The Coin-Tainer Company, LLC v. Pap-R Products Company
3:19-cv-00234
| S.D. Ill. | Mar 3, 2020Background
- Plaintiff Coin-Tainer Company (CT) owns a registered "Coin-Tainer" trademark and common-law rights in its name, logo, likeness, and related marks for coin/paper-currency handling products.
- CT and Pap-R Products (PRP) formed a joint venture, Pap-R-Tainer, LLC (PRT); the venture failed and the parties executed a settlement/agreement.
- The agreement granted PRP/PRT a temporary, exclusive, royalty-free license to use the "Coin-Tainer" name through December 31, 2018, and required PRP/PRT to stop shipping products bearing that name after that date and to update vendors for 2020.
- CT alleges PRP, PRT, and defendant Scott Ware continued to manufacture, market, and ship products bearing the Coin-Tainer mark in 2019 (CT identifies a purchaser, Regent) and thus violated the Lanham Act and breached the agreement (including alleged misuse of GS1/barcode codes and vendor assets).
- Defendants moved to dismiss under Rule 12(b)(6), arguing CT lacks statutory standing under the Lanham Act (assignment-in-gross / loss of goodwill), failed to plead counterfeiting (manufacture vs. shipment timing), and failed to plead breach regarding GS1 codes/vendor assets.
- The court denied the motions, finding CT pleaded sufficient facts to plausibly allege ownership/limited license, post-license manufacture/shipment and counterfeiting, and that the contract is ambiguous enough to support CT’s breach claim regarding GS1/vendor assets.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lanham Act standing/ownership of mark | CT retained ownership and only granted a time-limited license through 12/31/2018 (agreement language quoted). | PRP/PRT contend the mark/goodwill were effectively assigned (assignment-in-gross) and CT lacks statutory standing to sue. | Court: CT plausibly alleged ownership/a limited license (agreement language supports CT); denial of dismissal. |
| Counterfeiting (manufacture vs. shipment timing) | CT alleges defendants manufactured, sold, and shipped goods bearing the mark in 2019 (names buyer Regent). | Defendants: factory overruns manufactured before license expiry are not counterfeit; CT must plausibly allege manufacture after authorization ended, not merely shipment. | Court: CT’s factual allegations (agreement banning shipping after 12/31/2018 and named buyer) make post-license counterfeiting plausible; denial of dismissal. |
| Breach re GS1 codes and vendor assets | CT contends the agreement’s prohibition on use of the name/likeness and requirement to update vendor info implies GS1 codes/vendor assets must be returned/updated; defendants breached by continuing use. | Defendants say the agreement did not expressly transfer or require return of GS1 codes/vendor assets and thus CT cannot show a contractual breach. | Court: Contract terms are ambiguous as to GS1/vendor assets; CT plausibly alleged it retained or regained those assets and therefore pleaded breach sufficiently; denial of dismissal. |
| Pleading sufficiency under Rule 12(b)(6) | CT says it pleaded specific facts (agreement text, post-2018 shipments, named buyer) adequate under Twombly/Iqbal. | Defendants argue CT’s allegations are conclusory and fail to meet the plausibility standard. | Court: Applying Twombly/Iqbal, accepted CT’s factual allegations as sufficient to survive dismissal. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (establishes plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standards—legal conclusions vs. factual allegations)
- Specht v. Google Inc., 747 F.3d 929 (7th Cir. 2014) (statutory standing under trademark law requires ownership)
- Phoenix Ent. Partners v. Rumsey, 829 F.3d 817 (7th Cir. 2016) (elements for trademark infringement: protectable mark and likelihood of confusion)
- All Star Championship Racing, Inc. v. O’Reilly Automotive Stores, Inc., 940 F. Supp. 2d 850 (C.D. Ill. 2013) (discusses factory overrun/manufacture timing in counterfeiting context)
- HyperQuest, Inc. v. N’Site Solutions, Inc., 632 F.3d 377 (7th Cir. 2011) (statutory entitlement to enforce IP is a merits issue resolved under Rule 12(b)(6))
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (acceptance of general factual allegations at pleading stage)
- Avila v. CitiMortgage, Inc., 801 F.3d 777 (7th Cir. 2015) (elements of breach of contract claim)