United States District Court, E.D. New York
Milbank Tweed Hadley & McCloy, LLP Attorneys for the
Plaintiff Christopher J. Gaspar, Esq., Mark C. Scarsi, Esq.,
Ashlee Lin, Esq., Kristin L. Yohannan, Esq., Ryan N.
Hagglund, Esq., Nathaniel T. Browand, Esq., of Counsel.
& Rees LLP Attorneys for the Defendants Steelite
International U.S.A., Inc., Steven Lefkowitz, and Anthony
DeLosReyes Howard Shipley, Esq. John G. Ebken, Esq., Thomas
L. Allen, Esq., Paul Eastgate, Esq., Peter G. Siachos, Esq.,
& Singer Attorneys for the Defendants Tablewerks, Inc.,
and Richard Erwin David M. Rabinowitz, Esq., Shari Ann
Alexander, Esq., Of Counsel.
MEMORANDUM OF DECISION AND ORDER
D. SPATT UNITED STATES DISTRICT JUDGE.
action centers on whether certain dishes obtained trade dress
protections under the Lanham Act or New York State law, and
whether two parties ever entered into an exclusive
distribution contract for those dishes.
Plaintiff Oneida Group, Inc. (the “Plaintiff” or
“Oneida”) brought this action against the
Defendants Steelite International U.S.A. Inc.
(“Steelite”), Tablewerks Inc.
(“Tablewerks”), Richard Erwin
(“Erwin”), Steven Lefkowitz
(“Lefkowitz”), and Anthony DeLosReyes
(“DeLosReyes”) (collectively, the
“Defendants”). Oneida seeks damages and
injunctive relief, alleging trade dress infringement under
the Lanham Act, 15 U.S.C. § 1125(a) and New York common
law; unfair competition under New York common law; trade
secret misappropriation in violation of the Defend Trade
Secrets Act (“DTSA”), 18 U.S.C. § 1836; New
York state common law pertaining to misappropriation of trade
secrets; Ohio state laws pertaining to misappropriation of
trade secrets, Ohio Rev. Code § 1333.61 et
seq.; breach of contract; and tortious interference with
before the Court are four motions: a motion to dismiss the
Plaintiff's unfair competition and misappropriation of
trade secrets claims pursuant to Federal Rule of Civil
Procedure (“Fed. R. Civ. P.” or
“Rule”) 12(b)(6) by Steelite, Lefkowitz, and
DeLosReyes (the “Steelite Defendants”); a motion
to dismiss the Plaintiff's tortious interference with
business relations claims pursuant to Rule 12(b)(6) by
Tablewerks and Erwin (the “Tablewerks
Defendants”); a motion to intervene as a plaintiff by
Steelite Distribution, LLC (“Steelite
Distribution”) pursuant to Rule 24; and a motion by the
Plaintiff to amend the complaint pursuant to Rule 15 to add
Steelite Distribution as a defendant, and to add several
following reasons, the Steelite Defendants' motion to
dismiss is denied; the Tablewerks Defendants' motion to
dismiss is granted; Steelite Distribution's motion to
intervene is granted; and Oneida's motion to amend the
complaint is granted in part and denied in part.
The Relevant Facts
following facts are drawn from the Plaintiff's proposed
amended complaint ((ECF No. 100-2) the “PAC”).
See, e.g., MB v. Islip Sch. Dist., No. 14-cv-4670,
2015 WL 3756875, at *4 (E.D.N.Y. June 16, 2015) (stating that
when a party files a motion to amend while a motion to
dismiss is pending, the Court “has a variety of ways in
which it may deal with the pending motion to dismiss, from
denying the motion to dismiss as moot to considering the
merits of the motion in light of the amended
complaint.” (quoting Schwartzco Enters. LLC v. TMH
Mgmt., LLC, No. 14 -cv -1082, 2014 WL 6390299, at *1
(E.D.N.Y. Nov. 17, 2014) (internal quotation marks omitted)).
all of the Plaintiff's claims are challenged by the
Defendants, the Court will not go through a detailed
recitation of all of the allegations or facts contained in
the complaint. Instead, the Court will review the relevant
designs and sells dinnerware. For more than twenty years,
Oneida sourced many of its premier dinnerware products from
Royal Porcelain Public Co., Ltd. (“Royal
Porcelain”), a manufacturer located in Thailand. Oneida
purchased the Royal Porcelain products through Tablewerks,
which is purportedly the exclusive North American distributor
of Royal Porcelain. Oneida alleges that it had the exclusive
right to sell Royal Porcelain products in North America; and
that Royal Porcelain and Tablewerks agreed not to supply any
competitors with Royal Porcelain designs sold by Oneida.
