throbber
Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
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`Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA692926
`ESTTA Tracking number:
`09/01/2015
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91223583
`Plaintiff
`Proven Sytems, LLC dba Z-Burger
`Proven Sytems, LLC dba Z-Burger
`4321 Wisconsin Ave. NW
`Washington, WA 20016
`UNITED STATES
`trademarks@aplegal.com
`Motion to Suspend for Civil Action
`Stevan Lieberman
`trademarks@aplegal.com
`/Stevan Lieberman/s/
`09/01/2015
`2015-8-27 Motion to Suspend.pdf(157656 bytes )
`Exhibit 1 - Amended Complaint.pdf(336403 bytes )
`Exhibit 2 - ANSWER & Counterclaim.pdf(298345 bytes )
`Exhibit 3 - Memo in Support of Mot to Dismiss.pdf(110728 bytes )
`Exhibit 4 - Opp to Motion to Dismiss.pdf(113786 bytes )
`Exhibit 5 - Memo in Support of Emerg. Motion for Prel Injunction.pdf(117492
`bytes )
`Exhibit 6 - Answer to Counterclaim.pdf(293799 bytes )
`Exhibit 7 - Memo for Injuctive Relief.pdf(445982 bytes )
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`IN THE UNITED STATE PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`
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`Opposition No. 91223583
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`PROVEN SYSTEMS, LLC
` dba Z-Burger
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`Opposer,
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`vs.
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`PAYAM TABIBIAN
`
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`Applicant.
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`OPPOSER’S MOTION TO SUSPEND OPPOSITION PENDING
`OUTCOME OF US DISTRICT COURT OF MARYLAND
`CIVIL ACTION NO. 8:14-cv-03227-PJM
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`Pursuant to 37 CFR § 2117, Opposer Proven Systems, LLC (“Proven Systems” or
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`“Opposer”), through its counsel, hereby respectfully requests the Trademark Trial and Appeal
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`Board (TTAB) to suspend all proceedings in the above-captioned Opposition Proceeding
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`pending the final outcome of the litigation between the parties in the United States District Court
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`for Maryland (Civil Action No. 8:14-cv-03227-PJM) involving virtual identical subject matter
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`between the same parties. In support of this motion Opposer sets forth the following:
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`FACTUAL BACKGROUND
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`On October 14, 2014 Applicant filed a complaint in the United States District Court for
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`the District of Maryland and filed an amended complaint on November 12, 2014 against
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`Opposer, among others (“Opposer, et al.”), for trademark infringement, among other things (See
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`Exhibit 1 – Applicant’s Amended Complaint without exhibits). On November 26, 2014 Opposer,
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`et al. filed an Answer & Counterclaim claiming Applicant’s United States service mark
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`registrations were fraudulently obtained as Applicant made false material representations to the
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`1
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`United States Trademark office, submitted faked specimens of use in a number of his statements
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`of use, and submitted specimens of use showing Proven Systems’ use in commerce, not
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`Applicants’ use (See Exhibit 2 – Opposer et al.’s Answer & Counterclaim without exhibits). On
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`January 21, 2015 Applicant filed a Motion to Dismiss (See Exhibit 3 – Applicant’s Memo in
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`Support of Motion to Dismiss without exhibits) and on Feb. 9, 2015 Opposer et al. filed its
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`Opposition to Motion to Dismiss (See Exhibit 4 - Opposer’s Opposition to Motion to Dismiss
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`without exhibit), as well as filed an Emergency Motion for Preliminary Injunction (See Exhibit 5
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`– Oppposer et al.’s Memo in Support of Emergency Motion for Preliminary Injunction without
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`exhibits) on Feb. 26, 2015. By Order of the Court, Applicant did not file an Opposition to
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`Opposer’s Motion for Preliminary Injunction, but rather on March 20, 2015 filed an Answer to
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`the Counterclaims (See Exhibit 6 – Applicant’s Answer to Counterclaim) and its own Motion for
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`Preliminary Relief (See Exhibit 7 – Applicant’s Motion for Injunctive Relief without exhibits).
