Court Opinion

ID: 4302320
Source: CourtListenerOpinion
Date Created: 2018-08-09 16:00:29.097768+00
Date Added: 2024-06-11T14:30:07.685453
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 16-4483
                         ___________________________

                         Bruce Munro; Bruce Munro Studio

                        lllllllllllllllllllllPlaintiffs - Appellants

                                            v.

  Lucy Activewear, Inc.; Lucy Apparel, LLC; VF Outdoor, Inc.; VF Corporation

                       lllllllllllllllllllllDefendants - Appellees
                                       ____________

                     Appeal from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                              Submitted: May 16, 2018
                               Filed: August 9, 2018
                                   ____________

Before SHEPHERD, MELLOY, and GRASZ, Circuit Judges.
                          ____________

SHEPHERD, Circuit Judge.

       Bruce Munro and Bruce Munro Studio (collectively “Munro”) appeal the
district court’s dismissal of his complaint against Lucy Activewear, Inc., Lucy
Apparel, LLC, VF Outdoor, Inc., and VF Corporation (collectively “Lucy”) and the
denial of his motion to amend his complaint based on a finding of futility. Munro
argues that the district court erred when it found that his tortious interference claim
was preempted by the Copyright Act1 and that his proposed amended trade dress,
trademark, and fraud claims were futile. We disagree with Munro except as to his
trademark claim. Thus, we affirm in part and reverse and remand in part.

                                    I. Background

       Munro is an artist best known for his works “Field of Light” and “Forest of
Light”—“large-scale, immersive, light-based installations, and exhibitions.”
Proposed Amend. Compl. ¶ 1. Munro alleges that Lucy contacted him and proposed
a Lucy advertising and promotional campaign featuring Munro’s work. He further
claims that, relying on a promise of confidentiality, he shared additional information
with Lucy about his prior work, including “attendance figures, achieved online/multi-
media traffic, and promotional methods used for the exhibitions.” He further
disclosed that he was in talks with public officials in Boston, Massachusetts about
creating a public exhibition in the city. Following these disclosures, Munro says that
Lucy stopped contacting him and that communications with Boston officials ceased
soon thereafter as well.

        In October 2013, Lucy launched a light exhibition and advertising campaign
for Lucy in Boston. The exhibition, titled “Light Forest,” was an interactive light
installation that responded to the participants’ movements. An advertising campaign
associated with the exhibit crossed several media platforms, including television,
print, internet, and in-store displays.

       In 2015, Munro filed a complaint against Lucy in Texas state court alleging
that, by presenting the “Light Forest” exhibition and advertising campaign in Boston,
Lucy infringed on Munro’s trademark and trade dress and usurped a prospective
business opportunity. In September 2015, Lucy removed the case to federal court and

      1
          17 U.S.C. § 101 et seq.

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then filed a motion to dismiss for lack of personal jurisdiction, or, in the alternative,
to transfer venue. Lucy also filed a separate Fed. R. Civ. P. Rule 12(b)(6) motion to
dismiss for failure to state a claim. In January 2016, the case was transferred to the
federal district court in Minnesota. The following month, Lucy renewed its Rule
12(b)(6) motion. Munro responded, but in March 2016, he also moved to amend his
complaint. In his proposed amended complaint, Munro alleged: trademark and trade
dress infringement, trademark and trade dress dilution, false designation of origin and
unfair competition, misappropriation, fraud, tortious interference with prospective
business opportunities, and unfair competition. The district court found that Munro’s
proposed amended complaint was futile and denied his motion to amend. It also
granted Lucy’s motion to dismiss Munro’s complaint for failure to state a claim. The
court dismissed without prejudice Munro’s fraud claim as well as his trademark
claim—to the extent it is based on the similarity of the names of the two
exhibitions— but it dismissed all remaining claims with prejudice. Munro appeals.

                                    II. Discussion

       We usually review the district court’s “denial of leave to amend a complaint
under an abuse of discretion standard; however, when the district court bases its
denial on the futility of the proposed amendments, we review the underlying legal
conclusions de novo.” Jackson v. Riebold, 815 F.3d 1114, 1122 (8th Cir. 2016)
(internal quotation marks omitted). Federal Rule of Civil Procedure 15(a)(2) states
“a party may amend its pleading only with the opposing party’s written consent or the
court’s leave[,] [and] [t]he court should freely give leave when justice so requires.”
However, “[f]utility is a valid basis for denying leave to amend.” Jackson, 815 F.3d
at 1122. “[W]hen the court denies leave on the basis of futility, it means the district
court has reached the legal conclusion that the amended complaint could not
withstand a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure.” Cornelia I. Crowell GST Tr. v. Possis Med., Inc., 519 F.3d 778, 782 (8th
Cir. 2008). When reviewing “a motion to dismiss an action for failure to state a claim

