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Mud Pie, LLC v. Belk, Inc.

United States District Court, W.D. North Carolina, Charlotte Division

July 18, 2019

MUD PIE, LLC Plaintiff,
v.
BELK, INC., et al., Defendants.

          ORDER

          Robert J. Conrad, Jr. United States District Judge

         THIS MATTER comes before the Court on Defendants Belk, Inc., Belk International, Inc., and Belk eCommerce, LLC's (collectively, “Belk”) Motion to Dismiss, (Doc. No. 33), and the parties' associated briefs and exhibits.

         I. BACKGROUND

         Accepting the factual allegations of the First Amended Complaint, (Doc. No. 29: First Amended Complaint (“FAC”)), as true, Plaintiff Mud Pie, LLC (“Mud Pie” or “Plaintiff”) created a line of casual dishware products around June 2012 that would become known as Mud Pie's “Circa” line. (Doc. No. 29: FAC ¶ 13). Some of the products in the Circa line, and those at issue in this case, are “comprised generally of white ceramic embossed with a humorous pun or phrase in a black American Typewriter font and paired with an antique-style silver utensil also containing a humorous pun or phrase” (“Mud Pie Trade Dress”). (FAC ¶ 14). Sometime on or before 2013, Belk and Mud Pie entered into a relationship wherein Belk purchased Mud Pie products, including those from Mud Pie's Circa line, and sold those products directly to consumers. (See FAC ¶ 17). Belk sold Mud Pie products, about 25% of which were from the Circa line, from 2013 until 2017. (FAC ¶¶ 17-18).

         On or around November 2017, Mud Pie terminated its relationship with Belk. (FAC ¶ 20). At some unspecified point, Belk hired TRIRAF, Inc. f/k/a Thirstystone Resources, Inc. (“Thirstystone”) to create a “casual whiteware private label line” for Belk under Belk's “Modern. Southern. Home.” brand (“MSH”). (FAC ¶ 21). Thirstystone supplied Belk with dishware products that Mud Pie alleges copy and incorporate the Mud Pie Trade Dress and Mud Pie's copyrights[1], which Belk began selling in April 2018, less than six months after Mud Pie pulled its products from Belk stores. (FAC ¶¶ 22-23). Mud Pie did not authorize Belk to make copies or derivative works of the Circa line, and Belk has not compensated Mud Pie for sales of any of its MSH products. (FAC ¶¶ 26-28).

         Plaintiff initiated this action on November 13, 2018 by filing a Complaint, (Doc. No. 1), and a Motion for Temporary Restraining Order and Preliminary Injunction, (Doc. No. 6), against Belk. After a hearing on November 19, 2018, the Court denied Plaintiff's Motion. (Doc. No. 28). On December 3, 2018, Plaintiff filed its FAC, in which it added Thirstystone as a defendant to this action based on Thirstystone's alleged role in designing and supplying Belk with the products at issue in this suit. (Doc. No. 29). In its FAC, Plaintiff alleges four causes of action against Defendants: (1) trade dress infringement in violation of the Lanham Act, 15 U.S.C. § 1125(a); (2) copyright infringement in violation of the Copyright Act, 17 U.S.C. §§ 101 et seq.; (3) violation of North Carolina's Unfair and Deceptive Trade Practices Act (“ N.C. UDTPA”) as codified in N.C. Gen. Stat. § 75-1.1; and (4) violation of North Carolina's Unfair Competition standard at common law. On December 17, 2018, Belk filed a Motion to Dismiss First Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6). (Doc. No. 33).

         II. STANDARD OF REVIEW

         The standard of review for a motion to dismiss under 12(b)(6) for failure to state a claim is well known. Fed.R.Civ.P. 12(b)(6). It tests the “legal sufficiency of the complaint” but “does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains enough facts “to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility means allegations that allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

         Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Specific facts are not necessary; the statement need only “‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Twombly, 550 U.S. at 545 (quoting Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 775 (1984)). Additionally, when ruling on a defendant's motion to dismiss, a court must accept as true all of the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007) (quoting Twombly, 550 U.S. at 555-56). Nonetheless, a court is not bound to accept as true legal conclusions couched as factual allegations. Papasan v. Allain, 478 U.S. 265, 286 (1986). Courts cannot weigh the facts or assess the evidence at this stage, but a complaint entirely devoid of any facts supporting a given claim cannot proceed. Potomac Conference Corp. of Seventh-Day Adventists v. Takoma Acad. Alumni Ass'n, Inc., 2 F.Supp.3d 758, 767-68 (D. Md. 2014). Furthermore, the court “should view the complaint in the light most favorable to the plaintiff.” Mylan Labs, Inc. v. Matkar, 7 F.3d 1130, 1134 (4th Cir. 1993).

