Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 1 of 54 PageID #: 2456
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`
`FULL CIRCLE UNITED, LLC,
`
` CASE NO. 1:20-CV-03395-BMC
`
`
`
`Plaintiff,
`
`
`
`v.
`
`BAY TEK ENTERTAINMENT, INC.,
`
`Defendant.
`
`
`
`
`BAY TEK ENTERTAINMENT, INC.,
`
`Counterclaim Plaintiff,
`
`v.
`
`FULL CIRCLE UNITED, LLC,
`
`Counterclaim Defendant,
`
`and
`
`
`ERIC PAVONY,
`
`
`
`
`
`
`
`
`
`
`Additional Counterclaim
`Defendant.
`
`
`MEMORANDUM OF LAW IN SUPPORT OF BAY TEK ENTERTAINMENT, INC.’S
`MOTION FOR SUMMARY JUDGMENT
`
`
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 2 of 54 PageID #: 2457
`
`TABLE OF CONTENTS
`
`Page
`
`PRELIMINARY STATEMENT ........................................................................................ 1
`
`B.
`
`UNDISPUTED FACTS IN SUPPORT OF THE INSTANT MOTION ............................ 4
`A.
`Background Facts.................................................................................................... 4
`1.
`The Skee-Ball Mark and SBI ...................................................................... 4
`2.
`Full Circle and Eric Pavony ........................................................................ 5
`3.
`SBI/FCU Lawsuit........................................................................................ 5
`4.
`Bay Tek ....................................................................................................... 5
`5.
`Standard vs. Custom Lanes ......................................................................... 6
`Undisputed Facts That Defeat FCU’s Claims ......................................................... 6
`1.
`Breach Of The License Agreement (Count I) ............................................. 6
`2.
`Breach Of The Alleged Oral Revenue Share Agreement (Count II) ........ 10
`3.
`Tortious Interference (Count III) .............................................................. 12
`4.
`Lost Profits ................................................................................................ 12
`Undisputed Facts Entitling BTE To Summary Judgment On Certain
`Counterclaims ....................................................................................................... 13
`1.
`Breach Of The License Agreement (Count VI) ........................................ 13
`2.
`Claims For Declaratory Judgment (Counts VII and VIII) ........................ 16
`3.
`Trademark Infringement (Count I), False Endorsement (Count II),
`And Common Law Unfair Competition (Count IV) ................................. 16
`
`C.
`
`B.
`
`LEGAL ARGUMENT ...................................................................................................... 17
`A.
`BTE Is Entitled To Summary Judgment On FCU’s Claims ................................. 17
`1.
`FCU’s Claim For Breach Of The License Agreement Fails ..................... 17
`2.
`FCU’s Claim For Breach Of An Alleged Oral Agreement Fails .............. 20
`3.
`FCU’s Tortious Interference Claim Fails As A Matter Of Law ............... 26
`4.
`FCU Cannot Establish Lost Profits As A Matter Of Law ........................ 27
`BTE Is Entitled To Summary Judgment On Certain Of Its Counterclaims .......... 34
`1.
`FCU Breached The License Agreement As A Matter Of Law ................. 34
`2.
`BTE Is Entitled To Declaratory Relief As A Matter Of Law ................... 38
`3.
`BTE Is Entitled To Judgment On Its Trademark Infringement Claim ..... 40
`4.
`BTE Is Entitled To Judgment On Its False Endorsement Claim .............. 42
`5.
`BTE Is Entitled To Judgment On Its Unfair Competition Claim ............. 43
`6.
`Pavony Is Individually Liable ................................................................... 43
`7.
`FCU Cannot Avoid Liability By Invoking The License Agreement’s
`Notice-And-Cure Provision ...................................................................... 44
`
`i
`
`I.
`
`II.
`
`III.
