UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

D’Pergo Custom Guitars, Inc.

v. Civil No. 17-cv-747-LM Opinion No.

Sweetwater Sound, Inc.

O R D E R

D’Pergo Custom Guitars, Inc. (“D’Pergo”) brings this suit

against Sweetwater Sound, Inc. (“Sweetwater”), alleging claims

of copyright and trademark infringement and violations of the

New Hampshire Consumer Protection Act (“CPA”). D’Pergo claims

that Sweetwater used a copyrighted photograph of D’Pergo’s

trademarked custom guitar necks to promote and sell Sweetwater

products on Sweetwater’s website. Pursuant to Federal Rule of

Civil Procedure 12(b)(6), Sweetwater moves to dismiss Counts II

through V of the first amended complaint—the CPA claims and the

trademark infringement claims. Sweetwater also moves to strike

D’Pergo’s request for attorney’s fees under Count I (copyright

infringement). D’Pergo objects. For the following reasons,

Sweetwater’s motion to dismiss is denied and its motion to

strike is granted.

STANDARD OF REVIEW

Under Rule 12(b)(6), the court must accept the factual

allegations in the complaint as true, and draw all reasonable inferences from those facts in the plaintiff’s favor. Foley v.

Wells Fargo Bank, N.A.,

(1st Cir. 2014). In

addition to the complaint, the court may consider documents

attached to it or expressly incorporated into it.

.

It must then “determine whether the factual allegations in the

plaintiff’s complaint set forth ‘a plausible claim upon which

relief may be granted.’”

(internal quotation marks

omitted). A claim is facially plausible “when the plaintiff

pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal,

(2009).

BACKGROUND

The following facts are taken from D’Pergo’s first amended

complaint and the attached documents. D’Pergo manufactures and

sells custom guitars. In 2003, D’Pergo created a photograph

showcasing a number of its unique guitar necks, which it

published to its website. D’Pergo later registered the

copyright for the photograph and registered its signature guitar

neck headstock as a trademark. Doc. nos. 44-2, 44-4.

Sweetwater is a retailer that sells musical instruments,

including guitars, through its website. D’Pergo alleges that

Sweetwater copied D’Pergo’s photograph and published it on

2 Sweetwater’s website. More specifically, Sweetwater used the

photograph in an “Electric Guitar Buying Guide,” in the section

titled “Guitar necks explained.” Doc. no. 44-3 at 2, 5. The

end of the Buying Guide features a number of guitars from

various manufacturers for purchase, as well as a hyperlink to

“Shop for Electric Guitars.” Id. at 7-8.

In December 2017, D’Pergo brought this action alleging

claims of copyright infringement (Count I), unfair competition

in violation of the CPA (Count II), and deceptive business

practices in violation of the CPA (Count III) based upon

Sweetwater’s use of the photograph on its website. D’Pergo’s

first amended complaint added two additional counts: false

designation of origin and unfair competition in violation of

(a)(1) (Count IV) and trademark infringement in

violation of

(1)(a) (Count V).

DISCUSSION

Sweetwater moves to dismiss Counts II through V. The court

will first address Sweetwater’s arguments concerning the two

state law claims, and then turn to the two trademark

infringement claims.

3 I. New Hampshire Consumer Protection Act Claims (Counts II and III)

Counts II and III allege that Sweetwater’s use of D’Pergo’s

photograph constituted unfair competition and a deceptive

business practice in violation of the CPA, New Hampshire Revised

Statutes Annotated (“RSA”) chapter 358-A. Specifically, D’Pergo

alleges that, by using the photograph, Sweetwater has “passed

off [its] goods, specifically guitars, for purchase and sale” as

D’Pergo’s goods, and that Sweetwater’s use of the photograph is

likely to cause confusion as to the source or origin of

Sweetwater’s goods and their affiliation with D’Pergo. Doc. no.

44 at ¶¶ 47-48, 52.1

Sweetwater contends that Counts II and III should be

dismissed for many of the same reasons it argues that the

trademark infringement claims, Counts IV and V, should be

dismissed. See doc. no. 45 at 7, 11-12. Its arguments are

based on the premise that, in order to state a viable CPA claim,

D’Pergo must allege that it used the photograph itself as a

trademark or otherwise successfully allege a trademark

1Sweetwater has twice unsuccessfully tried to dismiss the CPA claims. See doc. nos. 18 (denying Sweetwater’s motion to dismiss Counts II and III as preempted by federal law), 30-1 at 7 (Sweetwater’s objection to D’Pergo’s motion to amend complaint, arguing state claims were futile).

