Source: https://www.expresshomebuyers.com/trademark-lawsuit/
Timestamp: 2019-04-20 11:00:22+00:00

Document:
To see complete filing details click here: Express Homebuyers Trademark Lawsuit or see below.
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1. This case is about the common, ubiquitous, and generic phrase “we buy houses”—a phrase that has been used in the real estate industry since the real estate industry first came into existence. There is nothing unique, special, or distinctive about a real estate company or professional saying, either in print or in online advertising, that they “buy houses.” Indeed, thousands of real estate companies and professionals have used, and continue to use, this phrase in describing what they do.
2. Defendants are quintessential trademark bullies. They claim to have a nationwide grip on the generic phrase “we buy houses.” This action arises out of the Defendants’ inappropriate, multi-State campaign of intimidation and harassment over the decades-long, widespread use in the real estate industry of the generic phrase “we buy houses.” Defendants have taken the head-snapping position that they, and they alone, are the only ones in the entire United States that can use the phrase “we buy houses” in all forms of media—print, online, and otherwise—related to real estate goods and services.
3. Yet, as alleged herein, and as the evidence will show, the Defendants never had legitimate rights in their alleged trademark in the first place. That is because the Defendants defrauded the U.S. Patent and Trademark Office and entered into a phony, collusive agreement with a third party to supposedly obtain exclusive rights to the phrase “we buy houses.” At all relevant times herein, Defendants were fully aware that they did not have legitimate or enforceable federal trademark rights but they engaged in their wrongful conduct anyway.
5. The Defendants brought their bullying tactics to the Commonwealth of Virginia in 2016. In July of that year, WBH embarked on an onslaught against Express Homebuyers’ use of the phrase “we buy houses” to describe its direct home buying services online.
6. In particular, WBH filed numerous take-down complaints with YouTube.com, alleging that approximately 91 of Express Homebuyers’ videos supposedly violated WBH’s rights in its purported trademarks, WE BUY HOUSES and WEBUYHOUSES.COM (collectively “the WE BUY HOUSES Marks” or “Marks”). YouTube removed all 91 videos based on WBH’s assertions that it supposedly had federal trademark rights in the generic phrase “we buy houses” that were broad enough to capture use of that phrase in online advertising. Defendants took these actions for the improper and illegal purpose of extracting money from Plaintiff.
7. Express Homebuyers brings this action to stop, once and for all, Defendants’ bullying tactics. Plaintiff seeks cancellation of the registrations associated with the WE BUY HOUSES Marks on the ground that they are void ab initio because they were procured by fraud and/or improper assignment. In the alternative, the phrase “we buy houses” has been used for many years by numerous businesses and professionals, rendering the Marks generic and abandoned. Plaintiff Express Homebuyers also seeks a declaration that it did nothing wrong when it used the “we buy houses” phrase in its online advertising, that the Marks are invalid, and therefore have not been infringed by Express Homebuyers. Finally, and independent of its requests for declaratory relief, Plaintiff seeks to recover money damages caused by the Defendants’ tortious act of taking down almost one hundred of Plaintiff’s online advertisements.
8. Plaintiff Express Homebuyers is a limited liability company organized under the laws of the Commonwealth of Virginia with its principal place of business at 6564 Loisdale Court, Suite 215, Springfield, Virginia 22150.
9. Defendant WBH is a Texas corporation with its principal place of business at 2140 E. Southlake Blvd., Suite L-615, Southlake, Texas 76092-6516.
10. Defendant Brandt is a citizen and resident of Texas, with an address of 2140 E. Southlake Blvd., Suite L-615, Southlake, Texas 76092-6516. Defendant Brandt is the founder and CEO of WBH. At all times relevant herein, Defendant Brandt directed, ordered, or otherwise substantially participated in all of WBH’s business activities related to wrongful conduct alleged in this Complaint.
11. This Court has subject matter jurisdiction over Express Homebuyers’ request for a declaratory judgment pursuant to 28 U.S.C. §§ 1331, 2201, and 2202. This action arises under the Lanham Act, 15 U.S.C. §§ 1051 et seq and the laws of the Commonwealth of Virginia, which are all within the subject matter jurisdiction of this Court pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§ 1332(a)(1), 1338(a), and 1367(a).
