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Avco Corporation v. Precision Airmotive LLC

May 10, 2013

AVCO CORPORATION,
PLAINTIFF
v.
PRECISION AIRMOTIVE LLC, DEFENDANT.



The opinion of the court was delivered by: Matthew W. Brann United States District Judge

(Judge Brann)

MEMORANDUM

For the reasons that follow, the Court grants in part and denies in part the plaintiff's September 24, 2012 motion to strike defendant's answer and counterclaims. (ECF No. 35).

I. Background

AVCO Corp. (hereinafter, "AVCO") commenced this action by filing a complaint on July 6, 2012, alleging various claims against defendant Precision Airmotive LLC (hereinafter, "Precision") -- defamation (count I), product disparagement (count II), tortious interference with contractual relations (count III) -- and seeking declaratory relief and the cancellation of several trademarks. (Compl., ECF No. 1).

AVCO asserts that it (acting through its unincorporated Lycoming Engines division (hereinafter, "Lycoming")) is a manufacturer and seller of aircraft engines. (Compl. ¶ 8). Its engine designs are "type certificated," meaning that they have been approved by the Federal Aviation Administration (hereinafter, "FAA"). A fuel injection system (also known as a "servo") is a component part of many of AVCO's designs, (Id. ¶ 10), and AVCO designates servos appropriate for installation in its engines by codes of the form RSA-10ED1, with each component of the code (i.e., "RSA," "10," "E," "D," "1") describing an aspect of the servo. (Id. ¶¶ 11-17). AVCO calls these codes "model designations." Each model designation corresponds to an AVCO part number associated with AVCO's engine design. (Id. ¶ 18). As the type certificate holder for its engines, AVCO is entitled by law to delegate the manufacture of parts (including servos) for its engines to outside suppliers, and has selected two such suppliers for this purpsoe -- defendant Precision and AVStar Fuel Systems, Inc. (hereinafter, "AVStar"). (Id. ¶¶ 19-20).

AVCO alleges that Precision has engaged in a wrongful campaign "to obtain a monopoly" in the servo supply market by "attempting to prevent Lycoming from using any suppliers other than" Precision, and by registering and seeking to enforce the trademark of the model designations. (Id. ¶¶ 25-26). In particular, Precision has been misrepresenting to AVCO customers that AVStar servos are counterfeit; that Precision is the only manufacturer of the RSA-model designated servos; that Precision's servos incorporate patented technology; that other manufacturers of the servos are infringing on Precision's trademarks; and that servos from other manufacturers carry a safety risk. (Id. ¶¶ 27-40).

Precision answered on September 10, 2012 (ECF No. 16) (hereinafter, "Answer"), denying liability and asserting counterclaims against AVCO and AVStar: trademark infringement (count I), unfair competition under the Lanham Act (count II), unfair competition under Pennsylvania law (count III), breach of contract (count IV against AVCO only), tortious interference with contractual relations (count V against AVStar only), and tortious interference with prospective contractual relations (count VI).

Precision asserts that it and its predecessors-in-interest have for several decades been the "sole and exclusive source of fuel injection servos" bearing the model numbers beginning with RS and RSA. (Answer ¶¶ 8-13). In 2010, Precision registered nine such model numbers (all beginning "RSA") as trademarks. Precision claims that "[t]here has never been a time, prior to the recent infringement by [AVCO] and AVStar, when anyone in the industry used the RSA Marks to refer to fuel injection servos manufactured by a source other than Precision" or its predecessors. (Id. ¶ 13).

Precision alleges that AVStar, after years in the overhaul and replacement parts business, recently entered into direct competition with Precision by manufacturing new servos. (Answer ¶¶ 14-15). In order to attract customers away from Precision, AVStar has been placing Precision's RSA marks on AVStar servos. (Id. ¶ 16). The strategy has succeeded. AVCO informed Precision that it was canceling numerous existing orders from Precision to purchase from AVStar instead. (Id. ¶ 18).

But AVCO is not just an innocent purchaser, according to Precision. Rather, it "instructed, knew about, or otherwise was involved in AVStar's decision to use the RSA marks," and has referred to AVStar servos by their RSA marks in the documentation associated with its engines. (Id. ¶¶ 19-20). It has done this because it, along with AVStar "consciously desired and intended to use the RSA Marks for the purpose of associating AVStar's new fuel injection servos with the decades of goodwill associated with the RSA Marks, which goodwill belongs to Precision." (Id. ¶ 21).

On September 24, 2012, AVCO briefed a motion to strike Precision's answer and counterclaims for failure to comply with the Federal Rules of Civil Procedure.*fn1 (ECF No. 36) (hereinafter, "AVCO Supp. Br."). Precision filed opposing papers on September 28, 2012 (ECF No. 39) (hereinafter, "Precision Opp. Br.") and AVCO replied on October 1, 2012 (ECF No. 42) (hereinafter, "AVCO Reply Br.").

II. The Motion is Granted in Part and Denied in Part

AVCO's opening and reply briefs take the Court on a turbulent flight over the Federal Rules of Civil Procedure (hereinafter, the "Rules"), with layovers at ...


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