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1 JAMES P. COLLINS, JR. (SBN 47608) COTKIN & COLLINS 2 A PROFESSIONAL CORPORATION 200 West Santa Ana Blvd., Suite 800 3 P.O. Box 22005 Santa Ana, CA 92702-2005 4 Telephone: (714) 835-2330 Facsimile: (714) 835-2209 5 Email: [email protected]
6
7 8 9 10 11 12
DAVID T. SCHULTZ (MN NO. 169730) JOLYNN M. MARKISON (MN NO. 0386876) JOHN K. DARDA (MN NO. 0388298) MASLON EDELMAN BORMAN & BRAND LLP 3300 Wells Fargo Center 90 South 7th Street Minneapolis, MN 55402-4140 Telephone: (612)672-8200 Facsimile: (612) 672-8397 Email: [email protected] [email protected] [email protected]
13 Attorneys for Plaintiffs STEVEN SCHUSSLER and SCHUSSLER CREATIVE, INC. 14 UNITED STATES DISTRICT COURT 15 SOUTHERN DISTRICT OF CALIFORNIA 16 Case No. 07CV2016IEG (AJB) 17 STEVEN SCHUSSLER and INC., SCHUSSLER CREATIVE, 18 Plaintiffs, 19 20 21 22 23 24 25 26 27 28 /// /// /// /// vs. J. FRANK WEBSTER, aka "MR. HOT DOG," aka "UNCLE FRANK," Defendants.
PLAINTIFFS' MEMORANDUM POINTS AND AUTHORITIES SUPPORT OF MOTION FOR SUMMARY JUDGMENT OF IN
DATE: August 18, 2008 TIME: 10:30 a.m. COURTROOM: 1
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INTRODUCTION Defendant J. Frank Webster, aka "Mr. Hot Dog, aka "Uncle Frank" ("Mr. Webster" ) is an avid hot dog enthusiast and
collector of hot dog memorabilia,
who has declared himself to He believes he owns
be the "official" "Hot Dog Hall of Fame."
the exclusive right to use the phrase, "Hot Dog Hall of Fame," even though he has made no identifiable commercial use of that name and has not attempted federal agency. through his to register it with any state or ("Mr. Schussler"), Creative, Inc.
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8
9
Plaintiff Steven Schussler Plaintiff Schussler
10 11 12 13 14 15 16 17 18 19 20 21 22 23
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company
("Schussler Creative"),
is a highly successful
restauranteur
who specializes in the development of theme-based restaurants. His successes Mr. Schussler themed include began the now famous Rainforest to develop Cafe. When
his idea to open a hot dog
restaurant
called
Hot Dog Hall of Fame, Mr. Webster
took umbrage. Webster campaign made
Rather than seeking legal redress, however, Mr. a conscious decision to embark business on a personal and reputation,
to damage Mr. Schussler's plan.
and to derail his business right to prohibit Mr.
Because Mr. Webster has no legitimate business
Schussler's
activities, Mr. Schussler and Schussler Creative are entitled to summary judgment defamation, on their claims for declaratory interference. ARGUMENT relief,
and tortious
25
26 27
I. Schussler Creative Is Entitled to a Declaratory Judgment That Its Use of "Hot Dog Hall of Fame" Does Not Infringe Any Protectible Right Held By Mr. Webster A. This Court Has Jurisdiction Declaratory Relief to Grant This
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Under the Declaratory
Judgment Act
(UDJA"), a federal
court may udeclare the rights and other legal relations" of parties in Ua case of actual controversy." v. Asarco, 28 U.S.C.
§
2201; see Wickland Oil Terminals 887, 893 (9th Cir. 1986). disputes
Inc., 792 F.2d trademark
In the Ninth Circuit,
constitute an actual controversy has a real and reasonable
under the DJA when apprehension that Inc.
Uthe plaintiff
he will be subject to liability." v. Faberge,
Chesebrough-Pond's,
Inc., 666 F.2d 393, 396 (9th Cir. 1982) omitted). In determining whether the the
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
(internal quotation plaintiff's
perceived
threat is real and reasonable, position
court focuses on the plaintiff's and examines the defendant's probable
and perceptions,
actions in light of their and the risk imposed on the is engaged in
impact on competition (Id.) Further,
plaintiff.
if the plaintiff
the ongoing use of the allegedly showing of apprehension
infringing mark, the See
Uneed not be substantial."
Societe de Condi tionnement en Aluminium 655 F.2d 938, 944 (9th Cir. 1981) case). Here, Schussler Creative the legal rights between accordance with the DJA. that
v. Hunter Eng'g Co.,
(patent infringement
asks this Court to determine in Creative
itself and Mr. Webster Specifically,
Schussler
seeks a declaration trademark
(1) Mr. Webster has no protectable
right in his use of uThe Hot Dog Hall of Fame;" Creative is not infringing any trademark use of
(2) Schussler
rights owned by Mr. Webster;
and (3) Mr. Webster's
the name uThe Hot Dog Hall of Fame" cannot prevent Schussler
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Creative's
use of the name Hot Dog Hall of Fame for its Under the DJA, Schussler Creative has standing Mr. Webster's threats
restaurants.
to seek declaratory
relief from this Court.
