Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_09-cv-04200/USCOURTS-cand-4_09-cv-04200-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SLEEP SCIENCE PARTNERS,

Plaintiff,

 v.

AVERY LIEBERMAN and SLEEPING WELL,

LLC,

Defendants. /

No. 09-04200 CW

ORDER GRANTING IN

PART AND DENYING

IN PART DEFENDANT

SLEEPING WELL,

LLC’S MOTION TO

DISMISS

(Docket No. 27)

Defendant Sleeping Well, LLC moves to dismiss Plaintiff Sleep

Science Partners’ claims for trade dress infringement, copyright

infringement, tortious interference with contract, common law

misappropriation, unfair competition, civil conspiracy and unjust

enrichment. Defendant Avery Lieberman has answered the complaint

and does not join in the motion. Plaintiff opposes the motion. 

The motion was taken under submission on the papers. Having

considered all of the papers submitted by the parties, the Court

GRANTS Sleeping Well’s motion in part and DENIES it in part.

BACKGROUND 

The following allegations are contained in Plaintiff’s

Complaint.

Plaintiff is a California-based business which manufactures,

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markets and sells an anti-snoring prescription mandibular

repositioning device (MRD) called PureSleep. An MRD is an FDAregulated medical device that may only be obtained by prescription

from a medical doctor or dentist. In 2005, Plaintiff’s founders

developed a business model, the PureSleep Method, which allows

consumers to purchase a PureSleep device without visiting a

dentist. The PureSleep Method consists of, among other things, a

screening questionnaire, website, telephone ordering system, and

television commercials. Plaintiff implemented and marketed the

PureSleep device through the PureSleep Method.

In early 2006, Plaintiff entered into discussions with

Defendant Avery Lieberman, a California-based dentist, to see if he

would prescribe the PureSleep device using the PureSleep Method. 

As a condition of discussing the PureSleep Method, Plaintiff

required Dr. Lieberman to sign a non-disclosure agreement. At the

time of these discussions, Plaintiff had not yet publicly displayed

the PureSleep Method. Dr. Lieberman helped Plaintiff refine the

PureSleep Method until May, 2007, when he ceased all communication

with Plaintiff. Plaintiff launched its website and began marketing

through the PureSleep Method in November, 2007. 

Plaintiff alleges that Dr. Lieberman contacted Daniel and

Katrine Webster, Vermont residents, and told them how to use the

PureSleep Method to sell MRDs. Plaintiff claims that the Websters

ordered an MRD from its website in order to test the functionality

of the PureSleep device and copy the website’s look and feel. 

Plaintiff’s website requires anyone who orders a product to signify

that he or she has read and agrees to be bound by Plaintiff’s

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“Terms and Conditions” which state, in part, “No part of this

website may be reproduced or transmitted.” Pl.’s Compl., Ex. 1.

On August 4, 2008, the Websters registered the domain name

“ZQuiet.com” and, in September, 2008, registered Defendant Sleeping

Well as a limited liability company with the Secretary of State of

Vermont. Sleeping Well entered into a contract with Euro RSCG Edge

(Euro), a California-based media buying company, to purchase

television advertising air time. Euro has always been and is

Plaintiff’s exclusive television media buyer. Plaintiff spent over

a year with Euro, which tested different television stations and

air times to find the most profitable way to market the PureSleep

device. Lindsay Decl. ¶ 21. 

In April, 2009, Sleeping Well launched its television

commercials, website and ordering system. Plaintiff alleges that

Sleeping Well misappropriated its PureSleep Method through Dr.

Lieberman and that its website has the same format, design and feel

as Plaintiff’s website. Plaintiff also claims that Sleeping Well

directed Euro to target the same television stations and air times

that it uses to advertise the PureSleep device. 

In October, 2009, Sleeping Well moved to dismiss Plaintiff’s

claims against it for lack of personal jurisdiction. The Court

denied this motion, concluding that it has specific jurisdiction

over Sleeping Well. See generally Order of Nov. 23, 2009 Denying

Def.’s Mot. to Dismiss (Docket No. 23). 

LEGAL STANDARD

A complaint must contain a “short and plain statement of the

claim showing that the pleader is entitled to relief.” Fed. R.

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Civ. P. 8(a). Dismissal under Rule 12(b)(6) for failure to state a

claim is appropriate only when the complaint does not give the

defendant fair notice of a legally cognizable claim and the grounds

on which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). In considering whether the complaint is sufficient to

state a claim, the court will take all material allegations as true

and construe them in the light most favorable to the plaintiff. NL

Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

However, this principle is inapplicable to legal conclusions;

“threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements,” are not taken as true. 

Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949-50 (2009)

(citing Twombly, 550 U.S. at 555).

DISCUSSION

I. Trade Dress Infringement Claim

“The Lanham Act was intended to make ‘actionable the deceptive

and misleading use of marks,’ and ‘to protect persons engaged

in . . . commerce against unfair competition.’” Dastar Corp. v.

