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CHARLES L. ROBERTS (5137; croberts@wnlaw.com) MATTHEW A. BARLOW (9596; mbarlow@wnlaw.com) DAVID P. JOHNSON (13260, djohnson@wnlaw.com) WORKMAN | NYDEGGER 1000 Eagle Gate Tower 60 East South Temple Salt Lake City, Utah 84111 Telephone: (801) 533-9800 Facsimile: (801) 328-1707 Attorneys for Plaintiff SKULLCANDY, INC. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION ) SKULLCANDY, INC., a Delaware Corporation, ) ) ) Plaintiff, ) v. ) ) SKELANIMALS, LLC, a California Limited ) ) Liability Company, and JAZWARES, INC., a ) Florida Corporation, ) ) Defendants. ) ) Civil Action No.: 2:11-cv-01039-DN COMPLAINT (JURY TRIAL DEMANDED) Magistrate Judge David Nuffer

Skullcandy, Inc. (Skullcandy) complains against defendants Skelanimals, LLC (Skelanimals) and Jazwares, Inc. (Jazwares) (Skelanimals and Jazwares are collectively referred to herein as Defendants), and for good cause alleges as follows: THE PARTIES 1. Skullcandy is a corporation organized under the laws of the State of Delaware with its

principal place of business in Park City, Utah.

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2.

On information and belief, Skelanimals is a limited liability company organized under

the laws of the State of California, with a principal place of business located at 23586 Calabasas Road #210, Calabasas, California 91302, and is doing business in this judicial district. 3. On information and belief, Skelanimals may be served through Alison Kenney, its

designated agent for service of process, at 23586 Calabasas Road #210, Calabasas, California 91302. 4. On information and belief, Jazwares is a Florida corporation with a principal place of

business located at 1067 Shotgun Road, Sunrise, Florida 33326, and is doing business in this judicial district. 5. On information and belief, Skelanimals may be served through Laura Zebersky, its

designated agent for service of process, at 1067 Shotgun Road, Sunrise, Florida 33326. JURISDICTION AND VENUE 6. This is an action for trademark infringement arising under the provisions of the

Trademark Laws of the United States of America, Title 15 of the United States Code. 7. Subject matter jurisdiction over Skullcandys claims is conferred upon this Court by

28 U.S.C. 1331, 1332, and 1338(a). 8. On information and belief, Defendants have solicited business in the State of Utah,

transacted business within the State of Utah and attempted to derive financial benefit from residents of the State of Utah, including benefits directly related to the instant trademark infringement cause of action set forth herein. 9. On information and belief, Defendants have placed their infringing products into the

stream of commerce throughout the United States, which products have been offered for sale, sold and/or used in the State of Utah and/or in the District of Utah.

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10.

Defendants, directly or through their subsidiaries, divisions, groups or distributors,

have committed acts of infringement in this judicial district, are subject to personal jurisdiction in this judicial district, and/or are doing business in this judicial district. 11. Venue is proper in this judicial district under 28 U.S.C. 1391(c). GENERAL ALLEGATIONS 12. Since at least as early as 2003, Skullcandy has developed and continuously used a

logo in the shape of a skull on or in connection with various goods, including headsets, headphones, ear buds, earphones, backpacks, book bags, sports bags, handbags, t-shirts, sweatshirts, and hats, in interstate commerce throughout the United States and throughout the world (the Skullcandy Logo). 13. Skullcandy is the owner of the following federal trademark registrations on the

Skullcandy Logo that have been granted by the United States Patent and Trademark Office (collectively, the Skullcandy Logo Registrations): REG. NO. 3,168,754 MARK GOODS AND SERVICES Devices for hands-free use of mobile phones; Digital audio players; Digital phones; Earphones; Headphones; MP3 players; Portable listening devices, namely, MP3 players; Portable media players; Protective helmets; Protective helmets for sports; Sports helmets (in International Class 009) Clothing and headwear, namely t-shirts, sweatshirts, and hats (in International Class 025) Bags, namely, backpacks, book bags, sports bags, handbags (in International Class 018)

3,381,053

3,794,944

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3,871,064

Wallets (in International Class 018)

14.

