Case 1:19-cv-06614-RPK-RER Document 99 Filed 04/29/21 Page 1 of 20 PageID #: 7604
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`----------------------------------------------------x
`PADO, INC. and HOMELEC KOREA CO.,
`LTD.,
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`Plaintiffs,
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`-against-
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`SG TRADEMARK HOLDING CO LLC,
`WIEDER AND FRIEDMAN
`ENTERPRISES, MOSHE FRIEDMAN
`a/k/a COY WEST, HERSCHEL
`FRIEDMAN, ABC CORPORATIONS
`1-10, and JOHN DOES 1-10,
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`MEMORANDUM AND ORDER
`19-CV-6614 (RPK) (RER)
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`Defendants.
`----------------------------------------------------x
`RACHEL P. KOVNER, United States District Judge:
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`Plaintiffs Pado, Inc. (“Pado”) and Homelec Korea Co., Ltd. (“Homelec”), makers of the
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`“Purewave” massage device, filed this suit alleging that the makers of the competing “Mighty
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`Bliss” device infringed their patent, copyright, and trademark rights under federal and New York
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`law. Plaintiffs also bring claims for various torts under New York law. In the operative complaint,
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`plaintiffs name as defendants SG Trademark Holding Co., LLC (“SG”) and Wieder and Friedman
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`Enterprises, Inc. (“Wieder”) (together, the “Corporate Defendants”). Plaintiffs also name as
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`defendants Moshe Friedman, whom plaintiffs allege to be the sole owner of SG, and Herschel
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`Friedman, whom plaintiffs allege to be an agent of SG and the owner of Wieder (together, the
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`“Individual Defendants”). The Individual Defendants have moved to dismiss plaintiffs’ claims
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`against them under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint does not
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`adequately plead that they are personally liable for SG and Wieder’s alleged misconduct. For the
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`reasons below, plaintiffs’ claim of direct patent infringement against the Individual Defendants is
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`dismissed. The motion to dismiss is otherwise denied.
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`1
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`Case 1:19-cv-06614-RPK-RER Document 99 Filed 04/29/21 Page 2 of 20 PageID #: 7605
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`I.
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`The Parties
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`BACKGROUND
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`Since 2015, Pado has sold, marketed, and distributed a line of handheld massagers under
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`the brand “Purewave.” Second Am. Compl. ¶ 26 (“SAC”) (Dkt. #32). Pado asserts nationwide
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`common law trademark rights in that mark. Id. ¶ 27. Homelec designs and manufactures
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`electronic massagers. Id. ¶ 7. It licenses to Pado patent number D855,197 (“the ’197 Patent”), a
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`massager-related patent that is used in Purewave devices. Id. ¶¶ 6-7, 16-20, 25.
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`Defendants SG and Wieder sell a competing massager under the brand “Mighty Bliss.” Id.
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`¶¶ 8-9. According to the complaint, SG holds federal registrations for the trademarks “MIGHTY
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`BLISS” and “PURWAVE” for handheld massagers. Ibid. Wieder is the exclusive licensee of
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`those marks. Ibid. Plaintiffs also name as a defendant Moshe Friedman, who is alleged to be “the
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`sole owner” of SG, id. ¶ 52; see id. ¶ 10, and Herschel Friedman, who is alleged to be “the owner”
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`of Wieder, id. ¶ 65, as well as “an agent” of SG, id. ¶ 11.
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`II.
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`Procedural History
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`Pado filed this action in November 2019 against SG, the Individual Defendants, and several
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`unnamed corporations and individuals. See Compl. (Dkt. #1). On January 28, 2020, plaintiffs
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`filed the operative Second Amended Complaint, which added Homelec as a plaintiff, Wieder as a
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`defendant, and several new claims and theories of liability. See generally SAC.
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`The Second Amended Complaint contains 11 claims. These include nine claims against
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`the Individual Defendants: direct and induced patent infringement (Count I), direct and vicarious
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`copyright infringement (Count II), trademark infringement and unfair competition (Counts III-V,
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`X), and various claims under New York tort law (Counts VI, VII, IX). See generally ibid.
