POLYWAD INC v. ABLES SPORTING INC

District Court, M.D. Georgia·Decided June 25, 2024·No. 5:23-cv-00512·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA MACON DIVISION

POLYWAD, INC., Plaintiff, CIVIL ACTION NO. v. 5:23-cv-00512-TES ABLE’S SPORTING, INC., et al., Defendants.

ORDER DENYING IN PART AND GRANTING IN PART GROUP 1 DEFENDANTS’ MOTION TO DISMISS

Plaintiff Polywad, Inc. (“Polywad”) filed suit against 20 Defendants, asserting various federal and state-law causes of action surrounding allegedly infringing uses of its trademark. [Doc. 78].1 Now, Defendants Florida Gun Exchange, Inc. d/b/a Gunbuyer (“Gunbuyer”), Midway Arms, Inc. (“Midway Arms”), Delmic Enterprise LLC d/b/a Target Sports USA (“Target Sports”), and Sportsman’s Guide LLC (“Guide”) (collectively, “Group 1 Defendants”) move to dismiss Plaintiff’s Amended

1 Specifically, Plaintiff alleges trademark infringement under 15 U.S.C. § 1114 (Count I); false designation of origin under 15 U.S.C. § 1125(a) (Count II); trademark dilution under 15 U.S.C. § 1125(c) (Count III); and violations of Georgia’s Fair Business Practices Act (Count IV) and Uniform Deceptive Trade Practices Act (Count V). Complaint2 pursuant to Federal Rule of Civil Procedure 12(b)(6). [Doc. 85-1, p. 2]. Former Group 2 Defendant Arnzen Arms LLC (“Arnzen”) also joins in Group 1’s

12(b)(6) Motion.3 [Doc. 86-1, p. 2]. For the following reasons, the Court DENIES in part Movants’ Motion to Dismiss [Doc. 85], finding that, based on the face of the Amended Complaint,

Plaintiff’s claims are not time-barred. See [Doc. 85-1, p. 7]. That said, the Court GRANTS in part their Motion [Doc. 85] as to Count III, finding that Plaintiff fails to state a claim for trademark dilution under 15 U.S.C. § 1125(c). See [Doc. 85-1, p. 15].

Accordingly, the Court DISMISSES Plaintiff’s trademark dilution claim against the Movants with prejudice. Plaintiff’s remaining claims will proceed for further factual development. BACKGROUND

Plaintiff Polywad is a Georgia corporation that designs ammunition and consults with ammunition manufacturing companies. [Doc. 78, ¶¶ 4, 52]. Run by its sole employee, Jay Menefee, Polywad has sold and marketed products bearing its

federally registered trademark, “Quik-Shok,” since 1997. [Id. at ¶¶ 52–54]. Since then,

2 Plaintiff filed its Original Complaint [Doc. 1] on December 22, 2023, but on April 5, 2024, Plaintiff filed its Amended Complaint [Doc. 78], the operative pleading for purposes of this Order. See [Doc. 81].

3 All of the Group 2 Defendants, including Arnzen, joined in Group 1’s Rule 12(b)(6) Motion in the alternative to their own Motion to Dismiss [Doc. 86] for lack of personal jurisdiction. See [Doc. 86-1, p. 2]. However, the Court previously granted Group 2’s Motion in part, dismissing all Group 2 Defendants except for Arnzen. [Doc. 108, p. 2]. For purposes of this Order, the Court will refer to the Group 1 Defendants and Arnzen together as “Movants.” Polywad has been investing significant time and money into promoting its brand and building consumer goodwill (although it did not receive its trademark registration

until 1999). [Id. at ¶¶ 54, 56–57]. In 2001, Plaintiff entered into an agreement (“CCI Agreement”) with Cascade Cartridge, Inc. (“CCI”), a non-party, allowing CCI to sell a product using Plaintiff’s mark (“CCI Product” or the “Product”). [Doc. 78-2, p. 2].

