DRL Enters., Inc. v. North Atlantic Op. Co., Inc., No. 16 C 8384, Slip Op. (N.D. Ill. Mar. 12, 2018) (Castillo, C.J.).

Judge Castillo denied plaintiff DRL’s motion for summary judgment that defendants lacked standing to seek cancellation of DRL’s trademark registrations in this appeal of the Trademark Trial and Appeal Board (“TTAB”) cancellation decision regarding DRL’s 1.0, 1.25 and 1.5 marks for use with tobacco rolling papers.

As an initial matter, the Court warned the parties that responding to a Local Rule 56.1 statement of undisputed material facts challenging the materiality of a fact without admitting or denying its truth was both “unhelpful” and improper pursuant to the Local Rules which require a direct admission or denial.

Regarding standing, the Court held as follows:

  • While defendants told DRL they would use fractions instead of DRL’s 1.25 and 1.5 decimal trademarks, defendants made no binding commitment to do so. Defendants also noted that their decision was solely based upon litigation avoidance.
  • Defendants also qualified their agreement saying it was “without prejudice and not to be deemed binding through contract, estoppel or otherwise.” DRL registered its dissatisfaction with defendants’ qualifications when they were made.
  • The fact that DRL and defendants were competitors would ordinarily be sufficient to create standing by giving defendants a real interest in the cancellation proceedings.
  • To the extent that the competitive relationship was not enough, DRL’s cease and desist letter would create standing.
  • While defendants’ distribution agreement preventing defendants from using the decimal marks could be seen as removing standing, a reasonable fact-finder could find that the limitation was based solely upon DRL’s trademarks and that, therefore, the restriction would be removed upon cancellation of the marks. Therefore, defendants could be found to have standing.

Having denied DRL’s summary judgment motion regarding standing, the Court ordered each party to reevaluate their settlement positions and exhaust all settlement possibilities.