Professional Documents
Culture Documents
coonty
Phone:(818)992-4463
Fax: (818)992-7629
ggoodheartlaw@gmail.com
NOV13 2014
Shorn
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CASE NO.:
Plaintiffs,
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BC 6a S 4 9
vs.
COMPLAINT FOR:
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1. Malicious Prosecution
Defendants,
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THE PARTIES
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existing under the laws ofthe State ofNevada and maintains its principagp^^ ^^uiln^ss^at J $
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Plaintiff is informed and believes and thereon alleges that Defendant Fleischer StudroS; c.
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(hereinafter"Defendant FSI" or "FSI") is a corporation organized under the laws oBM State
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COMPLAINT
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ofCalifornia that maintains its principal place ofbusiness at 10160 Cielo Drive, Beverly
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(hereinafter ARENT FOX) isa business entity doing business inthe State ofCalifornia, County of
Los Angeles, with a principal place of business located at 555 West Fifth Street, 48th Floor, Los
Angeles, California 90013. Plaintiff isinformed and believes and thereon alleges that defendant
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MANATT, PHILLIPS & PHELPS LLP (hereinafter MANATT) is a business entity doing
business in the State of California, County of Los Angeles, with a principal place of business
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Plaintiffdoes not knowthe true names of defendants DOES 1 through 50, inclusive, and therefore
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sues them by those fictitious names. Plaintiff isinformed and believes, and on the basis ofthat
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information and belief al leges, that each of those defendants were in some manner intentionally,
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negligently and proximately responsible for the events and happenings alleged in this complaint
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Plaintiff is informed and believes, and on the basis of that informationand belief alleges, that at
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all times mentioned in thiscomplaint, defendants were theagents andemployees of their co19
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defendants, and in doing the things alleged in this complaint were acting within the course and
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PRIOR LITIGATION
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Studios, Inc. v. A. V.E.L.A., Inc., 772 F. Supp. 2d 1135 (CD. Cal. 2008); FleischerStudios, Inc. v.
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A.V.E.L.A., Inc., 772 F. Supp. 2d 1155 (CD. Cal. 2009); Fleischer Studios, Inc. v. A.V.EL.A.,
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Inc., 636 F.3d 1115 (9* Cir. 2011); Fleischer Studios, Inc. v. A. V.E.L.A., Inc., 654 F.3d 958 (9th
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COMPLAINT
Cir. 2011); Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 925 F. Supp. 2d 1067 (CD. Cal. 2012)
7.
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FSI initiated theBoop action against A.V.E.LA. in2006. The Boop action was finally
determined on November 14,2012, in the form of anorder granting a motion for summary
judgmentin AVELA'sfavor.
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MANATT and ARENT FOX wereat all timescounsel on behalfof FSI in the abovementioned
prior actions.
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On September 29,2006, FSI, by and through its counsel, MANATT, filed suit, contending,
among other things, that AVELA infringed FSI's Betty Boop word mark and sought a
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permanent injunction. At some point in litigation ARENT FOX took over litigation on behalf
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of FSI.
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There was never a final judgment ontheissue ofwhether AVELA infringed on FSI's word
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mark until United States District Court Judge Audrey B. Collins issued an orderon November
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14,2012, granting AVELA's motion and denying FSI's motion as to the word mark
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FACTS
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public domain materials have fallen intodisrepairand have lost their original luster or
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attractiveness. AVELA registered copyrights withthe United States Copyright Office for its
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artistic works and indicated these works are based on and derivative of materials that have
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Sinceas early as 1989, AVELA acquired, restored, and reprinted a number of publicity movie
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COMPLAINT
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Before modifying and restoring the old works,AVELA took meticulous steps to comply with
copyrightlaw. AVELA does not desire to infringe on any copyrights. In this regard, AVELA
conducted considerable research to make sure that there were no recorded copyright
claimants for any of the old movie posters it restored. AVELA obtained actual copyright
reports from the U.S. Copyright Office whichidentified hundreds of old cartoons and movies
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for which no copyrightrenewal had been recorded,and hence entered into the public
domain. More than 50 Betty Boop cartoons appeared on the list of cartoons in the public
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domain.
