Opinion
Case No. CV 11-01350 DDP (DTBx)
03-21-2013
DANIEL HENDERSON, an individual, Plaintiff, v. MATTHEW LINDLAND, an individual; TEAM QUEST FIGHT CLUB,LLC, an Oregon limited liability company, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S THIRD
MOTION FOR SUMMARY JUDGMENT AND DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
[DOCKET NOS. 83 AND 85]
I. Background
Plaintiff Daniel Henderson has sued Defendants Matthew Lindland and Team Quest Fight Club, LLC ("TQFC"), for five claims: (1) common law trademark infringement under Lanham Act § 43(a); (2) copyright infringement under 17 U.S.C. §§ 101, et seq.; (3) federal unfair competition under Lanham Act § 43(a); (4) common law unfair competition; and (5) California Unfair Competition under California Business & Professions Code § 17200. (See generally Compl., Docket No. 1.) Defendants have counterclaimed for (1) federal trademark infringement under Lanham Act § 32(1); (2) federal trademark infringement, false designation of origin, passing off, and unfair competition under Lanham Act § 43(a)(1)(A); (3) federal trademark counterfeiting under Lanham Act §§ 32(1)(a) and 34(d); (4) statutory unfair competition under California Business & Professions Code § 17200; (5) deceptive advertising under California Business & Professions Code § 17500; (6) common law trademark infringement, unfair competition, and misappropriation; (7) common law breach of contract; (8) common law covenant of good faith and fair dealing; (9) intentional interference with prospective economic advantage; and (10) copyright infringement.(See generally Amended Answer and Counterclaims, Docket No. 43.)
Defendants' copyright infringement claim was previously summarily adjudicated in Plaintiff's favor. (Docket No. 80.)
Presently before the Court is (1) Plaintiff's Third Motion for Summary Judgment, or in the alternative, for an order treating specified facts as established, and (2) Defendants' Motion for Summary Judgment on Various Counts and Defenses. The facts of the case are familiar to the parties, and the Court has outlined them before. (Docket Nos. 67, 80.) Plaintiff, Daniel Henderson is a professional Mixed Martial Arts (MMA) fighter, who has started MMA gyms. The Court previously summarily adjudicated that he is the senior and continuous user of the Team Quest mark, that he owns the mark, and that he has priority in the mark. (Docket Nos. 80, 100.) Lindland is a retired MMA fighter. Before Henderson started any MMA gyms, Lindland founded one, TQFC, which is also a Defendant. Henderson and Lindland were once friends. Their relationship soured in 2011, shortly before Henderson brought this suit. Both have used Team Quest marks in their MMA-related services for over a decade. These marks are at the heart of this case.
The Court GRANTS summary judgment in favor of Plaintiff on the following of his claims: trademark infringement under Lanham Act § 43(a), common law unfair competition, unfair competition under California Business & Professions Code § 17200, and trademark cancellation. The Court GRANTS summary judgment in Defendants' favor on the laches issue. The Court DENIES Summary Judgment on Defendants' first through fourth counterclaims, and notes that these claims have been abandoned. All other claims and counterclaims have, likewise, been abandoned.
II. Legal Standard on Summary Judgment
Summary judgment shall be granted when a movant "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). In other words, summary judgment should be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Parth v. Pomona Valley Hosp. Med. Ctr., 630 F.3d 794, 798-99 (9th Cir. 2010)(internal quotation marks omitted).
To satisfy its burden at summary judgment, a moving party must produce facts on each element for which it has the burden of proof at trial "sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986) (emphasis omitted). A moving party without the burden of persuasion "must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co., v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000); see also Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc) ("When the nonmoving party has the burden of proof at trial, the moving party need only point out 'that there is an absence of evidence to support the nonmoving party's case.'") (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), and citing Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000) (holding that the Celotex "showing" can be made by "pointing out through argument- the absence of evidence to support plaintiff's claim")).
