Trademarks – New York Appellate Digest

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Rodriguez, determined defendant’s motion to dismiss the complaint for failure to state a cause of action should not have been granted. The complaint alleged breach of a confidentiality and nondisparagement agreement (TRB Agreement) which stemmed from a trademark infringement and unfair competition action brought by nonparty Reebok. “… [D]efendant and his attorneys allegedly caused anonymous phone calls to be made to Reebok’s counsel stating that defendant possessed information that TRB [plaintiff] ‘intended to copy Reebok from the get-go.’ Defendant’s attorneys also notified Reebok’s counsel that defendant would comply with a subpoena issued to him. Reebok listed defendant as a witness before trial and detailed defendant’s expected testimony, including allegedly false testimony that TRB intended to create a ‘knockoff’ brand infringing on Reebok’s marks. The description of expected testimony also made clear that defendant had breached the TRB Agreement by disclosing information concerning TRB’s operations and information concerning the Reebok litigation:”

The main issue presented on this appeal is whether plaintiffs’ complaint alleges conduct upon which invocation of the absolute litigation privilege would constitute abuse of the privilege such that its protections should not apply or be withdrawn.

Examination of the applicable law, particularly with respect to plaintiffs’ proposed exception to the privilege, demonstrates that the course of conduct alleged implicates a limited exception analogous to that applied in Posner v Lewis (18 NY3d 566 [2012]) to another absolute privilege. Accordingly, where a party engages in an extortion attempt by threatening to provide false testimony in a separate action if their demands are not accepted, and, following rejection, affirmatively reaches out to the extortion target’s adversaries in the separate litigation, indeed offering to provide false testimony in that action, the absolute litigation privilege will not bar the action. TRB Acquisitions LLC v Yedid, 2023 NY Slip Op 01654, First Dept 3-28-23

Practice Point: Here defendant’s offer to provide false testimony in a separate proceeding was not protected by the litigation privilege in this action alleging defendant’s breach of a confidentiality and nondisparagement agreement.

The Second Department, modifying Supreme Court, determined that defendants’ motion to dismiss the trademark infringement, trademark dilution and unfair competition causes of action was properly denied. The court noted that the complaint properly alleged torts by defendants in their individual capacities without alleging facts supporting piercing the corporate veil. The Second Department held that the judge, sua sponte, should not have granted the preliminary injunction:

” [P]reliminary injunctive relief is a drastic remedy which will not be granted unless a clear right thereto is established under the law and the undisputed facts upon the moving papers, and the burden of showing an undisputed right rests upon the movant'” … . “As a general rule, the decision to grant or deny a preliminary injunction lies within the sound discretion of the Supreme Court” … . “In exercising that discretion, the Supreme Court must determine if the moving party has established: (1) a likelihood of success on the merits, (2) irreparable harm in the absence of an injunction, and (3) a balance of the equities in favor of the injunction” … . ” [A]bsent extraordinary circumstances, a preliminary injunction will not issue where to do so would grant the movant the ultimate relief to which he or she would be entitled in a final judgment'” … .

The plaintiff did not request a preliminary injunction … [T]he record in this case lacks evidence establishing, among other things, irreparable harm or extraordinary circumstances warranting a preliminary injunction that would, in effect, depart from the status quo and grant the plaintiff its ultimate relief … . The evidence at this stage further fails to demonstrate that the plaintiff possesses a likelihood of success on the merits … . The court therefore improvidently exercised its discretion in sua sponte awarding preliminary injunctive relief to the plaintiff. Emanuel Mizrahi, DDS, P.C. v Angela Andretta, DMD, P.C., 2019 NY Slip Op 02315, Second Dept 3-27-19

DEFENDANT’S OFFER TO PROVIDE FALSE TESTIMONY IN A SEPARATE ACTION IS NOT PROTECTED BY THE LITIGATION PRIVILEGE IN THIS RELATED ACTION ALLEGING DEFENDANT’S BREACHED A CONFIDENTIALITY AND NONDISPARAGEMENT AGREEMENT (FIRST DEPT).

JUDGE SHOULD NOT HAVE, SUA SPONTE, GRANTED A PRELIMINARY INJUNCTION IN THIS TRADEMARK INFRINGEMENT CASE, CORPORATE OFFICERS PROPERLY SUED IN THEIR INDIVIDUAL CAPACITIES (SECOND DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.