Cape, PLC et al v. Cape Law PC et al

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
JOEL E. CAPE, PLC d/b/a CAPE LAW FIRM, PLC,
and JOEL E. CAPE, Individually
V. 	CASE NO. 5:24-CV-5104
CAPE LAW PC
CONSENT JUDGMENT AND PERMANENT INJUNCTION
PLAINTIFFS
DEFENDANT
On May 14, 2024, Plaintiffs Joel E. Cape, PLC d/b/a Cape Law Firm, PLC, and
Joel E. 	Cape, 	individually, 	(collectively, "Original Cape Law") brought a Complaint,
seeking injunctive and monetary relief against Defendants Cape Law PC ("CLP"), Josh
Morgenstern, and Akiko Endo for alleged false association, unfair competition, and false
advertising under the Lanham Act; unfair competition and infringement under Arkansas
law; violation of the right of publicity under the Frank Broyles Publicity Rights Protection
Act, Ark. Code Ann. § 4-75-1101 et seq.; and negligence under Arkansas law.
On August 28, 2024, Original Cape Law filed a First Amended Complaint ("FAG").
And on September 12, 2024, the Court entered an order conditionally dismissing Mr.
Morgenstern 	without 	prejudice. 	On 	November 	12, 	2024, 	the 	Court 	entered 	a
Memorandum Opinion and Order (Doc. 56) denying dismissal as to Counts Ill (false
advertising) and IV (violation of publicity rights) but dismissing Count V (negligence).
The Court's order also conditionally dismissed Ms. Endo without prejudice pursuant to
the parties' joint stipulation.
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Original 	Cape 	Law 	and 	CLP 	(collectively, 	"Parties") 	have 	entered 	into 	a
Settlement Agreement, made effective as of the Effective Date defined therein, and
expressly agree and consent to the entry of th is Consent Judgment and Permanent
Injunction in resolution of the dispute among them and in performance of the Settlement
Agreement. 	An executed copy of the Settlement Agreement is attached as Schedule
"A" to this Consent Judgment and Permanent Injunction. 	This Consent Judgment and
Permanent Injunction is being entered to effectuate the settlement of the matters
alleged in the FAC.
THE PARTIES
1. 	Plaintiff, Joel E. Cape, (sometimes referred to herein as "Mr. Cape") is a
citizen and resident of Washington County, Arkansas.
2. 	Plaintiff, Joel 	E. 	Cape, PLC d/b/a 	Cape 	Law 	Firm, PLC 	(sometimes
referred to herein as "Cape Law Firm") is a professional limited liability company
organized under Arkansas law with its principal office at 217 E. Dickson Street, Suite
106, Fayetteville, AR 72701.
3. 	Mr. Cape and Cape Law Fi rm are referred to herein as "Original Cape
Law."
4. 	Defendant, 	Cape Law PC ("CLP") is an Arizona 	corporation, with 	its
principal office at 7077 E. Marilyn Road, Suite 130, Scottsdale, AZ 85254.
STIPULATED FINDINGS
5. 	This Court has subject matter jurisdiction over this action pursuant to 28
U.S.C. §§ 1331 , 1338, and 1367.
6. 	This Court has personal jurisdiction over Defendant CLP for this action.
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7. 	Venue is proper over CLP in this District pursuant to 28 U.S.C. § 1391 for
this action.
8. 	Plaintiff Cape Law Firm is the owner of the trade names "Joel E. Cape,
PLC," "Law Firm of Joel E. Cape, 	PLC," and "Cape Law Firm, 	PLC" (collectively,
"JECape Trade Names") which it has used in interstate commerce for many years prior
to this lawsuit.
9. 	Plaintiff Cape 	Law 	Firm 	is 	also the 	owner of valid 	and 	enforceable
common-law service mark rights to the marks CAPE and CAPE LAW FIRM in certain
jurisdictions including Arkansas, which it has used in interstate commerce for many
years prior to this lawsuit and which are the subject of U.S. Trademark Application Serial
Nos. 97796594 and 97796518, and is the owner of the registered Arkansas state
service mark CAPE LAW FIRM, Registration No. 811487757 (the "JECape Marks").
10. 	The 	Parties stipulate that certain 	online databases (including 	Google
Reviews) display at least 38 negative or incorrect reviews of Plaintiff, which arose from
reviewers and consumers who mistakenly believed they were reviewing CLP's services,
thereby harming Plaintiff's professional legal reputation. The Parties stipulate, and the
Court hereby agrees, such negative or incorrect reviews: (1) incorrectly, inappropriately,
and falsely referenced Original Cape Law's services when they intended to reference
CLP's services; 	(2) made negative or incorrect comments regarding Original Cape
Law's 	services 	that 	were 	intended 	to 	be 	made 	regarding 	CLP's 	services; 	(3)
inappropriately 	and 	incorrectly 	tied 	the 	reviews 	to 	Plaintiff's 	services; 	(4) 	violate
Google's 	standards 	and 	policies 	against 	being 	materially 	misleading, 	having
misinformation, 	and 	having 	unsubstantiated 	allegations 	of 	unethical 	behavior 	or
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wrongdoing on the part of Plaintiff; (5) contain false or misleading accounts of the
description or quality of a service offered by Plaintiff; (6) harmful content that depicts
false , inaccurate, or deceptive information about Plaintiff's business; and is (7) offensive
or off-topic to Plaintiff's services.
