Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA216232
`ESTTA Tracking number:
`06/08/2008
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91174345
`Defendant
`Toytrackerz LLC
`TOYTRACKERZ LLC
`TOYTRACKERZ LLC
`302 SOUTH LOWMAN STREET
`FORT SCOTT, KS 66701
`UNITED STATES
`toylaw@classicnet.net
`Other Motions/Papers
`Terri Lynn Coop
`circlexranch@sbcglobal.net
`/Terri Lynn Coop/
`06/08/2008
`unsuspendmarx.pdf ( 2 pages )(47302 bytes )
`Ex1TransferVenue.pdf ( 5 pages )(38276 bytes )
`Ex2BBJEJudgment.pdf ( 2 pages )(47087 bytes )
`Ex3FederalOpinion.pdf ( 32 pages )(102411 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the matter of trademark application No: 78788519
`In the matter of TTAB Opposition proceeding No: 91174345
`
`For the mark: "Marx Toys" [stylized logo]
`
`October 03, 2006
`Date published for Opposition:
`Date Notice of Opposition Filed: December 04, 2006
`
`American Plastic Equipment Inc. [Opposer/Plaintiff]
`A Florida Corporation
`
`vs.
`
`Toytrackerz LLC [Applicant/Defendant]
`A Kansas Limited Liability Company
`
`UPDATE ON CIVIL PROCEEDINGS
`
`COMES NOW, the Defendant, Toytrackerz LLC, who respectfully presents the following
`
`update on the civil proceedings between the parties:
`
`1.
`
`2.
`
`2.
`
`3.
`
`On March 7, 2007, the TTAB suspended any further action on the above referenced
`trademark pending the civil proceedings between the parties.
`
`On June 6, 2007, the Federal Court for the Western District of Missouri granted
`Toytrackerz’ motion to transfer venue to the District of Kansas. [Ex. 1]
`
`On August 1, 2007, the District Court of Bourbon County Kansas entered a consent
`judgment between the parties stating that American Plastic Equipment had ‘no protectible
`or actionable interest’ in the disputed trademarks under Kansas law. [Ex. 2]
`
`On March 31, 2007, the Federal Court for the District of Kansas granted Toytrackerz’
`motion to dismiss all trademark related claims [counts II - IX] filed under Fed. R. Civ. P.
`12(b)(6) for failure to state a claim on the grounds of:
`
`a)
`b)
`c)
`
`Failure to maintain a compulsory counterclaim,
`Res Judicata, citing the state court judgment,
`Collateral Estoppel, citing the state court judgment. [Ex. 3]
`
`4.
`
`Count I, copyright infringement, remains open in the federal court, but all issues
`
`

`
`regarding the disputed trademarks are complete and settled in Toytrackerz favor.
`
`Accordingly, Toytrackerz asks for guidance from the TTAB on whether the suspension can be
`lifted and further proceedings may commence in this matter.
`
`/Terri Lynn Coop/
`Owner - Toytrackerz LLC
`302 South Lowman Street
`Fort Scott KS 66701
`(620) 224-2945
`
`CERTIFICATE OF SERVICE
`
`th
`I, Terri Lynn Coop, certify that on the 8 day of June 2008, I mailed a copy of the foregoing
`Update on Civil Proceedings [Letter only - no exhibits] by first class mail, postage prepaid,
`Delivery Confirmation attached, to the following:
`
`David E. Herron II
`Attorney for the Respondent
`PO Box 2678
`Kansas City KS 66110
`
`/Terri Lynn Coop/
`Owner - Toytrackerz LLC
`
`

`
`IN THE UNITED STATES DISTRICT COURT FOR THE
`WESTERN DISTRICT OF MISSOURI
`WESTERN DIVISION
`
`)
`
`) )
`
`) )
`
`AMERICAN PLASTIC EQUIPMENT, INC.,
`a Florida Corporation,
`
`Plaintiff,
`
`) No. 07-00185-CV-W-SOW
`)
`
`) )
`
`)
`
`ORDER
`
`vs.
`
`TOYTRACKERZ LLC, et al.,
`
`Defendants.
`
`Before the Court is Defendants Toytrackerz and Noah Coop’s Motion to Transfer Venue,
`
`Motion to Dismiss for Lack of Subject Matter Jurisdiction, Motion for Sanctions (Doc. # 6). For
`
`the reasons stated below this case is transferred to the District of Kansas pursuant to 28 U.S.C. §
`
`1404(a).