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In 1998 and 2005, AVELA obtained formal written search reports from the U.S. Copyright
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Defendant FSI, for any of the old movie posters AVELA had acquired and restored, including
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AVELA obtained registration with the U.S. Copyright Office for its own copyrighted works,
making clear that AVELA's works are based on and derivative of materials that have been
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previously published.
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AVELA has sold copies of the restored Betty Boop posters for many years. More recently,
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AVELA has licensed third parties to produce and distribute merchandise, which utilizes the
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restored Betty Boop poster image.The products licensed by AVELA are based on these
restored vintage posters. AVELA does not license the production and distribution of
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merchandise utilizing anything other materials relating to Betty Boop except for the
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AVELA does not license to third parties any rights to use the name "Betty Boop" or any
imagery of Betty Boop other than how it is depicted in the poster artwork. The actual
COMPLAINT
merchandise licensed by AVELA use, as part of product package, only the actual Betty Boop
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AVELA does not license the production and distribution of merchandise utilizinganything
other than the poster artwork.
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AVELA does not use the TM symbol next to or in connection with the words "Betty Boop."
AVELA does not label nor has it ever labeled its Betty Boop merchandise as "Official"
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AVELA does not use the word "Betty Boop" in connection with the sale of goods. The only
time the name appears as part ofany product is when "BettyBoop" appeared as part of the
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original poster artwork. Oneach ofAVELA's licensed products, there is a tag,label, or other
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textual identification of the source of the product None of these labels identify or suggest in
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any manner that FSI is the source or originof the merchandise. AVELA's licensing
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Betty Boop is a prominently and centrally displayed feature of each item. Boop is the clear
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Until the prior actions, AVELA never received any complaints or correspondences indicating
that there has been any consumer confusion in the marketplace as to the source, origin,
affiliation, or sponsorship of any of AVELA's licensed products as it relates to FSI's licensed
products.
FSIhas no legal relationship with and is not the same entity as the company named
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Fleischer Studios, Inc., which existed when the Betty Boop character was created in the early
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1930s ("Original FSI"). In 1929, Dave and Max Fleischer formed Original FSI. Original FSI
COMPLAINT
was dissolved in 1946 for failure to pay taxes under Florida law.
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Between 1929 and 1946, Original FSI created andproduced various Betty Boop cartoon
films. Prior toits dissolution, Original FSI, by agreement dated May 24,1941, assigned to
Paramount Pictures all ofits assets, including all the rights inallcartoon films and all
characters contained therein. Despite the dissolution ofOriginal Fleischer Studios, the
Fleischer brothers, in their individual capacities, continued to claim or attempt to claim rights in
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the Betty Boop character. Dave Fleischer has gone so far as initiated dozens oflawsuits, the
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In the November 14,2012 decision, the Court found, as a matter or law, that AVELA's use ofthe
Betty Boop word mark is not atrademark use. In finding that the use ofthe word mark Betty
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Boop was an aesthetically functional use and not source-identifying trademark use, the court noted
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that FSI failed to present "a single instance ofaconsumer who was misled about the origin or
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sponsorship of Defendants' products." (Fleischer Studios. Inc. v. A.V.E.L.A., Inc., (2012) 925
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F.Supp.2d 1067,1074.)
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Inthe November 14,2012 decision, the Court found asa matter oflaw that AVELA's use ofBetty
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Boop was "fair use" and hence could not be atrademark violation. The Court stated "Here,
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Defendants use the phrase Betty Boop in connection with their products bearing the image of
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Betty Boop. It is extremely unlikely that a prospective customer would understand those words as
identifying the source ofthe goods rather than merely naming the character." (Fleischer Studios.
