Professional Documents
Culture Documents
Plaintiffs,
Defendants,
v.
Third-party Defendants.
Case 1:18-cv-00140-CW-EJF Document 12 Filed 11/26/18 Page 2 of 43
Defendants, 1000 Lights, LLC, Nicholas Menendez, Zach Wertz, and Andrew Kenney,
pursuant to Rules 8 and 12 of the Federal Rules of Civil Procedure, as and for their answer to the
ANSWER
I. FIRST DEFENSE
The Complaint fails to state a claim, in whole or in part, upon which relief may be
granted.
follows:
PARTIES
3. Admit.
4. Admit.
5. Admit.
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GENERAL ALLEGATIONS
10. Admit One World engages in generic event planning activities across the United
11. Admit One World’s events cause people to gather, deny remainder. Affirmatively
allege that Plaintiff’s activities are generic in the field of event planning.
knowledge and understanding is not unique and can be easily obtained from information that is
14. Without knowledge, deny. Affirmatively allege that One World’s products and
overall customer experience are not unique to Plaintiff and similar experiences may be had at
15. Without knowledge, deny. Affirmatively allege that Knight and Schaefer’s “best
practices, policies, and procedures” were actually developed by Defendant Menendez and are
generic and substantially similar to other events being held around the U.S.
17. Deny. Affirmatively allege that Defendant Menendez was the one that brought
the idea to Knight and Schaefer and also the one that organized, planned and executed the water
18. Deny. Affirmatively allege that the water lantern festivals were not Knight and
Schaefer’s idea and that they did very little in the execution of the plan to create a business
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19. Without knowledge, deny. Affirmatively allege that One World’s products and
overall customer experience are not unique to them and similar experiences may be had at
similar events across the country. Affirmatively allege that the “design” of One World’s water
lantern festivals was the brainchild of Menendez and others and that Knight and Schaefer had
very little to do with how One World events were “designed.” Affirmatively allege that there
are no intellectual property protections available for an entire “experience, consisting of food
trucks, games, and entertainment, culminating in launching a…floating lantern onto a body of
water.”
20. Deny. Affirmatively allege that One World’s products and overall customer
experience are not unique and similar experiences may be had at other similar events across the
country and even if it was a one of a kind event, nothing would be protectable under the
21. Admit Schaefer and Knight started their plans in September of 2017, deny
remainder. Affirmatively allege that Schaefer and Knight began executing a business plan and
model that was primarily Menendez’s and involved hours of research and market launch
24. Without knowledge, deny. Affirmatively allege that Plaintiffs have not articulated
26. Deny. Affirmatively allege that Knight and Schaefer’s alleged “improvements”
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are clearly obvious and functional and do not merit any kind of intellectual property protection,
patent or otherwise. Further Affirmatively allege that the design of One World’s water lantern
festivals was the idea and work of Menendez, along with Schaefer and Knight, and the additions
and changes to the design were specifically completed for the purpose of increasing the
27. Deny. Affirmatively allege that One World’s supposed trade dress as well as the
“Water Lantern Festival Mark” are generic, functional or otherwise completely lacking in
trademark value, do not constitute trademarks or trade dress, and have not been used as
trademarks. Affirmatively allege that Defendants were the first to use “Light the Water” as a
trademark in commerce and are the true owners of the “Light the Water” mark and that One
World is engaging in a scheme of false registration and reverse confusion, wherein the
Plaintiffs, as junior users of the Light the Water mark, are attempting to make it appear that
Defendants, as the senior user of the Light the Water mark, are the infringers.
28. Deny. Affirmatively allege that One World did not begin offering any goods or
29. Admit that One World applied for a federal trademark registration for “Water
Lantern Festival” and that it is still pending, deny remainder. Affirmatively allege that One
World’s alleged mark is at best descriptive, but most likely generic of the goods and services
30. Deny. Affirmatively allege that One World did not even offer tickets for sale for
31. Admit. Affirmatively allege that One World’s application was filed fraudulently,
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claiming a false date of first use and was filed knowing of Defendants’ prior use of the “Light
32. Deny. Affirmatively allege that One World has been engaging in its business
33. Without knowledge, deny. Affirmatively allege that substantially similar events
34. Without knowledge. Affirmatively allege that the term “water lantern festival” is
generic and descriptive in that the terms describe a generic category of event, i.e. lantern
festivals, and that the general consuming public would immediately recognize the terms “water
36. Deny. Affirmatively allege that One World’s event was not as original as it claims
41. Deny. Affirmatively allege that Defendants were the first to use “Light the Water”
as a trademark in commerce and are the true owners of the “Light the Water” mark and that One
World is engaging in a scheme of false registration and reverse confusion, wherein the
Plaintiffs, as junior users of the Light the Water mark, are attempting to make it appear that
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Defendants, as the senior user of the Light the Water mark, are the infringers.
43. Without knowledge, deny. Affirmatively allege that One World has not brought
suit against these copycat events because they know there is nothing protectable about its
events.
45. Admit that One World sent a cease and desist letter, deny remainder.
Affirmatively allege that Defendants agreed to rebrand using a different name than “Light the
Water” in exchange for avoiding a costly legal battle with One World, but after substantially
complying with One World’s demands, Plaintiffs still brought the present suit.
