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B&E Dimensional Stoneworks, LLC v. Wicki Wholesale Stone

February 15, 2012

B&E DIMENSIONAL STONEWORKS, LLC,
PLAINTIFF,
v.
WICKI WHOLESALE STONE, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Conaboy

MEMORANDUM

Here we consider Defendant and Cross-Defendant Ayers Supply Inc.'s Second Motion to Dismiss Defendant and Cross-Claimant Wicki Wholesale Stone, Inc.'s Second Motion to Dismiss Defendant and Cross-Claimant Wicki Wholesale Stone, Inc.'s Cross-Claim (Doc. 99).*fn1 Defendant and Cross-Claimant Ayers Supply Inc. ("Ayers") filed a supporting brief (Doc. 100) with the motion, and Defendant and Cross-Claimant Wicki Wholesale Stone, Inc. ("Wicki") timely filed a brief in opposition (Doc. 109). With the timely filing of Ayers' reply brief (Doc. 110), this motion is fully briefed and ripe for disposition. For the reasons discussed below, Ayers' motion is granted in part and denied in part.

I. Background

Plaintiff filed its Complaint on July 12, 2011, alleging federal trademark infringement, false designation of origin, common law trademark infringement, unfair competition, and unjust enrichment. (Doc. 1 at 1.) Plaintiff properly filed its First Amended Complaint (Doc. 89) on October 31, 2011, asserting claims for federal trademark infringement, false designation of origin, common law trademark infringement, unfair competition, and cancellation of Registration Number 2,580,734 for Karney®. (Doc. 89 at 1.)

Plaintiff is a business that mines, refines and sells natural stone products. (Doc. 89 ¶ 22.) Plaintiff and Defendants are "substantially in the same industry (i.e., supplying natural stone products) and sell, either directly or indirectly, to substantially the same customer base using the same channels of trade, including direct in-person sales to consumers, sales and marketing over the telephone, and through Internet-related solicitation." (Doc. 89 ¶ 23.) One of Plaintiff's products is its Kearney Stone®-brand natural dimension stone which Plaintiff asserts had unique and well known properties and a long-standing reputation for high quality. (Id. ¶ 24.) The trademark name is based on the name of a relative of the owner of the land from which the stone is extracted. (Id.) The land is located in the Township of Sterling, Wayne County, Pennsylvania. (Id. ¶ 25.) Plaintiff holds the exclusive right to mineral extraction from this quarry "and has been assigned all rights, title, and interest to the use of the Kearney Stone mark in conjunction with the sale of this unique and well known brand of natural dimensional stone." (Id.) Plaintiff "owns all right, title, and interest in a United States federal Registration for Kearney Stone, Registration No. 3896915 on the Principal Register for 'Kearney Stone®.'" (Id. ¶ 27.) Plaintiff avers that the federal registration was "[o]riginally obtained in the name of Harold Litts, B&E Dimensional Stoneworks, LLC's principal, [and] this federally registered trademark was subsequently assigned to the Plaintiff by Harold Litts." (Id.) Based on this registration, Plaintiff asserts it "has the exclusive right to the 'Kearney Stone®' mark and, under federal law, Plaintiff's trademark registration is conclusive evidence that Plaintiff is the owner of the exclusive rights to this mark throughout the United States." (Id. ¶ 28.)

Plaintiff makes several specific averments as to Ayers, including the assertion that "Plaintiff . . . alleges that Defendant Ayers Supply is the largest single supplier of . . . imitation stone to the other defendants in this action, which those defendants then subsequently resold to unsuspecting downstream customers." (Doc. 89 ¶ 33.)

The first four counts of the First Amended Complaint are brought against all Defendants. Wicki's "Karney"® mark is the subject of Count V of Plaintiff's First Amended Complaint: Count V, Plaintiff v. Wicki Wholesale Stone, Inc., for "Cancellation of Registration Number 2,580,734 for Karney®." (Doc. 89 at 11.) Plaintiff states that "Plaintiff and Defendant Wicki operate in substantially the same industry (i.e. supplying natural stone products) and sell, either directly or indirectly, to substantially the same customer base using the same channels of trade, including direct in-person sales to consumers, sales and marketing over the telephone, and through Internet-related solicitation." (Doc. 89 ¶ 61.) Plaintiff further alleges that, although Wicki at one time purchased legitimate Kearney Stone-brand, at some point Wicki began passing off an inferior product as Kearney Stone-brand. (Id. ¶ 67.) Wicki also has a "Karney"® mark which Plaintiff avers is "both subject to cancellation and not entitled to an incontestable presumption of the right to use the mark." (Id. ¶ 69.) Plaintiff also avers that Wicki has not consistently used the "Karney"® mark in conjunction with the product it sought to pass off as Kearney Stone-brand natural dimensional stone. (Id. ¶ 68.)

In its answer to Plaintiff's First Amended Complaint, Wicki includes a "Cross-claim Against Co-Defendants" and "Counterclaim Against B&E Dimensional Stone Works, LLC." (Doc. 94 at 10, 11.) The three-paragraph Cross-claim which is at issue here is set out below.

1. Answering Defendant hereby incorporates by reference all prior allegations as if fully set forth herein, and for purposes of this Cross-claim only, incorporates all allegations made against any and all co-defendants in Plaintiff's First Amended Complaint.

2. Should any or all of the averments and/or prayers for relief of Plaintiff be upheld by this Honorable Court, the same having been previously denied by Answering Defendant, Answering Defendant hereby avers than any such actions, infringement, false designation, and/or unfair competition was caused by, undertaken or effectuated by Co-Defendants, one, some, or all.

3. As such, Co-Defendants, one, some, or all, are alone liable, jointly and/or severally liable, or liable over to Answering Defendant on any recovery obtained by Plaintiff in this Honorable Court. (Doc. 94 at 10-11.)

Defendant Ayers filed the instant motion (Doc. 99) on November 14, 2011, and filed its answer to the First Amended Complaint (Doc. 104), which contains a Counterclaim, on November 22, 2011.

II. Discussion

A. Motion to Dismiss ...


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