Breathe LLC v Breathe Corp etc 12282015

7/23/2019 Breathe LLC v Breathe Corp etc 12282015

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UNITED STATES SOUTHERN DISTRICT COURT

OF NEW YORK

________________________________________________

BREATHE LLC ) Civil Action No.

Plaintiff ) 15:06403

)

v. )

METRO TABLET, INC., BREATHE ECIGS CORP )

And JOSHUA KIMMEL )

Defendants )

________________________________________________)

MEMORANDUM OF LAW IN OPPOSITION TO MOTION TO DISMISS

BREATHE LLC AND TYLER GLOVER

By Their Attorneys,

Christopher L. Brown

New York Bar No. 2953891

Brown & Rosen LLC

Attorneys At Law

100 State Street, Suite 900

Boston, MA 02109

617-728-9111 (T)617-695-3202 (F)

Case 1:15-cv-06403-AT Document 66 Filed 12/28/15 of 23



2

Table of Contents

Table of Contents 2

Table of Cases 2

Table of Statutes 4

A. Facts 5

B. Argument 6

1. Defendants’ Motion Seeking To Dismiss The Complaint Based On Its“Uncontroverted” Evidence Must Be Denied 6

2. Defendants’ Analogous Use Requires Discovery And Is SubstantiallyFact Intensive Precluding Dismissal 7

3. Defendants’ Use Is Not Continuous Due To A Break In The Chain Of Title 16

4. The Facts Alleged By The Plaintiffs Are Sufficient To Establish A Famous Mark 18

5. The Facts Alleged By The Plaintiffs Are Sufficient To Establish Unfair Competition 18

6. First Filed Rule 19

7. Exceptions To The First File Rule 19

8. Anticipatory Filing 20

9. The Balances of Conveniences 21

10. Joshua Kimmel As A Defendant 22

C. Conclusion 22

Table of Cases

AFA Dispensing Grp. B.V. v. Anheuser-Busch, Inc.,740 F. Supp. 2d 465 (S.D.N.Y. 2010) 20

Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622 (9th Cir. 1991) 19


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Aycock Eng’g, Inc. v. Airflite, Inc., 560 F.3d 1350 (Fed. Cir. 2009) 8

Brookfield Communications, Inc. v. West Coast Entertainment Corp.,

174 F.3d 1036, 50 USPQ2d 1545 (9th Cir. 1999) 8, 9

CGI Solutions, LLC v. Sailtime Licensing Grp., LLC, No. 05-cv-4120, 2005U.S. Dist. LEXIS 28878, 2005WL 3097533 (S.D.N.Y. Nov. 17, 2005) 20

Chicago Ins. Co. v. Holzer, No. 00-cv-1062, 2000 U.S. Dist. LEXIS 8327,2000 WL 777907, (S.D.N.Y. June 16, 2000) 20

Computer Food Stores, Inc. v. Corner Store Franchises, Inc.,175 U.S.P.Q. (BNA) 535 (TTAB 1973) 16

Curtis v. Citibank, N.A., 226 F.3d 133 (2d Cir. 2006) 19

Emplrs. Ins. v. Fox Entm't Group, Inc.,522 F.3d 271 (2d Cir. N.Y. 2008) 19, 20

Giersch v. Scripps Networks Inc., 90 USPQ2d 1020 (TTAB 2009) 7

Guantanamera Cigar co. v. Corporacion Habanos SA, 2009 U.S. Dist. LEXIS1115127 (D.D.C. Dec. 10, 2009) 8

J. Lyons & Co. v. Republic of Tea, Inc., 892 F. Supp. 486, 491 (S.D.N.Y. 1995) 20, 21

Malcolm Nicol & Co. v. Witco Corp., 881 F.2d 1063, 11 USPQ2d 1638,

1639 (Fed. Cir. 1989) 7, 9

Mondo, Inc. v. Spitz,No. 97-cv-4822, 1998 U.S. Dist. LEXIS 369, 1998 WL 17744(S.D.N.Y. Jan. 16, 1998) 21

National Cable Television Ass'n, Inc. v. American Cinema Editors, Inc.,

937 F.2d 1572, 19 U.S.P.Q.2D (BNA) 1424 (Fed. Cir. 1991) 9, 16

Old Swiss House, Inc. v. Anheuser-Busch,Inc.,

569 F.2d 1130, 196 U.S.P.Q. (BNA) 808 [***1882] (CCPA1978) 10

Oleg Cassini, Inc. v. Serta, Inc., 2012 LEXIS 33875 (S.D.N.Y. 2012) 19

Pactel Teletrac v. T.A.B. Systems, 32 USPQ2d 1668 (TTAB 1994) 7


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Schnabel v. Ramsey Quantitative Sys. ,322 F. Supp. 2d 505 (S.D.N.Y. 2004) 20

Sead Pepic, Lifeguard Master, LLC v. The Lifeguard Store, Inc., 12-cv-3171 21

Smith v. McIver, 22 U.S. (9 Wheat) 532, 535 (1824) 19

T.A.B. Systems v. PacTel Teletrac, 77 F.3d 1372, 37 USPQ2d 1879

(Fed. Cir. 1996) 7,9,15,16

The PNC Financial Services Group, Inc. v.