Twentieth Century Fox Film Corp., 539 U.S. 23, 28 (2003) (quoting

15 U.S.C. § 1127). The Act “prohibits actions like trademark

infringement that deceive consumers and impair a producer's

goodwill.” Id. at 32. To this end, section 43(a) of the Act, 15

U.S.C. § 1125(a), proscribes “the use of false designations of

origin, false descriptions, and false representations in the

advertizing and sale of goods and services.” Jack Russell Terrier

Network of N. Cal. v. Am. Kennel Club, Inc., 407 F.3d 1027, 1036

(9th Cir. 2005) (citing Smith v. Montoro, 648 F.2d 602, 603 (9th

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Cir. 1981)). 

Plaintiff charges Sleeping Well with trade dress infringement,

in violation of § 43(a) of the Lanham Act. Plaintiff describes its

trade dress as the “unique look and feel of SSP’s website,

including its user interface, telephone ordering system and

television commercial . . . .” Compl. ¶ 84. Sleeping Well argues

that Plaintiff fails to define its trade dress with sufficient

clarity. Sleeping Well also asserts that Plaintiff’s trade dress

infringement claim seeks protection of rights covered by the

Copyright Act and that such claims should be dismissed. 

A. Plaintiff’s Alleged Trade Dress

“Trade dress protection applies to ‘a combination of any

elements in which a product is presented to a buyer,’ including the

shape and design of a product.” Art Attacks Ink, LLC v. MGA Entm’t

Inc., 581 F.3d 1138, 1145 (9th Cir. 2009) (quoting J. Thomas

McCarthy, McCarthy on Trademarks and Unfair Competition § 8:1, at

8-3 (4th ed. 1996)). “Trade dress involves ‘the total image of a

product and may include features such as size, shape, color or

color combination, texture, graphics, or even particular sales

techniques.’” Mattel, Inc. v. Walking Mountain Prods., 353 F.3d

792, 808 n.13 (9th Cir. 2003) (quoting Two Pesos, Inc. v. Taco

Cabana, Inc., 505 U.S. 763, 765 n.1 (1992)). In evaluating a trade

dress claim, a court must not focus on individual elements, “but

rather on the overall visual impression that the combination and

arrangement of those elements create.” Clicks Billiards, Inc. v.

Sixshooters, Inc., 251 F.3d 1252, 1259 (9th Cir. 2001). “Trade

dress is the composite tapestry of visual effects.” Id. 

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A plaintiff should clearly articulate its claimed trade dress

to give a defendant sufficient notice. See Walker & Zanger, Inc.

v. Paragon Indus., Inc., 549 F. Supp. 2d 1168, 1174 (N.D. Cal.

2007) (citing Yurman Design, Inc. v. PAJ, Inc., 262 F.2d 101, 115

(2d Cir. 2001)); Autodesk, Inc. v. Dassault Systemes SolidWorks

Corp., 2008 WL 6742224, at *5 (N.D. Cal.). 

Plaintiff appears to seek trade dress protection of its

website, telephone ordering system and television commercial. 

Plaintiff has not clearly plead that it defines its trade dress as

these three marketing components taken in combination. Nor has it

alleged that these elements interact to create a particular visual

impression. The Court therefore considers below whether Plaintiff

pleads sufficient facts to support trade dress protection for each

individual component. 

Plaintiff seeks protection of its website’s “unique look and

feel.” Compl. ¶ 84. It pleads that its website’s features

“include (1) the ability to view SSP’s television commercial;

(2) user testimonials; (3) the screening questionnaire; and (4) the

PureSleep Method.” Compl. ¶ 31. It also alleges that other

components of the website’s “design, look and feel are more subtle

including, but not limited to, the size and location of text, the

size and location of graphics, the features that it offers and the

location of hyperlinks of those features.” Id. Plaintiff then

describes several other website design elements. Compl. ¶ 51. 

Although it has cataloged several components of its website,

Plaintiff has not clearly articulated which of them constitute its

purported trade dress. Notably, Plaintiff employs language

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1

 At least one court has concluded that television commercials

can constitute protected trade dress. See Chuck Blore & Don

Richman Inc. v. 20/20 Adver. Inc., 674 F. Supp. 671 (D. Minn.

1987). 

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suggesting that these components are only some among many, which

raises a question of whether it intends to redefine its trade dress

at a future stage of litigation. Without an adequate definition of

the elements comprising the website’s “look and feel,” Sleeping

Well is not given adequate notice. 

With regard to separate trade dress protection for its

telephone ordering system, Plaintiff only pleads that, through it,

consumers answer a screening questionnaire. The use of a screening

questionnaire would not, on its own, constitute protectable trade

dress. To afford such protection would allow Plaintiff to

monopolize the use of a questionnaire in connection with a

telephone ordering system. Moreover, trade dress generally applies

to a visual impression created through a combination of elements. 

Thus, it is not clear that Plaintiff may seek trade dress

protection of its telephone ordering system, but if it wishes to

attempt to do so, it must provide additional detail. 

