Bullets2bandages, LLC v. Caliber Corporation

Opinion

6 UNITED STATES DISTRICT COURT

7 SOUTHERN DISTRICT OF CALIFORNIA

8 BULLETS2BANDAGES, LLC, a Case No. 3:18-cv-00669-GPC-MSB 9 California limited liability company,

10 Plaintiff, ORDER GRANTING CALIBER’S MOTION FOR LEAVE TO FILE 11 v. AMENDED COUNTERCLAIMS AND THIRD-PARTY CLAIMS 12 CALIBER CORPORATION, an Illinois corporation, [Dkt. No. 64.] 13 Defendant. 14 CALIBER CORPORATION, an Illinois 15 Corporation,

16 Counterclaim-Plaintiff,

17 v.

18 BULLETS2BANDAGES, LLC, a California limited liability company, 19 Counterclaim-Defendant, 20 CALIBER CORPORATION, an Illinois 21 Corporation,

22 Third-Party Plaintiff,

23 v.

24 LUCKY SHOT USA LLC, a Florida 25 Limited Liability Company; and 2 MONKEY TRADING, LLC, a Florida 26 Limited Liability Company,

27 Third-Party Defendants, 1

3 LUCKY SHOT USA LLC, a Florida Limited Liability Company; and 2 4 MONKEY TRADING LLC, a Florida Limited Liability Company, 5 Third- Party Counterclaim- 6 Plaintiffs,

7 v.

8 CALIBER CORPORATION, an Illinois Corporation, 9 Third Party Counterclaim- 10 Defendant.

12 Before the Court is Defendant/Counterclaim Plaintiff/Third-Party 13 Plaintiff/Third Party Counterclaim-Defendant Caliber Corporation’s motion for leave 14 to file an Amended Counterclaim and Third-Party Claim. (Dkt. No. 64.) Third Party 15 Defendant/Third Party Counterclaim Plaintiff 2 Monkey Trading LLC and 16 Plaintiff/Counterclaim-Defendant Bullets2Bandages, LLC filed an opposition. (Dkt. 17 No. 77.) Caliber filed a reply. (Dkt. No. 84.) Based on the reasoning below, the Court 18 GRANTS Caliber’s motion for leave to file an Amended Counterclaim and Third Party 19 Complaint. 20 Background 21 Plaintiff Bullets2Bandages, LLC (“B2B”) and Defendant Caliber Corporation 22 (“Caliber”) are both in the business of selling bullet-shaped bottle openers. (Dkt. No. 23 41, Counterclaim ¶ 14; Case No. 13cv3134-CAB(BLM), Dkt. No. 1, Compl. ¶ 11.) On 24 December 20, 2013, in Case No. 13cv3134-CAB(BLM), B2B filed a complaint against 25 Caliber for trademark infringement of B2B’s U.S. Trademark Registration No. 26 4,364,453 for the CALIBER mark as well as a federal unfair competition, and 27 1 California statutory and common law unfair competition claims. (Case No. 13cv3134- 2 CAB(BLM), Dkt. No. 1, Compl.) In turn, Caliber filed a counterclaim against B2B for 3 unfair competition based on B2B’s wrongful use of the CALIBER mark and wrongful 4 use of Caliber’s Bullet Trade Dress1, cancellation of the CALIBER mark2, false or 5 fraudulent registration, and trademark infringement and unfair competition under 6 California law. (Id., Dkt. No. 15, Caliber’s Ans./Counterclaim.) 7 On June 9, 2014, B2B and Caliber entered into a Settlement Agreement in Case 8 No. 13cv3134-CAB(BLM), effective April 7, 2014, where B2B assigned to Caliber all 9 rights to the CALIBER Mark, U.S. Trademark Registration No. 4,364,453, agreed to 10 withdraw its opposition to Caliber’s registration of the Bullet Trade Dress3 and agreed 11 not to use the phrase “the original”4 in connection with the sale of bullet-shaped bottle 12 openers. (Dkt. No. 41, Counterclaim ¶ 23; id., Ex. 2.) In exchange, Caliber agreed to 13 grant B2B a worldwide, nonexclusive license to the Bullet Trade Dress and to “B2B’s 14 then-current use of the word ‘Caliber’”. (Id. ¶ 23; Dkt. No. 1, Compl. ¶ 9.) 15 The Complaint alleges that B2B, relying on its rights under the Settlement 16 Agreement, manufactures products that it then sells to wholesalers, such as 2 Monkey 17 Trading, LLC (“2 Monkey”) (a/k/a Lucky Shot) who sells the products directly to 18 consumers. (Dkt. No. 1, Compl. ¶ 11.) 2 Monkey sells B2B’s products through 19 Amazon and Etsy. (Id.) B2B learned that someone complained that 2 Monkey’s 20 products were infringing. (Id. ¶ 12.) Due to the complaints, Amazon and Etsy removed 21 2 Monkey’s listings from their websites, barring it from engaging in any sales of B2B’s 22 products. (Id.) 23

