Othello Trademark Lawsuit

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Benjamin A. Katzenellenbogen (SBN 208,527) [email protected] Lynda J. Zadra-Symes (SBN 156,511) [email protected] KNOBBE, MARTENS, OLSON & BEAR, LLP 2040 Main Street Fourteenth Floor Irvine, CA 92614 Phone: (949) 760-0404 Facsimile: (949) 760-9502 Attorneys for Plaintiff KABUSHIKI KAISHA MEGAHOUSE

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

Kabushiki Kaisha MegaHouse, a Japanese corporation,

Plaintiff,

v.

Anjar Co. LLC, a Delaware Limited Liability company, Becker Associates, LLC, a Delaware limited liability company, Jonathan Becker, Patti Becker, J.A.R. Games, Co., and Anjar Co., a New York sole proprietorship

Defendants.

))))))))))))))))

Case No. 2:14-CV-00598-CAS-CW

FIRST AMENDED COMPLAINT FOR TRADEMARK INFRINGEMENT, TRADE DRESS INFRINGEMENT, FALSE DESIGNATION OF ORIGIN, FALSE ADVERTISING, UNFAIR COMPETITION, IMPOSITION OF CONSTRUCTIVE TRUST, BREACH OF CONTRACT, BREACH OF FIDUCIARY DUTY AND DECLARATORY JUDGMENT

Case 2:14-cv-00598-CAS-CW Document 21 Filed 08/07/14 Page 1 of 23 Page ID #:243

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Plaintiff Kabushiki Kaisha MegaHouse hereby complains of Defendants

Anjar Co. LLC, Becker Associates LLC, Jonathan Becker, Patti Becker, J.A.R.

Games Co., and Anjar Co., and alleges as follows:

I. JURISDICTION AND VENUE 1. This is an action for: (1) false designation of origin, and false

advertising under 15 U.S.C. 1125(a); (2) trademark infringement and unfair

competition under California common-law; (3) California statutory unfair

competition; (4) specific performance; (5) imposition of a constructive trust;

(6) breach of contract; (7) breach of fiduciary duty; and (8) declaratory

judgment.

2. The Court has original subject matter jurisdiction over at least the

claims that relate to trademark infringement, false designation of origin, unfair

competition, and false advertising, pursuant to sections 34(a) and 39(a) of the

Lanham Act and 28 U.S.C. 1331 and 1338, 15 U.S.C. 1116 and 1121(a)

as these claims arise under the laws of the United States.

3. The Court has at least supplemental jurisdiction pursuant to

28 U.S.C. 1367(a) over the claims that arise under California state statutory

and common law because they are so related to the federal claims that they form

part of the same case or controversy and derive from a common nucleus of

operative facts.

4. This Court has personal jurisdiction over Defendants at least

because each Defendant has a continuous, systematic, and substantial presence

within this judicial district and within California, including by committing acts

of trademark infringement, false advertising, and/or unfair competition in this

judicial district, by licensing, selling or offering to license or sell infringing

products to consumers and/or retailers in this district, or otherwise making

statements knowing such statements would be accessible in California and in

this district, and because Defendants have not disputed personal jurisdiction in


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their Answer to the original Complaint, and because Defendants have filed

counterclaims in this case.

5. Venue is proper in this judicial district pursuant to at least

28 U.S.C. 1391, and because Defendants have not disputed venue in their

Answer to the original Complaint, and because Defendants have filed

counterclaims in this case.

II. THE PARTIES 6. Plaintiff Kabushiki Kaisha MegaHouse (MegaHouse) is

organized and existing under the laws of Japan, having a principal place of

business at Bandai 2nd Building, 5-4 Komagata 2 Chome, Taito-Ku, Tokyo 111-

0043, Japan.

7. Upon information and belief, Anjar Co. LLC (Anjar) is a limited

liability company organized and existing under the laws of the State of

Delaware, having a principal place of business at 42 Russet Road Stamford,

Connecticut 6903, United States.

8. Upon information and belief, Becker Associates LLC (Becker

Associates) is a limited liability company organized and existing under the

laws of the State of Delaware, having a principal place of business at 42 Russet

Road Stamford, Connecticut 6903, United States.

