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Control Solutions, LLC, A Delaware Limited Liability Company v. Oshkosh Corporation

March 28, 2011

CONTROL SOLUTIONS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
OSHKOSH CORPORATION, A WISCONSIN CORPORATION, DEFENDANT. OSHKOSH CORPORATION, A WISCONSIN CORPORATION, COUNTERCLAIMANT,
v.
CONTROL SOLUTIONS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, COUNTERCLAIM DEFENDANT.



The opinion of the court was delivered by: Judge Sharon Johnson Coleman

Magistrate Judge Arlander Keys

MEMORANDUM OPINION AND ORDER

Plaintiff-counter defendant, Control Solutions LLC, moves to dismiss Counts II through VIII of defendant-counterclaimant Oshkosh Corporation's First Amended Counterclaim pursuant to Rule 12(b)(6) for failing to state a claim. For the reasons that follow, the motion is granted.

Background

The following facts are taken as true for the purposes of this motion. Control Solutions designs and manufactures "control and user interface devices" for use in a variety of commercial, medical and military applications. The particular component at issue in this case is Control Solutions' power door system designed for armored vehicles. Oshkosh designs and manufactures armored vehicles and is owner of the common-law and federally-registered "OSHKOSH" trademark in connection with its trucks and tactical vehicles.

In December 2008, the U.S. Army solicited bids for a new vehicle, the Mine Resistant Ambush Protected ("MRAP") All Terrain Vehicle ("M-ATV"). The vehicle was designed to be outfitted with armor kits to upgrade the protection on the doors. The doors on these vehicles are very heavy and require powered assistance to operate safely. Control Solutions built and installed a prototype power door system on some of Oshkosh's prototype vehicles, which Oshkosh used to bid on the Army contract. On June 30, 2009, the Army awarded Oshkosh the contract to manufacture the M-ATV. The Army also awarded to Oshkosh the separate contract to manufacture the armor up-grade kits for the doors. Oshkosh began producing the finished MATVs, but did not use Control Solutions' power door systems. Control Solutions filed the instant lawsuit claiming breach of contract. Oshkosh answered the complaint and filed the counterclaim that is the subject of the motion currently under consideration.

Counterclaim

Oshkosh filed an eight count counterclaim, which Control Solutions now seeks dismissal of Counts II through VIII. Counts II, III, IV, and V, are brought under the Lanham Act alleging trademark infringement, unfair competition, false designation of origin, dilution, and false advertising. The remaining Counts VI, VII, VII, involve the same allegations brought under Illinois law.

Control Solutions moves to dismiss arguing that: (1) Oshkosh has failed to state a claim for false advertising, unfair competition, and false designation of origin (Counts III, V, VIII) because Oshkosh does not plead with sufficient particularity to satisfy the heightened pleading standard of Rule 9(b); (2) Counts II through VIII fail to sufficiently allege damages; (3) the Lanham Act claims (Counts II-V) do not allege that Control Solutions used any infringing mark or made any false or misleading representations "in commerce" within the meaning of the Act; (4) Oshkosh lacks standing to assert false advertising (Count V) and fails to allege that Control Solutions engaged in "commercial advertising"; (5) the alleged trademark infringement (Count II) is protected by the fair use doctrine; (6) Oshkosh's trademark does not qualify for dilution protection because it is not "famous" within the meaning of the Lanham Act; (7) Oshkosh's state law claims fail for the same reasons as its federal claims.

Legal Standard

When considering a motion to dismiss pursuant to Rule 12(b)(6), the court must accept as true all well-pleaded allegations (Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 59 (2007)), and draw all reasonable inferences in favor of the nonmoving party. Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 633 (7th Cir. 2007). In order to withstand a motion to dismiss a complaint must provide a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a). The pleader must show that it is plausible, rather than merely speculative, that he is entitled to relief. INEOS Polymers, Inc. v. BASF Catalysts, 553 F. 3d 491, 497 (7 th Cir. 2009).

Under Federal Rule of Civil Procedure 9(b), in all allegations sounding in fraud or mistake, a plaintiff must plead with specificity the who, what, where, and when of the alleged fraud or mistake. Fed. R. Civ. P. 9(b); Fidelity Nat. Title Ins. Co. of New York v. Intercountry Nat. Title Ins. Co., 412 F.3d 745, 749 (7th Cir. 2005). Allegations stated on information and belief are inadequate to support a fraud claim unless the facts are inaccessible to the plaintiff. Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677, 684 (7th Cir. 1992). If the facts are inaccessible to the plaintiff, the complaint must state a basis for the plaintiff's suspicion. Id. Discussion

Counts III, V, and VIII, involve allegations sounding in fraud, namely unfair competition and false designation of origin, false advertising in violation of section 43(a) of the Lanham Act (15 U.S.C. §1125(a)), and common law unfair competition.

The Lanham Act ("Act") prohibits false designation of origin, false descriptions, and dilution. 15 U.S.C. ...


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