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John B. Sganga, Jr. (SBN 116211) [email protected] Y. Yee (SBN 239114)[email protected]
Nicholas M. Zovko (SBN 238248)[email protected]
KNOBBE, MARTENS, OLSON & BEAR, LLP2040 Main StreetFourteenth FloorIrvine, CA 92614Phone: (949) 760-0404Facsimile: (949) 760-9502
Attorneys for PlaintiffGHOST MANAGEMENT GROUP, LLC
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
GHOST MANAGEMENTGROUP, LLC, a Delawarelimited liability company,
Plaintiff,
v.
LAYER SIX MEDIA, INC.,a Delaware corporation,
Defendant.
)))))))))))))))))))))
))))))))))
Civil Action No. 8:16-CV-00635
COMPLAINT FOR DAMAGES ANDINJUNCTIVE RELIEF:
1. VIOLATION OF THE COMPUTERFRAUD AND ABUSE ACT, 18 U.S.C.§ 1030, et seq.
2. TRADEMARK INFRINGEMENTAND FALSE DESIGNATION OFORIGIN UNDER 15 U.S.C. §§ 1114,1125(a)
3.
TORTIOUS INTERFERENCE WITHCONTRACTS AND ECONOMICRELATIONS
4. UNLAWFUL, UNFAIR, ANDFRAUDULENT COMPETITION
UNDER CALIFORNIA BUSINESS &PROFESSIONS CODE § 17200, et seq.
5.
COMMON LAW UNFAIRCOMPETITION
DEMAND FOR JURY TRIAL
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Plaintiff GHOST MANAGEMENT GROUP, LLC (“Plaintiff”), for its
Complaint against Defendant LAYER SIX MEDIA, INC. (“Defendant”),
alleges as follows:
INTRODUCTION
1. This action arises from Defendant’s infringement of Plaintiff’s
intellectual property rights, its improper solicitation of and false statements to
Plaintiff’s clients, its unauthorized use of Plaintiff’s clients’ login information to
gain access to Plaintiff’s protected computer network, and its unlawful removal
of content from Plaintiff’s computer network.
2. Plaintiff is the owner of a highly successful online software
platform located at www.weedmaps.com. The platform provides listing
services for medical cannabis dispensaries, doctors’ offices and delivery
services. The platform also provides a forum for dispensary reviews and patient
social networking, and creates an online community that promotes safe access.
3. Plaintiff’s online software platform has become the largest and
most widely used dispensary directory. The medical cannabis community views
Plaintiff as a premiere source of information and trusted authority.
Understandably, dispensaries, doctors’ offices and delivery services all believe
that listing their business on Plaintiff’s website is necessary to build credibility
with patients. As a result, Plaintiff has developed a tremendous amount of
goodwill in its brand.
4. Plaintiff’s clients include dispensaries, doctors’ offices and
delivery services that make information about their business available onPlaintiff’s website. This information includes the location of dispensaries,
menus of available products, pricing information, and reviews from patients.
Plaintiff provides confidential login account and password information to its
clients so that the clients can securely login to Plaintiff’s online software
platform and update content relating to their business.
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5. Defendant operates a competing website at www.wheresweed.com.
Without authorization, Defendant has contacted Plaintiff’s clients and falsely
represented that Defendant is affiliated with Plaintiff. Defendant has done so
improperly to gain the trust of Plaintiff’s clients, and to deceive them into
disclosing to Defendant their confidential account login information and
password for Plaintiff’s online software platform. Defendant then proceeded to
use the improperly obtained account login information to access secure portions
of Plaintiff’s platform and, without permission, deleted content on Plaintiff’s
website, including menus of products available from Plaintiff’s clients.
6. Defendant has also used, without authorization, Plaintiff’s logos on
Defendant’s website in a manner that suggests there is some affiliation or
connection between Defendant and Plaintiff, when there is none. To further free
ride on Plaintiff’swork, Defendant has taken content from Plaintiff’s website to
populate Defendant’s own website, including copying verbatim reviews posted
on Plaintiff’s website.
7. Plaintiff, through this lawsuit, seeks to immediately stop Defendant
from its continuing injurious actions, from which Plaintiff has suffered
irreparable and incalculable harm, and which will continue unless Defendant is
enjoined from further abuse of Plaintiff’s intellectual property rights and
unauthorized access to its protected computers.
THE PARTIES
8. Plaintiff is a limited liability company organized and existing under
the laws of the State of Delaware, and has its principal place of business at41 Discovery, Irvine, California 92618.
