Background
This action arises from a trademark dispute over the logo used by the rock band LIVE. The band's four founding members formed Action Front Unlimited, Inc. in 1989, each holding an equal 25% share. Edward Kowalczyk, a former LIVE lead singer, owns Plaintiff The Fifth Veda, Inc. Action Front obtained four PTO trademark registrations for the Mark in 1997 and 1999, but the PTO cancelled them in 2020. In 2022 the shareholders licensed Fifth Veda to use the Mark.
On May 21, 2024, Fifth Veda's attorneys obtained Registration No. 7390329 for apparel, and on January 14, 2025, Registration No. 7647160 for live-performance entertainment services, listing Action Front as registrant on both. Fifth Veda sued Action Front on July 1, 2025, seeking declaratory judgment of non-infringement, correction of the registrations, and cancellation. On September 12, 2025, Action Front moved to dismiss or stay under Colorado River abstention; on June 2, 2026, the Court denied dismissal as to Count I, granted it as to Counts II–IV, and declined to abstain because the federal and state actions were not parallel. Action Front answered with counterclaims for trademark infringement, false designation of origin, and breach of the 2013 Settlement Agreement, plus third-party claims against Kowalczyk, Chris Hardin, and David Kostiner.
On August 20, 2026, instead of opposing pending dismissal motions, Action Front filed an Amended Answer adding counterclaims for fraudulent procurement of registration under 15 U.S.C. § 1120, breach of the 2013 Settlement Agreement and 2022 MOUs, unjust enrichment, and RICO. Fifth Veda moved to strike the Amended Answer for violating Rule 15(a)(2) and Local Rule 103.6, and Action Front then moved for leave to amend with the required marked copy and exhibits.
The Court’s Holding
The Court granted Action Front's Motion for Leave to Amend, rejecting Fifth Veda's prejudice, bad-faith, and futility arguments. On prejudice, the new claims merely added theories of recovery to facts already pled and were offered before any discovery, so they were not unduly prejudicial. On bad faith, amending rather than opposing motions that would become moot did not show an obvious design to harass, and the initial filing deficiencies were cured by the later motion for leave.
On futility, the Court found at least some claims not clearly insufficient. Counterclaim I (trademark infringement) was viable because Action Front alleged it is the registrant of record on both registrations. Counterclaim III (fraudulent procurement) survived because Action Front pled actual damages, including $19,056.65 in trademark-related costs and lost royalties. Counterclaims IV and V were not barred by claim splitting because the other pending suit was in state court, not the same federal court. The RICO claim was not obviously frivolous given the complexity of the arguments over predicate acts five and six, even though Action Front conceded the other predicate acts did not support it.
The Court granted Fifth Veda's Motion to Strike the Amended Answer filed at ECF No. 37 because it was filed three days after the Rule 15(a)(1) deadline, without consent or leave, and without the nine exhibits or a marked copy required by Local Rule 103.6; Action Front was directed to refile with those materials as separate attachments. The Court denied as moot Fifth Veda's Motion to Dismiss Counterclaims and the Third-Party Defendants' motion to dismiss the Third-Party Complaint.
Key Takeaways
- Amendments adding new legal theories to already-pled facts are not prejudicial when offered before discovery begins.
- Filing an amended pleading instead of opposing a motion to dismiss is not bad faith or dilatory motive under Rule 15(a).
- Leave to amend should be denied as futile only when the proposed amendment is clearly insufficient or frivolous on its face.
- The rule against claim splitting bars piecemeal suits in the same court, not federal claims when a related action is pending in state court.
- An amended pleading filed without leave after the Rule 15(a)(1) deadline and without required exhibits and a marked copy is properly stricken, even if leave to amend is later granted.
Why It Matters
The decision applies Rule 15(a)'s liberal amendment standard at the pleading stage in the District of Maryland, distinguishing prejudicial late amendments that introduce new facts from permissible amendments that add legal theories to existing allegations before discovery.
It also confirms that a registrant of record may plead a Section 32 Lanham Act infringement claim, that fraudulent-procurement claims under Section 38 require pleaded damages, and that the claim-splitting doctrine does not bar federal counterclaims while a related state action is pending.
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