9. Upon information and belief, Jonathan Becker is a citizen of the

United States and is the Principal of Anjar and directs all the business and

commercial activities of Anjar.

10. Upon information and belief, Patti Becker is a citizen of the United

States and is President of Becker Associates and directs all the business and

commercial activities of Becker Associates.

11. Upon information and belief, J.A.R. Games Co. is a company of

unknown organizational structure, having a principal place of business at

42 Russet Road Stamford, Connecticut 6903, United States.


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12. Upon information and belief, Anjar Co. is a sole proprietorship

organized and existing under the laws of the State of New York, having a

principal place of business at 42 Russet Road Stamford, Connecticut 6903,

United States.

III. COMMON ALLEGATIONS FOR ALL CLAIMS OF RELIEF A. The OTHELLO Game, Trademarks, and Trade Dress

13. Plaintiff MegaHouse is the owner by assignment of all worldwide

trademark rights (outside of Japan) in the famous mark OTHELLO for use in

connection with games and related goods and services.

14. In the early 1970s, Goro Hasegawa created the game OTHELLO.

The name and trade dress were inspired by Shakespeares play Othello. The

games disks are black on one side (general Othello the Moor) and white on the

other side (Desdemona his wife). The green color of the playing surface alludes

to a battlefield as well as to the emotional jealousy that led Othello to kill

Desdemona and himself.

15. In connection with the creation of the OTHELLO game, Mr.

Hasagawa, or another individual whose actions inured to the benefit of

MegaHouses predecessors-in-interest, conceived of a Japanese phrase that was

later translated into English as A MINUTE TO LEARN A LIFETIME TO

MASTER (hereinafter referred to as the MINUTE TO LEARN mark).

16. The OTHELLO game was launched in Japan in 1973, and in the

U.S. shortly thereafter. The game OTHELLO has been wildly popular and has

won recognition and numerous awards from the toy and game industry. In 2004,

The New York Times Magazine estimated that over 40 million OTHELLO

games had been sold since its introduction.

17. MegaHouses predecessors-in-interest obtained the exclusive right

to license the OTHELLO game and to register the trademark OTHELLO outside

Japan. Starting in 1974, MegaHouses predecessors-in-interest began registering


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the trademark OTHELLO worldwide.

18. The MINUTE TO LEARN mark was originally registered in the

United States by a licensee of one of MegaHouses predecessors-in-interest

regarding the OTHELLO game, and its registration and use inured to the benefit

of MegaHouse and its predecessors-in-interest.

19. In March 2005, MegaHouse acquired the trademark rights and

registrations for OTHELLO from one of its predecessors-in-interest.

20. MegaHouse owns numerous trademark registrations for

OTHELLO for board games throughout the world. A list of OTHELLO

registrations is attached as Exhibit A to this Amended Complaint.

21. MegaHouse is the legal and/or equitable owner of U.S. Registration

No. 1055196 for the mark OTHELLO for EQUIPMENT SOLD AS A UNIT

FOR PLAYING A PARLOR GAME USING A GAME BOARD AND

MOVABLE PIECES, which was originally registered on December 25, 1976

by one of MegaHouses predecessors-in-interest.

22. MegaHouse owns numerous trademark applications for the

MINUTE TO LEARN mark for board games throughout the world.

23. MegaHouse is the legal and/or equitable owner of U.S. Registration

No. 1366802 for the mark A MINUTE TO LEARNA LIFETIME TO

MASTER for EQUIPMENT SOLD AS A UNIT FOR PLAYING A PARLOR-

TYPE BOARD GAME, which originally registered on October 22, 1985 by a

licensee of one of MegaHouses predecessors-in-interest.

24. Since 1973, MegaHouse and/or its predecessors-in-interest, directly

and/or indirectly through authorized distributors, have continuously used the

OTHELLO mark, the MINUTE TO LEARN mark, and the OTHELLO trade

dress for board games and other goods.

25. As a result of substantial and continuous use and licensing of the



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dress (including its distinctive black/white disks and the green game board) by

MegaHouse and its predecessors-in-interest, the OTHELLO mark, the MINUTE

TO LEARN mark, and the OTHELLO trade dress have acquired secondary

meaning and are well-known to consumers and potential consumers in the U.S.

and around the world.

