Opinion
No. 062350/2013.
08-20-2014
IVY LEAGUE SCHOOL, INC., Cooper Camps, LLC d/b/a Ivy League Day Camp and Volar, Inc., d/b/a The Day Care Center at Ivy League, Plaintiffs, v. DANICK INDUSTRIES, INC., d/b/a/ Ivy League Early Learning Academy and Gabriel Colmenares, Defendants.
Marylou Paulucci and Associates, Smithtown, attorneys for plaintiffs. French & Casey, New York, attorneys for defendants.
Marylou Paulucci and Associates, Smithtown, attorneys for plaintiffs.
French & Casey, New York, attorneys for defendants.
Opinion
THOMAS F. WHELAN, J.
Upon the following papers numbered 1 to 15 read on this motion by the defendants to dismiss the complaint; Notice of Motion and supporting papers: 1–3; Notice of Cross Motion and supporting papers; Answering papers 4–5; 6–7; 8–9; Reply papers 10; Other 11–12 (defendants' memorandum in support); 13–14 (plaintiffs' memorandum in opposition); 15 (defendants' reply memorandum in support); (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that this motion (# 001) by the defendants for an order dismissing the complaint served in this action is considered under CPLR 321(a)(1),(3) and (7) and is granted to the extent that those portions of the First cause of action set forth in the complaint in which the plaintiffs seek relief pursuant to Section 32 of the Lanham Act (15 U.S.C. § 1114 ) and the Second and Eighth causes of action are dismissed; and it is further
ORDERED, that the court shall conduct a preliminary conference with respect to the remaining causes of action on Friday, October 3, 2014, at 10:00 a.m. in the courtroom of the undersigned located in the Annex Building of the Supreme Courthouse at One Court Street, Riverhead, New York 11901.
The plaintiffs respectively operate a private, grammar school housing grades one through eight, a summer day camp for youngsters and teens and a day care center for children and pre-school children at facilities located in Smithtown, New York. The school has used the name “Ivy League” since 1965 while its affiliate plaintiffs have done so since their later incorporations in 2000 and 2011, respectively. In April of 2011, defendant Danick Industries Inc., [hereinafter “Danick”] was incorporated and thereafter commenced operating a day care center in Deer Park, New York known as Tutor Time under a franchise from Tutor Time Learning Center. Effective as of August 27, 2012, the name of the defendants' business was changed to the Ivy League Early Learning Academy of Deer Park. Defendant Colmenares is the owner of defendant Danick and he owns and operates four other former Tutor Time franchises in Queens, Bronx, Manhattan and Staten Island. All of defendant Colmenares day care centers, which provide supervision and educational services to pre-school, pre-Kindergarten primary school age children, use the name “Ivy League Early Learning Academy” together with the name of the borough or town in which the school is located.
The plaintiff commenced this action in August of 2013 seeking the recovery of money damages from the defendants and injunctive relief. They claim that the defendants' use of the name Ivy League constitutes actionable acts of trade name infringement and unfair competition which has caused great harm to the plaintiffs' business, confusion to its customers and has infringed on rights that are protected by various state and federal statutes. The eight causes of action advanced in the complaint are as follows: 1) Infringement of plaintiff's Trade Name and Mark in violation of the Lanham Act § § 32 & 43 (15 USC § 1114 and § 1125, et. seq. ); 2) Infringement of the plaintiff's Protected Trade Name and Mark in violation of GBL § 360–k ; 3) Injury to the plaintiffs' Business Reputation and Dilution in violation of GBL § 360 –1 ; 4) Common Law Unfair Business Competition; 5) Use of the plaintiffs' name with intent to deceive in violation of GBL § 133 ; 6) Infringement of plaintiffs' name with intent to deceive in violation of BCL § 301 ; 7) Common Law Misappropriation and Misrepresentation; and 8) Violations of GBL § 349. In lieu of answering, the defendants move to dismiss the complaint on several grounds delineated in CPLR 3211(a), including legal insufficiency, documentary proof and standing. For the reasons stated below, the motion is granted to the extent stated.