4 infringement claim. See id. at 11-12, doc. no. 53 at 4. The

court disagrees with this premise.

The CPA makes it “unlawful for any person to use any unfair

method of competition or any unfair or deceptive act or practice

in the conduct of any trade or commerce within this state.” RSA

358-A:2. Prohibited acts include, but are not limited to:

I. Passing off goods or services as those of another; II. Causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services; III. Causing likelihood of confusion or of misunderstanding as to affiliation, connection or association with, or certification by, another.

RSA 358-A:2, I-III. By its plain language, the CPA does not

require proof of an underlying trademark or trademark

infringement claim in order to bring a CPA claim. Compare RSA

358-A:2, with RSA 350-A:11 (authorizing cause of action for

infringement of state registered trademark). Instead, the CPA

prohibits a broader range of unlawful activity than federal

trademark law. See Ne. Lumber Mfrs. Assoc. v. N. States Pallet

Co.,

(D.N.H. 2010). It may well be

that conduct that constitutes federal trademark infringement is

also prohibited by the CPA. See RSA 358-A:2, II-III

(prohibiting causing likelihood of consumer confusion as to

source or affiliation of goods);

(a)

(authorizing civil action for use of trademark in commerce that

5 is likely to cause confusion as to the affiliation or

association of user with another person). But that does not

make the opposite true—conduct need not necessarily constitute

trademark infringement in order to be prohibited by the CPA.

Thus, even assuming that the complaint fails to allege that

Sweetwater used the photograph as a trademark or otherwise fails

to state a claim for trademark infringement, that deficiency is

not necessarily fatal to D’Pergo’s CPA claims. Sweetwater’s

motion to dismiss Counts II and III is therefore denied.

II. Trademark Infringement Claims (Counts IV and V)

D’Pergo’s first amended complaint added two claims related

to Sweetwater’s alleged infringement of D’Pergo’s trademark,

which is a distinctive design for its guitar necks:

Doc. nos. 44-4 at 2, 44-5 at 2 (resized from originals). Both

claims allege that Sweetwater’s display of the photograph

6 depicting D’Pergo’s trademarked guitar necks on Sweetwater’s

website is likely to cause confusion and mislead customers into

believing that Sweetwater’s goods are affiliated or connected

with D’Pergo. Count IV appears to rest on the fact that

D’Pergo’s guitar neck trademark is unregistered, while Count V

appears to rest on the fact that the trademark is federally

registered. See Borinquen Biscuit Corp. v. M.V. Trading Corp.,

(1st Cir. 2006) (“Both registered and

unregistered trademarks may be eligible for protection against

infringing uses.”). These distinct claims exist because

Sweetwater allegedly engaged in infringement both prior to and

after the official registration of D’Pergo’s trademark. See

doc. nos. 44-3 at 2 (Sweetwater’s Electric Guitar Buying Guide

featuring the allegedly infringing photograph, published in May

2013), 44-4 at 2 (D’Pergo’s trademark registration, effective

August 2016). Despite this distinction, most of Sweetwater’s

arguments apply to both Counts IV and V. The court therefore

addresses those claims together, unless otherwise noted.

Sweetwater advances four arguments in support of its motion

to dismiss Counts IV and V. The court addresses each in turn.

A. Use as a Trademark

Sweetwater argues that the complaint fails to state viable

claims for trademark infringement because it does not allege

7 that Sweetwater engaged in a “trademark use” of D’Pergo’s

signature guitar necks. Doc. nos. 45 at 4-6, 53 at 4-6. In

other words, Sweetwater contends that it used the photograph

depicting the trademarked guitar necks in a “non-trademark way,”

i.e. in an informational capacity that did not suggest an

association between Sweetwater and D’Pergo. The court is not

persuaded.

The fact that a defendant engaged in a “trademark use” of

the plaintiff’s trademark is not a separate element of a

trademark infringement claim in the First Circuit. To establish

a claim for trademark infringement, a plaintiff must demonstrate

that: (1) its mark merits protection; and (2) the allegedly

infringing use is likely to cause consumer confusion. Borinquen

Biscuit,

. In assessing the likelihood of

consumer confusion, the First Circuit considers eight non-

exclusive factors, none of which carries dispositive weight.