cease and desist letters, as well as his continuing of a trademark infringement
lawsuit, have caused Schussler apprehension that
Creative to develop a real and reasonable it will be subject to liability of Fame. Schussler Creative's
for its use of Hot Dog Hall fears have been bolstered by Schussler Creative's
Mr. Webster's
persistence
in contacting
business partners, Schussler
thereby overtly interfering business
with
Creative's
and damaging its reputation. of to be
Mr. Webster's Schussler
actions have caused future development Hot Dog Hall of Fame restaurants
Creative's
placed at risk, as Schussler strong business reputation
Creative relies heavily on its
to obtain tenant allowances. is engaged in ongoing use of to open the
Because Schussler
Creative
the trademark Hot Dog Hall of Fame-by preparing first unit of the restaurant with chain restaurant Red Development,
this summer and by contracting such as
and shopping mall developers
Levy, and Landry's
to secure additional Creative's
sites for future restaurants-Schussler apprehension
of liability does not need to be substantial. Mr. Webster's threats of of
See Societe, 655 F.2d at 944. litigation, Plaintiffs'
as well as his threats toward and harassment business associates, of Schussler demonstrate the of
reasonableness liability.
Creative's
apprehension
See Chesebrough-Pond's,
666 F.2d at 396.
Accordingly,
this trademark dispute has ripened into an
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actual controversy, Schussler B. Creative's
giving this Court jurisdiction request for declaratory
to grant
judgment.
Mr. Webster Has No Trademark Hall of Fame" Creative has received
Rights to "Hot Dog
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Schussler
notice
of allowance
of The
its registration registration of Schussler Schussler Brookfield 1036, 1047
of the word mark Hot Dog Hall of Fame.
constitutes prima facie evidence of the validity Creative's Hot Dog Hall of Fame mark, and of See
Creative's
exclusive
right to use that mark.
Corom., Inc. v. West Coast Entm't (9th Cir. 946, 957 1999); Garden of Life
Corp., 174 F.3d v. Letzer, 318
F.Supp.2d
(C.D. Cal. 2004). the was has presumption the first
Mr. Webster-as of to validity use mark the
in
a nononly mark by
in
registrant-may demonstrating commerce and
rebut that that he
he
used
the
commerce
continuously
since the date of his first use.
Brookfield, 174
F.3d at 1047; Garden of Life, 318 F.Supp.2d at 957. For purposes of this motion, Schussler Creative does not dispute that Mr. Webster used the phrase "The Hot Dog Hall of
Fame" to describe his activities prior to Schussler Creative's adoption of that name. Even so - as a matter of law - Mr.
Webster's use of that phrase in connection with his hobby has not created trademark rights and cannot defeat Schussler Creative's right to use Hot Dog Hall of Fame for
25 its restaurants.1
27 28
1 Because Mr. Webster has never registered the name "Hot Dog Hall of Fame" under any federal or state registration scheme, his trademark rights, if any, exist as a creation of common law. In determining the existence of
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Under both the Lanham Act and common law, the touchstone of trademark rights is actual use of the alleged commercial 174 F.3d at
mark in commerce,
and the test for establishing Brookfield,
use under either law is the same. 1051.
Under the Lanham Act, "use in commerce" the mark be:
requires that
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services. 15 U.S.C.
§
1127.
In fact, Congress amended the Lanham Act in strengthen the use in commerce trademark rights can be
1988, in order to specifically requirement, conveyed only making through clear
that
"the bona
fide use of a mark
in the
ordinary course of trade, and not [use] made merely to reserve a mark." 1127). Because Mr. Webster has never used the phrase "Hot Dog Brookfield, 174 F.3d at 1051 (citing 15 U.S.C.
§
Hall of Fame" in commerce, Mr. Webster has no trademark rights in that name and thus cannot prevent Schussler Creative from naming its restaurant
1.
Hot Dog Hall of Fame.
Mr. Webster's Lack of Sales Activity to His Claim that He Owns The Name Hall of Fame" does not "own" the name
is Fatal "Hot Dog
of
Mr. Webster
"Hot Dog Hall
common law trademark rights, courts frequently rely on decisions arising under the Lanham Act. See Allard Entm't, Inc. v. Advanced Programming Res., 146 F.3d 350, 357 (6th Cir. 1998).
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Fame," because he never used that name in commerce.
According
to the Ninth Circuit, ownership may be shown through evidence of actual sales of goods or services that use or display the mark. Chance v. Pac-Tel 2001). Teletrac Inc., 242 F.3d 1151, 1159 a lack of bona fide sales
(9th Cir.
Conversely,
activity-including
mere token sales or sham sales designed to often fatal to
circumvent the Uuse in commerce" requirement-is a party's claim to trademark rights.
(Id. at 1157, 1159.) under the name (Webster
In this case, Mr. Webster's
activities
uThe Hot Dog Hall of Fame" have produced zero sales. Dep. 63:14.) audience Chronicles of The Frankie Awards are given away hot dog enthusiasts), and the
(to a select Frankfurter
and WeenieGrams
are distributed
for free via the
internet and generate no revenues. sell his uconsulting"
(Id.) Nor does Mr. Webster
services or the services he provides at (Id.) first Finally, Mr. Webster's glance may appear to
hot dog stand grand openings. online Ustore," which at
demonstrate mark.
sales activity, in reality falls far short of the
The full inventory of Mr. Webster's online store consists of sixteen t-shirts and twelve ball caps - none of which he has actually Instead, sold.2 (Id. at 110:10-113:21.) away six t-shirts and
Mr. Webster
has gifted
three ball caps, to friends and family. (Id. at 123:4-125:11.)
