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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION FLATOUT, INC., a Delaware corporation, Plaintiff, v. 34 DEGREES LLC, a Colorado limited liability company, Defendant. COMPLAINT Plaintiff Flatout, Inc. (Flatout), by and through its attorneys, Dobrusin & Thennisch PC, hereby complains against Defendant 34 Degrees LLC (34 Degrees) as follows: NATURE OF THE ACTION 1. For more than ten (10) years, and prior to 34 Degrees conduct described below,

Civil Action No.: Honorable Magistrate Demand For Jury Trial

Flatout and its predecessors have manufactured, distributed, promoted, and sold bakery goods and other food items, including bread and cracker products, to the consuming public under the federally registered trademark, FLATOUT. 34 Degrees has recently adopted and began using the mark, FLAT OUT GOOD, prominently on its crispbread and cracker products in an attempt to trade off the commercial magnetism and goodwill of Flatouts FLATOUT mark and to deceive and confuse the public into believing that 34 Degrees and its crispbread and cracker products that bear the FLAT OUT GOOD mark are somehow connected to, affiliated with, or authorized by Flatout.

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2.

Since learning of 34 Degrees infringement, Flatout has repeatedly attempted to

resolve this matter without involving the Court. Flatout has repeatedly asked 34 Degrees to cease use of the designation FLAT OUT GOOD. 34 Degrees, however, has refused to stop, has persisted in its intentional infringement, and has left Flatout no choice but to bring this lawsuit to prevent 34 Degrees from further deceiving and confusing the public and harming Flatouts goodwill. 3. Accordingly, Flatout brings this action for (i) federal trademark infringement in

violation of Section 32 of the Lanham Act, 15 U.S.C. 1114, (ii) federal unfair competition, false designation of origin, and false representations in violation of Section 43 of the Lanham Act, 15 U.S.C. 1125(a), (iii) false and deceptive trade practices under the laws of the State of Michigan, MICH COMP. LAWS 4415.901 et seq., and of all the states in which 34 Degrees has sold its products, and (iv) for trademark infringement, unfair competition, and unjust enrichment under state common law. THE PARTIES 4. Plaintiff Flatout, Inc. is a corporation organized and existing under the laws of the

State of Delaware with its principal place of business in this judicial district, in Saline, Michigan. 5. Defendant 34 Degrees LLC is a limited liability company organized and existing

under the laws of the State of Colorado with its principal place of business in Denver, Colorado. 34 Degrees may be served at 668 Clarkson Street in Denver, Colorado 80218. JURISDICTION AND VENUE 6. This Court has federal question jurisdiction over the subject matter of this action

pursuant to 15 U.S.C. 1121, 28 U.S.C. 1331, 1338, and 1367(a).

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7.

This Court has personal jurisdiction over 34 Degrees because 34 Degrees

transacts business within this state, has caused injury to Flatouts property which lies in this judicial district, and has otherwise made or established contacts with this state sufficient to permit the exercise of personal jurisdiction over it. 8. Venue is proper in this case under 28 U.S.C. 1391(b) and (c) because a

substantial part of the events or omissions giving rise to Flatouts claims occurred in this judicial district, in that 34 Degrees has conducted the activities that are the subject of this action in this judicial district. FACTUAL BACKGROUND Flatout and Its Federally Registered FLATOUT Mark 9. Flatout is a family-owned and operated producer of innovative bakery products

and concepts that was started in the Ann Arbor, Michigan area by two graduates of Michigan State University and has since grown into a business which provides and distributes food items and bakery goods, including bread and cracker products, nationwide in numerous national grocery and supermarket chains, including Kroger, Meijer, and Walgreens, as well as big box retailers such as Wal-Mart and Costco. 10. Since at least as early as 1999, Flatout and its predecessors have manufactured,

distributed, promoted, and sold prepared food items and bakery goods, including bread and cracker products, to the consuming public under the federally registered trademark, FLATOUT. 11. Due to Flatouts long and continuous use of the FLATOUT mark in connection

with its food products, the mark is widely recognized by the public as an indicator of the source of Flatouts goods.

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12.