26. All of the licensed use of the OTHELLO mark, the MINUTE TO

LEARN, and the OTHELLO trade dress by others inured to the benefit of

MegaHouse and its predecessors-in-interest.

27. MegaHouse has common law and statutory trademark rights to the


dress in the U.S.

B. Defendants Licensing of OTHELLO and Failure to Pay Royalties 28. In January 1975, one of MegaHouses predecessors-in-interest

authorized Defendant Anjar to manufacture and sell the OTHELLO game in

the U.S. and Canada.

29. From 1975 to January 2013, Anjar used the OTHELLO mark, the

MINUTE TO LEARN mark, and the OTHELLO trade dress under the

authorization of MegaHouse and/or one of its predecessors-in-interest. Anjars

licensed use inured to the benefit of MegaHouse and/or its predecessors-in-

interest.

30. From 1975 through 1999, Anjar paid royalties to one or more of

MegaHouses predecessors-in-interest.

31. In 2003, Anjar submitted a royalty report to one of MegaHouses

predecessors-in-interest for sales for 2000-2003, but failed to make any royalty

payments.

32. From 2003-2012, Anjar and MegaHouse (and MegaHouses

predecessors-in-interest) attempted to resolve various disputes regarding

royalties and other issues. Anjar made various statements indicating that it


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agreed with MegaHouse (and MegaHouses predecessors-in-interest) regarding

future conduct of the OTHELLO business, but did not formally document that

agreement or resume paying royalties.

33. For example, on February 25, 1993, Jonathan Becker wrote a letter

on behalf of Anjar to Arthur Sarfati at Dujardin International S.A.R.L in which

Mr. Becker states that, [a]s you know, Anjar represents the rights of [one of

MegaHouses predecessors-in-interest] for Othello throughout the world. This

confirms that Anjar did not believe itself to be the owner of the OTHELLO

mark, the MINUTE TO LEARN mark, or the OTHELLO trade dress. It also

confirms that Anjar was representing the rights that were owned by

MegaHouses predecessor-in-interest.

34. Despite being a licensee and sub-licensor of the OTHELLO mark,

the MINUTE TO LEARN mark, and the OTHELLO trade dress, on September

12, 2012, Anjar filed a revocation action against MegaHouses Community

Trade Mark Registration No. 3228053 in the European Union for the

OTHELLO mark (the CTM Proceeding). On September 28, 2012, Anjar filed

a revocation action against MegaHouses U.K. Registration Nos. 1108434 and

1054295 for the OTHELLO mark (the UK Proceedings).

35. On information and belief, Anjar instituted the UK Proceedings

and the CTM Proceeding in bad faith. MegaHouse was forced to spend time,

money and resources opposing Defendants revocation actions.

C. Termination of Defendants License 36. On January 11, 2013, MegaHouse sent a letter to Jonathan Becker

at Anjar terminating Anjars license to use the OTHELLO mark and advising

that the termination would become effective on January 21, 2013 unless Anjar

provided written confirmation that the UK Proceedings and the CTM

Proceeding had been withdrawn.

/ / /


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37. On January 18, 2013, Goro Hasegawa, the creator of the

OTHELLO game, sent a warning letter to Jonathan Becker at Anjar

confirming that Mr. Hasegawas company had licensed the Othello game

exclusively to MegaHouse and its predecessor-in-interest; MegaHouse

appointed your company [Anjar] as licensee and licensing agent of the game

and trademark Othello; Anjar acted as licensor with respect to various sub-

licensees; and Anjars actions, including claiming ownership of the game and

of trademark Othello were not in good faith and infringe our rights on the

Othello game, in addition to those of MegaHouse.

38. On February 5, 2013, MegaHouse sent a letter to Jonathan Becker

at Anjar to confirm that the contractual relationships of any kind with your

company with respect to our Othello business in any country are terminated as

of January 21, 2013 and we warn you that your use of the Othello trademark

from the termination date [January 21, 2013] will constitute infringement of our

rights.

39. On October 21, 2013, an order favorable to MegaHouse was

entered in the CTM Proceedings that expressly referred to Anjars awareness

that it is a licensee as far as the sign OTHELLO is concerned and confirming

that, with respect to board games, computer game software and downloadable

computer game software, the European use of the OTHELLO mark and sales of

the OTHELLO game had inured to the benefit of MegaHouse.