24 1 The Bullet Trade Dress Application No. 85/588,703 became U.S. Trademark Registration No. 4,630,557 on November 7, 2014. (Dkt. No. 41, Counterclaim ¶ 17.) 25 2 On January 16, 2014, Caliber also filed a petition for cancellation of B2B’s CALIBER mark. (Dkt. No. 41, Counterclaim ¶ 22.) 26 3 On December 23, 2013, B2B filed an opposition to Caliber’s application for registration of the Bullet Trade Dress with the USPTO claiming that the mark constituted matter that is functional. (Dkt. No. 41, Counterclaim ¶ 21.) 27 4 Caiber also owns trademark Registration No. 4,930,487 for the mark, ORIGINAL .50 CALIBER BOTTLE OPENER. (Dkt. No. 41, Counterclaim ¶ 19.) 1 B2B suspected Caliber complained to Amazon and Etsy and when it contacted 2 Caliber, it was slow to respond despite the substantial financial damage to B2B for 2 3 Monkey’s inability to sell its products. (Id. ¶¶ 14-16.) Caliber then told B2B that it 4 was disappointed that B2B had signed an agreement with 2 Monkey. (Id. ¶ 17.) Instead 5 of raising an issue concerning the Settlement Agreement, it asked B2B to repudiate its 6 agreement with 2 Monkey so that B2B and Caliber could work together to make 2 7 Monkey pay a higher rate. (Id.) Caliber also threatened that it would begin licensing 8 the CALIBER Mark and Bullet Trade Dress to anyone so that the market would be 9 flooded ultimately taking sales away from B2B and 2 Monkey. (Id. ¶ 18.) 10 Consequently, on April 3, 2018, B2B filed the underlying Complaint against 11 Caliber for breach of contract, interference with existing contractual relations, 12 interference with prospective economic advantage and unfair competition under 13 California Business & Professions Code section 17200 et seq. (Dkt. No. 1, Compl.) 14 Meanwhile, Caliber’s Counterclaim and Third-Party Complaint alleges that 15 following the execution of the Settlement Agreement, Caliber manufactured large 16 caliber bullet-shaped bottle openers for third parties including, 2 Monkey. (Dkt. No. 17 41, Counterclaim ¶ 36.) On or after April 7, 2017, Caliber told 2 Monkey that it could 18 offer a nonexclusive license to its Bullet Trade Dress. (Id. at ¶ 37.) 2 Monkey then 19 ceased purchasing product from Caliber and expressed an interest in obtaining a license 20 for sale of products bearing the Bullet Trade Dress. (Id. ¶ 38.) During the remainder 21 of 2017, 2 Monkey continued to independently purchase and/or manufacture bullet- 22 shaped bottle openers. (Id. ¶ 39.) Around April 2017, 2 Monkey contracted with Triton 23 Welding & Machine Shop located in Cocoa, Florida to cut openings in .50 caliber shell 24 casings and contracted with Orlando Contract Packaging located in Altamonte Springs, 25 Florida to assemble .50 caliber bottle openers. (Id. ¶ 40.) 2 Monkey then de-burred 26 and polished the bottle openers, itself, and sold them to others through Lucky Shot. 27 (Id.) 2 Monkey knew it needed a license to the Bullet Trade Dress and engaged in 1 negotiations with Caliber throughout 2017 and early 2018 regarding a license for the 2 sale of large caliber bottle openers. (Id. ¶ 42.) On January 25, 2018, after making a 3 requested change by 2 Monkey to the agreement, Caliber believed they had an 4 agreement. (Id. ¶ 43.) But 2 Monkey delayed execution of the agreement. (Id. ¶ 44.) 5 On February 23, 2018, 2 Monkey told Caliber that it would purchase products from 6 B2B instead of Caliber. (Id. 45.) Because they did not enter into a license agreement, 7 2 Monkey’s prior sales of bullet-shaped bottle openers since April 2017 were 8 unlicensed, unauthorized and counterfeit. (Id. ¶ 46.) 9 Around February 23, 2018, 2 Monkey entered into a Manufacturing Agreement 10 with B2B without Caliber’s knowledge, and on that day, 2 Monkey placed its first order 11 of 5,000 .50 caliber bullet-shaped bottle openers and other bullet-shaped bottle openers. 12 (Id. ¶ 47.) As a result, Caliber notified Amazon and Etsy on February 23, 2018 that 13 Lucky Shot’s then-existing product was infringing its Bullet Trade Dress. (Id. ¶ 48.) 