Ballero v. 727 Inc., et al
ORDER AND REASONS: IT IS ORDERED that Defendants' 24 , 30 motions to dismiss are DENIED WITHOUT PREJUDICE to re-urge on a motion, or motions, for summary judgment after the exchange of discovery. Signed by Judge Ivan L.R. Lemelle on 3/28/2017. (mmv)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FRANK W. BALLERO
727 INC., ET AL.
ORDER AND REASONS
Incorporated and 721 Bourbon, Inc.’s “Motion to Dismiss Amended
Distributing, LLC’s “Motion to Dismiss” (Rec. Doc. 30). Plaintiff
Defendants then requested, and were granted, leave to file reply
memoranda. Rec. Docs. 36, 40. For the reasons discussed below,
IT IS ORDERED that the motions to dismiss (Rec. Docs. 24, 30)
are DENIED WITHOUT PREJUDICE.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
As previously discussed, this case arises out of the sale of
a red ale beer known as Pirate’s Blood. Rec. Doc. 1 at ¶ 5. Frank
W. Ballero (“Plaintiff”) claims that he invented and began brewing
the beer in 2009. Id. He also developed a “logo and mark” for the
beer. Id. The beer was subsequently sold by various bars, including
the Funky Pirate located at 727 Bourbon Street, New Orleans,
Louisiana 70116 and owned by 727, Incorporated (“Defendant 727”)
and Tropical Isle Bourbon located at 721 Bourbon Street, New
Orleans, Louisiana 70116 and owned by 721 Bourbon, Incorporated
(“Defendant 721”). Id.; see also Rec. Doc. 8-1 at 1 n.1.
In March of 2011, Plaintiff stopped producing Pirate’s Blood.
Rec. Doc. 1 at ¶ 6. Yet, the Funky Pirate and Tropical Isle Bourbon
continued to sell a beer called “Pirate’s Blood,” “use the same
exact tap handle bearing [Plaintiff’s] Pirate’s Blood logo and
name,” and tell customers that the beer “is locally brewed and
sold exclusively” at these two bars. Id.
According to Plaintiff, the beer “passing off as Pirate’s
Distributing, LLC (“Defendant Crescent”). Id. at ¶ 7. Plaintiff
Pirate and Tropical Isle Bourbon “to maintain and clean the
equipment associated with the product it has sold, i.e. the beer
tap lines,” and therefore is “complicit in the deception.” Id.
requesting injunctive and monetary relief pursuant to § 43(a) of
the Lanham Act, 15 U.S.C. §§ 1125(a), 1116, 1117, and the Louisiana
Unfair Trade Practices Act (“LUTPA”), Louisiana Revised Statute §
51:1401-1428.1 Rec. Doc. 1 at ¶¶ 12, 15.
Named as Defendants were 727, Crescent, Tropical Isle Beverages, LLC, and
Tropical Isle’s Original Papa Joe’s, Inc. Rec. Doc. 1 at ¶ 2. In their original
motion to dismiss, Defendants 727 and 721 explain that they are the owners of
In response to Defendants’ original motions to dismiss (Rec.
Docs. 8, 15), Plaintiff filed an amended complaint on February 2,
2017 asserting that he “met with various persons and companies in
2012, 2013, 2014, and 2015 regarding the production and sale of
Pirate’s Blood” and that he “fully intended/intends to continue
brewing and selling Pirate’s Blood under its trademarked name and
logo” (Rec. Doc. 21). Before the Court could rule on the original
motions to dismiss, Defendants 727 and 721 filed a second motion
to dismiss in response to the amended complaint. Rec. Doc. 24.
Nonetheless, Defendants’ original motions were denied without
specifically stated that “Plaintiff’s amended complaint appears to
allege that he intended to continue to use and/or resume using his
mark and therefore alleges that he did not abandon the mark.
Arguments to the contrary will be considered in conjunction with
the pending motion to dismiss filed by Defendants 721 and 727 . .
