aquarius broadcasting corp. v. vubiquity ent. - club taboo trademark complaint.pdf

8/18/2019 Aquarius Broadcasting Corp. v. Vubiquity Ent. - Club Taboo trademark complaint.pdf

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SECOND AMENDED COMPLAINT

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Charles M. Coate (SBN: 140404)ABRAMS COATE LLP12400 Wilshire Boulevard, Suite 1060Los Angeles, California 90025Tel. (310) 576-6161; Fax (310) 576-6160Email: [email protected]

Michael M. Plotkin (SBN: 38170)LAW OFFICES OF MICHAEL M. PLOTKIN12400 Wilshire Boulevard, Suite 1060Los Angeles, California 90025Tel. (310) 551-4900; Fax (310) 576-6160Email: [email protected] Attorneys for Plaintiff Aquarius Broadcasting Corp.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA – WESTERN DIVISION

AQUARIUS BROADCASTINGCORPORATION, a California corporation,

Plaintiff,

vs.

VUBIQUITY ENTERTAINMENTCORPORATION, a Delaware corporation(formerly known as TVNENTERTAINMENT CORPORATION orAVAIL-TVN) and DOES 1 through 10,inclusive,

Defendants.

CASE NO.

2:15-CV-01854-SVW (VBKx)

ssigned to the Honorable Stephen

V. Wilson

SECOND AMENDED COMPLAINTFOR:

(1) INFRINGEMENT OFTRADEMARKS 15 U.S.C. § 1125 -REVERSE PASSING OFF;

(2) CONTRIBUTORYINFRINGEMENT OFTRADEMARKS 15 U.S.C. . § 1125 -REVERSE PASSING OFF;

(3) BREACH OF WRITTENDISTRIBUTION AGREEMENT;

(4) BREACH OF COVENENT OFGOOD FAITH AND FAIRDEALING; AND

(5) VIOLATION OF CALIFORNIABUSINESS & PROFESSIONSCODE §§ 17200, ET SEQ.

Action Filed: March 12, 2015

DEMAND FOR JURY TRIAL

Case 2:15-cv-01854-SVW-VBK Document 31 Filed 03/25/16 Page 1 of 87 Page ID #:415


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JURISDICTION

1. This Court has subject matter jurisdiction over this action because certain

claims arise under the Lanham Act (15 U.S.C. §§1121 et seq., 28 U.S.C. §1331 et seq.)

and 28 U.S.C. §1338.

2. This Court has supplemental jurisdiction over the remaining claims in the

Complaint arising under California law pursuant to 28 U.S.C. §1367.

VENUE

3.

Venue is proper in the Central District of California pursuant to 28 U.S.C.

§1391 because a substantial part of the activities and events giving rise to the claims

occurred within this District and both Plaintiff and the Defendants conduct business and

have office locations within the county of Los Angeles, California.

THE PARTIES

4.

Plaintiff Aquarius Broadcasting Corporation (“Aquarius” or “Plaintiff”) is a

corporation organized and existing pursuant to the laws of the State of California, with

its principal place of business in the Central District of California.

5. Plaintiff Aquarius is informed and believes and, on that basis, alleges that

Defendant Vubiquity Entertainment Corporation is a corporation organized and existing

under the laws of the State of Delaware and its principal place of business is located at

1881 Campus Commons Drive, Suite 101, Reston, Virginia 20191. Vubiquity

Entertainment Corporation also maintains offices in Sherman Oaks, California;

Kalispell, Montana; and London, England. Vubiquity Entertainment Corporation has



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previously conducted business under the names “Avail Media” and/or “Avail-TVN”

and/or “TVN Entertainment Corporation.” For purposes of this Complaint, Defendant

Vubiquity Entertainment Corporation will be referred to as “TVN.” TVN’s California

office is located at 15301 Ventura Boulevard, Suite 3000, Sherman Oaks, California

91403.

6. Aquarius is unaware of the true names and capacities of Defendants sued

herein as DOES 1 through 10, inclusive, and therefore sues these Defendants by such

fictitious names. Nevertheless, Aquarius is informed and believes and on that basis

alleges that each of the fictitiously named DOE Defendants was, at relevant times,

complicit in the conduct of TVN and/or is either intentionally, negligently, or in some

other manner, a contributing cause of the damages suffered by Aquarius and is

responsible for such damages. Aquarius will seek leave to amend this complaint to

allege the true names and capacities of each DOE Defendant, together with such

allegations as may be appropriate, when their names have been ascertained.

A. GENERAL ALLEGATIONS

Background Facts Regarding Aquarius

7. Aquarius was incorporated in California in January 2006. Aquarius’

principal business has been to license audio-visual material from adult feature films

which it then combines into adult videos from which it manufactures digital files

intended for delivery to cable networks, telephone companies and satellite delivery



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companies (“Operators”) which deliver programming to home viewers, i.e., their

subscribers, on a Video On Demand (“VOD”) basis.

8. Aquarius does not produce the audio-visual materials which it acquires and

which it combines into the digital files which it delivers to Operators. Since 2006,

Aquarius has manufactured and delivered over 2,000 separate files for delivery to

subscribers by way of the facilities of Operators throughout the United States and

Canada. (For convenience, Aquarius’ digital compilations are sometimes referred to

herein as “Broadcast Titles.”)

9. Between 2006 and 2013, adult audio visual materials have been made

available to the home viewing public in the United States and Canada by Operators

utilizing several delivery methods: cable television, satellite television, television

delivered by telephone companies over their wired systems and/or television delivered

by internet protocol. Irrespective of delivery method, Operators deliver to “subscribers”

who pay to access and/or download files offered by that Operator by means of

transmission to their televisions at home. It is made available on a “VOD” basis; the

subscriber orders a particular Broadcast Title from a menu presented by the Operator,

and the subscriber is separately charged a one-time fee for the specific Broadcast Title

transmitted.

10. Throughout its years of operation, Aquarius has sought to reach home

viewers by entering into agreements with Operators throughout the United States and

Canada for carriage of its VOD Service. Such agreements allowed Aquarius to reach the



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collective audience of the Operators’ tens of millions of subscribers throughout the

United States and Canada.

11. John Chambliss ("Chambliss") and Robert Herrera ("Herrera") were well

respected programmers of adult-themed audio-visual materials who developed a process

to fabricate such materials into digital files which could be manufactured into a finished

product, a fully-manufactured digital product which could be delivered to subscribers.

In addition, they formulated a menu of files which subscribers of Aquarius systems

could download for viewing at home. For several years prior to the formation of

Aquarius, Chambliss had a productive relationship with Defendant TVN.

The TVN Agreement

12. Plaintiff is informed and believes, and on that basis alleges, that TVN is a

privately-held company engaged in the acquisition, delivery and management of

digitalized video files for VOD Services to Operators throughout the United States and

Canada. TVN acts as a distributor on behalf of manufacturers of digitized files who

engage TVN's services to provide encoding and delivery of their digitized files to

Operators throughout the United States and Canada. Operators to which TVN delivers

digital files containing audio-visual materials from numerous manufacturers include

virtually all of the major media and telecommunication companies throughout North

America including, by way of example, Comcast, AT&T and Verizon.



