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On May 5, 2009, The Cupcakery, LLC (?The Cupcakery?) filed a trademark infringement lawsuit against Sift: A Cupcakery (?Sift?) and owner Andrea Ballus in the U.S. District Court for the District of Nevada. See The Cupcakery, LLC v. Ballus et al, Case No. 09-cv-00807 (D. Nev.). A copy of the complaint (without exhibits) can be downloaded here.

The Cupcakery is a specialty bakery specializing in baking and selling gourmet cupcakes. The company has two locations in Las Vegas along with one in Texas.

According to the complaint, The Cupcakery initially began using the mark THE CUPCAKERY in December 2005 in connection with selling gourmet cupcakes through ?special order.? The Cupcakery opened its first retail store in January 2006.

The Cupcakery alleges that it hired Ballus for a part-time position in one of its Las Vegas stores on or about January 8, 2008, at which time Ballus executed a Confidentiality Agreement which included a non-disclosure provision and non-compete provision. Of course, the complaint later alleges that Ballus, upon quitting her job two months later, removed the signature page of this Agreement from her employee files, which suggests that The Cupcakery does not possess a fully executed copy of such agreement. [ed.? hmmmm.]

Sometime around February 8, 2008, Ballus purportedly filed Articles of Organization for SIFT: A CUPCAKERY, LLC with the California Secretary of State. On February 20, 2008, Ballus also registered the domain name www.siftcupcakery.com (which now hosts a webpage advertising Sift?s gourmet cupcakes).

The Cupcakery claims that Ballus used her employment to get access to its trade secrets (cupcake recipes, business development and marketing strategies, and customer lists) and upon quitting, opened up her own gourmet cupcake business in Cotati, California.

(Photo Credit: Elliot Kallen)

The Cupcakery also alleges that Ballus took the job with The Cupcakery under false pretenses in order to obtain these trade secrets so that she could develop her own gourmet cupcake business. The Cupcakery cites to a blog -- cupcakeaday.com ? where Ballus supposed discussed her plans to open a cupcake business as early as December 2007. (Click here for her post where she embarks on her ?massive mission to open my very own cupcake shop? and here to read in her own words the origin of the Sift name).

Most importantly, however, is that on August 18, 2008, Sift filed an application with the PTO to register the mark SIFT:A CUPCAKERY for ?Retail bakery shops; Retail stores featuring cupcakes? (claiming date of first use April 2008).

Who knows when The Cupcakery discovered Sift?s pending application or whether the timing is a strange coincidence, but on September 8, 2008, The Cupcakery filed four separate trademark applications of its own ? two for the word mark THE CUPCAKERY (for retail and online retail services and cakes and cupcakes) and two for the THE CUPCAKERY logo (for retail and online retail services and cakes and cupcakes). The ?cakes and cupcakes? applications claim a date of first use as December 2005 while date of first use for the ?retail and online retail services? is January 2006.

Of course, with Sift?s earlier filing date, Sift?s application was passed to publication first. When Sift?s application was published for opposition, The Cupcakery filed a timely opposition. See The Cupcakery, LLC v. Sift: A Cupcakery LLC, Opposition No. 91188833 (T.T.A.B. Filed February 12, 2009).

In the instant complaint, The Cupcakery squarely attacks Sift?s application on the basis of fraud, in particular, the declaration section of Sift?s application stating that ?no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, or to cause mistake, or to deceive.? The Cupcakery maintains that Sift (through Ballus) was aware of The Cupcakery?s senior use of THE CUPCAKERY when it made this declaration.

The Cupcakery?s causes of action are (1) Trademark Infringement under 15 U.S.C. § 1125(a) [Note: The Complaint actually cites 1125(c), but this is likely a mistake since no mention of trademark dilution is made and any claims to fame would be laughable]; (2) Unfair Competition under 15 U.S.C. § 1125(a); (3) Common Law Trademark Infringement; (4) Deceptive Trade Practices under Nevada law (N.R.S. § 598.0903, et seq.); (5) Breach of Contract; (6) Fraud; (7) Misappropriation of Trade Secrets under Nevada law (N.R.S. § 600A.030 et seq.); and (8) Intentional Interference with Prospective Economic Advantage

Vegas?Esq. Comments:
By moving the case out of the TTAB and into the federal courts (and adding in additional causes of actions like fraud, trade secret misappropriation and breach of contract), The Cupcakery is able to intensify the pressure against Sift to abandon its application, and thereby allowing The Cupcakery's applications to proceed to registration.

At first, the word ?cupcakery? seems somewhat suggestive ? a unique play on the words cupcake and bakery. However, with the explosive growth of these specialty ?cupcake? stores, several other ?cupcakeries? have opened up in different parts of the country. Just a quick internet search revealed the following third parties using the word ?cupcakery? to identify their cupcake store:

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