. .” Id. at 6. Defendant Crescent then filed its second motion to
dismiss. Rec. Doc. 30.
the bars at issue and that Tropical Isle Beverages, LLC and Tropical Isle’s
Original Papa Joe’s, Inc. “have no relationship to the factual allegations in
the Complaint.” Rec. Doc. 8-1 at 1 n.1. Accordingly, those parties were
terminated from the suit.
THE PARTIES’ CONTENTIONS
As they did in their original motions, Defendants 727 and 721
argue that “Plaintiff ceased using the ‘Pirate’s Blood’ mark nearly
six (6) years ago with no intent to resume use of the mark within
the reasonably foreseeable future; and, therefore, abandoned the
mark.” Rec. Doc. 24 at 1. Because Plaintiff’s claims for unfair
infringement, false designation of origin, and unfair competition
all require Plaintiff to own a protectable trademark, Defendants
maintain that Plaintiff failed to state a claim upon which relief
essentially adopts the arguments made by its co-Defendants. Rec.
Doc. 30-1 at 1.2
Plaintiff responds that “he intended and continues to use the
Pirate’s Blood formula with its associated logo,” as evidenced by
his negotiations in 2012, 2013, 2014, and 2015 with individuals
and businesses “regarding the contract brewing of Pirate’s Blood.”
Rec. Doc. 33 at 4.
Though, Defendant Crescent characterizes the timing of Plaintiff’s abandonment
a bit differently: instead of arguing that Plaintiff abandoned the mark six
years ago, it argues that he abandoned it five years prior to filing suit. Rec.
Doc. 30-1 at 1.
III. LAW AND ANALYSIS
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
a party can move to dismiss a complaint for failure to state a
claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6);
see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Such
motions are viewed with disfavor and rarely granted. Lowrey v.
Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting
Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc.,
677 F.2d 1045, 1050 (5th Cir. 1982)). Nonetheless, “[t]o survive
a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(internal quotation marks omitted). A claim is facially plausible
“when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Id. Further, when reviewing a motion to
dismiss, courts must accept all well-pleaded facts as true and
view them in the light most favorable to the non-moving party. See
Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
According to Defendants, to file a claim for federal and
common law trademark infringement, false designation of origin,
LUTPA, Plaintiff must have a valid protectable trademark. Rec.
Doc. 24-1 at 3-4 (citing Am. Rice, Inc. v. Producers Rice Mill,
Inc., 518 F.3d 321, 329 (5th Cir. 2008) (“To recover on a claim of
trademark infringement, a plaintiff must first show that the mark
is legally protectable and must then establish infringement by
showing a likelihood of confusion. To be protectable, a mark must
meaning in the mind of the public”) (internal citations omitted);
Action Ink, Inc. v. Anheuser-Busch, Inc., 959 F. Supp. 2d 934, 948
(E.D. La. 2013), aff’d sub nom. Action Ink, Inc. v. N.Y. Jets,
L.L.C., 576 F. App’x 321 (5th Cir. 2014)(“A showing of likelihood
of confusion presupposes the existence of a valid mark”) (citing
La. World Exposition, Inc. v. Logue, 746 F.2d 1033, 1039-40 (5th
Yet, “[o]wnership of trademarks is established by use,
not by registration.” Union Nat'l Bank of Tex., Laredo,
Tex. [v. Union Nat’l Bank of Tex., Austin, Tex.], 909
F.2d [839,] 842 [(5th Cir. 1990)]; see also 15 U.S.C. §
1127 (defining a trademark as a “word, name, symbol, or
device ... used by a person, or which a person has a
bona fide intention to use in commerce,” and in turn
defining “use in commerce” as “the bona fide use of a
mark in the ordinary course of trade, and not made merely
to reserve a right in a mark” (emphasis added)). And
under the Lanham Act, even if a registrant has owned the
mark at one time—indeed, even if the trademark
registration has become inconstestable—an opposing party
may successfully defend against an infringement claim by
showing that the registrant has abandoned the mark. See
15 U.S.C. § 1115(b)(2). A mark is deemed abandoned if
“its use has been discontinued with an intent not to
resume such use.” 15 U.S.C. § 1127.
