Monster Fails to State Declaratory Judgment Claim Against Dolby But Gets Second Chance

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A declaratory judgment action by the maker of Monster headphones and other audio equipment against the Dolby audio technology company failed to state a claim for non-infringement of Dolby's trademarks, the U.S. District Court for the Northern District of California ruled Aug. 22 (Monster Cable Products Inc. v. Dolby Laboratories Licensing Corp., N.D. Cal., No. 4:12-cv-02488-YGR, 8/22/12).

Granting judgment on the pleadings in favor of the defendant, the court, however, concluded that it was possible for the plaintiff to state a claim that would avoid judgment on the pleadings and thus granted leave to amend.

Logos Incorporate Headphone Shapes.

Monster Cable Products Inc. of Brisbane, Calif., founded in 1979, is an audio equipment manufacturer. In 2003, Monster obtained a U.S. trademark registration for its logo, a stylized letter Mmade up of two rectangular shapes with curves at the top.

Dolby Laboratories Licensing Corp. is an entity affiliated with Dolby Laboratories Inc. of San Francisco, another audio technology developer founded in London in 1965. Dolby's logo comprises two rectangles side-by-side each enclosing a mirroring semicircle shape. For certain digital devices, Dolby has a registered design mark in which the Dolby logo is surrounded by an arced shape representing headphones.

In 2010, Monster obtained another registration for a logo comprising the stylized letter Menclosed within headphones. Dolby filed an opposition alleging that the M headphone mark was confusingly similar to its own Dolby headphone mark.

Monster then initiated this proceeding, seeking a declaration that the M headphone trademark did not infringe any Dolby trademark rights.

Dolby moved for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c), arguing that the claim as presented in the pleadings failed as a matter of law to support a declaration of noninfringement.

Trademark Analysis Does Not Allow for Severing.

Judge Yvonne Gonzalez Rogers found that Monster's pleadings had failed to state a claim for noninfringement. Specifically, the error made by Monster was that in arguing that its logo was not confusingly similar to Dolby's logo, it asked the court to analyze its M headphone mark according to the separate components of which it was composed.

“The theory that the Court can sever the different elements of a design and analyze them separately to determine whether the mark as a whole is protectable has been rejected soundly by the Ninth Circuit,” the court said, citing Inc. v. Walt Disney Co., 202 F.3d 1199, 53 USPQ2d 1652 (9th Cir. 2000). “Ninth Circuit precedent expressly prohibits the dissection of a composite mark into its component parts for purposes of assessing its validity and determining infringement.”

A trademark might be protectable even if its elements taken individually are generic, the court said. Thus, the theory of non-infringement set forth by Monster's pleadings was one that could not result in judgment in its favor.

Monster also failed to cure this defect in its opposition to Dolby's motion for judgment, the court said.

However, the court said, it was possible for Monster to set forth an argument that its logo did not infringe any trademark rights held by Dolby, and thus, while awarding judgment to Dolby under Rule 12(c), it gave leave to Monster to amend its complaint.

The court thus granted Dolby's motion for judgment on the pleadings but granted Monster leave to amend its complaint.

Dolby was represented by George A. Riley of O'Melveny & Myers, San Francisco. Monster was represented by Mark Raymond Leonard of Davis & Leonard, Sacramento, Calif.

By Anandashankar Mazumdar  

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