LEONARD TRUCK & TRAILER INC., v. LEONARD BUILDINGS AND TRUCK ACCESSORIES dba Leonard USA and dba leonardusa.com, et al.
CASE NO. 4:21-cv-2362
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION
JUDGE SARA LIOI
July 14, 2022
This matter is before the Court upon the motion to dismiss filed by defendants Leonard Buildings and Truck Accessories and Leonard Aluminum Utility Buildings, LLC (collectively “Leonard Buildings” or “the Leonard Buildings defendants“).1 (Doc. No. 16; see Doc. No. 16-1 (Memorandum in Support).) Plaintiff Leonard Truck & Trailer Inc. (“Leonard T&T“) has opposed the motion (Doc. No. 24 (Response in Opposition)), and the Leonard Buildings defendants have filed a reply. (Doc. No. 26.) As part of its opposition, Leonard T&T has sought leave to amend its complaint. (See Doc. No. 24 at 5.2) For the reasons that follow, Leonard T&T is granted leave to amend, and Leonard Buildings’ motion to dismiss is denied.
According to the complaint, Leonard T&T is an Ohio-based corporation, established in 1963, that began by selling horses and horse trailers. (Doc. No. 1 (Complaint) ¶¶ 1, 16.) The company expanded its trailer product lines over the years, and today it sells a variety of trailers including “living quarter trailers, enclosed car and cargo trailers, dump trailers, utility and construction trailers, as well as heavy equipment trailers.” (Id. ¶ 17.) In 1999, it opened a megastore in North Jackson, Ohio, wherein it offers a wide selection of “stock trailers, an aftermarket display area in an indoor showroom, a comprehensive trailer parts and service department, plus a custom vinyl graphics department.” (Id. ¶¶ 18-19.)
Leonard T&T began using the mark “Leonard Trailers” in the promotion and sales of its trailers as early as January 1, 1963. (Id. ¶ 23; see Doc. No. 1-1 (Trademark Search).) On October 17, 2017, Leonard T&T caused a federal trademark to be registered on the principal register for “Leonard Trailers” as U.S. Trademark Registration No. 5,309,871. (Id. ¶ 20; see Doc. No. 1-1.) Leonard T&T has “widely and continuously promoted and sold Leonard Trailers® products[,]” and has invested considerable money in marketing and advertising its products under this mark. (Doc. No. 1 ¶¶ 22, 24.)
Leonard Buildings and Truck Accessories is a business entity with its principal place of business in North Carolina and physical locations in North Carolina, South Carolina, Virginia, West Virginia, and Tennessee. (Id. ¶ 2.) Leonard Aluminum Utility Buildings, Inc. is a North Carolina company that is the owner of a registered trademark for “Leonard Buildings & Truck Accessories®.” (Id. ¶ 3; see Doc. No. 16-2 (Trademark) at 2.) The first use of this mark was February 1, 1993. (Doc. No. 16-2 at 2; see Doc. No. 1 ¶ 3.) Together, Leonard Buildings also
On December 18, 2021, Leonard T&T brought suit in federal court raising a single claim of trademark infringement/unfair competition under § 43(a) of the Lanham Act,
Leonard Buildings’ motion to dismiss is grounded in the concept of laches. They argue, generally, that Leonard T&T “has failed to state a claim for trademark infringement even if its factual allegations are presumed true as [Leonard T&T] inexplicably, and without justification, waited well beyond the two-year statutory period to sue.” (Doc. No. 16 at 1.) They seek dismissal of Leonard T&T‘s infringement claim “in its entirety” or, alternatively, leave to engage in “limited, expedited discovery into laches.” (Doc. No. 16-1 at 7.)
The Leonard Buildings defendants request dismissal of the complaint under
The sufficiency of the pleading is tested against the notice pleading requirements of
In deciding a motion to dismiss under Rule 12(b)(6), the Court generally may not consider matters outside of the pleadings without converting the motion into a motion for summary judgment under Rule 56. As the Sixth Circuit has held, however, there are a number of exceptions to this rule. Indeed, it is well settled that, in ruling on a Rule 12 dispositive motion, a district court “may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant‘s motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein.” Bassett v. Nat‘l Collegiate Athletic Ass‘n, 528 F.3d 426, 430 (6th Cir. 2008) (citation omitted); see also Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (court may consider documents that govern a party‘s rights and are necessarily incorporated by reference in the complaint on a motion to dismiss) (citations omitted).
A. The Lanham Act and Laches
The Lanham Act prohibits the “use in commerce of any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services [where] such use is likely to cause confusion, or to cause mistake, or to deceive[.]”