12. WBH’s infringement allegations against Express Homebuyers, as expressed in its take-down letters to YouTube.com and the resulting removal of 91 of Express Homebuyers’ online advertisements, gives rise to an actual and justiciable controversy between the parties as to the invalidity and non-infringement of the WE BUY HOUSES Marks. WBH’s infringement allegations and the resulting removal of Express Homebuyers’ online advertising poses actual and imminent injury to Express Homebuyers that can only be redressed by judicial relief and is of sufficient immediacy to warrant the issuance of a declaratory judgment. Absent cancellation of the WE BUY HOUSES Marks and a declaration of invalidity and noninfringement, Express Homebuyers will continue to suffer harm to its business.
13. Defendants are subject to personal jurisdiction in this District because the Defendants transact business within the Commonwealth of Virginia; committed tortious and other wrongful acts within the Commonwealth; directed their conduct at, and specifically targeted, Plaintiff in Virginia; and/or otherwise committed tortious and other wrongful acts outside of the Commonwealth that caused harm within the Commonwealth. Defendant WBH regularly does or solicits business, or engages in a persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the Commonwealth of Virginia.
14. At all times relevant herein, Defendant Brandt had direct, personal involvement in the decisions and actions that are related to the damages incurred by Plaintiff Express Homebuyers as a result of Defendant WBH’s wrongful conduct. At all times relevant herein, Defendant Brandt controlled Defendant WBH and was the central figure in the wrongful acts alleged in this Complaint.
15. Venue is proper under 28 U.S.C. § 1391 because: (1) a substantial part of the events material to Plaintiff’s causes of action occurred in this District, (2) all Defendants are subject to personal jurisdiction in this District at the time this action commenced, and (3) the Plaintiff suffered harm in this District.
16. Plaintiff Express Homebuyers has been engaged in the direct home buying industry for more than thirteen years. Over the course of its existence, Express Homebuyers has purchased and rehabilitated more than 2,000 homes. Because of its dedication to efficient, cost-effective, and high quality services, Express Homebuyers has become a very prominent direct homebuyer in the Maryland, Washington D.C., and Virginia regions, among others.
17. Since 2003, Plaintiff Express Homebuyers used the phrase “we buy houses” to describe the services that it provides. Between 2003 and 2016, Plaintiff did not receive any complaints from any company or individual that Plaintiff’s use of the phrase “we buy houses” was inappropriate or otherwise consisted of infringement on a person’s or company’s intellectual property.
18. Defendant WBH also provides direct home buying services, by referring home owners in the United States who seek to sell their homes for cash to independent local operators that are affiliated with WBH. Defendant Brandt is the founder and CEO of WBH and controls its operations and business.
20. Defendant WBH does not have now, and never has had, federal trademark rights and the exclusive right to the use of that phrase in connection with online advertising. At all times relevant herein, Defendants were fully aware of the limited scope of their WE BUY HOUSES mark. At all times relevant herein, Defendants were fully aware that the phrase “we buy houses” has always been widely used in print and in online advertising. And, at all times relevant herein, Defendants were aware that extending the WE BUY HOUSES mark to cover online advertising was inappropriate and wrong.
22. WBH is also listed as the current owner of U.S. Trademark Registration No. 3,235,523 (“the ’523 Registration”) for the purported service mark WEBUYHOUSES.COM for “real estate services, namely, referrals in the field of real estate procurement for others” in International Class 35 and “real estate and investment services, namely providing on-line information in the field of real estate procurement for others” in International Class 36.
23. This controversy arises out of Defendants improperly seeking to stop Plaintiff, and others, from using the generic phrase “we buy houses” for home buying and real estate services by asserting exclusive rights to use its WE BUY HOUSES Marks. The validity and enforcement of Defendants’ WE BUY HOUSES Marks fall directly at the center of this dispute.
24. On July 11, 2001, an individual named Michel Payette (“Payette’) filed an intent-to-use Application No. 78,073,479 (“the ’479 Application”) with the U.S. Patent and Trademark Office (“PTO”) for the typeset mark WE BUY HOUSES for various real estate printed materials, in International Class 16, which covers only printed material or material on paper. On December 10, 2002, the PTO issued a Notice of Allowance, affording Payette six months to file a Statement of Use to prove actual use of the mark or, in the alternative, to request an extension of time within which to prove actual use.