It is not enough for a party opposing summary judgment to "rest on mere allegations or denials of his pleadings." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 259 (1986). Instead, the nonmoving party must go beyond the pleadings to designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 325.
At the summary judgment stage, the Court does not make credibility determinations or weigh conflicting evidence, and views all evidence and draws all inferences in the light most favorable to the non-moving party. See id. at 630-31 (citing Matsushita Elec. Indus. Co., v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)); see also Hrdlicka v. Reniff, 631 F.3d 1044 (9th Cir. 2011); Miranda v. City of Cornelius, 429 F.3d 858, 860 n.1 (9th Cir. 2005). Speculative testimony in affidavits and motion papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill Publ'g Co., v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). As the Supreme Court has stated, "[t]he mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
It is not the Court's task "to scour the record in search of a genuine issue of triable fact." Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). Counsel has an obligation to lay out their support clearly. Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1031 (9th Cir. 2001). The Court "need not examine the entire file for evidence establishing a genuine issue of fact, where the evidence is not set forth in the opposing papers with adequate references so that it could conveniently be found." Id.
III. Analysis
A. Plaintiff's Trademark Infringement Claims are Entitled to Summary Judgment
Plaintiff has filed for summary judgment on his trademark infringement claims. Plaintiff's Complaint makes clear that its common law infringement claim is under section 43(a) of the Lanham Act, and his Motion indicates that his unfair competition claim under that section is really an infringement claim: "Thus in suing under § 43(a) for infringement . . ." (Compl. at 9:1-3; Docket No. 85 at 16:9). Plaintiff also moves for summary judgment under common law unfair competition and statutory unfair competition. Courts "jointly analyze[]" trademark infringement and statutory and common law unfair competition claims. Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1079 (C.D. Cal. 2012). They do so because the Ninth Circuit "has consistently held that state common law claims of unfair competition and actions pursuant to California Business and Professions Code § 17200 are 'substantially congruent'?to claims made under the Lanham Act." Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994) (citation omitted).
"Section 43(a)(1) [of the Lanham Act] provides similar protection to trademarks regardless of registration." Bell v. Harley Davidson Motor Co., 539 F. Supp. 2d 1249, 1254 (S.D. Cal. 2008) (citing Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1046 n.6 (9th Cir. 1999)). "To establish a trademark infringement claim . . ., [Plaintiff] must establish that [Defendant] is using a mark confusingly similar to a valid, protectable trademark of [Plaintiff's]." Brookfield Commc'ns, 174 F.3d at 1046. "To show that he has a protectable trademark interest, Plaintiff must have been the first to use the mark in the sale of goods or services." Guichard v. Universal City Studios, LLLP, No. C 06-6392 JSW, 2007 WL 1750216, at *2 (N.D. Cal. June 15, 2007) aff'd sub nom. Guichard v. Universal City Studios LLLP, 261 F. App'x 15 (9th Cir. 2007). This Court has already decided Plaintiff is the senior and continuous user of the Team Quest mark. (Docket No. 80.) Accordingly, the Court now moves to the likelihood of confusion analysis.
Defendants' only argument in response to Plaintiff's infringement-related claims is: "Defendants request that the Court grant summary judgment that Defendants have priority with respect to the Team Quest marks." (Docket No. 83-1 at 13:10-11.) The Court has already decided the priority issue in Plaintiff's favor. (Docket Nos. 80, 100.) Whatever the merits of Defendants' new arguments and evidence (especially Randy Couture's autobiography) in support of their priority, they should have presented them in the prior summary judgment motion. (See Docket No. 100 (denying reconsideration of the Court's finding on summary judgment that Plaintiff has priority).)
1. Likelihood of Confusion
The factors for determining likelihood of confusion are:
1. strength of the mark;AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). It is unnecessary to meet every factor, because the likelihood of confusion test is "fluid". Surfvivor Media, Inc. v. Survivor Prods. , 406 F.3d 625, 631 (9th Cir. 2005).
