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Medical Products Laboratories, Inc v. Premier Dental Products Company

January 31, 2013

MEDICAL PRODUCTS LABORATORIES, INC., PLAINTIFF,
v.
PREMIER DENTAL PRODUCTS COMPANY, DEFENDANT.



The opinion of the court was delivered by: Buckwalter, S.J.

MEMORANDUM

Currently pending before the Court is the Motion by Defendant Premier Dental Products Company ("Premier") to Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 9(b), 12(b)(1), and 12(b)(6). For the following reasons, the Motion is granted.

I. FACTUAL BACKGROUND

According to the Complaint, Plaintiff Medical Products Laboratories, Inc. ("MPL") is a contract manufacturing company with expertise in research and development, manufacturing, packaging, and testing of quality medical products. (Compl. ¶ 8.) Defendant Premier is a distributor of various medical products, including dental products. (Id. ¶ 9.) On September 16, 1975, MPL and Premier entered into an agreement regarding the use of trademarks for products developed either by MPL or by MPL and Premier jointly and marketed by Premier (the "Trademark Agreement"). (Id. ¶ 10.) The Trademark Agreement provided that "[a]ll current and future trademarks put into interstate commerce by Premier Dental Products Company covering merchandise made for their distribution by Medical Products Laboratories are jointly owned by Medical Products Laboratories and Premier Dental Products Company." (Id. ¶ 11.) With the exception of some minor and immaterial modifications, this Agreement remains in full force and effect. (Id. ¶ 12.)

In 2003, MPL began developing and manufacturing a topical prophylaxis paste called "Enamel Pro." (Id. ¶ 13.) Enamel Pro is a 1.23% Fluoride prophylaxis paste with amorphous calcium phosphate (ACP). (Id. ¶ 14.) MPL distributed Enamel Pro through Premier. (Id. ¶ 15.) On July 6, 2004, Premier filed an application for a trademark on the use of the mark "Enamel Pro." (Id. ¶ 16.) The application was approved and Trademark Reg. No. 3,118,123 was entered on the principal Register on July 18, 2006 (the "2006 Trademark"). (Id. ¶ 17.) Premier is listed on the Register as the sole owner of the 2006 Trademark, while MPL is not included as an owner of the 2006 Trademark on any official document. (Id. ¶¶ 18--19.) On July 13, 2012, Premier filed a Joint Affidavit of Use and Incontestability, as required by 15 U.S.C. § 1058, asserting that the 2006 Trademark was still in commerce and re-listing Premier as the sole owner (the "2012 Affidavit"). (Id. ¶ 20.)

On October 12, 2006, Premier filed another application for a trademark on the use of the mark "Enamel Pro." (Id. ¶ 21.) This application was approved and Trademark Reg. 3,382,472 entered on the Principal Register on February 12, 2008 (the "2008 Trademark"). (Id. ¶ 22.) As with the 2006 Trademark, Premier is the sole owner of the 2008 Trademark listed on the Register. (Id. ¶ 23.)

MPL initiated the present litigation on October 23, 2012, setting forth three causes of action: (1) false and fraudulent registration of the 2006 Trademark pursuant to § 38 of the Lanham Act, 15 U.S.C. § 1120; (2) false and fraudulent registration of the 2008 Trademark pursuant to § 38 of the Lanham Act, 15 U.S.C. § 1120; and (3) breach of contract with respect to both Trademarks. The essence of these claims is that Premier filed trademark applications for the two Enamel Pro Trademarks that did not identify MPL as a joint owner of the marks. Such actions, according to Plaintiff, were not only false and fraudulent for purposes of the Lanham Act, but also breached the 1975 Agreement between the parties. (Id. ¶¶ 25--43.) Premier filed the current Motion to Dismiss on December 14, 2012. MPL responded on December 28, 2012, and Premier filed a Reply Brief on January 14, 2012. This Motion is now ripe for judicial consideration.

Under Federal Rule of Civil Procedure 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ. P.12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court recognized that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Following these basic dictates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), subsequently defined a two-pronged approach to a court's review of a motion to dismiss. "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678. Thus, although "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678--79. Second, the Supreme Court emphasized that "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679. "Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context- specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct. Id.; see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 232--34 (3d Cir. 2008) (holding that: (1) factual allegations of complaint must provide notice to defendant; (2) complaint must allege facts suggestive of the proscribed conduct; and (3) the complaint's "'factual allegations must be enough to raise a right to relief above the speculative level.'" (quoting Twombly, 550 U.S. at 555)).