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13. Both Chambliss and Herrera recognized the need to expand Aquarius’

ability to reach Operators and their subscribers throughout North America and to provide

for technical expertise to deliver its content to those Operators. To fulfill those needs,

Aquarius entered into an agreement entitled “TVN-Aquarius VOD Services Agreement”

(the “TVN Agreement”) pursuant to which TVN agreed to act as Aquarius’ exclusive

distributor of Aquarius’ products, i.e., fully-manufactured digital files (referred to for

convenience as "Broadcast Titles") as part of Aquarius’ VOD Service throughout the

United States and Canada. A true and correct copy of the TVN Agreement is attached

hereto as Exhibit “A” and incorporated by reference herein. (The TVN Agreement

mistakenly refers to Aquarius Broadcasting Corporation as “Aquarius Broadcasting

Systems, Inc.”)

14. Pursuant to the TVN Agreement, TVN was engaged and agreed to act on

Aquarius’ behalf as Aquarius’ “exclusive distributor” in the United States and Canada.

TVN had exclusive right to offer Aquarius Broadcast Titles as part of Aquarius’ VOD

Service to Operators licensed by Aquarius. TVN was also engaged and agreed to encode

and deliver Aquarius’ files as part of this service which TVN agreed to provide on

Aquarius' behalf to Operators licensed by Aquarius to provide Aquarius’ Broadcast

Titles to their subscribers. Such services were set forth on Schedule B of the TVN

Agreement. For convenience, such Operators are referred to as “Aquarius Systems.”

15. Each month during the term of the TVN Agreement, Aquarius

manufactured up to fifty (50) fully-manufactured digital files and delivered them to



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TVN. TVN encoded them to the specifications of Aquarius Systems and delivered them

to all such Operators to be added to their subscriber menus. In addition to providing,

encoding and delivery, the services which Aquarius engaged TVN to perform, TVN

supported Aquarius’ sales efforts to increase Aquarius Systems to include the services

which Aquarius engaged TVN to perform additional Operators. TVN had close

relationships with Operators throughout North America and adding Operators would

increase the Aquarius subscriber base and, if Aquarius’ Broadcast Titles were successful

with subscribers, increase the revenues of both TVN and Aquarius.

16. In 2006, when the Aquarius/TVN relationship began, Aquarius was a small

company delivering to a handful of cable systems with a total audience of approximately

165,000 subscribers. Its growth between 2006 and 2012 brought Aquarius to virtually

every major Operator in North America, reaching an audience well in excess of

50,000,000 subscribers.

17. The term of the TVN Agreement was seven (7) years. Throughout that

term, TVN was empowered to receive all revenues generated from Aquarius Systems in

the United States and was required to remit to Aquarius its share of revenues on a

monthly basis. Substantially all of Aquarius’ total corporate revenue was collected by

TVN on behalf of Aquarius and Aquarius relied on TVN’s remittance to maintain its

business operations.

18. The TVN Agreement obligated TVN to provide Aquarius with monthly

reports setting forth specific information from each of Aquarius Systems. That



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information was to include the then-current number of subscribers, number of buys,

retail price and gross revenues generated for each Aquarius System.

19. Under the TVN Agreement, Aquarius entrusted many of its critical business

functions to TVN. Aquarius’ inventory was exclusively entrusted to TVN; Aquarius'

trademarks were entrusted to TVN; and Aquarius’ relationships with its singular group

of customers, Aquarius Systems throughout the United States and Canada, were

exclusively controlled by TVN. Most importantly, all revenues generated by Aquarius

licensed Operators were collected directly by TVN.

20. Aquarius relied on TVN’s faithful performance of its obligations as it

would a fiduciary. Aquarius entrusted its principal assets and key business functions to

TVN. TVN exclusively controlled Aquarius’ inventory, its revenue stream and its

relations with Aquarius Systems throughout North America. Aquarius relied on TVN to

act in good faith as Aquarius’ exclusive distributor. In fact, the TVN Agreement

required Aquarius’ reliance, indeed, its dependence on TVN. The TVN Agreement

created a confidential relationship, given the extent of the sensitive and essential

business functions undertaken by TVN on which Aquarius was exclusively dependent

throughout the TVN Agreement’s seven (7) year term.

Aquarius’ VOD Service

21. Each month, Aquarius provided TVN with the upcoming month’s materials:

the Broadcast Titles which included Metadata relating to each digitally manufactured file

and promotional materials intended to promote and advertise the proprietary trademarks



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owned by Aquarius: “Club Taboo,” “Reality_FirsTimers” and “Urban Sin.” The fully-

manufactured files delivered by Aquarius to TVN included information which

specifically identified Aquarius as the manufacturer of each digital audio-visual file and

instructions to TVN as to which menu (identified by Aquarius trademark name) was to

list that particular fully-manufactured Broadcast Title.

22. Each Aquarius System would display on its menus which were branded

with Aquarius' trademarks all Broadcast Titles available for download by subscribers for

home viewing. Those menus were branded as “Club Taboo,” “Reality_FirsTimers” or

“Urban Sin.” The digital materials provided TVN specific information as to what was to

be listed on which menu. Aquarius’ brands and the corresponding promotional materials

were designed by Aquarius to make most effective use of the menus offered by each

Aquarius System and were an integral part of Aquarius’ VOD Service.

23.

Aquarius’ VOD Service consisted of (i) its Broadcast Titles; (ii) the

Metadata delivered to TVN each month along with the Broadcast Titles; and (iii)

promotional materials relating to each such title which included still photographs,

synopses and fanciful titles all of which were part and parcel of the Aquarius VOD

Service. In addition, an essential ingredient of the Aquarius VOD Service was its

brands, “Club Taboo,” “Reality_FirsTimers” and “Urban Sin.” The Metadata, as well as

the promotional materials, specifically tied each Broadcast Title to one of Aquarius’

proprietary brands.



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24. The materials which constituted Aquarius’ VOD Service were intended to

provide the broadest coverage of Aquarius’ Broadcast Titles throughout the menus

offered by Aquarius Systems. Attached hereto as Exhibits “E-1” through “E-4” are

true and correct copies (“Screen Captures”) of the menus used by AT&T U-verse as of

May 10, 2015. AT&T U-verse was an Aquarius System. Exhibit “E-1” is the menu

listing all categories of materials available to subscribers of AT&T U-verse on a VOD

basis. A subscriber wishing to access adult materials is instructed to click on the

“Adult” category, and, upon doing so, the subscriber is directed to a “Second Menu”

(Exhibit “E-2”) for adults only. From the Second Menu, adult materials can be

downloaded by a subscriber through several specific sub-menus. One of those specific

sub-menus allows the viewer to peruse and select adult offerings by Brand. When the

subscriber clicks on “By Brand,” he is directed to another sub-menu which lists the

brand names of each of the manufacturers whose digital materials are made available to

be accessed by subscribers to the digital AT&T U-verse. Attached hereto as Exhibit

“E-3” is a true and correct copy of the By Brand menu on AT&T U-verse as of May 10,

2015. As of that date, AT&T U-verse offered 14 brands, two of which are TVN's "Club

Fantasy" and "Urban Fantasy."

