UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

Oatly AB,

Plaintiff, Case No. 1:17cv840

v. Judge Michael R. Barrett

D's Naturals, LLC,

Defendant.

ORDER 

This matter is before the Court upon the July 20, 2018 Magistrate Judge’s Report 

& Recommendation (“R&R”) that the Partial Motion to Dismiss filed by PlaintiffCounterclaim Defendant Oatly AB (“Oatly”) be denied. 

The parties were given proper notice pursuant to Federal Rule of Civil Procedure 

72(b), including notice that the parties would waive further appeal if they failed to file 

objections to the R&R in a timely manner. See United States v. Walters, 638 F.2d 947, 

949-950 (6th Cir. 1981). On August 3, 2018, Oatly filed objections to the R&R. (Doc. 

30). D’s Naturals filed a Response to Oatly’s objections. (Doc. 32).

In its Complaint, Oatly brings the following claims: infringement of its registered 

“WOW NO COW!” trademark under the Trademark Act of 1946 (the “Lanham Act”), as 

amended; unfair competition pursuant to 15 U.S.C. § 1125(a); and related claims under 

state law and common law. (Doc. 1). Defendant D’s Naturals filed an answer and three 

counterclaims under the Lanham Act. (Doc. 7). D’s Naturals’ counterclaims stem from 

D’s Naturals’ allegation that Oatly intended to deceive the USPTO when it submitted its 

declaration in 2014 claiming a bona fide intent to use WOW NO COW! for all 30 goods 
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identified in its trademark application.

In its first counterclaim (“Cancellation or Partial Cancellation of Trademark 

Registration – No Bona Fide Intent to Use (15 U.S.C. §1119)”), D’s Naturals claims that 

the Plaintiff’s trademark WOW NO COW! is subject to cancellation for lack of bona fide 

intention to use the mark.

In its second counterclaim (“Cancellation or Partial Cancellation of Trademark 

Registration – Fraud on the USPTO”), D’s Naturals’ seeks cancellation or partial 

cancellation under 15 U.S.C. § 1119 based on a lack of bona fide intention to use the 

mark and adds that Oatly “submitted the false declaration with a willful intent to deceive 

the USPTO.” (Doc. 7 at ¶¶ 21, 22). 

D’s Naturals brings its third counterclaim (“Civil Liability for False or Fraudulent 

Registration”) under 15 U.S.C. § 1120, which provides: “Any person who shall procure 

registration in the Patent and Trademark Office of a mark by a false or fraudulent 

declaration or representation, oral or in writing, or by any false means, shall be liable in 

a civil action by any person injured thereby for any damages sustained in consequence 

thereof.” D’s Naturals alleges that Oatly procured its trademark “by a false or fraudulent 

representation or by false means as described above,” and that as a result, “D’s 

Naturals has suffered and continues to suffer damages in an amount to be determined.” 

(Doc. 7 at ¶¶ 27-28).

D’s Naturals sets forth all three of its counterclaims based upon “information and 

belief,” citing its “reasonable investigation into Oatly’s business and offerings,” including 

product information listed on Oatly’s international and U.S. websites. (Doc. 7 at ¶ 12). 

In its Partial Motion to Dismiss, Oatly moved to dismiss D’s Naturals’ second and third 
3

counterclaims based on failure to state a claim under Federal Rule of Civil Procedure 

12(b)(6). 

In her R&R, the Magistrate Judge explained that the heightened pleading 

standard under Federal Rule of Civil Procedure 9(b) generally applies to D’s Naturals’ 

counterclaims. The Magistrate Judge concluded that under this standard, D’s Naturals 

has adequately plead its counterclaims under 15 U.S.C. § 1119 and 15 U.S.C. § 1120.

Oatly maintains that each element of fraud must be pled with particularity under 

San Juan Products v. San Juan Pools of Kansas, Inc., 849 F.2d 468 (10th Cir. 1988). 

The Magistrate Judge explained that even if the San Juan standard were applied, D's

Naturals' counterclaims would be sufficiently pled.

