dunnhumby USA, LLC et al v. emnos USA Corp., 1-13-cv-00399 (ILND June 27, 2014, Order) (St. Eve, J.)
Tuesday, July 1, 2014
Prior Commercial Use Defense Does Not Apply to Later-Acquired Entities
The court granted plaintiffs' motion to strike defendant's "prior commercial use" defense because defendant did not engage in the prior commercial use. "Plaintiffs contend that [defendant] cannot assert the prior use defense because [defendant] was not under [its current corporate parent's] control at the time of [the parent's] alleged prior use. . . . Defendant does not challenge Plaintiffs’ assertion that [the corporate parent] — not [defendant] — engaged in the prior commercial activity . . . [but] argues that the plain language of the statute dictates that it can assert the prior use defense because [the corporate parent] and [defendant] are presently under the common control . . . [R]eading the plain language of § 273(e)(1)(A) and the overall purpose of the statute, the prior use defense under § 273 is a personal defense, limited to the entity that actually engaged in the prior commercial activity or directed the prior activity or an entity that controls, is controlled by, or is under common control with the prior user or the entity that directed the prior user at the time the prior commercial activity took place. . . . Defendant’s construction of § 273(e)(1)(A) — that the prior use defense also applies to current affiliates who had no relationship to the prior user at the time of the prior use — belies common sense and provides an unintended windfall for after-acquired entities."