2 The other Uitems" listed on Mr. Webster's website-a movie entitled The Weenie Roast Massacre and a book called 50 Ways to Top a Hot Dog-are actually links to other websites operated by the creators of those works. Mr. Webster does not himself own any inventory in those items and does not offer them for sale.
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Even if an actual customer wished to purchase a ball cap or tshirt, however, Mr. Webster's orders online. Potential website is not equipped to take interested in making a
customers
purchase
are asked to e-mail Mr. Webster (Id.) only
and he will Ureply Mr. Webster has for sale in
with particulars." admitted that he
More importantly, began to offer
items
response to this lawsuit, when he heard counsel for Schussler Creative argue that Mr. Webster had not made commercial use of the name UHot Dog Hall of Fame." (Id. at 125:6-15.)
3
In short, because Mr. Webster can present no evidence of bona fide sales activity associated with the name uThe Hot Dog Hall of Fame," he does not own trademark rights to that name
and cannot prevent Schussler Creative from using that name for its restaurant.
2.
Mr. Webster's Claim of Ownership Also Fails Under the Totality of the Circumstances Test the lack of any evidence of actual sales is
Although frequently
dispositive, be
the question on the
of use in commerce may of each case, as
alternatively trademark goods or
decided
facts
rights may occasionally services taken if the
vest prior to the sale of of a the alleged to owner's use the
totality establish
actions,
together,
right
3 Even if Mr. Webster had made a few token sales from his online Ustore," those sales would not constitute a bona fide use of the mark in commerce since, by his own admission, Mr. Webster's sole purpose in offering t-shirt and ball cap sales was to dodge the Uuse in commerce" requirement. See Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151, 1157 (9th eire 2001) (stating that sham attempts to conform with statutory requirements do not constitute bona fide use of a mark in commerce) .
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trademark. F. 3d at
Chance,
242 F.3d at 1158-1159; the totality of
Brookfield,
174
2
3
1052. are
Under by
circumstances including and
test, the
courts
guided factors:
non-sales
(1)
activities,
4
5 6
following character
the
genuineness
commercial of whether
of the activity;
(2) the determination public to identify segment
(3)
the mark was sufficiently the marked service
or distinguish of the public
7
8 9
in an appropriate
mind as those of the holder of the mark; non-sales reasonable ongoing activity relative
the scope of the
to what would be a commercially (4) the degree the business
(Id. )
10
attempt to market the service; and activity of the holder to conduct
11 of
12 13 14 15 16
using the mark and the amount of business
transacted.
Applying this test, no reasonable trier of fact could conclude that Mr. Webster has used the mark, "The Hot Dog Hall of
Fame," in commerce. a. Mr. Webster's activities commercial in character first test, prong Mr. of the totality are of are not the not
17 18 19 20 21 22 23 24 25 26 27 28 Under the
circumstances sufficiently use of
Webster's
activities
"commercial" to vest any trademark rights in his of Fame." Mr. Webster's various
"The Hot Dog Hall include: name (4)
activities (2) his
(1) his hot dog memorabilia and his website; (3) his and are
collection; and
domain
newsletter Frankie
WeenieGrams; ceremonies. nature.
and None
barbeques activi ties
Awards in
of these
"commercial"
First, Mr. Webster's does not constitute
collection
of hot dog memorabilia The memorabilia is
commercial
activity.
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not part of any regular trade or business,
does not generate
any revenue, and is not on regular public display, either free or for a charge. The two times that portions of the
collection were on public display-in
the uHal1 of Fame Hall of
Fame" and at the UHot Diggity Dogs" stand-were isolated, longago instances that were not of a commercial collection years, character. has been and
Finally, stored
the fact that the memorabilia for the past
in boxes
twenty-five
unseen
unused by Mr. Webster or anyone else, is further evidence that the memorabilia Second, collection is not of a commercial domain character.
neither
Mr. Webster's
name registration
nor his corresponding purposes of acquiring
website constitute trademark
ucommercial use" for Registration of a
priority.
domain name is insufficient priority Acad. Inc., purposes.
to establish
Uuse" for trademark
Brookfield,
&
174 F.3d at 1051; see also Scis. v. Network Cal. Solutions, (mere
of Motion
Picture Arts 1276,
989
F.Supp.
1281
(C.D.
1997)
registration of a domain name does not constitute a commercial use); Lockheed Martin Corp. v. Network Solutions, Inc., 985
F.Supp. 949, 957 (C.D. Cal. 1997) (acceptance of a domain name for registration is not a commercial use). Accordingly, the
registration of Mr. Webster's domain name, by itself, does not constitute commercial use.