40. On information and belief, in December, 2013, Anjar withdrew its

request for revocation in the UK Proceedings.

D. Defendants Infringement of the OTHELLO Mark, MINUTE TO LEARN mark, and OTHELLO trade dress and Breach of Their

Obligations

41. On information and belief, Defendants are engaged in the

unauthorized business of licensing, selling, offering to license or offering to sell


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goods, including board games and other goods in connection with the


dress.

42. Any and all authorization for Anjar to use the OTHELLO mark, the

MINUTE TO LEARN mark, and/or the OTHELLO trade dress was terminated

by January 21, 2013. On information and belief, none of the other Defendants

were ever authorized to use the OTHELLO mark, the MINUTE TO LEARN

mark, or the OTHELLO trade dress.

43. Defendants used and continued to use the OTHELLO mark, the

MINUTE TO LEARN mark, and the OTHELLO trade dress after notice of the

termination of the license, including on Anjars website, www.anjar.com, and

Becker Associates website, www.beckerassoc.com, in an attempt to falsely

associate with MegaHouse or to otherwise trade upon MegaHouses valuable

reputation and customer goodwill in its OTHELLO mark, the MINUTE TO

LEARN mark, and the OTHELLO trade dress.

44. Upon information and belief, Defendants use of MegaHouses

OTHELLO mark, MINUTE TO LEARN mark, and OTHELLO trade dress is

designed and intended to cause confusion, mistake, or deception as to the source

of the OTHELLO game.

45. Upon information and belief, Defendants willful and deliberate

use of the OTHELLO mark, the MINUTE TO LEARN mark, and the

OTHELLO trade dress is intended to cause consumers and potential customers

to believe that Defendants goods and services are associated with MegaHouse

or MegaHouses OTHELLO mark, MINUTE TO LEARN mark, and

OTHELLO trade dress, when they are not.

46. By virtue of the acts complained of herein, Defendants have:

created a likelihood of injury to MegaHouses business reputation and goodwill;

caused a likelihood of consumer confusion, mistake and deception as to the


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source of origin or relationship of MegaHouses and Defendants goods and

services; and otherwise competed unfairly with MegaHouse by unlawfully

trading on and using MegaHouses OTHELLO mark, MINUTE TO LEARN

mark, and OTHELLO trade dress without MegaHouses permission or consent.

47. Defendants acts complained of herein are willful and deliberate

and are in total disregard of MegaHouses rights in the OTHELLO mark, the

MINUTE TO LEARN mark, and the OTHELLO trade dress.

48. Defendants acts complained of herein have caused and will

continue to cause MegaHouse to suffer irreparable injury to its business.

MegaHouse will continue to suffer substantial loss of goodwill and reputation

unless and until Defendants are preliminarily and permanently enjoined from its

wrongful acts complained of herein.

49. MegaHouse has no adequate remedy at law.

E. The OTHELLO U.S. Trademark Registration 50. On December 19, 1997 an agreement was signed between

MegaHouses predecessor-in-interest and Anjar (signed by James Becker)

stating that MegaHouses predecessors-in-interest is the true owner of U.S.

Trademark Registration No. 1055196.

51. MegaHouses predecessor-in-interest retroactively assigned legal

title to U.S. Trademark Registration No. 1055196 to Anjars predecessor-in-

interest (and indirectly to Anjar) as the U.S. licensee of OTHELLO in order to

maintain the registration from being cancelled.

52. MegaHouse and/or its predecessor-in-interest remained at all times

the true and equitable owner of U.S. Trademark Registration No. 1055196 as

the licensor of OTHELLO.

53. The agreement prohibited Anjar from conveying the registration to

any unrelated third party. The agreement further required Anjar to return formal

legal title in the registration upon termination by mutual consent or if the


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agreement could no longer be maintained.

54. Even after termination of the license, and despite its legal

obligation to assign the registration to MegaHouse, Anjar has not yet assigned

the registration to MegaHouse.

