After answering the First Amended Complaint, Defendants moved for Partial Judgment on the Pleadings pursuant to Rule 12 c , seeking to dismiss three of Plaintiffs' claims as time-barred. Plaintiffs then filed a Motion for Leave to File a Second Amended Complaint in order to add a claim for fraud and conspiracy to commit fraud and a Motion to Compel Discovery.
All three motions are fully briefed and ripe for review. In their Motion for Partial Judgment on the Pleadings, Defendants assert that certain of Plaintiffs' claims are time-barred by either the applicable statute of limitations or laches. A court's review of a motion for judgment on the pleadings pursuant to Rule 12 c is conducted in the same manner as its review of a motion to dismiss pursuant to Rule 12 b 6.
Vickers v. Fairfield Med. As such, courts must "view the complaint in the light most favorable to the plaintiff, accepting as true 'all plausible well-pled factual allegations,' and drawing 'all reasonable inferences' in favor of the plaintiff.
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Anderson Lumber Co. Generally, a motion for judgment on the pleadings is "an inappropriate vehicle for dismissing a claim based upon the statute of limitations.
Steel Corp. However, dismissal is appropriate when "the allegations in the complaint affirmatively show that the claim is time-barred. Grand Trunk Western R. But, "[i]f the defendant meets this requirement then the burden shifts to the plaintiff to establish an exception to the statute of limitations.
Defendants assert that Plaintiffs' federal misappropriation of trade secrets claim—which is subject to a three-year statute of limitations—is barred because Defendants opened their first Condado Tacos restaurant in November and Plaintiffs failed to bring this suit until almost four years later in September Plaintiffs respond by arguing that this claim actually arises from the RSA, which means it is subject to the eight-year statute of limitations for breach of contract claims under Ohio law. The Court finds Plaintiffs' argument unpersuasive and thus holds that their federal misappropriation of trade secrets claim is barred by the statute of limitations.
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Pursuant to the DTSA, a civil action for misappropriation of a trade secret "may not be commenced later than 3 years after the date on which the misappropriation with respect to which the action would relate is discovered or by the exercise of reasonable diligence should have been discovered. In addition, "a continuing misappropriation constitutes a single claim of misappropriation. Iowa Parts , Inc. Prescott Mach.
Accordingly, the decisive inquiry in determining when the statute of limitations begins to run is when the plaintiff knew or should have reasonably known that the defendant was using trade secret information in an unauthorized fashion. Kehoe Component Sales Inc. Best Lighting Products , Inc. Ohio applying Ohio's UTSA, which provides that "[a]n action for misappropriation shall be commenced within four years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered" quoting Ohio Rev.
Barry Corp. Bevcorp , LLC , F. Ohio quoting Hambleton , 12 Ohio St. In this case, Defendants argue that Plaintiffs' First Amended Complaint affirmatively demonstrates that Plaintiffs reasonably should have discovered the alleged misuse of their trade secrets shortly after the first Condado Tacos opened. Once Condado Tacos began operating, Plaintiffs allege the similarities between the restaurants were immediately apparent:. The minute a patron walks into a Condado, the patron is immersed in an atmosphere and embarking on a dining experience that has the look and feel of Barrio.
Finally, the proximity and connection between Columbus and Cleveland, as alleged in the First Amended Complaint, provides additional support that Plaintiffs were or should have been aware of Defendants' alleged misappropriations. Based on all of this, Defendants assert Plaintiffs should have discovered any alleged misappropriation of their trade secrets shortly after the opening of the first Condado Tacos, yet failed to commence this action until almost four years later in September , well after the three-year statute of limitations had passed.
Plaintiffs do not advance any argument in response and appear to concede the issue. Defendants also attempt to rely on Exhibits F and G to their opposition to Plaintiffs' Motion for a Temporary Restraining Order and ask the Court to take judicial notice of the exhibits. Exhibits F and G are communications from Mr. Leneghan and his attorney that Defendants contend conclusively establish Plaintiffs' knowledge of Condado Tacos' operations in late and early However, a court typically cannot take judicial notice of these types of documents.