`
`
`
`
`
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 3 of 54 PageID #: 2458
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`16 Casa Duse, LLC v. Merkin,
`791 F.3d 247 (2d Cir. 2015).....................................................................................................27
`
`Advanced Water Techs., Inc. v. Amiad U.S.A., Inc.,
`457 F. Supp. 3d 313 (S.D.N.Y. 2020) ................................................................................34, 35
`
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) .................................................................................................................17
`
`Anderson v. Regents of Univ. of Cal.,
`203 Wis.2d 469, 554 N.W.2D 509 (Ct. App.1996) .................................................................27
`
`Apollon Waterproofing & Restoration Corp. v. Bergassi,
`241 A.D.2d 347 (1st Dep’t 1997) ............................................................................................33
`
`Atateks Foreign Trade Ltd. v. Private Label Sourcing, LLC,
`2009 WL 1803458 (S.D.N.Y. June 23, 2009) .......................................................28, 30, 31, 32
`
`Awards.com, LLC v. Kinko’s, Inc.,
`42 A.D.3d 178 (1st Dep’t 2007) ........................................................................................30, 31
`
`Baskin-Robbins Ice Cream Co. v. D & L Ice Cream Co., Inc.,
`576 F. Supp. 1055 (E.D.N.Y. 1983) ..................................................................................41, 43
`
`BJB Ltd. v. iStar Jewelry LLC,
`533 F.Supp. 3d 83 (E.D.N.Y. 2021) ........................................................................................41
`
`Bowmar Instrument Corp. v. Cont’l Microsystems, Inc.,
`497 F.Supp. 947 (S.D.N.Y. 1980)............................................................................................42
`
`Burck v. Mars, Inc.,
`571 F. Supp. 2d 446 (S.D.N.Y. 2008) ......................................................................................42
`
`Carson Optical, Inc. v. Prym Consumer USA, Inc.,
`11 F. Supp.3d 317 (E.D.N.Y. 2014) ........................................................................................43
`
`City of N.Y. v. Tavern on the Green Int’l LLC,
`351 F.Supp. 3d 680 (S.D.N.Y. 2018) .......................................................................................44
`
`
`
`ii
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 4 of 54 PageID #: 2459
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Co. Embotelladora Del Pacifico, S.A. v. Pepsi Cola Co.,
`650 F. Supp. 2d 314 (S.D.N.Y. 2009) ................................................................................28, 39
`
`Coastal Aviation, Inc. v. Commander Aircraft Co.,
`937 F. Supp. 1051 (S.D.N.Y. 1996) .........................................................................................29
`
`Crabtree Auto., Inc. v. BMW of N. Am.,
`105 A.D.2d 825 (2d Dep’t 1984) .............................................................................................25
`
`Danusiar v. Auditchain USA, Inc.,
`No. 20-CV-1477 (KNF), 2020 WL 6126378 (S.D.N.Y., Oct. 8, 2020) ..................................20
`
`Daubert. Amorgianos v. Nat’l. R.R. Passenger Corp.,
`303 F.3d 256 (2d Cir. 2002).....................................................................................................31
`
`Dial-A-Mattress Operating Corp. v. Mattress Madness, Inc.,
`847 F. Supp. 18 (E.D.N.Y. 1994) ............................................................................................39
`
`Express Indus. & Terminal Corp. v. New York State Dept. of Transp.,
`93 N.Y.2d 584 (1999) ..............................................................................................................20
`
`First Bank v. HKA Enters., Inc.,
`183 Wis. 2d 418 (1994) ...........................................................................................................25
`
`Glob. Truck & Equip. Co. v. Palmer Mach. Works, Inc.,
`628 F. Supp. 641 (N.D. Miss. 1986) ........................................................................................26
`
`Grayson v. Ressler & Ressler,
`271 F. Supp. 3d 501 (S.D.N.Y. 2017) ......................................................................................21
`
`Great Earth Int’l. Franchising Corp. v. Milks Dev.,
`311 F. Supp.2d 419 (S.D.N.Y. 2004) .......................................................................................29
`
`Ho Myung Moolsan, Co. v. Manitou Mineral Water, Inc.,
`2010 WL 4892646 (S.D.N.Y. Dec. 2, 2010),
`aff’d, 501 F. App’x 85 (2d Cir. 2012) ......................................................................................28
`
`In re Ore Cargo, Inc.,
`544 F.2d 80 (2d Cir. 1976).......................................................................................................19
`
`
`
`iii
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 5 of 54 PageID #: 2460
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`John Hancock Mut. Life Ins. Co. v. Carolina Power & Light Co.,
`717 F.2d 664 (2d Cir. 1983).....................................................................................................19
`
`Kayo Corp. v. Fila U.S.A., Inc.,
`2022 WL 381995 (S.D.N.Y. Jan. 26, 2022) ............................................................................29
`
`Kenford Co., Inc. v. Cnty of Erie,
`67 N.Y.2d 257 (1986) ........................................................................................................28, 33
`
`Kenford Co. v. Cnty of Erie,
`73 N.Y.2d 312 (1989) ........................................................................................................28, 30
`
`Ketcham v. Hall Syndicate, Inc.
