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Doubletap Defense, LLC v. Hornady Manufacturing Co.

United States District Court, D. Nebraska

February 11, 2019

DOUBLETAP DEFENSE, LLC, Plaintiff,
v.
HORNADY MANUFACTURING CO., Defendant.

          MEMORANDUM AND ORDER

          LAURIE SMITH CAMP SENIOR UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the Motion to Dismiss, ECF No. 33, filed by Defendant Hornady Manufacturing Co. (“Hornady”) and the Amended Motion for Leave to Amend Complaint, ECF No. 38, filed by Plaintiff DoubleTap Defense, LLC (“DTD”). For the reasons stated below, Hornady's Motion to Dismiss will be denied and DTD will be granted leave to file its Second Amended Complaint.

         BACKGROUND

         Except as otherwise noted, the following facts are those alleged in DTD's proposed Second Amended Complaint for Breach of Contract attached to DTD's Amended Motion for Leave to Amend Complaint. ECF No. 38-1.

         Hornady is a manufacturer of bullets and ammunition for sportsmen, law enforcement personnel, and military professionals. Second Am. Compl., ECF No. 38-1, Page ID 110. Since 1997, Hornady has marketed and sold various products, including ammunition, bearing its registered TAP® trademark. Id.

         On December 22, 2010, Central Holding Corporation (“CHC”) filed a trademark application seeking registration of the trademark “DOUBLETAP” in connection with firearms. Id. at 109. On June 11, 2012, CHC assigned the registration application to Heizer Technologies, LLC, which later changed its name to Double Tap Defense, LLC, and then to DoubleTap Defense, LLC. Id. At the 2012 SHOT Show, a national firearms tradeshow, DTD used the DOUBLETAP trademark to promote the forthcoming DoubleTap Tactical Pistol it intended to manufacture and sell. Id. The pistol has the DOUBLETAP mark etched into the pistol's barrel and frame. Id.

         Double Tap Ammunition, Inc. (DTA) is a manufacturer of ammunition specializing in hand-loaded rounds and uncommon calibers. Id. at 110. Since at least 2006, DTA's packaging has displayed the unregistered marks DOUBLETAP or DOUBLE TAP. Id.

         On January 5, 2011, Hornady brought suit against DTA alleging DTA's use of the unregistered mark infringed on Hornady's registered TAP® mark in violation of the Lanham Act. Id. On June 11, 2012, Hornady brought a suit against DTD alleging violations of the Lanham Act for DTD's use of the DOUBLETAP mark claiming it also infringed on Hornady's TAP mark. Id. at 111.

         On March 6, 2013, DTD and Hornady entered into a Trademark Assignment and Licensing Agreement (“Licensing Agreement”) to resolve the dispute between them. Id. at 112. DTD agreed to assign all right, title, and interest in the DOUBLETAP Mark[1] to Hornady; to abandon the registration application; and to pay Hornady a $25, 000 license fee. Id. at 111. In exchange, Hornady agreed to license the DOUBLETAP Mark back to DTD and to indemnify and hold DTD harmless “FROM AND AGAINST ALL CLAIMS, DEMANDS, LAWSUITS, DAMAGES, LIABILITIES, JUDGMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING FROM OR RELATING TO . . . LIABILITY RELATED TO TRADEMARK INFRINGEMENT CLAIMS FOR [DTD's] USE OF THE MARKS AS CONTEMPLATED BY THIS AGREEMENT.” Id.

         After execution of the Licensing Agreement, DTD alerted Hornady to the existence of at least three other businesses using the DOUBLETAP Mark and requested that Hornady, as licensor, honor its obligation to address possible third-party infringement by others who might claim an interest in the DOUBLETAP Mark. Id. at 112. On March 7, 2013, Hornady transmitted at least three cease-and-desist letters to companies using the DOUBLETAP Mark. Id. at 113-14. Hornady never demanded or requested that DTD cause DTA or any other entity or individual to assign to Hornady all interest claimed in the DOUBLETAP Mark. Id. at 116.

         On March 26, 2013, DTD abandoned its registration application for the DOUBLETAP Mark by filing its “Notice of Express Abandonment” with the Patent and Trademark Office. Id. at 114.

         On April 24, 2013, the United States District Court for the District of Utah ruled that DTA's unregistered mark did not infringe on Hornady's TAP mark. Id. at 115. Hornady appealed and on March 19, 2014, the Tenth Circuit affirmed. Id.

         On June 9, 2014, DTA sent a cease-and-desist letter to DTD alleging DTD's use of the DOUBLETAP Mark, licensed from Hornady, infringed on DTA's unregistered marks and were likely to cause consumer confusion. Id. DTA demanded DTD cease all use of the DOUBLETAP Mark and/or association of the DOUBLETAP Mark in connection with promotional advertising materials, including websites, for firearms and ammunition. Id. at 115-16. DTD ceased sales of the DoubleTap Tactical Pistol and transmitted a copy of the cease-and-desist letter to Hornady, demanding it “honor the indemnify and hold harmless provision” of the Licensing Agreement. Id. at 116. Hornady refused to indemnify, defend, protect, and hold DTD harmless. Id.

         On June 7, 2018, DTD filed a Complaint alleging Hornady breached the Licensing Agreement. ECF No. 1. DTD's First Amended Complaint was filed on June 8, 2018. ECF No. 2. After transfer to the District of Nebraska, Hornady filed a Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6). ECF No. 33. DTD seeks leave to file its proposed Second Amended Complaint. Amended Mot. Amend, ECF No. 38. ...


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