December 12, 2016, Steelite apparently acquired substantially
all of the assets and rights of Tablewerks. On December 13,
2016, John Miles (“Miles”), the Chief Executive
Officer (“CEO”) and President of Steelite, sent a
letter to Oneida advising it of this acquisition. In the
letter, Steelite advised Oneida that Steelite would
self-distribute all products produced by Royal Porcelain.
Steelite stated that it had been advised that there was no
contractual agreement between Oneida and either Tablewerks or
Royal Porcelain. Steelite offered to make several
accommodations to Oneida: fulfilling all of Oneida's
existing purchase orders for Royal Porcelain products;
allowing Oneida to sell its current inventory of Royal
Porcelain products; and respecting Oneida's intellectual
property-namely, Oneida's registered product names.
alleges that Steelite refused to respect Oneida's
intellectual property, and that the letter was incorrect in
stating that there was no contractual relationship between
Oneida and Tablewerks or Royal Porcelain.
and Tablewerks are now selling dinnerware designs that were
previously sold under Oneida's Sant' Andrea line, and
Oneida claims that it has trade dress protections in those
designs. Steelite and Tablewerks have told Oneida's
customers that Oneida will not be able to provide the
Sant' Andrea dinnerware, and that such products will only
be available through Steelite. Furthermore, Steelite and
Tablewerks have represented to customers that Steelite has
acquired the designs and the distribution rights of Royal
Porcelain products. Oneida further alleges that, upon
information and belief, the Defendants have used Oneida's
trademarks in their promotional and sales media.
January 2017, representatives from Oneida and Steelite
engaged in mediation. As a result of the mediation, the
parties entered into a standstill agreement. However,
forty-eight hours after the mediation, Steelite purportedly
displayed Royal Porcelain products at a trade show that had
been exclusively sold by Oneida.
Alleged Trade Secrets and Intellectual Property
complaint further alleges that Oneida has developed valuable
proprietary and confidential information that constitute
trade secrets. The purported trade secrets concern
“valuable marketing, sales and strategy information . .
. .” (PAC ¶ 39). These include but are not limited
(1) Oneida's “where to play and how to win”
business strategy that includes information about customer
segmentation and product category particularized by
sub-category and sub-channels, (2) Oneida's go-to market
strategy for interacting with customers based on proprietary
developed customer segmentation and end-user analysis, (3)
Oneida's product margins, costs, rebate programs, other
trade spend activities, and proposed changes in those rebate
programs and trade spend activities, (4) Oneida's costs,
margins, and expected pricing of customer specific designs,
and (5) Oneida's customer sales forecasting and
customer-specific account strategy.
protect these purported trade secrets, Oneida requires
employees and consultants to sign non-disclosure agreements;
maintains a handbook that prohibits unauthorized disclosure
of confidential business information; and has a records
retention policy in place that requires securing and properly
disposing of all documents which contain trade secrets.
alleges that Lefkowitz and DeLosReyes, who both left Oneida
to work for Steelite, violated those agreements by divulging
Oneida's trade secrets to Steelite.
Lefkowitz met with an Oneida employee to return all Oneida
property on January 4, 2017, Lefkowitz refused to give the
employee access to his computer. Lefkowitz would only provide
copies of certain files to the employee. During the meeting
with the Oneida employee, Lefkowitz was able to find Oneida
materials on his computer despite his claims that he had
deleted all Oneida materials. The complaint does not state
what files Lefkowitz had on his computer that would be
considered trade secrets.
DeLosReyes, Oneida alleges that “on information and
belief, on January 3, 2017, he connected an external memory
drive to his Oneida laptop computer and copied files from his
Oneida laptop computer to the external memory drive.”
(PAC ¶ 68). The complaint does not state what files
DeLosReyes had on his laptop that would be considered trade
claims that because Steelite has been able to offer
Oneida's claimed designs to Oneida's own customers,
Lefkowitz and DeLosReyes must have disclosed some trade
secrets. The amended complaint also states that a Steelite
employee possessed a confidential Oneida video, and Oneida
confidential information. While it states that the video and
the information were contained in an email, the amended
complaint does not identify what the information was, or what
was on the video.
complaint further alleges, based on “information and
belief, ” that “each of the Defendants knowingly
acquired, disclosed, and/or used Oneida trade secrets and
confidential information to injure Oneida[, ] . . . [and]
threatens to misappropriate Oneida's trade secrets and
confidential information . . . .” (PAC ¶¶
amended complaint also alleges that the Defendants are using
Oneida's registered trademarks to promote and sell the
further states that Steelite has advertised that
“Belisa was the first pattern in the market to feature
an ergonomic set of ridges on the underside to facilitate
easy handling, making its design unrivaled in the hospitality
industry.” (PAC ¶ 236). Oneida avers that this is
false and misleads consumers because Oneida's Botticelli
dinnerware, which is now being sold by Steelite under the
name Belisa, was the first pattern to feature that design.
