Diece-Lisa Industries, Inc. v. Disney Store USA
2:20-cv-09147
C.D. Cal.May 1, 2024Background
- Diece-Lisa Industries created and trademarked "Lots of Hugs" for stuffed animals featuring a patented hugging mechanism.
- Disney, through Pixar, developed the character "Lots-o'-Huggin’ Bear" ("Lotso") for Toy Story 3 and commercialized related merchandise.
- Diece-Lisa sued Disney for trademark infringement under a reverse confusion theory, asserting Disney’s use of the Lotso mark overwhelmed Diece-Lisa’s own brand.
- The dispute involved extensive procedural history, including multiple dismissals, transfers of venue, consolidation/deconsolidation of cases, and several rounds of appeals, culminating in remand following the Supreme Court’s decision in Jack Daniel’s Properties, Inc. v. VIP Prod. LLC.
- After remand, Disney moved for summary judgment, arguing First Amendment protection (Rogers test), lack of likelihood of confusion, time-barred claims, and non-availability of disgorgement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First Amendment/Rogers defense | Rogers test no longer applies under Jack Daniel’s | Rogers bars claims as use is expressive | Rogers inapplicable; Disney used mark as source identifier. |
| Likelihood of Consumer Confusion (Lanham Act) | Disney’s use of a similar mark causes confusion | No likelihood of confusion established | Plaintiff established prima facie case of confusion. |
| Statute of Limitations (Time-Barred Claims) | Equitable tolling applies for gap in claims | Claims before Feb 12, 2017 are time-barred | Equitable tolling denied; partial summary judgment granted. |
| Disgorgement of Profits | No willfulness required after Romag | No profits possible without willful intent | Willfulness not required; remedy remains available. |
| California UCL Claim (Standing) | Sufficient for equitable relief | Not all legal remedies inadequate | Claim dismissed for lack of equitable jurisdiction. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standards for shifting burdens)
- Dreamwerks Prod. Grp., Inc. v. SKG Studio, 142 F.3d 1127 (reverse confusion and likelihood of confusion legal standard)
- GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (evaluation of mark strength in confusion analysis)
- AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (likelihood of confusion factors in trademark law)
- Romag Fasteners, Inc. v. Fossil, Inc., 140 S. Ct. 1492 (willfulness not a prerequisite for disgorgement under Lanham Act)
- Jack Daniel’s Properties, Inc. v. VIP Prod. LLC, 599 U.S. 140 (Rogers test does not apply when mark used as source identifier)