Atabek & Co. Defeats Complex Trademark Motion for Summary Adjudication

Team Members Involved: Jon A. Atabek and Tiffany D. Chukiat

Atabek & Co. is proud to have obtained a recent intermediate victory on behalf of one of our clients on a factually and legally complex trademark litigation matter! The lawsuit presented as a “bet the company” case, where the Plaintiffs sought millions of dollars in damages for alleged trademark infringement.

The case involves former business partners suing each other over who first used certain cannabis-related trademarks, and who rightly owns those marks today. More specifically, the Plaintiffs sued Atabek & Co.’s clients (the Defendants), alleging trademark infringement, dilution, and unfair competition relating to a well-known cannabis brand. One of the Plaintiffs alleged he owned the trademarks based on prior use in other industries, and merely gave permission to Defendants to use the marks while they worked together. That Plaintiff alleges he revoked Defendants’ permission after one of the Defendants terminated their relationship. Defendants, on the other hand, alleged Plaintiffs had no valid marks, and that any rights in the marks relating to cannabis belonged to Defendants as Plaintiffs’ employer, and the first user of those marks. Defendants filed a cross-complaint seeking to invalidate Plaintiffs’ trademark registrations and sue them for infringement.

Plaintiffs started the lawsuit off with shock-and-awe tactics, suing eight defendants, and serving more than 5,000 written discovery requests on them, collectively. Defendants responded to that discovery.

Then, Plaintiffs filed a Motion for Summary Adjudication, asking the Court to rule in their favor before trial. In essence, Plaintiffs wanted the judge, rather than a jury, to find as a matter of law that they owned the marks and dismiss the cross-complaint threatening their trademark registrations. In support of their motion, Plaintiffs submitted declarations from the supposed owner of the marks, licensees, graphic designer, private investigators (together with detailed investigative reports), lab technicians, and others to present a façade of overwhelming evidence.

Atabek & Co. got to work dismantling the story bit-by-bit. In deposition, as loose threads exposed themselves, our attorneys pulled on them one-by-one until they unraveled, and exposed potential weaknesses in Plaintiffs’ case. Atabek & Co. followed up by serving written discovery that further exposed the weakness and lack of evidence in Plaintiffs’ case. Atabek & Co. then drafted an opposition to the motion highlighting the weaknesses to present those findings in the best light possible.

After multiple rounds of briefing, depositions, investigation, other discovery, and hearings, the Court finally denied the Motion outright—meaning, the Court will let a jury decide who owns the trademarks.

In denying the Motion, the Court found that Plaintiffs did not meet their burden to establish statutory trademark infringement, especially considering the timing of registrations and alleged use by the Defendants. As to common law marks, the Court ruled that triable issues of material fact exist regarding continuous use of the marks on clothing, tobacco, and cannabis products, and, therefore, summary adjudication was denied. More specifically, during a contentious set of depositions, Defendants established that Plaintiffs lacked credible evidence that they continually used those marks in the United States sufficient to meet their initial evidentiary burden. Moreover, other testimony established that Plaintiffs had largely stopped using the marks for significant periods of time. Finally, the Court found that the other causes of action of Plaintiff’s lawsuit, and indeed Defendants’ cross-complaint too, all turned on the same issues. Accordingly, the Court denied the Motion on all of the remaining issues as well. A lawyer with enough untethered “creativity”, coupled with a client who does not shy from stretching the truth, can put together a case that looks righteous from the outside, even with very little to stand on. Having a lawyer who is tenacious and detail-oriented is critical to dismantling a case built on smoke and mirrors. Here, Atabek & Co.’s attorneys did just that!