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Georgia IP Litigation: November 2013

BLOGS: Georgia IP Litigation

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Friday, November 22, 2013, 3:51 PM

Georgia Knife Companies Cross Swords in Complaints by Bud K and United Cutlery Alleging Copyright and Trademark Infringement Against Mutual Competitor Wholesale Gallery

On October 8, 2013 United Cutlery Corporation (“UC”) and Bud K World Wide, Inc. (“Bud K,” collectively, “plaintiffs”), both of Moultrie, Georgia filed separate suits against Wholesale Gallery Inc., (“Wholesale Gallery”) of Dallas, Georgia.  Both complaints allege trademark infringement, dilution, copyright infringement and unfair competition, and both complaints request injunctive relief.  Bud K’s complaint also includes additional allegations of cybersquatting and false designation of origin.
Both UC and Bud K are in the business of selling merchandise such as knives, swords, survival equipment, tomahawks, axes, crossbows and other miscellaneous items through their respective websites unitedcutlery.com, budk.com, and budk.org.  Bud K also sells other items such as self-defense weapons, stun guns, pepper sprays, handcuffs, batons, military surplus items such as stoves, canteens, rucksacks, gas masks, airsoft guns, BB guns, air guns and a wide variety of other miscellaneous items.  In addition to the aforementioned, United Cutlery also offers for sale decorative movie and television show replica items such as swords or other weapons.  The two companies share ownership, with United Cutlery having been bought by Bud K after filing for bankruptcy in 2007.
Bud K's cyber-squatting complaint stems from allegations that Wholesale Gallery registered the domain name “budk.net” through GoDaddy.com and used that domain name to redirect the general public to a website “kaswords.com” through which Wholesale Gallery offers competing goods for sale.  Namely, these items include collectible swords, knives, throwing knives, axes, airsoft guns and a number of other related products.  Both Bud K and UC's complaints also allege that Wholesale Gallery registered the domain name “swordsswords.com” and that Wholesale Gallery uses marks belonging to the plaintiffs to sell competing goods similar or the same as those sold on kaswords.com.
In addition, the complaints allege unauthorized use of several word marks owned by the plaintiffs and unauthorized use of images taken from the plaintiffs’ respective websites.  For United Cutlery, the alleged unauthorized use includes use of the following marks: registered mark ELITE FORCES (trademark number 3,081,970), for use with a number of handtools, blades, swords, axes, and the like, and unregistered marks SOA, ONE SHOT ONE KILL, WE ARE THE BUMP IN THE NIGHT, and DEAD AND NOT DEAD ENOUGH, all for use in connection with knives and similar goods.  For Bud K, the alleged unauthorized use includes use of another set of marks including the registered mark BUDK (trademark number 3,214,533) for use with hand tools (knives, hatchets, tomahawks, etc.) and the mark SECRET AGENT for use with knives and swords.  Images demonstrating the alleged unauthorized use of word marks and alleged unauthorized copying of website images are reproduced below using screenshots taken from the parties’ respective sites.

Alleged unauthorized use of Bud K's image for a 'skull gauntlet' item.  Bud K's website appears to the left, swordsswords.com in the middle, and kaswords.com to the right.

Alleged unauthorized use of the SOA and ONE SHOT ONE KILL marks.  United Cutlery's website appears to the left and kaswords.com appears to the right.
The cases are United Cutlery Corporation v. Wholesale Gallery, Inc. No. 4:13-cv-00242-HLM and Bud K World Wide, Inc. v. Wholesale Gallery, Inc. No. 4:13-cv-002410-HLM.  Both are in the United States District Court for the Northern District of Georgia, Rome Division, and both are assigned to Judge Harold L. Murphy.

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Friday, November 8, 2013, 5:34 PM

Titanic Lawsuit Proceeds after Dismissal of Overseas Defendants Based on Rejection of Reverse Alter Ego Theory

This is an update to our prior post on the filing of the case to enjoin and recover damages against an individual and group of entities for copying a complex exhibition on the Titanic.  The prior  post can be accessed here

On October 17, 2013, Judge Duffey of the Northern District of Georgia entered an Opinion and Order resolving defendants’ motions to dismiss.  Practical Law posted a detailed review of the Court’s ruling with regard to the overseas defendants, particularly with regard to the reverse alter ego theory advanced by plaintiffs (collectively referred to as “RMST”).  The information contained in that link is not repeated here.
The Court also addressed the other claims asserted by RMST.  The Court permitted the Lanham Act claim of Trade Dress Infringement to proceed based on allegations that:  1) the product design of the two products is confusingly similar; 2) the features of the product design are primarily non-functional; and 3) the product design is inherently distinctive or has acquired secondary meaning.
The Court ruled that RMST’s claim of conversion must be dismissed because “Plaintiffs fail to identify any intangible property that is outside of the copyright laws.”  While the Court noted that a claim for conversion of tangible property is not preempted by the Copyright Act, RMST did not sufficiently allege facts to show a conversion of tangible property.
The Court dismissed RSMT’s claims for conversion and unjust enrichment as superseded by the Georgia Trade Secrets Act.  However, the Court found that RSMT’s fraud and fraudulent inducements claims were not superseded and were further sufficient to meet the pleading particularity requirements of Fed. Rule Civ. P. 9(b). The Court noted that a promise about a future event “generally cannot form the basis of a fraud claim” . . .but “promises made without a present intent to perform” are an exception.  See Mecca Const., Inc. v. Maestro Investments, LLC, 320 Ga. App. 34, 42, 739 S.E. 2d 51, 59 (Ga. App. 2013). 
The Court, with some apparent reluctance, let a breach of contract claim for violation of a promise of confidentiality continue over a Statute of Frauds objection that it was not required to be performed within one year. The Court noted that RMST will not ultimately be able to recover on both its contractual and fraud theories.
The Court allowed additional discovery on whether or not Imagine-Nevada was subject to personal jurisdiction in Georgia, but found both jurisdiction and venue proper for all the other non-overseas defendants.
The case is RMS Titanic, Inc. and Premier Exhibitions, Inc. v. Thomas Zaller, Imagine Exhibitions, Inc., and Imagine Exhibitions PTE, Ltd., No. 1:13-cv-625-WSD, filed 2/26/13 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and has been assigned to U.S. District Judge William S. Duffey, Jr.  The “Opinion and Order” was filed as Document 33 on the Docket on October 17, 2013.