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In ruling in favor ofAVELA, Judge Collins found that as a matter oflaw that AVELA's use ofthe
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word Betty Boop does not indicate a source ororigin ofthe products, and is therefore not a
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Defendants FSI, MANATT and ARENT FOX didnot acton a good faith beliefwhen filing and
prosecuting the underlying action. FSI's purpose for filing the unsupportable lawsuit described
herein was to interfere with business relationships AVELA had withretailers who were selling
AVELA's Betty Boop merchandise. The lawsuitwas made for the purposeof scaringand
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There was no probablecause for the prior action in regards to the allegations regarding
infringement of the Betty Boop word mark. The named defendants, and each of them, had no
reasonable belief as to the validityof the prior action. There were no grounds upon which a
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infringement. The Court made a simple finding that "the phrase Betty Boop describesor
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identifies by name the characterDefendants depict on the products, that is, that this use is
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'otherwise than a mark,' descriptive, and not in bad faith." (Fleischer Studios. Inc. v. A.V.E.L.A..
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Inc.. (2012) 925 F.Supp.2d 1067,1076.) No reasonable attorney could believe that use of the
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word Betty Boop, as used by AVELA in describing the character Betty Boop, was in any way an
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There was malice on the part of the named defendants, and each of them, in that the underlying
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action was filed for an improper purposeof harassing the AVELA and AVELA'S clients. FSI,
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with the aid of MANATT and ARENT FOX,made a decision to go after AVELA and threaten
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trademark claims. In fact, the allegations regarding trademark infringementwere decided in
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AVELA's favor as a matter of law in the November 14,2012 ruling on AVELA's motion for
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FSI, MANATT and ARENT FOX threatened and brought the underlying actionfor trademark
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related to Betty Boop. The veiled threat was sent to AVELA and any client of AVELA that if
you dare use anything related to Betty Boop, you will be sued unless you pay off FSI. FSI
MANATT and ARENT FOX knew that AVELA in no way violated the Betty Boop word mark
32.
FSI engages in the perverse practice of using or threatening to use the court system to
threaten its competitors into submission. Through the years, FSI has sent hundreds, if not
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thousands, of cease and desist letters to competitors. The cease and desist letters have no
substantive value and are simply meant to intimidate and scare off legitimate competitors.
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FSI abuses the legal system by indiscriminately filing lawsuits to see what will eventually
stick. It is essentially a continuous, sustained, and aggressive fishing expedition the purpose
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of which is not to protect any alleged trademark, but rather to try to scare off competitors
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and their client's by threat of lawsuits and actual lawsuits. MANATT and ARENT FOX are
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FSI's heavy handed and litigious behavior has the effect of exhorting money from its
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competitors, who are conducting business lawfully. FSI, MANATT and ARENT FOXforced
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infringementwhich had no likelihoodof success and was brought in an attempt to try to bleed
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AVELA dry.
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Since the early 1990s, FSI has initiated over thirty-eight lawsuits in federal court The bulk
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competition. The vast and overwhelming majority of these cases ended in voluntary
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dismissal of the case or, at the very least, voluntary dismissal of multiple defendants within
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the case. The vast remainder of the cases ended in court ordered default judgments.
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MANATT and ARENT FOX were awareof this past litigation historyof FSI and chose to help
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COMPLAINT
FSI in its attempt to intimidate and improperly file claims which had no likelihood ofsuccess.
MANATr and ARENT FOX did in fact file, maintain and argue the underlying matter on behalf
ofFSI, which upon review ofthe facts, a reasonable law firm should know had no chance of
success on its merits. ARENT FOX, MANATT and FSIhadno concern withthe merits of the
underlying case and instead chose to attempt to game the system and use lawsuits, such as the one
filed against AVELA, asa weapon and warning to others that if they dare use Betty Boop,
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The extreme and outrageous behavior ofFSI has continued since court rulings decided that FSI
had no trademark protection asit related to AVELA's use ofBetty Boop. FSI has continued its
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malicious behavior by erecting billboards which claim exclusive rights ofBetty Boop and intimate
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that any use ofBetty Boop not authorized by FSI isa trademark violation and such use will be
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challenged in a court oflaw. The threats are directly meant to hurt AVELA and intimate
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businesses who would otherwise do businesswith AVELA. FSI is aware that the threats made on
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the billboards, and elsewhere, are not true but they persist anyway.