Finally, concerning its television commercial,1

 Plaintiff

claims that it is “made up of a variety of carefully designed

components, including an introduction with the sound of loud

snoring, graphics illustrating an MRD opening a human airway and

user testimonials.” Compl. ¶ 32. However, Plaintiff does not

plead sufficiently descriptive details of the graphics or any other

element of its television advertisement to qualify as protected

trade dress. As with its telephone ordering system, Plaintiff must

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more clearly describe the combination of elements contained in its

television commercial for which it seeks trade dress protection. 

Accordingly, the Court grants Sleeping Well’s motion to

dismiss Plaintiff’s trade dress infringement claim. Plaintiff must

articulate more clearly what constitutes its trade dress. 

B. Trade Dress Infringement and the Copyright Act

As noted above, Sleeping Well also contends that Plaintiff’s

trade infringement claim under the Lanham Act must be dismissed

because it impermissibly overlaps with rights protected under the

Copyright Act. Although Plaintiff has not adequately plead its

trade dress, the Court provides the following as guidance for any

amended pleading. 

The Copyright Act protects “original works of authorship fixed

in any tangible medium of expression, now known or later developed,

from which they can be perceived, reproduced, or otherwise

communicated, either directly or with the aid of a machine or

device.” 17 U.S.C. § 102(a). Protection does not extend to “any

idea, procedure, process, system, method of operation, concept,

principle, or discovery, regardless of the form in which it is

described, explained, illustrated, or embodied in such work.” Id.

§ 102(b).

Courts have “long limited application of the Lanham Act so as

not to encroach on copyright interests.” 1 Melvin B. Nimmer &

David Nimmer, Nimmer on Copyright, § 1.01[D][2] (2005); see also

Dastar, 539 U.S. at 33 (declining to apply Lanham Act in manner

that would cause a “conflict with the law of copyright”). A court

should not “expand the scope of the Lanham Act to cover cases in

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which the Federal Copyright Act provides an adequate remedy.” Shaw

v. Lindheim, 919 F.2d 1353, 1364-65 (9th Cir. 1990). “Parallel

claims under the Copyright Act and Lanham Act, however, are not per

se impermissible.” Blue Nile, Inc. v. Ice.com, Inc., 478 F. Supp.

2d 1240, 1244 (W.D. Wash. 2007) (citing Nintendo of Am. v. Dragon

Pac., Int’l, 40 F.3d 1007, 1011 (9th Cir. 1994)); see also RDF

Media Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556, 564 (C.D. Cal.

2005) (stating that “trademark and copyright protection may

coexist,” citing 1 J. Thomas McCarthy, McCarthy on Trademarks and

Unfair Competition § 6:5 (4th ed. 1996)). 

As noted above, Plaintiff bases its trade dress infringement

claim in part on the “look and feel” of its website. However,

Plaintiff has filed for copyright protection for its website and

seeks to sue for copyright infringement on this basis. Because

Plaintiff has not adequately explained the “look and feel” of its

website, it is not clear to what extent its purported trade dress

falls within the scope of copyright. The Copyright Act could

therefore afford an adequate remedy for the alleged infringement,

and Plaintiff’s trade dress infringement claim could overstep the

line between the Lanham and Copyright Acts. 

Nevertheless, it does not follow that a trade dress

infringement claim based on the “look and feel” of a website must

fail as a matter of law. Courts have concluded that a website’s

“look and feel” could constitute protectable trade dress that would

not interfere with copyright interests. See, e.g., Conference

Archives, Inc. v. Sound Images, Inc., ___ F. Supp. 2d ___, 2010 WL

1626072, at *14-*21 (W.D. Pa.); Blue Nile, 478 F. Supp. 2d at 1243. 

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Although it has not said so explicitly, Plaintiff may have plead

its trade dress claim in the alternative, accounting for a

possibility that its website may not be copyrightable. However,

even if Plaintiff were to plead as its trade dress a “look and

feel” that does not encroach upon copyright interests, it would

still bear the burden of establishing the elements of a trade dress

infringement claim. “To prove trade dress infringement, a

plaintiff must demonstrate that (1) the trade dress is

nonfunctional, (2) the trade dress has acquired secondary meaning,

and (3) there is a substantial likelihood of confusion between the

plaintiff's and defendant's products.” Art Attacks, 581 F.3d at

1145.

The Court need not decide this issue here because Plaintiff

has not adequately identified the elements of its website that

comprise its alleged trade dress. However, if it intends to

maintain a Lanham Act claim based on its website’s “look and feel,”

in addition to articulating clearly the website features that

comprise its alleged trade dress, Plaintiff must plead a “look and

feel” that does not fall under the purview of the Copyright Act. 

II. Copyright Infringement Claim

Generally, “no civil action for infringement of the copyright

in any United States work shall be instituted until preregistration

or registration of the copyright claim has been made in accordance

with this title.” 17 U.S.C. § 411(a). The requirement for

preregistration or registration of the copyright is not a

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2

 Sleeping Well asserts that § 411(a) creates a jurisdictional

bar. However, its motion was filed before the Supreme Court’s

decision in Reed Elsevier, Inc., which held to the contrary. 