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`2
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`Count I alleges that the Corporate and Individual Defendants have infringed the ’197
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`patent. Id. ¶¶ 39-51, 146-152. Plaintiffs allege that, as of the date plaintiffs served the complaint
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`and summons on the defendants, “all Defendants had actual knowledge of the ’197 Patent” and
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`had “actual knowledge” that the Mighty Bliss massager infringed that patent, or intentionally
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`avoided such knowledge. Id. ¶¶ 43, 48-49. The complaint also alleges, on information and belief,
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`that the Individual Defendants are both “personally responsible for product development, product
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`design, marketing, and sales at the Corporate Defendants,” are “essential to the operations of the
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`Corporate Defendants,” id. ¶¶ 52, 65, and “encouraged and induced the Corporate Defendants to
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`continue to sell the Mighty Bliss massager despite being aware of the ’197 Patent,” id. ¶ 50.
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`Plaintiffs also allege that, after learning of the ’197 Patent, the Individual Defendants “personally
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`directed and authorized” the manufacture, use, and sale of the allegedly infringing Mighty Bliss
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`device, including by creating and maintaining “websites and online stores” and by creating
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`“advertising and marketing material” used to sell the device. Id. ¶¶ 148-149. The complaint
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`includes photos comparing the appearance and design of the Mighty Bliss device that the
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`Individual Defendants allegedly designed with the device depicted in the ’197 Patent. See id. at
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`10-11. Plaintiffs allege that the two devices are “highly similar in appearance.” Id. ¶ 56.
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`Count II alleges that the Corporate and Individual Defendants infringed plaintiffs’
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`copyrighted user manuals and marketing materials for the Purewave device. Id. ¶¶ 67-80; 153-
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`161. According to the complaint, several sections of the Mighty Bliss user manual contain
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`language that is “identical and[/]or strikingly similar” to language in the Purewave manual. Id. ¶¶
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`68-77. The complaint alleges that the Individual Defendants “personally directed and authorized
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`the creation and distribution of the infringing advertising and promotional material,” “authorized
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`3
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`the infringing activity,” “were dominant influences in the Corporate Defendants,” and “determined
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`the policies which resulted in the infringements.” Id. ¶¶ 155-158; see id. ¶¶ 76, 80.
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`Counts III, IV, and V allege that the Corporate and Individual Defendants infringed
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`plaintiffs’ trademark rights in the PUREWAVE mark by including in the Mighty Bliss user manual
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`the term “Pure Wave.” Id. ¶¶ 162-180; see id. ¶¶ 81-88. The complaint alleges that “the Individual
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`Defendants personally directed and authorized” the creation, distribution, and use of the infringing
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`materials. See id. ¶¶ 165, 173, 178. Count X alleges that the Corporate and Individual Defendants
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`made false and misleading representations in violation of the Lanham Act, 15 U.S.C. § 1125, by
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`filing complaints with Amazon, Facebook, Instagram, and Twitter claiming that Pado’s Purewave
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`device infringed SG’s Purwave trademark. Id. ¶¶ 120-143, 218-232. In response to these
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`complaints, Amazon removed Pado’s Purewave device from its platform and the social media
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`companies removed or considered removing Pado’s Purewave social media accounts. Id. ¶¶ 120-
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`126. Plaintiffs allege that as a result, they suffered monetary losses and loss of goodwill. Id. ¶¶
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`144-145. The complaint further alleges that the Individual Defendants directed their attorney to
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`file the complaints with Amazon and the social media companies. Id. ¶ 128.
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`Counts VI, VII, and IX allege that the Corporate and Individual Defendants violated New
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`York General Business Law and common law. See id. ¶¶ 181-189, 200-217. In particular, Counts
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`VI and VII allege that the Corporate and Individual Defendants violated New York law because
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`they diluted SG’s trademark, and because their acts constituted misleading and deceptive trade
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`practices. See id. ¶¶ 181-189. Count IX alleges that the Corporate and Individual Defendants
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`tortiously interfered with plaintiffs’ contractual relations with Amazon and with social media
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`companies by filing infringement complaints with those companies. See id. ¶¶ 200-217.