46. Admit Plaintiff Menendez was hired by YOLO on January 30, 2017 as a
47. Admit that Menendez was initially hired as a marketing intern, then after quitting
to take another job, he was hired again in August of 2017 as an event coordinator, and one of
his primary job responsibilities was to research locations for One World to hold events. Deny
remainder. Affirmatively allege that Menendez never had any contractual relationship with and
48. The employment contract speaks for itself, deny remainder. Affirmatively allege
that any employment contract Menendez signed with YOLO terminated when he quit to take
another job in the summer of 2017. Affirmatively allege that Menendez never signed a new
49. Admit that Menendez performed a few searches to find the name of one vendor,
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deny remainder. Affirmatively allege that One World made the information publicly available to
all its employees and anyone else, including Menendez, who was not its employee, and made no
50. Admit. Affirmatively allege that this was the first use of the term “Light the
51. Admit that Menendez performed a few searches to find the name of a vendor,
deny remainder. Affirmatively allege that Menendez, like everyone else at YOLO and One
World was given access to email accounts and that One World made no attempt to keep or even
52. Admit Defendant Menendez was one of many people responsible for researching
potential venues, deny remainder. Affirmatively allege that One World lacked any semblance of
operational controls or process and that no one logged their research of potential venues because
53. Admit Menendez researched a number of venues for water lantern events that was
not logged, deny remainder. Affirmatively allege that One World lacked any semblance of
operational controls or process and that no one logged their research of potential venues because
54. Deny. Affirmatively allege that Menendez sat in an open area with other workers,
directly across from his direct supervisor, Joey McKnight, and this “issue” was never addressed
with Menendez even once. Affirmatively allege that Menendez survived a series of layoffs and
55. Admit.
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56. Deny. Affirmatively allege that Menendez reported directly to a company contact,
Joey McKnight and that Menendez was neither responsible for ensuring independent
contractors signed contracts nor was he trained on any process or provided with any standard
57. Deny. Affirmatively allege that Menendez was never trained for or informed he
was responsible for obtaining a signed independent contractor agreement from Kenney.
Affirmatively allege that there was absolutely no process at YOLO or One World for obtaining
58. Deny. Affirmatively allege that Menendez was never trained for or informed he
was responsible for obtaining a signed independent contractor agreement from Kenney.
Affirmatively allege that there was absolutely no process at One World for obtaining signed
59. Deny. Affirmatively allege that Menendez had not agreed to not compete and/or
not solicit and that he was not asked to sign any agreement when he was hired as an event
coordinator.
60. Admit.
61. Deny. The lanterns that Defendants purchased came in different packaging, used
thicker paper and were taller than the ones used by One World.
62. Admit Defendant 1000 Lights began using “Light the Water” as a trademark,
deny remainder. Affirmatively allege that 1000 Lights, not One World was the first to use
“Light the Water” as a trademark and that One World is engaging in a scheme of false
registration and reverse confusion, wherein the Plaintiffs, as junior users of the Light the Water
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mark, are attempting to make it appear that Defendants, as the senior user of the Light the Water
63. Deny. 1000 Lights first offered event tickets for sale using the “Light the Water”
trademark on July 17, 2018 and the first sale occurred on July 22, 2018.
64. Admit.
65. Admit the video was posted on Defendant’s website, deny remainder.
Affirmatively allege that the video was posted as an HTML iframe, which preserved the
original source of the video ensuring that consumers understood the video was from another
event and provided proper attribution to both One World and the author of the video.
66. Without knowledge, deny. Affirmatively allege that the Plaintiffs purchased rights
to the video and pictures solely for the purpose of bringing frivolous claims against Defendants
and that Defendants immediately took the video down after One World demanded that they do
so. Affirmatively allege that the video and pictures have no registered copyrights and are not
entitled to any further legal recourse than they have already received.
67. Admit the photos were of a One World event, deny remainder.
68. Without knowledge, deny. Affirmatively allege that the photos were Google
images that Defendants were under the impression needed no license, a practice Menendez
learned from One World’s own business practices, and as soon as it was learned they might be
69. Deny. Affirmatively allege that certain posts were made and once Defendants
learned that they could be confusing to consumers, they were taken down. Affirmatively allege
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70. Admit. Affirmatively allege that the confusion created is due to the fact that One
World’s mark is at best descriptive of its events if not wholly generic. Affirmatively allege that
once Defendants learned that the alleged comment was made, it immediately took it down.
72. Deny.
73. Admit.
74. Deny. Affirmatively allege that even if the events were “carbon copies”, which
they were not, there would be nothing improper about it, that there is nothing proprietary about
the floating lantern design, that there are only so many ways to present information normally
included on an event guide, and that Plaintiffs do not have any right to prevent other organizers
a. Deny. Affirmatively allege that the water lantern design is wholly functional,
generic and Plaintiffs do not have any proprietary rights to said design.
b. Deny. Affirmatively allege that the mandala design is a common design and
c. Deny. Affirmatively allege that Defendants’ event guide is different from One
d. Deny. Affirmatively allege that One World has no legal right to prevent
Defendants from engaging in similar activities, such as bean bag toss and
scavenger hunts.