2. proximity of the goods;
3. similarity of the marks;
4. evidence of actual confusion;
5. marketing channels used;
6. type of goods and the degree of care likely to be exercised by the purchaser;
7. defendant's intent in selecting the mark; and
8. likelihood of expansion of the product lines.
Defendants do not respond to Plaintiff's argument that there is a likelihood of confusion. The Court finds that there is a high likelihood of confusion. Both parties use the names Team Quest as marks. Both often pair the words "Team Quest" with an image of a clenched fist. (Compare Second Henderson Decl. Exs. F-I, with Wright Ex. D.) Although Defendants were the first to use the Team Quest mark for MMA-gym related services, Plaintiff used the marks for MMA-entertainment services before Defendants began using them in commerce. (Second Henderson Decl. ¶¶ 9-12 and Exs. F-I; Docket No. 100 (explaining that April 2001 was when Defendants began using the mark in commerce, and that Plaintiff used it before).) Moreover, TQFC was especially connected to the world of professional MMA fighting. Not only were a number of its founders professional fighters, but TQFC "attracted mixed martial arts fighters from around the country who came to prepare for fights and to assist with training camps at the professional and student levels." (Follis Decl. ¶ 6.)
Finally, "Team Quest" is an arbitrary mark because it has an arbitrary link to MMA services. See Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1390 (9th Cir. 1993) ("An arbitrary mark consists of common words arranged in an arbitrary way that is non-descriptive of any quality of the goods or services."); Cf. Stork Rest. Inc. v. Sahati, 166 F.2d 348, 355 (9th Cir. 1948) (finding that "The Stork Club" was an arbitrary mark for a nightclub.). Arbitrary marks are considered strong. E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1291 (9th Cir. 1992) (holding that an "arbitrary" mark is "awarded maximum protection"). Accordingly, this factor favors finding a likelihood of confusion.
For the reasons stated above, and because Defendants do not address the likelihood of confusion issue, the Court finds that there is a substantial likelihood of confusion.
B. Defendants Are Entitled to Laches, But Only for Damages
Defendants argue that even if they have committed trademark infringement, they are entitled to laches. "'Laches is an equitable time limitation on a party's right to bring suit,' resting on the maxim that 'one who seeks the help of a court of equity must not sleep on his rights.'" Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002) (citations omitted). Defendants, who assert laches, must prove that "(1) [Plaintiff's] delay in filing suit was unreasonable, and (2) [Defendants] would suffer prejudice caused by the delay if the suit were to continue." Id. at 838. The Ninth Circuit has also "set out six factors for determining whether laches bars a claim for either damages or injunctive relief in an action for trademark infringement." Grupo Gigante SA De CV v. Dallo & Co., 391 F.3d 1088, 1102 (9th Cir. 2004). These factors include:
1. strength and value of trademark rights asserted;Id. at 1102.
2. plaintiff's diligence in enforcing mark;
3. harm to senior user if relief denied;
4. good faith ignorance by junior user;
5. competition between senior and junior users; and
6. extent of harm suffered by junior user because of senior user's delay.
"The limitations period for laches starts 'from the time the plaintiff knew or should have known about its potential cause of action.'" Tillamook Country Smoker, Inc. v. Tillamook Cnty. Creamery Ass'n, 465 F.3d 1102, 1108 (9th Cir. 2006) (citation omitted). Plaintiff claims trademark infringement under the Lanham Act, and infringement-like claims under state unfair competition laws. Although the Lanham Act does not have a statute of limitations, courts look to the "most closely analogous action under state law" for guidance in determining the applicability of laches. RSI Corp. v. Int'l Bus. Machs. Corp., No. 5:08-cv-3414 RMW, 2012 WL 3277136, at *13 (N.D. Cal. Aug. 9, 2012) (quoting Jarrow Formulas, 304 F.3d at 836) (internal quotation marks omitted). "If the plaintiff files suit within the limitations period for the analogous state action, it is presumed that laches does not apply; the presumption is reversed if the plaintiff files suit after the analogous limitations period has expired." Id. At least one district court in this Circuit has found that the relevant limitations period for federal trademark infringement and unfair competition claims is four years. See id.