`
`Background
`
`This is a case brought by plaintiff American Plastic Equipment Inc. (“American Plastic”)
`
`against defendants Toytrackerz and Noah Coop for federal trademark infringement. According
`
`to the record, the parties are currently engaged in a state law suit in Bourbon County, Kansas,
`
`filed in January 2006 styled Toytrackerz v. American Plastic Equipment, Inc. (“state suit”). In
`
`February 2006, American Plastic attempted, unsuccessfully, to remove the state suit to federal
`
`court in the District of Kansas. The Bourbon County Petition relied solely on Kansas trademark
`
`statutes and Kansas common law theories of trademark abandonment. On August 30, 2006, the
`
`case was remanded to state court by the Kansas District Court, after a finding that the removal
`
`action was “frivolous and meritless.” In Magistrate Judge Waxse’s Order, he found that the only
`
`Case 4:07-cv-00185-SOW Document 17 Filed 06/11/2007 Page 1 of 5
`
`

`
`federal claims asserted were contained in American Plastic’s Answer, which included a
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`counterclaim against Toytrackerz and individuals Noah and Terri Coop. Relying on the well-
`
`pleaded complaint rule which requires that federal question jurisdiction must be found on the
`
`face of the Complaint, and removal cannot be predicated on allegations contained in a
`
`defendant’s proposed counterclaim, the case was remanded.
`
`On March 9, 2007, American Plastic filed a lawsuit in this Court against Toytrackerz
`
`LLC and Noah Coop for trademark infringement under federal law. American Plastic’s
`
`Complaint states that this Court has original jurisdiction over the subject matter of this action
`
`pursuant to the Lanham Trademark Act and supplemental jurisdiction over any state law claims.
`
`American Plastic also states that venue is proper in the Western District of Missouri under 28
`
`U.S.C. § 1391(b) because the defendants have conducted business, advertised infringing articles
`
`for sale, sold infringing articles, and shipping infringing articles to buyers that reside within the
`
`Western District of Missouri.
`
`Defendants Toytrackerz and Coop bring the instant motion to transfer venue under 28
`
`U.S.C. § 1404(a), to the District of Kansas because that court has familiarity with the parties and
`
`the case. American Plastic is a resident of Ohio and Toytrackerz and Coop are residents of
`
`Kansas, and neither party resides or maintains a place of business in Missouri.
`
`Discussion
`
`Federal courts are courts of limited jurisdiction. The court may only exercise that
`
`jurisdiction which is granted by Congress. The starting point for the Court is to determine
`
`whether venue is proper within this District. Even though this action is brought under the
`
`Lanham Trademark Act (“the Act”), the Act “has no special venue provision and thus the general
`
`2
`
`Case 4:07-cv-00185-SOW Document 17 Filed 06/11/2007 Page 2 of 5
`
`

`
`venue statute is applicable.” Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995). The relevant
`
`portion of 28 U.S.C. § 1391(b) notes that a federal-question case may be filed in “a judicial
`
`district in which a substantial part of the events or omissions giving rise to the claim occurred.”
`
`28 U.S.C. § 1391(b)(2). The Eighth Circuit has recognized that “[t]he statute does not posit a
`
`single appropriate district for venue; venue may be proper in any [sic] number of districts,
`
`provided only that a substantial part of the events giving rise to the claim occurred there.” Id.
`
`(citing Setco Ents. Corp. v. Robbins, 19 F.3d 1278, 1281 (8th Cir. 1994)).
`
`In their briefing, plaintiff American Plastic briefly explains that this case was brought in
`
`the Western District of Missouri rather than any other federal court because defendant
`
`Toytrackerz has done a substantial portion of its business within the district. More specifically,
`
`that Toytrackerz has conducted business, advertised infringing articles for sale, sold infringing
`
`articles, and shipping infringing articles to buyers that reside within the Western District of
`
`Missouri, as alleged in the Complaint. In support, American Plastic attaches an affidavit and
`
`exhibits showing that one person within the Western District of Missouri purchased and received
`
`a doll from defendant.