As a result of Skullcandys continuous use of the Skullcandy Logo Registrations,

the Skullcandy Logo has become an asset of substantial value to Skullcandy as a distinctive indicator of the origin and quality of Skullcandys products. 15. By using the Skullcandy Logo, Skullcandy has developed significant and valuable

goodwill in eyes of the consuming public. FIRST CLAIM FOR RELIEF Infringement of the Skullcandy Logo Registered in the 754 Registration 15 U.S.C. 1114 16. 17. Skullcandy realleges the foregoing allegations as though set forth herein. On November 7, 2006, U.S. Trademark Registration No. 3,168,754 (the 754

Registration), depicting an image of a skull, a copy of which is attached hereto as Exhibit A, was duly and legally issued to Skullcandy. Skullcandy is the owner of all right, title and interest in and to the 754 Registration, including the right to sue for and recover all past, present and future damages for infringement of the rights conferred by the 754 Registration. 18. Upon information and belief, Defendants have used and continue to use in commerce

various skull logos in association with at least headphones, earphones, mp3 players, portable media players, digital audio players, and protective helmets. 19. The skull logos used by Defendants on the aforementioned products are colorable

imitations of Skullcandys registered logo, and Defendants use of such logos in association with the aforementioned products is likely to cause confusion, to cause mistake, or to deceive the consuming public.

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20.

Upon information and belief, Defendants use of the skull logos on the

aforementioned products was and is committed with the purpose of exploiting and trading on the substantial goodwill and reputation of Skullcandy as symbolized by and associated with the Skullcandy skull logo as registered in the 754 Registration. 21. Defendants conduct described herein constitutes Federal trademark infringement in

violation of Section 32 of the Lanham Act, 15 U.S.C. 1114. 22. Skullcandy has been and continues to be damaged by Defendants actions in an

amount to be established at trial, including Defendants profits and Skullcandys lost profits, plus the costs of this action. 23. Upon information and belief, Defendants had actual knowledge of Skullcandys

exclusive rights in the 754 Registration and willfully and deliberately infringed and continue to infringe Skullcandys skull logo as registered in the 754 Registration. 24. Pursuant to Section 35 of the Lanham Act, 15 U.S.C. 1117, Skullcandy is entitled to

a judgment for damages not to exceed three times the amount of its actual damages, together with interest thereon, in an amount to be determined at trial. 25. Skullcandy has no adequate remedy at law for the damage to its reputation and

goodwill and will continue to be irreparably damaged unless Defendants are permanently enjoined from their infringing and illegal conduct, pursuant to Section 34 of the Lanham Act, 15 U.S.C. 1116. SECOND CLAIM FOR RELIEF Infringement of the Skullcandy Logo Registered in the 053 Registration 15 U.S.C. 1114 26. 27. Skullcandy realleges the foregoing allegations as though set forth herein. On February 12, 2008, U.S. Trademark Registration No. 3,381,053 (the 053

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Registration), depicting an image of a skull, a copy of which is attached hereto as Exhibit B, was duly and legally issued to Skullcandy. Skullcandy is the owner of all right, title and interest in and to the 053 Registration, including the right to sue for and recover all past, present and future damages for infringement of the rights conferred by the 053 Registration. 28. Upon information and belief, Defendants have used and continue to use in commerce

various skull logos in association with clothing, including at least t-shirts, sweatshirts, and hats. 29. The skull logos used by Defendants on the aforementioned products are colorable

imitations of Skullcandys registered logo, and Defendants use of such logos in association with the aforementioned products is likely to cause confusion, to cause mistake, or to deceive the consuming public. 30. Upon information and belief, Defendants use of the skull logos on the

aforementioned products was and is committed with the purpose of exploiting and trading on the substantial goodwill and reputation of Skullcandy as symbolized by and associated with the Skullcandy skull logo as registered in the 053 Registration. 31. Defendants conduct described herein constitutes Federal trademark infringement in

violation of Section 32 of the Lanham Act, 15 U.S.C. 1114. 32. Skullcandy has been and continues to be damaged by Defendants actions in an

amount to be established at trial, including Defendants profits and Skullcandys lost profits, plus the costs of this action. 33. Upon information and belief, Defendants had actual knowledge of Skullcandys

exclusive rights in the 053 Registration and willfully and deliberately infringed and continue to infringe Skullcandys skull logo as registered in the 053 Registration.

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34.