Standing, like lack of capacity to sue, are affirmative defenses which challenge the right of the plaintiff to recover. However, a challenge based on a purported lack of capacity to sue requires inquiry into the status of claimant and its right to appear and bring its grievance before the court, whereas, a standing challenge requires an inquiry into whether the litigant has “an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request” (Wells Fargo Bank Minnesota, Natl. Ass'n v. Mastropaolo, 42 AD3d 239, 242, 837 N.Y.S.2d 247 [2d Dept 2007] [internal citations omitted] ). A party moving to dismiss on standing grounds must establish, in the first instance, that the claimant lacks standing to sue, after which the claimant bears the burden of establishing its standing (id ). A motion to dismiss a complaint pursuant to CPLR 3211(a)(1) is grounded upon a defense possessed by the moving party and it may be granted only if the documentary evidence submitted by the moving party utterly refutes the factual allegations of the complaint and conclusively establishes a defense to the claims as a matter of law (see Goshen v. Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858 [2012];Shuttle Contr. Corp. v. Peikarian, 108 AD3d 179, 968 N.Y.S.2d 179 [2d Dept 2013] ; Choudhary v. First Option Title Agency, 107 AD3d 657, 967 N.Y.S.2d 86 [2d Dept 2013] ; Bua v. Purcell & Ingrao, P.C., 99 AD3d 843, 952 N.Y.S.2d 592 [2d Dept 2012] ). To succeed on such a motion, the movant must establish that the documentary evidence that forms the basis of the motion resolves all factual issues as a matter of law and conclusively disposes of the plaintiff's claim (see AG Capital Funding Partners, L.P. v. State St. Bank and Trust Co., 5 NY3d 582, 590–591, 808 N.Y.S.2d 573 [2005];Choudhary v. First Option Title Agency, 107 AD3d 657, supra ; Bua v. Purcell & Ingrao, P.C. 99 AD3d 843, supra ; Fontanetta v. Doe, 73 AD3d 78, 898 N.Y.S.2d 569 [2d Dept 2010] ). To qualify as “documentary,” the evidence relied upon must be unambiguous and undeniable in a manner like judicial records and documents reflecting out-of-court transactions such as mortgages, deeds, and contracts. Documents compiled by the parties such as affidavits, notes, accounts, depositions, correspondence and the like generally do not constitute documentary evidence within the ambit of CPLR 3211(a)(1) (see Granada Condominium III Assn. v. Palomino, 78 AD3d 996, 913 N.Y.S.2d 668 [2d Dept 2010] ; Fontanetta v. Doe, 73 AD3d 78, supra )
“On a motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Agai v. Liberty Mut. Agency Corp., 118 AD3d 830, 2014 WL 2743253 [2d Dept 2014], quoting Breytman v. Olinville Realty, LLC, 54 AD3d 703, 703–704, 864 N.Y.S.2d 70 [2d Dept 2008] ; see Leon v. Martinez, 84 N.Y.2d 83, 87, 614 N.Y.S.2d 972 [1994] ). If the court can determine that the plaintiff is entitled to relief on any view of the facts alleged, its inquiry is complete and the complaint must be declared legally sufficient (see Symbol Tech. v. Deloitte & Touche, LLP, 69 AD3d 191, 888 N.Y.S.2d 538 [2d Dept 2009] ). Whether a plaintiff can ultimately establish its allegations is not part of the calculus (see EBC I, Inc. v. Goldman, Sachs & Co., 5 NY3d 11, 19, 799 N.Y.S.2d 170 [2005];Haberman v. Zoning Bd. of Appeals of City of Long Beach, 94 AD3d 997, 942 N.Y.S.2d 571 [2d Dept 2012] ).
Where evidentiary material is submitted by the moving party and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate (see Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 274–275, 401 N.Y.S.2d 182 [1977];Agai v. Liberty Mut. Agency Corp., 118 AD3d 830, supra ; Minovici v. Belkin BV, 109 AD3d 520, 971 N.Y.S.2d 103 [2d Dept 2013] ; Fishberger v. Voss, 51 AD3d 627, 628, 858 N.Y.S.2d 257 [2d Dept 2008] ). However, “on a motion made pursuant to CPLR 3211(a)(7), the burden never shifts to the nonmoving party to rebut a defense asserted by the moving party” (Weill v. East Sunset Park Realty, LLC, 101 AD3d 859, 955 N.Y.S.2d 402 [2d Dept 2012], quoting Sokol v. Leader, 74 AD3d at 1181, 904 N.Y.S.2d 153 [2d Dept.2010] ). A plaintiff may choose to submit affidavits and/or other evidentiary materials but is not obliged to do so on penalty of dismissal (see Rovello v. Orofino Realty, Co., 40 N.Y.2d 633, 389 N.Y.S.2d 814 [1976] ) and such submissions are considered for the limited purpose of remedying defects in the complaint (id., at 40 N.Y.2d 636; see Karimov v. Brown Harris Stevens Residential Mgt., LLC, 117 AD3d 910, 985 N.Y.S.2d 883 [2d Dept.2014] ; Way v. City of Beacon, 96 AD3d 829, 947 N.Y.S.2d 531 [2d Dept 2012] ; Quinones v. Schaap, 91 AD3d 739, 937 N.Y.S.2d 262 [2d Dept 2012] ). Upon such consideration, the facts alleged therein, like those set forth in the complaint, must also be assumed to be true (see Harris v. Barbara, 96 AD3d 904, 947 N.Y.S.2d 548 [2d Dept 2012] ; Kopelowitz & Co., Inc. v. Mann, 83 AD3d 793, 921N. Y.S.2d 108 [2d Dept 2012] ).
First considered are those portions of the defendants' motion wherein they seek dismissal of the First and Second Causes of action due to a lack of standing. Advanced in support of this ground for dismissal is the claim that the plaintiffs' failure to register “Ivy League” as trademark with the United State Trademark and Patent Office or as a trade name with the State of New York leaves them without standing to sue for trademark infringement under the federal Lanham Act § § 32 and 43 (15 USC § 1114, and § 1125 et. seq. ), and/or under GBL § 360–k.
Under Section 32 of the Lanham Act (15 USC § 1114 ), a plaintiff who asserts a trademark infringement claim must show that the defendant, (1) without consent, (2) used in commerce, (3) a reproduction, copy or colorable imitation of plaintiff's registered mark, as part of the sale or distribution of goods or services, and (4) that such a use is likely to cause confusion (see 15 USC § 1114 [1][a] ). Registration of a trademark allows the owner to sue an infringer under Section 32 and creates a presumption that the mark is valid (see 15 USC § 1057 ). The language of 15 USC § 1114(1) has been held to be clear in limiting standing only to the owner of the trademark, its “legal representatives, predecessors, successors, and assigns” (Federal Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd., 726 F3d 62 [2d Cir.2013] ; see Brooklyn Bottling of Milton, New York, Inc. v. Ecuabeverage Corp., 2008 WL 577288 [SDNY 2008] ; DeBeers LV Trademark Ltd. v. DeBeers Diamond Syndicate, Inc., 440 F.Supp2d 249 [SDNY 2006] ). Accordingly, the plaintiff must be the owner of a registered mark to bring an infringement claim under 15 USC § 1114 (see Federal Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd., 726 F3d 62,supra; Sik Gaek, Inc. v. Yogi's II, Inc., 2013 WL 2408606 [EDNY 2013] ; Basile, S.p.A. v. Basile, 899 F.2d 35, 37 [DC Cir.1990] ; [A mark's registration is a predicate to its protection under § 32[1][a] of the Lanham Act, although the underlying right depends not on registration but rather on use and the priority of such use ] ). Here, the plaintiffs make no claim that they are registered owners of the name or mark “Ivy League”. Those portions of the plaintiffs' First cause of action wherein they seek relief pursuant to § 32 of the Lanham Act (15 USC § 1114 ) are thus dismissed pursuant to CPLR 3211(a)(3) due to the plaintiffs' lack of standing to assert such claims.
