Reed Elsevier Inc. et al v. Escalante et al

Filing 1

COMPLAINT filed against Joseph P. Escalante, Kung Fu Records Inc., The Vandals - Magistrate Consent Notice to Pltf. ( Filing fee $ 350, receipt number 3811.) - filed by Reed Elsevier Inc., Reed Elsevier Properties Inc.. (Attachments: # 1 Complaint - part 2, # 2 Exhibits A - D, # 3 Exhibit E, # 4 Exhibit F, # 5 Exhibit G, # 6 Exhibit H, # 7 Exhibits I - K, # 8 Civil Cover Sheet, # 9 Acknowledgement of Consent Form)(dzs, ) [Transferred from Delaware on 3/30/2011.]

Reed Elsevier Inc. et al v. Escalante et al

Doc. 1

lill'l'1'k;l) STATES IIISTRI<'T CIOI.JHT IIISTRIC'T 01.' IIELAWAUE

KI.TI) 1-;LSEVIIIK ISC.. throi~gliits RI<i.Il
f3IJSINI'SS INI:OKMA'I'ION I)i\,ision. and REED t~I.SIIVIIIKI'ROPliK'I'IES IN('.

JOSEI)I I). I<S(-AI.ANIT: I sosr:pl I 1'. ES('A1,ANTE. JOSI I FRlitiSI.:. LVAKIII'X FI'I'%(;EKALD. 1)AVID Q :A('Kl:NH[ :SII. I JOSI I I'REFSI.. L)/13/A '1'1 11: V:ZSL)d-ll.S: K U N G t-'t: l<l~('Ol<l)S. IS('.

COMPLAINT
Plaintiflb. Kccd Elscvicr Inc.. through i\s di\,ision Kcccl Husincss Inli>rli~iltion. and Reed I'lsevicr I'ropcrtics Inc. (collecti\cly "Recd I!lscvier"). appearing throt~gh undersigned counsel. alltyc as ti,llo\vs based o n first-hand k n o ~ ~ l c d g c on infomiation and

1.

'I'his acrio~i stems lion1 1)eikntiants' (except Ihr Drkndant Sosli 1;rccsc)

past and ongoing \.iolations ol'thc .ludg~ncnt (clclincd bclo~v) c~itcr~il t h I~Iniled Statcs by 1)istrict Court ii)r the ('cntrill I)istric~ ol'C'3lifi,riiiu. and 1111 thc Ilekndanrs' past and ongoing breaches of the Seltlcnienr Agrcemcnts (deiineci bclou) regarding the 1)cl'endimts' unaurhorizcd ilsc ot'tl~c111iiqi1tfIy st!.Ji~cd graphics crt'thc I'laintiit's' VARIETY. 1)tZII.Y V~ZlIlll'l'Y ant1 l:Ij ing V logo nlarks (defined below).
3 .

O n Seprenibcr 3. 2004. I'lr~intill'sdisccnercd that flefendants were

infringing sc\.cral of'tlicir protcctcd VAKlE'l'Y marks in marketing lhcir recorded music. llckndants responded quichl~. seniiing a ccasc and desist letter lo Defendants on September 10. 3001. and shortly tlicrcaiier tiling n la\rsuit in the Central Ilistrict ot' C'alifornia alleging trademark infiingemcnt. and otlicr \.icrlations. In order to sc'ttlc and

I11511'-MOIX?fil I . :

Dockets.Justia.com

resolve the lawsuit. 1)clkndonts committed to ccasc use of certain graphics anJ!or

materials containing Plaintiffs VAIIIIi'I'Y marks in conncctinn lvith ihc sale ol'ccrtain
albums/C'L>s. L)clknclants' corlimitnients MCSC ~i~cniosi;ili~Cd ( i ) Dcli'nclants' csecution t. ) ol'negotiatcd Scltlenient Agrccmcn~s \\ith Kced Else\ icr. ( i i ) I)ctt;'~idiltit~' (cxcep~ .IOSII Frccse) consent to Judgment entered hy the C'cntral Ilistrict ol'('alitc>snia. and ( i i i ) Ilckndants' sworn atlidavits tcstitj'ing to compliance ~vith thest coli~~nitliicnts. 3. Notwithstanding thc mcniorialization ol'rllrsc commitnients. in 1)eceliihcr

2009 Reed Elscvicr discovered ~nultiplc uses by 1)cfcndants ol'cnioined graphics and/or
inlapcs on 1)elkndants' o\vn u,cbsitcs and otlicr web sites i1ndt.r their con~rol.When notified of these brcaclics nlid askcti to relnoce the graphics. 1)cl'tlndants remo\,cd onl!. the representative uscs spcciticnll> idcntilicd by IIccd I~lsevicr. leaving otlicr uscs kno\\~i to Kced Elscvier

-- intlicating that I>cl>ndunrs( i ) did not tnkc liccd I:lsctvicr's

concerns

with violations ol'thr Sudgnicnt anti hrcuchcs ot'tllc Scttlc~~icnt .4grcc1ilentsscsiousl~. n ~ i a

( i i ) failed to cngagc' in an). sitbstanti\.c r c it\\.ot'tlici 1. 7000 and 20 10 uscs ol' the cnjoincd ~
imapcs. 'l'hc continuing in\,estigation ct'li)rts that liccd l-:lsc\.icrhas been forced to conduct. at signiticant expense. as a rcslilt of I)clrndants rcfilsal to conduct a substanti\,c rcvicw ol'thcir activities Sor compli;incc with thcir obligations under the Scttlcnicnt Agrccmcnt and Judgment h a w identilied yct ti~rtlicruscs ot'thc cnioincd praphics/imogcs leading to the iniliation ol'tliis second l a ~ ~ s u i t . PAH'i'l ES

4.

