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Hibbett Sporting Goods Inc v. Sock & Accesory Brands Global Inc

United States District Court, N.D. Alabama, Southern Division

January 29, 2018

HIBBETT SPORTING GOODS, INC., et al., Plaintiffs,



         This matter is before the court on Defendant Shoebacca, Ltd.'s Motion to Dismiss. (Doc. # 17). Plaintiffs have responded to the Motion. (Doc. # 21).

         I. Background

         Plaintiffs Hibbett Sporting Goods, Inc. and Hibbett Holdings, LLC own and/or license certain federal trademarks. (Doc. # 1 at 6). Former Defendant Sock and Accessory Brands Global, Inc. (“SABG”)[1] is a hosiery and accessories design, product development, and distribution company. (Doc. # 1 at 8). In 2011, SABG agreed to manufacture certain basketball crew socks (“the Infringing Socks”) for Plaintiff. The Infringing Socks include the Hibbett Marks printed on descriptive tags attached to the front and back and woven into interior of the garments. The Socks also include a ® mark next to the Hibbett Marks. (Doc. # 1 at 8). SABG had agreed to Hibbett Wholesale Inc.'s Vendor Compliance Manual, which provides that: “Vendor may not resell any Goods, including cancelled product, overstocks, overruns, defectives, and irregulars, which incorporate Hibbett's intellectual property, labels or marks without (i) prior written approval of Hibbett and (ii) removal of all such intellectual property, marks and labels.” (Doc. # 1 at 8).

         After SABG completed production of the Infringing Socks, Hibbett Sporting Goods decided against selling the sock. Hibbett cancelled the order and returned all the Infringing Socks to SABG, receiving credit for the order. (Doc. # 1 at 8). Hibbett and SABG entered into an agreement authorizing SABG to offer the unsold stock of the Infringing Socks exclusively to accounts for non-domestic distribution. (Doc. # 1 at 9).

         In or around August 2013, SABG requested authorization from Hibbett to sell its remaining unsold stock of the Infringing Socks domestically. (Doc. # 1 at 9). On September 12, 2013, Hibbett informed SABG by e-mail that it was not authorized to sell the Infringing Sock domestically. (Doc. # 1 at 9). Despite Hibbett denying authorization for domestic sales, SABG sold the Infringing Socks to multiple domestic retailers including, but not limited to, K-Mart and Defendant Shoebacca Ltd. (Doc. # 1 at 9). SABG did not remove the Hibbett Marks from the Infringing Socks prior to making the unauthorized domestic sales. (Doc. # 1 at 10).

         Shoebacca is a discount shoe, apparel, and accessories retailer. (Doc. # 1 at 8). Plaintiff alleges that Shoebacca has sold the Infringing Socks, including domestically, through its online retail services. (Doc. # 1 at 10).

         II. Standard of Review

         The Federal Rules of Civil Procedure require only that the complaint provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, the complaint must include enough facts “to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked assertion[s]” without supporting factual allegations. Twombly, 550 U.S. at 555, 557. In deciding a Rule 12(b)(6) motion to dismiss, courts view the allegations in a complaint in the light most favorable to the non-moving party. Watts v. Fla. Intl. Univ., 495 F.3d 1289, 1295 (11th Cir. 2007).

         To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility 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, 556 U.S. 662, 678 (2009). Although “[t]he plausibility standard is not akin to a 'probability requirement, '” the complaint must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Id. A plausible claim for relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” to support the claim. Twombly, 550 U.S. at 556.

         In considering a motion to dismiss, a court should “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'” Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 Fed.Appx. 136, 138 (11th Cir. 2011) (quoting Am. Dental Assn. v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)). That task is context specific and, to survive the motion, the allegations must permit the court based on its “judicial experience and common sense . . . to infer more than the mere possibility of misconduct.” Twombly, 550 U.S. at 556. Further, “courts may infer from the factual allegations in the complaint ‘obvious alternative explanation[s], ' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental, 605 F.3d at 1290 (quoting Iqbal, 556 U.S. at 682). If the court determines that well-pleaded facts, accepted as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly, 550 U.S. at 556.

         III. Analysis

         Plaintiff's Complaint contains the following claims against Shoebacca: (1) Count One -Federal Trademark Infringement in Violation of 15 U.S.C. § 1114(1); (2) Count Two - Common Law Trademark Infringement; (3) Count Three - Trademark Dilution Pursuant to 15 U.S.C. § 1125(c); (4) Count Four - Trademark Dilution Pursuant to Ala. Code § 8-12-17; (5) Count Five -Unfair Competition in Violation of 15 U.S.C. § 1125(a)(1); and (6) Count Six - Common Law Unfair Competition. (Doc. # 1).

         In support of its Motion to Dismiss, Shoebacca makes the following arguments: (1) that Plaintiffs' claims are barred as a matter of law because trademark law does not reach the sale of genuine goods bearing a true mark, even if such sale is without the mark owner's consent; and (2) Plaintiffs' rejection of the Infringing Socks for a credit constitutes a ...

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