Action Ink, 959 F. Supp. 2d at 942. Similarly, actions for false
competition under either the Lanham Act or the LUTPA may be
defended against by demonstrating that the plaintiff abandoned his
or her use of the mark. Id. at 948 (citing Riggs Mktg. Inc. v.
Mitchell, 993 F. Supp. 1301, 1305 (D. Nev. 1997)); see also 15
U.S.C.A. § 1127 (in which the Lanham Act provides that a mark is
abandoned when one of two things occurs: (1) “its use has been
discontinued with intent not to resume such use. Intent not to
resume may be inferred from circumstances.” (2) The owner’s course
of conduct caused the mark to become the generic name for the goods
or services or otherwise to lose its significance as a mark.).
“The party asserting abandonment must establish that the
owner of the mark both (1) discontinued use of the mark and (2)
intended not to resume its use.” Action Ink, Inc. v. N.Y. Jets,
LLC, No. 12-46, 2013 WL 12106878, at *3 (E.D. La. June 20, 2013),
adhered to on denial of reconsideration, 2013 WL 5532781 (E.D. La.
Oct. 4, 2013), aff’d sub nom. 576 F. App’x 321 (citation omitted)
(granting summary judgment in favor of the defendants on claims of
federal trademark infringement and false designation of origin
infringement and unfair competition). Again, under the Lanham Act,
“use” of a mark “means the bona fide use of such mark made in the
ordinary course of trade, and not made merely to reserve a right
in a mark.” 15 U.S.C.A. § 1127; see also Action Ink, 2013 WL
12106878, at *4 (citing Who Dat Yat Chat, LLC v. Who Dat, Inc.,
No. 10-1333, 2012 WL 1118602, at *11 (E.D. La. Apr. 3, 2012)).
Further, under the Lanham Act, nonuse “for 3 consecutive years
shall be prima facie evidence of abandonment.” 15 U.S.C.A. § 1127.
This creates a “rebuttable presumption of intent not to resume
[use].” Action Ink, 2013 WL 12106878, at *4 (quoting Cumulus Media,
Inc. v. Clear Channel Commc’ns, Inc., 304 F.3d 1167, 1172 (11th
Cir. 2002)). “Once the rebuttable presumption of intent not to
‘[s]hifts to [the holder] to produce evidence that [it] either
used the mark during the statutory period or intended to resume
use.’” Id. (quoting Nat. Answers, Inc. v. SmithKline Beecham Corp.,
529 F.3d 1325, 1330 (11th Cir. 2008)).3
However, “[t]he intent to resume cannot be far-flung or
indefinite; rather there must be an intent to resume use within
the reasonably foreseeable future.” Id. (quoting Nat. Answers, 529
F.3d at 1330 (quoting Silverman v. CBS Inc., 870 F.2d 40, 46 (2d
trademark holder must come forward with objective, hard evidence
Plaintiff misconstrues the law on this point, reading § 1127 to provide that
it is Defendants’ burden to show that the “owner of the mark discontinued use
of the mark for a period of three years and further intended not to resume its
use.” Rec. Doc. 33 at 3-4; see also Rec. Doc. 32 at 4. The statute, however,
merely provides that nonuse for three years is prima facie evidence of
abandonment and thereby creates a presumption of abandonment.
abate.” Id. (quoting Emmpresa Cubana Del Tabaco v. Culbro Corp.,
213 F. Supp. 2d 247, 268 (S.D.N.Y. 2002) (quoting Silverman, 870
F.2d at 46)). “Thus, ‘a bare assertion of possible future use is
not enough’ to prove an intent to resume use.” Id. (quoting
Silverman, 870 F.2d at 47).
In Action Ink, after a fifteen-year period of nonuse, renewal
of the mark and actions against alleged infringers, in light of
the fact that there was no evidence that the holder used the mark
in commerce or had plans to use the mark in commerce, were “minor
activities” that were “inadequate to show an intent to resume use.”
