Bern Unlimited, Inc. v. Burton Corp.
| Decision Date | 12 June 2014 |
| Docket Number | Civil No. 11–12278–FDS. |
| Citation | 25 F.Supp.3d 170 |
| Court | U.S. District Court — District of Massachusetts |
| Parties | BERN UNLIMITED, INC., Plaintiff, v. The BURTON CORPORATION ; Easton–Bell Sports, Inc., now known as BRG Sports, Inc. ; Smith Sport Optics, Inc., d/b/a Smith Optics, Inc. ; Vans, Inc.; Amer Sports Winter & Outdoor Co.; and K–2 Corporation, Defendants. |
Andrew A. Caffrey, III, David S. Godkin, Birnbaum & Godkin, LLP, Boston, MA, for Plaintiff.
Hunter D. Keeton, Michael A. Albert, Wolf, Greenfield & Sacks, PC, James M. Campbell, Stephen I. Hansen, Campbell, Campbell, Edwards & Conroy, PC, Kate R. Isley, Pierce Atwood LLP, Michael J. Racette, Morrison Mahoney LLP, Christopher P. Flanagan, Wilson Elser, Boston, MA, Anne M. Readel, Christopher G. Hanewicz, Gabrielle E. Bina, Rodger K. Carreyn, Perkins Coie LLP, Madison, WI, Marc J. Goldstein, Beveridge & Diamond, P.C., Wellesley, MA, Peter S. Ehrlichman, Lauren Rainwater, Nathan T. Alexander, Dorsey & Whitney LLP, Lawrence D. Graham, Lowe Graham Jones PLLC, Seattle, WA, Robert H. Stier, Jr., Pierce Atwood LLP, Portland, ME, Jeffery A. Key, Key & Associates, Chicago, IL, for Defendants.
MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION TO STRIKE DEFENDANTS' COUNTERCLAIMS, OR IN THE ALTERNATIVE, TO SEVER
This is a dispute between several companies that sell sports helmets involving alleged trade-dress infringement and unfair competition. Plaintiff Bern Unlimited, Inc., has brought suit against six other makers of biking, skating, snow, and water sporting helmets.1 Bern contends that the distinctive look of its helmets constitutes a trade dress, and that defendants are manufacturing and selling confusingly similar helmets, thereby misleading the public. It seeks relief under both federal and state law.
Bern has amended its complaint three times, most recently on March 7, 2014. In their answers to the third amended complaint, defendants Burton Corporation, Easton–Bell Sports, Inc., Smith Sport Optics, Inc., Vans, Inc., Amer Sports Winter & Outdoor Co., and K–2 Corporation brought, for the first time, counterclaims against plaintiff. Plaintiff has moved to strike the counterclaims, contending that leave of Court was required to assert the counterclaims and such leave should be denied on the grounds of undue delay and futility.
For the following reasons, the motion to strike will be granted in part and denied in part. The motion to sever will be denied without prejudice as to its renewal.
The facts are summarized below as set forth in the third amended complaint and answers.
Bern Unlimited, Inc., is a manufacturer of helmets for biking, skating, snow, and water sports. (Third Am. Compl. ¶ 11). In January 2006, Bern introduced the “Baker” line of snow helmets. (Id. ). The “Baker” helmet was a commercial success for Bern, and led the company to introduce additional helmet lines featuring the same elements, including the “Watts,” “Lenox,” and “Muse” lines. (Id. ¶ 14).
The complaint refers to two distinctly identifiable design elements to these helmets: first, the “rounded profile of the helmet, which is designed to follow the shape of the wearer's head”; and second, “the distinctive visor.” (Id. ¶ 11). Taken together, Bern refers to these elements as the “Bern Trade Dress.” (Id. ).
The Burton Corporation, Easton–Bell Sports, Inc., Smith Sport Optics, Inc., Amer Sports Winter & Outdoor Co., Vans, Inc., and K–2 Corporation are also involved in the business of designing and selling sports helmets. (Id. ¶¶ 15–18, 20). Bern has accused those companies of selling helmets with designs that are confusingly similar to Bern's design. (Id. ¶ 21).
In December 2005, Bern began selling the “Baker” line of helmets. (Vans Countercl., Docket No. 166 at 11 ¶ 8).2
On January 19, 2007, Jonathan Baker filed an application for a patent on the “Baker” helmet from the United States Patent and Trademark Office. (Id., Ex. A). The patent, United States Design Patent No. D572,865 S (the “'865 patent”), was issued on July 8, 2008. (Id. at 11 ¶ 9). During the application process, the PTO was not informed that Bern had begun selling the “Baker” helmet in 2005. (Id. at 11 ¶ 12).