25. When a subscriber selects a specific brand, he is directed to a sub-menu

which displays all of the offerings by that particular manufacturer. Attached hereto is a

true and correct copy of Exhibit “E-4” which is the brand menu of “Club Fantasy” as it

appeared on AT&T U-verse as of May 10, 2015. “Club Fantasy” offered a total of sixty



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(60) different Broadcast Titles. After the subscriber selects his or her preferred brand,

the subscriber may review all of the materials offered by that brand and select the

specific Broadcast Title he or she wishes to download for viewing. That file which

contains that material is delivered by the Operator to the subscriber’s television screen,

and the subscriber is billed on his or her monthly invoice for the VOD charge. Plaintiff

is informed and believes and thereon alleges that while there were and are minor

differences in the menu structure of the numerous Aquarius Systems, the menu offerings

of AT&T U-verse as reflected in Exhibits “E-1,” “E-2,” “E-3” and “E-4” are fairly

representative of the menus utilized on all of the 141 Aquarius Systems.

26. By September 2012, Aquarius was reaching more than 50,000,000

subscribers. Aquarius’ VOD Service was being carried by and broadcast to viewers

throughout North America over approximately 140 Aquarius Systems in the United

States and Canada. Aquarius Systems included virtually every cable system and

telephone company in the United States and Canada. A true and correct list of the

Operators which were authorized by Aquarius as Aquarius Systems is attached hereto as

Exhibit “D” and is incorporated herein as though fully set forth. Aquarius was

delivering approximately 50 fully-manufactured Broadcast Titles per month to TVN in

the form of digital files which also contained unique marketing material with respect to

each such Broadcast Title. Each of the Broadcast Titles was crafted to fit within one of

Aquarius’ proprietary brands identified with Aquarius' trademarks: "Club Taboo,"

"Reality_FirsTimers," amd "Urban Sin." TVN was receiving approximately $400,000 in



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VOD revenues from Aquarius Systems from subscriber downloads of Aquarius

Broadcast Titles each month.

27. Aquarius’ products were among the best commercially performing adult

materials available to Operators and their respective subscribers throughout the United

States and Canada. At the retail level (at the level of the Operators), Aquarius’

Broadcast Titles were generating revenues from VOD orders of approximately

$5,000,000 per month.

28.

The TVN Agreement provided that revenues produced by the subscriber

downloads and VOD payment by the Aquarius Systems were to be paid directly to TVN.

Therefore, with respect to Aquarius' Broadcast Titles, all but three of the Aquarius

Systems paid TVN directly; TVN was to account for all such payments and the Aquarius

share was to be remitted to Aquarius within 30 days of its receipt by TVN. Both

Aquarius and TVN knew that TVN’s monthly remittance was Aquarius’ most significant

revenue stream and was relied upon by Aquarius to fund its business operations.

Aquarius’ Brands, i.e. Proprietary Trademarks

29. From its inception, Aquarius sought to create and develop proprietary trade

names to provide Operators and subscribers with recognizable “brands” which identified

Aquarius as the source of its unique Broadcast Titles. Aquarius’ Broadcast Titles were

created to fit specific content categories reflected by each of Aquarius’ brands.

30. From 2006 until approximately October 2012, Aquarius’ Broadcast Titles

were delivered to Aquarius Systems and their subscribers as part of Aquarius’



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“branded” platforms and menus. Aquarius’ brands included its premier platform “Club

Taboo,” as well as its highly successful platform, “Reality_FirsTimers.” During 2012,

Aquarius developed and established a third brand, “Urban Sin.” Those marks or brands

were designed to be distinctive and were an integral and essential element of Aquarius’

VOD Service.

31. Each digital file delivered by Aquarius to TVN and then by TVN to

Aquarius Systems contained the fully-manufactured product information and marketing

material which correlated with the Aquarius brand to which it was to be delivered. The

Metadata file which was delivered by Aquarius to TVN for each Broadcast Title

identified both Aquarius and its distinctive brand as the source of the product. Aquarius

Systems offered its product to viewers by means of menus which allowed viewers to

select the specific product the viewer wanted sent to his or her home. Those menus were

substantially in the form of the menus on AT&T U-verse which are reflected on

Exhibits "E-1" through "E-4" which are attached hereto and incorporated herein. That

information was made available by Operators to their subscribers who ordered a

download with the expectation that they would receive an Aquarius Broadcast Title.

Over the seven years of the TVN/Aquarius relationship, Aquarius delivered more than

2,000 fully-manufactured Broadcast Titles to TVN for distribution to Aquarius Systems

in the United States and Canada. Each file was specifically assigned to a brand and

menu designated by Aquarius, e.g., “Club Taboo,” “Reality_FirsTimers” or “Urban

Sin.”



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32. The TVN Agreement acknowledged the unique value of Aquarius’

trademarks and brand identifications. The TVN Agreement also acknowledged the

unique quality of Aquarius’ Broadcast Titles and the unique promotional materials

which accompanied those Broadcast Titles, including the unique titles, synopses which

drew viewers and other promotional materials delivered to Operators to advertise

Aquarius’ Broadcast Titles, all of which were contained in the fully-manufactured

products which were delivered to TVN. The TVN Agreement expressly recognized that

Aquarius’ VOD Service, comprised of Aquarius’ brands, its Broadcast Titles and the

unique promotional materials, were the exclusive property of Aquarius and that TVN did

not acquire any rights therein by reason of the TVN Agreement or of the conduct of the

parties thereunder.

33. Throughout the term of the Aquarius-TVN relationship, “Club Taboo” was

Aquarius’ principal platform and was, in fact, one of the most successful adult brands

distributed by TVN. “Club Taboo” often ranked among the most successful adult brands

carried by Broadcast Operators throughout the United States. Aquarius' Broadcast Titles

consistently placed among the most successful titles broadcast by Aquarius Systems.

34. On or about April 20, 2010, the United States Patent and Trademark Office

issued to Aquarius an original Certificate of Registration for the service mark “Club

Taboo.” The Certificate bore Registration Number 3,779,187 and recognized that the

first use of the service mark in commerce occurred in August 2007. A true and correct



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copy of the Certificate of Registration for “Club Taboo” is attached hereto as Exhibit

“B” and incorporated fully herein.

35. On or about September 6, 2011, the United States Patent and Trademark

Office issued to Aquarius an original Certificate of Registration for the service mark

“Reality_FirsTimers.” The Certificate bore Registration Number 4,024,163 and

recognized that the first use of the service mark in commerce occurred on November 18,

2009. A true and correct copy of the Certificate of Registration for

“Reality_FirsTimers” is attached hereto as Exhibit “C” and incorporated fully herein.

FIRST CLAIM FOR RELIEF

Violation of 15 U.S.C. Section 1125 (The Lanham Act - Reverse Passing Off)

(Against TVN)

36. Aquarius repeats and re-alleges each and every allegation set forth in

paragraphs 1 to 35 of this Second Amended Complaint and incorporates each herein by

reference.

37. From approximately March 2006 and throughout the term of the TVN

Agreement, Aquarius established three unique brands or trade names, i.e. “Club Taboo,”

“Reality_FirsTimers” and “Urban Sin.” These proprietary trademarks defined

categories through which Aquarius’ Broadcast Titles were brought to the viewing

audience. “Club Taboo” was registered for trademark by Aquarius in August 2007 and

has been used by Aquarius continuously in interstate commerce since that date.

