Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA234597
`ESTTA Tracking number:
`09/04/2008
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92049784
`Plaintiff
`Jill Koehler
`Jill Koehler
`403 Rankin Drive
`Englewood, OH 45322
`UNITED STATES
`jillkoehler@woh.rr.com
`Motion to Amend Pleading/Amended Pleading
`Jill Koehler
`ljillkoehler@woh.rr.com
`/JKoehler/
`09/04/2008
`11 FOJ SUIT 2-4.pdf ( 32 pages )(121163 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`

`
`Ga%£e:§38:~@?~@‘§:‘~E%3§€—§§‘¥’lEl:fl%i.R D rfiz@—4 Fiiefii%.@@.é Q8 Pafiagmi @§ 32
`
`DJW/bh
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF KANSAS
`
`AMERICAN PLASTIC EQUIPMENT, INC.,
`
`Plaintiff,
`
`Civil Action
`
`V.
`
`No. 07—2253—DJW
`
`TOYTRACKERZ, LLC, et al.,
`
`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.
`
`1.
`
`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
`
`

`
`Ga%£e:§I}B:~@?~@‘§:‘~3%l‘Z€—§§‘¥’lEl:flLR D rfizQ—4 Fiiefii%.@6,é Q8 Pafiagmfi 3% 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
`
`reas sertion 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 l2(b)(6)
`
`A dismissal for failure to state a claim under Federal Rule of Civil Procedure l2(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 l2(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.”
`
`2C0nley v. Gibson, 355 U.S. 41, 45-46 (1957); Ledbetter v. City 0fT0peka, 318 F.3d H83,
`H87 (10th Cir. 2003).
`
`

`
`Ga%£e:§I}B:~@?~@‘§:‘~3%l‘Z€—§§‘¥’lEl:flLR D rfizQ—4 Fiiefii%.@6.l Q8 Pafiagmfi 3% 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)).
`
`“Id. (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
`
`

`
`Ga%£e:§I}B:~@?~@‘§:‘~3%l‘Z€—§§‘¥’lEl:flLR D rfizQ—4 Fiiefii%.@6,é Q8 Pafiagmé 3% 32
`
`Kansas.8 The Court’ s consideration of those pleadings, however, will be lin1ited 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.”“ 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 H92, H94, n.l (D. Kan. 2008)
`(considering contents of pleadings from an Illinois state court action in ruling on Rule l2(b)(6)
`motion to dismiss).
`
`9Id. (quoting Oxford Asset Mgmt., Ltd. v. Jarvais, 297 F.3d H82, H88 (llth 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.”).
`
`1°See Pet. for Declaratory J ., Case No. 06 CV 0004, attached as EX. E. to Defs.’ Br. in Supp.
`of Mot. to Dismiss (doc. 21).
`
`“See generally id.
`
`121d. at 8 & l0.
`
`13Id., ‘][ ll.
`
`

`
`Ga%£e:§I}B:~@?~@‘§:‘~3%l‘Z€—§§‘¥’lEl:flLR D rfizQ—4 Fiiefii%.@6,é Q8 Pafiaéfl 3% 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.“ 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.”
`
`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
`
`14161., ‘]] l3.
`
`15161., ‘]] l6.
`
`16151., Wherefore Clause 7[ 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 ‘]I 3, p. 3.
`
`5
`
`

`
`Ga%£e:§I}B:~@?~@‘§:‘~3%l‘Z€—§§‘¥’lEl:flLR D rfizQ—4 Fiiefii%.@6./ Q8 Pafiafifi 3% 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.” The Court also found
`
`diversity jurisdiction was lacking.” On August 30, 2006, the Court remanded the case to the District
`
`Court of Bourbon County.”
`
`On October 31, 2006, American re—filed its Answer and Counterclaim in the State Court
`
`Action.” 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
`
`20566 8/30/2006 Order granting Mot. to Remand (doc. 48), Case No. 06—cV—2042—DJW.
`
`211d.
`
`22566 id. and 8/31/2006 Judgment (doc. 49), Case No. 06—cV—2042—DJW.
`
`23See Answer and Countercl., Case No. 06 CV 00041, attached as EX. C to doc. 21.
`
`6
`
`