Keith Alexander Ashe dba Spendology and Spendology LLC ( TTAB 2013) 8, 9

West Florida Seafood, Inc. v. Jet Restaurants,

1 F.3d 1122, 31 USPQ2d 1660 (Fed. Cir. 1994) 7

Table of Statutes

15 U.S.C. § 1127 8

28 U.S.C. § 1404(a) 21




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A. FACTS

1. Breathe LLC (“Breathe”) is a Florida entity and has a business address at 1400 MountJefferson Road, Suite 7, West Jefferson, NC 28694. Breathe does business in the State of New York.

2. Tyler Glover (“Glover”) is the sole member of Breathe and has a business addressof 1400 Mount Jefferson Road, Suite 7, West Jefferson, NC, 28694. Glover presentlyresides in North Carolina.

3. Metro Ta blet, Inc. is a New York entity w (“Metro” or “Defendant”) and the registeredagent for Metro is the United States Corporation Agents, Inc, 7014 13th Ave., Suite 202,Brooklyn, New York, 11228.

4. Breathe E Cigs Corp (“Corp” or “Defendant”) is a Nevada company with an address at 9921

Lani Lane Knoxville, TN 37932. Corp is publicly traded in the State of New York.

5. Joshua Kimmel is the president of Corp and has a business address at 9921 Lani LaneKnoxville, TN 37932 (“Corp” or “Defendant”).

6. Corp is a publicly traded company in the state of New York and does business in the state of New York. Corp actually launched its products in New York City in 2015.http://breathecig.com/2015/07/14/maximlaunch/ See Exhibit “A” to Complaint. Corp’s distribution partner in the State of New York is Metro Tablet, Inc.

7. Breathe is an electronic cigarette company with a website at www.breatheic.com.

8. Breathe has a registered trademark with the United States Patent and Trademark Office(“USPTO”), registration number 4,633,887.

9. Corp is an electronic cigarette company with a website at www.Breathecig.com. Metro is thedistribution partner of Corp in the State of New York. See Exhibit “B”.

10. Corp recently applied for a trademark associated with the use of “Breathe” in the electroniccigarette market and was declined by the USPTO.

11. In July 2015, Breathe contacted Corp via email and informed Corp that it was infringing on

Breathe’s registered trademark. Corp continued to use the registered trademark of Breathe despite thenotification.

12. The marks used by Breathe and Corp are substantially similar and both companies are engaged inthe same business.

13. The actions of Corp and Metro infringes on the mark of Breathe.


http://breathecig.com/2015/07/14/maximlaunch/


http://www.breatheic.com/


http://www.breathecig.com/







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14. The actions of Corp and Metro are diluting the mark of Breathe.

15. The action of Corp and Metro has confused the public and has engaged in unfair competition in

the use of Breathe’s trademark.

16. The actions of Corp and Metro has harmed Breathe in its business.

17. Beginning in June 2013 through September 2013, Glover began creating, marketing, advertisingand promoting “Breathe”. Glover created samples, purchased inventory, began locating web developersand partners for his new business.

18. In July 2013 Breathe signed a commission contract to have its products enter Foxwoods Casinoin Connecticut. Presently Breathe is the official e-cigarette of the renowned Foxwoods Casino.

19. In August-September 2013, Glover created Breathe LLC in the State of Florida and beganselling, disturbing, marketing and promoting his products through the company.

20. In September 2013, Glover caused for a Trademark Application to be filed with the USPTOwhich was granted.

21. Glover/Breathe filed an intent to use application with the USPTO because the initial marketinghad not been completed and its website was not “live” in September 2013.

22. The defendants are infringing on the common law mark utilized by the Plaintiffs and haveharmed their business.

B. ARGUMENT

1. Defendants’ Motion Seeking To Dismiss The Complaint Based On Its

“Uncontroverted” Evidence Must Be Denied.

Defendants seek to dismiss Plaintiffs’ entire Complaint alleging that the uncontroverted

evidence associated with Mr. Kimmel’s Affidavit of October 2015 establishes analogous use

superior to the rights of the Plaintiffs. The Defendants are incorrect on all accounts. As this

Court is aware, there has been no discovery in this action nor has Kimmel’s Affidavit the

Defendants heavily reply upon in support of the Motion to Dismiss been subjected to scrutiny.

