Court filing

REPLY to Response to Motion regarding 8 MOTION for Temporary Restraining Order and… — Blueacorn Beringer (Dkt. 35)

No. 5:21-cv-00251-BO · Doc. 35 · Docket on CourtListener

Summary

Plaintiff Beringer Commerce, Inc. d/b/a Blue Acorn iCi's reply brief in support of its motion for preliminary injunctive relief under Rule 65, filed July 6, 2021 as Doc. 35 in No. 5:21-cv-00251-BO in the U.S. District Court for the Eastern District of North Carolina, against Fin Cap, Inc. d/b/a Blueacorn.co and the other defendants. It argues that defendants' opposition presents no viable defense under the Lanham Act or North Carolina law to infringement of the BLUE ACORN ICI mark, the BLUE ACORN mark and the Acorn Logo. The reply states that plaintiff's use of the BLUE ACORN ICI mark dates to March 31, 2019, while defendants say they chose the blue acorn name in April 2020, and that the Acorn Logo was viewed over 14 million times on YouTube. It cites a second declaration filed with the reply and evidence of forward and reverse consumer confusion.

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
Civil Action No. 5:21-CV-251-BO

BERINGER COMMERCE, INC. d/b/a
BLUE ACORN iCi,

Plaintiff,

v.
REPLY BRIEF IN SUPPORT OF
PLAINTIFF’S MOTION PRELIMINARY
FIN CAP, INC. d/b/a “BLUEACORN.CO,”
INJUNCTIVE RELIEF
BLUE ACORN PPP, LLC, BLUE OAK
(Rule 65)
FOREST, LLC, MICHAEL S. COTA,
JIMMY FLORES, STEPHANIE
HOCKRIDGE REIS, and NATHAN REIS,

Defendants.

NOW COMES Plaintiff BERINGER COMMERCE, INC. d/b/a BLUE ACORN iCi (“Blue

Acorn iCi”) and submits this Reply Brief in Support of Plaintiff’s Motion for Preliminary

Injunctive Relief against Defendants FIN CAP, INC. d/b/a “BLUEACORN.CO,” BLUE ACORN

PPP, LLC, BLUE OAK FOREST, LLC, MICHAEL S. COTA, JIMMY FLORES, STEPHANIE

HOCKRIDGE REIS and NATHAN REIS (collectively “Defendants”).

INTRODUCTION

After multiple verbal and written requests, two cease & desist letters, multiple attorney

communications and extensive motions practice involving Defendants’ continued, obvious and

intentional infringement of Plaintiff’s marks, Defendants continue to demonstrate to this Court

that they have no desire to comply with the law or even take the minimum steps necessary to begin

curing the great degree of consumer confusion at issue. Defendants have profited greatly from

their infringement and have ample resources in which to rebrand with minimal interruption or

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 1 of 12
expense. However, instead of simply doing so, Defendants offer up multiple irrelevant, illogical,

and provably unsupportable “defenses” in their Memorandum in Opposition to the Motion for

Preliminary Injunction (“Opposition”) [DE-31]. For example:

• Defendants claim their use of the “blue acorn” name/logo was inadvertent, yet fail to
explain the incredible, unmistakable similarity in color, font, style, emphasis, and other
definable artistic characteristics of their logo and Blue Acorn iCi’s longstanding marks.

• Defendants claim that no reasonable, ordinary consumer would be confused by the
marks despite clear evidence of both actual forward and reverse consumer confusion
in the thousands.

• Defendants claim the evidence of consumer confusion amounts to nothing more than
“careless mistakes,” despite indisputable evidence that customers of both Blue Acorn
iCi and Defendants are confused about the source of services offered by the parties.

• Defendants deny the existence of reputational harm to Blue Acorn iCi, completely
ignoring the immense amount of evidence showing that customers of both Blue Acorn
iCi and Defendants blame Blue Acorn iCi for the multitude of shortcomings,
frustrations, and even alleged fraud associated with Defendants’ business practices.