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75. Deny. Affirmatively allege that One World has failed to articulate specific design
elements that merit protection and therefore has not established protectable trade dress because
its overall feel and experience is generic and common to similar events across the country,
76. Deny. The lanterns that Defendants purchased came in different packaging, used
thicker paper and were taller than the ones used by One World. Affirmatively allege that One
World’s design is wholly generic, is readily available online from several vendors and that none
77. Deny. Affirmatively allege that if there has been any customer confusion it has
been caused by One World’s use of the generic terms “Water Lantern Festival” coupled with its
78. Without knowledge, deny. Affirmatively allege that any confusion amongst
consumers is due to the generic or otherwise descriptive terms One World has chosen to use to
brand its business (“Water Lantern Festival”) as well as its dogged pursuit to misappropriate
79. Without knowledge, deny. Affirmatively allege that any confusion amongst
consumers is due to the generic or otherwise descriptive terms One World has chosen to use to
brand its business (“Water Lantern Festival”) as well as its dogged pursuit to misappropriate
80. Without knowledge, deny. Affirmatively allege that Schaefer and Knight have
reached out to venues that have already agreed to host events put on by Defendants in order to
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81. Admit that One World sent a cease and desist letter, deny remainder.
82. Admit. Affirmatively allege that Defendants and not One World were the first to
use the term “Light the Water” in commerce and are the true owners of the “Light the Water”
mark. Further affirmatively allege that One World is engaging in a scheme of false registration
and reverse confusion, wherein the Plaintiffs, as junior users of the Light the Water mark, are
attempting to make it appear that Defendants, as the senior user of the Light the Water mark, are
the infringers.
83. Admit that Defendants chose to rebrand instead of engaging in costly, frivolous
litigation, admit that it still has a registered d/b/a/ “Light the Water” and that it still maintains the
remainder. Affirmatively allege that Defendants and not One World were the first to use the term
“Light the Water” in commerce and are the true owners of the “Light the Water” mark. Further
affirmatively allege that One World is engaging in a scheme of false registration and reverse
confusion, wherein a junior user of a mark (Plaintiffs) makes it appear that the senior user
84. Deny.
85. Admit that the press release speaks for itself, deny remainder. Affirmatively
allege that Facebook required 1000 Lights to issue the press release before it would change its
86. Deny. Affirmatively allege that One World does not have exclusive rights to the
term “Water Lantern Festival” because it is at best descriptive, but more so is a generic phrase
for the goods and services it provides. Affirmatively allege further that Defendants and not One
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World were the first to use the term “Light the Water” in commerce and are the true owners of
the “Light the Water” mark. Further affirmatively allege that One World is engaging in a scheme
of false registration and reverse confusion, wherein the Plaintiffs, as junior users of the Light the
Water mark, are attempting to make it appear that Defendants, as the senior user of the Light the
87. Deny. Affirmatively allege that One World has no trademarks because their
alleged trademarks either are generic or highly descriptive and not entitled to protection, or that
88. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
89. Deny. Affirmatively allege that the “Light the Water” mark is owned by
Defendants and that once Plaintiffs realized their “Water Lantern Festival” mark was generic,
they attempted to abuse their power as a larger, more established company with more resources
goodwill.
90. Deny. Affirmatively allege that if Plaintiffs suffered any damages at all, their own
actions caused the harm they now allege. Affirmatively further allege that Defendants are the
91. Deny. Affirmatively allege that Defendants and not Plaintiffs are entitled to a
preliminary and permanent injunction against Plaintiffs, as well as all other remedies available
under the Lanham Act, including, but not limited to actual damages, costs, attorney fees, profits
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derived from Plaintiffs’ infringing activities, said amounts to be trebled by virtue of Plaintiffs’
92. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
93. Deny. Affirmatively allege Plaintiffs’ cause of action is duplicative and covered
under their first cause of action as the Lanham Act protects trademark owners regardless of
whether they have registered their mark or not. Affirmatively further allege that Plaintiffs’ use of
the “Light the Water” mark infringes Defendants’ common law rights in the mark.
94. Deny. Affirmatively allege that Plaintiffs have been unjustly and improperly
enriched through its wrongful use of the “Light the Water” mark and such damages to
Defendants are without adequate remedy at law unless the Court enjoins Plaintiffs from such
further behavior. Affirmatively allege that Defendants and not Plaintiffs are entitled to an award
of punitive damages as a result of Plaintiffs’ intentional and unauthorized use of the “Light the
Water” mark.
95. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
96. Deny. Affirmatively allege that Plaintiffs have failed to articulate specific
elements that they believe are entitled to trade dress protection and to the extent they have
identified elements to protect as trade dress, these elements are functional, generic, merely
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97. Deny. Affirmatively allege that Plaintiffs’ alleged trade dress, whatever it might
be, is functional.
98. Deny. Affirmatively allege that Plaintiffs’ floating lanterns are available from
various vendors on the internet and can be purchased by any average consumer wishing to exert
a modicum of effort. Affirmatively allege further that Defendants’ lanterns use thicker paper and
are taller than One World’s lanterns and that Defendants only purchased water lanterns from
99. Deny.
100. Deny. Affirmatively allege that any confusion that may exist has been the direct
101. Deny. Affirmatively allege that Defendants are entitled to damages in an amount
to be proven at trial as well as injunctive relief prohibiting Plaintiffs from engaging in continuing
infringing activities.
102. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
103. Deny. Affirmatively allege that Plaintiffs actions constitute intentional business
acts and practices that are unlawful, unfair, and misleading, and have led to a material diminution
104. Deny. Affirmatively allege that Defendants are entitled to damages caused by
Plaintiff’s unfair competition, as well as costs, attorney fees, and punitive damages.
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105. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
106. Deny. Affirmatively allege that it is Plaintiffs’ conduct and actions that have
107. Deny. Affirmatively allege that Plaintiffs have engaged in conduct unfairly
competing with Defendants and have done so knowingly, willfully, and, on information and
belief, with actual malice and in bad faith, so as to justify the assessment of increased,
108. Deny. Affirmatively allege that Plaintiffs’ conduct has caused Defendants
109. Deny. Affirmatively allege that Plaintiffs’ conduct has caused, and unless
enjoined by this Court will continue to cause, irreparable damage, loss, and injury to Defendants
for which Defendants have no adequate remedy at law and which justify the entry of a
110. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
111. Deny. Affirmatively further allege that Defendants and not Plaintiffs were the first
to use the term “Light the Water” in commerce and are the true owners of the “Light the Water”
mark. Further affirmatively allege that Plaintiffs are engaging in a scheme of false registration
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and reverse confusion, wherein a junior user of a mark (Plaintiffs) makes it appear that the senior
user (Defendants) are the infringers, which has interfered with Defendants prospective and actual
112. Deny. Affirmatively allege that Plaintiffs have demonstrated willful, malicious, or
intentionally deceptive conduct, or conduct that manifests a knowing and reckless indifference
113. Deny. Affirmatively allege that Defendants have suffered actual and
114. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
115. Deny. Affirmatively allege that Plaintiffs are the ones who have benefited from
116. Deny. Affirmatively allege that Plaintiffs would be unjustly enriched if permitted
to retain the profits and other gains they have received, and continue to receive, from such
actions.
117. Deny. Affirmatively allege that Plaintiffs and not Defendants should be required
to account for and turn over to Defendants, or to be deemed to hold in a constructive trust for the
benefit of Defendants, all profits and gains derived and to be derived from the sale by One World
of any products and/or services using the “Light the Water” mark, as outlined in Defendants’
counterclaims.
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118. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
119. Admit.
120. Deny. Affirmatively allege that the rules of employment were actually quite lax
and that many other employees, including Menendez, often did personal projects, homework,
and took care of other personal matters during work hours in full view of their supervisor(s), who
121. Deny. Affirmatively allege that Menendez never took any venues that One World
would have selected based on its strict criteria for venue selection.
compensate Menendez for many, many hours of work he performed for the company.
123. Deny.
124. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
125. Deny. Affirmatively allege that access to the alleged confidential information was
granted to all employees of One World and even non-employees, such as Menendez, that this
information was never labeled as confidential or otherwise proprietary, was not adequately
safeguarded or protected by Plaintiffs in a manner that was reasonable under the circumstances,
and that since Menendez had no employment agreement with YOLO or One World, had no duty
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126. Deny. Affirmatively allege that as a result of this search Menendez only learned
the name of one vendor and only used that vendor for a short period of time, but no longer uses
it.
127. Deny.
128. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
129. Deny.
130. Deny.
131. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
136. Deny.
137. Deny.
138. Deny. Affirmatively allege that Plaintiffs’ alleged copyrightable works have not
been registered and thus are not entitled to be presented in this litigation pursuant to 17 U.S.C.
411(a), which states “No civil action for infringement of the copyright in any United States work
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shall be instituted until . . . registration of the copyright claim has been made in accordance with
this title.” Plaintiff further affirmatively alleges that there are no actual damages at issue in this
139. Deny. Affirmatively allege that Defendants engaged in fair use. Affirmatively
further allege that Plaintiffs’ alleged copyrightable works have not been registered and thus are
only entitled to injunctive relief as there are no actual damages and statutory damages are not
140. Deny.
141. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
142. The statute speaks for itself, deny remainder. Affirmatively allege that Plaintiffs
have not met their prima facia case for false advertising claims under the Lanham Act because
143. Deny.
144. Deny.
145. Deny.
146. Deny.
147. Deny.
148. Deny.
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149. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
151. Deny.
152. Deny.
153. Deny.
154. Deny.
156. Deny.
157. Defendants re-allege and incorporate herein, as if set forth in full, the foregoing
158. The contract speaks for itself, deny remainder. Affirmatively allege that said
contract terminated when Menendez quit to take another job during the summer of 2017.
Affirmatively further allege that Menendez never signed a new contract when he was hired for a
159. Deny. Affirmatively allege that said contract terminated when Menendez quit to
take another job during the summer of 2017. Affirmatively further allege that Menendez never
signed a new contract when he was hired for a new position on or about August 2017.
160. The contract speaks for itself, deny remainder. Affirmatively allege that said
contract terminated when Menendez quit to take another job during the summer of 2017.