Pursuant to Section 35 of the Lanham Act, 15 U.S.C. 1117, Skullcandy is entitled to

a judgment for damages not to exceed three times the amount of its actual damages, together with interest thereon, in an amount to be determined at trial. 35. Skullcandy has no adequate remedy at law for the damage to its reputation and

goodwill and will continue to be irreparably damaged unless Defendants are permanently enjoined from their infringing and illegal conduct, pursuant to Section 34 of the Lanham Act, 15 U.S.C. 1116. THIRD CLAIM FOR RELIEF Infringement of the Skullcandy Logo Registered in the 944 Registration 15 U.S.C. 1114 36. 37. Skullcandy realleges the foregoing allegations as though set forth herein. On May 25, 2010, U.S. Trademark Registration No. 3,794,944 (the 944

Registration), depicting an image of a skull, a copy of which is attached hereto as Exhibit C, was duly and legally issued to Skullcandy. Skullcandy is the owner of all right, title and interest in and to the 944 Registration, including the right to sue for and recover all past, present and future damages for infringement of the rights conferred by the 944 Registration. 38. Upon information and belief, Defendants have used and continue to use in commerce

various skull logos in association with bags, including at least backpacks, book bags, sports bags, and handbags. 39. The skull logos used by Defendants on the aforementioned products are colorable

imitations of Skullcandys registered logo, and Defendants use of such logos in association with the aforementioned products is likely to cause confusion, to cause mistake, or to deceive the consuming public.

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40.

Upon information and belief, Defendants use of the skull logos on the

aforementioned products was and is committed with the purpose of exploiting and trading on the substantial goodwill and reputation of Skullcandy as symbolized by and associated with the Skullcandy skull logo as registered in the 944 Registration. 41. Defendants conduct described herein constitutes Federal trademark infringement in

violation of Section 32 of the Lanham Act, 15 U.S.C. 1114. 42. Skullcandy has been and continues to be damaged by Defendants actions in an

amount to be established at trial, including Defendants profits and Skullcandys lost profits, plus the costs of this action. 43. Upon information and belief, Defendants had actual knowledge of Skullcandys

exclusive rights in the 944 Registration and willfully and deliberately infringed and continue to infringe Skullcandys skull logo as registered in the 944 Registration. 44. Pursuant to Section 35 of the Lanham Act, 15 U.S.C. 1117, Skullcandy is entitled to

a judgment for damages not to exceed three times the amount of its actual damages, together with interest thereon, in an amount to be determined at trial. 45. Skullcandy has no adequate remedy at law for the damage to its reputation and

goodwill and will continue to be irreparably damaged unless Defendants are permanently enjoined from their infringing and illegal conduct, pursuant to Section 34 of the Lanham Act, 15 U.S.C. 1116. FOURTH CLAIM FOR RELIEF Infringement of the Skullcandy Logo Registered in the 064 Registration 15 U.S.C. 1114 46. 47. Skullcandy realleges the foregoing allegations as though set forth herein. On November 2, 2010, U.S. Trademark Registration No. 3,871,064 (the 064

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Registration), depicting an image of a skull, a copy of which is attached hereto as Exhibit D, was duly and legally issued to Skullcandy. Skullcandy is the owner of all right, title and interest in and to the 064 Registration, including the right to sue for and recover all past, present and future damages for infringement of the rights conferred by the 064 Registration. 48. Upon information and belief, Defendants have used and continue to use in commerce

various skull logos in association with bags, including at least wallets. 49. The skull logos used by Defendants on the aforementioned products are colorable

imitations of Skullcandys registered logo, and Defendants use of such logos in association with the aforementioned products is likely to cause confusion, to cause mistake, or to deceive the consuming public. 50. Upon information and belief, Defendants use of the skull logos on the

aforementioned products was and is committed with the purpose of exploiting and trading on the substantial goodwill and reputation of Skullcandy as symbolized by and associated with the Skullcandy skull logo as registered in the 064 Registration. 51. Defendants conduct described herein constitutes Federal trademark infringement in

violation of Section 32 of the Lanham Act, 15 U.S.C. 1114. 52. Skullcandy has been and continues to be damaged by Defendants actions in an

amount to be established at trial, including Defendants profits and Skullcandys lost profits, plus the costs of this action. 53. Upon information and belief, Defendants had actual knowledge of Skullcandys

exclusive rights in the 064 Registration and willfully and deliberately infringed and continue to infringe Skullcandys skull logo as registered in the 064 Registration.

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54.