`
`While at this point in the litigation the Court must accept all well-pleaded allegations
`
`regarding venue as true, specifically that Toytrackerz has conducted business within the Western
`
`District of Missouri, the Court may still employ its inherent power to transfer venue of this case
`
`pursuant to 28 U.S.C. § 1404(a). “For the convenience of the parties and witnesses, in the
`
`interest of justice, a district court may transfer any civil action to any other district or division
`
`where it might have been brought.” 28 U.S.C. § 1404(a).
`
`In determining whether to transfer venue, the court must consider the convenience of the
`
`3
`
`Case 4:07-cv-00185-SOW Document 17 Filed 06/11/2007 Page 3 of 5
`
`

`
`parties, the convenience of the witnesses, the interests of justice, and any other relevant factors.
`
`Terra Int’l v. Mississippi Chem. Corp., 119 F.3d 688, 696 (8th Cir. 1997). “[F]ederal courts give
`
`considerable deference to a plaintiff’s choice of forum and thus the party seeking a transfer under
`
`section 1404(a) typically bears the burden of proving that a transfer is warranted.” Id. at 695.
`
`The Court finds that venue would be proper in the District of Kansas. There is currently
`
`an open case in Bourbon County, Kansas. This case has been before the District of Kansas in the
`
`failed removal action. Further, neither party resides or maintains a place of business in Missouri.
`
`Documents and witnesses are either in Kansas or Ohio. Both attorneys reside and office in
`
`Kansas. American Plastic is a resident of Ohio and Toytrackerz is a resident of Kansas.
`
`Therefore, it would be in the interest of justice, as well as convenient, for this case to be
`
`transferred to the District of Kansas. American Plastic may vindicate its federal remedies in a
`
`federal tribunal, but these allegations should have been brought in the District of Kansas.
`
`As the Court has determined that venue is not proper in this district, it makes no opinion
`
`on all other issues raised in defendants’ brief. As the Court has determined that venue is proper
`
`in the District of Kansas, the pending motion for partial summary judgment is dismissed as moot.
`
`Accordingly, it is hereby
`
`Conclusion
`
`ORDERED that Defendants Toytrackerz and Noah Coop’s Motion to Transfer Venue,
`
`Motion to Dismiss for Lack of Subject Matter Jurisdiction, Motion for Sanctions (Doc. # 6) is
`
`granted in part. It is further
`
`ORDERED that this case is hereby transferred to the United States District Court for the
`
`4
`
`Case 4:07-cv-00185-SOW Document 17 Filed 06/11/2007 Page 4 of 5
`
`

`
`District of Kansas for all further proceedings. It is further
`
`ORDERED that Plaintiff’s Motion for Partial Summary Judgment (Doc. # 12) is
`
`dismissed as moot.
`
`Dated: June 11, 2007
`
`/s/Scott O. Wright
`SCOTT O. WRIGHT
`Senior United States District Judge
`
`5
`
`Case 4:07-cv-00185-SOW Document 17 Filed 06/11/2007 Page 5 of 5
`
`

`
`F ' L E D
`AUG - 1 2007
`
`J 3 pm ‘$9
`
`a.i'!'.°*ua.c‘lu“my"‘°T°«§n“é‘as
`
`IN THE DISTRICT COURT OF BOURBON COUNTY
`STATE OF KANSAS
`
`Case No: 06 CV 04
`
`)
`)
`)
`
`) )
`
`) )
`
`)
`)
`)
`)
`)
`)
`
`)
`
`TOYTRACKERZ LLC
`dba
`CIRCLE X RANCH
`A Kansas Limited Liability Company,
`
`Plaintiff,
`
`v.
`
`AMERICAN PLASTIC
`EQUIPMENT, INC.
`A Florida Corporation
`
`Defendant,
`
`JOURNAL ENTRY OF JUDGEMENT
`
`, 2007 the above referenced matter comes
`g 5 Z:
`NOWON THIS 51- day of
`before the Court on Plaintiffs Petition for Declaratory Judgment. Premises considered, the
`
`Court finds the following:
`
`I.
`
`2.
`
`The Court has jurisdiction over the subject matter and parties to this action.
`
`American Plastic Equipment, Inc. has no protected or actionable interest in the trademark
`
`‘Circle X Ranch’ [word mark] under K.S.A. §81~202 et seq. or Kansas common law;
`
`3.