1. Undue Delay
Courts look to the party against whom laches is asserted to explain the delay. See Danjaq LLC v. Sony Corp., 263 F.3d 942, 954 (9th Cir. 2001) ("McClory has presented no sufficient justification for his delay."). There are a number justifications for delay. See id. at 954-55 (giving examples). Plaintiff argues that there was no undue delay, because he and Lindland had an amicable relationship until 2011 and he and his co-senior user Randy Couture gave Defendants an implied license to use the Team Quest mark. Plaintiff cites no cases where friendship alone was found to be a sufficient reason for delaying a trademark action.
Plaintiff's second justification has more solid legal grounding. There can be no trademark infringement if a defendant has an implied license to use a trademark. J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition ("McCarthy"), § 18:43.50 (4th ed. 2012); see Dep't of Parks & Recreation for California v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1129 (9th Cir. 2006) (describing an implied license as a defense to trademark infringement). If Plaintiff gave Defendants an implied license, they were not infringing, and Plaintiff, thus, did not delay in bringing this lawsuit. To show an implied license there must be "evidence of an agreement or course of conduct by the parties to contract for a trademark license." Bazaar Del Mundo, 448 F.3d at 1130. In order for a court to find the existence of an implied license, it is imperative for a licensor to have "maintain[ed] control over the quality of the finished product or service to guarantee to the public that the goods or services are of the same, pre-license quality." Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1017 (9th Cir. 1985); see also Stanfield v. Osborne Indus., Inc., 839 F. Supp. 1499, 1504 (D. Kan. 1993)(claiming that the Ninth Circuit, like most, requires a licensor to "in fact exercise[] control over the licensee's operations so as to ensure adequate quality"), aff'd, 52 F.3d 867 (10th Cir. 1995).
Plaintiff presents no evidence that he exercised quality control over Defendants. In fact, "as of December 2004, Henderson did not have an ownership interest in [TQFC]". (Defendants' Statement of Uncontroverted Facts ("SUF") at 4: 19-21, Docket No. 88.) Although Randy Couture, a co-senior user, used to be a part owner of TQFC, Plaintiff presents no evidence that Couture exercised quality control over TQFC. Regardless, Couture "surrender[ed] all interest" in TQFC in March 2006, nearly five years before Plaintiff brought this action. (Follis Decl., Ex. F at 2 of 4, Docket No. 19) (filed under seal). Additionally, Defendants have presented unrebutted evidence that they were not operating under Plaintiff's control or using the Team Quest marks pursuant to Plaintiff's permission. For example, in 2010 Plaintiff "request[ed] that Lindland sign a license agreement on behalf of TQFC, allowing a video game manufacturer . . . to use the [Team Quest] marks." (Defendants' SUF at 5:25-28.)
The Court only references portions of Defendants' SUF that Plaintiff did not controvert in his Statement of Genuine Disputes. Pursuant to the Local Rules, Plaintiff concedes all such uncontroverted facts. C.D. Cal. L.R. 56-3.
2. Prejudice
There are "various sorts" of prejudice that are sufficient for asserting laches. Danjaq, 263 F.3d at 955. One of them is "expectations-based" prejudice. Id. Expectations-based prejudice may occur when an infringer has "invested money to expand its business or entered into business transactions based on his presumed rights." Miller v. Glenn Miller Prods, 318 F. Supp. 2d 923, 944 (C.D. Cal. 2004) aff'd, 454 F.3d 975 (9th Cir. 2006). "[C]ontinuing investments and outlays by the alleged infringer in connection with the operation of its business" is sufficient for showing prejudice. Danjaq, 263 F.3d at 955 (9th Cir. 2001) (citation omitted). Over the course of more than a decade, Lindland and his family have built a business, TQFC, that bears the Team Quest name. (Angela Lindland Decl. ¶¶ 1-2, Docket No. 83-3.) He has bought out co-owners to make the business his own. (See, e.g., Follis Decl. Ex. F.) Plaintiff, therefore, risks suffering classic expectations-based prejudice.
