Medical Extrusion Technologies, Inc. v. Apollo Medical Extrusion Technologies, Inc.
Filing
11
ORDER denying 5 Defendant's Motion to Dismiss Plaintiff's Complaint. The Court DENIES Apollo's motion to dismiss, finding MET's appeal is not untimely and is not issue-precluded by TTAB's conclusions. (Doc. No. 5-1.) The Court also STAYS the trademark infringement, unfair competition, and unfair trade claims pending the resolution of the Court's ruling on MET's TTAB appeal. Signed by Judge Anthony J. Battaglia on 4/10/2018. (acc)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
SOUTHERN DISTRICT OF CALIFORNIA
10
11
12
MEDICAL EXTRUSION
TECHNOLOGIES, INC., a California
corporation,
13
Case No.: 17-cv-2150-AJB-KSC
ORDER DENYING DEFENDANT’S
MOTION TO DISMISS
PLAINTIFF’S COMPLAINT
(Doc. No. 5)
Plaintiff,
14
v.
15
APOLLO MEDICAL EXTRUSION
TECHNOLOGIES, INC., a Delaware
corporation,
16
17
Defendant.
18
19
Before the Court is defendant Apollo Medical Extrusion Technologies, Inc.’s motion
20
to dismiss plaintiff Medical Extrusion Technologies, Inc.’s (“MET”) complaint.
21
(Doc. No. 5.) MET opposes the motion. (Doc. No. 8.) For the reasons discussed herein, the
22
Court DENIES the motion.
23
I.
BACKGROUND
24
The following facts are taken from MET’s complaint, (Doc. No. 1), and are
25
construed as true for the limited purpose of resolving the instant motion. See Brown v. Elec.
26
Arts, Inc., 724 F.3d 1235, 1247 (9th Cir. 2013) (reasoning that when considering a motion
27
to dismiss, courts presume the facts alleged by the plaintiff are true). Here, MET filed for
28
registration of the mark “Medical Extrusion Technologies” in 2013, which Apollo opposed.
1
17-cv-2150-AJB-KSC
1
(Doc. No. 1 ¶¶ 6–7.) On August 18, 2017, the Trademark Trial and Appeal Board
2
(“TTAB”) issued a final ruling, refusing to register the mark. (Doc. No. 1-2 at 29–30.)
3
Notwithstanding the TTAB decision, MET owns a trademark on its logo, which displays
4
the mark. (Doc. No. 1 ¶ 10.) A typical representation of Applicant’s mark is shown below:
5
6
7
8
9
10
11
(Doc. No. 1-2 at 15.)
Without MET’s consent, beginning in 2014, Apollo used the mark as part of its name
(Apollo Medical Extrusion Technologies) and thus, in its advertising. (Doc. No. 1 ¶¶ 16–
12
17.) Further, Apollo’s logo, (Doc. No. 1-4 at 2, shown below), displays the text “Apollo
13
Medical Extrusion Technologies” to the left of three tubes surrounding a globe; MET’s
14
logo, (Doc. No. 1-3 at 2), displays the text “MET Medical Extrusion Technologies” to the
15
left of three tubes. MET demanded that Apollo cease and desist use of the mark and its
16
logo, and in response, Apollo began referring to itself as simply “Apollo Medical
17
Extrusion” at trade shows, on its website, and on social media. (Doc. No. 1 ¶ 21.) However,
18
in the latter half of 2015, Apollo resumed calling itself “Apollo Medical Extrusion
19
Technologies” and using its 2014 logo. (Id. ¶ 27.) An example of the allegedly confusing
20
logo is shown below:
21
22
23
24
25
26
(Doc. No. 1-4 at 2.)
27
MET filed its complaint on October 19, 2017, (Doc. No. 1), seeking de novo review
28
of the August 18, 2017 TTAB decision, (Doc. No. 1-2). Additionally, MET alleges
2
17-cv-2150-AJB-KSC
1
trademark infringement and unfair competition under federal law, and unfair trade
2
practices under California law. (Doc. No. 1.)
3
II.
LEGAL STANDARDS
4
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal
5
sufficiency of a plaintiff’s complaint; it allows a court to dismiss a complaint upon a finding
6
that the plaintiff has failed to state a claim upon which relief may be granted. See Navarro
7
v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
8
“The court may dismiss a complaint as a matter of law for (1) lack of a cognizable
9
legal theory or (2) insufficient facts under a cognizable legal claim.” SmileCare Dental
10
Grp. v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (internal quotations
11
omitted). However, a complaint will survive a motion to dismiss if it contains “enough
12
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
13
U.S. 544, 570 (2007). In making this determination, a court reviews the contents of the
14
complaint, accepting all factual allegations as true and drawing all reasonable inferences
15
in favor of the nonmoving party. See Cedars-Sinai Med. Ctr. v. Nat’l League of
16
Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007).