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`All of these documents are attached to this Motion.
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`As evident from all pleadings, it is obvious that the federal litigation raises the same
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`issues as those associated with this opposition: 1) whether Applicant has any registration rights
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`to the Z-BURGER marks; 2) whether Opposer’s common law Z-BURGER trade/service mark
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`rights for providing food and drink to the public through restaurant, fast food and snackbar
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`services are valid and senior to any service mark registration rights Applicant may have; 3)
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`whether there is an oral trademark license agreement between Opposer and Applicant; 4)
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`whether Applicant’s use of Z-BURGER at common law for “providing of food and drink via a
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`mobile truck” and his associated “intent to use” application to register the mark Z-BURGER for
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`the same infringes Opposer’s senior common law trade/service mark rights; 5) whether
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`Opposer’s use of Z-BURGER infringes any trademark registration rights Applicant may have, as
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`well as Applicant’s. Given the factual circumstance regarding the parties, the civil action also
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`deals with Opposer’s and Applicant’s legal and/or equitable rights to object to the other party’s
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`service marks.
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`LEGAL ARGUMENT
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`Because the final outcome of the federal district court action would define both
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`Applicant’s and Opposer’s rights and affect the present Opposition, there is little need to spend
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`public and private resources to litigate duplicate matters in different forums. Moreover, the
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`decision of the federal district court would be binding on the Trademark Trial and Appeal Board
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`(TTAB)(15 USC §1119). Thus, Opposer respectfully requests the Board to suspend the present
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`Opposition proceeding as the federal district court action would have a direct bearing on the
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`Applicant’s rights to use and thus, register the mark Z-BURGER for a food truck that provides
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`the exact same food and services as Proven System.
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`Pursuant to 37 CFR § 2.117(a):
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`Whenever it shall come to the attention of the Trademark Trial and Appeal Board that a
`party or parties to a pending case are engaged in a civil action or another Board
`proceeding which may have a bearing on the case, proceedings before the Board may be
`suspended until termination of the civil action or the other Board proceeding.
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`
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`If parties to an opposition are involved in a district court action involving the same mark, upon
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`review of the pleadings in the civil action, the Board may determine if the issues before the court
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`have a bearing on the TTAB action. (see Forest Laboratories Inc. v. G.D. Searle & Co., 52
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`USPQ2d 1058, 1061 (TTAB 1999). The Board noted in New Orleans Louisiana Saints LLC v.
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`Who Dat? Inc., 99 USPQ2d 1550, 1552 (TTAB 2011), wherein cross motions to suspend an
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`opposition were filed, “[a] decision by district court may be binding on the Board, but
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`determination by the Board of a defendant’s right to obtain or maintain a registration would not
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`be binding or res judicata in respect to the proceeding pending before the court (citing Whopper-
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`Burger, Inc. v. Burger King Corp., 171 USPQ 805, 806-07 (TTAB 1971)). It makes sense to
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`suspend an administrative proceeding before the TTAB because, in this case, if the federal court
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`enjoins the use of Z-BURGER by Opposer or by Applicant, that would have a direct bearing on
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`this TTAB proceeding.
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`Because the federal district court civil action involves issues in common with those in
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`this opposition and the decision of the Court will be binding on the Board, Opposer therefore
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`respectfully requests that the above-captioned opposition be suspended, pending the outcome of
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`United States District Court for Maryland Civil Action No. 8:14-cv-03227-PJM.
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`
`
`
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`Respectfully submitted,
`
`Proven Systems, LLC
`
`
`By: ____________________________
`Stevan H. Lieberman
`Debora J. McCormick
`Greenberg & Lieberman, LLC
`1425 K Street NW
`Suite 350
`Washington, DC 20005
`Phone: 202-625-7000
`Fax: 202-625-7001
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`Attorneys for Opposer
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`Dated: Sept. 1, 2015
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`CERTIFICATE OF SERVICES
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` I
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` hereby certify that on the 1st day of September, 2015 a true and correct copy of the foregoing
`was served via Certified First Class US Mail to the Applicant’s following counsel of record:
`
`Thomas G. Southard
`RatnerPrestia
`1090 Vermont Ave. NW
`Suite 1200
`Washington, DC 20005
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`By: ___/s/______________________
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`Stevan Lieberman
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`

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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 1 of 34
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MARYLAND
`GREENBELT DIVISION
`
`
`
`
`
`CASE NO. 8:14-cv-03227-PJM
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`PAYAM TABIBIAN,
`an individual,
`
`
`
`Plaintiff,
`
`
`
`v.
