Leonard Truck & Trailer Inc. v. Leonard Buildings & Truck Accessories

• Decision Date: 14 July 2022
• Docket Number: 4:21-cv-2362
• Court: U.S. District Court — Northern District of Ohio
• Parties: LEONARD TRUCK & TRAILER INC., PLAINTIFF, v. LEONARD BUILDINGS AND TRUCK ACCESSORIES dba Leonard USA and dba leonardusa.com, et al., DEFENDANTS.

LEONARD TRUCK & TRAILER INC., PLAINTIFF, v. LEONARD BUILDINGS AND TRUCK ACCESSORIES dba Leonard USA and dba leonardusa.com, et al., DEFENDANTS.

No. 4:21-cv-2362

United States District Court, N.D. Ohio, Eastern Division

July 14, 2022

MEMORANDUM OPINION AND ORDER

HONORABLE SARA LIOI, UNITED STATES DISTRICT JUDGE.

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.

I. Background

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 offer their products for sale through a website at: www.leonardusa.com. (Id. ¶¶ 11-14.) By their use of the website, they sell their products throughout the United States, including the State of Ohio. (Id.)

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, 15 U.S.C. § 1125(a). (Doc. No. 1 ¶¶ 34-40.) In the complaint, Leonard T&T alleges that Leonard Buildings began using the mark “Leonard Trailers” in connection with the marketing and promoting of goods and services over their website, and that this use infringes upon Leonard T&T's registered mark. (Id. ¶¶ 25-26; see Doc. No. 1-2 (website screenshot).) According to Leonard T&T, the Leonard Buildings defendants have also placed metadata in the code behind the website that infringes upon the “Leonard Trailers®” mark. (Doc. No. 1 ¶ 27; see Doc. No. 1-3 (Metadata).) This infringing conduct, Leonard T&T complains, has resulted in a loss of sales, and a diminution in the value of the “Leonard Trailers®” mark. This alleged infringement has also resulted in actual confusion in the industry and will likely continue to do so unless abated. (Doc. No. 1 ¶¶ 36, 38-39.) Leonard T&T seeks damages, an accounting, injunctive relief, indemnification, interest, and attorney's fees. (Doc. No. 1 at 10-11 (Prayer).)

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.)

I. Standard of Review

The Leonard Buildings defendants request dismissal of the complaint under Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the pleading. Davis H. Elliot Co., Inc. v. Caribbean Util. Co., Ltd., 513 F.2d 1176, 1182 (6th Cir. 1975). All allegations of fact by the non-moving party are accepted as true and construed in the light most favorable to that party. See Grindstaff v. Green, 133 F.3d 416, 421 (6th Cir. 1998) (citing Meador v. Cabinet for Human Res., 902 F.2d 474, 475 (6th Cir. 1990)). The Court, however, “need not accept as true legal conclusions or unwarranted factual inferences.” Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir. 1999) (citing Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)). Nor is the Court required to accept as true complaint allegations that are contradicted by public records and other evidentiary materials of which the Court may take judicial notice. See Moody v. CitiMortgage, Inc., 32 F.Supp.3d 869, 874-75 (W.D. Mich. 2014) (“court may disregard allegations in the complaint if contradicted by facts established by exhibits attached to the complaint[]”) (internal quotation marks and citation omitted); see also Williams v. CitiMortgage, Inc., 498 Fed.Appx. 532, 536 (6th Cir. 2012) (“if a factual assertion in the pleadings is inconsistent with a document attached for support, the Court is to accept the facts as stated in the attached document[]”) (internal quotation marks and citation omitted).

The sufficiency of the pleading is tested against the notice pleading requirements of Fed.R.Civ.P. 8(a)(2), which provides that a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Although this standard is liberal, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). If the plaintiff has not “nudged [her] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570.

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).

II. Law and Discussion

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[.]” 15 U.S.C. § 1114(1)(a). “To recover on a federal trademark counterfeiting claim, a plaintiff must show that: (1) the defendant infringed a registered trademark in violation of 15 U.S.C. § 1114; and (2) the defendant intentionally used the mark knowing it was a counterfeit as the term counterfeit is defined in 15 U.S.C. § 1116.” Laukus v. Rio Brands, Inc., 391 Fed.Appx. 416, 425 (6th Cir. 2010) (citing 15 U.S.C. § 1117(b)).

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...