Reed tllscvicr Inc, is a Massachi~sctts corporation having a principal place

of business at 125 Park A\.CIILIC. York. N Y 1001 7. Kced Ri~sincss New I~iti)rn~ation il is division of' Kced t*:!sevicr Inc.
>.

Ikcd ISlscvicr I'ropcrtics Illc. is a I)clau.arc corporation having a princi;>al

pllicc of business at 1 105 N. Market Street. Wilniington. Delaware 1080 1. Reed Husincss InSornlation is a trademark licensee ot' Rccd I-:lscvicr I'roperlics Inc.

6.

On inlhrlnation and helicl: .loscpli 1'. liscalante ("l_scalantc") is an

individual residing in the I loll>wood. C'nli tbrnia arca and having a b~~siness addrcss at

1405 Llcctric .4vc. Seal Reach. C'alili,rnia. 907.10-6523.
7. On inli~rmation hclict: Soscph 1'. 1:scnlante. Sosll 1:rcttse. Warre11 and

1:itzgcrald and 1)avid Quackenbusli. doing business iis "The Vandals" arc residents of'thc 1.0s Angclcs. California area and hacc a busi~iess address at 020 N.Citrus ,lvenuc.
1 lollywood, Chlilbrnia 90038.

8.

On information and belief: Kung 1:u Records. Inc. (-'KFK") is an acti\.c

Nevada corporation having a last hnoun principal place o1'busint.s~at 020 N . Citrus Avenue. I lollywood. ('alifosnia 90038 and a listed registcrcd agcnt as Anita Rivas. 1 . a ~ Otficcs of Walner Rivas. 4004 1.a Sallc Ate. Stc 1. ('ul\.cs C'ity Calili,r~~ia 00232
1.

For rettrcncc purposes. .loseph 1'. lfscnlnntc individually and .loscph 1'.

llscalantc, Josh 1:rccse. b'arrcn 1:itrgcrald and I)n\.id Quackenbi~sh doing business as "'l'he Vandals" shall collccti\.cly be rckrrcd to as "Vandals.

..

~II'HISDICTION
10. 'I'his ('our1 has sub.jcct nlattcrjurisdictic)~~ pi~rsuantt o 28 I.:.S.('. 8$13-39(a)

and 2201 c! .scJq. I'laintiff's Kccd Elsc\,icr Inc. and Kced I3usinttss Inli,nnation are residents of' S c u York. Plainti !I' Kccd l:lsc\ ier Inc, is a cilizen of Massachusetts by incorporation. I'laintifl'Kced Elsc\,icr 1'ropertic.s Inc. is a rcsidcnt and citizen (hq incorporntioni ol'thc Statc of'I)claivarc. 1)cfend:ints arc all rcsidcnts and citizens of Cali l'orllia. 'l'he amount in
1 1.
contra\ ersy

cscccds $73.000. csclusive ol' interest and costs.

'1'0 aid in resolving ciisputcs based on or arising horn thc Scltlenlcnt

Agreement. the Dclk~~dants agreed in Scction 4. I4 ol'tlie KFKJVandals Settlement Agreemcnt and Scction 4.1 1 of'rhc I.'rccsc Settlcmcnt ~\grccnient:

c '1'0 consent 10 pcrsonal jurisdiction in thc l initcd States : District ('ourt li)r tlie t.)islrict of 1)clnware:

~IIMI.'-WOIlj2(I I . ;

o To pertilit Kccd lilst.\.icr to bring any action based 011 or arising out 01'111~ Sctllenient Agrccnienl in the Ilnited States District (.'ourt ti)r thc District ol'1)clawarc:

12.

1)cfcndants arc. tliercli~rc.subjcct to personal jurisdiction in tliis Ilistrict.

and have contractually waived a n objections to \.eniic in tliis Ilistrict.

B.ACK<;HOI:SI)
1 .
Plaintiff Reed 13lsc\,ier Inc.. thsoi~gliits IIccd Hi~sincss Intiwnation

division. offers publications and on-line inlimnation in the licld ol'nttus and in1i)rmation in the enrcrtainmcnt industry. including lbr thc music industrl*. i l l interstate commcrcc. under the tilarks VAKIE'I'Y atid l)./\II.Y VAKII~'I'Y.and under a ta'lying V logo.

I .

