Intellectual Property Law

Western District Denies Motion to Dismiss Contributory Infringement Claim

By Michael Atkins

In ProteoTech, Inc. v. Unicity International, Inc., plaintiff ProteoTech alleges the University of Washington granted it an exclusive license to use certain technology. Thereafter, ProteoTech granted an exclusive, limited field of use license with respect to the technology to third-party defendant Rexall Sundown, Inc. Through various corporate transactions, a Rexall subsidiary was combined with another company and then purchased by a third entity that became known as defendant Unicity. ProteoTech alleges that Rexall granted a non-exclusive, transferable sublicense to Unicity’s predecessor. ProteoTech also alleges that PTI-00703 is a registered trademark (for dietary supplements) in which it retains all rights despite its lack of use.

ProteoTech claims that Rexall was not authorized to sublicense the technology at issue to Unicity. Last year, it filed suit in the Western District, claiming in pertinent part that Rexall is liable for contributory trademark infringement, as well as patent infringement. Rexall moved to dismiss under Rule 12(b)(6), the motion currently before the court.

In its motion, Rexall argued that because the sublicense did not grant Unicity any rights to use PTI-00703, it cannot be held liable for contributory trademark infringement. ProteoTech responded that it is not relying on the sublicense as evidence of Rexall’s wrongdoing, but rather on the chain of events pursuant to which Unicity continued marketing its product with the brand PTI-00703. In particular, ProteoTech’s complaint alleges that “Rexall knew or should have known that Unicity was using the PTI-00703 mark” and “granted Unicity an implied license to continue advertising and promoting sales of the Infringing Products through use of the PTI-00703 mark.” 

The court found this was enough for ProteoTech to survive Rexall’s motion: 

“Although the details are sparse, ProteoTech appears to have alleged sufficient facts to present a plausible claim of contributory trademark infringement, which requires proof that the defendant ”intentionally induced’ the primary infringer to infringe,’ Perfect 10, Inc. v. Visa Internat’l Serv. Ass’n, 494 F.3d 788, 807 (9th Cir. 2007)…” (STL post here).

The case cite is ProteoTech, Inc. v. Unicity International, Inc., No. 06-1297, 2008 WL 539945 (W.D. Wash. Feb. 27, 2008) (Zilly, J.).

Full post as published by Seattle Trademark Lawyer on March 02, 2008 (boomark / email).