Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04996/USCOURTS-cand-3_05-cv-04996-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JUST WATER HEATERS INC., a

California corporation; WATER

HEATERS ONLY, INC., a California

corporation,

Plaintiffs,

 v.

AFFORDABLE WATER HEATERS AND

PLUMBING, INC., a California

corporation,

and

DOES 1-50, inclusive, 

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

No. C-05-4996 SC

ORDER GRANTING IN

PART AND DENYING IN

PART DEFENDANT'S

MOTION TO DISMISS

AND

ORDER DENYING

PLAINTIFFS' MOTION

FOR A PRELIMINARY

INJUNCTION 

 

I. INTRODUCTION

Plaintiffs Just Water Heaters, Inc. and Water Heaters Only

("Plaintiffs") brought this action against Affordable Water

Heaters and Plumbing, ("Defendant" or "Affordable"), alleging,

inter alia, copyright infringement, false advertising, and fraud.

Presently before the Court is Affordable's motion to dismiss

Plaintiffs' claims pursuant to Federal Rules of Civil Procedure

("FRCP") 12(b)(1) and (b)(6) and Plaintiffs' motion for a

preliminary injunction. 

The Court, having reviewed the parties' submissions, hereby

GRANTS IN PART and DENIES IN PART Defendant's motion to dismiss. 

The Court also DENIES Plaintiffs' motion for a preliminary

injunction. 

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 1 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 The Complaint referred to here is actually the First Amended

Complaint and was filed before any responsive pleading was filed. 

For purposes of this Order, the Court will refer to this Amended

Complaint as the Complaint. 

-2-

II. BACKGROUND

The following allegations are taken from the Complaint and

will be assumed as true for purposes of this Order.1

Plaintiffs, providers of water heater installation,

maintenance and repair to residential and commercial customers,

"have applied for copyright registration with the U.S. Copyright

Office covering the protectible content of stickers containing

emergency water heater shutdown procedures." Complaint ¶¶ 10, 11

("Compl."). 

Plaintiffs "have discovered that defendants...are selling,

marketing, reproducing and making derivative products" from these

emergency stickers. Id. ¶ 13. Defendant, Plaintiffs assert, has

been distributing similar stickers without a license and without

payment to Plaintiffs for their use. Id. Furthermore, Plaintiffs

contend that Affordable has "included statements with its

materials designed to purposely mislead consumers in Northern

California so as to cause those consumers to believe that they had

previously conducted business with defendants when in fact they

have not." Id. ¶ 14. 

In the Complaint, Plaintiffs allege (1) copyright

infringement under 17 U.S.C. § 101, et seq.; (2) unjust

enrichment; (3) that Affordable should hold the ill-gotten gains

in a constructive trust and should put forth an accounting of such

gains; (4) making false statements with the intent to induce

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 2 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -3-

others to alter their positions to the injury of Plaintiffs,

violations of California Business and Professions Code § 17200;

(5) fraud and deceit; and (6) false advertising under the Lanham

Act. Compl. at 10-13. 

III. LEGAL STANDARD

"[A] complaint should not be dismissed for failure to state a

claim unless it appears beyond doubt that the plaintiff can prove

no set of facts in support of his claim which would entitle him to

relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). "In

reviewing a 12(b)(6) motion, this Court must accept the factual

allegations of the complaint as true and must draw all reasonable

inferences in favor of the plaintiff." Bernheim v. Litt, 79 F.3d

318, 321 (2d Cir. 1996); see also Usher v. City of Los Angeles,

828 F.2d 556, 561 (9th Cir. 1987). The complaint need not set out

the facts in detail; what is required is a "short and plain

statement of the claim showing that the pleader is entitled to

relief." FRCP 8(a); see also La Salvia v. United Dairymen, 804

F.2d 1113, 1116 (9th Cir. 1986). Thus, the Court's task "is

merely to assess the legal feasibility of the complaint, not to

assay the weight of the evidence which might be offered in support

thereof." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998). 

