United States District Court, S.D. New York
December 10, 2004.
ZDENEK MAREK d/b/a ZINC, Plaintiff pro se,
OLD NAVY (APPAREL) INC. and OLD NAVY INC., Defendants. ZDENEK MAREK d/b/a ZINC, Plaintiff pro se, v. OLD NAVY (APPAREL) INC. and OLD NAVY INC., Defendants.
The opinion of the court was delivered by: JOHN SPRIZZO, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff pro se Zdenek Marek ("plaintiff") brings the
above-captioned actions against defendants Old Navy (Apparel)
Inc. and Old Navy Inc. ("defendants") for tortious interference
with prospective business relationship, injurious falsehood, and
libel per se. Defendants move pursuant to Rule 12(b)(6) of
the Federal Rules of Civil Procedure to dismiss both actions due
to plaintiff's failure to state a claim. For the reasons that
follow, defendants' motions to dismiss are granted.
Plaintiff is in the business of manufacturing and selling
clothes in New York City. See Amended Complaint for Libel Per
Se, dated May 22, 2004 (the "2004 Complaint" or "2004
Compl.") ¶ 7. Some time in 1998, plaintiff developed the
trademark OLD ARMY, which he began using in manufacturing and advertising. See Amended
Complaint, dated September 27, 2003 (the "2003 Complaint" or
"2003 Compl.") ¶ 3. Plaintiff registered his mark OLD ARMY with
the New York State Department of State, and also registered OLD
ARMY as a business with the City of New York. See 2003 Compl. ¶
Plaintiff received his first order for OLD ARMY merchandise on
September 17, 1998. See 2003 Compl. ¶ 6; 2004 Compl. ¶ 10. In
addition to pursuing customers interested in purchasing OLD ARMY
merchandise, plaintiff also concentrated his efforts on licensing
and even selling the OLD ARMY mark. See 2003 Compl. ¶¶ 9-12. To
this end, plaintiff placed several advertisements in trade
newspapers and, as a result, received numerous inquiries
concerning the licensing of the OLD ARMY mark. See 2003 Compl.
¶ 11. In the 2003 Complaint plaintiff identifies by name three
parties that were seriously considering licensing the OLD ARMY
mark. Id. ¶ 12.*fn1 Furthermore, plaintiff alleges that
two of the interested prospective licensees orally agreed to
enter into contracts for the licensing of the OLD ARMY mark.
Id. ¶ 13. The prospective licensees informed plaintiff,
however, that they would not enter into formal licensing
agreements with him unless the OLD ARMY mark was federally
registered. Id. ¶ 16.
On March 8, 1999, plaintiff applied to register the OLD ARMY
mark with the United States Patent and Trademark Office (the
"PTO") for various categories of clothing, footwear, and
headgear. See 2003 Compl. ¶ 17, Exhibit ("Exh.") D; 2004
Compl. ¶ 12, Exh. C. In accordance with its registration
procedures, the PTO published the OLD ARMY mark for opposition in
the PTO's Official Gazette on January 4, 2000. See 2003 Compl.,
Exh. E. It was at this point that defendants in these actions
first mounted their challenge to the registration of the OLD ARMY
Defendant Old Navy (Apparel) Inc. is the owner of the federally
registered trademark OLD NAVY, which it licenses to defendant Old
Navy Inc. for use in connection with retail stores, clothing,
accessories, and other products. See 2003 Compl., Exh. B ¶¶
1-2; 2004 Compl., Exh. B ¶¶ 1-2. On May 1, 2000, after applying
for and obtaining three successive extensions of time, defendants
filed a Notice of Opposition with the PTO's Trademark Trial and
Appeal Board (the "Board"), opposing registration of the OLD
ARMY mark on the grounds that there was a likelihood of confusion
between the goods and services provided by defendants under the
OLD NAVY mark and the goods provided by plaintiff under the OLD
ARMY mark. See 2003 Compl., Exh. G. Defendants, however, failed
to timely submit a brief in support of their opposition. See
2003 Compl. ¶ 31. Apparently, both the attorney and the legal
assistant handling this matter before the Board left defendants'
employment in early 2001, and the information concerning the
deadlines set by the Board for the filing of defendants'
opposition brief was inadvertently lost. See 2003 Compl., Exh.
