(main body of complaint)

 

Plaintiffs Karen Dudnikov, and Michael Meadors, pro se, complains of E! Entertainment Television, ("E!") and allege as follows: I. NATURE OF THE ACTION         1. This is an action for Declaratory Judgment under the Declaratory Judgment Act, 28 U.S.C. § 2201. The claims for relief are covered by the Lanham Act 15 U.S.C., and through the Copyright Act 17, U.S.C. § 101 et seq. Additionally, this court has jurisdiction under the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. §512 (g) (3) (D) wherein jurisdiction is established in this court as part of the counter notification procedure. Venue is also proper in this judicial district pursuant to 28 U.S.C. § 1391(b) in that a substantial part of the events or omissions giving rise to this law suit, as well as injury to the plaintiffs, have occurred or will occur in this district, as a result of the unlawful acts of the defendant as outlined below.         2. Plaintiffs Karen Dudnikov, a/k/a TABBERONE, and husband Michael Meadors, are Colorado residents who run a unincorporated home-based business that primarily does business on the eBay internet auction site as well as through a web site, www.tabberone.com.         3. Using the eBay seller name of witnessprotectionprogram and tabberone, the plaintiffs hand manufacture fabric items from lawfully acquired copyrighted fabrics and then sell these fabric items on the web site as well as through eBay. The Plaintiffs also buy and resell a variety of collectibles and other items in the same manner.         4. Upon information and belief, defendant E! Entertainment Television, a California corporation with it's headquarters located at 5750 Wilshire Boulevard, Los Angeles, CA 90036.         5. Upon information and belief, the defendant makes and distributes DVDs designed to promote a variety of broadcast televisions programs for Emmy consideration. These DVDs are distributed as unsolicited gifts to members of ATAS/NATAS.         6. Upon information and belief, the defendant has actively engaged in threatening and intimidating persons who have attempted to sell the aforementioned DVDs on eBay. These actions include threats of litigation through cease and desist letters as well as terminating eBay auctions selling the DVDs distributed by E!. II. Jurisdiction and Venue         7. This Court has jurisdiction over the federal claims in this action under the Trademark Laws of the United States, Lanham Act Sections 32, 39, 43(a), and 43 (c)(1), 15 U.S.C. §§ 1114, 1121 and 1125(a)(c)(1), the Copyright Act 17, U.S.C. § 101 et seq. and the Judicial Code of the United States, 28 U.S.C. §§ 1331, 1338(a) and (b). This Court has supplemental jurisdiction over any common law and state statutory claims under 28 U.S.C. § 1367.         8. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(2), in that a substantial part of the events giving rise to the claims occurred in this judicial district and plaintiffs are doing business within this judicial district.         9. This action arises out of defendant's improper use of the eBay VeRO Program to terminate an auction listing by the plaintiffs. The defendant alleged in an affidavit to eBay, under penalty of perjury, that the auction by the plaintiffs was infringing because the plaintiffs were infringing upon their trademarks and/or copyrights.         10. By this complaint, plaintiffs seek a Declaratory Judgment affirming the right under law to sell lawfully acquired DVDs without further interference from the defendant. Plaintiffs seek a Declaratory Judgment affirming the right to refer to E! with these sales and any other similar sales as well as their right to use detailed pictures of the products offered for sale. III. BACKGROUND FACTS A. Plaintiffs' Business         11. The plaintiffs manufacture a wide variety of fabric items from a selection of fabrics lawfully purchased through a variety of national outlets. In the course of business, the plaintiffs also buy and resell various collectibles and other items.         12. The plaintiffs offer these items for sale using the eBay internet auction site using the seller identification of witnessprotectionprogram and Tabberone. They have been selling fabric items and collectibles on the internet auction site since 1998.         13. The plaintiffs also maintain a web site, www.tabberone.com, through which fabric items and collectibles are also sold. This web site has been in continuous operation since 1999. B. The Defendant and The Defendant's Unlawful Acts         14. The defendant is the holder of trademark rights and copyright rights to the name "E!".         15. Upon information and belief, the defendant aggressively protects the trademarked names. These actions include policing of internet auctions sites. On the auction sites, auctions selling DVDs distributed by E! have been terminated at the request of the defendant.         