Tradebay, LLC v. eBay, Inc.

278 F.R.D. 597, 2011 U.S. Dist. LEXIS 143686, 2011 WL 6182039
CourtDistrict Court, D. Nevada
DecidedDecember 13, 2011
DocketNo. 2:11-cv-00702-ECR-PAL
StatusPublished
Cited by506 cases

This text of 278 F.R.D. 597 (Tradebay, LLC v. eBay, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 2011 U.S. Dist. LEXIS 143686, 2011 WL 6182039 (D. Nev. 2011).

Opinion

ORDER

(Mot. to Stay Disc. — Dkt. # 21)

PEGGY A. LEEN, United States Magistrate Judge.

Before the court is Defendant’s Motion to Stay Discovery Pending Disposition of Motion to Dismiss (Dkt. # 21). The court has considered the Motion, Plaintiffs Opposition (Dkt. #22) and Defendant’s Reply (Dkt. #23). Defendant seeks a protective order pursuant to Rule 26(c)(1) of the Federal Rules of Civil Procedure staying discovery pending resolution of its Motion to Dismiss (Dkt. # 12) filed June 28, 2011.

BACKGROUND

The Complaint (Dkt. # 1) in this case was filed May 3, 2011, and it seeks declaratory relief. Plaintiff seeks a judgment declaring that its use of the mark in suit will not infringe the rights of Defendant’s and that its acts do not constitute trademark infringement. Complaint ¶ 1. An Amended Complaint (Dkt. # 11) was filed before the Defendant filed an answer or other responsive pleading. The amended complaint expands the scope of declaratory relief sought and also seeks a preliminary and/or permanent injunction enjoining the Defendant from claiming or charging that Plaintiff has infringed Defendant’s trademark rights, unfairly competed, or has in any other respect violated any of Defendant’s rights. Amended Complaint ¶ 1. Plaintiff alleges that it is a Nevada Corporation with an office in this district and is the owner of all right, title and interest to the trademark TRADEBAY which was approved for publication by the United States Patent and Trademark Office (“USPTO”) on January 27, 2010. Id. ¶3.

The amended complaint alleges that Plaintiff has made or intends in the future to make considerable expenditures to protect its right in and to its mark. Id. ¶ 4. The mark is “valid, legally subsisting, and an asset of considerable value to Plaintiff.” Id. ¶ 5. On January 6, 2009, Plaintiff made a formal, written record of its trademark claim and intent to use the mark and filed a trademark application which was issued a U.S. serial number. Id. ¶ 6. The trademark application was examined, accepted and approved for publication by the USPTO and published as an approved application. Id. ¶ 7. Plaintiff is offering and/or intends to offer computerized online services under the mark. Id. ¶ 9.

Defendant claims to be the owner of numerous trademarks and trademark registrations which incorporate the eBay mark. Id. ¶ 11. Defendant asserts that Plaintiffs mark is confusingly similar to Defendant’s mark and has asserted, in writing, that Plaintiffs mark infringes Defendant’s trademark rights and “further causes dilution and other actionable wrongs.” Id. V12. Defendant has demanded that Plaintiff permanently cease and desist from all uses of Plaintiffs mark or face legal action. Id. ¶ 13. Plaintiff “desires to commence and/or expand the volume use of its mark,” but “Defendant’s past threats now create a substantial impediment of immediate concern to Plaintiff and the use of Plaintiffs approved mark.” Id. ¶ 14. Defendant filed an administrative proceeding to stop Plaintiffs application from going to registration. Id. ¶ 15. The administrative body, however, does not adjudicate claims of infringement and cannot grant Plaintiff the relief it seeks in this case. Id. Plaintiff is in reasonable apprehension of litigation, damage to its trademark, and resultant financial loss and harm. Id. ¶ 16. Defendant’s acts have an adverse impact on the public interest, prevent full and fair competition, and require the court’s immediate intervention to declare the rights and obligations of the parties. Id. ¶ 19.

[600]*600The Defendant responded to the amended complaint by filing a Motion to Dismiss (Dkt. # 12). A briefing schedule was approved by the district judge, and the motion is now fully briefed and under submission to him. The motion to dismiss raises the preliminary issue of the court’s subject matter jurisdiction. Defendant’s motion to stay asserts that the motion to dismiss is meritorious, potentially dispositive of the entire case, and can be decided without any discovery. Additionally, this case is at the pleading stage, and the Defendant has not yet filed an answer or counterclaim, no party has served any discovery, discovery is not required to decide the pending motion, and a stay will preserve the time and resources of the court and the parties. Finally, Defendant argues that an evaluation of the merits of the pending motion to dismiss weighs in favor of granting a stay.

Plaintiff opposes the motion, arguing it initiated this action to seek a declaration that its mark does not infringe or dilute eBay’s marks. This lawsuit was filed after Plaintiff received cease and desist letters from eBay accusing it of infringing and diluting eBay’s marks and threatening legal action unless Tradebay stopped using the Tradebay mark. Plaintiff contends that eBay’s motion to dismiss reverses its position in arguing that Tradebay’s complaint fails to present a live case or controversy and therefore deprives this court of subject matter jurisdiction. Plaintiff maintains that the court may stay discovery only if there is no question that eBay will succeed on the motion to dismiss. Plaintiff claims that eBay’s motion to dismiss disregards the accusations and threats it made against Tradebay and relies on an incorrect legal standard from the Federal Circuit which has been rejected by both the Ninth Circuit and the United States Supreme Court. Therefore, eBay is unlikely to win the motion to dismiss. Plaintiff also contends that because no discovery requests have been served, the court lacks the ability to assess whether any requested discovery will prejudice the Defendant. Therefore, a stay is inappropriate. Finally, Plaintiff argues that eBay has failed to meet its burden of showing it is entitled to a protective order under Rule 26 because eBay has not persuasively or convincingly explained it will win its motion to dismiss, and because eBay has failed to point out any specific facts showing that extraordinary justification exists for prohibiting discovery.

Defendant filed a Reply (Dkt. # 23) which requested expedited resolution because Tra-debay declined a request for a short, informal stay of discovery until the court rules on the motion to stay. Tradebay scheduled a Rule 26(f) conference for October 20, 2011, and eBay argues that if it is required to incur the time and expense of discovery before the motion to stay is decided, it will effectively be denied the relief it seeks. Defendant acknowledges that a pending motion to dismiss is not ordinarily a situation that in and of itself would warrant a stay of discovery. However, an exception exists where, as here, a motion to dismiss raises preliminary issues of jurisdiction, venue or immunity. Defendant’s motion raises the threshold issue of the court’s subject matter jurisdiction and will completely dispose of the case if granted. Plaintiff does not dispute this or articulate how it would suffer any prejudice if the court grants a brief stay until the preliminary issue of jurisdiction is resolved. Defendant reiterates that other factors weigh in favor of a temporary stay. Specifically, no discovery is needed to decide the motion, the case is merely at the pleading stage, no answer has been filed, no counterclaim is pending, no discovery has been initiated, and there are no other parties to this lawsuit. Defendant also refutes Plaintiffs arguments concerning the merits of its motion to dismiss.

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278 F.R.D. 597, 2011 U.S. Dist. LEXIS 143686, 2011 WL 6182039, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tradebay-llc-v-ebay-inc-nvd-2011.