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Affirmatively further allege that Menendez never signed a new contract when he was hired for a
161. Deny.
162. Deny.
163. Deny each and every allegation in Plaintiffs’ Complaint not expressly admitted
above.
trademark infringement for the term “Water Lantern Festival,” a mark that is generic of the
Plaintiffs’ claims should be denied, in whole or in part, because Defendants were the first
to use the “Light the Water” mark in commerce and that they are the rightful owners of the
“Light the Water” mark and that One World is engaging in a scheme of false registration and
reverse confusion, wherein the Plaintiffs, as junior users of the Light the Water mark, are
attempting to make it appear that Defendants, as the senior user of the Light the Water mark, are
the infringers.
Plaintiffs’ claims should be denied, in whole or in part, because Plaintiffs have failed to
articulate specific elements they believe merit trade dress protection and to the extent they do,
such trade dress is functional, generic, merely ornamental, not used as trademarks, or otherwise
not entitled to trademark protection under the Lanham Act or any other applicable federal or state
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law.
V. FIFTH DEFENSE
copyrights have not been registered and therefore are not entitled to be litigated before this court,
there have been no damages of any kind, and even if the designs were registered, pursuant to the
Copyright Act Plaintiff would only be entitled to injunctive relief. Further, Defendants use of the
Plaintiffs’ claims should be denied, in whole or in part, because prior to leaving YOLO to
take another job, YOLO committed a prior material breach of its agreement to pay Menendez by
the hour when it failed to compensate him for all the hours he worked for YOLO.
Plaintiffs’ claims should be denied, in whole or in part, because Plaintiffs fail to exhibit
Plaintiffs’ claims should be denied, in whole or in part, because Plaintiffs’ claims are
Defendants reserve the right to assert such other and additional defenses as they may
take nothing thereby; and that Defendants instead be awarded damages, attorney fees, and costs
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COUNTERCLAIM
Defendants, 1000 Lights, LLC, Nicholas Menendez, Zach Wertz, and Andrew Kenney, by
and through counsel, as and for their Counterclaim complain against Plaintiffs as follows:
PARTIES
1. One World Lantern Festival, LLC (“One World”) is a Utah limited liability
company, having its principal business office and registered agent address in Benson, Utah.
its principal business office and registered agent address in Providence, Utah.
3. 1000 Lights, LLC (“1000 Lights”) is a Utah limited liability company, having its
9. Jurisdiction and venue are proper in this Court because both Plaintiffs and
Defendants, as well as both Third-party Defendants have conducted business in Northern, Utah
and this action raises issues governed by state and federal laws.
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GENERAL ALLEGATIONS
10. In February 2017, Color Vibe LLC, the former business name of what is now
known as YOLO, hired Menendez for an entry level paid internship as a regional marketing
coordinator. Menendez signed a general employment agreement with Color Vibe, LLC and
agreed to be paid $9.00 an hour. Menendez’s primary job responsibility was to promote and
grow YOLO events with minimal or no cost to the company by doing things like sending out
11. In May 2017, Menendez quit working for YOLO to pursue an internship with
General Mills.
12. In August 2017, YOLO reached out to Menendez and offered him the position of
event coordinator which had just been vacated by a former employee. Menendez accepted the
new position for a wage of $10.25 an hour, but he never signed a new employment agreement.
with other employees to produce YOLO’s various events, such as a 5k color runs.
14. In November 2017, the owners of YOLO, Michael Schafer (“Schafer”) and David
Knight (“Knight”) informed their employees that they were starting an independent and separate
15. Menendez, along with several other YOLO employees, were instructed to attend a
sky lantern festival put on by another company and to research and document how it was done.
They were instructed to take pictures, and Menendez was specifically instructed to find a way to
get back stage during the event and take as many notes and pictures as he could.
16. Shortly thereafter, Menendez was assigned the task of finding locations to hold
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One World’s sky lantern festivals, but he had a difficult time finding feasible locations to hold
the sky lantern festivals. The market was already saturated with similar companies who had
17. Menendez had seen YouTube videos of Lantern Floating Hawaii Memorial Day
water lantern festival and pitched the idea to Schafer and Knight that they should focus on water
18. One World decided to use Menendez’s idea and Schafer and Knight took content,
including photos, from Lantern Floating Hawaii’s website for One World’s website. In fact, One
World’s original website bore a striking resemblance to Lantern Floating Hawaii’s website.
19. Upon realizing that at that time they did not have a lot of competition, One World
began purchasing any online domain name that they thought could be associated with a water
lantern festival hoping to prevent any future online competition. They purchased at least four or
20. In March 2018, Menendez headed up the production of One World’s first water
lantern festival in El Paso, Texas. This event and the several events Menendez organized adopted
many of the same elements Menendez, Schaefer and Knight had seen and witnessed at other
similar events in developing their business plan. He then went on to head up the production of
One World’s next several water lantern festivals. Menendez was in charge of finding the venues,
the vendors, creating the event guides, and otherwise orchestrating all of the logistics associated
21. Shafter and Knight did not provide their employees with any training or insight
they had from their own professional experience. Instead, they focused on marketing the events
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and coordinating the shipping of the water lanterns from China to the United States.