See

; see also Beacon Mut. Ins. Co. v. OneBeacon Ins.

Grp.,

(1st Cir. 2004).

Notwithstanding this controlling authority, Sweetwater does

not address the eight-factor test and instead relies primarily

on Sixth Circuit precedent in support of its position. In the

Sixth Circuit, the “likelihood of consumer confusion” analysis

“involves a preliminary question: whether the defendants are

8 using the challenged mark in a way that identifies the source of

their goods.” Hensley Mfg. v. ProPride, Inc.,

(6th Cir. 2009) (internal quotation marks omitted); see also

Interactive Prod. Corp. v. a2z Mobile Office Sols., Inc.,

(6th Cir. 2003). If defendants are not, then the

mark is being used in a “non-trademark” way and the eight-factor

analysis applicable in the First Circuit does not even apply.

See Hensley,

.

The First Circuit has not ruled on this approach.2

Accordingly, the court will neither apply that approach here nor

dismiss Counts IV and V because the complaint fails to allege

that Sweetwater engaged in a “trademark use” of D’Pergo’s

trademarked guitar neck design.

B. Timing of Registration of Trademark

Sweetwater next argues that Count V fails to state a valid

claim of trademark infringement because the complaint does not

allege any instances of Sweetwater’s infringing use occurring

after the issuance of the federal trademark registration in

2At least one Circuit Court of Appeals has rejected the Sixth Circuit’s “use as a trademark” rule, and commentators have criticized it. See Kelly-Brown v. Winfrey,

(2d Cir. 2013) (declining to adopt Sixth Circuit’s “use as a trademark” requirement); 4 McCarthy on Trademarks and Unfair Competition § 23:11.50 (5th ed.) (expressing view that Sixth Circuit’s “use as a trademark” rule “finds no support either in the Lanham Act or in precedent”).

9 August 2016.3 See doc. nos. 45 at 7-8, 53 at 6-7. Drawing all

reasonable inferences from the facts alleged, however, the first

amended complaint alleges Sweetwater’s ongoing use of the

federally registered trademark. See doc. no. 44 at ¶¶ 14-18,

25-27, 56-60, 66-70. Although the complaint could be more

precise about the timing of Sweetwater’s alleged infringement,

the allegations suffice to withstand a Rule 12(b)(6) motion.

Sweetwater also contends that the complaint is deficient in

that it does not specifically allege that Sweetwater continued

its infringing use after receiving D’Pergo’s notice to take down

the photograph (“takedown notice”). Doc. no. 45 at 6. This

argument appears to be based on Sweetwater’s assertion that it

took the infringing photograph down from its website on January

6, 2016—two days after D’Pergo issued a takedown notice and

eight months prior to the date D’Pergo registered its trademark

(August 23, 2016). See doc. no. 30-1 at 4. At this phase of

the proceedings, however, the court may not consider those

facts, drawn from outside the complaint. See Foley,

. Examining the allegations in the complaint, one could

3Although Sweetwater asserts this argument as to both Counts IV and V, the court considers it only as to Count V. As explained above, the court construes Count IV as a claim for infringement of an unregistered trademark. Therefore, the timing of trademark registration is not germane to that claim.

10 reasonably infer that Sweetwater did not take down the

photograph: it alleges that D’Pergo notified Sweetwater of its

improper use in January 2016, Sweetwater admitted it had used

the photograph on its website, and Sweetwater claimed its use

was “fair use,” implying that it thought the use was legal.

Doc. no. 44 at ¶¶ 17-18.

C. Trade Dress or Trademark Infringement

Sweetwater characterizes Counts IV and V as based on a

claim of “trade dress” infringement rather than trademark

infringement. A “trademark” is “any word, name, symbol, or

device, or any combination thereof” used to identify and

distinguish goods “from those manufactured or sold by others and

to indicate the source of the goods.”

. By

contrast, “trade dress” is “the design and appearance of a

product together with the elements making up the overall image

that serves to identify the product presented to the consumer.”

Yankee Candle Co. v. Bridgewater Candle Co., LLC,

(1st Cir. 2001) (internal quotation marks omitted). Trade

dress has two varieties: product packaging and “product

design/configuration.”

