WorkingFilms, Inc. v. Working Narratives, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

WESTERN DIVISION

Case No. 7:20-CV-00139-M

WORKINGFILMS, INC., )

)

Plaintiff,

) ORDER

V. )

)

WORKING NARRATIVES, INC.,

Defendant.

)

Before the court is Defendant’s Motion for Judgment on the Pleadings [DE 15]. Defendant

seeks dismissal pursuant to Fed. R. Civ. P. 12(c) for the Plaintiff's purported failure to allege

timely claims. For the reasons that follow, the motion is denied.

1, Statement of Facts

The following are factual allegations (as opposed to statements of bare legal conclusions,

unwarranted deductions of fact, or unreasonable inferences) made by the Plaintiff in the operative

Complaint (DE 1), which the court accepts as true pursuant to King v. Rubenstein, 825 F.3d 206,

212 (4th Cir. 2016).

Plaintiff is a North Carolina non-profit corporation based in Wilmington, North Carolina

since 2000, whose mission is to use documentaries to advance social justice and environmental

protection. Compl. at §§ 7, 8, 13. Plaintiff fulfills its mission primarily through the curation and

touring of short documentary films; Plaintiff also provides consulting, funding and technical

support to documentary filmmakers and shares its methodology and best practices through training

and presentations with the nonprofit, philanthropic, and documentary film sectors, including

filmmaker, nonprofit, and foundation grantee cohorts. Jd. at 14-17.

Plaintiff has used the mark “Working Films” (the “Mark”) to promote and distribute its

services in interstate commerce—including using the Mark on its social media sites (Instagram,

Twitter, and Facebook), written communications, promotional materials, and its website—over

the last twenty years. Compl. at J§ 10-12, 29, 35-38. Plaintiff applied for and procured Trademark

Registration No. 57311102 from the United States Patent and Trademark Office (USPTO) on April

23, 2019 in International Class 36 for “Providing grants for film and video production” and in

International Class 41 for “Planning, management, and coordination of film and video screenings;

consulting, strategic planning, workshops, and educational training in the field of film and video

production; providing a website featuring information on the production and use of non-

fiction films, and non-downloadable publications in the nature of blogs, and articles involving

social justice and environmental protection.” Jd. at § 32; see also Trademark Registration, DE

1-1. The Registration shows that Plaintiff's first use in commerce of the Mark was September 14,

2000. DE 1-1 at 2.

Defendant is a non-profit corporation also based in Wilmington, North Carolina. Compl.

at §§ 18-19. According to its website at www.workingnarratives.org, Defendant “consults with

foundations and nonprofits to help (1) develop a story-based communications strategy; (2) create

and manage web platforms for social-change groups or movement; and (3) provide movements

and grantee cohorts with ongoing ‘narrative strategy’ support.” Jd. at § 26. Initially, Defendant

used several marks to promote its services (including “Nation Inside” as the entity’s name), then

began using the mark “Working Narratives” (alleged by Plaintiff as the “Infringing Mark”) more

consistently. Jd. at {§ 21, 48. Defendant’s use of the Infringing Mark, at first, did not overlap in

a substantial way with Plaintiffs. Jd. at ]49. However, Defendant’s conduct materially changed,

and Defendant is now consistently using the alleged Infringing Mark to provide services that are

substantially similar to those provided by Plaintiff. /d at J 50-51.

For example, in 2020, more than one year after Plaintiff's announcement that it would be

working on and touring short documentary films on the topic of hurricane recovery, Defendant

announced that it had created and would tour a collection of short form documentary films focused

on hurricane recovery. Compl. at f§ 15, 28. In so doing, Defendant used a “request a screening”

form that was strikingly similar to that used by Plaintiff in numerous projects. Jd. at § 28.

In addition, Defendant’s use of the alleged Infringing Mark has caused the following

instances of confusion in the marketplace: (1) at events attended by both Plaintiff and Defendant,

other attendees assumed that Working Films was the same organization as Working Narratives or

that the two organizations were otherwise affiliated or connected; (2) a consultant of one of

Plaintiff's funders confused Plaintiff and Defendant, despite Plaintiff's personnel’s direct

interview with the consultant; (3) a project collaborator confused Plaintiff and Defendant when

writing about the collaboration; (4) a foundation that has provided funding to Plaintiff and,

possibly, to Defendant, confused Plaintiff and Defendant; and (5) other third parties engaging with

Plaintiff have believed they were engaging with Defendant or that Working Films and Working

Narratives were otherwise affiliated or connected. Compl. at Jf] 54-59.

After encountering these instances of confusion, Plaintiff attempted unsuccessfully to

effectuate Defendant’s cessation of use of the Infringing Mark and to reach an amicable resolution

of this dispute. Compl. at 60-62. Defendant continues to use the alleged Infringing Mark to

identify and promote its goods and services. /d. at § 63.

Il. Procedural History

Based on these allegations, Plaintiff seeks permanent injunctive relief for Defendant’s

alleged trademark infringement in violation of 15 U.S.C. § 1114(1)(a) (first claim for relief); false

designation of origin in violation of 15 U.S.C. § 1125(a) (second claim); trademark infringement

and unfair competition in violation of North Carolina’s common law (third claim); and unfair and

deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1 (fourth claim). Compl., ECF 1.

Defendant argues that the operative Complaint should be dismissed because Plaintiffs claims are

barred by the applicable four-year statute of limitations and the doctrine of laches.