I, at 1-2. The Board eventually concluded that defendants'
failure to submit a timely brief could not be excused.
Defendants' opposition was dismissed by the Board with prejudice,
see 2003 Compl., Exh. J; 2004 Compl., Exh. D, and plaintiff's
OLD ARMY mark was registered on January 28, 2003. See 2003
Compl., Exh. K; 2004 Compl., Exh. E.
On March 26, 2003, defendants (proceeding swiftly this time)
filed a Petition for Cancellation of the OLD ARMY mark pursuant
to 15 U.S.C. § 1064(3) (the "Cancellation Petition") on the
grounds that the mark's registration was fraudulently obtained.
See 2003 Compl., Exh. B ¶¶ 6-7; 2004 Compl., Exh. B ¶¶ 6-7. Specifically,
defendants alleged in the Cancellation Petition that the
statement made by plaintiff in the registration application he
submitted to the PTO that the OLD ARMY mark was first used in
commerce on September 17, 1998 was false because, according to
defendants "there ha[d] been little or no use of the OLD ARMY
mark." 2003 Compl., Exh. B ¶ 6; 2004 Compl., Exh. B ¶ 6.
Defendants further contended in their Cancellation Petition that
while plaintiff "purportedly began preparations to manufacture a
T-shirt, . . . there is no evidence that an OLD ARMY T-shirt was
ever actually manufactured or sold in commerce." Id. Finally,
defendants also alleged that plaintiff made no commercial use of
the OLD ARMY mark "in connection with the other apparel and
footwear set forth in the registration." Id. To the Court's
knowledge, the cancellation proceeding commenced by defendants
before the PTO (the "Cancellation Proceeding") is still ongoing
as of this date.
On June 2, 2003, plaintiff filed a complaint against defendants
in New York State Supreme Court (the "2003 Action") asserting
claims for tortious interference with prospective economic
advantage, libel per se, and punitive damages. Defendants
removed the 2003 Action to this Court. Ruling on defendants'
motion to dismiss the 2003 Action, the Court dismissed
plaintiff's original complaint and granted plaintiff leave to
replead. See Court's Order dated September 29, 2003. On October
17, 2003 plaintiff filed the 2003 Complaint, asserting claims for
"intentional interference with prospective contractual
relationships, prospective pre-contractual relationships and
prospective business relationship in the alternative" and
injurious falsehood. See 2003 Compl. ¶¶ 2-59, ¶¶ 60-68. While
defendants' motion to dismiss the 2003 Complaint was pending
before the Court, plaintiff commenced a second action against
defendants in this Court, this time asserting a single claim of
libel per se based on the statements made by defendants in
the Cancellation Proceeding. See 2004 Compl. ¶¶ 17-25. DISCUSSION
In considering a motion to dismiss brought pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure, the Court must
accept as true all factual allegations set forth in the complaint
and draw all reasonable inferences in favor of the plaintiff.
See Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n. 1
(2002); Blue Tree Hotels Inv. (Canada), Ltd. v. Starwood Hotels
& Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004)
(citing Gryl v. Shire Pharm. Group PLC, 298 F.3d 136, 140 (2d
Cir. 2002)). The Court's function is "not to weigh the evidence
that might be presented at a trial but merely to determine
whether the complaint itself is legally sufficient." Goldman v.
Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court may not
dismiss a complaint for failure to state a claim "unless it
appears beyond doubt that the plaintiff can prove no set of facts
in support of his claim which would entitle him to relief."
Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In deciding a Rule
12(b)(6) motion the Court "may consider `any written instrument
attached to [the complaint] as an exhibit or any statements or
documents incorporated in it by reference.'" Yak v. Bank
Brussels Lambert, 252 F.3d 127, 130 (2d Cir. 2001) (alteration
in original) (quoting Cortec Indus., Inc. v. Sum Holding L.P.,
949 F.2d 42, 47 (2d Cir. 1991)); see also Fed.R.Civ.P.
10(c) ("A copy of any written instrument which is an exhibit to a
pleading is a part thereof for all purposes."). Furthermore, the
Court will "read the pleadings of a pro se plaintiff
liberally and interpret them `to raise the strongest arguments
that they suggest,'" McPherson v. Coombe, 174 F.3d 276, 280 (2d
Cir. 1999) (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d
Cir. 1994)), while holding them "to less stringent standards than
formal pleadings drafted by lawyers." Haines v. Kerner,
404 U.S. 519, 520 (1972) (per curiam).
I. Plaintiff's Claim for Tortious Interference with
Prospective Business Relationship.
Plaintiff alleges that defendants tortiously interfered with
his efforts to license or sell the OLD ARMY mark, at first by
fraudulently delaying the opposition proceeding before the PTO, and later by initiating the Cancellation Proceeding. Under New
York law, to state a claim for tortious interference with
prospective business relations plaintiff must allege the
following four elements: (1) a business relationship between
plaintiff and a third party; (2) that defendants, having
knowledge of such relationship, intentionally interfered with
it; (3) that defendants acted with the sole purpose of harming
the plaintiff or, failing that level of malice, used dishonest,
unfair, or improper means; and (4) injury to the business
relationship. See Goldhirsh Group, Inc. v. Alpert,
107 F.3d 105, 108-09 (2d Cir. 1997) (citing Purgess v. Sharrock,
33 F.3d 134, 141 (2d Cir. 1994)); see also Nadel v. Play-By-Play
Toys & Novelties, Inc., 208 F.3d 368, 382 (2d Cir. 2000).
Furthermore, plaintiff must allege that defendants directly
interfered with the business relationship by directing "some
activities towards the third party and convinc[ing] the third
party not to enter into a business relationship with the
plaintiff." Fonar Corp. v. Magnetic Resonance Plus, Inc.,
957 F. Supp. 477, 482 (S.D.N.Y. 1997) (citing G.K.A. Beverage Corp.
v. Honickman, 55 F.3d 762 (2d Cir. 1995)); see also Piccoli
A/S v. Calvin Klein Jeanswear Co., 19 F. Supp. 2d 157, 167
(S.D.N.Y. 1998). It is due to this utter failure to allege any
knowledge on the part of defendants of any business relationships
with which they allegedly interfered that plaintiff's claim must
As stated above, the 2003 Complaint contains allegations that
three identified parties seriously contemplated the licensing of
the OLD ARMY mark, and that two of them orally agreed to enter
into licensing arrangements with plaintiff.*fn2 These
allegations, however, simply cannot fill the glaring void in the
2003 Complaint with respect to any knowledge defendants may have
had regarding plaintiff's conversations or dealings with any
third parties. Simply put, plaintiff fails to identify even one prospective licensee or
interested purchaser of the OLD ARMY mark of whose existence or
interest in the mark defendants may have been aware. Nor does
plaintiff even vaguely suggest that defendants, having knowledge
of any interested third parties, took any actions with the intent
of interfering with plaintiff's business relationships with such
interested third parties.*fn3
While failing to identify any instances in which defendants may
have become aware of plaintiff's relationships with any third
parties interested in the OLD ARMY mark, plaintiff does allege
that one of the attorneys he approached in connection with
potential licensing of the OLD ARMY mark declined to represent
him and gave him a "definite implied impression that the law
office was somehow involved with [defendants or their parent
corporation, GAP.]" 2003 Compl. ¶ 15. Based on his definite
implied impression, plaintiff alleges that the attorney, friendly
to defendants, informed them of plaintiff's plans to license or
sell the OLD ARMY mark. Id. ¶ 19. While taking, as the Court
must, plaintiff's allegations that defendants learned of his
licensing plans from the "friendly" attorney as true, the Court
is nevertheless hard pressed to find any allegations in the 2003
Complaint that defendants, by virtue of said attorney's
questionable conduct, learned the identities of any third parties
contemplating entering into transactions with plaintiff. In fact,
plaintiff does not even allege that he revealed the identities of
any such third parties to the unscrupulous attorney. Given the complete lack of any allegations that defendants had
knowledge of any specific third parties interested in purchasing
or licensing the OLD ARMY mark from plaintiff or, having obtained
such knowledge, directed any activities towards such third
parties or acted to interfere in any manner with their
prospective business relationships with plaintiff, the Court has
no choice but to dismiss plaintiff's claim for tortious
interference with prospective business relationship.
