Court Opinion

ID: 6340726
Source: CourtListenerOpinion
Date Created: 2022-05-13 20:00:55.213279+00
Date Added: 2024-06-11T09:03:19.838342
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAY 13 2022
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

ARIZONA BOARD OF REGENTS, a body                No.    21-16525
corporate, for and on behalf of: on behalf of
Arizona State University,                       D.C. No. 2:20-cv-01638-DWL

                Plaintiff-Appellant,
                                                MEMORANDUM*
 v.

JOHN DOE, AKA asu_covid.parties, an
individual,

                Defendant-Appellee,

and

FACEBOOK, INC., a Delaware corporation,

                Defendant.

                   Appeal from the United States District Court
                            for the District of Arizona
                    Dominic Lanza, District Judge, Presiding

                       Argued and Submitted April 15, 2022
                              Pasadena, California

Before: CALLAHAN and VANDYKE, Circuit Judges, and Y. GONZALEZ
ROGERS,** District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Yvonne Gonzalez Rogers, United States District Judge
      Plaintiff-Appellant Arizona Board of Regents (“ABR”) appeals the district

court’s order denying ABR’s motion for default judgment and dismissal of its

complaint. ABR’s appeal raises six issues, namely whether the district court erred

by: (1) dismissing sua sponte its complaint without leave to amend and without

providing prior notice; (2) dismissing its Lanham Act and state law unfair

competition claims under Rule 12(b)(6); (3) refusing to apply the doctrine of initial

interest confusion; (4) dismissing its false advertising claim; (5) refusing to rule on

its state law dilution claim; and (6) denying its motion for default judgment. We

have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. After a review of

the record, oral argument, and relevant case law, we affirm the district court’s

order on all grounds.

      “We review de novo a district court’s dismissal of [a complaint] for failure

to state a claim under Rule 12(b)(6).” Prodanova v. H.C. Wainwright & Co., LLC,

993 F.3d 1097, 1105 (9th Cir. 2021). Questions involving the application of legal

principles to established facts are also reviewed de novo. Flores v. City of San

Gabriel, 824 F.3d 890, 905 (9th Cir. 2016).

      However, a district court’s determination of likelihood of confusion is

reviewed for clear error. Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1123

(9th Cir. 2014). The denial of a motion for default judgment as well as the

for the Northern District of California, sitting by designation.

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decision whether to retain jurisdiction over supplemental claims when the original

federal claims are dismissed are reviewed for abuse of discretion. Aldabe v.

Aldabe, 616 F.2d 1089, 1092–93 (9th Cir. 1980); Lima v. United States Dep’t of

Educ., 947 F.3d 1122, 1125, 1128 (9th Cir. 2020).

       1.     The district court did not err by dismissing ABR’s complaint sua

sponte without leave to amend and without providing notice because amendment

would have been futile. See Wong v. Bell, 642 F.2d 359, 361–62 (9th Cir. 1981).

With respect to all of ABR’s claims, amendment would have been futile given the

implausibility of the allegations and of a finding of likelihood of confusion. Of

Doe’s eighteen posts included on the Instagram page, only one post included the

use of ABR’s mark and trade dress. That one post contained profanity and a

reasonable consumer would not think that a university would use such language

when addressing the public. Reviewing the posts in their totality does not change

the result, but rather reaffirms it.

       Additionally, amendment would have also been futile given the non-

commercial nature of Doe’s activities. The Lanham Act was enacted to be applied

in the commercial context, thus “infringement claims are subject to a commercial

use requirement.” Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 676 (9th Cir.