11. 	This 	Consent Judgment and 	Permanent Injunction 	constitutes a final
judgment on the merits of Plaintiffs' claims for purposes of res judicata, collateral
estoppel, issue preclusion , and claim preclusion.
PERMANENT INJUNCTION
12. 	In this Permanent Injunction, the word "CAPE," the JECape Marks, and
the JECape Trade Names shall be referred to collectively as the "Enjoined Marks."
13. 	Except 	as 	provided 	in 	paragraphs 	14 	through 	16 	herein, 	CLP, 	its
predecessors, 	successors, affiliates, subsidiaries, 	assigns, and 	all 	other 	persons,
companies, and entities in active concert or participation with CLP (including Lexense
Technologies 	Ltd.) 	(collectively 	"Enjoined 	Parties") 	are 	permanently 	enjoined 	and
restrained, directly or indirectly:
a. 	from 	all 	use 	of the 	Enjoined 	Marks 	in 	connection 	with 	services,
products, 	and 	business, 	including 	advertising, 	marketing, 	selling,
and/or offering to sell any services, products, or business;
b. 	from all use of the Enjoined Marks in advertising, marketing materials,
websites, 	online 	platforms, 	domain 	names, 	metatags, 	keywords,
advertising keywords, letterhead, business cards, online uses, online
marketing, social media, social media handles, social media uses, and
the like;
c. 	from incorporating the Enjoined Marks in any trade name or trademark;
d. 	from all use of any mark that is confusingly similar to, or a colorable
imitation or dilutive of the Enjoined Marks;
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e. 	from making or displaying any statement, representation, or depiction
that is likely to lead the public to believe that (i) CLP is in any manner
approved, endorsed, licensed, sponsored, authorized, or franchised by
or associated, affiliated, or otherwise connected with Original Cape
Law or (ii) Original Cape Law is in any manner approved, endorsed,
licensed, 	sponsored, 	authorized, 	or 	franchised 	by 	or 	associated,
affiliated, or otherwise connected with CLP;
f. 	from registering or applying to register any trademark, service mark,
domain name, trade name, or other source identifier or symbol of origin
consisting of or incorporating the Enjoined Marks, or any other marks
whose use would infringe or would likely to be confused with the
Enjoined Marks, or any goods or services of Original Cape Law, or
Original Cape Law as their source; and
g. 	from aiding, assisting, or abetting any other individual or entity in doing
any act prohibited by paragraph 13(a) through paragraph 13(f).
h. 	For purposes of paragraph 13 of this permanent injunction, the term
"use" shall mean the bona fide use in the ordinary course of trade.
i. 	CLP, LEX, and those acting in active concert with CLP and LEX, as
defined above, are not prohibited from using the word "cape" in its
generic sense that does not denote the origin of a good or service or
dilute the Enjoined Marks (i.e., 	use of the word cape to denote a
geographic region, an article of clothing, and an animal pelt).
14. 	In the Settlement Agreement, Original Cape Law granted to CLP, those
acting on CLP's behalf, and in active concert or participation with CLP (including LEX) a
limited, non-exclusive, transitional use license to use the Enjoined Marks until June 22,
2025 to phase-out its use of the Enjoined Marks ("Mark Phase-Out License"), and a
limited, 	non-exclusive, 	transitional 	use 	license 	to 	use 	the 	domain 	name
"capejustice.com" until December 31, 2025 to phase-out its use of the domain name
"capejustice.com" ("Domain Phase-Out License"), and agreed that certain internal use
by CLP, those acting on CLP's behalf, and in active concert or participation with CLP
(including LEX) is permitted ("Internal Use"). The Mark Phase-Out License authorizes
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CLP 	to 	use 	the 	Enjoined 	Marks 	to 	engage 	in 	the 	activities 	in 	paragraph 	13 	in
accordance with the license terms while that license is in effect, and the Domain Phase-
Out License authorizes CLP to use the domain name "capejustice.com" to engage in
the activities in paragraph 13 in accordance with the license terms while that license is
in effect. Therefore, actions by CLP, those acting on CLP's behalf, and in active concert
or participation with CLP (including LEX) that fall within the Mark Phase-Out License,
Domain Phase-Out License are not enjoined while those licenses are in effect, and
actions that fall within the Internal Use provisions of the Settlement Agreement are not
enjoined . A copy of the Settlement Agreement containing the terms of the limited , non-
exclusive, 	transitional 	use 	licenses 	is attached 	as "Schedule A" 	to this 	Consent
Judgment and Permanent Injunction. The Parties stipulate and agree that that Schedule
A is confidential and shall be submitted under seal. Schedule A shall remain confidential
unless CLP fails to perform any provision therein . The Parties shall submit a redacted
version of Schedule A for filing in the Court's public record.
