PBTM LLC v. Football Nw., LLC

• Citation: 511 F.Supp.3d 1158
• Decision Date: 05 January 2021
• Docket Number: CASE NO. C19-2081-RSM
• Parties: PBTM LLC, Plaintiff, v. FOOTBALL NORTHWEST, LLC, et al., Defendants.
• Court: U.S. District Court — Western District of Washington

511 F.Supp.3d 1158

PBTM LLC, Plaintiff,

v.FOOTBALL NORTHWEST, LLC, et al., Defendants.

CASE NO. C19-2081-RSM

United States District Court, W.D. Washington, at Seattle.

Signed January 5, 2021

Anthony M. Verna, III, Pro Hac Vice, Verna Law, P.C., Rye, NY, Judith A. Endejan, Endejan Law LLC, Everett, WA, for Plaintiff.

Benjamin J. Hodges, Tim J. Filer, Foster Garvey PC, Seattle, WA, for Defendant Football Northwest LLC.

Ashley K. Long, Kenneth W. Hart, Mark Rosencrantz, Randolph J. Johnson, Carney Badley Spellman PS, Seattle, WA, for Defendant NFL Properties LLC.

ORDER RE: DEFENDANTS’ MOTIONS TO DISMISS AND PLAINTIFF'S MOTION FOR LEAVE TO AMEND

RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

This matter comes before the Court on Defendants Football Northwest LLC and NFL Properties, LLC's Motions to Dismiss. Dkts. #28, #30. Plaintiff PBTM LLC ("PBTM") opposes Defendants’ motions. Dkt. #34. PBTM has also moved for leave to amend its complaint, Dkt. #40, which Defendants have opposed. Dkts. #42, #43. The Court finds oral argument unnecessary to resolve the underlying issues. Having reviewed the relevant briefing and the remainder of the record, the Court GRANTS IN PART Defendants’ motions to dismiss as set forth below.

II. BACKGROUND

A. Factual Background

PBTM, previously known as Volume 12, LLC ("Volume 12"), is a Nevada limited liability company. PBTM brings this lawsuit against Defendants Football Northwest LLC ("FBNW" or "the Seahawks") and NFL Properties, LLC ("NFLP"). The NFLP represents the National Football League and its member clubs, including the Seahawks, for the licensing and protection of the clubs’ trademarks and other commercial identifications. Id. at ¶ 13.

Since 2009, PBTM has developed and used markers incorporating the number 12 with the word "VOLUME" or "V" in reference to Seahawks fans. Dkt. #26 at ¶¶ 16-17. The number "12" refers to the Twelfth Man, a term used in American football to honor fans as the twelfth member of the team, while "volume" references Seahawks fans’ record-breaking crowd roar at CenturyLink Field, the team's home stadium. Id. at ¶ 28. In June 1, 2009, PBTM began using a styled number 12 in conjunction with the term "Volume" or "V," on produced products that included towels, flags, banners and flyers.

Id. at ¶ 24. PBTM later registered this mark with the USPTO on January 31, 2017, under registered trademark No. 5,132,208. See Dkt. #26-1 at 12. PBTM created a website and associated social media accounts, and its VOLUME 12 flags and banners were displayed across Seattle bars and restaurants during the 2009 season. PBTM alleges that for every home game, VOLUME 12 banners were displayed prominently at CenturyLink Field, while Seahawks players and management carried and were photographed with VOLUME 12 flags, banners and towels. PBTM claims that the Seahawks never objected to VOLUME 12 at any point during the 2009 season, but instead "genuinely created an association with VOLUME 12." Dkt. #26 at ¶ 24. Between 2009 and 2010, PBTM expanded its VOLUME 12 product line for use by other Seattle sports teams, including the Sounders, Mariners, Stealth, and University of Washington Huskies. Id. at ¶ 25.

In the first quarter of 2011, Seahawks management informed PBTM that they wanted the VOLUME 12 trademark to be associated exclusively with the Seahawks, and they did not want other Seattle sports teams using the mark. Id. at ¶ 26. On June 7, 2011, the Seahawks and PBTM entered into a license agreement ("the 2011 Agreement") that granted the Seahawks exclusive rights to use VOLUME 12 on stationery, signage, video boards and LED within the stadium and to promote and publicize VOLUME 12 "anywhere in the public domain" but only in conjunction with the sale of Seahawks jerseys. Dkt. #25-1. In return, PBTM received the "opportunity to capitalize on the publicity" created by the Seahawks’ use of the mark. Dkt. #26 at ¶ 26.

From 2009 until 2011, the VOLUME 12 design remained the same on Seahawks banners and flags. In 2012, the Seahawks’ graphic department developed new designs for the VOLUME 12 banners. Id. at ¶ 27. PBTM and the Seahawks "jointly selected a design" used on the team's end zone banners for the 2012 season. In June 2013, PBTM opened a VOLUME 12 commercial store in Redmond Town Center to sell Seahawks-related products. Id. at ¶ 28. PBTM claims that the Seahawks never protested PBTM's use of VOLUME 12 or claimed infringement related to the VOLUME 12 marks.

