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Ken Block Lawsuit

Ken Block Lawsuit

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Published by matt hardigree
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Published by: matt hardigree on Aug 20, 2012
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07/17/2015

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Plaintiffs Gravel Farms Racing, LLC (“GFR”) and Ken Block (“Block”) (jointly “Plaintiffs”), for their Complaint against Defendant Mad Media LLC (“Mad Media”), allege as follows: INTRODUCTION 1. Mad Media breached its legal and ethical obligations to its former clients, Plaintiffs Ken Block and Gravel Farms Racing, by improperly using knowledge that Mad Media gained from its contractual relationship with Plaintiffs to misappropriate, interfere with and unfairly profit from Plaintiffs. 2. Plaintiffs are pioneers in the autocross motor sports industry and have spent considerable resources since at least as early as 2008 successfully promoting the GYMKHANA brand, for which they have a tremendous fan following. In the course of promoting their brand, Plaintiffs contracted with Mad Media to record some of Plaintiffs’ popular GYMKHANA videos. Plaintiffs paid Mad Media over $300,000 and disclosed to Mad Media confidential information relating to the GYMKHANA brand. It is universally accepted, practiced, understood and implicit in every filming agreement that the filming company cannot use, profit or usurp rights, opportunities or property from its client. 3. Mad Media flagrantly disregarded its legal and ethical obligations and the accepted standards of professional conduct by registering the domain name GYMKHANA.COM to usurp Plaintiffs’ legitimate business opportunities and unfairly competing directly with their now former client. Plaintiffs have tried to address Mad Media’s bad faith, but Mad Media has insisted on continuing to take advantage of and harm its former clients. Mad Media’s decision leaves Plaintiffs no choice but to seek resolution through the courts. THE PARTIES 4. Plaintiff Gravel Farms Racing, LLC is a California Limited Liability
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Company organized and existing under the laws of the State of California,

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having a principal place of business at 4250 Wilshire Blvd, Los Angeles, California, 90010. 5. 6. Plaintiff Ken Block is an individual resident of Utah. Upon information and belief, Defendant Mad Media LLC is a

Limited Liability Company organized and existing under the laws of the State of California, having a principal place of business at 2554 Pahvant Street, Oceanside, CA 92054. 7. Upon information and belief, Mad Media is regularly engaged in the JURISDICTION AND VENUE 8. This is an action for false designation of origin and dilution arising under the Lanham Act of the United States, 15 U.S.C. § 1125(a) & (c), violation of the Anticybersquatting Consumer Protection Act (“ACPA”) of the United States, 15 U.S.C. § 1125(d), and for various causes of action arising under California state law. 9. This Court has subject matter jurisdiction pursuant to at least 15 This Court has U.S.C. § 1121 and 28 U.S.C. §§ 1331 and 1367(a). business of video production and advertising services in the State of California.

supplemental jurisdiction over the California statutory and common law claims pursuant to 28 U.S.C. § 1367(a) because the state law claims are so related to the federal claim that they form part of the same case or controversy. 10. This Court has personal jurisdiction over Mad Media by virtue of its systematic and continuous contacts with California and by the actions in California giving rise to this Complaint, including in this Judicial District. 11. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391 (b) and (c), and by Plaintiffs’ choice of venue. /// /// ///
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BACKGROUND 12. Plaintiffs are pioneers in the autocross motor sport industry and have invested considerable resources in developing the GYMKHANA brand in connection with this industry and related goods and services. 13. Plaintiffs have enjoyed great success marketing the GYMKHANA brand, including through a series of videos. GYMKHANA brand. 14. Plaintiffs entered into one or more contracts with Mad Media to record Plaintiffs’ GYMKHANA videos. In accordance with the contractual provisions, Plaintiffs paid Mad Media over $300,000 for their recording of the GYMKHANA videos. 15. Upon information and belief, Mad Media had no affiliation with the GYMKHANA brand prior to being contacted by Plaintiffs. Upon information and belief, Mad Media learned of the GYMKHANA brand exclusively through its contractual relationship with Plaintiffs. 16. Upon information and belief, after learning of Plaintiffs GYMKHANA brand through their contractual relationship with Plaintiffs, Mad Media registered the domain name GYMKHANA.COM and created a web site at GYMKHANA.COM. 17. It is universally accepted, practiced, understood and implicit in every filming agreement that the filming company cannot use, profit or usurp rights, opportunities or property from its client. 18. By registering and using the domain name GYMKHANA.COM, Mad Media breached its contractual obligations to Plaintiffs to refrain from using the knowledge it gained from its contractual relationship with Plaintiffs to misappropriate, interfere with, or profit from opportunities and property in the GYMKHANA brand.
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Through their investment of