• Defendants claim they will be burdened by simply rebranding and communicating
basic information to their customer base, despite the fact that Defendants are
purportedly no longer marketing their services, intend to contact each customer
personally, and do not continue to provide services after the end of the PPP program.

None of Defendants’ attempts to explain their intentional infringement are credible, and no

argument contained in the Opposition presents a viable defense to infringement under The Lanham

Act and under the common law of North Carolina. For that matter, Defendants have provided no

defense to Blue Acorn iCi’s claim for copyright infringement. Based on the evidence before this

Court, including the Verified Complaint [DE-1], the Declaration of Judy Geaslen [DE-28], the

Second Declaration of Judy Geaslen (“Geaslen Decl.”), filed contemporaneously with this Reply,

and all exhibits submitted by Plaintiff, Blue Acorn iCi requests that this Court grant its Motion for

Preliminary Injunctive Relief.

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 2 of 12
I. DEFENDANTS HAVE NOT PRESENTED A VIABLE DEFENSE TO INFRINGEMENT UNDER
THE LANHAM ACT OR NORTH CAROLINA LAW

Defendants’ attempt to narrowly characterize Plaintiff’s intellectual property rights fails

under basic trademark law. Blue Acorn iCi has demonstrated that Defendants have infringed three

distinguishable marks – 1) the BLUE ACORN ICI mark; 2) the BLUE ACORN mark; and 3) the

Acorn Logo mark (“Plaintiff’s Marks”). Compl., ¶¶ 25-26, 49, 138.

In the Opposition, Defendants ignore their infringement of the Acorn Logo mark, dismiss

the BLUE ACORN mark as abandoned, and claim that the BLUE ACORN ICI mark is neither

superior nor strong enough to be protected under The Lanham Act. None of these claims are

accurate or legally supported, and the weight of authority demonstrates that Blue Acorn iCi has

asserted strong and clearly actionable claims for each of Plaintiff’s Marks.

A. Plaintiff’s BLUE ACORN ICI Mark

Both common law and federal trademark rights share the same basic elements for a party

to have standing to enforce its rights under a trademark: (1) prior use of the mark in United States

commerce; and (2) that the mark is distinctive. 15 U.S.C. § 1114(1); Emergency One, Inc. v. Am.

Fire Eagle Engine Co., 332 F.3d 264, 267 (4th Cir. 2003); Investacorp, Inc. v. Arabian Inv.

Banking Corp. (Investcorp) E.C., 931 F.2d 1519, 1522 (11th Cir. 1991); Lopez v. Gap, Inc., 883

F. Supp. 2d 400, 414-15 (S.D.N.Y. 2012).

Here, Blue Acorn iCi has shown an absolute right to relief based on its ownership and

widespread geographic use of the BLUE ACORN ICI mark, which unquestionably predates

Defendants’ creation of their “Blue Acorn” mark (“Infringing Mark”):

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 3 of 12
Specifically, Plaintiff’s use of the BLUE ACORN ICI mark dates back to March 31, 2019

and was in widespread use throughout the United States, including the states of North Carolina

and Arizona. Compl., ¶ 26, Exhibits B and C; Geaslen Decl., ¶ 21.

Defendants claim they chose the “blue acorn” name in April 2020. Accordingly,

Defendants have no claim of prior use, superiority, or even intermediate use under state or federal

law. Moreover, because Defendants’ Infringing Mark is confusingly similar to the BLUE ACORN

ICI Mark and has generated mass consumer confusion, Defendants’ infringement of the BLUE

ACORN ICI Mark alone is grounds for liability and the award of injunctive relief. These basic

facts illuminate the irrelevance of Defendants’ arguments based on alleged “abandonment” or

“tacking” of Plaintiff’s trademark rights prior to March 31, 2019.

B. Plaintiff’s BLUE ACORN Mark

The evidence before the Court also shows that Blue Acorn iCi has established superior

trademark rights in its BLUE ACORN mark. Specifically, Plaintiff’s BLUE ACORN marks

depicted in the Verified Complaint have been in consistent, continued nationwide use by Plaintiff

for over fourteen (14) years. Compl., ¶ 26; Exhibit B; Geaslen Decl., ¶ 22.

