Buffalo Wild Wings, Inc. v. Buffalo Wings & Rings, LLC et al

Filing 252

ORDER OVERRULING Buffalo Wings & Rings' objections [Docket No. 249] and ADOPTING the REPORT AND RECOMMENDATION of the Magistrate Judge 246 . Accordingly, Buffalo Wild Wings' 176 Motion to Strike Pleading is GRANTED. (Written Opinion). Signed by Judge John R. Tunheim on June 8, 2011. (HAM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
BUFFALO WILD WINGS, INC., a
Minnesota corporation,
Plaintiff/Counter Defendant,
v.

Civil No. 09-1426 (JRT/SER)

ORDER AFFIRMING THE REPORT
AND RECOMMENDATION OF THE
MAGISTRATE JUDGE DATED
MARCH 21, 2011

BUFFALO WINGS & RINGS, also known
as Buffalo Wings & Rings, LLC,
Defendant/Counter Claimant.

Lora Mitchell Friedemann, Laura L. Myers, and Ted C. Koshiol,
FREDRIKSON & BYRON, PA, 200 South Sixth Street, Suite 4000,
Minneapolis, MN 55402, for plaintiff/counter defendant.
Jonathan C. Marquet, Kevin P. Hickey, and Nicole A. Delaney,
BASSFORD REMELE, PA, 33 South Sixth Street, Suite 3800,
Minneapolis, MN 55402, for defendant/counter claimant.

This matter is before the Court on defendant/counter-claimant Buffalo Wings &
Rings, LLC’s (“BWR”) objections to the March 21, 2011 Report and Recommendation
(“R&R”) of United States Magistrate Judge Steven E. Rau recommending that the Court
grant plaintiff/counter-defendant Buffalo Wild Wings, Inc.’s (“BWW”) motion to dismiss
or strike BWR’s third counterclaim. (Docket Nos. 176, 246.) BWW and BWR operate
competing national restaurant chains specializing in buffalo-style chicken wings. BWW
alleges that BWR is infringing on BWW’s trademarks and trade dress. After BWW filed
a second amended complaint with leave of the Court, BWR included a new counterclaim

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in its amended answer without seeking leave of the Court. BWW moved to strike the
newly asserted counterclaim.
After conducting a de novo review of those portions of the R&R to which BWR
objects, see 28 U.S.C. § 636(b)(1)(C), D. Minn. L.R. 72.2, the Court concludes that the
second amended complaint did not change the scope or theory of the case so as to
empower BWR to add a new counterclaim without leave. The Court therefore overrules
the objections, adopts the R&R, and strikes the counterclaim.

BACKGROUND
BWW’s initial complaint included numerous claims, including one requesting the
Court to direct the United States Patent and Trademark Office (“USPTO”) to refuse
BWR’s application to register certain design marks (“the black and white logos”) it
alleged infringed on BWW’s trademarks. (Compl. ¶¶ 73-78, Docket No. 1.) As an
example of how BWR allegedly emulated BWW’s trade dress, BWR’s initial complaint
included a photograph of one of the black and white logos colored in with a red
background (“the red circle logo”). (Id. ¶ 36.) The parties filed a stipulation with the
USPTO agreeing to resolve their dispute regarding BWR’s trademark applications for the
black and white logos through this litigation.
On August 31, 2009, over two months after BWW filed suit, BWR petitioned the
USPTO to amend its incontestable design mark, U.S. Registration No. 1,567,637 (“the
’637 mark”) to reflect the red circle logo. See 15 U.S.C. § 1057(e) (allowing amendment
of an existing registration). The USPTO approved the application and amended the ’637

