My Pillow, Inc. v. LMP Worldwide, Inc.

Background

My Pillow and LMP are competitors in the pillow business. My Pillow uses the registered word mark “MYPILLOW,” and LMP uses a registered design mark. The parties previously settled a trademark lawsuit by entering an agreement governing their use of the marks and certain advertising keywords. The agreement stated that, when used as described in the agreement, the marks were not confusingly similar and were not likely to cause confusion.

My Pillow alleged that LMP breached the agreement, used the My Pillow mark, made false statements about My Pillow, and created confusing radio advertisements. My Pillow terminated the agreement on January 23, 2018, and filed this lawsuit the next day. Its claims included breach of contract, trademark infringement, unfair competition, false advertising or representation, and trademark cancellation.

In an earlier order, the court allowed some claims to continue but dismissed without prejudice My Pillow’s Lanham Act and common-law trademark-infringement claims, its false-advertising and false-representation claims, and its trademark-cancellation claim. My Pillow then moved for leave to amend its complaint.

Legal standard

Federal Rule of Civil Procedure 15(a) generally directs courts to freely allow amendments before trial when justice requires. But a court may deny amendment when, among other reasons, the proposed amendment would be futile. An amendment is futile if the proposed complaint could not survive a motion to dismiss for failure to state a legally sufficient claim under Rule 12(b)(6).

Trademark-infringement amendments

The court concluded that My Pillow’s amended trademark-infringement claim involving pillows was not futile. My Pillow alleged that it owned a registered trademark, that LMP used its mark in selling pillows, that LMP’s use was no longer authorized after My Pillow terminated the agreement, and that the use was likely to cause confusion. The court found that the allegations and supporting materials, including a website screenshot and an email referring to customers confusing the companies, were enough to make the claim plausible at the pleading stage.

The court recognized that the agreement’s statement that the marks were not confusingly similar could later create factual or evidentiary problems for My Pillow. But those issues were not enough to make the proposed claim legally futile on its face. The court therefore granted leave to amend this trademark-infringement claim.

My Pillow also sought to add a trademark-infringement claim concerning pillow cases or covers. The court said it did not need to decide whether those products were covered by the settlement agreement. Because the proposed claim involved the same marks and the pillow-based infringement claim would proceed, the court concluded that the added claim also could withstand a motion to dismiss. The court granted leave to add it.

False-advertising amendment

The court denied leave to amend the false-advertising and false-representation claims. My Pillow added allegations, made on information and belief, that LMP had made false or misleading comparisons and quoted unsupported statistics to a substantial portion of relevant purchasers. But the court found that these allegations did not materially differ from arguments My Pillow had already made based on a single private email to one wholesale customer.

The court explained that the proposed complaint did not identify a broader group of recipients or provide enough factual allegations showing that the statements were disseminated to the purchasing public. The cases My Pillow cited involved more specific allegations, such as press releases, brochures, or identified categories of recipients. The court therefore found the proposed false-advertising claim futile at that stage. It noted that My Pillow was not barred from seeking amendment later if discovery produced information showing that the email was part of a larger marketing campaign.

Disposition

The court granted in part and denied in part Plaintiff’s Motion for Leave to Amend its Complaint. It granted My Pillow leave to assert the proposed amended trademark-infringement claim and the added trademark-infringement claim. It denied My Pillow leave to amend its proposed false-advertising and false-representation claims. The court directed My Pillow to file an amended complaint complying with the order.