However, Payette did not attach any of the referenced “instructional materials” to his correspondence, presumably because they did not exist. Instead, he attached a “fact sheet” or business outline which simply outlined a few methods and ideas for future business endeavors.
26. Payette ultimately filed two Extensions of Time, rather than a Statement of Use, for the WE BUY HOUSES mark—the first on May 16, 2003 and the second on December 10, 2003.
27. In February 2003, while the ’479 Application was still pending, an entity unrelated to Payette, Webuyhouses.com, Corp., filed Application No. 76,491,672 (“the ’672 Application”) to register the typeset service mark WEBUYHOUSES.COM for various real estate services, in International Classes 35 and 36, which generally cover advertising, promotion, and marketing of services such as investing, appraising, banking or credit unions, and real estate services that delve into finance (brokerage, listing, escrow, management).
28. In an Official Action dated August 14, 2003, the PTO refused registration of the ‘672 Application based on descriptiveness, stating “the proposed mark merely describes the services.” The PTO also listed several pending applications, including the ‘479 Application, as the basis for a potential likelihood of confusion refusal, if the proposed marks were to register.
29. On February 23, 2004, Webuyhouses.com, Corp. filed its response to the Official Action and argued, among other things, that its mark is not descriptive and that the ‘479 Application had become abandoned and can no longer be the basis of a likelihood of confusion refusal.
30. On June 29, 2004, the PTO (a) suspended Webuyhouses.com Corp.’s application pending the disposition of the ‘479 Application (which was not abandoned, as claimed by Webuyhouses.com, Corp.) and (b) reiterated the descriptiveness refusal.
Since applicant’s effective filing date is subsequent to the effective filing date of the above-identified [’479] application(s), the latter, if and when it registers, may be cited against this application. See 37 C.F.R. §2.83…. Applicant’s mark and the prior filed mark are legally identical. The addition of .com does not have source significance.
31. One month before the PTO issued the above-quoted explanation (May 26, 2004), WeBuyHouses.com, Corp. had purchased the ’479 Application for the WE BUY HOUSES mark from Payette for $12,500. A Record of Assignment was filed on June 14, 2004 at the PTO (Reel: 2991, Frame: 0907). This purchase was an attempt on the part of WeBuyHouses.com, Corp. to overcome the likely refusal of its WEBUYHOUSES.COM mark on the basis of likelihood of confusion with the ‘479 Application.
Payette and Assignee agree that the said business and trademark, “WE BUY HOUSES,” may co-exist with Payette’s other businesses and trademark, “I BUY HOUSES,” as set forth in U.S. Trademark Application Serial No. 78/079,011, due to the difference between the marks, the channels of trade, the logo-designs utilized by the parties, and the personal nature of the goods and services. In the unlikely event that the parties become aware of any instances of actual or potential confusion, they shall cooperate to further distinguish themselves by means other than modification of their respective trademarks. In the event that either party requires the written consent of the other party to facilitate the allowance of a trademark application and/or registration for its mark, the other party shall cooperate with the requesting party at the requesting party’s expense, including the execution of further documents, to accomplish the allowance in accordance with the spirit and intent of this agreement. Moreover, neither party shall challenge the right of the other party to achieve allowance of any trademark application and/or issuance and maintenance of any trademark registration for its mark as contemplated herein.
35. At the time of the Assignment Agreement, the WE BUY HOUSES mark had never been used in commerce, and no Statement of Use had ever been filed. In fact, on June 14, 2004, the date the Record of Assignment was filed with the PTO, Webuyhouses.com, Corp. filed another Notice of Extension for the WE BUY HOUSES mark. The Assignment Agreement was therefore improper under Trademark Act § 10(a)(1), rendering the application void ab initio.
36. Nonetheless, Webuyhouses.com, Corp. claimed to have begun using the WE BUY HOUSES mark in commerce in 2005. On December 2, 2005, Webuyhouses.com, Corp. filed a Statement of Use for the ’479 Application, alleging a first use at least as early as October 21, 2005. The ’479 Application was, however, abandoned between January 11, 2006 and March 24, 2006 because the Statement of Use failed to meet the relevant statutory requirements.