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Thursday, November 7, 2013, 12:12 PM

Clothing Company Emory Group Files Complaint Alleging Copying By Upstart Competitor Kobty & Keane

On September 16, 2013, Emory Group, LLC of Spartanburg, South Carolina filed a complaint against Kobty & Keane Custom Apparel, Inc., Aziz Kobty, and Parker Keane, all of Arlington, Texas (collectively, "Kobty & Keane" or "Defendants"), alleging trademark infringement, unfair competition, false misrepresentation and designation of origin, and reverse passing off under Section 43(a) of the Lanham Act, statutory unfair competition and reverse passing off in violation of Georgia’s Uniform Deceptive Trade Practices Act and Georgia’s Fair Business Practices Act, and common law claims for unfair competition, copyright infringement, and unjust enrichment.

Emory Group is a web-based clothing apparel company that offers clothing and other merchandise for sale under a variety of brand names, including the brand names "Geneologie" and "Morgan Row" via its websites morganrow.com and geneologie.com.  According to the complaint, Emory Group has used the trademark and brand name MORGAN ROW™ and the Morgan Row trademark logo (pictured right) since at least February 1, 2012 and has both a pending trademark application, USSN 85/577,521 and a pending trademark logo application USSN 85/577,536 for the marks.

Kobty & Keane Custom Apparel is also a web-based clothing apparel company that offers clothing for sale at kobtykeanecustom.com and at facebook.com/KeaneKobtyCustom.  The logo used by Kobty & Keane for advertising their clothing apparel is pictured to the left.

The controversy in this case involves certain college and university Greek-letter themed clothing.  In its complaint, Emory Group alleges that Kobty & Keane stole or copied certain college and university Greek-letter themed clothing designs and, in some instances, removed the MORGAN ROW™ brand name and trademark, replacing the marks with its own brand name and logo while leaving intact Emory Group's copyrighted works.

On its website, Emory Group provides the customer with the opportunity to customize apparel by selecting the product style from a variety of shirt styles, selecting the logo design from either a customer provided image or from a number of available Morgan Row designs, and selecting whether to add text with a chosen font.  Kobty & Keane also offers customized apparel.  However, several of the designs that appear for sale on Kobty & Keane apparel are also available for sale on the Morgan Row web site.  One such example is depicted below.

Left: Morgan Row's website showing multiple design offerings
Right: An advertisement from Kobty & Keane's Facebook using a same design
Emory Group alleges the Defendants’ have copied copyrighted works without license, authorization, sponsorship, endorsement or approval.  It further alleges that potential purchasers will be deceived, confused, and misled to believe Defendants’ services are in some manner authorized or otherwise associated with Emory Group and that Defendants are trying to pass off the clothing apparel offered on the Kobty & Keane websites as Morgan Row’s.

Emory Group seeks injunctive relief enjoining use of copyrighted works and passing off (or the reverse) of Defendants’ goods as Emory Group’s, damages to be trebled pursuant to 15 U.S.C. § 1117(a), costs and attorneys' fees, and punitive damages to deter the alleged willful and intentional copying and deceptive and deceitful advertising pursuant to O.C.G.A. § 51-12-5.1.

The case is Emory Group LLC v. Kobty & Keane Custom Apparel Inc. et al, No. 1:13-cv-03088-WSD in United States District Court for the Northern District of Georgia, Atlanta Division and is assigned to Judge William S. Duffey, Jr.

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Friday, November 1, 2013, 2:05 PM

Kirk Watkins to Moderate Panel Discussion on Non-Practicing Entities at GSU Corporate IP Institute® on November 4

Georgia State University's College of Law and J. Mack Robinson College of Business collaborate every year to host a number of engrossing and educational events relating to intellectual property, chief among them the Corporate IP Institute®  (CIPI).  CIPI is a two-day event that offers a forum for in-house IP professionals from corporations of all sizes to gather and discuss the latest developments and current trends in the IP arena.  This year's CIPI event will take place at Georgia State University's Student Center on November 4-5.

Womble Carlyle is an annual sponsor of CIPI, and this year the Georgia IP Litigation Blog's own Kirk Watkins will moderate a panel discussion entitled "Non-Practicing Entities: Hot Topics and Trends."  The panel discussion will take place on Monday, November 4, at 4:30 p.m., and will include in-house counsel from Intel Corporation and WiLAN.

Visit the GSU CIPI website for more details.

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