Redbox Automated Retail LLC v. Xpress Retail LLC

Filing 85

MEMORANDUM Opinion and Order written by the Honorable Gary Feinerman on 2/20/2018.Mailed notice.(jlj, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
REDBOX AUTOMATED RETAIL, LLC,
Plaintiff/Counter-Defendant,
vs.
XPRESS RETAIL LLC,
Defendant/Counter-Plaintiff.

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17 C 5596
Judge Gary Feinerman

MEMORANDUM OPINION AND ORDER
Redbox Automated Retail, LLC brought this suit against Xpress Retail LLC
(“DVDXpress”), alleging trademark infringement and false advertising in violation of the
Lanham Act, 15 U.S.C. § 1051 et seq., and Illinois law. Doc. 1. DVDXpress answered, asserted
nine affirmative defenses, and brought two counterclaims, including one under Illinois law for
tortious interference with contract. Doc. 29. Redbox moves to dismiss that counterclaim under
Federal Rule of Civil Procedure 12(b)(6) and to strike five of the affirmative defenses under Rule
12(f). Doc. 39. The motion to dismiss is denied, and the motion to strike is granted in part and
denied in part.
Background
In considering Redbox’s Rule 12(b)(6) and 12(f) motions, the court assumes the truth of
the counterclaim’s and affirmative defenses’ factual allegations, though not their legal
conclusions, and draws all reasonable inferences in DVDXpress’s favor. See Smoke Shop, LLC
v. United States, 761 F.3d 779, 785 (7th Cir. 2014); United States v. 416.81 Acres of Land, 514
F.2d 627, 631 (7th Cir. 1975) (Clark, J.). The court must also consider “documents attached to
the [counterclaim and affirmative defenses], documents that are critical to the [counterclaim and

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affirmative defenses] and referred to in [them], and information that is subject to proper judicial
notice,” along with additional facts set forth in DVDXpress’s brief opposing dismissal, so long
as those facts “are consistent with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714
F.3d 1017, 1020 (7th Cir. 2013) (internal quotation marks omitted). As required on Rule
12(b)(6) and 12(f) motions, the facts are set forth as favorably to DVDXpress as those materials
allow. See Meade v. Moraine Valley Cmty. Coll., 770 F.3d 680, 682 (7th Cir. 2014). In setting
forth those facts, the court does not vouch for their accuracy. See Jay E. Hayden Found. v. First
Neighbor Bank, N.A., 610 F.3d 382, 384 (7th Cir. 2010).
Redbox and DVDXpress both operate DVD rental services through automated vending
machines called kiosks. Doc. 29 at pp. 1-2, ¶ 1. According to Redbox, the vast majority of its
kiosks feature the word mark REDBOX and are branded with distinctive red coloring on their
face and sides. Doc. 1 at ¶ 18. Redbox has registered trademarks for its word mark and for the
kiosks’ color scheme. Docs. 1-1, 1-2, 1-3, 1-4, 1-5.
Redbox filed this suit on July 31, 2017. Doc. 1. The complaint alleges that DVDXpress
recently began using kiosks that are entirely red in color, making them confusingly similar to
Redbox’s kiosks and infringing its registered trademarks and common law trade dress rights, in
violation of 15 U.S.C. §§ 1114(1) and 1125(a), respectively. Id. at ¶¶ 34-35, 72-98. Redbox
further alleges that DVDXpress’s use of red kiosks violates the Illinois Uniform Deceptive Trade
Practices Act (“UDTPA”), 815 ILCS 510/2. Doc. 1 at ¶¶ 126-138. Redbox also alleges that
DVDXpress infringed its word mark, in violation of 15 U.S.C. § 1114(1), by including the term
“redbox” in the metadata for its website, in an attempt to capture search requests at Redbox’s
expense. Id. at ¶¶ 69-70, 105. Finally, Redbox alleges that DVDXpress falsely advertises that
customers can rent movies through DVDXpress twenty-eight days before the same movies

