Sream, Inc. v. Superior Disc., LLC
| Decision Date | 01 March 2019 |
| Docket Number | CIVIL ACTION NO. 17-8246 SECTION: "E" (1),CIVIL ACTION NO. 17-8218 SECTION: "E" (1),CIVIL ACTION NO. 17-8238 SECTION: "E" (1),CIVIL ACTION NO. 17-8244 SECTION: "E" (1),CIVIL ACTION NO. 17-8191 SECTION: "E" (1),CIVIL ACTION NO. 17-8252 SECTION: "E" (1),CIVIL ACTION NO. 17-8242 SECTION: "E" (1),CIVIL ACTION NO. 17-8193 SECTION: "E" (1),CIVIL ACTION NO. 17-8243 SECTION: "E" (1),CIVIL ACTION NO. 17-8186 SECTION: "E" (1),CIVIL ACTION NO. 17-8177 SECTION: "E" (1),CIVIL ACTION NO. 17-8180 SECTION: "E" (1),CIVIL ACTION NO. 17-8179 SECTION: "E" (1),CIVIL ACTION NO. 17-8216 SECTION: "E" (1),CIVIL ACTION NO. 17-8205 SECTION: "E" (1),CIVIL ACTION NO. 17-8184 SECTION: "E" (1) |
| Parties | SREAM, INC., Plaintiff v. SUPERIOR DISCOUNT, LLC, Defendant Related Case: SREAM, INC., Plaintiff v. JOSEPH TRUONG, INC., Defendant Related Case: SREAM, INC., Plaintiff v. KATTOUM, INC., Defendant Related Case: SREAM, INC., Plaintiff v. MKM GROUP, LLC, Defendant Related Case: SREAM, INC., Plaintiff v. SLIDELL QUICK STOP, INC., Defendant Related Case: SREAM, INC., Plaintiff v. DOCK QUICK SHOP, LLC, Defendant Related Case: SREAM, INC., Plaintiff v. KWIK E MART, ET AL. Defendants Related Case: SREAM, INC., Plaintiff v. M&S FUEL, LLC, Defendant Related Case: SREAM, INC., Plaintiff v. E-Z PICK, INC., Defendant Related Case: SREAM, INC., Plaintiff v. VILLAGE 2015, INC., Defendant Related Case: SREAM, INC., Plaintiff v. DISCOUNT N-OUT, LLC Defendant Related Case: SREAM, INC., Plaintiff v. SUPER DISCOUNT GAS, INC., Defendant Related Case: SREAM, INC., Plaintiff v. QUICKYS DISCOUNT, Defendant Related Case: SREAM, INC., Plaintiff v. DANNY FOOD STORE, Defendant Related Case: SREAM, INC., Plaintiff v. CLAIRBORNE EXPRESS, Defendant Related Case: SREAM, INC., Plaintiff v. SHELL 3032 EXPRESS, LLC, Defendant Applies to: All Cases |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court are Motions to Dismiss filed by various Defendants;1 Motions for Rule 11 Sanctions filed by Defendants Joseph Troung, Inc.,2 E-Z Pick, Inc.,3 and Quickys Discount;4 Motions for Leave to Amend the Complaints to Add Additional Party Plaintiff to All Counts filed by Plaintiff Sream, Inc. ("Sream");5 and Motions to Stay filed by Defendants Superior Discount, LLC,6 MKM Group, LLC,7 Discount-N-Out,8 and Quickys Discount.9 For the following reasons, the Motions to Dismiss are GRANTED IN PART and DENIED IN PART. The Motions for Rule 11 Sanctions are DENIED. The Motions for Leave to File Amended Complaints are GRANTED. The Motions to Stay are DENIED.