“Reality_FirsTimers” was registered for trademark by Aquarius on November 18, 2009,



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and has been used by Aquarius continuously in interstate commerce since that date.

“Urban Sin” was not registered but was established and has been used by Aquarius

continuously since 2012. Each of Aquarius’ proprietary brands was an essential

ingredient of Aquarius VOD Service.

38. As Aquarius’ exclusive distributor, TVN licensed Aquarius’ VOD Service

and the Broadcast Titles included therein to Operators approved by Aquarius throughout

the United States and Canada. Each of those Operators became Aquarius Systems. The

list of Aquarius Systems, Operators that were licensed to carry Aquarius’ Broadcast

Titles, is set forth on Exhibit “D.” Throughout the term of the TVN Agreement, TVN

distributed Aquarius’ Broadcast Titles accompanied by metadata specifying that each

title was to be included on one of Aquarius’ branded menus; that information and

metadata were delivered by TVN to Aquarius Systems. The success of Aquarius’

products throughout that term helped to establish "Club Taboo," "Reality_FirsTimers,"

and "Urban Sin" as recognizable “brands” which commanded the attention of

subscribers.

39. Each of the Operators had their own on-screen menus which served as a

road map for adult viewers. On those menus, Operators presented to their subscribers

choices from the adult film manufacturers whose products were carried by that Operator.

The menus used by AT&T U-verse as reflected in Exhibits "E-1," "E-2," "E-3" and

"E-4." All such titles were offered on a VOD basis. When subscribers accessed a

menu, that menu listed “Urban Sin,” “Club Taboo” and “Reality_FirsTimers” which



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were Aquarius’ proprietary brands. A subscriber would be directed to the individual

menu under “Club Taboo,” “Reality_FirsTimers” or “Urban Sin” and each of the

Broadcast Titles listed thereon could be ordered by the subscriber on a VOD basis.

40. During and throughout the term of the TVN Agreement, Aquarius’

Broadcast Titles were uniquely successful in producing subscriber “buys” on the

Aquarius Systems listed on Exhibit “D.” Plaintiff is informed and believes and on that

basis alleges that Aquarius’ Broadcast Titles produced levels of subscribers’ “buys”

which were among the most successful of any manufacturer of adult-themed product not

available throughout the United States. Each of those “buys” resulted in billing by the

individual Operator to the subscriber of as much as $14.00 per “buy.”

41. From March 2006 through approximately November 2012, Aquarius’

Broadcast Titles and their success in the marketplace established “Club Taboo,”

“Reality_FirsTimers” and “Urban Sin” as successful and recognizable brands throughout

the broadcast community and among the VOD subscribers to whom Aquarius Broadcast

Titles were delivered.

42. I n November 2012, TVN (as Vubiquity Entertainment Corporation) filed

trademark applications with the U.S. Patent and Trademark Office to register the

following trade names: “Club Fantasy,” “First Time Fantasy” and “Urban Fantasy.”

Plaintiff is informed and believes and thereon alleges that the names selected were

intended to be confusingly similar to Aquarius’ successful and well-known brands.



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43. Plaintiff is further informed and believes and on that basis alleges that on or

about December 1, 2012, TVN instructed all Aquarius Systems to remove from their

menus all references to the Aquarius brands. Specifically, the Aquarius Systems were

told that “Club Taboo” was to be removed and in its place, the System was to insert

TVN’s newly-registered “Club Fantasy;” Aquarius’ “Reality_FirsTimers” was to be

removed from the Aquarius Systems and in its place, the Aquarius Systems were to

insert TVN’s newly-registered “First Time Fantasy;” and the Aquarius Systems were

advised that “Urban Sin” was to be removed from the Aquarius Systems and in its place,

the Aquarius Systems were to insert TVN’s newly-registered “Urban Fantasy.” In all

other respects, the Broadcast Titles had been entrusted to TVN and which comprised the

entire inventory of products of the Aquarius VOD Service were to remain in place

unchanged.

44.

Throughout the period December 1, 2012 through March 31, 2013, all

Broadcast Titles on each of the Aquarius Systems were Aquarius Broadcast Titles which

had been delivered to TVN for distribution to Aquarius Systems as part of Aquarius’

VOD Service as required under the TVN Agreement. At TVN’s direction, Aquarius’

Broadcast Titles were to remain unchanged; however, each of the branded menus of the

141 Aquarius Systems were to be changed to reflect TVN’s brand names in place of

Aquarius’ brands.

45. The menus on all Aquarius Systems were changed to comply with TVN’s

instructions. Aquarius brands were removed and the menus were re-labeled to reflect



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TVN’s newly-acquired and confusingly similar brands. The titles displayed on the

relabeled menus remained Aquarius’ Broadcast Titles. References to Aquarius’ brands

were removed and replaced with TVN’s newly-acquired and confusingly similar brands.

46. As a result of TVN's re-labeling, when a subscriber accessed adult-themed

"By Brand," Aquarius' "Club Taboo" was removed and in its place, TVN's "Club

Fantasy" was substituted. Aquarius' "Reality_FirstTimers" was removed and in its

place, TVN's "First Time Fantasy" was substituted and Aquarius' "Urban Sin" was

removed and in its place, TVN's "Urban Fantasy" was substituted. .

As a result of TVN’s instructions, if a subscriber accessed adult-themed materials “By

Category,” all references to Aquarius and its brands were removed from the individual

Broadcast Titles as well as the promotional and advertising materials which Aquarius

had provided to TVN as part of the fully-manufactured digital files which TVN had

agreed to distribute as they had been delivered to TVN.

47. All promotional materials delivered by Aquarius to TVN were then

delivered by TVN to the Aquarius Systems without any reference to Aquarius’ “Club

Taboo,” “Reality_FirstTimers” or “Urban Sin.” The promotional materials, which were

intended by Aquarius to advertise Aquarius brands, were instead used by TVN and

DOES 1 through 6 to advertise TVN’s confusingly similar brands. TVN secretly re-

labeled and re-packaged all of Aquarius’ Broadcast Titles and replaced Aquarius labels

with TVN’s counterfeit brand labels.



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48. On the 141 Aquarius Systems’ menus, Plaintiff’s Broadcast Titles were

labeled with TVN’s counterfeit branding. As Exhibits “E-1” through “E-4” reflect,

Aquarius Systems still continue to use and display TVN’s counterfeit brands. In doing

so, the commercial value of Aquarius’ brands has been effectively destroyed. Aquarius

was, in fact, advised by one or more Aquarius Systems that Broadcast Operators simply

could not carry two confusingly similar brands. Inasmuch as it was then offering TVN’s

counterfeit brands, it would be confusing to subscribers to be offered two similar adult

brands.

49. Aquarius was never advised of nor did it authorize such changes made in

the terms and conditions of its “agreements” with its authorized Aquarius Systems.

Moreover, Aquarius was never advised of TVN’s secret and fraudulent activity. TVN

traded upon and utilized successful Aquarius products to establish its newly-registered

trade names/brands, each of which was intentionally named to be so similar to Aquarius’

brand names as to confuse the consumer, ie. subscriber.

