`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`--------------------------------------------------------x
`TILE, INC.,
`
`Plaintiff,
`
`Civil Action No.: 1:20-cv-1761
`
`-against-
`
`DIGITAL PAVILION ELECTRONICS LLC,
`CHUKA LLC, ULTRA DISCOUNTS CORP,
`and
`FLATBUSH
`PHOTO
`AND
`ELECTRONICS LLC,
`
`Defendants.
`--------------------------------------------------------x
`
`COMPLAINT
`
`Plaintiff Tile, Inc. (“Tile” or “Plaintiff”) by and through its undersigned counsel,
`
`complains of Defendants Digital Pavilion Electronics LLC (“Digital”), Chuka LLC (“Chuka”),
`
`Ultra Discounts Corp (“Ultra”), and Flatbush Photo and Electronics LLC’s (“Flatbush”)
`
`(together, “Defendants”) conduct and alleges upon information and belief as follows:
`
`NATURE OF THIS ACTION
`
`1.
`
`Plaintiff seeks injunctive relief and monetary damages for Defendants’ trademark
`
`infringement, unfair competition, and false advertising under the Lanham Act, 15 U.S.C. § 1051,
`
`et seq., as well as related state law claims, arising from Defendants’ wrongful, unauthorized
`
`promotion and sale of Tile’s products through online commerce sites including but not limited
`
`to, Amazon.com.
`
`2.
`
`3.
`
`Tile sells its products through a nationwide network of Authorized Resellers.
`
`Further, Tile sells its products under the “Tile” brand. Tile is the owner of a
`
`federally-registered trademark TILE®, and has been utilizing that trademark since 2014.
`
`1
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 2 of 14 PageID #: 2
`
`
`4.
`
`Defendants offer for sale and sell non-genuine Tile products bearing this
`
`registered trademark through websites including but not limited to Amazon.com. Tile products
`
`sold via unauthorized resellers do not come with a Tile warranty.
`
`5.
`
`Despite advertising their Tile products as “new,” Defendants are deceiving
`
`customers by selling liquidated or used Tile products.
`
`6.
`
`Defendants have undertaken these wrongful acts willfully and with full
`
`knowledge of their wrongdoing.
`
`7.
`
`Consumers are likely to be and have been actually confused by Defendants’ sale
`
`of Tile products that are being falsely advertised as new product when they are in fact used or
`
`liquidation products.
`
`8.
`
`Defendants’ conduct has produced and, unless enjoined by this Court, will
`
`continue to produce a likelihood of consumer confusion and deception, to the irreparable injury
`
`of consumers and Tile.
`
`9.
`
`As a result of Defendants’ actions, Tile is suffering a loss of the enormous
`
`goodwill that Tile has created in its trademarks and is losing profits from lost sales of products.
`
`This action seeks permanent injunctive relief and damages for Defendants’ trademark
`
`infringement and unfair competition.
`
`JURISDICTION AND VENUE
`
`10.
`
`This Court has jurisdiction over the subject matter of this Complaint pursuant to
`
`15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1338(a) and (b), as these claims arise under the
`
`Trademark Laws of the United States.
`
`11.
`
`Defendants are subject to personal jurisdiction in the State of New York and this
`
`District pursuant to because (a) Defendants have sold numerous products into the State and this
`
`
`
`
`2
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 3 of 14 PageID #: 3
`
`
`District; (b) Defendants have caused injury to Tile’s trademarks within the State and this District;
`
`(c) Defendants practice the unlawful conduct complained of herein, in part, within the State and
`
`this District; (d) Defendants regularly conduct or solicit business within the State and this
`
`District; (e) Defendants regularly and systematically direct electronic activity into the State and
`
`this District with the manifest intent of engaging in business within the State and this District,
`
`including the sale and/or offer for sale to Internet users within the State and this District; and (f)
`
`Defendants enter into contracts with residents of the State and this District through the sale of
`
`items on various online retail platforms and in Internet auctions. Moreover, Defendants are each
`
`incorporated within New York.
`
`12.
`
`Venue is proper in this district pursuant to 28 U.S.C. § 1391 because a substantial
`
`part of the events or omissions giving rise to this claim occurred in this district.
`
`PARTIES
`
`13.