The Federal Courts have "original jurisdiction over all civil

actions arising under the Constitution, laws or treaties of the

United States." 28 U.S.C. § 1331. The Federal Courts have

supplemental jurisdiction over state law claims if the claims are

"so related" to the federal claims that they "form part of the

same case or controversy." 28 U.S.C. § 1367. 

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 3 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 The Court notes that while registration is not a

prerequisite to having a protectible interest in a work, it is a

jurisdictional requirement to initiating an infringement suit in

Federal Court. See 17 U.S.C. §§ 408(a) and 411(a). 

-4-

A Federal Court may examine the question of subject matter

jurisdiction sua sponte. See Steel Company v. Citizens for a

Better Environment, 523 U.S. 83, 94 (1998). Federal Courts must

normally determine issues of subject matter jurisdiction before

considering a case on its merits. Id. When a court lacks

jurisdiction, the "only function remaining to the court is that of

announcing the fact and dismissing the cause." Id., quoting Ex

parte McCardle, 7 Wall. 506, 514 (1868). 

IV. DISCUSSION

A. First Claim: Copyright Infringement

A Court does not have jurisdiction over a copyright claim

until the copyright has been registered: "[N]o action for

infringement of the copyright in any United States work shall be

instituted until...registration of the copyright claims has been

made in accordance with this title." 17 U.S.C. § 411.2 

The Circuit Courts are split over when "registration" occurs.

Specifically, does registration occur when the Register of

Copyrights issues a certificate of registration or does it occur

when the registration is pending after the applicant has initiated

the process by depositing a copy of the work, along with an

application and filing fee, with the Copyright Office? See Loree

Rodkin Management Corp., v. Ross-Simons, Inc., 315 F. Supp. 2d

1053, 1054-1055 (C.D. Cal. 2004). 

The Second and Eleventh Circuits find that a certificate of

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 4 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 As support for this, the Second Circuit cites Noble v. Town

Sports, Int'l, Inc., 1998 U.S. Dist. No. C-96-4257, 1998 WL 43127

at *1 (S.D.N.Y. February 2, 1998): "District courts are without

subject matter jurisdiction to hear claims for federal copyright

infringement unless a party asserts in its pleadings that he has

received an actual certificate of registration or its denial from

the Copyright Office."

-5-

registration is a prerequisite to filing suit. The Second Circuit

has stated that it "is well-settled that the court lacks subject

matter jurisdiction unless the claimant has a registration or its

registration has been refused."3 The Eleventh Circuit has stated

that "[r]eceipt of an actual certificate of registration or denial

of same is a jurisdictional requirement, and this court cannot

prejudge the determination to be made by the Copyright Office." 

M.G.B. Homes, Inc. v. Ameron Homes, Inc. et al., 903 F.3d 1486,

1488, n.4 (11th Cir. 1990), quoting Demetriades v. Kaufman, 680

F.Supp. 658, 661 (S.D.N.Y. March 8, 1998). 

These Circuits read several sections of the Copyright Act

("Act"), codified at 17 U.S.C. § 101 et seq., together to provide

the answer. For example, Section 410(a) states that "after

examination" and determination by the "Register of Copyrights"

that the "material deposited constitutes copyrightable subject

matter and that the other legal and formal requirements of this

title have been met, the Register shall register the claim and

issue to the applicant a certificate of registration under the

seal of the Copyright Office." (Emphasis added.) These Circuits

find it significant that Sections 410(d) and 411(a) state that the

Register can refuse to issue a certificate of registration and

that an applicant has recourse to the Courts to argue for the

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 5 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -6-

registrability of a work. 

Other Circuit Courts, such as the Fifth Circuit, relying on

17 U.S.C. § 408(a), contend that registration occurs when a person

has deposited the required materials. Section 408(a) states that

the "owner of copyright or of any exclusive right in the work may

obtain registration of the copyright claim by delivering to the

Copyright Office the deposit specified by this section, together

with the application and fee." (Emphasis added.) "[I]t is not

necessary to prove possession of a registration certificate. One

need only prove payment of the required fee, deposit of the work

in question, and receipt by the Copyright Office of a registration

application." Apple Barrel Productions, Inc. v. R.D. Beard, et

al., 730 F.2d 384, 386-387 (5th Cir. 1984). 

