be noticeable that the dress contains front and back panels separate from other components of the dress, which when integrated into the dress create looks that are smooth and continuous, with no apparent gaps or spaces between one part or the next, and without seams or obvious joins. Thus, while the front and rear panels are noticeable to the ordinary observer as distinct components of the dress, nonetheless, they create the impression of an integrated, natural, elegant, unified dress design. This ornamental, non-functional special feature as described above has become JY's renowned Trade Dress (the “JY Trade Dress”), instantly recognizable among consumers and industry professionals alike as being associated with JY.[3]

         JY identified the alleged distinct components of its trade dress, explaining:

The character and scope of the JY Trade Dress is that the dresses are made of lightweight material with: (i) a strapless upper garment (bodice) portion with a sweetheart shape neckline covering an area above the waist of the user having a front and rear portion; (ii) a skirt having a front and rear portion attached to the upper garment (bodice); and (iii) two front and rear panels that overlay the full length of the skirt ending just above the bottom hemline.[4]

         JY also identified the third component as “two front panels and two rear panels with a natural soft drape that seamlessly blend with the dress regardless of whether the panels are hanging in their natural position or raised over the bodice to create the different configurations of the dress.”[5] Additionally, JY included twelve individual sketches showing the different configurations of the dresses containing the trade dress, as well as side-by-side photograph comparisons between its dresses and Essense's allegedly infringing products.[6]

         JY claims that it revolutionized the bridal gown industry in 2012 when it introduced its “Aidan” and “Annabelle” convertible bridesmaid dress designs, which embody its alleged trade dress.[7] JY has sold over 132, 000 of these dresses, resulting in over $30 million in revenue.[8] It claims “[r]eviewers, analysts and consumers immediately recognized the convertible dress as a ‘game changer, '” because prior versions of convertible dresses “were bulky, awkward and utilitarian, requiring that conversions be made by tying together components of the dress in different and often unattractive configurations.”[9] The JY convertible dress design was “radically different” in that

[i]t provided for use of lightweight material with two rear and two front convertible panels attached at the waist seam that blended seamlessly into the design of the bottom part of the dress, and could be easily raised by hand and rearranged for purposes of converting the dress into different neckline styles and inherently attractive, elegant looks.[10]

         JY references this “unique-indeed, revolutionary ornamental feature that has become famous” throughout its Amended Complaint.[11] Additionally, JY alleges that various media outlets have promoted and recognized its convertible bridesmaid dress design.[12]

         II. Legal Standard

         Under D. Kan. Rule 7.3(a), “[p]arties seeking reconsideration of dispositive orders or judgments must file a motion pursuant to Fed.R.Civ.P. 59(e) or 60” to alter or amend the judgment. Grounds which justify alteration or amendment under Rule 59(e) include: (1) an intervening change in controlling law; (2) new evidence that was previously unavailable; or (3) a need to correct clear error or prevent manifest injustice.[13] Plaintiff asserts that reconsideration is warranted under the third prong.

         The decision to grant or deny a motion for reconsideration is within the Court's discretion.[14] A court will grant reconsideration when the “court has misapprehended the facts, a party's position, or the controlling law.”[15] A motion for reconsideration, however, is not an opportunity to “revisit issues already addressed or advance arguments that could have been raised in prior briefing.”[16]

         III. Discussion

         JY argues that dismissing its Lanham Act and New York common law trade dress infringement claims on a motion to dismiss was clear error and resulted in manifest injustice. Specifically, JY asserts that the Court erred by: (1) basing its analysis upon a single component of JY's trade dress; (2) determining that JY's allegation of “seamless blending” was unclear on a motion to dismiss; (3) focusing only on JY's verbal description of its trade dress; and (4) conflicting with other courts' decisions that JY has sufficiently alleged its trade dress. When boiled down, these arguments rely on the same premise-that the Court incorrectly applied the standard for deciding a motion to dismiss by prematurely determining whether JY has a legally cognizable trade dress. As the requirements to plead trade dress infringement under New York common law mirror those under the Lanham Act, the Court considers JY's arguments as relating to both claims.[17]

         A. Manifest Injustice

         JY argues that it will suffer manifest injustice by “losing claims against Essense based upon JY's valuable rights that it has in its Trade Dress that other Courts have refused to dismiss.”[18] As an initial matter, this assertion is inaccurate. As discussed below, this Court's dismissal of JY's trade dress claims does not conflict with other courts' decisions. Further, “[w]here reconsideration is sought to prevent manifest injustice, the moving party can only prevail if he demonstrates injustice that is ‘indisputable.'”[19] “[A] manifest injustice does not result merely because a harm may go unremedied.”[20] Here, JY does not demonstrate how denying reconsideration results in “indisputable” injustice; rather, its alleged injustice is merely a potentially unremedied harm.[21] Accordingly, the Court finds that manifest injustice does not provide a reason to reconsider dismissing JY's trade dress infringement claims. Thus, the Court considers whether dismissing the trade dress infringement claims constituted clear error.