17
Notwithstanding this deference, the reviewing court need not accept legal
18
conclusions as true. See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009) (reasoning that
19
allegations of material fact are accepted as true and reviewed for plausibility, while
20
conclusory statements are ignored); Twombly, 550 U.S. at 555 (reasoning that a complaint
21
does not need detailed factual allegations, but “a plaintiff’s obligation to provide the
22
grounds of his entitlement to relief requires more than labels and conclusions, and a
23
formulaic recitation of the elements of a cause of action will not do.”); Pareto v. FDIC,
24
139 F.3d 696, 699 (9th Cir. 1998) (reasoning that “conclusory allegations of law and
25
unwarranted inferences are not sufficient to defeat a motion to dismiss.”).
26
However, “[w]hen there are well-pleaded factual allegations, a court should assume
27
their veracity and then determine whether they plausibly give rise to an entitlement to
28
relief.” Iqbal, 556 U.S. at 664.
3
17-cv-2150-AJB-KSC
1
III.
DISCUSSION
2
MET seeks de novo review of TTAB’s decision refusing to register the mark.
3
(Doc. No. 1 ¶ 1.) Further, MET alleges two federal causes of action and one state law claim.
4
(Id.) Apollo seeks to dismiss the appeal and each of the other claims, arguing in each
5
instance that MET did not state a claim upon which relief can be granted. (Doc. No. 5-
6
1 at 1–2.) Since Apollo’s arguments for dismissing the federal and state law claims are
7
predicated on dismissing the appeal, the Court will first examine whether MET adequately
8
sought de novo review of the TTAB decision, and then will examine the remaining claims.
9
A. MET ADEQUATELY PLEADS ITS REQUEST FOR DE NOVO REVIEW
10
OF THE TTAB DECISION
11
Apollo contends that MET’s appeal of the TTAB decision should be dismissed
12
because MET failed to file its complaint within two calendar months of the TTAB decision,
13
and thus the appeal is time-barred. (Doc. No. 5-1 at 1.) MET argues that the appeal should
14
survive this motion to dismiss because the time limit is 63 days, not two calendar months.
15
(Doc. No. 8 at 2.)
16
“After the TTAB issues a registration decision, a party ‘who is dissatisfied with the
17
decision’ may either appeal to the Federal Circuit or file a civil action in district court
18
seeking review.” B&B Hardware, Inc. v. Hargis Indus., 135 S. Ct. 1293, 1315 (2015)
19
(citing 15 U.S.C. § 1071(a)(1), (b)(1)). Here, the statute—15 U.S.C. § 1071—lays out
20
broad parameters for such appeals, and the administrative agency—U.S. Patent and
21
Trademark Office (“USPTO”)—promulgates rules and regulations delineating specifics.
22
For example, the statute establishes that the time limit for filing an appeal for de novo
23
review is “not less than sixty days, as the Director appoints[.]” 15 U.S.C. § 1071(b)(1). The
24
USPTO instituted the TTAB Rules of Practice, which clarified that “civil action[s] must
25
be commenced no later than sixty-three (63) days after the date of the final decision of the
26
Trademark Trial and Appeal Board or Director.” 37 C.F.R. § 2.145(d)(3).
27
The discrepancy in Apollo’s argument arises from its use of the rule as it existed
28
prior to October 7, 2016. The USPTO amended the TTAB Rules of Practice at least nine
4
17-cv-2150-AJB-KSC
1
times since its inception in 1982. On October 7, 2016, “[t]he Office also [changed] the
2
times for filing a notice of appeal or commencing a civil action from two months to sixty-
3
three days (i.e., nine weeks) from the date of the final decision of the Board.”
4
Miscellaneous Changes to Trademark Trial and Appeal Board Rules of Practice, 81 Fed.
5
Reg. 69950, 69969 (Oct. 7, 2016). This change was effective as of January 14, 2017. Id. at
6
69988. Thus, though the rule used to delineate two months as the deadline, the rule as it
7
stands today defines a 63 day deadline.
8
Here, the TTAB decision was dated August 18, 2017. (Doc. No. 1-2 at 1.) MET filed
9
its complaint on October 19, 2017. (Doc. No. 1.) In counting the calendar days, MET filed
10
its complaint on the 62nd day. See 37 C.F.R. § 2.145(d)(4)(ii) (stating that “the times
11
specified in this section in days are calendar days”). Thus, the appeal was filed within the
12
statutory and regulatory time limit. Thus, upon a finding that MET sought its de novo
13
review within the applicable time period, the Court DENIES Apollo’s motion to dismiss
14
the appeal as untimely.