In addition, even a cursory reading of the content of Mr. Webster's website and his electronic publications demonstrates the noncommercial content-movie family's nature of his web activities. recipes, during commentary national The website's
reviews,
of Mr. Webster's hot dog month,
eating
habits
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etc .-demonstrates commercial,
that
these
activities
are
personal,
not
and are simply born of Mr. Webster's hot dog. Further, as discussed
fascination above, Mr.
with all things
Webster's online "store" also fails to qualify as a commercial use of the phrase as a "Hot Dog attempt Hall to of Fame," conform because with it was
created
sham
statutory
requirements inception.
and because it has produced zero sales since its
Finally, neither of Mr. Webster's last two activities can be considered "commercial" in character. Because Mr.
Webster's newsletters any advertising,
and WeenieGrams are free, do not contain
and are sent via e-mail, these pUblications in any sense of the term. that e-mail See Chance, 242 does not
are not commercial F.3d at 1158
(stating
correspondence priority
constitute Brookfield, Webster's past)
commercial
use for trademark
purposes);
174 F.3d at 1052
(stating same). parties
Similarly, Mr. (in the not
sporadic barbecue out the
at which he has were free,
given
Frankie
Awards
were
sponsored, and were only attended by Mr. Webster's family and personal friends. As such, those barbeques and the
corresponding
Frankie Awards ceremonies
are not "commercial"
in nature because
they have nothing to do with any "service" Rather, these activities-like engaged in by Mr. Webster-are
that is offered "in commerce." each of the prior activities
simply a part of his personal hobby. As further evidence of the noncommercial character of Mr.
Webster's hobby, none of his "Hot Dog Hall of Fame" activities has the normal indicia of commercial activity. Not only does
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2
Mr. Webster's revenues, state or
"Hot Dog Hall
of Fame"
generate
no sales
or
it has no paid employees, federal income taxes,
has never has never
filed either possessed a
3 4
5 6
California
sales tax registration status.
certificate,
and does not
enjoy non-profit
In short, Mr. Webster can produce no character. His
evidence of any activity of a true commercial "Hot Dog Hall of Fame" is just a personal which Mr. Webster dog enthusiasts.
b.
7 8 9
10
hobby,
the joy of
shares with a small band of like-minded hot
11
12 13 14 15
Mr. Webster's use sufficiently public in the public mind
of the mark is not to create association
Applying the second factor, Mr. Webster's use of "The Hot Dog Hall of Fame" also fails to establish priority commerce. consumers Brookfield, A primary the purpose source of of a trademark product
1S
of use in to help
identify
the
or
service.
16
17 18 19 20 21 22 23 24 25
174 F.3d at 1051.
A trademark
cannot serve its
source-identifying mark. (Id.)
function if the public has never seen the a mark does not acquire trademark
Thus,
protection until it is used in a public manner that creates an association among consumers between the mark as used on goods (Id.) Here, Mr. Webster's public
or services and the mark's owner.
use of "The Hot Dog Hall of Fame" is not sufficiently to create that association.
Mr. Webster's various displays of the phrase "The Hot Dog Hall of Fame" are insufficient to establish a
26 27 28
source-identifying
function.
The words "The Hot Dog Hall of in the Frankfurter Chronicles
Fame" appear only sporadically
and on Mr. Webster's website, they have rarely appeared on the
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WeenieGrams, Mr.
and they have never appeared in association with awards cookouts or on the Frankie Award.
Webster's
(Webster Dep. at 113:21-114:3, In fact, as Mr. Webster
93:18-22, 117:10-14, 96:10-25.) himself has admitted, he has
deliberately
tried to keep the public and his website.
from gaining access to The
his newsletter
(Id. at 110:10-113:21.)
Frankfurter Chronicles are distributed by invitation only, and Mr. Webster has deliberately with internet search engines. Hall of Fame" activities-even far short of evidencing avoided registering (Id.) his website "Hot Dog
Mr. Webster's
when viewed
in his favor-fall between that
a public
association
phrase and his activities. c. Mr. Webster's has failed to make a commercially reasonable attempt to market his "Hot Dog Hall of Fame" the scope of non-sales advertising
14 15 16 17 18 19 20
21
In
some
cases,
activity can demonstrate market one's services
a commercially that is, in
reasonable attempt to turn, sufficient to The
establish trademark
rights.4
Chance,
242 F.3d at 1160.
analysis is, of course, fact specific.
of Life,
For example, in Garden that plaintiff its product had to a
the court
found
that
evidence
22 23 24 25 26 27 28
spent approximately
$6 million
advertising
target market demonstrated 959-60.
use in commerce.
318 F.Supp.2d at
Inc.,
In New West Corp. v. NYMCompany of California,
4 While advertising alone cannot establish priority of use, in some circumstances advertising in combination with other non-sales activity may be sufficient to establish use in commerce. New West Corp. v. NYM Co. of Calif., Inc, 595 F.2d 1194, 1200 (9th Cir. 1979).
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the
court
determined consisting magazine
that of
a
publisher's
direct of
mail its and
solicitations forthcoming
430,000 to
"mock-ups"
cover
potential
customers
advertisers was sufficient to establish use in commerce where the publisher spent $1.3 million in developing and advertising the magazine. 595 F.2d 1194, 1199 (9th Cir. 1979). "The Hot Dog unlike in
Mr. Webster claims to have been cultivating Hall of Fame" for the last 30 years.