Pursuant to Section 35 of the Lanham Act, 15 U.S.C. 1117, Skullcandy is entitled to

a judgment for damages not to exceed three times the amount of its actual damages, together with interest thereon, in an amount to be determined at trial. 55. Skullcandy has no adequate remedy at law for the damage to its reputation and

goodwill and will continue to be irreparably damaged unless Defendants are permanently enjoined from their infringing and illegal conduct, pursuant to Section 34 of the Lanham Act, 15 U.S.C. 1116. FIFTH CLAIM FOR RELIEF Federal Unfair Competition/False Designation of Origin 15 U.S.C. 1125(a) 56. 57. Skullcandy realleges the foregoing allegations as though set forth herein. Defendants use of the skull logos on the aforementioned products, alone or in

combination with other words or designs on its labeling, advertising, marketing, and selling of headphones is likely to cause confusion or mistake, or to deceive as to the affiliation, connection, or association of Defendants with Skullcandy, or as to the origin, sponsorship, or approval of Defendants goods, services, or commercial activities by Skullcandy, and thus constitutes unfair competition and false designation of origin in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a). 58. Upon information and belief, Defendants were aware of the 754, 052, 944, and

064 Registrations when Defendants committed their acts of infringement in willful and flagrant disregard of Skullcandys lawful rights. 59. Upon information and belief, Defendants intend to cause confusion and mistake

and intend to deceive the buyers of products offered or sold under the infringing marks into

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believing that they are buying products produced by, marketed by, sponsored by, approved of or licensed by Skullcandy. 60. Upon information and belief, Defendants will, if not enjoined by this Court,

continue in their acts of unfair competition by the use of the false designations and false representations set forth above. Such improper acts by Defendants have caused, and will continue to cause, Skullcandy immediate and irreparable harm. 61. As a result of Defendants acts of unfair competition as set forth above,

Skullcandy has suffered damages, the exact amount of which will be proven at trial. 62. Pursuant to Section 35 of the Lanham Act, 15 U.S.C. 1117, Skullcandy is

entitled to a judgment for damages not to exceed three times the amount of its actual damages, together with interest thereon, in an amount to be determined at trial. 63. Skullcandy has no adequate remedy at law for the damage to its reputation and

goodwill and will continue to be irreparably damaged unless Defendants are permanently enjoined from their infringing and illegal conduct, pursuant to Section 34 of the Lanham Act, 15 U.S.C. 1116. SIXTH CLAIM FOR RELIEF Federal Trademark Dilution 15 U.S.C. 1125(c) 64. 65. Skullcandy realleges the foregoing allegations as though set forth herein. The Skullcandy Logo has become famous and distinctive throughout the U.S. and

worldwide through Skullcandys continuous and exclusive use of it in connection with Skullcandys products and services.

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66.

Because Skullcandy products and services have gained a reputation for superior

quality and performance, the Skullcandy Logo (which is always used in connection with Skullcandy products and services) has gained substantial renown. 67. After the Skullcandy Logo became famous, Defendants adopted their skull logo and

have infringed and continue to infringe the Skullcandy Logo in connection with the advertisement, promotion, and sale of Defendants products and services. 68. Defendants use their skull logo in commerce in a manner that is likely to cause

dilution by blurring or dilution by tarnishment of the Skullcandy Logo, in violation of Skullcandys rights under 15 U.S.C. 1125(c). 69. Thus, Defendants wrongful infringement of the Skullcandy Logo dilutes, blurs,

tarnishes, and whittles away at the distinctiveness of the Skullcandy Logo. 70. As a direct and proximate result of Defendants conduct, the valuable Skullcandy

Logo will continue to be irreparably harmed, tarnished, and diluted. Skullcandy has no adequate remedy at law that will compensate for the continued and irreparable harm it will suffer if Defendants actions are allowed to continue. 71. Defendants have used and continue to use colorable imitations of the Skullcandy

Logo willfully and with the intent to dilute the Skullcandy Logo, and with the intent to trade on the reputation and goodwill of Skullcandy and the Skullcandy Logo. Accordingly, this is an exceptional case within the meaning of 15 U.S.C. 1117(a). 72. As a direct and proximate result of Defendants conduct, the value of the Skullcandy

Logo has been damaged, and Skullcandy has also suffered other damages in an amount to be proved at trial.