II. Plaintiff's Claims for Injurious Falsehood and Libel Per
Plaintiff's claims for injurious falsehood*fn4 and libel
per se*fn5 must also be dismissed. Both claims are
grounded in the statements defendants made in the Cancellation
Petition, wherein they sought to cancel the registration of the
OLD ARMY mark on the grounds that certain statements made by
plaintiff in the registration application with respect to the
mark's use in commerce were false, thus rendering the
registration fraudulent. See 2003 Compl. ¶¶ 42, 52, 55; 2004
Compl. ¶¶ 17-22. It is a well established principle of New York law that
statements made in judicial and quasi-judicial proceedings are
privileged and may not be actionable so long as they are
pertinent to the controversy. See, e.g., Bleecker v. Drury,
149 F.2d 770, 771 (2d Cir. 1945) ("Fearless administration of
justice requires, among other things, that an attorney have the
privilege of representing his client's interests, without the
constant menace of claims for libel."); Anonymous v. Trenkman,
48 F.2d 571, 573-74 (2d Cir. 1931) (stating that "counsel are
privileged with respect to any statements, oral or written, made
in judicial proceedings and pertinent thereto"); Andrews v.
Gardiner, 224 N.Y. 440, 445, 121 N.E. 341, 342 (1918) (Cardozo,
J.) (same). "The test of `pertinency' is extremely broad and
embraces `anything that may possibly or plausibly be relevant or
pertinent with the barest rationality, divorced from any palpable
or pragmatic degree of probability.'" Aequitron Med., Inc. v.
Dyro, 999 F. Supp. 294, 298 (E.D.N.Y. 1998) (quoting O'Brien v.
Alexander, 898 F. Supp. 162, 171 (S.D.N.Y. 1995)); see also
Singh v. HSBC Bank USA, 200 F. Supp. 2d 338, 340 (S.D.N.Y.
"The determination of the question of privilege is a question
of law, and if it be determined that the language used was not
impertinent, the privilege is absolute." People ex rel. Bensky
v. Warden of City Prison, 258 N.Y. 55, 60, 179 N.E. 257, 259
(1932). It is beyond doubt that the statements made by defendants
in the Cancellation Petition were pertinent to the Cancellation
Proceeding. Defendants petitioned the Board to cancel plaintiff's
OLD ARMY mark pursuant to 15 U.S.C. § 1064(3), which provides
that a petition to cancel the registration of a mark may be filed
when the mark's "registration was obtained fraudulently."
15 U.S.C. § 1064(3). Having commenced a proceeding to cancel
plaintiff's mark based on fraudulent registration, defendants
proceeded to specify in their Cancellation Petition precisely
which of the statements made by plaintiff in his application to
register the OLD ARMY mark were false. Indeed, the Court finds it hard to imagine statements that may
have been more pertinent to the cancellation proceeding brought
on the basis of fraud than those detailing the allegedly
fraudulent aspects of plaintiff's registration application.
Having fully satisfied itself that the statements made by
defendants were pertinent to the Cancellation Proceeding, the
only issue left for the Court to decide is whether the
Cancellation Proceeding was quasi-judicial in nature. An
administrative proceeding is considered quasi-judicial when it is
"adversarial, result[s] in a determination based upon the
application of appropriate provisions in the law to the facts and
[is] susceptible to judicial review." Park Knoll Assocs. v.