However,
Garden of Life and New West, no reasonable conclude, based on the undisputed Webster's attempts activities to market a constitute commercial and
fact-finder
could
facts in this case, that Mr. "commercially venture. reasonable" Webster's
Mr. are
Frankfurter electronically acquaintances. distributed Webster sales. ceremony does
Chronicles
WeenieGrams
distributed and are
to approximately (Webster Dep.
200 friends, 108:23-110:8.)
relatives, They
free of charge not use them
at irregular
intervals, or
and Mr.
for advertising
to generate
Similarly, and/or
invitation to Mr. Webster's Frankie Awards Hot Dog Month barbecue (which
his National
have not been held in any event for several years) were not advertised and attendance was mostly limited to Mr. Webster's friends, relatives, and acquaintances. Mr. Webster's fame, museum, (Id. at 96:1-99:7.) If
ultimate goal is to open a combination restaurant, gallery, and gift shop
hall of
(which he
indicated during his deposition), activities
then as a matter of law his reasonable attempt
to-date are not a commercially
to market toward that goal. ///
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d.
2
Mr. Webster is not engaged in ongoing activity using the alleged mark to conduct business
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Mr. Webster does not currently, nor has he ever, operated a business under the trade name "The Hot Dog Hall of Fame."
His three hot dog stands were called "Frank's Quality Franks," "The Great American Hot Dog Machine," (Id. at 29:2, 29:7, 33:10.) and "Hot Diggity Dogs."
Despite the fact that during the
six months Mr. Webster operated Hot Diggity Dogs, he displayed a few items of memorabilia under a hand-painted sign reading,
"The Hot Dog Hall of Fame," this one-time use, now ancient, is clearly insufficient to establish trademark rights. (Id. at
36:20-23.) a business
At best, this use is akin to putting one's mark on office door sign or letterhead, rights. which is
insufficient
to establish
trademark
See Brookfield,
174 F.3d at 1052; Steer Inn Sys., Inc. v. Laughner's Drive-In, Inc., 405 F.2d 1401, 1402 (C.C.P.A. 1969). Further, Mr .
Webster's Hot Diggity Dogs business failed in 1983, after only six months of operation. (Id. at 35: 9 .) Even if the hand
painted sign and display of memorabilia had been sufficient to create trademark rights in 1983, Hot Diggity Dogs went out of business business that 25 years using ago and Mr. Webster has not operated a
the phrase Therefore,
"The Hot Dog Hall of Fame" since by any reasonable standard, Mr.
time.
Webster's lacks rights. the
use of
"The Hot Dog Hall of Fame" over the years nature required to create trademark
continuous
Moreover, restaurant,
Mr.
Webster's hall of
dream fame,
of
one
day and
opening gift
a
museum,
gallery,
shop
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cannot establish Mr. Webster's phrase goals "Hot Dog Hall and dreams rights.
right to exclusive use of the It is axiomatic in commerce that mere create
of Fame." a mark
to use
do not
trademark
Guichard
v. Universal City Studios, LLLP,
No. 06-6392, 2007 WL 1750216, at *3 (N.D. Cal. June 15, 2007); Matrix Motor Co., Inc v. Toyota Jidosha Kabushiki Kaisha, 290 F.Supp.2d 174 F.3d 1083, 1089 at 1052 (C.D. Cal. 2003); see also Brookfield, that trademark a mark rights are not
(stating mere intent what
acquired Here,
through
to use
commercially).
that
is exactly
Mr. Webster's
"Hot Dog Hall of
Fame" is-a future dream or ambition Webster's mind. Accordingly,
that exists only in Mr. also fails on the analysis.
Mr. Webster
final factor ln the totality of circumstances Because, based on the undisputed
facts and circumstances trademark
of this case, Mr. Webster has no valid, protectible interest in the phrase Schussler Creative
"Hot Dog Hall of Fame," he cannot bar
from using that name for its restaurant. Creative is entitled to the requested
Accordingly, declaratory
Schussler judgment.
III. Steven Schussler Defamation Claim As a matter of
is Entitled
to Summary Judgment On His
law,
the
e-mails
Mr.
