Altus v. Schwartz - Complaint

8/10/2019 Altus v. Schwartz - Complaint

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ALTUS 6.1-00 I

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NEW YORK

ALTUS HOLDINGS, INC. and

SRG LOGISTICS, LLC,

Civil Action No.: 14-CV-

Plaintiffs,

DEMAND FOR JURY TRIAL

v

ADAM SCHWARTZ and

FRESHeTECH, LLC,

Defendants.

COMPLAINT FOR PATENT AND TRADEMARK INFRINGEMENT BREACH OF

CONTRACT UNJUST ENRICHMENT PROMISSORY ESTOPPEL AND FOR

TORTIOUS INTERFERENCE WITH A PROSPECTIVE ECONOMIC ADV ANT AGE

Plaintiffs ALTUS HOLDINGS, INC. and SRG LOGISTICS, LLC, by and through their

undersigned counsel, hereby file suit against Defendant ADAM SCHWARTZ (hereinafter

defendant or Schwartz ), for design patent and trademark infringement, breach

o

contract,

unjust enrichment, promissory estoppel, and for tortious interference with prospective economic

advantage. Allegations made on belief are premised on the belief that the same are likely to have

evidentiary support after a reasonable opportunity for further investigation and discovery.

JURISDICTION VENUE PARTIES NATURE OF THE ACTION

I

Plaintiff ALTUS HOLDINGS, INC. (hereinafter Altus ) is a New York

Corporation having a place o business located at 33 Thirty-Fourth Street, Brooklyn, New York

11232.

2 Plaintiff SRG LOGISTICS, LLC (hereinafter SRG ) is New York corporation

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Case 1:14-cv-06967 Document 1 Filed 11/28/14 Page 1 of 16 PageID #: 1


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9.

Defendant Adam Schwartz represented to Plaintiff Altus that he had invented and

designed a new design for a shower radio, and he provided the patent drawings to Altus for

preparing and filing U.S. Design Patent Appln. Serial No. 29/478,643 on January 7, 2014 which

was recently allowed by the U.S. Patent Office. Also, the issue fee has been paid.

10. On December 31, 2014, Defendant Schwartz assigned ownership

o

all patent

rights, title, and interest to Plaintiff Altus Holdings, Inc. regarding his design o

a shower radio.

Plaintiff Altus now possesses all rights o recovery under U.S. Design Patent Appln. Serial No.

29/478,643, including the right to sue for infringement and recover past damages.

11. Defendant Schwartz is now selling said shower radio to the public without the

permission or consent

o

the owner Plaintiff Altus, in violation

o

said patent rights owned by

Altus which Defendant Schwartz assigned to Plaintiff Altus.

12. Defendant Schwartz s actions are in violation

o

the Patent Act,

35

U.S.C.

100,

et seq., and has caused and is causing damage to the Plaintiff Altus.

13. Therefore, Plaintiff Altus is entitled to recover from the Defendant the damages

sustained by Plaintiff as a result

o

the Defendant s wrongful acts in an amount subject to proof at

trial, including an accounting for profits and damages.

14. Upon information and belief, the Defendant s infringement o Plaintiff Altus s

patent has exceeded 1 million in sales, and has been willful and deliberate, entitling Plaintiff

Altus to increased damages under 35 U.S.C. 284 and to attorney s fees and costs incurred in

prosecuting this action under 35 U.S.C. 285.

15. Defendant s infringement o Altus s exclusive rights under said design patent will

continue to damage Altus, causing irreparable harm for which there is

no

adequate remedy at law,

unless it

is

enjoined by this Court.

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COUNT II

COMPL INT FOR TR DEM RK INFRINGEMENT

16.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained

in

the

previous paragraphs o this Complaint with the same force and effect as though the same were

more fully set forth at length herein.

17.

Plaintiff Altus

is

the owner o federal trademark appln. Serial No. 86/135,136, filed

on December

4

2013, for the trademark SPLASH SHOWER TUNES for wireless audio speakers,

now Registration No. 4,556,026, which has been used as a trademark on said shower radios

to

sell

them

to

the public.

18.

Defendant Schwartz is using the SPLASH SHOWER TUNES trademark

to

sell

said shower radios to the public without the permission o Altus, and without payment

to

Altus,

and in violation o said trademark rights owned by Altus.

19.

Defendant Schwartz's actions are in violation o the Trademark Act, 15 U.S.C.

l 125(a), and have caused and are causing damages o over 500,000 to the Plaintiff Altus.

Therefore, Altus

is

entitled to an accounting for profits and damages, and an injunction to stop said

unlawful sales by Defendant Schwartz.

COUNT III

COMPL INT FOR TR DEM RK INFRINGEMENT OF FRESHeTECH

20.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained

in

the

previous paragraphs

o

this Complaint with the same force and effect as though the same were


21. A Hong Kong company called Sam Direct Global Trade Co., Limited knew that

another party owned the trademark FRESHeTECH, and that company improperly filed a

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trademark application to register the trademark in the U.S. Trademark Office on December 2 2013.