`
`Plaintiff Tile, Inc. is a Delaware corporation with its principal place of business in
`
`San Mateo, CA. Tile designs, manufactures, and sells a variety of wireless tracking devices used
`
`to locate objects (“Tile Products”).
`
`14.
`
`Upon information and belief, defendant Digital Pavilion Electronics LLC is a
`
`New York LLC with an address of 1014 Stanley Avenue in Brooklyn. It does business or has
`
`done business and sold or offered to sell products to consumers, including Tile products through
`
`various online commerce sites, including, but not limited to, Amazon.com, using the seller name
`
`“Firemall LLC.”
`
`15.
`
`Amazon has assigned identification number A9VBWN1Q1U6E6 to Digital
`
`Pavilion Electronics LLC’s Amazon seller ID.
`
`16.
`
`Upon information and belief, defendant Chuka LLC is a New York LLC with an
`
`address of Jericho Tpke #170, in Garden City. It does business or has done business and sold or
`
`
`
`
`3
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 4 of 14 PageID #: 4
`
`
`offered to sell products to consumers, including Tile products through various online commerce
`
`sites, including, but not limited to, Amazon.com, using the seller name “Pops Deals.”
`
`17.
`
`Amazon has assigned identification number AC5IW3JCE7ZLI to Chuka LLC’s
`
`Amazon ID.
`
`18.
`
`Upon information and belief, defendant Ultra Discounts Corp is a New York
`
`corporation with an address of 5614 15th Avenue in Brooklyn. It does business or has done
`
`business and sold or offered to sell products to consumers, including Tile products through
`
`various online commerce sites, including, but not limited to, Amazon.com, using the seller name
`
`“Ultra Design.”
`
`19.
`
`Amazon has assigned identification number AQD8CSXUPVRAZ to Ultra
`
`Discounts Corp’s Amazon ID.
`
`20.
`
`Upon information and belief, defendant Flatbush Photo and Electronics LLC is
`
`New York LLC with an address of 4313 18th Avenue in Brooklyn. It does business or has done
`
`business and sold or offered to sell products to consumers, including Tile products through
`
`various online commerce sites, including, but not limited to, Amazon.com, using the seller name
`
`“Dave Parkers.”
`
`21.
`
`Amazon has assigned identification number A2SP7PATXBS8OB to Flatbush
`
`Photo and Electronics LLC’s Amazon ID.
`
`22.
`
`Upon information and belief, Defendants all work together and pool resources to
`
`commit the acts described herein.
`
`
`
`
`
`
`
`
`
`
`4
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 5 of 14 PageID #: 5
`
`
`A. Tile’s Authorized Reseller Network
`
`FACTS
`
`23.
`
`To create and maintain goodwill among its customers, Tile has taken substantial
`
`steps to ensure that Tile-branded products are of the highest quality. As a result, Tile has
`
`become widely known and is recognized throughout New York, the United States, and the world
`
`as a manufacturer of high quality products.
`
`24.
`
`One of the most significant steps taken in this regard is Tile’s development of a
`
`nationwide network of exclusive and authorized Resellers (“Authorized Resellers” and the
`
`“Authorized Reseller Network”).
`
`25.
`
`As a prerequisite to becoming part of the carefully selected Authorized Reseller
`
`Network, Tile requires that each of its Authorized Resellers agrees to sell Tile products only at
`
`the locations and websites designated in their agreement (the “Authorized Reseller Agreement”).
`
`The terms of the Authorized Reseller Agreement also prohibit the transshipment, diversion, or
`
`transfer of any Tile products to any other party.
`
`26.
`
`Tile’s requirement that each of its Authorized Resellers agrees not to transfer any
`
`Tile products to any other party is well known in the retail industry, particularly among retailers
`
`of consumer electronics. Upon information and belief, Defendants were fully aware of this at all
`
`relevant times.
`
`B. Tile’s Trademark Usage
`
`27.
`
`On September 11, 2018, the U.S. Patent and Trademark Office (“USPTO”) issued
`
`Reg. No. 5,561,760 for use of the Tile mark on, inter alia, a “Wireless tracking device…”
`
`(hereinafter, the “Tile Mark”).
`
`
`
`
`5
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 6 of 14 PageID #: 6
`
`
`28.
