Court Refuses to Declare Pending Trademark Application Void or Grant Judgment on Fraudulent Procurement Claim Based on Application Alone
In Hammerhead Entertainment, L.L.C. v. Ennis, et al., Civil Action No. 4:11cv65 (July 18, 2011), found here, Judge Mark S. Davis granted default judgment and entered a permanent injunction on Hammerhead’s trademark infringement claims but refused to grant judgment for fraudulent procurement of a trademark registration or to declare defendants’ pending trademark application void.
Hammerhead operates numerous bars and nightclubs in North Carolina and Florida under the registered trademark Whiskey River. In January 2011, defendants opened a bar and restaurant under the name Whiskey River Country Bar & Grill in Chesapeake. Defendant had also filed an application seeking to register the mark Whiskey River. Despite actual and constructive notice of Hammerhead’s rights to Whiskey River, Defendant continued to use the mark.
After the Defendant failed to respond to its Complaint, Hammerhead moved for default judgment and entry of a permanent injunction on its claims of trademark infringement. The Court found that Hammerhead stated claims for registered trademark infringement, false designation of origin, unfair competition and false advertising and common law unfair competition but nevertheless acknowledged its responsibility to “examine the essential elements of each of Plaintiff’s claims and determine whether Plaintiff has pled facts sufficient to satisfy those elements.” Id. at 6.
Two issues are noteworthy. First, Judge Davis found that Hammerhead had not stated a claim for relief under 15 U.S.C. § 1120 for fraudulent procurement of a registration because Defendant had not yet obtained registration of their mark. Procuring registration of the mark, the Court held is “a necessary precursor to civil damages under 15 U.S.C. § 1120.” Id. at 14.
Second, while the court granted a permanent injunction, it declined to declare the Defendant’s pending trademark application void. Hammerhead asserted that the application was based on false and deceptive statements, but the Court held that it did not have statutory authority to grant the relief Hammerhead sought. Relying on authorities from other jurisdictions, the Court found that a pending application alone is insufficient to satisfy its statutory requirement under section 1119 that the action involve a registered mark. Id. at 25-27.