The Ninth Circuit has yet to decide the issue and the

District Courts of this Circuit do not always agree with each

other. See Loree Rodkin Management, 315 F. Supp. 2d at 1055, n.1. 

For example, one Court declared that "works with pending

registrations will be given the benefit of the presumption of

ownership." In re Napster Inc. Copyright Litigation, 191 F. Supp.

2d 1087, 1102 (N.D. Cal. 2002). The Court reasoned that the

language of Section 410(d) ("[the] effective date of a copyright

registration is the day on which an application...[is] received in

the Copyright Office") settled the matter. Id. 

Another Court, however, declared that a "close reading of the

[Copyright] Act indicates that registration does not occur until

after the Copyright Office issues a certificate of registration." 

Ryan et al. v. Carl Corporation, et al., No. C-97-3873, 1998 WL

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 6 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -7-

320817 at *2 (N.D. Cal. June 15, 1998). The Court reasoned that

because Section 410(a), which is quoted above, "indicates that the

Copyright Office, not the applicant, registers a claim, and that

examination is a prerequisite to registration," the Section "cuts

against plaintiffs' position of automatic registration." Id. 

Still another Court, building on the reasoning in Ryan,

stated that:

If 'registration' is complete upon receipt of the application

materials by the Copyright Office, then an application that

would later be rejected by the Copyright Office could support

an infringement action prior to receiving a certificate or

denial thereof and without satisfying the condition that

Congress included for bringing actions upon rejection, that

is, to give notice to the Copyright Office. Interpreting the

Act to require a certificate prior to bringing an

infringement action gives effect to the requirements for

bringing a claim upon rejection of the copyright application

contained in 17 U.S.C. § 411(a). 

Brush Creek Media, Inc. v. Boujaklian et al., No. C-02-3491, 2002

WL 1906620 at *4 (N.D. Cal. August 19, 2002). 

This Court finds that the Act supports the position that

registration occurs when the Copyright Office issues a certificate

of registration. The Court cannot accept the idea that an

applicant can confer a copyright on his work - and thereby invoke

the weighty protections of federal law - merely by depositing

materials and a fee with the Copyright Office. Such a notion goes

against the language of the Act, which requires registration or

refusal of registration by the Register of Copyrights as a

prerequisite to filing suit. 

Based on the foregoing, the Court finds that it lacks

jurisdiction over Plaintiffs' claim for copyright infringement. 

Plaintiffs concede that they only have deposited the application

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 7 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -8-

materials. See Compl. ¶¶ 10, 11. Plaintiffs have not pled that

they possess a certificate of registration. 

Accordingly, the Court GRANTS Defendant's motion under FRCP

12(b)(1) as to this claim and DISMISSES Plaintiffs' claim of

copyright infringement. 

B. Second and Third Claims: Unjust Enrichment and

Constructive Trust and an Accounting

Plaintiffs contend that Affordable has "not adequately

compensated plaintiffs for their use of [Plaintiffs'] materials"

and therefore Affordable has been unjustly enriched and that

Affordable should account for all profits and then hold them in a

constructive trust for Plaintiffs. Compl. ¶¶ 22-25, 28.

Affordable contends that this claim is preempted by the

Copyright Act. Defendant's Memorandum in Support of Motion to

Dismiss at 8 ("Def.'s Mem."). 

Claims for unjust enrichment - the unjust retention of a

benefit obtained from another without offering compensation -

under California law are generally preempted by the Copyright Act

because the elements of a claim for unjust enrichment do "not

qualitatively change the rights at issue, the rights the plaintiff

holds in the copyrighted work." See Del Madera Properties v.

Rodes and Gardner, Inc., 820 F.2d 973, 977 (9th Cir. 1987); Zito

v. Steeplechase Films Inc., 267 F. Supp. 2d 1022, 1027 (N.D. Cal.