`236 N.Y.S.2d 206 (Sup.Ct. N.Y. Cnty. 1962),
`aff’d 242 N.Y.S.2d 182 (1st Dep’t 1963).................................................................................39
`
`Kleinschmidt Div. of SCM Corp. v. Futuronics Corp.,
`41 N.Y.2d 972 (1977) ..............................................................................................................21
`
`Kosher Provisions, Inc. v. Blue & White Food Prod. Corp.,
`No. CV-04-361 (NGG) (SAC), 2005 WL 1890039 (E.D.N.Y. Aug. 9, 2005) ........................21
`
`Lakeside Bridge & Steel Co. v. Mountain State Const. Co.,
`400 F.Supp. 273 (E.D. Wis. 1975) ...........................................................................................24
`
`Linden v. Cascade Stone Co., Inc.,
`283 Wis. 2d 606 (Ct. App. 2005) .............................................................................................24
`
`Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
`475 U.S. 574 (1986) .................................................................................................................17
`
`Mitsubishi Motors N. Am. Inc. v. Grand Auto., Inc.,
`2018 WL 2012875 (E.D.N.Y., Apr. 30, 2018) ........................................................................40
`
`Murray v. Holiday Rambler, Inc.,
`83 Wis.2d 406, 265 N.W.2d 513 (Ct. App. 1978) ...................................................................29
`
`New York Trust Co. v. Believe It Or Not, Inc.,
`178 N.Y.S.2d 12 (1958) ...........................................................................................................42
`
`
`
`iv
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 6 of 54 PageID #: 2461
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`New York Univ. v. Cont’l Ins. Co.,
`87 N.Y.2d 308 (1995) ..............................................................................................................20
`
`Old Country Toyota Corp. v. Toyota Motor Distribs., Inc.,
`966 F.Supp. 167 (E.D.N.Y.1997) ......................................................................................23, 24
`
`Ontel Prod. Corp. v. Airbrushpainting Makeup Store,
`2017 WL 1969681 (S.D.N.Y. May 12, 2017) .........................................................................40
`
`Or. Potato Co. v. Kerry Inc.,
`No. 20-CV-92-JDP, 2022 WL 1153469 (W.D. Wisc. Apr. 19, 2022) ....................................29
`
`PCS Sales (USA), Inc. v. Nitrochem Distrib. LTD,
`2004 WL 944541 (S.D.N.Y. May 3, 2004),
`aff’d, 128 F. App’x 817 (2d Cir. 2005) ....................................................................................21
`
`Peguero v. 601 Realty Corp.,
`58 A.D.3d 556 (1st Dep’t 2009) ..............................................................................................44
`
`PH Int’l Trading Corp. v. Nordstrom, Inc.,
`555 F.App’x 9 (2d Cir. 2013) ..................................................................................................26
`
`R.G. Group, Inc. v. Horn & Hardart Co.,
`751 F.2d 69 (2d Cir. 1984).......................................................................................................22
`
`Realtime Data, LLC v. Melone,
`104 A.D.3d 748 (2d Dep’t 2013) .............................................................................................19
`
`Renschler Co., Inc. v. MSA Prof’l Servs., Inc.,
`348 Wis.2d 763 (Ct. App. 2013) ..............................................................................................33
`
`Revealed Water Prods., Inc. v. Arrowhead Plastic Eng’g, Inc.,
`No. IP99-0069-C-T/G, 2000 WL 1469571 (S.D. Ind., Sept. 29, 2000) ..................................26
`
`Richard A. Rosenblatt & Co., Inc. v. Davidge Data Sys. Corp.,
`295 A.D.2d 168(1st Dep’t 2002) .............................................................................................24
`
`Roe v. City of Waterbury,
`542 F.3d 31 (2d Cir. 2008).......................................................................................................17
`
`
`
`v
