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IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

NETJETS INC., et al., 

 Plaintiffs, Case No. 2:12-cv-00059 

 Judge Gregory L. Frost 

v. Magistrate Judge Abel 

INTELLIJET GROUP, LLC, 

 Defendant.

OPINION AND ORDER

 This matter is before the Court on Defendant/Counterclaim Plaintiff Intellijet Group, 

LLC’s (“Intellijet”) objections to and motion for reconsideration of the Magistrate Judge’s Order 

denying Intellijet’s motion for leave to file a second amended counterclaim. (ECF No. 35.) Also 

before the Court are the memorandum in response of Plaintiffs NetJets, Inc. (“NetJets”) and 

Columbia Insurance Company (ECF No. 42), and the reply memorandum of Intellijet (ECF No. 

43). For the reasons set forth below, the Court GRANTS Intellijet’s motion for reconsideration 

and therefore GRANTS leave to file a second amended counterclaim. 

I. 

 Plaintiff NetJets is a private aviation company specializing in the fractional ownership of 

aircraft. In December 1996, Executive Jet, Inc. (now known as NetJets), obtained a federal 

registration for the “INTELLIJET” trademark, which applied to a computer software system 

utilized for managing aircraft leasing and sales. NetJets developed the “INTELLIJET” software 

during the 1990s. Deposition testimony indicates that from 1995 to at least 2001, NetJets used 

the “INTELLIJET” software internally at NetJets’ corporate headquarters in Columbus, Ohio. 

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 As part of NetJets’ trademark application with the United States Patent and Trademark 

Office (“USPTO”) to register the term “INTELLIJET,” NetJets stated that it used the mark in 

interstate commerce as of July 1995. In September 2002, nearly six years after obtaining the 

trademark registration for “INTELLIJET,” NetJets filed a declaration of use and incontestability 

with the USPTO, swearing that the “INTELLIJET” mark had been in continuous use in 

commerce for five consecutive years after the date of registration. 

 Defendant Intellijet owns the internet domain www.intellijet.com. Intellijet uses its mark 

without authorization or consent of NetJets. Among other defenses, Intellijet pleads in its answer 

that the “INTELLIJET” mark is weak and diluted because of the multitude of federal trademark 

registrations for the term for a variety of good and services. (Ans., ECF No. 11 at PageID# 38.) 

Intellijet also filed an amended counterclaim, in which it seeks cancellation of NetJets’ 

registration of “INTELLIJET.” (Am. Counterclaim, ECF. No. 11 at Page ID# 39-40.) The 

Amended Counterclaim pleads abandonment by NetJets as a basis for cancellation (id., ¶¶ 4-6) 

and also pleads a claim for common law unfair competition (id., ¶¶ 7-10 at PageID# 40). 

 Intellijet sought leave to file a second amended counterclaim, seeking to add another 

ground for cancellation of NetJets’ registration of “INTELLIJET.” In its proposed second 

amended counterclaim, Intellijet alleged that the registration was “void ab initio” because 

NetJets did not make use of the term “INTELLIJET” in interstate commerce as of the claimed 

first date of use: 

 Separately, and in the alternative, Defendant/Counterclaim Plaintiff 

states that Plaintiffs/Counterclaim Defendants were not using the INTELLIJET 

mark as a trademark in interstate commerce as of the July 2005 sworn date of first 

use alleged in their December 1, 1995 trademark application to the U.S. Patent & 

Trademark Office the date their trademark application was filed pursuant to 15 

U.S.C. § 1051(a). Upon information and belief, Plaintiff/Counterclaim 

Defendants made no use of its IntelliJet software as a trademark in interstate 

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commerce from July 1995 through at least December 2002. Defendant further 

avers that since have made no use of the INTELLIJET mark as a trademark in 

interstate commerce from February 2003 up until the time Plaintiffs/Counterclaim 

Defendants filed this lawsuit. Accordingly, since Plaintiffs claimed that they were 

making use of the mark in commerce on a software product as of July 1995 and 

made no such use for at least seven (7) years after that date, Registration No. 