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under Rule 12(b)(6), [we] tak[e] the factual allegations in the complaint as true and
afford[] the non-moving party all reasonable inferences from those allegations.”
Butler v. Bank of Am., N.A., 690 F.3d 959, 961 (8th Cir. 2012). A plaintiff’s motion
to amend the complaint will be granted if he “show[s] that such an amendment would
be able to save an otherwise meritless claim.” Jackson, 815 F.3d at 1122.

       Munro argues that the district court erred when it denied his motion for leave
to amend four of his claims: (1) trade dress infringement; (2) fraud; (3) tortious
interference; and (4) trademark infringement. We address each claim in turn.

                                    1. Trade Dress

       In Dastar Corp. v. Twentieth Century Fox Film Corp., the Supreme Court held
that “[t]he 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, 539 U.S. 23, 28 (2003) (quoting 15 U.S.C. § 1127).
The Court found, however, that the Lanham Act was not designed to protect
originality or creativity and it does not create a cause of action for plagiarism. Id. at
36-37. “Trade dress is the total image of a product, the overall impression created,
not the individual features.” Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 868
(8th Cir. 1994) (internal quotation marks omitted). The Lanham Act creates a civil
cause of action for trade dress infringement, stating:

      Any person who, on or in connection with any goods or services . . . ,
      uses in commerce any word, term, name, symbol, or device, or any
      combination thereof, or any false designation of origin . . . which—is
      likely to cause confusion, or to cause mistake, or to deceive as to the
      affiliation, connection, or association of such person with another
      person, or as to the origin, sponsorship, or approval of his or her goods,
      services, or commercial activities by another person, or in commercial
      advertising or promotion, misrepresents the nature, characteristics,

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      qualities, or geographic origin of his or her or another person’s goods,
      services, or commercial activities, shall be liable in a civil action by any
      person who believes that he or she is or is likely to be damaged by such
      act.

15 U.S.C. § 1125(a)(1). To successfully allege a claim under the Lanham Act, a
plaintiff must prove that his trade dress is: (1) distinctive; (2) nonfunctional; and (3)
likely to “be confused with the accused product.” Aromatique, Inc., 28 F.3d at 868.
In Wal-Mart Stores, Inc. v. Samara Brothers, Inc., the Supreme Court held that a
plaintiff could not succeed in a trade dress claim against another company for
producing a “knockoff” of its design without showing that the designs had acquired
“secondary meaning” so that they “identify the source of the product rather than the
product itself.” Samara Brothers, 529 U.S. 205, 208, 211, 214 (2000) (internal
quotation marks omitted). “[T]he origin of goods—the source of wares—is the
producer of the tangible product sold in the marketplace . . . not the producer of the
(potentially) copyrightable or patentable designs that the clothes embodied.” Dastar,
539 U.S. at 31, 37.

        Here, Munro presents essentially the same claim presented in Dastar and Wal-
Mart. Munro asserts that Lucy created a “knockoff” light installation that basically
plagiarized his creative designs. Copyright law, not trademark law, protects Munro’s
creative works. As the district court found, Munro’s installation is not a “mark” that
the Lanham Act was attempting to protect. Rather, the installation is the product
itself. Because the light installation is a product, not a mark, and because copyright,
not trademark, protects artistic and creative ideas and concepts, see Dastar, 539 U.S.
at 37, Munro’s claim does not properly fall under the Lanham Act. Furthermore,
because Munro’s proposed amended complaint continues to style his claim as trade
dress infringement under the Lanham Act, he has not shown that amending the
complaint would save his claim. Thus we find the district court properly dismissed
his motion to amend his trade dress claim as futile.

                                          -5-
                                      2. Fraud

       Next, Munro argues that Lucy perpetrated fraud by making promises to Munro
that it never intended to keep. He argues that Lucy stated it would keep the
information he provided regarding his light exhibitions and prospective business
opportunity with the city of Boston confidential. But, he asserts, Lucy knowingly
made those false promises so that it could exploit the information for its own gain, as
evidenced by the fact that Lucy did not maintain confidences.

