Cat3 v. Black Lineage - SLAMXHYPE.pdf

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x Cat3, LLC, a New Jersey limited liability company, SXH, LLC, a New Jersey limited liability company, and Suchman, LLC, a New Jersey limited liability company,

Plaintiffs, - against -

BLACK LINEAGE, INC., a California corporation, and VAHE ESTEPANIAN a/k/a FLETCH ESTEPANIAN,

Defendants.

: : : : : : : : : : :

14-CV-5511 (AT)(JF)

SECOND AMENDED COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF JURY TRIAL DEMANDED

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Plaintiffs Cat3, LLC (“Cat3”), SXH, LLC (“SXH”), and Suchman, LLC

(“Suchman”) (collectively “Plaintiffs”), by and through their undersigned attorneys, for

their Complaint against Defendants Black Lineage, Inc. (“Black Lineage”) and Vahe

Estepanian (“Estepanian”) (collectively “Defendants”), allege as follows:

NATURE OF THE ACTION

1. This is an action for trademark infringement, false designation of origin and

unfair competition, under the federal Lanham Act and New York state common law, as well

as for cybersquatting under the Lanham Act and dilution under New York General Business

Law §360-l.

2. Plaintiffs are the owners and exclusive licensees of all trademark and related

rights in the trademarks XHYPE, SLAMXHYPE, and the domain name

www.SLAMXHYPE.com for use in connection with a website and magazine with content

in the fields of style, fashion, culture, art and entertainment, and in connection with the sale

of clothing, through brick-and-mortar retail stores and on-line.

Case 1:14-cv-05511-AT-JCF Document 74 Filed 09/27/15 Page 1 of 22

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3. This action stems from the fact that Defendants, with full knowledge of

Plaintiffs’ rights in and to the trademarks XHYPE, SLAMXHYPE, and the domain name

www.SLAMXHYPE.com, have adopted and are using the trademark FLASHXHYPE and

the domain name www.FLASHXHYPE.com in association with the sale of identical,

substantially similar and/or directly related goods and/or services.

4. Plaintiffs seek injunctive relief, monetary damages, including but not limited

to compensatory and punitive damages, and an order requiring Defendants to transfer to

Plaintiffs the www.FLASHXHYPE.com domain name.

THE PARTIES

5. Plaintiff Cat3, LLC is a limited liability company organized and existing

under the laws of the State of New Jersey, with a principal place of business at 501 Tenth

Avenue, Floor 7, New York, New York 10018.

6. Plaintiff SXH, LLC is a limited liability company organized and existing



7. Plaintiff Suchman, LLC is a limited liability company organized and existing



8. Upon information and belief, Defendant Black Lineage, Inc. is a corporation

organized and existing under the laws of the State of California, with a principal place of

business at 370 Myrtle Street, #308, Glendale, California 91203.


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9. Upon information and belief, Defendant Vahe Estepanian a/k/a Fletch

Estepanian is a citizen of California, the owner of Black Lineage, Inc., and maintains a place

of business at 370 Myrtle Street, #308, Glendale, California 91203.

JURISDICTION AND VENUE

10. This Court has subject matter jurisdiction over the claims in this action

pursuant to 15 U.S.C. §1121 of the Lanham Act and 28 U.S.C. §§1331, 1338(a) and

1338(b). The Court has supplemental subject matter jurisdiction over the New York state

law claims in this action pursuant to 28 U.S.C. §1367(a).

11. This Court has personal jurisdiction over Defendants pursuant to New York

Civil Practice Law and Rules, §§301 and 302(a), because, upon information and belief:

(i) Defendants transact business in New York and contract to supply goods or services in

New York; (ii) Defendants have committed acts outside of New York which have caused

injury to Plaintiffs in New York; and/or (iii) Defendants regularly conduct or solicit

business in New York and/or derive substantial revenue from the sale of goods or services

in New York.

12. Venue is proper in this district pursuant to 28 U.S.C. §1391(b), because, upon

information and belief, Defendants are subject to personal jurisdiction in this district, a

substantial part of the events which give rise to this action have occurred in this district, and

Plaintiffs have suffered harm from Defendants’ conduct in this district.