14 B2B did not obtain Caliber’s consent to transfer rights to the Bullet Trade Dress or 15 CALIBER mark to 2 Monkey or Lucky Shot. (Id. ¶ 49.) Lucky Shot continues to list 16 bullet-shaped bottle openers on its own website, Amazon.com and Etsy.com without a 17 license from Caliber. (Id. ¶ 50.) Lucky Shot also uses the phrase “the original” without 18 a license from Caliber. (Id. ¶ 51.) B2B continues to use the phrase “the original” in 19 connection with the sale of bullet-shaped bottle openers without a license from Caliber. 20 (Id. ¶ 52.) Amazon and Etsy removed specific listings of Lucky Shot to comply with 21 their policies on sale of infringing and/or counterfeit products. (Id. ¶ 53.) On March 22 1, 2018, B2B contacted Caliber demanding that the take-down notices be withdrawn 23 explaining that all 2 Monkey/Lucky Shot products were being manufactured by B2B 24 as of Monday, February 26, 2018. (Id. ¶ 56.) In response, Caliber sought a copy of the 25 Manufacturing Agreement that was heavily redacted but confirmed that B2B and 2 26 Monkey/Lucky Shot entered into a sublicense agreement. (Id. ¶ 60.) Moreover, 27 invoices related to the production of bottle openers for 2 Monkey were produced 1 indicating that B2B subcontracted with Triton Welding & Machine Shop, Inc. and 2 Orlando Contract Packaging, the same companies 2 Monkey hired directly to 3 manufacture bottle openers from April 2017 to February 2018. (Id. ¶¶ 61-62.) Caliber 4 also requested the pricing information in the Manufacturing Agreement and purchase 5 documents that verify that B2B is the manufacturer but B2B and 2 Monkey refused. 6 (Id. ¶¶ 65, 66.) Therefore, Caliber is unable to determine whether the Lucky Shot 7 bullet-shaped bottle openers on Amazon and Etsy are counterfeit, non-infringing or 8 produced under the settlement agreement with B2B. (Id. ¶ 67.) 9 Based on these facts, on April 27, 2018, Defendant Caliber filed its Answer and 10 a Counterclaim against B2B for breach of contract, interference with prospective 11 economic advantage and negligent misrepresentation, unfair competition, two counts 12 of federal unfair competition pursuant to 15 U.S.C. § 1125(a) for the CALIBER and 13 ORIGINAL marks, and two counts of trademark infringement of U.S. Registration No. 14 4,930,487 (THE ORIGINAL .50 CALIBER BOTTLE OPENER) and the U.S. 15 Registration No. 4,364,453 (CALIBER) pursuant to 15 U.S.C. § 1114. (Dkt. No. 5.) 16 Caliber also filed a Third-Party Complaint (“TPC”) against Third Party Defendants 17 Lucky Shot and 2 Monkey. (Id.) In the TPC, Caliber alleges eight causes of action of 18 common law unfair competition, three counts of trademark infringement of U.S. 19 Registration No. 4,630,557 (Bullet Design mark), U.S. Registration No. 4,364,453 20 (CALIBER) and U.S. Registration No. 4,930,487 (ORIGINAL .50 CALIBER 21 BOTTLE OPENER) pursuant to 15 U.S.C. § 1114; three counts of federal unfair 22 competition pursuant to 14 U.S.C. § 1125(a), and counterfeiting. (Dkt. No. 5 at 22- 23 29.) 24 On June 8, 2018, B2B filed its Answer to Caliber’s Counterclaims. (Dkt. No. 25 22.) On August 7, 2018, Third Party Defendants filed their Answer to the TPC and 26 filed a Third-Party Counterclaim. On August 28, 2018, Caliber filed its answer to the 27 Third-Party Defendants’ Counterclaim. (Dkt. No. 30.) 1 On January 9, 2019, the Court granted Caliber’s unopposed motion for leave to 2 file an Amended Answer, Counterclaims and Third-Party Complaint due to a 3 typographical error. (Dkt. Nos. 37, 39, 40.) On January 10, 2019, Caliber filed the 4 operative Amended Answer, Counterclaims and Third-Party Claims. (Dkt. No. 41.) 5 On January 24, 2019, Third Party Defendants filed an Answer to the Third-Party 6 Complaint and Counterclaim as well as their Third Party Counterclaims against Caliber 7 seeking a declaration that trademark registration no. 4,630,557 (Bullet Trade Dress) is 8 invalid, cancellation of federal trademark registration No. 4,630,557 (Bullet Trade 9 Dress), cancellation of federal trademark registration No. 4,364,453 (CALIBER mark), 10 and cancellation of federal trademark registration No. 4,930,487 (ORIGINAL mark). 