`
`American Plastic Equipment, Inc. has no protected or actionable interest in the
`
`trademark ‘Fort Apache Fighters’ [stylized logo] under K.S.A. §8l-202 et seq. or Kansas
`
`common law;
`
`4.
`
`American Plastic Equipment, Inc. has no protected or actionable interest in the
`
`trademark ‘Best Of The West’ [stylized logo] under K.S.A. §8l-202 et seq. or Kansas common
`
`law;
`
`5.
`
`American Plastic Equipment, Inc. has no protected or actionable interest in the
`
`

`
`trademark ‘Johrmy West Adventure’ [stylized logo] under K.S.A. §81-202 et seq. or Kansas
`
`common law;
`
`6.
`
`American Plastic Equipment, Inc. has no protected or actionable interest in the trademark
`
`‘Johnny West’ [standard word mark] under K.S.A. §81-202 et seq. or Kansas common law;
`
`7.
`
`American Plastic Equipment, Inc. has no protected or actionable interest in plaintiffs use
`
`‘Marxman’ and ‘Marxman Bros.’ under K.S.A. §81-202 et seq. or Kansas common law.
`
`8.
`
`American Plastic Equipment, Inc.’s Answer, Counterclaim, and third-party claims are
`
`hereby dismissed, without prejudice, in their entirety.
`
`9.
`10.
`
`All other pending motions are hereby overruled and dismissed as moot.
`Costs charged to the responsible parties.
`
`F ' L E D
`AUG ' 1 2007
`
`Clark Of District CO
`Bourbon county. K3"
`
`'
`
`IT IS SO ORDERED.
`
`
`
`flaazémm
`David E. Herron II #15783
`Attorney For Defendant
`PO Box 2678
`Kansas City KS 66110
`(913) 371-701 1
`
`
`
`7//0/5 7
`
`Attorney For Plaintiff
`302 South Lowman Street
`Fort Scott KS 66701
`(620) 224-2945
`
`T
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 1 of 32
`
`DJW/bh
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF KANSAS
`
`AMERICAN PLASTIC EQUIPMENT, INC.,
`
`Plaintiff,
`
`v.
`
`TOYTRACKERZ, LLC, et al.,
`
`Civil Action
`
` No. 07-2253-DJW
`
`
`
`
`
`
`Defendants.
`
`MEMORANDUM AND ORDER
`
`Pending before the Court is Defendants’ Motion to Dismiss Counts II-IX for Failure to State
`
`a Claim (doc. 20). For the reasons set forth below, the Court will grant the motion and dismiss
`
`Counts II-IX with prejudice.
`
` I.
`
`Nature of the Matter Before the Court
`
`Plaintiff American Plastic Equipment, Inc. (“American) brings this action against Defendants
`
`Toytrackerz, LLC (“Toytrackerz”) and Noah Coop, who Plaintiff alleges is a managing member of
`
`Toytrackerz. Plaintiff asserts the following claims against Defendants:
`
`Count I - Copyright Infringement in violation of 17 U.S.C. § 501
`
`Count II - Trademark Infringement in violation of 15 U.S.C. § 1501
`
`Count III - Federal Dilution in violation of 15 U.S.C. § 1125(d)
`
`Count IV - Trade Dress Infringement in violation of 15 U.S.C. § 1125(a)
`
`Count V - Federal Cybersquatting in violation of 15 U.S.C. § 1125(d)
`
`Count VI - Unfair Competition
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 2 of 32
`
`Count VII1 - Request for an order compelling the Commissioner of Trademarks to cancel
`Toytrackerz’ registration of certain trademarks and restore American’s registration in them.
`
`
`
`Count VIII - Request for an order compelling the Commissioner of Trademarks to refuse
`registration of Toytrackerz’ pending applications to register trademarks
`
`Count IX - Trademark Infringement of “Fort Apache” trademark.
`
`Defendants move to dismiss Counts II-VI on the basis that they are compulsory counter-
`
`claims that American voluntarily dismissed without prejudice in a prior Kansas state court action
`
`between the parties and cannot be reasserted in this action. Defendants also move to dismiss those
`
`same claims, along with Counts VII-IX, on the basis that the doctrine of collateral estoppel bars
`
`them from being relitigated in this action because the issue of who has a protected and actionable
`
`interest in the disputed trademarks was resolved against American in the prior state action. Finally,
`
`Defendants move to dismiss Counts II-IX on the basis that the doctrine of res judicata bars their
`
`reassertion in this action because those same claims were litigated through to a final judgment in the
`
`state action.