3. Other Factors
Courts are also instructed to analyze the following factors in deciding laches within the context of trademark infringement: 1. strength and value of trademark rights asserted; 2. plaintiff's diligence in enforcing mark; 3. harm to senior user if relief denied; 4. good faith ignorance by junior user; 5. competition between senior and junior users; and 6. extent of harm suffered by junior user because of senior user's delay. Grupo Gigante, 391 F.3d at 1102. Because the sixth factor is so related to the Court's discussion of prejudice, it is found to weigh in favor of laches. Similarly, the Court's earlier analysis of the relatedness of the parties' MMA services bears strongly on the fifth factor, and it, thus, weighs against laches.
The first, third, and fifth factors weigh against laches. Defendants do not address these factors. The strength and value of the mark is the first factor. Grupo Gigante, 391 F.3d at 1102. For the reasons discussed in the likelihood of confusion analysis, Team Quest is an arbitrary mark, and arbitrary marks are considered strong. E. & J. Gallo Winery, 967 F.2d at 1291 (finding that an "arbitrary" mark is "awarded maximum protection") (internal quotation marks omitted). This factor thus weighs against laches.
As to the third factor, "[t]he question of whether a senior user will be harmed if relief is denied turns largely on the court's analysis of the likelihood of confusion." RSI, 2012 WL 3277136, at *18 (citing Grupo Gigante, 391 F.3d at 1103.) As discussed above, the likelihood of confusion is high. Indeed, Defendants do not argue otherwise.
The second, fourth, and sixth factors favor laches. The second factor is Plaintiff's diligence in enforcing the mark. Grupo Gigante, 391 F.3d at 1102. Plaintiff does not claim to have enforced his rights in the Team Quest mark against anyone other than Defendants. For the reasons discussed in the analysis of Plaintiff's undue delay, this factor weighs in favor of laches.
The fourth factor is Defendants' good faith ignorance. Id. Plaintiff only argues, but cites no evidence that Defendants were not acting in good faith. (Docket No. 94 at 10:1-23.) Plaintiff presents no evidence that he informed Defendants of his priority rights in the Team Quest mark before 2011, when he brought this suit. In fact, as noted above, he asked Plaintiff for permission to use the marks in a video game.
For similar reasons, Plaintiff cannot successfully argue that Defendants have unclean hands. Plaintiff's argument here is unclear. "A party with unclean hands may not assert laches." Jarrow Formulas, 304 F.3d at 841. A party acting in fraud or deceit has unclean hands. Id. Plaintiff argues that Defendants falsely asserted that they had legal rights to the Team Quest marks in their trademark registration application. Plaintiff's argument seems to relate more to whether the registration was proper, not whether Defendants' longstanding use of the Team Quest mark, which predates Defendants' registration application by several years, is entitled to protection under laches. Regardless, for the reasons discussed above, no evidence suggests Lindland knew he did not own the Team Quest marks.
4. Remedy
Laches may be applied even if all the factors do no weigh in Defendant's favor. Grupo Gigante, 391 F.3d at 1104-05 (granting a laches defense even though one factor weighed "heavily" in the plaintiff's favor and another was a "close one"). Laches is especially likely to bar an injunction when the parties have previously had a friendly relationship, and when for a substantial period of time, the plaintiff did nothing to indicate disapproval of the defendant's use of the mark. McCarthy § 31:7, n.7 (discussing "plus factors" that courts often emphasize in applying laches to deny an injunction). Because of Plaintiff's long delay, Lindland's substantial investment in his business which has borne the name "Team Quest" for over a decade, and because of the plus factor just discussed, the Court finds that laches bars trademark infringement-related claims against Defendants.