In contrast, Lanham Act Section 43(a) (15 USC § 1125 ) “has defined a statutory civil wrong of false representation of goods in commerce and has given a broad class of suitors injured or likely to be injured by such wrong the right to relief in the federal courts” (Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 112 S.Ct. 2753 [1992] ). Broadly construed by the federal bench, Section 43(a) provides a statutory framework for legal and equitable relief for unfair competition claims resting on false descriptions or representations concerning the source of production and/or origin of a good or service by prohibiting any misrepresentation likely to cause confusion, mistake or deception about the origin, source or sponsorship of a product or service. Limited at first to claims of false advertising and common law claims of “palming-off” or “passing-off”, the statute now embraces various forms of unfair competition claims including the infringement of unregistered trademarks, trade names and trade dress not entitled to protection under Section 32 and other acts of unfair competition (id. [Stevens, J. and Thomas J., concurring opinions]; see also Wal–Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210, 120 S.Ct. 1339 [2000];ITC Limited v. Punchgini, Inc., 482 F3d 135, [2d Cir2007] ; Time, Inc. v. Peterson Publ. Co., LLC, 173 F3d 113, 117 [2d Cir1999] ; Murphy Door Bed Co. v. Interior Sleep Sys., 874 F.2d 95, 102 [2d Cir1989] ; Sexy Hair Concepts, LLC v. Sexy Hair Inc., 2013 WL 5460629 [EDNY 2013] ; Tiny Tot Sports Inc. v. Sporty Baby, LLC., 2005 WL 2044944 [SDNY 2005] ).
Standing to sue under Section 43(a) of the Lanham Act is conferred upon “any person” who has a reasonable belief he or she is damaged or is “likely to be damaged” by the acts of unfair competition (Merck Eprova Ag v. Gnosis S.p.A., 901 F.Supp2d 436 [SDNY 2012] ; ITC Limited v. Punchgini, Inc., 482 F3d 135, supra ; Chambers v. Time Warner, Inc., 282 F3d 147 [2d Cir2002] ; Berni v. Int'l. Gourmet Rest. of Am., Inc., 838 F.2d 642, 647–48 [2d Cir1988] ; PPX Enter., Inc. v. Audiofidelity, Inc., 746 F.2d 120 [2d Cir1984] ). The fact that another entity engaged in a business wholly unrelated to the business of the plaintiff has registered a mark does not render the plaintiffs without standing to assert their statutory unfair competition claims under Section 43(a) of the Lanham Act because the presumptive right to use the mark extends only to the goods and services noted in the registration certificate (see Savin Corp. v. Savin Group, 391 F3d 439 [2d Cir2004] ; Natural Footwear Ltd. v. Hart, Schaffner & Marx, 760 F.2d 1383 [3d Cir1985] ; Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44 [2d Cir1978] ).
Here, the plaintiffs are charged with a lack of standing both because of the absence of a registered mark and because the Council of Ivy League Presidents registered the name “Ivy League” in 1994 for certain printed matter and publications and another in 2013 for certain collegiate wearing apparel. Under the above cited case authorities, the plaintiffs are not precluded from asserting their pleaded claims for relief under Section 43(a) of the Lanham Act due to the absence of a registered trademark or the existence of the two trademarks held by the Council of Ivy League Presidents. Denied are those portions of the defendants' motion wherein they seek dismissal, on standing grounds, of those portions of the plaintiffs' First cause of action wherein they seek damages and/or other relief available under Section 43(a) of the Lanham Act at 15 USC § 1125, et. seq.
Also denied are those portions of the defendants' motion wherein they seek dismissal of the plaintiffs' First Cause of Action for relief pursuant to Lanham Act Section 43(a) claims on the grounds of legal insufficiency and/or a defense premised upon documentary evidence. These demands are premised upon the defendants' contentions that the plaintiffs have no such claim due to the absence of a secondary meaning as to the term “Ivy League” as employed in the names of the plaintiffs. However, the defendants' contentions in this regard lack merit for the reasons stated.
As indicated above, Section 43(a) of the Lanham Act is broadly construed by federal courts and it embraces numerous causes of action (see Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, supra ). “The act was intended to make actionable the deceptive and misleading use of marks,” and “to protect persons engaged in ... commerce against unfair competition, 15 USC § 1127 ” (Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 123 S.Ct. 2041 [2003] ). The several variants of the generic unfair competition claim that are actionable under Section 43(a), include, unfair competition, common law trade mark infringement, false advertising, false designation and false description (see Gameologist Group, LLC v. Scientific Games Intern., Inc., 838 F.Supp2d 141 [SDNY 2011], aff'd 508 Fed.Appx. 31 [2d Cir2013] ).