`
`
`MOHAMMAD ESFAHANI,
`an individual,
`
`EBRAHIM ESFAHANI,
`an individual,
`
`PROVEN SYSTEMS, LLC,
`a Washington, DC limited liability
`company,
`
`2001-13 ME LLC,
`a Washington, DC limited liability
`company,
`
`MPE LLC,
`a Maryland limited liability company,
`
`3301 14th Street Columbia Heights, LLC,
`a Washington, DC limited liability
`company,
`
`1101 Southwest LLC,
`a Washington, DC limited liability
`company,
`
`
`and
`
`
`3325 Wilson ME, LLC
`a Virginia limited liability company,
`
`
`Defendants.
`
`
`
`
`
`
`
`
`VERIFIED AMENDED COMPLAINT
`
`1
`
`

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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 2 of 34
`
`
`Plaintiff Payam “Peter” Tabibian hereby alleges the following against
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`
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`Mohammad Esfahani (“Esfahani”), Ebrahim Esfahani (“E. Esfahani”), Proven Systems,
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`LLC (“Proven Systems”), 2001-13 ME LLC (“2001-13 ME”), MPE LLC (“MPE”), 1101
`
`Southwest LLC (“1101 Southwest”), 3325 Wilson ME (“3325 Wilson”), and 3301 14th
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`Street Columbia Heights, LLC (“3301 14th Street”), collectively “Defendants.” Proven
`
`Systems, MPE, 2001-13 ME, 1101 Southwest, 3325 Wilson, and 3301 14th Street are
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`referred to collectively as “the LLC Defendants.”
`
`NATURE OF THE ACTION
`
`1.
`
`This is an action arising under intellectual property, tort, and contract law.
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`Specifically, Plaintiff alleges trademark infringement under the trademark laws of the
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`United States, 15 U.S.C. §§ 1114 and 1125(a), copyright infringement under the laws of
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`the United States, 17 U.S.C. § 501, and state law claims for common law trademark
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`infringement and unfair competition, breach of contract, unjust enrichment, quantum
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`meruit, fraudulent misrepresentation, detrimental reliance, breach of fiduciary duty, and
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`civil conspiracy.
`
`PARTIES
`
`2.
`
`Payam “Peter” Tabibian (“Tabibian”) is an individual residing in Great
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`Falls, Virginia. Tabibian is an owner and operator of a chain of fast food restaurants
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`known as Z-Burger.
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`3.
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`Mohammad Esfahani (“Esfahani”) is an individual residing in Arlington,
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`Virginia. Upon information and belief, Mohammad Esfahani is a member of each of the
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`LLC Defendants.
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`2
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`

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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 3 of 34
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`4.
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`Ebrahim Esfahani (“E. Esfahani”) is an individual residing in Alexandria,
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`Virginia. Upon information and belief, E. Esfahani is a member of one or more of the
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`LLC Defendants.
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`5.
`
`Proven Systems, LLC is a Washington, D.C. limited liability company that
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`purports to own and operate a Z-Burger restaurant located at 4321 Wisconsin Avenue,
`
`N.W., Washington, D.C. 20016.
`
`6.
`
`MPE, LLC is a Maryland limited liability company that purports to own
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`and operate a Z-Burger restaurant located at 8145C Honeygo Boulevard, Nottingham,
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`Maryland 21236.
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`7.
`
`3301 14th Street Columbia Heights, LLC is a Washington, D.C. limited
`
`liability company that purports to own and operate a Z-Burger restaurant located at 3301
`
`14th Street, N.W., Washington, D.C. 20010.