In an attempt to undermine the well-established use and strength of Plaintiff’s Marks in

commerce, Defendants argue that Plaintiff’s BLUE ACORN mark has been abandoned. To

demonstrate abandonment of a mark, Defendants have the burden of proof and must provide

evidence that Blue Acorn iCi discontinued use of the mark with an intent not to resume its use. 15

U.S.C. § 1127; Emergency One, 228 F.3d at 536; On-Line Careline, Inc. v. Am. Online, Inc., 229

F.3d 1080, 1087 (Fed. Cir. 2000); Roulo v. Russ Berrie & Co., 886 F.2d 931, 938 (7th Cir. 1989).

Defendants have produced no evidence of abandonment. The April 4, 2019 Blue Acorn

iCi Press Release contains no evidence of abandonment, and the Verified Complaint and

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 4 of 12
Declaration of Judy Geaslen verify Plaintiff’s continued use of the BLUE ACORN mark to the

present time. Compl., ¶ 26; Geaslen Decl., ¶ 27. Notably, the creation of a new mark (“BLUE

ACORN ICI”) in no way implies the abandonment of a mark with such long-standing use and

value as the BLUE ACORN mark.

Defendants further argument that Plaintiff’s Marks are limited in “territory” or

geographical scope is also unsubstantiated and easily refuted. In support of this argument,

Defendants cite Emergency One, 332 F.3d at 268 for the well-known concept that common law

trademark rights follow the holder’s commercial activities. However, nothing in the record

supports Defendants’ claim that any alleged territorial limitation (even if they existed) would allow

them to continue their widespread, nationwide infringing activity. Indeed, Defendants have

marketed and sold their services to all potential PPP consumers in all states, including North

Carolina. In other words, even a single act of infringement in this state where Blue Acorn iCi

maintains an office, conducts business, and is attempting to handle massive consumer confusion,

would be sufficient to require Defendants to rebrand.

Regardless, Defendants’ territory argument simply ignores the evidence of Plaintiff’s

significant, continuous, and prior use of its marks throughout the United States from 2007 to the

present time. Compl., Exhibit D, ¶¶ 17-19, 25-26; Geaslen Decl., ¶¶21–27. Blue Acorn iCi’s

trademark rights encompass the United States as it markets its products and services on a national

and international basis and has customers located throughout the United States, including in the

State of Arizona. As such, all arguments proffered by Defendants to undermine Plaintiff’s common

law trademarks rights are void of merit.

Finally, Plaintiff’s “tacking” argument is entirely misplaced. Plaintiff is not attempting to

“tack” any of its trademark rights as it has clear, distinct, and protectable trademark rights in both

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 5 of 12
the BLUE ACORN ICI Mark (under The Lanham Act and common law) and the BLUE ACORN

word mark (under common law). “Tacking” is unnecessary and wholly irrelevant to this case.

C. Plaintiff’s Acorn Logo

Defendants provide no defense that their use of Acorn Logo constitutes trademark and

counterargument to the fact that the Acorn Logo 1) was used to identify Defendants’ business; 2)

was viewed over 14 million times on YouTube; 3) was used to promote Defendants’ PPP services;

and 4) resulted in profit to Defendants. Finally, Defendants claim that the YouTube channel is the

sole source of infringement of the Acorn Logo. This is incorrect. Blue Acorn iCi has identified

other social media accounts controlled by Defendants in which the Acorn Logo is shown. See DE

16-3. In sum, Defendants present no defense to infringement of the Acorn Logo.

D. Plaintiff’s Marks are Strong

Defendants’ final attack on Plaintiff’s Marks is predicated on their alleged lack of strength.

