FAZE Apparel v. FaZe Clan, Et Al. - Countercomplaint

Case 2:18-cv-02052-RGK-JEM Document 30 Filed 04/13/18 Page 1 of 20 Page ID #:564
1 Eleanor M. Lackman, Esq., No. 298594

elackman@cdas.com
2
COWAN, DEBAETS, ABRAHAMS,
3 & SHEPPARD LLP
9595 Wilshire Boulevard, Suite 900
4
Beverly Hills, CA 90212
5 Telephone: (310) 492-4392
Telefax: (310) 492-4394
6
7 Attorneys for Defendant

FAZE CLAN INC.
8
9 UNITED STATES DISTRICT COURT

10 CENTRAL DISTRICT OF CALIFORNIA
11
12 FAZE Apparel, LLC, a California Case No.: 2:18-cv-02052-RGK-JEM

13
limited liability company,
14 Plaintiff, DEFENDANT FAZE CLAN INC’s

15
ANSWER TO PLAINTIFF’S
vs. COMPLAINT, AFFIRMATIVE
16 DEFENSES
17 FAZE CLAN INC., a Delaware
corporation, and DOES 1 through 25,
18 inclusive,
19
Defendants.
20
21 Defendant Faze Clan Inc. (“Faze Clan”), by its undersigned attorneys Cowan,
22
DeBaets, Abrahams & Sheppard LLP, for its Answer to the Complaint filed by plaintiff
23
24 FAZE Apparel, LLC (“FAZE Apparel”), states as follows:

25 1. Faze Clan denies the allegations contained in Paragraph 1 of the
26
Complaint.
27
28 1
DEFENDANT FAZE CLAN INC.’S ANSWER TO PLAINTIFF’S COMPLAINT, AFFIRMATIVE
DEFENSES
1
2. Faze Clan lacks knowledge or information sufficient to form a belief
2 concerning the truth of the allegations contained in Paragraph 2 of the Complaint, and
3
on that basis denies the allegations of this Paragraph.
4
6 Complaint, except admits that Faze Clan denotes a team of online “e-Sports” gamers
7
and that Faze Clan has sold certain apparel under its FAZE CLAN name and
8
9 trademarks.
10 4. Faze Clan lacks knowledge or information sufficient to form a belief

11
concerning the truth of the allegations contained in Paragraph 4 of the Complaint, and
12
13 on that basis denies the allegations of this Paragraph.

15
16
18 6. Faze Clan denies that FAZE Apparel owns a registered trademark for
19
F.A.Z.E. in a non-stylized form. Faze Clan further states that the remaining allegations
20
21 contained in Paragraph 6 of the Complaint contain conclusions of law as to which no

22 responsive pleading is necessary, and therefore denies them.
23
7. Faze Clan admits the allegations contained in Paragraph 7 of the
24
25 Complaint, but clarifies that Faze Clan does not “operate[] an online gaming ‘team,’”
26 but rather is comprised of multiple eSports teams.
27
28 2
DEFENSES
1
8. Faze Clan denies that it is the “successor-in-interest” to Faze Clan, LLC, a
2 Massachusetts limited liability company, but states that all trademark rights owned by
3
Thomas Oliveira and Faze Clan, LLC have been assigned to Faze Clan Inc. Faze Clan
4
5 states that Thomas Oliveira is the founder and current owner of Faze Clan, LLC, and is
6 a shareholder of Faze Clan Inc. Faze Clan further states that Mr. Oliveira filed
7
trademark applications individually and as “Thomas Oliveira d/b/a FaZe Clan.”
8
11
12
13 10. Faze Clan states that the allegations contained in Paragraphs 10-20 of the
14 Complaint are mooted by the fact that this Action is no longer before the Northern
15
District of California, as referenced in these Paragraphs, and therefore the allegations
16
17 are owed no response. Faze Clan admits that the Central District of California has
18 subject matter and personal jurisdiction over Faze Clan, and denies any remaining
19
allegations that may exist in these paragraphs.
20
23
24
26
27
28 3
DEFENSES
1
subject matter and personal jurisdiction over Faze Clan, and denies any remaining
2 allegations that may exist in these paragraphs.