F. The Wakui Agreement 55. On April 1, 2000, Anjar entered an agreement (hereinafter the

Wakui Agreement) with one of MegaHouses predecessors-in-interest, the

Wakui Corporation. The Wakui Agreement purported to grant the right to

manufacture and sell an ITEM defined in Exhibit A of the Wakui Agreement,

as follows:

The Item, sometimes referred to as Games on the Go, Shirt

Pocket Games or Pocketable, comprises various versions of

games, such as Chess, Backgammon, Shogi, Go and all other

games and puzzles, having a vinyl folding case containing a full

set of game pieces which adhere to the vinyl surface of the

playing board.

56. Paragraph 13 of the Wakui Agreement further states that, [t]his

Agreement shall continue as long as the ITEM covered by this Agreement shall

continue to be manufactured or sold, whichever is longer, unless sooner

terminated under the provisions of this Agreement.

57. On or before August 31, 2014, MegaHouse will cease all

manufacture and sale of the ITEM covered by the Wakui Agreement. Thus,

the Wakui Agreement will terminate on or before August 31, 2014.

58. MegaHouse is taking active steps to market a travel version of the

OTHELLO game as substantially set forth in Exhibit B to this Amended

Complaint. MegaHouse is not obligated to pay royalties on this new version of

the OTHELLO game, as the product set forth in Exhibit B is not an ITEM as

defined by the Wakui Agreement.


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IV. FIRST CLAIM FOR RELIEF (False Designation of Origin and False Advertising)

59. MegaHouse hereby repeats, realleges, and incorporates by

reference paragraphs 1-58 of this Amended Complaint as though fully set forth

herein.

60. This is an action for false designation of origin and false

advertising arising under 15 U.S.C. 1125(a).

61. MegaHouse owns the trademark OTHELLO, the trademark A

MINUTE TO LEARNA LIFETIME TO MASTER and the OTHELLO trade

dress in the U.S., and is the legal and/or equitable owner of the OTHELLO

mark shown in U.S. Registration No. 1055196 and the MINUTE TO LEARN

mark shown in U.S. Registration No. 1366802.

62. As a result of the lengthy and widespread use and promotion of the


dress in the U.S. and the world, including use in U.S. commerce in connection

with board games and other goods, the OTHELLO mark, the MINUTE TO

LEARN mark, and the OTHELLO trade dress have acquired substantial

secondary meaning to consumers and potential customers in the U.S.

marketplace. United States consumers and potential customers have come to

associate board games and other related products bearing the OTHELLO mark,

the MINUTE TO LEARN mark, and the OTHELLO trade dress with

MegaHouse.

63. Defendants infringed, and have willfully infringed, MegaHouses

OTHELLO trademark, MINUTE TO LEARN mark, and OTHELLO trade

dress, and created a false designation of origin, and engaged in false advertising

by using in U.S. commerce, without MegaHouses permission, a trademark and

trade dress confusingly similar to MegaHouses OTHELLO mark, MINUTE TO

LEARN mark, and OTHELLO trade dress, in connection with the distribution,


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licensing, offering for license, sale and/or offering for sale of Defendants goods

and/or services, including Defendants infringing OTHELLO games.

64. Defendants actions are causing a likelihood of confusion, mistake,

or deception as to the affiliation, connection, or association between

MegaHouse and Defendants, and/or to suggest MegaHouse as the origin of

Defendants goods and/or services, or that MegaHouse sponsors or approves of

Defendants commercial activities.

65. Defendants statements that they have the authority to license the


dress in the U.S., and other countries, are false and misleading and are intended

to confuse, mislead or deceive consumers and potential consumers.

66. Defendants false statements have been made in interstate

commerce, including over the Internet and through Defendants websites.

67. Upon information and belief, consumers rely upon Defendants

false statements, including by licensing and/or purchasing Defendants goods.

68. Defendants false statements have been willful and deliberate.

69. MegaHouse is informed and believes, and on that basis alleges, that

Defendants acted with the intent to unfairly compete against MegaHouse, to

trade upon MegaHouses reputation and goodwill by causing confusion and

mistake among customers and the public, and to deceive the public into

believing that Defendants goods were authentic products, and/or were

associated with, sponsored by or approved by MegaHouse, when they are not.

70. On information and belief, Defendants had actual knowledge of

MegaHouses ownership and prior use of the OTHELLO mark, the MINUTE

TO LEARN mark, and the OTHELLO trade dress, and without the consent of

MegaHouse, Defendants have willfully violated 15 U.S.C. 1125(a).