`
`Ga%£e:§38:~@?~@‘§:‘~E%3§€—§$‘¥’lEl:fl%i.R D rfiz@—4 Fiiefii%,@@,é Q8 Pa@a§’m? @§ 32
`
`On March 9, 2007, American filed the instant action.
`
`It was initially filed in the United
`
`States District Court for the Western District of Missouri, Case No. 07—cV—0l885—SOW.
`
`It was
`
`ultimately transferred to this Court and denominated Case No. 07—2253—DJW.24
`
`The State Court Action was still pending when Plaintiff filed the instant action. On June 7,
`
`2007, American filed in the State Court Action a pleading entitled “Voluntary Withdrawal of
`
`Answer, Counterclaim and Third Party Claim.”25 In that pleading, American asked that its Answer,
`
`Counterclaim, and Third—Party Claims be dismissed without prejudice. The pleading stated as
`
`follows:
`
`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
`
`On August 1, 2007, a Journal Entry of Judgment, signed by the parties and the state court
`
`judge, was filed in the State Court Action. It provided as follows:
`
`1.
`
`2.
`
`3.
`
`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;
`
`“The action was transferred to this Court on June ll, 2007. See June ll, 2007 Order
`
`transferring Venue, Case No. 07—cV—0l85—SOW, attached as EX. P. to Defs.’ Br. in Supp. of Mot. to
`Dismiss (doc. 21).
`
`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).
`
`261d.
`
`

`
`(.32.‘i%:Ee:§I}B:-IE?-@‘.?:‘~.'§%l‘Z€—§§“\»’lE?z:fllLR D rfizQ—4 Fiiefii%.@6,é Q8 Pafiafimfi 3% 32
`
`4.
`
`5.
`
`6.
`
`7.
`
`8.
`
`9.
`
`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.”
`
`Counts I - V of the Counterclaim, which was dismissed in the State Court Action, are
`
`Virtually identical to the claims asserted by American in this case in Counts I - V for copyright
`
`infringement, trademark infringement, federal dilution, trade dress infringement, and federal
`
`cybersquatting. The Counterclaim differs somewhat from the instant action, in that the Counter-
`
`claim contains two counts for unfair competition: one is pursuant to federal law (Count VI) while
`
`the other is pursuant to Kansas law (Count VII).
`
`In contrast, the instant action contains only one
`
`count for unfair competition (Count VI) and does not distinguish between federal and state law. The
`
`Counterclaim also differs from the instant action in that it contains no claims relating to the
`
`cancellation, restoration, or refusal to register trademarks as found in Counts VII-VIII of the instant
`
`action. The Counterclaim also differs in that it contains no claim like that found in Count IX of the
`
`instant action for infringement of the “Fort Apache” trademark.
`
`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).
`
`

`
`Ga%£e:§I}B:~@?~@‘§:‘~3%l‘Z€—§§‘¥’lEl:flLR D rfizQ—4 Fiiefii%.@6.é Q8 Pa@a@m§ 3% 32
`
`IV.
`
`Should Counts II—VI Be Dismissed on the Basis That They Were Compulsory
`Counterclaims in the State Court Action and May Not Be Relitigated in the Instant
`Action?
`
`A.
`
`Summary of the Parties’ Arguments
`
`Defendants move for dismissal of Counts II—VI on the basis that they were brought as
`
`compulsory counterclaims in the State Court Action, and because American withdrew and
`
`Voluntarily dismissed them, American is barred from relitigating them in the instant action.
`
`Defendants assert that American’s Counterclaim was a compulsory counterclaim with respect to
`
`Defendant’s claims in the State Court Action because they both arose out of the same transaction
`
`or operational set of facts. Defendants argue that “the heart of Toytrackerz’ claim in the State Court
`
`Action was its assertion of ownership of six trademarks and the dispute caused by [American’s]
`
`cease and desist letter.”28 Defendants recognize that Toytrackerz’ state law declaratory judgment
`
`claims were centered on Kansas statutory trademark law”
`
`and Kansas common law, while
`
`American brought its Counterclaim pursuant to the federal law.” Defendants maintain, however,
`
`that the compulsory nature of a counterclaim is not based on the theory of law pled, but rather on
`
`the nature of the transactions at issue. They argue that “the factual nexus” of both Toytrackerz’
`
`claims and American’s counterclaim was the same — the ownership and protected interest in the
`
`six trademarks. Thus, Defendants ask the Court to rule that American’s Counterclaim was a
`
`compulsory counterclaim.
`
`Defendants further assert that Counts II—VI in the instant action are Virtually identical to the
`
`claims American pled in the Counterclaim. Because the Counterclaim was dismissed through the
`
`28Defs.’ Br. in Supp. of Mot. to Dismiss (doc. 21) at p. 10.
`
`29See Kansas Trademark Act, K.S.A. 81-201 et seq.
`
`3°See Trademark Act of 1946 (known as the Lanham Act), 15 U.S.C. §§ 1051, et seq.
`
`9
`
`