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FACTS COMMON TO ALL CAUSES OF ACTION

Noise Media’s Launch and Operation of the SLAMXHYPE Brand

13. At least as early as 2005, Noise Media, Ltd. (“Noise Media”) launched a

website at the domain name www.SLAMXHYPE.com (“the SLAMXHYPE Website”), the

purpose of which was, among other things, to serve as a digital portal for news about street

culture, including but not limited to street art sightings, art shows, and clothing and footwear

trends. Attached as Exhibit A is a true and correct copy of the homepage of the

SLAMXHYPE Website.

14. In the years following 2005, as street culture blended with fashion and design

and became more commercial, Noise Media began to sell merchandise on the

SLAMXHYPE Website, including but not limited to clothing, such as t-shirts and baseball

caps, toys and headphones.

15. During this time, the SLAMXHYPE Website developed a substantial

viewership and the volume of its sales of merchandise increased significantly.

16. Due to the substantial viewership and merchandise sales of the

SLAMXHYPE Website, consumers began to associate the term SLAMXHYPE with street

culture news and clothing, thereby firmly establishing SLAMXHYPE as a strong trademark

identifying the goods and services of Noise Media.

Plaintiffs’ Rights in the SLAMXHYPE® Trademark

17. The terms “Marc Ecko Enterprises” and/or “The Collective” refer to one or

more groups of affiliated companies. These companies include, without limitation, Plaintiff


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Cat3, LLC, Plaintiff SXH, LLC, Plaintiff Suchman, LLC and non-party MEE Direct, LLC

(“MEE Direct”).

18. At all relevant times through and including April 1, 2014, MEE Direct owned

and operated a nationwide chain of retail clothing stores branded under the trademarks

‘Ecko Unltd.’ and ‘Marc Ecko’. MEE Direct made use of the ‘Ecko Unltd.’ and ‘Marc

Ecko’ marks pursuant to a trademark license set to expire in 2015.

19. In order to plan for its future, one or more companies forming part of Marc

Ecko Enterprises and/or The Collective made the decision, at least as early as early 2013, to

acquire ownership of Noise Media’s SLAMXHYPE business, to continue operation of the

SLAMXHYPE Website, and to change the name of its retail clothing stores from ‘Ecko

Unltd.’ and/or ‘Marc Ecko’ to SLAMXHYPE.

20. The reason that Marc Ecko Enterprises and/or The Collective desired and

decided to acquire ownership of Noise Media’s SLAMXHYPE business, to continue

operation of the SLAMXHYPE Website, and to convert the branding of its retail store chain

to SLAMXHYPE was, among other things, to capitalize upon the synergies between its

clothing businesses and the SLAMXHYPE website, which had a huge audience and

substantial popularity and good will.

21. In June 2013, to effectuate its rebranding decision, one of Marc Ecko

Enterprises’ companies acquired all the intellectual property and other assets of Noise

Media in any way relating to the SLAMXHYPE mark and SLAMXHYPE Website,

including but not limited to the trademark SLAMXHYPE, the domain name

www.SLAMXHYPE.com, and all rights in and to the SLAMXHYPE Website.


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22. Following such acquisition, (a) all intellectual property rights in and relating

to the SLAMXHYPE business, including without limitation the SLAMXHYPE trademark,

were transferred to Plaintiff Cat3, LLC; and (b) all assets of Noise Media relating to the

SLAMXHYPE business other than intellectual property rights were transferred to Plaintiff

SXH, LLC.

23. On June 3, 2013, prior to the date upon which the Defendants made any use

of the FLASHXHYPE trademark, Plaintiff Cat3 filed U.S. Trademark Application Serial

No. 85/949,247, which covers the mark SLAMXHYPE for use on and in connection with

“Clothing, namely, shirts, sweatshirts, pants, jeans, shorts, socks, belts, sleepwear,

underwear, swimwear, jackets and coats; footwear; headwear” and for “Retail store and on-

line store services featuring clothing, footwear and headwear”. The USPTO has issued a

Notice of Allowance for this application.