Both trademarks and trade dress are eligible for federal

trademark protection. See

. Trade dress

infringement claims, like trademark infringement claims, require

11 proof that the mark is “distinctive.” See

(as to

trade dress); Borinquen Biscuit,

(stating that,

in order to meet the first requirement of meriting protection,

trademark must be “distinctive”). “Distinctiveness” may be

established in two ways: a mark is “considered distinctive (and,

thus, eligible for trademark protection) if it either is

inherently distinctive or exhibits acquired distinctiveness

gained through secondary meaning.” Borinquen Biscuit,

; see also Yankee Candle,

. However, the

Supreme Court has held that trade dress of “product design” can

never be “inherently distinctive,” and therefore is only

deserving of protection if plaintiff shows that the trade dress

has acquired distinctiveness through secondary meaning. See

Wal-Mart Stores, Inc. v. Samara Bros., Inc.,

, 214-

16 (2000). It is upon this legal principle that Sweetwater

attempts to capitalize. Sweetwater argues that viewing Counts

IV and V as claims for trade dress protection of product design,

the complaint fails to allege that the trade dress acquired

distinctiveness through secondary meaning prior to Sweetwater’s

first use. Doc. no. 45 at 11.

Even assuming for the sake of argument that Counts IV and V

are premised upon product design “trade dress” rather than

trademark, the complaint contains an allegation that the guitar

12 neck design acquired distinctiveness through secondary meaning.

The complaint alleges that D’Pergo has used its unique guitar

neck design since 2002. Doc. no. 44 at ¶ 23. The complaint

asserts that D’Pergo guitars are known nationally and

internationally for their “unique and distinctive headstock” and

that the headstock has “become exclusively identified” with

D’Pergo. Id. at ¶¶ 19, 67; see Boston Duck Tours, LP v. Super

Duck Tours, LLC,

(1st Cir. 2008)(defining

acquisition of “secondary meaning” as when a mark “becomes

associated with a single commercial source”).

Although the complaint does not specify the time of

Sweetwater’s first alleged infringing use, the Electric Guitar

Buying Guide was published in 2013, over a decade after D’Pergo

began using the guitar neck design.4 See doc. no. 44-3 at 2.

Drawing all reasonable inferences in D’Pergo’s favor, the

complaint alleges that D’Pergo’s guitar neck design acquired

distinctiveness through secondary meaning prior to Sweetwater’s

first infringing use. Thus, even assuming Counts IV and V

assert trade dress infringement claims, the court is not

4 Based upon ongoing discovery, Sweetwater maintains that its first use of the photograph occurred between August 2003 and August 2004. See doc. no. 45 at 11. The court must, however, confine its analysis to the allegations in the complaint and attached documents. See Foley,

.

13 persuaded that they should be dismissed for the reasons asserted

by Sweetwater.

D. Fair Use Defense

Sweetwater also argues that Counts IV and V should be

dismissed because it engaged in “fair use” of D’Pergo’s

trademark. “Fair use” is a statutory affirmative defense to a

trademark infringement claim. See

(b)(4); KP

Permanent Make-Up, Inc. v. Lasting Impression I, Inc.,

(2004). An affirmative defense like fair use may be

adjudicated on a Rule 12(b)(6) motion if certain conditions are

met. In re Colonial Mortg. Bankers Corp.,

(1st

Cir. 2003). It is appropriate to dismiss an action based on an

affirmative defense only if: “the facts that establish the

defense [are] definitively ascertainable from the allegations of

the complaint, the documents (if any) incorporated therein,

matters of public record, and other matters of which the court

may take judicial notice” and those facts “conclusively

establish the affirmative defense.”

The fair use defense allows a defendant to use the

plaintiff’s trademark for descriptive purposes, usually to

describe the defendant’s own product. See Int’l Ethical Labs.,

Inc. v. Advance Generic Corp., No. CV 10-1381 (ADC),

, at *6 (D.P.R. Mar. 31, 2011). To successfully assert

14 this affirmative defense, the defendant must prove that the use

was made: (1) other than as a mark; (2) in a descriptive sense;

and (3) in good faith. Kelly-Brown v. Winfrey,

(2d Cir. 2013). Addressing the third element (good faith)

first, the complaint does not conclusively establish it.

Indeed, the complaint alleges the opposite.

A defendant’s “intent to trade on the good will of the

trademark holder by creating confusion as to source or

sponsorship” is evidence of bad faith.

(internal

quotation marks omitted); see also Int’l Stamp Art, Inc. v. U.S.