50. Plaintiff is informed and believes and on that basis alleges that TVN

instructed each of Aquarius Systems to remove all references to Aquarius and/or its

proprietary trademarks from any of the menus and/or promotional materials available to

viewers/subscribers. TVN falsely designated the source of the Broadcast Titles as “Club

Fantasy,” its own registered trade name, instead of the manufacturer of the product, i.e.,

the Broadcast Titles’ true source, Aquarius’ “Club Taboo.” TVN falsely designated the

source of the Broadcast Titles as “First Time Fantasy,” its own registered trade name,



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instead of Broadcast Titles’ true source, Aquarius’ “Reality_FirsTimers.” TVN falsely

designated the source of the Broadcast Titles as “Urban Fantasy,” its own registered

trade name, instead of Broadcast Titles’ true source, Aquarius’ “Urban Sin.” TVN

obtained Aquarius’ fully-manufacture4d digital files and effectively removed therefrom

references to Aquarius and its trademarks and re-packaged Aquarius’ titles under its own

labels, its counterfeit brand names. TVN’s conduct in re-labeling Aquarius’ Broadcast

Titles constituted “reverse passing-off” under the Lanham Act.

51.

Notwithstanding TVN’s changes to the menus and promotional materials

furnished by TVN for broadcast over Aquarius Systems, all Broadcast Titles available to

subscribers for the period December 2012 through March 2013 consisted of Broadcast

Titles delivered to TVN by Aquarius as provided in the TVN Agreement.

52. No substantive change was made by TVN to Aquarius' Broadcast Titles.

They were as the TVN Agreement mandated, to be distributed, i.e. "handed off," to

Aquarius Systems with associated metadata as delivered to TVN by Aquarius. Instead

those titles were offered for purchase under TVN’s labels. TVN simply re-labeled

Aquarius’ tangible products, the Broadcast Titles and sold them as their own. Plaintiff is

informed and believes and on that basis alleges that during the period April 1, 2013 to

June 30, 2013, TVN continued to distribute Aquarius Broadcast Titles over what had

been Aquarius Systems and to falsely designate the source of those Broadcast Titles

under TVN’s newly-registered trade names.



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53. Plaintiff is informed and believes and on that basis alleges that during the

period starting in November 2012 until sometime in February 2013, TVN, with the

active (albeit secret) and fraudulent involvement of one or more employees of Aquarius,

systematically removed from Aquarius’ Broadcast Titles any reference to Aquarius’

brands “Club Taboo” and/or “Reality_FirsTimers.” Such references were similarly

removed from the Metadata which accompanied those Broadcast Titles to Aquarius

Systems throughout North America.

54.

Plaintiff is informed and believes and on that basis alleges that TVN falsely

designated and misrepresented the source of Aquarius’ Broadcast Titles by passing off

such titles as having been manufactured by TVN rather than Aquarius. TVN’s false

and fraudulent identification of the source of Aquarius’ titles was intended to divert

subscribers away from the Aquarius’ brands and establish TVN’s similar infringing

brands by exploiting the proven quality of Aquarius’ Broadcast Titles.

55. In or about February or March 2013, Aquarius contacted several Aquarius

Systems which had successfully carried Aquarius’ Broadcast Titles during the previous

six years. Aquarius advised those Operators that its Broadcast Titles and its successful

brands would no longer be distributed by TVN. Aquarius requested the Operators

continue to carry Aquarius Broadcast Titles under Aquarius’ established brands by

dealing directly with Aquarius rather than through TVN. Aquarius was advised by

several Operators that Aquarius’ Broadcast Titles had been broadcast for several months



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under TVN’s similar brand names at TVN’s instruction. Those Operators informed

Aquarius that they could not carry two such confusingly similar brands.

56. TVN’s misrepresentation of the source of the manufacture of Aquarius’

Broadcast Titles, i.e., its “reverse passing off,” has destroyed Aquarius’ ability to

maintain continuity for its trade names. Those trade names which had been established

in the marketplace over many years were taken off the airwaves at the specific

instruction of TVN, Aquarius’ exclusive distributor, without the knowledge or consent

of Aquarius.

57. Plaintiff is informed and believes and on that basis alleges that TVN’s

conduct was intentional and willful. Aquarius has been severely damaged as its trade

names, which it had spent years to establish, are no longer of appreciable value to the

141 Operators which had successfully brought them to their subscribers for more than

six years. TVN co-opted those relationships and diverted them for its own exclusive

benefit. As a direct and proximate result of TVN’s willful misconduct as alleged above,

Aquarius has suffered damages to its goodwill, its brands and to its business, including

lost profits. The exact amount of the damages is unknown, but Plaintiff is informed and

believes and on that basis, alleges that such damage is not less than Five Million U.S.

Dollars ($5,000,000.00).

58. Plaintiff is further informed and believes and on that basis, alleges that in

addition to the damage willfully caused, TVN and its affiliated companies made and

continue to generate substantial revenues resulting from their willfully passing off



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Aquarius’ products as their own. The amount of such revenues is currently unknown but

Plaintiff believes them to be in excess of Five Million U.S. Dollars ($5,000,000.00).

Those amounts can only be ascertained by an accounting of all profits received by TVN

as a result of its illegal conduct.

59. By virtue of TVN’s willful violation of the Lanham Act, including,

specifically, 15 U.S.C. § 1125(a), Plaintiff is further entitled to recover from TVN all

damages permitted thereunder for willful infringement of Aquarius’ federally-registered

trademarks, including all direct and consequential damages, lost profits, defendants’

profits, as well as treble damages to the extent provided by law, and all attorneys’ fees

and costs incurred in connection with this lawsuit.

SECOND CLAIM FOR RELIEF

Violation of 15 U.S.C. Section 1125 (The Lanham Act)

Contributory Infringement of Trademarks -

Reverse Passing Off

(Against Defendants Does 1-10)


paragraphs 1 to 35 and 37 to 59 of this Second Amended Complaint and incorporates

each herein by reference.

61. Plaintiff is informed and believes and based thereon alleges that TVN’s

scheme to pass off Plaintiff’s Broadcast Titles as its own was made known by TVN to



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not less than six of the Operators of the 141 listed in Exhibit “D” and to persons, firms

or corporations whose identities are not known to Plaintiff at this time.

62. Plaintiff is informed and believes and based thereon alleges that Defendants

DOES 1 to 6 are Operators and/or individuals employed by such Operators who

knowingly and actively participated in TVN’s scheme and received substantial benefits

from TVN’s reverse passing off of Aquarius’ products, i.e. fully-manufactured

Broadcast Titles which TVN simply repackaged to remove Aquarius trademarks and

substituted its own. Plaintiff is informed and believes and, on that basis, alleges that

DOES 1 to 6 removed all “Club Taboo,” “Reality_FirsTimers” and “Urban Sin”

references from their menus with the knowledge that in so doing, they were knowingly

contributing to and were complicit in TVN’s violations of the Lanham Act and the

infringement of Aquarius’ trademarks.

63.