         B. Other Courts' Decisions on JY's Trade Dress Allegations

         JY argues that the Court should reconsider dismissal of its trade dress infringement claims because it conflicts with other district courts' determinations that JY has sufficiently alleged trade dress claims.

         First, JY asserts that this Court's decision to dismiss its trade dress infringement claims is inconsistent with the Northern District of Texas' decision in Jenny Yoo Collection, Inc. v. Watters Designs, Inc. (the “Texas Lawsuit”).[22] The Court is aware of the Texas Lawsuit, as made clear by its reference to the Texas Lawsuit in the Memorandum and Order dismissing JY's trade dress claims.[23] The Texas court allowed JY to amend its complaint to explain the meaning of “seamless blending” on the basis of its allegation that “seamless blending” was a term of art and to clarify what its trade dress covered “beyond two front panels and two rear panels attached to the waist.”[24] JY requests “[a]t a minimum . . . that the Court allow JY to amend its pleadings in accordance with the Texas District Court's decision.”[25] The Court already allowed JY to amend its complaint, [26] which is clear as this motion for reconsideration is before the Court on its dismissal of claims in JY's Amended Complaint. Furthermore, as this Court mentioned in dismissing the trade dress claims, the defendants in the Texas Lawsuit also filed a second motion to dismiss after JY amended its complaint. The Texas court has not decided this motion, however, because the parties reached a settlement after its filing.[27]

         JY additionally cites its new case filed in the Southern District of New York against David's Bridal, Inc. (“DBI”), alleging trade dress and trademark infringement claims, as well as claims based on breach of a settlement agreement.[28] Specifically, JY points the Court to a transcript where the Southern District of New York gave its impressions on DBI's pre-motion letter seeking permission to file a motion to dismiss.[29] The Court finds the transcript inapplicable to JY's present motion for reconsideration. The transcript cited by JY is from a hearing on April 18, 2019-ten days after this Court dismissed JY's trade dress claims. Moreover, the Southern District of New York was not deciding a motion to dismiss, and no motion to dismiss had even been filed.[30] As an initial reaction to DBI's pre-motion letter, the Southern District of New York stated, as to the issue of the articulation of specific elements comprising the trade dress, that “[DBI] up to this point has not pointed out particular deficiencies in plaintiff's iteration of the elements of the trade dress that are applicable here, and so my impression at this point is that [DBI's] argument on that point is likely to fail.”[31] This statement-not found in a court order and not being binding authority on this Court-does not support the proposition that this Court should reconsider its dismissal of JY's trade dress claims because it conflicts with other courts' decisions.

         C. Articulation of a Trade Dress

         As an initial matter, JY asserts that the Court erred by not considering the drawings and photographs included in its Amended Complaint. The Court did consider JY's visual depictions of its trade dress as embodied by its “Aidan” and “Annabelle” convertible dress designs, however, and explicitly stated “[a]lthough JY includes drawings and photographs of the designs, these do not alleviate the deficiencies of JY's trade dress descriptions.”[32] Further, the Court found that JY's verbal articulation could not comprise a legally cognizable trade dress because its description of “seamless blending” required a determination of quality, beauty or cachet, which precluded a finding of a protectable trade dress. Importantly, Yeti Coolers, LLC v. Magnum Solace, LLC-relied on by JY-explained that “photographs alone are insufficient to provide notice of the elements of an alleged trade dress.”[33] Therefore, the Court finds that JY's inclusion of drawings and photographs encompassing the alleged trade dress does not relieve JY of the requirement of articulating its trade dress allegations.