`
`Ca%§€{33fi{3:i§-®2=£@2—‘éi$¥iE.c$€.R
`
`DCE32m€—3:rim?€€42—4
`
`FiE§JlE%fl%.,:“Z.92€{}3i‘£®08 Pamgo W E 32
`
`Journal Entry of Judgment in the State Court Action, Defendants argue that American is barred from
`
`reasserting those same claims in the instant action. Defendants relies on case law from various
`
`jurisdictions, including Kansas, which holds that a party may not dismiss a compulsory counterclaim
`
`in one lawsuit and then re—file it in another action.
`
`American counters that the compulsory counterclaim doctrine is inapplicable to this case
`
`because the claims it asserted in the Counterclaim and reasserted in Counts II—VI in the instant
`
`Complaint cannot be deemed compulsory counterclaims with respect to Toytrackerz’ State Court
`
`Action. American does not dispute that its Counterclaim and the instant action involve the same
`
`trademarks at issue in the State Court Action. It does, however, argue that Toytrackerz’ Petition for
`
`Declaratory Judgment asked only for relief under Kansas law. The Petition asked the state court to
`
`(l) construe the Kansas trademark statute and Kansas common law, and (2) regulate conduct that
`
`occurred within the state of Kansas. American argues that, in contrast, American’s Counterclaim
`
`and Counts lI—VI of the instant Complaint allege infringement and other conduct and occurrences
`
`that took place outside ofKansas in interstate commerce, and that its claims rely Wholly on federal
`
`law. Thus, it argues that its Counterclaim and Counts lI—VI of the instant action cannot be deemed
`
`compulsory counterclaims with respect to the State Court Action.
`
`B.
`
`Applicable Law Regarding Compulsory Counterclaims
`
`I.
`
`This Court will apply Kansas law
`
`The first issue the Court must resolve is whether to apply Kansas law or the Federal Rules
`
`of Civil Procedure. This Court has, on prior occasions, held that Kansas’ compulsory counterclaim
`
`statute, K.S.A. 60—2l3(a), should be applied to determine whether a claim filed in federal court was
`
`10
`
`

`
`Ca%§€{3Bfi{3:i§~®2=£@2J.§i$’¥iE.c$€.R D €fiE?§E$i4Q-4
`
`FiE§o3E%,€%,:“32€§).i2®G8 Pafiagé E? E 32
`
`a compulsory counterclaim with respect to an earlier action brought in Kansas state court.“ This
`
`Court has also applied Kansas case law to determine the preclusive effect of the failure to raise such
`
`a compulsory counterclaim in the earlier state court action.”
`
`In light of the above, and given that American’s Counterclaim was brought in the District
`
`Court of Bourbon County, Kansas, the Court will apply the law of Kansas to decide whether it was
`
`a compulsory counterclaim and to determine the preclusive effect, if any, of it being dismissed
`
`without prejudice in the State Court Action.”
`
`2.
`
`Definition of compulsory counterclaim under Kansas law
`
`Compulsory counterclaims are defined by K.S.A. 60—2l3(a) as follows:
`
`A pleading shall state as a counterclaim any claim which at the time of serving the
`pleading the pleader has against any opposing party, if it arises out of the transaction
`or occurrence that is the subject matter of the opposing party’s claim and does not
`require for its adjudication the presence of third parties of whom the court cannot
`acquire jurisdiction .
`.
`.
`.34
`
`3.
`
`Preclasive eflect of not asserting the claim as a compulsory counterclaim or
`
`dismissing the counterclaim
`
`Although the statute itself does not explicitly provide that failure to plead a compulsory
`
`counterclaim precludes the pleader from asserting it in a subsequent action, Kansas courts have
`
`“See, e.g., Lee v. Farmers Group, Inc., 923 F. Supp. 1391, 1399 (D. Kan. 1996).
`
`32See id.
`
`33Even if the Court were to apply federal compulsory counterclaim law to determine these
`issues, the Court’ s holding would not differ. As discussed in detail in Part IV.C. l, infra. , the Kansas
`compulsory counterclaim statute is virtually identical to Fed. R. Civ. P. l3(a), which governs
`compulsory counterclaims brought in federal court.
`
`“K.S.A. 60—2l3(a). While K.S.A. 60—2l3(a) carves out two exceptions to this general rule,
`neither exception is applicable here.
`
`ll
`
`