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jurisdictional requirement.2 Reed Elsevier, Inc. v. Muchnick, ___

U.S. ___, 130 S. Ct. 1237, 1248 (2010). Instead, it is a nonjurisdictional, threshold element that a plaintiff must satisfy

before asserting a claim. Id. 

Sleeping Well contests Plaintiff’s assertion that its

application to register the copyright of its website constitutes

“preregistration.” The Ninth Circuit has not decided whether an

application suffices as “preregistration,” and there are

conflicting decisions on the matter. Compare Kema, Inc. v.

Koperwhats, 658 F. Supp. 2d 1022, 1028-29 (N.D. Cal. 2009) (holding

that an application does not constitute preregistration) with

Penpower Tech. Ltd. v. S.P.C. Tech., 627 F. Supp. 2d 1083, 1091

(N.D. Cal. 2008) (concluding that plaintiff’s application is “an

action equivalent to ‘preregistration’”). However, legislative

history and associated regulations favor Sleeping Well’s position. 

The Family Entertainment and Copyright Act (FECA) of 2005

created a preregistration process for copyright. Pub. L. No. 109-

9, § 104, 119 Stat. 218, 221-22. “FECA was concerned, in large

part, with the piracy of movies and the subsequent sale and

distribution of illegal copies of movies.” La Resolana Architects,

PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1207 (10th Cir.

2005). To this end, preregistration addresses “works being

prepared for commercial distribution.” 17 U.S.C. § 408(f). The

House Judiciary Committee report on the underlying bill stated that

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§ 408(f) 

expressly requires the Register of Copyrights to issue

regulations to establish a preregistration system for

copyrighted works. Since works are generally not

formally copyrighted until they are in final form and

ready for distribution to the public, civil remedies for

the distribution of pre-release works are lacking. This

section will give the Register flexibility to determine

which classes of works are appropriate for

preregistration.

H.R. Rep. No. 109-33, at 4 (2005), reprinted in 2005 U.S.C.C.A.N.

220, 223. 

A work is eligible for preregistration if it is

“(i) Unpublished; (ii) Being prepared for commercial distribution;

and (iii) In a class of works that the Register of Copyrights has

determined has had a history of infringement prior to authorized

commercial release.” 37 C.F.R. § 202.16(b)(3). “A work eligible

for preregistration may be preregistered by submitting an

application and fee to the Copyright Office pursuant to the

requirements set forth in this section.” Id. § 202.16(c)(1). “An

application for preregistration is made using Electronic Form PRE.” 

Id. § 202.16(c)(3). 

Plaintiff’s application for registration does not constitute

“preregistration” for the purposes of § 411(a). Plaintiff does not

argue that it applied for preregistration or that it filed an

Electronic Form PRE. Nor does it assert facts to suggest that the

website is eligible for preregistration. On the contrary,

Plaintiff asserts that it applied for registration of its

copyright. Moreover, it has already published the website on the

Internet and made it available to the public. Although an

application for preregistration and payment of a fee could accord

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jurisdiction, an application for registration does not. 

Accordingly, Plaintiff’s copyright claim is dismissed without

prejudice. Plaintiff may move to amend its complaint to add a

copyright claim if the Copyright Office approves its application

during the pendency of these proceedings. 

III. Claim for Tortious Interference with Contract

Sleeping Well contends that it cannot be held liable for

tortious interference with contract because Plaintiff pleads that

it is a party to the contract with which it interfered. 

“To recover in tort for intentional interference with the

performance of a contract, a plaintiff must prove: (1) a valid

contract between plaintiff and another party; (2) defendant’s

knowledge of the contract; (3) defendant’s intentional acts

designed to induce a breach or disruption of the contractual

relationship; (4) actual breach or disruption of the contractual

relationship; and (5) resulting damage.” Applied Equip. Corp. v.

Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 514 n.5 (1994) (citing

Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126

(1990)). The “tort cause of action for interference with a

contract does not lie against a party to the contract.” Applied

Equip. Corp., 7 Cal. 4th at 514 (citations omitted). 

In its complaint, Plaintiff alleges that Sleeping Well induced

its “employees or agents who have used SSP’s website” to breach the

site’s “Terms and Conditions.” Compl. ¶ 127. In its opposition,

Plaintiff asserts that “a third party entered into the Terms and

Conditions of SSP’s website, and SW then encouraged that third

party -- their web developers -- to breach SSP’s website

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3

 The Court does not decide, on this motion, whether Sleeping

Well’s web developers were its agents. Plaintiff’s complaint does

not allege that Sleeping Well interfered with its web developers’

contracts with Plaintiff. 

14

agreement.” Opp’n at 10. Plaintiff then argues that it alleges

tort liability based on Sleeping Well’s claimed interference with

the non-disclosure agreement between Dr. Lieberman and Plaintiff,

even though this theory is not explicitly raised in its Complaint. 