Applicant must establish acquired distinctiveness by a preponderance of the evidence. Yamaha Int’l Corp. v. Hoshino Gakki Co., 840 F.2d 1572, 6 USPQ2d 1001 (Fed. Cir. 1988). This evidence may include specific dollar sales under the mark, advertising figures, samples of advertising, consumer or dealer statements of recognition of the mark, and any other evidence that establishes the distinctiveness of the mark as an indicator of source. The Office will decide each case on its own merits.
38. On July 20, 2006, in an attempt to demonstrate acquired distinctiveness of the purported WEBUYHOUSES.COM mark, Webuyhouses.com Corp. submitted an 82-page Amendment to its ’672 Application that included evidence of sales amounts associated with the website from 2003 forward, as well as samples of advertisements from 2006, several consumer and dealer statements, and a declaration from the President of Webuyhouses.com, Corp. However, the evidence that Webuyhouses.com Corp. submitted to the PTO was false and misleading because it did not accurately reflect or otherwise establish that the phrase “we buy houses” had acquired distinctiveness and/or that Webuyhouses.com Corp. was the source of those services.
39. On August 17, 2006, following submission of the false and misleading Amendment, the PTO accepted Webuyhouses.com, Corp.’s false and misleading claim of acquired distinctiveness under 2(f) and withdrew the refusal to register on the basis of descriptiveness under Section 2(e)(1).
40. The ’479 Application for WE BUY HOUSES matured into U.S. Registration No. 3,149,336 (“the ’336 Registration”) on September 26, 2006.
41. Less than a year later, on May 1, 2007, the ’672 Application for WEBUYHOUSES.COM matured into U.S. Registration No. 3,235,523 (“the ’523 Registration”).
42. In November 2012, Webuyhouses.com, Corp. assigned both the ’336 Registration and the ’523 Registration, along with all associated interest and goodwill, to X5 Ventures, LLC, a limited liability company owned, operated, and controlled by Defendant Brandt. (Reel: 4918, Frame: 0217).
43. In September 2016, Defendant Brandt filed a nunc pro tunc assignment, conveying the WE BUY HOUSES Marks to Defendant WBH, with an effective assignment date of September 10, 2013. (Reel: 5881, Frame: 0959). Defendant Brandt is also the founder and CEO of WBH.
44. During its prosecution of the ’672 Application for the WEBUYHOUSES.COM mark, Webuyhouses.com, Corp. made numerous fraudulent misrepresentations to the PTO, rendering the ’523 Registration void ab initio.
Internet Archive, https://web.archive.org/web/*/webuyhouses.com (last visited June 22, 2017). Moreover, the phrase “webuyhouses.com” was used descriptively, and not as a trademark, until January 2003.
48. This declaration was knowingly and intentionally false. The declaration indicated that Webuyhouses.com, Corp. had been selling goods and/or services under the WEBUYHOUSES.COM mark since at least December 10, 1997, and that the mark was used exclusively and continuously in commerce since at least December 10, 1998. But, as stated above, webuyhouses.com was not an active URL until 2000, and the phrase “webuyhouses.com” was used descriptively, and not as a trademark, until January 2003.
50. Third, as alleged, Webuyhouses.com, Corp. improperly acquired the intent-to-use ’479 Application for the purpose of overcoming a likelihood of confusion refusal, so that its WEBUYHOUSES.COM mark could be registered.
51. Fourth, in response to the Trademark Office’s 2(e) refusal dated January 18, 2006, Mr. Gordon submitted an additional declaration, dated June 16, 2006, in which he once again falsely alleged use of the WEBUYHOUSES.COM mark as early as 1997 or 1998 in yet another attempt to demonstrate acquired distinctiveness of the purported WEBUYHOUSES.COM mark.
52. Fifth, in his final declaration before the ’523 Registration issued, dated October 3, 2006, Mr. Gordon reiterated under penalty of perjury that the WEBUYHOUSES.COM mark was used continuously and in interstate commerce since as early as November 13, 1997. This was a knowing and intentional false statement submitted to the PTO.