11 (Dkt. No. 42 at 15-22.) 12 The deadline for the completion of fact discovery in this case was May 10, 2019 13 and expert discovery deadline was September 13, 2019. (Dkt. No. 35 at 2-3.) Summary 14 judgment motions were filed by all parties on October 28, 2019 and are now fully 15 briefed. (Dkt. Nos. 59, 68, 80, 81, 87, 89.) 16 On September 12, 2019, B2B and 2 Monkey entered into an Asset Purchase 17 Agreement (“APA”) where B2B sold all of its business assets related to bullet bottle 18 openers, including the subject matter of the Settlement Agreement, which is at issue in 19 this case, to 2 Monkey. (Dkt. No. 64-10,Ex. 6 to Ex. A.) The APA specifically 20 provides, 21 a. B2B hereby assigns, transfers, grants, conveys, and delivers to 2 22 Monkey, all of its business assets related to the subject matter of the 23 Settlement Agreement free and clear of all debts, security interest, liens, charges, or other encumbrances. For example, this includes 24 B2B’s bullet bottle opener manufacturing business. 25 b. The Parties hereby make this assignment retroactively effective as of April 7, 2017. 26 (Id., APA ¶ 1.) 27 1 Due to the APA, on September 13, 2019, 2 Monkey filed a motion to substitute 2 it in place of B2B, which was denied on November 1, 2019. (Dkt. Nos. 49, 65.) On 3 October 25, 2019, Caliber sought to re-open discovery concerning the execution and 4 content of the APA to determine its impact on the instant litigation. (Dkt. No. 59.) In 5 its motion, Caliber stated that once discovery is complete, the parties will need to brief 6 and argue pre-trial motions related to the APA. (Dkt. No. 57-1 at 12.) On December 7 9, 2019, the Magistrate Judge granted Caliber’s motion to reopen discovery solely into 8 the APA with discovery to be completed by January 24, 2010. (Dkt. No. 90 at 6.) The 9 Magistrate Judge noted that because the APA was executed weeks after the close of 10 fact discovery, and the APA creates new legal relationships between the parties with 11 respect with the Bullet Trade Dress creating new causes of action, the Magistrate Judge 12 found good cause to reopen discovery. (Id. at 6.) 13 According to Caliber, the APA complicates the issues in the case because “(1) 14 it purports to change the relationship of the parties and affect nearly every aspect of 15 this case; (2) it creates new claims of trademark infringement and unfair competition 16 against B2B by retroactively removing B2B’s trademark license and granting it to 2 17 Monkey; (3) it creates new breach of contract claims against Third-Party Defendants 18 by allegedly transferring the license to 2 Monkey; and (4) it creates new interference 19 with prospective economic advantage claims against Third-Party Defendants.” (Dkt. 20 No. 64-1 at 4.) 21 Based on new claims raised by the APA, Caliber now seeks leave to file an 22 amended counterclaim pursuant to Federal Rules of Civil Procedure (“Rule”) 15 and 23 16 to add claims for federal unfair competition and trademark infringement of U.S. 24 Reg. No. 4,630,557 (Bullet Trade Dress) against B2B and an amended Third-Party 25 Complaint to add causes of action for interference with prospective economic 26 advantage and breach of contract against 2 Monkey. (Dkt. 64-3, Ex. A, Proposed 27 1 Second Am. Answer, Counterclaim and Third-Party Claims.) B2B and 2 Monkey 2 oppose the motion. (Dkt. No. 77.) Caliber filed a reply. (Dkt. No. 84.) 3 A. Federal Rule of Civil Procedure 16 4 Once a district court has established a deadline for amended pleadings, and that 5 deadline has passed, Rule 16 applies. Coleman v. Quaker Oats Co., 232 F.3d 1271, 6 1294 (9th Cir. 2000); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-608 7 (9th Cir. 1992). In this case, the deadline for a party to file a motion for leave to amend 8 the pleadings expired on December 10, 2018. (Dkt. No. 35 at 2.) 