4 Wall Nevada, with offices in Las Vegas, New York, and Phoenix, is in the business of designing, servicing, leasing, and selling entertainment lighting systems for theaters, trade shows, concerts, nightclubs, building exteriors, and themed restaurants and retail stores. 4 Wall Nevada holds several federal trademark registrations for the mark 4 WALL for such goods and services as Online retail stores featuring lighting fixtures; Custom construction of lighting fixture and lighting devices; and Design for others in the field of theater lighting. 4 Wall Nevada also holds a registration for the design mark 4 WALL LIGHTING ENTERTAINMENT (pictured below) for, among other things, lighting design and installation and design of software related thereto. While the marks were only registered in the last two years, all of the marks claim use dating back to 1999.
Sometime in August 2007, Karabes formed 4 Wall Iowa with the Iowa Secretary of State. According to the complaint, sometime in December 2007, Karabes began operating a movie theater in Albion, Michigan using the name “4 Wall”; and then in March 2008, Karabes opened another movie theater in Cordell, Oklahoma under the name “4 Wall.”
According to the complaint, Karabes made representations to officials with the City of Cordell (with whom 4 Wall Iowa was negotiating and eventually entered into a lease agreement for the aforementioned theater property) that 4 Wall Iowa was affiliated with 4 Wall Nevada. Karabes supposedly held himself out to the City of Cordell as a Las Vegas resident and the President of 4 Wall Nevada and that he leased and operated theaters and sold specialty lighting systems and home theater equipment.
In March and then again in May of 2008, counsel for 4 Wall Nevada sent cease and desist letters to Karabes demanding that he stop using the “4 Wall” name and trademarks and holding himself out as being affiliated with 4 Wall Nevada. Karabes did not respond to either letter.
4 Wall Nevada claims that the use of the “4 Wall” name by 4 Wall Iowa is likely to cause confusion with 4 Wall Nevada’s “4 Wall” name and registered trademarks. In addition, 4 Wall Nevada claims that 4 Wall Iowa and Karabes have made false or misleading misrepresentations of fact which are likely to cause confusion or mistake or to deceive as to the association of 4 Wall Iowa with 4 Wall Nevada and as to the origin or approval of 4 Wall Iowa’s services by 4 Wall Nevada. Finally, 4 Wall Nevada claims that there is such unity of interest and ownership between 4 Wall Iowa and Karabes that 4 Wall Iowa is basically the “alter ego” of Karabes and that adherence to the fiction of 4 Wall Iowa as a separate entity would sanction a fraud or promote injustice. This last claim, however, probably has more to do with 4 Wall Nevada’s attempt to argue personal jurisdiction in Nevada over an Iowa corporation based on the personal jurisdiction of Karabes rather than an attempt to pierce the corporate veil to reach Karabes' personal assets for damages arising from acts attributed to 4 Wall Iowa.
4 Wall Nevada’s causes of action are for federal trademark infringement under 15 U.S.C. § 1114, federal unfair competition under 15 U.S.C. § 1125(a), and a claim for “alter ego.” 4 Wall Nevada seeks injunctive relief, damages (compensatory, treble, and punitive) and interest, costs and attorney’s fees.