22. While Menendez’s work responsibilities began to focus more and more on One
23. In March 2018, shortly after One World’s first two water lantern festivals, Schafer
told Menendez that he had received a Facebook message from Lantern Floating Hawaii asking
them to stop copying their event and if they did not, they could expect to receive a formal cease
and desist letter. Schafer was unphased by the message and informed Menendez that he had
expected such a letter, but that they would continue to produce water lantern festivals.
24. While working in the office, Menendez and the other YOLO and One World
employees who were tasked with producing the water lantern festivals were paid by the hour.
However, when they were required to travel across the country to produce events, YOLO only
paid their travel expenses and a small flat fee for their time.
25. By May 2018, as One World grew, so did the demand on the employees whose
work load and hours had doubled. The events were getting bigger and more complex and the
travel time had increased. Instead of paying the employees more to compensate them for the
26. Menendez was concerned that the quickly growing company would disintegrate if
it didn’t find a way to retain its employees. In May 2018, Menendez proposed several cost saving
procedures that would help One World save money on their expenditures, which could then be
reallocated to employee pay raises. Shafter and Knight informed Menendez that since they
hadn’t paid themselves from One World in 2017 they would not consider any pay raises for their
employees.
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27. Around this same time, Menendez’s wife became very ill and required intensive
medical treatment. Upon realizing that there was little potential for career development and
merited pay increases at YOLO, he began looking for other employment opportunities that
would provide him with compensation to meet his increased financial demands.
and other interested persons to help produce YOLO’s various events. These individuals were
hired as independent contractors on an event by event basis. Menendez was never advised or
otherwise made aware that he was required to have these independent contractors sign any type
of contract or agreement with YOLO or One World. In fact, Schafer and Knight knew of these
hiring arrangements and even attended several of these events and never inquired as to whether
30. In June 2018, Kenney was hired by One World as an independent contractor to
help produce water lantern festivals in Lake Gregory, California and in Colorado Springs,
Colorado.
31. Kenney took several pictures of the California water lantern festival with his
personal cell phone and posted the pictures on his personal Instagram account.
32. He received lots of positive feedback about the photos, which caused Kenney to
consider starting his own water lantern festival production company. Kenny had been a student
body officer in high school, a Utah State University ambassador, and the president of the Utah
State University student business counsel while he was in college. All of these positions required
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him to take the lead in organizing and producing various events and conferences, often for
33. Kenney began sharing his ideas with Wertz. Kenny has a degree in accounting
and Wertz is finishing up a degree in business management. Together they started looking at the
costs of producing a water lantern festival and decided that they could start their own business
34. They began contemplating various names for their company. Considering the
numerous company names that already existed in the marketplace, they decided upon Light the
Water as a good fit. This was in part because they also believed they would be able to generate
good organic online marketing with the name. The online domain name of lightthewater.com
was available, as was the business name for purposes of registering with the state of Utah.
starting or joining a water lantern festival company with him and Wertz. Menendez was hesitant
to commit due to his wife’s health, and he was concerned about taking any financial risks.
36. On June 19, 2018, Kenney created a Light the Water Facebook page and
37. On June 20, 2018, Menendez created a Light the Water Instagram profile for
38. By June 29, 2018, Kenney and Wertz had decided to start 1000 Lights, whether or
39. On July 1, 2018, Menendez gave YOLO his two-week notice of his intent to quit
working for the company, and July 12, 2018 was his last day with YOLO. At that time, he had
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40. Menendez had accepted another full-time position in the marketing department of
41. On July 10, 2018, Kenney and Wertz started Andrew Kenney & Associates, LLC,
doing business as Light the Water, which later amended its name to 1000 Lights, LLC.
42. On July 12, 2018, 1000 Lights published their website using the name Light the
Water with their logo that consists of a circle surrounding a sun rising over 5 lines that represent
water. The sun has 7 rays coming off the top, as depicted in the following image: ‘
43. On July 13, 2018, 1000 Lights opened a business bank account under the name
44. On July 17, 2018, 1000 Lights launched their website www.lightthewater.com
that included an event page allowing customers to purchase tickets for their first three events in
45. On July 24, 2018, Schafer and Knight contacted Menendez and demanded to
know if he had any association with “Light the Water” and threatened that he would be hearing
46. On July 25, 2018, 1000 Lights filed their application for a Light the Water
47. On July 31, 2018, Menendez received a long and harassing text message from a
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48. On July 31, 2018, an “Alice Aken” posted on the Light the Water Facebook page
that the company was a scam and fraud. During Menendez’s employment at YOLO, his
supervisor had informed him that Schafer had created a Facebook profile under the alter ego of
49. Throughout the month of August, 1000 Lights received several phone calls from
venues with whom they had been working. The venues had received phone calls from Schafer
and other individuals associated with One World, claiming that 1000 Lights was being sued and
50. On August 14, 2018, 1000 Lights, and Menendez personally, received cease and
desist letters from One World claiming that One World had applied to trademark the phrase
Light the Water, so 1000 Lights could not use it, that Menendez was in breach of his
employment contract with YOLO, and One World otherwise demanded that they shut down
1000 Lights.
51. On August 22, 2018, through counsel, 1000 Lights responded that they weren’t in
violation of any trademark laws or employment agreements and they intended to continue to
operate 1000 Lights and use the name Light the Water. However, they did agree to make a good
faith effort to work with One World to alleviate their concerns about unfair competition, the use
52. On September 6, 2018, 1000 Lights received another demand letter from One
World threatening litigation if they did not essentially cease all business activity and otherwise
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53. As a fledgling business, 1000 Lights decided that instead of fighting a contested
trademark action, it would be easier and less expensive to stop using the dba Light the Water and
rebrand to 1000 Lights. They also took down all information on their website that One World
54. Facebook required 1000 Lights to issue a press release before it would authorize
their request to change the name. As a result, on September 21, 2018, 1000 Lights issued the
September 21, 2018 – Light the Water Lantern festival is committed to providing the
absolute best experience for all who attend the events. While there are many lantern
festivals you could choose to go to, we are glad you have chosen Light the Water.