`
`II.
`
`Standard for Ruling on a Motion to Dismiss Pursuant to Rule 12(b)(6)
`
`A dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is
`
`appropriate only when it is apparent that a plaintiff can prove no set of facts that would entitle it
`
`relief.2 Consistent with the well-established standard for evaluating a Rule 12(b)(6) motion to
`
`1Plaintiff’s Complaint contains two counts labeled “Count VII.” The first is entitled
`“Cancellation of Registered Trademarks,” and the second is entitled “Restoration of Previously
`Canceled Mark.” For clarity’s sake, the Court has combined them into one count that will be
`referred to as “Count VII.”
`
`2Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Ledbetter v. City of Topeka, 318 F.3d 1183,
`1187 (10th Cir. 2003).
`
`2
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 3 of 32
`
`dismiss, the court accepts as true all well-pleaded factual allegations in the plaintiff’s complaint.3
`
`A court’s function in ruling on a Rule 12(b)(6) motion is not to weigh potential evidence that the
`
`parties might present at trial or whether the plaintiff will prevail, but whether the plaintiff is entitled
`
`to offer evidence to support its claims.4
`
`Ordinarily, consideration of material outside of the pleadings requires the court to convert
`
`the motion to one for summary judgment and afford the parties notice and an opportunity to present
`
`relevant evidence.5 Facts subject to judicial notice may, however, be considered in a Rule 12(b)(6)
`
`motion without converting the motion to dismiss into one for summary judgment.6 This allows the
`
`court to take judicial notice of its own files, records, and pleadings, as well as facts which are a
`
`matter of public record.7 Thus, in resolving the motion, the Court will consider the other pleadings
`
`filed in this action, a related action also filed in this Court and the United States District Court for
`
`the Western District of Missouri, and an action filed in the District Court of Bourbon County,
`
`3Moya v. Schollenbarger, 465 F.3d 444, 455 (10th Cir. 2006) (quoting Maher v. Durango
`Metals, Inc., 144 F.3d 1302, 1304 (10th Cir. 1998)).
`
`4Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v.
`Fitzgerald, 457 U.S. 800 (1982)).
`
`5Tal v. Hogan, 453 F.3d 1244, 1264, n.24 (10th Cir. 2006) (quoting Sutton v. Utah State Sch.
`for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)).
`
`6Id. (citing Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1278 n. 1 (10th Cir.
`2004)).
`
`7Id. (citing Van Woudenberg ex rel. Foor v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000),
`abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001)).
`
`3
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 4 of 32
`
`Kansas.8 The Court’s consideration of those pleadings, however, will be limited to their contents,
`
`and they will not be relied upon to prove the truth of any matters asserted therein.9
`
`III.
`
`Background Information
`
`The first lawsuit involving American and Toytrackerz was a declaratory judgment action that
`
`Toytrackerz filed against American in the District Court of Bourbon County, Kansas (“State Court
`
`Action”) on January 6, 2006.10 In that action, Toytrackerz filed a “Petition for Declaratory Judgment
`
`of State and Common Law Non-Infringement of Trademarks,” in which it asserted that it sells
`
`certain products in commerce under the trademarks “Circle X Ranch,” “Apache Fighters,” “Best of
`
`the West,” “Johnny West Adventure,” “Johnny West,” and “Marxman” or “Marxman Bros.”11 The
`
`Petition also asserted that Toytrackerz sells products using Internet domain designations
`
`“www.circlexranch.com” and “www.markmanbros.com.”12 In addition, the Petition stated that by
`
`way of a December 3, 2005 “cease and desist” letter, American had accused Toytrackerz of
`
`trademark infringement and had threatened legal action, including criminal prosecution, against
`
`Toytrackerz.13
`
`8See Raab Sales, Inc. v. Domino Amjet, Inc., 530 F. Supp. 2d 1192, 1194, n.1 (D. Kan. 2008)
`(considering contents of pleadings from an Illinois state court action in ruling on Rule 12(b)(6)
`motion to dismiss).