`
`8.
`
`1101 Southwest, LLC is a Washington, D.C. limited liability company that
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`purports to own and operate a Z-Burger restaurant located at 1101 4th Street, S.W., Unit
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`170, Washington, D.C. 20024.
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`9.
`
`3325 Wilson ME, LLC is a Virginia limited liability company that
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`purports to own and operate a Z-Burger restaurant located at 3325 Wilson Boulevard,
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`Arlington, Virginia 22201.
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`10.
`
`2001-13 ME LLC is a Washington, D.C. limited liability company that
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`purports to own and operate a Z-Burger restaurant located at 2414 Wisconsin Avenue,
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`N.W., Washington, D.C. 20007.
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`
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`
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`
`3
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`

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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 4 of 34
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`JURISDICTION
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`11.
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`This Court has original subject matter jurisdiction over the federal
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`trademark and copyright claims pursuant to 28 U.S.C. §§ 1331 and 1338(a) and 15
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`U.S.C. § 1121. This Court has related claim jurisdiction over the state law tort and
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`contract claims pursuant to 28 U.S.C. §§ 1338(b) and 1367.
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`12.
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`Defendants Esfahani and E. Esfahani purport to own and operate Z-Burger
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`restaurants within this district, including the restaurant at 8145C Honeygo Boulevard,
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`Nottingham, Maryland 21236 (“the White Marsh location”). They—and the LLC
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`Defendants by and through them—have established sufficient minimum contacts with
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`this district by purposefully availing themselves of the laws and benefits of this district,
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`and the exercise of personal jurisdiction over them would not offend traditional notions
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`of fair play and substantial justice.
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`13.
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`Venue is proper in this district under 28 U.S.C. § 1391(a) because all
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`Defendants are subject to personal jurisdiction in this district at the time the action was
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`commenced, and under 28 U.S.C. § 1391(b) and (c) because a substantial part of the
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`events or omissions giving rise to the claims occurred in this district and the Defendants
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`maintain their principal place of business in this district.
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`FACTUAL BACKGROUND
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`14.
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`Payam “Peter” Tabibian is a successful restaurateur, with decades of
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`experience in the industry. After escaping from Iran with his family in 1982 at the age of
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`ten, he entered the food service industry as a teenager four years later, starting as an
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`employee with Burger King. Within three years, he was promoted to assistant manager,
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`the youngest ever at the chain’s busy L’Enfant Plaza location. Additional jobs followed,
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`4
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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 5 of 34
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`including an eight-year stint as a general manager of Jerry’s Subs and Pizza in Capitol
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`Heights, where, over the course of that time, he increased the restaurant’s sales from
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`$4,000 per week to $23,000 per week.
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`15.
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`In 2005, Tabibian developed his idea for a restaurant based on the concept
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`of hand-crafted burgers, a unique sauce, freshly cut french fries, and over fifty varieties
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`of hand-spun milkshakes. That proprietary concept eventually became Z-Burger.
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`16.
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`In addition to developing the Z-Burger concept, Tabibian spent
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`considerable time and effort refining it. As the sole creative force behind the Z-Burger
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`brand, he personally designed the Z-Burger trade dress, including the layout and interior
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`design of the restaurants, the layout and content of the menus, the employee uniforms,
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`and the soda cup and to-go bag artwork. Tabibian also created the recipes for the food,
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`including the hamburgers, fries, and milkshakes. Tabibian’s attention to detail extended
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`even to the smallest of items. For example, he developed all of the food recipes, including
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`“Z-Sauce,” Z-Burger’s proprietary meat blend, french fry seasoning, onion ring batter,
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`milkshake recipes, and a secret bread recipe known only to Tabibian and the hand-picked
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`bakery he uses to make the bread for use in Z-Burger’s hamburger and hot dog buns.
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`17.
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`As part of his brand development efforts, Tabibian designed and registered
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`the trademarks “GRILLED TO PERFECTION” (U.S. Reg. No. 3,327,137) for fast
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`food restaurant services, filed on January 20, 2006, and “Z-BURGER” (U.S. Reg. No.
