West Marine, Inc v. Watercraft Superstore, Inc

Filing 84

ORDER by Magistrate Judge Howard R. Lloyd Denying 64 West Marine's Motion for Summary Judgment on Watercraft Superstore's Counterclaims. (hrllc1, COURT STAFF) (Filed on 11/27/2012)

*E-FILED: November 27, 2012*

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NOT FOR CITATION

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

For the Northern District of California

United States District Court

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WEST MARINE, INC.,
Plaintiff,

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v.
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WATERCRAFT SUPERSTORE, INC. and
DOES 1-50, inclusive,

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No. C11-04459 HRL
ORDER DENYING WEST MARINE’S
MOTION FOR SUMMARY
JUDGMENT ON WATERCRAFT
SUPERSTORE’S COUNTERCLAIMS

Defendants.
____________________________________/

[Dkts. 64]
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This action arises from failed negotiations over the shared use of a trademark. Plaintiff West

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Marine, Inc. (“West Marine”) and defendant Watercraft Superstore, Inc. (“Watercraft”) are purveyors of

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boating equipment. Both parties attempted to register with the U.S. Patent and Trademark Office

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(“USPTO”) a similar mark (“the mark” or “Blacktip mark”). Watercraft had filed its application

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with the USPTO first. West Marine approached Watercraft to negotiate an agreement to govern

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shared use of the mark, and withdrew its own application for trademark protection. The

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negotiations failed to yield an agreement, but West Marine has been using the mark in connection

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with fishing tools and accessories, clothing, hats, visors and personal floatation devices. West

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Marine filed this action against Watercraft for breach of oral contract and related claims (breach of

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the covenant of good faith and fair dealing, intentional and negligent interference with economic

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advantage, declaratory and injunctive relief, unjust enrichment, quantum meruit, and promissory

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estoppel). Watercraft counterclaimed for trademark infringement and related claims (false

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designation of origin, unfair competition, trademark dilution, injury to business reputation, and

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unfair business practices).
Third party Surftech, LLC (“Surftech”) also had a federal trademark registration for the

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Blacktip mark. Surftech had acquired its right to use the Blacktip mark before Watercraft had

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acquired its right to use the Blacktip mark, but Surftech had the right to use the mark in connection

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with surfboards. After filing this suit, West Marine obtained an assignment of Surftech’s right to

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use the Blacktip mark (“Surftech Assignment”). West Marine moves for dismissal of the

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counterclaims on the basis that the Surftech Assignment gives it priority rights in the Blacktip mark,

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thus defeating Watercraft’s counterclaims. In opposition to the motion, Watercraft contests the

For the Northern District of California

United States District Court

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validity of the Surftech Assignment and argues that, even if it were a valid assignment relevant to

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this action, the Surftech Assignment would only cover the narrow product class of surfboards, not

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all of the other goods at issue in this suit. On November 13, 2012, this Court heard West Marine’s

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motion for summary judgment. 1 Based on the papers filed by the parties, as well as the arguments

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of counsel, the motion is denied.

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West Marine has failed to establish that the Surftech Assignment defeats Watercraft’s

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counterclaims. To prevail on its motion, West Marine needed to establish, inter alia, that its use of

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the Blacktip mark in connection with its fishing equipment, accessories, clothing, and personal

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floatation devices was related to or within the zone of natural expansion of the rights it has now

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acquired from Surftech. It did not do so. The evidentiary submissions from both parties on this

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fact-intensive inquiry only established the existence of disputed issues of material fact. Although

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West Marine objects to some of the evidence submitted by Watercraft, the evidence that it does not

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object to amply shows that disputed issues of material fact preclude summary judgment. For these

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reasons, and for the reasons stated on the record at the hearing, West Marine’s motion is DENIED.
IT IS SO ORDERED.

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Dated: November 27, 2012

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HOWARD R. LLOYD
UNITED STATES MAGISTRATE JUDGE

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Pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73, all parties have expressly consented that all
proceedings in this matter may be heard and finally adjudicated by the undersigned magistrate
judge.
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C 11-04459 HRL Order will be electronically mailed to:

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Allen Ruby: [e-mail], [e-mail],
[e-mail], [e-mail], [e-mail],
[e-mail]

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Benjamin Ross Lemke: [e-mail], [e-mail]

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Chandra Sophia Snyder: [e-mail]

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Daniel Harlan Fingerman: [e-mail], [e-mail], [e-mail],
[e-mail]

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Ian Ballon: [e-mail], [e-mail]
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Kathryn G. Spelman: [e-mail], [e-mail], [e-mail]
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Lisa Christine McCurdy: [e-mail], [e-mail]

For the Northern District of California

United States District Court

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Lori Chang: [e-mail], [e-mail]
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Wendy Michelle Mantell: [e-mail], [e-mail]
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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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