2,025,410 was void ab initio and must be cancelled under Section 1(a) of the 

Trademark Act, 15 U.S.C. § 1051 (a). This Court has the power to order the 

Commissioner of Patents and Trademarks cancel a registration that is void ab 

initio pursuant to 15 U.S.C. § 1119. 

(Proposed Second Am. Counterclaim ¶ 7, ECF No. 26-1 at PageID# 116.) 

The Magistrate Judge denied Intellijet leave to file the second amended counterclaim on 

the ground that Intellijet’s amendment was futile because it failed to state a claim that would 

withstand a motion to dismiss. (ECF No. 34 at PageID# 174-76.) The Magistrate Judge credited 

NetJets’ argument that 15 U.S.C. § 1115(b) barred the proposed amendment to Intellijet’s 

counterclaim because the statute conclusively establishes the incontestability of NetJets’ 

trademark. (Id. at PageID# 174.) Intellijet seeks reconsideration of the Magistrate Judge’s 

denial of leave to file its second amended counterclaim. 

II. 

Intellijet moves for reconsideration of the Magistrate Judge’s order under Fed. R. Civ. P. 

72. Because the Magistrate Judge’s Order to which Intellijet objects concerns a nondispositive 

motion, this Court reconsiders the Order under the “clearly erroneous or contrary to law” 

standard of review contained in Fed. R. Civ. P. 72(a). See United States v. Curtis, 237 F.3d 598, 

603 (6th Cir. 2001). The “clearly erroneous” standard applies to factual findings made by the 

Magistrate, while legal conclusions are reviewed “under the more lenient ‘contrary to law’ 

standard.” Gandee v. Glaser, 785 F. Supp. 684, 686 (S.D. Ohio 1992), aff'd 19 F.3d 1432 (6th 

Cir. 1994) (table). This Court’s review under the “contrary to law” standard is plenary, and the 

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Court “may overturn any conclusions of law which contradict or ignore applicable precepts of 

law, as found in the Constitution, statutes, or case precedent.” Id. (citations and internal 

quotations omitted). 

In denying leave for Intellijet to file its second amended counterclaim, the Magistrate 

Judge determined that Intellijet’s proposed amendment, which added a basis for cancellation of 

NetJets’ mark, failed to state a claim for relief because a registration being “void ab initio” is not 

an enumerated ground for challenging incontestability status under 15 U.S.C. § 1115(b). The 

Court disagrees with the Magistrate Judge’s analysis and finds that Intellijet has stated a valid 

challenge to incontestability status based on a theory that NetJets’ registration of the 

“INTELLIJET” mark was void ab initio by virtue of (1) failing to meet the requirements of 

incontestability under 15 U.S.C. § 1065 or (2) being obtained “fraudulently” within the meaning 

of 15 U.S.C. § 1115(b)(1). 

A. 15 U.S.C. § 1065 

 Under 15 U.S.C. § 1065, “the right of the owner to use such registered mark in commerce 

for the goods or services on or in connection with which such registered mark has been in 

continuous use for five consecutive years subsequent to the date of such registration and is still 

in use in commerce, shall be incontestable.” (Emphasis added.) Intellijet concedes that an 

incontestable trademark registration may be challenged only under one of the statutory grounds 

enumerated in 15 U.S.C. § 1115(b). But in its objections, Intellijet contends that the exceptions 

in Section 1115(b) do not come into play until the registrant first establishes the conditions of 

incontestability under Section 1065. In other words, Intellijet argues that it is not foreclosed 

from challenging the “INTELLIJET” registration as “void ab initio” for failure to satisfy the usein-commerce requirement. 

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 The Court finds legal merit in Intellijet’s statutory interpretation with regard to 15 U.S.C. 