Plaintiff is informed and believes and based thereon alleges that DOES 7, 8,

9 and 10 are individuals, persons, firms or corporations who actively participated in

TVN’s scheme and received substantial economic benefit from TVN’s fraudulent

conduct, its reverse passing off. Plaintiff is informed and believes and on that basis,

alleges that one or more of DOES 7 , 8, 9 and 10 were or had been employees of

Aquarius and/or persons and companies who participated in and facilitated TVN's

scheme and that TVN compensated DOES 7 to 10 in some form or fashion for their

complicity in TVN’s scheme. Each of DOES 7 to 10 was complicit in TVN’s scheme

in order to assure themselves that after Aquarius’ brands were forced off the air and the



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TVN Agreement had terminated, they would be guaranteed broadcast platforms to

populate TVN’s infringing trademarks and/or the shelf-space which TVN had arrogated

to itself in violation of its obligations to Aquarius. Plaintiff is informed and believes that

TVN continues to compensate DOES 7, 8, 9 and 10 for such complicity.

64. The conduct of TVN and DOES 1 to 10 was intentionally designed to

deprive Aquarius of the advertising value of its trade names “Club Taboo,”

“Reality_FirsTimers” and “Urban Sin” and of the goodwill that would result from public

knowledge of the true source of the manufacture of Aquarius Broadcast Titles in order to

establish the value of TVN’s new trade names and to destroy the value of Aquarius’

existing trade names. TVN’s conduct and that of DOES 1 through 10 was willful and

intentionally done to damage Plaintiff. Aquarius was damaged to the extent that the

trade names which it had spent six years to establish were no longer of any value to the

141 Operators with whom it had successfully dealt during that six year period. Those

Operators and their subscribers represented and continue to represent the vast majority

of the total audience of adult VOD broadcasts in the United States. The exact amount of

such damages is unknown to Plaintiff at this time, but Plaintiff is informed and believes

and, on that basis, alleges that such damage is not less than Five Million U.S. Dollars

($5,000,000.00).

65. By virtue of TVN’s willful infringements of Plaintiff’s registered

trademarks in violation of 15 U.S.C. §1125(a), and the knowing contribution of DOES 1

to 10 to those infringements, Plaintiff is entitled to all damages and/or statutory



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remedies provided under the Lanham Act for willful infringements of Aquarius’

trademarks. Such damages include treble damages to the extent provided by law, lost

profits, defendants’ profits and attorneys’ fees and costs against each of the Defendants

DOES 1 to 10 who participated in and contributed to TVN’s willful infringements.

THIRD CLAIM FOR RELIEF

Breach of Written Distribution Agreement

(Against Defendant TVN)

66.

Aquarius repeats and incorporates the allegations set forth in paragraphs 1

to 35 and paragraphs 37 to 59 of this Second Amended Complaint as if set forth in full

herein.

67. Under the TVN Agreement, Aquarius engaged TVN as its exclusive

distributor in the United States and Canada to encode, manage and deliver Aquarius

Broadcast Titles as part of Aquarius’ VOD Service to Aquarius’ Systems. TVN agreed

to deliver the Aquarius VOD Service intact, as it was delivered to TVN by Aquarius.

68. Plaintiff is informed and believes and on that basis alleges that during and

throughout the term of the TVN Agreement, TVN entered into numerous agreements

with Operators, pursuant to which TVN licensed those Operators to carry Aquarius’

Broadcast Titles. At no time during the term of the TVN Agreement did TVN provide

Aquarius with copies of any such agreements. Notwithstanding TVN’s specific

agreement to obtain Aquarius’ approval of the material terms of such agreements, TVN

never fully disclosed the material terms of those agreements to Aquarius. Instead of



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entering into agreements as a licensor on behalf of Aquarius as required by the TVN

Agreement, TVN materially breached its contractual obligations to Aquarius by entering

into agreements with Operators solely in TVN’s own name and for its own exclusive

benefit. TVN acquired the rights to control an unknown quantity of hours of

programming time, bandwidth or “shelf-space” on the systems controlled by Operators.

69. By entering into those agreements, the material terms of which it never

fully disclosed to Aquarius, TVN sought control of a majority of the “shelf-space”

available for manufacturers of adult products on major systems throughout the United

States. TVN used Aquarius’ successful adult Broadcast Titles to obtain “shelf-space” in

its own name and on its own behalf.

70. The TVN Agreement expired on or about March 15, 2013. By that time,

Aquarius’ VOD Service was being carried on virtually every Operator (cable and

telephone companies) within North America. At relevant times herein, TVN never

advised Aquarius and Aquarius was unaware that its “exclusive distributor” had entered

into undisclosed agreements with Operators under which TVN used Aquarius’ products

to acquire shelf-space in TVN’s own name. The agreements deprived Aquarius of the

benefits of any continuing relationship with Operators upon the expiration of the TVN

Agreement. The “shelf-space” had been appropriated exclusively by TVN to the

exclusion of its client, Aquarius.

71. During the term of the exclusive TVN Agreement, TVN co-opted the

relationships with each of the Operators which carried Aquarius’ products for TVN’s



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sole exclusive benefit. TVN failed to act as distributor of Aquarius’ Broadcast Titles on

behalf of Aquarius. Instead, TVN secretly utilized Aquarius’ proprietary trademarks and

licensed adult-themed products to reserve and appropriate the “shelf-space” on those

Operators. TVN continued to occupy that shelf-space after the TVN Agreement expired.

This deprived Aquarius of its ability to continue the business it had built for seven years.

72. Plaintiff is further informed and believes and on that basis alleges that, prior

to the expiration of the TVN Agreement, in or about November 2012, TVN secretly

notified Operators that TVN would no longer be distributing Aquarius’ products, that all

“shelf-space” being occupied by Aquarius’ content was the property of TVN and that

Aquarius had no contractual rights under the agreements between TVN and those

Operators.

73. During and throughout the term of the TVN Agreement, many of the

material terms of agreements between TVN and the Operators to which Aquarius’

content was licensed by TVN were not disclosed to or approved by Aquarius in writing.

In fact, none of the agreements between TVN and Aquarius Systems were ever shown to

Aquarius.

74. The TVN Agreement (Exhibit “A”) provides that revenues generated by

the Aquarius Broadcast Titles from Broadcast Operators to which TVN distributed

Aquarius’ Broadcast Titles were to be collected directly by TVN. TVN agreed to

account to Aquarius within thirty (30) days of receipt by TVN of any such revenues and

to pay to Aquarius its share of such revenues concurrently with such accountings.



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75. In or about the fall of 2012, TVN withheld significant portions of the

revenues to which Aquarius was entitled. TVN claimed those withholdings to be in

payment of a debt owed by Aquarius to TVN. TVN and Aquarius agreed that from

August 27, 2010 to August 15, 2011, TVN could withhold an agreed upon amount, i.e.

$75,000 per month to apply toward what TVN claimed to be the Aquarius debt.

76. Notwithstanding TVN’s specific agreement to act as Aquarius’ exclusive

distributor, to collect on Aquarius’ account all Aquarius’ revenues and remit those

revenues to Aquarius, starting in or about November 2012, TVN, unilaterally and

without the consent of Aquarius, withheld all of Aquarius’ share of revenues from

Aquarius’ Broadcast Titles. TVN knew that the collections it made for Aquarius’

account represented a significant majority of Aquarius’ revenues and that by withholding

such funds, Aquarius would be forced to cease its operations for lack of sufficient funds.

