Fullsend, Inc. v. Nelk, Inc.

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FULLSEND, INC., Plaintiff, v. NELK, INC., Defendant.

No. 21-CV-5639 (PKC) (RML)

United States District Court, E.D. New York

March 30, 2023

MEMORANDUM & ORDER

PAMELA K. CHEN, UNITED STATES DISTRICT JUDGE

In this action, Plaintiff FullSend, Inc. (“FullSend”) seeks declaratory judgments and monetary damages regarding trademarks to which Defendant Nelk, Inc. (“Nelk”) claims rights and ownership. Presently, Nelk has filed a partial motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), challenging FullSend's state law tortious interference and trade libel claims. For the reasons stated herein, the Court grants Nelk's motion in its entirety.^[1]

BACKGROUND

I. Facts

FullSend is an Oregon corporation engaged in the sale of CBD products including gummies. (Dkt. 13, ¶¶ 3, 6.)^[2]Nelk is a Canadian entity engaged in the sale of, among other goods, CBD skincare products. (Id. ¶¶ 7, 30; see also Dkt. 9.)

According to public records, in September 2014, the USPTO announced the registration of the FULSEND trademark, in connection with clothing products, for the benefit of “Nelk, Inc.” (Dkt. 13-1 (describing Trademark number “4,613,485.”).) In September 2020, Nelk asked to change that trademark from “FULSEND” to “FULLSEND,” which the USPTO subsequently allowed. (Dkt. 13, ¶¶ 100-01.)^[3] Similarly, between 2018 to 2020, at least two applications were filed with the USPTO to register the phrase “FULL SEND” as a trademark for the benefit of “Nelk, Inc.,” which the USPTO granted in 2019 and 2020. (See Dkt. 13-1, at ECF4 3-6 (noting registration of trademarks “5,943,945” and “6,151,830” in connection with towels and entertainment products respectively).) On September 21, 2020, six more applications were filed with the USPTO to expand the scope of the existing “FULL SEND” trademarks, which the USPTO^[4] granted for the benefit of “Nelk, Inc.” in April and August 2021. (See Dkts. 21-3, 21-4, 21-5, 216, 21-7, 21-8; see also Dkt. 21-3, at ECF 4 (noting that the purpose of the application was use on “stickers”); Dkt. 21-4, at ECF 4 (noting intended usage on “key chains”); Dkt. 21-5, at ECF 4 (noting intended usage in the “fashion” industry); Dkt. 21-8, at ECF 4 (noting intended usage in “online retail”).).

Public records likewise show that on July 28, 2020, an Oregon entity named “FullSend, Inc.” applied to the USPTO to register a trademark for the word FULLSEND, in connection with CBD gummies (the “July 2020 Application.”). (See Dkt. 21-19.) The July 2020 Application included, as an example for usage of the mark, the following attachments:

(Image Omitted)

(Dkt. 21-19, at ECF 8-10 (exhibit cropped by the Court).) The same records state that the July 2020 Application was unsuccessful, and the USPTO eventually suspended it. (See Dkt. 21-19, at ECF 1 (stating that an “action suspending further action on the application has been sent (issued) to the applicant”).)

In March 2021, FullSend operated an Instagram page and used the domain “www.fullsendgummies.com,” to market CBD gummies and vaping products. (Dkt. 13, ¶¶ 17, 60; see also Dkt. 21-26, 2-4.) On or about March 5, 2021, Nelk complained to Instagram that FullSend was violating Nelk's rights in three registered trademarks-4,613,485; 5,943,945; and 6,151,830-and two trademarks it sought to register: 88/621,767, and 88/133,370. (Id. ¶¶ 1720.) This complaint resulted in the suspension of FullSend's Instagram account. (Id. ¶¶ 18, 24, 137.) FullSend alleges in the FAC here that it had previously offered “its products for sale on numerous e-commerce platforms, as well as to retail brick and mortar establishments,” and due to the suspension of its Instagram account, FullSend's “relationship with its partners has been permanently tarnished.” (Dkt. 13, ¶¶ 125, 127.)^[5] FullSend further alleges that Nelk's Instagram complaint led to “losses of at least $100,000.” (Id. ¶ 135.)

On March 23, 2021, Nelk sent FullSend a “cease and desist” letter stating in relevant part:

Nelk is the exclusive owner of all right, title, and interest in and to the trademark and related marks, such as FULLSEND, . . . and the design mark

FUllSEND. . . (collectively, the “FULL SEND Marks”) . . . . It has [also] recently come to our attention that . . . FullSend, Inc. has [made the July 2020 Application] [and] [commenced] registration and use of the domain name www.fullsendgummies.com [.]