After careful consideration, with the tremendous amount of competition in the market,
Light the Water has decided to further differentiate itself from other lantern festivals to
help eliminate customer confusion. We hope that this will help consumers know how
which event provides them with the best entertainment and experience.
Effective immediately, “Light the Water” lantern festival will be changing to “1000
Lights” lantern festival. All current tickets for light the Water events will remain valid as
well as future events.
55. 1000 Lights had the expectation, based on assurances from One World, that if
they rebranded they would be able to enter into good faith negotiations with One World to
56. While Menendez’s brief experience in producing water lantern festivals for One
World was helpful, he did not provide 1000 Lights with any information that it could not readily
obtain from publicly available sources. For example, Menendez knew that One World was
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purchasing its water lanterns from a Chinese company. However, an internet search of “where to
buy water lanterns” quickly produces Alibaba along with several other retailers and online
platforms. Furthermore, 1000 Lights has decided to use another company as its primary supplier
of lanterns.
57. On September 29, 2018, 1000 Lights produced its first two events in Burbank,
California and Utah County, Utah. Schafer and Knight attended both events.
58. Schafer was on the same flight to Burbank, California, as Menendez and Wertz
and was seated directly across the aisle from them. As they were getting off the flight, Schafer
leaned over the seats so that his face was close to Menendez and told Menendez that he is “a
59. Upon arriving back in Salt Lake City, Utah the following day, Menendez’s former
supervisor at YOLO was waiting for him at baggage claim, and told Menendez that he is a “piece
of shit” and that he “never wants to see his face again.” As Menendez was walking away, he
thrust his finger towards Menendez’s face in a threatening manner and warned Menendez not to
start anything.
60. On October 19, 2018, Kenney updated 1000 Lights business status with the Utah
61. On November 1, 2018, Plaintiff filed its Complaint against Defendants initiating
this action.
62. Since its inception, 1000 Lights has tried to create a better experience for both
63. While 1000 Lights, One World, and other sky lantern festivals provide pre-lantern
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launch activities, sell merchandise, work with various vendors to provide food to the customers,
64. 1000 Lights is a for profit business, but it seeks to give back to the communities
65. 1000 Lights is creating a business model that will pay employees livable wages
and benefits that will allow employees to maintain long term employment with the company.
66. 1000 Lights seeks out musicians who are local to areas where the water lantern
67. 1000 Lights is working with various charitable organizations in the areas where
the water lantern festivals are held to bring awareness and raise money for the charities. For
example, 1000 Lights is working on an event in Las Vegas, Nevada where it plans to honor and
68. 1000 Lights is also in the process of finding a national charity they can partner
70. Defendant is the owner and senior user of the “Light the Water” trademark in the
United States, having first used the mark in interstate commerce on July 17, 2018 in connection
with lantern festivals, public events, and associated goods and services.
71. Plaintiffs have misappropriated and used Defendants’ “Light the Water” mark,
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consumer confusion, as well as reverse confusion by proceeding to use the trademark “Light the
Water” throughout their business, including but not limited to, creating a website that uses the
trademark, using the trademark in emails to customers, and using the trademark in online and
print marketing material, despite knowing that the “Light the Water” mark was already being
73. Defendants have been, and will continue to be, injured and damaged by Plaintiffs’
misappropriation of the “Light the Water” mark, including but not limited to a loss of goodwill
and business and customer relationships. Unless remedied, this injury will continue and will
against Plaintiffs use of the “Light the Water” mark, as well as all other remedies available under
the Lanham Act, including but not limited to actual damages, costs, attorneys fees, Plaintiffs
profits derived from the infringing activities, and treble damages for willful infringement.
76. On July 13, 2018, Plaintiffs attempted to improperly assert their rights to the
trademark light the water by applying to federally register the trademark “Light the Water”, even
though they knew that they are not the senior user of the trademark.
77. In applying for registration for the “Light the Water” mark, Plaintiff by and
through the signature of Mike Schaefer, signed a declaration affirming that ““to the best of his
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facts, knowledge or belief, no other person, firm, corporation, or association has the right to use
78. At the time of filing the declaration, Plaintiffs knew that prior to their application
that Defendants were using and had been using the “Light the Water” trademark in interstate
commerce.
79. As such, Plaintiffs’ declaration that to the best of his facts, knowledge or belief,
no other person, firm, corporation, or association has the right to use this mark in commerce”
constitutes a false representation regarding a material fact regarding the “Light the Water”
80. Upon information and belief, Plaintiff intended to induce reliance by the USPTO
in accepting the Light the Water application based on this false declaration.