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become available through Redbox, in violation of the Lanham Act, 15 U.S.C. § 1125(a), the
UDTPA, and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS
505/1 et seq. Doc. 1 at ¶¶ 42-63, 114-144.
DVDXpress’s counterclaim alleges that Redbox tortiously interfered with DVDXpress’s
contractual relationship with Weis Markets, Inc., a retail grocery chain. Doc. 29 at pp. 5760, ¶¶ 26-61. According to DVDXpress, Weis signed a DVD Rental Kiosk Agreement with
DVDXpress in July 2017 and accordingly asked Redbox to remove its kiosks from Weis’s
stores. Id. at pp. 58-59, ¶¶ 41, 45. The agreement provided that DVDXpress would be Weis’s
“exclusive provider of DVD rental kiosks” and would “install its kiosks in stores currently
containing Redbox kiosks, or other active movie kiosks by September 25.” Doc. 47 at 8. On
August 4, 2017, four days after Redbox filed this suit, Redbox’s general counsel, Frederick
Stein, sent a letter to Weis stating that Redbox would not remove its kiosks “on Weis’s requested
schedule.” Doc. 29 at p. 59, ¶¶ 49-50. The letter also stated that Redbox was seeking an
injunction against DVDXpress and that Redbox “would be concerned if more red DVDXpress
kiosks began to appear in the marketplace.” Id. at p. 59, ¶¶ 51-53. Redbox ultimately removed
the last of its kiosks from Weis’s stores in late October 2017, after DVDXpress filed its
counterclaim. Doc. 47 at 8 n.12; Doc. 48 at 3-4.
Discussion
I.

Motion to Dismiss the Tortious Interference Counterclaim
“To state a claim under Illinois law for tortious interference with contract[], a plaintiff

must demonstrate: (1) the existence of a valid and enforceable contract between the plaintiff and
another; (2) the defendant’s awareness of this contractual relation; (3) the defendant’s intentional
and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other,

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caused by the defendant’s wrongful conduct; and (5) damages.” Healy v. Metro. Pier &
Exposition Auth., 804 F.3d 836, 842 (7th Cir. 2015). While “a subsequent breach by the other”
would appear to require an allegation that the tortious interference plaintiff’s contractual
counterparty breached the contract, the breach element also “encompasses the situation in which
the defendant prevents the plaintiff from performing the contract” by making performance
impossible. Havoco of Am., Ltd. v. Sumitomo Corp. of Am., 971 F.2d 1332, 1344 (7th Cir. 1992)
(quoting Scholwin v. Johnson, 498 N.E.2d 249, 255 (Ill. App. 1986)).
Redbox contends that the counterclaim should be dismissed because it fails to allege that
Weis breached its contract with DVDXpress or that Redbox made DVDXpress’s performance
impossible. Doc. 41 at 3-5; Doc. 48 at 2-6. Redbox’s contention fails to persuade. True, the
counterclaim does not explicitly allege that Redbox’s delay in removing its kiosks from Weis’s
stores caused Weis to breach the contract or made it impossible for DVDXpress to perform. But
such an explicit allegation is unnecessary. “[T]he Federal Rules of Civil Procedure … require[]
plaintiffs to plead claims rather than facts corresponding to the elements of a legal theory.”
Chapman v. Yellow Cab Coop., 875 F.3d 846, 848 (7th Cir. 2017). “It is enough to plead a
plausible claim, after which ‘a plaintiff receives the benefit of imagination, so long as the
hypotheses are consistent with the complaint.’” Ibid. (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 563 (2007)). “Because complaints need not identify the applicable law, it is
manifestly inappropriate for a district court to demand that complaints contain all legal elements
(or factors) plus facts corresponding to each.” Ibid. (citations omitted).
It is, at the very least, plausible that the continued presence of Redbox’s kiosks at Weis’s
stores through late October caused Weis to breach the contract or made it impossible for
DVDXpress to perform. DVDXpress identifies two provisions of the contract that allegedly