22.

Plaintiff Altus and Defendant Schwartz agreed to pay the Hong Kong company to

assign the FRESHeTECH trademark application to Plaintiff Altus.

23. However, Defendant Schwartz improperly advised the Hong Kong company to

assign the trademark to his company, FRESHeTECH,

LL

o Florida, instead o to Altus.

24.

Defendant Schwartz breached the agreement and Defendant Schwartz started to use

the trademark FRESHeTECH on behalfo his company, FRESHeTECH, LLC o Florida.

25. Defendant Schwartz has been and is continuing to use the FRESHeTECH

trademark

to

sell said shower radios to the public without the permission

o

Altus, and without

payment to Altus, and in violation o said trademark rights owned by Altus.

26.

Defendant Schwartz's actions are in violation o the Trademark Act, 15 U.S.C.

l 125(a), and have caused and are causing damages o over 500,000 to the Plaintiff Altus.

Therefore, Altus is entitled to an accounting for profits and damages, and an injunction to stop said

unlawful sales

by Defendant Schwartz.

COUNT IV

BREACH OF CONTRACT FOR NON DELIVERY OF PRODUCTS PAID FOR

27.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs o this Complaint with the same force and effect as though the same were


28.

On or about March 6, 2014, Plaintiff SRG LOGISTICS, LLC agreed to purchase

and Defendant Adam Schwartz agreed to sell 8,000 units o shower radios, for a deposit o

61,425, and the 8,000 units were to be delivered to Plaintiff SRG. Plaintiff SRG timely paid

Defendant Adam Schwartz the deposit o 61,425, but Defendant refused to deliver to SRG the

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8,000 units, as agreed upon between the parties.

29 This agreement constituted a binding sales contract pursuant

to

the UCC.

30 Defendant Schwartz has failed to deliver to SRG or its designee Altus the 8,000

shower radios, and Defendant Schwartz has failed

to

return said funds o 61,425 to SRG due to

the non-delivery, which SRG has demanded from Defendant Schwartz. Therefore, Defendant

Schwaitz has breached the aforementioned sales contract.

31 To date, Plaintiffs are not in possession o the 8,000 shower radios while Defendant

is in possession o both, the 8,000 shower radios and Plaintiffs money totaling 61,425.

32.

As

a result

o

Defendant Schwmtz' s failure

to

deliver the 8,000 shower radios

to

the Plaintiffs, Plaintiffs have suffered damages in the amount o 61,425 together with costs,

disbursements and interest.

OUNT IV

UNJUST ENRI HMENT

33. Plaintiffs repeat, reiterate and re-allege each and every allegation contained in the

previous paragraphs

o



34. Plaintiffs transferred 61,425 to the Defendant in order to purchase the 8,000

shower radios.

35. Defendant Schwartz received the funds o 61,425 from Plaintiffs but Plaintiffs

have not received the 8,000 shower radios, as agreed upon.

36

To date, Defendant Schwartz

is

in possession o both, the money and the 8,000

shower radios while Plaintiffs have received nothing in return.

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37 As a result, Defendant Schwartz has been unjustly enriched in the amount o

61,425 together with costs, disbursements and interest. Therefore, Plaintiff SRG hereby demands

the return o the 61,425 together with costs, disbursements and interest, because Schwartz has

failed to deliver said 8,000 shower radios to Plaintiff SRG or to Plaintiff Altus.

OUNTY

PROMISSORY STOPP L

38. Plaintiffs repeat, reiterate and re-allege each and every allegation contained in the

previous paragraphs o this complaint with the same force and effect as though the same were


39. On information and belief, Defendant Schwartz made promises, statements and

representations that he would deliver the 8,000 shower radios to Plaintiff SRG or to Plaintiff Altus

for the Plaintiffs.

40. In reliance on said promises, Plaintiff SRG made a payment o 61,425 to

Defendant with the intent to receive the benefits o Defendant 's promises.

41. Defendant accepted Plaintiff's payments but never provided anything that was

promised to Plaintiffs. Specifically, Defendant has not delivered the 8,000 shower radios to the

Plaintiffs.

42. Plaintiffs sustained damages due to their reliance on promises made by Defendant

because they detrimentally changed their position by making said payments to Defendant.

43. As a result, Plaintiffs have suffered damages in the amount o 61,425, together

with costs, disbursements and interest.

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COUNT VI

TORTIOUS INTERFERENCE WITH PLAINTIFFS PROSPECTIVE

ECONOMIC ADVANTAGE WITH AMAZON.COM

44. Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs

o



45

In order to state a claim for tortious interference with prospective economic

advantage, a plaintiff must show: ( ) it had a business relationship with a third party; (2) the

defendant knew

o

that relationship and intentionally interfered with it; (3) the defendant acted

solely out o malice, or used dishonest, unfair, or improper means; and (4) the defendant s

interference caused injury

to

the relationship.