81. Upon information and belief, the USPTO reasonably relied on the
82. Defendant has suffered damages as a result of the USPTO’s reliance on Plaintiffs’
83. Furthermore, Plaintiffs alleged and claimed in their trademark application a date
of first use of the “Light the Water” mark in interstate commerce of 11/16/2018, which is not
84. Upon information and belief, the USPTO reasonably relied on the
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85. Defendant has suffered damages as a result of the USPTO’s reliance on Plaintiffs’
86. As Plaintiffs knowingly made at least two false and misleading representations to
the USPTO that the USPTO reasonably relied upon, Plaintiffs “Light the Water” application
87. Defendant incorporates by reference its allegations in the proceeding paragraphs and
88. Plaintiffs have engaged in several intentional business acts to create unfair competition
89. Plaintiffs contacted 1000 Lights’ event venues falsely alleging that 1000 Lights is not a
viable company and that the venues should not be doing business with 1000 Lights.
90. Plaintiffs have engaged in malicious cyber activity by making Facebook posts on 1000
91. Plaintiffs have attempted to create reverse confusion improperly using and attempting to
92. Plaintiffs have otherwise engaged in a scheme, including litigation, to create the
impression that Defendants infringed on Plaintiff’s trademark hoping that Defendants cannot withstand a
93. The Court should award Defendants their damages, to be proved at trial, for Plaintiffs’
actions that have caused unfair competition and Defendants’ attorney fees and costs for having to defend
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94. Defendant incorporates by reference its allegations in the proceeding paragraphs and
95. Plaintiffs and Third-party Defendants have attempted to interfere with Defendants’
economic relationships with their venues by contacting the venues and falsely alleging that 1000 Lights is
96. Plaintiffs and Third-party Defendants have attempted to interfere with Defendants’
economic relationships with 1000 Lights customer and potential customer by making Facebook posts
alleging that 1000 Lights is a sham company and is perpetuating a fraud on consumers.
97. Plaintiffs and Third-party Defendants have attempted to interfere with Defendants’
economic relations by attempting to create reverse confusion in the marketplace by using the trademark
“Light the Water” knowing that they are not the senior user of the trademark.
98. Plaintiffs and Third-party Defendants are attempting to interfere with Defendants’
economic relations buy initiating this litigation in the hopes that Defendants cannot withstand prolonged
99. The Court should award Defendants their damages, to be proved at trial, for Plaintiffs’
and Third-party Defendants’ actions that have caused interference with their economic relations and
Defendants’ attorney fees and costs for having to defend against Plaintiffs’ malicious lawsuit.
100. Plaintiffs and Third-party Defendants are also attempting to use this litigation to put
Defendants out of business, hoping to profit from unfairly eliminating their direct competition and to
101. Plaintiffs and Third-party Defendants should not be allowed to keep any proceeds or befit
that they have or will obtain by their unlawful actions to eliminate their competition, 1000 Lights.
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102. The Court should award Defendants their damages, to be proved at trial, for Plaintiffs’
and Third-party Defendants’ actions that have unjustly enriched them and Defendants’ attorney fees and
costs for having to defend against Plaintiffs’ and Third-party Defendants’ malicious lawsuit.
103. Defendant incorporates by reference its allegations in the proceeding paragraphs and
104. Plaintiffs and specifically, Third-party Defendants, Michael Schaefer and David Knight,
contacted several of 1000 Lights’ venues and told them that they should not work with Defendants
because they are going to be sued and are otherwise not a viable or trustworthy company, with the intent
105. Plaintiffs, specifically Third-party Defendants Michael Schaefer and David Knight,
published a Facebook post claiming that 1000 Lights is a sham and fraudulent company and were using
that post to redirect 1000 Lights customers to One World’s water lantern festival.
106. The Court should enjoin Plaintiffs and Third-party Defendants from making and
107. The Court should award Defendants their damages, to be proved at trial, for Plaintiffs’
and Third-party Defendants defamatory statements and Defendants’ attorney fees and costs.
108. Defendant incorporates by reference its allegations in the proceeding paragraphs and
109. Plaintiffs did not fairly compensate Menendez for the time he spent working for YOLO
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110. Plaintiffs paid Menendez a small flat fee for his travel time and hours worked when
traveling as opposed to paying him by the hour for work done on behalf of Plaintiffs and for travel time
111. Plaintiffs should be ordered to pay Menendez his back wages earned while travel and
B. That the Court issue a permanent injunction enjoining Plaintiff from using “Light
the Water.”
C. That Defendants be awarded any profits Plaintiffs derived from its wrongful
Plaintiff’s wrongful and malicious actions, the sum of which to be proved at trial;
F. That Defendants be awarded their attorney fees and costs for having to defend and
G. That the Court grant Defendant’s such other and further relief that it deems
appropriate.
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/s/Joshua M. Green
Counsel for Defendants
CERTIFICATE OF SERVICE
I hereby certify that on this 26th day of November 2018, I caused a true and correct copy
of the foregoing proposed ANSWER AND COUNTER CLAIM to be served via the Court’s
bbaxter@peckhadfield.com
mjewell@peckhadfield.com
/s/Joshua M. Green
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