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`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 7 of 54 PageID #: 2462
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Sang Lan v. Time Warner, Inc.,
`2014 WL 764250 (S.D.N.Y., Feb. 25, 2014) ...........................................................................21
`
`Schonfeld v. Hilliard,
`218 F.3d 164 (2d Cir. 2000).....................................................................................................31
`
`Scott-Macon Sec., Inc. v. Zoltek Cos., Inc.,
`2007 WL 2914873 (2d Cir. Oct. 4, 2007) ................................................................................35
`
`Seasbury Const. Corp. v. Jeffrey Chain Corp.,
`289 F.3d 63 (2d Cir. 2022).......................................................................................................18
`
`Sevel Argentina, S.A. v. General Motors Corp.,
`46 F. Supp.2d 261 (S.D.N.Y. 1999) .........................................................................................21
`
`SG Block, Inc. v. Osang Healthcare Co.,
`2022 WL 16787936 (E.D.N.Y. Sept. 22, 2022) ................................................................28, 29
`
`SSAA-A, Inc. v. Morgan Stanley Dean Witter & Co.,
`281 A.D.2d 201 (1st Dep’t 2001) ............................................................................................30
`
`Starke v. SquareTrade, Inc.,
`913 F.3d 279 (2d Cir. 2019).....................................................................................................20
`
`Sunshine Steak, Salad & Seafood, Inc. v. W.I.M. Realty, Inc.,
`135 A.D.2d 891 (3d Dep’t 1987) .............................................................................................44
`
`Superview Network, Inc. v. SuperAmerica, a Div. of Ashland Oil, Inc.,
`827 F. Supp. 1392 (E.D. Wis. 1993) ..................................................................................20, 21
`
`Swerdloff v. Mobil Oil Corp.,
`74 A.D.2d 258 (2d Dep’t 1980) ...............................................................................................25
`
`T & M Inventions, LLC v. Acuity Brands Lighting, Inc.,
`2013 WL 1754862 (E.D. Wis. Apr. 23, 2013) .........................................................................21
`
`Talon Indus., LLC v. Rolled Metal Prod., Inc.,
`2022 WL 3754800 (D.N.J. Aug. 30, 2022) .............................................................................25
`
`
`
`vi
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`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 8 of 54 PageID #: 2463
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Target Corp. v. RichRelevance, Inc.,
`2017 WL 590316 (S.D.N.Y., Feb. 13, 2017) ...........................................................................26
`
`Toltec Fabrics, Inc. v. August Inc.,
`29 F.3d 778 (2d Cir.1994)........................................................................................................31
`
`Total Wall, Inc. v. Wall Sos. Supply, LLC,
`No. 09-cv-404-WME, 2010 WL 2572816 (W.D. Wisc. June 23, 2010) .................................29
`
`Tractebel Energy Mktg. v. AEP Power Mktg.,
`487 F.3d 89 (2d Cir. 2007).......................................................................................................29
`
`Two Guys from Harrison–N.Y., Inc. v. S.F.R. Realty Assocs.,
`63 N.Y. 2d 395 (1984) .............................................................................................................19
`
`Vacuum Concrete Corp. of Am. v. Am. Mach. & Foundry Co.,
`321 F. Supp. 771 (S.D.N.Y. 1971)...........................................................................................34
`
`Warner-Lambert Pharm. Co. v. John J. Reynolds, Inc.,
`178 F. Supp. 655 (S.D.N.Y. 1959),
`aff’d on opinion of the district court, 280 F.2d 197 (2d Cir. 1960) .........................................39
`
`Winston v. Mediafare Entm’t Corp.,
`777 F.2d 78 (2d Cir.1985)........................................................................................................21
`
`Wood v. Lucy, Lady Duff-Gordon,