Oneida alleges that Steelite Distribution's claimed
patents and copyrights are ineligible for intellectual
property protection. Specifically, Oneida states that Patent
D481, 261 (the “'261 Patent”), which is a
division of Patent D463, 955 (the “'955
Patent”), describes features that lack the novelty,
ornamentality, and nonobviousness required for patentability.
the copyrights, Oneida states that the Defendants'
copyright application reference no. #1-4108448151 was denied
by the Copyright Office on April 5, 2017, several days before
this Court conducted a hearing to determine whether to grant
Oneida's motion for a preliminary injunction. During that
hearing, the Defendants introduced evidence that the
copyright application was pending, and relied on the
copyright application in support of their opposition to
Oneida's motion for a preliminary injunction. The
Defendants never informed Oneida or the Court during or after
the hearing that their copyright application had been denied.
does not allege that the same misrepresentation occurred in
regards to copyright application reference number
#1-4734329381, but nevertheless claims that the subject
matter of the application is not copyrightable material.
The Relevant Procedural History
February 20, 2017, Oneida filed its initial complaint. Oneida
sought injunctive and declaratory relief, along with damages.
As stated above, Oneida brought claims for trade dress
infringement under the Lanham Act and New York common law;
unfair competition under New York common law;
misappropriation of trade secrets in violation of the DTSA,
New York common law and the Ohio Rev. Code § 1333.61
et seq.; breach of contract; and tortious
interference with business relations.
February 22, 2017, the Court signed an ex parte
order directing the Defendants to show cause why Oneida's
motion for a temporary restraining order, preliminary
injunction, and expedited discovery should not be granted.
The Court referred Oneida's motion to Magistrate Judge A.
February 28, 2017, Judge Tomlinson issued a report and
recommendation (the “R&R”) recommending that
the Court issue a temporary restraining order pending
resolution of Oneida's motion for a preliminary
injunction. Judge Tomlinson followed up her initial R&R
with a full written opinion on March 14, 2017. Following that
ruling, the Court held a five day hearing from April 10, 2017
through April 14, 2017 to resolve Oneida's motion for a
10, 2017, the Court issued a memorandum of decision and order
denying Oneida's motion for a preliminary injunction, and
granting Oneida's motion for expedited discovery.
March 31, 2017, while the Plaintiff's motion for a
preliminary injunction was being entertained by the Court,
two sets of Defendants filed two separate motions to dismiss
several counts contained in the initial complaint pursuant to
Rule 12(b)(6). The motion to dismiss filed by the Steelite
Defendants seeks to dismiss the Plaintiff's
misappropriation of trade secrets and unfair competition
claims against them. The other motion to dismiss, filed by
the Tablewerks Defendants, seeks a dismissal of the
Plaintiff's tortious interference with business relations
claims against them.
14, 2017, Steelite Distribution filed a motion to intervene
as a plaintiff pursuant to Rule 24. In its proposed
complaint, Steelite Distribution brings claims for patent
infringement; copyright infringement; trade dress
infringement in violation of the Lanham Act; false
designation of origin in violation of the Lanham Act; common
law trade dress infringement; unfair competition, commercial
disparagement; interference with contractual relations;
breach of contract; and declaratory judgment. Oneida does not
oppose the motion. (ECF No. 94 (“[Oneida] (i) does not
object to Steelite Distribution, LLC's intervention . . .
but (ii) does not waive any right to challenge the proposed
Complaint . . . [, ] including to challenge both the
sufficiency of the claims and any purported Rule 11 basis for
August 7, 2017, Oneida filed a motion to amend its complaint
pursuant to Rule 15 to add Steelite Distribution as a
defendant; to add certain factual allegations; and to add
claims for breach of implied contract; promissory estoppel;
false endorsement and false designation of origin under 15
U.S.C. § 1125(a)(1)(A); false advertising; and for
declaratory judgments regarding alleged invalidity of patents
and copyright ineligibility. Only Steelite Distribution
opposes Oneida's motion to amend. Oneida's proposed
amended complaint includes causes of action against Steelite
Distribution for unfair competition; tortious interference
with business relations; false endorsement and false
designation of origin; false advertising; and declaratory