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After FSI had become aware of the limitations of its alleged trademark a billboard surfaced in
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Brazil which stated that the Betty Boop character and worldwide trademarkis the exclusive
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property ofFSI and that anymisuse ofthe character is a serious violation. The billboard
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went on to claim, "All violatorswillbe pursued to the fullest extent of the law." The purpose
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of this untruthful Billboard was to intimidate those businesses who would otherwise engage
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Defendant FSI is not a successor in any way to the 1930s company. Bytaking the exact name
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as the original FSI, Defendant FSI sought to create the impression that it was in fact the
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same FSI that existing when Betty Boop and other well-known characters were created.
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Defendant has a known habit of manipulating facts to exaggerate the extent of its rights. The
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COMPLAINT
"The Court is troubled by Plaintiffs casual conflation in its submissions of itself and the
unrelated, long-defunct Original Fleischer that initially owned the rights in Betty Boop...As
this Court and the Ninth Circuit have noted, the present Fleischer Studios is legally
unrelated to the original 1930s Fleischer Studios. Evidently, Plaintiff used this sleight-of6
hand attempt to persuade the reader that its legal interest in Betty Boop is of longer
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standing than it actually is. The Court is not persuaded or favorably impressed by this
tactic." Fleischer Studios. Inc.v. A.V.E.L.A.. Inc. 925 F.Supp. 2d 1067,1070 n.l (CD. Cal.
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2012).
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Defendants FSI, MANATT and ARENT FOX knew or should have known that FSI lacked
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exclusive rights to the Betty Boop name. Defendant FSI, MANATT and ARENT FOX knew or
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should have known there was no continuity of trademark rights from the Original FSI.
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With all intellectual property rights, to the extent they still exist, having been long since
transferred to others, and with the knowledge that others held such rights, FSI nevertheless
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decided to create a new company, taking the exact name as the Original FSI, and apparently
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began to license Betty Boop merchandise. Despite losing at every stage in the prior
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litigation, Defendant FSI nonetheless continues to threaten AVELA with legal action over the
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Notwithstanding the judgments stating the contrary, FSI nonetheless continues to threaten
AVELA, its licensees, and potential licensees with legal action and accuse AVELA, without
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merit or justification, of breaking the law.
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With legal defeats in the U.S., Defendant FSI shifted its attention towards interfering with
AVELA's domestic and international business relations. With this goal in mind, Defendant FSI
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sent threatening letters to AVELA's clients, licensees and potential licensees, in which they
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COMPLAINT
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Defendant FSI did not stop at sending misleading letters. Rather, Defendant initiated additional
lawsuits, throughout the world, based on the already litigated issues of copyright and trademark
infringement of the Betty Boop characterrights. These suits were initiated internationally
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After the district court granted summaryjudgment in favor of AVELA on the trademark matter,
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Plaintiff receivednotice from Italythat it was to be joined as a party in a Betty Boop trademark
infringement suit in the courtof Bari, Italy. A few months afterthe Ninth Circuit's favorable
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ruling, Defendant FSI and Hearst Holdings, Inc. ("Hearst") filedan actionfor copyright
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infringement against AVELA before the High Court of Justice, Chancery Division, in the United
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Kingdom. The action also alleged trademark infringement arisingout of BettyBoop imagery, an
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issuethat FSI already litigated and lost in the U.S. AVELA has further beendragged into
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litigation in Brazil overits alleged infringement of the Betty Boop character copyrights and
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trademarks.
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Malicious Prosecution
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Plaintiffsre-allege and incorporate herein by reference each and every allegation contained
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On November 14,2012, the underlying action was concluded and resulted in a ruling in
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favor of AVELA. The Court ruled on summary judgment that AVELA did not infringe on any
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alleged word mark FSImay have had as a matter of law. The court found there was no
grounds upon which FSI's trademark violation allegations could proceed.
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COMPLAINT
48.