Webster
sent
to
Plaintiffs'
business
partners,
the industry press,
and city
officials in Sparks, Nevada, as well as the messages he posted on his website, constitute libel. Between May and October
2007, Mr. Webster published the following libelous statements: (1) Mr. Webster told media organizations and hospitality companies, including Host Marriott, Levy Restaurants, Success Magazine, The Harford Courant,
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4
The Rocky Mountain News, The Chicago Sun Times, The San Diego Union Tribune, and Chain Magazine that the concept, name, and related intellectual property of Hot Dog Hall of Fame belonged exclusively to him, not to Mr. Schussler. (Pl.'s Ex. 7; Webster Dep. at 171:18-172:8.) (2) In an edition of his Frankfurter Chronicles dated June 17, 2007, Mr. Webster again stated that Mr. Schussler had stolen his intellectual property. (PI.'s Ex. 10.) He also posted a copy of a letter he had previously sent to one of Schussler Creative's business partners, in which Mr. Webster had threatened his plan to "first blacken both of your eyes (yours and Mr. Schussler's) professionally, first in the papers and on TV, then we will see you in court." (Id.) (3) In September, 2007, Mr. Webster began contacting Schussler Creative's business partners in an effort to disrupt Schussler Creative's business. In an email dated September 17, 2007, Mr. Webster told Red Development that Mr. Schussler was a "liar," a "thief," and a "con man," because Mr. Schussler was attempting to steal the concept and name of Hot Dog Hall of Fame from him. (PI.'s Ex. 11.) (4)In an e-mail dated September 18, 2007, sent to Red Development, Mr. Webster wrote, "[Mr. Schussler] may not own another one of the concepts he's currently touting." (Pl.'sEx. 10.) Mr. Webster claimed he received this information from an anonymous source, but did nothing to verify the truth of this statement before publishing it. (Webster Dep. at 187:18-188:14, 192:7-13.) (5)On September 18, 2007, Mr. Webster sent an e-mail to the Mayor and City Council for the City of Sparks, Nevada, in which he again called Mr. Schussler a "liar," a "thief," and a "con man," because Mr. Schussler had stolen the concept and name of Hot Dog Hall of Fame from Mr. Webster. (PI.'s Ex. 11.) The e-mail also contained links to Mr. Webster's website where he published similar defamatory allegations.
(Id. )
5 6 7 8
9
10
11
12 13 14 15 16 17 18 19 20 21
22
23 24 25 26 27 28
(6)On October 10, 2007, Mr. Webster posted an edition of the Frankfurter Chronicles on his website in which he wrote that Schussler Creative had stolen his intellectual property. (PI.'s Ex. 10.) California Civil Code Section publication 45 provides: by writing "Libel is a . which
false and unprivileged
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4
exposes any person to hatred, contempt, which causes him to be shunned
[or] ridicule
...
or
or avoided,
or which
has a
tendency to injure him in his occupation." A. Mr. Webster's Written Schussler Are False has admitted Creative's
{emphasis added} .
Statements About Mr. that he authored business partners and sent eand to city
5
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Mr. Webster
mails to Schussler
officials, calling Mr. Schussler a "liar, thief and con man," and alleging that Mr. Schussler stole the concept and name Hot Dog Hall of Fame from him. Webster posted Frankfurter Schussler similar {Webster Dep. 183:-186:11.} on his website Red Development Mr.
statements and told
and in the that Mr. he was
Chronicles,
might
not own another
one of the concepts 192:7-13.}
claiming to own.
{Id. at 187:18-188:14,
Because,
based on the undisputed
facts of this case, Schussler Creative
does in fact have the right to use Hot Dog Hall of Fame name on its restaurants, has not infringed on any trademark rights
owned by Mr. Webster, and is not "touting other concepts that it might not actually own,5 Mr. Webster's statements are false as a matter of law. B. Mr. Schussler's Damages Are Presumed Because Mr. Webster's Statements Are Libelous Per Se per se is "libel which is defamatory of the
Libel
plaintiff without the necessity of explanatory matter, such as an inducement, innuendo or other extrinsic fact." Cal. Civ.
5 In his deposition, Mr. Webster admitted that he now believes that his representation was untrue. {Webster Dep. At 192:8-23.}
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Code [] a
§
45a. reader
As stated by the California Court of Appeals, would perceive a defamatory meaning
"If
without
extrinsic
aid beyond
his or her own intelligence
and common Inc. v.
sense, then there is a libel per se." Allergan Pharmaceuticals, Ct. App. 1986). In Inc.,
Barnes-Hind,
226 Cal.Rptr. 354, 356 (Cal. publications that are
other
words,
libelous per se have a natural tendency to injure. Code,
§§
Cal. Civ. Inc., 15
45, 46; Mann v. Quality Old Time Service, 215, 224 (Cal. Ct. App. 2004).
Cal.Rptr.3d calling
For instance, to injure
someone
a "thief" has a natural
tendency
that person's reputation. C-95-1299 1996).
Smith v. Airborne Freight, Co., No. (N.D. Cal. Apr. 19, "liar," where that
SI, 1996 WL 207760, at *2 n.2 Likewise, calling someone a
accusation is based on conduct capable of being proved false, also injures a person's Cal. Rptr. 3d 480, reputation. (Cal. Ct. See Carver v. Bonds, 37 App. 2005). Where a
494-95
statement is defamatory per se, actual damages are presumed so that a cause of action is conclusively false statement itself. Burdette established from the
v. Carrier Corp., 71 Cal.
Rptr.3d 185, 205 (Cal. Ct. App. 2008); Contento v. Mitchell, 104 Cal.Rptr.591, 592 (Cal. Ct. App. 1972). statements are defamatory per se and of damages. The defamatory
Here, Mr. Webster's he is entitled meaning
to a presumption words
of Mr. Webster's
is clear on their face: Mr. a "liar," "thief," and
Schussler "con man." meaning very
is dishonest-specifically,
Anyone reading these words would understand their
and would be able to see that such words, by their would injure a person's reputation. Mr.
nature,
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Webster's threshold,
defamatory alleging
statements
go
even
further
than
this
that Mr. Schussler
is a "liar," "thief,"
and "con man" because he stole the concept and name, Hot Dog Hall of Fame, and because he may not actually own another of the concepts he is touting. are defamatory Because Mr. Webster's allegations
on their face and are based on facts that can and bad-mouthing Schussler need constitute present 71 Cal.
be proven false, his name-calling libel per se. Consequently,
not
evidence of actual injury or damages. Rptr.3d at 205.