In 2014, PBTM and the Seahawks entered into negotiations for purchase of the VOLUME 12 trademark. Id. at ¶ 29. PBTM claims that the Seahawks ultimately declined to buy the VOLUME 12 trademark when PBTM informed them "they needed at least $400,000 to recoup their costs" to develop the mark. Id. The negotiations then turned to another PBTM trademark: a stylized design of the phrase "LEGION OF BOOM." General counsel for the Seahawks drafted a purchase agreement for the trademark ("the LEGION OF BOOM Agreement"), which parties signed on August 24, 2014. Dkt. #25-2.

PBTM claims that parties did not discuss the VOLUME 12 mark during negotiations and was therefore "surprised to see later drafts" of the LEGION OF BOOM Agreement that included clauses about VOLUME 12. Id. at ¶ 29. PBTM claims that it specifically objected to paragraphs 21 and 22 and "wanted them deleted," since they contained language requiring PBTM to obtain the Seahawks’ consent prior to marketing a BOOM or VOLUME 12 product. Id. at ¶¶ 29-30. However, Seahawks management allegedly insisted that paragraphs 21 and 22 remain but promised to modify the language so that PBTM would not be required to obtain the Seahawks’ consent prior to marketing a BOOM or VOLUME 12 product. Id. at ¶ 30.

PBTM claims that notwithstanding parties’ discussions about paragraphs 21 and 22, the Seahawks did not revise paragraph 22 to remove the mandatory consent provision. Dkt. #26 at ¶ 30. PBTM alleges that as a result of pressure from Seahawks management to immediately sign the agreement, and because parties previously had a cordial working relationship, PBTM only gave the execution version a "cursory review." Id. Consequently, it failed to notice that paragraph 22 was not revised as PBTM requested and read as follows:

Given FBNW's rights and interest in the trademark "12," VOLUME 12 LLC will not offer or market goods or services under "VOLUME 12" or any other mark containing "12" or "TWELVE" to or in connection with any team or any sport other than Seattle Seahawks football. Further, VOLUME 12 LLC shall seek and obtain prior written approval of FBNW before producing, advertising and/or selling or otherwise distributing any product featuring a trademark that incorporates "12." It is understood that FBNW is under no commitment to purchase, market or distribute "VOLUME 12" goods or services.

Dkt. #25-2 at 6 (emphasis added). Shortly after signing, PBTM discovered that the Seahawks had omitted the language PBTM requested in paragraph 22 to make the Seahawks’ consent non-mandatory, and PBTM "promptly protested this omission several times." Dkt. #26 at ¶ 30. Although the Seahawks reassured PBTM that its general counsel would add the "not mandatory" language to paragraph 22 to make the consent provision non-obligatory, the language was never added and the Seahawks have since refused to do so. As a result, PBTM contends, the sale of its "LEGION OF BOOM" mark was tied to a restriction on the use of its VOLUME 12 mark that PBTM never negotiated or agreed to. In May 23, 2016, PBTM asked for the Seahawks’ consent for PBTM to use two VOLUME 12 designs that predated the LEGION OF BOOM Agreement, but the Seahawks refused. Id. at ¶ 37. PBTM later requested consent in 2017 for a "Turn the Volume UP to 12" mark, which the Seahawks again refused. Id. at ¶ 39.

PBTM claims that since execution of the 2014 LEGION OF BOOM Agreement, the Seahawks and NFLP have taken "inconsistent, but steady" challenges at the U.S. Patent and Trademark Office ("USPTO") to prevent PBTM from using its Volume 12 and V12 trademarks. Id. at ¶ 31. These efforts include filing an opposition in 2015 to PBTM's trademark applications for stylized "VOLUME 12" and "TURN UP THE VOLUME TO 12" marks, which Defendants later withdrew in 2016. Id. After withdrawing their opposition in the TTAB, NFLP sent a letter dated December 19, 2016, stating its belief that PBTM's use of these marks "without the permission of the Seahawks Club would violate the Legion of Boom Agreement, in addition to constituting infringement of the Seahawks Marks ...." Id. NFLP also reserved rights and remedies to future use of or application for Seahawks trademarks related to the number 12. Id.

In response to NFLP's December 19, 2016 letter, PBTM filed a petition to cancel the Seahawks’ trademark registration for No. 5084564, a styled number 12, in the Trademark Trial and Appeal Board ("TTAB").¹ Defendants moved to dismiss on the basis that the LEGION OF BOOM Agreement deprived the USPTO of jurisdiction, since the provision applied to "the issue of future trademark disputes." Id. at ¶ 32 (quoting Dkt. #26-1 at 31). PBTM subsequently withdrew its Petition to Cancel, and the TTAB dismissed the matter without prejudice.

In 2016 and 2017, PBTM filed applications for its 2009 VOLUME 12 mark, reg. no. 5,132,208, and another VOLUME 12 mark that it first used in June 2012, reg. no. 5,132,113. See Dkt. #26-1 at 10-13. Defendants did not file oppositions to these applications, and the marks were registered on January 31, 2017. Id. However, in 2019, Defendants opposed PBTM's registration application for a styled 12 mark that included a "V" and the phrase "verified property of the fans," U.S. Serial No. 88477341 ("the Verified Property mark"):

Dkt. #26 at ¶¶ 14, 34. In addition to opposing PBTM's use of the above mark, Defendants obtained extensions to oppose three other pending registration applications from PBTM related to "VOLUME 12" and "V12" marks. Id. at ¶ 34.

At the same time Defe...