2013 WL 12106878, at *9-10. Further, the holder’s declaration that
there was never an intention to abandon the mark amounted to “selfserving
judgment. Id. at *10.
Similarly, in Silverman, the Second Circuit determined that
the holder’s “actions in licensing the programs for limited use in
connection with documentary and educational programs, challenging
infringing uses brought to its attention, renewing its copyrights,
programs” were minor activities that did not amount to use. 870
F.2d at 47-48. “Such uses do not sufficiently rekindle the public’s
identification of the mark with the proprietor, which is the
establish an intent to resume commercial use.” Id. at 48.
In Specht v. Google Incorporated, the holder pointed to four
activities that he believed showed his continued use of the mark
after he supposedly ceased using it:
(1) he attempted to sell his
business assets; (2) he did not cancel his phone service; (3) he
continued operating his website; and (4) he conducted two sales
efforts, including a mass mailing and a failed bid to license
software. 747 F.3d 929, 934-35 (7th Cir. 2014). According to the
Seventh Circuit, these activities did not amount to “use” because
(1) “an effort to sell the assets of a business is different from
trading on the goodwill of a trademark to sell a business’s goods
allegedly stopped using the mark were included in a balance sheet
from the previous year “precisely because, in his view, [the
company] did not operate in [the later year]”; (3) “he did not
identify any goods or services [the company] could have provided
through or in connection with the website after [his use allegedly
sustained; sporadic attempts to solicit business are not a ‘use in
mailing evidenced an intent to resume use failed because, by that
time, the defendant had publicized its use of the mark; in other
words, by the time of the mass mailing, the mark was permanently
abandoned. Id. at 935-36.
In his original complaint, Plaintiff admits that he “ceased
production of Pirate’s Blood in March of 2011.” Rec. Doc. 1 at ¶
6. However, Plaintiff’s amended complaint adds a paragraph, which
provides that Plaintiff “met with various persons and companies in
2012, 2013, 2014, and 2015 regarding the production and sale of
Pirate’s Blood. [Plaintiff] fully intended/intends to continue
brewing and selling Pirate’s Blood under its trademarked name and
logo.” Rec. Doc. 21 at ¶ 6(A).4
Defendants argue that Plaintiff admitted in his complaint
that he stopped using the “Pirate’s Blood” mark in 2011. Rec. Doc.
24-1 at 5; see also Rec. Doc. 30-1 at 5. Further, they assert that
intended to resume use of the mark. Rec. Doc. 24-1 at 6; Rec. Doc.
30-1 at 5. Specifically, Defendants maintain that meetings with
companies about the production and sale of Pirate’s Blood were
minor activities that did not amount to “use” and that Plaintiff’s
allegation that he intends to continue brewing and selling Pirate’s
The Court is aware of the arguments made by Defendants 727 and 721 in their
reply memorandum—namely that “Plaintiff improperly embellishes the facts that
were alleged in his original . . . and amended complaint . . . .” Rec. Doc. 40
at 1. The Court will consider the statements actually made in Plaintiff’s
original and amended complaints, rather than Plaintiff’s characterization of
those statements in his opposition memoranda.
Blood is merely a vague assertion of possible future use. Rec.
Doc. 24-1 at 6-7; Rec. Doc. 30-1 at 5.
Plaintiff essentially responds that its amended complaint is
sufficient under Federal Rules of Civil Procedure 8 and 12(b)(6)
and that “Defendants offer no case where a Court found abandonment
at the 12(b)(6) stage.” Rec. Doc. 33 at 4.
However, Defendant Crescent cited a recent district court
case from Massachusetts in which the court granted a motion to
dismiss due to abandonment of a trademark. Rec. Doc. 30-1 at 7
(citing Beram v. Ceaco, Inc., No. 16-10569, 2016 WL 7030427, at *4
(D. Mass. Dec. 1, 2016). Plus, Defendants’ reply memoranda point
the Court to a second, similar Massachusetts case. Rec. Docs. 36
at 2, 40 at n.1 (citing Swartz v. Schering-Plough Corp., 53 F.
