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IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF NORTH CAROLINANORTHERN DIVISIONOBX-STOCK, INC.,

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Plaintiff,

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BICAST, INC.,

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Defendant.

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ORDERThis matter is before the Court on Defendant's Motion for Summary Judgment. In theunderlying case, Plaintiff OBX-Stock, Inc. alleges intentional trademark infringement, unfaircompetition and false designation of origin in violation of 15 U.S.C.

1125(a); trademarkdilution in violation of 15 U.S.C.1125(c); violations of common law trademark rights; andviolations of North Carolina's unfair and deceptive trade practices statute, N.C. Gen. Stat.

75-1.1. Defendant Bicast, Inc. did not file a counterclaim, but has requested that the Court considercancellation of Plaintiffs registered trademarks. A hearing on the instant motion was held inElizabeth City on March 27,2006. For the reasons discussed below, Defendant's Motion forSummary Judgment is GRANTED and the matter is DISMISSED.BACKGROUNDThis case arises out of the efforts of two companies to capitalize on the popularity ofNorth Carolina's Outer Banks. The Outer Banks are North Carolina's unique access to theAtlantic Ocean, consisting of hundreds of miles of barrier islands, sand beaches and naturepreserves. The area attracts tourists from around the world for its historical significance,

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recreational opportunities and natural beauty.Plaintiff OBX-Stock

nc. ("Stock") is based on the Outer Banks at Kill Devil Hills.Plaintiffs former president, Jim Douglas, claims that he coined the term "OBX as anabbreviation for the Outer Banks in 1994. In deposition testimony, Douglas recounted thataround that time he was vacationing in Nantucket, Massachusetts, and saw stickers with theabbreviation "ACK." The ACK abbreviation for Nantucket comes from the identification codefor a World War 11-era airport located on Nantucket. The format of such stickers- generally around white sticker with a short abbreviation in a stark black font- is based on car decals inEurope, which are used to identify a vehicle's country of origin. Similar stickers are now soldthroughout the United States, with different abbreviations for different regions or cities.After seeing the Nantucket stickers, Douglas concluded that similar stickers with

abbreviation for the Outer Banks could be successful. Douglas alleges that after returning fromNantucket, he began selling "OBX" stickers at his restaurant "Chili Peppers" in Kill Devil Hills.Shortly thereafter, Douglas and a partner incorporated Plaintiff OBX-Stock, and expanded intoother OBX-branded goods, including t-shirts, bottle openers, and other tourist sundries.Plaintiff first sought federal trademark registration for OBX in 1998. Initially, the UnitedStates Patent and Trademark Office ("USPTO") rejected Plaintiffs applications on the basis thatOBX was geographically descriptive, and thus not eligible for registration. However, since theinitial rejection, the USPTO has granted Plaintiff five registrations for various uses of "OBX:Principal Registration No. 2,593,347: For metal license plates and sports clothing,including t-shirts, shirts, hats and caps.Principal Registration No. 2,837,794: For stickers.Supplemental Registration No. 2,610,784: For beer.Supplemental Registration No. 2,606,141

For entertainment services.

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Supplemental Registration No. 2,861,721

For eyeglasses, magnets and computermouse pads; non-metal key rings; beverage glassware, bottle openers, bottlesqueegees, and bottled drinking water.'Plaintiffs business has experienced significant growth, and OBX-branded stickers havebecome popular. At the same time, OBX has become a widely-accepted abbreviation for theOuter Banks.Defendant Bicast, Inc. ("Bicast") was formed in 1989, and is wholly-owned by Williamand Jo Carolyn Gaertner. The company, based in Williamsburg, Virginia, provides souvenirs toregional retail outlets. Since its founding, Defendant has sold many items with geographicabbreviations, including Outer Banks stickers with the abbreviation "OB."According to Defendant, in 2002, Mr. Gaertner's daughter Stacy Harris came up with anew logo: "OBXtreme." Defendant claims that the logo was a combination of its pre-existing"OB" sticker and the phrase "Xtreme," which refers to the many outdoor activities available onthe Outer Banks. In June 2003, Defendant began selling products with the "OBXtreme" logo,including stickers, magnets, postcards, hats and license plates. Defendant claims that its salesfrom "OBXtreme" logo goods have been minimal, accounting for a total of $9,663 in revenuesand $5,030 in gross profits. In April of 2005, Defendant stopped selling "OBXtreme" brandedproducts, pending the outcome of this lawsuit.'Registration on the Principal Register confers a number of substantive and proceduralrights that are unavailable for marks on the Supplemental Register. See IDVN. America

S&MBrands, 26 F. Supp. 2d 815 (E.D. Va. 1998) (citing 3 J. Thomas McCarthy, Trademarks andUnfair Competition

19:9, 19:36 (4th ed. 1996). For example, Principal Registration serves asprima facie evidence of a registrant's exclusive right to use a mark, while SupplementalRegistration has no such effect. Id. Supplemental Registration does not confer any substantivetrademark rights, however, Supplemental Registration has the dual benefits of creating federaljurisdiction for disputes arising over a mark's use, and putting others on notice of a party's use ofthe mark.

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