3
12. Faze Clan states that the allegations contained in Paragraphs 10-20 of the
4
6 District of California, as referenced in these Paragraphs, and therefore the allegations

7
are owed no response. Faze Clan admits that the Central District of California has
8

11
12

15
16

19
20
23
24
27
28 4
DEFENSES
1
3
4
7
8
11
12
15
16
19
20
23
24
27
28 5
DEFENSES
1
3
4
7
Complaint are mooted by the fact that this Action is no longer before the Northern
8
11
12
15
Complaint are mooted by the fact that this Action is no longer before the Northern
16
19
20

23
24

26
27
28 6
DEFENSES
1
3
4
7
8
11
12
13 25. Faze Clan admits that Exhibits A & B purport to be trademark records but
14 denies knowledge or information sufficient to form a belief concerning the truth of the
15
remaining allegations contained in Paragraph 25 of the Complaint, and on that basis
16
17 denies them.

19
20

23
24

26
27
28 7
DEFENSES
1
3
4
5 29. Faze Clan admits that FAZE Apparel has been asserting its rights against
6 Faze Clan for some time, but denies that FAZE Apparel has “superior” rights, that Faze
7
Clan has “acknowledged” such rights, or that Faze Clan has “suddenly” done anything
8
9 pertaining to any marketing campaigns. Faze Clan denies the remaining allegations
10 contained in Paragraph 29 of the Complaint.

11
30. Faze Clan admits that FAZE Apparel has filed a lawsuit but denies that
12
13 FAZE Apparel is denied to any relief thereunder. Faze Clan denies the remaining
14 allegations contained in Paragraph 30 of the Complaint.

15
31. Faze Clan admits the allegations contained in Paragraph 31 of the
16
17 Complaint.

19
Complaint.
20
21 33. Faze Clan admits that FAZE Apparel interfered with Faze Clan’s efforts
22 to register its non-confusing trademarks. Faze Clan denies the remaining allegations
23
contained in Paragraph 33 of the Complaint.
24
25 34. Faze Clan states that the allegations contained in Paragraph 34 of the
26 Complaint to “privity” contain conclusions of law as to which no response is required.
27
28 8
DEFENSES
1
Faze Clan further states that trademark applications filed by Mr. Oliveira before Faze
2 Clan Inc.’s formation were filed by Mr. Oliveira either individually or “d/b/a Faze
3
Clan.”
4
5 35. Faze Clan admits that it applied to register two trademarks on or around
6 2013, and avers that the USPTO issued office actions as to both on grounds reflected in
7
the USPTO file. Faze Clan specifically denies that a declination to address a USPTO
8
9 office action can be reasonably interpreted as “admitting” anything, and denies the
10 remaining allegations contained in Paragraph 35 of the Complaint.

11
36. Faze Clan admits that it filed a trademark application in around July 2013
12
13 and that the USPTO did not issue an office action as to Class 41 in its application. Faze
14 Clan further admits that an initial office action issued as to Class 25 but denies that such
15
office action adjudicated anything. Faze Clan denies the remaining allegations
16
17 contained in Paragraph 36 of the Complaint.
18 37. Faze Clan admits that the USPTO published Faze Clan’s application for
19
opposition, and further admits that FAZE Apparel opposed the application. Faze Clan
20
21 lacks knowledge or information sufficient to form a belief as to the truth of the

22 remaining allegations contained in Paragraph 37 and therefore denies them on that
23
ground.
24
25
26
27
28 9
DEFENSES
1
38. Faze Clan admits that FAZE Apparel alleged likely confusion in its
2 opposition. Faze Clan lacks knowledge or information sufficient to form a belief as to

3
the remaining allegations contained in Paragraph 38 and therefore denies them.
4
5 39. Faze Clan admits that it did not respond to the notice of opposition but
6 denies that declination to respond to a notice of opposition equates to or otherwise

7
results in admission of confusion. Faze Clan denies the remaining allegations contained
8
9 in Paragraph 39 of the Complaint.
10 40. Faze Clan admits so much of the allegations contained in Paragraph 40 of

11
the Complaint that the TTAB entered default judgment. Faze Clan denies the remaining
12
13 allegations contained in Paragraph 40 of the Complaint.