There was no probable cause inbringing the trademark infringement claim inthe
underlying lawsuit There was no reasonable belief as to the validity of the prior action and
claim by FSI, MANATT orARENT FOX. There is no conceivable way a reasonable attorney
would believe there was a meritorious claim fortrademark violations in the underlying
action. The lawwas clearand welldefined that use ofa word mark, such as the use by
AVELA ofBetty Boop, isdescriptive, fair use and not a trademark violation. FSI isa
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sophisticated entity who is very litigious and knew that the use ofBetty Boop by AVELA did
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FSI MANATT and ARENT FOX did nothave probable cause to instigate and/or continue the
Boop litigation once itwas underway. Defendants knew orreasonably should have know
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that the Boop litigation was without merit from the moment the original Complaint had
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beenfile and at all times while the action was pending. Furthermore, Defendants pursued
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the action even though they knew or reasonably shown have know the claims they were
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FSI acted primarily for a purpose other than securing a proper adjudication. That purpose
included, but was not limited to,actual hostility or ill will towards AVELA, and the desireto
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unjustly exclude AVELA from the market and ruin the finances and reputation ofLeo
Valencia, AVELA's owner. The underlying actionwas broughtwith malice in that FSI
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sought, in bring the action, to threaten AVELA and any businesses doing business with or
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wanting to do business with AVELA ARENT FOX and FSI knew that theclaim oftrademark
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infringement was notsupportable but brought it anyway because the purpose wasnot to
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winin courtand seekto righta legal wrong but rather to cause damage to AVELA and ruin
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AVELA's relationship with other businesses. The malice is further shown by FSI continuing
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The actions of FSI MANATT and ARENT FOX in bringing the meritless and unsupportable
underlying claim for trademark infringement was malicious, intentional and oppressive
conduct and was a substantial factor and proximate cause in bringing about AVELA's harm.
AVELA was damaged by having to pay great sums to defend meritless claims brought by the
named defendants and lost business as a result of the threatened claims. Defendants intent
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in bringing the underlying lawsuit was to bleed AVELA of funds and to intimidate anyone
wising to do business with AVELA AVELA was damaged bythe named defendants as a
result ofthe bringing ofthe underlying claim in a sum tobe proved at trial.
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proved at trial. AVELA's suffered damages include, but are not limited to: out ofpocket
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expenditures, including attorney's fee and other legal fees, business losses, general harm to
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good will reputation and credit, and mental anguish. The aforementioned conduct was
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oppressive, malicious, duplicitous, and performed with willful and conscious disregard ofthe
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multiple court decision with the intent to deprive AVELA ofits rights. Accordingly, AVELA is
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Plaintiffs re-allege and incorporate herein by reference each and every allegation contained
is.
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COMPLAINT
54.
AVELA and anexpansive network ofdomestic and international licensing agencies and
to AVELA.
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AVELA is informed and believes and thereon alleges that FSI knew ofthe relationship
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FSI intended todisrupt this relationship by threatening unsupported legal actions against
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FSI engaged in and continues to engage inwrongful conduct by threatening tosue and bring
lawsuits based on an allegedclaimof trademark violations when FSI knows such claims to
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trademark infringement claims is for the purpose ofintimidating those businesses that
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would otherwise engage in commerce with AVELA and to run costsup for AVELA. FSI
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would likelyshy away from doing business with AVELA even if the claims are meritless.
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The relationship between AVELA andmany ofits licensing partners and retailers has been
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disrupted asa result ofthe wrongful conduct ofFSI. The treatoflitigation stresses and often
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breaks the relationship AVELA has formed with these other businesses. FSI misrepresents
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that AVELA is infringing on FSI's trademark as it relates to Betty Boop even though they
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know such claims are not true and have already been adjudicated and the rulings were in
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AVELA's favor.
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FSI intended to and has in fact harmed the name and reputation ofAVELA by repeatedly
alleging that AVELA is infringing on FSI's trademark when FSI knows that AVELA's use does
not infringe on any such word mark trademark.
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COMPLAINT
60.
The wrongful conduct of FSI in alleging trademark infringement as itrelates to AVELA's use
of Betty Boop is asubstantial factor in causing harm to AVELA. AVELA has lost business,
sales and contacts as a result fo the threats and unfounded allegations of FSI.
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at trial, but which includes the loss ofcustomers, licensing agreements, royalties, and good will
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reputation. Moreover, Defendant's misconduct will continue unabated barring relief, and AVELA
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The aforementioned conduct was oppressive, malicious, duplicitous, and performed with willful
and conscious disregard ofthe multiple court decision with the intent to deprive AVELA ofits
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6. For such other and further relief as the court may deem proper.
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COMPLAINT