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were breached. First, by leaving its kiosks in place, Redbox may have caused Weis to breach the
contract’s provision that DVDXpress would be Weis’s “exclusive provider of DVD rental
kiosks.” Doc. 47 at 8. And, second, Redbox may have made it impossible for DVDXpress “to
install its kiosks in stores currently containing Redbox kiosks, or other active movie kiosks by
September 25.” Ibid.
Of course, as Redbox points out, it is theoretically possible that kiosks from different
vendors can coexist in the same store. Doc. 48 at 3. Drawing all inferences in DVDXpress’s
favor, however, it would appear that Weis was transitioning from one “exclusive provider” of
DVD-rental kiosks to another. Doc. 29 at p. 59, ¶ 47; Doc. 47 at 8. Thus, it is plausible that the
Redbox machines already occupied all (or most) available positions for DVD-rental kiosks in
Weis’s stores. If there was nowhere for DVDXpress to put its machines other than the locations
occupied by Redbox’s kiosks, then the continued presence of Redbox’s kiosks after September
25 made it impossible for DVDXpress to install its kiosks as the contract required. This would
be true impossibility—there was simply nowhere for DVDXpress to install its kiosks—not mere
“impossibility of performance as intended.” PECO Pallet, Inc. v. Nw. Pallet Supply Co., 2016
WL 5405107, at *13 (N.D. Ill. Sept. 28, 2016) (internal quotation marks omitted).
Redbox also suggests that it cannot plausibly be inferred from the counterclaim’s
allegations that Redbox’s conduct was wrongful or unjustified. Doc. 48 at 5. In support, Redbox
emphasizes that DVDXpress alleges that Stein informed Weis that Redbox “would not remove
[its] DVD rental kiosks on Weis’s requested schedule,” not that Redbox refused to ever remove
its kiosks. Doc. 29 at p. 59, ¶ 50. But the fact that Stein promised delay rather than total
noncompliance does not make it implausible that Redbox’s action was motivated by a desire to
harm DVDXpress. Intentional delay can be just as malicious as outright refusal. And in any

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event, the counterclaim alleges facts—specifically, that Stein informed Weis that Redbox was
seeking an injunction against DVDXpress and “would be concerned if more red DVDXpress
kiosks began to appear in the marketplace,” id. at p. 59, ¶ 53—indicating that Redbox’s failure to
comply with Weis’s requested schedule stemmed not from some independent logistical
difficulty, but rather from Redbox’s desire to stop (or at least slow) the expansion of
DVDXpress’s business.
For these reasons, the tortious interference counterclaim survives dismissal.
II.

Affirmative Defenses
Under Rule 12(f), a court may “strike from a pleading an insufficient defense or any

redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). “Affirmative
defenses will be stricken only when they are insufficient on the face of the pleadings.” Heller
Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989).
A.

Acquiescence

The second affirmative defense alleges that Redbox’s trademark claims are barred by the
acquiescence doctrine. Doc. 29 at p. 48, ¶ 4. “[A]cquiescence is an equitable doctrine that
permits the court to deny relief in an action for trademark infringement if the evidence shows
that the owner of the mark has, through its words or conduct, conveyed his consent to the
defendant’s use of the mark.” Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 935, 940 (7th Cir.
2016). Redbox argues that DVDXpress’s acquiescence affirmative defense is deficient because
it fails “to plead active consent.” Doc. 41 at 5.
Again, parties need not “plead … facts corresponding to the elements of a legal theory.”
Chapman, 875 F.3d at 848. And according to DVDXpress, Redbox has been aware since 2002
of DVDXpress’s use of the color red on its kiosks. Doc. 29 at pp. 46-47, ¶ 1. At the latest,

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DVDXpress alleges, Redbox should have known of DVDXpress’s use of red kiosks by 2007,
when DVDXpress and Redbox were temporarily merged under then-parent company Coinstar,
Inc. Ibid. One can reasonably infer that, while the two companies were merged, Redbox
affirmatively approved DVDXpress’s use of the red color scheme on its kiosks. That plausible
scenario is sufficient for the acquiescence defense to survive at the pleading stage.
B.