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`The complaint also contains allegations regarding the Individual Defendants’ roles at SG
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`and Wieder. Plaintiffs allege, on information and belief, that “Moshe Friedman is the sole owner
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`of [SG],” id. ¶ 52, and “co-designed and developed the Infringing Products for the Corporate
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`Defendants,” id. ¶¶ 53, 59. The complaint supports these pleadings with additional allegations—
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`not on information and belief—that Moshe Friedman is “a named co-inventor” of a patent for a
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`“cordless massager” that is owned by SG (“the ’295 Patent”), id. ¶ 54, and that Moshe Friedman
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`communicates with SG’s customers under the alias “Coy West,” id. ¶ 60. Plaintiffs attached to
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`the complaint a letter from “Coy West” in which “Coy” represents himself to be the “owner of
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`Mighty Bliss” and requests a positive review. Id., Ex. 11. The return address is alleged to be that
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`of Moshe Friedman. See ibid.
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`As for Herschel Friedman, the complaint alleges, on information and belief, that he is “an
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`agent of” SG and “the owner of” Wieder. Id. ¶ 11; see id. ¶ 65. It further alleges that Herschel
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`Friedman’s “home address is the same as” Wieder’s “business address.” Id. ¶ 66. The complaint
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`also alleges that “according to the New York Department of State online database,” Herschel
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`Friedman “accepts service” for SG. Id. ¶ 64.
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`Plaintiffs further allege, on information and belief, that both Moshe Friedman and Herschel
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`Friedman “[have] personally participated in and [have] willfully and knowingly directed the
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`wrongful acts of the Corporate Defendants,” and did so “for the benefit of the Corporate
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`Defendants and for [their] own benefit.” Id. ¶¶ 10-11.
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`The Individual Defendants have moved to dismiss all claims against them for failure to
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`state a claim. See Mot. to Dismiss (“Defs.’ Br.”) (Dkt. #67-1).
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`STANDARD OF REVIEW
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`Federal Rule of Civil Procedure 12(b)(6) directs a court to dismiss a complaint that fails
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`“to state a claim upon which relief can be granted.” To avoid dismissal on that basis, a complaint
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`must “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
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`(2009). The facial “plausibility standard is not akin to a ‘probability requirement.’” Ibid. (quoting
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`Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007)). But it requires a plaintiff to allege
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`sufficient facts to enable the court to “draw the reasonable inference that the defendant is liable for
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`the misconduct alleged.” Ibid.
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`A plaintiff may “plead[] facts alleged ‘upon information and belief’ where the facts are
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`peculiarly within the possession and control of the defendant or where the belief is based on factual
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`information that makes the inference of culpability plausible.” Arista Recs., LLC v. Doe 3, 604
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`F.3d 110, 120 (2d Cir. 2010) (citations omitted).
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`“[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof
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`[of the facts alleged] is improbable, and that a recovery is very remote and unlikely.” Twombly,
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`550 U.S. at 556 (quotations omitted). In evaluating a motion to dismiss under Rule 12(b)(6), the
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`court must accept all facts alleged in the complaint as true. Iqbal, 556 U.S. at 678. The court,
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`however, is not obligated to adopt “[t]hreadbare recitals of the elements of a cause of action” that
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`are “supported by mere conclusory statements.” Ibid.
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`In deciding a motion to dismiss, the court may only “consider the facts alleged in the
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`complaint, documents attached to the complaint as exhibits, and documents incorporated by
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`reference in the complaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).
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`DISCUSSION
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`Plaintiffs’ claim for direct patent infringement against Moshe Friedman and Herschel
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`Friedman is dismissed because the complaint fails to allege facts that would justify piercing the
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`corporate veil. The motion to dismiss is otherwise denied. Plaintiffs have adequately alleged that
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`the Individual Defendants are personally liable for induced patent infringement under federal law,
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`trademark infringement and unfair competition under federal and state law, copyright infringement
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`under federal law, and related New York business torts.
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`I. Direct Patent Infringement (Count I)
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`Plaintiffs have failed to adequately plead that the Individual Defendants committed direct
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`patent infringement.