Flatout has expended considerable resources in promoting and marketing the

FLATOUT mark through various media, including newspapers, magazines, other printadvertisements, on-line, established social media sites, Flatout-affiliated bloggers, as well as numerous in-store promotions and point-of-purchase materials in restaurants, traditional supermarkets, smaller markets, grocery stores, and specialty food retailers. True and correct copies of select advertising and promotional materials featuring the FLATOUT mark are attached hereto as Exhibit A. 13. Flatout has also taken advantage of the internet to promote its FLATOUT mark.

Flatouts website, located at http://www.flatoutbread.com, prominently features the FLATOUT mark. The website, among other things, identifies products sold under the FLATOUT mark and their attributes, provides information about Flatout as a company, and provides recipes for use in conjunction with Flatouts products. True and correct copies of select pages from

Flatouts website featuring the FLATOUT mark are attached hereto as Exhibit B. 14. As a result of Flatouts extensive use and promotion of the FLATOUT mark,

Flatout has built and now owns enormously valuable goodwill symbolized by the mark, and the purchasing public strongly associates the mark with Flatout. 15. Flatout has been the recipient of multiple awards, accolades, and honors for the

quality, taste, and nutritional attributes of its products under the FLATOUT mark from multiple segments of the food industry. Further, Flatouts products and Flatout as a company have been featured in multiple newspaper and magazine articles. Indeed, the founders of Flatout, Mike and Stacey Marsh, have personally participated in numerous media interviews, public appearances, and other venues promoting and selling goods under the FLATOUT mark.

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Flatout sells and provides its goods under the FLATOUT mark in hundreds of retail outlets and venues throughout the United States and its territories. 16. Flatout is the owner of U.S. Trademark Registration No. 2,456,804 for the

FLATOUT mark in connection with [p]repared foods; namely, packaged combinations composed primarily of bakery goods, breads, crackers and cheese in International Class 030, which issued on June 5, 2001. A true and correct copy of U.S. Trademark Registration No. 2,456,804 is attached as Exhibit C. 17. Flatouts U.S. Trademark Registration No. 2,456,804 for the FLATOUT mark

is incontestable pursuant to Section 15 of the Lanham Act, 15 U.S.C. 1065, and serves as conclusive evidence of Flatouts ownership of the mark and of its exclusive rights to use the mark in commerce on or in connection with the goods identified in the registration under Section 33(b) of the Lanham Act, 15 U.S.C. 1115(b). 18. Well before 34 Degrees began using its FLAT OUT GOOD mark, the

FLATOUT mark was well-known and distinctive in that: (a) the FLATOUT mark is extensively used throughout the United States in

connection with the goods listed in Flatouts federal trademark registration; (b) the FLAOUT mark is prominently featured in millions of dollars worth

of advertising throughout the United States and its territories; (c) millions of dollars worth of goods bearing the FLATOUT mark have

been sold throughout the United States and its territories; (d) goods bearing the FLATOUT mark are distributed through a widespread

distribution network that includes sales through traditional establishments, the internet, and restaurants;

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(e) 19.

the FLATOUT mark is covered by an incontestable federal registration.

Due to high brand awareness and Flatouts reputation for quality and innovative

food items, including bread and cracker products, the FLATOUT mark is a tempting target for 34 Degrees, a competitor of Flatout in at least the crispbread and cracker market, which has decided to trade on the goodwill of Flatout and reap the profits of being associated with Flatout and its FLATOUT mark. 34 Degrees Unlawful Conduct 20. Notwithstanding Flatouts prior rights in the FLATOUT mark, 34 Degrees

recently adopted the FLAT OUT GOOD mark for use in connection with crispbread and cracker products. True and correct copies of select pages from 34 Degrees website demonstrating its use of FLAT OUT GOOD are attached hereto as Exhibit D. 21. Upon information and belief, 34 Degrees is currently marketing and promoting

crispbread and cracker products under the FLAT OUT GOOD mark. 22. By using FLAT OUT GOOD prominently on 34 Degrees crispbread and cracker

products, 34 Degrees has set a backdrop for consumer confusion and demonstrated a bad-faith intent to trade on the commercial magnetism of the FLATOUT mark. 34 Degrees bad faith and opportunistic motives in seeking to use the FLATOUT mark are apparent from its actions. 23. Indeed, Flatout has repeatedly attempted to resolve this matter without involving

the Court. Flatout has repeatedly asked 34 Degrees to cease use of the designation FLAT OUT GOOD. 34 Degrees, however, has refused to stop, has persisted in its intentional infringement, and has left Flatout no choice but to bring this lawsuit to prevent 34 Degrees from further deceiving and confusing the public and harming Flatouts goodwill.