Plaintiff, appearing to concede that its pleadings are not clear,

“requests leave to more fully articulate” its claim. Opp’n at 10-

11.

Based on its Complaint, Plaintiff’s tortious interference

claim fails. Plaintiff avers that Sleeping Well “intentionally and

knowingly induced their employees and/or agents to access

www.puresleep.com in order to copy SSP’s intellectual

property . . . .” Compl. ¶ 125. If this were so, then Sleeping

Well’s employees and agents3

 accessed the website and assented to

the Terms and Conditions for the benefit of Sleeping Well. This

conduct would make Sleeping Well a party to the Terms and

Conditions. Am. Builders Ass’n v. Au-Yang, 226 Cal. App. 3d 170,

176 (1990) (“‘A contract made by an agent for an undisclosed

principal is for most purposes the contract of the

principal, . . .’”) (quoting Bank of Am. v. State Bd. of

Equalization, 209 Cal. App. 2d 780, 796 (1962)). Assuming that the

Terms and Conditions constitute a contract, Sleeping Well cannot be

held liable for tortiously interfering with it. 

Accordingly, Plaintiff’s tortious interference with contract

claim is dismissed with leave to amend. Should Plaintiff amend its

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pleadings, it may not allege facts that are inconsistent with those

alleged in the current Complaint.

IV. Claims for Common Law Misappropriation, Statutory and Common

Law Unfair Competition and Common Law Unjust Enrichment

Sleeping Well contends that the Copyright Act and California’s

Uniform Trade Secrets Act (CUTSA) preempt Plaintiff’s claims for

common law misappropriation of its intellectual property, statutory

and common law unfair competition and common law unjust enrichment. 

Alternatively, Sleeping Well asserts that Plaintiff has not

sufficiently plead its unfair competition and unjust enrichment

claims. 

A. Preemption

1. Copyright Act

Two conditions must be satisfied for the Copyright Act to

preempt state law: (1) “‘the content of the protected right must

fall within the subject matter of copyright as described in 17

U.S.C. §§ 102 and 103’” and (2) “‘the right asserted under state

law must be equivalent to the exclusive rights contained in section

106 of the Copyright Act.’” Sybersound Records, Inc. v. UAV Corp.,

517 F.3d 1137, 1150 (9th Cir. 2008) (quoting Downing & Abercrombie

& Fitch, 265 F.3d 994, 1003 (9th Cir. 2001)). 

The “equivalent rights” prong of the test requires a court to

consider whether the state claim asserts rights

within the general scope of copyright as specified by

section 106 of the Copyright Act. Section 106 provides a

copyright owner with the exclusive rights of

reproduction, preparation of derivative works,

distribution, and display. To survive preemption, the

state cause of action must protect rights which are

qualitatively different from the copyright rights. The

state claim must have an extra element which changes the

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nature of the action.

Laws v. Sony Music Entm’t, Inc., 448 F.3d 1134, 1143 (9th Cir.

2006) (quoting Del Madera Props. v. Rhodes & Gardner, 820 F.2d 973

(9th Cir. 1987)). 

2. CUTSA

California’s legislature enacted CUTSA in 1984 “to provide

unitary definitions of trade secret and trade secret

misappropriation, and a single statute of limitations for the

various property, quasi-contractual, and violation of fiduciary

relationship theories of noncontractual liability utilized at

common law.” Am. Credit Indem. Co. v. Sacks, 213 Cal. App. 3d 622,

630 (1989) (internal quotation marks omitted). It defines a “trade

secret” as:

information, including a formula, pattern, compilation,

program, device, method, technique, or process, that:

(1) Derives independent economic value, actual or

potential, from not being generally known to the

public or to other persons who can obtain economic

value from its disclosure or use; and

(2) Is the subject of efforts that are reasonable

under the circumstances to maintain its secrecy.

Cal. Civ. Code § 3426.1(d).

“CUTSA preempts common law claims that are based on

misappropriation of a trade secret.” Ali v. Fasteners for Retail,

Inc., 544 F. Supp. 2d 1064, 1070 (E.D. Cal. 2008) (internal

quotation marks omitted). However, CUTSA exempts certain claims

from the scope of its preemption: it “does not affect

(1) contractual remedies, whether or not based upon

misappropriation of a trade secret, (2) other civil remedies that

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are not based upon misappropriation of a trade secret, or

(3) criminal remedies, whether or not based upon misappropriation

of a trade secret.” Cal. Civ. Code § 3426.7(b).

“Courts have held that where a claim is based on the

‘identical nucleus’ of facts as a trade secrets misappropriation

claim, it is preempted by [C]UTSA.” Silicon Image, Inc., 2007 WL

1455903, at *9 (N.D. Cal.). “The preemption inquiry for those

causes of action not specifically exempted by § 3426.7(b) focuses

on whether other claims are no more than a restatement of the same

operative facts supporting trade secret misappropriation. . . . If

there is no material distinction between the wrongdoing alleged in

a [C]UTSA claim and that alleged in a different claim, the [C]UTSA

preempts the other claim.” Convolve, Inc. v. Compaq Computer

Corp., 2006 WL 839022, at *6 (S.D.N.Y.) (applying California law).

