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14Nov 2015
Nov 14, 2015

“Stripping Down” the King of Diamonds Infringement Dispute

Fly Low, Inc. v. Moore, 2015 U.S. Dist. LEXIS 141085 (S.D. Fla. Oct. 16, 2015).

Whether they will admit it or not, almost anyone living in South Florida has heard of King of Diamonds, the popular (and likewise notorious) afro-centric strip club which caters to rap stars such as Rick Ross, boxers including Floyd Mayweather, and other celebs. Putting aside the stereo types of raining dollar bills, poll dancing, and erotic female dancers, King of Diamonds has become an important platform for young hip hop artists to try to break into the hip hop music scene – with many of South Florida’s best known artists graduating amongst its ranks. Many of our music clients, including Ariza Obey, have at one time performed there.

So let’s start with the back story: King of Diamonds was created in 2002 by the late Jake Galardi, who was ultimately able to create what the Miami New Times coined last year as the “titty bar empire” stretching from Las Vegas to Miami. See http://www.miaminewtimes.com/music/king-of-diamonds-sold-to-new-york-investors-6468968 (last viewed Oct. 15, 2012). Those were their words, not mine. In the 2008 timeframe, Galardi (allegedly) approached Leonard Moore to help design a new logo for King of Diamonds as well as potentially help manage the club. Purportedly, Mr. Moore met with Galardi in October 2002 to present the logo (which was created by a third-party graphics designer) as well as a confidential business plan to help advance the King of Diamonds. Apparently, Mr. Moore did not get the gig, but Galardi and his business partner John Steve Ennis began using the following logo to promote the club:

King Of Diamonds

The good news for King of Diamonds is that its operating company, Fly Low Inc. (“FLI”), in September 2011 “threw some dollars” at a Miami Trademark Attorney to file before the Trademark Office the logo in Class 41 (for night club services) and Class 43 (for bar and cocktail lounge services). That application issued as U.S. Trademark Registration No. 4,135,316 on May 1, 2012. What is even better news for King of Diamonds is that apparently Mr. Moore (or his graphics designer) never sought to obtain a copyright registration as record notice of their artistic creation in the underlying logo.

After the business relationship between Galardi and Moore soured, it appears that Moore sought retaliation against Galardi by using a similar logo – without consent or permission – for purposes of promoting unrelated adult entertainment services local to the South Florida area. To “strip” away Moore’s ability to use the unauthorized logo – FLI did what any South Floridian would do – sue. However, what comes next is what is interesting.

past-dueWell, after FLI sued under U.S. Trademark Registration No. 4,135,316, Moore attempted to present a theory of copyright infringement as a counterclaim– namely based upon the suggested facts above – that he (with the help of a graphics designer) created the logo and it apparently not used with his consent (or assigned to FLI). In addition, Moore attempted to lodge other related claims sounding in breach of contract and tortious interference (amongst other theories). However, Moore attempted to do this pro se – in other words without legal counsel.

FLI filed a motion for dismissal, under Federal Rule of Civil Procedure 12(b)(6), Moore’s counterclaim on three basis (1) that the copyright infringement theory (as well as the other claims) were not pled in sufficient detail to provide adequate pleading notice under Federal Rule of Civil Procedure 8(a); (2) that Moore awaited well past the deadline in the court’s scheduling order to bring his theories; and (3) that Moore did not present evidence that he owned or had rights to any registered copyright for the logo.

District Judge Marcia G. Cooke, here in the Southern District of Florida, addressed all three basis for dismissal through her written order issued on October 16, 2015.

After DeadlineIn first addressing whether Moore’s pro se allegations provided sufficient pleading notice, Judge Cooke noted that the court must accept all factual allegations as true and take them in the light most favorable to the claimant. Christopher v. Harbury, 536 U.S. 403, 406, 122 S. Ct. 2179, 153 L. Ed. 2d 413 (2002); Watts v. Florida Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007). The court’s consideration on a motion to dismiss is limited to the pleadings and exhibits attached thereto. Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (citing GSW, Inc. v. Long County, 999 F.2d 1508, 1510 (11th Cir. 1993)). Pro se pleadings are to be liberally construed. Miller v. Donald, 541 F.3d 1091, 1100 (11th Cir. 2008).    Based upon this standard, Judge Moore noted that Moore’s pleadings did not consist of the requisite ” short and plain statement…showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the…claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

Judge Cooke next addressed the second issue with Moore’s counterclaim – namely, that it was tardy. Judge More noted that she had set a firm scheduling order and Moore’s theories were sought well beyond the timetable to amend.

unauthorized-access-and-useJudge Cooke then addressed the last – and fatal problem with Moore’s counterclaim – specifically, that he did not have a registration issued by the U.S. Copyright Office. In bringing a copyright infringement claim, a claimant must plead: (1) ownership of a valid copyright; and (2) the defendant’s unauthorized copying of protected elements of the copyrighted material. Roig v. Star Lofts on the Bay Condominium Assoc., Inc., 2011 U.S. Dist. LEXIS 142625, 2011 WL 6178882, at *2 (S.D. Fla. Dec. 12, 2011). A claimant seeking to assert a copyright under federal law must first register the copyright prior to filing a civil action for copyright infringement. 17 U.S.C. § 411(a).  Here, Moore merely brought allegations suggesting that he was indeed the creator of the King of Diamonds logo – he admitted that he did not own the copyright. He also failed to prove evidence of actual copying of the protected elements of the copyrighted material. Therefore, the court dismissed Defendant’s copyright infringement counterclaim (and related causes of action) for lack of jurisdiction.

get-it-in-writingThere are many takeaway lessons here to learn from. First and foremost, businesses that have third-party graphics artists, consultants, and other third-parties to help propose new trade names, logos, and branding for their business should make sure to have written assignments of not only the trademark rights, but also any related copyrights so that these issues don’t pop up later – including through costly litigation. Spending a few hundred dollars on a written assignment agreement can save a business tens of thousands of dollars down the road.

Second, going at it alone and defending a Miami Trademark Infringement claim pro se is almost always a lose-lose scenario. Here, Moore’s delay in filing the counterclaim theories of breach of contract and tortious inference – even if they had overwhelming merit – was a costly mistake, and one that would not have been made by competent counsel.

Lastly, copyright registrations are one of the most affordable forms of copyright protection. For a few hundred bucks (or for some in South Florida a night at the “club”), one could have a reputable Miami Intellectual Property Attorney prepare and obtain a registration as record evidence of ownership of your artistic creations.

If you have questions regarding how to protect your business logo, as well as how to provide record notice of your ownership in your logo, please contact us to discuss your legal rights before a competitor tries to “strip” them away.

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