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24.

34 Degrees conduct has caused, and is likely to continue casing substantial,

irreparable injury to the public and to Flatout. Flatout has no adequate remedy at law for this injury. 34 Degrees is Blatantly Trading on the Commercial Magnetism of the FLATOUT Mark 25. 34 Degrees did not buy any rights from Flatout, nor has it requested or obtained

Flatouts permission to use FLAT OUT GOOD in connection with 34 Degrees goods. 26. Flatout and its predecessors began using the FLATOUT mark well before 34

Degrees first use of FLAT OUT GOOD. 27. The FLAT OUT GOOD designation used by 34 Degrees is confusingly similar to

Flatouts FLATOUT mark. 28. Upon information and belief, 34 Degrees adopted the FLAT OUT GOOD

designation for use in conjunction with crispbread and cracker products with the full knowledge of Flatouts prior use and registration of the FLATOUT mark for bakery goods and other food items, including bread and cracker products. 29. Upon information and belief, 34 Degrees adopted the FLAT OUT GOOD

designation for use in conjunction with crispbread and cracker products to mislead consumers into believing that there is some connection or affiliation between 34 Degrees or its products on the one hand, and Flatout and its products sold under the FLATOUT mark, on the other hand. 30. By using FLAT OUT GOOD in this manner, 34 Degrees is intentionally trading

on Flatouts goodwill in the FLATOUT mark and intentionally seeking to confuse consumers and other members of the public as to the source or affiliation of Flatouts products and the FLATOUT mark.

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31.

34 Degrees products sold under the FLAT OUT GOOD designation are closely

related to, and competitive with, the line of cracker and bread products offered by Flatout under the FLATOUT mark. 34 Degrees products are the same types of goods, offered for sale to the same customers through the same channels of trade, and are advertised through many of the same media as goods sold by Flatout under the FLATOUT mark. 32. 34 Degrees unauthorized use of a designation that is confusingly similar to

Flatouts FLATOUT mark is likely to cause mistake and/or to deceive consumers and other members of the public, as to the affiliation, connection, or association of 34 Degrees with Flatout, or as to the origin, sponsorship, or approval of products sold prominently displaying the FLAT OUT GOOD designation. 33. 34 Degrees unauthorized use of FLAT OUT GOOD indicates to consumers and

other members of the public that 34 Degrees cracker and crispbread products originate with Flatout, or are affiliated, connected, or associated with Flatout, or are sponsored, endorsed, or approved by Flatout, or are in some manner related to Flatout and/or Flatouts products sold under the FLATOUT mark. 34. 34 Degrees unauthorized use of FLAT OUT GOOD enables 34 Degrees to trade

on and receive the benefit of goodwill in Flatouts FLATOUT mark, which Flatout has built up through great labor and expense over many years. 34 Degrees unauthorized use of a

confusingly similar designation to FLATOUT enables 34 Degrees to gain acceptance for its crispbread and cracker products, not solely on the merits of its own products, but on the reputation and goodwill of Flatout, the FLATOUT mark, and the end products sold under the FLATOUT mark by Flatout.

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35.

Flatout has no control over the quality of 34 Degrees products. Dissatisfied

customers of 34 Degrees products may well hold Flatout accountable. 36. The combination of 34 Degrees illegal acts unjustly enriches 34 Degrees at

Flatouts expense. COUNT I Federal Trademark Infringement (Violation of 32(1) of the Lanham Act, 15 U.S.C. 1114(1)) 37. 38. Flatout repeats and incorporates by reference the allegations of paragraphs 1-36. 34 Degrees use of a confusingly similar imitation of Flatouts FLATOUT mark

is likely to cause confusion, deception, and mistake by creating the false and misleading impression that 34 Degrees goods are manufactured or distributed by Flatout, or are affiliated, connected, or associated with Flatout, or have the sponsorship, endorsement, or approval of Flatout. 39. 34 Degrees has prominently used a confusingly similar designation to Flatouts

federally registered FLATOUT mark in violation of 15 U.S.C. 1114, and 34 Degrees activities have caused and, unless enjoined by this Court, will continue to cause a likelihood of confusion and deception of members of the trade and public and, additionally, injury to Flatouts goodwill and reputation as symbolized by the federally registered FLATOUT mark, for which Flatout has no adequate remedy at law. 40. 34 Degrees actions demonstrate an intentional, willful, and malicious intent to

trade on the goodwill associated with Flatouts federally registered FLATOUT mark to Flatouts great and irreparable injury. 41. 34 Degrees has caused and is likely to continue casing substantial and irreparable

injury to the public and to Flatout, and Flatout is entitled to injunctive relief and to recover 34

