Covet & Mane, LLC v. Invisible Bead Extensions, LLC, 1:21-cv-07740

Background

Covet & Mane (C&M) makes luxury human-hair wefts and taught application techniques via education products; founder Dafina Smith alleges long-standing community practice and proprietary weft design.
Invisible Bead Extensions (IBE), founded by McKenzie Turley, provided training and later launched its own wefts; C&M alleges Turley solicited a partnership, obtained confidential info, then used it to create copycat products and file IP registrations.
IBE obtained trademarks for “INVISIBLE BEAD EXTENSIONS” and “IBE” (2020–2021) and a patent for the “Invisible Bead Extensions” method (issued Aug. 23, 2022). IBE sent C&M a cease-and-desist in Aug. 2021.
C&M moved (Sept. 2022) to file a Second Amended Complaint adding patent- and trademark‑invalidity claims and three defendants; Magistrate Judge Lehrburger (Mar. 23, 2023) granted leave to add the ‘376 patent and ‘446 trademark claims, denied a product‑disparagement claim (R&R).
IBE objected, arguing the patent claims were moot because of a covenant not to sue and that Rule 16(b) diligence was lacking for the late trademark amendment; District Judge Cronan overruled the objections, adopted the R&R, dismissed the disparagement claim with prejudice, and directed IBE to raise any broader covenant argument via motion to dismiss.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether IBE’s covenant not to sue (Previous Covenant) moots C&M’s patent invalidity/declaratory-judgment claims	Previous Covenant is narrowly drafted: it protects only C&M (not C&M’s customers/partners) and does not cover future products or services; C&M has concrete plans and meaningful preparation that leave a live controversy	Covenant eliminates subject-matter jurisdiction because IBE has released claims against C&M and lacks intent to sue; no real threat	Magistrate correctly found Previous Covenant insufficient to extinguish jurisdiction; district court overruled IBE’s objection. Court declined to consider a later Revised Covenant on the amendment motion and required IBE to raise it in a dismissal motion.
Whether C&M satisfied Rule 16(b) (diligence/good cause) to add the ‘446 trademark after the scheduling-order deadline	Amendment is proper because the ‘446 trademark was already in the case, adding parallel legal theories, discovery is complete on the topic, and denial would be inefficient and prejudicial to C&M	C&M failed Rule 16(b) diligence; counsel’s oversight should not be excused and amendment would be untimely	Magistrate exercised discretion: despite lack of diligence, amendment allowed because no prejudice to IBE and amendment would not require new discovery. District court overruled IBE’s objection.
Whether the Revised Covenant (submitted with objections) may be considered to moot patent claims	Revised Covenant was submitted after the magistrate’s decision and appears responsive to the magistrate’s concerns; it should not be allowed to retroactively nullify the decision without proper procedure	Revised Covenant extinguishes the controversy because it broadly releases claims against C&M and its affiliates for past, present, and future use/sale including services	District court refused to consider the Revised Covenant on review of the magistrate’s decision (not properly before the court); IBE must move to dismiss to invoke it; court criticized gamesmanship.
Whether C&M may add a product and brand disparagement claim	Sought to add disparagement claim as part of broader amendments	IBE argued the claim is futile	Magistrate recommended denying leave as futile; no objections were filed to the R&R; district court adopted the R&R and dismissed the disparagement claim with prejudice.

Key Cases Cited

Already, LLC v. Nike, Inc., 568 U.S. 85 (considerations for whether a covenant not to sue eliminates a justiciable patent controversy)
Nike, Inc. v. Already LLC, 663 F.3d 89 (2d Cir.) (factors for determining scope/effect of covenants and intention to engage in future activity)
Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871 (Fed. Cir.) (meaningful preparation and justiciability in patent declaratory judgment actions)
Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229 (2d Cir.) (Rule 16(b) diligence is primary but courts may consider prejudice and other factors)
Parker v. Columbia Pictures Indus., 204 F.3d 326 (2d Cir.) (scheduling orders fix the pleadings; Rule 16’s purpose)
Sacerdote v. New York Univ., 9 F.4th 95 (2d Cir.) (Rule 16(b) good-cause requirement and limits on liberal amendment under Rule 15)