To prevail on a claim for trademark infringement, pursuant to 15 USC § 1125(a), a plaintiff must establish that “(1) it has a valid mark that is entitled to protection under the Lanham Act; and that (2) the defendant used the mark, (3) in commerce, (4) in connection with the sale ... or advertising of goods or services, (5) without the plaintiff's consent” (1–800 Contacts, Inc. v. WhenU.Com, 414 F3d 400 [2d Cir.2005] ). In addition, the plaintiff must establish that the defendant's use of its own mark will likely cause confusion with plaintiff's mark (see Aceto Agric. Chems. Corp. v. Bayer Aktiengesellschaft, 531 F. App'x 103, 103–04 [2d Cir2013] ). “[T]he Lanham Act protects marks from two kinds of confusion. It protects against direct confusion, where there is a likelihood that consumers will believe that the trademark owner sponsors or endorses the use of the challenged mark.' It also protects against so-called reverse confusion,' where the consumer will believe that the junior user is the source of the senior user's goods” ' (Kelly–Brown v. Winfrey, 717 F3d 295, 304 [2d Cir.2013] ).
A claim of trademark infringement under Section 43(a), is not dependent on the plaintiff's possession of a registered trademark as Section 43(a), unlike Section 32, protects unregistered common law trademarks, trade names and trade dress (see Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, supra ). However, the mark or name must be registrable to be entitled to protection (see Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F3d 373 [2d Cir2005] ; Courtenay Communications Corp. v. Hall, 334 F3d 210, 214 [2d Cir2003] ).
“[T]he general principles qualifying a mark for registration under Section 2 of the Lanham Act governing trademark registration are for the most part applicable in determining whether an unregistered mark is entitled to protection under § 43(a)” (Gruner + Jahr USA Publ. v. Meredith Corp., 991 F.2d 1072, 1075 [2d Cir1993] ; see also Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F3d 373 supra; Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 [2d Cir1976] ). Protection, or the level thereof, is first dependent upon the strength of the mark which is measured by its distinctiveness. Distinctiveness may be demonstrated in either of two ways. First, the mark may be “inherently distinctive” if its intrinsic nature serves to identify its particular source. Second, even if not inherently distinctive, the mark may be distinctive in the market place by virtue of having acquired a “secondary meaning” in the marketplace and in the minds of consumers (see Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F3d 373, supra ). An inherently distinctive mark or service name needs no showing of secondary meaning to support trade mark infringement claims under Section 43(a) of the Lanham Act (id ).
Inherent distinctiveness is traditionally determined by placing a mark within one of the following categories, arranged from weakest to strongest: generic, descriptive, suggestive, or arbitrary or fanciful (see Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 supra ). Suggestive marks use terms which do not describe, but merely, suggest the features of the product. It requires the purchaser to use imagination, thought and perception to reach a conclusion as to the nature of goods. It signifies to the public the generic name other than the source of a particular brand of that article. Like arbitrary and fanciful marks, suggestive marks are considered inherently distinctive and are thus protected under Section 43(a) without a showing of secondary meaning (see Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F3d 373,supra; Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9, supra ).
While a suggestive mark is entitled to registration without evidence of secondary meaning (see Abercrombie & Fitch Co. v. Hunting World, Inc., supra ), there is authority for the proposition that suggestiveness is not necessarily dispositive of the issue of the strength of the mark which is an element of the Polaroid measure employed to determine consumer confusion (see Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 [2d Cir], cert. denied, 368 U.S. 820, 82 SCt. 36 [1961];Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 76 [2d Cir1988] ). Ultimately, the strength of the mark turns on its “origin-indicating' quality, in the eyes of the purchasing public, so that in a given case whether the mark has acquired secondary meaning' is a matter which may be relevant and probative and hence useful in determining the likelihood of confusion” ' (Lang v. Retirement Living Pub. Co., Inc., 949 F.2d 576 [2d Cir1991] ; see Gameologist Group, LLC v. Scientific Games Intern., Inc., 838 FSupp2d 141, supra , aff'd 508 Fed.Appx. 31 [2d Cir2013] ).
To succeed on an unfair competition claim under Lanham Act Section 43(a), a plaintiff “must establish it has a valid mark or name entitled to protection and that the defendant's use of it is likely to cause confusion when applied to the second user's good” (Genessee Brewing Co. v. Stroh Brewing Co., 124 F3d 137, 150 [2d Cir1997] ). As indicated above, the protectabilty of a mark is dependent upon its strength which is measured by its distinctiveness and those that are not inherently distinctive require a showing of a secondary meaning, which is one for which the trade name has become so associated in the public's mind with the plaintiff that it identifies goods sold by that entity as distinguished from goods sold by others (see Star Indus., Inc. v. Bacardi & Co. Ltd., 412 F3d 373, supra ). “Where the products or services are competitive and the marks quite similar ... the senior user of a more than descriptive mark need not prove secondary meaning” (McGregor–Doniger Inc., 1126, 1132, overruled on other grounds in Bristol–Myers Squibb Co. v. McNeil–P.P.C., Inc., 973 F.2d 1033 [2d Cir.1992] ; American Home Prod. v. Johnson Chemical Co., 589 F.2d 103, 106 [2d Cir1978] ).
In assessing whether a mark has acquired distinctiveness in the marketplace, that is a secondary meaning, a court considers whether the primary significance of the mark to the consuming public is to identify the source of the product rather than the product itself (see Nora Beverages, Inc. v. Perrier Grp. of Am., Inc., 269 F3d at 123 [2d Cir2001] ). Factors that are relevant to a secondary meaning determination include (1) advertising expenditure; (2) consumer studies linking the mark to a source; (3) unsolicited media coverage of the product; (4) sales success; (5) attempts to plagiarize the mark; and (6) length and exclusivity of the mark's use (see Denimafia Inc. v. New Balance Athletic Shoe, Inc., 2014 WL 814532 [SDNY 2014] ).