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`A. Legal Standard
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`“When deciding a summary judgment motion in a patent action, the district court applies
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`the law of the circuit in which it sits to non-patent issues, and the law of the Federal Circuit to
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`substantive patent law issues.” Coconut Grove Pads, Inc. v. Mich & Mich TGR, Inc., 222 F. Supp.
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`3d 222, 231 n.6 (E.D.N.Y. 2016); see Am. Tech. Ceramics Corp. v. Presidio Components, Inc.,
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`414 F. Supp. 3d 304, 307 (E.D.N.Y. 2019). The Federal Circuit has held that as a general matter,
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`“[t]he ‘corporate veil’ shields a company’s officers from personal liability for direct [patent]
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`infringement that the officers commit in the name of the corporation, unless the corporation is the
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`officers’ ‘alter ego.’” Wordtech Sys., Inc v. Integrated Networks Sols., Inc., 609 F.3d 1308, 1313
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`(Fed. Cir. 2010). Determining whether corporate officers are personally liable for direct patent
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`infringement therefore “requires invocation of those general principles relating to piercing the
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`corporate veil.” Ibid.; see Koninklijke Philips Elecs. N.V. v. The ADS Grp., 694 F. Supp. 2d 246,
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`251 (S.D.N.Y. 2010). The corporate veil doctrine “is not unique to patent law” and is accordingly
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`governed by the law of the regional circuit. Wechsler v. Macke Int’l Trade, Inc., 486 F.3d 1286,
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`1295 (Fed. Cir. 2007).
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`In the Second Circuit, “the veil-piercing analysis is governed by the law of the place of
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`incorporation.” Sykes v. Mel Harris & Assocs., LLC, 757 F. Supp. 2d 413, 430 (S.D.N.Y. 2010)
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`(citing United States v. Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96, 106
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`(2d Cir. 2000)). Because SG and Wieder are New York corporations, the parties agree that New
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`York law governs the veil-piercing analysis here. SAC ¶¶ 9-10; Defs.’ Br. at 11; Mem. of L. in
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`Opp’n to Dismissal at 10 (“Pls.’ Br.”) (Dkt. #71); see AVELA, Inc. v. Est. of Monroe, 34 F. Supp.
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`3d 311, 319 (S.D.N.Y. 2014) (citing Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir. 1995)).
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`Under New York law, “[a]s a rule, the corporate form is accorded great respect and is set
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`aside only when necessary to avoid a manifestly inequitable result.” Koninklijke, 694 F. Supp. 2d
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`at 251. A party seeking to pierce a corporate veil must allege “(i) that the owner exercised complete
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`domination over the corporation with respect to the transaction at issue; and (ii) that such
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`domination was used to commit a fraud or wrong that injured the party seeking to pierce the veil.”
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`Ibid. (quoting Am. Fuel Corp. v. Utah Energy Dev. Co., 122 F.3d 130, 134 (2d Cir. 1997)). That
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`party “must come forward with factual allegations as to both elements of the veil-piercing claim.”
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`EED Holdings v. Palmer Johnson Acquisition Corp., 228 F.R.D. 508, 512 (S.D.N.Y. 2005).
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`In analyzing whether an individual exercised “domination” over a corporation, New York
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`courts have considered:
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`(1) whether corporate formalities are observed,
`(2) whether the corporation is adequately capitalized,
`(3) “whether funds are put in and taken out of the corporation for personal rather than
`corporate purposes,”
`(4) whether there is “an overlap in ownership, officers, directors, and personnel,”
`(5) whether the corporate entities share “common office space, address and telephone
`numbers,”
`(6) “the amount of business discretion displayed by the allegedly dominated corporation,”
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`(7) whether the alleged dominator deals with the dominated corporation at arm’s length,
`(8) whether the corporation is treated as an independent profit center,
`(9) whether others pay or guarantee debts of the corporation, and
`(10) whether the corporation had property that was used by the alleged dominator as if it
`were his own.
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`
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`Koninklijke, 694 F. Supp. 2d at 251-52 (quoting Wm. Passalacqua Builders, Inc. v. Resnick Devs.
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`S., Inc., 933 F.2d 131, 139 (2d Cir. 1991)).