Because of TVN’s conduct, Aquarius’ revenue was cut off, its relationships with the

Operators were co-opted and its ability to operate as an ongoing business was destroyed.

77. In or about December 2012, four (4) months prior to the expiration of the

TVN agreement, TVN stopped sending any monthly accountings or payments to

Aquarius. To date, Aquarius has not received any accounting of revenues received by

TVN for the Aquarius Broadcast Titles since November 2012, when Aquarius received

an accounting of revenues for VOD buys during the month of August 2012. Typically,

Operators’ accountings and remittances followed the monthly period in which buys



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occurred, by three months (hence, a November accounting for revenues earned in

August).

78. August 2012 was the last monthly period for which TVN furnished any

accountings to Aquarius. That accounting was received in November 2012. For the

periods from August 2012 through June 2013, Plaintiff is informed and believes and

based thereon alleges that TVN received from Operators not less than $3,000,000 on

account of revenues produced by VOD sales of Aquarius’ Broadcast Titles. The TVN

Agreement is specific in its requirement that Aquarius is to receive monthly accountings

with respect to each of the Operators on which its Broadcast Titles are carried. Those

accountings are required to show the specific income produced by each Broadcast Title

from each of the Operators to which TVN delivered Aquarius’ Broadcast Titles.

Aquarius is informed and believes and on that basis, alleges that all of the materials

which contain that specific information was provided by Aquarius Systems to TVN

setting forth all buys of Aquarius Broadcast Titles and all revenues for the periods

through and including the month of June 2013. Aquarius does not here, nor elsewhere,

acknowledge the truth or accuracy of those accountings which were furnished by TVN.

TVN refused and continues to refuse to provide any accountings for those periods and

has further refused to remit any of the revenues which it had received from Operators for

subscribers VOD buys of Aquarius’ products.

79. Aquarius has performed all of its obligations under the TVN Agreement

except only those obligations which it was incapable of performing by virtue of TVN’s



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retention of Aquarius’ revenues and breaches of TVN’s obligations under the TVN

Agreement.

80. By reason of the foregoing, Aquarius is entitled to an accounting of all

revenues received by TVN and its affiliated companies from VOD buys of Aquarius

Broadcast Titles under each and every agreement between TVN and any Broadcast

Operators which carried Aquarius Broadcast Titles and/or Aquarius VOD Service during

the period August 2012 to present. The exact amount of the damages is unknown but

could be ascertained based on detailed accountings from TVN.

81. As a result of TVN’s breaches of its obligations under the TVN Agreement,

including TVN’s breach of its obligations to account for and pay Aquarius’ revenues,

Aquarius has been rendered unable to continue its business and has suffered significant

damages, including lost profits and loss of goodwill. Aquarius is unable to ascertain the

exact amount of such damage and losses without a detailed accounting which TVN has

refused to provide. Aquarius is informed and believes and on that basis alleges that such

amount is not less than Five Million U.S. Dollars ($5,000.000.00).

FOURTH CLAIM FOR RELIEF

Breach of Covenant of Good Faith and Fair Dealing

(Against Defendant TVN)


paragraphs 1 to 35, paragraphs 37 to 59 and paragraphs 67 to 81 of this Second

Amended Complaint and incorporates each herein by reference.



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83. Under California law, each and every contract is to be interpreted as

containing an implied promise of good faith and fair dealing that each party will act

fairly and in good faith toward its contracting partner and will refrain from doing

anything to unfairly interfere with the right of any other party to receive the benefits of

the contract. The TVN Agreement is, by its terms, to be interpreted in accordance with

California law.

84. In the TVN Agreement, TVN undertook obligations which were

confidential in nature and tantamount to those of a fiduciary. TVN agreed to act as

Aquarius’ exclusive distributor; TVN had the exclusive right to regulate the distribution

of Aquarius’ one and only product, its Broadcast Titles; TVN had the exclusive right to

collect virtually all of Aquarius’ revenues; and TVN had the exclusive right to enter into

agreements on Aquarius’ behalf with Operators throughout North America, which

provided Aquarius’ only means to reach the viewing audience for its Broadcast Titles.

Virtually all of Aquarius’ business functions, the life’s blood of its business existence,

were controlled by TVN, and TVN agreed to act in good faith and to deal fairly with

Aquarius in the performance of TVN’s rights and obligations under the TVN

Agreement.

85. Aquarius placed its trust and reliance upon TVN’s faithful performance of

each and all of its obligations under the TVN Agreement. TVN violated that trust and

used the discretion granted it under the TVN Agreement to deprive Aquarius of its

benefits under the TVN Agreement.



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86. TVN, without the knowledge of Aquarius, entered into agreements with

Operators not in Aquarius’ name but in its own. Rather than distributing Aquarius’

products in good faith, TVN used Aquarius’ products to acquire “shelf-space” on the

systems owned by Operators on which Aquarius’ products were made available to

subscribers on a VOD basis. Rather than distributing Aquarius’ Broadcast Titles for the

benefit of Aquarius, TVN used Aquarius’ titles to acquire a proprietary interest in the

“shelf-space” on which Aquarius’ Broadcast Titles were carried.

87.

TVN knew that Aquarius acquired scenes from adult film producers and

manufacture derivative compilations into digital files which contained fully-

manufactured Broadcast Titles. TVN knew that Aquarius did not produce original adult

materials but acquired such materials from suppliers who had been associated with

Aquarius throughout its years of operation. Notwithstanding its obligations to Aquarius,

TVN solicited the principal suppliers of content who provided the underlying material

from which Aquarius created its Broadcast Titles.

88. Plaintiff is informed and believes and on that basis alleges that TVN

represented to each of those providers that it, TVN, owned the “shelf-space” on which

Aquarius’ products were being carried. TVN offered to “sell” that “shelf-space” by

promising that it would provide to each such provider a minimum number of hours of

“shelf-space” if those providers ceased to do business with Aquarius and commenced

doing business directly with TVN or companies over which TVN had substantial

control.



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89. Sometime in 2012, both TVN and Aquarius were aware that the TVN

Agreement was set to expire in March 2013.

90. Plaintiff is informed and believes and on that basis, alleges that in fact, prior

to March 13, 2013, which was the expiration date of the TVN Agreement, TVN entered

into agreements with one or more of Aquarius’ providers (one or more of DOES 7 – 10),

and those providers did, in fact, refuse to do business with Aquarius from that point and

actively participated in TVN’s fraudulent scheme.

91.

TVN withheld all funds of Aquarius for the seven (7) months preceding the

expiration of the TVN Agreement, thereby and knowingly leaving Aquarius without

sufficient resources to continue its business. TVN co-opted and diverted to itself the

productive relationships with Operators who had carried Aquarius’ Broadcast Titles

throughout the seven-year term of the TVN Agreement. TVN solicited the providers

from which Aquarius obtained the raw materials for its Broadcast Titles and induced

them to deal with TVN and not Aquarius. TVN solicited one or more employees of

Aquarius to participate in its plan to undermine Aquarius and to divert Aquarius’

business relationships from Aquarius to TVN and/or to persons, firms or corporations

controlled by TVN.

92. All of the aforesaid conduct was done with the intent to destroy Aquarius’

ability to conduct its business and to appropriate unto itself the materials which Aquarius

needed to continue conducting its business. Essentially, TVN did everything it could to



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force Aquarius out of business while arrogating to itself or companies under its control

of all Aquarius’ business relationships, assets and, in some cases, its personnel.