Notwithstanding these new dictates, the basic tenets of the Rule 12(b)(6) standard of review have remained static. Spence v. Brownsville Area Sch. Dist., No. Civ.A.08-626, 2008 WL 2779079, at *2 (W.D. Pa. July 15, 2008). The general rules of pleading still require only a short and plain statement of the claim showing that the pleader is entitled to relief and need not contain detailed factual allegations. Phillips, 515 F.3d at 233. Further, the court must "accept all factual allegations in the complaint as true and view them in the light most favorable to the plaintiff." Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the court must "determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002).

II. DISCUSSION

Defendant raises multiple grounds for dismissal of the present Complaint, including lack of subject matter jurisdiction, lack of standing, time bar under the applicable statute of limitations, and failure to adequately plead fraud under Rules 9(b) and 12(b)(6). Having considered the parties' briefs, the Court finds that Plaintiff's Lanham Act claims are time-barred and that supplemental jurisdiction should not be exercised over Plaintiff's remaining state breach of contract claim.*fn1

"The Lanham Act contains no express statute of limitations and the general rule is that when a federal statute provides no limitations, the court looks to the state statute of limitations for an analogous action." Ritz Hotel, Ltd. v. Shen Mfg. Co., Inc., No. Civ.A.05-4730, 2009 WL 1119496, at *3 (E.D. Pa. Apr. 27, 2009). The United States Court of Appeals for the Third Circuit has explicitly held that a claim under § 38 of the Lanham Act is subject to Pennsylvania's two-year statute of limitations for fraud claims. Beauty Time, Inc. v. VU Skin Sys., Inc., 118 F.3d 140, 143 (3d Cir. 1997) (citing 42 Pa. Cons. Stat. § 5524(7)). The court has further stated that, "Pennsylvania tolling principles would also be applicable in determining whether this suit is time-barred," meaning that the statute of limitations begins to run at the time "'the right to institute and maintain the suit arises.'" Id. at 144 (quoting Pocono Int'l Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d 468, 471 (Pa. 1983)). In other words, "aggrieved parties must . . . bring their claim within two years of when they learned or should have learned, through the exercise of due diligence, that they have a cause of action." Id. at 148. The Lanham Act expressly states that "[r]egistration of a mark on the principal register provided by this chapter . . . shall be constructive notice of the registrant's claim of ownership thereof." 15 U.S.C. § 1072.

In the present case, the Complaint contains two causes of action under § 38 of the Lanham Act. Count I alleges that Defendant filed a false application for trademark registration on the Principal Register on July 18, 2006 that did not list MPL as owner of the Trademark, despite Premier's knowledge that MPL was a co-owner of the 2006 Trademark at the time the application for the Trademark was made. (Compl. ¶¶ 17, 26.) Count II asserts that Defendant filed another false application for a trademark registration on February 12, 2008, that also did not list MPL as owner of the trademark despite Premier's knowledge that MPL was co-owner of the 2008 Trademark at the time the application for the Trademark was made. (Id. ¶¶ 22, 33--34.) According to the Complaint, these failures constituted false statements made to the United States Patent and Trademark Office. (Id. ¶¶ 28, 35.) Under the two year statute of limitations, Plaintiff would have had to file the current action by July 18, 2008, for the 2006 Trademark, and by February 12, 2010, for the 2008 Trademark. Plaintiff did not initiate this action, however, until October 23, 2012, well past the expiration of the two-year limitations periods for both claims.

In an effort to escape this procedural bar, Plaintiff offers two arguments. First, Plaintiff points to the allegation of the Complaint that, "[f]or the 2006 Trademark, Premier filed a[] Joint Affidavit of Use and Incontestability on July 13, 2012 as required by 15 U.S.C. § 1058 asserting that the mark was still in commerce and listing Premier as the sole owner of the mark (the '2012 Affidavit')." (Compl. ¶ 20.) Plaintiff's cause of action for false or fraudulent procurement then includes a claim arising from the false or fraudulent filing of a maintenance or renewal affidavit, on October 12, 2012 (the "2012 Affidavit"), pursuant to 15 U.S.C. §§ 1058 and 1059. (Id. ¶¶ 29--30.) Because the 2012 Affidavit was ...


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