         JY additionally argues that the Court erred by dismissing JY's trade dress infringement claims based on its description of “seamless blending” being vague and contradictory and relying on a determination of beauty, quality or cachet.[34] Specifically, JY argues that the Court focused too much on a single component of its alleged trade dress-“seamless blending”-and “improperly ignored other alleged components of JY's Trade Dress and improperly disregarded the total look of JY's Trade Dress.”[35] As an initial matter, this argument conflicts with JY's treatment of “seamless blending” in its pleadings. JY references and describes “seamless blending” throughout its Amended Complaint;[36] in opposing Essense's motion to dismiss, JY did not explicitly argue the impropriety of considering “seamless blending” allegations; and in its motion for reconsideration, JY now states “[t]he whole point is that the panels seamlessly blend no matter what configuration the dress is worn in.”[37] Many allegations describing JY's alleged trade dress-mainly those related to “seamless blending”-appear to require a determination of beauty, quality or cachet-(1) “[t]he panels have a natural soft drape;” (2) “seamlessly blend with the natural and gentle soft folds;” (3) “looks that are smooth and continuous, with no apparent gaps or spaces between one part or the next, and without seams or obvious joints;” and (4) “integrated, natural, elegant, unified dress design.”[38] Similarly, the allegations appear to contain contradictory phrases such as “[t]he concept of ‘seamless blending' means that from the point of view of an ordinary observer, it will be noticeable that the dress contains front and back panels separate from other components of the dress, which when integrated into the dress create looks that are smooth and continuous . . . .”[39]

         Nevertheless, in its motion for reconsideration, JY directs the Court to cases indicating the error of deciding on a motion to dismiss that these allegations preclude JY from asserting a trade dress infringement claim. This Court would be remiss not to consider authority that indicates error in dismissing JY's trade dress claims for failure to specifically articulate its trade dress on a motion to dismiss. “A complaint is neither an injunction nor a judgment; it merely puts the defendant on notice of the plaintiff's claims.”[40] As JY now articulates, with citation to relevant case law, [41] determining whether a trade dress is identified in a complaint requires the Court to consider whether the allegations, taken as true, provide notice of the alleged trade dress, not whether the trade dress is described with the requisite specificity to grant relief.[42]

         Applying the standard that “the plaintiff's burden at the motion to dismiss stage was to put the defendant on notice of the claims against it, and that there was no requirement that the plaintiff plead its trade dress with further specificity, ”[43] the United States District Court for the Eastern District of Michigan found that a plaintiff's allegations, which included “photographs of [the plaintiff's] and [the defendant's products], as well as product numbers, sufficiently put [the defendant] on notice of the individual trade dress infringement claims against it.”[44] Although the plaintiff would “eventually be expected to list, in detail, the elements of the trade dresses it seeks to protect, ” the court found that at the motion to dismiss stage, “the lingual and pictorial allegations in the complaint [were] sufficient to survive [defendant's] motion.”[45] JY additionally points to other cases where the visual depictions of the alleged trade dress-when combined with identification and visuals of the alleged infringing products-placed the defendant on notice of the trade dress.[46] Essense does not direct the Court to law contrary to JY's assertion that at a motion to dismiss stage its pleadings must simply provide notice of its alleged trade dress and can do so through a combination of visual and linguistic descriptions.[47] Instead, Essense relies on its argument that JY has not clearly articulated a trade dress because the descriptions of “seamless blending” are contradictory and require a determination of beauty.[48]

         The Court finds that it misapprehended JY's arguments for why it has sufficiently alleged a trade dress at the motion to dismiss stage. Specifically, the Court finds error in dismissing JY's trade dress infringement claims without consideration of whether its Amended Complaint provided Essense notice of the alleged trade dress. In its Complaint, JY alleges that

[t]he character and scope of the JY Trade Dress is that the dresses are made of lightweight material with (i) a strapless upper garment (bodice) portion with a sweetheart neckline covering an area above the waist of the user having a front and rear portion; (ii) a skirt having a front and rear portion attached to the upper garment (bodice); and (iii) two front panels and two rear panels that overlay the full length of the skirt ending just above the bottom hemline.[49]