In its marketing materials, Bern has promoted the fact that its helmets are covered by the '865 patent. According to the counterclaims, it did so in order to discourage retailers from buying the helmets of its competitors. (Id. at 12 ¶ 15). The patent itself appears in many of Bern's advertising catalogs. (Id. at 12 ¶ 13). Bern's advertising also claims that Bern was the first to invent a helmet with a visor. (Id. at 12–13 ¶ 16). Finally, Bern's advertising claims that the “Baker” helmets are the “first visor helmet offering a protective visor cover in the front,” the “world's first functional visor lid,” “the original,” and the “INDUSTRY'S FIRST VISOR.” (Id. at 13 ¶ 18). These statements, which the counterclaims allege are false, have resulted in increased sales for Bern and decreased sales for its competitors. (Id. at 12 ¶ 15). Bern allegedly made these statements knowing they were false. (Id. at 12 ¶ 15, 13–14 ¶ 21).
On December 20, 2011, Bern filed this lawsuit, alleging claims of infringement of the '865 patent against Burton. On April 27, 2012, Bern dropped the claims of patent infringement and replaced them with claims of trade dress infringement.
On April 8, 2014, Jonathan Baker assigned the '865 patent to Bern. (Assignment, Docket No 196, Ex. 1). The assignment was retroactive to January 19, 2007. (Id. ).
On April 11, Bern filed a statutory disclaimer of the '865 patent with the PTO under 25 U.S.C. § 253. (Caffrey Decl., Docket No. 183, Ex. 1). The PTO accepted the disclaimer on May 13, 2014. (Second Caffrey Decl., Docket No. 211, Ex. 1).
As noted, Bern initially brought suit for design-patent infringement against Burton on December 20, 2011. The original complaint alleged that Burton had infringed on the '865 patent. On April 27, 2012, Bern filed an amended complaint, adding five defendants and changing its claims from patent infringement to trademark infringement. Defendants did not assert any counterclaims in response.
On September 28, 2012, defendants moved for summary judgment on the ground that Bern could not prevail because it could not prove the non-functionality of its asserted trade dress. On May 15, 2013, the Court denied that motion.
On July 11, 2013, after obtaining leave of court, Bern filed a second amended complaint, adding two defendants. The second amended complaint alleged trade-dress infringement under 15 U.S.C. § 1125(a) and Massachusetts common law; trade-dress dilution under 15 U.S.C. § 1125(c) and Mass. Gen. Laws ch. 110H, § 13 ; and unfair competition under Mass. Gen. Laws ch. 93A. The second amendment complaint did not allege any claims of patent-law violations. Defendants again did not assert any counterclaims in response.
On March 7, 2014, again after obtaining leave of court, Bern filed a third amended complaint, adding additional allegedly infringing helmets introduced by defendants after the inception of the case. On April 28, one defendant was voluntarily dismissed from the case. The remaining named defendants are Burton, Easton–Bell, K–2, Smith, Vans, and Amer Sports.
On March 24, 2014, defendants filed answers to the third amended complaint. For the first time, defendants asserted counterclaims with their answers. With one partial exception, the counterclaims brought claims for (1) a declaratory judgment that the '865 patent is invalid, (2) a declaratory judgment that Bern cannot enforce the '865 patent because of its inequitable conduct, (3) false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a), (4) common-law unfair competition, and (5) unfair and deceptive trade practices in violation of Mass. Gen. Laws ch. 93A.3
On April 14, 2014, Bern filed a motion to strike the counterclaims or, in the alternative, to sever. It contends that (1) defendants were required to seek leave from the Court to amend their answers to add new counterclaims; (2) the declaratory judgment claims are moot because it disclaimed the '865 patent ; and (3) the false advertising, unfair competition, and Chapter 93A counterclaims fail to state a claim upon which relief can be granted.
The first question presented is procedural. When a plaintiff, with leave of court, amends its complaint, may the defendant freely assert new counterclaims in its answer, or must it seek leave of court to do so? The answer to that question is not provided, at least not directly, in the Federal Rules of Civil Procedure.
Under Rule 7, only certain kinds of “pleadings” are allowed, including “(1) a complaint; (2) an answer to a complaint; [and] (3) an answer to a counterclaim designated as a counterclaim.” Fed.R.Civ.P. 7(a). Thus, under Rule 7, any counterclaim made by a defendant against a plaintiff must be made in the answer. See id. Under Rule 12, a defendant must ordinarily serve an answer (and assert any counterclaims) within 21 days after being served with the summons and complaint. Fed.R.Civ.P. 12(a)(1)(A).
Amendments to the pleadings are addressed in Rule 15. Under Rule 15(a), a party may amend a “pleading” without leave of court in certain relatively narrow circumstances.4 “In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Unless the court orders otherwise, “any required response to an amended pleading must be made within the time remaining to respond to the original pleading or within 14 days after service of the amended pleading, whichever is later.” Fed.R.Civ.P. 15(a)(3).
Rule 15 thus requires that the plaintiff must normally obtain leave of court to amend its complaint. An amended complaint requires a “response”—either a motion under Rule 12 or a new (that is, amended) answer....
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