Secondary Meaning

The fourth affirmative defense, directed at Redbox’s claim that DVDXpress’s red kiosks
infringe Redbox’s trademark and trade dress rights, alleges that Redbox’s use of the color red
lacks secondary meaning. Doc. 29 at p. 49, ¶ 7. Redbox argues that this defense simply disputes
the merits of Redbox’s infringement claim and should therefore be stricken as redundant. Doc.
41 at 6.
The court has “considerable discretion” when ruling on a motion to strike matter as
redundant, immaterial, impertinent, or scandalous. See FDIC v. Giannoulias, 918 F. Supp. 2d
768, 771 (N.D. Ill. 2013) (quoting 5C Charles A. Wright & Arthur R. Miller, Federal Practice &
Procedure § 1382 (3d ed. 2004)). As a general rule, such motions should be denied “unless the
challenged allegations … may cause some form of significant prejudice to one or more of the
parties.” Ibid. (quoting Wright & Miller, supra, § 1382). Redbox identifies no prejudice caused
by the allegedly redundant secondary meaning defense. To the contrary, as DVDXpress points
out, the defense puts Redbox “on notice” of DVDXpress’s argument. Doc. 47 at 11.
Accordingly, Redbox’s motion to strike the secondary meaning defense is denied.
C.

Fair Use

The sixth affirmative defense alleges that, to the extent DVDXpress uses any valid
trademark owned by Redbox, DVDXpress is protected from liability by the fair use doctrine.

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Doc. 29 at p. 50, ¶ 9. In a trademark suit, the fair use defense is available to a defendant whose
“use of the name, term, or device charged to be an infringement is a use, otherwise than as a
mark, … of a term or device which is descriptive of and used fairly and in good faith only to
describe the goods or services of such party.” 15 U.S.C. § 1115(b)(4); see KP Permanent MakeUp, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004).
Redbox argues that DVDXpress’s fair use defense should be stricken as insufficient. In
so arguing, Redbox does not submit that the fair use defense is incompatible with the pleaded
facts, just that it is “unsupported by facts.” Doc. 41 at 6 (emphasis added). But, for a third time,
parties need not “plead … facts corresponding to the elements of a legal theory.” Chapman, 875
F.3d at 848. It is plausible that, when DVDXpress included the term “redbox” in the metadata
for its website, Doc. 1 at ¶¶ 69-70, it did so “fairly and in good faith … to describe” its own
kiosks, 15 U.S.C. § 1115(b)(4). Redbox’s motion to strike the fair use defense is therefore
denied.
D.

Unclean Hands

The seventh affirmative defense alleges that Redbox’s claims are barred, in whole or in
part, by the unclean hands doctrine because Redbox itself has engaged in deceptive advertising
by falsely promising “no late fees” and Blu-Ray quality discs, and by falsely asserting that
certain DVDs would be available at Redbox kiosks on their release dates. Doc. 29 at p. 50, ¶ 10.
Redbox argues that this defense should be stricken because the conduct of which DVDXpress
complains is not sufficiently related to the subject matter of this lawsuit. Doc. 41 at 7-10.
“The doctrine of ‘unclean hands’ … means that equitable relief will be refused if it would
give the plaintiff a wrongful gain.” Scheiber v. Dolby Labs., Inc., 293 F.3d 1014, 1021 (7th Cir.
2002). The equivalent defense for an action at law is in pari delicto. See Schlueter v. Latek, 683