I'laintiSf Reed I!lsc\.it.r Properties Inc. is the owner ol'the trademarks and

scrvicc marks VARI I-I'I'Y. I)AII .Y VAKI tI'I'Y and the 1:lyilig V logo (the "VARIETY Marks") uscd in connection with puhlicarions and on-line inlhrniation in t11c licld oI'nc\vs

and information in the entenainunc~itindustry. i~lcli~ditig [lie music iniiustr>.. l'laintil'l. li)r
Rccd Elscvicr Inc.. through irs Rccd 13nsincss 1nli)rnlation division. is the liccnscc 01' I'laintiSS Kccd Elsevier Propcrrics luc. li)r tlsc ol'tlie V/IRl J X " Marks.

I .

The Plaintif'li' VAKIKI'Y Marks as genesall!. uscd. appear as ~'IIIIL)LL.s:

0

0 1 1 or

aroi~tid .lullc 7 0 . 2004. Dc.Selldants K1.X and Vandals adopted

graphics for their band name "The Vandals" incorporated graphics from Reed lllscvicr's

VARIETY Marks. anif in particular in connection nith thc'ir alhum/('l)s entitled

"I lollywood Potato ('hip.
was:

'The graphical presentation 01'-"L'hc Viindals" on album co\.crs

17.

KFK and Vandals also creatcd and sold an album cl~titlcd "(;one With 'l'hc

Wind" ol'I'unk Rock Samplers which incorporated substantially all of Plaintifl's' Slylized

VARIEI'Y mark in what purpom to he a niockup ot'a Ilaily Variety cover t'caturing a
favorable revieu of'thc album:

18.

On September 1.3. 2004. Reed t ~ l s ~ v ilcirl ~ d Civil Action No. C'Vi14-7584

PA ("thc Action") against KFK nncl Vandals in rhc I : n i t 4 Statcs Ilistrict C ' O L I ~ 1;)r t l i ~ ~

('cntral Ilistrict of California. alleging ~radcmai-k infi-ingcrncnt. ~radeniark dilution. use 01' a false designation of origin. i~lll'air competition. ul!just enrichment and rradcmark countcrfkiting undcr the 1.anham Act and C'alitilsnia law. bascd on K1:R.s and Vandals' i~ctivities relating to [lie offer and sale oi'products and scrviccs in coninicrcc: under marks illcorporatiny the uniquely stylized graphics ot'the VAKIII'I'Y Marks of Reed tlscvicr. 19. Effective 1)cccmber 10. 2004. a contidcn~ial Scttlemcnt Agrccmcut (thc

"KI:R/Vandals Scttlenient Agreement") was cnccrcd into bctwccn Kccd Elsevier and Ilefendants Kung I.'u Records. Inc.. Joseph I). Escalante individually. and Joseph P.

Escalantc. Warren Fitzgerald and Ilavid Q~lackcnbush doing business as "'l'hc Vandals." A copy ot'thc Kl:R/Vandals Settlement Agrccment is attached ns Exhibit A.

20.

t*:SSective Ileccnibcr 10. 2004. a conlidcntial Scttlcmc~~t ,4green1cnt Lras

also entered into between Reed Elsevier and 1)elkndnnt Sosli 1:reesc (the "1-reese Scttlcmcnt Agrccment") and a copy oftlic Frccsc Sc'ttlcr~ic'~it Agrecn~cnl attached as is 1-khibil 13. The KFRIVandals Settlement Agrccment and the I:rccsc Scttlcment Agreement shell collcctivcly be refbrrcd ro as '-the Settlement Agreements.

..

2 1.

On 1)ccenlbcr 17. 2004. u C'onscnt Sudgmcnt and I'crnmannt 11:iilnctiori

(-'Judgmentw)was cntcrcd in the I1.S. Dislrict C'oiis~li)r thc Central Ilistrict ot'California against Joseph 1'. t4;scalantc indi\:iduall\.. and Joscpli 1'. Ilscalunte. Warren Fitzgcrald and David Qilackcnbush doing business as "'l'hc Vandals." and Kung I:ii Records. Inc. A copy ol'thc Consent Judgnient is a~tachcd Exhihir as
('.

22.

In accordance with the Sudgnicnt and Settlcmcnr Agrccn~cnt. rcviscd the

graphic fix "the Vandals" which appcarcd in thc "I l o l l y ~ o o d I'otatc) ('hip" albun11CD was to appear as Ihllows:

23.

Kccd Elsc\~icr received 1)cclarations ol'(:oriipliancc with the C'onsrnt

Jitdgnicnt and I'crmanent In.junctiori sifncd by I)cScndanrs. Josh 1:rcese. Warren I:itzgcrald and David Quackenbush. and dared 1)cccmbcs 1-3. 2004. in their individual capacities and signed by Ilettndant Joseph l.:scalantc and dated Janiiitry 10. 2004 (sic)/2005 on behalf of KFIL Joscpli 1'. t<scalantcindi\.iduiill!.. and "'['he Vandals." Thcsc documents arc hcrcaficr rckrsed to as 11ic "liscala~itclVaridalsAflidn\;its." Copies of'the Escalan~cIVandals Alfida~~its attached as I~sliibitI). arc