southeast grinding and grooving by martyschwimmer

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									        Case 1:13-cv-03052-WSD Document 1 Filed 09/12/13 Page 1 of 19




                                                                                FILED IN CLERK'SOFflCE
                                                                                     U.S.D.C.• Atlanta

                    IN THE UNITED STATES DISTRICT COURT       SEP 1 J 2013
                   FOR THE NORTHERN DISTRICT OF GEORGIAJ~1:1S. t~:    II;iij\J QI



PENHALL COMPANY
                             ATLANTA DIVISION

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      Plaintiff,                       )       CIVI~   ACTION NO.
v.                                     )
                                       )
                                                  1=     13-CV-3052
SOUTHEAST GRINDING AND                 )
GROOVING, LLC and STEFAN               )
FRAME,                                 )
                                       )
      Defendants.                      )

                                   COMPLAINT

      COMES NOW PlaintiffPenhall Company ("Penhall"), by its undersigned

attorneys, and for its complaint against Southeast Grinding & Grooving, LLC

("Southeast") and Stefan Frame ("Frame"), respectfully states as follows:

                                 INTRODUCTION

      1.     This case consists of an action by Penhall against Southeast for

Federal trademark infringement, Federal and common law unfair competition,

trademark dilution and injury to business reputation, deceptive trade practices,

false advertising, violation of the Georgia Fair Business Practices Act, and

common law trademark infringement arising under the Federal Trademark Act of

1946,60 Stat. 427,15 U.S.C. 1051 et seq., the statutes of the State of Georgia and

the common law.

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      2.       Penhall is the assignee of a trademark registered by the United States

Patent and Trademark Office to Safety Grooving & Grinding, L.P. ("Safety

Grooving"), which has been a leading contractor providing grinding and grooving

of pavement surfaces throughout the United States including, but not limited to, in

the southeastern states of Georgia, Florida, North Carolina, South Carolina, and

Tennessee. In the operation of its business, Safety Grooving has used the

trademark "SGG" at least since August 22, 1988. On October 4, 2011, the United

States Patent and Trademark Office issued Registration Number 403910 to Safety

Grooving in connection with the "SGG" mark. On December 7, 2012, the

ownership of the registered mark SGG was transferred from Safety Grooving to

Penhall as part of a larger asset purchase transaction. Penhall continues to use the

mark in connection with its pavement grooving and grinding construction business.

      3.       On about January 15,2010, Defendant Stefan Frame ("Frame"), a

former employee of Penh all, formed Southeast Grinding and Grooving, LLC as a

Georgia limited liability company.

      4.       Southeast began conducting business in the same industry and market

segment as Safety Grooving using "SGG" as its shorthand mark.




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      5.     Frame and Southeast used and continue to use "SGG" with full

knowledge of Safety Grooving's use of the SGG mark and its identification with

the trademark within the construction industry.

      6.     Subsequently, Safety Grooving became aware of several instances of

actual confusion among its customers and prospective customers with respect to

the origin of services being provided under the auspices of the SGG mark.

      7.     On or about February 14,2012, counsel for Safety Grooving (prior to

the assignment of the trademark to Penhall) sent, by certified mail, a letter to

Southeast and Frame detailing claims of infringement by Southeast and Frame of

the registered trademark. A true and correct copy of this letter is attached hereto as

Exhibit "A". Southeast responded through counsel but refused to cease its

infringing actions. A true and correct copy of this response letter is attached hereto

as Exhibit "B". Safety Grooving replied on April 3, 2012, by facsimile and U.S.

mail, renewing the demands for Southeast to cease and desist in its infringing

behavior. A true and correct copy of this renewed demand letter is attached to this

Complaint as Exhibit "C". Southeast failed to respond further.

      8.     As the owner of the registered trademark "SGG," Penhall is now

bringing this action seeking damages and such other relief as this Court deems just

and proper by reason of Southeast's and Frame's continued infringement on


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Penhall's rights as the owner of the trademark "SGG" and in an effort to eliminate

any further confusion as to the origin of the services provided under the "SGG"

mark. Because of the federal trademark registration and in light of Safety

Grooving's prior use of the "SGG" mark, Southeast and Frame have no legal right

to continue to use the "SGG" mark and Penhall is entitled to judgment on the

claims set forth herein.

                                     PARTIES

      9.     Penhall is a corporation organized and existing under the laws of the

State of California, having its principal place of business in Anaheim, California.

      10.    Southeast is a limited liability company organized and existing under

the laws of the State of Georgia, having a principal place of business at 549 Goose

Ridge, S.W., Marietta, Georgia 30064.

      11.    Frame is an adult resident of Georgia who may be served with process

at 549 Goose Ridge, S.W., Marietta, Georgia 30064.

                           JURISDICTION AND VENUE

      12.    The action raises claims arising under the Lanham Act, 15 U.S.C.

§ 1125. This Court has subject-matter jurisdiction under 28 U.S.C., §§ 1331, 1332

and 1338.




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      13.    The action also raises claims under the Uniform Deceptive Trade

Practices Act of Georgia, O.C.G.A. §§ 10-1-370 et seq., the Fair Business Practices

Act, O.C.G.A. § 10-1-390 et seq., and other applicable statutory and common law

in Georgia. This Court has subject matter jurisdiction to resolve these claims

under 28 U.S.C. § 1367.

      14.    This Court has personal jurisdiction over Southeast and Frame.

      15.    Venue is proper in this district under 28 U.S.C. §§ 1391 and 1400(b).

                             THE CONTROVERSY

      16.    Safety Grooving was formed as a limited partnership under the laws

of the Commonwealth of Pennsy Ivania and has operated since 1983.

      17.    Safety Grooving began using the mark "SGG" in connection with its

business of providing construction services in the nature of pavement grooving and

grinding and related services at least as early as August 22, 1988.

      18.    Stefan Frame was employed with Penhall from approximately 1999

through sometime late in 2009, during which time he became acquainted with

Safety Grooving, which at the time was a competitor of Penhall in the pavement

grooving and grinding contracting business.

      19.    On January 8, 2010, Frame contacted John Depman, then president of

Safety Grooving, and discussions ensued concerning the possibility of Frame


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potentially heading up an office for Safety Grooving in Atlanta, Georgia. I Those

discussions did not result in a transaction between the parties, and Frame ceased

further communications with Safety Grooving shortly thereafter.

      20.    On January 15, 2010, Frame formed Southeast Grinding and

Grooving, LLC and began competing against Safety Grooving in the pavement

grooving and grinding business, using "SGG" as a shorthand moniker for its

business. Southeast and Frame did so with full knowledge of the prior use of the

"SGG" mark by Safety Grooving and the recognition within the industry of "SGG"

referring to Safety Grooving, a quality provider of pavement grooving and

grinding services.

      21.    During the course of 20 10, Safety Grooving received numerous calls

in its Florida office from contractors and other participants in certain construction

projects, requesting certified payrolls and other reporting forms, who mistakenly

believed that Safety Grooving was involved in such projects, when in fact the

projects were being handled by Southeast.

      22.    In or around December, 2011, John Depman was complimented by a

good customer of Safety Grooving with respect to a large project in South

Carolina, and during the course of that discussion the customer made mention of

1John Depman is now the Eastern Regional Manager of Safety Grooving and
Grinding, a division of Penhall Company.

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additional projects with respect to which he had seen the "SGG" name on checks

he had signed. These additional projects were actually being performed by

Southeast.

      23.    On or about May 23, 2011, Mr. Duff Parker of Safety Grooving

received an email from Barry Adams, Chief Estimator for Hi-Way Paving, Inc.,

who was responding to an email request from Southeast for possible future

business and copied Mr. Parker on his response, obviously confusing the two

companIes.

      24.    On October 4,2011, the United States Patent and Trademark Office

issued Registration Number 403910 to Safety Grooving in connection with the

"SGG" mark.

      25.    On about February 14,2012, counsel for Safety Grooving sent by

certified mail a letter to Southeast and Frame detailing claims of infringement by

Southeast and Frame of the registered trademark "SGG." A true and correct copy

of this letter is attached hereto as Exhibit "A". Southeast and Frame responded

through counsel but refused to cease the infringing actions. A true and correct

copy of counsel's response is attached hereto as Exhibit "B". Counsel for Safety

Grooving sent a reply to counsel for Southeast on or about April 3, 2012 by

facsimile and U.S. mail, renewing the demands for Southeast to cease and desist in


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its infringing behavior. A true and correct copy of this letter is attached to this

Complaint as Exhibit "C". Southeast and Frame failed to respond further.

       26.     On December 7, 2012, the ownership of the registered mark "SGG"

was transferred from Safety Grooving to Penhall as part of a larger transaction.

Penhall continues to use the registered mark "SGG" in connection with its

pavement grooving and grinding construction business. A true and correct copy of

the assignment of the mark from Safety Grooving to Penhall is attached hereto as

Exhibit "D".

                                      COUNT I
                         TRADEMARK INFRINGEMENT

      27.      Paragraphs 1 through 26 are realleged and incorporated herein by

reference.

      28.      Southeast and Frame, without the consent of Penhall (and in fact, in

defiance of repeated requests to cease such use) have used and are continuing to

use in commerce a reproduction, counterfeit, copy and/or colorable imitation of

Penhall's trade name and registered trademark "SGG" in connection with the sale,

offering for sale, and performance of pavement grooving and grinding construction

servIces.




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      29.    Said use of the "SGG" mark has caused actual confusion and is likely

to continue to cause confusion, or to cause mistake, or to deceive the public.

      30.    Southeast and Frame have had actual notice of Penh all's (and its

predecessor Safety Grooving's) rights in and to the trade name and trademark

"SGG" and, by their said acts herein complained of, Southeast and Frame have

made substantial profits to which they are not by law, in equity, or in good

conscience, entitled.

      31.    Southeast and Frame have had actual and/or constructive notice of

Penhall's trade name and trademark "SGG" and claim of ownership under the

provisions of Section 22 of the Trademark Act of 1946 (15 U.S.C. § 1072).

      32.    The infringement by Southeast and Frame of Penhall's trade name and

trademark "SGG" has caused and is causing irreparable harm and damage to

Penh all in an amount thus far not determined, and will continue to cause harm and

damage to Penhall unless enjoined by this Court, Penhall having no adequate

remedy at law.

      33.    Penhall avers that the acts of Southeast and Frame, as alleged

hereinabove, are being committed with the knowledge that such counterfeiting and

imitation is intended to be used to cause confusion or to cause mistake or to

deceive. Southeast's and Frame's aforementioned acts are therefore intentional,


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willful and are maliciously calculated to cause confusion to cause mistake or to

deceive.

      34.    Southeast's and Frame's use of Penhall's trade name and trademark

"SGG" is an infringement of Penhall' s federally registered mark "SGG" in

violation of Section 32(1) of the Trademark Act of 1946 [15 U.S.C. § 1114(1)].

                                     COUNT II

                      FEDERAL UNFAIR COMPETITION

      35.    Paragraphs 1 through 34 are realleged and incorporated herein by

reference.

      36.    Southeast, on its equipment, marketing materials, and in its internet

web site and email designations, has used, is continuing to use, and has induced

and is inducing others to use in commerce words, terms, names, symbols, and/or

devices, or combinations thereof, or a false designation of origin, or a false or

misleading description of fact, or a false or misleading representation of fact,

including using the trade name "SGG" and mark "SGG," a mark which is

confusingly similar, and in fact identical, to Penhall' s trade name and mark

"SGG," which have actually caused and are likely to cause confusion, or to cause

mistake, or to deceive as to the affiliation, connection, or association of Southeast

and/or Southeast's customers with Penhall and/or as to the origin, sponsorship, or


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approval of Southeast's goods by Penhall and has caused, with knowledge of the

falsity of such designation of origin or description or representation, such services

to be offered or used in commerce.

      37.    Southeast has willfully promoted in commerce the sale of its services

using reproductions of Penhall's registered mark "SOO," using Penhall's trade

name in such a manner so as to falsely designate an origin or an association with

Penhall, and so as to cause confusion or mistake among purchasers as to the true

origin, source, sponsorship or affiliation of Southeast's services, all to Southeast's

profit and Penhall's great damage.

      38.    The conduct by Southeast has caused and is causing irreparable harm

and damage to Penhall in an amount thus far not determined, and will continue to

cause harm and damage to Penhall unless enjoined by this Court, Penhall having

no adequate remedy at law.

      39.    Southeast's acts, as set forth above, constitute a violation of

Section 43(a) of the Trademark Act of 1946 [15 U.S.C. § 1125(a)].

                                     COUNT III

 TRADEMARK DILUTION AND INJURY TO BUSINESS REPUTATION

      40.    Paragraphs 1 through 39 are realleged and incorporated herein by

reference.


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      41.    Southeast's and Frame's aforesaid conduct has caused, is causing and

will continue to cause injury and damage to Penhall's business reputation and/or

dilution of the distinctive quality ofPenhall's trade name and mark "SGG" in

violation ofO.C.G.A. § 10-1-4S1(b).

      42.    Penhall has no adequate remedy at law and has suffered irreparable

injury and damage as a result of Southeast's and Frame's acts as aforesaid, in an

amount thus far not determined, unless enjoined by this Court.

                                     COUNT IV
                       DECEPTIVE TRADE PRACTICES

      43.    Paragraphs 1 through 42 are realleged and incorporated herein by

reference.

      44.    By reasons of the acts set forth above, Southeast and Frame have

engaged in deceptive trade practices within the meaning of the Uniform Deceptive

Trade Practices Act of Georgia, O.C.G.A. § 10-1-370 et seq., in that Southeast and

Frame, in the course of their respective businesses, vocations, or occupations, upon

information and belief, have, inter alia:

      (a)    passed off Southeast's services as those of Safety Grooving or

Penhall;




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       (b)    caused a likelihood of confusion or of misunderstanding as to the

source, sponsorship, approval or certification of Southeast's services;

       (c )   caused a likelihood of confusion or of misunderstanding as to the

affiliation, connection or association of Southeast with Penhall or of certification

by Penhall;

       (d)    represented that Southeast's services have the sponsorship, approval,

characteristics, ingredients, uses, benefits, or qualities of P enh all 's services that

they do not have or that Southeast has a sponsorship, approval, status, affiliation,

or connection with Penhall that Southeast does not have;

      (e)     disparaged the services or business of Penh all by false and misleading

representations of fact; and/or

      (f)     engaged in other conduct which similarly created a likelihood of

confusion or of misunderstanding.

      45.     The aforesaid deceptive practices of Southeast and Frame have

caused, are causing and are likely to cause further substantial injury to the public

and to the Penhall. Southeast's and Frame's practices constitute unfair or

deceptive trade practices declared unlawful by O.C.G.A. § 10-1-372 and Penhall is

entitled to relief pursuant to the aforesaid Act, including injunctive relief, costs and

an award of attorneys' fees.


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      46.    Penhall has no adequate remedy at law and has suffered irreparable

injury and damage as a result of Southeast's and Frame's acts as aforesaid, in an

amount thus far not determined.

                                     COUNT V

                             FALSE ADVERTISING

      47.    Paragraphs 1 through 46 are realleged and incorporated herein by

reference.

      48.    Southeast's aforesaid acts constitute false and fraudulent advertising

within the meaning ofO.C.O.A. § 10-1-421 et seq.

      49.    Southeast's false advertising is injurious to Penhall. Penhall has no

adequate remedy at law and has, as a result of such aforesaid false advertising,

suffered irreparable injury and damage in an amount thus far not determined.

Penhall is therefore, entitled to injunctive relief pursuant to O.C.O.A. § 10-1-423.

                                    COUNT VI

   VIOLATION OF FAIR BUSINESS PRACTICES ACT OF GEORGIA

      50.    Paragraphs 1 through 49 are realleged and incorporated herein by

reference.




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      51.    Southeast's and Frame's aforementioned unfair and deceptive

practices are in violation of the Fair Business Practices Act, O.C.G.A. § 10-1-390



      52.    Penhall has no adequate remedy at law and has suffered irreparable

injury and damage as a result of Southeast's and Frame's acts as aforesaid, in an

amount thus far not determined. Penhall is entitled to relief pursuant to the

aforesaid Act, including injunctive relief, costs and attorneys' fees.

                                    COUNT VII

             COMMON LAW TRADEMARK INFRINGEMENT
                  AND UNFAIR COMPETITION

      53.    Paragraphs 1 through 52 are realleged and incorporated herein by

reference.

      54.    Through Penhal1's extensive and continuous use of Penhall's trade

name and mark "SGG," Penhall's trade name and mark "SGG" have become

distinctive of Penhall's construction services and are associated by the public with

Penhall.

      55.    As a result of such association by the public of Penhall' s trade name

and mark "SGG," Southeast's use of the same or deceptively and confusingly

similar trademarks, in connection with services which are the same as or similar to




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the services of Penh all is likely to cause confusion, mistake and to deceive the

public.

      56.      Southeast and Frame have offered for sale and sold Southeast's

services in association with the trade name and marks which are confusingly

similar to Penhall's trade name and mark "SGG," with full prior knowledge of

Penhall's trade name and mark "SGG" and Southeast's and Frame's sale of

Southeast's services were and are for the willful and calculated purpose of trading

upon Penhall's goodwill and business reputation; further, Penhall alleges upon

information and belief that Southeast and Frame have willfully promoted and sold

Southeast's services in such a manner so as to inevitably suggest an association or

affiliation with, or sponsorship or approval by Penhall and so as to cause, or be

likely to cause, confusion or mistake among purchasers as to the origin of

Southeast's services, all to Southeast's and Frame's gain and Penhall's irreparable

damage, in an amount thus far not determined.

      57.     The aforesaid conduct of Southeast and Frame constitutes

infringement of Penhall's common law rights in Penhall's trade name and mark

SGG, and further constitutes improper and unfair competition with Penhall, all of

which has damaged and will continue to damage Penhall' s goodwill and reputation




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to the irreparable injury thereof, unless enjoined and restrained by this Court.

Penhall has no adequate remedy at law.

                             PRAYER FOR RELIEF

      WHEREFORE, Penhall prays:

1.    That Southeast, its officers, agents, servants, employees and attorneys,

      Frame individually and all other persons in active concert or participation

      with them be permanently enjoined and restrained:

      a.     from using the trade name and trademark SGG, or any other

             designation which is confusingly similar to Penhall' s trade name and

             trademark SGG;

      b.     from otherwise infringing upon Penhall' s trade name and mark SGG

             and from otherwise unfairly competing with Penhall in any manner

             whatsoever; and

      c.     from offering for sale and selling and rendering such other services

             under marks and/or a trade dress confusingly similar to Penhall 's trade

             name and mark SGG.

2.    That Southeast be ordered to deliver up for destruction all of its documents,

      signs, packages, forms, advertisements, business cards, letterheads and other

      representations and means for reproducing the same or any other printed


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     material bearing the mark SGG or any other designation confusingly similar

     to Penhall's trade name and mark SGG, and to obliterate, destroy or remove

     all other uses of the mark SGG.

3.   That Southeast be ordered to alter its internet website address and

     appearance and its email domain nomenclature to remove the mark SGG or

     any representation thereof and any other designation or nomenclature which

     is confusingly similar to Penhall's registered mark SGG.

4.   That Southeast and Frame be directed to file with the Court and serve on

     Penhall, no later than thirty (30) days after the issuance of an injunction, a

     report in writing and under oath setting forth in detail the manner and form

     in which Southeast has complied with the injunction.

S.   That an accounting and judgment be rendered against the Southeast for:

     a.    all profits received by the Southeast and Frame from the sale of

           Southeast's services in which the marks and/or trade dress used by

           Southeast directly or indirectly, are confusingly similar to Penhall' s

           trade name and mark SGG;

     b.    all damages sustained by Penhall on account of Southeast's and

           Frame's trademark infringement, unfair competition, unfair or

           deceptive acts or practices, false designation of origin and false


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           description or representation, and false advertising, and furthermore,

           that such damages and profits, as found herein, be trebled as provided

           by Section 35 of the Trademark Act of 1946 [15 U.S.C. § 1117]; and

     c.    actual and compensatory and punitive damages in the amount to be

           determined in the discretion of the Court.

6.   That Penhall have and recover its costs in this suit, including reasonable

     attorneys' fees and expenses; and

7.   That Penhall have such other and further relief as the Court may deem just

     and proper.

     Dated this    I 2.. day of September, 2013.


                                      William D. Flatt
                                      Georgia Bar No. 262827
                                      Kevin S. Dale
                                      Georgia Bar No. 328098
                                      Attorneys for PlaintiffPenhall Company
                                      Hendrick Phillips Salzman & Flatt
                                      230 Peachtree Street, N.W., Suite 2500
                                      Atlanta, Georgia 30303
                                      Telephone: (404) 522-1410
                                      Email: wdf@hpsf-Iaw.com
                                      Email: ksd@hpsf-Iaw.com




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