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Innovation Ventures, LLC v. Pittsburg Wholesale Grocers, Inc.

United States District Court, Ninth Circuit

May 13, 2013

INNOVATION VENTURES, LLC, et al., Plaintiffs,
v.
PITTSBURG WHOLESALE GROCERS, INC., et al., Defendants.

ORDER GRANTING PLAINTIFFS' MOTION TO STRIKE AFFIRMATIVE DEFENSES AND VACATING HEARING

WILLIAM ALSUP, District Judge.

In this anti-counterfeiting action regarding 5-hour Energy drinks, plaintiffs move to strike certain affirmative defenses from defendants' first amended answer. For the reasons given below, this motion is GRANTED.

Plaintiff International IP Holdings, LLC owns the 5-hour Energy trademark, copyright, and trade dress. Plaintiff Innovation Ventures, LLC exclusively licenses the 5-hour Energy trademark, copyright, and trade dress. Plaintiff Living Essentials, LLC, a subsidiary of Innovation Ventures, distributes 5-hour Energy. Plaintiffs allege that the defendants in this action have been involved in a scheme to manufacture and sell counterfeit 5-hour Energy drinks. Defendants Dan-Dee Company, Inc., and its owners Fadi Attiq and Kevin Attiq (collectively "Dan-Dee"), are among the many wholesale grocers and distributors allegedly involved.

Dan-Dee and the Attiqs separately answered plaintiffs' second amended complaint in January 2013 (Dkt. Nos. 159, 161). Plaintiffs moved to strike most of the 26 asserted affirmative defenses (Dkt. No. 191). Dan-Dee conceded that many of its defenses did not meet the pleading standard (Dkt. No. 234). An order allowed plaintiffs to withdraw the motion and permitted Dan-Dee and the Attiqs each to file an amended answer, which are identical except for defendants' names (Dkt. Nos. 235, 243, 245). Now, plaintiffs bring a Rule 12(f) motion to strike 11 of the 27 defenses contained in Dan-Dee's answers. None of these 11 defenses is an affirmative defense and all are STRICKEN.

1. LEGAL STANDARD.

Our court of appeals has not addressed whether the pleading standards of Iqbal and Twombly apply to affirmative defenses. Judges in this district, including the undersigned, have generally agreed that they do. See PageMelding, Inc. v. ESPN, Inc., C 11-06263-WHA, 2012 WL 3877686 (N.D. Cal. Sept. 6, 2012) (collecting cases). "Affirmative defenses plead matters extraneous to the plaintiff's prima facie case, which deny plaintiff's right to recover, even if the allegations of the complaint are true. In contrast, denials of the allegations in the Complaint or allegations that the Plaintiff cannot prove the elements of his claims are not affirmative defenses." G & G Closed Circuit Events, LLC v. Nguyen, C 10-00168, 2010 WL 3749284, at *5 (N.D. Cal. Sept. 23, 2010) (Judge Lucy Koh) (internal citation and quotation marks omitted). "Affirmative defenses are governed by the same pleading standards as claims. Notice requires more than legal conclusions; factual allegations must establish a right to relief that is beyond the speculative level.'" PageMelding, 2012 WL 3877686 at *5 (internal citation omitted).

"Pursuant to a motion under [Rule] 12(f), the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. [Rule] 12(f) is a means by which to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial." Matsushita Elec. Indus. Co. Ltd. v. CMC Magnetics Corp., C 06-04538-WHA, 2006 WL 3290413 (N.D. Cal. Nov. 13, 2006) (internal citation and quotations omitted).

2. DEFENSES THAT DENY LIABILITY.

The fifth, twelfth, seventeenth, nineteenth, twenty-third, and twenty-fifth affirmative defenses deny allegations in the complaint or elements of plaintiffs' prima facie case and thus are not true affirmative defenses but denials of liability. J & J Sports Prods., Inc. v. Mendoza-Govan, C 10-05123-WHA, 2011 WL 1544886 (N.D. Cal. Apr. 25, 2011). These include: (5) lack of prior knowledge; (12) bona fide error and/or innocent mistake; (17) lack of duty owed; (19) lack of willful misconduct; (23) lack of bad faith; and (25) lack of an agency relationship. The above-listed affirmative defenses are STRICKEN.

The fourth affirmative defense also attacks plaintiffs' case rather than being a true affirmative defense. It reads:

Each of Plaintiffs' trademarks that contains the term or phrase "5-Hour Energy" is merely descriptive of the supposed and desired effect of their products upon consumers who ingest them - viz., providing an energy boost that lasts for five hours. The term or phrase "5-Hour Energy" is therefore descriptive and has become associated with Plaintiffs only by secondary meaning - namely, Plaintiffs' ongoing sales and promotion of their own products under the name "5-Hour Energy." Plaintiffs' rights and remedies must be limited accordingly.

(Dkt. No. 243 at 21).

This defense is also a mere denial of one aspect of plaintiffs' case, rather than a true affirmative defense. The parties spill much ink arguing whether a motion to strike is the proper place to determine if the 5-hour Energy marks and trade dress merit strong trademark protections. This order need not reach that issue. Elsewhere in their answers, defendants have addressed plaintiffs' assertions regarding the relative strength of the marks (Ans. at 6). Because the fourth affirmative defense is not an affirmative defense at all, but merely responds to an element of plaintiffs' case, it ...


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