24. On June 17, 2013, prior to the date upon which the Defendants made any use

of the FLASHXHYPE trademark, Plaintiff Cat3 filed U.S. Trademark Application Serial

No. 85/961,419, which covers the mark SLAMXHYPE for use on and in connection with

“Magazines in the fields of culture, art, fashion, lifestyle, sports and/or entertainment”

“provision of a web site featuring information on pop culture, cultural events, art, sports,

music and/or entertainment” and “provision of a web site featuring information on fashion

and lifestyles.”

25. On September 9, 2014, the USPTO issued Plaintiffs a federal trademark

registration, Registration No. 4,602,820, for the mark SLAMXHYPE for use in association

with a web site “featuring information on fashion and lifestyles, in Class 45,” and “featuring


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information on pop culture, cultural events, art, sports, music and/or entertainment, in Class

41,” based upon the trademark application Plaintiffs filed on June 17, 2013. Attached as

Exhibit B is a true and correct copy of this trademark registration. The date of first use in

commerce for this trademark was at least as early as July 1, 2003.

26. On August 11, 2015, the USPTO issued Plaintiffs a federal trademark

registration, Registration No. 4,791,114, for the mark SLAMXHYPE for use in association

with “Retail store services featuring clothing, footwear, and headwear, in Class 35,” based

upon the trademark application Plaintiffs filed on June 3, 2013. Attached as Exhibit C is a

true and correct copy of this trademark registration. The date of first use in commerce for

this trademark was at least as early as April 10, 2015.

27. At all relevant times since its acquisition of the SLAMXHYPE Website,

Plaintiff SXH, and/or its affiliates, have continued to operate the SLAMXHYPE Website,

including without limitation, as it relates to clothing and offering content in the fields of

style, fashion, culture, art and entertainment.

28. On or about April 2, 2014, MEE Direct filed for Chapter 11 bankruptcy. At

that time, MEE Direct’s primary and most valuable set of assets included its leasehold rights

in approximately one hundred (100) different retail stores across the country (the “Retail

Leases”). The Retail Leases covered very valuable and premium spaces, including from

well-known landlords operating on a nationwide basis.

29. On or about June 1, 2014, the U.S. Bankruptcy Court entered a Sale Order

pursuant to which MEE Direct’s assets, including without limitation twenty-eight (28) of

the Retail Leases, were assumed by and assigned to Plaintiff Suchman. Plaintiff Suchman


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paid more than Twelve Million Dollars ($12,000,000) for those assets, primarily comprising

the Retail Leases.

30. Plaintiff Suchman purchased the Retail Leases for the sole purpose of using

them for operation of retail clothing stores branded under the trademark SLAMXHYPE,

and would not have acquired these assets were it not for its ability to use the Retail Leases

for operation of clothing stores branded under the trademark SLAMXHYPE.

31. Indeed, the U.S. Bankruptcy Court and each of the landlords which were

parties to the Retail Leases were well aware of Plaintiff Suchman’s interest in acquiring

these assets only for the purpose of operating stores under the trademark SLAMXHYPE,

and the bankruptcy court as well as each of those landlords expressly consented and agreed

to such in the course of the bankruptcy proceeding.

Plaintiffs’ Rights in the XHYPE® Trademark

32. On July 21, 2015, the USPTO issued Plaintiff Cat3, LLC a federal trademark

registration, Registration No. 4,778,763, for the mark XHYPE for use in association with

“retail store service featuring clothing, footwear, headwear, fragrances, watches, eyewear

and accessories, in Class 35,” a web site “featuring information on fashion styles and

lifestyles, in Class 45,” and “featuring information on pop culture, cultural events, art,

sports, music and/or entertainment, in Class 41.” Attached as Exhibit D is a true and correct

copy of this trademark registration. The date of first use in commerce for this trademark was

at least as early as July 1, 2003.


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Defendants’ Unlawful Conduct

33. Upon information and belief, in or around 2011, Black Lineage, Inc., a

company owned and operated by Defendant Vahe Estepanian (a/k/a “Fletch Estepanian”),

began to manufacture clothing and sell it wholesale and retail, under the trademark ARSNL,

through a website with the domain name www.ARSNLClothing.com.