The Leonard Buildings defendants argue that the present trademark infringement complaint should be dismissed because Leonard T&T impermissibly delayed in bringing suit. “The Lanham Act does not include a statute of limitations.” Tandy Corp. v. Malone & Hyde, Inc., 796 F.2d 362, 365 (6th Cir. 1985). Consequently, courts have applied the equitable doctrine of laches to determine whether a Lanham Act claim is barred due to a delay in filing. Id. (collecting cases); see Kehoe Component Sales Inc. v. Best Lighting Prods., Inc., 769 F.3d 576, 584 (6th Cir. 2015) (Because the Lanham Act does not contain a statute of limitations, “determining whether a Lanham Act claim is time-barred depends upon the defendant‘s ability to show that the claim is barred by laches.“) (citing Tandy Corp., 796 F.2d at 365). The Sixth Circuit has defined laches as the “negligent and unintentional failure to protect one‘s rights.” Nartron Corp. v. STMicroelectronics, Inc., 305 F.3d 397, 408 (6th Cir. 2002) (quotation marks and citation omitted). To succeed on the laches defense, a defendant must demonstrate: (1) the
The starting point of the laches analysis is the analogous statute of limitations of the forum statute. Nartron, 305 F.3d at 408. If the lawsuit was filed before the analogous statute of limitations lapsed, there is a strong presumption that the delay in filing was reasonable. Id. If, however, the action was not brought within the period provided by the state statute of limitations, a strong presumption arises that the delay was prejudicial and unreasonable. Id. The forum state in this case is Ohio. In Ohio, Lanham Act claims are analogous to claims for bodily injury or damage to personal property under
Under the doctrine of laches, the period of delay in pursing a Lanham Act claim begins to run when the claimant has “actual or constructive knowledge of the alleged infringing activity.” Kehoe, 769 F.3d at 584. Accordingly, if Leonard T&T had actual or constructive knowledge of the alleged infringing activity prior to December 18, 2019, there would be a presumption in favor of laches; if it did not learn of the alleged infringement until after that date, the presumption would favor a finding that any delay in filing was reasonable. The parties dispute the onset of Leonard T&T‘s knowledge, actual or constructive. At this stage of the proceedings, the factual dispute is fatal to Leonard Buildings’ motion to dismiss.
The doctrine of laches is an affirmative defense and, as such, the Leonard Buildings defendants have the burden of proving it. See Am. Addiction Ctrs., Inc. v. Nat‘l Assoc. of Addiction Treatment Providers, 515 F. Supp. 3d 820, 840 (M.D. Tenn. 2021) (citation omitted). A plaintiff typically need not anticipate or negate an affirmative defense to state a valid claim. See Cataldo v. U.S. Steel Corp., 676 F.3d 542, 547 (6th Cir. 2012) (citations omitted). For this reason, a motion to dismiss, which considers only the allegations in the complaint, is usually an inappropriate vehicle for testing an affirmative defense. See id. This is certainly true for the fact-specific inquiry that surrounds the equitable doctrine of laches. See Am. Addiction Ctrs., 515 F. Supp. 3d at 838 (“The strictures of Rule 12(b)(6), wherein dismissal of the claim is based solely on the complainant‘s pleading, are not readily applicable to a determination of laches“) (citations omitted)); see also Cataldo, 676 F.3d at 547 (Rule 12(b)(6) motion ill-suited to resolve issues involving statutes of limitations). However, when the allegations in the complaint affirmatively show that a claim is time-barred, dismissal under Rule 12(b)(6) is appropriate. Jones v. Bock, 549 U.S. 199, 215 (2007); see Mullin v. Butler, 452 F. Supp. 3d 794, 799 (M.D. Tenn. 2020) (“[c]ourts generally cannot grant motions to dismiss on the basis of an affirmative defense unless the plaintiff has anticipated the defense and explicitly addressed it in the pleadings“) (quotation marks and citations omitted).