Defendants do not dispute that Plaintiff’s Marks are inherently distinctive as arbitrary marks and

deserving of the highest protection under the law. Instead, Defendants submit arguments against

“tacking” which, as noted above, is irrelevant to Plaintiff’s separate and distinct trademark

infringement claims, cites case law for analyzing a mark’s inherent strength while providing no

specific analysis of the inherent strength of Plaintiff’s Marks, and lists a number of websites

including the phrase “blue acorn” without citing any caselaw supporting their conclusion that their

existence “severely undercut the distinctiveness and strength of” Plaintiff’s Marks. As “tacking”

is irrelevant and Plaintiff’s Marks are arbitrary and therefore highly distinctive (see TMEP §

1209.01(a)), Plaintiff will only address the specious attack on strength by third party use of the

“blue acorn” phrase.

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 6 of 12
Of the eleven uses of the “blue acorn” phrase cited by the Defendants, most uses are wholly

unrelated to the goods and services offered by Plaintiff (i.e., “Blue Acorn Properties” and “Blue

Acorn” spiritual counseling), some of the third party brands may no longer even be in use (e.g.,

“Blue Acorn Marketing” who has shown no further activity since their launch in 2013), and some

brands may have never been commercially used in the United States at all (e.g., “Blue Acorn

Solutions” and “Blue Acorn Consulting” of the United Kingdom). What is clear, however, is that

unlike Defendants, none of the entities identified have intentionally copied stylized elements of

Plaintiff’s Marks, nor have any of these entities embarked on a widespread, national marketing

campaign to promote their business which resulted in actual confusion with Plaintiff’s Marks,

creating significant business interruption. Here, Defendants have used their Infringing Mark in

connection with selling their business to almost 1 million customers, and their advertisements have

no doubt been visualized by millions more through social media and website advertisements.

Further, not one of the thousands of consumers who contacted Plaintiff were actually

confused about the source of goods and services of any other “blue acorn” entity. All consumer

confusion relates to Defendants’ PPP business, which is and has been the sole source of infringing

activity Plaintiff is aware of to date. Defendants’ attempt to obscure their blatant copying of

Plaintiff’s Marks by pointing to other entities who registered a “blue acorn” name in Arizona is

not a defense to infringement. Defendants alone engaged in intentional copying of Plaintiff’s

Marks, and Defendants alone are the source of mass consumer confusion.

II. DEFENDANTS’ CLAIM OF INNOCENCE IS NOT CREDIBLE

Defendants claim their use of the Infringing Mark was inadvertent and unintentional. This

contention is not credible.

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 7 of 12
A side-by-side comparison demonstrates that Blue Acorn iCi’s BLUE ACORN mark,

Acorn Logo mark and/or BLUE ACORN ICI mark was the artistic basis for Defendants’ Infringing

Mark given the unmistakable similarity in font, style, lower case, color, emphasis, and general

artistic impression. This conclusion is bolstered by Defendants’ blatant copying of Plaintiff’s

Acorn Logo, for which they offer no viable defense.

Defendants did not accidently copy the Acorn Logo and publish it to over 14 million

consumers on YouTube and other social media sites. Likewise, Defendants did not accidentally

fashion a logo with the same font, coloring, format, emphasis, and style as that of Plaintiff’s Marks.

Defendants’ copying of both the Acorn Logo and the Infringing Mark demonstrates Defendants’

intent to trade upon the goodwill of Plaintiff, make consumers believe Defendants are a reputable

company in business for many years, and trick consumers into believing Defendants are associated

with a long-standing company.

III. EVIDENCE OF ACTUAL CONSUMER CONFUSION IS DISPOSITIVE

Defendants’ attempt to undermine the overwhelming evidence of actual consumer

confusion is baseless.

“The traditional pattern of forward confusion occurs when customers mistakenly think that

the junior user’s goods or services are from the same source as or connected with the senior user’s

goods or services.” Valador, Inc. v. HTC Corp., 242 F. Supp. 3d 448, 453 (E.D. Va.), aff’d, 707 F.

