Kuster Laboratories, Inc. v. Lee

In this trademark infringement suit, defendant counterclaimed for damages for the alleged breach of a distributorship agreement authorizing defendant to distribute plaintiff’s food products. Plaintiff has moved to dismiss the counterclaim on. the ground that it is not a Compulsory Counterclaim, under Rule 13(a), Federal Rules of Civil Procedure, 28 U.S.C.A.,. which derives its jurisdictional support from it relationship to the plaintiff’s claim. It is plaintiff urges, merely a Permissive-Counterclaim under Rule 13(b), unrelated to plaintiff’s claim, and requires an independent jurisdictional basis.

A compulsory counterclaim must arise “out of the transaction or occurrence that is the subject matter of the opposing party’s claim.” Rule 13(a), Federal Rules, of Civil Procedure. Plaintiff’s claim of infringement in this case is based upon the-sale by the defendant of food products labeled similarly to plaintiff’s food products. The counterclaim arises out of an alleged' breach of an agreement permitting defendant to distribute plaintiff’s food products-under plaintiff’s label. It is patent that the claim and the counterclaim do not arise out of the same transaction or the same…