AMERICAN ARBITRATION ASSOCIATION

FILED ELECTRONICALLY

FHTM HI-TECH MARKETING, INC.

CLAIMANT

AAA Case No. 52 459 308 10

v.

JOSEPH M. ISAACS, ET AL.

RESPONDENTS.

RESPONDENTS’ MOTION TO COMPEL DISCOVERY ON COUNTS 1, 3,

4, AND 5 OF CLAIMANT’S AMENDED DEMAND FOR ARBITRATION

Pursuant to Rule 37 of the Federal Rules of Civil Procedure, Respondent Joseph Isaacs

(“Isaacs”), by and through counsel, Smith Greenberg & Leightty PLLC, hereby moves the

Arbitrator to enter an Order against Claimant Fortune Hi-Tech Marketing, Inc‟ (“FHTM”):

1. Compelling responses to Interrogatory Nos. 2, 3, 5, 6, 7, 9, 10, and 21 in Isaacs‟

First Set of Interrogatories directed to FHTM,1 within 10 days of the Order;

2. Compelling responses to Isaacs‟ Second Set of Interrogatories directed to FHTM

(relating to trademark and cybersquatting damages),2 within 10 days of the Order;

3. Compelling responses to Isaacs‟ Second Request for Production of Documents,

(relating to trademark and cybersquatting damages)3 within 10 days of the Order.

For cause, Isaacs states that the foregoing discovery requests directly relate to Counts 1,

3, 4 and 5 of FHTM‟s Amended Demand For Arbitration and that trial on these claims has been

1
Attached hereto as Exhibit A.
2
Attached hereto as Exhibit B.
3
Id.

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set for March 8, 2011. The specific grounds for Isaacs‟ motion are fully addressed in the Brief In

Support of Respondent‟s Motion to Compel Discovery that follows.

Respectfully submitted,

/s/Edward J. Smith________________
Edward J. Smith
Smith, Greenberg & Leightty, PLLC
2321 Lime Kiln Lane, Ste. C
Louisville, KY 40222
(502) 426-1058
Attorney for Respondent Joseph Isaacs

CERTIFICATE OF SERVICE

I hereby certify that a true and accurate copy of the foregoing was filed electronically on
AAA‟s WebFile system this 7th day of February, 2011. A copy was also served upon the
following by email attachment and U.S. Mail, postage prepaid, the same date:

Brian M. Johnson
Jason T. Ams
Greenebaum Doll & McDonald PLLC
300 West Vine Brian Street, Suite 1100
Lexington, Kentucky 40507

/s/Edward J. Smith

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 BRIEF IN SUPPORT OF RESPONDENT’S MOTION TO COMPEL DISCOVERY

I. PROCEDURAL HISTORY

FHTM‟s Amended Demand For Arbitration asserts six claims against Isaacs: (1)

misappropriation of mark (2) intentional interference (3) cybersquatting (4) trademark

infringement (5) unjust enrichment and (6) defamation. On December 15, 2010, this Arbitrator

ruled that truth is relevant to the defense of justification in the intentional interference claim.

However, discovery on whether FHTM was operating an illegal pyramid scheme will not

commence until the federal court decides whether to transfer a pending class action against

FHTM to this arbitration.

Consequently, the bifurcated arbitration scheduled for March 8, 2011 is confined to

Counts 1, 3, 4, and 5 of the Amended Demand For Arbitration. Isaacs‟ affirmative defenses to

these counts include: lack of standing, license or authorized use, estoppel, laches, waiver,

unclean hands, absence of damages, fair use, and nominative use. Prior to the order on

bifurcation, Isaacs‟ had propounded numerous interrogatories and document requests relating to

all six of FHTM‟s claims.4 Calling them an impermissible “fishing expedition”, FHTM

registered every objection imaginable: timeliness, privilege, relevance, harassment, form,

quantity, clarity, and accessibility.5 FHTM‟s most popular objection is also the least defensible:

[The request] demands information that is not relevant to any claim

or defense of any party to this arbitration and is not reasonably
calculated to lead to the discovery of admissible evidence relevant
to any claim or defense of any party.6

When the dust settled, FHTM had not answered one interrogatory or produced a single

document. Even the solitary interrogatory FHTM promised to answer—identifying its registered

4
Respondents‟ First Set of Interrogatories and Request for Production of Documents, Exhibit C.
5
Claimant‟s Response to Respondents‟ First Request for Interrogatories and Production of Documents, Exhibit D.
6
See, e.g. Response 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28.