Sream is a California corporation that manufacturers glass products and various smokers' articles, including water pipes.11 Sream alleges it is the exclusive United Stateslicensee authorized to use the trademark "RooR" and alleges it has the authority by license from the trademark's owner to police and enforce the RooR marks within the United States.12 Sream alleges Defendants sold counterfeit merchandise bearing the RooR mark.13
On August 24, 2017, Sream filed the captioned actions, asserting the following causes of action against the Defendant(s) in each case: (1) a claim for trademark counterfeiting and infringement under 15 U.S.C. § 1114 and (2) a claim for false designation of origin and unfair competition under 15 U.S.C. § 1125(a).14
Defendant Quickys Discount, LLC in case no. 17-8243 instituted a Petition for Cancellation of the RooR marks in the United States Patent and Trademark Office before the Trademark Trial and Appeal Board (TTAB).15 As a result of the cancellation action before the TTAB, several Defendants, including Quickys, filed Motions to Stay16 requesting this Court stay these proceedings pending a ruling on the cancellation action from the TTAB. Currently, the TTAB proceedings are suspended pending final determination of these civil actions.17
Because concerns had been expressed as to Sream's standing to assert its claims, on January 15, 2019, the Court ordered Defendants to file any motions to dismiss basedon Plaintiff's lack of standing by no later than January 28, 2019.18 In their Motions to Dismiss, several Defendants also moved for sanctions under Federal Rule of Civil Procedure 11.19 In response to the Motions to Dismiss, Sream moved for leave to amend its Complaint to add Roor International BV, the owner of the RooR trademark, as an additional Plaintiff.20 The Defendant(s) in some cases oppose the Motions for Leave to Amend the Complaints;21 Defendants in ten cases do not oppose the Motions for Leave to Amend the Complaints.22
"Federal courts are courts of limited jurisdiction; without jurisdiction conferred by statute, they lack the power to adjudicate claims."23 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenges a federal court's subject-matter jurisdiction.24 Under Rule 12(b)(1), "[a] case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case."25Standing is a required element of subject matter jurisdiction properly challenged in a Federal Rule of Civil Procedure 12(b)(1) motion to dismiss.26
A plaintiff's standing, and thus the court's subject matter jurisdiction, may be challenged through a facial attack or a factual attack on the complaint.27 A facial attack is based on the face of the complaint and the documents attached to the complaint.28 A facial attack is treated similarly to a motion under 12(b)(6)—the court must consider the allegations in the complaint as true.29 However, if a Rule 12(b)(1) motion is based on and supported by evidence presented by the movant, the motion is a factual attack on subject matter jurisdiction, and the court does not presume that the allegations in the complaint are true.30 Instead, the court has the power to make factual findings which are decisive of jurisdiction.31
Sream attaches to its Complaints a copy of the trademark registrations for the RooR marks32 and the licensing agreement between Martin Birzle and Sream.33 Defendants attach documents to their Motions to Dismiss demonstrating the "unlawful use" of the RooR marks. Although the court has discretion to consider evidence attached a motion to dismiss for lack of subject matter jurisdiction, the documents provided by the Defendants are not germane to the Court's determination of standing.34 Instead, the attachments support Defendants' affirmative defense of invalidity of the trademark butneed not be considered with respect to Sream's standing.35 The allegations of the Complaint and the documents submitted by the Plaintiff are sufficient for the Court to determine whether Sream has standing to assert its claims under both 15 U.S.C. § 1114 and 15 U.S.C. § 1125. A determination of whether Sream has standing to assert its claims does not require the Court to make factual findings. Accordingly, Defendants' motions are a facial attack on Plaintiff's standing and the Court's subject matter jurisdiction. Because Defendants mount a facial attack, the Court examines the Complaint and documents attached thereto and considers the allegations in the Complaint as true.36
Section 32 of the Lanham Act, 15 U.S.C. § 1114, creates a cause of action for infringement of a registered trademark. The cause of action is available only to "the registrant" of the mark.37 The term "registrant" includes "the legal representatives, predecessors, successors and assigns of such applicant or registrant."38 An "truly exclusive licensee, one who has the right even to exclude his licensor from using the mark," may also bring a cause of action under 15 U.S.C. § 1114 when the terms of its license give it status equal to that of an assignee.39
Defendants argue Sream lacks standing to assert a claim for trademark counterfeiting and infringement under 15 U.S.C. § 1114 because it is not the registrant or owner of the trademark and because the terms of the license agreement do not equateSream to an assignee. Sream alleges, and the trademark registrations attached to the Complaints demonstrate, Martin Birzle is the registrant of the RooR marks.40 Sream does not argue it is the legal representative, predecessor, successor or assignee of Martin Birzle. Instead, Sream alleges its status as an exclusive licensee makes it equal to an assignee and gives it standing to assert a claim under 15 U.S.C. § 1114.
Other courts have analyzed the licensing agreement at issue and concluded that Sream lacks standing to assert a claim under 15 U.S.C. § 1114 because the license agreement does not confer upon Sream the status of an assignee.41 This Court is persuaded by the reasoning in Sream v. Grateful J's, Inc. and likewise concludes Sream's status as the exclusive licensee does not equate to an assignment under which it would be permitted to bring a claim pursuant to 15 U.S.C. § 1114.42 Under the license agreement, Sream "acknowledges ownership of the mark, including all goodwill associated therewith" remains with Martin Birzle.43 Sream's use of the mark is restricted to the products listed in Schedule B of the agreement and in accordance with Birzle's "Brand Image Policy," attached as Schedule C.44 Compliance with these restrictions is determined at the sole discretion of Birzle.45 The agreement limits Sream's use of the marks to the United States and permits Birzle to use the marks elsewhere.46 Taken together, the contractual provisions demonstrate the contract is an exclusive license arrangement only, with ultimate control and ownership of the trademarks resting with Birzle.47 As a result, thelicensing agreement does not confer upon Sream status equal to that of an assignee, and Sream lacks standing to bring a claim under 15 U.S.C. § 1114. Accordingly, the Motions to Dismiss Sream's claims for trademark counterfeiting and infringement under 15 U.S.C. § 1114 are granted.
The Court may raise the jurisdictional question...
To continue reading
Request your trial