App’x 138 (4th Cir. 2017) (internal quotation and citation omitted). “In a reverse confusion

trademark case, ‘[t]he public comes to assume the senior user’s products are really the junior users

or that the former has become somehow connected to the latter.’” Id. at 453 n.4 (quoting Ameritech,

Inc. v. Am. Info. Techs. Corp., 811 F.2d 960, 964 (6th Cir. 1987)). “In this respect, the senior user

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 8 of 12
loses the value of the trademark—its product identity, corporate identity, control over its goodwill

and reputation, and ability to move into new markets.” Id. (internal quotation and citation omitted).

Here, Blue Acorn iCi has presented ample evidence of both forward and reverse confusion

showing that customers of both parties believe there is a connection between the parties. Plaintiff’s

customers have expressed confusion, and customers of Defendants’ PPP business have reached

out to Blue Acorn iCi by the thousands. The consumer contacts here are not merely misdirected

communications; rather, consumers are reaching out to Blue Acorn iCi requesting information

about the funding of their loans and are providing sensitive personal and financial information.

Furthermore, an overwhelming number of these contacts involve serious complaints about

Defendants’ business practices and extremely poor customer service—all of which is directed at

Blue Acorn iCi based on consumers’ belief that Blue Acorn iCi is the source of their frustration

and is the company responsible for making things right. Further, Blue Acorn iCi has been contacted

by multiple investigative bodies (including the Better Business Bureau, the State of Tennessee

Department of Consumer Affairs, a District Attorney within the Commonwealth of Massachusetts,

the Arizona Attorney General’s Consumer Protection Office, and a State Attorney’s Office in

Florida) who believe Blue Acorn iCi is affiliated with Defendants.

Thus, even if the thousands of misdirected communications could be characterized as

“careless mistakes,” such mistakes are precisely the type of consumer confusion and resultant harm

The Lanham Act and state infringement laws are designed to remedy. See, e.g., 4 McCarthy on

Trademarks and Unfair Competition § 23:8 (5th ed) (“The confusion that is remedied by trademark

and unfair competition law is confusion not only as to source, but also as to affiliation, connection

or sponsorship.”); 4 McCarthy § 23:10 (actual reverse confusion shown when “customers of the

junior user’s goods who are dissatisfied . . . mistakenly communicate with the senior user to

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 9 of 12
complain.”); Attrezzi, LLC v. Maytag Corp., 436 F.3d 32 (1st Cir. 2006) (evidence of actual

confusion included emails mistakenly sent to the senior user by customers complaining of

problems with the appliances they bought from the junior user); Sports Auth., Inc. v. Prime Hosp.

Corp., 89 F.3d 955, 963–64 (2d Cir. 1996) (evidence of misdirected calls to senior sufficient to

show confusion); Coach House Restaurant Inc. v. Coach and Six Restaurants, Inc., 934 F.2d 1551,

1562 (11th Cir. 1991) (TTAB incorrectly disregarded evidence of actual confusion consisting of

inquiries as to the affiliation between two restaurants); see also 3 McCarthy on Trademarks §

23:16, pp. 23–38, 39; 15 U.S.C. § 1125(a).

Furthermore, the cases cited by Defendants in their Opposition are readily distinguishable

and have no application to the type, volume, pattern, content, and overwhelmingly negative nature

of the confusion at issue in this case. In those cases, the plaintiffs offered only vague evidence of

confusion, but did not make a sufficient showing of confusion about the source of the parties’

goods and services and otherwise failed to present a forecast of “chronic mistakes” or more than

di minimus incidents of confusion. 1 Here, Plaintiff has provided significant evidence of actual

forward and reverse confusion, which is compelling evidence of infringement.

