City of Carlsbad v. Shah

Citation850 F.Supp.2d 1087
Decision Date09 February 2012
Docket NumberCivil No. 08cv1211 AJB (WMc).
PartiesCITY OF CARLSBAD, a California municipal corporation; and Carlsbad Public Financing Authority, a California joint powers authority, Plaintiff, v. Prince Reza SHAH, an individual, Defendants.
CourtU.S. District Court — Southern District of California

OPINION TEXT STARTS HERE

Jacob C. Reinbolt, Paul A. Tyrell, Procopio Cory Hargreaves & Savitch LLP, San Diego, CA, Paul G. Edmonson, Office of the City Attorney, Carlsbad, CA, for Plaintiff.

James E. Clevenger, Law Offices of James E. Clevenger, Escondido, CA, for Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING BENCH TRIAL AND JUDGMENT THEREON

ANTHONY J. BATTAGLIA, District Judge.

This matter having come on for trial before the bench on July 11, 2011, and the Court having heard the testimony of witnesses and received evidence, the Court makes the following Findings of Fact, and Conclusions of Law based upon the admissible evidence, and enters Judgment thereon as follows:

FINDINGS OF FACT

I. The Parties

1. Plaintiff and Counter–Defendant, the City of Carlsbad (the City), is a California corporation. The Carlsbad City Council is the city's legislative body, which inter alia enacts ordinances, sets policies through resolutions, and adopts an annual budget. The Carlsbad City Council meetings are televised live via cable television and are also transmitted live on the City's website. (Stipulated Fact (hereinafter “SF”) No. 3.)

2. The Carlsbad Public Financing Authority (CPFA) is a joint powers authority which was formed for the purpose of financing and operating the City's municipal golf course. It is also a licensee of the City of Carlsbad's trademarks and copyrights that are at issue in this case. (SF No. 4.)

3. The Defendant, Prince Reza Shah (Shah), is an individual who resides in the City of Carlsbad. Shah does not have any formal affiliation with the City of Carlsbad, the Carlsbad Public Financing Authority,1 or the City's municipal golf course. (SF No. 5.)

II. Jurisdiction

4. This Court has jurisdiction over this action. The federal claims alleged in this Complaint arise under the Copyright Laws of the United States, 17 U.S.C. § 101 et seq., the Lanham Act, 15 U.S.C. § 1051 et seq., and the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201–02. This Court has subject matter jurisdiction over those claims under 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331 and 1338(a), and over the related state causes of action under 28 U.S.C. §§ 1338(b) and 1367(a). (SF No. 1.)

5. This Court has personal jurisdiction over the defendant in this action pursuant to 28 U.S.C. §§ 1331, 1391 and 1400 because the Defendant resides in this judicial district (in Carlsbad, California) and regularly conducts business in this judicial district. (SF No. 2.)

III. Procedural History

6. On July 7, 2008, the City brought its complaint against Shah for copyright infringement, cybersquatting, unfair competition in violation of the Lanham Act, unfair competition in violation of California's Business & Professions Code section 17200 et seq., common law unfair competition, and declaratory judgment of trademark rights.

7. In return, Shah filed a counterclaim against the City seeking a declaration that his trademark rights are superior to that of the City's and seeking an injunction against the City from further utilizing the marks.

8. During the course of the litigation, the City brought a motion for partial summary judgment which, after oral argument, was decided on October 20, 2009. This Court granted the City's motion for partial summary judgment. (Doc. No. 26.) In granting the motion, the Court declared that the City is the rightful owner of the trademarks and logo at issue in the case and authorized the United States Patent and Trademark Office (“USPTO”) to register the City's pending trademark applications and to deny registration of Shah's application of the marks and his Marbrisa logo. Id.

9. The City's trademarks “the Crossings at Carlsbad” and “TCAC” and logo for these were officially registered with the USPTO in November 2010.

IV. FACTS TO WHICH THE PARTIES HAVE STIPULATEDA. Naming of the City's Golf Course

10. Beginning at least as early as 1990, the City began planning a municipal golf course to be located within the City. The City began construction in 2005, and continuously constructed the golf course and its accompanying buildings and facilities through July 2007. (SF No. 6.)

11. At a June 6, 2006, public City Council meeting, the City announced its plan to solicit names from the public and invited people to submit proposed names within a specified period of time. At that meeting, the City announced its intention to publicly unveil the chosen name for the golf course on October 18, 2006. The City also hired marketing consultants and experts in the industry of promoting and branding golf courses to assist the City in choosing a name for the golf course. (SF No. 7.)