The court rejects the defendants' contentions that the plaintiffs have no claim under Section 43(a) for trademark or trade name infringement because the name or term “Ivy League” as employed by the plaintiffs is not sufficiently distinctive enough to warrant protection or that the plaintiffs' use thereof has not acquired the requisite secondary meaning to support a claim of unfair competition. The name “Ivy League” is arguably suggestive in nature, as such term does not describe, but instead, suggests features of the plaintiffs' services thereby requiring the purchaser to use imagination, thought and perception to reach a conclusion as to the nature of such services. The claim may thus be actionable as inherently distinctive and without a showing of secondary meaning for purposes of an infringement claim and may likewise be sufficiently distinctive to warrant protection from other unfair competitive acts injurious to the plaintiffs' businesses due to confusion. In addition, the plaintiffs' allegations of long time employment of the name in connection with its school and its more recently incorporated affiliate companies that provide day care and summer camp to children of the same age as those whom the defendants serve in the operation of its day care center sufficiently demonstrate a plausible claim of secondary meaning to satisfy the element of confusion for purposes of sustaining the statutory unfair competition claim as legal sufficiency. The court thus finds that the defendants failed to establish that the plaintiffs have no claim for damages and/or injunctive relief under Section 43(a) due to a lack of an acquired secondary meaning in the term “Ivy League” and it sustains as legally sufficient those portions of the plaintiffs' First cause of action and others wherein such relief is demanded.
Dismissal of the plaintiff's Second cause of action for relief pursuant to GBL § 360–k which cause sounds in a state claim for trademark infringement on the grounds that none of the plaintiffs is a registered owner of the name “Ivy League” is warranted as that statute protects only those who possess marks registered here in New York (see GBL § 360–k[a] ; ITC Ltd. v. Punchgini, Inc., 482 F3d 135 supra; cf., Norden Rest. Corp. v. Sons of the Revolution, 51 N.Y.2d 518, 522–23, 434 N.Y.S.2d 967, 968 [1980]; [acknowledging and distinguishing common law right in unregistered trademarks ] ). The Second cause of action advanced in the complaint is thus dismissed pursuant to CPLR 3211(a)(3).
Next considered are the defendants' demands for dismissal of the Third, Fourth and Seventh causes of action set forth in the complaint which sound in violations of GBL § 360 –1 (Injury to plaintiffs' business reputation and Dilution), common law unfair business competition and common law misappropriation and misrepresentation. The defendants' demands for dismissal of these claims rest upon legal insufficiencies or documentary evidence grounds as they contend that the plaintiffs have inadequately pleaded and/or have no claim to a secondary meaning of the term “Ivy League” as there are a myriad of business entities employing that name including one that has two federally registered trademarks.
Injunctive relief is available to a plaintiff claiming injury to business reputation and/or trademark dilution under GBL § 360 –1. It provides that a “[l]ikelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark, registered or not registered, or in cases of unfair competition, notwithstanding the absence of competition between the parties or in the absence of confusion as to the source of goods or services.” The statute prohibits any use of a name or mark likely to dilute the distinctive quality of a name in use and affords protection against dilution to trade marks that are distinctive as a result of an acquired secondary meaning as well as to those that are inherently distinctive (see De Beers LV Trademark Ltd. v. DeBeers Diamond Syndicate, Inc., 440 F.Supp2d 249 supra ).
To establish a claim under GBL § 360 –1, a plaintiff “... must prove (1) that the trademark is truly distinctive or had acquired secondary meaning, and (2) a likelihood of dilution either as a result of blurring or tarnishment” (U–Neek, Inc. v. Wal–Mart Stores, Inc., 147 F.Supp2d 158, 175 (SDNY 2001). To merit protection, the plaintiff must possess a strong mark, one which has a distinctive quality or has acquired a secondary meaning which is capable of dilution (Allied Maintenance Corp. v. Allied Mech. Trades, Inc., 42 N.Y.2d 538, 543, 399 N.Y.S.2d 628 [1977] [emphasis added]; Alexander Ave. Kosher Rest. Corp. v. Dragoon, 306 A.D.2d 298, 300 [2d Dept 2003] ; Wisell v. Indo–Med Commodities, Inc., 11 Misc.3d 1089[A], 819 N.Y.S.2d 852 [Sup Ct Nassau County 2006] ; Scholastic, Inc. v. Stouffer, 221 F.Supp2d 425 [SDNY 2002] ). For purposes of this statute, a secondary meaning is one for which “the trade name has become so associated in the public's mind with the plaintiff that it identifies goods sold by that entity as distinguished from goods sold by others” (see Allied Maintenance Corp. v. Allied Mech. Trades, Inc., 42 N.Y.2d 538, 543,supra; Fireman's Ass'n of State of New York v. French Am. School of New, 41 AD3d 925, 839 N.Y.S.2d 238 [3d Dept 2007] ; Staten Is. Bd. of Realtors, Inc. v. Smith, 98 A.D.2d 592, 749 N.Y.2d 267 [2d Dept 2002] ). The statute does not require a showing of confusion or competition to obtain an injunction, it does require a “(l)ikelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name” (Allied Maintenance Corp. v. Allied Mech. Trades, Inc., 42 N.Y.2d 538, 543, supra ). Nor is a showing of bad faith or fraudulent intent a prerequisite to the granting of injunctive relief (see Adirondack Appliance Repair, Inc. v. Adirondack Appliance Parts, Inc., 148 A.D.2d 796, 538 N.Y.S.2d 118 [3d Dept 1989] ).