`222 N.Y. 88 (1st Dep’t. 1917) .................................................................................................34
`
`STATUTES
`15 U.S.C.A. § 1055 ..................................................................................................................34, 40
`
`1 White, Summers, & Hillman, Uniform Commercial Code § 3:7 (6th ed.) .................................26
`
`Lanham Act ..............................................................................................................................40, 42
`
`New York Uniform Commercial Code
`..............................................................................................................20, 21, 23, 24, 25, 28, 29
`
`
`
`vii
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`

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`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 9 of 54 PageID #: 2464
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`N.Y. U.C.C.
`§ 1-201 .....................................................................................................................................25
`§ 2-201(1).................................................................................................................................25
`
`Wisconsin Statute
`§ 401.201..................................................................................................................................25
`§ 402.........................................................................................................................................24
`§ 402.201(1) .............................................................................................................................25
`
`OTHER AUTHORITIES
`3 McCarthy on Trademarks and Unfair Competition § 18:52 (5th ed.) ........................................40
`
`
`
`
`
`viii
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`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 10 of 54 PageID #: 2465
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`
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`Bay Tek Entertainment, Inc. (“BTE”) respectfully submits this Memorandum of Law in
`
`Support of its Motion for Summary Judgment on the Second Amended Complaint of Full Circle
`
`United, LLC (“FCU”), and on certain of BTE’s Counterclaims against FCU and Eric Pavony
`
`(“Pavony”).1 At the November 29, 2022 Pre-Motion Conference, the Court converted BTE’s
`
`pending Motion for Judgment on the Pleadings to a Motion for Summary Judgment and allowed
`
`BTE to submit supplemental briefing (ECF No. 146) .2
`
`I.
`
`PRELIMINARY STATEMENT
`
`Under black letter law, a substantial, fundamental and unequivocal difference exists
`
`between a trademark owner and a limited-use trademark licensee.
`
`Here, there is no dispute that BTE, a privately held Wisconsin-based company, is the sole
`
`owner and licensor of the trademark at issue, “Skee-Ball” (the “Mark”), and that FCU, a single-
`
`member entity run by one person, namely Pavony, is only a limited-use trademark licensee of the
`
`Mark. “Skee-Ball” is an iconic brand name that has been widely used in connection with alley
`
`roller games for over a century; it enjoys common law and trademark registration protection.
`
`FCU, through Pavony, has been intent on taking over the Mark for its own agenda for
`
`years, refusing to accept FCU is not the owner of the Mark or free to use the Mark as it pleases.
`
`This litigation is their latest attempt to usurp expansive rights in the Mark—far greater than
`
`FCU’s limited license provides—that belong to the trademark owner, BTE.
`
`
`1 BTE seeks summary judgment on FCU’s claims for breach of contract, breach of the alleged
`revenue share agreement, and tortious interference, as well as FCU’s lost profits damages claims.
`BTE seeks summary judgment on its counterclaims for breach of the License Agreement,
`trademark infringement, false endorsement, and common law unfair competition, and seeks
`declaratory judgments.
