507 F.Supp.3d 547
S.D.N.Y.2020Background
- Unicorn Crowdfunding, Inc. (producer) engaged Socialfix (marketing/branding) from 2017–2018 to develop and promote a TV show called The Unicorn; the parties signed a nonbinding MOU that contemplated Socialfix work and discussed compensation (equity was expected; limited early cash payments were made).
- Socialfix designed and contributed to Unicorn’s branding and logo; it claims it was to be paid in equity (and also contends a $75,000/month budget), while Unicorn says only modest cash payments were agreed and equity transfers never occurred.
- Relations collapsed in Oct. 2018 after Socialfix sent demand letters with retroactive invoices seeking ~$1.7M and asserted ownership over branding; Tateossian applied (then withdrew) for a UNICORN trademark and counsel for Socialfix sent a cease-and-desist to Bloomberg two days before a sponsored Bloomberg event.
- Bloomberg removed Unicorn branding from the event; Unicorn alleges that Socialfix’s letter caused loss of promotional benefits and ultimately led Bloomberg to stop working with Unicorn; Socialfix says its letter protected perceived IP rights and was a settlement tactic to get Unicorn to negotiate.
- Procedurally: Unicorn sued for Lanham Act false designation, N.Y. GBL § 349, and tortious interference; Socialfix counterclaimed for breach (dropped), unjust enrichment, quantum meruit, and promissory estoppel. Cross-motions for summary judgment followed.
- Court dispositions: Unicorn’s summary judgment denied in full; Socialfix’s summary judgment granted only as to dismissal of Unicorn’s GBL § 349 claim; Lanham Act and tortious-interference claims denied summary judgment due to factual disputes; Socialfix’s quantum meruit/unjust enrichment claims survive but summary judgment on liability denied because valuation and scope of services remain for trial.
Issues
| Issue | Plaintiff's Argument (Unicorn) | Defendant's Argument (Socialfix) | Held |
|---|---|---|---|
| Lanham Act (false designation/use in commerce) | Socialfix’s trademark filing, statements, and cease-and-desist letter show use in commerce and likely confusion | Trademark filing and cease-and-desist letter are not statutory "use in commerce"; factual dispute about actual commercial use of mark | Denied for Unicorn — genuine dispute whether Socialfix made a statutory use in commerce precludes summary judgment |
| Tortious interference (wrongful means; causation) | Socialfix knowingly threatened baseless litigation to harm Unicorn’s Bloomberg relationship | Socialfix acted to protect perceived IP rights or to force Unicorn to negotiate; lacked intent to prosecute; any harm not proven or was caused by other events | Both parties’ SJ denied — material disputes about Socialfix’s motives (bad faith vs. genuine belief) and causation (proximate harm to Bloomberg relationship) require factfinding |
| N.Y. Gen. Bus. Law § 349 (consumer-oriented deceptive acts) | (asserted) Socialfix’s conduct was deceptive and caused public harm | Socialfix: conduct was not consumer-oriented or public-facing trademark injury | Granted to Socialfix — Unicorn abandoned the claim and record lacks public-consumer injury; claim dismissed |
| Unjust enrichment / Quantum meruit | Socialfix provided accepted services expecting compensation (equity/cash) and Unicorn unjustly benefited | Unicorn contests scope/value of services, disputes invoices, and raises (untimely) unclean-hands defense | Denied for Socialfix on liability — entitlement established at a high level but material disputes over the specific services/time and valuation prevent summary judgment on liability; unclean-hands defense waived / insufficient |
Key Cases Cited
- Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009) (discusses "use in commerce" element under the Lanham Act)
- 1-800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400 (2d Cir. 2005) (Lanham Act precedent on trademark use issues)
- Universal City Studios, Inc. v. Nintendo Co., 797 F.2d 70 (2d Cir. 1986) (bad-faith threats to licensees can be wrongful means for tortious interference)
- Carvel Corp. v. Noonan, 3 N.Y.3d 182 (N.Y. 2004) (New York wrongful-means standard for tortious interference)
- Catskill Dev., LLC v. Park Place Ent. Corp., 547 F.3d 115 (2d Cir. 2008) (elements of tortious interference under New York law)
- Leibowitz v. Cornell Univ., 584 F.3d 487 (2d Cir. 2009) (unjust enrichment / quantum meruit standards)
- Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168 (2d Cir. 2005) (quantum meruit elements)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden on movant)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (genuine dispute of material fact standard for summary judgment)