2003). 

Ordinarily, the Court would be compelled to dismiss this

claim on preemption grounds. Plaintiffs' claim is, however, saved

because of the existence of the claim of false advertising under 

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 8 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

 Defendant also contends that the Act preempts this claim. 

Def.'s Mem. at 12. Because the Court is dismissing the claim on

other grounds, it need not consider the preemption issue at this

time. 

-9-

§ 43 of the Lanham Act, 15 U.S.C. § 1125(a). Specifically, as

part of their false advertising claim under the Lanham Act,

Plaintiffs incorporated all foregoing allegations, thus subsuming

the unjust enrichment claim under the claim for false advertising.

Similarly, because the claims for constructive trust and an

accounting are linked to the claims of unjust enrichment,

Plaintiffs' third claim withstands the motion to dismiss.

The Court DENIES Defendant's motion to dismiss Plaintiffs'

second and third claims. 

C. Fourth Claim: California Business and Professions Code

§ 1709 et seq.

Plaintiffs contend that Affordable, by making false

statements with the intent to induce others to alter their

positions to the detriment of Plaintiffs, have misled the general

public, a violation of California Business and Professions Code 

§ 1709 et seq., constituting an unlawful business practice within

the meaning of California Business and Professions Code § 17200. 

Compl. ¶¶ 32-33.

Affordable contends that Plaintiffs have not pled facts

sufficient to state a claim. Specifically, Affordable contends

that Plaintiffs have not alleged any "injury in fact," or "any

intentional deceit or any change in position on the part of

Plaintiffs that resulted in injury."4

 Def.'s Mem. at 11. 

California Civil Code § 1709, "Fraudulent Deceit," states

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 9 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -10-

that one "who willfully deceives another with intent to induce him

to alter his position to his injury or risk, is liable for any

damage he thereby suffers." One must allege that the person who

suffered damage, "has suffered injury in fact and has lost money

or property as a result of such unfair competition." California

Business and Professions Code § 17204. 

Plaintiffs have not pled facts sufficient to state a claim

for a violation of § 1709. While they have stated that

"[c]onsumers will be injured or placed at risk when they are

deceived," Plaintiffs have not pled that these consumers have

suffered an injury in fact and that they have lost money or

property because of the alleged fraudulent deceit. Plaintiffs'

Memorandum in Opposition to Motion to Dismiss at 9 ("Pls.' Mem."). 

Rather, Plaintiffs have stated that they, Plaintiffs, have

suffered an injury in fact because "Affordable is receiving

business revenues that rightfully belong to Plaintiffs." Id. 

Because Plaintiffs have failed to state a claim, the Court

GRANTS Affordable's motion and DISMISSES Plaintiffs' fourth claim.

D. Fifth Claim: Fraud and Deceit

Plaintiffs contend that Affordable has committed fraud and

deceit by sending their (Affordable's) stickers to consumers and

instructing consumers to place this sticker over Affordable's old 

stickers. Compl. ¶¶ 36-41. These new stickers have Affordable's,

rather than Plaintiffs', telephone numbers, thereby allegedly

deceiving customers into entering business relationships under

false pretenses and diverting business from Plaintiffs. Id. 

Affordable contends that Plaintiffs failed to plead this

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 10 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

 Because the Court dismisses this claim on other grounds, it

is unnecessary for it to rule on the issue of preemption. 

-11-

claim with particularity, as required by the heightened pleading

requirements of FRCP 9(b). Def.'s Mem. at 12. Affordable also

contends that this claim is preempted by the Act.5

While notice pleading is nearly always sufficient, in all

averments of fraud or mistake the circumstances constituting fraud

or mistake shall be stated "with particularity." FRCP 9(b). 