B. Common Law Misappropriation Claim

Plaintiff alleges that Sleeping Well misappropriated “its

Trade Secrets, Trade Dress and other intellectual property related

to its Confidential Information, the PureSleep Method, the

puresleep.com website, telephone ordering system and television

commercial.” Compl. ¶ 141. It also incorporates paragraphs 1-139

of its Complaint into its claim for misappropriation. Sleeping

Well contends that the Copyright Act preempts this claim to the

extent that it is based on the copying of elements from Plaintiff’s

website. 

Plaintiff’s website or some its elements may fall within the

subject matter covered by copyright. For instance, its screening

questionnaire, its television commercial and its logo could fall

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within the scope of copyright. 

To the extent that Plaintiff’s misappropriation claim rests on

elements covered by the Copyright Act, Plaintiff must offer an

“extra element” to distinguish this claim from one for copyright

infringement. Plaintiff analogizes its misappropriation claim to

one for misrepresentation, which courts have concluded avoids

copyright preemption. See, e.g., Silicon Image, Inc. v. Analogix

Semiconductor, Inc., 2007 WL 1455903, at *7-*8 (N.D. Cal.). 

However, the torts of misappropriation and misrepresentation are

different: misappropriation involves a defendant taking another’s

property for “little or no cost” and appropriating it to the

detriment of the plaintiff. See Hollywood Screentest of Am., Inc.

v. NBC Universal, Inc., 151 Cal. App. 4th 631, 650 (2007). On the

other hand, misrepresentation involves fraudulent conduct. 

Plaintiff avers that Sleeping Well acquired elements of its website

for little or no cost and used this intellectual property to its

detriment. The gravamen of this claim is that Sleeping Well

unlawfully acquired property, which constitutes misappropriation or

copyright infringement, not misrepresentation. 

Plaintiff cites Downing to argue that misappropriation claims

are not always preempted. However, Downing involves the

misappropriation of the names and likenesses of individuals, which

is not subject matter protected under the Copyright Act. 265 F.3d

at 1004-05. Thus, as to the portion of its claim directed to

subject matter susceptible to copyright protection, Plaintiff’s

reliance on Downing is unavailing. 

Plaintiff acknowledges that CUTSA preempts its

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misappropriation claim to the extent that it involves confidential

information subject to trade secret protections. Plaintiff

explicitly alleges in this claim that Sleeping Well misappropriated

its trade secrets. It is not apparent what this claim addresses

beyond the trade secrets implicated in Plaintiff’s CUTSA claim. 

The Court dismisses this claim with leave to amend. Plaintiff

must plead clearly what non-trade-secrets Sleeping Well allegedly

misappropriated. In addition, Plaintiff must aver what has been

misappropriated that is not subject to copyright protection or

allege a cause of action with an extra element that distinguishes

the rights asserted from those provided under the Copyright Act. 

C. Statutory Unfair Competition Claim

California’s Unfair Competition Law (UCL) prohibits any

“unlawful, unfair or fraudulent business act or practice.” Cal.

Bus. & Prof. Code § 17200. The UCL incorporates other laws and

treats violations of those laws as unlawful business practices

independently actionable under state law. Chabner v. United Omaha

Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). Violation of

almost any federal, state or local law may serve as the basis for a

UCL claim. Saunders v. Superior Court, 27 Cal. App. 4th 832, 838-

39 (1994). In addition, a business practice may be “unfair or

fraudulent in violation of the UCL even if the practice does not

violate any law.” Olszewski v. Scripps Health, 30 Cal. 4th 798,

827 (2003). 

Plaintiff does not identify the conduct upon which its UCL

claim rests. It pleads that Sleeping Well’s conduct is “unlawful

and unfair,” Compl. ¶ 146, and incorporates into its UCL claim

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paragraphs 1-143 of the Complaint. 

To the extent that Plaintiff brings this claim based on

conduct involving subject matter covered by the Copyright Act, the

claim is preempted if it implicates rights contained in that Act. 

Furthermore, this claim is preempted by CUTSA to the extent that it

is based on the misappropriation of Plaintiffs’ trade secrets. 

Although Plaintiff’s UCL claim may not be preempted in its

entirety, the Court nevertheless dismisses it with leave to amend. 

Plaintiff’s vague allegations fail to give Sleeping Well adequate

notice of the nature of any unpreempted element of this claim. 

Plaintiff must identify the conduct of Sleeping Well that is

actionable under a theory of liability that applies the UCL in a

manner that avoids preemption. Plaintiff must specify whether the

conduct is unlawful –- and if so, under what law –- or if it is

unfair or fraudulent. If fraud is alleged, it must be plead with

particularity under Federal Rule of Civil Procedure 9(b). 