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mark on April 6, 2010. On May 21, 2010, BWW sought leave to amend its complaint to
assert a new claim (“Count Six”) requesting the Court to order the USPTO to cancel the
amendment to the ’637 registration. (Docket No. 49.) In its supporting memorandum,
BWW explained that
[t]he parties attempted to agree upon on a stipulation permitting [BWW] to
file its Second Amended Complaint, but were unable to do so. After
months of negotiation, BWR insisted that it should be allowed to assert
new counterclaims after the deadline imposed by the Court’s
scheduling order even though the new claims do not arise out of the
same facts as [BWW’s] new claim. [BWW] could not agree to such a
proposal, and therefore, is required to bring this motion.
(BWW’s Mem. in Support at 2, Docket No. 51 (emphasis added).) BWR opposed
BWW’s motion to amend but did not seek leave to add counterclaims or respond to
BWR’s opposition to its interest in asserting new counterclaims. On August 26, 2010,
the Magistrate Judge1 granted BWW leave to file the second amended complaint,
concluding that since Count Six could not have been brought before the amended
registration was issued, “extraordinary circumstances” justified the delayed filing of
BWW’s motion to amend. (Partial Order at 5, Docket No. 141.)
On September 10, 2010, BWR answered the second amended complaint, adding a
third counterclaim seeking cancellation of two of BWR’s word and design trademarks
featuring its original restaurant name, Buffalo Wild Wings and Weck (“the Weck
registrations”). (Def.’s Answer at 22, Docket No. 146.) According to BWR, BWW
abandoned the Weck registrations. (Id.) BWW moved the Court to dismiss or strike
1

United States Magistrate Judge Susan R. Nelson issued this order. Due to Judge
Nelson’s confirmation as a United States District Court Judge for the District of Minnesota, the
case was subsequently re-assigned to United States Magistrate Judge Rau. (Docket No. 215.)
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BWR’s third counterclaim, and the Magistrate Judge recommended granting the motion.
BWR objects, arguing, among other assertions, that since BWW’s second amended
complaint changed the theory or scope of the case BWR was entitled to assert the third
counterclaim without leave as a matter of right. The Court subsequently issued an order
which, in part, denies summary judgment to BWW and grants summary judgment to
BWR on Count Six. (See Order at 31-35, Docket No. 251.)

ANALYSIS
If a party can no longer file an amended pleading as a matter of course, it must
seek leave of the Court or written consent to amend from the opposing party. Fed. R.
Civ. P. 15(a)(2). BWR asserts that it was permitted to plead the third counterclaim as a
matter of right while BWW argues that BWR was required to request leave of the Court
or obtain BWW’s consent. The Magistrate Judge adopted the rule enunciated in Tralon
Corp. v. Cedarapids, Inc., 966 F. Supp. 812, 832 (N.D. Iowa 1997), aff’d, 205 F.3d 1347
(8th Cir. 2000) (unpublished table decision):
[W]hen a plaintiff files an amended complaint which changes the theory or
scope of the case, the defendant is allowed to plead anew as though it were
the original complaint filed by the Plaintiff. . . . The obvious corollary is
that if an amended complaint does not change the theory or scope of the
case, a [party] must seek leave of court pursuant to Rule 15(a) before it can
amend its answer to assert a counterclaim.
(internal citations and quotation marks omitted). BWR does not object to the Magistrate
Judge’s use of the Tralon standard to determine whether BWR could assert the third
counterclaim as a matter of course, but argues that it was misapplied.

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Specifically, BWR argues that the Magistrate Judge erroneously conflated BWR’s
application for the black and white logos and its ’637 mark, amended to reflect the red
circle logo. Since challenges to a pending application and to an incontestable registered
mark rely on different statutes, and since BWR has a different legal relationship to the
black and white logo than it does to the red circle logo, BWR asserts that Count Six
changed the scope or theory of this case. The red circle logo is, however, a color version
of one of the black and white logos, which BWW has consistently challenged from the
outset of this litigation.

The Magistrate Judge appropriately relied on this fact in

concluding that BWW’s assertion of Count Six, seeking cancellation of the amendment
to the ’637 mark, did not change the theory or scope of the case.
Moreover, as the Magistrate Judge noted, in its original complaint BWW offered
the amended ’637 mark the red circle logo, as an illustration of BWR’s allegedly
infringing behavior. That there are legal differences between a claim for infringement of
a mark in a pending application and for cancellation of an amendment to an existing mark
does not alter the Court’s conclusion that Count Six did not alter the scope or theory of
the case, given BWW’s consistent challenge to the black and white logos and the red
circle logo since the beginning of this litigation.2