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trademarks and copyrights—remains a mystery.7 In light of impending trial, Isaacs voluntarily

confined discovery on liability to the following interrogatories most on point to FHTM‟s claims

of cybersquatting and tortious interference: 2, 3, 5, 6, 7, 9, 10, and 21.8 Isaacs also propounded a

new interrogatory and document request that restricts discovery on damages in like manner.

FHTM‟s response failed even to acknowledge Isaacs‟ desperate attempt to address the

most pressing interrogatories.9 Instead, FHTM added new objections to Isaacs‟ damage requests

before yielding the first bit of useful information in several months—that FHTM will claim $208

in damages at the bifurcated trial.

FHTM‟s correspondence of January 28, 2011—requesting a continuance of trial as a

pretext for sidestepping AAA protocol—merely adds salt to the wound. The truth is that Isaacs

has responded in good faith to FHTM‟s discovery requests. It is FHTM‟s own dilatory tactics

that now necessitate continuance of trial.

II. ARGUMENT

Rule 26(b) is widely recognized as a discovery rule which is liberal in scope and

interpretation, extending to those matters which are relevant and reasonably calculated to lead to

the discovery of admissible evidence. Kramer v. Boeing Co., 126 F.R.D. 690, 692 (D.Minn.

1989). Because the standard of relevance for discovery is broader than at trial, Rule 26(b) warns

that inadmissibility is no grounds for objection. Oppenheimer Fund, Inc. v. Sanders, 437 U.S.

340, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978), Culligan v. Yamaha Motor Corp., USA, 110 F.R.D.

122 (S.D.N.Y.1986). According to the 1983 Advisory Committee notes to Rule 26:

The purpose of discovery is to provide a mechanism for making relevant

information available to the litigants. “Mutual knowledge of all the

7
See, Claimant‟s Answer to Interrogatory 2.
8
Correspondence of Edward J. Smith to Jason T. Ams dated December 21, 2010, Exhibit E.
9
Claimant‟s Response to Respondents‟ Second Request for Interrogatories, Exhibit F.

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 relevant facts gathered by both parties is essential to proper litigation.”
Hickman v. Taylor, 329 U.S. 495, 507 (1947). Thus the spirit of the rules
is violated when advocates attempt to use discovery tools as tactical
weapons rather than to expose the facts and illuminate the issues by
overuse of discovery or unnecessary use of defensive weapons or evasive
responses. All of this results in excessively costly and time-consuming
activities that are disproportionate to the nature of the case, the amount
involved, or the issues or values at stake.

FHTM‟s refusal to answer one interrogatory or produce a single document makes a

mockery of Rule 26‟s purpose. That Isaacs could fire arrow-after-arrow that completely miss the

target is inconceivable. As will be demonstrated, Isaacs‟ streamlined interrogatories and

document requests are „on the mark‟.

A. Isaacs’ Discovery Requests Directly Relate to FHTM’s Trademark Claims.

A trademark is “any word, name, symbol, or device ... used by a person ... to identify and

distinguish his or her goods, including a unique product, from those manufactured or sold by

others and to indicate the source of the goods, even if that source is unknown.” 15 U.S.C. § 1127.

Congress enacted the Lanham Act over fifty years ago to protect the value of trademarks by

encouraging their registration and to provide a federal cause of action to prevent their

misappropriation. 15 U.S.C. § 1125. One legislative purpose was to ensure that “where the

owner of a trade-mark has spent energy, time, and money in presenting to the public the product,

he is protected in his investment from its misappropriation by pirates and cheats.” S.Rep. No.

1333, at *3 (1946).

To prevail on trademark infringement, FHTM must establish: (1) it owns the registered

trademark; (2) Isaacs used the mark in commerce; and (3) his use was likely to cause

confusion. 15 U.S.C. § 1114(1). “The touchstone of liability is whether the defendant's use of the

disputed mark is likely to cause confusion among consumers regarding the origin of the goods

offered by the parties.” Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109

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F.3d 275, 280 (6th Cir.1997). Courts typically weigh eight factors: (1) strength of the senior

mark; (2) relatedness of the goods or services; (3) similarity of the marks; (4) evidence of actual

confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7) the intent of

defendant in selecting the mark; and (8) likelihood of expansion of the product lines. Id.; see

also Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 694 (6th

Cir.2003).