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`3,270,187) also for fast food restaurant services, filed on January 20, 2006. Copies of the
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`registrations are attached as Exhibits A and B, respectively. Both registrations are valid,
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`in full force, and incontestable, including as to Tabibian’s claim of ownership.
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`5
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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 6 of 34
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`18.
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`Tabibian subsequently designed and registered the following three
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`additional trademarks:
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`U.S. Reg. No. 3,918,088, filed March 8, 2010, for fast food restaurant services;
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`U.S. Reg. No. 3,989,013, filed October 24, 2010, for restaurant services; and
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`
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`U.S. Reg. No. 4263457, filed November 14, 2011, for restaurant services. Copies of
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`these registrations are attached as Exhibits C, D and E, respectively. All three of these
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`registrations are valid and in full force. Collectively, the five trademarks identified in
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`Exhibits A-E are referred to as the “Asserted Marks.”
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`6
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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 7 of 34
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`19.
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`Tabibian used his own personal funds for the preparation and registration
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`of all five Asserted Marks. Neither Esfahani nor any of the other Defendants had any
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`involvement or investment in the creation of any of the Asserted Marks, nor did they
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`provide any funds for the preparation or registration of the Asserted Marks. The Asserted
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`Marks are owned by Tabibian alone.
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`20.
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`The Z-Burger menus and logo that Tabibian created and designed are new
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`and original works of art, subject to U.S. Copyright Application Nos. VA 1-1809124071,
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`VA 1-1809276333, and VA 1-1809383706, which are attached as Exhibits F, G, and H,
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`respectively.
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`21.
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`After developing the Z-Burger concept and filing the first two Asserted
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`Marks, Tabibian presented his idea to Esfahani in the hope of securing financing. The
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`two agreed to form a partnership with the express purpose of opening a new restaurant
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`for Tabibian’s Z-Burger concept. The two agreed that Tabibian would provide the
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`knowledge, expertise, and operational control, that Esfahani would provide the necessary
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`funds, and that any profits would be split evenly between the two of them.
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`22.
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`Tabibian and Esfahani formed a general partnership in the Fall of 2006
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`under the terms specified above (“the Z-Burger Partnership”). In addition, while Tabibian
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`retained all ownership of the Asserted Marks, he granted the Z-Burger Partnership a
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`license to use the Asserted Marks, subject to his personal control over their use, including
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`ensuring that any food, goods, or services provided under the marks were held to the
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`highest standards of quality.
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`23.
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`By 2007, Tabibian was ready to launch Z-Burger. In March 2007, he and
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`Esfahani jointly signed a lease for property at 4321 Wisconsin Avenue, N.W.,
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`7
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`

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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 8 of 34
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`Washington, DC 20016 (“the Tenleytown location”). As equal partners in the Z-Burger
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`Partnership, both Tabibian and Esfahani signed individual personal guarantees.
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`24.
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` Shortly after signing the lease for the Tenleytown location, Esfahani
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`asked Tabibian for permission to bring his brother, E. Esfahani, into the Z-Burger
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`Partnership as a one-third partner. Because he was focused on the success of the business
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`and wanted to maintain a good working relationship with Esfahani, Tabibian agreed, even
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`though E. Esfahani had no involvement with Z-Burger to that point. Accordingly, as of
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`April 2007, Tabibian, Esfahani, and E. Esfahani were each one-third partners in the Z-
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`Burger Partnership, with profits to be split equally among them.
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`25.
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`As a result of Tabibian’s tireless efforts, the Tenleytown location opened
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`in March 2008 as the first Z-Burger restaurant, using the Asserted Marks, trade dress,
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`interior design and layout, recipes, and menus created by Tabibian. At all times relevant
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`to the instant dispute, Tabibian has controlled the use of the Asserted Marks at the
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`Tenleytown location and has exercised control over the quality of goods and services
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`provided, including the food, design, signage, advertising, and marketing.
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`26.
