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Aegis Food Testing Laboratories, Inc. v. Aegis Sciences Corp.

United States District Court, D. South Dakota, Southern Division

December 20, 2012

AEGIS FOOD TESTING LABORATORIES, INC., a South Dakota company, Plaintiff,
v.
AEGIS SCIENCES CORPORATION, a Tennessee corporation, Defendant and Third-Party Plaintiff,
v.
Aegis Food Testing Laboratories of Oklahoma, LLC, a South Dakota limited liability company, Third-Party Defendant.

Page 743

Michael P. Schmiedt, Crary Huff, South Sioux City, NE, Michael T. Griggs, Boyle FredricksonS.C., Milwaukee, WI, for Plaintiff.

Christina L. Klinger, May, Adam, Gerdes & Thompson, Pierre, SD, Joel T. Galanter, Adams and Reese LLP, Nashville, TN, Melissa S. Rizzo, Adams and Reese LLP, Tampa, FL, for Defendant and Third-Party Plaintiff.

ORDER

KAREN E. SCHREIER, Chief Judge.

Plaintiff, Aegis Food Testing Laboratories, Inc., brought a declaratory judgment action against defendant, Aegis Sciences Corporation, to determine whether Aegis Food was infringing upon the trademark rights of Aegis Sciences. Docket 1. Aegis Sciences answered and brought four counterclaims. Docket 8. Aegis Food moves to dismiss count four of Aegis Sciences' counterclaim asserting that the court does not have subject matter jurisdiction over that count, which pertains to state marks, and that Aegis Sciences failed to state a claim upon which relief can be granted. Docket 17. Aegis Sciences resists the motion to dismiss and argues that the court can order that the state-registered marks be canceled under the Declaratory Judgment Act and that it has sufficiently stated a claim upon which relief may be granted. Docket 18. For the following reasons, Aegis Food's motion to dismiss is denied in part and granted in part.

BACKGROUND

According to the pleadings: Aegis Food is a South Dakota company that is headquartered in North Sioux City, South Dakota. Aegis Sciences is a Tennessee corporation that has its headquarters in Nashville, Tennessee. Both companies are engaged in an industry that involves scientific testing. Aegis Food alleges that its business consists mainly of testing meat for pathogens. Aegis Sciences engages in forensic science testing that relates to food testing services, namely, laboratory testing of dietary and nutritional supplements and other foods for the presence of drugs, steroids, and other elements.

Since 1990, Aegis Sciences has continuously used the mark AEGIS in relation to providing laboratory testing services and related consulting services. In the years that followed, Aegis Sciences added additional types of testing and services. Since 1999, Aegis Sciences has owned and operated a website and registered the domain name of www. aegislabs. com. Aegis Sciences also owns a number of federally registered marks with the Aegis name. Aegis Sciences offers its testing services nationwide. Aegis Food, conversely, has registered marks relating to the word Aegis in the states of South Dakota, Iowa, Illinois, Nebraska, and Texas.

Page 744

Aegis Sciences first became aware of Aegis Foods on January 6, 2011, when a customer of Aegis Food sent an email to Aegis Sciences by mistake. Aegis Sciences then sent Aegis Food a cease and desist letter on January 26, 2011, requesting that Aegis Food stop using the Aegis mark. For approximately a year after the letter was sent the parties attempted to resolve the trademark concerns raised in the letter. The parties could not reach an agreement.

Aegis Food filed suit, requesting that the court declare its non-infringement of Aegis Sciences' registered marks. Docket 1 at 3-4. Aegis Sciences answered and raised a number of counterclaims. In count four of the counterclaim, Aegis Sciences requests " declaratory relief cancelling [Aegis Food]'s state trademark registrations." Docket 8 at 14. Specifically, Aegis Sciences argues that the state trademarks that Aegis Food obtained in the states of South Dakota, Nebraska, Iowa, Illinois, and Texas were fraudulently obtained, were registered improperly, and are so similar to Aegis Sciences' marks that this court should declare that the registrations be canceled on those grounds.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(1) provides that a court may dismiss an action for lack of subject matter jurisdiction. It is a rule " ‘ rooted in the unique nature of the jurisdictional question.’ " Osborn v. United States, 918 F.2d 724, 729 (8th Cir.1990) (quoting Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.1981)). Under a motion to dismiss based on lack of subject matter jurisdiction, the defendant may challenge either the plaintiff's complaint on its face or based on the factual truthfulness of the claims. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir.1993); Osborn, 918 F.2d at 729 n. 6. The plaintiff carries the burden of showing that jurisdiction exists. V S Ltd. P'ship v. Dep't of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir.2000) (citation omitted). " A motion to dismiss for lack of jurisdiction under rule 12(b)(1) which is limited to a facial attack on the pleadings is subject to the same standard as a motion brought under Rule 12(b)(6)." Mattes v. ABC Plastics, Inc., 323 F.3d 695, 698 (8th Cir.2003) (citation omitted).

When reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court assumes that all facts in the complaint are true and construes any reasonable inferences from those facts in the light most favorable to the nonmoving party. Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008). To decide the motion to dismiss under Rule 12(b)(6), the court may consider the complaint, some materials that are part of the public record, or materials embraced by the complaint. Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir.1999). To survive the motion to dismiss, the complaint must contain " enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The factual content in the complaint must " allo[w] the court to draw the ...


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