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ATM Express, Inc. v. ATM Express

September 11, 2009

ATM EXPRESS, INC., PLAINTIFF,
v.
ATM EXPRESS, INC., DEFENDANT;
AND RELATED COUNTERCLAIM.



The opinion of the court was delivered by: M. James Lorenz United States District Court Judge

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, FOR SUMMARY ADJUDICATION, AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, FOR SUMMARY ADJUDICATION

In this trademark infringement action, the parties filed cross-motions for summary judgment, or in the alternative, summary adjudication. The parties opposed each other's motions.*fn1 For the reasons which follow, Defendant's motion for summary adjudication of all of Plaintiff's claims is GRANTED. Plaintiff's motion is DENIED.

It is undisputed that both parties use the name ATM Express in connection with the sale and leasing of automated teller machines and related services. Plaintiff first began using the name in June 1997. Defendant started using it in April 1999. In 2001, Plaintiff learned about Defendant's use. In November 2003, Plaintiff filed an application with the United States Patent and Trademark Office to register the ATM Express name. It received a registration in the Supplemental Register*fn2 in July 2005. In 2001 Defendant earned revenues of approximately $3.5 million and a net income of approximately $35,000. From 2001 through 2007, Defendant earned more than $162 million in revenues and more than $6 million in net income. (Joint Statement of Undisputed Facts filed Dec. 15, 2008 ("Joint Statement"), at 2-3.)

In July 2007 Plaintiff filed the instant action for trademark infringement pursuant to 15 U.S.C. § 1114(1), false designation of origin pursuant to 15 U.S.C. § 1125(a), cybersquatting pursuant to 15 U.S.C. § 1125(d) and unfair competition pursuant to California Business and Professions Code § 17200 et seq. Defendant filed a counterclaim for cancellation of Plaintiff's federal trademark registration pursuant to 15 U.S.C. § 1119.

In its summary judgment motion, Defendant argues that at the time Defendant started using the ATM Express name, Plaintiff's mark did not have a secondary meaning so as to be entitled to trademark protection and that Plaintiff's action is barred by laches. In the alternative, Defendant argues that it is entitled to summary adjudication of the cybersquatting claim because there is a triable issue of fact whether it used the atmexpress.com domain name in bad faith, and that it is entitled to summary adjudication of certain damage claims. Plaintiff argues that it is entitled to summary judgment because Plaintiff infringed its trademark. Because the court finds that Plaintiff's action is barred by laches, it need not address other arguments raised in the motions.

Federal Rule of Civil Procedure 56 empowers the court to enter summary judgment on factually unsupported claims or defenses, and thereby "secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327 (1986). "If summary judgment is not rendered on the whole action, the court should, to the extent practicable, determine what material facts are not genuinely at issue." Fed. R. Civ. P. 56(d)(1).

Summary judgment or adjudication of issues is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A fact is material when it affects the outcome of the

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" of material fact arises if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

The burden on the party moving for summary judgment depends on who bears the burden of proof at trial. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." See C.A.R. Transp. Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). When the moving party would not bear the burden at trial, then he or she can meet its burden on summary judgment by pointing out the absence of evidence with respect to any one element of the claim. See Celotex, 477 U.S. at 325.

If the movant meets its burden, the burden shifts to the non-movant to show summary adjudication is not appropriate. Celotex, 477 U.S. at 317, 324. The non-movant does not meet this burden by showing "some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The non-movant must go beyond the pleadings to designate specific facts showing there are genuine factual issues which "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250.

The mere fact the parties filed cross-motions "does not necessarily mean there are no disputed issues of material fact and does not necessarily permit the judge to render judgment in favor of one side or the other." Starsky v. Williams, 512 F.2d 109, 112 (9th Cir. 1975). "[E]ach motion must be considered on its own merits." Fair Hous. Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). Furthermore, the court must consider evidence submitted in support of and in opposition to both motions before ruling on either one.

When ruling on a summary judgment motion, the non-movant's evidence is to be believed, and all justifiable inferences are to be drawn in its favor. Anderson, 477 U.S. at 255. Determinations regarding credibility, the weighing of evidence, and the drawing of legitimate inferences are jury functions, and are not appropriate for resolution by the court on a summary judgment motion. Id. Only admissible evidence may be considered in deciding a motion for summary judgment. See Fed. R. Civ. P. 56(e).

Defendant argues that Plaintiff's claims are barred by laches because Plaintiff delayed the filing of this action for approximately six years after discovering Defendant's allegedly infringing use of the ATM Express name. During this time, Defendant's business grew significantly. Plaintiff contends that the defense is not available to Defendant because it was entitled to wait and see whether the infringement will become sufficient to warrant litigation and because Defendant is not entitled to the defense based on the unclean hands doctrine.

A defense of laches can defeat an otherwise valid trademark infringement claim. Tillamook Country Smoker, Inc. v. Tillamook County Creamery Ass'n, 465 F.3d 1108 (9th Cir. 2006). It can be resolved on summary judgment. See, e.g., Tillamook Country Smoker, 465 F.3d 1102; Miller v. Glenn Miller Prod., Inc., 454 F.3d 975 (9th Cir. 2006); Grupo Gigante SA de CV v. Dallo & Co., Inc., 391 ...


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