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`B. Analysis
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`Plaintiffs have not adequately pleaded facts that would justify piercing the corporate veil
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`to hold the Individual Defendants directly liable for patent infringement. While defendants argue
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`that the allegation that Herschel Friedman is the owner of Wieder should be disregarded because
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`“[p]laintiffs’ counsel was previously advised that Herschel Friedman is not employed by the
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`Corporate Defendants or otherwise affiliated with the matters in this case,” Defs.’ Br. at 12, at this
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`stage of litigation the allegations in the complaint are assumed to be true. See DiFolco, 662 F.3d
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`at 111.
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`Nevertheless, plaintiffs’ allegations that Moshe Friedman is “sole owner” of SG, and that
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`Herschel Friedman is the owner of Wieder and an “agent” of SG with the same address as SG, see
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`SAC ¶¶ 10-11, 52, 64-66, are not enough to plead domination, because “the mere fact that an
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`individual is the sole member, shareholder, or a controlling person in an entity does not, by itself,
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`justify piercing the corporate veil.” Kasper Glob. Collection & Brokers, Inc. v. Glob. Cabinets &
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`Furniture Mfrs. Inc., 952 F. Supp. 2d 542, 578 (S.D.N.Y. 2013); see Naftali v. New York Deferred
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`Exch. Corp., No. 15-CV-7152, 2017 WL 4325725, at *9-*10 (E.D.N.Y. Aug. 15, 2017), report
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`and recommendation adopted, 2017 WL 4286260 (E.D.N.Y. Sept. 26, 2017); see also Nelson v.
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`Adams USA, Inc., 529 U.S. 460, 471 (2000) (“One-person corporations are authorized by law and
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`should not lightly be labeled sham[s].”).
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`And plaintiffs do not allege sufficient additional facts to support a finding of domination.
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`They do not allege, for example, that the Individual Defendants failed to observe corporate
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`formalities, that the corporations were inadequately capitalized, that the Individual Defendants
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`comingled funds with the corporations, that the corporations were not treated as “independent
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`profit center[s],” or that the Individual Defendants paid or guaranteed the debts of the corporations.
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`See Koninklijke, 694 F. Supp. 2d at 251-52; Allison v. Clos-ette Too, LLC, No. 14-CV-1618, 2014
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`WL 4996358, at *5 (S.D.N.Y. Sept. 15, 2014) (dismissing veil-piercing claim in part because
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`“[n]one of the factors for analyzing complete domination [were] alleged: the complaint makes no
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`reference to lack of corporate formalities, intermingling, or personal use of corporate funds”),
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`report and recommendation adopted sub nom. Ellison v. Clos-ette Too, LLC, No. 14-CV-1618,
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`2014 WL 5002099 (S.D.N.Y. Oct. 7, 2014). Accordingly, plaintiffs’ claim of direct patent
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`infringement against the Individual Defendants is dismissed.
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`II.
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`Induced Patent Infringement (Count I)
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`Plaintiffs have adequately pleaded a claim of induced patent infringement against the
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`Individual Defendants.
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`A. Legal Standard
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`Under 35 U.S.C. § 271(b), “[w]hoever actively induces infringement of a patent shall be
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`liable as an infringer.” To state a claim for induced patent infringement, a plaintiff must plead (1)
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`that the patent was directly infringed, (2) that the defendant “knowingly induced infringement,”
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`and (3) that the defendant “possessed specific intent to encourage another’s infringement.” Omega
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`Patents, LLC v. CalAmp Corp., 920 F.3d 1337, 1349 (Fed. Cir. 2019).
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`To adequately plead knowledge, a plaintiff must allege that a defendant both “knew of the
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`patent and knew as well that the induced acts constitute patent infringement.” Enplas Display
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`Device Corp. v. Seoul Semiconductor Co., Ltd., 909 F.3d 398, 407 (Fed. Cir. 2018) (quoting
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`Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926 (2015)). But “in this Circuit at least,”
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`it “is not essential to a claim of induced infringement” that the defendant have had such knowledge
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`before the lawsuit was filed. Automated Transactions, LLC v. First Niagara Fin. Grp., Inc., No.