15
Complaint.
16
18 Complaint.
19
43. Faze Clan admits that Olivera wrote in response to a Twitter message from
20
21 a teammate the language quoted in Paragraph 43 of the Complaint. Faze Clan denies
22 the remaining allegations contained in Paragraph 43 of the Complaint.
23
44. Faze Clan denies the allegations contained in Paragraph 44 of the
24
25 Complaint.
26
27
28 10
DEFENSES
1
45. Faze Clan admits that, in 2014, it used the domain name “fazeclan-
2 apparel.com” to sell apparel and accessories, but denies that such items infringed FAZE
3
Apparel, LLC’s asserted rights in the trademark FAZE. Faze Clan admits that it also
4
5 sold apparel through third party vendor Electronic Gamers’ League. Faze Clan admits
6 that it sold items featuring its name, “Faze Clan,” and also sold items featuring its “FC”
7
logo without the words “Faze Clan.” Faze Clan lacks knowledge or information
8
9 sufficient to form a belief as to the truth of the remaining allegations contained in
10 Paragraph 45 and therefore denies them on that ground.

11
12
13 Complaint, but admits that, in an October 22, 2014 letter from EGL to FAZE Apparel,
14 EGL stated that it planned to “stop using the Faze Clan Mark on clothing and apparel
15
goods on approximately November 1, 2014 for reasons unrelated to [FAZE Apparel’s]
16
17 letter.” EGL also informed FAZE Apparel that it was “not aware of any actual confusion
18 between [EGL’s] use of the Faze Clan Mark and [FAZE Apparel]’s use of the Faze
19
Apparel Mark.”
20
21 47. Faze Clan admits that, for a period of time between September 2014 and
22 August 2015, the website “fazeclanstore.com” redirected to the domain name
23
“redmilitia.com.” Faze Clan further admits that it sold apparel and related accessories
24
25 through the website “redmilitia.com” displaying Faze Clan’s “FC” logo. Faze Clan
26 further states that it continued to use the name “Faze Clan” during this time period.
27
28 11
DEFENSES
1
2 Complaint and specifically avers that the use of “Faze Clan” has remained unbroken for
3
nearly a decade.
4
6 Complaint.
7
8
9 Complaint.

11
Complaint and specifically avers that FAZE Apparel has violated Fed. R. Evid. 408 by
12
13 using mere settlement discussions to show liability.
14 52. Faze Clan admits that FAZE Apparel has not given permission to use any
15
of its trademarks but denies that any permission is necessary. Faze Clan denies the
16
17 remaining allegations contained in Paragraph 52 of the Complaint.

19
Complaint.
20

22 Complaint.
23
24
25 Complaint.
26
27
28 12
DEFENSES
1
2 Complaint, except admits that it – like tens of thousands of parties who offer apparel –
3
sells its goods over the internet.
4
6 Complaint.
7
8
9 Complaint.

11
Complaint.
12
13 60. Faze Clan lacks knowledge or information sufficient to form a belief as to
14 the truth of whether anyone has been confused and on that ground denies the allegation.
15
Faze Clan denies the remaining allegations contained in Paragraph 60 of the Complaint.
16
17 61. Faze Clan lacks knowledge or information sufficient to form a belief as to
18 the truth of the allegations contained in Paragraph 61 of the Complaint and on that basis
19
denies them.
20

22 Complaint.
23
24
25 Complaint.
26
27
28 13
DEFENSES
1
64. Faze Clan denies that its use of its FAZE CLAN® trademark is infringing.
2 Faze Clan further states it use of the mark FAZE UP is not infringing. Faze Clan lacks
3
knowledge or information sufficient to form a belief concerning the truth of the
4
5 allegations that the image displayed next to Paragraph 64 of the Complaint was taken
6 before a nationally-televised playoff game against the Jacksonville Jaguars, and that the
7
telecast was watched by 31.4 million American viewers, and therefore denies them on
8
9 that ground. Faze Clan admits that on January 14, 2018, JuJu Smith-Schuster, a
10 professional football player, wore a jersey displaying the words FAZE UP, in addition
11
to the words FAZE CLAN and other eSports-related insignia, prior to playing in a
12
13 National Football League game.
14 65. Faze Clan admits that JuJu Smith-Schuster, a fan of Faze Clan’s eSports
15
teams, has created several posts through his Twitter account concerning Faze Clan. Faze
16
17 Clan further admits that it has referenced Mr. Smith-Schuster in several posts to Faze
18 Clan’s Twitter account. Faze Clan denies that the jersey referenced in Paragraph 65 is
19
infringing, and lacks knowledge or information sufficient to form a belief concerning
20
21 the truth of the remaining allegations and therefore denies them on that ground.
23
Complaint.
24

26 Complaint.
27
28 14
DEFENSES
1
2 Complaint.
3
4
5 Complaint.
6 70. Faze Clan incorporates by reference each response to the preceding

7
allegations in the Complaint.
8
9 71. Faze Clan states that the allegations contained in Paragraph 71 of the
10 Complaint consist of conclusions of law as to which no response is required, but to the

11
extent any response is required, Faze Clan lacks knowledge or information sufficient to
12
13 form a belief as to the truth of the allegations contained in Paragraph 71 of the
14 Complaint, and on that basis denies them.