34. Throughout the course of 2013, one or more employees of Marc Ecko

Enterprises and/or The Collective repeatedly had business dealings with Defendant

Estepanian. By way of example, during that time period, one or more entities forming part

of Marc Ecko Enterprises and/or The Collective purchased products from Defendant

Estepanian and/or his ARSNL business.

35. In the course of the aforementioned business dealings, employees of Marc

Ecko Enterprises and/or The Collective specifically made Defendant Estepanian aware that

Plaintiffs had acquired the rights in and to the trademarks XHYPE, SLAMXHYPE, and the

SLAMXHYPE Website, and of Plaintiffs’ plans to expand the SLAMXHYPE business into

a chain of retail clothing stores. All of this occurred prior to the date that Defendants

acquired the www.FLASHXHYPE domain name and/or otherwise adopted the trademark

FLASHXHYPE.

36. Defendant Estepanian, himself and through Defendant Black Lineage, preyed

upon the information provided by Plaintiffs and/or their affiliates forming part of Marc

Ecko Enterprises and/or The Collective. Defendants used such information for purposes of

developing a trademark, FLASHXHYPE, that would confuse consumers and falsely convey

an association with Plaintiffs and their trademarks XHYPE and SLAMXHYPE.


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37. Upon information and belief, on August 23, 2013, after one or more

employees of Plaintiffs and/or their affiliates forming part of Marc Ecko Enterprises and/or

The Collective had disclosed to Defendant Estepanian Plaintiffs’ plans to rebrand their

business as SLAMXHYPE, Defendant Black Lineage registered the domain name

www.FLASHXHYPE.com. Attached as Exhibit E is a true and correct copy of the

information, displayed upon conducting a WHOIS seach, reflecting registration of the

domain name www.FLASHXHYPE.com.

38. Thereafter, on November 29, 2013, Defendant Black Lineage launched a

website (the “FLASHXHYPE Website”) with content identical, substantially similar and/or

directly related to that offered by Plaintiffs at www.SLAMXHYPE.com. Attached as

Exhibit F is a true and correct copy of the homepage of the FLASHXHYPE Website.

39. Defendant Black Lineage’s website www.FLASHXHYPE.com has a very

similar look and feel to Plaintiffs’ SLAMXHYPE Website.

40. Like the SLAMXHYPE Website, the FLASHXHYPE Website contains a

‘blog’ section which offers articles on street culture.

41. Like Plaintiffs, which operate under the name “The Collective”, the

FLASHXHYPE Website describes its business as a ‘collective.’

42. Upon information and belief, Black Lineage’s former website,

www.ARSNLClothing.com, did not contain any articles on street culture and did not

describe itself as a ‘collective.’

43. Upon information and belief, since Black Lineage transferred its business

from the domain name www.ARSNLClothing.com to the domain name


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www.FLASHXHYPE.com, the FLASHXHYPE Website has experienced a dramatic

increase in traffic and sales.

44. Upon information and belief, Black Lineage’s dramatic increase in traffic and

sales is attributable in whole or part to the reputation and good will of Plaintiffs’ trademarks

XHYPE and SLAMXHYPE, and occurred because consumers are confused into believing

that the FLASHXHYPE Website is associated, affiliated or connected with Plaintiffs and

the SLAMXHYPE Website, which has developed a substantial presence in the street culture

marketplace over a period of almost nine (9) years.

45. In February 2014, at an Agenda trade show in Long Beach, California,

several attendees expressed actual confusion between Plaintiffs’ website and Defendants’

website, falsely believing that the FLASHXHYPE Website is associated, affiliated or

connected with Plaintiffs’ SLAMXHYPE Website.

46. Upon information and belief, in April 2014, Black Lineage launched an

iPhone app which enables iPhone users to access its FLASHXHYPE Website and purchase

clothing from it using their cell phones.

47. Upon information and belief, Black Lineage intends to sell clothing and/or

other merchandise displaying the term FLASHXHYPE in the near future.

48. Upon information and belief, Defendant Estepanian has directed, and is the

motivating force behind, all of Black Lineage’s actions related to its use of the term

FLASHXHYPE in its business.

49. Upon information and belief, through its ever more expansive efforts to

rebrand itself as FLASHXHYPE, Defendants are intentionally and deliberately attempting


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to trade upon the substantial reputation and goodwill of the trademarks XHYPE and

SLAMXHYPE, which Plaintiffs and this trademark’s previous owner, Noise Media, have

developed over the previous nine (9) years.