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`10-CV-407, 2010 WL 5819060, at *6 (W.D.N.Y. Aug. 31, 2010), report and recommendation
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`adopted, No. 10-CV-407, 2011 WL 601559 (W.D.N.Y. Feb. 11, 2011); see 3D Sys., Inc. v.
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`Formlabs, Inc., No. 13-CV-7973, 2014 WL 1904365, at *4 (S.D.N.Y. May 12, 2014); Smartwater,
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`Ltd. v. Applied DNA Scis., Inc., No. 12-CV-5731, 2013 WL 5440599 at *8 (E.D.N.Y. Sept. 27,
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`2013).
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`To adequately plead specific intent, a plaintiff must allege (1) that the defendant “intended
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`to cause the acts that constitute the direct infringement” and (2) that the defendant “kn[ew] or
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`should have known [that] its actions would cause the direct infringement[.]” Broadcom Corp. v.
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`Qualcomm Inc., 543 F.3d 683, 699 (Fed. Cir. 2008). Specific intent “may be established through
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`circumstantial evidence” and “may be inferred from all of the circumstances.” Ibid.
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`B. Analysis
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`Plaintiffs have adequately stated a claim against the Individual Defendants for induced
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`patent infringement.
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`Contrary to the Individual Defendants’ arguments, the operative complaint adequately
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`alleges knowledge and specific intent on the part of the Individual Defendants. As to knowledge,
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`plaintiffs allege that the Individual Defendants “became aware of the ’197 Patent,” and the fact
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`that the Mighty Bliss massager infringed that patent, “at least by November 26, 2019 when the
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`summons and original complaint were served,” id. ¶ 43; see id. ¶¶ 48-49, and yet continued to
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`encourage and induce the Corporate Defendants to sell the infringing device afterward, id. ¶¶ 50,
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`148. The weight of authority in this circuit indicates that a plaintiff may plead a defendant’s
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`knowledge and intent as of the date the suit was filed. See Carson Optical Inc. v. eBay Inc., 202
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`F. Supp. 3d 247, 254 (E.D.N.Y. 2016) (“[T]he filing of a federal complaint identifying the patents-
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`in-suit satisfies the requirement that a plaintiff plead a defendant’s knowledge of the patents-in-
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`suit.”); see also SEB, S.A. v. Montgomery Ward & Co., 412 F. Supp. 2d 336, 344 (S.D.N.Y. 2006);
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`3D Sys., No. 13-CV-7973, 2014 WL 1904365, at *4; Smartwater, Ltd., No. 12-CV-5731, 2013
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`WL 5440599, at *8 (collecting cases); cf. Crypto Rsch., LLC v. Assa Abloy, Inc., 236 F. Supp. 3d
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`671, 686-87 (E.D.N.Y. 2017) (allegations “that the defendants ‘continued to make, use, offer to
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`sell, sell, and/or import into the United States’ the infringing products after the plaintiff put the
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`defendants on notice of its infringement by sending it letters notifying it of the patents-in-suit”
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`sufficed to plead knowledge); Automated Transactions, No. 10-CV-407, 2010 WL 5819060, at
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`*6; but see Pfizer, Inc. v. Gelfand, No. 08-CV-2018, 2008 WL 2736019, at *1 (S.D.N.Y. July 9,
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`2008) (suggesting without further discussion that plaintiff had to allege “that [defendant] was
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`aware or should have been aware” of the patent “prior to the commencement of [the] action”).
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`Furthermore, plaintiffs have alleged additional facts that provide circumstantial evidence
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`that the Individual Defendants knew of plaintiffs’ patent and knew that the Mighty Bliss massager
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`infringed that patent. See Enplas Display, 909 F.3d at 407. For example, the complaint alleges
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`that the infringed and infringing products are “highly similar” and includes images supporting that
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`allegation. SAC ¶ 56; see id. at 10-11. And plaintiffs have alleged that the infringed and infringing
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`products are competing products in a single market—the market for handheld massage devices.
