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Purple Heart Patient Center, Inc. v. Military Order of The Purple Heart of The United States of America, Inc.

United States District Court, N.D. California

February 11, 2014

PURPLE HEART PATIENT CENTER, INC., Plaintiff,
v.
MILITARY ORDER OF THE PURPLE HEART OF THE UNITED STATES OF AMERICA, INC. and MILITARY ORDER OF THE PURPLE HEART SERVICE FOUNDATION, INC., Defendants.

ORDER DENYING DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS ON CLAIMS THREE THROUGH ELEVEN AND GRANTING IN PART AND DENYING IN PART REQUESTS FOR JUDICIAL NOTICE

WILLIAM ALSUP, District Judge.

In this declaratory judgment action for alleged trademark infringement, defendants move for judgment on the pleadings pursuant to FRCP 12(c). For the reasons stated below, the motion is DENIED.

STATEMENT

In 1782, George Washington created the Badge of Military Merit. It was succeeded by the Order of the Purple Heart in 1932, a medal awarded to combat veterans wounded or killed in action.

Plaintiff Purple Heart Patient Center, Inc. sells medical marijuana (also known as cannabis) in Oakland via a permit issued by the City of Oakland (Compl. ΒΆ 7). Defendant Military Order of the Purple Heart of the United States of America, Inc. ("Military Order") was chartered by Congress in 1958 and is composed of recipients of the Purple Heart medal. Defendant Military Order of the Purple Heart Service Foundation, Inc. ("Service Foundation") raises money for the Military Order. Defendants hold a number of trademarks and service marks, including United States Registration Nos. 2, 206, 761, 2, 206, 762, 2, 206, 764, 2, 206, 768, 2, 208, 425, 2, 212, 475, 3, 735, 894, 3, 738, 805, and 4, 015, 788.

In February 2013, plaintiff, medical marijuana dispensary, filed this action seeking declaratory relief. This action was reassigned to the undersigned judge in April 2013. The operative May 2013 case management order set an April 2014 fact discovery deadline and a July 2014 jury trial date (Dkt. No. 31).

A July 2013 order granted the parties' stipulation to amend the complaint to add, inter alia, trademark cancellation claims. The gravamen of the case now is that plaintiff seeks declaratory relief from trademark infringement and cybersquatting claims. For their part, defendants seek "equitable relief and not money damages" via their trademark infringement and state-law counterclaims (Dkt. No. 47). Two of the marks at issue in this action are shown below:

This order pauses to note that there was another action pending in the District of Maryland, captioned as Military Order of the Purple Heart Service Foundation, Inc. v. Others First, Inc., et al., No. 1:12-cv-01483-GLR (D. Md. May 16, 2012), which has since settled. Plaintiff was not a party to that action. A December 2012 order by Judge George L. Russell, III granted a motion to dismiss counterclaims of cancellation of the Service Foundation's United States Registration No. 4, 015, 788 on the basis of fraudulent procurement and violation of the Sherman Act (Dkt. No. 35). The dismissal (in favor of defendant Service Foundation, here) was based, in part, on failure to plead with particularity.

ANALYSIS

1. JUDGMENT ON THE PLEADINGS.

Defendants seek judgment on plaintiff's cancellation claims based on lack of standing. Defendants argue that plaintiff cannot show the type of damages cognizable under federal law because the sale of marijuana, a substance prohibited by the federal Controlled Substances Act, 21 U.S.C. 812(b)(1)(B), 812(c) Schedule I(c)(10), 841(a)(1), 844(a), violates federal law. Plaintiff cannot use the Lanham Act to protect activities illegal under federal law, defendants argue.

A judgment on the pleadings is appropriate when, even if all material facts in the pleading under attack are true, the moving party is entitled to judgment as a matter of law. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). Title 15 of United States Code Section 1064 provides the grounds for bringing a cancellation claim. Section 1064 states in relevant part:

A petition to cancel a registration of a mark, stating the grounds relied upon, may... be filed as follows by any person who believes that he is or will be damaged, including as a result of a likelihood of dilution by blurring or dilution by tarnishment ...

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