(Dkt. 21-26, 2-4.) Nelk demanded that FullSend stop using the relevant marks and withdraw the pending July 2020 Application. (Id.) Public records state that on April 26, 2021, roughly a month after Nelk's March cease-and-desist letter, an Oregon entity named “FullSend, Inc.” filed a fresh application with the USPTO to register a trademark for a logo, in connection with CBD gummies, numbered 90/671,618 (the “April 2021 Application.”):

(Image Omitted)

(Dkt. 21-20, at 2-6 (exhibit cropped by the Court).) Following the April 2021 Application, Nelk sent another letter to FullSend on July 8, 2021, which noted the April 2021 Application and stated in relevant part:

The filing dates of Nelk's [registered trademarks and trademark applications] [namely, ] . . . September 18, 2019 and September 26, 2018, respectively[] each predate[s] the filing date of [FullSend's pending July 2020 and April 2021 Applications, because] . . . Nelk [has a] prior . . . registration of the FULL SEND [marks] . . .

(Dkt. 21-27, at 1, 1 n.3.)

II. Procedural History

In October 2021, FullSend initiated this action against Nelk, and on February 15, 2022, filed the FAC. (Dkts. 1, 13.) The FAC seeks a declaration that FullSend has not infringed under the Lanham Act-and has not engaged in dilution, false designation of origin, federal unfaircompetition, common law trademark infringement, bad-faith or cyberpiracy-with respect to the disputed trademarks. (Id. ¶¶ 26-41, 42-46, 47-51, 52-55, 56-58, 59-64.) FullSend also asks to cancel Nelk's trademark number 4,613,485, and seeks damages under New York tort law for “tortious interference with prospective economic advantage” and “trade libel.” (Id. ¶¶ 67-117, 118-38.) On June 13, 2022, pursuant to Federal Rule of Civil Procedure 12(b)(6), Nelk moved to dismiss the tortious interference and trade libel claims. (Dkt. 21.) FullSend filed a memorandum in opposition, to which Nelk replied. (Dkts. 22, 24.)

STANDARD OF REVIEW

To withstand a Rule 12(b)(6) motion to dismiss, the plaintiff's complaint need not “plead . . . specifics,” but must still plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Vengalattore v. Cornell Univ., 36 F.4th 87, 102 (2d Cir. 2022) (same). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court “must accept the plaintiff's factual allegations as true and draw all reasonable inferences in the plaintiff's favor,” UCAR Int'l Inc. v. Union Carbide Corp., 119 Fed.Appx. 300, 301 (2d Cir. 2004) (citation omitted), however, “on a motion to dismiss, courts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). Thus, when “a given set of actions may well be subject to diverging interpretations, each of which is plausible . . . [t]he choice between [them] is not a choice to be made by the court on a Rule 12(b)(6) motion.” Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012). Conversely, “threadbare recitals of a cause of action's elements, supported by mere conclusory statements” do not suffice to establish a facially plausible claim. Iqbal, 556 U.S. at 663. In short, “[d]ismissal is appropriate when ‘it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law.'” Uber Inc. v. Uber Techs., Inc., 521 F.Supp.3d 455, 462 (S.D.N.Y. 2021) (ultimately citing Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000)).

DISCUSSION

I. Judicial Notice

A. Legal Standard

“[I]n ruling on a 12(b) motion to dismiss, the district court [is] permitted to consider matters of which judicial notice may be taken.” Simmons v. Trans Express Inc., 16 F.4th 357, 360 (2d Cir. 2021) (cleaned up). First, exhibits attached to the complaint can be considered. See Roth, 489 F.3d at 503) (“Documents that are attached to the complaint or incorporated in it by reference are deemed part of the pleading and may be considered.” (citation omitted)). Second, “[e]ven where a document is not [attached or] incorporated by reference, the court may nevertheless consider it where the complaint ‘relies heavily upon its terms and effect,' which renders the document ‘integral' to the complaint.” Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (citation omitted); In re Trib. Co. Fraudulent Conv. Litig., 10 F.4th 147, 176 (2d Cir. 2021) (same) cert. denied sub nom. Kirschner v. FitzSimons, 142 S.Ct. 1128 (2022). Third, the Court may consider documents, attached to the defendant's motion to dismiss, which the “plaintiffs had either in its possession or had knowledge of and upon which they relied in bringing suit[.]” Cortec Indus., 949 F.2d at 47. Finally, the Court may also take judicial notice of “public records.” See Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006). When taking judicial notice of a fact, the Court does so “for the limited purpose of noting what the documents state, rather than to prove the truth of their contents.” In re Arcimoto Inc., Sec. Litig., No. 21-CV-2143 (PKC), 2022 WL...