OCEAN CITY — While the legal battle over the use of the word “Shorebilly” between the owner of a Boardwalk brew pub and a resort-based retailer has on the surface been resolved with a name change for the bar last winter, the case in federal court moved on this week with the first two days of trial.

Last July, Teal Bay Alliances, a resort-based retailer that markets and distributes various items of clothing and other merchandize prominently featuring the term “Shorebilly” filed suit in U.S. District Court against Shorebilly Brewing Company, alleging it was infringing on its registered trademark. Southbound One, Inc. and brewing company owner Danny Robinson initially challenged the suit, alleging, among other things, the term “Shorebilly” was generic and not subject to trademark protection.

Last fall, Southbound One acquiesced somewhat and decided to drop the name Shorebilly Brewing Company for the Boardwalk establishment and after a public naming contest reopened at the location as the Backshore Brewing Company. However, that did not put an end to the suit as Teal Bay Alliances continued to push for an award of any profits the old Shorebilly Brewing Company earned while allegedly operating under its registered trademark.

The trial opened this week in U.S. District Court in Baltimore with the first two days of testimony on Tuesday and Wednesday. While the Shorebilly Brewing Company is now operating as the Backshore Brewing Company in an attempt to avoid any confusion and distance itself from the retail marketer, the plaintiff continues to push for the profits Southbound One earned while allegedly infringing on the trademark granted to Teal Bay Alliances as far back as 2008.

The defendant, Southbound One, despite changing the name of the Boardwalk brew pub, continues to push back, alleging the term “Shorebilly” is generic and used in a variety of ways on the Eastern Shore and thus not protected by the trademark registration issued by the U.S. Patent and Trademark Office. Just two weeks before the trial began this week, Southbound One, through its attorneys, filed an amended answer to the original complaint, alleging Teal Bay Alliances fraudulently gained the trademark protection from the USPTO in the first place.
“Discovery proceeded during the spring of 2014, yielding facts that support the cancelation of the plaintiff’s registration,” the amended answer reads. “Specifically, the plaintiff failed to submit a valid statement of use to the USPTO and cannot now do so because the 36-month time period in which to correct the statement of use has expired. Additionally, the defendant learned facts that support a separate basis for cancelation, that the plaintiff committed fraud on the trademark office.”

Specifically, Southbound One is now alleging the original specimen submitted to the USPTO requesting a trademark of the term “Shorebilly” was a drawing, and not a photograph as the patent and trademark office requested. Southbound One is also alleging Teal Bay Alliances misrepresented to the USPTO what items bearing the Shorebilly name were meant for commerce.

As a result, Southbound One this week asked the federal judge to consider its amended answer, pointing out the alleged fraud used by Teal Bay Alliances to obtain the trademark for “Shorebilly” in the first place. As the trial opened on Tuesday, the judge had not issued a ruling on the defendant’s amended answer.

“It would be not be futile to allow the defendant to amend its answer,” the amended answer reads. “The defendant intends to present evidence at trial that the plaintiff represented to the USPTO that the specimen T-shirt was being used in commerce, when it fact is knew the specimen submitted to the USPTO was not being used in commerce.”
For their part, Teal Bay Alliances claim Southbound One’s 11^th hour assertion the trademark was obtained through fraud was not valid and questioned the late timing for the amended answer filed just before the trial was set to begin.

“The defendant seeks leave to amend its answer to assert a claim of fraud upon the PTO over eight months after it filed its original answer, two months after the close of discovery, after the submission of the parties’ proposed pretrial order and just two weeks before the scheduled start of trial,” the answer reads. “The defendant’s answer, which was devoid of any fraud allegations, could not have possibly pout the plaintiff on notice that the defendant was alleging that the plaintiff’s trademark registration was invalid on the grounds of fraud. Allowing the defendant to assert a claim of fraud at this late stage of the case would be unduly prejudicial to the plaintiff.”

The original complaint urged the court to issue a preliminary and permanent injunction enjoining Southbound One and Shorebilly Brewing Co. from using the trademarked name for the restaurant and brew pub and for any of its merchandise. Even after Southbound One changed the name to Backshore Brew Pub, the plaintiff is still seeking an award of any profits gained while allegedly infringing on the trademark.