15
16
17 Complaint.

19
Complaint.
20

22 Complaint.
23
24
25 Complaint.
26
27
28 15
DEFENSES
1
2 Complaint.
3
4
5 Complaint.

7
8
10 Complaint.
11
12
13 Complaint.

15
Complaint.
16
18 Complaint.
19
20
21 Complaint.
23
Complaint.
24

26 allegations in the Complaint.
27
28 16
DEFENSES
1
2 Complaint.
3
4
5 Complaint.

7
Complaint.
8
10 Complaint.
11
90. Faze Clan incorporates by reference each response to the preceding
12
13 allegations in the Complaint.

15
Complaint.
16
18 Complaint.
19
20
21 Complaint.
23
24

26 Complaint.
27
28 17
DEFENSES
1
2 Complaint.
3
4
5 Complaint.

7
Complaint.
8
10 Complaint.
11
12
13 Complaint.
14 FAZE Apparel’s Prayer for Relief does not necessitate responsive pleading, but
15
Faze Clan denies that FAZE Apparel is entitled to any of the relief sought therein.
16
17 FAZE CLAN’S AFFIRMATIVE DEFENSES
18 Faze Clan makes the following allegations as affirmative defenses against the
19
claims asserted against it without admitting that it bears the burden of persuasion or
20
21 presentation of evidence on each or any of these matters, and without waiving the right
22 to assert and rely upon other defenses that become available or appear during the course
23
of this Action.
24
25 FIRST AFFIRMATIVE DEFENSE

26 The Complaint is barred, in whole or in part, by the doctrine of unclean hands,
27
28 18
DEFENSES
1
including due to FAZE Apparel’s bad faith interference in Faze Clan’s business
2 relationships, FAZE Apparel’s assertion of rights it does not have, FAZE Apparel’s
3
unlawful use of settlement negotiations before the Court where clearly prohibited by
4
5 the Federal Rules of Evidence, by knowingly delaying the assertion of its purported
6 rights, and for other reasons to be elicited at trial.

7
SECOND AFFIRMATIVE DEFENSE
8
9 The Complaint is barred, in whole or in part, by the doctrine of laches, waiver,
10 estoppel, or acquiescence, including due to FAZE Apparel’s years of delay in asserting

11
its purported rights despite knowing that Faze Clan was using the terms “Faze” and
12
13 “Faze Clan” for eSports related apparel since at least as early as 2013.
14 THIRD AFFIRMATIVE DEFENSE

15
For reasons including those stated above and in Faze Clan’s claim for declaratory
16
17 judgment, FAZE Apparel has suffered no damages, and even if it did, it has failed to
18 mitigate those damages.

19
FOURTH AFFIRMATIVE DEFENSE
20
21 FAZE Apparel may not rely on its trademark registrations to the extent that they
22 were obtained using false and fraudulent misrepresentations.
23
PRAYER FOR RELIEF
24
25 WHEREFORE, Faze Clan respectfully requests that it be awarded judgment as

26 follows:
27
28 19
DEFENSES
1
1. In favor of Faze Clan and against FAZE Apparel on all of FAZE Apparel’s
2 claims;
3
2. In favor of Faze Clan and against FAZE Apparel on all of Faze Clan’s
4
5 counterclaims;
6 3. Ordering the Director of the USPTO to cancel all trademark registrations

7
fraudulently obtained by FAZE Apparel, and to make appropriate entries upon the
8
9 USPTO’s records to reflect such action;
10 4. Awarding Faze Clan its reasonable attorney’s fees, costs, expenses, and
11
interest; and
12
13 5. Awarding Faze Clan such other and further relief as the Court deems just
14 and proper.
15
16
17 Dated: April 13, 2018
18 COWAN DEBAETS ABRAHAMS