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`Consistent with his role in the Z-Burger Partnership, Tabibian also
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`supervised the day-to-day operation of all aspects of the Tenleytown location; he
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`interviewed and hired the managers and employees, he was responsible for negotiating all
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`supply agreements, set up systems to allow for vendor audits, set up the credit card
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`processing contract, and ordered supplies. He was present at the Tenleytown location
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`seven days a week, often working the register or assisting the cooks while aggressively
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`marketing the new business by giving interviews and creating promotions that quickly
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`established him as the public face of Z-Burger. Tabibian’s hard work and creativity in
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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 9 of 34
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`promoting the Z-Burger brand generated substantial and valuable goodwill in the Z-
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`Burger business.
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`27.
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`In contrast, Esfahani, consistent with his role in the Z-Burger Partnership,
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`was barely present at the Tenleytown location and played no role in its day-to-day
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`operation. Instead, Esfahani maintained control over the partnership’s finances, including
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`having sole responsibility for paying all expenses and preparing the partnership’s tax
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`returns. Esfahani was also responsible for picking up the revenue at the individual stores
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`and depositing it into the appropriate bank accounts.
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`28.
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`Although most restaurant startups fail, the Tenleytown location quickly
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`became successful due to Tabibian’s hard work and unwavering commitment to
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`providing top quality customer service, quality food at a fair price, and his unrelenting
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`efforts to market and promote the Z-Burger business. That success led to the opening of
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`five additional Z-Burger restaurants between 2008 and 2013:
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` 2414 Wisconsin Avenue, N.W, Washington, D.C. 20007 (“the Glover
`Park location”);
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` 8145C Honeygo Boulevard, Nottingham, Maryland 21236 (“the White
`Marsh location”);
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` 1101 Fourth Street, S.W., Unit 170, Washington, D.C. 20024 (“the
`Southwest location”);
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` 3301 14th Street, N.W., Washington, D.C. 20010 (“the Columbia Heights
`location”); and
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` 3325 Wilson Boulevard, Arlington, Virginia 22201 (“the Clarendon
`location”).
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`29.
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`Each of the five new Z-Burger locations used the Asserted Marks, trade
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`dress, interior design and layouts, menus, and recipes created by Tabibian. At all times
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`9
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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 10 of 34
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`prior to the instant dispute, Tabibian has controlled the use of the Asserted Marks at each
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`location and has exercised control over the quality of goods and services provided,
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`including the food, design, signage, advertising, and marketing. Over the course of
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`opening the various restaurants, Tabibian continued to develop and refine the brand,
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`including his expansion of the dessert menu to include “concretes”—a dense frozen
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`custard treat with mix-ins that earned rave reviews.
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`30.
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`Consistent with his role in the Z-Burger Partnership, Tabibian supervised
`
`and was the sole Z-Burger partner responsible for opening each location and the day-to-
`
`day operations, including hiring and training employees, ordering supplies, designing
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`new store promotions, and ensuring that each Z-Burger location maintained high food
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`quality and food service standards. Tabibian devoted significant time developing and
`
`promoting each Z-Burger restaurant, often spending over eighty hours per week rotating
`
`between each of the Z-Burger locations to ensure that each location provided high quality
`
`food and customer service on a consistent basis.
`
`31.
`
`In contrast, Esfahani, spent little time at any of the locations and took no
`
`responsibility for the day-to-day operation of any location.
`
`32.
`
`In addition to supervising the day-to-day operation of the six locations,
`
`Tabibian was the sole Z-Burger partner responsible for the promotion and marketing of
`
`the business. As Z-Burger’s goodwill ambassador, he created promotions such as food-
`
`eating contests, free milkshake happy hours, and food giveaways, including one
`
`promotion during which the Z-Burger locations gave out almost 16,000 free burgers to
`
`federal government employees furloughed by the government shutdown in 2013.
`
`
`
`
`
`10
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`

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`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 11 of 34
`
`33.