`2 On September 30, 2020, BTE filed a Motion for Judgment on the Pleadings on FCU’s
`Complaint. (ECF No. 34). FCU opposed on October 28, 2020 (ECF No. 44), and BTE filed a
`Reply on November 23, 2020 (ECF No. 54). BTE incorporates herein these prior submissions.
`
`1
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 11 of 54 PageID #: 2466
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`
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`In October 2011, litigation commenced between the Mark’s previous owner, Skee-Ball,
`
`Inc. (“SBI”) and FCU (BTE acquired the Mark from SBI in 2016 pursuant to an asset purchase
`
`agreement). In that litigation, SBI claimed that FCU was infringing the Mark by using the term
`
`“Brewskee Ball,” and FCU challenged the validity of the Mark as generic—revealing then its
`
`overarching goal to invalidate the Mark to achieve its own business agenda. In resolution of that
`
`litigation, FCU was granted certain narrow and expressly limited rights in the Mark under the
`
`License Agreement that is the subject of this litigation. Therein FCU warranted: to never contest
`
`the validity or ownership of the Mark; that all of the licensed uses would “inure to the benefit” of
`
`the Mark’s owner by FCU’s “best efforts; that FCU would refrain from disparaging the Mark’s
`
`owner and the Mark, and that FCU would only use the Mark under approved terms and slogans.
`
`None of this has come to pass. FCU’s conduct has only worsened, as it arrogantly
`
`disregards the License Agreement and uses the Mark beyond the licensed scope in multiple
`
`infringing ways (including by creating disgusting and infringing slogans). Most damaging and
`
`brazen, however, is FCU’s insistence that BTE build it customized Skee-Ball lanes. FCU admits
`
`BTE has no obligation to do so under the License Agreement, which contemplates only standard,
`
`non-custom lanes. The contemplated use of standard lanes is the heart of the License Agreement,
`
`from which all rights licensed to FCU flow. From merchandise to sponsorship, they pre-suppose
`
`that FCU will be promoting the Skee-Ball brand by using those standard alley rollers
`
`manufactured by BTE. By refusing to do so—in favor of vainly pursuing its own ends—FCU has
`
`spent the last several years failing to build out its business and generate any benefit for BTE, its
`
`licensor. Indeed, in the nearly seven years since BTE was assigned the License Agreement,
`
`the only royalties paid by FCU to BTE thereunder amount to $161.50.
`
`
`
`2
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 12 of 54 PageID #: 2467
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`
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`As demonstrated herein, BTE never agreed to the claimed oral agreement on “custom
`
`lanes”—the undisputed record establishes it instead only made a non-binding arrangement for 10
`
`prototype custom lanes as a test case, and that there was no “meeting of the minds” beyond that
`
`arrangement. BTE soured on any further relationship beyond those prototypes with FCU when it
`
`began to fully comprehend the bad-faith conduct exhibited by Pavony, which included his habit
`
`of surreptitiously taping his conversations with BTE employees, maligning BTE on social media,
`
`threatening litigation, and pursuing an agenda that had nothing to do with compliance with the
`
`License Agreement. BTE realized that the more it entertained FCU’s pie-in-the-sky fantasies, the
`
`more Pavony would want from BTE—i.e., that no good deed would go unpunished.
`
`True to form, rather than work under the License Agreement to exploit the narrow
`
`licensed uses for BTE’s benefit, as the “best efforts” clause required it to do, FCU then brought
`
`this baseless litigation to continue to pressure BTE to capitulate to FCU’s business agenda.
`
`Now, at the close of voluminous discovery, FCU’s claims are exposed as devoid of any
`
`evidence that could raise a genuine issue of material fact in their favor, and are defeated by
`
`FCU’s own admissions. FCU’s concocted narrative of a conspiracy in which BTE has been
`
`seeking to take over FCU’s business is pure fantasy, and has zero support in the record. BTE
`
`breached no agreement, and it has committed no tortious interference, as a matter of law.