16. Upon information and belief, E! knows, and its counsel knows, or reasonably should know, that the resale of lawfully acquired product is permitted under copyright law, specifically The First Doctrine. E! knows, and their counsel knows, or reasonably should know, that under the Lanham Act, the term "authorized" refers to the counterfeiting of a mark or trademarked product and does not apply to lawfully acquired trademarked material. The intimidation tactics used by E! are therefore illegal and immoral. They rely on the fact people can't fight back because of the potential enormous legal expense. 1. Perjury         17. Upon information and belief, on or about November 17, 2003, the defendant requested eBay terminate the auction listing by Tabberone, falsely alleging to eBay in an affidavit that the article offered in this auctions was an infringing item. The false affidavit filed by the defendant constitutes perjury under 17 U.S.C Section 512. 2. Tortious Business Interference         18. By listing the item on eBay, a contract existed between the plaintiffs and eBay whereby eBay agreed to host the listing for a period of time. During that time it was reasonable to expect another party to place a bid on the item. Receiving a bid constitutes a binding contract to sell and to buy. The defendant reasonably knew contracts were in effect because the defendant had to look at the listings to affirm information used to terminate the auctions. The defendant improperly instructed eBay to terminate the auction listing effectively and unilaterally canceling the contracts that existed. This action resulted in loss of future revenue and good will to the plaintiffs. The action by the defendant constitutes tortious business interference under Colorado law.         19. Offering an item on eBay and receiving a bid constitutes a binding contract to sell and to buy. The defendant reasonably knew a contract was in effect because the defendant reasonably had to look at the listing to affirm information used to terminate the auction. The defendant instructed eBay to terminate the auction listings effectively and unilaterally canceling the contract that existed. This action resulted in loss of future revenue to Tabberone. The action by the defendant constitutes tortious business interference under Colorado law. 3. Negligent Representation         20. Defendant made representations to eBay that plaintiff was engaged in an unlawful activity and violating federal laws.         21. The aforementioned representations to eBay were made in the course of business, profession and employment of the defendant as representative of the defendant.         22. Such representations were false.         23. Defendant failed to exercise reasonable care and competence in communicating said information to eBay.         24. Defendant should reasonably have expected that eBay would rely on said representations.         25. These representations have cost the plaintiff future sales and good will. 4. Fraudulent Representation         26. The aforesaid representations by the defendant, described in Paragraph 19, were false.         27. At the time said representations were made, the defendant knew that they were false or was indifferent as to their truth or falsity.         28. Said representations were material to eBay in deciding whether or not to terminate the auctions. Part of the auction terminations was that eBay sent all bidders an email that stated the plaintiffs had violated the law and infringed upon rights held by the defendant. These emails also strongly urged the bidder not to complete the auction by purchasing the items.         29. The defendant made said representations with the intent of inducing eBay to rely on them to terminate the auctions and send libelous emails to the bidders.         30. eBay did in fact, rely on the representations, and acted in accordance therewith in terminating the auctions, and such reliance was justifiable. 5. Outrageous Conduct         31. Upon information and belief, defendant's representative who terminated the auctions was not properly trained to judge whether there was a trademark infringement but merely "following orders" and lacked the training to handle subsequent inquiries. Form letters were sent in response to inquiries.         32. Defendant's conduct towards plaintiffs, as described in paragraphs above, is so extreme in degree as to go beyond the bounds of decency and is regarded as atrocious and intolerable in a civilized community.         33. Defendant's acts were extreme and outrageous and were done with the intent to cause Plaintiff severe emotional distress and to defame to plaintiffs. IV. Communications         34. As stated above, defendant replied to inquiries as to the situation with what appears to be a form letter. Despite several attempts, the only communication from them stated:         Please note that the E! DVD contains a warning which states, "Distribution or sale expressly prohibited." This warning is located on the DVD itself next to E!'s copyright notice along the outer edge of the DVD. Also, please be aware that it is a violation of federal copyright law to sell on eBay DVDs that contain E! content which were created solely for Emmy consideration purposes only for members of ATAS/NATAS. If other companies allow this type of re-sale practice, E! is unaware of it, nor does E! follow the practice of allowing others to infringe E!'s valuable copyrights and intellectual property.         