71. Defendants aforementioned acts have damaged MegaHouse in an

amount to be determined at trial.


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72. Defendants have irreparably injured MegaHouse. Such irreparable

injury will continue unless Defendants are preliminarily and permanently

enjoined by this Court from further violation of MegaHouses rights, for which

MegaHouse has no adequate remedy at law.

73. Defendants willful and intentional acts of trademark and trade

dress infringement, false designation of origin and false advertising entitle

MegaHouse to enhanced damages.

V. SECOND CLAIM FOR RELIEF (California Common-Law Unfair Competition and

Trademark and Trade Dress Infringement)



herein.

75. This is a claim for unfair competition, including trademark and

trade dress infringement, arising under California common law.

76. Defendants have no right to the OTHELLO mark, the MINUTE

TO LEARN mark, and/or the OTHELLO trade dress and have attempted to

misappropriate these common-law rights from MegaHouse.

77. Defendants acts and statements complained of herein constitute

trademark and trade dress infringement and unfair competition under California

common law.

78. Defendants acts complained of herein have been intentional, are

willful and deliberate, and have been committed with knowledge that the

unlawful use of MegaHouses OTHELLO mark, MINUTE TO LEARN mark,

and OTHELLO trade dress causes a likelihood of confusion.



/ / /


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81. Defendants willful and intentional acts of trademark and trade

dress infringement and unfair competition under California common law

constitute fraud, oppression, and malice, and entitle MegaHouse to exemplary

damages.

THIRD CLAIM FOR RELIEF

(California Statutory Unfair Competition)



herein.

83. This is a claim for unfair competition, arising under California

Business and Professions Code 17200, et seq.

84. Defendants acts of unlawful, unfair and/or fraudulent business acts

or practices, and unfair, deceptive, untrue and/or misleading advertising,

including the acts of trademark and trade dress infringement, false designation

of origin, and false advertising, complained of herein, constitute unfair

competition with MegaHouse under the statutory laws of the State of California,

particularly California Business and Professions Code 17200, et seq.

85. MegaHouse has suffered injury in fact and has lost money or

property as a result of Defendants aforementioned intentional and willful acts.

86. MegaHouse is entitled to equitable relief, including an injunction

for the aforesaid unfair acts and the disgorgement of any money or other

property that Defendants acquired through the aforesaid unlawful acts and

restitution of all money or other property that MegaHouse lost through the

aforesaid unlawful acts.


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VI. FOURTH CLAIM FOR RELIEF (Specific Performance)



herein

88. The terms of the December 19, 1997 agreement were clear and

certain that none of Defendants were the true owner of U.S. Trademark

Registration No. 1055196, and that Anjar was required to return formal legal

title in the registration upon termination of the underlying license to the

OTHELLO mark.

89. Anjar received adequate consideration for this reasonable

obligation, including the ongoing license to the OTHELLO marks.

90. MegaHouse and its predecessors-in-interest performed any and all

of their obligations under the agreement, except to the extent they were

prevented from doing so by Defendants non-performance.

91. The agreement required Anjar to convey formal legal title in the

registration to MegaHouse upon MegaHouses termination for cause of any and

all license Anjar may have had to the OTHELLO trademark. Anjar was also

obligated to convey formal legal title in the registration to MegaHouse when the

1997 agreement could no longer be maintained, including as a result of Anjars

breaches and Defendants failure to pay royalties.

92. Anjar breached its obligations by failing to convey the registration

to MegaHouse.

93. MegaHouse has no adequate remedy at law. MegaHouses

irreparable injury will continue unless Defendants are preliminarily and

permanently enjoined by this Court and ordered to specifically perform under

the 1997 agreement, at least by causing Anjar to convey to MegaHouse formal

legal title to U.S. Trademark Registration No. 1055196.


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VII. FIFTH CLAIM FOR RELIEF (Imposition of a Constructive Trust)



herein.

95. This is a claim for imposition of a constructive trust under

California Civil Code 2224 with respect to U.S. Trademark Registrations

No. 1055196 and 1366802.

96. MegaHouse is the rightful owner of U.S. Trademark Registrations

No. 1055196 and 1366802.