      The circumstances of fraud must be pled with particularity. Fed. R. Civ. P.
9(b); Parnes v. Gateway 2000, Inc., 122 F.3d 539, 549 (8th Cir. 1997). The
circumstances that a plaintiff must allege “include such matters as the time, place and
contents of false representations, as well as the identity of the person making the
misrepresentation and what was obtained or given up thereby.” Id. (internal quotation
marks omitted). “[C]onclusory allegations that a defendant’s conduct was fraudulent
and deceptive are not sufficient to satisfy the rule.” Id. (internal quotation marks
omitted). If the plaintiff’s “allegations of fraud are explicitly . . . based only on
information and belief, the complaint must set forth the source of the information and
the reasons for the belief.” Id. at 550 (internal quotation marks omitted). The
Minnesota Supreme Court has held:

      It is a well-settled rule that a representation or expectation as to future
      acts is not a sufficient basis to support an action for fraud merely
      because the represented act or event did not take place. It is true that a
      misrepresentation of a present intention could amount to fraud.
      However, it must be made affirmatively to appear that the promisor had
      no intention to perform at the time the promise was made.

Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 368-69 (Minn. 2009).

                                         -6-
       In his proposed amended complaint, Munro merely alleged who made the false
promise, when the promise was made, and the general content of the promise. This
is insufficient to show fraud. See Parnes, 122 F.3d at 549; Stumm v. BAC Home
Loans Servicing, LP, 914 F. Supp. 2d 1009, 1014 (D. Minn. 2012). Munro relies on
the phrase “on information and belief” to allege that Lucy intentionally provided false
promises. He argues the fact that Lucy broke its promises is proof that Lucy never
intended to keep those promises in the first place. We disagree. Munro’s complaint
does not set forth any supporting facts showing that Lucy intended to defraud him
when the promises were made. Thus, he has not adequately alleged fraud under
Minnesota law, and the district court did not err in dismissing his claim. See Valspar,
764 N.W.2d at 368-69; cf. Parnes, 122 F.3d at 549. Additionally, in his proposed
amended complaint, Munro still failed to allege sufficient facts to support his fraud
claim. Therefore, the proposed amendment is futile, so we find the district court did
not err in denying Munro’s motion to amend.

                               3. Tortious Interference

       In his third claim for tortious interference under state law, Munro asserts that
he had a reasonable probability of staging an exhibition of his “Field of Light” and/or
“Forest of Light” works in the city of Boston, but Lucy usurped his prospective
business opportunity. Munro claims that using the information he provided Lucy in
confidence, Lucy wrongfully and intentionally interfered with his business dealings
with the city of Boston by soliciting and presenting Boston city officials an
alternative knock-off light exhibition and advertising campaign.

      To succeed on a claim for tortious interference with prospective economic
advantage, a plaintiff must establish:

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      1) The existence of a reasonable expectation of economic advantage;
      2) Defendant’s knowledge of that expectation of economic advantage;
      3) That defendant intentionally interfered with plaintiff’s reasonable
      expectation of economic advantage, and the intentional interference is
      either independently tortious or in violation of a state or federal statute
      or regulation;
      4) That in the absence of the wrongful act of defendant, it is reasonably
      probable that plaintiff would have realized his economic advantage or
      benefit; and
      5) That plaintiff sustained damages.

Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210, 219
(Minn. 2014).

        The Copyright Act will preempt a state-law claim if: “(1) the work at issue is
within the subject matter of copyright as defined in § 102 and 103 of the Copyright
Act, and (2) the state law created right is equivalent to any of the exclusive rights
within the general scope of copyright as specified in § 106 [of the Copyright Act].”
Ray v. ESPN, Inc., 783 F.3d 1140, 1142 (8th Cir. 2015) (per curiam) (alteration in
original) (internal quotation marks omitted). “[P]ictorial, graphic, and sculptural
works” are subject matter falling under the umbrella of copyright protection. 17
U.S.C. §102(a)(5). Munro’s light-based artwork and installations are sculptures and,
as such, are copyrightable. See id. Munro does not contest that his works fall within
the subject matter of copyright. Accordingly, we find that Munro’s claim meets the
first element of preemption.