35. What is evident from defendant's email is that defendant is terminating all auctions without bothering to ascertain what was being sold and whether the items being sold are lawfully acquired.         36. The defendant does not maintain an eBay VeRO "About Me" page as do many other corporations.         37. The response from defendant admits they will not stop and infers they will use all available means to stop persons from selling the E! items on eBay.         38. Based upon the previously established lack of reasonable response by the defendant, the plaintiffs felt further communication would be fruitless. It was apparent these actions would continue. On November 21, 2003, plaintiffs filed a counter notice with eBay pursuant to 17 U.S.C. §512, faxing and sending copies to the defendant and counsel of record as could best be determined. V. ARGUMENTS A. COPYRIGHTS 1. First Sale Doctrine         39. The common-law roots of the first sale doctrine allows the owner of a particular copy of a work to dispose of that copy. This judicial doctrine was grounded in the common-law principle that restraints on the alienation of tangible property are to be avoided in the absence of clear congressional intent to abrogate this principle. This doctrine appears in section 109 of the Copyright Act of 1976. Section 109(a) specifies that this notwithstanding a copyright owner's exclusive distribution right under section 106 the owner of a particular copy or phonorecord that was lawfully made under title 17 is entitled to sell or further dispose of the possession of that copy or phonorecord.         40. The defendant has offered no proof the DVD offered for sale was obtained illegally.         41. The plaintiffs lawfully purchased the DVD from another eBay seller. The subsequent re-sale of the DVD falls wholly under the First Sale Doctrine. B. TRADEMARKS 1. Trademark Infringing Activities a. FAIR USE         42. Fair use of trademarks in conjunction with selling or promoting the sale of goods made by the mark holder is acceptable. The defendant appears to contend that selling the DVDs is a violation because they say so.         43. It is a fundamental principle marking an outer boundary of the trademark monopoly that, although trademark rights may be acquired in a word or image with descriptive qualities, the acquisition of such rights will not prevent others from using the word or image in good faith in its descriptive sense, and not as a trademark. See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 12-13 (2d Cir. 1976); Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055, 1058 (7th Cir. 1995); United States Shoe Corp. v. Brown Group, Inc., 740 F. Supp. 196, 198-99 (S.D.N.Y. 1990); Holzwarth v. Hulse, 14 N.Y.S.2d 181, 181 (Sup. Ct. 1939); Johnson & Johnson v. Seabury & Johnson, 67 A. 36, 38 (N.J. 1907); Restatement (Third) of Unfair Competition § 28 (1995); 3A Louis Altman, Callmann on Unfair Competition, Trademarks and Monopolies § 21.24 (4th ed. 1983); Margreth Barrett, Intellectual Property 760-61 (1995). The principle is of great importance because it protects the right of society at large to use words or images in their primary descriptive sense, as against the claims of a trademark owner to exclusivity. See U.S. Shoe, 740 F. Supp. at 198-199. This common-law principle is codified in the Lanham Act, which provides that fair use is established where "the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, . . . which is descriptive of and used fairly and in good faith only to describe the goods or services of . . . [a] party, or their geographic origin." 15 U.S.C. § 1115(b)(4).         44. One could hardly sell a used automobile in the classified ads or other mediums without telling prospective buyers the make and model of the vehicle. The use of pictures of the DVD and the name "E!" does not violate fair use.         45. Regardless whether the protected mark is descriptive, suggestive, arbitrary, or fanciful as used in connection with the product or service covered by the mark, the public's right to use descriptive words or images in good faith in their ordinary descriptive sense must prevail over the exclusivity claims of the trademark owner. See Dowbrands, L.P. v. Helene Curtis, Inc., 863 F. Supp. 963, 966-69 (D. Minn. 1994)         46. In short, fair use permits others to use a protected mark to describe aspects of their own goods, provided the use is in good faith and not as a mark. See 15 U.S.C. § 1115(b)(4). That is precisely the case here.         47. The fair use doctrine permits use of a protected mark by others to describe certain aspects of the user's own goods. See Car­Freshner Corp. v. S.C. Johnson & Son, Inc., 70 F.3d 267, 270 (2d Cir. 1995).         48. The Restatement (Third) of Unfair Competition adopts as a relevant factor the "physical nature of the use in terms of size, location, and other characteristics in comparison with the appearance of other descriptive matter or other trademarks." Restatement (Third) of Unfair Competition §28 cmt. c. (1995).         