Leonard Buildings argue that laches is readily apparent from the allegations in the complaint and the relevant documents appended thereto or incorporated therein. First, they posit that Exhibit 2 to the complaint, a screen shot of their website, reveals that they have been using the mark “Leonard” for “decades, [and they have] been manufacturing and selling trailers since the 1960s under the Leonard brand name[.]” (Doc. No. 16-1 at 11.) Second, they underscore that Leonard T&T had an affirmative duty to police and protect its mark. (Id. at 12 (collecting cases).) Third, they note that the complaint alleges (and, therefore, Leonard T&T concedes) that
Leonard T&T counters by arguing that the infringement alleged in the complaint is the unauthorized use of “Leonard Trailers,” and not the use of a different mark or the mere existence of a competitor in the industry. Indeed, the complaint bears this out. (See Doc. No. 1 ¶¶ 26, 27; see also id. ¶ 37.) Leonard T&T underscores that the complaint is “silent as to when [it] first became are of [Leonard Buildings‘] confusing similar use of ‘Leonard Trailer[s]4.‘” (Doc. No. 24 at 2.) On that note, it argues that it only learned of Leonard Buildings’ use of “Leonard Trailers” when customers started calling complaining about Leonard Buildings’ products. “Importantly, all this activity happened in the last one to two years per Clint Leonard, owner of [Leonard T&T].” (Id. at 5.) Nevertheless, in order to “clear the matter up,” Leonard T&T seeks leave to file an amended complaint that would add the following allegation:
Plaintiff first received actual or constructive notice of the alleged infringement, that is, that the Defendants were using “Leonard Trailer” as a brand identifier during the year 2020 when Plaintiff began to receive online and telephone complaints where Defendants’ customers were mistaking the Plaintiff as the Defendants. It was this actual confusion that alerted the Plaintiff that the Defendants were using “Leonard Trailers.” Admittedly, Plaintiff knew of the
mere existence of the Defendants many years ago but only knew them as “Leonard Buildings and Truck,” and never had any reason to look into their business any further. To be clear, Plaintiff does not allege in this lawsuit that “Leonard Buildings and Truck” is an infringement of the Plaintiff‘s registered trademark. Rather, Plaintiff specifically alleges in this case that the only infringement is the Defendants’ use of “Leonard Trailer,” which Plaintiff only recently became aware of.
(Id. at 5 (footnote omitted).)
The Leonard Buildings defendants object that Leonard T&T relies on facts that are not contained in the pleadings, and further that the practice of incorporating an informal request to amend in an opposition brief is discouraged. (Doc. No. 26 at 7.) Beginning with the latter argument, Rule 15 instructs courts to “freely give leave” to amend.
“However, when[, as here,] a plaintiff describes the new allegations he seeks to include, the court may consider them to determine if leave to amend appears to be appropriate.” Grose v. City of Bartlett, No. 2:20-cv-2307, 2021 WL 7368570, at *2 (W.D. Tenn. Dec. 21, 2021)
Permitting amendment in this instance is especially appropriate as the amendment merely provides additional support for and brings clarity to the initial pleading. As previously observed, Leonard T&T was under no obligation to anticipate the affirmative defense of laches and proactively assert allegations to counter it.6 See, e.g., Randolph v. Congress Collection LLC, No. 20-cv-12146, 2021 WL 364256, at *1-2 (E.D. Mich. Feb. 3, 2021) (allowing implicit motion for leave to amend where facts were set forth with particularity in opposition brief and did not create a new cause of action). Leonard T&T was not, therefore, required to plead the date in which it had actual or constructive knowledge of the allegedly infringing conduct. The proposed amendment merely supplies that date, however unnecessary it was to the pleading, and leave is properly granted. Moreover, even without the amendment, or the new facts offered in the opposition brief, the Court would find, at this stage in the proceedings, that a determination cannot be made as to laches.
Given that both businesses operated in the same industry under similar monikers, Leonard Buildings may well ultimately prevail on a laches defense. The Court cannot, however, reach that conclusion as a matter of law. Leonard Buildings’ motion to dismiss on the basis of laches is denied. If appropriate, the parties may revisit the issue of laches on summary judgment.
B. Expedited Discovery
Alternatively, the Leonard Buildings defendants request that the Court permit the parties to conduct limited discovery on Leonard T&T‘s knowledge of Leonard Buildings’ use of “Leonard Trailers.” (Doc. No. 26 at 15; see Doc. No. 16-1 at 16-17.) Leonard Buildings represent that they “expect[] that discovery will reveal, among other things, that the parties have
Rule 26(d) provides generally that discovery may not begin prior to the Rule 26(f) conference.
In this case, the Court is not persuaded that the Leonard Buildings defendants have established the necessary good cause to conduct expedited discovery. For example, this is not an instance where the true identities of parties are unknown, where parties are challenging the Court‘s personal jurisdiction over them, or where information sought will be lost or destroyed. Additionally, while the Leonard Buildings defendants identify certain facts that they believe will
For the foregoing reasons, Leonard T&T‘s motion to amend (see Doc. No. 24) is granted. Leonard T&T is directed to file an amended pleading, limited to the allegations in the original complaint and the additional allegation proposed in its response brief, by July 22, 2022. Leonard Buildings’ motion to dismiss, and alternative motion for expedited discovery (Doc. No. 16), are denied. A case management conference (“CMC“) will be set by separate order.7
IT IS SO ORDERED.
Dated: July 14, 2022
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE