Complaint - Cycles Inc V Felt Racing (DNJ 2014)

Page 1
COMPLAINT

SCHWABE, WILLIAMSON & WYATT, P.C.
Attorneys at Law
Pacwest Center
1211 SW 5th Ave., Suite 1900
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF NEW J ERSEY
NEWARK DIVISION

CYCLES, INC. D/B/A JAMIS BIKES, a
Domestic Profit Corporation,

Plaintiff,
vs.

FELT RACING, LLC, a Limited Liability
Corporation,

Defendant.
Case No.: _______________

COMPLAINT

DEMAND FOR JURY TRIAL

For its Complaint, Plaintiff Cycles, Inc. d/b/a J amis Bikes (Cycles) states and alleges as
follows:
NATURE OF THE ACTION
1. This is an action for trademark infringement and unfair competition arising from
Defendant Felt Racing, LLCs (Defendants) manufacture, marketing, promotion and sale of
bicycles which utilize the distinct top tube design of Cycles, Inc. (Cycles). As a result of
Defendants unlawful conduct as described herein, Cycles seeks: (i) an injunction prohibiting
Defendant from infringing Cycles intellectual property rights or otherwise unfairly competing
with Cycles in the marketplace; and (ii) damages resulting from Defendants infringement and
unfair competition to date.
PARTIES
2. Cycles is a corporation organized and existing under the laws of the State of New
J ersey, with its principal place of business at 151 Ludlow Avenue, Northvale, New J ersey 07647.
3. On information and belief, Defendant is a corporation organized and existing
under the laws of the State of California, with its principle place of business at 12 Chrysler,
Irvine, California 92618.

Case 2:33-av-00001 Document 22433 Filed 10/14/14 Page 1 of 15 PageID: 605355
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
JURISDICTION AND VENUE
4. This is an action for trademark infringement and unfair competition under the
Lanham Act, 15 U.S.C. 1051 et seq., misappropriation of trademark under N.J .S.A. 56:4-1 et
seq., and common law trademark infringement and unfair competition.
5. This Court has original subject-matter jurisdiction over this action pursuant to 28
U.S.C. 1331 and 1338, and 15 U.S.C. 1121 because the action arises, in part, under 15
U.S.C. 1114 and 1125. This Court has jurisdiction over Cycles related state law claims
under 28 U.S.C. 1338(b), because these claims are joined with substantial and related claims
under federal trademark law and pursuant to the doctrine of supplemental jurisdiction under 28
U.S.C. 1367.
6. This Court has personal jurisdiction over Defendant because, on information and
belief, Defendant has distributed, sold, and/or offered for sale infringing products to customers
located within the State of New J ersey, has engaged in acts or omissions within the State of New
J ersey causing injury to Cycles, has engaged in acts or omissions outside the State of New J ersey
causing injury to Cycles within the State of New J ersey in the ordinary course of trade, and/or
has otherwise made or established contacts within the State of New J ersey sufficient to permit
the exercise of personal jurisdiction over Defendant.
7. Venue in this judicial district is proper under 28 U.S.C. 1391(b)(2) because a
substantial part of the events or omissions giving rise to Cycles claims occurred in this judicial
district. Venue is also proper under 28 U.S.C. 1391(b)(1), (c), and (d).
FACTUAL BACKGROUND
The Parties and Their Respective Businesses
8. Cycles parent company G. J oannou Cycle Company (GJ C) was established in
1937 by the father of the current CEO Carine J oannou, when he started the company to distribute
European bicycles in the New J ersey area. Ms. J oannou took over from her father in 1981 and
has grown the company into a national powerhouse with distributors throughout the world. GJ C
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
is now one of the oldest and largest bicycle companies under original family ownership in the
United States. Cycles is a wholly-owned subsidiary, established in 1990. Nirve Bicycles
(Nirve) was purchased by GJ C in 2013 and all of its assets, including its trademarks, were
acquired by GJ C. J amis is a dba of Cycles.
9. In the early 2000s Nirve developed the top tube design at issue in this case and
depicted below (Top Tube Design). Nirve spent thousands of dollars promoting this design
and, as a result of Nirves extensive advertising and marketing initiatives, the Top Tube Design
has been Nirves signature since 2001.

10. As a result of its extensive advertising, marketing, and branding initiatives, Cycles
has developed a high degree of consumer recognition and goodwill. Among distributors and
consumers alike, Cycles has become known for its distinctive cruiser-style bicycles, as well as its
versatile performance road and mountain bikes. Given the reputation that Nirve had developed
in the industry and the customer recognition Nirve had established in its Top Tube Design, the
acquisition of Nirve made perfect sense. Since GJ C acquired Nirve, substantial resources have
been spent further developing customer recognition in the Top Tube Design. This effort
included development of a new website, production of catalog, photo shoots and a new Business
to Business site featuring Nirve bikes.
11. Cycles attributes its success, in part, to its reputation as a progressive and
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
innovative designer of stylish, performance bicycles, as well as its efforts to distinguish itself
through the use of unique designs and product names, many of which are protected under federal
trademark law.
12. Cycles sells its products, including its Nirve line, throughout the United States
through its network of national and international distributors. In addition to its corporate
headquarters in Northvale, New J ersey, Cycles also maintains regional offices in Miami, Florida
and Costa Mesa, California.
13. On information and belief, Defendant is in the business of marketing, distributing,
and selling bicycles, including without limitation, road, mountain, lifestyle and cruiser bikes,
through its online website www.feltbicycles.com, and through its network of national and
international distributors.
14. On information and belief, Defendant currently employs certain individuals who
were formerly employed by Nirve. In particular, Michael Mullman, Nirves co-founder and
former employee, is on information and belief currently employed by Defendant as Defendants
European President. Similarly, Bill Duehring, Nirves co-founder and former employee, is on
information and belief a co-founder of Defendant, and is currently employed by Defendant as
Defendants President. While employed by Nirve, Mr. Mullman and Mr. Duehring were
involved in, among other things, creating designs for bicycles and bicycle parts.
Cycles Intellectual Property
15. As noted above, Cycles is the owner of numerous trademarks registered with the
United States Patent and Trademark Office (the USPTO) for use in connection with bicycles
and bicycle parts. In particular, Cycles is the owner of a U.S. trademark registration for the top
tube design depicted in U.S. Registration No. 3,743,794, for Bicycle and bicycle structural
parts in Class 12, which registration issued on or about February 2, 2010, and which claims a
first use dates of J uly 8, 2002 (the Top Tube Design).
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1

U.S. Registration No. 3,743,794
A true and correct copy of the registration certificate for the Top Tube Design is attached hereto
as Exhibit A.
16. Since at least as early as J uly 8, 2002, Cycles and Nirve have continuously and
exclusively used the Top Tube Design, have received substantial revenues for products utilizing
the Top Tube Design, and have spent thousands of dollars each year advertising, marketing, and
promoting products which utilize the Top Tube Design, both on its own and through its network
of authorized distributors. As a result, the Top Tube Design is a strong mark that has become
associated exclusively with Cycles and Nirve (or at a minimum, a single anonymous source) and
is recognized favorably by consumers as an indicator of Cycles products and the quality of those
products. Accordingly, Cycles owns valuable consumer goodwill in connection with the Top
Tube Design.
17. Among the products sold by Cycles that utilize the Top Tube Design are the 53,
Forty Nine, Kilroy, Pyro, Red Star, Skulls and Classic model bicycles (the Cycles Products).
Cycles provides product information about the Cycles Products on its website www.nirve.com,
and a true and correct copy of the pertinent portion of which is attached hereto as Exhibit B.
18. As evidenced by the representative images in Exhibit B, the Cycles Products each
feature the Top Tube Design, that is, a distinctive, curved top tube which runs from the head tube
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
fork to the seat tube, and down to the rear wheel hub. Cycles bicycle models that feature the
Top Tube Design are some of its top-selling products.
Defendants Infringement
19. Among the products manufactured, advertised, offered for sale, sold, and/or
imported by Defendant are Defendants Red Wolfe, Deepsix, 1909 and Beaumont cruisers (the
Infringing Designs). An example of the similarity between Cycles Kilroy and Red Star
bikes and Defendants Red Wolfe Cruiser, both of which prominently feature the Top Tube
Design, can be seen below:

Cycles Kilroy Cruiser

Defendants Red Wolfe Cruiser

Cycles Red Star
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
Defendant provides product information about each of the Infringing Designs, including the Red
Wolfe Cruiser, on its website www.feltbicycles.com, a true and correct copy of the pertinent
portion of which is attached hereto as Exhibit C.
20. As evidenced by the representative images attached as Exhibit C, Defendant is
currently using the Top Tube Design in connection with the Infringing Designs. Each of the
Infringing Designs prominently features a continuous, curved top tube which connects the head
tube fork to the seat tube, and the seat tube to the rear wheel hub.
21. The appearance of the top tube portion of the Infringing Designs is identical
and/or confusingly similar to the Top Tube Design. Due to the similarities in the appearance of
the Infringing Designs curved top tube to the Top Tube Design, and the identical nature of the
goods sold in connection with the Top Tube Design, the Infringing Designs look the same and
create the same commercial impression as the Top Tube Design.
22. As between Defendant and Cycles, Cycles has priority in the Top Tube Design as
a result of its federal trademark registration and/or based on its first use of the Top Tube Design
in commerce. Accordingly, Defendants adoption and use of the Infringing Designs infringes
Cycles trademark rights in the Top Tube Design as consumers encountering the Infringing
Designs in the marketplace are likely to be confused, deceived, or mistaken as to whether
Defendant and/or its products featuring the Infringing Designs originate from or are otherwise
associated with, affiliated with, endorsed by, sponsored by, or connected to Cycles and/or its
products, or vice versa.
23. Due to the specialized nature of high-end, lifestyle and cruiser bicycles,
consumers, including buyers purchasing bicycles through retailers and online, are likely to
purchase goods whose trademark they recognize. The consumer goodwill and acquired
distinctiveness of the Top Tube Design cause consumers, including buyers purchasing bicycles
through retailers and online, to seek out and purchase Cycles products.
24. Cycles and Defendants bicycles are, on information and belief, marketed to
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
bicycle shops and retailers in the State of New J ersey and throughout the nation, and when sold
in a retail store, are very likely to occupy the same sales space if both brands are purchased and
displayed. Moreover, both Cycles and Defendant maintain Internet sites for product
advertisement and sale.
25. For these reasons, the products sold and/or offered for sale by Defendant which
feature the Infringing Designs are directly competitive, identical and/or closely related to the
products sold by Cycles which utilize the Top Tube Design. Furthermore, the parties respective
products are advertised and sold in identical and/or overlapping trade and marketing channels
and to the same classes of prospective purchasers, who are unlikely to exercise a high degree of
care in making their respective purchasing decisions.
26. Defendant is not an authorized licensee of Cycles, and Cycles has never given
Defendant permission to use the Top Tube Design.
FIRST CLAIM FOR RELIEF
(Federal Trademark Infringement, 15 U.S.C. 1114)
27. Cycles restates and realleges each of the allegations set forth in Paragraphs 1
through 26 above.
28. Defendants use of the Infringing Designs in commerce in connection with the
sale, distribution and advertising of Defendants products is likely to cause confusion, mistake,
and deception by creating the false and misleading impression that Defendants products are
manufactured or distributed by Cycles; are affiliated, connected, or associated with Cycles; or
have the sponsorship, endorsement, or approval of Cycles. Defendants conduct infringes the
Top Tube Design in violation of Section 32 of the Lanham Act, 15 U.S.C. 1114(1).
29. Defendants activities have caused, and unless enjoined by this Court will
continue to cause a likelihood of confusion and deception among members of the trade and
among consumers and the public at large. This likelihood of confusion and deception has caused
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
and will continue to cause, unless enjoined by this Court, irreparable harm to the goodwill and
reputation symbolized by the Top Tube Design.
30. Cycles has no adequate remedy at law because the Top Tube Design is unique and
represents to the public the source, reputation, and goodwill of Cycles products. Certain
damages caused by Defendants acts may not be susceptible to any ready or precise calculation
of damages because such damages involve lost business opportunities and loss of goodwill.
Accordingly, monetary damages alone cannot fully compensate Cycles for Defendants
misconduct.
31. Cycles is entitled to preliminary and permanent injunctive relief under 15 U.S.C.
1116 against Defendants continued use of the Top Tube Design or any confusingly similar
variations of the Top Tube Design. Unless enjoined, Cycles will continue to suffer irreparable
harm and injury to its goodwill and reputation.
32. As a direct and proximate result of Defendants conduct, Cycles has suffered
damages in an amount to be proven at trial. Pursuant to 15 U.S.C. 1117(a), Cycles is also
entitled to recover the costs of the action and three (3) times its actual damages and the profits
wrongfully obtained by Defendant attributable to its conduct, in an amount to be proven at trial.
33. Defendants actions in adopting and using the Top Tube Design in connection
with directly competing goods gives rise to an inference of intentional, willful and malicious
intent on the part of Defendant to trade on the goodwill associated with the Top Tube Design and
to cause confusion, to cause mistake and to deceive the public about the source or affiliation of
Defendants products. Accordingly, Cycles is further entitled to recover its reasonable attorneys
fees pursuant to 15 U.S.C. 1117(a), to the extent the Court finds this case to be exceptional.
SECOND CLAIM FOR RELIEF
(Federal Unfair Competition and False Designation of Origin in Violation of 15 U.S.C.
1125(a)(1)(A))
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COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
through 26 above.
35. Defendants use of the Infringing Designs in commerce in connection with the
sale, distribution and advertising of Defendants products is likely to cause confusion, mistake,
and deception by creating the false and misleading impression that Defendants products are
manufactured or distributed by Cycles; are affiliated, connected, or associated with Cycles; or
have the sponsorship, endorsement, or approval of Cycles.
36. Defendant has made false representations, false descriptions, and false
designations of origin of its goods in violation of 15 U.S.C. 1125(a) by using the Infringing
Designs in connection with Defendants products.
37. Defendant is liable under 15 U.S.C. 1125(a)(1)(A) for unfair competition as a
result of its use of the Infringing Designs.
38. Defendants activities have caused, and unless enjoined by this Court will
continue to cause, a likelihood of confusion and deception among members of the trade and
among consumers and the public at large. This likelihood of confusion and deception has caused
and will continue to cause, unless enjoined by this Court, irreparable harm to the goodwill and
reputation symbolized by the Top Tube Design.
39. Cycles has no adequate remedy at law because the Top Tube Design is unique and
represents to the public the source, reputation, and goodwill of Cycles products. Certain
damages caused by Defendants acts may not be susceptible to any ready or precise calculation
of damages because such damages involve lost business opportunities and loss of goodwill.
Accordingly, monetary damages alone cannot fully compensate Cycles for Defendants
misconduct.
40. Cycles is entitled to preliminary and permanent injunctive relief under 15 U.S.C.
1116 against Defendants continued use of the Infringing Design or confusingly similar
variations of the Top Tube Design. Unless enjoined, Cycles will continue to suffer irreparable
harm and injury to its goodwill and reputation.
Page 11
COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
41. As a direct and proximate result of Defendants conduct, Cycles has suffered
damages in an amount to be proven at trial. Pursuant to 15 U.S.C. 1117(a), Cycles is also
entitled to recover the costs of the action and three (3) times its actual damages and the profits
wrongfully obtained by Defendant attributable to its conduct, in an amount to be proven at trial.
42. Defendants actions in adopting and using the Infringing Designs in connection
Defendants products. Accordingly, Cycles is further entitled to recover its reasonable attorneys
fees pursuant to 15 U.S.C. 1117(a), to the extent the Court finds this case to be exceptional.
THIRD CLAIM FOR RELIEF
(Unfair Competition in Violation of N.J.S.A. 56:4-1, et seq)
through 26 above.
44. Defendants unauthorized use of the Top Tube Design in advertising constitutes
acts of unfair competition through Defendants appropriation for its own use of the name, brand,
trademark, reputation and goodwill of Cycles in violation of N.J .S.A. 56:4-1.
45. As a direct and proximate result of Defendants unfair competition and pursuant
to N.J .S.A. 56:4-2, Cycles is entitled to recover its actual damages and the profits wrongfully
obtained by Defendant attributable to its conduct in an amount to be proven at trial.
46. As a direct and proximate result of Defendants unfair competition and pursuant
to N.J .S.A. 56:4-2, Cycles has been, and continues to be, irreparably harmed in its business,
including its reputation and business identity, resulting in lost revenues and profits, and
diminished goodwill and reputation.
47. Defendants actions as alleged herein have caused, and unless enjoined by this
Court will continue to cause, immediate and irreparable injury to Cycles property and business.
Page 12
COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
48. Cycles has no adequate remedy at law because its Top Tube Design represents to
the public the source, reputation, and goodwill of Cycles products. Certain damages caused by
Defendants acts may not be susceptible to any ready or precise calculation of damages because
such damages involve lost business opportunities and lost goodwill. Accordingly, monetary
damages alone cannot fully compensate Cycles for Defendants misconduct. If Defendants
activities are not enjoined, Cycles will continue to suffer irreparable harm and injury to its
goodwill and reputation.
Defendants products.
FOURTH CLAIM FOR RELIEF
(Unfair Competition Under New Jersey Common Law)
through 26 above.
51. Defendant is using the Infringing Designs in a manner that is likely to cause
confusion, to cause mistake, and to deceive as to affiliation, connection, or association of
Defendant with Cycles, and as to the origin, sponsorship, and approval of Defendants products
by Cycles. Defendants acts constitute trademark infringement, unfair competition, and
deceptive trade practice in violation of the common law of the State of New J ersey.
52. Defendants use of the Infringing Designs in commerce has created and will
continue to create a likelihood of confusion thereby causing irreparable harm to Cycles,
including without limitation, injury to its reputation and business identity resulting in lost
revenue and profits and diminished goodwill and reputation. Cycles has no adequate remedy at
law for this injury.
Page 13
COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
53. Defendants actions as alleged above have caused, and unless enjoined by this
Court will continue to cause, immediate and irreparable injury to Cycles property and business.
Defendants products.
55. As a result of Defendants acts, Cycles has been damaged in an amount not yet
determined or ascertainable. At a minimum, Cycles is entitled to injunctive relief, to an
accounting of Defendants profits, actual damages, punitive damages, and costs.
JURY DEMAND
56. Pursuant to Fed. R. Civ. P. 38(b), Cycles hereby demands a trial by jury of all
issues so triable that are raised herein or which hereinafter may be raised in this action.
PRAYER FOR RELIEF
WHEREFORE, Cycles respectfully requests that the Court enter judgment in its
favor against Defendant, granting the following relief:
A. The Defendant, its officers, directors, agents, servants, affiliates, employees,
parent and subsidiary corporations, successors, assigns, and representatives, and all those acting
in privity or in concert or participation with Defendant, be preliminarily and permanently
enjoined and restrained from directly or indirectly:
(i) Affixing, applying, annexing, or using in connection with the advertising,
sale, or offering of any products that feature the Top Tube Design, or any other trademarks,
service marks or other words, names, titles, designs, logos, marks, or trade dress similar to the
Top Tube Design that might tend to falsely describe or represent such goods as being those of
Cycles or being endorsed or approved by Cycles or affiliated with Cycles in any way;
(ii) Performing any actions or using any trademarks, service marks or other
Page 14
COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
words, names, titles, designs, logos, marks, or trade dress, that are likely to cause confusion,
mistake, or to deceive, or to otherwise mislead the trade or public into believing that Defendants
products are endorsed or approved by or are associated, affiliated, or in any way connected with
Cycles;
(iii) Using any trademarks, service marks, or other words, names, titles,
designs, logos, marks, or trade dress or engaging in any other conduct that creates a likelihood of
injury to the business reputation of Cycles or a likelihood of misappropriation of Cycles
distinctive trademarks and the goodwill associated therewith; and
(iv) Engaging in any trade practices, including those complained of herein,
which unfairly compete with or injure Cycles, its business or the goodwill appertaining thereto.
B. That Cycles be awarded all damages it has sustained by reason of Defendants
wrongful acts, and that such damages be trebled to the extent allowed by law, pursuant to 15
U.S.C. 1117 and N.J .S.A. 56:4-2, together with prejudgment interest;
C. That an accounting and disgorgement be ordered and that Cycles be awarded all
gains, profits and advantages derived by Defendant from its wrongful acts, and that the amount
of any accounting be trebled to the extent allowed by law;
D. That Defendant be required to deliver to the Court or to remove and destroy any
products and materials (including but not limited to signage) that consist of or include a
reproduction or colorable imitation of Cycles trademarks;
E. That Defendant be ordered to pay and Cycles be awarded exemplary and punitive
damages;
F. That Defendant be required to pay to Cycles all of Cycles litigation expenses,
including reasonable attorneys fees and costs, pursuant to 15 U.S.C. 1117; and
//
//
//
Page 15
COMPLAINT

Attorneys at Law
Pacwest Center
Portland, OR 97204
Telephone 503.222.9981 Fax 503.796.2900
PDX\122447\198769\PEH\14214063.1
G. That the Court grants Cycles any such other relief it deems just and proper.
Dated this 14
th
day of October, 2014.
Respectfully submitted,

By: /s/ Robert C. Hess
Peter E. Heuser, pro hac vice pending
Schwabe, Williamson & Wyatt, P.C.
1211 SW 5
th
Avenue, Suite 1900
Portland, OR 97204
(503) 222-9981
pheuser@schwabe.com

Robert C. Hess, Bar No. 019511997
Law Offices of Robert C. Hess
840 Van Houten Avenue
Clifton, NJ 07013
(973) 778-9310
rchlaw@optonline.net


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