Plaintiff counters that (1) its allegations demonstrate the alleged infringement is a

“continuing wrong”; (2) courts sparingly apply the laches doctrine and the Plaintiffs allegations

do not reflect “unreasonable delay”; (3) Plaintiff plausibly alleges Defendant progressively

encroached on its Mark and, thus, did not delay in bringing suit until “the likelihood of confusion

... present[ed] a significant danger” to the Mark; (4) Plaintiff's allegations of “willfulness” may

give rise to unclean hands, which is a defense to laches; (5) the court should not consider

Defendant’s exhibits attached to the Answer and Counterclaims, because they are not central to

Plaintiff's claims; and (6) Defendant’s arguments contain factual disputes which may not be

adjudicated under Rule 12(c).

Defendant replies that its exhibits are, indeed, central to Plaintiff's allegations and are

properly considered, Plaintiff allegations do not demonstrate progressive encroachment as it is

described by the Fourth Circuit, and courts in this district “regularly” apply the doctrine of laches

to bar claims for injunctive relief.

Ill. Legal Standards

Motions brought pursuant to Rule 12(c) of the Federal Rules of Civil Procedure are

governed by the same standard as motions brought under Rule 12(b)(6). Massey v. Ojaniit, 759

F.3d 343, 347 (4th Cir. 2014) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.

1999)). When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all of

the well-pleaded factual allegations contained within the complaint and must draw all reasonable

inferences in the plaintiff's favor, Hall v. DIRECTV, LLC, 846 F.3d 757, 765 (4th Cir. 2017), but

any legal conclusions proffered by the plaintiff need not be accepted as true, Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (“[T]he tenet that a court must accept as true all of the allegations contained

in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause

of action, supported by mere conclusory statements, do not suffice.”). The Jgbal Court made clear

that “Rule 8 marks a notable and generous departure from the hypertechnical, code-pleading

regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with

nothing more than conclusions.” Jd. at 678-79.

To survive a Rule 12(b)(6) motion, the plaintiffs well-pleaded factual allegations, accepted

as true, must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). Twombly’s plausibility standard requires that a plaintiff's well-pleaded

factual allegations “be enough to raise a right to relief above the speculative level,” i.e., allege

“enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal

[conduct].” Jd. at 555-56. A speculative claim resting upon conclusory allegations without

sufficient factual enhancement cannot survive a Rule 12(b)(6) challenge. /gbal, 556 U.S. at 678-

79 (“where the well-pleaded facts do not permit the court to infer more than the mere possibility

of misconduct, the complaint has alleged--but it has not ‘show[n]’--‘that the pleader is entitled to

relief.’” (quoting Fed. R. Civ. P. 8(a)(2)); Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009)

(“‘naked assertions’ of wrongdoing necessitate some ‘factual enhancement’ within the complaint

to cross ‘the line between possibility and plausibility of entitlement to relief.’” (quoting Twombly,

550 U.S. at 557)).

“A Rule 12(c) motion tests only the sufficiency of the complaint and does not resolve the

merits of the plaintiffs claims or any disputes of fact.” Drager v. PLIVA USA, Inc., 741 F.3d 470,

474 (4th Cir. 2014) (citing Butler v. United States, 702 F.3d 749, 751 (4th Cir. 2012)). In

adjudicating Defendant’s motion, the court may consider the complaint, answer, matters of public

record, and any exhibits that are “integral to the complaint and authentic” without converting the

motion to a motion for summary judgment. Massey, 759 F.3d at 347; see also Philips v. Pitt Cty.

Mem’! Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (courts may “consider documents attached to the

complaint, see Fed. R. Civ. P. 10(c), as well as those attached to the motion to dismiss, so long as

they are integral to the complaint and authentic.”’).

As noted, Defendant seeks judgment on the pleadings by raising the defenses of laches and

statute of limitations to Plaintiff's claims. The laches doctrine and statute of limitations are

affirmative defenses. Powell v. Bank of Am., N.A., 842 F. Supp. 2d 966, 978 (S.D.W. Va. 2012)

(citing Fed. R. Civ. P. 8(c)). “As such, these defenses often are not appropriate for disposition

under Rule 12(b)(6).” Jd.; see also Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007)

(finding that a Rule 12(b)(6) challenge, “which tests the sufficiency of the complaint, generally

cannot reach the merits of an affirmative defense, such as the defense that the plaintiff's claim is

time-barred.”). An exception exists for the “relatively rare circumstances where facts sufficient to

rule on an affirmative defense are alleged in the complaint... .” Powell, 842 F. Supp. 2d at 978

(quoting Goodman, 494 F.3d at 464). The exception is strictly construed, requiring that all “facts

necessary to the affirmative defense ‘clearly appear [ | on the face of the complaint.’” /d.

IV. Analysis

The Fourth Circuit has recently clarified that claims under the Lanham Act are not

controlled by any statute of limitations; rather, claims alleging trademark infringement pursuant to

15 U.S.C. § 1114(1) and those alleging section 43(a) violation(s) pursuant to 15 U.S.C.A. § 1125

are subject to the doctrines of laches and acquiescence. See Belmora LLC v. Bayer Consumer

Care AG, 987 F.3d 284, 293, 294 n.7 (4th Cir. 2021) (finding laches, rather than a statute of

limitations, provides a satisfactory vehicle for enforcement of section 43(a) claims and noting as

precedential its prior decision concluding the same for infringement claims) (citing What-A-Burger

of Va., Inc. v. Whataburger, Inc. of Corpus Christi, Tx., 357 F.3d 441, 449 (4th Cir. 2004)).!

In North Carolina, however, certain state law claims are subject to statutes of limitation.