The Court’s ruling in denying Plaintiff’s Motion for Preliminary Injunction only indicates that




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the Defendants’ facts (Kimmel’s Affidavit) presenting Kimmel’s usage of the “ breathe” mark

“may” rise to level of analogous usage. See this Court’s Order dated November 6, 2015,

Transcript page 23 Line 24. The Court has not made a final determination of the facts as the

Defendants’ argue in their Motion To Dismiss. In fact the Defendants’ evidence is void of any

substantial evidence suggesting analogous use at all. Discovery has not been completed and the

Defendants’ actually style their Motion To Dismiss as a Motion For Summary Judgment

inclusive of a new Kimmel Affidavit. Therefore, all facts must be viewed in a light most

favorable to the non-moving party (Plaintiffs) and the facts indicate the Defendants’ Motion must

be denied.

2. Defendants’ Analogous Use Requires Discovery And Is Substantially Fact

Intensive Precluding Dismissal

In order to demonstrate that use analogous to trademark use has given rise to proprietary

rights, a party must show that such prior use was sufficient to create an association in the minds

of the purchasing public between the mark and the goods. Malcolm Nicol & Co. v. Witco Corp.,

881 F.2d 1063, 11 USPQ2d 1638, 1639 (Fed. Cir. 1989). This is a fact intensive analysis. We

may infer the fact of identification of the mark with the party on the basis of indirect evidence

regarding the party's use of the word or phrase in advertising brochures, catalogs, newspaper ads,

articles in newspapers, trade publications and Internet websites which create a substantial public

awareness of the designation as a trademark identifying the party as a source. See T.A.B.

Systems v. PacTel Teletrac, 77 F.3d 1372, 37 USPQ2d 1879, 1882 (Fed. Cir. 1996) vacating

Pactel Teletrac v. T.A.B. Systems, 32 USPQ2d 1668 (TTAB 1994); Giersch v. Scripps Networks

Inc., 90 USPQ2d 1020, 1023 (TTAB 2009). The Court found that taken as a whole, applicant’s

exhibits do not establish proprietary rights arising before the constructive use date. West Florida




8

Seafood, Inc. v. Jet Restaurants, 31 F.3d 1122, 31 USPQ2d 1660, 1663 (Fed. Cir. 1994).

Applicant’s securing of the spendology.net web domain from hostgator.com on July 24, 2010

does not by itself establish use analogous to trademark use in connection with the services.

Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 50

USPQ2d 1545, 1556 (9th Cir. 1999) (registration of a domain name does not by itself constitute

use for purposes of establishing priority of use).

Pursuant to the Lanham Act a mark must be “used in commerce,” when it used or displayed in

the sale or advertising of services, the services are rendered in commerce and the person rendering the

services is engaged in commerce in connection with the services. 15 U.S.C. § 1127; Aycock Eng’g, Inc.

v. Airflite, Inc., 560 F.3d 1350, 1357 (Fed. Cir. 2009). The Court in Aycock noted that mere

preparations to use a mark in commerce are insufficient to constitute use in commerce. The Court then

explained the fundamental proposition that “[w]ithout question, advertising or publicizing a service that

the applicant intends to perform in the future will not substantiate commerce usage and that the

advertising must instead “relate to an existing service which has already been offered to the public.” Id.

at 1358. Mere advertising and web sites (potentially viewable by U.S. residents) is not "use in

commerce" in the absence of actual evidence of U.S. sales. Guantanamera Cigar co. v. Corporacion

Habanos SA, 2009 U.S. Dist. LEXIS 1115127 (D.D.C. Dec. 10, 2009).

In The PNC Financial Services Group, Inc. v. Keith Alexander Ashe dba Spendology

and Spendology LLC ( TTAB 2013), the entity attempting to establish analogous use provided

two Spendology “beta” website pages which are not self -authenticating as they do not include

the date and URL on the printout, although one page includes a copyright notice dated 2010.

Neither page references the services identified in the involved application. Furthermore, the site




9

was not “public” (as in this case) as it was under construction. There was no declaration

testimony provided regarding how many persons viewed or were exposed to the website.

Hence, the Board concluded that the website evidence failed to establish use analogous to

trademark use in connection with applicant’s products. Such is the case with Kimmel’s alleged

use of his website from May-September 2013 and his social media actitivty.

In addition, like in Spendology, Kimmel’s extremely modest use of social media such as

joining Facebook does not by itself establish use analogous to trademark use. Cf . Brookfield

Commc'ns, Inc., 50 USPQ2d at 1556 (registration of domain name does not by itself constitute

use for purposes of priority). With regard to the social media evidence submitted by Kimmel,

which includes URL and dates of publication, there is no declaration testimony as to consumer

exposure to applicant’s blog posts, twitter page, tweets, or Facebook page. None of this evidence

shows use in connection with applicant’s identified services. Thus, this evidence failed to

establish use analogous to trademark use in Spendology, and it fails to establish sufficient use by

Kimmel and the Defendants in the instant litigation.