9. Plaintiff is informed and believes, and thereupon alleges, that
Defendant is a corporation organized and existing under the laws of the State of
Delaware, and has its principal place of business at 36 S. 18th Ave, Suite D,
Brighton, Colorado 80601.
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JURISDICTION AND VENUE
10. This Court has federal question jurisdiction of this action under 28
U.S.C. § 1331 because this action alleges violations of federal statutes,
including the Computer Fraud and Abuse Act (18 U.S.C. § 1030) and the
Lanham Act (15 U.S.C. §§ 1114 and 1125(a)). The Court has supplemental
jurisdiction over the remaining claims under 28 U.S.C. § 1367.
11. Venue is proper in this Judicial District pursuant to 28 U.S.C.
§ 1391 because Defendant has substantial contacts within California, including
their participation in the acts and events occurring in this Judicial District
described herein, and because Plaintiff’s claims arose in this Judicial District.
12. Defendant has repeatedly, knowingly, and intentionally solicited
confidential login information from Plaintiff’s clients, and accessed or permitted
access to Plaintiff’s servers located in this Judicial District without Plaintiff’s
authorization. While accessing Plaintiff’s servers, Defendant made systematic
and continuous contacts with this Judicial District, and has targeted its wrongful
acts at Plaintiff, which is headquartered in this Judicial District.
FACTS AND BACKGROUND
A. Background
13. Plaintiff’s online software platform located at www.weedmaps.com
attracts over two million monthly visitors. The platform is widely regarded as
the leading directory of dispensaries and premiere source of information for the
medical cannabis community. Many of Plaintiff’s clients pay a monthly fee to
list their business on Plaintiff’s platform. Plaintiff’s clients are permitted toaccess Plaintiff’s secure computer network to update, change or maintain the
content of their listing.
14. To access its secure computer network, Plaintiff requires that its
clients register with a unique username and password. Only registered
dispensaries may access and update their information. Registered dispensaries
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may customize their profile by adding content such as product menus and
information about their location.
15. Access and use of Plaintiff’s online software platform is governed
by Terms of Service. Plaintiff’s Terms of Service require users to abide by
certain rules of user conduct. Those terms include, among other things, that
users agree not to do any of the following:
a. “Attempt to gain unauthorized access to the Service, user
accounts, computer systems or networks connected to the
Service through hacking, password mining or any other means”;
b. “Record, process, or mine information about other users”; and
c. “Modify, adapt, appropriate, reproduce, distribute, translate,
create derivative works or adaptations of, publicly display, sell,
trade, or in any way exploit the Service or Content (other than
Your Content), except as expressly authorized by Weedmaps.”
16. Plaintiff’s Terms of Service also provide that users agree not to
“[a]ccess, retrieve or index any portion of the Service for purposes of
constructing or populating a searchable database of business reviews.”
17. Plaintiff’s website is, by design, uniquely distinctive in its creative
composition and its comprehensive and user-friendly interfaces. Among the
significant unique elements of Plaintiff’s website are the distinctive product
menus for Plaintiff’s clients.
18. As an online venture, the intellectual property related to Plaintiff’s
website is a vital asset to Plaintiff.19. Plaintiff owns all common law rights in its WM and WEEDMAPS
marks. Plaintiff also owns all common law rights in various design marks and
logos used in connection with its goods and services.
20. Plaintiff is also the owner of United States federal trademark
registrations, including U.S. Registration Nos. 4,321,512; 4,321,513; 4,776,082;
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4,798,449; and 4,798,456. The design marks covered by U.S. Registration
Nos. 4,798,456 and 4,776,082, respectively, are shown below:
21. By virtue of the extensive marketing conducted by Plaintiff,
Plaintiff’s marks have become recognized by consumers as designating Plaintiff
as the source of Plaintiff’s branded services. Accordingly, Plaintiff’s
trademarks are extremely valuable to Plaintiff.
22. In addition, the presence of Plaintiff’s marks on social media
websites has grown at a staggering rate. For example, Plaintiff’s Twitter page
has 59,000 followers. Additionally, since the launch of its website in 2008,
Plaintiff’s marks have received extensive press coverage in nationally circulated
media sources, including The Los Angeles Times, The Huffington Post, CNBC,
The Wall Street Journal, Entrepreneur, Business Insider, NBC News,
Bloomberg Businessweek, and The Washington Post.
23. Plaintiff’s successful brand promotion and widespread media
coverage of Plaintiff and its services have led to an unrivaled reputation with
consumers.
24. Plaintiff’s trademarks are among Plaintiff’s most important and
valuable assets.
B.