2005). Here, the record does not support the conclusion that Doe used ABR’s

marks for the sale of goods or services. Rather, the record shows that Doe used the

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marks to criticize and mock ABR and ABR’s policies and administration. While

some of the initial posts did refer to a future party, none of those posts contained

references to a particular party nor did they mention a specific date, time, cost, or

any other details about any party. The mere reference that Doe was a “party

planner” is only one factor for consideration. Because ABR’s claims require a

showing of likelihood of confusion and/or commercial use, the district court did

not err in dismissing ABR’s complaint sua sponte.1

      2.     The district court did not err in dismissing ABR’s trademark

infringement, false designation of origin, and unfair competition claims after

finding that there was no likelihood of confusion. Given the flexibility in

application of the Sleekcraft factors, application of certain factors over others does

not constitute clear error. Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190,

1209 (9th Cir. 2012). The district court conducted its likelihood of confusion

1
  ABR’s appeal also implicates several First Amendment considerations worth
noting. Even assuming Doe’s posts were commercial in nature, this Court has
recognized and adopted the Rogers test, which protects expressive uses of
trademarks from Lanham Act liability. See Mattel v. MCA Records, Inc., 296 F.3d
894, 902 (9th Cir. 2002). Doe’s Instagram posts appear to constitute expressive
work under Rogers as the posts communicated messages that mocked ABR’s
policies and administration. To the extent ABR’s appeal attempts to improperly
use trademark laws to block the expression of negative views about the university
and its administration, such efforts fail.

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analysis by looking at the full context of Doe’s Instagram posts and by expressly

evaluating some of the Sleekcraft factors. The court’s analysis included a review of

the surrounding posts, comments, and the context in which the posts were made.

Only after conducting this review, and analyzing some of the Sleekcraft factors,

did the district court find that there was no likelihood of confusion. We find that

the district court properly applied the factors and did not abuse its discretion.

      3.     Similarly, the district court did not err by refusing to apply the initial

interest confusion doctrine, which also requires a finding of likelihood of

confusion. Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d

1137, 1149 (9th Cir. 2011).

      4.     The district court did not err in its analysis of ABR’s false advertising

claim. Contrary to ABR’s assertion, the district court analyzed the claim, finding

that a prudent consumer would not be confused or deceived by the posts included

on Doe’s Instagram. This necessarily includes the post regarding the alleged

collaboration with Teva Pharmaceuticals. The district court’s failure to quote the

factual allegations verbatim does not constitute error. Thus, we affirm the district

court’s order dismissing ABR’s false advertising claim since the claim also

requires a showing of deceit or likelihood of deceit. Wells Fargo & Co. v. ABD

Ins. & Fin. Servs. Inc, 758 F.3d 1069, 1071 (9th Cir. 2014), as amended (Mar. 11,

2014).

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      5.     The district court did not err in declining to decide ABR’s Arizona

state law dilution claim once the court dismissed all of the claims over which it had

original jurisdiction. Contrary to ABR’s contention, 28 U.S.C. § 1338(b) does not

confer district courts with original jurisdiction over state law dilution claims.

Rather, the statute provides “original jurisdiction of any civil action asserting a

claim of unfair competition . . . .” 28 U.S.C. § 1338(b). The statute provides

supplemental jurisdiction over state law dilution claims. Levi Strauss & Co. v.

Blue Bell, Inc., 778 F.2d 1352, 1362 (9th Cir. 1985). Accordingly, the district

court properly exercised its discretion in deciding not to exercise supplemental

jurisdiction over the state law dilution claim after dismissing all federal claims. Id;

see also 28 U.S.C. § 1367(c)(3).

      That the district court decided ABR’s state law unfair competition claim but

did not decide its state law dilution claim was not an abuse of discretion. As

explained above, under 28 U.S.C. § 1338(b), the court had original jurisdiction

over ABR’s unfair competition claim and properly resolved that claim. An unfair

competition claim and a state dilution claim are distinct. Given that the dilution

claim required additional analysis, the district court did not err in declining to

exercise supplemental jurisdiction over ABR’s dilution claim.

      6.     The district court did not err in denying ABR’s motion for default

judgment as the complaint lacked merit as to the substantive claims and was

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insufficient. See Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986); Aldabe,

616 F.2d at 1092–93.

      AFFIRMED.

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