53. For all of the foregoing reasons, because the WEBUYHOUSES.COM Mark was procured through fraud on the PTO, with an intent to deceive, the mark is void and unenforceable.
54. Even though the Defendants have attempted to enforce their alleged rights in the phrase “we buy houses,” neither they nor the prior owners have done so consistently. Instead, a parade of third parties, including those in the direct home buying market and more generally in the real estate industry, have used and continue to use the phrase “we buy houses” and close variations thereof as either a trademark or a generic, affirmative statement of the services offered.
56. As a result of the long term, widespread use of the phrase “we buy houses” by companies and professionals in the real estate industry, the WE BUY HOUSES Marks do not indicate any particular source, are generic, and therefore have been abandoned by Defendant WBH.
57. Express Homebuyers, like many other home buying entities—including but not limited to those mentioned above—has, since 2003, used the generic phrase “we buy houses” in its advertising. Indeed, “we buy houses” is nothing more an affirmative statement of the very services offered by Express Homebuyers: buying houses.
YouTube.com, https://www.youtube.com/watch?v=DL2gm-42Spw (last visited June 23, 2017).
60. As a result of its online advertisements being taken down at the direction of Defendants, Plaintiff Express Homebuyers’ business has suffered losses, including, but not limited to: damage to Plaintiff’s brand, lost business, interruptions to its advertising campaign, and the lost costs of the advertisements themselves.
61. On May 17, 2017, Plaintiff Express Homebuyers filed Cancellation Proceeding No. 92,066,159 with the PTO for the WE BUY HOUSES mark on the basis of genericness. That action will be stayed pending the outcome of this litigation.
62. Plaintiff incorporates Paragraphs 1 through 61 of this Complaint as if fully set forth herein.
63. The question of whether Plaintiff Express Homebuyers infringed on Defendant WBH’s purported trademark of the phrase “we buy houses” when it advertised its services in 91 online videos is real, substantial, and continues to affect the rights and business of Plaintiff.
64. An actual controversy exists between Defendant WBH and Plaintiff over Plaintiff’s alleged infringement of the mark WE BUY HOUSES when Plaintiff advertised its services on YouTube.
66. The phrase “we buy houses” is now, and has always been, understood by the real estate industry and the consuming public as a generic phrase referring to direct home buying transactions and/or direct home buying companies in general. As such, the phrase “we buy houses” is not understood by the consuming public to refer to Defendant WBH.
67. As discussed above, the phrase “we buy houses” and close variations thereof have been used by numerous third parties for nearly two decades for informational purposes and/or to generically refer to real estate industry services and transactions. Neither Defendants nor any of the previous owners of the WE BUY HOUSES mark have consistently enforced their purported trademark rights in the mark, resulting in widespread and continuing use by competitors and real estate professionals.
68. WE BUY HOUSES is not capable of distinguishing Defendants’ goods or services pursuant to 15 U.S.C. § 1052 because it is a generic term for direct home buying transactions and/or direct home buying companies in general and because the invalid mark has been abandoned.
69. Defendants’ ownership and enforcement of a generic mark damages and interferes with Plaintiff Express Homebuyers’ and other third parties’ rights to make legitimate use of the phrase “we buy houses” and close variations thereof in connection with the real estate industry.
70. Accordingly, by reason of the foregoing, Plaintiff Express Homebuyers is entitled to a declaration that the ’336 Registration should be cancelled on the bases of fraud, genericness, and/or abandonment under Trademark Act § 14(3).
71. Moreover, the Assignment of the intent-to-use ’479 Application from Payette to WeBuyHouses.com (Reel: 2991, Frame: 0907) was obtained in violation of the Anti-Assignment provision of the Trademark Act § 10(a)(1) because the WE BUY HOUSES mark was not in use prior to or on the date of the assignment.
72. Accordingly, Plaintiff Express Homebuyers is entitled to a declaration that: (a) the ’336 Registration is void ab initio and all subsequent assignments of the ’336 Registration—specifically, those between WeBuyHouses.com and X5 Ventures, and X5 Ventures and WBH—are null and void as well; (b) the ’336 Registration is cancelled on the basis of violation of the Anti-Assignment provision of the Trademark Act § 10(a)(1), and (c) that it did not infringe on Defendant WBH’s mark WE BUY HOUSES.