In Spendology, the Board found that the applicant’s indirect evidence fails to establish

use analogous to trademark use as it does not support an inference of identification in the mind

of the consuming public. See T.A.B. Systems, 37 USPQ2d at 1881 (analogous use must be “of

such a nature and extent as to create public identification of the target term with the opposer's

product or service. See, e.g., National Cable Television Ass'n, Inc. v. American Cinema Editors,

Inc., 937 F.2d 1572, 1578, 19 U.S.P.Q.2D (BNA) 1424, 1429 (Fed. Cir. 1991) ("Prior public

identification of petitioner with the name ACE for awards from use analogous to service mark

usage is sufficient ground for cancellation."); Malcolm Nicol & Co., 881 F.2d at1065 (affirming




10

Board's determination that "Witco used 'BRITOL' in a way that created in the minds of people

the necessary association between 'BRITOL' and the Witco product").

Where, however, such indirect evidence falls short of supporting the critical inference of

identification in the mind of the consuming public, we have not hesitated to reject an analogous

use opposition. For example, in Old Swiss House, Inc. v. Anheuser-Busch,Inc., 569 F.2d 1130,

196 U.S.P.Q. (BNA) 808 [***1882] (CCPA1978), the uncontradicted evidence of analogous use

consisted of the following: "12 articles, each published only once, which appeared in various

newspapers and trade journals between December 27, 1963, and April 1, 1964, and a single

speech, on April 22, 1964, by one of [the user's] vice-presidents at a shareholders' meeting." Id.

at 1133, 196 U.S.P.Q. (BNA) at 810. The court rejected the contention that the articles

constituted analogous use sufficient to demonstrate prior proprietary rights in the target phrase.

Nor can there be any doubt that purchaser perception must involve more than an

insubstantial number of potential customers. For example, if the potential market for a given

service were 10,000 persons, then advertising shown to have reached only 20 or 30 people as a

matter of law could not suffice. However close the linkage between the mark and the future

service, analogous use could not be shown on such facts because the actual number of potential

customers reached, not the strength of the linkage for some "reasonable potential customer," is

the focal point of the analogous use inquiry. As noted above, under Old Swiss House, HN8 what

is required is "public exposure of a mark that would be expected to have any significant impact

on the purchasing public." 569 F.2d at 1133.

According to Defendant Corp, the target market for e-cigarettes is 42.1 Million

Americans and the market potential is 2.1 Billion in total area market.




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See http://breathecig.com/investor-info/

Target Market: 42.1 Million U.S. smokers

Market Potential: 2.1B + Total Area Market

Investment: $3-5 Million Investment Opportunity

In order to demonstrate that use analogous to trademark use has given rise to proprietary

rights, Corp must show that such prior use was sufficient to create an association in the minds of

the purchasing public between the mark and the goods they offered from May 2013 through

September. Corp has not met this burden nor has the facts been challenged in discovery yet.

A review of Corp.’s “uncontroverted” facts which appear in the Affidavit of Kimmel

dated October 23, 2015 (which Plaintiffs have not had the ability to challenge in the discovery

phase of this litigation) fails on its face to establish analogous use. There is no evidence

submitted by Corp/Kimmel that the use was suf f icient to create an associati on in the minds of

the purchasing publi c from May 2013 through September 2013 . Below is a discussion relating

to the Exhibits attached to Kimmel’s Affidavit dated October 23, 2015 that are “uncontroverted”.

Exhibit 1-WayBill May 26, 2013

The Waybill attached as Exhibit to the Affidavit of Kimmel cannot be found on any

carriers website (UPS, Fedex, DHL or USPS). A request was made to the Defendants to produce

evidence that the waybill actually existed prior to discovery, however, the request was declined.

See Exhibit 4 to the Affidavit of Christopher Brown dated December 28, 2015. Regardless of


http://breathecig.com/investor-info/






12

Attorney Trainor lack of interest in supplying support evidence and the fact that Waybill fails to

establish that any product actually arrived in Tennessee or at any Corp location (the shipment

stops in Ohio and does not reach Tennessee) the Waybill fails to establish an association in the

minds of the purchasing public of Corp and “breathe”.

Exhibit 2-Logo Concept May 19, 2013

Next, Corp and Kimmel allege that their sample logo designs allegedly created in May

2013 is evidence of analogous use. Internal sample log designs are clearly not sufficient to

establish an association in the minds of the purchasing public of Corp and “breathe”

Exhibit 3- Chinese “Quotation” To Produce Product June 3, 2013

Corp and Kimmel present a quotation of e-cigarettes Kimmel allegedly purchased. First,

the quote does not contain any product that bear the logo “breathe” nor does the quotation

present any evidence, other than Kimmel’s word, that the product was actually purchased. A

cancelled check, receipt, wire payment transaction would suffice, however, it is clear that

Kimmel cannot produce such documents or chooses not to produce such documents. Without

proof that it was actually purchased, this quotation is of no value and fails to establish an

association in the minds of the purchasing public of Corp and “breathe”.