2

As noted in the Court’s order disposing of the parties’ summary judgment motions,
prior to this litigation, BWW’s primary concern as expressed in the parties’ discussions was
BWR’s use of yellow as a predominant part of its color scheme and its use of an image of a
buffalo in a circle without any additional distinguishing features. (See Order at 7, Docket No.
251.) BWR’s position since filing suit, however, has always included a challenge to the red
circle logo.
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BWR asserts that Count Six expands the theory or scope of the case because it
marks the first time BWW is attacking trademark registration rights already held by
BWR. As the Magistrate Judge explained, and as the parties’ summary judgment briefs
made clear, Count Six seeks only to disallow the amendment to the ’637 mark. (Second
Am. Compl. ¶¶ 93-99, Docket No. 143; BWW’s Mem. in Supp., Docket No. 152; R&R
at 11, Docket No. 246.) A federal court may, in an action involving a registered mark,
“order the cancelation of registrations, in whole or in part, . . . and otherwise rectify the
register with respect to the registrations of any party to the action.” 15 U.S.C. § 1119.
The Court has denied summary judgment to BWW and granted summary judgment to
BWR on Count Six, for the reasons explained in the Court’s Order. (See Order at 31-35,
Docket No. 251.) Had the Court granted summary judgment to BWW on that claim,
however, the result would have been only the cancellation of the amendment made during
the pendency of this action; BWR’s rights in the original ’637 mark as it existed when
this case began would not have been disrupted. As the Magistrate Judge stated, Count
Six sought to undo changes BWR made to its registered trademark while this litigation
was pending so as to put the parties in the same position they were in when BWW filed
suit. As such, Count Six did not change the scope of theory of the case.
In addition, the Court agrees with the Magistrate Judge’s conclusion that allowing
BWR to assert the third counterclaim at this stage of the litigation would circumvent the
pretrial scheduling order and the order granting BWW’s motion to amend.

BWR

expressed interest in asserting its new counterclaim as early as April 2010. BWR refused
to stipulate to the amendments because BWW would not agree to allow BWR to add the
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third counterclaim, compelling BWW to file a motion to amend. Yet BWR did not raise
the issue of the third counterclaim with the Court in the context of the motion to amend,
or seek leave to amend at any time.3
Finally, BWR argues that its third counterclaim challenging the Weck registrations
are responsive to Count Six. Rule 15 allows party to plead, as a matter of right, “in
response to an amended pleading . . . .” Fed. R. Civ. P. 15 advisory committee’s note,
2009 Amendments.

According to BWR, if BWW were to succeed on its cancellation

claim and assert priority of use based on the original Weck registrations, it would be
compelled to assert a counterclaim challenging the Weck registrations as abandoned.
See, e.g., Ultratan Suntanning Ctrs. Inc. v. Ultra Tan Int’l AB, 49 U.S.P.Q.2d (BNA)
1313, 1998 WL 950640, at *2 (T.T.A.B. 1998) (“[P]rior use need not be shown by an
opposer relying on a registration of its pleaded mark for its pleaded goods or services
unless the applicant counterclaims for cancellation.”). As discussed above, however,
BWW has never sought to cancel BWR’s ’637 mark entirely, only to cancel the
amendment made to the mark during the course of this litigation. BWR’s proposed
challenge to the Weck registrations, therefore, is entirely unrelated to Count Six.

ORDER
Based on the foregoing, and the records, files, and proceedings herein, the Court
OVERRULES Buffalo Wings & Rings’ objections [Docket No. 249] and ADOPTS the
Report and Recommendation of the Magistrate Judge dated March 21, 2011 [Docket
3

BWW, by contrast, sought leave to amend shortly after the USPTO amended the ’637
registration; in other words, as soon as Count Six became viable.
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No. 246]. Accordingly, IT IS HEREBY ORDERED that Buffalo Wild Wings’ Motion
to Dismiss or Strike Third Counterclaim [Docket No. 176] is GRANTED.

DATED: June 8, 2011
at Minneapolis, Minnesota.

___________s/ John R. Tunheim__________
JOHN R. TUNHEIM
United States District Judge

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