9 Rule 16 provides that a pretrial scheduling order can only be modified “upon a 10 showing of good cause.” Fed. R. Civ. P. 16(b). “Good cause” focuses on the diligence 11 of the party seeking an amendment. Johnson, 975 F.2d at 609. The pretrial schedule 12 may be modified “if it cannot reasonably be met despite the diligence of the party 13 seeking the extension.” Id. In general, the focus of the diligence inquiry is on the time 14 between the moving party’s discovery of new facts and its asking leave of the court to 15 file an amended pleading. See Zivkovic v. S. Cal. Edison Corp., 302 F.3d 1080, 1087- 16 88 (9th Cir. 2002). Prejudice to the non-moving party, though not required under FRCP 17 16(b), can supply additional reasons to deny a motion. Coleman, 232 F.3d at 1295. 18 Rule 16's good cause standard is more stringent that the liberal amendment standard 19 under Rule 15. AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 952 (9th 20 Cir. 2006). 21 Caliber argues that it timely and diligently filed its motion for leave to amend. 22 The APA was signed on September 12, 2019 and within 22 days after receiving notice 23 of the APA, it attempted to contact 2 Monkey’s counsel but received no response. As 24 a result, Caliber filed its motion for leave to amend 43 days after having received notice 25 of the execution of the APA. The Court finds that good cause has been satisfied as the 26 APA was only recently entered into on September 12, 2019, and Caliber, after 27 unsuccessfully attempting to contact 2 Monkey, filed its motion on October 21, 2019. 1 2 Monkey does not challenge Caliber’s diligence but argues that amendment 2 may not be used to prevent the efficient resolution of a case and amendments raised at 3 the “eleventh” hour after discovery is complete and motions for summary judgment are 4 pending before the court may be denied citing Roberts v. Arizona Bd. of Regents, 661 5 F.2d 796, 798 (9th Cir. 1981) (district court did not abuse its discretion denying leave 6 to amend to add claim when discovery was “virtually complete” and a “motion for 7 summary judgment was pending before the court.”) Roberts does not provide support 8 because, unlike the present case, it did not involve actions taken by a non-moving party, 9 after discovery had been completed, which altered the legal relationship amongst the 10 existing parties. B2B and 2 Monkey, only recently and after fact discovery had closed, 11 entered into an APA, which purports to grant rights to the Settlement Agreement, the 12 key agreement in this case, retroactive to April 17, 2017. Caliber has easily 13 demonstrated good cause to modify the scheduling order. 14 B. Federal Rule of Civil Procedure 15 15 The standard for a motion for leave to file a counterclaim is the same as those 16 governing a motion for leave to amend a pleading under Rule 15(a). Magnesystems, 17 Inc. v. Nikken, Inc., 933 F. Supp. 944, 947 (C.D. Cal. 1996). Federal Rule of Civil 18 Procedure (“Rule”) 15(a) provides that leave to amend “shall be freely given when 19 justice so requires” and the standard is applied liberally. Foman v. Davis, 371 U.S. 20 178, 182 (1962); Fed. R. Civ. P. 15(a). Granting leave to amend rests in the sound 21 discretion of the trial court. See Internat’l Ass’n of Machinists & Aerospace Workers 22 v. Republic Airlines, 761 F.2d 1386, 1390 (9th Cir. 1985). This discretion must be 23 guided by the strong federal policy favoring the disposition of cases on the merits and 24 permitting amendments with “extreme liberality.” DCD Programs Ltd. v. Leighton, 25 833 F.2d 183, 186 (9th Cir. 1987). 