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SEVENTH CLAIM FOR RELIEF Utah Statutory Unfair Competition Utah Code Ann. 13-5(A)-101, et seq. 73. 74. Skullcandy realleges the foregoing allegations as though set forth herein. Defendants actions complained of herein constitute an intentional business act that is

unlawful, unfair, and fraudulent, and has led to the material diminution in value of Skullcandys intellectual property. 75. Defendants use of the image of a skull displayed on headphones, earphones, mp3

players, portable media players, digital audio players, protective helmets, t-shirts, sweatshirts, hats, backpacks, book bags, sports bags, handbags, and wallets, as complained of herein constitutes an infringement of Skullcandys trademark rights in the Skullcandy Logo. 76. As such, Defendants actions are in violation of the Utah Unfair Competition Act,

Utah Code Ann. 13-5-102(4)(a). 77. Pursuant to Utah Code Ann. 13-5a-103, Skullcandy is entitled to actual damages,

costs, attorney fees, and punitive damages. 78. Skullcandy has no adequate remedy at law for the damage to its reputation and

goodwill and will continue to be irreparably damaged unless Defendants are first preliminarily and then permanently enjoined from their infringing and illegal conduct. EIGHTH CLAIM FOR RELIEF State Law Deceptive Trade Practices Utah Code Ann. 13-11a-1, et seq. 79. 80. Skullcandy realleges the foregoing allegations as though set forth herein. Skullcandy has continuously used and extensively advertised its various merchandise

using the Skullcandy Logo for at least eight (8) years throughout the United States and, through such

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use and advertisement, has obtained common law rights in the Skullcandy Logo throughout the United States. 81. Skullcandy is the owner of the Skullcandy Logo, and the consuming public

recognizes it as being distinctive and as identifying the high quality goods and services associated with Skullcandy. 82. Defendants, by their actions as set forth hereinabove, have caused, cause, and will

continue to cause a likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of their products; have caused, cause, and will continue to cause a likelihood of confusion or misunderstanding as to the affiliation, connection, association with, or certification by another of their products; have represented, represent, and will continue to represent that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or qualities that they do not have, and have thereby engaged in deceptive trade practices, pursuant to, inter alia, Utah Code Ann. 13-11a-3(1)(a), (b), and (e). 83. Defendants conduct as set forth hereinabove gives rise to a cause of action for

deceptive trade practices and related wrongs under the statutory and common law of the State of Utah and other states, including at least Utah Code Ann. 13-11a-1, et seq. 84. On information and belief, Defendants have engaged in deceptive trade practices

against Skullcandy in willful and deliberate disregard of the rights of Skullcandy and the consuming public. 85. By reason of Defendants acts of deceptive trade practices, Skullcandy has suffered

damages and irreparable harm.

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86.

By reason of the foregoing, Skullcandy is entitled to preliminary and permanent

injunctive and monetary relief against Defendants, along with its attorneys fees and costs, pursuant to at least Utah Code Ann. 13-11a-4(2)(a), (b), and (c), as more fully set forth herein below.

PRAYER FOR RELIEF Wherefore, Skullcandy prays for the following relief: A. Judgment that Defendants have infringed the marks registered in the 754, 052,

944, and 064 Registrations; B. Entry of a permanent injunction pursuant to 15 U.S.C. 1114 and/or 1125(c)(1)

enjoining Defendants, their officers, agents, servants, employees and those persons in active concert or participation with them from further acts of trademark infringement, unfair competition, deceptive trade practices, or trademark dilution; C. D. E. An award of Defendants profits; An award of Skullcandys damages; An order that Skullcandy be granted pre-judgment and post-judgment interest on

the damages caused to it by reason of Defendants trademark infringement; F. A declaration by the Court that this an exceptional case and that Skullcandy be

granted its reasonable attorneys fees in accordance with 15 U.S.C. 1117; G. An order, pursuant to Utah Code Ann. 13-5a-103(1)(b), granting Skullcandy its

actual damages, costs and attorneys fees, and punitive damages in an amount to be determined at trial for Defendants acts of unfair competition in violation of Utah state law;

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H.

An award, pursuant to Utah Code Ann. 13-11a-4, granting Skullcandy injunctive

relief, the greater of its actual damages or $2,000, costs, and attorneys fees for Defendants deceptive trade practices in violation of Utah state law; and I. Any other relief that the Court may deem just and proper under the circumstances. DEMAND FOR JURY TRIAL Skullcandy demands trial by jury on all claims and issues so triable. Dated: November 14, 2011 WORKMAN | NYDEGGER By: /s/ Matthew A. Barlow Charles L. Roberts Matthew A. Barlow David P. Johnson Attorneys for Plaintiff SKULLCANDY, INC.

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