Delicato Vineyards v. Cohn

Background

Delicato Vineyards brought a trademark-infringement and unfair-competition action against Alexa Cohn and other defendants. Delicato owns registered trademarks for “BOTA,” “BOTA BOX,” “BOTA MINI,” and “BOTA BRICK” for wine products. It alleged that defendants used “BOTA” and “BOTA BACKPACK” in connection with backpacks used to carry beverages.

The defendants asserted an unclean-hands defense. That defense alleged that Delicato deceived the U.S. Patent and Trademark Office during trademark prosecution by failing to disclose that “bota” is a term for a traditional Spanish wine container, typically made of leather. According to the defense, disclosure of that information would have caused the agency to refuse registration of the “BOTA” trademark as descriptive.

Motion and Analysis

Delicato moved for partial judgment on the pleadings, asking the court to reject the unclean-hands defense. Delicato argued that because the defense was based on alleged fraud on the trademark office, defendants had to plead false and material factual representations, an intent to deceive, and the elements of fraud with particularity under Federal Rule of Civil Procedure 9(b).

Defendants argued that an unclean-hands defense requires allegations of inequitable conduct related to the subject matter of the claims, and that bad faith can establish inequitable conduct. The court agreed with defendants. It held that the defense did not require pleading all the elements of fraud. Instead, defendants had to allege inequitable conduct, including bad faith, related to the subject matter of Delicato’s claims.

Assuming the defense’s factual allegations were true, the court found that Delicato was not entitled to judgment as a matter of law. The alleged failure to disclose information about the meaning of “bota” related directly to the trademarks Delicato was asserting. The court also could not decide at that stage that the alleged withholding was not bad faith or inequitable conduct.

The court ruled that the materiality of the allegedly withheld information was a factual question. It also considered a later trademark-prosecution filing in which Delicato stated that “BOTA” referred to a traditional Spanish wine skin. Delicato argued that this later disclosure undermined the defense. Defendants argued that the timing and circumstances of the disclosure raised a factual question about whether it was procedurally improper and showed bad faith. The court concluded that further briefing and development of the record were required.

Other Ruling and Disposition

The court granted Delicato’s unopposed request for judicial notice of the file histories for its registered trademarks.

The court denied Delicato’s partial motion for judgment on the pleadings as to defendants’ unclean-hands defense. Judge Beth Labson Freeman signed the order.