LLC v. Treehouse Comedy Productions, Ltd.

          RULING ON APPLICATION FOR PREJUDGMENT REMEDY

          KARI A. DOOLEY UNITED STATES DISTRICT JUDGE.

         The Plaintiff, Funny 4 Funds, LLC, (“F4F”) brings this action against the Defendants, Treehouse Comedy Productions, Ltd. (“Treehouse”) and Brad Axelrod (“Axelrod”) (collectively, the “Defendants”), alleging trademark infringement and related claims. Concurrent with the filing of the Complaint, F4F filed an application for prejudgment remedy seeking to attach or secure $100, 000.00 as a reasonable estimate of its provable damages (the “Application”). The Court held a hearing on the Application on April 23, 2019. For the reasons set forth in this Order, the Application is GRANTED in part and DENIED in part.

         Factual Allegations and Procedural History

         F4F and Treehouse are competitors in the comedy show market. Each provides, with some variation, a soup to nuts comedy show for clients hoping to raise funds for a charity or other worthy cause. F4F typically charges a fee of $1, 200.00 for its services, and it pays for the comics who appear and other costs associated with the event itself.

         In September 2015, F4F and Treehouse embarked on a joint venture as means of expanding the F4F brand into Connecticut. F4F provided education and experience to Treehouse and Treehouse, in turn, began branding its comedy shows under both the Treehouse and F4F's then- unregistered “FUNNY 4 FUNDS” mark. This was a Gentleman's Agreement not memorialized in writing. Thereafter, Treehouse began using a fusion logo, which combined the “FUNNY 4 FUNDS” mark and the Treehouse logo (“fusion logo”), in the marketing, advertising, and promotion of its fundraising comedy shows. It is not disputed that between September 2015 and June or July of 2018, Treehouse had unfettered access to and permission to use the F4F's name and mark. By agreement, Treehouse did not pay F4F any compensation for the use of the “FUNNY 4 FUNDS” mark. Both parties believed the relationship to be mutually beneficial.

         On September 6, 2016, F4F submitted applications to the United States Patent and Trademark Office for the registration of two marks - “FUNNY 4 FUND$” and “FUNNY 4 FUNDS” (individually and collectively, the “Marks”). The registration of the Marks was completed on October 31, 2017. Thereafter, F4F began entering into written licensing agreements with individuals and groups, known as “branches, ” who wish to market and sell comedy shows under the F4F brand name and use the Marks. F4F has nine “branches” in several states. For each show marketed and sold using the Marks, F4F receives a licensing fee of $150.00 and “transaction” fees of approximately $180.00. F4F has no actual involvement in the staging of the shows arranged by the “branches.”

         After the registration of the Marks, Treehouse continued to use the Marks, with permission under the pre-existing Gentleman's Agreement, until approximately June or July 2018. At that time, F4F began discussing the terms of a potential licensing agreement with Treehouse whereby, presumably, Treehouse would become a “branch.” The discussions broke down in October 2018 with no agreement being reached. F4F understood that Treehouse would thereafter begin phasing out its use of the fusion logo and the Marks and announce a new brand or marketing plan.

         Nevertheless, Treehouse continued to use the Marks in its marketing and advertisement through the end of 2018. On January 8, 2019, F4F sent a cease and desist letter to Treehouse regarding the use of the Marks. Following receipt of that letter, Treehouse acknowledges that it continued using the Marks.

         On March 26, 2019, F4F instituted this action against Treehouse and its president, Brad Axelrod. In the Complaint, F4F asserts claims for violations of the Lanham Act, trademark common law, and the Connecticut Unfair Trade Practices Act (“CUTPA”). With the filing of its complaint, F4F further filed the Application.

         Discussion

         Standard for Issuance of a Prejudgment Remedy

         In federal court, “throughout an action, every remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment.” Fed.R.Civ.P. 64(a). Accordingly, this Court can issue a prejudgment remedy pursuant to Conn. Gen. Stat. §§ 52-278a, et seq. Under that statute,

[a] prejudgment remedy is available upon a finding by the court that ‘there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff. . . .'

TES Franchising, LLC v. Feldman, 286 Conn. 132, 137 (2008) (quoting Conn. Gen. Stat. § 52- 278d(a)(1)). Probable cause requires less proof than that which is required for a fair preponderance of the evidence. TES Franchising, LLC, 286 Conn. at 137. “[P]robable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it.” Id. (internal quotation marks omitted). Probable cause is “a flexible common sense standard” that “does not demand that a belief be correct or more likely true than false.” Id. (internal quotation marks omitted). In assessing a motion for a prejudgment remedy, “the trial court's function ...