Defendant’s Unauthorized Activities25. Defendant’s website promotes a “Menu Syndication” feature for
dispensaries. According to Defendant, “Menu Syndication allows you to update
your product inventory across the web, all in real-time,” and “[b]y tying in your
login credentials, we’ll help you update your inventory listed on WeedMaps,
Leafly, THCFinder, Facebook and of course your own website.”
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Defendant’s Website
(https://wheresweed.com/california/newport-beach/marijuana-delivery/true-
green/reviews)
30. In addition, Defendant has improperly used Plaintiff’s federally-
registered trademarks on Defendant’s website.
31. For example, as shown below by the red circle, Defendant has used
and continues to use Plaintiff’s federally-registered trademark for the “WM”
design and logo:
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Defendant’s Website
(https://biz.wheresweed.com/2014/nov/5-reasons-you-should-be-using-menu-syndication (annotation added))
32. In addition, as shown below by the red circle, Defendant has used
and continues to use Plaintiff’s federally-registered trademark for the
“WEEDMAPS” design and logo:
Defendant’s Website
(https://wheresweed.com/tour.php (annotation added))
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33. Further, as shown below by the red underline, Defendant has used
and continues to use Plaintiff’s other federally-registered trademarks:
Defendant’s Website
(https://biz.wheresweed.com/2014/nov/5-reasons-you-should-be-using-menu-
syndication (annotation added))
34. At no time has Defendant received permission from Plaintiff to
conduct any commercial activity on Plaintiff’s website.
35. At no time has Defendant received permission from Plaintiff to use
other users’ accounts to access Plaintiff’s computer systems.
36. At no time has Defendant received permission from Plaintiff to use
any of Plaintiff’s intellectual property, including Plaintiff’s trademarks.
37. Defendant’s actions are deliberate, intentional, willful, malicious,
and fraudulent.
38. Plaintiff is informed and believes, and thereupon alleges, that
Defendant does not disclose to Plaintiff’s clients that Defendant’s actions are
unlawful and violate Plaintiff’s Terms of Service. Indeed, Defendant
knowingly, willfully, intentionally, fraudulently, and maliciously induce,
encourage, and assist Plaintiff’s clients in abusing Plaintiff’s online platform
and violating Plaintiff’s Terms of Service.
39. Defendant’s acts have caused damage to Plaintiff in an amount to
be determined at trial, and such damages will continue to increase unless
Defendant is enjoined from its wrongful actions.
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40. Plaintiff is informed and believes, and thereupon alleges, that
Defendant has derived and received, and will continue to derive and receive,
gains, profits, and advantages from the acts complained of herein in an amount
that is not presently known to Plaintiff. By reason of Defendant’s acts, Plaintiff
has been damaged, and it is entitled to monetary relief in an amount to be
determined at trial.
41. Defendant’s acts complained of herein have caused damage and
irreparable injury to Plaintiff, and these acts will result in further damage and
irreparable injury if Defendant is not restrained by this Court from further
violations of Plaintiff’s rights for which Plaintiff has no adequate remedy at law.
FIRST CLAIM FOR RELIEF
(VIOLATION OF THE COMPUTER FRAUD AND ABUSE ACT,
18 U.S.C. § 1030, et seq.)
42. Plaintiff hereby realleges and incorporates by reference, as if fully
set forth herein, the allegations in all the preceding paragraphs.
43. Plaintiff’s computers are involved in interstate commerce and
communication, and are protected computers under 18 U.S.C. § 1030(e)(2).
44. On information and belief, Defendant knowingly and intentionally
accessed Plaintiff’s computers without authorization, and in excess of
authorization as defined by Plaintiff’s Terms of Service.
45. On information and belief, after gaining unauthorized access to
Plaintiff’s servers, Defendant obtained and used valuable information from
Plaintiff’s protected computers in transactions involving interstatecommunications. This information included, among other things, product
menus for Plaintiff’s clients. The use included removing content and data from
Plaintiff’s website, and copying proprietary data and re-displaying it on
Defendant’s website.
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46. On information and belief, Defendant knowingly, willfully, and
with intent to defraud accessed Plaintiff’s computers without authorization or in
excess of authorization and obtained valuable information from Plaintiff’s
computers that, on information and belief, Defendant used to obtain something
of value.
47. On information and belief, Defendants knowingly, willfully, and
with intent to defraud trafficked in login information through which computers
were accessed without authorization, affecting interstate commerce.
48. Defendant’s conduct has caused a loss to Plaintiff during a
one-year period in excess of $5,000.