`
`Ca%§€{33fi{3:i§-®2=£@2—‘éi$¥iE.c$€.R
`
`DCE32m€—3:rim?€€42—4
`
`FiE§JlE%fl%.,:“Z.92€{}3i‘£®08 Pamge E? E 32
`
`consistently applied the statute in that fashion.35 Thus, “[i]t is well established in Kansas that he
`
`failure to assert a compulsory counterclaim prevents a party from bringing a later independent action
`
`on that claim.”36
`
`This general rule applies to the failure to assert the claim as a counterclaim in the first action.
`
`It does not directly address the situation where a party asserts the claim as a counterclaim and then
`
`voluntarily dismisses it while the rest of the action goes to judgment, only to reassert it in another
`
`action. These are the rather unique facts of this case. Fortunately, a similar factual scenario was
`
`addressed by the Kansas Court of Appeals in Bugner v. Farm Bureau Mutual Insurance Co.” In
`
`that case, the plaintiff, Daryl Bugner, and an uninsured motorist, Erin Lathen, were involved in a
`
`car collision. Lathen sued Bugner for personal injuries she suffered in the collision. Bugner filed
`
`a counterclaim, asserting that Lathen was at fault and seeking to recover for his personal injuries.
`
`Bugner then filed a separate lawsuit against his insurance company, Farm Bureau, to recover under
`
`his uninsured motorist coverage. Farm Bureau moved to consolidate the actions, but the other
`
`parties objected, and the judge refused to consolidate them. Bugner offered to withdraw his
`
`counterclaim against Lathen if the parties would agree that any finding of fault in the mthen case
`
`would not be binding in Bugner’ s action against Farm Bureau. Over Farm Bureau’s objection, the
`
`court allowed the parties to include a provision in the Lathen pretrial order that the findings in
`
`35See, e.g., Loving v. Fed. Land Bank of Wichita, 244 Kan. 96, 99, 766 P.2d 802 (1988);
`Mohr v. State Bank 0fStanley, 241 Kan. 42, 51, 734 P.2d 1072 (1987); U.S. Fid. & Guar. Co. v.
`Maish, 21 Kan. App. 2d 885, 890, 908 P.2d 1329 (1995).
`
`“Loving, 244 Kan. at 99.
`
`3728 Kan. App. 2d 537, 18 P.3d 283 (2001).
`
`12
`
`

`
`Ca%§€{33fi{3:i§-®2=£@2—‘éi$¥iE.c$€.R
`
`DCE32m€—3:tim?€€42—4
`
`FiE§JlE%fl%.,:“Z.92€{}3i‘£®08 Pamge E3 E 32
`
`Lathen were binding only as to the Lathen case and would not bind the parties in any other action.
`
`Bugner then dismissed his counterclaim without prejudice.38
`
`The jury in Lathen returned a Verdict finding Lathen 10% at fault, another party 25% at fault,
`
`and Bugner 65% at fault. Farm Bureau moved for judgment on the pleadings in the action Bugner
`
`had brought against it, arguing that Bugner’ s fault had been determined by the Lathen Verdict. The
`
`judge denied the motion, noting that the cases had not been consolidated and the parties had agreed
`
`in the Lathen case that the findings in that case would not be binding in any other case. The jury in
`
`the Bugner case found that Lathen was 100% at fault. State Farm appealed to the Kansas Court of
`
`Appeals, arguing that all of the issues should have been resolved in one lawsuit, i.e., the Lathen
`
`suit.”
`
`The Kansas Court of Appeals agreed. Relying on the compulsory counterclaim rule, the
`
`court held as follows:
`
`Although Daryl [Bugner] did not initiate the suit against the tortfeasor, Erin [Lathen]
`he was obligated under K.S.A. 60—213(a) to file a counterclaim against Erin once he
`
`was sued by Erin. Because Daryl’ s claim against Erin arose out of the same accident
`that resulted in Erin’ s claim against Daryl,
`this made Daryl’ s counterclaim
`compulsory. Although Daryl initially filed a counterclaim against Erin, he later
`dismissed it. Nevertheless, Daryl was required to maintain his counterclaim against
`Erin or be barred from later bringing an independent action on this claim/‘O
`
`The Kansas Court of Appeals concluded that because all of the issues of liability concerning
`
`Bugner’s uninsured motorist claim could have been litigated in the Lathen lawsuit, Bugner was
`
`381d. at 538.
`
`391d. at 539.
`
`401d. at 540 (citing Stock v. Nordhas, 216 Kan. 779, 781, 533 P.2d 1324 (1975)) (emphasis
`
`added).
`
`13
`
`