Exhibit 4- Gift Letter to SBE dated June 2013

Kimmel’s “gift” letter to the SBE Group according the letter at Exhibit 4, provided five

(5) e-cigarettes in the package. The letter indicates a solicitation to have the SBE Group work

with the Defendants. Clearly SBE Group was not the purchasing public. The letter is a request

for a venture of some type between the Defendants and the SBE Group. This is not analogous

use.




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Exhibit 5-Kimmel/Breathe website September 2013

Kimmel alleged to have had a website from June 2013 to September 2013 in this Exhibit.

The evidence clearly establishes that no such website existed. It was in fact a sample landing

page which had the web address of Npcxr.ewkhf.servertrust.com/login.asp. This is not a

website open to the public. This is part of the design process of a website and/or is a “beta”

testing private site. This is simply more material that fails to establish an association in the minds

of the purchasing public of Corp. and “breathe”.

Exhibit 6- Chinese Manufacturer communication August 14, 2013

This Exhibit is another attempt by Defendants to prove the purchase of product bearing

the “breathe” logo. It fails to contain proof that the product was actually purchased. This Exhibit

fails to establish an association in the minds of the purchasing public of Corp. and “breathe”

Exhibit 7- Chinese Quotation To Purchase Product August 14, 2013

This Exhibit is another quotation associated with Exhibit 6, however, the Defendants’ fail

to establish that the product was actually purchased from the Chinese manufacturer or sold to

actual customers. This is simply more material that fails to establish an association in the minds

of the purchasing public of Corp. and “breathe”.

Exhibit 8-Facebook postings of September 7 and 18 2013

This is an alleged Facebook posting that received one (1) “like” from Kimmel’s

Facebook friends. This establishes that one person that “follows” Kimmel/Br eathe on Facebook

(potentially Kimmel’s wife, family member or friend) “approved” of the post. This is clearly

negligible and actually indicates the lack of identification between the public and the logo

“breathe” with Corp.




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Exhibit 9-Voice Over- Advertisement of September 2013

This Exhibit is an email allegedly containing a voice advertisement posted on youtube

and Kimmel’s website. However, the actual voice advertisement is not submitted, nor is the

evidence that anyone in the purchasing public actually “heard” the advertisement. This is simply

more material that fails to establish an association in the minds of the purchasing public of Corp.

and “breathe”.

Exhibit 11-Chinese Manufacture Quotation of September 26, 2013

This Exhibit is another quotation for “breathe” e-cigarettes to be purchased. Yet again,

there is no documented evidence submitted that suggests Kimmel actually purchased the material

from China or sold the product to the public.

Exhibit 12-Kimmel Website Build (Website Not Live) September 2013

This Exhibit is an email establishing that the Defendants’ website/domain was not “live”

or public in September 2013. A third party vendor contacted the Defendants’ seeking to assist in

making the website “live”. Clearly this does not establish a connection to the purchasing public.

The “uncontroverted” evidence in the Exhibits above establish that Kimmel’s best

marketing and advertising efforts from May 2013 through September 2013 reached less than ten

(10) people. The evidence submitted indicates that one (1) “like” on his Facebook page from a

person who is Kimmel’s “Facebook friend” and the gift letter allegedly sent to the SBE Group

are the only leads potentially to members of the purchasing public that “might” have been aware

of Kimmel’s “breathe” usage. Clearly we cannot determine any number of alleged customers

Kimmel sold any breathe product o as he claims he has no records of sales in the Affidavit dated




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October 2015 and the new Affidavit dated November 2015. It is also of note that Kimmel has

provided no documented evidence of purchases of any “breathe” product such as receipts, wire

transfers or cancelled check to the alleged Chinese manufacture. It is rather convenient to allege

over Forty Thousand Dollars ($40,000.00) in “breathe” inventory purchases in 2013 in a sworn

Affidavit, yet have no records of actually spending the funds and no proof. Furthermore, in

Kimmel’s new Affidavit dated November 2015 filed in the Tennessee action and in support of

Defendants’ instant Motion To Dismiss, Kimmel again indicates he has no records of sales and

presumably, purchases of product bearing the “breathe” logo. Kimmel could easily have

supplied his 2013 tax returns from his sole proprietorship, however he has chosen not to do so.

We already know that no company affiliated with Kimmel purchased any product in 2013 and

2014 as Corp’s SEC filings indicate, further establishing the lack of identification of the

“breathe” logo with Corp. with the purchasing public. In addition, the alleged voice

advertisement (Exhibit 9) fails to present any evidence as to who or how many individuals heard

the alleged advertising. The fact of the matter is that the Defendants’ “uncontroverted”

evidence indicates that less than ten (10) people who may constitute members of the purchasing

public were aware of Kimmel’s activity from May 2013 through September 2013. This is far

less than the 42.1 Million (42,100,000) smokers- Kimmel’s intended market target. This

evidence fails to establish analogous use as the law in clear on the matter of public identification

of a Company with a mark:

‘That is not to say that a fixed percentage, like 20%,

much less 51%, of the potential customers must have

formed in their mind the required "prior public identification."