49. Plaintiff has been damaged by Defendant’s actions, including being
forced to expend resources to investigate the unauthorized access and abuse of
its computer network. Plaintiff seeks compensatory and other equitable relief
under 18 U.S.C. § 1030(g) in an amount to be proven at trial.
50. Plaintiff has suffered irreparable and incalculable harm and injuries
resulting from Defendant’s conduct, which harm will continue unless Defendant
is enjoined from further unauthorized use of Plaintiff’s protected computers.
Plaintiff has no adequate remedy at law.
SECOND CLAIM FOR RELIEF
(TRADEMARK INFRINGEMENT AND FALSE DESIGNATION OF
ORIGIN UNDER 15 U.S.C. §§ 1114, 1125(a))
51. Plaintiff hereby realleges and incorporates by reference, as if fully
set forth herein, the allegations in all the preceding paragraphs.52. Plaintiff owns U.S. Federal Trademark Registration
Nos. 4,321,512; 4,321,513; 4,776,082; 4,798,449; and 4,798,456. These
registrations are in full force and effect, and are enforceable.
53. At all relevant times, Defendant exercised ownership and control
over online advertising for its products, services, and websites, and knowingly
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cooperated in and/or induced, encouraged, enabled, or aided in the infringement
of Plaintiff’s trademark rights in online advertising for its products, services,
and website.
54.
Defendant’s false statements to Plaintiff’s clients wrongly
suggesting that Defendant is affiliated with Plaintiff is likely to cause confusion
or to cause mistake or to deceive as to the origin of the products or services
offered and sold by Defendant and as to their affiliation, connection, or
association with and/or endorsement or approval by Plaintiff.
55. Defendant’s use of Plaintiff’s marks in interstate commerce is
likely to cause confusion or to cause mistake or to deceive as to the origin of the
products or services offered and sold by Defendant and as to their affiliation,
connection, or association with and/or endorsement or approval by Plaintiff.
56. The foregoing acts of Defendants constitute false designation of
origin, association, affiliation, connection, endorsement and/or approval under
15 U.S.C. § 1125(a), and/or vicarious or contributory infringement of Plaintiff’s
rights under 15 U.S.C. § 1125(a).
57.
Defendant’s actions also constitute the use in interstate commerce
of a reproduction, counterfeit, copy, or colorable imitation of a registered
trademark of Plaintiff in connection with the sale, offering for sale, distribution,
or advertising of goods or services on or in connection with which such use is
likely to cause confusion or mistake, or to deceive, in violation of 15 U.S.C.
§ 1114.
58.
Plaintiff is informed and believes, and thereupon alleges, thatDefendant has engaged in such false designation of origin, association,
affiliation, connection, endorsement and/or approval knowingly, willfully,
deliberately, and in conscious disregard of Plaintiff’s rights, making this an
exception case under 15 U.S.C. § 1117.
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67. Plaintiff is informed and believes, and thereupon alleges, that
Defendant’s false statements have been, or will be, successful in diverting at
least some business from Plaintiff to Defendant.
68.
As a proximate result of Defendant’s false statements, Plaintiff has
suffered damages in an amount to be proven at trial.
69. On information and belief, Defendant’s conduct was intended
unfairly to harm Plaintiff through unlawful acts. Additionally, the conduct of
Defendant has been willful, malicious, and oppressive. Plaintiff is therefore
entitled to punitive damages.
70. Plaintiff is informed and believes, and thereupon alleges, that
Defendant threatens to, and unless restrained will, disrupt other contracts or
business relationships between Plaintiff and Plaintiff’s clients or potential
clients, which will cause irreparable harm to Plaintiff and for which damages
would not afford adequate relief in that damages would not completely
compensate for the injury to Plaintiff’s business reputation and goodwill.
FOURTH CLAIM FOR RELIEF
(UNLAWFUL, UNFAIR, AND FRAUDULENT COMPETITION UNDER
CALIFORNIA BUSINESS & PROFESSIONS CODE § 17200, et seq.)
71. Plaintiff hereby realleges and incorporates by reference, as if fully
set forth herein, the allegations in all the preceding paragraphs.
72. The acts and conduct of Defendant as alleged above in this
Complaint constitute unlawful, unfair, and/or fraudulent business acts or
practices as defined by Cal. Bus. & Prof. Code § 17200 et seq.73. Defendant’s acts of unlawful, unfair, and fraudulent competition
have caused harm to competition, to consumers, and to its competitors.
Defendant’s acts of unlawful, unfair, and fraudulent competition have
proximately caused Plaintiff to suffer injury in fact and loss of money and/or
property (including as a result of expenses that Plaintiff has incurred, and
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continues to incur, in its efforts to prevent and deter Defendant from engaging in
unlawful conduct) in an amount to be proven at trial.
