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Gibson Brands, Inc. v. John Hornby Skewes & Co. Ltd.

United States District Court, C.D. California

October 23, 2014

GIBSON BRANDS, INC., a Delaware corporation, Plaintiff,
v.
JOHN HORNBY SKEWES & CO. LTD., Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STRIKE/DISMISS DEFENDANT'S AMENDED DEFENSES, AMENDED COUNTERCLAIMS, AND THIRD PARTY COMPLAINT [DKT. NO. 46]

DEAN D. PREGERSON, District Judge.

Presently before the Court is Plaintiff's motion to strike or dismiss certain of Defendant's amended defenses and counterclaims, as well as its third-party complaint against Bank of America, in this trademark infringement case. Having considered the parties' submissions and heard oral argument, the court adopts the following order.

I. BACKGROUND

The parties are manufacturers of electric guitars. Plaintiff, in a complaint filed on January 27, 2014, alleges that it manufactures distinctively-shaped guitars, that the designs of those guitars are trademarks (collectively, "the marks"), and that the marks are famous and enjoy substantial goodwill in the electric guitar market. (Compl. ¶¶ 10-17.) Plaintiff also alleges that the marks are used exclusively by Plaintiff. (Id. at ¶ 18.) Plaintiff further alleges that Defendant's products infringe Plaintiff's trademarks, using Plaintiff's marks without authorization in both its product designs and its advertising. (Id. at ¶ 20-22.) Plaintiff also alleges related trademark counterfeiting, trademark dilution, and trade dress infringement claims, as well as unfair competition and false advertising claims under federal and California law.

On May 30, 2014, Defendant filed an Answer, asserting various affirmative defenses, and a Counterclaim. Those pleadings were the subject of an order striking or dismissing the defenses and counterclaims, but granting leave to amend as to some defenses and all the counterclaims. (Dkt. No. 29.) On September 5, 2014, Defendant filed an Amended Answer, an Amended Counterclaim, and Third Party Complaint against Bank of America as a third party defendant. (Dkt. Nos. 30 & 31.) In the Amended Answer, Defendant presents affirmative defenses of laches; "waiver, acquiescence, and estoppel"; unclean hands; failure to mitigate damages; duplicativeness of claims; fraud; and inapplicability of punitive damages claims for various constitutional and statutory reasons. (Am. Answer ¶¶ 67-88.) Defendant's Amended Counterclaim alleges, with regard to each mark at issue, that third-party companies have used the marks over a period of decades; that Plaintiff knew of the use; that the third-party companies were not licensees or subsidiaries of Plaintiff; that after decades of "rampant third-party usage" Plaintiff filed applications for trademark registration of the marks; and that Plaintiff misrepresented on those applications that it had "substantially exclusive and continuous use" of the marks. (Am. Counterclaim, passim.)

Plaintiff now moves to strike or dismiss certain of Defendant's affirmative defenses in the Amended Answer, the Amended Counterclaim, and the Third Party Complaint.

II. LEGAL STANDARD

A court may strike any "insufficient defense" or "immaterial" matter from a pleading. Fed.R.Civ.P. 12(f). "To show that a defense is insufficient, ' the moving party must demonstrate that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defense succeed." Cal. Dep't of Toxic Substances Control v. Alco Pac., Inc. , 217 F.Supp.2d 1028, 1032 (C.D. Cal. 2002) (internal quotation marks omitted). "As motions to strike a defense as insufficient are disfavored, they will not be granted if the insufficiency of the defense is not clearly apparent." J & J Sports Prods., Inc. v. Romero, No. 1:11-CV-1880-AWI-BAM, 2012 WL 2317566 (E.D. Cal. June 18, 2012).

Any "claim for relief in any pleading, " including a counterclaim, may be dismissed if it fails to state a claim for relief. Fed.R.Civ.P. 12(b)(6). A claim may be dismissed under Rule 12(b)(6) only if it "either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory." Somers v. Apple, Inc. , 729 F.3d 953, 959 (9th Cir. 2013). "All allegations of material fact in the complaint are taken as true and construed in the light most favorable to the plaintiff." Williams v. Gerber Products Co. , 552 F.3d 934, 937 (9th Cir. 2008). "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal , 556 U.S. 662, 679 (2009).

III. DISCUSSION

A. Affirmative Defenses

Defendant's Amended Answer (Dkt. No. 31) presents seven affirmative defenses: (1) laches; (2) waiver, acquiescence, and estoppel; (3) unclean hands; (4) failure to mitigate damages; (5) duplicativeness; (6) fraud; and (7) constitutional/statutory bars to any award of punitive damages. Plaintiff moves to strike the first three affirmative defenses as insufficiently pled. Plaintiff also moves to strike the sixth as failing to meet the heightened pleading standard for allegations of fraud under Fed.R.Civ.P. 9(b).

As a preliminary matter, it is not yet clear in the Ninth Circuit whether the pleading requirements of Ashcroft v. Iqbal , 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly , 550 U.S. 544 (2007) apply to affirmative defenses as well as claims and counterclaims. As the Court noted in its previous order, federal district courts have frequently concluded that defendants must allege enough facts to state an affirmative defense that is plausible on its face. (Dkt. No. 29 at 8-9.) On the other hand, with the exception of an affirmative defense of fraud, which must be pled under the stricter standards of Fed.R.Civ.P. 9(b), affirmative defenses need not be presented in fine-grained detail. The Court simply seeks to avoid the use of "boilerplate" defenses: a "series of conclusory statements asserting the existence of an affirmative defense without stating a reason why that affirmative defense might exist." Barnes v. AT & T Pension Ben. Plan-Nonbargained Program , 718 F.Supp.2d 1167, 1172 (N.D. Cal. 2010).

1. Laches

Defendant alleges that the marks were the subject of "correspondence" between the companies from the 1990's to the present. "At no time did Plaintiff take any action against JHS regarding the alleged infringement." (Am. Answer ¶¶ 67-71.) Defendant also refers to a "Prior Action" between the parties in which Plaintiff did not raise these claims.[1] (Id. at ¶¶ 72-73.) Thus, argues Defendant, Plaintiff has unreasonably delayed litigation, and the doctrine of laches should bar Plaintiff's claims.

Laches has two elements: unreasonable delay in bringing suit, and prejudice to the defendant. Internet Specialties W., Inc. v. Milon-DiGiorgio Enterprises, Inc. , 559 F.3d 985, 990 (9th Cir. 2009). Plaintiff argues that a bare allegation that there was "correspondence" about the marks two decades ago does not give rise to an inference of unreasonable delay. Reading the allegations in the light most favorable to the non-moving party, however, the Court finds that the allegation could give rise to that inference. "[C]orrespondence regarding the purported Marks, " though vague, is in context presumably intended to mean correspondence regarding infringement of the Marks. Defendant's allegations, although minimal, tend to show ...


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