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F.3d 350, 355 (7th Cir. 2012) (“When … the plaintiff is asking for equitable relief, the in pari
delicto defense is referred to as the unclean-hands defense. But the label doesn’t matter and the
doctrines were equated in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 360-61
(1995) … .”). “Properly applied, the maxim is to prevent ‘a wrongdoer from enjoying the fruits
of his transgression.’” Packers Trading Co. v. CFTC, 972 F.2d 144, 149 (7th Cir. 1992)
(quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 815 (1945));
see also Williams Elec. Games, Inc. v. Garrity, 366 F.3d 569, 574 (7th Cir. 2004) (“The defense
of in pari delicto is intended for situations in which the victim is a participant in the misconduct
giving rise to his claim.”); Jackson v. Bd. of Election Comm’rs, 975 N.E.2d 583, 590 (Ill. 2012)
(“[The doctrine] is based on the principle that litigants should not be permitted to enlist the aid of
a court of equity to further their fraudulent or unlawful purposes or take advantage of their own
wrongdoing.”).
Significantly for present purposes, the unclean hands doctrine applies only “to one tainted
with inequitableness or bad faith relative to the matter in which he seeks relief.” Packers
Trading Co., 972 F.2d at 148 (quoting Precision Instrument Mfg., 324 U.S. at 814) (emphasis
added); see also Wolfram P’ship, Ltd. v. LaSalle Nat’l Bank, 765 N.E.2d 1012, 1024 (Ill. App.
2001) (noting that the doctrine applies to “a party who has been guilty of misconduct amounting
to fraud or bad faith connected to the subject matter of the litigation”). For the purposes of an
unclean hands defense, a plaintiff’s misdeed is considered unrelated to the litigation’s subject
matter “when the right for which the plaintiff seeks protection in the injunction suit did not
accrue to him because of the misdeed.” Restatement (Second) of Torts § 940, cmt. c (1979); see
also Republic Molding Corp. v. B.W. Photo Utils., 319 F.2d 347, 350 (9th Cir. 1963) (“Unless
the secondary meaning was acquired by virtue of Republic’s misrepresentations, we find no

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significant connection between that misrepresentation and Republic’s asserted right to be free
from unfair competition.”).
It also bears mention that the unclean hands defense is disfavored where a plaintiff seeks
to enforce laws, such as a false advertising prohibition, that protect the public. See McKennon,
513 U.S. at 360 (noting that “[w]e have rejected the unclean hands defense where a private suit
serves important public purposes,” as in antitrust suits) (internal quotation marks omitted);
Republic Molding, 319 F.2d at 350 (“In the interests of right and justice the court should not
automatically condone the defendant’s infractions because the plaintiff is also blameworthy,
thereby leaving two wrongs unremedied and increasing the injury to the public.”); J. Thomas
McCarthy, 6 McCarthy on Trademarks & Unfair Competition § 31:53 (5th ed.) (“[W]here the
law invoked by plaintiff is really for the protection of the public, unclean hands is not a defense.
That is, if the evidence shows that plaintiff is engaging in inequitable practices, but defendant is
also guilty of the unfair competition charged, an injunction should be granted … .”). And the
defense is particularly disfavored where the defendant could challenge the plaintiff’s conduct
through a counterclaim or separate suit. See Restatement (Third) of Unfair Competition § 32
(1995) (“If a failure to enjoin the defendant’s infringement would subject the public to a
significant risk of harm, even substantial misconduct by the plaintiff will not preclude an
injunction, particularly when the plaintiff’s misconduct can be challenged directly through a
counterclaim or an independent action.”).
As noted, DVDXpress identifies three misdeeds by Redbox as grounds for its unclean
hands defense: (1) falsely promising not to charge late fees; (2) falsely promising to provide
“Blu-Ray quality discs”; and (3) falsely asserting that certain DVDs would be available in
Redbox kiosks on their release dates. Doc. 29 at p. 50, ¶ 10. The first two clearly have nothing