50. Defendants’ actions have caused, and unless enjoined will continue to cause,

significant irreparable harm to the substantial value of Plaintiffs’ trademarks XHYPE and

SLAMXHYPE.

COUNT I TRADEMARK INFRINGEMENT OF SLAMXHYPE® REG. NO. 4,602,820

UNDER 15 U.S.C. §1114(1)

51. Plaintiffs repeat and incorporate by reference the allegations in paragraphs 1

through 50 as if fully set forth herein.

52. Defendants’ use of the trademark FLASHXHYPE is likely to confuse the

purchasing public into falsely believing that Plaintiffs, who, themselves and through their

predecessor-in-interest Noise Media, have employed the trademark SLAMXHYPE since at

least as early as 2005, are the origin, sponsor and source of the FLASHXHYPE Website

and the products sold thereon.

53. The FLASHXHYPE Website offers goods and services, clothing items and

articles on street culture and fashion, which are identical or substantially similar to or

directly related to the goods and services offered by Plaintiffs on the SLAMXHYPE

Website.

54. Defendants adopted the trademark FLASHXHYPE without Plaintiffs’

authorization and with the intent to willfully, deliberately and in bad faith deceive

consumers as to the source, sponsorship or origin of Defendants’ goods and specifically to


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cause consumers to believe that Defendants’ goods are sponsored by, affiliated with,

approved by or otherwise connected with Plaintiffs.

55. As a consequence of their aforesaid conduct, Defendants have used a

reproduction, copy or colorable imitation of Plaintiffs’ registered trademark in connection

with the sale of their goods and services which is likely to cause confusion in violation of

the Lanham Act, 15 U.S.C. §1114(1).

56. Defendants’ conduct has caused, and if not enjoined will continue to cause,

irreparable injury to the goodwill and reputation established by Plaintiffs in their trademark

SLAMXHYPE.

57. Plaintiffs have no adequate remedy at law.

COUNT II TRADEMARK INFRINGEMENT OF SLAMXHYPE® REG. NO. 4,791,114

UNDER 15 U.S.C. §1114(1)


through 57as if fully set forth herein.









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Website and through its retail stores.












SLAMXHYPE.


COUNT III FALSE DESIGNATION OF ORIGIN AND

UNFAIR COMPETITION UNDER 15 U.S.C. §1125(a)







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Website.






69. As a consequence of their aforesaid conduct, Defendants have falsely

designated the origin of their goods and have engaged in unfair competition in violation of

Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a).



SLAMXHYPE.


COUNT IV UNFAIR COMPETITION UNDER NEW YORK COMMON LAW




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articles on street culture and fashion, which are identical or substantially similar to the

goods and services offered by Plaintiffs on the SLAMXHYPE Website.






76. As a consequence of their aforesaid conduct, Defendants have engaged in

unfair competition in violation of New York common law.



SLAMXHYPE.

78. By the aforesaid conduct, Defendants have made and will continue to make

substantial profits and gains to which they are not entitled.



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COUNT V DILUTION UNDER NEW YORK GENERAL BUSINESS LAW §360-l



81. Plaintiffs’ trademark SLAMXHYPE is unique and distinctive.

82. Defendants’ trademark FLASHXHYPE is substantially similar to Plaintiffs’

trademark SLAMXHYPE.

83. Defendants’ use of the trademark FLASHXHYPE is likely to dilute

Plaintiffs’ trademark SLAMXHYPE by blurring consumers’ identification of Plaintiffs’

goods and services with Plaintiffs’ trademark SLAMXHYPE and/or tarnishing the

affirmative association which Plaintiffs’ SLAMXHYPE trademark has come to convey.



SLAMXHYPE.

85. By the aforesaid conduct, Defendants have made and will continue to make

substantial profits and gains to which they are not entitled.


COUNT VI CYBERSQUATTING

UNDER 15 U.S.C. §1125(d)



88. Defendants have registered and employed the domain name

www.FLASHXHYPE.com, which is similar to, and likely to cause confusion with,


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Plaintiffs’ domain name, www.SLAMXHYPE.com, which Plaintiffs, through their

predecessor-in-interest Noise Media, registered and have used since at least as early as

2005.