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`See id. ¶¶ 1, 14-15, 42. Courts have found that the likelihood of a defendant’s knowledge of
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`“existing patents in the industry” is “heighten[ed]” where the plaintiff and defendant are
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`competitors in such a market. 3D Sys., No. 13-CV-7973, 2014 WL 1904365, at *3; cf. Weiland
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`Sliding Doors v. Panda Windows and Doors, LLC, No. 10-CV-677, 2012 WL 202664, at *4 (S.D.
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`Cal. Jan. 23, 2012) (holding that complaint adequately pleaded knowledge in part because it
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`alleged that the parties were competitors in the “high-end lift-slide door system market”).
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`Plaintiffs have also adequately pleaded that the Individual Defendants had the specific
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`intent to induce infringement of plaintiffs’ patent. Plaintiffs allege that the Individual Defendants
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`personally participated in the design, manufacture, marketing, and sale of the infringing product,
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`and that the infringing Mighty Bliss massager was very similar to the patented Purewave device.
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`See SAC ¶¶ 56, 148-149. Courts have found such allegations adequate to plead specific intent to
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`induce infringement. Crypto Rsch., 236 F. Supp. 3d at 686-87 (“[I]n light of the fact that the
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`defendants’ products are allegedly infringing, and drawing all reasonable inferences in the
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`plaintiff’s favor, the mere sale of the allegedly infringing product is enough to plead the
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`defendants’ intent to induce their end-users’ infringement.” (citing Conair Corp. v. Jarden Corp.,
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`No. 13-CV-6702, 2014 WL 3955172, at *3 (S.D.N.Y. Aug. 12, 2014))); see Ricoh Co. v. Quanta
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`Computer Inc., 550 F.3d 1325, 1343 (Fed. Cir. 2008) (stating that the defendant’s “role as the
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`designer and manufacturer of the [allegedly infringing devices] may evidence an intent sufficiently
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`specific to support a finding of inducement”).
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`The Individual Defendants argue that the operative complaint is inadequate because those
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`of its allegations that are made on “information and belief” should be disregarded as conclusory.
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`But a complaint may rely on allegations made on information and belief when “the belief is based
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`on factual information that makes the inference of culpability plausible,” as the complaint does
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`here by alleging a strong similarity between the infringed and infringing products. Arista, 604
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`F.3d at 120; see Marquess v. CardFlex, Inc., No. 19-CV-4790, 2021 WL 355153, at *9 (E.D.N.Y.
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`Feb. 2, 2021) (stating that the pleading standard “demands ‘factual amplification where needed to
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`render a claim plausible,’ but it does not follow that plaintiffs [are] required to plead the sources
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`of [their] information or explain ‘the reasons for Plaintiffs’ belief upon which the allegations are
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`based’” (quoting Arista, 604 F.3d at 120)). Such pleading is also permitted as to facts “peculiarly
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`within the possession and control of the defendant,” Arista, 604 F.3d at 120; see Haley v. Tchrs.
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`Ins. & Annuity Assoc. of Am., 377 F. Supp. 3d 250, 269 (S.D.N.Y. 2019)—such as the facts
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`regarding knowledge and intent that are at issue here. The motion to dismiss the induced patent
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`infringement claim against the Individual Defendants is therefore denied.
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`III. Trademark Infringement and Unfair Competition Under the Lanham Act and New
`York Common Law (Counts III-V, X)
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`Plaintiffs have adequately pleaded that the Individual Defendants engaged in false
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`designation of origin, unfair competition, and false or misleading representation under the Lanham
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`Act, 15 U.S.C. § 1125(a) (Counts III, X), as well as trademark infringement and unfair competition
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`under New York law (Count IV, V).
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`A. Legal Standard
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`A corporate officer may be held directly liable for trademark infringement and unfair
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`competition if the officer is a “moving, active, conscious force behind the defendant corporation’s
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`infringement.” Innovation Ventures, LLC v. Ultimate One Distrib. Corp., 176 F. Supp. 3d 137,
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`155 (E.D.N.Y. 2016) (quoting KatiRoll Co. v. Kati Junction, Inc., 33 F. Supp. 3d 359, 367
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`(S.D.N.Y. 2014)). “A corporate officer is considered a moving, active, conscious force behind a
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`company’s infringement when the officer was either the sole shareholder and employee, and
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`therefore must have approved of the infringing act, or a direct participant in the infringing activity.”
