PHILADELPHIA – Potato chip manufacturer Utz Quality Foods’ trademark infringement case against a proprietor of rib spices and seasonings is now headed to a Tennessee federal court.
Utz initially filed a complaint on Feb. 28 in the U.S. District Court for the Eastern District of Pennsylvania, against Troy Long of Fayetteville, Tenn. and his company, Dirty South BBQ, of Winchester, Tenn.
According to the complaint, Dirty South is infringing on Utz’s trademark, which Utz’s corporate predecessor acquired in 2011 by buying Zappe Endeavors. Since 1987, Zappe made and sold “Dirty” brand potato chips.
Utz stated the product line is worth several million dollars.
“Utz’s ‘Dirty’ marks are strong. They are inherently distinctive and represent the exceedingly valuable goodwill of Utz,” the company said.
According to the complaint, Long started selling “Dirty South BBQ” products in April 2014 and more recently launched a line of “Dirty” pork rinds. Dirty South BBQ has products in more than 100 grocery stores in Tennessee, Alabama and Utah.
According to Utz, it sent Dirty South BBQ a cease-and-desist letter in May 2019, explaining Long had “at least constructive knowledge of Utz’s rights” to the word “Dirty” when he began using it and sought his own legal protection.
On June 19, counsel for the parties met for a joint rule meeting per Federal Rule of Civil Procedure 26(f), in order to discuss discovery process for the litigation.
Utz says it has owned the trademarks at issue in this action since 1987 and asserts the actions taken by the defendants are a clear-cut case of infringement.
“The use of the infringing ‘Dirty’ designations in connection with the advertising, marketing, offering for sale, sale, and distribution of food seasonings and pork rinds is likely to cause consumer confusion with Utz’s prior, well-known ‘Dirty’ marks and, accordingly, constitutes, inter alia, trademark infringement, unfair competition and trade name infringement as set forth in more detail in Utz’s complaint,” according to counsel for Utz.
In contrast, the defendants restated their claims of improper venue and jurisdiction, and believe their original motion to dismiss should be granted on those grounds. Outside of that argument, Dirty South BBQ contends its reference to “Dirty” is entirely distinguishable from any product manufactured by Utz.
“Defendants maintain that their outstanding motion to dismiss should be granted on the basis of invalid venue and jurisdiction. As more fully set forth in their motion and brief, the full weight of the plaintiff’s claim to personal jurisdiction and venue rests on a single purchase of defendants’ allegedly infringing product by plaintiff’s counsel of record. This is insufficient basis for venue and jurisdiction,” counsel for Dirty South BBQ and Long stated.
UPDATE
The defendants previously filed a motion to dismiss the action on May 18, based upon the Court allegedly lacking personal jurisdiction and that venue is improper in this district.
U.S. District Court for the Eastern District of Pennsylvania Judge Wendy Beetlestone weighed in with her ruling in a memorandum on July 28, beginning with the topic of waiver of defenses.
“Long failed to raise a lack of personal jurisdiction or an improper venue defense in that answer – which was filed before the defenses were raised in defendants’ initial motion to set aside default and dismiss – Long waived those defenses before joining that motion. As such, he may not assert them here. Accordingly, Long has consented to personal jurisdiction with this Court and to venue in this district,” Beetlestone said.
“The same is not necessarily true with respect to Dirty South, however. A corporation may appear in federal court ‘only through licensed counsel.’ Long is not an attorney. Therefore, despite Long’s inclusion of Dirty South in his pro se answer, Dirty South first appearance was in defendants’ motion to set aside entry of default and dismiss. Because Dirty South raised the defenses in that motion, it preserved the right to assert those defenses now.”
As to specific jurisdiction, Dirty South argues the Court lacks that quality because it as a company “never purposefully directed its activities at Pennsylvania.”
Utz, however, believes (1) Dirty South sold one product to Utz’s counsel; (2) Dirty South operates a website accessible in Pennsylvania that allows product sales into Pennsylvania; (3) Dirty South’s products may be sold into Pennsylvania via third-party websites; and, (4) there exists a likely possibility products have been sold into Pennsylvania by Dirty South and third-party websites.
“As the sale to Utz’s counsel and Dirty South’s website and third-party websites allowing sales into Pennsylvania fails to demonstrate purposeful direction, and the likely possibility sales have occurred via those websites into Pennsylvania fails to ‘make even a threshold showing’ of specific jurisdiction…Utz has failed to meet its burden to establish a prima facie case of personal jurisdiction. As such, this Court lacks personal jurisdiction over Dirty South,” Beetlestone said.
As to the issue of transfer and after analyzing the public-private factors under Jumara, Beetlestone said the case would be most home in the U.S. District Court for the Eastern District of Tennessee.
“A district court in the Eastern District of Tennessee could exercise personal jurisdiction over Dirty South, because Dirty South is situated in Franklin County, Tennessee. Further, venue would be proper in that district as Dirty South is a resident of Tennessee,” Beetlestone said.
“Finally, as Utz could refile its complaint in that district if this case were dismissed, transferring this case skips the middle steps of dismissal and refiling, which therefore makes transfer in the interest of justice in this case ‘because dismissal would be ‘time-consuming and justice-defeating.”
For counts of unfair competition under the Lanham Act, federal trademark infringement and infringement of trade name, the plaintiff is seeking the court to strip Long’s trademark registration for Dirty South BBQ Co.
The plaintiff is represented by Camille M. Miller, J. Trevor Cloak and Melanie A. Miller of Cozen O’Connor, in Philadelphia.
The defendant is represented by Joel Aaron Ready of Cornerstone Law Firm, in Blandon.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-01146
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com