The court rejects the defendants' contentions that the plaintiffs have no claim under GBL § 360 –1 because the name or term “Ivy League” as employed by the plaintiffs is not sufficiently distinctive enough to warrant protection under GBL § 360 –1 or that the plaintiffs' use thereof has not acquired a secondary meaning. However, a secondary meaning is not necessary if the term or name is a strong mark having a distinctive quality like one that is inherently distinctive. As indicated above, the term “Ivy League” may be considered suggestive in nature, as such term does not describe but instead suggests features of the plaintiffs' services thereby requiring the purchaser to use imagination, thought and perception to reach a conclusion as to the nature of such services. As such, it may qualify as inherently distinctive under the test employed by the federal courts and is sufficiently strong and distinctive enough to sustain a claim under GBL § 360 –1 without a showing of a secondary meaning. The court thus finds that the defendants failed to establish that the plaintiffs have no claim for injunctive relief under GBL § 360 –1 and it sustains, as legally sufficient and undefeated by any asserted defenses allegedly resting on documentary evidence, the plaintiffs' Third cause of action for such injunctive relief.
Also sustained as legally sufficient and otherwise cognizable are the plaintiffs' Fourth and Seventh causes of action which sound in common law claims of unfair competition and misappropriation and misrepresentation.
New York's common law unfair competition doctrine is both broad and flexible “encompassing an incalculable variety of illegal practices' or commercial immorality” ' (Roy Export Co. Est. of Vaduz, Liecht. v. Colum. Broad. Sys., Inc., 672 F.2d 1095, 1105 [2d Cir1982], quoting Ronson Art Metal Works, Inc. v. Gibson Lighter Mfg. Co., 3 A.D.2d 227, 159 N.Y.S.2d 606, 609 [1st Dept 1957] ; Metro. Opera Ass'n v. Wagner–Nichols Recorder Corp., 199 Misc. 786, 101 N.Y.S.2d 483, 488–89, 492 [Sup.Ct. N.Y. County 1950] ; aff'd, 279 AD 632, 107 N.Y.S.2d 795 [1st Dept 1951] ). There is no complete list of the activities that are actionable as unfair competition and protection now extends in some cases to parties who are not even in competition (see Electrolux Corp. v. Val–Worth, Inc., 6 N.Y.2d 556, 190 N.Y.S.2d 977 [1959] ). The essence of an unfair competition claim under New York common law is that the defendant assembled a product or provides a service which bears so striking a resemblance to the plaintiff's product or service that the public will be confused as to the identity of the products (see Shaw v. Time–Life Records, 38 N.Y.2d 201, 379 N.Y.S.2d 390 [1975] ). It is rooted in the bad faith misappropriation of the labors and expenditures of another, likely to cause confusion or to deceive purchasers as to the origin of the goods or services (see Forschenr Group Inc. v. Arrow Trading Co., Inc., 124 F3d 402 [2d Cir.1997] ; Johnson & Johnson v. Azam Intern. Trading, 2013 WL 4048295 E.D.N.Y.2013] ).
“[T]o prevail in an unfair competition case, the plaintiff may prove either: (1) that the defendant's activities have caused confusion with, or have been mistaken for, the plaintiff's activities in the mind of the public, or are likely to cause such confusion or mistake; or (2) that the defendant has acted unfairly in some manner” (104 N.Y. Jur.2d, Trade Regulation § 196 ; see Kg2, LLC v. Weller, 105 AD3d 1414, 966 N.Y.S.2d 298 [4th Dept 2013] ). The bad faith misappropriation of a commercial advantage belonging to the plaintiff by the infringement or dilution of a trademark or trade name or by the exploitation of proprietary information or trade secrets are actionable (see Out of Box Promotions, LLC v. Koschitzki, 55 AD3d 575, 866 N.Y.S.2d 677 [2d Dept 2008] ; Eagle Comtronics, Inc. v. Pico Prods., Inc., 256 A.D.2d 1202, 682 N.Y.S.2d 505 [4th Dept 1998]. The tort of “[c]ommon law unfair competition must be grounded in either deception or appropriation of the exclusive property of the plaintiff such as trade secrets” (H.L. Hayden Co. of New York, Inc. v. Siemens Med. Sys., Inc., 879 F.2d 1005 [2d Cir1989] ; Societe Comptoir de L'Industrie Cotonniere Establissements Boussac v. Alexander's Dept. Stores, Inc., 299 F.2d 33, 36 [2d Cir1962] ).
Among the several types of claims encompassed by the unfair competition doctrine are the traditional common law tort of “palming-off” and the later recognized tort of “misappropriation” (see ITC Ltd. v. Punchgini, Inc., 9 NY3d 467, 850 N.Y.S.2d 366 [2007] ). Palming-off is the act of a seller deceptively suggesting that its product service originated with, or was approved by, another, typically better-known, producer or supplier while a claim for misappropriation usually concerns the taking and use of the plaintiff's property to compete against the plaintiff's own use of the same property (Id. at 859); see Telecom Intern. Am., Ltd. v. AT & T Corp., 280 F3d 175 [2d Cir2001] [claims for misappropriation rest upon allegations that the defendant misappropriated the fruit of the plaintiff's labors and expenditures by obtaining access to plaintiff's business idea either through fraud or deception, or an abuse of a fiduciary or confidential relationship ] ). New York common law thus allows a plaintiff to sue for unfair competition where a “property right or a commercial advantage” has been “misappropriated” (see ITC Ltd. v. Punchgini, Inc., 482 F3d 135 supra ). False description claims rest upon allegations that defendants made false or misleading representations about the nature, characteristics or quality of plaintiff's goods and/or services, that the representations were made in the scope of commerce and in the context of advertising or promotion and the defendants' actions made the plaintiff believe that it would be damaged by the defendants' representations (Tower Fin. Corp. v. Dun & Bradstreet, Inc., 803 FSupp 820 [SDNY 1992] ).
