The U.S. District Court for the Northern District of Illinois denied a defendant's Fed.R.Civ.P. 12(b)(6) motion to dismiss a three-count complaint alleging (1) trademark infringement under Section 43(a) of the Lanham Act (actually an unfair competition claim), (2) infringement under the Illinois Trademark Registration and Protection Act, and (3) deceptive trade practices under the Uniform Deceptive Trade Practices Act (UDTPA). Plaintiff alleged that it had used the mark "Superior Dent" since November, 2000, and had registered the mark "Superior Paintless Dent Removal" in Illinois in April, 2001. Plaintiff further alleged that it became aware of defendant's use of "Superior Dental Removal" in January, 2001, and wrote a cease & desist letter as well as commenced negotiations with defendant regarding use of the parties' trademarks at that time. As an aside, I never realized the intellectual property rights at stake in the automobile dent removal area (see my prior post found here).
After the initial communications during the first few months of 2001, the plaintiff's complaint did not allege any further contacts with defendant regarding this matter until March, 2005, when plaintiff's attorney wrote another cease & desist letter. The defendant, therefore, argued that the Section 43(a) claim was barred by the doctrine of laches and that the Illinois Trademark and UDTPA claims were barred by the applicable statutes of limitations.
The Lanham Act (U.S. Trademark Act) does not include a statute of limitations. Instead, courts use the equitable doctrine of laches to determine whether a trademark infringement claim is untimely. Laches is actually an affirmative defense that the defendant must plead in its response to the complaint. The elements of laches are: (1) plaintiff knew of the allegedly infringing use by defendant, (2) plaintiff's delay in taking any action was inexcusable, and (3) defendant would be unduly prejudiced if plaintiff is allowed to assert its rights. The Court determined that these elements are not clearly present on the face of the complaint. While plaintiff alleged knowledge of defendant's allegedly infringing use as early as 2001, the complaint did not demonstrate that the delay in bringing the instant suit was inexcusable or that the defendant would be prejudiced by allowing the claim to be brought now.
With respect to plaintiff's claim under the Illinois Trademark Act, the Court reasoned that, similar to the federal Lanham Act, the Illinois Trademark Act does not have a statute of limitations. While it does provide that Lanham Act construction should be given persuasive authority in interpreting the Illinois Trademark Act, the Court pointed out that the Lanham Act itself does not contain a statute of limitations. Hence, the Court denied defendant's motion to dismiss count 2.
Finally, defendant argued that plaintiff's UDTPA claim should fail due to the expiration of the applicable statute of limitations. The Court, once again, asserted that the UDTPA does not set forth a statute of limitations. While the defendant might possibly have a legitimate doctrine of laches defense, the Court maintained that such a defense cannot be resolved at this stage of the litigation. Bottom line: it is very difficult to get a case dismissed under Rule 12(b)(6) based on laches unless the factual assertions in the plaintiff's complaint show inexcusable delay and prejudicial conduct. Such an affirmative defense is more likely to be successful on a motion for summary judgment after discovery has been concluded.
Superior Paintless Dent Removal, Inc. v. Superior Dent Removal, Inc., 2006 WL 2821545 (N.D. Ill., Sept. 29, 2006).