Before applying the „likelihood of confusion‟ analysis, however, the Arbitrator must first

determine whether Isaacs‟ used FHTM‟s marks in a way that identified the source of his own

goods. Interactive Prods., 326 F.3d at 695. If not, the mark was used in a „non-trademark‟ way

that is immune from claims of trademark infringement. Id. In Interactive Products, for example,

the Sixth Circuit concluded that the appearance of the plaintiff's trademark in the post-domain

path of the defendant's website would not cause consumer confusion regarding the source of the

website or the products on it. Id. at 698. Because there was no likelihood of confusion as to the

source of the products, it was “unnecessary for the district court to examine the eight factors

traditionally used to determine likelihood of confusion between two source-signifying

marks.” Id.

Even if FHTM proves that Isaacs used their marks, failed to identify his own goods, and

caused likely confusion, the affirmative defense of fair use may still bar recovery. Hensley Mfg.

v. ProPride, Inc., 579 F.3d 603 (6th Cir. 2009). Isaacs can use this defense to establish that:

the use of the name, term, or device charged to be an infringement

is a use, otherwise than as a mark, of the party's individual name in
his own business, or of the individual name of anyone in privity
with such party, or of a term or device which is descriptive of and
used fairly and in good faith only to describe the goods or services
of such party, or their geographic origin.

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 15 U.S.C. § 1115(b)(4); see also KP Permanent Make-Up, Inc. v. Lasting Impression I,

Inc., 543 U.S. 111, 118-22, 125 S.Ct. 542, 160 L.Ed.2d 440 (2004); Audi AG v. D'Amato, 469

F.3d 534, 547 (6th Cir.2006). Under the fair use doctrine, “the holder of a trademark cannot

prevent others from using the word that forms the trademark in its primary or descriptive

sense.” Herman Miller, Inc. v. Palazzetti Imports and Exports, Inc., 270 F.3d 298, 319 (6th

Cir.2001). The original, descriptive primary meaning is always available for use by others to

describe their goods, in the interest of free competition. Id. (quoting J. Thomas McCarthy,

McCarthy on Trademarks & Unfair Competition § 11:45 (4th ed.1996)); see also Car-Freshner

Corp. v. S.C. Johnson & Son, Inc., 70 F.3d 267, 270 (2d Cir.1995) (“[F]air use permits others to

use a protected mark to describe aspects of their own goods, provided the use is in good faith and

not as a mark.”). The defense contemplates and tolerates “some possibility of consumer

confusion.” KP Permanent, 543 U.S. at 121, 125 S.Ct. 542.

“In evaluating a defendant's fair use defense, a court must consider whether defendant has

used the mark: (1) in its descriptive sense; and (2) in good faith.” ETW Corp. v. Jireh Pub.,

Inc., 332 F.3d 915, 920 (6th Cir.2003). In ETW Corp., the Sixth Circuit held that an artist's use of

Tiger Woods's name on the back of the envelope containing the artist's print and in the narrative

description of the print was “purely descriptive,” and that there was “nothing to indicate that [it

was] used other than in good faith.” Id. at 920-21. Woods' name, the court noted, was used only

to describe the content of the print, and all of the materials accompanying the print clearly

identified the artist himself as the source of the print. Id. Accordingly, the plaintiff's claim for

violation of its trademark “Tiger Woods” was “barred by the fair use defense as a matter of

law.” Id.

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 In the instant case, Isaacs‟ took great care in his correspondence of December 31, 2010 to

reduce the first set of interrogatories to the handful that are closest to the bull‟s eye of FHTM‟s

trademark claims. These include:

NO. REQUEST

2 Identify all trademarks and copyrights approved by the United States Patent and
Trademark for which FHTM claims ownership
3 Identify any trademarks or copyrights that are claimed as owned by others for
which you have been notified to cease and desist from using
5 Identify any correspondence from Time, Inc., Time Warner, GE and any others
with respect to trademarks used by FHTM
6 Identify any and all logos which you claim copyright with supporting
documentation from the USPTO
7 Identify any prior logos used by Fortune and the dates of their use, discontinuance
and reason for discontinuance.

In light of the numerous obstacles facing FHTM‟s trademark claims, the relevance of

Isaacs‟ requests cannot be seriously denied. Among other things, FHTM must prove: (i) it owns

the trademarks in question, (ii) it enjoys superior rights to the marks, (iii) Isaacs‟ alleged use of

the marks was likely to cause confusion, and (iv) he did innocently employ the marks in their

descriptive sense. FHTM‟s continued refusal to answer interrogatories that hit the bull‟s eye of

its burden under the Lanham Act offends the liberal discovery guaranteed all parties under Rule

26.