19 & SHEPPARD, LLP
20 By: /s/Eleanor M. Lackman
21 Eleanor M. Lackman, Esq.
22 Attorneys for Defendant,
23 FAZE CLAN INC.
24
25
26
27
28 20
DEFENSES

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Case 2:18-cv-02052-RGK-JEM Document 30 Filed 04/13/18 Page 1 of 20 Page ID #:564

1 Eleanor M. Lackman, Esq., No. 298594

7 Attorneys for Defendant

9 UNITED STATES DISTRICT COURT

12 FAZE Apparel, LLC, a California Case No.: 2:18-cv-02052-RGK-JEM

14 Plaintiff, DEFENDANT FAZE CLAN INC’s

24 FAZE Apparel, LLC (“FAZE Apparel”), states as follows:

5 3. Faze Clan denies the allegations contained in Paragraph 3 of the

10 4. Faze Clan lacks knowledge or information sufficient to form a belief

13 on that basis denies the allegations of this Paragraph.

14 5. Faze Clan lacks knowledge or information sufficient to form a belief

17 on that basis denies the allegations of this Paragraph.

21 contained in Paragraph 6 of the Complaint contain conclusions of law as to which no

9 9. Faze Clan lacks knowledge or information sufficient to form a belief

2 allegations that may exist in these paragraphs.

6 District of California, as referenced in these Paragraphs, and therefore the allegations

10 allegations that may exist in these paragraphs.

14 District of California, as referenced in these Paragraphs, and therefore the allegations

18 allegations that may exist in these paragraphs.

5 allegations that may exist in these paragraphs.

9 District of California, as referenced in these Paragraphs, and therefore the allegations

13 allegations that may exist in these paragraphs.

17 District of California, as referenced in these Paragraphs, and therefore the allegations

21 allegations that may exist in these paragraphs.

25 on that basis denies the allegations of this Paragraph.

5 23. Faze Clan lacks knowledge or information sufficient to form a belief

9 24. Faze Clan lacks knowledge or information sufficient to form a belief

18 26. Faze Clan lacks knowledge or information sufficient to form a belief

21 on that basis denies the allegations of this Paragraph.

25 on that basis denies the allegations of this Paragraph.

10 contained in Paragraph 29 of the Complaint.

14 allegations contained in Paragraph 30 of the Complaint.

18 32. Faze Clan denies the allegations contained in Paragraph 32 of the

10 remaining allegations contained in Paragraph 35 of the Complaint.

17 contained in Paragraph 36 of the Complaint.

21 lacks knowledge or information sufficient to form a belief as to the truth of the

2 opposition. Faze Clan lacks knowledge or information sufficient to form a belief as to

6 denies that declination to respond to a notice of opposition equates to or otherwise

9 in Paragraph 39 of the Complaint.

10 40. Faze Clan admits so much of the allegations contained in Paragraph 40 of

13 allegations contained in Paragraph 40 of the Complaint.

14 41. Faze Clan denies the allegations contained in Paragraph 41 of the

17 42. Faze Clan denies the allegations contained in Paragraph 42 of the

9 sufficient to form a belief as to the truth of the remaining allegations contained in

10 Paragraph 45 and therefore denies them on that ground.

5 49. Faze Clan denies the allegations contained in Paragraph 49 of the

10 51. Faze Clan denies the allegations contained in Paragraph 51 of the

13 using mere settlement discussions to show liability.

17 remaining allegations contained in Paragraph 52 of the Complaint.

18 53. Faze Clan denies the allegations contained in Paragraph 53 of the

21 54. Faze Clan denies the allegations contained in Paragraph 54 of the

5 57. Faze Clan denies the allegations contained in Paragraph 57 of the

10 59. Faze Clan denies the allegations contained in Paragraph 59 of the

13 60. Faze Clan lacks knowledge or information sufficient to form a belief as to

17 61. Faze Clan lacks knowledge or information sufficient to form a belief as to

21 62. Faze Clan denies the allegations contained in Paragraph 62 of the

13 National Football League game.

25 67. Faze Clan denies the allegations contained in Paragraph 67 of the

6 70. Faze Clan incorporates by reference each response to the preceding

10 Complaint consist of conclusions of law as to which no response is required, but to the

13 form a belief as to the truth of the allegations contained in Paragraph 71 of the

14 Complaint, and on that basis denies them.

18 73. Faze Clan denies the allegations contained in Paragraph 73 of the