15
B. MET’S FEDERAL AND STATE LAW CLAIMS
16
The Court will briefly address MET’s federal and state law claims, each of which
17
Moving Defendants seek to dismiss. Apollo contends that MET’s other claims are
18
precluded by TTAB’s final judgment. (Doc. No. 5-1 at 2.) MET argues that since the TTAB
19
decision is pending appeal, the previous decision does not have preclusive effect.
20
(Doc. No. 8 at 3–4.)
21
The TTAB found that the mark was “highly descriptive” and thus did not have
22
“acquired distinctiveness.” (Doc. No. 1-2 at 29.) Here, issue preclusion would apply when
23
“an issue of fact or law is actually litigated and determined by a valid and final judgment,
24
and the determination is essential to the judgment, the determination is conclusive in a
25
subsequent action. . . .” See B&B Hardware, 135 S. Ct. at 1303 (internal quotations
26
omitted); New Hampshire v. Maine, 532 U.S. 742, 748–49 (2001).
27
However, Apollo’s reliance on B&B’s holding to support its assertion that MET’s
28
claims are issue precluded has been rejected before. See Hanginout, Inc. v. Google, Inc.,
5
17-cv-2150-AJB-KSC
1
Case No.13cv2811 AJB (NLS), 2015 WL 11254689, at *3 (S.D. Cal. June 3, 2015). In
2
rejecting the same argument Apollo makes, the Court stated:
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
The holding of B&B however, is not as far-reaching as Plaintiff
contends. B&B involved the application of issue preclusion in the context of
trademark law and TTAB opposition proceedings. In B&B, the TTAB made
a determination that one party argued should have an issue-preclusive effect
in a related district court proceeding. The Supreme Court recognized that
preclusion was not limited to instances where two courts evaluated the same
issue, and often applied to agency decisions. B&B held that issue preclusion
could apply to decisions of an administrative agency where the ordinary
elements of issue preclusion are met, and the issue adjudicated by the TTAB is
materially the same as that before a district court. Because the TTAB decision
in B&B was not appealed, the Supreme Court resorted to general principles
of issue preclusion in reaching its holding. Plaintiff reads B&B to support the
conclusion that any decision by the TTAB would be binding on issues pending
before this Court. Such reliance neglects to account for the appeal mechanism
available to a party unsatisfied with a TTAB decision.
Id. (internal citations omitted). The Court ultimately held “[r]egardless of how thoroughly
an issue is litigated before the TTAB, if the unsuccessful party appeals the decision,
deference to the TTAB is no longer efficient.” Id. at *4. Thus, this Court continues to hold
that the issues before the Court are not precluded by TTAB’s decision.
However, with that said, MET’s trademark infringement, unfair competition, and
unfair trade allegations should be stayed pending the resolution of the appeal. The
trademark infringement claim, particularly, could become precluded depending on how
this Court rules on the MET’s appeal of TTAB’s decision. In the complaint, MET alleges
Apollo infringed by using both the mark and the logo. (Doc. No. 1 at 6.) Thus, if the Court
affirms TTAB’s decision, MET’s argument that Apollo infringed on the mark would be
precluded. The Ninth Circuit noted that “[i]n the context of district court litigation, this
potential problem [issue preclusion] can be avoided, whether by delaying further
proceedings in the second action pending conclusion of the appeal in the first action . . . .”
Id. at 882–83 (internal quotations omitted).
28
6
17-cv-2150-AJB-KSC
1
Here, the Court will follow the Ninth’s Circuit’s guidance. A court’s power to stay
2
proceedings is incidental to its inherent power to control the disposition of its cases in the
3
interests of efficiency and fairness to the court, counsel, and litigants. Landis v. N. Am. Co.,
4
299 U.S. 248, 254 (1936); see also Single Chip Sys. Corp. v. Intermec IP Corp., 495 F.
5
Supp. 2d 1052, 1057 (S.D. Cal. 2007). A stay may be granted pending the outcome of other
6
legal proceedings related to the case in the interests of judicial economy. Leyva v. Certified
7
Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979). Ordering a stay in this case
8
will “provide for a just determination of the case[] pending before it.” Id. at 864. Thus,
9
MET’s other claims are hereby STAYED pending the outcome of MET’s appeal.
10
IV.
CONCLUSION
11
The Court DENIES Apollo’s motion to dismiss, finding MET’s appeal is not
12
untimely and is not issue-precluded by TTAB’s conclusions. (Doc. No. 5-1.) The Court
13
also STAYS the trademark infringement, unfair competition, and unfair trade claims
14
pending the resolution of the Court’s ruling on MET’s TTAB appeal.
15
IT IS SO ORDERED.
16
17
Dated: April 10, 2018
18
19
20
21
22
23
24
25
26
27
28
7
17-cv-2150-AJB-KSC
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?