Plaintiff and CCI, however, terminated their agreement in 2007—thus leaving CCI with no contractual right to use the “Quik-Shok” mark. [Id.]. Unbeknownst to Plaintiff, the Defendants—who were in the business of selling

hunting and/or shooting supplies—offered the CCI Product for sale on their websites using a picture of the Product with the old packaging containing the “Quik-Shok” mark. See [Doc. 78, ¶¶ 60–81]. To be sure, Plaintiff does not allege that any Defendant actually sold any physical CCI Product bearing the mark. See generally [id.]. Instead,

Plaintiff alleges that they displayed the old packaging on their websites where they offered the CCI Product for sale. See [id. at ¶¶ 62–81]. Polywad alleges that Menefee diligently protected the mark and would, for

example, “regularly check retail shops which sold ammunition for any infringing products.” [Id. at ¶ 82]. Yet, Plaintiff had no idea about the Defendants’ allegedly infringing use. See [id. at ¶¶ 82–83]. This is because, Plaintiff alleges, its sole owner, Menefee, is in his seventies and “is not particularly ‘computer-savvy.’” [Id. at ¶ 83].

Not until early June 2023 did Menefee search the internet for the “Quik-Shok” mark and discover Defendants’ use. [Id.]. Shortly after the discovery, Plaintiff sent cease- and-desist letters to each Defendant.4 [Id. at ¶ 84]; [Doc. 78-2].

Plaintiff additionally alleges that “Defendants’ use of the intellectual property owned by Plaintiff as described above is a deliberate, intentional, and willful attempt to cause confusion, to cause mistake, and to deceive purchasers.” [Doc. 78, ¶¶ 91, 104,

113]. To support its assertion of willfulness, Plaintiff further alleges that “Defendants’ deliberate, intentional, willful, and/or willfully blind use of Plaintiff’s intellectual property as described above is evidenced by the fact that, apparently, Defendants’

have used Plaintiff’s intellectual property for many years without inquiring as to whether they had any right to do so.” [Id. at ¶¶ 92, 105, 114].

4 The Movants argue in their Motion to Dismiss that “Group 1 Defendants removed the alleged infringing advertisements from their websites after receiving cease-and-desist letters in June 2023.” [Doc. 85-1, p. 19]. In an attempt to support their contention, the Movants cite to two paragraphs of the Amended Complaint, Paragraphs 62 and 96. See [id.]. Paragraph 62 states that non- movant Defendant Able’s Sporting, Inc. “advertises and/or has advertised the sale of a product it describes as ‘CCI Quik-Shok Varmint Rimfire Ammunition 0064, 22 Long Rifle, Hollow Point (HP), 32GR, 1540 fps, 50,’” and then provides a picture of the packaging with the “Quik-Shok” mark on the box. See [Doc. 78, ¶ 62]. Paragraph 69 says something similar with regard to Group 1 Defendant GunBuyer, stating: “GunBuyer, Inc. advertises and/or has advertised the sale of a product it describes as ‘CCI 22 LR Subsonic Quik Shok Segmented 40 Grain JHP 50 Round Box CCI0074.’” [Id. at ¶ 69]. However, the picture Plaintiff included of the packaging on GunBuyer’s website does not include the “Quik-Shok” mark. See [id.].

From these two photos in Plaintiff’s Amended Complaint, it seems that the Movants are asking the Court to infer that Defendant GunBuyer (and perhaps the other Movants too) no longer use the “Quik-Shok” mark on its website. See [Doc. 85-1, p. 19]. But to make such an assumption would be to make an inference in favor of Defendants—and that, the Court cannot do. See Randall v. Scott, 610 F.3d 701, 705 (11th Cir. 2010) (explaining that when ruling on a motion to dismiss, courts “accept as true the facts as set forth in the complaint and draw all reasonable inferences in the plaintiff’s favor”). Because the Movants cite nothing to show that they have ceased using the trademark—let alone when they ceased using the trademark—the Court cannot consider the Movants’ assertion when ruling on this Motion. See id.

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