Misappropriation may include the misappropriation of trade mark or trade name. Such a claim requires a wrongful misappropriation and distribution of a party's name or product or unauthorized copying and distribution in the marketplace or similar actions designed for commercial benefit and/or deception of the public (see Capitol Records v. Naxos of Am., Inc., 4 NY3d 540, 563–564, 797 N.Y.S.2d 352 [2005];Telford Home Assistance, Inc. v. TPC Home Care Servs., Inc., 211 A.D.2d 674, 621 N.Y.S.2d 636 [1995] ). The touchstone for this type of unfair competition claim is ownership of a legal interest in the intellectual property, not ownership of the product to which intellectual property owned by others attaches, even if the alleged misconduct causes the plaintiff pecuniary injury (see Zino Davidoff SA v. Selective Distrib. Intern. Inc. 2013 WL 1245974 [SDNY 2013] supra ).
Where a common-law cause of action to recover damages rests upon unfair competition through the use of a trade name, the plaintiff must establish that the defendant's acts “constituted an unfair appropriation or exploitation of a special quality attached to plaintiff's name” (Telford Home Assistance, Inc. v. TPC Home Care Servs., Inc., 211 A.D.2d 674, supra; quoting Buffalo Packaging Corp. v. Buff–Pac, Inc., 155 A.D.2d 877, 878, 547 N.Y.S.2d 714 [4th Dept 1989] ). The allegations in the complaint must include an assertion of the defendant's misappropriation of a commercial advantage belonging exclusively to the plaintiff (see LoPresti v. Massachusetts Mut. Life Ins. Co., 30 AD3d 474, 820 N.Y.S.2d 275 [2d Dept 2006] ).
The common law doctrine of unfair competition is distinguishable from trademark infringement in that the former does not involve the exclusive right to use a particular, name symbol or device (see Tripledge Prods., Inc. v. Whitney Resources, Ltd., 735 F.Supp. 1154 [EDNY 1990] ). New York's common law unfair competition claim does, however, require the element of bad faith or intent to deceive on the part of the defendant which is not required by the federal statutory claim (see Luv N' Care, Ltd. v. Regent Baby Prods. Corp., 2014 WL 572524 [SDNY 2014] ; Johnson & Johnson v. Azam Intern. Trading, 2013 WL 4048295 [EDNY 2013] ; Maharishi Hardy Blechman Ltd. v. Abercrombie & Fitch Co., 292 F.Supp2d 535 [SDNY 2003] ; Genesee Brewing Co., Inc. v. Stroh Brewing Co., 124 F3d 137 [2d Cir1997] ). Intent to deceive may be inferred by the absence of justification (see Tiffany & Co. v. Tiffany Prods., Inc ., 147 Misc. 679, 264 NYS 459 [Sup Ct, N.Y. County 1932], aff'd. 237 App.Div. 801, 260 NYS 821 [1st Dept 1932], aff'd. 262 N.Y. 482, 188 NE 30 [1933] ).
Here, the plaintiffs' Fourth cause of action and their Seventh cause of action sound in “common law unfair competition” and “common law misappropriation and misrepresentation”. The defendants contend that these claims are subject to dismissal since the defendants' use of the term “Ivy League”, which is employed by other businesses in the downstate area, does not constitute a misappropriation of a commercial advantage belonging exclusively to the plaintiff, that the plaintiffs have no exclusive right to the use of such term and that such term is not distinctive or unique enough to qualify for protection (see p. 9 of the defendants' Memorandum of Law in support of motion).
The court, however, finds that the plaintiffs' exclusive use of the name or term “Ivy League” is not necessary to sustain the plaintiffs' Fourth and Seventh causes of action since exclusive use of trademark or trade name is limited to the territory or markets where it becomes first established by its actual use by the plaintiffs and the plaintiffs need not be the only user of the term to have a protectable interest therein (see Playland Holding Corp. v. Playland Ctr., Inc., 1 N.Y.2d 300, 135 N.E.2d 202 [1956];Ball v. Broadway Bazaar, 194 N.Y. 429 [1909];Nassau County v. Sterling, 59 A.D.2d 902, 399 N.Y.S.2d 246 [2d Dept 1977] ; see also Tripledge Prods., Inc. v. Whitney Resources, Ltd., 735 F.Supp. 1154, supra ). In addition, and as indicated above, the fact that another entity engaged in a business wholly unrelated to the business of the plaintiffs' and has a registered mark or name does not render the plaintiffs' common law unfair competition claims nonactionable because the presumptive right to use the mark extends only to the goods and services noted in the registration certificate (see Savin Corp. v. Savin Group, 391 F3d 439 [2d Cir2004] ; Natural Footwear Ltd. v. Hart, Schaffner & Marx, 760 F.2d 1383 [3d Cir1985] ; Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44 [2d Cir1978] ). The defendants' second use of such term, in a field and locale already occupied by the plaintiffs may constitute a misappropriation of commercial advantage belonging exclusively to the plaintiffs thus precluding dismissal of either the Fourth or the Seventh causes of action on grounds of legal insufficiency or purported defenses resting on documentary evidence. Morever, since the court has already found that the term “Ivy League” is distinctive enough to preclude dismissal of the federal unfair competition claim embraced by Lanham Act § 43(a) and the state law claim for injunctive relief pursuant to GBL 360–l, such finding interdicts the claim that the term is not actionable as a claim for unfair competition under New York's common law. For these reasons, dismissal of the Fourth and Seventh causes of action sounding in common law unfair competition is unwarranted pursuant to CPLR 3211(a)(17) or (a)(7) and such relief is thus denied.