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Degrees profits, actual damages, enhanced profits and damages, costs, and reasonable attorneys fees under 15 U.S.C. 1114, 1116, 1117. COUNT II Federal Unfair Competition, False Designation of Origin, and False Representations (Violation of 43(a) of the Lanham Act, 15 U.S.C. 1125(a)) 42. 43. Flatout repeats and incorporates by reference the allegations of paragraphs 1-41. 34 Degrees use of a confusingly similar imitation of Flatouts FLATOUT mark

has caused and is likely to cause confusion, deception, and mistake by creating the false and misleading impression that 34 Degrees goods are manufactured or distributed by Flatout, or are affiliated, connected, or associated with Flatout or have the sponsorship, endorsement, or approval of Flatout. 44. 34 Degrees has made false representations, false descriptions, and false

designations about the origin of its goods in violation of 15 U.S.C. 1125(a), and 34 Degrees activities have caused and, unless enjoined by this Court, will continue to cause a likelihood of confusion and deception of members of the trade and public, as well as injury to Flatouts goodwill and reputation as symbolized by the FLATOUT mark, for which Flatout has no adequate remedy at law. 45. 34 Degrees actions demonstrate an intentional, willful, and malicious intent to

trade on the goodwill associated with Flatouts FLATOUT mark to Flatouts great and irreparable injury. 46. 34 Degrees has caused and is likely to continue causing substantial and

irreparable injury to the public and to Flatout, and Flatout is entitled to injunctive relief and to recover 34 Degrees profits, actual damages, enhanced profits and damages, costs, and reasonable attorneys fees under 15 U.S.C. 1125(a), 1116, and 1117.

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COUNT III Deceptive Trade Practices and Acts (Violation of MICH. COMP. LAWS 445.903 and Other State Statutes) 47. 48. Flatout repeats and incorporates by reference the allegations of paragraphs 1-46. 34 Degrees acts constitute unfair, unconscionable, or deceptive methods, acts or

practices in conducting trade or commerce in violation of MICH. COMP. LAWS 445.903 et seq. 49. 34 Degrees acts also constitute unfair and deceptive acts or practices in the

course of business, trade, or commerce in violation of the unfair and deceptive trade practice statutes of other states in which it has marked and sold its infringing products. 50. 34 Degrees has caused and is likely to continue casing substantial and irreparable

injury to the public and to Flatout, and Flatout is entitled to injunctive relief and to recover 34 Degrees profits, Flatouts damages, and, as appropriate, punitive damages, costs, and reasonable attorneys fees. COUNT IV Trademark Infringement under State Common Law 51. 52. Flatout repeats and incorporates by reference the allegations of paragraphs 1-50. 34 Degrees actions constitute trademark infringement in violation of the common

law of states in which it has marketed and sold its infringing products. 53. 34 Degrees has caused and is likely to continue casing substantial and irreparable

injury to the public and to Flatout, and Flatout is entitled to injunctive relief and to recover 34 Degrees profits, Flatouts damages, and, as appropriate, punitive damages, costs, and reasonable attorneys fees. COUNT V Unfair Competition under State Common Law 54. Flatout repeats and incorporates by reference the allegations of paragraphs 1-53.

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55.