97. Defendants are not entitled to control U.S. Trademark Registrations

No. 1055196 and 1366802 and currently have control of them as a result of acts

and/or statements that were fraudulent, due to undue influence, in violation of

an agreement or trust, and/or were otherwise wrongful.

98. To the extent Defendants have legal title to U.S. Trademark

Registrations No. 1055196 and 1366802, Defendants are the constructive trustee

of U.S. Trademark Registrations No. 1055196 and 1366802, and hold them and

all property or income derived from them, on behalf of MegaHouse.







VIII. SIXTH CLAIM FOR RELIEF (Breach of Contract)




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herein.

102. This is a claim for breach of contract pursuant to the license

agreement entered into between Anjar and MegaHouses predecessor-in-

interest.

103. MegaHouse and its predecessor-in-interest did all, or substantially

all, that was required under the contract. To the extent MegaHouse or its

predecessor-in-interest failed to perform any obligation required under the

contract, such performance was excused or rendered impossible by Anjars

breach.

104. Defendants failed to comply with what was required under the

contract.

105. Defendants failure to pay the royalties due under the contract

constitutes a material breach of the agreement between the parties.

106. Defendants filing of the trademark cancellation proceedings was

prohibited by the express terms of the contract, and/or the implied covenant of

good faith and fair dealing, and constitutes a material breach of the agreement

between the parties.

107. Defendants acts of trademark and trade dress infringement, false

designation of origin, and false advertising, complained of herein, were

prohibited by the express terms of the contract, and/or the implied covenant of

good faith and fair dealing, and constitute a material breach of the agreement

between the parties.

108. Defendants failure to convey to MegaHouse formal legal title to

U.S. Trademark Registrations No. 1055196 and/or 1366802 constitutes a

material breach of the agreement between the parties.

109. Defendants material breach of the agreement, and the other

aforesaid acts, have damaged MegaHouse in an amount to be determined at

trial.


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IX. SEVENTH CLAIM FOR RELIEF (Breach of Fiduciary Duty)



herein.

112. Defendants owed a fiduciary duty to MegaHouse and its

predecessors-in-interest, including collecting and timely paying royalties, and to

refrain from taking any actions adverse to the OTHELLO marks, the MINUTE

TO LEARN mark, or the OTHELLO trade dress.

113. Defendants failure to account for and pay royalties pursuant to the

license agreement constitutes a breach of fiduciary duty.

114. Defendants filing of cancellation proceedings against the

OTHELLO marks constitutes a breach of fiduciary duty.







X. EIGHTH CLAIM FOR RELIEF (Declaratory Judgment Regarding Contractual Obligations)



herein.


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118. An actual controversy exists between MegaHouse and Defendants

by virtue of the allegations of the Amended Complaint. Additionally, an actual

controversy exists because, upon information and belief, Defendants dispute

whether the Wakui Agreement will terminate on or before August 31, 2014.

Additionally, an actual controversy exists because, upon information and belief,

Defendants dispute whether MegaHouse will owe royalties for the distribution

of the travel version of the OTHELLO game as set forth substantially in

Exhibit B to this Amended Complaint. MegaHouse has been, and continues to

be, damaged in that Defendants continue to demand payment under the terms of

the Wakui Agreement.

119. The Wakui Agreement will terminate on or before August 31, 2014

because MegaHouse will cease to manufacture or sell the item specified by its

terms.

120. MegaHouse will not owe royalties for products substantially in the

form of the product set forth in Exhibit B to this Amended Complaint because

the product is not an ITEM under the terms of Exhibit A of the Wakui

Agreement.

XI. PRAYER FOR RELIEF WHEREFORE, MegaHouse prays that the Court render a final judgment

in favor of MegaHouse and against Defendants as follows:

A. Final judgment in favor of MegaHouse and against Defendants on

all claims for relief alleged herein, and that Defendants actions were willful;

B. Final judgment that MegaHouse is the sole and exclusive legal and

equitable owner of the OTHELLO mark, the MINUTE TO LEARN mark, and

the OTHELLO trade dress.

C. Final judgment that Defendants have held U.S. Trademark

Registrations No. 1055196 and 1366802 in a constructive trust for MegaHouse;

ordering Defendants to immediately assign this registrations to MegaHouse; and


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declaring that MegaHouse is legal and equitable owner of U.S. Trademark

Registrations No. 1055196 and 1366802.