considerable resources, Plaintiffs have become synonymous with the

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19. At no time have Plaintiffs given authorization or consent for Mad Media’s registration and use of the domain name GYMKHANA.COM or any other use of the GYMKHANA brand other than the contracted video recording work. 20. Mad Media’s affiliation with Plaintiffs due to recording Plaintiffs’ hugely popular GYMKHANA videos makes it extremely likely that consumers and others in the industry will mistakenly believe that the GYMKHANA.COM domain name and website are sponsored by, affiliated with, endorsed by and/or approved by Plaintiffs. This likelihood of confusion is exacerbated by the numerous videos and images displayed of Mr. Block on the GYMKHANA.COM site. 21. Due to Mad Media’s bad faith registration of GYMKHANA.COM, Plaintiffs have lost business opportunities in marketing and advertisements and Mad Media has usurped these opportunities by violating the agreement between the parties. FIRST CLAIM FOR RELIEF (False Designation Of Origin Under The Lanham Act, 15 U.S.C. § 1125(a)) 22. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-21 above. 23. Plaintiffs have a valid mark in GYMKHANA. 24. Mad Media has used and is using GYMKHANA.COM in commerce by, among other acts, operating the GYMKHANA.COM website, and providing videos and advertising on the website. 25. Mad Media’s use of the website GYMKHANA.COM has and is likely to cause confusion, mistake, or to deceive as to the affiliation, connection, or association of Plaintiffs with Mad Media’s website. ///
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26. Mad Media’s use of the website GYMKHANA.COM along with Plaintiff’s images, videos, and/or likeness has and is likely to cause confusion, mistake, or to deceive as to the origin, sponsorship, or approval of Plaintiffs as to the goods and service offered, marketed and/or advertised on GYMKHANA.COM. 27. By reason of the foregoing acts, Mad Media has injured and continues to injure Plaintiffs. 28. Mad Media’s wrongful acts are causing irreparable harm to Plaintiffs, for which there is no adequate remedy at law. Mad Media’s false designation of origin with respect to Plaintiffs’ GYMKHANA brand will continue, and will continue to cause irreparable harm to Plaintiffs unless Mad Media is enjoined by this Court. SECOND CLAIM FOR RELIEF (Trademark Dilution Under The Lanham Act, 15 U.S.C. § 1125(c)) 29. 30. Plaintiffs incorporate by reference and reallege each of the At the time of Mad Media’s registration of the GYMKHANA.COM allegations set forth in Paragraphs 1-28 above. domain name, the GYMKHANA mark was famous and distinctive in its association with Plaintiffs. 31. Plaintiffs. 32. Mad Media’s use of GYMKHANA.COM dilutes the quality of the GYMKHANA mark by diminishing the capacity of the mark to identify and distinguish Plaintiffs’ goods and services. 33. ///
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Mad Media’s commercial use of GYMKHANA.COM began after

the GYMKHANA mark was famous and distinctive in its association with

By reason of the foregoing acts, Mad Media has injured and

continues to injure Plaintiffs.

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34.