Postal Serv.,

(11th Cir. 2006). Here,

the complaint alleges that Sweetwater used D’Pergo’s trademark

guitar headstock in the Electric Guitar Buying Guide “to

capitalize off the significant goodwill associated with”

D’Pergo’s trademark. Doc. no. 44 at ¶ 72. It also alleges that

Sweetwater’s infringement of D’Pergo’s trademark “is knowing,

willful, deliberate, fraudulent, and intentional, and was made

with knowledge that such violation would enhance [Sweetwater’s]

image, sales, and reputation by association with [D’Pergo].”

Id. at ¶ 76. In light of these allegations, it cannot be said

that the complaint conclusively establishes the element of good

faith, or the defense of fair use.

15 In sum, the court is unpersuaded by Sweetwater’s arguments

in support of its motion to dismiss Counts IV and V. Its motion

to dismiss those counts is denied.

III. Punitive Damages

The complaint includes a general request in the prayer for

relief for “an award of exemplary or punitive damages in an

amount to be determined by the Court.” Doc. no. 44 at ¶ G.

Sweetwater imputes this general request to each of D’Pergo’s

five claims and argues that the request must be dismissed

because punitive damages are not an available remedy for any of

those claims. Doc. no. 45 at 8-10. The court is not convinced.

A general request for punitive damages is not a “claim for

relief” within the meaning of Federal Rule of Civil Procedure

8(a)(2), but a request for a remedy. See Murphy v. Wal-Mart

Stores, Inc., No. CIV. 00-117-B,

, at *4 (D. Me.

Mar. 13, 2001)(“‘Punitive damages’ is not a claim but a

remedy.”). As such, the court will not dismiss D’Pergo’s

request for punitive damages at this stage of the proceedings.

See, e.g., Douglas v. Miller,

(W.D.

Okla. 2012) (“[W]hether [punitive] damages are recoverable is

not a proper subject for adjudication in a Rule 12(b)(6) motion,

as the prayer for relief is not a part of the cause of

action.”); Elias v. Navasartian, No. 115CV01567LJOGSAPC,

1013122, at *4 (E.D. Cal. Feb. 17, 2017) (collecting cases

supporting same proposition).

IV. Motion to Strike

Sweetwater does not move to dismiss the copyright

infringement claim (Count I), but moves to strike D’Pergo’s

request for attorney’s fees on that claim. Doc. no. 45 at 3-4.

D’Pergo concedes that, pursuant to the court’s prior order, see

doc. no. 43 at 9, its request for attorney’s fees associated

with that claim must be stricken from the first amended

complaint, see doc. no. 49-1 at 2. Therefore, Sweetwater’s

motion to strike D’Pergo’s request for attorney’s fees under

Count I of the first amended complaint is granted. See doc. no.

44 at ¶ 45.

V. D’Pergo’s Request for Attorney’s Fees as Sanction

Finally, D’Pergo requests attorney’s fees for having to

respond to Sweetwater’s motion to dismiss. Doc. no. 49-1 at 13.

It argues that Sweetwater has previously unsuccessfully moved to

dismiss its state law and trademark infringement claims and that

the present motion “recycle[s] many of its failed arguments.”

Sweetwater’s conduct does not warrant sanctions.

Sweetwater previously moved to dismiss the state law claims on

17 different legal grounds, and the court specifically left open

the possibility that Sweetwater could raise some of its

trademark infringement arguments in later motion practice. See

doc. nos. 18 (court order denying motion to dismiss state law

claims as preempted by federal law), 43 at 7 (refusing to

address one of Sweetwater’s arguments in objection to D’Pergo’s

motion to amend complaint as insufficiently developed, but

noting that Sweetwater was “free to raise [it] in the future”).

D’Pergo’s request for attorney’s fees incurred in responding to

the present motion to dismiss is denied. Cf. Mariani v. Doctors

Assocs., Inc.,

(1st Cir. 1993) (affirming

imposition of sanctions for filing of second motion that

“consisted of virtually verbatim argumentation from the first

motion” on which party had not prevailed).

CONCLUSION

For the foregoing reasons, Sweetwater’s motion to dismiss

Counts II through V of the first amended complaint is denied.

Sweetwater’s motion to strike D’Pergo’s request for attorney’s

fees under Count I of the first amended complaint is granted.

See doc. no. 44 at ¶ 45. Additionally, D’Pergo’s request for

18 attorney’s fees incurred in responding to the pending motion is

denied.

SO ORDERED.

__________________________ Landya McCafferty United States District Judge

December 11, 2018

cc: Counsel of record

19