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`Mayes v. Summit Ent. Corp., 287 F. Supp. 3d 200, 211 (E.D.N.Y. 2018) (quoting Innovation
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`Ventures, 176 F. Supp. 3d at 155).
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`Case 1:19-cv-06614-RPK-RER Document 99 Filed 04/29/21 Page 15 of 20 PageID #: 7618
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`B. Analysis
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`Plaintiffs have adequately alleged that the Individual Defendants are individually liable for
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`trademark infringement under the Lanham Act. First, in the context of trademark infringement,
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`“[t]he case law is clear that if a corporate officer was either the sole shareholder and employee,
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`and therefore must have approved of the infringing act, or a direct participant in the infringing
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`activity, the officer is a moving, active, conscious, force behind the corporation’s infringement.”
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`Chloe v. Queen Bee of Beverly Hills, LLC, No. 06-CV-3140, 2011 WL 3678802, at *5 (S.D.N.Y.
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`Aug. 19, 2011); see, e.g., Innovation Ventures, 176 F. Supp. 3d at 171; Elastic Wonder, Inc. v.
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`Posey, No. 13-CV-5603, 2015 WL 273691, at *4 (S.D.N.Y. Jan. 22, 2015); Int’l Diamond
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`Importers, Inc. v. Oriental Gemco (N.Y.), Inc., 64 F. Supp. 3d 494, 504, 525-26 (S.D.N.Y. 2014);
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`cf. Johnson & Johnson Consumer Cos., Inc. v. Aini, 540 F. Supp. 2d 374, 397-98 (E.D.N.Y. 2008)
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`(denying summary judgment for individual defendant because his status as “president, sole
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`shareholder, and only full-time employee” of corporate defendant raised a genuine factual dispute
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`as to whether he was a “moving, active, conscious force” behind the corporate defendant’s
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`trademark infringement). And here, the complaint alleges that Moshe Friedman is the “sole
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`owner” of SG, SAC ¶ 52, and that Herschel Friedman is “the owner” of Wieder, id. ¶ 65. Second,
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`plaintiffs further allege that both Individual Defendants “personally directed and authorized the
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`creation, distribution, and use of the infringing materials, including the ‘Pure Wave’ Mark” in the
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`Mighty Bliss user manual. Id. ¶ 173; see id. ¶¶ 80, 83, 165. They have thus also adequately
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`pleaded that the Individual Defendants were “direct participant[s] in the infringing activity.”
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`Chloe, No. 06-CV-3140, 2011 WL 3678802, at *5; see e.g., KatiRoll Co., 33 F. Supp. 3d at 370.
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`For substantially the same reasons, plaintiffs have adequately alleged that the Individual
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`Defendants are personally liable for trademark infringement and unfair competition under New
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`York common law. “It is well-established that the elements necessary to prevail on causes of
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`action for trademark infringement and unfair competition under New York common law mirror
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`the Lanham Act claims.” Lorillard Tobacco Co. v. Jamelis Grocery, Inc., 378 F. Supp. 2d 448,
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`456 (S.D.N.Y. 2005). Allegations that suffice to plead individual liability under the Lanham Act
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`therefore also suffice to plead individual liability for trademark infringement and unfair
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`competition under New York law. See, e.g., Canon U.S.A., Inc. v. F & E Trading LLC, No. 15-
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`CV-6015, 2017 WL 112515, at *5 (E.D.N.Y. Jan. 11, 2017); Elastic Wonder, No. 13-CV-5603,
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`2015 WL 273691, at *5 n.5. Accordingly, the motion to dismiss plaintiffs’ trademark infringement
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`and unfair competition claims against the Individual Defendants is denied.
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`IV. Copyright Infringement (Count II)
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`Plaintiffs have adequately pleaded that the Individual Defendants are liable for copyright
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`infringement under 17 U.S.C. § 501 (Count II).
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`A. Legal Standard
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`Under the Copyright Act, “[a]ny