89. On the FLASHXHYPE Website, Defendants offer goods and services,

clothing items and articles on street culture and fashion, which are identical or substantially

similar to the goods and services offered by Plaintiffs on their SLAMXHYPE Website.

90. Defendants registered and employ the domain name

www.FLASHXHYPE.com in order to profit from Plaintiffs’ www.SLAMXHYPE.com

domain name in bad faith and with the intent to deceive consumers into believing that

Defendants’ FLASHXHYPE Website is sponsored by, affiliated with, approved by or

otherwise connected to Plaintiffs.

91. Defendants’ actions with respect to the domain name

www.FLASHXHYPE.com constitute cybersquatting in violation of Section 43(d) of the

Lanham Act, 15 U.S.C. §1125(d).

COUNT VII TRADEMARK INFRINGEMENT OF XHYPE® UNDER 15 U.S.C. §1114(1)





predecessor-in-interest Noise Media, have employed the trademark XHYPE since at least as


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early as 2003, are the origin, sponsor and source of the FLASHXHYPE Website and the

products sold thereon.



directly related to the goods and services offered by Plaintiffs under the XHYPE mark.












XHYPE.



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PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully pray for judgment as follows:

1. An order permanently enjoining Defendants from:

a. using the trademark FLASHXHYPE, or any other similar name or

trademark which is confusingly similar to the trademarks XHYPE or

SLAMXHYPE, in connection with the sale, offering for sale,

promotion, advertising, marketing, manufacture, production,

importation or distribution, including but not limited to through a

website or cell phone app, of clothing or any related goods, or in

connection with any publication, including but not limited to on-line

and print publications, containing articles, news or any information

related to the fields of style, fashion, culture, art and entertainment;

b. using the domain name www.FLASHXHYPE.com, or any other

similar domain name which is confusingly similar to the domain name

www.SLAMXHYPE.com, in connection with the sale, offering for

sale, promotion, advertising, marketing, manufacture, production,

importation or distribution of clothing or any related goods, or in

connection with any publication, including but not limited to on-line

and print publications, containing articles, news or any information

related to the fields of style, fashion, culture, art and entertainment;

2. An order directing Defendants to transfer the domain name

www.FLASHXHYPE.com to Plaintiffs;


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3. An order awarding Plaintiffs all monetary damages, pursuant to 15 U.S.C.

§1117, which they have sustained as a consequence of Defendants’ unfair

competition in violation of 15 U.S.C. §1125(a);

4. An order awarding Plaintiffs all monetary damages, pursuant to 15 U.S.C.

§1117, which they have sustained as a consequence of Defendants’ trademark

infringement in violation of 15 U.S.C. §1114(1);

5. An order awarding Plaintiffs enhanced statutory and treble damages,

pursuant to 15 U.S.C. §1117(a) & (b), due to Defendants’ willful and

intentional violation of Plaintiffs’ rights under the Lanham Act;

6. An order awarding Plaintiffs all monetary damages which they have sustained

as a consequence of Defendants’ violation of the New York common law of

unfair competition;

7. An order awarding Plaintiffs all monetary damages which they have sustained

as a consequence of Defendants’ violation of New York General Business

Law §360-l prohibiting dilution of a trademark;

8. An order awarding Plaintiffs all costs which they have incurred to bring this

action, including but not limited to attorneys’ fees, pursuant to 15 U.S.C.

§1117(a) and any applicable New York state law; and

9. An order awarding Plaintiffs any such other relief as the Court deems just and

proper.

JURY DEMAND

Plaintiffs demand a trial by jury for all issues so triable.


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Dated: September 27, 2015 Respectfully Submitted,

s/ Nicholas R. Lewis Nicholas R. Lewis

[email protected] Florida Bar No. 16146 3873 NE 22nd Way

Lighthouse Point, Florida 33064 (954) 662-8664

Attorney for Plaintiffs Cat3, LLC, SXH, LLC, and Suchman, LLC


Documents

Cat3 v. Black Lineage - SLAMXHYPE.pdf