Plaintiffs must put forth the "who, what, where, and when of the

alleged fraud" in order to "assure that the charge of fraud is

responsible and supported, rather than defamatory and

extortionate." Ackerman v. Northwestern Mutual Life Insurance

Company, 172 F.3d 467, 469 (7th Cir. 1999). FRCP 9(b)'s

particularity requirement is in place so that the "defendant can

prepare an adequate answer from the allegations," Moore v. Kayport

Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989), and "not

just deny that [he has] done anything wrong." Semegen v. Weidner,

780 F.2d 727, 731 (9th Cir. 1985). 

Fraud, under California law, consists of the following

elements: (1) misrepresentation; (2) scienter; (3) intent to

induce reliance; (4) justifiable reliance on the

misrepresentation; and (5) damage caused by reliance on the

misrepresentation. Witkin, Summary of California Law, Volume 5,

Torts, § 772 (10th ed. 2005). 

Plaintiffs have not stated a claim for fraud. Plaintiffs

have not pled facts that they relied on any misrepresentation by

Defendants to their detriment. While some consumers may have been

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 11 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -12-

defrauded by Affordable, it is unclear how Plaintiffs have been.

Accordingly, the Court GRANTS Affordable's motion and

DISMISSES this claim.

E. Sixth Claim: False Advertising Under 15 U.S.C. § 1125(a)

Plaintiffs contend that Affordable's statements (that is,

instructing consumers to place Affordable's sticker "over our old

sticker") are "false and misleading" and have the "capacity to

deceive a substantial segment of the population...[and] will have

an influence on the purchasing decision of members of the public,"

and therefore violates the Lanham Act. Compl. ¶¶ 39, 47-48. 

Affordable contends that Plaintiffs have failed to provide a

"false statement of fact" that would support a claim for false

advertising and have instead provided but a "light sprinkling of

facts to support the elements of a false advertising claim."

Def.'s Mem. at 14-15. 

To state a claim for false advertising under § 43(a) of the

Lanham Act, codified at 15 U.S.C. § 1125(a), a plaintiff must

allege that (1) the defendant made a false statement of fact in a

commercial setting about his own or another's product; (2) the

statement actually deceived or has the tendency to deceive a

substantial segment of its audience; (3) the deception is

material, in that it is likely to influence the purchasing

decision; (4) the defendant caused its false statement to enter

interstate commerce; and (5) the plaintiff has been or is likely

to be injured as a result of the false statement, either by direct

diversion of sales from itself to defendant or by a lessening of

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 12 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -13-

the goodwill associated with its products. See Southland Sod

Farms v. Stover Seed Company, 108 F.3d 1134, 1139 (9th Cir. 1997). 

A "plaintiff may show that the statement was literally false,

either on its face or by necessary implication, or that the

statement was literally true but likely to mislead or confuse

consumers." Id., citing Castrol Inc. v. Pennzoil Co., 987 F.2d

939, 946 (3d Cir. 1993). 

Plaintiffs have stated a claim for false advertising. 

Because Affordable has nailed its colors to the mast of the

element of false statement, that is the issue the Court will

address. Though the statement may not be literally false, it is

plausible that it likely could, under the standard stated above, 

mislead or confuse consumers into using Affordable's services

rather than Plaintiffs'. 

Accordingly, the Court DENIES Affordable's motion to dismiss

this claim. 

F. Preliminary Injunction

Plaintiffs have asked the Court to "enjoin[] Affordable from

distributing more confusingly similar stickers containing [the

allegedly impermissible] message." Plaintiffs' Memorandum in

Support of Motion for a Preliminary Injunction at 4 (Pls.' PI

Mem."). Unless Defendant is prevented from distributing the

stickers, "Plaintiffs will continue to be harmed." Id. 

Plaintiffs also ask the Court to compel Defendant to assign

Affordable's telephone numbers to Plaintiffs. Id. at 11. 

Defendant contends that Plaintiffs have failed to "submit any

credible evidence to support their motion." Defendant's

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 13 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -14-

Memorandum in Opposition to Motion for a Preliminary Injunction at

1 ("Def.'s PI Mem."). Defendant contends that the balance of

hardship tips in Defendant's favor because a preliminary

injunction would result in the complete loss of Affordable's

business in northern California, will chill competition and would

not benefit the public. Id. at 16-17. 