§ 1065. The Magistrate Judge’s order and the arguments of NetJets proceed from the premise 

that NetJets’ “INTELLIJET” mark has conclusively obtained incontestability status under 

Section 1065, leaving only the bases set forth in Section 1115(b) as the exclusive methods of 

challenging incontestability. But this analysis places the cart before the horse. In Park’n Fly, 

Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985), the United States Supreme Court 

expressly stated that Section 1115(b) “provides that registration is conclusive evidence of the 

registrant’s exclusive right to use the mark, subject to the conditions of [Section 1065] and the 

seven defenses enumerated in [Section 1115(b)] itself.” Id. at 196; see also id. at 194 (“§ 33(b) 

of the Lanham Act [15 U.S.C. § 1115(b)] states that ‘registration shall be conclusive evidence of 

the registrant’s exclusive right to use the registered mark’ subject to the conditions of § 15 [15 

U.S.C. § 1065] and certain enumerated defenses”). In other words, a registrant must meet the 

requirements of incontestability in 15 U.S.C. § 1065; a registrant’s failure to satisfy them means 

that the registrant has not obtained incontestability status over a mark in the first place. 

 In light of Park’n Fly’s description of the statutory interplay between 15 U.S.C. § 1065 

and § 1115(b), the Court finds that the Magistrate Judge erred in rejecting Intellijet’s proposed 

second amended complaint. Intellijet’s proposed amendment seeks cancellation of NetJets’ 

registration of “INTELLIJET” on the additional ground that it is void ab initio because NetJets 

did not, in fact, use “INTELLIJET” in interstate commerce either at the time of its application or 

for five consecutive years preceding NetJets’ declaration of use and incontestability. Thus, 

Intellijet alleges that NetJets failed to obtain incontestability status under Section 1065 in the first 

place. The Court finds that this allegation states a valid claim for cancellation of NetJets’ mark 

under the Lanham Act. 

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B. 15 U.S.C. § 1115(b) 

 Even assuming that NetJets’ registration of the “INTELLIJET” mark obtained 

incontestability status under 15 U.S.C. § 1065, the Court finds an additional ground for granting 

reconsideration. The proposed second amended counterclaim pleads a basis for challenging 

incontestability under 15 U.S.C. § 1115(b). This section provides seven grounds for defeating 

incontestability. The grounds are: 

(1) That the registration or the incontestable right to use the mark was obtained 

fraudulently; or 

(2) That the mark has been abandoned by the registrant; or 

(3) That the registered mark is being used, by or with the permission of the 

registrant or a person in privity with the registrant, so as to misrepresent the 

source of the goods or services on or in connection with which the mark is 

used; or 

(4) That the use of the name, term, or device charged to be an infringement is a 

use, otherwise than as a mark, of the party's individual name in his own 

business, or of the individual name of anyone in privity with such party, or of 

a term or device which is descriptive of and used fairly and in good faith only 

to describe the goods or services of such party, or their geographic origin; or 

(5) That the mark whose use by a party is charged as an infringement was adopted 

without knowledge of the registrant's prior use and has been continuously 

used by such party or those in privity with him from a date prior to (A) the 

date of constructive use of the mark established pursuant to section 7(c) [15 

USCS § 1057(c)], (B) the registration of the mark under this Act if the 

application for registration is filed before the effective date of the Trademark 

Law Revision Act of 1988, or (C) publication of the registered mark under 

subsection (c) of section 12 of this Act [15 USCS § 1062(c)]: Provided, 

however, That this defense or defect shall apply only for the area in which 

such continuous prior use is proved; or 

(6) That the mark whose use is charged as an infringement was registered and 

used prior to the registration under this Act or publication under subsection (c) 

of section 12 of this Act [15 USCS § 1062(c)] of the registered mark of the 

registrant, and not abandoned: Provided, however, That this defense or defect 

shall apply only for the area in which the mark was used prior to such 

registration or such publication of the registrant's mark; or 

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(7) That the mark has been or is being used to violate the antitrust laws of the 

United States; or 

(8) That the mark is functional; or 

(9) That equitable principles, including laches, estoppel, and acquiescence, are 

applicable. 