The Restatement also observes that the scope of the fair use should be related to the degree to which the descriptive meaning is relevant to the goods with which it is associated in the alleged infringement, and whether there are other terms available to describe the pertinent characteristic. See id. Where a mark incorporates a term that is the only reasonably available means of describing a characteristic of another's goods, the other's use of that term in a descriptive sense is usually protected by the fair use doctrine. See New Kids on the Block v. News Am. Publ'g, Inc., 971 F.2d 302, 308 (9th Cir. 1992); 2 McCarthy, supra, §10:14 at 10-26 ("Since the use of a descriptive title cannot serve to prevent others from using the title in a descriptive, non­trademark sense, others may be able to use the title as the only term available.").         49. As Justice Holmes clarified,         "A trade mark[sic] only gives the right to prohibit the use of it so far as to protect the owner's good will against the sale of another's product as his. . . . When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo." (3). Unauthorized Use         50. Court after court refers to "counterfeiting" and "knockoffs" when applying the Lanham Act. The Lanham Act plainly refers to someone who, without authorization, uses or imitates another's mark in such a way as to possibly cause confusion. Confusion is the benchmark of Trademark Infringement. Without confusion there is no infringement. The plaintiffs have not counterfeited any products or marks. Sale of the DVD is covered under the First Sale Doctrine. No further authorization is required and since there is no counterfeiting of product or of marks, there is no violation of the Lanham Act. A. VeRO Program         51. eBay has a Verified Rights Owners program called the VeRO ProgramŪ that allows verified rights owners to terminate auctions listings when the verified rights owner submits an affidavit, under penalty of perjury, stipulating the auction is "infringing" upon their copyright and/or trademark rights. The decision to terminate rests solely in the hands of the VeRO member. This gives the VeRO member the ability to cancel auctions even when the "offending" party, is in fact, within their legal rights to sell. Instead of being compelled to sue in federal court, the VeRO member can intimidate through auction cancellations and the threat of possible suspension from eBay should the offending activity continue.         52. Parties seeking to use the VeRO Program become members of eBay and are therefore subject to the rules and regulations of eBay. As such, the defendant accepted and recognized that offering an item for auction is a pending contract to perform and to sell. When an item receives a bid, there is a binding contract to buy. Terminating an auction without cause, as alleged in this complaint, constitutes tortious interference with business on the part of the defendant. Terminating the auctions also creates the possibility of permanent suspension of the plaintiffs from eBay as habitual offenders.         53. Additionally, the defendant's VeRO representative knew, or reasonably should have known in their capacities as legal or quasi-legal representatives for intellectual property, that the items on auction that were terminated was not infringing, and therefore they willfully and knowingly committed perjury as defined in the Digital Millennium Copyright Act, 17 U.S.C. Section 512 simply to intimidate and attempt to control the marketplace. V. CONCLUSION         Based upon the above arguments, the plaintiffs firmly believe that the actions of the defendant are calculated, improper, unethical and illegal and will continue unless stopped. The defendant, like many other companies, is using the threat of federal court action to interfere with businesses conducting business legally and within the applications of federal law. The actions of the defendant has caused financial harm, present and future, to the plaintiffs, as well as defamed the conduct and character of their business.         Therefore the plaintiffs request the court issue a declaratory judgment affirming:         1. Persons selling lawfully acquired DVDs are allowed reasonable "fair use" of images and descriptions that pertain to the items being offered without interference and threats from the copyright and trademark holder.         2. Persons selling lawfully acquired DVDs are protected by the "First Sale Doctrine".         3. Persons selling lawfully acquired DVDs do not need "authorization" to offer for sale these items.         4. "Cease and Desist" letters (or emails) that reference the above items (1 & 2 & 3) are illegal and a violation of professional ethics.         5. Auctions terminated for reasons stated in 1, 2 and 3 constitute tortious interference with business.         6. Auctions terminated for reasons stated in 1, 2 and 3 constitute perjury under 17 U.S.C Section 512.         7. Plaintiffs request the court grant legal costs and any other reimbursements deemed to be appropriate.         8. Should the issues go to trial, the plaintiffs request a jury trial.     Respectively submitted this 21st day of November, 2003   Karen Dudnikov Michael Meadors 3463 Maskoke Trail P.O. Box 87 Hartsel, Colorado 80449 PRO SE PLAINTIFFS 303-913-4702 303-913-6075     (end of complaint)