Allbirds, Inc. v. Giesswein Walkwaren AG

Background

Allbirds alleged that it owned the registered WOOL RUNNERS® trademark for its Merino-wool sneakers. It sued Giesswein Walkwaren AG and M. Leonard International Inc., alleging that they used “MERINO WOOL RUNNERS” and “MERINO RUNNERS” in marketing their own shoes. The complaint asserted eight causes of action, including federal and California trademark infringement, false advertising, unfair competition, and violations of California’s Unfair Competition Law. The trade-dress allegations were not at issue in this motion.

The defendants filed a partial motion to dismiss Counts 1, 4, 5, and 7. They argued that their use of “wool runners,” “merino wool runners,” and “merino runners” was protected by classic fair use because those terms described sneakers made from merino wool.

Legal Standard

A motion under Federal Rule of Civil Procedure 12(b)(6) tests whether the complaint states a legally sufficient claim. At this stage, the court generally accepts the complaint’s factual allegations as true and views them favorably to the nonmoving party. An affirmative defense—meaning a defense that can defeat liability even if the plaintiff proves its claim—usually cannot support dismissal unless the defense is clear from the complaint and raises no disputed factual issues.

Classic fair use is an affirmative defense under the Lanham Act. It requires the defendant to show that it used the term (1) other than as a trademark, (2) only to describe its own goods, and (3) in good faith. The defendants had to establish these elements using the complaint and facts subject to judicial notice.

Court’s Analysis

The court assumed, for purposes of the motion, that “wool,” “merino,” and “runners” could have descriptive meanings. But it found that the defendants had not established that they used the terms only descriptively and not as trademarks.

The court relied on allegations that the defendants used “merino runners” within their own trademark, “Giesswein Merino Runners.” It also considered allegations that “MERINO WOOL RUNNERS” appeared prominently in large, bold, capitalized lettering on webpages and promotional materials, rather than within longer descriptive sentences. Those allegations could support a finding that the terms were being used to associate the products with the manufacturer or attract public attention.

Because these allegations created factual issues about whether the defendants’ use was trademark use or descriptive use, the court concluded that the defendants had not established even the first element of the fair-use defense. The court stated that the factual issues prevented dismissal at the pleading stage.

Disposition

The court DENIED the defendants’ partial motion to dismiss. The defendants remained free to assert their fair-use defense at summary judgment and trial. The order did not decide the ultimate merits of the trademark claims or whether the defendants would ultimately prevail on fair use.