Rule 9(b) requires a party alleging fraud to “state with particularity the 

circumstances constituting fraud.” Fed. R. Civ. P. 9(b). To plead fraud with 

particularity, the allegations must include “the time, place, and content of the alleged 

misrepresentation on which [the deceived party] relied; the fraudulent scheme; the 

fraudulent intent of the defendants; and the injury resulting from the fraud[.]” Holley 

Performance Prod., Inc. v. Quick Fuel Tech., Inc., No. 1:07-CV-00185-JHM, 2011 WL 

3159177, at *3 (W.D. Ky. July 26, 2011) (quoting United States ex rel. Poteet v. 

Medtronic, Inc., 552 F.3d 503, 518 (6th Cir. 2009)). To succeed on a claim of fraudulent 

trademark procurement, the plaintiffs must plead and ultimately establish:

(1) [a] ... false representation regarding a material fact; (2) the registrant's 

knowledge or belief that the representation is false (scienter); (3) the 

intention to induce action or refraining from action in reliance on the 

misrepresentation; (4) reasonable reliance on the misrepresentation; and 

(5) damages proximately resulting from such reliance.

San Juan Products, Inc. v. San Juan Pools of Kansas, Inc., 849 F.2d 468, 473 (10th Cir. 
4

1988).

As the Magistrate Judge explained, generally, allegations based on information 

and belief fail to satisfy the particularity requirement of Rule 9(b). However, an 

exception to this rule exists for matters that are peculiarly within the knowledge of the 

opposing party. In such a case, pleading upon information and belief is permissible, but

the plaintiff must still plead a particular statement of facts upon which the belief is 

based. Craighead v. E.F. Hutton & Co., 899 F.2d 485, 489 (6th Cir.1990); U.S. ex rel. 

Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 512 (6th Cir. 2007) (“While fraud may 

be pled on information and belief when the facts relating to the alleged fraud are 

peculiarly within the perpetrator's knowledge, the plaintiff must still set forth the factual 

basis for his belief.”).

As the Magistrate Judge found, Oatly alone possesses information on whether it 

had the capability and intention to produce the type of products in the U.S. that were 

specifically listed in its application for expansion of its international trademark. The 

Magistrate Judge also explained that D’s Naturals had set forth the factual basis for the 

alleged fraud by pointing out the inconsistency between the list of products in the 2014 

declaration submitted to the USPTO and the publicly available evidence of products

Oatly has sold in the United States.

1 The Court finds no error in the Magistrate Judge’s 

 1

Specifically, in its Counterclaim, D’s Naturals states:

D’s Naturals’ belief as to Oatly’s use and intent to use its claimed mark, WOW 

NO COW!, is based on a reasonable investigation into Oatly’s business and 

offerings. For example, Oatly’s U.S. website, located at https://us.oatly.com, 

indicates that the only product it currently sells in the United States is oat milk. 

The U.S. website lists additional products that are not currently available in the 

United States but that are “coming to you soon.” Yet that list does not include a 

number of items identified in U.S. Trademark Registration No. 5043246, such as 

bread, biscuits and pastry. Likewise, Oatly’s international website, located at 
5

analysis.

In its objections, Oatly raises a concern arising from the Madrid Protocol and 

Section 66(a) of the Trademark Act, which permits a foreign applicant to obtain a U.S. 

trademark registration without showing use of the mark. Oatly states that D’s Naturals

is attempting to disguise a non-use claim as a bona fide intent to use claim. However, 

as D’s Naturals points out, Section 66(a) does require that a foreign applicant have a 

bona fide intent to use the mark in the United States for all identified goods and 

services. 15 U.S.C. § 1141f (a). D's Naturals' counterclaims are based on a lack of 

intent to use WOW NO COW!, not a failure to use. As the Magistrate Judge explained, 

at this stage of the pleadings, the Court is not determining whether evidence exists to 

support D’s Naturals’ claim that Oatly did not have bona fide intent to use its WOW NO 

COW! mark on the multitude of products listed on its application.

Based on the foregoing, the July 20, 2018 Magistrate Judge’s R&R (Doc. 28) is 

ADOPTED. Accordingly, the Partial Motion to Dismiss filed by Plaintiff-Counterclaim 

Defendant Oatly AB (Doc. 16) is DENIED. 

IT IS SO ORDERED. 

/s/ Michael R. Barrett

JUDGE MICHAEL R. BARRETT

 

www.oatly.com, does not indicate that Oatly sells, has ever sold, or intends to 

sell those items anywhere in the world, let alone in the United States.

(Doc. 7, PAGEID# 72).