Schmidt, 89 A.D.2d 164, 171, 454 N.Y.S.2d 901, 906 (2d Dep't
1982), rev'd on other grounds 59 N.Y.2d 205, 451 N.E.2d 182,
464 N.Y.S.2d 424 (N.Y. 1983). New York courts have extended the
privilege with respect to the statements made in judicial and
quasi-judicial proceedings to a wide array of proceedings held
before administrative agencies. See, e.g., Bleeker v.
Drury, 149 F.2d 770 (2d Cir. 1945) (privileged statements made
before the New York State Industrial Board); Wiener v.
Weintraub, 22 N.Y.2d 330, 239 N.E.2d 540, 292 N.Y.S.2d 667
(1968) (privileged statements made before the grievance committee
of the New York City Bar Association); Harms v.
Riordan-Bellizi, 223 A.D.2d 624, 636 N.Y.S.2d 839 (2d Dep't
1996) (privileged statements made before the New York City
Department of Transportation); Allan & Allan Arts Ltd. v.
Rosenblum, 201 A.D.2d 136, 615 N.Y.S.2d 410 (2d Dep't 1994)
(privileged statements made before a Zoning Board of Appeals);
Hezfeld & Stern, Inc. v. Beck, 175 A.D.2d 689, 572 N.Y.S.2d 683
(1st Dep't 1991) (privileged statements made before the
Department of Enforcement of the New York Stock Exchange);
Julien J. Studley, Inc. v. Lefrak, 50 A.D.2d 162,
376 N.Y.S.2d 200 (2d Dep't 1975) (privileged statements made in an affidavit
submitted to the New York State Department of State in connection with a real
estate license revocation proceeding).
A cancellation proceeding before the Board involves the filing
of a petition and an answer. See 37 C.F.R. §§ 2.111, 2.114. The
parties are entitled to conduct discovery, submit trial testimony
and evidence, file motions, and may request oral argument to be
heard by a panel consisting of at least three members of the
Board. See 37 C.F.R. §§ 2.120, 2.121-125; 2.128-129. The
proceedings are governed by the Federal Rules of Civil Procedure,
see 37 C.F.R. § 2.116, and the Federal Rules of Evidence, see
37 C.F.R. § 2.122. The parties may appeal the Board's decision to
the United States Court of Appeals for the Federal Circuit, or
bring a civil action in a United States District Court. See
15 U.S.C. § 1071.
Although, to the Court's knowledge, no New York court has had
the occasion to consider the question of whether a cancellation
proceeding before the Board is quasi-judicial in nature, at least
two other courts have held so. In Ball Corp. v. Xidex Corp.,
967 F.2d 1440 (10th Cir. 1992), the Tenth Circuit Court of
Appeals found that a proceeding before the PTO is quasi-judicial
in nature, holding that "private lawyers are entitled to absolute
immunity from charges of defamation based on statements in the
quasi-judicial setting of PTO proceedings." Ball,
967 F.2d at 1445. More recently, an Ohio Federal District Court held that the
Board was a quasi-judicial tribunal and extended the protection
of privilege to the statements contained in a petition for
cancellation filed by the defendant in that case. See Baldwin
v. Adidas America, Inc., No. C2-02-265, 2002 WL 2012562, at *3
(S.D. Ohio July 29, 2002).
Having carefully considered the decisions of the courts
described above, as well as the nature and the various features
of a cancellation proceeding before the Board, the Court is
satisfied that such proceeding is quasi-judicial it is
adversarial in nature, it involves the application of appropriate legal provisions to the facts, and it
is subject to judicial review. Because the Court has determined
that defendants' statements made in the Cancellation Petition
were pertinent to the quasi-judicial proceeding in which they
were made, the Court must hold that such statements were entitled
to the protection of privilege. Accordingly, plaintiff's claims
for injurious falsehood and libel per se arising from
defendants' statements must be dismissed.
Based on the foregoing, defendants' motions to dismiss the 2003
Complaint and the 2004 Complaint shall be and hereby are granted.
The Clerk of the Court is hereby directed to close the
It is SO ORDERED.