`
`Tile is the sole and exclusive owner of the federally registered Tile Mark on the
`
`USPTO’s Principal Register. The Tile Mark has been in continuous use since at least 2014.
`
`Said registration is in full force and effect.
`
`29.
`
`Tile owns several other federal trademark and service mark registrations, many of
`
`which utilize the Tile Mark. Said registrations are in full force and effect. All of Tile’s
`
`trademarks, including the Tile Mark, are collectively referred to as the “Tile Marks.”
`
`30.
`
`Tile advertises, distributes, and sells its products to consumers under the Tile
`
`Marks.
`
`31.
`
`Tile has also acquired common law rights in the use of the Tile Marks throughout
`
`the United States.
`
`32.
`
`Tile’s federal trademark registrations were duly and legally issued, are valid and
`
`subsisting, and constitute prima facie evidence of Tile’s exclusive ownership of the Tile Marks.
`
`33.
`
`Tile has invested significant time, money, and effort in advertising, promoting,
`
`and developing the Tile Marks throughout the United States and the world. Tile has also
`
`implemented an Authorized Reseller Network in order to guarantee that Tile products sold to
`
`consumers meet high standards of quality control. As a result of such actions, Tile has
`
`established substantial goodwill and widespread recognition in its Tile Marks, and those marks
`
`have become associated exclusively with Tile and its products by both customers and potential
`
`customers, as well as the general public at large.
`
`C. Defendants’ Infringing and Improper Conduct
`
`34.
`
`Defendants have sold and are currently selling Tile products on several online
`
`retail platforms, including, but not limited to, Amazon.com.
`
`35.
`
`Defendants offer for sale and sell Tile products using the Tile Marks.
`
`
`
`
`6
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 7 of 14 PageID #: 7
`
`
`36.
`
`Tile has never authorized or otherwise granted Defendants permission to use the
`
`Tile Marks in the sale of its products or otherwise.
`
`37.
`
`Defendants are falsely advertising that the Tile products they list for sale on
`
`Amazon.com and other websites are “new” despite the fact that they are in fact used or
`
`liquidation product.
`
`38.
`
`For example, defendant Ultra received the following feedback from its
`
`customers:
`
`
`
`
`
`
`
`
`
`39.
`
`Similarly, defendant Flatbush had the following feedback from a customer:
`
`40.
`
`Customer feedback for seller Digital is similar:
`
`
`
`
`7
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 8 of 14 PageID #: 8
`
`
`41.
`
`Lastly, while the following feedback is not for a Tile product, it makes clear that
`
`Chuka’s normal business practice is to sell used products falsely advertising them as “new.”
`
`
`
`
`
`42.
`
`Defendants’ literally false advertisement of a used or liquidation product as a
`
`“new” product is detrimental to Tile as consumers do not receive the product that they believe
`
`that they are obtaining and such false advertising by Defendants results in less sales of actual
`
`“new” Tile product.
`
`43. Moreover, Defendants advertise and/or infer that their Tile products come with a
`
`manufacturer’s warranty when they do not. Again, Defendants are falsely advertising the terms
`
`of Tile’s warranty.
`
`44.
`
`Tile warrants that its products will be free from defects in materials and
`
`workmanship for a period of one year. Tile’s warranty does not apply to products purchased
`
`from unauthorized resellers such as Defendants.
`
`45. Warranty information is important to consumers as is evidenced by the
`
`Defendants’ listing on their Amazon pages that their Tile products come with a warranty.
`
`46. Moreover, the feedback listed above makes clear the importance of refunds and
`
`warranties to customers when purchasing products online. The following feedback from a
`
`customer of Chuka makes this point abundantly clear:
`
`
`
`
`8
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 9 of 14 PageID #: 9
`
`
`
`
`
`
`47.
`
`Defendants’ continued advertisement and sale of used or liquidation Tile product
`
`as “new” as well as its false promise of a full Tile warranty has harmed, and continues to harm,
`
`Tile as well as the consuming public.
`
`D. The Likelihood of Confusion and Injury Caused by Defendants’ Actions
`
`48.
`
`49.
`
`Defendants’ actions substantially harm Tile through their false advertising.