`
`On the other hand, FCU has committed serious wrongdoings as a matter of law.
`
`Undisputedly, FCU has engaged in uses of the Mark that exceed the scope of several
`
`unambiguous terms of the License Agreement and committed material and willful breaches
`
`thereof. FCU has also willfully and continuously infringed the Mark in violation of trademark
`
`and unfair competition laws. Pavony is fully cognizant of, a participant in and responsible for the
`
`
`
`3
`
`

`

`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 13 of 54 PageID #: 2468
`
`
`willful trademark infringement of the Mark by FCU, as both an officer and sole controlling
`
`member of that entity, and is liable for his own such acts as an individual. BTE should prevail on
`
`its counterclaims against FCU for breach of the License Agreement, and against FCU and
`
`Pavony for violating trademark and unfair completion laws, as a matter of summary judgment.
`
`The undisputed evidence also demonstrates that BTE is entitled to terminate the License
`
`Agreement at will and alternatively for cause. Under governing law, the absence of any term of
`
`duration and express statement of perpetuity therein allows for its termination at will, and BTE
`
`has requested a declaration to that effect by the Court. Further, based on the abundant, irrefutable
`
`evidence of FCU’s willful trademark infringement and material breaches of the License
`
`Agreement, BTE is entitled to a declaration that it may terminate for cause.
`
`In sum, FCU is not a protector of the Mark, but rather its enemy. FCU uses the Mark in
`
`callous disregard of BTE’s rights, and in pursuit of only its self-serving purposes, absent
`
`capitulation to which it improperly threatens to revert to its goal of seeking to destroy the Mark’s
`
`validity. FCU must be prevented from doing any further harm to the Mark.
`
`II.
`
`UNDISPUTED FACTS IN SUPPORT OF THE INSTANT MOTION
`Background Facts
`A.
`The Skee-Ball Mark and SBI
`1.
`Skee-Ball is played on a machine called an alley roller, composed of an inclined lane
`
`leading to a ramp with rings corresponding to different point values arranged on a backboard
`
`positioned beyond the ramp. SUF ¶ 1.
`
`The term “SKEE-BALL®” was registered on the Principal Register of the United States
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`Patent and Trademark Office (“USPTO”) on May 21, 1929, in connection with “a game in the
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`nature of a bowling game and parts thereof” (the “Mark”). SUF ¶ 2. The Mark remains registered
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`4
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`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 14 of 54 PageID #: 2469
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`on the Principal Register of the USPTO and is incontestable by law. SUF ¶¶ 3, 4. Prior to
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`February 2016, the Mark was owned by Skee-Ball, Inc. (“SBI”). SUF ¶ 5.
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`Full Circle and Eric Pavony
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`2.
`FCU has operated live leagues, events and tournaments with alley roller lanes in bars
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`under the name “Brewskee Ball” since 2005. SUF ¶ 7. Pavony is the owner, founder, president
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`and sole member of FCU, which has never had any employees. SUF ¶ 6. Eric Wikman
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`(“Wikman”) and Eric Cooper (“Cooper”) are independent contractors with FCU. SUF ¶¶ 10, 11.
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`FCU operates Brewskee Ball in bars in Brooklyn, New York and Austin, Texas, called “Full
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`Circle Bar.” SUF ¶¶ 8, 9. Pavony is a co-owner of the Brooklyn bar through Full Circle Bar,
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`LLC, and the Austin bar through Extra Positive Land, LLC. SUF ¶¶ 8, 12.
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`SBI/FCU Lawsuit
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`3.
`In October 2011, litigation commenced between FCU and SBI, in which SBI claimed that
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`FCU was infringing the Mark by using the term “Brewskee Ball.” SUF ¶ 13. The case settled in
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`2014, and FCU and SBI entered into a settlement agreement and limited License Agreement (the
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`“License Agreement”) “granting to FCU a limited license to use the SKEE-BALL Trademark in
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`connection with Live Play, subject to the restrictions, exclusions and other terms and conditions
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`set forth herein.” SUF ¶¶ 14-17. “Live Play” is defined as “live play leagues, teams, events, and
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`tournaments utilizing alley rollers manufactured by SBI and called Skee-Ball® machines
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`(including without limitation BREWSKEE BALL live play leagues, teams, events, and
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`tournaments) utilizing alley rollers manufactured by SBI.” SUF ¶ 33.