`
`Ca%§€{33fi{3:i§-®2=£@2—‘éi$¥iE.c$€.R
`
`DCE32m€—3:rim?€€42—4
`
`FiE§J’£E%fl%.4"Z.92€{}3'i‘£®08 Pamge mt E 32
`
`“precluded from having a second opportunity to litigate percentages of causal negligence.”“ The
`
`court therefore held that Bugner should not have been allowed to reassert his claim in his own
`
`lawsuit against Farm Bureau.“
`
`The Bugner decision thus stands for the proposition that when a party files a compulsory
`
`counterclaim in an action in Kansas state court, that party must maintain that claim or be barred from
`
`later bringing another action on that claim. The fact that the counterclaimaint dismisses the
`
`counterclaim without prejudice and even with the other parties’ agreement that the first action will
`
`not be binding in any other actions involving the parties, does not alter the preclusive effect of the
`
`dismissal.
`
`In sum, a party’s dismissal of a compulsory counterclaim in an action that eventually
`
`goes to judgment, even when the dismissal is without prejudice, precludes that party from refiling
`
`that same claim in another action.
`
`The rule from Bugner is consistent with the small number of other published cases that have
`
`addressed the dismissal of compulsory counterclaims that are later reasserted.43 The Bugner rule is
`
`also consistent with the Advisory Committee’ s Note to Federal Rule of Civil Procedure l3(a), which
`
`states: “If the action proceeds to judgment without interposition of a counterclaim as required by
`
`“Id.
`
`“Id.
`
`“See, e.g., SSMC, Inc., N. V. v. Stefien, 102 F.3d 704, 711 (4th Cir. 1996) (affirming district
`court’ s conclusion that dismissal of a compulsory counterclaim, even when it is without prejudice,
`
`would bar relitigation of that claim in another action) (citing Fed. R. Civ. P. 13 (a) and advisory
`comn1ittee’s note); Grynberg v. Phillips, 148 P.3d 446, 449 (Colo. Ct. App. 2006) (applying
`counterclaim rule similar to Kansas’ rule and affirming trial court’s ruling that party’s voluntary
`dismissal without prejudice of compulsory counterclaim precluded litigation of that claim in another
`case).
`
`14
`
`

`
`Ca%§€{33fi{3:i§-®2=£@2—‘éi$¥iE.c$€.R
`
`DCE32m€—3:rim?€€42—4
`
`FiE§JlE%fl%.4"Z.92€{}3'i‘£®08 Pafiagé E5 E 32
`
`subdivision (a) of this rule, the counterclaim is barred.”44 The clear inference to be drawn from the
`
`Advisory Comn1ittee’ s Note is that when a party asserts a compulsory counterclaim,
`
`the
`
`counterclaim should be taken to judgment; if it is withdrawn or dismissed while the rest of the action
`
`is taken to judgment, the counterclaim may not be reasserted in a later action.
`
`C.
`
`Application of the Law to this Case
`
`Having determined the applicable law, the Court must first decide whether American’ s
`
`Counterclaim was a compulsory counterclaim as defined by K.S.A. 60—2l3(a). If so, the Court must
`
`then determine whether the Bagner rule applies and whether it prevents American from asserting
`
`Counts II—VI in the instant action.
`
`I .
`
`Was the Counterclaim a compulsory counterclaim in the State CoartAction ?
`
`As explained above, K.S.A. 60—2l3(a) provides that a counterclaim is compulsory if “it arises
`
`out of the transaction or occurrence that is the subject matter of the opposing party’ s claim.” Kansas
`
`courts have provided little guidance as to how this definition is to be applied. They have, however,
`
`consistently and expressly followed federal case regarding compulsory counterclaims, given the
`
`close similarities between K.S.A. 60—213(a) and Federal Rule of Civil Procedure 13(a).45 Thus, case
`
`law from the Tenth Circuit further defining the term “arising out of the transaction or occurrence”
`
`is helpful.
`
`The Tenth Circuit has noted that “courts have given the terms ‘transaction’ and ‘occurrence’ .
`
`.
`
`. flexible and realistic constructions in order to effect ‘judicial economy’, i.e., trial in one action
`
`“Fed. R. Civ. P. l3(a) advisory comn1ittee’s note 7 (1937).
`
`“See, e.g., Stock v. Nordhas, 216 Kan. 779, 782, 533 P.2d 1324 (1975) (“Traditionally, we
`have followed federal interpretation of federal procedural rules after which our own have been
`patterned. We see no reason to depart here from that view where our own policy [imbedded in
`
`K.S.A. 60—213(a)] is to avoid piecemeal [litigation].”).
`
`15
`
`