B. Isaacs’ Discovery Requests Also Hit the Target On FHTM’s Cybersquatting Claim.

In recent years, the development of the Internet has created new concerns about

protecting proprietary information. In 1999, Congress passed the Anticybersquatting Consumer

Protection Act (ACPA) to prevent misappropriation of trademarks by stopping conduct known as

“cybersquatting.” See ACPA, Pub.L. No. 106-113, 113 Stat. 1501 (1999) (codified at 15 U.S.C.

§ 1125(d)). In the ACPA, Congress added section 43(d) to the Lanham Act and defined

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cybersquatting as registering or using with a bad faith intent to profit a domain name that is

confusingly similar to a registered or unregistered mark or dilutive of a famous mark. See 15

U.S.C. § 1125(d).

A number of cybersquatting problems prompted Congressional action. There was

concern about individuals registering domain names that are similar to famous marks for the

purpose of profiting by selling them to the legitimate owners of the marks. See, Harrods Ltd. v.

Sixty Internet Domain Names, 302 F.3d 214, 238 (4th Cir.2002). Congress was also aware of

individuals attaching obscene or pornographic material to an infringing domain name in order to

tarnish the mark. S.Rep. No. 106-140, at *6 (Aug. 5, 1999). Others attempted to divert

unsuspecting consumers to their sites in order to engage in unfair competition. Id. Conduct of

this sort has been described as the “Internet version of a land grab.”Interstellar Starship Servs.,

Ltd. v. Epix, Inc., 304 F.3d 936, 946 (9th Cir.2002).

Congress enacted the ACPA to provide legal clarity for trademark owners by prohibiting

the bad faith and abusive registration of distinctive marks as Internet domain names with intent

to profit from their goodwill. S.Rep. No. 106-140, at *4. The ACPA was intended to balance the

interests of trademark owners against the interests of those who would make fair uses of a mark

online, such as for comment, criticism, parody, and news reporting. Id. at *8. For these reasons,

Congress gave courts the charge to “weigh the facts of each case and make a determination based

on those facts whether or not the defendant registered, trafficked in, or used the domain name

with bad-faith intent to profit from the goodwill of the mark of another.” Id. at *10.

In the present case, Isaacs has also zeroed in on the few interrogatories which are closest

to FHTM‟s cybersquatting claim. These include:

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 NO. REQUEST

9 Identify the servers, IP addresses and locations of all servers maintained or

controlled by you
10 Identify all URL‟s currently or previously owned or controlled by you.

21 Identify all contracts from vendors giving permission for FHTM to use “Fortune”
or “Fortune Hi-Tech” in its name and description.

It will be hard to take FHTM‟s charge seriously if it is unwilling to disclose such basic

information about the IP and URL addresses allegedly threatened by Isaacs‟ actions. Equally

important is discovering the extent to which FHTM has allowed others to use the “Fortune” and

“Fortune Hi-Tech” names in promoting their own businesses. Whether the information requested

is admissible at trial misses the mark. Rule 26 mandates disclosure “if the discovery appears

reasonably calculated to lead to the discovery of admissible evidence” relevant to the subject

matter involved in the action. Fed. R. Civ. Proc. 26(b)(1).

III. CONCLUSION

For all of the foregoing reasons, Respondent Joseph Isaacs respectfully moves the

Arbitrator to enter an Order against Claimant Fortune Hi-Tech Marketing, Inc:

1. Compelling responses to Interrogatory Nos. 2, 3, 5, 6, 7, 9, 10, and 21 in Isaacs‟

First Set of Interrogatories directed to FHTM within 10 days of the Order;

2. Compelling responses to Isaacs‟ Second Set of Interrogatories directed to FHTM

(relating to trademark and cybersquatting damages) within 10 days of the Order;

3. Compelling responses to Isaacs‟ Second Request for Production of Documents

(relating to trademark and cybersquatting damages) within 10 days of the Order.

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 Respectfully submitted,

s/Edward J. Smith________________
Edward J. Smith
Smith, Greenberg & Leightty, PLLC
2321 Lime Kiln Lane, Ste. C
Louisville, KY 40222
(502) 426-1058
Attorney for Respondent Joseph Isaacs

CERTIFICATE OF SERVICE

I hereby certify that a true and accurate copy of the foregoing was filed on AAA‟s
Webfile system and served upon the following by electronic mail and U.S. Mail, postage
prepaid, this 7th day of February, 2011:

Brian M. Johnson
Jason T. Ams
Greenebaum Doll & McDonald PLLC
300 West Vine Street, Suite 1100
Lexington, Kentucky 40507

s/Edward J. Smith

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