D. Common Law Unfair Competition Claim

“The common law tort of unfair competition is generally

thought to be synonymous with the act of ‘passing off’ one’s goods

as those of another.” Bank of the W. v. Superior Court, 2 Cal. 4th

1254, 1263 (1992). “The tort developed as an equitable remedy

against the wrongful exploitation of trade names and common law

trademarks that were not otherwise entitled to legal protection.” 

Id. (citation omitted). The tort requires a showing of competitive

injury. Id. at 1264. 

The thrust of Plaintiff’s common law unfair competition claim

is that Sleeping Well markets its MRD in a way that suggests that

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4

 Sleeping Well cites Kodadek v. MTV Networks, Inc., 152 F.3d

1209 (9th Cir. 1998), and Motown Record Corp. v. George A. Hormel &

Co., 657 F. Supp. 1236, 1239-40 (C.D. Cal. 1987), to argue that the

Copyright Act preempts Plaintiff’s unfair competition and unjust

enrichment claims. However, both cases addressed preemption of the

plaintiffs’ claims under California’s Unfair Competition Law, which

were premised on copyright violations. See Kodadek, 152 F.3d at

1212-13; Motown Records Corp., 657 F. Supp. at 1239-40. 

Plaintiff’s claims are not limited to seeking recovery for

copyright violations. To the extent that they are, they are

preempted. 

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the product is associated with Plaintiff. Regardless of whether

the advertising material at issue constitutes copyright-protected

subject matter, this claim asserts rights separate from those

provided under copyright law. The unfair competition tort involves

“the sale of confusingly similar products, by which a person

exploits a competitor’s reputation in the market.” Id. at 1263. 

In other words, the tort protects against competitive injury

resulting from others trading on a party’s goodwill. This

sufficiently provides the “extra element” necessary to avoid

preemption by the Copyright Act.4

Accordingly, the Copyright Act does not preempt Plaintiff’s

common law unfair competition claim. Nor is the claim preempted by

the CUTSA, to the extent that it does not implicate protected trade

secrets. In addition, the claim sufficiently provides Sleeping

Well notice of the conduct of which Plaintiff complains. The Court

therefore denies Sleeping Well’s motion to dismiss this claim. 

E. Unjust Enrichment Claim

California courts appear to be split on whether there is an

independent cause of action for unjust enrichment. Baggett v.

Hewlett-Packard Co., 582 F. Supp. 2d 1261, 1270-71 (C.D. Cal. 2007)

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(applying California law). One view is that unjust enrichment is

not a cause of action, or even a remedy, but rather a general

principle, underlying various legal doctrines and remedies. 

McBride v. Boughton, 123 Cal. App. 4th 379, 387 (2004). In

McBride, the court construed a “purported” unjust enrichment claim

as a cause of action seeking restitution. Id. There are at least

two potential bases for a cause of action seeking restitution:

(1) an alternative to breach of contract damages when the parties

had a contract which was procured by fraud or is unenforceable for

some reason; and (2) where the defendant obtained a benefit from

the plaintiff by fraud, duress, conversion, or similar conduct and

the plaintiff chooses not to sue in tort but to seek restitution on

a quasi-contract theory. Id. at 388. In the latter case, the law

implies a contract, or quasi-contract, without regard to the

parties’ intent, to avoid unjust enrichment. Id.

Another view is that a cause of action for unjust enrichment

exists and its elements are receipt of a benefit and unjust

retention of the benefit at the expense of another. Lectrodryer v.

SeoulBank, 77 Cal. App. 4th 723, 726 (2000); First Nationwide

Savings v. Perry, 11 Cal. App. 4th 1657, 1662-63 (1992). 

Plaintiff pleads that Sleeping Well has “been unjustly

enriched, including without limitation by unjustly retaining the

benefits from unauthorized use of SSP’s Confidential Information,

Trade Secrets and Related Information.” Compl. ¶ 179. As with its

UCL pleadings, this broad allegation encompasses a wide variety of

conduct and does not provide Sleeping Well with sufficient notice. 

Because the conduct at issue in this claim is not clear, the

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potential preemptive effects of the Copyright Act and CUTSA are not

certain. To the extent that Plaintiff intends to recover on this

claim for subject matter within the purview of the Copyright Act,

it cannot do so if the alleged conduct only infringes rights

contained in that Act. Moreover, this claim is preempted by CUTSA

to the extent that it is based on Plaintiff’s trade secrets.

The Court dismisses Plaintiff’s unjust enrichment claim with

leave to amend because it fails to provide Sleeping Well with

adequate notice. Plaintiff must identify the conduct for which it

seeks a restitutionary remedy that is not preempted.

V. Civil Conspiracy Claim

Plaintiff alleges that Sleeping Well conspired with Dr.

Lieberman “for the purpose of misappropriating SSP’s intellectual

property.” Compl. ¶ 164. Sleeping Well asserts that this claim

fails because conspiracy does not constitute a cause of action

under California law. Also, citing Accuimage Diagnostics Corp. v.

Terarecon, Inc., 260 F. Supp. 2d 941 (N.D. Cal. 2003), Sleeping

Well argues that dismissal is required because Plaintiff did not

include its conspiracy allegations in the same section of its

complaint as the allegations supporting its claim for

misappropriation. 