93. Plaintiff alleges that it performed all, or substantially all, of its material

obligations under the TVN Agreement. Plaintiff further alleges that all conditions

precedent to TVN’s performance were duly and timely performed or were excused.

TVN unfairly interfered with Aquarius’ rights to receive the benefits of the TVN

Agreement. Plaintiff has been harmed as a result of TVN’s conduct.

94.

By reason of the foregoing, Aquarius is entitled to an accounting of all

revenues received by TVN, its affiliated companies and any persons, firms or

corporations under its control or with which it entered into agreements by virtue of its

inducement to provide programming services and/or products to TVN directly (DOES 7

- 10) and to damages measured by the amounts of all revenues received by TVN and/or

DOES 7 - 10. The exact amount of the damages is unknown but any such amount could

only be ascertained by means of detailed accountings from TVN.

95. Plaintiff further alleges that by virtue of TVN's breaches of its obligations

to act in good faith and deal fairly with Aquarius, including TVN's failure to account for

and pay Aquarius' revenues, Aquarius was unable to continue its business and suffered

damages including lost profits and loss of goodwill as a result of such breaches.

Aquarius is unaware of the exact amount of such profits but Aquarius is informed and

believes and on that basis, alleges that such amount is not less than Five Million U.S.

Dollars ($5,000,000.00).



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FIFTH CLAIM FOR RELIEF

Violation of California Business & Professions Code §§ 17200, et seq.

(Against Defendants TVN and DOES 7 - 10)


paragraphs 1 to 95 of this Second Amended Complaint and incorporates each herein by

reference.

97. The unlawful and unfair conduct of TVN and DOES 7 - 10 took place in the

State of California and specifically, in Los Angeles County. Reverse passing off is a

prohibited conduct under, inter alia, California Business & Professions Code §§ 17200,

et seq.

98. Plaintiff is informed and believes and based thereon alleges that DOES 7, 8,

9 and 10 are individuals, persons, firms or corporations who actively participated in

TVN’s scheme and received substantial economic benefit from TVN’s fraudulent

conduct in violation of its confidential, quasi fiduciary obligations to Aquarius and its

reverse passing off in derogation of Aquarius' proprietary trademarks. Plaintiff is

informed and believes and on that basis, alleges that one or more of DOES 7, 8, 9 and 10

were or had been employees of Aquarius who actively participated in TVN's scheme and

that TVN compensated DOES 7 to 10 in some form or fashion for their complicity in

TVN’s scheme. They were complicit in TVN’s scheme in order to assure themselves

that after Aquarius’ brands were forced off the air and the TVN Agreement had

terminated, they would be guaranteed broadcast platforms to populate TVN’s infringing



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trademarks, and/or to populate the "shelf-space" which TVN had arrogated to itself in

violation of its obligations under the TVN Agreement. Plaintiff is informed and believes

that TVN continues to compensate DOES 7, 8, 9 and 10 for such complicity.

99. The conduct of TVN and DOES 7 to 10 was intentionally designed to

deprive Aquarius of the advertising value of its trade names “Club Taboo,”

“Reality_FirsTimers” and “Urban Sin” and of the goodwill that would result from public

knowledge of the true source of the manufacture of Aquarius Broadcast Titles in order to

establish the value of TVN’s new trade names and to destroy the value of Aquarius’

existing trade names. That conduct was also designed by TVN and by DOES 7 to 10 to

unlawfully force TVN off the Aquarius Systems, to cut off its supply of scene4s from

which it could manufacture its products. In essence, that conduct was intended to force

Aquarius out of business. TVN’s conduct and that of DOES 7 through 10 was willful

and intentionally done to damage Plaintiff. Aquarius was damaged to the extent that the

trade names which it had spent six years to establish were no longer of any value to the

141 Operators with whom it had successfully dealt during that six year period. Those

Operators and their subscribers represented and continue to represent the vast majority

of the total audience of adult VOD broadcasts in the United States. The exact amount of

such damages is unknown to Plaintiff at this time, but Plaintiff is informed and believes

and, on that basis, alleges that such damage is not less than Five Million U.S. Dollars

($5,000,000.00).



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100. The conduct of Defendants TVN and DOES 7 to 10, in willfully and

intentionally passing off TVN's confusingly and similar trade names as the source of

Aquarius Broadcast Titles, constitutes reverse passing off as defined in said statutes and

is specifically designated as an unfair business practice under California law.

101. Defendants TVN and DOES 7 to 10 acts hereinabove alleged are acts of

unfair competition within the meaning of Cal. Bus. & Prof. Code § 17200, et seq.

102. Pursuant to Cal. Bus. & Prof. Code §§ 17200, et seq., as a direct, proximate

and foreseeable result of Defendants TVN and DOES 7 to 10 willfully and intentionally

committing such unfair business practices, Plaintiff is entitled to relief, including full

restitution and/or disgorgement of all revenues, earnings, profits, compensation and

benefits that may have been obtained by Defendants TVN and DOES 7 - 10 as a result of

such unfair business acts or practices.

103.

Plaintiff has incurred and, during the pendency of this action, will incur

expenses for attorney’s fees and costs herein. Such attorney’s fees and costs are

necessary for the prosecution of this action.

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PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief against Defendants, and each of them,

jointly and severally, as follows:

1. On the First Claim for Relief, Plaintiff be awarded damages in an

amount according to proof, but which Plaintiff is informed and believes to be

not less than Five Million U.S. Dollars ($5,000,000.00), plus interest thereon;

2. On the Second Claim for Relief, Plaintiff be awarded damages for

Defendants’ intentional and willful conduct in an amount according to proof,

3. but which Plaintiff is informed and believes to be not less than Five

Million U.S. Dollars ($5,000,000.00), plus interest thereon;

4. On the First and Second Claims for relief, for Defendants' profits

that are attributable to the infringement;

5.

On the Third Claim for Relief, a full and complete accounting and

that Plaintiff be awarded damages in an amount according to proof, but which

Plaintiff is informed and believes to be not less than Five Million U.S.

Dollars ($5,000,000.00), plus interest thereon;

6. On the Fourth Claim for Relief, Plaintiff be awarded damages in an

amount according to proof, but which Plaintiff is informed and believes to be

not less than Five Million U.S. Dollars ($5,000,000.00), plus interest thereon;

7. On the Fifth Claim for Relief, that Plaintiff be awarded full

restitution and/or disgorgement of all revenues, earnings, profits,



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compensation and benefits that may have been obtained that resulted from

Defendants’ unfair business practices in an amount according to proof and

pursuant to Cal. Bus. & Prof. Code §§ 17200, et seq.;

8. For costs of suit incurred;

9. For reasonable attorney’s fees to the extent permitted by law;

and,

10. For such other and further relief as the Court may deem just and

proper.

Dated: March 25, 2015 Respectfully submitted,

ABRAMS COATE LLP

By: /S/

Charles M. CoateMichael M. PlotkinAttorneys for Plaintiff Aquarius BroadcastingCorporation



4

aquarius broadcasting corp. v. vubiquity ent. - club taboo trademark complaint.pdf

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