## Facts

- Peter A. Morton and affiliated investment limited partnerships developed Hard Rock Cafe locations and held territorial trademark rights to the Hard Rock Cafe marks in the western United States.
- Rank America, Inc., through its subsidiary Hard Rock Cafe International, Inc. (HRCI), held territorial rights to exploit the Hard Rock Cafe marks in the eastern United States.
- The territorial arrangement included mutual promises not to use the Hard Rock Cafe marks in a manner that would interfere with the other party’s use.
- Plaintiffs alleged defendants created and developed Planet Hollywood, a themed-restaurant chain, using confidential Hard Rock Cafe business information and copying Hard Rock’s restaurant “look and feel” (trade dress).
- Plaintiffs alleged certain individuals associated with Hard Rock-related entities had access to confidential information and later used it to benefit Planet Hollywood.
- Plaintiffs brought federal and state claims including antitrust, Lanham Act trade dress infringement, breach of fiduciary duty, misappropriation of trade secrets under California law, and tortious interference.
- Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6).

## Issues

1. Whether plaintiffs adequately pleaded federal and state antitrust claims, including antitrust injury and anticompetitive conduct in a relevant market.
2. Whether plaintiffs stated a Lanham Act trade dress claim sufficient to survive dismissal, including allegations addressing protectable trade dress and likelihood of confusion.
3. Whether plaintiffs plausibly alleged breach of fiduciary duty based on alleged conflicts of interest and misuse of confidential information.
4. Whether plaintiffs adequately pleaded trade secret misappropriation under California’s Uniform Trade Secrets Act, including identification of the secrets and reasonable secrecy measures, and whether co-ownership barred misappropriation as a matter of law.
5. Whether plaintiffs adequately pleaded tortious interference with existing or prospective economic relationships by identifying specific relationships and disruption.

## Decision

- The court granted in part and denied in part the motion to dismiss.
- Antitrust claims were dismissed for failure to plead anticompetitive conduct causing antitrust injury, rather than harm to a competitor.
- The Lanham Act trade dress claim was not dismissed; questions such as functionality and confusion were treated as fact-intensive and not resolved on the pleadings, though plaintiffs were required to clarify aspects of the claim.
- Breach of fiduciary duty claims were not dismissed because the existence, scope, and breach of any duty turned on factual questions not suitable for resolution at the pleading stage.
- The trade secret misappropriation claim was not dismissed, but the court required a more definite statement identifying the alleged secrets, the secrecy protections used, and the alleged acts of misappropriation; the court declined to adopt a categorical rule that co-owners cannot misappropriate.
- Tortious interference claims were dismissed for failure to plead identifiable economic relationships with third parties and specific interference.

## Legal Principles

- Antitrust pleadings must allege a cognizable relevant market, anticompetitive conduct, and antitrust injury of the type antitrust law addresses, not merely injury to a competitor.
- Restaurant décor and overall commercial image may constitute protectable trade dress, but functionality and likelihood of confusion are commonly fact questions not suited to resolution on a Rule 12(b)(6) motion.
- Fiduciary-duty claims often depend on fact-bound inquiries into relationships, conflicts of interest, access to confidential information, and alleged misuse.
- Under California’s Uniform Trade Secrets Act, a plaintiff must plead the existence of a trade secret (including reasonable efforts to maintain secrecy) and misappropriation; inadequate specificity may warrant a more definite statement rather than dismissal.
- Co-ownership of information does not necessarily immunize a defendant from trade secret liability where the alleged use or disclosure may violate duties or restrictions; whether conduct is “misappropriation” may require factual development.
- Tortious interference requires pleading an identifiable economic relationship with probable future benefit, defendant’s knowledge, intentional disruption, actual disruption, and resulting harm; generalized allegations are insufficient.

## Conclusion

The court narrowed the case at the pleading stage by dismissing antitrust and tortious interference theories as insufficiently pleaded, while allowing trade dress and fiduciary-duty claims to proceed and requiring plaintiffs to provide greater specificity for their trade secret claim, including the secrets at issue and the measures used to keep them confidential.


Morton v. Rank Am., Inc., 812 F. Supp. 1062 (C.D. Cal. 1993)