Plaintiff urges the Court to allow an injunction, arguing that laches will not prevent the issuance of an injunction when customer confusion between the marks is inevitable. (Docket No. 85 at 22:21-24:9.) However, it is only in a "narrow set of circumstances" in which "inevitable confusion . . . will defeat a successful laches defense." Tillamook, 465 F.3d at 1111. As the Ninth Circuit has held, "the public's interest will trump laches only when the suit concerns allegations that the product is harmful or otherwise a threat to public safety and well being." Id. (citation omitted). Since Plaintiff does not make such allegations, he has not shown that his claim fits within the narrow set of circumstances in which inevitable confusion is relevant. Id.; (see Docket No. 85 at 22:21-24:9 (arguing that consumers are generally harmed when they are confused, not that Plaintiffs services and products are harmful or a danger to public safety).
C. Defendants' Trademarks Will Be Cancelled
Plaintiff asks the Court to cancel Defendants' registered trademarks. When priority is established, cancellation may be appropriate if the marks are similar. Russell Chem. Co. v. Wyandotte Chems. Corp., 337 F.2d 660, 661 (C.C.P.A. 1964); Cunningham v. Laser Golf Corp., 222 F.3d 943, 945 (Fed. Cir. 2000). Marks registered fewer than five years before being challenged may be cancelled if they are likely to cause confusion with the senior user's mark. McCarthy § 20:53; 15 U.S.C. §§ 1052(d), 1064. Defendants' primary argument against cancellation is essentially that Plaintiff is not the senior and continuous user of the Team Quest marks. As discussed, the Court has previously decided that Plaintiff is, and has now decided that there is a likelihood of confusion.
Registration Nos. 3090065, 3085376, 3736030, and 3736031.
Defendants' other argument is that it should be able to keep its registration pursuant to 15 U.S.C. § 1055. However, this statute stands for the notion that "properly licensed use by licensees will serve to fortify the legal and commercial strength of the licensed mark." Mccarthy § 18:45.50. It is unclear what relevance this statute has to Plaintiff's cancellation claim. Defendants do not explain the relevance, nor do they cite any cases for their position. The local rule require moving papers to contain "[a] brief but complete memorandum in support thereof and the points and authorities upon which the moving party will rely." C.D. Cal. L.R. 7-5.
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Additionally, Defendants' infringement-based laches argument is inapplicable to Plaintiff's cancellation claim. In the context of registration cancellation, laches is only appropriate when a senior user has unduly delayed objecting to the junior user's registration, not to the use. "As applied in trademark opposition or cancellation proceedings, [laches] must be tied to a party's registration of a mark, not to a party's use of the mark. Lincoln Logs Ltd. v. Lincoln Pre-Cut Log Homes, Inc., 971 F.2d 732, 734 (Fed. Cir. 1992) (emphasis in original); see also Tillamook Country Smoker, Inc. v. Tillamook Cnty. Creamery Ass'n., 333 F. Supp. 2d 975, 981 (D. Or. 2004) aff'd, 465 F.3d 1102 (9th Cir. 2006).
Defendants' most senior registered mark was registered on April 25, 2006. (See generally Wright Decl. Ex. D.) Plaintiff commenced this suit in February 2011, fewer than five years after any of Defendants' marks were registered. (See Compl.) Because Plaintiff initiated this suit within the five-year window, and has priority, and because there is a likelihood of confusion, the registrations are cancelled.