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Michican Dep't of Civil Rights , No. Nor do they fall into any of the other categories of documents that courts may consider at the pleading stage. Nat'l Collegiate Athletic Ass'n , F. Consequently, the Court will not consider these documents in ruling on Defendants' motion. As such, Plaintiffs assert their claim should be governed by Ohio's eight-year statute of limitations for claims based upon "an agreement, contract, or promise in writing. However, none of the cases that Plaintiffs cite stand for the proposition that claims made pursuant to a specific statute are subject to the statute of limitations for a breach of contract claim simply because a contract between the parties may protect similar rights.
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As a result, Plaintiffs' statutory claim for misappropriation of trade secrets is subject to the three-year statute of limitations prescribed by the DTSA—not Ohio's eight-year statute of limitations for breach of contract claims. Next, Defendants argue that Plaintiffs' claims for trade dress infringement and unfair competition under the Lanham Act and Ohio Deceptive Trade Practices Act are barred by laches. In response, Plaintiffs again assert that their claims are subject to Ohio's eight-year statute of limitations for breach of contract claims. For the same reasons discussed above, the Court rejects that argument.
Counts 2 and 5 are clearly statutory claims, not claims for breach of contract. However, Plaintiffs also argue that laches is inapplicable based on an exception for intentional and willful infringement and the progressive encroachment doctrine.
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The Court agrees with Plaintiffs that, at this stage, they have adequately alleged that Defendants' conduct was willful and intentional, and Defendants therefore cannot rely on the equitable defense of laches. With respect to "Lanham Act and Deceptive Trade Practices Act claims, because there are no specific statutes of limitations, courts apply the equitable doctrine of laches. Altadis U. Ohio Mar.https://alpeepnovi.cf
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STMicroelectronics , Inc. In the Lanham Act context, however, if the plaintiff files its claim "within the time that it would have been required to file in the forum state a state-law claim for injury to personal property, then the plaintiff's delay in asserting its rights is presumptively reasonable. However, "a delay beyond the analogous limitations period 'is presumptively prejudicial and unreasonable. In addition, this period begins to run "when the plaintiff has 'actual or constructive knowledge of the alleged infringing activity.
Marva Collins Preparatory Sch. Ohio July 9, Here, for essentially the same reasons discussed above, Defendants contend that Plaintiffs had actual or constructive knowledge of Defendants' alleged trade dress infringement shortly after the first Condado Tacos opened.
Thus, Plaintiffs' claims fall outside of the analogous two-year statute of limitations period and presumptively should be barred. Again, Plaintiffs do not dispute this point. However, "[l]aches is an equitable defense and. Air Filter Co. Universal Air Products , L. Weintraub , F. Accordingly, "a person who deliberately infringes upon another person's intellectual property has unclean hands and may not claim the equitable defense of laches.
For example, the Sixth Circuit has held that laches was not available to a defendant if its patent infringement "was the result of deliberate, calculated plagiarism. Dura Corp. In addition, numerous district courts in the Sixth Circuit have held that the defendant's intentional infringement precluded the defendant from relying on a laches defense.
Arguably, Universal Air has unclean hands and may not raise the equitable defense of laches. Adrian Motel Co. Defendant purposefully used the name 'Big Ten'". Defendants assert that the Sixth Circuit has not recognized the willful infringement exception to laches because the Sixth Circuit enforced the defense of laches in a willful trade dress infringement case in Herman Miller , Inc.
Palazzetti Imps. However, in Herman Miller , the Sixth Circuit did not address whether willful infringement precludes a defendant from raising a laches defense, as the issue does not appear to have been raised by the parties. Indeed, the court did not even discuss whether the infringement was intentional or willful when analyzing the defendant's laches defense.