         JY further alleges that the front and rear panels are a special feature that “overlay the full length of the skirt . . . are stitched into the waist seam and naturally hang down the skirt of the dress.”[50]While other allegations of JY's purported trade dress-those describing “seamless blending”- appear to be contradictory and require a determination of beauty, the other articulated components of JY's trade dress are sufficient to place Essense on notice of what JY claims as its trade dress. JY also provides side-by-side images of its and Essense's convertible bridesmaid dresses containing the alleged trade dress, as well as sketches and product numbers of JY's dresses containing the alleged trade dress. When combined with the non-contradictory and non-fanciful allegations, these allegations provide Essense notice of JY's alleged trade dress. Thus, JY's descriptions of “seamless blending” do not prevent the Court from finding, on a motion to dismiss, that JY has plausibly pled a protected trade dress. To the extent the components of JY's trade dress result in “seamless blending, ” the determination of the meaning of “seamless blending” is best left to summary judgment, where JY will be required to show that it is not contradictory and does not require analyses of beauty.[51] While the Court now finds that JY's pleadings place Essense on notice of its trade dress, as the litigation continues, the Court will require JY to clearly and specifically articulate its alleged trade dress in a legally cognizable manner-with non-contradictory language that does not rely on a determination of beauty, quality or cachet.[52]

         D. Trade Dress Infringement Allegations

         As the Court finds that JY's allegations adequately place Essense on notice of the trade dress it seeks to protect, on reconsideration, the Court now considers whether JY has pleaded trade dress infringement under the Lanham Act and New York common law.[53] To prevail on a trade dress infringement claim, a plaintiff must show: “(1) The trade dress is inherently distinctive or has become distinctive through secondary meaning; (2) There is a likelihood of confusion among consumers as to the source of the competing products; and (3) The trade dress is nonfunctional.”[54] The parties do not dispute whether JY has alleged a likelihood of confusion, and rather, they disagree whether JY has alleged that the trade dress is nonfunctional and has developed secondary meaning.

         1. Nonfunctional

         The Supreme Court has promulgated two tests for determining the functionality of a trade dress. First, under the “traditional” test, the United States Supreme Court has explained that a “‘product feature is functional,' and cannot serve as a trademark, ‘if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.'”[55] Second, under the “competitive necessity” test, a product feature is functional if it “is one the ‘exclusive use of [which] would put competitors at a significant non-reputation-related disadvantage.'”[56] The party asserting trade dress infringement bears the burden of demonstrating that the trade dress is nonfunctional.[57]

         In its motion to dismiss JY's Amended Complaint, Essense asserts similar arguments to those it made in its first motion to dismiss as to why JY's alleged trade dress is functional. Summarily, Essense argues that because the four panels allow the bridesmaid dresses to be converted into various configurations, they are essential to the use or purpose of the dresses and thus ineligible for trade dress protection. As explained in this Court's August 2018 Memorandum and Order declining to dismiss JY's trade dress infringement claims because of functionality, the Northern District of Texas addressed the same issue and concluded it was at least plausible that the overall placement of the four panels in relation to the bridesmaid dress identify JY as the manufacturer and distinguish the dress from those of JY's competitors.[58]

         As the Texas court noted, courts must examine the functionality of the trade dress as a whole.[59] Like the defendants in the Texas Lawsuit, Essense focuses on individual elements of JY's trade dress, ignoring that “a particular combination of functional elements may be protected if configured in an ‘arbitrary, fanciful, or distinctive fashion.'”[60] The Texas court found that under the “competitive necessity test, ” it is plausible that “there are sufficient alternative designs available to [JY's] competitors, i.e., convertible dresses that do not use the four panels arranged at the front and back of the waist, such that granting [JY] exclusive use of the trade dress would not put competitors at a significant non-reputation-related disadvantage.”[61] As the Texas court further found, “because a design patent is granted only for non-functional designs, it can serve as evidence that a plaintiff's trade dress is nonfunctional.”[62] Finally, the Texas court addressed JY having pending utility patent applications covering elements of the alleged trade dress.[63]Although a utility patent is “strong evidence that the [elements] therein claimed are functional, ”[64] pending applications do not bar a plaintiff, as a matter of law, from asserting the trade dress claim.[65] Accordingly, the Court again finds it plausible that JY's trade dress is nonfunctional.

         2. Secondary Meaning

         In addition to being nonfunctional, a trade dress must either be inherently distinctive or have secondary meaning.[66] As product design cannot be inherently distinctive, in a product design case, a plaintiff must show that the alleged trade dress has developed secondary meaning.[67] A trade dress acquires secondary meaning “when, ‘in the minds of the public, the primary significance of a [mark] is to identify the source of the product rather than the product itself.'”[68] A plaintiff asserting a trade dress claim may establish secondary meaning ...


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