26 Because Rule 15(a) favors a liberal policy, the nonmoving party bears the burden 27 of demonstrating why leave to amend should not be granted. Genentech, Inc. v. Abbott 1 Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989). In assessing the propriety of an 2 amendment, courts consider several factors: (1) undue delay, (2) bad faith or dilatory 3 motive; (3) repeated failure to cure deficiencies by amendments previously permitted; 4 (4) prejudice to the opposing party; and (5) futility of amendment. Foman, 371 U.S. 5 at 182; United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). These 6 factors are not equally weighted; the possibility of delay alone, for instance, cannot 7 justify denial of leave to amend, DCD Programs, 833 F.2d at 186, but when combined 8 with a showing of prejudice, bad faith, or futility of amendment, leave to amend will 9 likely be denied. Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). 10 On the amendment to the Third-Party Complaint seeking to add a breach of 11 contract and a claim for interference with prospective economic advantage against 2 12 Monkey, 2 Monkey and B2B maintain that the additional claims have no bearing on 13 the underlying case because the APA did not occur until September 2019. They further 14 argue that the acts that give rise to this claim do not arise from the same operative facts 15 as the original pleadings and 2 Monkey would be highly prejudiced by adding an 16 unrelated claim at this point of this proceeding. Finally, they contend that the breach 17 of contract claim is without merit and adding the claim would be futile. 18 The Court disagrees. While 2 Monkey and B2B argue that the APA did not 19 occur until September 2019, long after the acts giving rise to the underlying pleadings, 20 the APA makes the assignment of business assets retroactive to April 7, 2017. April 21 7, 2017 is a critical date in the underlying pleadings as that is the date when Caliber 22 was given permission to license the Bullet Trade Dress and CALIBER mark under the 23 terms of the Settlement Agreement. (Dkt. No. 49-3, Keener Decl., Ex. A, Sett. 24 Agreement ¶¶ 2(c) and 4(b) (“Caliber may not license or assign the Bullet trade Dress 25 [or the CALIBER Mark] . . .for a period of three years, with the three-year term 26 beginning on the Effective Date [April 7, 2014].”) Sometime on or after April 7, 2017, 27 Caliber offered a non-exclusive license to the Bullet Trade Dress to 2 Monkey and they 1 were close to finalizing an agreement on January 25, 2018, when Caliber was informed 2 by 2 Monkey, on February 23, 2018, that it would be purchasing products from B2B 3 instead of Caliber under a Manufacturing Agreement. (Dkt. No. 41, Am. Ans. 4 Counterclaim ¶¶ 37-47.) Because of the Manufacturing Agreement between B2B and 5 2 Monkey, Caliber notified Amazon and Etsy that Lucky Shot’s products were 6 infringing its Bullet Trade Dress. (Id. ¶ 48.) That conduct was the basis for B2B’s 7 filing of the underlying Complaint. (Dkt. No. 1, Compl.) Because the APA is 8 retroactive to April 7, 2017, the proposed claims arise from the same operative facts as 9 the original pleadings. 10 The proposed breach of contract claim also arises out of the terms of the 11 Settlement Agreement which is the basis of the underlying claims. Since 2 Monkey 12 allegedly now stands in the place of B2B, the same breach of contract claims alleged 13 against B2B may be brought against 2 Monkey.5 Moreover, the claim for interference 14 with prospective economic advantage arises from the settlement negotiations on the 15 underlying Complaint and Counterclaim between B2B and Caliber shortly before the 16 APA was signed. These claims are clearly related to the underlying facts of the case 17 and any contrary suggestion is without merit. 18 On the amendment to the counterclaim alleging federal unfair competition as it 19 relates to the Bullet Trade Dress and trademark infringement as to the CALIBER mark 20 against B2B, 2 Monkey and B2B argue that these claims would be futile if the motion 21 for summary judgment seeking cancellation of the ‘557 and ‘453 registrations is 22 granted at the hearing next month. B2B and 2 Monkey’s argument on futility is based 23 on a hypothetical that may or may not occur and is not a basis to deny a motion for 24 leave to amend. 25 26