"The traditional equitable criteria for granting preliminary

injunctive relief are (1) a strong likelihood of success on the

merits, (2) the possibility of irreparable injury to plaintiff if

the preliminary relief is not granted, (3) a balance of hardships

favoring the plaintiff, and (4) advancement of the public interest

(in certain cases)." Dollar Rent A Car of Washington, Inc. v.

Travelers Indemnity Co., 774 F.2d 1371, 1374 (9th Cir. 1985). The

moving party has the burden of persuading the Court that all four

factors are present. See McDonald's Corp. v. Robertson, 147 F.3d

1301 (11th Cir. 1998) (emphasis added). "The moving party may

meet its burden by demonstrating either (1) a combination of

probable success on the merits and the possibility of irreparable

injury or (2) that serious questions are raised and the balance of

hardships tips sharply in its favor." Id. at 1374-1375 (citations

removed). "These are not separate tests, but the outer reaches of

a single continuum." Id. at 1375 (citations removed). 

Plaintiffs have not met their burden. First, Plaintiffs have

not demonstrated that there is a strong likelihood or probability

of success on the merits, despite their belief that they are

"likely to succeed on the merits." Pls.' PI Mem. at 5. 

Plaintiffs' claim of copyright infringement has been dismissed as

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 14 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6 Although it is not the Court's role to assay the weight of

evidence in a motion to dismiss for failure to state a claim, it is

the Court's role to assay the weight of evidence when Plaintiffs

have moved for a preliminary injunction, as the criteria for

judging an application for an injunction indicate. 

-15-

have two state law claims. The remaining state law claims pend

from the remaining - and rather thin - federal claim, that is, the

claim for false advertising.6 Though Plaintiffs have stated a

claim for false advertising, Plaintiffs have not persuaded the

Court that there is a strong likelihood that they will prevail on

this claim.

Second, Plaintiffs contend that "irreparable injury is

presumed where plaintiff demonstrates a likelihood of success on a

copyright infringement claim." Pls.' PI Mem. at 9. Because the

copyright claim has been dismissed, this contention is meritless. 

Third, Plaintiffs have failed to persuade the Court that

their injuries "far outweigh any harm that might be created by

injunctive relief." Id. at 10. By assigning Affordable's

telephone numbers to Plaintiffs, the Court "simply returns the

parties to the status quo by causing Plaintiffs to receive the

service calls they would have received had Affordable not engaged

in a misleading advertising claim." Id. Otherwise, "Plaintiffs

will no longer receive enough service calls to allow them to

generate sufficient revenues to remain in business." Id. 

Defendant, however, states that, after having invested

hundreds of thousands of dollars in its northern California

campaign, a preliminary injunction would "constitute an arbitrary

and unjust appropriation of Affordable's entire business, as

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 15 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 -16-

Affordable would lose not only its business in Northern

California, but potentially its entire business." Def.'s PI Mem.

at 16. 

In balancing the concerns of both parties, the Court finds

that Plaintiffs have not demonstrated that the balance of

hardships tips sharply in Plaintiffs' favor.

Accordingly, the Court DENIES Plaintiffs' motion for a

preliminary injunction. 

V. CONCLUSION

The Court GRANTS Defendant's motion as to the first, fourth

and fifth claims. Accordingly, the Court DISMISSES the claims for

copyright infringement, violation of the California Business and

Professions Code, and fraud.

The Court GRANTS Plaintiffs leave to amend these three

claims. If Plaintiffs fail to file amended claims within thirty

days from the date of this Order, the Court will bar Plaintiffs

from bringing these claims at all. The Court reminds Plaintiffs

that they must have a certificate of registration from the

Register of Copyrights before they can reallege their claim for

copyright infringement.

The Court DENIES Plaintiffs' motion for a preliminary

injunction. 

IT IS SO ORDERED.

Dated: February 23, 2006

 

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-04996-SC Document 34 Filed 02/23/06 Page 16 of 16