12. On September 5, 2006, a committee formed to evaluate names proposed by the public selected the name “The Crossings at Carlsbad” as its final recommendation. (SF No. 8.)

13. At an October 17, 2006, public City Council meeting, the City formally announced its selection of “The Crossings at Carlsbad” as the final recommended name for the golf course. (SF No. 9.)

14. On November 21, 2006, the City Council formally adopted the name “The Crossings at Carlsbad” for the City's new golf course at a public City Council meeting. (SF No. 10.)

15. Shah was present at the City Council meeting at which the City Council formally adopted the name “The Crossings at Carlsbad” for the City's new golf course. (SF No. 11.)

16. TCAC is an acronym developed by the City to further identify the golf course and related goods and services. (SF No. 12.)

B. The City's Development of the Logo

17. In December 2006, the City began working on the development of a logo for use with the marks “The Crossings at Carlsbad” and “TCAC” (together herein, “the Marks.”) (SF No. 13.)

18. On February 5, 2007, during a public City Council meeting, City employees and consultants formally presented the City Council with the logo (the “Logo”) that officially became the Logo for the City's golf course. (SF No. 14.)

19. On March 1, 2007, the City formally adopted the Logo for the golf course at a public City Council meeting. (SF No. 15.)

C. The City's Use of the Marks and Logo

20. On September 11, 2006, an agent acting on behalf of the City registered several domain names on the City's behalf, including: www. thecrossings atcarlsbad. com, www. thecrossings atcarlsbad golfclub. com, and www. thecrossings golfclub atcarlsbad. com. (SF No. 16.)

21. On October 18, 2006, the day following the City Council meeting at which the recommended name was announced, the North County Times newspaper published an article titled “Carlsbad Releases Golf Course Name,” which identified “The Crossings at Carlsbad” as the name recommended for the City's golf course. (SF No. 17.)

22. On November 21, 2006, the same day the City Council formally adopted the name “The Crossings at Carlsbad” for its new golf course and announced the selection of the name during a City Council meeting, the City issued a press release announcing the adoption of the name “The Crossings at Carlsbad” for its new golf course. (SF No. 18.)

23. On November 22, 2006, the San Diego Union Tribune published an article reporting on the City Council's selection of “The Crossings at Carlsbad” as the name of its golf course. (SF No. 19.)

24. In January 2007, the City and its agents began ordering and distributing marketing materials using the name “The Crossings at Carlsbad” and provided such name as the name of its golf course for publication on the “San Diego Golf Map,” which was distributed in late January and early February 2007. (SF No. 20.)

25. In February 2007, the City and its agents marketed its golf course through the Carlsbad Chamber of Commerce, the Carlsbad Conventions and Visitors Bureau and San Diego Golf Expo under the name “The Crossings at Carlsbad.” (SF No. 21.)

26. In February 2007, the City and its agents also ordered merchandise, such as golf balls and pens, which included the Marks and the Logo. (SF No. 22.)

27. The March 4, 2009, issue of Fore Magazine contained a half-page ad for the City's golf course under the name “The Crossings at Carlsbad.” (SF No. 23.)

28. On March 9, 2009, the name “The Crossings at Carlsbad” and the Logo were displayed by the City and the City's agents at San Diego Golf Fest at the Del Mar fairgrounds, and brochures for the City's golf course bearing the name “The Crossingsat Carlsbad” and the Logo were distributed to the public. (SF No. 24.)

29. On March 15, 2007, the City and its agents officially launched the www. thecrossings atcarlsbad. com website which included, among other things, the Marks and the Logo. (SF No. 25.)

30. On August 2, 2007, the City's golf course pro shop (operated by the City's licensee) began selling clothing, golf balls, and other items bearing the Marks and the Logo. (SF No. 26.)

31. On August 5, 2007, the City's golf course opened for play by Carlsbad residents and was opened to the general public on August 11, 2007. (SF No. 27.)

32. At all times, the golf course has operated under the name “The Crossings at Carlsbad.” Kemper Sports Management (“Kemper”) is a licensee of the City's Marks and the Logo. Kemper operates the City's golf course, pro shop and related facilities for the City and on the City's behalf. (SF No. 28.)

D. The City's Trademark Applications

33. While the City and its agents were already using the marks “THE CROSSINGS AT CARLSBAD” and “TCAC” for its golf course and related goods and services, it filed nine Intent to Use (“ITU”) trademark applications with the USPTO for the Marks and Logo. The applications were for Class 25 (golf clothing), Class 28 (golf accessories) and Class 41 (golf-related entertainment). (SF No. 29.) The following is a list summarizing the dates and substance of...

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