Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

North Atlantic Operating Company, Inc. v. Zzss, LLC

United States District Court, W.D. Kentucky

March 21, 2018

NORTH ATLANTIC OPERATING COMPANY, INC.
v.
ZZSS, LLC, d/b/a ZIG ZAG SMOKE SHOP DEFENDANT and NATIONAL TOBACCO COMPANY, L.P. PLAINTIFFS

          MEMORANDUM OPINION

          Charles R. Simpson III, Senior Judge United States District Court

         I. Introduction

         This case is before the court on defendant ZZSS, LLC d/b/a Zig Zag Smoke Shop's (hereinafter “defendant”) motion to dismiss the amended complaint pursuant to Fed.R.Civ.P. 12(b)(6). ECF No. 15. Plaintiffs North Atlantic Operating Company (“NAOC”) and National Tobacco Company (“NTC”) (collectively “plaintiffs”) responded. ECF No. 16. This matter is now ripe for review. Because defendant's motion only contests three of plaintiffs' claims, the court will treat it as a partial motion to dismiss. For the reasons set forth below, defendant's motion will be denied.

         II. Factual Background

         On April 7, 2017, Plaintiffs filed a complaint against defendant in this court, alleging that defendant “has and continues to use the designation ‘Zig Zag' in connection with its ongoing business in violation of plaintiffs' rights in a portfolio of Zig-Zag trademarks, ” and in violation of “the Settlement Agreement executed by the parties to this action.” ECF No. 1, ¶ 2. Plaintiffs asserted claims for breach of contract, breach of the implied duty of good faith and fair dealing, injunctive relief, federal trademark infringement, federal unfair competition, specific performance and indemnification, unjust enrichment, promissory estoppel, and declaratory judgment. Id. at ¶¶ 28-86. Defendant subsequently filed a motion to dismiss. ECF No. 11. Plaintiffs then filed an amended complaint pursuant to Fed.R.Civ.P. 15(a)(1)(B). ECF No. 13.

         According to plaintiffs' amended complaint, plaintiff NAOC “owns or is the exclusive licensee of a portfolio of trademarks incorporating the words ‘Zig-Zag' with or without other words, hyphens, stylizations, and design components (the “Zig-Zag Marks”) for use in connection with tobacco products, cigarette rolling papers, electronic cigarettes, vaping products, and accessories.” ECF No. 13, ¶ 11. Plaintiff NTC is the distributor for plaintiff NAOC, and owns the domain name www.zigzag.com, which it uses to market ‘Zig-Zag' smoking products. Id. at ¶¶ 12-13.

         The amended complaint alleges that in March 2012, plaintiffs discovered that defendant was using the words ‘Zig Zag' “in its business of selling retail smoking and tobacco related products.” Id. at ¶ 17. Specifically, defendant was using the words ‘Zig Zag' in the name of its business-Zig Zag Smoke Shop-and in its advertisements and internet domain name, www.zigzagsmokeshop.com. Id. Plaintiffs sent defendant a cease and desist letter to prevent it from continuing to use its protected marks. Id. at ¶ 18.

         In response to the cease and desist letter, plaintiffs and defendant entered into a settlement agreement. ECF 13-1. Defendant agreed to limit its use of the words ‘Zig Zag' in the following ways:

1) [defendant's] use of the words ‘Zig Zag' is always, at least, immediately followed by the words ‘Smoke Shop, ' and all four of those words appear in the same or similar font, style, size, color, and the like;
2) [defendant's] advertisements, marketing materials, and promotional materials are of a local nature and are directed to the local Houston, Texas market;
3) all of [defendant's] advertisements, marketing materials, and promotional materials clearly and conspicuously display the address of [defendant's] sole, existing retail store in close proximity to the words ‘Zig Zag Smoke Shop;' 4) all of [defendant's] advertisements, marketing materials, and promotional materials clearly and conspicuously display the following disclaimer in close proximity to the words ‘Zig Zag Smoke Shop': ‘Zig Zag Smoke Shop is not affiliated with or endorsed by National Tobacco Company, L.P. or North Atlantic Operating Company, Inc.'” ECF No. 13-1, p. 2.

         Additionally, defendant agreed to discontinue its use of the internet domain name, www.zigzagsmokeshop.com, and to cease any other use of the words ‘Zig Zag' in connection with its business on the internet. Id. at 3. In exchange for defendant's compliance with the terms of the agreement, plaintiffs agreed to “release [defendant] from any claim . . . for damages resulting from [defendant's] use of ‘Zig Zag' prior to” the date of the agreement. Id. at 4.

         Plaintiffs' amended complaint further alleges that in late 2016, they discovered that defendant had breached the terms of the settlement agreement “through its improper use of the words, ‘Zig Zag, ' in its signage and advertising and in other ways evident from the review of the terms of the settlement agreement.” ECF No. 13, ¶ 26. On January 12, 2017, plaintiffs sent defendant a cease and desist letter “demanding full compliance with the settlement agreement and requesting written confirmation that any and all violations of its terms and conditions . . . had been permanently remedied. Id. at ¶ 30. Plaintiffs provided photographs showing defendant's improper use of the words ‘Zig Zag' on its business sign and on its internet posts. Id. On January 19, 2017, defendant sent a response letter with photographs showing that the violations on the business signs had been modified.

         On February 3, 2017, Plaintiffs sent another letter to defendant “demanding full compliance with the settlement agreement and requesting written confirmation that any and all violations of the terms and conditions . . . had been permanently remedied.” Id. at ¶ 32. Plaintiffs included “internet screenshots showing [defendant's] continued violation of the settlement agreement.” Id. Defendant never responded to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.