74. Defendant’s acts of unlawful, unfair, and fraudulent competition
also have caused irreparable and incalculable injury to Plaintiff, to Plaintiff’s
marks and trade name, and to the business and goodwill represented thereby,
and, unless enjoined, could cause further irreparable and incalculable injury,
whereby Plaintiff has no adequate remedy at law.
75. Defendant’s misconduct was deliberate, and undertaken with
oppression, fraud, or malice within the meaning of California Civil Code
§ 3294, justifying an award of exemplary damages sufficient to punish
Defendant and to deter it from such misconduct in the future.
FIFTH CLAIM FOR RELIEF
(COMMON LAW UNFAIR COMPETITION)
76. Plaintiff hereby realleges and incorporates by reference, as if fully
set forth herein, the allegations in all the preceding paragraphs.
77. The acts of Defendant, alleged herein, constitute unlawful, unfair,
and fraudulent business practices in violation of the California common law of
Unfair Competition.
78. Plaintiff is informed and believes, and thereon alleges, that
Defendant has willfully and in conscious disregard for Plaintiff’s rights and its
business, committed unfair and unlawful business practices including, but not
limited to, stealing Plaintiff’s computer information, using for Defendant’s own
purposes, and adversely to the interests of Plaintiff and its business venture,Plaintiff’s business information, removing and copying Plaintiff’s website data,
content, and information, and interfering with Plaintiff’s business.
79. These acts of Defendants were and continue to be willful,
oppressive, fraudulent, and malicious, warranting an award of punitive damages
in addition to the actual damages suffered by Plaintiff.
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80. As a direct and proximate result of Defendant’s willful, improper,
and unlawful conduct, Plaintiff has suffered, and will continue to suffer, great
harm and damage. Plaintiff will continue to be irreparably damaged unless
Defendants are enjoined from further committing unfair and unlawful business
practices against Plaintiff and Plaintiff’s business.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment against Defendant and for
the following relief:
A. That the Court enters judgment in favor of Plaintiff and against
Defendant on all claims for relief alleged herein.
B. For injunctive relief as follows: A preliminary and permanent
injunction enjoining and restraining Defendant, and all persons and entities
acting in concert with them, during the pendency of this action and thereafter
perpetually from:
1. Soliciting and/or obtaining account login information to
Plaintiff’s online software platform;
2.
Accessing or attempting to access Plaintiff’s website and
computer systems;
3. Initiating and procuring unsolicited communications with
Plaintiff’s clients;
4. Displaying or otherwise using Plaintiff’s trademarks anywhere,
including on Defendant’s websites;
5.
Indicating or suggesting any affiliation with Plaintiff;6. Engaging in any activity that disrupts, diminishes the quality of,
interferes with the performance of, or impairs the functionality
of Plaintiff’s online software platform; and
7. Engaging in any activity that violates Plaintiff’s Terms of
Service.
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C. An award to Plaintiff of damages, including but not limited to
compensatory, consequential, statutory, enhanced, and punitive damages, as
permitted by law and in such amounts to be proven at trial.
D.
An award to Plaintiff of reasonable costs, including reasonable
attorneys’ fees.
E. For pre-judgment and post-judgment interest as allowed by law
F. For such other relief as the Court may deem just and proper.
KNOBBE, MARTENS, OLSON & BEAR, LLP
Dated: April 5, 2016 By: /s/ Nicholas M. ZovkoJohn B. Sganga, Jr.Thomas Y. Yee
Nicholas M. Zovko
Attorneys for PlaintiffGHOST MANAGEMENT GROUP, LLC
Case 8:16-cv-00635-AG-JCG Document 1 Filed 04/05/16 Page 18 of 19 Page ID #:18
8/18/2019 Ghost Mgmt v. Layer Six Media - Weedmarps CFAA trademark complaint.pdf
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DEMAND FOR JURY TRIAL
Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff
GHOST MANAGEMENT GROUP, LLC hereby demands a trial by jury on all
issues so triable that are raised herein or that hereinafter may be raised in this
action.
KNOBBE, MARTENS, OLSON & BEAR, LLP
Dated: April 5, 2016 By: /s/ Nicholas M. ZovkoJohn B. Sganga, Jr.Thomas Y. Yee
Nicholas M. Zovko
Attorneys for PlaintiffGHOST MANAGEMENT GROUP, LLC
23011839
Case 8:16-cv-00635-AG-JCG Document 1 Filed 04/05/16 Page 19 of 19 Page ID #:19