46. Plaintiffs had a business relationship with Amazon.com and Plaintiffs sold many

o

their shower radio products on Amazon.com.

47 Defendant Schwartz knew

o

Plaintiffs business relationship with Amazon.

Consequently, Defendant Schwartz illegally interfered with Plaintiffs business with Amazon

by

sending false written notices to Amazon which illegally stated that Plaintiff was selling counterfeit

products on Amazon, and as a result SRG no longer had the right to sell said shower radios on

Amazon.

48. As a result Defendant Schwartz s illegal actions, Amazon stopped Plaintiff SRG

from listing its products on Amazon.com, which has interfered with the sales by SRG on Amazon,

causing substantial lost sales

to

SRG.

49. By interfering with PlaintiffSRG s relationship with Amazon, Defendant Schwartz

acted with the sole purpose

o

harming Plaintiffs or used dishonest, unfair or improper means in

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doing so

In

all cases, the Defendant Schwartz caused injury to SRO's relationship with Amazon

and caused Plaintiffs a loss o prospective sales revenues on Amazon.

50. Such unlawful interference with the business o Plaintiff SRO by Defendant

Schwartz has caused lost sales

o

at least 1,000,000, and Plaintiff SRO

is

entitled to compensation

for all o the lost sales and damages caused by Defendant Schwartz.

PR YER FOR RELIEF

WHEREFORE Plaintiffs Altus Holdings, Inc. and SRO Logic respectfully request this

Court

to

enter judgment in their favor against Defendant Schwaitz granting the following relief:

1 Finding Plaintiff Altus' allowed U.S. Design Patent Appln. Serial No. 29/478,643

valid and infringed

by

Defendant Schwartz;

2 That preliminary and permanent injunctions be entered enjoining and restraining the

Defendant Schwartz his officers, agents, servants, employees, privies, successors and

assigns, and all persons in active concert, participation and combination with

Defendant Schwartz, from selling or causing to be sold or inducing others to sell, or

using or causing

to

be used or inducing others to use, any shower radio or product

covered by or coming within the scope o or otherwise infringing said allowed U.S.

Design Patent Appln. Serial No. 29/478,643 as provided for in 35 U.S.C. 283, or

including said trademarks SPLASH

SHOWER TUNES and FRESHeTECH;

3

Requiring Defendant Schwaitz to deliver up to be impounded during the pendency

o this action, all infringing shower radios or products in his possession or under his

control, and to withdraw all materials, including advertising and promotional

materials, cartons and containers and, thereafter, to deliver up for destruction all such

copies, as well as molds and any other material for making such design;

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4

An order requiring the Defendant Schwartz to account for and to pay over to the

Plaintiffs all proceeds made by Defendant Schwartz by reason o the wrongful act o

patent infringement and trademark infringement complained o herein, and pay

to

Plaintiffs all damages incurred by Plaintiffs by such wrongful acts including lost

profits and not less than a reasonable royalty as may be determined by an accounting,

and that said damages be trebled pursuant to

35

U.S.C. 284 and 15 U.S.C. 1117 in

view o the flagrant and willful nature o Defendant's conduct;

5 An order requiring Defendant Schwartz

to

pay Plaintiffs their costs and

disbursements in this action;

6 Declaring this case exceptional by reason o Defendant Schwartz's willful

infringement and awarding Plaintiffs their attorney's fees incurred in prosecuting this

action as provided for in

35

U.S.C. 285 and 15 U.S.C. 1117;

7 That a permanent injunction be entered

to

stop Defendant Schwartz from violating

the trademark rights

o

Plaintiff Altus;

8 For a judgment for the payment to Plaintiff SRG o 61,425, plus costs,

disbursements and interest;

9 For a judgment for damages to Plaintiff Altus for its lost sales on Amazon caused by

the tortious interference

o

Defendant Schwartz;

I0 That an injunction be entered to stop Defendant Schwartz from tortiously interfering

with Plaintiff Altus's sales on Amazon; and

11 Granting Plaintiffs such other and further relief as the Court may deem just, equitable,

and proper.

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DEMAND FOR JURY TRIAL

Plaintiffs demand a trial

by

jury on all issues of fact in this case.

Dated: November 26, 2014

Respectfully submitted,

By: s/Ezra Sutton/

EZRA SUTTON ES-2189)

EZRA SUTTON P.A.

Plaza 9 Bldg., 900 U.S. Hwy. 9

Woodbridge,

ew

Jersey 07095

Ph.) 732-634-3520

Email: [email protected]

Attorneys for Plaintiffs



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EXHIBITS

TO THE

COMPL INT



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Altus v. Schwartz - Complaint