Id. 

 The Magistrate Judge concluded that Section 1115(b) does not include a mark being 

“void ab initio” as one of the grounds for challenging incontestability status. (ECF No. 34 at 

PageID# 175.) Thus, the Magistrate Judge found that Section 1115(b) precluded the defense that 

Intellijet sought to plead in its second amended counterclaim. (Id.) 

 Section 1115(b)(1) provides that incontestability may be challenged on the basis that “the 

registration or the incontestable right to use the mark was obtained fraudulently.” The 

Magistrate Judge did not find that this section applied, deeming Intellijet not to be raising this 

ground for cancelling NetJets’ trademark. The Magistrate Judge reasoned: 

Section 1115(b)(1) does permit a challenge on the ground that “the registration or 

the incontestable right to use the mark was obtained fraudulently.” However, I do 

not read the proposed amended counterclaim to plead that the registration was 

obtained by fraud. It merely alleges that NetJets asserted it used the mark in 

interstate commerce when the only use of the mark was by NetJets employees in 

internal flight management operations. 

(ECF No. 34 at PageID# 175-76.) 

Instead of establishing a failure to state a claim, the Magistrate Judge’s reasoning brings 

Intellijet’s “void ab initio” theory squarely into Section 1115(b)(1)’s coverage. The Magistrate 

Judge’s reasoning can just as easily be reworded to say that the counterclaim “merely alleges that 

NetJets asserted it used the mark in interstate commerce when NetJets did not use the mark in 

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interstate commerce.” Indeed, it is Intellijet’s theory that NetJets falsely claimed it used the 

“INTELLIJET” mark in interstate commerce when it did not do so. 

In essence, Intellijet is arguing that NetJets registration was obtained fraudulently. 

Intellijet theorizes that NetJets made a false statement in its registration application when it 

stated that its mark was used in interstate commerce. Intellijet therefore alleges that NetJets’ 

registration of the “Intellijet” mark could not have become incontestable because its original 

registration was based upon a false statement. 

 The Magistrate Judge and NetJets place undue emphasis on Intellijet’s use of the phrase 

“void ab initio” as the linchpin to the argument that Intellijet’s proposed amendment to its 

counterclaim is futile. To determine whether an amendment would be futile, the Court 

determines whether the amendment could survive a motion to dismiss pursuant to Rule 12(b)(6). 

Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000). Under this standard, 

the Court must “construe the complaint in the light most favorable to the plaintiff, accept its 

allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Directv v. 

Treesh, 487 F.3d 471, 476 (6th Cir. 2007). The plaintiff must provide “a short and plain 

statement of the claim,” Fed. R. Civ. P. 8(a), that is “enough to raise a right to relief above the 

speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The plaintiff must 

plead “factual content that allows the court to draw the reasonable inference that the defendant is 

liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. 

Ed. 2d 868 (2009). 

Here, Intellijet’s proposed second amended counterclaim meets the standard for 

overcoming a Rule 12(b)(6) motion. In substance, Intellijet is alleging that NetJets obtained its 

original registration fraudulently and could not, therefore, obtain incontestability status over the 

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mark. Intellijet’s pleading of its theory in terms of the registration being “void ab initio” is not 

fatal to its claim. Intellijet alleges and seeks to prove is that NetJets obtained its registration and 

incontestability status through the allegedly false statement that NetJets used the “INTELLIJET” 

mark in interstate commerce since 1995 when it did not do so. If Intellijet is able to prove this 

set of facts in this case, Intellijet will be able to prevail on its challenge to NetJets’ registration. 

Regardless of the fact that Intellijet has labeled its amended counterclaim as being that NetJets’ 

registration is “void ab initio,” the substance of Intellijet’s amendment is that NetJets obtained its 

registration and incontestability status through a false (i.e., fraudulent) statement. 

 The Court is mindful of the Magistrate Judge’s reliance on Collectable Promotional 

Prods., Inc. v. Disney Enters., Inc., No. CIV-06-1187-D, 2009 WL 1543449, 2009 U.S. Dist. 