Also denied are the defendants' demands for dismissal of the plaintiffs' Fifth cause of action which sounds in a claim for injunctive relief under GBL § 133, as such claim is legally sufficient (see Playland Holding Corp. v. Playland Ctr., Inc., 1 N.Y.2d 300,supra; Matter of Staten Is. Bd. of Realtors, Inc., 298 A.D.2d 592, 749 N.Y.S.2d 267 [2d Dept 2002] ; Frank's Rest. v. Lauramar Enters., 273 A.D.2d 349, 350, 711 N.Y.S.2d 433 [2d Dept 2000] ; Wisell v. Indo–Med Commodities, Inc., 11 Misc.3d 1089 [A], 819 N.Y.S.2d 852, supra ; Rainbow Shops v. Rainbow Specialty Shops, 176 Misc. 339, 27 N.Y.S.2d 390 [Sup.Ct. Kings County 1941] ; Tiffany & Co. v. Tiffany Prod., Inc., 147 Misc. 679, supra ; aff'd. 237 App.Div. 801, 260 NYS 821 [1st Dept 1932], aff'd. 262 N.Y. 482, 188 NE 30 [1933] ). Rejected as lacking merit are those portions of the defendants' motion wherein they seek dismissal of the plaintiffs' Sixth cause of action for injunctive relief based upon the defendants' purported violations of BCL § 301(a)(2) on the grounds no private right action for such relief exists under that statute (see Vantage Careers, Inc. v. Vantage Agency, Inc., 79 A.D.2d 912, 434 N.Y.S.2d 428 [1st Dept 1981] ).
However, the court grants those portions of the instant motion wherein the defendants seek dismissal of the Eighth cause of action in which the plaintiffs seek damages pursuant to GBL § 349. While corporate competitors have standing to bring claims under this statute, the gravamen of the complaint must be consumer injury or harm to the public interest (see Securitron Magnalock Corp. v. Schnabolk, 65 F3d 256, 264 [2d Cir1995]. “[P]arties claiming the benefit of General Business Law § 349(h) must, at the threshold, charge conduct that is consumer oriented” (New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 320, 639 N.Y.S.2d 283 [1995];see Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330, 334, 704 N.Y.S.2d 177 [1995];Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 25, 623 N.Y.S.2d 529 [1995];see also Genesco Entertainment, Div. of Lymutt Indus., Inc. v. Koch, 593 F.Supp. 743, 752 [SDNY] ). “Private contract disputes, unique to the parties ... [do] not fall within the ambit of the statute” (Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d at 25, 623 N.Y.S.2d 529, supra; see New York Univ. v. Continental Ins. Co., 87 N.Y.2d at 320, 639 N.Y.S.2d 283,supra; North State Autobahn, Inc. v. Progressive Ins. Group Co., 102 AD3d 5, 953 N.Y.S.2d 96 [2d Dept 2012] ). “Claims that arise out of a trademark infringement action and disputes between competitors where the core of the claim is harm to another business as opposed to consumers constitute situations which courts have found to reflect a public harm that is too insubstantial” for purposes of a claim under GBL § 349 (Gucci Am., Inc. v. Duty Free Apparel, Ltd. 277 F.Supp2d 269 [SDNY 2003] ; see Maharishi Hardy Blechman Ltd. v. Abercrombie & Fitch Co., 292 F.Supp2d 535 [SDNY 2003] ). The dispositive question to assess whether or not a competitor can properly state a claim under § 349 is whether the matter affects the public interest in New York (see Securitron Magnalock Corp. v. Schnabolk, 65 F3d 256, 264, supra ). Here, the court finds that the plaintiffs' pleaded claims for relief pursuant to GBL § 349 are insufficient and thus subject to dismissal pursuant to CPLR 3211(a)(7).
Left for consideration are the remaining portions of the defendants' motion wherein they seek dismissal of all claims asserted against defendant Colmenares on the grounds that there are no allegations of wrongdoing on his part and he cannot be liable for the acts of his independent corporation absent allegations sufficient to establish a pierce of the corporate veil. These contentions are, however, rejected. While a corporate officer will not be held liable for the negligence of the corporation merely because of his official relationship to it, a director or officer who commits or participates in the commission of a tort may be held liable to injured third parties (see Aguirre v. Paul, 54 AD3d 302, 862 N.Y.S.2d 580 [2d Dept 2008] ). The “commission of a tort” doctrine permits personal liability to be imposed upon a corporate officer for misfeasance or malfeasance, that is, an affirmative tortious act but not for nonfeasance or a failure to act (see Peguero v. 601 Realty Corp., 58 AD3d 556, 559, 873 N.Y.S.2d 17 [1st Dept 2009] ). A cognizable claim exits where there are allegations that the corporation acted through the corporate officer individually charged with liability or where the wrongdoing is attributable directly to the individual defendant (see Huggins v. Parkset Plumbing Supply, Inc., 7 AD3d 672, 776 N.Y.S.2d 827 [2d Dept 2004] ; Kopec v. Hempstead Gardens, 264 A.D.2d 714, 716, 696 N.Y.S.2d 53 [2d Dept 1999] ). The defendants' moving papers failed to demonstrate that the plaintiff has neither stated nor has no claim cognizable tort claims against defendant Colmenares. The court thus denies those portions of the instant motion which seeks dismissal of all claims sustained herein to the extent asserted against defendant Colmenares, individually.
Finally, the court rejects the defendants' demands for an award of costs and/or sanctions as none of the conduct about which the defendants complain constitutes frivolous conduct within the purview of 22 NYCRR Part 130–1.