Mad Media’s wrongful acts are causing irreparable harm to

Plaintiffs, for which there is no adequate remedy at law. Mad Media’s dilution of Plaintiffs’ GYMKHANA brand will continue, and will continue to cause irreparable harm to Plaintiffs unless Mad Media is enjoined by this Court. THIRD CLAIM FOR RELIEF (Violation Of Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)) 35. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-34 above. 36. The domain name GYMKHANA.COM is identical to a protected mark owned by Plaintiffs. 37. At the time of Mad Media’s registration of the GYMKHANA.COM domain name, the GYMKHANA mark was famous and distinctive in its association with Plaintiffs. 38. Upon information and belief, Mad Media had a bad faith intent to profit from the GYMKHANA mark when it usurped its clients’ (i.e., the Plaintiffs) opportunities and rights by registering the domain name only after learning of Plaintiffs’ brand through being hired by Plaintiffs to provide video recording services for Plaintiffs’ GYMKHANA videos. 39. By reason of the foregoing acts, Mad Media has injured and continues to injure Plaintiffs. 40. Mad Media’s wrongful acts are causing irreparable harm to Plaintiffs, for which there is no adequate remedy at law. Mad Media’s registration of GYMKHANA.COM in violation of the Anticybersquatting Consumer Protection Act has caused, and will continue to cause, irreparable harm to Plaintiffs unless Mad Media is enjoined by this Court. /// ///
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FOURTH CLAIM FOR RELIEF (Breach Of Contract Under California State Law) 41. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-40 above. 42. Plaintiffs and Mad Media entered into one or more agreements for video recording services in connection with recording videos for Plaintiffs entitled GYMKHANA and GYMKHANA 2. 43. California has been a world leader in filming since the dawn of the film industry. Over time, the industry has developed standard and implicit understandings when two entities undertake an agreement for recording services. These standard understandings, or usage, automatically become terms in any filming agreement unless the contract states otherwise. The contract(s) between Plaintiffs and Mad Media did not state otherwise or exempt Mad Media from its ordinary and customary obligations. 44. This practice has been codified in statute in California. California Civil Code § 1644 provides that when a “special meaning is given … by usage … [the usage] must be followed.” Furthermore, California Civil Code § 1655 states, “Stipulations which are necessary to make a contract reasonable, or conformable to usage, are implied, in respect to matters concerning which the contract manifests no contrary intention.” 45. It is universally accepted, practiced and understood that every filming agreement has an implicit contractual term that the filming company cannot use, profit from or usurp rights, opportunities or property from its client. 46. Plaintiffs fully performed all their obligations under the contract, including paying over $300,000 to Mad Media. 47. By registering the domain name GYMKHANA.COM, Mad Media breached its contract(s) with Plaintiffs. ///
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48. By these actions, Mad Media has injured and continues to injure Plaintiffs. FIFTH CLAIM FOR RELIEF (Breach Of The Covenant Of Good Faith And Fair Dealing Under California State Law) 49. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-48 above. 50. The contract(s) between the parties included a covenant of good faith and fair dealing. This required, among other things, that Mad Media refrain from usurping business opportunities from Plaintiffs and refrain from using confidential knowledge gained from Plaintiffs to compete with Plaintiffs or otherwise to Plaintiffs’ detriment. 51. Mad Media breached the covenant of good faith and fair dealing by usurping business opportunities from Plaintiff and using confidential knowledge of the GYMKHANA brand to the detriment of Plaintiffs by registering the domain GYMKHANA.COM and creating a website at GYMKHANA.COM. 52. By these actions, Mad Media has injured and continues to injure Plaintiffs. SIXTH CLAIM FOR RELIEF (Unfair Competition Under California Common Law) 53. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-52 above. 54. Plaintiffs have invested considerable resources in developing the GYMKHANA brand in connection with autocross motor sports and related goods and services. Mad Media received confidential information about the GYMKHANA brand from Plaintiffs without cost to Mad Media. information and belief, Mad Media
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Upon name

acquired

the

domain

GYMKHANA.COM and created the website GYMKHANA.COM at little cost

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to Mad Media. The actions of Mad Media have resulted in business loss and injury to Plaintiffs. 55. Further, by these actions, Mad Media has irreparably injured Plaintiffs. Such irreparable injury will continue unless Mad Media is enjoined by this Court from further violation of Plaintiffs’ rights, for which Plaintiffs have no adequate remedy at law. SEVENTH CLAIM FOR RELIEF (Trademark Infringement Under California State Law) 56. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-55 above. 57. Plaintiffs own and use the GYMKHANA mark and enjoy common law rights in California and throughout the United States. These rights are superior to any rights which Mad Media may claim with respect to the GYMKHANA mark. 58. Upon information and belief, Mad Media’s use of the GYMKHANA mark is intentionally designed to cause, and has caused, confusion regarding the source of Mad Media’s products, services and information as well as Plaintiffs’ affiliation with the GYMKHANA.COM website. 59. By reason of the foregoing acts, Mad Media has injured and continues to injure Plaintiffs. 60. Mad Media’s wrongful acts are causing irreparable harm to Plaintiffs, for which there is no adequate remedy at law. Mad Media’s false designation of origin and dilution of Plaintiffs’ GYMKHANA brand will continue, and will continue to cause irreparable harm to Plaintiffs unless Mad Media is enjoined by this Court. /// /// ///
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EIGHTH CLAIM FOR RELIEF (Misappropriation Of The Right Of Publicity Under California Civil Code § 3344) 61. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-60 above. 62. Upon information and belief, Mad Media has used and continues to use Mr. Block’s name, photograph, and likeness on the website GYMKHANA.COM. The GYMKHANA.COM website also contains