73. Plaintiff incorporates Paragraphs 1 through 72 of this Complaint as if fully set forth herein.
75. Plaintiff Express Homebuyers never referred to or otherwise used the phrase WEBUYHOUSES.COM in any one of the 91 online advertisements that Defendants wrongfully caused to be removed from YouTube.
76. The question of whether Plaintiff Express Homebuyers infringed on Defendant WBH’s purported trademark of WEBUYHOUSES.COM when it advertised its services in 91 online videos is real, substantial, and continues to affect the rights and business of Plaintiff.
77. An actual controversy exists between Defendant WBH and Plaintiff over Plaintiff’s alleged infringement of the mark WEBUYHOUSES.COM when Plaintiff advertised its services on YouTube.
78. The phrase “we buy houses” is now, and has always been, understood by the real estate industry and the consuming public as a generic phrase referring to direct home buying transactions and/or direct home buying companies in general. As such, the phrase “we buy houses” is not understood by the consuming public to refer to Defendant WBH.
80. Neither Defendants nor any previous owners of the WEBUYHOUSES.COM Mark have consistently enforced their trademark rights in the purported mark, resulting in widespread and continuing use by competitors and customers and resulting in abandonment of any purported rights.
81. WEBUYHOUSES.COM is not capable of distinguishing Defendants’ goods or services pursuant to 15 U.S.C. § 1052 because it is a generic term for direct home buying transactions and/or direct home buying companies in general and because the mark has been abandoned due to failure to enforce, resulting in widespread third-party use.
82. Defendants’ claims to ownership of a generic mark damages and interferes with Plaintiff Express Homebuyers’ and other third parties’ rights to make legitimate use of the generic phrase “we buy houses” and close variations thereof in connection with buying houses.
83. Accordingly, Plaintiff is entitled to a declaration that the ’523 Registration should be cancelled on the basis of genericness and abandonment under Trademark Act § 14(3).
84. Moreover, the multitude of false statements described above concerning, among other things, WEBUYHOUSES.COM’s claimed first use and claimed continuous and exclusive use for more than five years before the Application’s filing date, were knowingly and intentionally false and made with the intent to deceive the PTO for the purpose of obtaining trademark rights to which Webuyhouses.com, Corp., and now, Defendants, are not entitled.
85. These false, material misrepresentations caused the PTO to allow the registration of the ’523 Registration. Accordingly, Plaintiff Express Homebuyers is entitled to a declaration that the ’523 Registration was fraudulently obtained and should be cancelled.
86. Finally, based on the foregoing, Plaintiff Express Homebuyers is entitled to a declaration that it did not infringe on Defendant WBH’s mark WEBUYHOUSES.COM.
87. Plaintiff incorporates Paragraphs 1 through 86 of this Complaint as if fully set forth herein.
88. Plaintiff created its online advertisements using the phrase “we buy houses” with the expectation that those advertisements would lead to increased business and revenues.
90. Defendants at all times relevant herein were fully aware of Plaintiff’s expectations with respect to its use of “we buy houses” in its YouTube advertising.
93. As a proximate result of Defendants’ actions, Plaintiff Express Homebuyers has been damaged in an amount to be proven at trial.
94. At all times relevant herein, Defendants were aware, from their knowledge of existing circumstances and conditions, that their conduct in taking down 91 of Plaintiff’s online advertisements would cause injury to Plaintiff.
95. Defendants actions in taking down Plaintiff’s online advertisements were taken in disregard of Plaintiff Express Homebuyer’s rights, entitling Plaintiff to punitive damages in an amount to be proven at trial.
96. Defendants actions in taking down Plaintiff’s online advertisements were taken with reckless indifference to the consequences of their actions, entitling Plaintiff Express Homebuyers to punitive damages in an amount to be proven at trial.
6. Judgment against Defendants for all other and further relief, both at law and in equity, to which Plaintiff Express Homebuyers may show itself to be justly entitled.
Plaintiff Express Homebuyers demands a jury trial on all issues so triable.

References: § 1121
 § 1391
 Application No. 78
 Application No. 76
 §2
 § 10
 v. 
 § 1052
 § 14
 § 10
 § 10
 § 1052
 § 14