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Ardis Health, LLC, Curb Your Cravings, LLC, and Usa Herbals, LLC v. Ashleigh Nankivell

October 19, 2011

ARDIS HEALTH, LLC, CURB YOUR CRAVINGS, LLC, AND USA HERBALS, LLC, PLAINTIFF,
v.
ASHLEIGH NANKIVELL, DEFENDANT.



The opinion of the court was delivered by: Naomi Reice Buchwald United States District Judge

MEMORANDUM AND ORDER

Plaintiffs Ardis Health, LLC ("Ardis"), Curb Your Cravings, LLC ("CYC"), and USA Herbals, LLC ("USA Herbals") have moved for a preliminary injunction against defendant Ashleigh Nankivell requiring her to (i) return plaintiffs' login information for various websites, (ii) return a laptop allegedly owned by plaintiffs and the content thereon, and (iii) refrain from using any and all of plaintiffs' proprietary content and trademarked or copyrighted works.*fn1 For the reasons stated below, plaintiffs' motion is granted in part and denied in part.

BACKGROUND*fn2

Plaintiffs are a group of closely affiliated online marketing companies that develop and market a variety of herbal and beauty products. They are wholly owned and collaboratively operated by their founder Jordan Finger.

In October 2008, defendant was hired as Video and Social Media Producer by CYC, the main online entity in Finger's enterprise. Defendant was at various points paid by both CYC and USA Herbals or USA Herbals alone and performed work for a number of entities in Finger's enterprise, including each of the plaintiffs. Defendant's duties included producing videos and maintaining websites, blogs, and social media pages in connection with the online marketing of plaintiffs' products. Her responsibilities with respect to plaintiffs' online presence included maintaining passwords and other login information for websites, email accounts, and social media accounts, as well as for third-party servers where plaintiffs stored content (collectively, "Access Information").

At the start of her employment, defendant signed an agreement governing the creation of work product (the "Work Product Agreement") with CYC. That agreement provides that all work created or developed by defendant "shall be the sole and exclusive property of CYC, in whatever stage of development or completion," and that it "will be prepared as 'work-for-hire' within the meaning of the Copyright Act of 1976." (Decl. of Jordan Finger ("Finger Decl."), Ex. E, at ¶ 10.) The agreement also provides that defendant must return all confidential information to CYC upon request, and that "actual or threatened breach of [the agreement] will cause CYC irreparable injury and damage." (Id. at ¶¶ 5, 8.)

Plaintiffs provided defendant with equipment to perform her job functions, though she also used her own computer and video equipment on occasion. Defendant's personal computer crashed in the spring of 2010, purportedly due to over-use from work-related tasks, and plaintiffs provided her with a used laptop as a replacement. Defendant stored much of the work she created on this equipment.

In or about June 2010, Finger and defendant began to develop a service known as "Whatsinurs," a social media website for cosmetic products. Defendant produced both alpha and beta versions of a website for the service, and Ardis applied for a trademark in the name on April 6, 2011 and registered a copyright for the website on July 27, 2011. On June 6, 2011, Finger sent defendant an agreement pertaining to the organization and governance of Whatsinurs (the "Founders Agreement"). The agreement lists defendant as one of three "founding shareholders" and provides for her to acquire 5% of the outstanding founding shares and operating shares. (Decl. of Gail I. Auster, Ex. 1, at ¶¶ B, C.) Finger and Karl Alomar, the third founder, were to be the only two members of the organization's board of directors. The Founders Agreement was never signed.

Defendant, meanwhile, had begun seeking alternative employment in the spring of 2011. Plaintiffs allege that defendant's work suffered as a result of her job search, while defendant asserts that Finger simply became enraged upon learning of defendant's ambulatory intentions. Regardless of the motivation, defendant was fired on June 23, 2011.

Upon defendant's termination, Finger requested the return of the laptop plaintiffs had provided to her, as well as the Access Information. Defendant, however, declined to return the computer and information. Plaintiffs are now unable to access a number of their online accounts and websites to update them as needed for their marketing purposes. Plaintiffs also allege that the laptop contains proprietary information that is otherwise unavailable to them, though defendant maintains that the laptop was synced with the desktop she used at work, so all of the work files on the laptop are within plaintiffs' control.

Additionally, at some point prior to her termination, defendant began displaying content from the Whatsinurs website, alongside other projects she was involved with, on her personal websites as part of her design portfolio. Defendant uses these websites as a means of self-promotion to find future work. Internet searches for the term "Whatsinurs" will return these websites alongside the official Whatsinurs website and certain of its social media pages.

DISCUSSION

I. Legal Standard

A party seeking a preliminary injunction must show (1) a likelihood of irreparable harm in the absence of the injunction; and (2) either a likelihood of success on the merits or sufficiently serious questions going to the merits to make them a fair ground for litigation, with a balance of hardships tipping decidedly in the movant's favor. Monserrate v. N.Y. State Senate, 599 F.3d 148, 154 (2d Cir. 2010). The injury underlying an injunction "must be one requiring a remedy of more than mere money damages. A monetary loss will not suffice unless the movant provides ...


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