Fight Over ‘PepperBall’ Trademark Resumes

SAN FRANCISCO (CN) - A dispute over the "PepperBall" trademark to describe non-lethal projectiles can move forward after a federal judge lifted a stay on discovery that delayed litigation while jurisdictional issues were clarified.

United Tactical renewed a trademark infringement action against Real Action Paintball and its CEO, K.T. Tran, after acquiring Advanced Tactical Ordnance Systems in 2014. Previously, ATO had sued Real Action in Indiana Federal Court over its trademarked PepperBall bullets that look like paintballs but are made of plastic instead of gelatin and contain an irritant powder instead of paint - claiming its rival was selling similar pellets on its own website.

Real Action, a California company, filed multiple counterclaims against United Tactical and related counter-defendants, who filed a motion to dismiss the counterclaims. The motion was denied, and Real Action subsequently filed a motion to lift the stay on discovery.

U.S. District Judge Maria-Elena James granted the motion on Wednesday.

"Previously, the court had issued an order in the ATO case limiting the scope of discovery until the resolution of the pending jurisdictional motions," James said in a 14-page order. "Specifically, the court held that '[p]ending resolution of defendants' motions to dismiss, all discovery in this case shall be limited to that which aids in determining whether this court has jurisdiction. Now, following resolution of those personal jurisdictional motions and the consolidation of the ATO and UTS cases, Real Action seeks to proceed with full discovery, while counter-defendants urge the court to rule on their motion to dismiss before doing so. The court now grants Real Action's motion to lift the discovery stay."

Her decision came after denying the counter-defendants' motion to dismiss Real Action's 10th claim for false designation of origin against Tyler Tiberius and Gary Gibson and partially granting the 11th claim for antitrust violations under the Sherman Act.

The court previously held that Real Action failed to allege sufficient facts to support the false designation of origin claim, but James said Real Action has since cured that deficiency.

"These allegations, in tandem with the continued allegations that Gibson and Tiberius formed ATO with their companies Perfect Circle and Tactical Air and Tiberius Arms, provide a plausible basis for concluding that Gibson and Tiberius participated, authorized or directed in the conduct giving rise to Real Actions' false designation claim," she said.

James, however, granted dismissal of the Sherman Act claims.

"Real Action has not alleged facts supporting that Tiberius Arms was involved in concerted action with the other "alleged monopolists,'" she wrote. "Accordingly, the court grants counter defendants' motion to dismiss Tiberius Arms from Real Action's Sherman Act claims to the extent those claims are based on concerted action."

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