1
See Codename Enters. v. Fremantlemedia N. Am. Inc., No. 16-CIV-1267ATSN, 2018 WL 3407709, at *10 (S.D.N.Y.
Jan. 12, 2018) (unpublished) (finding no actual confusion when twenty examples of misdirected communications did
not evidence any confusion about the source of goods and services); Therma-Scan, Inc. v. Thermoscan, Inc., 295 F.3d
623 (6th Cir. 2002) (six emails that were arguably probative of confusion did not indicate “chronic mistakes and
serious confusion of actual customers” and were di minimus); Duluth News-Tribune v. Mesabi Publ’g Co., 84 F.3d
1093 (8th Cir. 1996) (insufficient evidence of likelihood of confusion where the purpose of misdirected calls/mail was
unclear and di minimus); WWW Pharmaceutical Co, Inc. v. Gilette, 984 F.2d 567 (2d Cir. 1993) (insufficient evidence
where only one speculative example of actual confusion was offered); Lang v. Retirement Living Pub. Co., Inc., 949
F.2d 576, 582–83 (2d Cir. 1991) (determining that phone calls and letters did not demonstrate actual confusion where
they were made during period when junior user was not listed in a telephone directory and it was not clear that
customers believed the senior user was connected to the junior user’s goods/services).

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 10 of 12
IV. THE BALANCE OF EQUITIES WEIGHS HEAVILY IN PLAINTIFF’S FAVOR

In less than a year, Defendants have raked in substantial profits by intentionally trading on

Blue Acorn iCi’s long-standing brand, all while Blue Acorn iCi has suffered significant,

unprecedented business interruption and reputational loss. Blue Acorn iCi is still mired in the

process of attempting to explain to consumers and governing bodies that it has nothing to do with

Defendants’ PPP business. It continues to be inundated daily with calls and contacts and continues

to expend time and resources responding to legal authorities who are investigating Defendants’

businesses. Ongoing evidence of mass confusion in the marketplace from consumers, state

authorities, and customers of Blue Acorn iCi are before the Court. Plaintiff has shown a likelihood

of success on the merits on its claims and an absolute need for immediate relief. Accordingly,

Plaintiff requests that its Motion for Preliminary Injunctive Relief be granted.

Respectfully submitted this 6th day of July 2021.

/s/ Beth A. Stanfield
Beth A. Stanfield (N.C. State Bar No. 36296)
Thomas Babel (N.C. State Bar No. 35004)
Laura K. Greene (N.C. State Bar No. 47771)
FORREST FIRM, P.C.
105 Grace Street, Suite 101
Wilmington, NC 28401
T/F: (336) 275 - 6344
Beth.stanfield@forrestfirm.com
thomas.babel@forrestfirm.com
katie.greene@forrestfirm.com
Attorneys for Plaintiff

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 11 of 12
CERTIFICATE OF SERVICE
The undersigned does hereby certify that a copy of the foregoing REPLY BRIEF IN
SUPPORT OF PLAINTIFF’S MOTION PRELIMINARY INJUNCTIVE RELIEF has been
filed with the Clerk for the United States District Court, Eastern District of North Carolina, using
the electronic filing system of the Court which will send notification to the following counsel of
record:

Christopher J. Blake
N.C. State Bar No. 16933
D. Martin Warf
N.C. State Bar No. 32982
Nelson Mullins Riley & Scarborough LLP
4140 Parklake Ave, Suite 200
Raleigh, NC 27612
Chris.blake@nelsonmullins.com
Martin.warf@nelsonmullins.com

Attorneys for Defendants Fin Cap, Inc, Blueacorn PPP,
LLC and Blue Oak Forest, LLC

 By placing a copy, contained in a first-class, postage paid wrapper, into a depository
under the exclusive custody of the United States Postage Service, addressed to the
parties as indicated below

Michael S. Cota James M. Flores
2138 S. Valle Verde Cir 7833 E. Harvard Street
Mesa, AZ 85209 Scottsdale, AZ 85257

Stephanie Hockridge Reis Nathan Reis
4747 N. Scottsdale Road, Unit C 4747 N. Scottsdale Road, Unit C
Scottsdale, AZ 85251 Scottsdale, AZ 85251

This the 6th day of July, 2021.
/s/ Beth A. Stanfield
Beth A Stanfield
Laura K. Greene
Thomas Babel

Attorneys for Plaintiff

Case 5:21-cv-00251-BO Document 35 Filed 07/06/21 Page 12 of 12

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