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`Bay Tek
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`4.
`BTE is a Wisconsin-based manufacturer of coin-operated arcade machines and ticket
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`redemption games. SUF ¶ 18. In 2016, BTE purchased SBI’s assets, including the Mark. SUF
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`5
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`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 15 of 54 PageID #: 2470
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`¶ 19. BTE is the sole owner of the Mark, in which it has common law and federal rights. SUF
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`¶¶ 19, 125. In connection with the sale, BTE was assigned the License Agreement by SBI. SUF
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`¶ 20.
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`Standard vs. Custom Lanes
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`5.
`After BTE was assigned the License Agreement, FCU approached BTE to build
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`customized lanes which would include equipment beyond that used in Standard Lanes such as
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`video cameras, HD video screens, and internet connectivity (the “Custom Lanes”). SUF ¶ 22.
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`Under the License Agreement, FCU was only entitled to receive, “SKEE-BALL® branded alley
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`roller machines manufactured by SBI or its successor” (“Standard Lanes”). 3 SUF ¶¶ 21, 23, 24.
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`On July 28, 2020, FCU sued BTE for breach of the License Agreement, breach of oral
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`contract, and tortious interference. (ECF No. 1). On September 21, 2020, BTE counterclaimed
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`for breach of the License Agreement and for trademark infringement and unfair competition, and
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`sought declaratory relief to terminate the License Agreement. (ECF No. 25). FCU filed its
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`operative Second Amended Complaint (“SAC”) on November 13, 2020. (ECF No. 52).
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`B.
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`Undisputed Facts That Defeat FCU’s Claims
`Breach Of The License Agreement (Count I)
`1.
`BTE’s Purported Violation Of ¶ 4.2
`a.
`¶ 4.2 provides that any phrases or slogans BTE wishes to use in connection with the Mark
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`must be approved by BTE, that no right is granted to FCU to ownership of any such phrases or
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`slogans, and that use of such phrases or slogans inures to BTE’s ownership rights in the Mark.
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`SUF ¶ 25.
`
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`3 In this case, Standard Lanes are sometimes referred to “stock” and “Classic” lanes. Custom
`Lanes are also called “Skee-Ball Live Lanes,” “Live Lanes,” or “NSBL Lanes.”
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`6
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`Case 1:20-cv-03395-BMC Document 150 Filed 12/23/22 Page 16 of 54 PageID #: 2471
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`
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`b.
`¶ 5.3 of the License Agreement reads as follows:
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`BTE’s Purported Violation Of ¶5.3
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`SBI hereby covenants, warrants, and agrees that it will not, directly or indirectly,
`during the Term and in the Territory, operate, sponsor, or endorse a business,
`involving Live Play.
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`SUF ¶ 26. FCU alleges that BTE breached ¶ 5.3 by “manufacturing custom Skee-Ball-branded
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`lanes for use in bars operating competing Live Play, endorsing competing Live Play on social
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`media and hosting and endorsing competing Live Play.” SAC ¶ 240. FCU never sent BTE a
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`Notice under the ¶ 11.6 “notice and cure” procedure pertaining to any breach of ¶ 5.3. In
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`discovery, FCU mentioned alleged violations pertaining to BTE licensees (GameCo and
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`Alchemy3) and two bars (Aunt Ethel’s and The Up Down). FCU admitted it has no supporting
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`evidence, and the undisputed facts show that BTE neither engaged in nor endorsed such conduct.
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`SUF ¶¶ 27-31.
`
`c.
`¶ 7.2 of the License