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to do with the allegedly false advertising at issue in this case: DVDXpress’s assertions that its
kiosks had certain films available twenty-eight days before Redbox.
The third—Redbox’s allegedly false assertions that its kiosks had certain DVDs available
on their release dates—is closer to the mark, but still misses. Those false assertions are not
sufficiently related to the subject matter of this litigation because they did not help Redbox
acquire the right (to enjoin DVDXpress’s assertions that its kiosks have certain movies twentyeight days before Redbox) that it seeks to enforce here. See Republic Molding, 319 F.2d at 350
(rejecting an unclean hands defense because the plaintiff’s claim was not “acquired by virtue of
[its] misrepresentations,” leaving “no significant connection between that misrepresentation and
[the plaintiff’s] asserted right”). DVDXpress’s allegedly false advertising was completely
independent of Redbox’s. Redbox’s alleged misrepresentations about the dates that certain
DVDs became available at its kiosks did not force DVDXpress to respond by (allegedly) falsely
advertising that its own kiosks have many DVDs twenty-eight days before Redbox’s kiosks do.
If DVDXpress felt the need to respond to Redbox’s misrepresentations, it should have corrected
Redbox’s claims through truthful advertising and a Lanham Act suit or counterclaim, not by
engaging in its own allegedly retaliatory false advertising. See Campagnolo S.R.L. v. Full Speed
Ahead, Inc., 258 F.R.D. 663, 666-67 (W.D. Wash. 2009) (striking an unclean hands defense
based on the plaintiff’s past misrepresentations about “the weight of its own crankset,” where the
plaintiff accused the defendant of misrepresenting “the stiffness-to-weight ratio of [plaintiff’s]
crankset”).
DVDXpress incorrectly argues that Packers Trading Co. establishes that the unclean
hands defense “is not restricted to conduct that occurred in connection with the very transaction
being considered in this instance.” Doc. 47 at 15 (internal quotation marks omitted). In

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addressing the Supreme Court’s decision in Precision Instrument Manufacturing, the Seventh
Circuit in Packers Trading noted that, “[p]roperly applied, the maxim is to prevent ‘a wrongdoer
from enjoying the fruits of his transgression,’ and the [Supreme] Court adds in some cases also
to avert injury to the public.” 972 F.2d at 149 (quoting Precision Instrument Mfg., 324 U.S. at
815) (emphasis added). DVDXpress reads the italicized phrase as creating an additional,
independent basis for the unclean hands defense. But this reading is inconsistent with Precision
Instrument Manufacturing, which observed that “if an equity court properly uses the maxim to
withhold its assistance … it not only prevents a wrongdoer from enjoying the fruits of his
transgression but averts an injury to the public.” 324 U.S. at 815 (emphasis added). Thus, the
Supreme Court in Precision Instrument Manufacturing and Seventh Circuit in Packers Trading
merely held that, if a court properly upholds an unclean hands defense because the plaintiff
acquired the right it asserts through misconduct, the court’s decision will also have the benefit of
averting an injury to the public. In so holding, the courts did not say that free-floating equitable
considerations about the public interest and the need to punish past misconduct can give rise to
an unclean hands defense. In fact, the Supreme Court said the opposite: “[E]quity does not
demand that its suitors shall have led blameless lives” only that “they shall have acted fairly and
without fraud or deceit as to the controversy in issue.” Precision Instrument Mfg., 324 U.S. at
814-15 (citations and internal quotation marks omitted).
DVDXpress does cite two district court opinions—Stokely-Van Camp Inc. v. Coca-Cola
Co., 646 F. Supp. 2d 510 (S.D.N.Y. 2009), and Procter & Gamble Co. v. Ultreo, Inc., 574 F.
Supp. 2d 339 (S.D.N.Y. 2008)—that recognize an unclean hands defense where the plaintiff did
not acquire the rights asserted by virtue of its alleged misconduct. In both cases, the plaintiff
companies had made claims in advertising that were “virtually identical” to claims later made by