`
`9Id. (quoting Oxford Asset Mgmt., Ltd. v. Jarvais, 297 F.3d 1182, 1188 (11th Cir. 2002)
`(public documents of which the court takes judicial notice “may only be considered to show their
`contents, not to prove the truth of matters asserted therein.”).
`
`10See Pet. for Declaratory J., Case No. 06 CV 0004, attached as Ex. E. to Defs.’ Br. in Supp.
`of Mot. to Dismiss (doc. 21).
`
`11See generally id.
`
`12Id. at ¶¶ 8 & 10.
`
`13Id., ¶ 11.
`
`4
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 5 of 32
`
`According to the Petition, the allegations contained in American’s “cease and desist” letter
`
`“raise[d] the scope, validity and enforceability of [American’s] alleged trademark interests in ‘Circle
`
`X Ranch’, ‘Fort Apache Fighters’, ‘Best Of The West’, ‘Johnny West’, ‘Johnny West Adventure’,
`
`‘Marxman Bros.’ and ‘Marxman’.”14 Toytrackerz alleged in its Petition that American had no
`
`protected or actionable interests in the above-cited trademarks “under state or common law.”15
`
`Toytrackerz requested the following relief: “Entry of Judgment that [American] is without
`
`right or authority to threaten or maintain suit against [Toytrackerz] for alleged trademark
`
`infringement of rights claimed by [American] under state or common law” for the above-cited
`
`trademarks.16 Toytrackerz also requested a preliminary and permanent injunction enjoining
`
`American from initiating or threatening trademark infringement litigation against Toytrackerz and
`
`from using any form of media to state or suggest that Toytrackerz had engaged in trademark
`
`infringement.17
`
`On February 8, 2006, American removed the State Court Action to this Court.18 American
`
`filed an Answer and Counterclaim on March 1, 2006, in which it asserted a counterclaim against
`
`Toytrackerz and new parties, Noah and Terri Coop, whom American alleged are principals of
`
`Toytrackerz.19
`
`14Id., ¶ 13.
`
`15Id., ¶ 16.
`
`16Id., Wherefore Clause ¶ i.
`
`17 Id., Wherefore Clause, ¶¶ ii & iii.
`
`18See Toytrackerz, LLC v. American Plastic Equipment, Inc., Case No. 06-cv-2042-DJW.
`
`19Answer and Countercl., Case No. 06-cv-2042-DJW (doc. 4) at ¶ 3, p. 3.
`
`5
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 6 of 32
`
`On March 9, 2006, Toytrackerz filed a motion to remand the case to state court. This Court
`
`granted the motion, finding that federal question jurisdiction was lacking because Toytrackerz’
`
`claims were based on the Kansas Trademark Act and Kansas common law.20 The Court also found
`
`diversity jurisdiction was lacking.21 On August 30, 2006, the Court remanded the case to the District
`
`Court of Bourbon County.22
`
`On October 31, 2006, American re-filed its Answer and Counterclaim in the State Court
`
`Action.23 That counterclaim (“Counterclaim”) was identical to the counterclaim American had filed
`
`in the removed federal court action. The Counterclaim consisted of seven separate counts:
`
`Count I - Copyright Infringement in violation of 17 U.S.C. § 501
`
`Count II - Trademark Infringement in violation of 15 U.S.C. § 1501
`
`Count III - Federal Dilution in violation of 15 U.S.C. § 1125
`
`Count IV - Trade Dress Infringement in violation of 15 U.S.C. § 1125(a)
`
`Count V - Federal Cybersquatting in violation of 15 U.S.C. § 1125(d)
`
`Count VI - Unfair Competition in violation of 15 U.S.C.§ 1125(a)
`
`Count VII - Kansas Unfair Competition
`
`20See 8/30/2006 Order granting Mot. to Remand (doc. 48), Case No. 06-cv-2042-DJW.
`
`21Id.
`
`22See id. and 8/31/2006 Judgment (doc. 49), Case No. 06-cv-2042-DJW.
`
`23See Answer and Countercl., Case No. 06 CV 0004l, attached as Ex. C to doc. 21.