IV.
See Burdette,
Schussler Creative Is Entitled to SummaryJudgment On Its Claim for Tortious Interference With Contract
The elements contract are:
of a claim for tortious contract between
interference plaintiff
with and a (c)
(a) a valid
third party;
(b) defendant's
knowledge
of that contract;
defendant's intentional act designed to induce a disruption of the contractual relationship; and (d) resulting damages.
Pacific Gas and Electric 587, 589
Co. v. Bear Stearns & Co., 791 P.2d v. Hamilton, 95 P.3d 513, 517
(Cal. 1990); Reeves
(Cal. 2004). Schussler Creative's claim against Mr. Webster meets each of these elements. It is undisputed that Schussler Creative and that Mr. Webster
has valid contracts with Red Development had knowledge
of those contracts when he sent his e-mails to (Schussler Decl. ~ 10;
Schussler Creative's business partners. Webster Dep. 184:1-5.) he sent the defamatory
In fact, Mr. Webster has admitted that e-mails in order to prevent Mr.
Schussler
from opening Hot Dog Hall of Fame and to convince
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Red Development not to work with Schussler Creative. Dep. at 184:22-185:14, Schussler 192:14-17.) Creative's trying In other
(Webster words, by Mr.
contacting Webster was
business to
associates, and
intentionally
frustrate
disrupt
Schussler Creative's As a result of
contractual Mr.
relationships. interference, Schussler
Webster's
Creative has sustained Mr. Schussler of
damages. his
By sending e-mails accusing intellectual property, that Mr.
stealing a key
Webster
implicated
representation
Schussler
Creative made in its contracts-that
Schussler Creative has the (Schussler Decl. implied that was of
right to use the name Hot Dog Hall of Fame. ~ 28.) Because Mr. Webster's Creative's e-mails
directly
Schussler false, Sparks Red
representation became license
to Red
Development the City
Development refuse to
concerned its
that
would
planned
shopping
mall
developments arise
due to the potential of Fame. to proceed City
(Id.)
for litigation
(Id. )
that could Red
over Hot Dog Hall had refused with Kansas
Consequently, proposed Nevada
Development agreements matter was
with
licensing until this
and
Sparks, Mr.
resolved.
Thus,
Webster's
conduct
effectively
forced Schussler
Creative to initiate this legal
action, as its only other option was to face potential loss of business and potential default
(Id.)
on its
$20 million
line of
credit with Red Development.
Indeed, this was the precise damage Mr. Webster intended to inflict. Mr. Webster's plan was to provoke Mr. Schussler
(See
into filing this lawsuit. Cause Hearing at 20:2-3
Transcript
of Order to Show [in sending the e-
("My entire purpose
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mails] was to get Mr. Schussler Mr. Webster's in conduct, fees and
to sue me."» Creative
As a result of has spent over
Schussler to secure
$50,000 against issue. and
legal
a preliminary and finally
injunction this
Mr. Webster
to fully
resolve
In addition, Schussler Creative has spent time, money, responding to inquiries and assuring its
resources
business
associates
of its right to the concept and name Hot in its contracts.
1S
Dog Hall of Fame as provided Accordingly, Schussler
(Id.
at ~ 32.) summary
Creative
entitled
to
judgment on is claim for tortious interference
V. Mr. Webster Is Liable For Tortious Prospective Business Relations
with contract.
With
Interference
The elements prospective with
of a claim
for tortious mirror
interference
with
economic with
relations one injury
those of interference Because prospective the latter
contract,
exception. to
a
protects
against
economic that
relationship, the defendant legal measure
it requires engaged other
the plaintiff
to demonstrate
in conduct than the
that was wrongful of interference
Inc.,
by some itself.
fact
20 Della
Penna v. Toyota Motor Sales,
U.S.A.,
902 P.2d 740, wrongful if it is
21 22 23 24 25 26
27
751 (Cal. 1995).
"[A]n act is independently
unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard."
Korea Supply Co. v. Lockheed Martin Corp.,
63 P.3d
937, 954 (Cal. 2003). constitutes
Sproqit
It is well established wrongful conduct.
that defamation
Visto Corp. v.
independently
Tech. Inc.,
360 F.Supp.2d 1064,1067 Creative has
(N.D. Cal. 2005). business
28
Here,
Schussler
prospective
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relationships Sparks, Nevada. Creati ve
with
both
Red
Development
and
the
City
of
These entities have contracted wi th Schussler and operate Hot Dog Hall of Fame at Red
to open
Development's Decl. ~ 11.)
Legends As
at Sparks Marina stated above,
in 2009.