Civil conspiracy “is not a cause of action, but a legal

doctrine that imposes liability on persons who, although not

actually committing a tort themselves, share with the immediate

tortfeasors a common plan or design in its perpetration.” Applied

Equipment Corp., 7 Cal. 4th at 510 (citing Wyatt v. Union Mortgage

Co., 24 Cal. 3d 773, 784 (1979)). “Standing alone, a conspiracy

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5

 As noted above, Sleeping Well contends that Plaintiff must

plead its allegations of conspiracy in the sections of the

complaint that address the underlying tort. Although the Accuimage

court required such pleading, it did so only to ensure that the

defendants had notice of which torts were the subject of the

plaintiff’s conspiracy allegations. 260 F. Supp. 2d at 947-48. 

However, the court did not, as Sleeping Well suggests, set this out

as a formal pleading requirement for civil conspiracy claims. 

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does no harm and engenders no tort liability. It must be activated

by the commission of an actual tort.” Applied Equipment Corp., 7

Cal. 4th at 511. 

Although civil conspiracy is not an independent cause of

action, this does not warrant dismissal. The claim provides a

basis on which Sleeping Well and Dr. Lieberman could both be liable

as co-conspirators for harm resulting from their alleged

misappropriation of Plaintiff’s intellectual property. 

However, Plaintiff does not clearly identify the tort which

Sleeping Well and Dr. Lieberman conspired to commit. Plaintiff’s

allegation that they conspired to misappropriate its intellectual

property could encompass, at the least, both its CUTSA and common

law misappropriation claims. As in Accuimage, Plaintiff has failed

to provide Sleeping Well with adequate notice of which torts they

allegedly conspired to commit.5 See 260 F. Supp. 2d at 947-48. 

Accordingly, the Court dismisses Plaintiff’s civil conspiracy claim

with leave to amend. Plaintiff must identify the tortious conduct

for which it seeks conspiratorial liability.

//

//

//

//

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CONCLUSION

For the foregoing reasons, the Court GRANTS in part Sleeping

Well’s Motion to Dismiss and DENIES it in part. (Docket No. 27.) 

The Court’s holding is summarized as follows:

1. Plaintiff’s trade dress infringement claim under the

Lanham Act is dismissed with leave to amend to articulate

its alleged trade dress with greater detail. In any

amended complaint, Plaintiff must allege a protectable

trade dress on which a Lanham Act claim could be based

without impermissibly encroaching upon copyright

interests. 

2. Plaintiff’s copyright infringement claim is dismissed

without prejudice because Plaintiff has not met the

requirements of 17 U.S.C. § 411(a). Plaintiff may move

to amend its complaint to add a copyright claim if the

Copyright Office approves its application for

registration during the pendency of this action.

3. Plaintiff’s tortious interference with contract claim is

dismissed with leave to amend. Sleeping Well cannot be

held liable for tortiously interfering with a contract

entered into by its agents for its benefit. Plaintiff

may amend its complaint to plead tortious interference

with a contract between Plaintiff and individuals who are

not agents of Sleeping Well. 

4. Plaintiff’s misappropriation claim is dismissed with

leave to amend to plead clearly what non-trade secrets

Sleeping Well allegedly misappropriated. In addition,

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Plaintiff must plead material that does not fall within

the subject matter of copyright or allege a cause of

action with an extra element that distinguishes the

rights asserted under this claim from those provided by

the Copyright Act. 

5. Plaintiff’s UCL claim is dismissed with leave to amend. 

Plaintiff must plead facts that identify the conduct of

Sleeping Well that is actionable under the UCL, and

specify whether it is unlawful –- and if so, under what

law –- or if it is unfair or fraudulent. If this claim

sounds in fraud, Plaintiff must plead in accordance with

Rule 9(b). The conduct plead must not be equivalent to

the infringement of copyrightable material or the use of

trade secrets. 

6. Plaintiff’s common law unfair competition claim may go

forward. The Copyright Act does not preempt this claim. 

Nor is the claim preempted by the CUTSA, to the extent

that the facts on which it is based differ from those

supporting Plaintiff’s CUTSA claim. 

7. Plaintiff’s unjust enrichment claim is dismissed with

leave to amend. Plaintiff must identify the conduct that

supports this claim, which must not be equivalent to the

infringement of copyrightable material or the use of

trade secrets. 

8. Plaintiff’s civil conspiracy claim is dismissed with

leave to amend. Plaintiff must identify the torts for

which it seeks conspiratorial liability. 

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Plaintiff may file an amended complaint addressing the

deficiencies detailed above within fourteen days of the date of

this Order. If Plaintiff does so, Defendants may file a motion to

dismiss three weeks thereafter, with Plaintiff’s opposition due two

weeks following and Defendants’ reply due one week after that. 

IT IS SO ORDERED.

Dated: May 10, 2010 

CLAUDIA WILKEN

United States District Judge

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