`
`6
`
`

`
`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 7 of 32
`
`On March 9, 2007, American filed the instant action. It was initially filed in the United
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`States District Court for the Western District of Missouri, Case No. 07-cv-01885-SOW. It was
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`ultimately transferred to this Court and denominated Case No. 07-2253-DJW.24
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`The State Court Action was still pending when Plaintiff filed the instant action. On June 7,
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`2007, American filed in the State Court Action a pleading entitled “Voluntary Withdrawal of
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`Answer, Counterclaim and Third Party Claim.”25 In that pleading, American asked that its Answer,
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`Counterclaim, and Third-Party Claims be dismissed without prejudice. The pleading stated as
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`follows:
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`In open court on May 1, 2007 [American] announced the voluntary withdrawal of
`its Answer, Counterclaim and third-party claim, coupled with its consent to judgment
`under Plaintiff’s Petition, which exclusively seeks relief under Kansas law. While
`[American] has no objection to the entry of an order declaring the rights of the
`parties hereto with regard to Kansas law, [American] persists in the enforcement of
`its rights under federal law. In that regard, on March 7, 2007, [American] filed a
`Complaint with the United States District Court for the Western District of Missouri
`seeking to enforce its rights under federal law.26
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`On August 1, 2007, a Journal Entry of Judgment, signed by the parties and the state court
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`judge, was filed in the State Court Action. It provided as follows:
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`1.
`2.
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`3.
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`The Court has jurisdiction over the subject matter and parties to this action.
`American Plastic Equipment, Inc. has no protected or actionable interest in
`the trademark “Circle X Ranch” [word mark] under K.S.A. § 81-202 et seq.
`or Kansas common law;
` American Plastic Equipment, Inc. has no protected or actionable interest in
`the trademark “Fort Apache Fighters” [stylized logo] under K.S.A. § 81-202
`et seq. or Kansas common law;
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`24The action was transferred to this Court on June 11, 2007. See June 11, 2007 Order
`transferring venue, Case No. 07–cv-0185-SOW, attached as Ex. P. to Defs.’ Br. in Supp. of Mot. to
`Dismiss (doc. 21).
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`25See Voluntary Withdrawal of Answer, Countercl. and Third Party Claim in Case No. 06
`CV 0004, attached as Ex. L. to Defs.’ Br. in Supp. of Mot. to Dismiss (doc. 21).
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`26Id.
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`7
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`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 8 of 32
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`4.
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`5.
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`6.
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`7.
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`8.
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`9.
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`American Plastic Equipment, Inc. has no protected or actionable interest in
`the trademark “Best of the West” [stylized logo] under K.S.A. § 81-202 et
`seq. or Kansas common law;
`American Plastic Equipment, Inc. has no protected or actionable interest in
`the trademark “Johnny West Adventure” [stylized logo] under K.S.A. § 81-
`202 et seq. or Kansas common law;
`American Plastic Equipment, Inc. has no protected or actionable interest in
`the trademark “Johnny West” [standard word mark] under K.S.A. § 81-202
`et seq. or Kansas common law;
`American Plastic Equipment, Inc. has no protected or actionable interest in
`plaintiff’s use “Marxman” and “Marxman Bros.” under K.S.A. § 81-202 et
`seq. or Kansas common law.
`American Plastic Equipment, Inc.’s Answer, Counterclaim, and third-party
`claims are hereby dismissed, without prejudice, in their entirety.
`All other pending motions are hereby overruled and dismissed as moot.27
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`Counts I - V of the Counterclaim, which was dismissed in the State Court Action, are
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`virtually identical to the claims asserted by American in this case in Counts I - V for copyright
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`infringement, trademark infringement, federal dilution, trade dress infringement, and federal
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`cybersquatting. The Counterclaim differs somewhat from the instant action, in that the Counter-
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`claim contains two counts for unfair competition: one is pursuant to federal law (Count VI) while
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`the other is pursuant to Kansas law (Count VII). In contrast, the instant action contains only one
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`count for unfair competition (Count VI) and does not distinguish between federal and state law. The
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`Counterclaim also differs from the instant action in that it contains no claims relating to the
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`cancellation, restoration, or refusal to register trademarks as found in Counts VII-VIII of the instant
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`action. The Counterclaim also differs in that it contains no claim like that found in Count IX of the
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`instant action for infringement of the “Fort Apache” trademark.
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`278/1/2007 Journal Entry of J., Case No. 06 CV 04, attached as Ex. A to Defs.’ Br. in Supp.