LEXIS 46775 (W.D. Okla. June 2, 2009). In Collectable Promotional Prods., the defendants 

sought to cancel a trademark on the ground that it was “void ab initio” because the owner’s 

trademark application “stated that the mark had been used in commerce prior to the date of the 

application when, in fact, there was no prior use in commerce.” 2009 U.S. Dist. LEXIS 46775 at 

*14. The defendants challenged the mark at issue in Collectable Promotional, arguing that the 

trademark owner did not use the mark in commerce until at least seven months after the date 

disclosed on its registration application. Id. at *16. Though acknowledging that the registration 

of a mark that does not meet the “use” requirement is “void ab initio,” the Collectable 

Promotional court rejected the defendants’ challenge to incontestability, reasoning that a mark 

being “void ab initio” was not an enumerated ground for challenging a mark’s incontestability 

status under 15 U.S.C. § 1115(b). Id. at *21-22. NetJets urges this Court to follow Collectable 

Promotional, just as the Magistrate Judge did in his ruling. 

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For its part, Intellijet argues that Collectable Promotional is “an outlier in every sense of 

the word.” (ECF No. 35 at PageID# 201.) While the Court will not necessarily go that far in 

describing the case, the Court agrees with Intellijet that Collectable Promotional is not 

persuasive here. A distinguishing factor of the Collectable Promotional case is that the court 

there observed, “While cancellation could arguably be sought on the grounds that [plaintiff] 

fraudulently misrepresented the date of use or otherwise committed fraud in its trademark 

application, Defendants do not allege that it did so.” 2009 U.S. Dist. LEXIS 46775 at *23. 

Indeed, there was an issue raised in Collectable Promotional as to whether the plaintiff 

misunderstood the meaning of the term “use.” See id. at *18, *23-24. Accordingly, it was 

perhaps theoretically possible that there may have been a misrepresentation of the date of first 

use in Collectable Promotional but not necessarily a fraudulent one. In contrast, the substance 

of Intellijet’s allegation in its proposed second amended counterclaim is that NetJets’ trademark 

application contained the materially false statement NetJets used the term “INTELLIJET” in 

interstate commerce. Based on the nature of Intellijet’s allegation in this case, the Court does not 

find Collectable Promotional persuasive. Not all “void ab initio” allegations are created equal—

here, Intellijet’s allegations of “void ab initio” bring its challenge within the scope of 15 U.S.C. § 

1115(b)(1). 

III. 

 For the foregoing reasons, the Court finds that Intellijet’s proposed amended 

counterclaim states a valid claim for cancellation based on the allegation that NetJets’ 

registration of the mark was “void ab initio” and therefore did not obtain incontestable status 

under 15 U.S.C. § 1065. The Court also construes the second amended counterclaim as alleging 

that NetJets obtained its registration or incontestable status fraudulently, thereby raising a 

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statutory challenge to incontestability recognized under 15 U.S.C. § 1115(b). Accordingly, the 

Court GRANTS Intellijet’s motion for reconsideration (ECF No. 35) of the Magistrate Judge’s 

order denying leave to amend and hereby GRANTS Intellijet leave to file its amended 

counterclaim. The Court HEREBY ORDERS Intellijet to file its second amended counterclaim 

forthwith. 

 The Court is mindful of the fact that a final pretrial conference in this case is scheduled 

for November 5, 2013, and that the parties have fully briefed Intellijet’s pending motion for 

summary judgment on the complaint and existing counterclaim. The Court hereby converts the 

final pretrial conference scheduled for November 5, 2013, into a status conference at which the 

parties and the Court will discuss necessary adjustments to the pretrial schedule in light of the 

Court’s allowance of leave to amend Intellijet’s counterclaim. 

 IT IS SO ORDERED. 

 /s/ Gregory L. Frost 

 GREGORY L. FROST 

 UNITED STATES DISTRICT JUDGE 

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