Opinion
No. 02 C 6577
February 25, 2003
OPINION
Spri makes and sells exercise products (equipment and instructional videos on their use) in a market that is highly competitive. S.P. Int'l conducts the same business and is allegedly violating Spri's intellectual property rights. The claims run the traditional gamut of trademark infringement and dilution, unfair competition, deceptive trade and business practices, and infringement of one patent. S.P. Int'l has counterclaimed (and I rule here on the basis of its amended answer and counterclaim, the filing of which I now allow) and offered a defense that Spri wants stricken or dismissed.
Spri's marks are SPRI, XERSTRETCH, XERTUBE, XERBAND, XERBALL, XERCUFFS. They were in use "long before" defendant began using SPI, XTREME and XTREME ZONE. The patent is said to cover a device sold as "Xtreme Zone, Bun, Arm and Thigh Buster."
Spri seeks dismissal of the counterclaim seeking cancellation of the trademark registration for XERTUBE upon the grounds that it should not have been issued in light of an earlier registration. Spri claims that S.P. Int'l does not own or possess any rights to the earlier issued registration for EXER-TUBING. One cannot, ordinarily, rely on the rights of some third person to secure cancellation of a registration. Herbko Intern., Inc. v. Kappa Books, Inc., 308 F.3d 1156 (Fed. Cir. 2002). The law regards such action as meddling in another's business. But the right to urge cancellation may arise from issues other than ownership or some form of privity with the owners. There is language in the cases allowing a competitor already using a trademark and selling products to defend against the trademark infringement charge by challenging the trademark itself and seeking cancellation. Holmes Products Corp. v. Duracraft Corp., 30 U.S.P.Q.2d 1549 (T.T.A.B. 1994). I cannot find on the basis of the counterclaim's allegations that S.P. Int'l will inevitably fail to secure the relief it asks. I agree that one with no formal legal rights in a third person's trademark has quite an uphill climb in order to use it to cancel another trademark that it is allegedly infringing, but the standard on motions to dismiss is "no chance to win." I cannot say that there is no chance here for S.P. Int'l to show it has a "legitimate interest" of the sort that would enable it to prevail. The issue would be better raised on the sort of factual record that is prepared for summary judgment motions.
A second counterclaim is simply stated as "The `322 patent [on which the complaint is founded] is invalid for failure to comply with Title 35 of the United States Code." Spri seeks dismissal because the statement is too simple (e.g., what section of the Title and on what facts is the claim based?). This is the ground, too, for striking Affirmative Defense No. 9. S.P. Int'l amended its counterclaim to specify 35 U.S.C. § 101,102 and/or 103, but this does not help. I do not think that Congress approved pleading in this form by enacting 35 U.S.C. § 282. The allegation does not limit the scope of the claim to the point where it can be defended without pointless and expensive discovery. Were I to let it stand, I would simply order a More Definite Statement under Rule 12, and S.P. Int'l would have to plead with greater specificity, which I doubt it can do. The inference I draw from these papers is that S.P. Int'l believes it might have a good invalidity defense but has no clearly formulated idea what it might be and does not want to waive it by failing to assert it early on. However, it is better to investigate the facts and try to add patent invalidity claims or defenses when they can seasonably be made. It is not my practice to preclude amendments of this sort if the grounds for them are discovered after the case has matured a little. Therefore, I grant the motion to dismiss the second amended counterclaim and affirmative defense number 4.
Implicit in this ruling is the notion that I will allow some reasonably focused discovery on the question of invalidity and will not approve the refusal to comply with such discovery on the sole grounds that it is outside the scope of the complaint and counterclaim.
I grant the motion to file the amended answer and counterclaim. The motion to dismiss the first count of the amended counterclaim is denied. The motion to dismiss the second count of the amended counterclaim is granted as is the motion to strike Affirmative Defense 4.