15. 	The Parties recognize that CLP customers and potential customers that
existed prior to June 22, 2025 ("Old CLP Customers") may be confused and/or may
make comments after June 22, 2025. The Parties agree that OLD CLP Customers are
not within CLP's control and are therefore not Enjoined Parties and are not bound by
this Injunction. This Injunction does not include any restriction or provision that can be
enforced against CLP because of acts by Old CLP Customers.
16. 	The Parties agree that the disassociation of Mr. Cape's Linkedln profile
with CLP's Linkedln profile shall be governed by the applicable terms of the Settlement
Agreement and not this Consent Judgment and Permanent Injunction.
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17. 	Within twenty (20) days of entry of this Consent Judgment and Permanent
Injunction, CLP shall instruct and cause its licensor, Lexense Technologies Ltd., to file
with the U.S. Patent and Trademark Office an express abandonment/withdrawal with
prejudice of U.S. Trademark Application Serial No. 97492395 pending for the mark
CAPE and U.S. Trademark Application Serial No. 97492400 pending for the mark CAPE
LAW, and to take any other actions reasonably necessary to accomplish abandonment
of those applications.
18. 	No later than December 31, 2025, CLP shall transfer ownership of the
domain name "capejustice.com" to Cape Law Firm or its authorized agent.
19. 	Without prejudice to the enjoined activities giving rise to claims of false
affiliation, false connection, false association, false designation of origin, and otherwise
actionable under 15 U.S.C. § 1125(a)(1 )(A) all of which shall be enjoined in accordance
with paragraph 13 above, CLP's alleged false statements and misrepresentations in
CLP advertising giving rise to claims under 15 U.S.C. § 1125(a)(1)(B) that were made
prior to the Effective Date of the Settlement Agreement that continue to be made after
the Effective Date are not subject to paragraph 13 above.
MONETARY JUDGMENT
20. 	A monetary judgment is entered against CLP and in favor of Original Cape
Law as specified in "Schedule B" of this Consent Judgment and Permanent Injunction.
The Parties stipulate and agree that that Schedule B is confidential and shall be
submitted under seal. Schedule B shall remain confidential unless CLP fails to perform
any provision therein. The Parties shall submit a redacted version of Schedule B for
filing in the Court's public record.
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21. 	Upon CLP's full and complete performance of Schedule "B", Original Cape
Law will provide CLP with a satisfaction of the monetary judgment provisions of this
Consent Judgment and Permanent Injunction, and all other provisions will remain valid,
continuing, enforceable, and in full effect. CLP's failure to complete performance of
Schedule B shall revoke the confidential designation, allow the seal upon Schedule B to
be removed , and entitle Original Cape Law to proceed with enforcement and execution
of the monetary judgement, together with all other remedies which Original Cape Law
may request or otherwise be entitled.
22. 	This Consent Judgment and Permanent Injunction shall be binding upon
and shall inure to the benefit of the Parties and their respective heirs, successors,
assigns, and acquiring companies.
23. 	If CLP is found by the Court to be in contempt of, or otherwise to have
violated this 	Consent Judgment and 	Permanent Injunction, the Parties agree that
Original Cape Law shall be entitled to all available relief which it may otherwise request
from the Court, including sanctions for contempt, damages, injunctive relief, attorneys'
fees, costs, and any other relief deemed proper in the event of such violation.
24. 	The Court retains jurisdiction of this matter for the purposes of enforcing
the terms of this Consent Judgment and Permanent Injunction and the terms of the
Settlement Agreement.
25. 	The Permanent Injunction shall remain in full force and effect unless and
until modified by order of this Court.
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SCHEDULE A
[filed under seal]
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SCHEDULE B
A. 	Original Cape Law and CLP stipulate and agree to the entry of monetary
judgment against CLP and in favor of Original Cape Law in the amount of
B. 	Original Cape Law and CLP stipulate and agree that CLP shall satisfy the
judgment in this Schedule B by delivering payments to Original Cape Law as follows: I
which
shall be due and payable on the first business day of each month following the month in
which the First Payment is made until the monetary judgment is paid in full.
C. 	Upon CLP's full and complete performance of Schedule B, Original Cape
Law will provide CLP with a satisfaction of the monetary judgment provisions of this
Consent Judgment and Permanent Injunction, and all other provisions will remain valid,
continuing, enforceable, and in full effect.
D. 	In the event that CLP fails to satisfy any portion of the monetary judgment,
including failing to make any payment on the date which it becomes due, the Parties
agree and stipulate that the confidential designation of Schedule B shall be immediately
and irrevocably revoked, the seal upon Schedule B shall be removed, and Plaintiff shall
be entitled to immediately proceed with enforcement and execution any unpaid portion of
the monetary judgement, and to obtain any remedy to which Original Cape Law may be
entitled in accordance with the terms of this Consent Judgment and Permanent Injunction,
the Settlement Agreement, or otherwise available under law.
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CONS ENTED TO :
Capel. ~awP ft 	.. 	<J) 	(/. 	)
By : 	~ti~Akiko Endo , President and CEO
Date: 	Jv1nv1C1V\/ 	2 ~/ 	ZOl.b
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