For example, claims alleging violation(s) of N.C. Gen. Stat. § 75—1.1 must be raised within four

years of the date the cause of action accrued. Jackson v. Minnesota Life Ins. Co., 275 F. Supp. 3d

712, 727 (E.D.N.C. 2017) (citing N.C. Gen. Stat. § 75-16.2). The parties do not cite, and the court

has not found, case law regarding any time limitations on a common law claim for trademark

infringement and unfair competition, but neither party disputes the application of the four-year

limitation to such claim. Therefore, for purposes of this motion, the court will apply the four-year

limitation in evaluating the common law claim.”

Accordingly, the court will first address whether Plaintiffs first and second claims, as

‘The Belmora court noted the opinion in PBM Prods., LLC v. Mead Johnson & Co., 639 F.3d 111,

121 (4th Cir. 2011), on which Defendant relies, stating that PBM Prods.’ finding that a set of

section 43(a) claims were “barred per se by the analogous state statute of limitations” “directly

conflicts with a prior precedential decision of this Court, which acknowledged that Lanham Act

claims are not controlled by any statute of limitations.” Belmora LLC, 987 F.3d at 294 n.7 (citing

What-a-Burger of Va., 357 F.3d at 449). The court determined that “without any other means of

reconciling” PBM Prods. and What-a-Burger, the court is “bound to apply the principles correctly

espoused in What-a-Burger.” Id.

? North Carolina’s statutes of limitation for common law matters are set forth in N.C. Gen. Stat. §§

1-48 through 1-54; none of these provisions mentions a claim for infringement or unfair

competition. If it were necessary, the court would find the statute most analogous to the Plaintiff's

common law claim would be the three-year limitation in § 1-52, which limits the time period in

which to bring claims for fraud and personal injury. However, because the parties assume that a

four-year limitation applies to both the statutory and common law claims in this case, and the court

finds Plaintiffs common law claim is most analogous to a claim brought under § 75-1.1, the court

will likewise assume that a four-year statute of limitations applies to the common law claim.

alleged in the operative pleading and on which Plaintiff relies for this court’s subject-matter

jurisdiction, are barred by the doctrines of laches and acquiescence; second, the court will

determine whether Plaintiffs third and fourth claims as alleged are barred by the applicable statute

of limitations.

A. Lanham Act Claims

In the trademark context, “courts may apply the doctrine of estoppel by laches to deny

relief to a plaintiff who, though having knowledge of an infringement, has, to the detriment of the

defendant, unreasonably delayed in seeking redress.” Newport News Holdings Corp. v. Virtual

City Vision, Inc., 650 F.3d 423, 438 (4th Cir. 2011) (quoting Sara Lee Corp. v. Kayser—Roth Corp.,

81 F.3d 455, 461 (4th Cir. 1996)). While § 1114(1) and § 1125 claims are not governed by statutes

of limitation, the Fourth Circuit confirms that such statutes “will continue to play an important role

in the district court’s laches analysis,” because “[l]aches is presumed to bar [Lanham Act] claims

filed outside the analogous limitations period”; however, “whether a Lanham Act claim has been

brought within the analogous state statute of limitations is not the sole indicator of whether laches

may be applied in a particular case.” Belmora, 987 F.3d at 294-95 (citations omitted). The court

instructs that, if a district court concludes the presumption applies, it should then consider the

following factors to determine whether the plaintiff can overcome the presumption: (1) whether

plaintiff knew of defendant’s adverse use of the subject mark, (2) whether plaintiff's delay in

challenging that use “was inexcusable or unreasonable,” and (3) whether defendant “has been

unduly prejudiced” by plaintiff's delay. Jd. at 295.

For its first claim, Plaintiff alleges that it owns and holds a current, valid, and protectible

federal registration for the Mark “Working Films” with the United States Patent and Trade Office

(“USPTO”) under U.S. Reg. No. 5,731,102, and Defendant is willfully using in commerce a

reproduction, copy, or colorable imitation of Plaintiff's registered Mark—i.e., “Working

Narratives”—with knowledge of Plaintiff's rights in the Mark and knowing that such use is likely

to cause and has caused actual confusion, and to cause mistake or to deceive as to the source,

affiliation, connection, or association of Defendant’s services with the services of Plaintiff.

Compl. at §§ 65-70. For its second claim, Plaintiff alleges Defendant is willfully using in

commerce, without Plaintiff's consent, a name and false designation of origin that Defendant

knows will likely cause and has caused confusion, to cause mistake or to deceive as to Defendant’s

affiliation with Plaintiff and as to the origin, sponsorship, or approval of Defendant’s services. Jd.

at J§ 77-85. Plaintiff contends that, without injunctive relief, it will continue to suffer harm,

“including loss of business that Plaintiff otherwise would have earned, and its reputation with

funders and the relevant public.” Jd. at ¥ 86.

Specifically, Plaintiff alleges (1) Defendant “knew of Working Films’ use of [its] Mark

from at least 2007 and prior to Defendant’s adoption of the Infringing Mark”; (2) Defendant is

“now using [‘Working Narratives’] to promote substantially similar services to the same class of

consumers from the same location using the same types of funding sources”; (3) Defendant’s use

of “Working Narratives” was “initially sporadic and inconsistent,” with Defendant “using several

marks to promote its services”; for example, a funding proposal prepared for a proposed

collaboration with Plaintiff referenced ‘‘Nation Inside” as Defendant’s name; (4) Defendant’s

services using “Working Narratives” “initially did not overlap in a substantial way with those of

Plaintiff,” but Defendant’s use “has materially changed”; (5) Defendant is “now consistently”

using “Wo-kinig Narratives” to “provide services that are substantially simar to those provided.

by Plaintiff’; (6) Plaintiff has encountered “instances of actual confusion” including, (a) “at events

attended by both Plaintiff and Defendant, other attendees have assumed that Working Films was

the same organization as Working Narratives or that the two organizations were otherwise

affiliated or connected”; (b) a consultant of one of Plaintiff's funders “confused Plaintiff and

Defendant, despite Working Films’ personnel interviewing directly with the consultant”; (c) a

“project collaborator confused Plaintiff and Defendant when writing about the collaboration” (d)

a “foundation that has provided funding to Plaintiff and, upon information and belief, has also

provided funding to Defendant, confused Plaintiff and Defendant”; and (e) “[o]ther third parties

engaging with Plaintiff have believed they were engaging with Defendant or that Working Films

and Working Narratives were otherwise affiliated or connected.” Compl. at □□ 45-59.

Defendant responded to the Complaint with an Answer, Defenses, and Counterclaims, in

which Defendant seeks a declaration that it has not infringed Plaintiff's Mark and requests an

award of damages for Plaintiff's alleged violations of N.C. Stat. Gen. § 75-1.1 and the common

law prohibiting unfair competition. Answer, DE 13. Defendant attached to the Answer forty-five

exhibits supporting its counterclaims against Plaintiff. See DE 13-2 through DE 13-26. Citing to

these exhibits, Defendant asserts that Plaintiff has known of Defendant’s use of “Working

Narratives” since 2013 and did nothing to challenge such use until 2020; Defendant argues that

Plaintiff's inaction constitutes “unreasonable delay,” which bars Plaintiff's Lanham Act claims.

First, in determining whether there exists a presumption that laches bars Plaintiffs claims,

the court finds that the facts necessary to support the affirmative defense, including that Plaintiff's

claims fall outside the four-year statute of limitations, do not “clearly appear on the face of the

complaint.’” Powell, 842 F. Supp. 2d at 978. Defendant does not seem to dispute this, bu: argues

that “the pleadings,” including its Counterclaims (and attached exhibits) and Plaintiff's Reply,

reflect the facts necessary to show that Plaintiff unreasonably delayed filing the present action.

Plaintiff counters that the court may not consider the exhibits attached to Defendant’s

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Counterclaims because they are neither integral to nor incorporated into the Complaint and any

such consideration would deprive Plaintiff of the opportunity to “present evidence and be heard

on a more complete record.” Defendant contends that the documents are, in fact, central to

Plaintiff's claims and that, even if they are not, the court may consider Plaintiffs “admissions” in

its Reply to Counterclaims.

1. Consideration of Defendant’s Exhibits

At the outset, the court notes it is not persuaded by Defendant’s argument that, simply

because documents are attached to a pleading—here, to Defendant’s Counterclaims—the

substance of the documents may be considered in analyzing a Rule 12(c) motion seeking dismissal

of the Plaintiff's Complaint. Proceeding in this manner would deprive the Plaintiff of preparing

and presenting its own evidence and would contravene Rule 12(d) of the Federal Rules of Civil

Procedure. Rather, cases in the Fourth Circuit reflect that documents attached to an answer and

counterclaims are considered under Rule 12(c) only if the counterclaims are challenged or if the

documents are attached and/or “integral” to the complaint. See, e.g., Williams v. Unum Grp.

(Corp.), No. 3:17-CV-01814-CMC, 2017 WL 10756823, at *1 (D.S.C. Oct. 18, 2017) (court

considered “Covenants [ | included in documents filed as attachments to both [the] Amended

Complaint and [the] Answer and Counterclaims”); Kantsevoy v. LumenR LLC, 301 F. Supp. 3d

577, 593 (D. Md. 2018) (where parties filed cross motions for judgment on the pleadings, the court

considered only those documents that were “incorporated” into the complaint and counterclaims

and determined not to consider documents proffered merely as “evidence”).?

> Defendant cites to three cases for support of its position that documents attached to an answer

and counterclaims may be considered in analyzing a Rule 12(c) motion seeking dismissal of a

complaint. Reply at 3. The court finds these cases unpersuasive and/or distinguishable from the

instant action as follows: May v. Horton, No. 5:09-CT-3081-BO, 2010 WL 2990198, at *2

(E.D.N.C. July 29, 2010), aff'd, 403 F. App’x 850 (4th Cir. 2010) (the court considered an Offense

and Disciplinary Report attached to two defendants’ answers in analyzing both Rule 12(b)(6) and

1]

The Fourth Circuit makes clear that, to avoid converting a Rule 12(c) motion to a Rule 56

motion, a district court may consider documents “submitted by the movant that [were] not attached

to or expressly incorporated in a complaint, so long as the document[s] [were] integral to the

complaint and there is no dispute about the document|s’| authenticity.” Goines v. Valley Cmty.

Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016); see also Jones v. Penn Nat. Ins. Co., 835 F. Supp.

2d 89, 94 (W.D.N.C. 2011) (“. .. the purpose of limiting a motion for judgment on the pleadings

to the contents of the pleadings, per se, is to prevent a court from basing decisions on factual

allegations made in one party’s documents that the other has not had an opportunity to address.”).

No party disputes that the Defendant’s exhibits were neither attached to nor expressly incorporated

in the Complaint; additionally, the Plaintiff does not contest the documents’ authenticity. Thus,

the court must determine whether the documents are central (or “integral”) to Plaintiffs claims.

A document that is quoted or referenced in a complaint is not integral to a plaintiff's claims

if the claims do not turn on, nor are based on, information contained in the document. Goines, 822

F.3d at 166 (citing Sira v. Morton, 380 F.3d 57, 67 (2d Cir.2004) (“Limited quotation from or

reference to documents that may constitute relevant evidence in a case is not enough to incorporate

those documents, wholesale, into the complaint.”) and Chambers v. Time Warner, Inc., 282 F.3d

147, 153 (2d Cir. 2002) (explaining that a document is “integral to the complaint” “where the

complaint relies heavily upon its terms and effect’”)). “When the plaintiff attaches or incorporates

12(c) motions but did not explain how or whether the report was incorporated into the complaint

by reference); Williams v. Branker, No. 5:09-CT-3139-D, 2011 WL 649845, at *3 (E.D.N.C. Feb.

10, 2011), aff'd, 462 F. App’x 348, 352 (4th Cir. 2012) (the Fourth Circuit found the court erred

in relying on documents attached to the answer—’ we are troubled by the district court’s reliance

on reports from Williams’s inmate file handpicked by the defendants, because the complaint is not

dependent on such reports”—but found such error harmless where dismissal was proper based

solely on consideration of the complaint’s allegations); Jordan v. Caromont Health, Inc., No.

3:12CV798-GCM, 2013 WL 443777, at *3 (W.D.N.C. Feb. 5, 2013) (court considered documents

attached to the answer in analyzing a Rule 12(c) motion but did not explain how or whether the

documents were incorporated into the complaint by reference).

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a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff

has adopted the contents of the document, crediting the document over conflicting allegations in

the complaint is proper.” Jd. at 167.

Defendant asserts that Exhibits 7 through 45° are, in fact, central to Plaintiff Complaint as

follows: Exhibits 7 through 21 “detail the parties’ knowledge and relationship” as set forth in the

Complaint at paragraphs 41 through 44; Exhibits 22 through 27 “detail the correspondence

between the parties” as described in paragraphs 60 through 63 of the Complaint; and Exhibits 28

through 45 are “Plaintiffs detailed filings with the USPTO” as described in paragraphs 29 through

40 of the Complaint.

First, paragraphs 41 through 44 of the Complaint allege as follows:

41. | Upon information and belief, the co-founder and Executive Director of

Defendant is Nick Szuberla (“Szuberla”).

42. In February 2007, Kentucky-based Appalshop, Inc., hired Working Films

to develop and facilitate a strategy for Szuberla’s project “Thousand Kites.”

43. | Upon information and belief, in 2007, Szuberla was either an employee, a

contractor, or otherwise associated with Appalshop, Inc. (“Appalshop”).

44. Upon information and belief, it was from his work with Working Films

through Appalshop that Szuberla learned of the work and mission of Working

Films, including its use of the Mark.

Compl., DE 1. Exhibits 7 through 17 are notes and emails between Szuberla and persons at

Working Films in 2013 and 2014 regarding a possible collaboration; Exhibit 18 is a 2014 Tax

Form 990 for Working Films; Exhibit 19 is a 2012 email and attached “toolkit” sent to Szuberla

from the Center for Media Justice; Exhibit 20 is a receipt for a workshop held October 3, 2013;

‘Exhibits 1 and 2 appear to be matters of public record for which the court may take judicial

notice, and which may be considered for whatever relevancy they have to the matters at issue.

See Greene v. Mullis, 829 F. App’x 604, 605 (4th Cir. 2020). Exhibits 3 through 6 are simply

proffered as evidence and, thus, the court will not consider them. See Kantsevoy, 301 F. Supp.

3d at 593.

13

and Exhibit 21 is a 2015 email exchange between Szuberla and Betty Wu. The court finds none

of these documents is integral to Plaintiffs allegations regarding whether Szuberla was associated

with Appalshop and whether he first learned of Working Films in 2007; therefore, they will not be

considered.

Second, paragraphs 60 through 63 of the Complaint allege:

60. As instances of actual confusion occurred, Plaintiff took several actions.

61. Plaintiff demanded several times that Defendant cease use of the Infringing

Mark.

62. Plaintiff made numerous efforts to engage Defendant in conversations to

reach an amicable resolution and to stop the actual confusion. However, despite

these efforts and some communication between the parties, Defendant has not been

willing to commit to a meeting to resolve the matter.

63. Despite Plaintiff's demands and efforts to reach a resolution, Defendant

continues to use the Infringing Mark to identify and promote its goods and services.

Compl., DE 1. Exhibit 22 is a February 23, 2018 cease and desist letter from an attorney

representing Working Films to Szuberla at Working Narratives; Exhibit 23 is a March 16, 2018

letter from an attorney for Working Narratives responding to the February 23, 2018 letter; Exhibit

24 is a May 1, 2019 letter from Working Films’ attorney to Working Narratives’ attorney seeking

a meeting to discuss the trademark dispute; Exhibit 25 is an email from Working Films’ chairman

of the board to Szuberla seeking a meeting to discuss the trademark dispute; Exhibit 26 is an email

exchange between the Working Films’ chairman and a Working Narratives’ board member

regarding a meeting to discuss the trademark dispute; and Exhibit 27 is an email exchange between

the parties’ board members attempting to schedule a meeting in February and April 2020. To the

extent that Plaintiffs claims turn on, or are based on, information contained in these documents

and the documents are relevant to the matters at issue, the court may consider them.

Finally, paragraphs 29 through 40 of the Complaint allege:

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29. Since at least 2000, Plaintiff has used the Mark consistently and

prominently in interstate commerce.

30. On February 9, 2018, Plaintiff filed an application for a federal trademark

registration for the Mark (the “Application”).

31. The United States Patent and Trademark Office (USPTO) published the

Application on February 5, 2019. No opposition was made to the Application.

32. | A United States trademark registration for the mark “Working Films” in

standard character form (Reg. No. 5731102) (the “Registration”) was issued on

April 23, 2019. The Registration is in International Class 36 for “Providing grants

for film and video production” and International Class 41 for “Planning,

management, and coordination of film and video screenings; consulting, strategic

planning, workshops, and educational training in the field of film and video

production; providing a website featuring information on the production and

use of non-fiction films, and non-downloadable publications in the nature of

blogs, and articles involving social justice and environmental protection.” A

copy of the Registration is attached as Exhibit A.

33. The Registration shows that Plaintiff ’s first use in commerce of the Mark

was September 14, 2000.

34, The Registration is valid and subsisting and constitutes prima facie evidence

of Plaintiff's ownership of the Mark, the validity of the Mark, and of Plaintiff's

exclusive rights to use the Mark in commerce on and in connection with the services

recited in the Registration.

35. In addition to the trademark registration, Plaintiff owns valid and

protectable common law rights for the Mark. Since at least 2000, Plaintiff has used

the Mark continuously in commerce to promote, distinguish and identify its

services. As a result of this long-standing and continuous use, consumers have

come to associate the Mark with Working Films and the services it provides.

36. Working Films uses the Mark on all communications, including letterhead,

emails, grant applications, invoices, etc.

37. Working Films uses the Mark on all promotional materials and in

connection with the promotion and distribution of all of its services.

38. | Working Films uses the Mark on its website at www.workingfilms.org, as

its domain name, and on all of its social media sites, including Instagram, Twitter

and Facebook.

39. Through Working Films’ long and continuous use, and_ substantial

investment and time in promoting its services using the Mark, the Mark has come

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to be known, recognized and identified as originating and affiliated with Working

Films.

40. | Working Films has acquired substantial goodwill in the Mark. Asa result,

it has become a valuable and irreplaceable asset of Working Films.

Compl., DE 1. Exhibits 28 through 45 consist of six applications for trademark registration filed

by Plaintiff in October 2015, the USPTO’s “office actions” in response to the applications, and

notices of abandonment of the applications issued by the USPTO. These documents are not

integral to Plaintiff's allegations concerning its 2018 application, 2019 registration, and Plaintiff's

use of its Mark in its business dealings. Accordingly, the court will not consider these documents

in analyzing Defendant’s Rule 12(c) arguments.

2. Plaintiff's Statements in its Reply to Counterclaims

Defendant contends that the court may consider admissions made by the Plaintiff in its

reply to the counterclaims. A reply, or answer, to a counterclaim is a “pleading.” Fed. R. Civ. P.

7(a)(3). The court finds that, just as it may consider relevant admissions in Defendant’s answer,

it may consider any relevant admissions Plaintiff made in its reply to counterclaims for a Rule

12(c) analysis. See Jones, 835 F. Supp. 2d at 95 (a Rule 12(c) motion “will result in claims being

dismissed where the material facts are not in dispute and a judgment on the merits can be rendered

by looking at the substance of the pleadings and any judicially noted facts”) (emphasis added)

(citation and internal quotation marks omitted); see also Ramos v. CMI Transportation, LLC, No.

3:18-CV-968 JD, 2019 WL 3244612, at *1 (N.D. Ind. July 19, 2019) (“In evaluating [a Rule 12(c)

motion, the Court considers the allegations in the complaint and any admissions in the answer.”

(citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir. 1998)).

3. Do the Pleadings Support Dismissal Based on Laches?

The court finds the Defendant has failed to demonstrate as a matter of law that Plaintiff

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unreasonably delayed filing its Lanham Act claims. The allegations in the Complaint do not reveal

when Plaintiff first became aware of Defendant’s use of “Working Narratives,” but Defendant

contends that Plaintiff's admissions in its reply to the counterclaims demonstrate Plaintiff knew of

“Working Narratives” in at least 2014. In its Reply to Defendant’s Counterclaims (DE 22),

Plaintiff “admitted that Molly Murphy and Anna Lee with Working Films met with Nick Szuberla

on February 13, 2014” (id. at § 131) and “admitted that Molly Murphy, Anna Lee, Nick Szuberla,

Rend Smith, and Paul VanDeCarr met on May 8, 2014” (id. at § 133). Plaintiff contends that

despite when it became aware of the use of “Working Narratives,” its allegations regarding

Defendant’s changing conduct support a theory of “progressive encroachment,” which thwarts the

defense of laches.

The Fourth Circuit instructs that “courts may apply the doctrine of estoppel by laches to

deny relief to a plaintiff who, though having knowledge of an infringement, has, to the detriment

of the defendant, unreasonably delayed in seeking redress.” What-A-Burger of Va., Inc., 357 F.3d

at 448 (quoting Sara Lee Corp. v. Kayser—Roth Corp., 81 F.3d 455, 461 (4th Cir. 1996)) (emphasis

added). Through its argument, Defendant attempts to persuade the court that Plaintiff's knowledge

of the existence of “Working Narratives” is sufficient to show Plaintiff's knowledge of an

infringement in Defendant’s use of “Working Narratives.” But, demonstrating mere knowledge

of the use of a trademark is insufficient to invoke the laches doctrine. “[T]o the extent that a

plaintiffs prior knowledge may give rise to the defense of estoppel by laches, such knowledge

must be of a pre-existing, infringing use of a mark.” Jd. at 449 (quoting Sara Lee, 81 F.3d at 462)

(emphasis in original); see also Brittingham vy. Jenkins, 914 F.2d 447, 456 (4th Cir. 1990)

(explaining that, in determining whether laches applies, a court should ordinarily consider

“whether the owner of the mark knew of the infringing use”). Thus, “a court’s consideration of

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laches in the trademark context should encompass at least these questions: ‘(1) whether the owner

of the mark knew of the infringing use; (2) whether the owner’s delay in challenging the

infringement of the mark was inexcusable or unreasonable; and (3) whether the infringing user

was unduly prejudiced by the owner’s delay.’” What-A-Burger, 357 F.3d at 448-49 (quoting

Brittingham, 914 F.2d at 456).

With respect to the first question, the Fourth Circuit explains that “[m]ere use of a mark

that is similar or even identical to a registered trademark does not a fortiori establish infringement.

The ‘keystone of infringement’ is ‘the likelihood of confusion.’” Jd. at 450 (quoting Sara Lee, 81

F.3d at 462; see also 15 U.S.C.A. § 1114(1)(a) and (b) (infringement of a registered mark requires

use that “is likely to cause confusion, or to cause mistake, or to deceive”). The What-A-Burger

court suggests that “a court should consider a number of factors relating to the way in which the

competing marks operate in the workplace” and asserts that “‘similarity of [ ] conflicting names is

but one of many factors relevant to a determination of whether the concurrent use of the marks

creates a likelihood of confusion.” /d.

Thus, to succeed on its motion, Defendant must demonstrate that the pleadings reflect

Plaintiff unreasonably delayed filing its Lanham Act claims after learning (or having knowledge)

that Defendant’s use of “Working Narratives” would likely cause confusion in the marketplace.

Because the Complaint is silent with respect to when Plaintiff had knowledge of Defendant’s

alleged infringement, Defendant relies on its documents proffered in support of its Counterclaims;°

however, the court has determined that the only documents it may consider in this analysis relate

to Defendant’s LLC filings and the parties’ communications after Plaintiff's 2018 cease and desist

letter, none of which are relevant to the first question in a laches analysis. Defendant also relies

> The court may also consider any admissions or other information Defendant provides in the

Answer, but the court finds nothing relevant to this issue contained in the Answer.

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on Plaintiff's admissions in its Reply to Counterclaims, which may be relevant, but they reflect

only that Plaintiff's representatives met with Defendant’s representatives in 2014 and, as such,

they do not rebut Plaintiff's allegations that Defendant’s use of “Working Narratives” was

“initially sporadic and inconsistent,” with Defendant “using several marks to promote its services”

including, for example, the use of “Nation Inside” as Defendant’s name; that Defendant’s services

using “Working Narratives” “initially did not overlap in a substantial way with those of Plaintiff,”

but Defendant’s use “has materially changed”; and that Defendant is “now consistently” using

“Working Narratives” to “provide services that are substantially similar to those provided by

Plaintiff’ Compl. at §§ 48-51.

Defendant contends that while Plaintiff argues its allegations demonstrate “progressive

encroachment”—which describes a “fact pattern, wherein the defendant . . . ‘either gradually edges

closer and closer in trademark similarity or product line operations or else escalates its volume or

scale of operations so as to create a higher profile’” (What-A-Burger, 357 F.3d at 451 (quoting 5

McCarthy at § 31:18))—Plaintiff fails to plead facts supporting such theory in the Complaint. The

court need not address Defendant’s contention because, even if Defendant is correct, the Fourth

Circuit determined that the allegations in What-A-Burger did not “present a “progressive

encroachment’ fact pattern” and concluded, “The principles underlying our decision in Sara Lee,

however, are controlling here: (1) delay is measured from the time at which the owner knew of an

infringing use sufficient to require legal action; and (2) legal action is not required until there is a

real likelihood of confusion.” Jd.; see also Ray Commce’ns, Inc. v. Clear Channel Commc’ns, Inc.,

673 F.3d 294, 301 (4th Cir. 2012).

Here, the court finds Defendant has failed to demonstrate on the pleadings that laches

applies to bar Plaintiff's Lanham Act claims; while it is possible that Defendant has evidence

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sufficient to assist the court in determining at what point Defendant’s use of “Working Narratives”

may have created a sufficient likelihood of confusion to trigger the Plaintiff's obligation to sue,

such evidence may not be considered for a Rule 12(c) analysis.

4. Do the Pleadings Support Dismissal Based on Acquiescence?

Citing the parties’ 2018 and 2019 communications described above, Defendant argues that

Plaintiff “acquiesced” in Defendant’s use of “Working Narratives.” Specifically, Defendant

asserts that after Plaintiff initially demanded that Defendant cease and desist its use of “Working

Narratives” in early 2018, Defendant did not hear again from the Plaintiff until May 2019; during

the delay, Defendant “relied on Plaintiff's silence as an acceptance that its allegations were

improper or that it accepted that the statute of limitations had passed.” Mot. at 6-7.

‘““Acquiescence is the active counterpart to laches . . . [b]oth doctrines ‘connote consent by

the owner to an infringing use of his mark,” but ‘acquiescence implies active consent.’” What-A-

Burger, 357 F.3d at 452 (quoting Sara Lee, 81 F.3d at 462) (emphasis in original). The doctrine

is encompassed within 15 U.S.C.A. § 1115(b)(9) and provides that “[a]n infringement action may

be barred... where the owner of the trademark, by conveying to the defendant through affirmative

word or deed, expressly or impliedly consents to the infringement.” Jd “As with laches,

acquiescence assumes a ‘preexisting infringement’ that ‘requires that the trademark owner

knowingly consent—albeit actively—to the defendant’s infringing use of the mark.’” Jd.

Defendant neither cites case law nor explains how Plaintiffs inaction between February

2018 and May 2019 supports a finding that Plaintiff conveyed to Defendant “through affirmative

word or deed” its consent to Defendant’s use of “Working Narratives.” The court finds Defendant

fails to demonstrate the application of acquiescence to bar Plaintiff's Lanham Act claims, and

Defendant’s motion seeking dismissal of Plaintiff's first and second claims is denied.

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B. State Law Claims

Plaintiff's third and fourth claims seek recovery pursuant to North Carolina’s statutory and

common law; the court has determined for purposes of Defendant’s motion that these claims are

subject to the four-year statute of limitations found in the Unfair and Deceptive Trade Practices

Act, N.C. Gen. Stat. § 75-16.2 ““UDTPA”). Thus, Plaintiffs claims must have accrued on or after

July 29, 2016.

A claim under the UDTPA accrues when the alleged violation occurs. Faircloth v. □□□□□

Home Loan Corp., 313 F. Supp. 2d 544, 553 (M.D.N.C. 2003), aff'd sub nom. Faircloth v. Fin.

Asset Sec. Corp. Mego Mortg. Homeowner Loan Tr., 87 F. App’x 314 (4th Cir. 2004) (citations

omitted). In other words, the claim accrues “when a plaintiff has the ‘right to institute and maintain

suit....’” Jd (quoting Barbee v. Atl. Marine Sales & Serv., Inc., 115 N.C. App. 641, 649, 446

S.E.2d 117, 122 (1994). The parties do not cite, and the court has not found, any cases involving

allegations of trademark infringement and violations of the UDTPA, in which the court opines as

to the circumstances under which a UDTPA claim accrues.® For the instant claim, Plaintiff alleges

Defendant “is using a mark that creates a likelihood of confusion, mistake or deception,” “with

knowledge of Plaintiff's ownership and exclusive rights,” and “without Plaintiff's authorization or

consent.” Compl. §§ 100-102. For purposes of this analysis, the court construes Plaintiff's

allegations (and those supporting the common law trademark infringement claim) as similar to

claims for fraud or misrepresentation, particularly given the Plaintiffs reference to deception. In

North Carolina, when a UDTPA claim is based on fraud, “the violation occurs—and the limitations

clock starts running—“at the time that the fraud is discovered or should have been discovered with

For example, in the insurance context, ‘““a UDTP cause of action accrues when the insurer denies

the claim.” Quillen y. Allstate Corp., No. 1:14-CV-00015-MR-DLH, 2014 WL 6604897, at *4

(W.D.N.C. Nov. 20, 2014).

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the exercise of reasonable diligence.” Dreamstreet Invs., Inc. v. MidCountry Bank, 842 F.3d 825,

830 (4th Cir. 2016) (citations omitted); see also Spoor v. Barth, 244 N.C. App. 670, 679, 781

S.E.2d 627, 633 (2016); Sebastian v. Davol, Inc., No. 517CVO0006RLVDSC, 2017 WL 3325744,

at *7 (W.D.N.C. Aug. 3, 2017) (same for both fraud and misrepresentation claims).

Like the defense of laches, to succeed on a statute-of-limitations defense at this stage, all

facts necessary to show the time bar must clearly appear “on the face of the complaint.” Dickinson

v. Univ. of N. Carolina, 91 F. Supp. 3d 755, 763 (M.D.N.C. 2015); see also Ferro v. Volvo Penta

of the Americas, LLC, 731 F. App’x 208, 210 (4th Cir. 2018) (quoting Semenova v. Ma. Transit

Admin., 845 F.3d 564, 567 (4th Cir. 2017) (“Where a defendant seeks dismissal on statute of

limitations grounds, the court may dismiss under Rule 12(b)(6) ‘only if the time bar is apparent on

the face of the complaint.”)).

No party disputes that Plaintiff's common law trademark infringement and UDTPA claims

are based on the same factual allegations as the Lanham Act claims. Defendant expresses the same

arguments for dismissal of the state law claims as it does for the federal claims. The court finds

that Defendant has failed to demonstrate on the pleadings that Plaintiff discovered or should have

discovered prior to July 29, 2016 that Defendant’s use of “Working Narratives” created a

likelihood of confusion, mistake, or deception. Again, the court recognizes the possibility that

Defendant may possess evidence to support its arguments in this respect, but the court is limited

in what it may consider for a Rule 12(c) analysis. Defendant’s motion seeking dismissal of the

Plaintiff's third and fourth claims for relief is denied.

V. Conclusion

A Rule 12(c) motion “tests only the sufficiency of the complaint and does not resolve the

merits of the plaintiff's claims or any disputes of fact.” Massey, 759 F.3d at 353 (quoting Drager

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v. PLIVA USA, Inc., 741 F.3d 470, 474 (4th Cir. 2014)). The Complaint in this case is silent with

respect to when Plaintiff knew or should have discovered that Defendant’s use of “Working

Narratives” would likely cause confusion, and Defendant’s reliance on its proffered exhibits and

Plaintiff's admissions do not persuade the court that the doctrines of laches and acquiescence or

the applicable statute of limitations apply to bar the Plaintiffs claims. Accordingly, Defendant’s

Motion for Judgment on the Pleadings [DE 15] is DENIED.

> Te

SO ORDERED this _©*__ day of March, 2021.

Videel / y 5 XL

RICHARD E. MYERS II

CHIEF UNITED STATES DISTRICT JUDGE

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