`
`Defendants’ actions substantially harm Tile and its consumers who ultimately
`
`purchase Defendants’ Tile products believing them to be the same genuine, warranted products
`
`that they would receive from Tile or an Authorized Reseller.
`
`50.
`
`Defendants’ conduct results in consumer confusion as well as the dilution of
`
`Tile’s goodwill and trade name as consumers are not receiving the products they believe they are
`
`purchasing.
`
`51.
`
`The sale of Tile products by unauthorized resellers interferes with Tile’s ability to
`
`control the quality and reputation of products bearing the Tile Marks.
`
`52.
`
`As a result of Defendants’ actions, Tile is suffering the loss of the enormous
`
`goodwill it created in the Tile Marks.
`
`53.
`
`Defendants are likely to continue to commit the acts complained of herein, and
`
`unless restrained and enjoined, will continue to do so, all to Tile’s irreparable harm.
`
`
`
`
`9
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 10 of 14 PageID #: 10
`
`
`COUNT I
` (Trademark Infringement in Violation of 15 U.S.C. § 1114)
`
`54.
`
`Tile hereby realleges each and every allegation contained in the foregoing
`
`paragraphs as if fully set forth herein.
`
`55.
`
`56.
`
`This is a claim for federal trademark infringement under 15 U.S.C. § 1114.
`
`The acts of Defendants alleged herein constitute the use in commerce, without the
`
`consent of Tile, of a reproduction, counterfeit, copy, or colorable imitation of the Tile Marks in
`
`connection with the sale, offering for sale, distribution, or advertising of goods, which use is
`
`likely to cause confusion or mistake, or to deceive consumers, and therefore infringes Tile’s
`
`rights in the Tile Marks, all in violation of the Lanham Act.
`
`57.
`
`Defendants have used, and continue to use, the Tile Marks in the sale of non-
`
`genuine Tile products that are not subject to Tile’s warranty and that are not “new” as
`
`Defendants advertise.
`
`58.
`
`Defendants’ infringing activities are likely to cause, are actually causing, and are
`
`willful and intended to cause, confusion, mistake, and deception among members of the trade
`
`and the general consuming public as to the origin and quality of such products, and constitute
`
`trademark infringement under 15 U.S.C. § 1114.
`
`59.
`
`Defendants’ use of the Tile Marks as described herein demonstrates an
`
`intentional, willful, and malicious intent to trade on the goodwill associated with the Tile Marks,
`
`thereby causing immediate, substantial, and irreparable injury to Tile.
`
`60.
`
`As a direct and proximate result of Defendants’ actions, Tile has been, and
`
`continues to be, damaged by Defendants’ activities and conduct. Defendants have profited
`
`thereby, and, unless their conduct is enjoined, Tile’s reputation and goodwill will continue to
`
`
`
`
`10
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 11 of 14 PageID #: 11
`
`
`suffer irreparable injury that cannot adequately be calculated or compensated by money
`
`damages. Accordingly, Tile is entitled to injunctive relief pursuant to 15 U.S.C. § 1116.
`
`COUNT II
`(Unfair Competition and False Advertising in Violation of 15 U.S.C. § 1125(a))
`
`61.
`
`Tile hereby realleges each and every allegation contained in the foregoing
`
`paragraphs as if fully set forth herein.
`
`62.
`
`63.
`
`This is a claim for federal trademark infringement under 15 U.S.C. § 1125(a).
`
`Tile engages in interstate activities designed to promote its goods and services
`
`sold, as well as the goodwill associated with the Tile Marks, throughout the United States.
`
`64.
`
`The Tile Marks have been, and will continue to be, known throughout the United
`
`States as identifying and distinguishing Tile’s products and services.
`
`65.
`
`By selling or distributing products using the Tile Marks as alleged herein,
`
`Defendants are engaging in unfair competition, false advertising, and/or falsely representing
`
`sponsorship by, affiliation with, or connection to Tile and its goods and services in violation of
`
`15 U.S.C. § 1125(a).
`
`66.
`
`By advertising or promoting products using the Tile Marks as alleged herein,
`
`Defendants are misrepresenting the nature, characteristics, and qualities of its goods and services
`
`in violation of 15 U.S.C. § 1125(a).
`
`67.
`
`Defendants’ actions demonstrate an intentional, willful, and malicious intent to
`
`trade on the goodwill associated with the Tile Marks, thereby causing immediate, substantial,
`
`and irreparable injury to Tile.