advertisements and promotional materials for Mad Media’s profit. 63. Plaintiffs have not consented to the use of Mr. Block’s name, photograph or likeness on the website GYMKHANA.COM. 64. By reason of the foregoing acts, Mad Media has injured and continues to injure Plaintiffs. 65. Mad Media’s wrongful acts are causing irreparable harm to Plaintiffs, for which there is no adequate remedy at law. Mad Media’s misappropriation of Mr. Block’s rights of publicity will continue, and will continue to cause irreparable harm to Plaintiffs unless Mad Media is enjoined by this Court. NINTH CLAIM FOR RELIEF (Trademark Dilution Under California Business And Professions Code § 14247) 66. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-65 above. 67. Plaintiffs’ GYMKHANA mark is famous and, upon information and belief, Mad Media’s commercial use of GYMKHANA.COM began after the mark became famous. 68. Mad Media’s use of GYMKHANA.COM dilutes the quality of Plaintiffs’ GYMKHANA brand.
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69. By reason of the foregoing acts, Mad Media has injured and continues to injure Plaintiffs. 70. Mad Media’s wrongful acts are causing irreparable harm to Plaintiffs, for which there is no adequate remedy at law. Mad Media’s dilution of Plaintiffs’ GYMKHANA brand will continue to cause irreparable harm to Plaintiffs unless Mad Media is enjoined by this Court. TENTH CLAIM FOR RELIEF (Unfair Competition Under California Business & Professions Code § 17200, et. seq.) 71. Plaintiffs incorporate by reference and reallege each of the allegations set forth in Paragraphs 1-70 above. 72. Mad Media has engaged in both unlawful and unfair business acts and/or practices which have resulted in business loss to Plaintiffs including loss of business opportunities usurped by Mad Media, dilution of Plaintiffs’ trademarks, and consumer confusion regarding Plaintiffs’ trademarks and Mad Media’s good and services. There is no ascertainable, valid justification or benefit for Mad Media’s harm to Plaintiffs, and to the extent any justification or benefit exists, it is greatly outweighed by the harm to Plaintiffs. 73. By reason of the foregoing acts, Mad Media has injured and continues to injure Plaintiffs. 74. Further, by these actions, Mad Media has irreparably injured Plaintiffs. Such irreparable injury will continue unless Mad Media is enjoined by this Court from further violation of Plaintiffs’ rights, for which Plaintiffs have no adequate remedy at law. PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray for judgment and seek relief as follows: ///
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A. Judgment that Mad Media has breached implied terms of their contract(s) with Mad Media. B. C. Judgment that Mad Media has breached the covenant of good faith Judgment that Mad Media has committed unfair competition in and fair dealing in its contract(s) with Mad Media. violation of California statute and California common law. D. Judgment that Mad Media has violated the Lanham Act of the United States. E. F. Judgment that Mad Media has violated Plaintiffs’ common law Judgment that Mad Media has violated the Anticybersquatting trademark rights. Consumer Protection Act. G. Judgment that Mad Media has violated Mr. Block’s right of publicity. H. Preliminary and permanent injunctions prohibiting Mad Media from using the GYMKHANA.COM domain name. I. J. Preliminary and permanent injunctions prohibiting Mad Media from A constructive trust to transfer ownership of the using Plaintiffs’ name, image, or likeness on the GYMKHANA.COM website. GYMKHANA.COM domain name to Plaintiffs. K. Statutory damages. L. Compensatory damages. M. Restitution, disgorgement and return of unjust enrichment. N. Punitive damages. O. Attorney’s fees and costs. P. /// ///
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Any other remedy or relief that the Court finds just and proper.

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