      We also find the second element of preemption is present. “[E]xclusive rights
within the general scope of copyright,” Ray, 783 F.3d at 1142, include “reproduc[ing]
the copyrighted works in copies or . . . prepar[ing] derivative works based upon the
copyrighted work,” 17 U.S.C. § 106. “A ‘derivative work’ is a work based upon one
or more preexisting works, such as a[n] . . . art reproduction . . . or any other form in

                                          -8-
which a work may be recast, transformed, or adapted.” Id. § 101. In Ray v. ESPN,
Inc., we held that the plaintiff’s state-law rights had been “infringed by the mere act
of reproduction,” so “his state-law rights are equivalent to the exclusive rights within
the general scope of copyright.” Ray, 783 at 1144 (internal quotation marks omitted).
Similarly, Munro alleges his state-law rights were infringed by Lucy’s reproduction
of his light-installations. Thus, Munro’s “state-law rights are equivalent to the
exclusive rights within the general scope of copyright.” Id. (internal quotation marks
omitted). As a result, Munro’s tortious interference claim is preempted by the
Copyright Act. Because the claim is preempted, allowing an amendment to the
complaint would be futile. See 17 U.S.C. § 301(a) (stating that when “legal or
equitable rights . . . are equivalent to any of the exclusive rights within the general
scope of copyright . . . no person is entitled to any such right or equivalent right in
any such work under the common law or statutes of any State”). Therefore, we find
the district court properly denied Munro’s motion to amend his tortious interference
claim.

                             4. Trademark Infringement

        Finally, Munro argues that Lucy’s use of the name “Light Forest” was a
confusingly similar and colorable imitation of his “Forest of Light” and “Field of
Light” trademarks. He asserts that Lucy’s unauthorized use of his marks likely
caused the public to erroneously believe that Lucy’s exhibition was the same or
affiliated with Munro’s exhibitions and that Lucy unfairly benefitted and profited
from Munro’s reputation and the reputation of his trademarks.

       A “trademark” can be “any word, name, symbol, or device, or any combination
thereof . . . [used] to identify and distinguish [a producer’s] goods, including a unique
product, from those manufactured or sold by others and to indicate the source of the
goods, even if that source is unknown.” 15 U.S.C. § 1127. Federal trademark law
is intended to “prevent[] competitors from copying a source-identifying mark.”

                                          -9-
Dastar, 539 U.S. at 33; see also 15 U.S.C. § 1125(a). The terms “origin of goods” and
the “source” of goods under the Lanham Act refer to the producer of the actual
product or good, not the producer of the creative idea for the product or good. Id. at
36. However, in some situations, the producer of the creative idea for the product and
the producer of the actual product are the same. See Shepard v. European Pressphoto
Agency, 291 F. Supp. 3d 465, 470 (S.D.N.Y. 2017). For example, an artist is
considered the producer of the creative ideas of his work, but if the artist also makes
and sells his artwork himself, then he is considered the producer of that good or
service as well and is “able to assert a Lanham Act claim for false designation of
origin.” Id.

       Here, the district court held that Munro did not properly assert a trademark
claim because he failed to provide facts suggesting that the names of his
installations—“Field of Light” and “Forest of Light”—served a source-identifying
function for a product or service. Instead, the court found, the names merely
identified Munro as the artist or source of the creative idea. We disagree. Munro has
alleged that he and his studio together create, design, develop, produce, promote, and
market these large-scale immersive light installations. Like the artists in Shepard v.
European Pressphoto Agency, Munro actually produces and sells these installations,
making him the producer of the good. Id.; see also Dastar, 539 U.S. at 36. Thus, the
names “Field of Light” and “Forest of Light” are serving a source-identifying
function for the installations, distinguishing them as unique products made by Munro
and his studio. See 15 U.S.C. § 1127; Dastar, 539 U.S. at 36. Because Munro
produces these installations, he is the “origin of goods” or “source” that the names
identify, which entitles him to bring an action under the Lanham Act. See Shepard,
291 F. Supp. 3d at 470. Munro pled these facts in his amended complaint and his
proposed second amended complaint. Because “[we] tak[e] the factual allegations in
the complaint as true and afford[] the non-moving party all reasonable inferences
from those allegations,” Butler, 690 F.3d at 961, we find that the district court erred
in dismissing Munro’s trademark claim regarding the names of the installations.

                                         -10-
                                  III. Conclusion

      For the foregoing reasons, we affirm the district court’s decision to dismiss
Munro’s trade dress, fraud, and tortious interference claims as well as its denial of
Munro’s motion to amend these claims because the proposed amendments are futile.
However, we find that Munro has sufficiently pled a trademark claim so as to survive
a motion to dismiss for failure to state a claim. Accordingly, we reverse the district
court’s dismissal of Munro’s trademark claim. Furthermore, we reverse the denial of
Munro’s motion to amend his compliant with respect to this claim. Finally, we
remand the trademark claim under 15 U.S.C. 1125(a) to the district court for further
proceedings consistent with this opinion.
                       ______________________________

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