Ballero v. 727 Inc.

• Decision Date: 22 September 2017
• Docket Number: CIVIL ACTION NO. 16-16098 SECTION "B"(3)
• Parties: FRANK W. BALLERO v. 727 INC., ET AL.
• Court: U.S. District Court — Eastern District of Louisiana

FRANK W. BALLERO v. 727 INC., ET AL.

CIVIL ACTION NO. 16-16098 SECTION "B"(3)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

September 22, 2017

ORDER AND REASONS

Before the Court are two motions: Defendants 727, Incorporated and 721 Bourbon, Inc.'s "Motion for Summary Judgment" (Rec. Doc. 54) and Defendant Crescent Crown Distributing, LLC's "Motion for Summary Judgment" (Rec. Doc. 55). Plaintiff timely filed response memoranda to both motions. Rec. Docs. 56-57. Defendants 727, Incorporated and 721 Bourbon, Inc. then requested, and were granted, leave to file a reply memorandum. Rec. Doc. 60-1. For the reasons discussed below,

IT IS ORDERED that the motions for summary judgment (Rec. Docs. 54-55) are GRANTED, and this action is thereby DISMISSED. All other pending motions are DISMISSED AS MOOT.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

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 ¶ 6.¹ 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. In his response to the instant motions, Plaintiff clarifies that Defendants started using Killian's Irish Red Ale as the Pirate's Blood replacement and that, "[i]nstead of using a Killian's Red Ale tap handle, Defendants continued to use the Pirate's Blood tap handle." Rec. Doc. 56 at 2 (citations omitted).

According to Plaintiff, the beer "passing off as Pirate's Blood" is sold and distributed by Defendant Crescent Crown Distributing, LLC ("Crescent"). Rec Doc. 1 at ¶ 7. Crescent regularly visits the Funky Pirate and Tropical Isle Bourbon "to maintain and clean the equipment associated with the product ithas sold, i.e. the beer tap lines," and therefore is "complicit in the deception." Id.

Consequently, on November 4, 2016, Plaintiff filed suit 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 § 51:1401-1428.² Rec. Doc. 1 at ¶¶ 12, 15.

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 prejudice on February 22, 2017. Rec. Doc. 29. Defendant Crescent then filed its second motion to dismiss. Rec. Doc. 30.

On March 28, 2017, this Court denied the motions to dismiss without prejudice to re-urge on a motion for summary judgment after the exchange of discovery. Rec. Doc. 41 at 15. On August 22, 2017, Defendants accordingly filed the instant motions reiterating the abandonment arguments made in their earlier motions to dismiss. Rec. Docs. 54 at 1; 55 at 1.³

LAW AND ANALYSIS

Under Federal Rule of Civil Procedure 56, summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting FED. R. CIV. P. 56(c)). See also TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002). A genuine issue exists if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant must point to "portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. Ifand when the movant carries this burden, the non-movant must then go beyond the pleadings and present other evidence to establish a genuine issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

However, "where the non-movant bears the burden of proof at trial, the movant may merely point to an absence of evidence, thus shifting to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial." Lindsey v. Sears Roebuck & Co., 16 F.3d 616, 618 (5th Cir. 1994). Conclusory rebuttals of the pleadings are insufficient to avoid summary judgment. Travelers Ins. Co. v. Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir. 1996) superseded by statute on other grounds, 28 U.S.C. § 636(b)(1) ("conclusory allegations, speculation, and unsubstantiated assertions are inadequate to satisfy the non[-]movant's burden") (citation omitted).

"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 be distinctive, either inherently or by achieving secondary meaning in the mind of the public." Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 329 (5th Cir. 2008)(internal citations omitted). See, e.g., 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 Cir. 1984))).

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 designation of origin under the Lanham Act or for unfair competition under either the Lanham Act or the LUTPA may be defended against by demonstrating that the plaintiff abandoned their use of the mark. Id. at 948 (citing Riggs Mktg. Inc. v. Mitchell, 993 F. Supp. 1301, 1305 (D. Nev. 1997)).

"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 under the Lanham Act, as well as for common law trademark infringement and unfair competition).

Further, under the Lanham Act, nonuse "for 3 consecutive years shall be prima facie evidence of abandonment." 15 U.S.C. § 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 . . . has been established, the burden of production then '[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)). The intent to resume use must manifest during the three-year period of non-use. Specht v. Google, Inc., 758 F. Supp. 2d 570, 594 (N.D. Ill. 2010), judgment entered, No. 09-2572, 2011 WL 4737179 (N.D. Ill. Oct. 6, 2011), and aff'd, 747 F.3d 929 (7th Cir. 2014) (citations omitted); Buck v. Palmer, No. 08-572, 2013 WL 11323280, at *3 (W.D. Tex. July 10, 2013) (citationomitted) (further noting that "evidence adduced after the three-year period is relevant to the extent it demonstrates intent during the period"); Louangel, Inc. v. Darden Rests., Inc., No. 12-147, 2013 WL 2452664, at *2 (S.D. Tex. June 5, 2013) (citation omitted).

However, "[t]he intent to resume cannot be far-flung or indefinite; rather there...