As we noted above, it simply requires "more than a

negligible portion of the relevant market." In other words,

advertising of sufficient clarity and repetition to create




16

the required identification must have reached a substantial

portion of the public that might be expected to purchase

the service. Thus, the user must prove that the "necessary

association" was created among more than an insubstantial

number of potential customers.’

T.A.B. Sys., 77 F.3d at 1376.

An unbroken line of precedents of both the Courts and the Trademark Board make clear

that activities claimed to constitute analogous use must have substantial impact on the

purchasing public. See T.A.B. Sys, 77 F.3d at HN5; Computer Food Stores, Inc. v. Corner Store

Franchises, Inc., 175 U.S.P.Q. (BNA) 535 (TTAB 1973). Analogous use can only succeed if the

use is of a nature and extent as to create public identification of the target term with the product

or service. National Cable Television Ass’n Inc., 937 F.2d at 1578.

There is no doubt that the evidence submitted by Kimmel and Corp at best indicates a

“negligible portion of the relevant market”. Case law has established that twelve (12) weeks of

advertising in the newspaper was not sufficient to create analogous use (See T.A.B. Sys), hence,

Kimmel’s evidence which is far less then in T.A.B Sys., clearly fails to have a substantial impact

on the purchasing public.

For this reason, the Plaintiffs’ action should not be dismissed. In fact, this Court should

sua-sponte, grant the Plaintiff summary judgment. K immel’s Affidavits present the Defendants’

best case scenario of facts (before their evidence is actually challenged in the discovery phase of

this litigation) and the evidence false to establish analogous use as presented by the Defendants ’

in this litigation.




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3. Defendants’ Use Is Not Continuous Due To A Break In The Chain Of Title

It is also important for the Court to address the clear break in the Defendants’ “Chain Of

Title”. The Defendants’ companion company Breathe LLC (TN) allegedly sold 100 percent of

its assets to Breathe Ecigs Corp (TN) in December 2014 according to all of the Defendants SEC

filings filed with the Court. Breathe LLC (TN) acquired its use of the “ breathe” mark from

Kimmel in October 2013. However, Breathe LLC (TN) was dissolved in August 2014 by the

Tennessee Secretary of State, hence it could not have sold anything in December 2014. In a

clear attempt to correct the paper trail, in September 2015, Breathe LLC (TN) authored an

“Assignment” transferring its interest in the logo/mark “breathe” to Breathe Ecigs Corp (NV) a

completely separate entity from Breathe Ecigs Corp (TN), bypassing and ignoring the

December 2014 sale previously reported in SEC filings. This September 2015 “Assignment”

contradicts all of the Defendants’ SEC filings and was surely created for this litigation. The

assignment attempts to avoid the clear fact that any rights the Def endants’ may have had,

evaporated in August 2014 when Breathe LLC (TN) dissolved without transferring the rights to

any third party.

Defendant Breathe ECigs Corp.’s form S-1 previously filed withThis Court states as follows:

Breathe LLC [TN] was formed in October 2013 and BreatheECigs Corp [TN] was formed on December 31, 2014. OnDecember 31, 2014, Breathe LLC [TN] entered into a

Bill of Sale to transfer 100% of the assets to BreatheECigs Corp.[TN]1

Since formation, Breathe has operated as a developmentstage company, with the intentions of designing marketing

1 The [TN] usages were placed in the quotation by Plaintiff ’s counsel and does not appear in theoriginal quote from the SEC filing.




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and distributing, electronic cigarettes, (“E cigarettes”) vaporizers, e-liquids (i.e, liquid nicotine)and related accessories. As of December 31, 2014 Breathe

had no revenues and limited assets.

When Breathe LLC (TN) dissolved in August 2014, one of its limited assets was its

alleged inter est in the mark “breathe”. The rights dissolved in August 2014, before the

December 2014 sale or before the very convenient September 2015 Assignment was

drafted/executed. In order to show that any analogous use is continuous (1) the use of the mark

must begin before its adversary's mark was registered and published, and (2) there has been

continuing use since that time. Casual Corner Assoc. v. Casual Stores of Nevada, Inc. , 493 F.2d

709 (9th Cir. 1974). Due to the fact that the Defendants’ have a break in the Chain Of Title, they

cannot establish that the use is continuous. This reason alone is grounds to deny the Defendants’

Motion To Dismiss.