`
`68.
`
`By selling and advertising products under the Tile Marks as alleged herein, Tile is
`
`entitled to a judgment of three times its damages and Defendants’ ill-gotten profits, together with
`
`reasonable attorneys’ fees, pursuant to 15 U.S.C. § 1117(a).
`
`
`
`
`11
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 12 of 14 PageID #: 12
`
`
`69.
`
`As a direct and proximate result of Defendants’ actions, Tile has been, and
`
`continues to be, damaged by Defendants’ activities and conduct. Defendants have profited
`
`thereby, and unless their conduct is enjoined, Tile’s reputation and goodwill will continue to
`
`suffer irreparable injury that cannot adequately be calculated or compensated by money
`
`damages. Accordingly, Tile is entitled to injunctive relief pursuant to 15 U.S.C. § 1116.
`
`RELIEF REQUESTED
`
`WHEREFORE, Plaintiff Tile, Inc. prays for judgment in its favor and against
`
`Defendants providing the following relief:
`
`1.
`
`Finding that, (i) as to Count I, Defendants’ unauthorized sale of Tile products
`
`infringes on Tile’s registered trademarks, in violation of 15 U.S.C. § 1114; (ii) as
`
`to Count II, Defendants’ unauthorized sale of Tile products constitutes unfair
`
`competition and false advertising, in violation of 15 U.S.C. § 1125(a); resulting in
`
`Defendants, their officers, agents, servants, employees, attorneys, and any other
`
`persons or entities acting in concert or participation with Defendants, including
`
`but not limited to any online platform such as Amazon.com or any other website,
`
`website host, website administrator, domain registrar, or internet service provider,
`
`being preliminarily and permanently enjoined from:
`
`a. using the Tile Marks or any other of Tile’s intellectual property;
`
`b. acquiring, or taking any steps to acquire, any Tile products acquired in
`
`violation of Tile’s Authorized Reseller Agreements, or through any other
`
`improper or unlawful channels;
`
`c. selling, or taking any steps to sell, any Tile products unless Defendants can
`
`substantiate with documentary evidence that the specific Tile products they
`
`
`
`
`12
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 13 of 14 PageID #: 13
`
`
`are listing for sale were not acquired in violation of Tile’s Authorized Reseller
`
`Agreements, or through any other improper or unlawful channels;
`
`d. engaging in any activity constituting unfair competition with Tile;
`
`e. inducing, assisting, or abetting any other person or entity in engaging in or
`
`performing any of the business activities described in the paragraphs above.
`
`2.
`
`Award Tile its actual damages suffered as a result of Defendants’ acts and treble
`
`said damages as provided by law pursuant to 15 U.S.C. § 1117;
`
`3.
`
`Award Tile any other damages suffered as a result of Defendants’ acts and treble
`
`said damages as provided by law pursuant to 15 U.S.C. § 1117;
`
`4.
`
`Award Tile its reasonable attorneys’ fees in bringing this action as allowed by
`
`law;
`
`5.
`
`Award Tile pre-judgment and post-judgment interest in the maximum amount
`
`allowed under the law;
`
`6.
`
`7.
`
`Award Tile the costs incurred in bringing this action; and
`
`Grant Tile such other relief as this Court deems just and proper.
`
`DEMAND FOR JURY TRIAL
`
`Tile hereby requests a trial by jury on all causes of action so triable.
`
`Dated: New York, New York
`April 10, 2020
`
`
`K&L GATES LLP
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`13
`
`
`
`
`
`
`
`Priya Chadha
`599 Lexington Avenue
`New York, New York 10022
`Tel.: (212) 536-3905
`Fax: (212) 536-3901
`Email: priya.chadha@klgates.com
`
`
`
`Case 1:20-cv-01761-PKC-SJB Document 1 Filed 04/10/20 Page 14 of 14 PageID #: 14
`
`
`
`Morgan T. Nickerson (pro hac anticipated)
`morgan.nickerson@klgates.com
`K&L Gates LLP
`State Street Financial Center
`One Lincoln Street
`Boston, MA 02111
`(617) 261-3100
`(617) 261-3175
`
`
`
`
`
`
`
`14
`
`