         III. DISCUSSION

         In its Motion to Dismiss, Belk asks this Court to dismiss Plaintiff's claims because “the FAC fails to provide adequate factual allegations to put Belk on notice either of what exactly it is accused of infringing, or which Belk products are at issue in this matter.” (Doc. No. 33 at 2). The Court is not persuaded by Belk's lack of notice argument.[2] Nonetheless, the Court finds that Plaintiff's FAC fails to meet the minimum pleading standards required to survive a 12(b)(6) motion as established by Twombly and Iqbal in regard to its trade dress claim (Count I). But the Court determines that Plaintiff has sufficiently pleaded its copyright and state-law claims (Counts II-IV).

         A. Federal Trade Dress Claim

         “A claim of trade dress infringement requires proof of three elements: (1) the trade dress is primarily non-functional; (2) the trade dress is inherently distinctive or has acquired a secondary meaning; and (3) the alleged infringement creates a likelihood of confusion.” Tools USA & Equip. Co. v. Champ Frame Straightening Equip. Inc., 87 F.3d 654, 657 (4th Cir. 1996). As stated above, a court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555 (quoting Papasan, 478 U.S. at 286). Here, Plaintiff makes the mistake of relying on a conclusory statement to establish the first element of its trade dress claim: that the Mud Pie Trade Dress is primarily non-functional.

         “A product feature is functional if it is essential to the use or purpose of the article or it affects the cost or quality of the article.” Tools USA, 87 F.3d at 658 (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (1982)). “In other words, a feature is functional ‘if exclusive use of the feature would put competitors at a significant nonreputation-related disadvantage.'” Id. (quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995)). “The law of functionality is further divided into ‘utilitarian' functionality and ‘aesthetic' functionality.” Baughman Tile Co. v. Plastic Tubing, Inc., 211 F.Supp.2d 720, 722 (E.D. N.C. 2002) (quoting TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 33 (2001)). Here, Plaintiff simply states that “[t]he Mud Pie Trade Dress is non-functional” without any further explanation or supporting factual allegations. (FAC ¶ 33). While the Court notes that functionality is a question of fact, McAirlaids, Inc. v. Kimberly-Clark Corp., 756 F.3d 307, 310 (4th Cir. 2014), a plaintiff still must plead some minimum baseline of accompanying factual allegations to support an assertion of non-functionality. Here, the FAC is devoid of any factual assertions to support Plaintiff's conclusion that the Mud Pie Trade Dress is primarily non-functional. Accordingly, Plaintiff's statement is nothing more than a threadbare, formulaic recitation of an element of its federal trade dress claim-something which Twombly and Iqbal prohibit.

         Regarding the other two elements of Plaintiff's trade dress infringement claim, Plaintiff provides factual allegations to support an inference that (1) Mud Pie's Trade Dress has acquired secondary meaning and (2) Belk's infringement creates a likelihood of confusion. To plausibly allege a claim for trade dress infringement, Plaintiff must allege that Mud Pie's trade dress has attained distinctiveness through a showing of secondary meaning. Secondary meaning “occurs, 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.'” Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 211, (2000) (quoting Inwood Labs., 456 U.S. at 851)). “‘Proof of secondary meaning entails vigorous evidentiary requirements,' and thus ‘secondary meaning is factual in nature and typically ill-suited for a motion to dismiss.'” Camco Mfg., 2019 WL 2176331, at *2 (quoting Rothy's, Inc. v. JKM Techs., LLC, 360 F.Supp.3d 373, 387 (W.D. Va. 2018)).

         “[E]vidence of intentional direct copying establishes a prima facie case of secondary meaning.” Osem Food Indus. Ltd. v. Sherwood Foods, Inc., 917 F.2d 161, 163 (4th Cir. 1986) (quoting Kramer Mfg. Co. v. Andrews, 783 F.2d 421, 448 (4th Cir. 1986)). Additionally, “[c]ourts in the Fourth Circuit consider four factors to determine if purported trade dress has acquired secondary meaning: ‘(1) long use; (2) advertising; (3) sales volume; and (4) identity of service or origin in the minds of the purchasing public.'” Ca ...


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