34 Degrees actions constitute unfair competition in violation of the common law

of states in which it has marketed and sold its infringing products. 56. 34 Degrees has caused and is likely to continue casing substantial and irreparable

injury to the public and to Flatout, and Flatout is entitled to injunctive relief and to recover 34 Degrees profits, Flatouts damages, and, as appropriate, punitive damages, costs, and reasonable attorneys fees. COUNT VI Unjust Enrichment under State Common Law 57. 58. Flatout repeats and incorporates by reference the allegations of paragraphs 1-56. 34 Degrees conduct has resulted in an inequitable benefit to 34 Degrees. 34

Degrees has profited and, unless restrained, will continue to profit from its unauthorized use of a confusingly similar imitation of Flatouts FLATOUT mark and corresponding goodwill, which is substantial, but in which 34 Degrees has made no investment. 59. 34 Degrees actions constitute unjust enrichment in violation of the common law

of states in which it has marketed and sold its infringing products. 60. 34 Degrees has caused and is likely to continue casing substantial and irreparable

injury to the public and to Flatout, and Flatout is entitled to injunctive relief and to recover 34 Degrees profits, Flatouts damages, and, as appropriate, punitive damages, costs, and reasonable attorneys fees. PRAYER FOR RELIEF WHEREFORE, Flatout prays that this Court grant it at least the following relief: 1. That the Court preliminarily and permanently enjoin and restrain 34 Degrees, its

subsidiaries and affiliated companies, and its officers, directors, agents, servants, employees, affiliates, and all other persons acting in concert, or participating, with 34 Degrees from:

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(a)

using the FLAT OUT GOOD mark or any other trademark, service mark,

name, logo, or source designation of any kind that is confusingly similar to Flatouts FLATOUT mark; (b) using any false designation of origin or false description, or performing

any act which is likely to lead members of the trade or public to believe that any product manufactured, distributed or sold by 34 Degrees is in any manner associated or connected with Flatout, or is sold, manufactured, licensed, sponsored, approved or authorized by Flatout; (c) using any simulation, reproduction, copy or colorable imitation of

Flatouts FLATOUT mark in connection with the promotion, advertisement, display, sale, offering for sale, manufacture, production, circulation or distribution of any product or service in such a manner as to relate or connect, or tend to relate or connect, such product in any way to Flatout or to any goods sold, manufactured, sponsored, or approved by or connected with Flatout; (d) engaging in any other activity constituting unfair competition with Flatout,

or constituting infringement of the FLATOUT mark; (e) engaging in activity that trades upon the commercial magnetism of the

FLATOUT mark and confuses or is likely to confuse the public as to Flatouts affiliation with 34 Degrees; and (f) instructing, assisting, aiding or abetting any other person or entity in

engaging in or performing any of the activities referred to in subparagraphs (a) through (e) above. 2. That the Court require 34 Degrees, its subsidiaries and affiliated companies, and

its officers, directors, agents, servants, employees, affiliates, and all other persons acting in

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concert, or participating, with 34 Degrees to deliver to the Court for destruction, or show proof of destruction of, any and all products labels, signs, prints, packages, wrappers, receptacles, and advertisements in 34 Degrees possession or control that use the FLAT OUT GOOD designation, or any other trademark, service mark, name, logo, or source designation of any kind that is confusingly similar to the FLATOUT mark. 3. That the Court require 34 Degrees to account for and pay over to Flatout the

profits realized by 34 Degrees from its infringement of the FLATOUT mark and its unfair competition with Flatout, and trebling such amount pursuant to 15 U.S.C. 1117(a). 4. That Flatout be awarded its actual damages arising out of 34 Degrees acts of

trademark infringement and unfair competition, and trebling such amount pursuant to 15 U.S.C. 1117(a). 5. That Flatout be awarded interest, including pre-judgment interest, on the

foregoing sums. 6. That Flatout be awarded its attorneys fees and costs incurred in this action

pursuant to 15 U.S.C. 1117(a). 7. That Flatout be awarded exemplary and punitive damages to deter any future

violations of Flatouts rights. 8. That the Court require that 34 Degrees files with the Court and serve upon

Flatouts counsel within thirty (30) days after entry of judgment, a report in writing under oath setting forth in detail the manner and form in which 34 Degrees has complied with the above. 9. and proper. That Flatout be awarded such other and further relief as the Court may deem just

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DEMAND FOR JURY TRIAL Flatout demands a jury trial for all issues so triable. Dated: July 11, 2011 Respectfully submitted, FLATOUT, INC. By: /s/ Jeffrey P. Thennisch One of its Attorneys Jeffrey P. Thennisch (P51499) DOBRUSIN & THENNISCH PC 29 W. Lawrence Street, Suite 210 Pontiac, Michigan 48342 (248) 292-2920 jeff@patentco.com Attorneys for Plaintiff Flatout, Inc.

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