D. Final judgment that Defendants willfully violated the provisions of

15 U.S.C. 1125(a) by using a false designation of origin, false description or

false representation in connection with their goods and services, including by

infringing MegaHouses OTHELLO mark, MINUTE TO LEARN mark, and

OTHELLO trade dress through the unauthorized marketing and promotion of

Defendants goods and services;

E. Final judgment that Defendants engaged in acts of unfair

competition under California statutory and common law, including by willfully

infringing MegaHouses OTHELLO mark, MINUTE TO LEARN mark, and

OTHELLO trade dress;

F. Final judgment that Defendants breached a contract with

MegaHouse and that such contract is terminated.

G. Final judgment that Defendants breached their fiduciary duty with

respect to MegaHouse.

H. Declaratory judgment that the Wakui Agreement will terminate on

or before August 31, 2014, and MegaHouse will not owe royalties under the

terms of the Wakui Agreement for the distribution of products substantially in

the form of Exhibit B to this Amended Complaint.

I. Final judgment that Defendants, their agents, servants, employees,

attorneys, successors, and assigns, and all other persons in active concert or

participation with any of them who receive actual notice of the injunction by

personal service or otherwise, be forthwith preliminarily and permanently

enjoined from:

i. using MegaHouses OTHELLO marks, MINUTE TO

LEARN mark and/or trade dress, in connection with any goods or

services, using the OTHELLO mark, the MINUTE TO LEARN mark


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and/or the OTHELLO trade dress in advertising or promoting any goods

or services, and/or using confusingly similar variations of the OTHELLO

mark, the MINUTE TO LEARN mark and/or the OTHELLO trade dress

in any manner that is likely to create the impression that any goods or

services originate from MegaHouse, are endorsed by MegaHouse, or are

connected in any way with MegaHouse;

ii. falsely advertising or promoting that Defendants are

licensors or licensing agents in connection with the OTHELLO mark, the

MINUTE TO LEARN mark and/or the OTHELLO trade dress;

iii. otherwise infringing the OTHELLO marks, the MINUTE

TO LEARN mark and/or the OTHELLO trade dress;

iv. falsely designating the origin of Defendants goods;

v. unfairly competing with MegaHouse in any manner

whatsoever; and

vi. causing a likelihood of confusion or injury to MegaHouses

business reputation;

J. Final judgment ordering Defendants to file with this Court and

serve on MegaHouse within thirty (30) days after the service of the injunction, a

report, in writing, under oath, setting forth in detail the manner and form in

which Defendants have complied with the injunction pursuant to 15 U.S.C.

1116 and 17 U.S.C. 502;

K. Final judgment that Defendants account for and pay to MegaHouse

any and all profits or other benefits derived by Defendants and all damages

sustained by MegaHouse by virtue of Defendants wrongful acts;

L. Final judgment awarding MegaHouse damages for Defendants

trademark and trade dress infringement pursuant to 15 U.S.C. 1117 in the

form of Defendants profits, damages sustained by MegaHouse and the costs of

the action, together with prejudgment and post-judgment interest;


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M. Final judgment awarding MegaHouse treble damages pursuant to

15 U.S.C. 1117;

N. Final judgment awarding MegaHouse exemplary damages from

Defendants;

O. Final judgment awarding MegaHouse restitution and disgorgement;

P. Final judgment awarding MegaHouse pre-judgment interest;

Q. Final judgment awarding MegaHouse its reasonable costs,

expenses and attorneys fees, including pursuant to 15 U.S.C. 1117;

R. Final judgment that Defendants actions were willful;

S. That Defendants be required to deliver and destroy any and all

product, literature, advertising, and other materials bearing the infringing the

OTHELLO mark, the MINUTE TO LEARN mark and/or the OTHELLO trade

dress pursuant to 15 U.S.C. 1118; and

T. That MegaHouse be awarded such other and further relief as this

Court may deem just.

Respectfully submitted, KNOBBE, MARTENS, OLSON & BEAR, LLP

Dated: August 7, 2014 By: /s/ Benjamin A. Katzenellenbogen Benjamin A. Katzenellenbogen Lynda J. Zadra-Symes Attorneys for Plaintiff, K.K. MEGAHOUSE

18595382


Othello Trademark Lawsuit

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