`of Mot. to Dismiss (doc.21).
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`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 9 of 32
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`IV.
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`Should Counts II-VI Be Dismissed on the Basis That They Wer e Compulsor y
`Counter claims in the State Cour t Action and May Not Be Relitigated in the Instant
`Action?
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`A.
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`Summary of the Parties’ Arguments
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`Defendants move for dismissal of Counts II-VI on the basis that they were brought as
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`compulsory counterclaims in the State Court Action, and because American withdrew and
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`voluntarily dismissed them, American is barred from relitigating them in the instant action.
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`Defendants assert that American’s Counterclaim was a compulsory counterclaim with respect to
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`Defendant’s claims in the State Court Action because they both arose out of the same transaction
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`or operational set of facts. Defendants argue that “the heart of Toytrackerz’ claim in the State Court
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`Action was its assertion of ownership of six trademarks and the dispute caused by [American’s]
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`cease and desist letter.”28 Defendants recognize that Toytrackerz’ state law declaratory judgment
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`claims were centered on Kansas statutory trademark law29 and Kansas common law, while
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`American brought its Counterclaim pursuant to the federal law.30 Defendants maintain, however,
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`that the compulsory nature of a counterclaim is not based on the theory of law pled, but rather on
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`the nature of the transactions at issue. They argue that “the factual nexus” of both Toytrackerz’
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`claims and American’s counterclaim was the same –– the ownership and protected interest in the
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`six trademarks. Thus, Defendants ask the Court to rule that American’s Counterclaim was a
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`compulsory counterclaim.
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`Defendants further assert that Counts II-VI in the instant action are virtually identical to the
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`claims American pled in the Counterclaim. Because the Counterclaim was dismissed through the
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`28Defs.’ Br. in Supp. of Mot. to Dismiss (doc. 21) at p. 10.
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`29See Kansas Trademark Act, K.S.A. 81-201 et seq.
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`30See Trademark Act of 1946 (known as the Lanham Act), 15 U.S.C. §§ 1051, et seq.
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`9
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`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 10 of 32
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`Journal Entry of Judgment in the State Court Action, Defendants argue that American is barred from
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`reasserting those same claims in the instant action. Defendants relies on case law from various
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`jurisdictions, including Kansas, which holds that a party may not dismiss a compulsory counterclaim
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`in one lawsuit and then re-file it in another action.
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`American counters that the compulsory counterclaim doctrine is inapplicable to this case
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`because the claims it asserted in the Counterclaim and reasserted in Counts II-VI in the instant
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`Complaint cannot be deemed compulsory counterclaims with respect to Toytrackerz’ State Court
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`Action. American does not dispute that its Counterclaim and the instant action involve the same
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`trademarks at issue in the State Court Action. It does, however, argue that Toytrackerz’ Petition for
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`Declaratory Judgment asked only for relief under Kansas law. The Petition asked the state court to
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`(1) construe the Kansas trademark statute and Kansas common law, and (2) regulate conduct that
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`occurred within the state of Kansas. American argues that, in contrast, American’s Counterclaim
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`and Counts II-VI of the instant Complaint allege infringement and other conduct and occurrences
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`that took place outside of Kansas in interstate commerce, and that its claims rely wholly on federal
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`law. Thus, it argues that its Counterclaim and Counts II-VI of the instant action cannot be deemed
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`compulsory counterclaims with respect to the State Court Action.
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`B.
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`Applicable Law Regarding Compulsory Counterclaims
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`1.
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`This Court will apply Kansas law
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`The first issue the Court must resolve is whether to apply Kansas law or the Federal Rules
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`of Civil Procedure. This Court has, on prior occasions, held that Kansas’ compulsory counterclaim
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`statute, K.S.A. 60-213(a), should be applied to determine whether a claim filed in federal court was
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`10
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`Case 2:07-cv-02253-DJW Document 44 Filed 03/31/2008 Page 11 of 32
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`a compulsory counterclaim with respect to an earlier action brought in Kansas state court.31 This
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`Court has also applied Kansas case law to determine the preclusive effect of the failure to raise such
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`a compulsory counterclaim in the earlier state court action.32
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`In light of the above, and given that American’s Counterclaim was brought in the District
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`Court of Bourbon County, Kansas, the Court will apply the law of Kansas t