880 F. Supp. 2d 425
S.D.N.Y.2012Background
- Ritani, a New York jewelry company, sues multiple entities controlled by Aghjayan for copyright/trademark infringement, misappropriation of trade secrets, breach of fiduciary duty, and other claims.
- Amended Complaint adds Shawndria Aghjayan as a party and narrows some state causes of action; other defendants include Harout R, HR LLC, HR Corp., and Amazing Settings.
- Defendants move to dismiss under Rule 12(b)(1) and 12(b)(6); Ritani seeks leave to amend the complaint.
- Key facts: Ritani alleges Aghjayan used confidential CAD/CAM design files and other trade secrets to create competing jewelry through Harout R and Amazing Settings, including a China production pathway.
- The court grants in part and denies in part the motion to dismiss; the motion to amend is granted subject to certain dismissed causes of action as futile.
- Leave to replead is granted within 20 days, with dismissal and retention of various counts as described in the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Copyright claim viability | Ritani owned and registered works; defendants used protected designs. | No specific acts tying registered works to alleged infringements; lack of substantial similarity. | Copyright claim dismissed as to all defendants. |
| Lanham Act claims against which defendants | Defendants’ use of Ritani marks/misrepresentation caused confusion; valid marks exist. | Some defendants’ use is descriptive fair use or not likely to confuse; others lack plauseable basis. | Counts II–IV upheld against Aghjayan, HR LLC, HR Corp., and Harout R; dismissed as to Mrs. Aghjayan and Amazing Settings. |
| State law false advertising, dilution and unfair competition | State claims mirror Lanham Act; dilutive and deceptive conduct harms public and Ritani. | Same tests apply; some claims lack consumer-oriented injury or sufficient misrepresentation. | Counts V–VIII: false advertising (Section 350) dismissed; dilution claim preserved for certain defendants; others retained. |
| Trade secret misappropriation scope | Ritani’s CAD/CAM trade secrets were misappropriated and used to compete via multiple defendants. | Only Aghjayan and Mrs. Aghjayan tied to misappropriation; others not sufficiently pled. | Count IX dismissed as to all defendants except Aghjayan and Mrs. Aghjayan. |
| Breach of fiduciary duty and loyalty | Aghjayan and Mrs. Aghjayan breached fiduciary duties through self-dealing and disclosure. | Claims should be evaluated with the employment relationship; need more facts. | Count XIII retained against Aghjayan and Mrs. Aghjayan. |
Key Cases Cited
- Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996 (2d Cir. 1995) (discerning observer test for substantial similarity in jewelry designs)
- Gaito Architecture, LLC v. Simone Devel. Corp., 602 F.3d 57 (2d Cir. 2010) (testing substantial similarity; courts may decide as matter of law when appropriate)
- Polaroid Corp. v. Polarad Elec. Corp., 287 F.2d 492 (2d Cir. 1961) (eight-factor likelihood of confusion framework)
- Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir. 1976) (classification of marks by distinctiveness for protection)
- Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337 (2d Cir. 1999) (protectability of mark and secondary meaning on protectable ownership)
- Barzingus v. Wilheim, 306 F.3d 17 (10th Cir. 2010) (motion to compel arbitration standard aligns with summary judgment)