`
`At all times since the opening of the Tenleytown location, Tabibian served
`
`as the public face of the Z-Burger Partnership and was featured by several media outlets,
`
`including profiles and/or stories by the Washington Post, the Wall Street Journal, ABC
`
`News, the Baltimore Sun, and the Washington Business Journal, as well as a televised
`
`appearance on the WBFF Fox 45 television station in Baltimore. In each case, Tabibian
`
`was recognized as a Z-Burger co-founder, owner, and/or CEO. Despite being aware of
`
`those profiles, neither Esfahani nor E. Esfahani ever challenged, corrected, or modified
`
`the description of Tabibian’s role, either privately to Tabibian or publicly, prior to the
`
`instant dispute.
`
`34.
`
`As a direct result of Tabibian’s efforts, the Z-Burger Partnership quickly
`
`became a successful business, with the Tenleytown location alone earning a profit of
`
`almost $700,000 in its first year on revenues of $2.8 million.
`
`35.
`
`Despite the success of the Z-Burger Partnership and the countless hours
`
`Tabibian spent turning Z-Burger into a successful business, he has received less than
`
`$40,000 per year, an amount barely enough to cover his living expenses. He agreed to
`
`that amount because he believed that any profits were being reinvested into the business
`
`to ensure its continued success. During that time, however, Tabibian received numerous
`
`assurances from Esfahani and the Z-Burger corporate attorney, David Mahdavi
`
`(“Mahdavi”), that he was an equal one-third owner of Z-Burger Partnership and would
`
`eventually receive his full one-third share of the profits.
`
`36.
`
`However, despite these assurances, Tabibian has not received any portion
`
`of the profits. Esfahani’s and E. Esfahani’s failure to share the partnership’s profits led
`
`the present dispute to arise in the Spring and Summer of 2014.
`
`
`
`11
`
`

`
`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 12 of 34
`
`37.
`
`Tabibian subsequently learned that Esfahani had, unbeknownst to
`
`Tabibian, named himself and E. Esfahani as the sole members of the LLC Defendants,
`
`and that all revenue from the six locations flowed into the LLC Defendants, which are
`
`currently controlled solely by Esfahani and/or E. Esfahani.
`
`38.
`
`On May 8, 2014, Tabibian requested a meeting with Esfahani to discuss Z-
`
`Burger’s finances and review the documents for the LLC Defendants. In attendance at
`
`this meeting were Esfahani, Mahdavi, Tabibian, and Tabibian’s advisor, Mr. Shaun
`
`Akahvan. During this meeting, Esfahani revealed that he was being audited by the
`
`Internal Revenue Service and had not shared the corporate organizational documents for
`
`the LLC Defendants with Tabibian because he did not want Tabibian implicated in
`
`Esfahani’s IRS audit. Esfahani confirmed to all in attendance at this meeting, however,
`
`that Tabibian nonetheless was a one-third owner of the entire Z-Burger business.
`
`39.
`
`In August 2014, as a result of the present dispute, Tabibian stopped
`
`receiving any compensation from Esfahani or the Z-Burger Partnership and has received
`
`no compensation from them since that time. Around the same time, Esfahani removed
`
`Tabibian from all Z-Burger operating bank accounts and fraudulently informed Z-Burger
`
`employees, suppliers, accountants, and agents that Tabibian was no longer involved with
`
`Z-Burger. Since August 2014, Esfahani has effectively blocked Tabibian from
`
`participating in any aspect of the business.
`
`40.
`
`Upon information and belief, Esfahani has fraudulently prepared and/or
`
`submitted documents for the LLC Defendants, including tax returns, employee
`
`withholding reports, and DC sales tax reports that include Tabibian as an officer.
`
`Signatures for Tabibian which appear on these documents are forged. Upon information
`
`
`
`12
`
`

`
`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 13 of 34
`
`and belief, Esfahani is responsible for these forgeries.
`
`41.
`
`Upon information and belief, Esfahani has also withdrawn Z-Burger funds
`
`for his personal use, including funds in the form of cash with no accounting to Tabibian.
`
`For example, Esfahani opened bank accounts that automatically sweep Z-Burger funds to
`
`his personal accounts and to non-Z-Burger business accounts controlled by Esfahani.
`
`42.