D. Defendants and Plaintiff Have Abandoned Claims and Counterclaims
The Court previously ordered the parties to move for summary judgment on each claim, counterclaim, and affirmative defense that remains in the case. (Docket No. 81.) The Court ordered that failure to so move would be construed as abandonment. (Id.) Plaintiff failed to move for summary judgment on his copyright claim, so it is abandoned. (See generally, Docket No. 85.) Similarly, Defendants' moving papers make no mention of their seventh and ninth counterclaims for common law breach of contract and intentional interference with prospective economic advantage. (See generally Docket No. 83-1.) Accordingly, they have been abandoned.
E. Defendants' Effectively Abandoned Claims
Defendants have essentially abandoned all of their remaining counterclaims, because they provide only a cursory argument in favor of summary judgment for these counterclaims. (Docket No. 83-1 at 14:16-16:5.) This argument does not comply with the local rules, which require "[a] brief but complete memorandum in support [of the motion] and the points and authorities upon which the moving party will rely." C.D. Cal. L.R. 7-5. The Court required Defendants to move for summary judgment on all their remaining counterclaims. The approximately 1.6 pages they devote to their counterclaims fall beneath what the Local Rules expect for several reasons.
First, it is unclear what claims Defendants have moved for. The relevant heading in Defendants' brief asserts that summary judgment is appropriate under the first through sixth and eighth counterclaims. (Docket No. 83-1 at 14:13-15.) However, the final sentence of that section indicates that Defendants only seek summary judgment on the first through fourth counterclaims. Id. at 16:5. Defendants' brief does not name the actual counterclaims on which summary adjudication is sought. Defendants only refer to the counterclaims by the order in which they appear in their Amended Answer and Counterclaims.
It is in their reply brief that Defendants state they seek summary judgment on their unfair trademark infringement, unfair competition, counterfeiting, and breach of good faith and fair dealing counterclaims. These relate to Defendants' first, third through sixth, eighth, and only part of Defendants' second counterclaims. (See generally Amended Answers and Counterclaims, Docket No. 43.) Waiting until the Reply Brief to clarify the claims on which summary judgment is sought creates due process concerns, and the Court need not consider arguments raised for the first time in a reply brief. See Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) (affirming district court's decision to reject points raised for the first time in reply). In light of the ambiguities noted above, Defendants at best provided sufficient notice that they moved for summary judgment on their first through fourth counterclaims: (1) federal trademark infringement under Lanham Act § 32(1); (2) federal trademark infringement, false designation of origin, passing off, and unfair competition under Lanham Act § 43(a)(1)(A); (3) federal trademark counterfeiting under section Lanham Act §§ 32(1)(a) and 34(d); and (4) statutory unfair competition under California Business & Professions Code § 17200. (Docket No. 43.)
Defendants cite Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175 (9th Cir. 1988) for the proposition that: "Indeed, continued use of the mark by the former licensee constitutes a fraud on the public, as the public is led to believe the continued use is authorized by the trademark owner." (Docket No. 83-1 at 15:19-22; Docket No. 96 at 8:5-8.) Defendants fail to explain how such a holding is sufficient legal authority-as the local rule requires them to provide-for granting summary judgment on all four of their counterclaims. C.D. Cal. L.R. 7-5. Moreover, Defendants' argument seems, again, to not recognize that the Court previously found Plaintiff to be the senior and continuous user of the Team Quest marks. Plaintiff has priority, and thus is the owner, not a licensee. "It is axiomatic . . . that the standard test of ownership is priority of use." Brookfield Commc'ns, 174 F.3d at 1047 (citation omitted).
IV. Conclusion
The Court GRANTS summary judgment in favor of Plaintiff on the following of his claims: trademark infringement under Lanham Act § 43(a), common law unfair competition, unfair competition under California Business & Professions Code § 17200, and trademark cancellation. The Court GRANTS summary judgment in Defendants' favor on the laches issue. The Court DENIES summary Judgment on Defendants' first through fourth counterclaims, and these claims are construed to have been abandoned anyway. All other claims and counterclaims are deemed to have been abandoned. IT IS SO ORDERED.
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DEAN D. PREGERSON
United States District Judge