Supp. 2d 95, 102 (D. Mass. 1999)).5
In Beram, the holder invented puzzles and entered into a
contract with a company that allowed the company to license the
puzzles for manufacture and sale. 2016 WL 7030427, at *1. One of
the puzzle designs was labeled “Puzzle Stix.” Id. During the
contract period, the company purportedly sold a product called
“Puzzlestix” that it attributed to a different inventor. Id. at
*2. Because the complaint did not allege any recent use of the
“Puzzle Stix” name by the holder or by the company, the holder was
Nonetheless, Defendants were unable to cite, and this Court was unable to find
after a brief review, any case from within the Fifth Circuit in which a motion
to dismiss was granted because the holder of the mark abandoned it.
told by the company that sales of her puzzles had ended, and the
complaint failed to allege any intention of the holder’s estate to
use the name in the reasonably foreseeable future, the holder’s
claims of trademark infringement were dismissed without prejudice.
Id. at *4.
In Swartz, the holder’s complaint merely alleged that he used
the mark in 1975 (twenty-four years earlier), that he “does now,
and has in the past, been working toward, and has sold, a product
that uses the ‘marks’ at issue,” and that he “had a product on the
market and plans to continue.” 53 F. Supp. 2d at 101. Because he
determined that even if he once held a protectable trademark, it
was lost through abandonment. Id. at 101-02 (citation omitted).
distinguishable from the cases cited by Defendants to warrant
denying Defendants’ motions to dismiss. In Action Ink, the holder
merely renewed the mark, filed suit against infringers, and alleged
that there was no intent to abandon (2013 WL 12106878, at *9-10);
in Silverman, the holder renewed the copyright, sued infringers,
considered resuming use, and licensed the programs to be used in
educational programs (870 F.2d at 47-48); and in Specht, the holder
tried to sell his business and maintained his phone service and
considered commercial in nature. The holders were not trying to
sell the good or service associated with the mark. Plus, in Beram
and Swartz, the holders failed to allege any recent use or intent
to use. 2016 WL 7030427, at *4; 53 F. Supp. 2d at 101-02.
Here, however, Plaintiff’s amended complaint at least alleges
that he met with individuals and companies over the course of
several years “regarding the production and sale of Pirate’s
Blood.” Rec. Doc. 21. While the Court agrees with Defendants that
this is a vague allegation that may not survive a subsequent motion
for summary judgment, it allows the Court “to draw the reasonable
inference that the defendant[s] [are] liable . . . .” See Iqbal,
556 U.S. at 678.6 Further, while the Seventh Circuit in Specht
recognized that the holder’s two sales attempts “were isolated and
not sustained” and therefore not entitled to protection (747 F.3d
at 935-36), Plaintiff’s case is distinguishable because he alleges
meetings from 2012 through 2015 (Rec. Doc. 21). He, of course,
involved, or the nature of their conversations. Thus, again, after
attempts were just as sporadic as the holder’s attempts in Specht.
At the motion to dismiss stage, however, the facts alleged in the
The Court specifically notes that Defendants are correct that the statement
in the amended complaint does not provide that Plaintiff “underwent
negotiations” with individuals and businesses (see Rec. Docs. 40 at 2, 21 at
1); however, a statement that the holder “met” with individuals and businesses
“regarding the production and sale” of the product allows the Court to draw the
reasonable inference that Plaintiff engaged in commercial activity.
complaint must be viewed in the light most favorable to Plaintiff.
See Baker, 75 F.3d at 196.
For the reasons outlined above,
IT IS ORDERED that Defendants’ motions to dismiss (Rec. Docs.
24, 30) are DENIED WITHOUT PREJUDICE to re-urge on a motion, or
motions, for summary judgment after the exchange of discovery.
New Orleans, Louisiana, this 28th day of March, 2017.
SENIOR UNITED STATES DISTRICT JUDGE
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