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Rfp LLC v. Scvngr

May 12, 2011

RFP LLC,
PLAINTIFF,
v.
SCVNGR, INC., DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION & ORDER

APPEARANCES:

Plaintiff RFP LLC ("RFP") asserts claims in this action arising under the Lanham Act, 15 U.S.C. §§ 1051 et seq., and New York General Business Law §§ 349 & 360-L, as well as common law claims of trademark infringement, trademark dilution, unfair competition and cyperpiracy. Defendant SCVNGR, Inc. ("SCVNGR") has filed counterclaims against RFP and a third-party complaint against Barry Rosenbloom ("Rosenbloom"), the president of RFP. The counterclaims and third-party complaint have two claims in common -- tortious interference with a business relationship and deceptive acts and practices under New York General Business Law § 349 ("Section 349"). RFP and Rosenbloom (collectively, "Counter-Defendants") have moved to dismiss these two claims. For the following reasons, the motion is granted.

BACKGROUND

The following facts are undisputed unless otherwise noted. RFP was the sponsor or licensor of a scavenger hunt under the trademark RACE FOR THE ROCK ("the Mark") on or around Valentine's Day each year between 2003 and 2008. In these scavenger hunts, participants vied for a grand prize of an engagement ring. RFP did not use the Mark in connection with a scavenger hunt around Valentine's Day in 2009 or 2010. SCVNGR alleges that RFP did not intend to resume use of the Mark after March 2008 and that consumers do not associate the Mark with RFP. SCVNGR therefore claims that RFP has abandoned its rights to the Mark.

In the fall of 2010, RFP discovered that SCVNGR was promoting scavenger hunt contests under the name "Race for theRock" in which the goal was also to win an engagement ring. One of these contests took place on October 9, 2010 in Bloomington, Illinois (the "Bloomington Event") through a business relationship between SCVNGR and Bremer Jewelry ("Bremer"). On September 17, 2010, Rosenbloom spoke with the Chief Operating Officer of SCVNGR, Michael Hagan, and advised him that RFP owned the trademark rights to the Mark. On September 21, 2010, RFP, through counsel, sent a letter to SCVNGR, asserting its rights to the Mark. The letter described the nature of RFP's claim to the Mark -- federal registration -- and appended a copy of RFP's registration certificate. The letter alleged that SCVNGR's ongoing and planned uses of the Mark were not authorized by RFP and infringed on its trademark rights. The letter ended with a demand that SCVNGR cease and desist from all further infringing uses of the Mark.

On October 6, 2010, RFP, through counsel, sent a similar cease-and-desist letter with almost identical wording to Bremer. Bremer subsequently informed SCVNGR by letter that it had received the letter from RFP. In the letter, Bremer informed SCVNGR that it had taken steps to remove the Mark from its own website and from advertisements and promotions within its control. Bremer requested that SCVNGR assist it in removing all other uses of the Mark from promotion of the Bloomington Event within SCVNGR's control. SCVNGR did not take any steps to remove the Mark from promotional or marketing material maintained for the event, including the "bloomingtonraceforthe rock.com" website.

RFP filed the complaint in this action on October 27, 2010. SCVNGR filed its answer, counterclaims and a third-party complaint against Rosenbloom on November 19. Counter-Defendants' motion to dismiss SCVNGR's third and fourth counterclaims and the third-party complaint against Rosenbloom was filed on December 30. The motion to dismiss was fully submitted on February 10, 2011.

DISCUSSION

Counter-Defendants have moved to dismiss SCVNGR's counterclaims and third-party complaint claims that they tortiously interfered with SCVNGR's business relationship with Bremer and engaged in deceptive acts or practices.*fn1 On a motion to dismiss the court must "accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor." LaFaro v. New York Cardiothoracic Group, PLLC, 570 F.3d 471, 475 (2d Cir. 2009) (citation omitted). The court is "not bound to accept as true legal conclusions couched as factual allegations. Only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 475--76 (citing Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950--51 (2009)). A complaint must do more than offer "naked assertions devoid of further factual enhancement." Iqbal, 129 S.Ct. at 1949 (citation omitted).

I. Tortious Interference

The elements of tortious interference with a business relationship are "(1) the plaintiff had business relations with a third party; (2) the defendant interfered with those business relations; (3) the defendant acted for a wrongful purpose or used dishonest, unfair, or improper means; and (4) the defendant's acts injured the relationship." Catskill Dev., L.L.C. v. Park Place Entm't Corp., 547 F.3d 115, 132 (2d Cir. 2008) (citation omitted).*fn2 Counter-Defendants do not appear to dispute that SCVNGR and Bremer had a business relationship or that their actions caused at least some form of interference with this relationship. But SCVNGR has failed sufficiently to allege either wrongful purpose or means or injury. Therefore, the tortious interference counterclaim and third-party complaint claim are dismissed.

A. Wrongful Purpose or Means

A claim of tortious interference with prospective economic advantage requires a showing of "interference with business relations existing between the [claimant] and a third party, either with the sole purpose of harming the [claimant] or by means that are dishonest, unfair or in any other way improper." PPX Enters., 818 F.2d at 269 (citation omitted). If there are "no allegations in the complaint capable of supporting a reasonable inference that any . . . defendant acted with the sole purpose of harming the plaintiff or used dishonest, unfair, or ...


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