`
`Upon information and belief, Esfahani has used his role as a Z-Burger
`
`Partner to negotiate lease and loan terms with other Esfahani-owned entities and/or the
`
`LLC Defendants that unfairly benefit Esfahani to the detriment of the Z-Burger
`
`Partnership. For example, he used Z-Burger funds to purchase the Arlington Z-Burger
`
`location, used Z-Burger funds to build out the store, then placed the ownership of the
`
`property into an entity controlled solely by him, thereby denying Tabibian the benefit of
`
`his hard work, labor, and ideas. On information and belief, Esfahani coerced third party
`
`building contractors to submit falsified invoices to the Z-Burger Partnership for work
`
`performed building out the Arlington Z-Burger location. Esfahani then presented these
`
`false invoices to banks to procure funds.
`
`43.
`
`As a result of the actions outlined above, on August 25, 2014, Tabibian
`
`expressly withdrew his trademark license to the Z-Burger Partnership and provided
`
`immediate notice of the withdrawal to Esfahani through counsel. The six Z-Burger
`
`locations continue to improperly use the Asserted Trademarks, copyrighted designs, and
`
`Z-Burger trade dress. Esfahani continues to fraudulently inform Z-Burger employees,
`
`suppliers, accountants and other agents that Tabibian is no longer involved in the Z-
`
`Burger business.
`
`
`
`
`
`13
`
`

`
`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 14 of 34
`
`COUNT I – TRADEMARK INFRINGEMENT
`AND COUNTERFEITING (15 U.S.C. § 1114(1)(a))
`(Against All Defendants)
`
`Plaintiff realleges and incorporates herein the allegations contained in
`
`44.
`
`paragraphs 1 through 43.
`
`45.
`
`Tabibian is the sole owner of the Asserted Trademarks. At all times prior
`
`to the instant dispute, Tabibian has controlled the use of the Asserted Marks at each
`
`location and has exercised control over the quality of goods and services provided,
`
`including the food, design, signage, advertising, and marketing.
`
`46.
`
`The Asserted Trademarks and the goodwill of the business, products, and
`
`services associated with them in the United States are of great and incalculable value, are
`
`highly distinctive and arbitrary, and have become universally associated in the public
`
`mind with Z-Burger as being products and services of the highest quality and reputation.
`
`47.
`
`As a member of the Z-Burger Partnership, Tabibian granted the Z-Burger
`
`Partnership a license to use the Asserted Trademarks subject to his ongoing control over
`
`the use of the Asserted Trademarks and the quality of goods and services provided
`
`thereunder.
`
`48.
`
`On August 25, 2014, however, Tabibian expressly revoked the license and
`
`provided notice, in writing, of the revocation to Esfahani and to the Z-Burger Partnership,
`
`E. Esfahani, and the LLC Defendants through Esfahani.
`
`49. Without Tabibian’s authorization or consent, and having knowledge of the
`
`Asserted Trademarks and Tabibian’s ownership of and prior rights to the Asserted
`
`Trademarks, as evidenced by the fact that Defendants’ products bear counterfeit marks
`
`
`
`
`
`
`
`14
`
`

`
`Case 8:14-cv-03227-PJM Document 20 Filed 11/12/14 Page 15 of 34
`
`that are identical to one or more of the Asserted Trademarks, Defendants Esfahani, E.
`
`Esfahani, and the LLC Defendants have distributed, offered for sale, and/or sold
`
`counterfeit goods and services to the consuming public with the intent to misrepresent the
`
`source of those goods and services and, by doing so, have affected interstate commerce.
`
`50.
`
`Defendants have distributed, sold, and offered for sale counterfeit products
`
`as genuine products covered by the Asserted Trademarks, when they are not genuine
`
`products covered by the Asserted Trademarks.
`
`51.
`
`Defendants’ unauthorized use of the Asserted Trademarks is likely to
`
`cause and is continuing to cause, confusion, mistake and deception among the general
`
`purchasing public as to the origin of the goods and services distributed, offered for sale,
`
`and/or sold under the Asserted Trademarks and is likely to deceive the public into
`
`believing that the goods and services distrib

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