would be to lessen competition or create a monopoly. Plaintiffs have failed to state a claim upon which relief can be granted under § 3 because they have not alleged that defendants sold their microfilm reels on the condition that their purchasers not deal in plaintiffs' goods.
d. Clayton Act § 7
Section 7 of the Clayton Act, 15 U.S.C. § 18, prohibits the acquisition of stock or assets of a corporation if the effect of such acquisition would be to lessen competition or tend to create a monopoly. Plaintiffs have failed to state a claim upon which relief can be granted under § 7 because they have not alleged that defendants acquired the stock of another corporation.
3. The Rico Claims
Plaintiffs' eleventh and twelfth claims for relief, compl. PP 55-80, allege violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. Specifically, plaintiffs contend that defendants violated §§ 1962(b) and (d) by, essentially, their manufacture and sale of microfilm reels that infringe plaintiffs' patents and falsely designate origin in violation of the Lanham Act.
Because, as discussed below, these allegations do not state a claim upon which relief can be granted, they are dismissed.
a. 18 U.S.C. 1962(b)
RICO § 1962(b) proscribes the acquisition or maintenance of any interest in an enterprise through a pattern of racketeering activity.
"Enterprise" is defined as "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4). "Racketeering activity" is defined, in part, as "any act which is indictable under . . . [18 U.S.C. §§ ] . . . 1341 (relating to mail fraud) . . . 1343 (relating to wire fraud) . . . 2314 and 2315 (relating to interstate transportation and receipt of stolen property) . . ." 18 U.S.C. § 1961(1)(B). "Pattern of racketeering activity" is defined as "at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years . . . after the commission of a prior act of racketeering activity." 18 U.S.C. § 1961(5).
Plaintiffs allege an enterprise comprised of each and/or all individual and corporate defendants. Compl. P 56. They then allege that defendants perpetrated a scheme to make or "sell counterfeit" goods; we assume "counterfeit" to mean goods that infringe plaintiffs' patents and falsely designate origin. The first alleged predicate act is mail fraud due to defendants' use of the mails to transport the alleged counterfeit goods, purchase orders, and payment checks in violation of 18 U.S.C. § 1341. Compl. PP 60, 61. The second alleged predicate act is transportation and receipt of stolen property due to defendants' shipping and receiving the alleged counterfeit goods in violation of 18 U.S.C. § § 2314 and 2315. Compl. PP 60, 62.
We discuss both of these predicate acts in turn and find that plaintiffs have failed to state a claim for either.
1) Mail Fraud
Rule 9(b), Fed. R. Civ. P., provides in pertinent part that "in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." With respect to mail fraud, plaintiffs must allege with particularity the "contents of the communications, who was involved, where and when they took place, and . . . why they were fraudulent." Mills v. Polar Molecular Corp., 12 F.3d 1170, 1176 (2d Cir. 1993); Browning Ave. Realty Corp. v. Rosenshein, 142 F.R.D. 85, 89 (S.D.N.Y. 1992) (plaintiff must allege "specifics of each purported use of the mail and wires, including the time, place, speaker, and content of the alleged fraudulent misrepresentation, as well as the manner in which the misrepresentations were fraudulent.") (citations omitted). Moreover, when more than one defendant is charged with fraud, plaintiffs must specify each defendant's alleged participation in the fraud. Browning Ave. Realty Corp. v. Rosenshein, 774 F. Supp. 129, 138 (S.D.N.Y. 1991). Plaintiffs conclusorily allege the use of the mails as follows:
The manufacture and/or transport into the United States through the foreign-United States commerce and/or United States inter-state commerce in activities of making and mailing and being involve [sic] in or with the purchase orders, the purchasing and/or selling and/or shipping of and invoicing for illegal and/or counterfeit goods . . . inclusive of mail fraud . . .