IP Law Daily, TRADEMARK—S.D. Ohio: Some counterclaims, affirmative defenses, tossed in trademark and copyright dispute, (Sep 18, 2025)

By Carolin Dennis, B.Sc., LL.B., LL.M.

Motion to dismiss amended counterclaims and motion to strike affirmative defenses in trademark and copyright dispute between pest control products makers granted in part and denied in part.

The U.S. District Court Southern District of Ohio Eastern Division granted in part and denied in part the Scotts Company’s motion to dismiss for failure to state a claim of SBM’s first amended counterclaims and motion to strike SBM’s affirmative defenses. The district court dismissed SBM’s counterclaims against Scotts seeking cancellation of Scotts’ registered trademarks red rectangle marks and its red and yellow ORTHO design mark used in connection with its ORTHO brand line of products based on fraud and abandonment (Scotts Company LLC v. SBM Life Science Corp., No. 2:23-cv-01541-EAS-EPD (S.D. Ohio Sept. 16, 2025)).

Background. The Scotts Company LLC and OMS Investments, Inc. (together, Scotts) is the largest marketer of consumer lawn, garden, pesticide, and insecticide products. Scotts brought a trademark infringement, copyright infringement, and unfair competition action against SBM Life Science Corp. (SBM), a competitor in the same industry in May 2023. Scotts claimed that SBM improperly copies and uses Scotts’ registered trademarks. This action concerns four aspects of Scotts’ ORTHO’s branding: (1) a distinctive Red Mark; (2) a distinctive Red Design Mark; (3) the packaging design Scotts refers to as the “ORTHO Black Trade Dress”; and (4) a copyrighted yellow pest barrier label referred to as the “Scotts’ Yellow Barrier Design.”

In September 2024 the district court granted in part and denied in part SBM’s motion to dismiss, dismissing two of Scotts’ 14 claims against SBM and allowing the rest to proceed. SBM brought counterclaims against Scotts and asserted 32 affirmative defenses to Scotts’ claims against it. Scotts then filed a Motion to Dismiss Counterclaims and Motion to Strike Affirmative Defenses. SBM then brought five amended counterclaims, all for cancellation of three of Scotts’ registered trademarks. Scotts then filed a Motion to Dismiss SBM’s amended counterclaims. SBM claimed that Scotts’ improper trademarks harm SBM because, Scotts is suing SBM for trademark infringement regarding those same trademarks. SBM requested cancellation of Scotts’ “Red Rectangle Mark” on the basis that it was obtained by fraud on the USPTO (Count I) and that Scotts abandoned its use of that mark (Count II). SBM also asks for cancellation of Scotts’ “Red Rectangle with Black Border Mark” based on fraud (Count III) and abandonment (Count IV). Lastly, SBM requests cancellation of the “Red and Yellow ORTHO Design Mark” based on abandonment (Count V).

Fraud claims. In Counts I and III, SBM alleged that Scotts made multiple materially false and misleading statements to the USPTO as part of its trademark applications for the Red Rectangle Mark and the Red Rectangle with Black Border Mark. SBM alleged Scotts made materially false statements by representing to the USPTO that the designs were “in use” when, in fact, they were used merely as a background for the ORTHO composite design logo. The district court found that even if SBM sufficiently alleged that Scotts made materially false statements to the USPTO, SBM failed to sufficiently allege that Scotts acted with the requisite intent to deceive. Further, Scotts’ undisputed representations to the USPTO regarding its use of the designs were consistent, and its undisputed submission of specimens showing the designs used as a mere component of the composite “ORTHO” logo substantially undermine any potential inference of scienter. Thus, no plausible inference of fraudulent intent can be drawn from the facts as alleged by SBM based on Scotts’ use of the designs as mere background for text.

SBM also alleged that Scotts was merely an entity that held title to intellectual property assets and did not market or sell products, and thus had never itself used the designs for which registration was sought. The district court noted that as part of its initial trademark applications which were included as records with Scotts subsequent applications based on acquired distinctiveness, Scotts expressly stated to the USPTO that the marks were in use through its licensees. The full context of Scotts’ representations to the USPTO sufficiently negates any potential inference of an intent to deceive. Further, as a matter of law, it is well-settled that use of a mark by a licensee inures to the benefit of the trademark owner. Lastly, SBM admitted that Scotts had the rights to the ORTHO line of business and brand at the time of the trademark applications and the allegedly fraudulent representations at issue. Accordingly, SBM’s claims that Scotts fraudulently obtained its trademarks by representing to the USPTO that Scotts itself was the entity using the designs had no plausible basis in the facts as alleged by SBM.

SBM argued that Scotts’ statements that it had made “substantially exclusive and continuous use” of the marks, and that it had done so since October 22, 1995, were materially false because Scotts only acquired the ORTHO line of business and brand from Monsanto in 1999. The district court found that when Scotts obtained the rights, title, and interest in the ORTHO line of business and associated designs from Monsanto in January 1999, it stepped into Monsanto’s shoes, including Monsanto’s prior use of the designs. Thus, SBM failed to allege a plausible basis for its claim that Scotts fraudulently obtained its trademarks for the Red Rectangle Mark and Red Rectangle with Black Border Mark based on Scotts’ representation that it had used the marks since October 22, 1995. Therefore, the district court dismissed SBM’s counterclaims against Scotts’ for cancellation of its trademarks based on fraud (Counts I and III).

Abandonment claims. In Counts II, IV, and V, SBM claimed that Scotts’ marks must be cancelled because Scotts abandoned their use. SBM alleged that Scotts has not used any of the three marks for at least seven years or more, as demonstrated by the marks’ absence from products featured in Scotts’ ORTHO product catalogs for 2017 through 2024. SBM also alleged that Scotts intended not to resume use of the three discontinued marks, as demonstrated by its long and continuing period of non-use. The district court found that SBM has sufficiently pled discontinued use as to all three marks and sufficiently alleged circumstances from which the court can plausibly infer that Scotts discontinued its use of the three marks and intended not to resume their use. Therefore, the district court denied Scotts’ motion to dismiss SBM’s counterclaims for cancellation of Scotts’ trademarks based on abandonment.

Motion to strike affirmative defenses. Scotts moved to strike 11 of SBM’s 32 affirmative defenses. The district court denied Scotts’ motion to strike SBM’s first affirmative defense because Scotts failed to show that SBM could plead no facts that would allow SBM to file a successive motion to dismiss for failure to state a claim. However, Scotts’ motion to strike as to SBM’s second through ninth affirmative defences was granted because even if standing could be raised as an affirmative defense, SBM’s assertion that Scotts lacked standing is moot because Scotts does not raise trademark infringement claims. The district court noted that demonstrating that Scotts is ineligible for statutory damages or attorney fees under the Copyright Act’s fee shifting provision, 17 U.S.C. § 412(2), requires specific facts about the effective date of the copyright registration that a plaintiff need not plead to allege a prima facie case of copyright infringement. Accordingly, the district court construed a defense raised under 17 U.S.C. § 412(2) as an affirmative defense, or at least as akin to an affirmative defense. Therefore, Scotts’ motion to strike as to SBM’s 21st and 27th affirmative defences was denied.

The Case is No. 2:23-cv-01541-EAS-EPD.

Judge: Sargus, Jr., E.

Attorneys: Cony Rosas (Barnes & Thornburg LLP) for Scotts Co. LLC. Corey M. Scher (Fox Rothschild LLP) for SBM Life Science Corp.

Companies: The Scotts Company, LLC; OMS Investments, Inc.; SBM Life Science Corp.

Cases: Copyright Trademark OhioNews