4. The Facts Alleged By The Plaintiffs Are Sufficient To Establish A Famous Mark

Throughout the years, certain court rulings have determined that famous marks deserve a

greater number of protection rights than those granted to lesser known marks. There are no

definitive characteristics that define fame for a mark; however, the loose requirements do at least

include that the mark be obviously distinct and that it achieves some public recognition and

renown. The Plaintiffs’ alleged that “Breathe” is the official e-cigarette of the renowned

Foxwoods Casino. The Plaintiffs’ also allege that the actions of Kimmel and his affiliated

companies have diluted the fame associated with the mark. The Defendants’ actions that have

caused the dilution are clearly identified as marketing, selling and distributing e-cigarettes with

the logo “breathe” on them. A mark owned by the Plaintiffs. Whether Plaintiffs’ mark is


http://www.leagle.com/cite/493%20F.2d%20709






19

“famous” pursuant to federal law is an issue for discovery and the finder of fact. The prerequisite

facts are properly alleged in the Complaint.

5. The Facts Alleged By The Plaintiffs Are Sufficient To Establish Unfair Competition

The Plaintiffs’ allege that Breathe is the owner of a registered trademark “breathe”. The

Defendants’ actions have infringed on the registered and common law mark and has forced the

Plaintiffs to compete with the marketing, selling and distributing of e-cigarettes bearing the logo

“breathe” which the Plaintiffs’’ actually owns. That is unfair competition. The prerequisite facts

are properly alleged in the Complaint.

6. The First-Filed Rule

The First-Filed Rule has been the policy of federal courts for nearly 200 years: "In all cases of

concurrent jurisdiction, the court which first has possession of the subject must decide it.” Smith v.

McIver, 22 U.S. (9 Wheat) 532, 535 (1824). However, the rule is discretionary. See Alltrade, Inc. v.

Uniweld Products, Inc., 946 F.2d 622, 629 (9th Cir. 1991)(“the most basic aspect of the first to file rule

that it is discretionary”). Courts analyzing the First Filed Rule avoid a rigid mechanical approach, instead

carefully considering the equities of the situation and whether exceptions to the first-filed rule apply. See

Curtis v. Citibank, N.A., 226 F.3d 133, 138 (2d Cir. 2006).

First, this action and the action pending in Tennessee do not qualify as “cases of concurrent

jurisdiction”. Presently, the only pending Motion before the Federal Court in Tennessee is Breathe’s

Motion To Dismiss For Lack Of Jurisdiction. Breathe contends it has no contacts with the State of

Tennessee. For this reason, the First-Filed Rule does not apply and this Court must reject the Defendants’

argument to Dismiss, Stay or Transfer this action to Tennessee.




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7. The Exceptions To The First-Filed Rule

The Second Circuit has recognized two exceptions to the First Filed Rule: (1) where

“special circumstances” exist, and (2) where the “balance of convenience” favors the second-

filed action. See Emplrs. Ins. v. Fox Entm't Group, Inc., 522 F.3d 271, 275 (2d Cir. N.Y. 2008).

The “special circumstances” exception applies where the first-filed case was an “anticipatory

filing” or the result of forum shopping. See Oleg Cassini, Inc. v. Serta, Inc., 2012 LEXIS 33875

*13 (S.D.N.Y. 2012).

8. Anticipatory Filing

What constitutes an anticipatory filing is a highly fact-dependent inquiry. See Schnabel v.

Ramsey Quantitative Sys. , 322 F. Supp. 2d 505, 511-512 (S.D.N.Y. 2004). Often, an anticipatory filing

takes the form of a Complaint seeking to invalidate claims articulated in a notice letter from a potential

plaintiff threatening litigation. The Second Circuit has made clear that where the filing of a Complaint

was “triggered by a notice letter, this equitable consideration may be a factor in the decision to allow the

later-filed action to proceed to judgment in the plaintiff’s chosen forum.” See Emplrs. Ins., 522 F.3d at275.

“For a legal action to be anticipatory, it must be filed in response to a direct threat of litigation

that gives specific warnings relating to subsequent legal action.” Employers Ins. Of Wassau, 522 F.3d at

276. Analyzing the case law, the Court held that “when a notice letter informs a defendant of the intention

to file suit, a filing date, and/or specific forum for the filing of the suit, the courts have found, in the

exercise of discretion, in favor of the second-filed action." J. Lyons & Co. v. Republic of Tea, Inc., 892

F. Supp. 486, 491 (S.D.N.Y. 1995). See, e.g., AFA Dispensing Grp. B.V. v. Anheuser-Busch, Inc., 740 F.

Supp. 2d 465, 470 (S.D.N.Y. 2010) (anticipatory filing found where notice letter stated that defendant

"has until 5PM EDT Friday July 16 to unequivocally confirm its commitment to perform under our

Agreement or it will face an injunction motion," and where the first claim was filed on the date on which









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plaintiff intended to petition for relief); CGI Solutions, LLC v. Sailtime Licensing Grp., LLC, No. 05-cv-

