Court Opinion

ID: 4203951
Source: CourtListenerOpinion
Date Created: 2017-09-15 20:01:06.958188+00
Date Added: 2024-06-11T14:41:06.421636
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            SEP 15 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

VBS DISTRIBUTION, INC., a California             No.   17-55198
corporation, AKA VBS Home Shopping;
VBS TELEVISION, a California                     D.C. No.
corporation,                                     8:16-cv-01553-CJC-DFM

              Plaintiffs-Appellants,
                                                 MEMORANDUM*
 v.

NUTRIVITA LABORATORIES, INC., a
California corporation; NUTRIVITA,
INC., a California corporation; US
DOCTORS CLINICAL INC., a California
corporation; ROBINSON PHARMA,
INC., a California corporation; KVLA,
INC., a California corporation; TUONG
NGUYEN, an individual domiciled in
California; TRAM HO, an individual
domiciled in California; JENNY DO, an
individual domiciled in California, aka
Ngoc Nu; DOES, 1-10 Inclusive,

              Defendants-Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                    Cormac J. Carney, District Judge, Presiding

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                        Argued and Submitted August 29, 2017
                                 Pasadena, California

Before: W. FLETCHER and IKUTA, Circuit Judges, and FREUDENTHAL,**
Chief District Judge.

      VBS Distribution, Inc. and Joseph Nguyen (collectively, VBS) appeal the

district court’s order denying VBS’s motion for preliminary injunction. We have

jurisdiction under 28 U.S.C. § 1292(a)(1), and we reverse and remand.

      The district court erred in holding that because the overall configuration of

VBS’s live auction television show was functional, VBS failed to carry its burden

of showing a likelihood of success on the merits of its trade dress infringement

claim. As with restaurants’ trade dress infringement claims, VBS can claim

protectable trade dress in the overall look and feel of VBS’s live auction show,

regardless whether individual elements that constitute part of the claimed trade

dress are functional. See Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252,

1259 (9th Cir. 2001).

      The record shows that VBS’s customer list contains identifying information

that is not readily accessible to the public or to other businesses, including

purchase histories, methods of payment, and amounts of payment. Moreover,

       **
              The Honorable Nancy Freudenthal, Chief United States District Judge
for the District of Wyoming, sitting by designation.
                                           2
because VBS has listed individuals who have already expressed an interest in

purchasing jewelry from an auction television show, the customer list has

independent economic value to VBS’s competitors. See MAI Sys. Corp. v. Peak

Computer, Inc., 991 F.2d 511, 521 (9th Cir. 1993). Therefore, the district court

erred in rejecting VBS’s trade secret misappropriation claim on the ground that

VBS failed to show that a reasonably diligent competitor could not readily obtain

the information in the customer list.

      The district court erred in holding that VBS failed to present sufficient

evidence that Nutrivita’s advertising was literally false with respect to two of the

challenged statements. See Southland Sod Farms v. Stover Seed Co., 108 F.3d

1134, 1139 (9th Cir. 1997). First, Nutrivita’s advertising claim that Arthro-7 was

“100% herbal” was contradicted by Arthro-7’s own ingredient list, which includes

animal products; there is no evidence in the record that “herbal” means something

other than “of, relating to, or made of herbs,” Webster’s New International

Dictionary 1058 (3rd ed. 1993) in the supplement industry. Second, VBS’s claim

that Nutrivita’s advertising statement, “8 Million Bottles Sold,” is literally false is

essentially undisputed by Nutrivita; indeed, its CEO admitted there was no basis

for this claim. Nutrivita’s advertising statement, “Doctor Recommended,”

                                            3
however, is not literally false, and VBS provided no evidence to substantiate its

claim that the statement would be misleading to the public.

      Because the district court erred in analyzing VBS’s claims of trade dress

infringement, trade secret misappropriation and false advertising, we reverse and

remand to the district court to reconsider the elements of the preliminary injunction

analysis in light of this disposition. See Winter v. Nat. Res. Def. Council, Inc., 555

U.S. 7, 22 (2008); All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134 (9th

Cir. 2011).

      REVERSED AND REMANDED.

                                           4