`
`Ca%§€{33fi{3:i§-®2=£@2—‘éi$¥iE.c$€.R
`
`DCE32m€—3:rim?€€42—4
`
`FiE§JlE%fl%.,:“Z.92€{}3i‘£®08 Pafiagfi W E 32
`
`of all related controversies between the parties and, of course, the avoidance of multiplicity of
`
`suits.”46 The Tenth Circuit has also observed that rather than attempting to define the terms
`
`“transaction” and “occurrence” precisely, “most courts .
`
`.
`
`. have preferred to suggest standards by
`
`which the compulsory or permissive nature of specific counterclaims may be determined.”47 Most
`
`courts, including the Tenth Circuit, will consider one or more of the following factors: (1) whether
`
`the issues of fact and law raised by the claim and counterclaim are largely the same; (2) whether
`
`substantially the same evidence will support or refute the claim and counterclaim; and (3) whether
`
`there is a “logical relationship between the claim and counterclaim/‘8
`
`Applying these factors here, the Court concludes that the claims American asserted in its
`
`Counterclaim were compulsory counterclaims in the State Court Action. The issues of law and fact
`
`raised by Toytrackerz’ declaratory judgment action and American’ s Counterclaim were primarily
`
`the same. Both Toytrackerz, through its action for declaratory judgment, and American, through
`
`its Counterclaim, asserted that they own the same disputed trademarks and have a protected right
`
`to use them. More specifically, both the declaratory judgment action and the Counterclaim raised
`
`issues as to the ownership, scope, validity and enforceablity of the same seven trademarks, and
`
`would require a court to determine which party had a protected and actionable interest in each of
`
`those trademarks.”
`
`“Fox v, Maalding, ll2 F.3d 453, 457 (10th Cir. 1997) (quoting Pipeliners Local Union No.
`798 v. Ellerd, 503 F.2d ll93, ll98 (10th Cir. 1974)).
`
`"Fox, ll2 F.3d at 457 (quoting Pipeliners Local, 503 F.2d at ll98).
`
`48Id. (quoting Pipeliners Local, 503 F.2d at ll98).
`
`49To seek redress under either federal or Kansas law for trademark infringement and the other
`trademark—related claims asserted by the parties, the claimant must be able to prove ownership of,
`or a valid, protectable interest in, the trademark. See Donclzez v. Coors Brewing Co., 392 F.3d l2l 1,
`(continued...)
`
`16
`
`

`
`Ca%§€{3Bfi{3:i§~®2=£@2J.§i$’¥iE.c$€.R D €fiE?§E$i4Q-4
`
`FiE§o3E%,€%,:“32€§),i2®08 Pafiatgé" EYE 32
`
`The fact that Toytrackerz brought its declaratory judgment action pursuant to the Kansas
`
`Trademark Act” and Kansas common law, while American brought its Counterclaim pursuant to
`
`the Lanham Act,“ is not dispositive. The issue is not whether both parties sue on the same causes
`
`of action or under the same legal theories; rather, the issue is whether both actions arose out of the
`
`same transactions or occurrences. Courts have consistently looked beyond the particular legal
`
`theories pled and held claims to be compulsory counterclaims to earlier actions, even though the
`