27 5 The Court questions whether Caliber will dismiss the related breach of contract claim in the counterclaim alleged against B2B for similar conduct. (See Dkt. No. 41, Counterclaim ¶¶ 68-78.) 1 Finally, Caliber notes that 2 Monkey is relying on the APA to assert it had a 2 || valid license to the Bullet Trade Dress and CALIBER mark. (See e.g., Dkt. No. 68-3 3 14.) It would be unfair to allow 2 Monkey to use the APA as a defense to the claims 4 ||against it without allowing Caliber to complete discovery on the APA and present 5 ||argument to challenge 2 Monkey’s position. Accordingly, the Court GRANTS 6 ||Caliber’s motion for leave to file an amended Counterclaim and Third-Party 7 Complaint. 8 Conclusion 9 Based on the above, the Court GRANTS Caliber’s motion for leave to file an 10 |}amended Counterclaim and Third-Party Complaint. Caliber shall file the proposed 11 |}amended Counterclaim and amended Third-Party Complaint within 3 days of the 12 || Court’s order. The hearing set for December 20, 2019 shall be vacated. 13 Because the APA may change the legal positions of B2B and 2 Monkey as it 14 || relates to the Settlement Agreement, the Court DENIES Caliber’s motion for summary 15 judgment, (Dkt. No. 59), and B2B/2 Monkey/Lucky Shot’s motion for summary 16 || judgment, (Dkt. Nos. 68, 69, 70) as MOOT and subject to refiling once the limited 17 discovery on the APA has been completed.° 18 IT IS SO ORDERED. 19 30 Dated: December 18, 2019 7 sale 0s ( 21 Hon. Gonzalo P. Curiel United States District Judge 23 24 25 26 27 | tion they sok elif on. (Sees, DK No. 59 aig to specify which pleadings it soks summary judgment on.) 28 SS