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Kaplan, Inc. v. Yun

United States District Court, S.D. New York

April 30, 2014

Kaplan, Inc. ET AL., Plaintiffs,
v.
Tracy Yun, ET AL., Defendants

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Kaplan, Inc., MG Prep, Inc., doing business as Manhattan Prep, Plaintiffs: Howard Jeffrey Shire, Kenyon & Kenyon LLP, New York, NY; Michelle Mancino Marsh, Kenyon & Kenyon, New York, NY; Mimi Kristin Rupp, Kenyon & Kenyon, Palo Alto, CA.

For Tracy Yun, Manhattan Enterprise Group L.L.C., doing business as Manhattan Elite Prep, Defendants: Arthur M. Peslak, LEAD ATTORNEY, Mandel & Peslak, LLC, Freehold, NJ; Kalpana Nagampalli, Feldman Law Group, New York, NY.

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OPINION AND ORDER

John G. Koeltl, United States District Judge.

The plaintiffs, Kaplan, Inc. and MG Prep, Inc., bring this action against defendants Tracy Yun and Manhattan Enterprise Group, LLC (" MEP" ), alleging that the defendants infringed and misappropriated the plaintiffs' trademarks, " Manhattan Prep" and " Manhattan GMAT" (collectively, the " Manhattan marks" ) by running a competing business under the name " Manhattan Elite Prep." The plaintiffs allege various causes of action under the Lanham Act and the Anticybersquatting Consumer Protection Act (ACPA), as well as several causes of actions under New York State law.

This Court has federal question jurisdiction under 28 U.S.C. § § 1331, 1338(a), and 1338(b) over the federal law claims and supplemental jurisdiction under 28 U.S.C. § 1367 over the state law claims. The defendants now move to dismiss the Amended Complaint pursuant to Rule 12(b)(6), or, in the alternative, to convert the motion to a summary judgment motion pursuant to Rules 12(d) and 56 of the Federal Rules of Civil Procedure. However, because the parties have not engaged in discovery and the plaintiffs have not had the opportunity to gather and present evidence and argument in opposition to a summary judgment motion, the Court declines to convert the motion into one for summary judgment. See Fargas v. Cincinnati Mach., LLC, 986 F.Supp.2d 420, No. 13 Civ. 4443, 2013 WL 6508863, at *1 (S.D.N.Y. Dec. 12, 2013).

I.

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiffs' favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007); Arista Records LLC v. Lime Grp. LLC, 532 F.Supp.2d 556, 566 (S.D.N.Y. 2007). The Court's function on a motion to dismiss 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 should not dismiss the complaint if the plaintiff has stated " enough facts to state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While the Court should construe the factual allegations in the light most favorable to the plaintiff, " the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id.

When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). In particular, the Court may take judicial notice of official records of the United States Patent and Trademark Office (PTO). Telebrands Corp. v. Del Labs., Inc., 719 F.Supp.2d 283, 287 n.3 (S.D.N.Y. 2010).

II.

The Court accepts the allegations in the Amended Complaint as true for purposes

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of this motion. The plaintiffs and the defendants run competing preparation courses for various standardized tests including the Graduate Management Admission Test (" GMAT" ), Graduate Record Examinations (" GRE" ), and the Law School Admission Test (" LSAT" ). (See Am. Compl. ¶ ¶ 1, 5.) The plaintiffs have previously offered courses under the brand " Manhattan GMAT." (Am. Compl. ¶ 3.) Allegedly in July 2011, the plaintiffs adopted a new umbrella brand, " Manhattan Prep," because they offered preparation courses for exams other than GMAT; the plaintiffs continued to offer GMAT courses under the brand " Manhattan GMAT." (Am. Compl. ¶ ¶ 3-4.)

Around December 2011, defendant Yun launched a business offering GMAT, GRE, and LSAT preparation courses and registered the domain name " manhattaneliteprep.com" ; the defendants first used the mark " Manhattan Elite Prep" in commerce in February 2012. (Am. Compl. ¶ ¶ 5, 88, 111.) Consumers were allegedly confused between the two brands. (See generally Am. Compl. ¶ ¶ 41-58.) The plaintiffs specifically allege circumstances in which potential students mistook " Manhattan Elite Prep" courses for " Manhattan Prep" courses while purchasing the courses on internet shopping websites such as Groupon or Gilt City. (E.g. Am. Compl. ¶ ¶ 44, 48, 52.)

The plaintiffs applied for registration of the trademark " Manhattan Prep" with the PTO on May 4, 2012 in an " intent-to-use" application under § 1(b) of the Lanham Act, 15 U.S.C. § 1051(b). (Butera Decl. Ex. A (" Application" ) at 5.) The PTO initially denied registration of the " Manhattan Prep" mark in September 2012 because the mark was " primarily geographically descriptive of the origin of [the plaintiffs'] services." (Butera Decl. Ex. B at 2.) On March 14, 2013, the PTO further found that the mark had not acquired secondary meaning. (Butera Decl. Ex. C at 2.) However, ...


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