(Schussler facts
the
undisputed
demonstrate
that Mr. Webster
had knowledge
of this contract and the City of their causing
and sent defamatory e-mails to Red Development Sparks expressly with for the purpose of
disrupting thereby
relationship
Schussler
Creative,
Schussler Creative to file the present lawsuit and incur both monetary damages and damages to its reputation. Because the
undisputed
facts also establish that Mr. Webster's conduct was wrongful (i.e. his conduct constituted to summary judgment libel), on its business
independently Schussler
Creative
is entitled
claim for intentional relations. VI. Schussler Relief Permanent
interference
with prospective
Creative
Is Entitled relief
to Per.manent Injunctive to deter Mr.
injunctive
is necessary
Webster from continuing his tortious and defamatory behavior. Once a statement permanent defendant is judicially relief determined is to be defamatory, to prevent a
injunctive
appropriate
from repeating
that statement.
See Balboa
Island
Village Inn, Inc. v. Lemen, 156 P.3d 339, 350-51
(Cal. 2007)
(recognizing that once the court finds published statements to be false, the plaintiff may seek a permanent injunction
restraining any further pub Ld ca t i on of the defamatory matter) ; see also MAI Sys., Inc. v. Peak Computers, Inc., 991 F2d 511,
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17
520
(9th Cir. 1993)
(stating that a permanent
injunction
is
particularly and the
appropriate of
once liability has been established violations remains ongoing);
threat
continuing
Transgo, Inc. v. Ajac Transmission 1022 (9th Cir. 1985)
Parts Corp., may be
768 F.2d 1001, framed to bar
("An injunction
future violations A permanent
that are likely to occur") . injunction is even more necessary where an from
award of damages is insufficient continuing the tortious behavior.
to deter the defendant Balboa,
156 P.3d at 351
(stating that if the court could not award injunctive relief, "a defendant harmed by a continuing pattern of defamation . . . to
would be required to bring a succession deter the defendant Damages either wealthy
(Id.)
of lawsuits
from continuing
the tortious behavior") . when the defendant proof,' or is so
are an insufficient "so impecunious as
deterrent to be
'judgment
as to be willing
to pay
any resulting
judgments."
18 19 20 21 22 23 24 25 26 27 28
Absent undoubtedly Mr. Webster continue
a
permanent
injunction,
Mr.
Webster
will
resume his defamatory testified
e-mail campaign.
Indeed, to
in his deposition Creative.
that he intends Mr. Webster
defaming
Schussler
stated,
"I'm going to tell the public, one way or another, this is the story that's going on. [Mr. Schussler] has a choice of doing
the right thing with us or else I'm going public with this at some point." (Webster Dep. at 200:22-25.) Mr. Webster
specifically stated that he will go public with his story once this lawsuit has ended - "When this is allover, going to decide who was right. the public is of public
This is a matter
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27
record when this is done.
And then there is the book.6
If
Mr. Schussler does not understand we're not playing nice, either."
that he's not playing nice, Mr. Webster has stated "[Mr.
Schussler] has placed us in the position of having NOTHING to lose" and that he plans to "poison the well" by defaming By his
Schussler Creative.
(Id. at ~ 25; PI.'s Ex. 9 at 4-5.)
own words, Mr. Webster has established
that nothing short of
a court order will prevent him from continuing to assert that Mr. Schussler has stolen Hot Dog Hall of Fame from him. Indeed, the necessity been proven once before, motion for a temporary for court intervention has already in relation injunction. to Schussler Creative's Initially, Schussler
Creative contacted Mr. Webster to request that he stop sending defamatory e-mails. Instead, however, Mr. Webster continued e-mails and to post defamatory on his website, Complaint. Court statements
to send defamatory about Schussler
Creative
even after he was (Schussler Decl. a preliminary
served with Schussler ~~ 24,28.) Only
Creative's after this
issued
injunction did Mr. Webster remove the defamatory material from his website and cease sending defamatory e-mail messages. As
before, a court order is necessary to prevent Mr. Webster from following through on his threats statements of "going public" with his or otherwise interfering in
false and defamatory
28
6 The "book" Mr. Webster is referring to is a work-inprogress that Mr. Webster is creating. The book is comprised largely of various segments from different issues of the Frankfurter Chronicles. (Webster Dep. At 99:10-16, 100:11-12.)
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1
2
Schussler
Creative's
legitimate
business
enterprises.
See
Balboa, 156 P.3d at 350-53. In addition, monetary damages a permanent are injunction to is necessary because Mr. Webster from
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
unlikely
deter
continuing his tortious activity.
Schussler Creative is well
aware that Mr. Webster is probably not in a financial position to pay the damages for which he is liable. If Schussler is essentially there will
Creative's
hunch is correct, then Mr. Webster Absent a permanent
"judgment proof."
injunction,
be nothing preventing Mr. Webster from resuming his defamatory campaign permanent Schussler against Schussler Creative. Consequently, a
injunction is all the more necessary to ensure that Creative sustains no further injury. See Balboa,
156 P.3d at 151. Accordingly, order a permanent Schussler Creative requests that this Court injunction barring Mr. Webster from further
publishing his defamatory statements or otherwise interfering with Schussler Creative's business enterprises.
CONCLUSION For each respectfully of the requests foregoing reasons, Schussler Creative for
that this Court GRANT
its Motion
Summary Judgment
in its entirety. JAMES P. COLLINS, JR. COTKIN & COLLINS A PROFESSIONAL CORPORATION D LLP
DATED: June 27, 2008
26 27 28
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