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West Marine, Inc v. Watercraft Superstore

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION


November 27, 2012

WEST MARINE, INC., PLAINTIFF,
v.
WATERCRAFT SUPERSTORE, INC. AND DOES 1-50, INCLUSIVE,
DEFENDANTS.

The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

*E-FILED: November 27, 2012*

NOT FOR CITATION

ORDER DENYING WEST MARINE'S MOTION FOR SUMMARY JUDGMENT ON WATERCRAFT SUPERSTORE'S COUNTERCLAIMS [Dkts. 64]

This action arises from failed negotiations over the shared use of a trademark. Plaintiff West Marine, Inc. ("West Marine") and defendant Watercraft Superstore, Inc. ("Watercraft") are purveyors of 18 boating equipment. Both parties attempted to register with the U.S. Patent and Trademark Office 19

("USPTO") a similar mark ("the mark" or "Blacktip mark"). Watercraft had filed its application 20 with the USPTO first. West Marine approached Watercraft to negotiate an agreement to govern 21 shared use of the mark, and withdrew its own application for trademark protection. The 22 negotiations failed to yield an agreement, but West Marine has been using the mark in connection 23 with fishing tools and accessories, clothing, hats, visors and personal floatation devices. West 24 Marine filed this action against Watercraft for breach of oral contract and related claims (breach of 25 the covenant of good faith and fair dealing, intentional and negligent interference with economic 26 advantage, declaratory and injunctive relief, unjust enrichment, quantum meruit, and promissory 27 estoppel). Watercraft counterclaimed for trademark infringement and related claims (false 28 designation of origin, unfair competition, trademark dilution, injury to business reputation, and 2 unfair business practices). 3

Third party Surftech, LLC ("Surftech") also had a federal trademark registration for the Blacktip mark. Surftech had acquired its right to use the Blacktip mark before Watercraft had 5 acquired its right to use the Blacktip mark, but Surftech had the right to use the mark in connection 6 with surfboards. After filing this suit, West Marine obtained an assignment of Surftech's right to 7 use the Blacktip mark ("Surftech Assignment"). West Marine moves for dismissal of the 8 counterclaims on the basis that the Surftech Assignment gives it priority rights in the Blacktip mark, 9 thus defeating Watercraft's counterclaims. In opposition to the motion, Watercraft contests the 10 validity of the Surftech Assignment and argues that, even if it were a valid assignment relevant to this action, the Surftech Assignment would only cover the narrow product class of surfboards, not all of the other goods at issue in this suit. On November 13, 2012, this Court heard West Marine's motion for summary judgment.*fn1 Based on the papers filed by the parties, as well as the arguments 14 of counsel, the motion is denied. 15

West Marine has failed to establish that the Surftech Assignment defeats Watercraft's 16 counterclaims. To prevail on its motion, West Marine needed to establish, inter alia, that its use of 17 the Blacktip mark in connection with its fishing equipment, accessories, clothing, and personal 18 floatation devices was related to or within the zone of natural expansion of the rights it has now 19 acquired from Surftech. It did not do so. The evidentiary submissions from both parties on this 20 fact-intensive inquiry only established the existence of disputed issues of material fact. Although 21

West Marine objects to some of the evidence submitted by Watercraft, the evidence that it does not 22 object to amply shows that disputed issues of material fact preclude summary judgment. For these 23 reasons, and for the reasons stated on the record at the hearing, West Marine's motion is DENIED. 24

IT IS SO ORDERED.

C 11-04459 HRL Order will be electronically mailed to: Allen Ruby: Allen.Ruby@Skadden.com, abraham.andrade@skadden.com, chandra.snyder@skadden.com, marilyn.garibaldi@skadden.com, rosanna.keenan@skadden.com, 3 thomas.christopher@skadden.com 4 Benjamin Ross Lemke: blemke@mount.com, mdavalos@mount.com 5 Chandra Sophia Snyder: chandra.snyder@skadden.com 6 Daniel Harlan Fingerman: dfingerman@mount.com, ecf@mount.com, jcherng@mount.com, mdavalos@mount.com 7 Ian Ballon: ballon@gtlaw.com, kolbers@gtlaw.com 8 Kathryn G. Spelman: kspelman@mount.com, mbikul@mount.com, mdavalos@mount.com 9 Lisa Christine McCurdy: mccurdyl@gtlaw.com, rodriguezje@gtlaw.com 10 Lori Chang: changl@gtlaw.com, cronkritec@gtlaw.com Wendy Michelle Mantell: mantellw@gtlaw.com, rincona@gtlaw.com Counsel are responsible for distributing copies of this document to co-counsel who have not registered for e-filing under the court's CM/ECF program.


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