4120, 2005 U.S. Dist. LEXIS 28878, 2005 WL 3097533, at *3-4 (S.D.N.Y. Nov. 17, 2005) (although

notice letter “did not outright announce that it would be filing suit by a particular date,” a notice letter

stating that the party “may file a lawsuit seeking injunctive relief and civil damages for breach of contract,

conversion, theft of trade secrets, copyright infringement, unfair competition or other causes of action”

sufficiently “intimated its resolve to bring a lawsuit” and “sufficiently notified Plaintiffs of its resolve to

sue”); Chicago Ins. Co. v. Holzer, No. 00-cv-1062, 2000 U.S. Dist. LEXIS 8327, 2000 WL 777907, at *3

(S.D.N.Y. June 16, 2000) (first-filed suit was an anticipatory filing when the notice letter stated a specific

jurisdiction and gave a 48-hour deadline); Mondo, Inc. v. Spitz, No. 97-cv-4822, 1998 U.S. Dist. LEXIS

369, 1998 WL 17744 (S.D.N.Y. Jan. 16, 1998) (first-filed suit was anticipatory when notice letter stated a

specific venue).

In the instant action, two letters dated July 21, 2015 and July 26, 2015 gave notice to Corp. that

litigation with be forthcoming by the Plaintiffs. See Exhibits A, B and C To the Affidavit of Christopher

Brown dated December 28, 2015. Plaintiffs filed the instant litigation on August 14, 2015, just four (4)

days after Corp. filed an action in Tennessee. Corp.’s filing was clearly anticipatory. “For a legal action

to be anticipatory, it must be filed in response to a direct threat of litigation that gives specific warnings

relating to subsequent legal action.” Employers Ins. Of Wassau, 522 F.3d at 276. In Wassau, the Court

held that “when a notice letter informs a defendant of the intention to file suit, a filing date, and/or

specific forum for the filing of the suit, the courts have found, in the exercise of discretion, in favor of the

second-filed action." J. Lyons & Co., 892 F. Supp. at 491. For this reason, the Plaintiffs’ action should

not be dismissed by the Court

9. The Balance Of Conveniences

The First-Filed Rule can also be abrogated where the balance of conveniences decidedly tilts to

the second-filed action. The factors applied in this analysis are derived from and identical to the factors
















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considered on a motion to transfer venue under 28 U.S.C. § 1404(a): (1) plaintiff’s choice of forum, (2)

convenience of the witnesses, (3) location of relevant documents and ease to sources of proof, (4)

convenience of the parties, (5) locus of the operative facts, (6) availability of process to compel the

attendance of unwilling witnesses and (7) relative means of the parties. See Sead Pepic, Lifeguard

Master, LLC v. The Lifeguard Store, Inc., 12-cv-3171 (S.D.N.Y 2012).

The facts of this case establish that defendant Metro is a New York Company. Corp. is a

publicly traded in the State of New York. Corp has contracts enter with at least one New York Company.

Corp has held marketing events in New York City. Defendant Kimmel in his affidavit dated October

2015 alleged that he “sold” product in the State of New York in 2013 despite the fact that he cannot locate

any evidence of any sales in 2013. Plaintiff Breathe also has availed itself of the laws of New York by

selling product in New York. There is no doubt that all of the defendants have availed themselves of the

laws of State of New York. There is substantial connection to the State of New York and this Court

clearly has jurisdiction over this matter.

Furthermore, as Breathe and Glover has no connection to the State of Tennessee the “first-filed”

action in Tennessee has no jurisdiction. Hence, the “second-filed” action must proceed. For this reason,

this Court cannot dismiss, stay or transfer this action to Tennessee.

10. Joshua Kimmel As A Defendant

Kimmel is personally a defendant for his actions in regards to his use of the “breathe” mark that violates

the Plaintiffs’ use. Kimmel alleges his used the “breathe” mark personally from May 2013 through

October 2013. Glover and Breathe claim ownership of the mark during a substantially similar period of

time. Hence, Kimmel is a defendant for his direct activity in selling and marketing product bearing the

logo “ breateh”, not as a director of any entity. There is no attempt to “pierce the corporate veil”.




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C. CONCLUSION

For the reasons stated above, this Court must deny Defendants’ Motion to Dismiss, Stay

Or Transfer this action to Tennessee. The Defendants’ evidence fails to establish analogous use,

Tennessee does not have jurisdiction over the Plaintiffs’ and the Plaintiffs’ Complaint is factually

sufficient to sustain several causes of actions against the Defendants.

BREATHE LLC AND TYLER GLOVER

By Their Attorneys,

____________________________

Christopher L. Brown

New York Bar No. 2953891

Brown & Rosen LLC

Attorneys At Law

100 State Street, Suite 900Boston, MA 02109

617-728-9111 (T)

December 28, 2015 617-695-3202 (F)


Breathe LLC v Breathe Corp etc 12282015

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