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their competitors, which the plaintiffs then alleged to constitute false advertising under the
Lanham Act. See Stokely-Van Camp, 646 F. Supp. 2d at 533; Procter & Gamble, 574 F. Supp.
2d at 355. In both decisions, the courts denied preliminary injunctions in part due to the
plaintiffs’ unclean hands. See Stokely-Van Camp, 646 F. Supp.2d at 532-34; Procter & Gamble,
574 F. Supp. 2d at 353-56.
This court respectfully disagrees with that aspect of those decisions. No doubt, there is
obvious hypocrisy in one company suing a competitor for doing the very same thing it did in the
past (and got away with). But as objectionable as such opportunism might be, it does not
warrant denying an otherwise merited injunction or other relief, especially when the relief would
end a deceptive practice that is harmful to the public. The unclean hands doctrine prevents
plaintiffs from profiting from their own misconduct; it does not prevent them from bringing
claims against other parties who have independently engaged in similar misconduct. Because
Redbox’s alleged misconduct, like the alleged misconduct of the plaintiffs in Stokely-Van Camp
and Procter & Gamble, was independent of and in no way caused DVDXpress’s alleged
misconduct, the unclean hands doctrine should not be an obstacle to relief.
Even if Redbox’s alleged false advertising factored into the court’s analysis, DVDXpress
does not explain why equity would favor an unclean hands defense in this particular case. If
anything, assuming that Redbox’s claims have merit, upholding the defense would “leav[e] two
wrongs unremedied and increase[e] the injury to the public.” Republic Molding, 319 F.2d at
350. That outcome would be especially perverse when Redbox’s wrongs could potentially be
remedied if DVDXpress simply brought its own false advertising claim against Redbox.
In sum, none of the alleged Redbox misconduct identified by DVDXpress is sufficiently
related to the subject matter of this litigation to support an unclean hands defense. Redbox’s

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motion to strike the unclean hands defense is therefore granted. This disposition renders it
unnecessary to address Redbox’s other arguments for striking the defense.
E.

Abandonment

The ninth affirmative defense alleges that Redbox’s trademark claims are barred by the
abandonment doctrine. Doc. 29 at p. 51, ¶ 12. “[U]nder 15 U.S.C. § 1127, abandonment of a
mark is an affirmative defense to a trademark infringement action.” Rust Env’t & Infrastructure,
Inc. v. Teunissen, 131 F.3d 1210, 1214 (7th Cir. 1997). A mark is deemed abandoned “[w]hen
its use has been discontinued with intent not to resume such use.” 15 U.S.C. § 1127.
To ground its abandonment defense, DVDXpress alleges only that “Redbox has
discontinued its use of the color red on its kiosks in the ordinary course of business, at least, with
regard to certain locations, namely at Walmart retail stores,” and that “Redbox has allowed a
number of their kiosks to fade to a color that could better be described as pink.” Doc. 29 at
p. 51, ¶ 12. The fact that Redbox may have some blue and pink kiosks does not in any way
suggest that it has discontinued use of the red kiosks covered by its trademark. In fact, in the
same picture that DVDXpress uses to demonstrate that some of Redbox’s kiosks have faded to
pink, a red kiosk sits right alongside the “pink” one. Ibid. Redbox’s motion to strike the
abandonment defense is granted.
Conclusion
Redbox’s motion to dismiss the tortious interference counterclaim is denied. Redbox’s
motion to strike is granted only as to DVDXpress’s seventh (unclean hands) and ninth
(abandonment) affirmative defenses, which are stricken. By agreement, Doc. 47 at 3 n.2,
DVDXpress’s reservation of defenses, Doc. 29 at p. 52, is also stricken. DVDXpress has until
March 13, 2018 to replead its stricken affirmative defenses. Cf. Runnion ex rel. Runnion v. Girl

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Scouts of Greater Chi. & Nw. Ind., 786 F.3d 510, 519 (7th Cir. 2015) (“Ordinarily, … a plaintiff
whose original complaint has been dismissed under Rule 12(b)(6) should be given at least one
opportunity to try to amend her complaint before the entire action is dismissed.”).

February 20, 2018
United States District Judge

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