Case 1:20-cv-00428-FJS-DJS Document 1 Filed 04/10/20 Page 1 of 13
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF NEW YORK
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`TILE, INC.,
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`Plaintiff,
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`Civil Action No.
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`1:20-CV-0428 (FJS/DJS)
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`-against-
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`CELLNTELL DISTRIBUTION INC. and
`RELIANCE DISTRIBUTION INC.,
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`Defendants.
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`COMPLAINT
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`Plaintiff Tile, Inc. (“Tile” or “Plaintiff”) by and through its undersigned counsel, complains
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`of Defendants CellnTell Distribution Inc. and Reliance Distribution Inc.’s (together,
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`“Defendants”) conduct and alleges upon information and belief as follows:
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`NATURE OF THIS ACTION
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`1.
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`Plaintiff seeks injunctive relief and monetary damages for Defendants’ trademark
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`infringement, unfair competition, and false advertising under the Lanham Act, 15 U.S.C. § 1051,
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`et seq., as well as related state law claims, arising from Defendants’ wrongful, unauthorized
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`promotion and sale of Tile’s products thought to be stolen through online commerce sites including
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`but not limited to, Amazon.com.
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`2.
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`3.
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`Tile sells its products through a nationwide network of Authorized Resellers.
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`Further, Tile sells its products under the “Tile” brand. Tile is the owner of a
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`federally-registered trademark TILE®, and has been utilizing that trademark since 2014.
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`4.
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`Defendants offer for sale and sell non-genuine, potentially stolen, Tile products
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`bearing this registered trademark through websites including but not limited to Amazon.com. Tile
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`products sold via unauthorized resellers do not come with a Tile warranty.
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`5.
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`Despite advertising their Tile products as “new,” Defendants are deceiving
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`customers by selling liquidated, used, or even potentially stolen Tile products.
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`6.
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`Defendants have undertaken these wrongful acts willfully and with full knowledge
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`of their wrongdoing.
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`7.
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`Consumers are likely to be and have been actually confused by Defendants’ sale of
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`Tile products that are being falsely advertised as new product when they are in fact used,
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`liquidation, or potentially stolen products.
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`8.
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`Defendants’ conduct has produced and, unless enjoined by this Court, will continue
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`to produce a likelihood of consumer confusion and deception, to the irreparable injury of
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`consumers and Tile.
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`9.
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`As a result of Defendants’ actions, Tile is suffering a loss of the enormous goodwill
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`that Tile has created in its trademarks and is losing profits from lost sales of products. This action
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`seeks permanent injunctive relief and damages for Defendants’ trademark infringement and unfair
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`competition.
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`JURISDICTION AND VENUE
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`10.
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`This Court has jurisdiction over the subject matter of this Complaint pursuant to 15
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`U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1338(a) and (b), as these claims arise under the Trademark
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`Laws of the United States.
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`11.
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`This Court has supplemental jurisdiction over the pendent state law claims pursuant
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`to 28 U.S.C. § 1367(a).
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`12.
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`Defendants are subject to personal jurisdiction in the State of New York and this
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`District because (a) Defendants have sold numerous products into the State and this District; (b)
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`Defendants have caused injury to Tile’s trademarks within the State and this District; (c)
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`Defendants practice the unlawful conduct complained of herein, in part, within the State and this
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`District; (d) Defendants regularly conduct or solicit business within the State and this District; (e)
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`Defendants regularly and systematically direct electronic activity into the State and this District
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`with the manifest intent of engaging in business within the State and this District, including the
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`sale and/or offer for sale to Internet users within the State and this District; and (f) Defendants
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`enter into contracts with residents of the State and this District through the sale of items on various
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`online retail platforms and in Internet auctions. Moreover, defendant Reliance Distribution Inc. is
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`incorporated within New York.
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`13.
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`Venue is proper in the United States District Court for the Northern District of New
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`York pursuant to 28 U.S.C. § 1391 because a substantial part of the events or omissions giving
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`rise to this claim occurred in this District.
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`PARTIES
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`14.
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`Plaintiff Tile, Inc. is a Delaware corporation with its principal place of business in
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`San Mateo, CA. Tile designs, manufactures, and sells a variety of wireless tracking devices used
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`to locate objects (“Tile products”).
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`15.
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`Upon information and belief, defendant Reliance Distribution Inc. is a New York
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`corporation with a principal place of business in Albany, New York. It does business or has done
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`business and sold or offered to sell products to consumers, including Tile products, within the State
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`of New York.
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`16.
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`Upon information and belief, defendant CellnTell Distribution Inc. is a Canadian
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`corporation with a principal place of business in Mississauga, Ontario. Upon information and
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`belief, CellnTell Distribution Inc. is the parent company of defendant Reliance Distribution Inc.
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`CellnTell Distribution Inc. does business or has done business and sold or offered to sell products
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`to consumers, including Tile products, within the State of New York.
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`17.
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`Defendants sell products, including Tile products, through various means including
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`but not limited to the Amazon seller IDs “cellulartech” and “évoluer.”
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`18.
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`The Amazon seller identification number for Defendants’ cellulartech seller
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`account is A34YHZBJ3H3XXW.
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`19.
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` The Amazon seller identification number for Defendants’ évoluer account is
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`A2BCTGGGPILFXE.
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`A. Tile’s Authorized Reseller Network
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`FACTS
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`20.
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`To create and maintain goodwill among its customers, Tile has taken substantial
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`steps to ensure that Tile-branded products are of the highest quality. As a result, Tile has become
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`widely known and is recognized throughout New York, the United States, and the world as a
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`manufacturer of high quality products.
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`21.
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`One of the most significant steps taken in this regard is Tile’s development of a
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`nationwide network of exclusive and authorized Resellers (“Authorized Resellers” and the
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`“Authorized Reseller Network”).
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`22.
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`As a prerequisite to becoming part of the carefully selected Authorized Reseller
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`Network, Tile requires that each of its Authorized Resellers agrees to sell Tile products only at the
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`locations and websites designated in their agreement (the “Authorized Reseller Agreement”). The
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`terms of the Authorized Reseller Agreement also prohibit the transshipment, diversion, or transfer
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`of any Tile products to any other party. Tile also ensures that its Authorized Reseller Network is
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`familiar with the subtle differences between its products to ensure that customers receive exactly
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`the Tile product they intend to purchase.
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`B. Tile’s Trademark Usage
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`23.
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`On September 11, 2018, the U.S. Patent and Trademark Office (“USPTO”) issued
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`Reg. No. 5,561,760 for use of the Tile mark on, inter alia, a “Wireless tracking device…”
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`(hereinafter, the “Tile Mark”).
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`24.
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`Tile is the sole and exclusive owner of the federally registered Tile Mark on the
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`USPTO’s Principal Register. The Tile Mark has been in continuous use since at least 2014. Said
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`registration is in full force and effect.
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`25.
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`Tile owns several other federal trademark and service mark registrations, many of
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`which utilize the Tile Mark. Said registrations are in full force and effect. All of Tile’s trademarks,
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`including the Tile Mark, are collectively referred to as the “Tile Marks.”
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`26.
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`Tile advertises, distributes, and sells its products to consumers under the Tile
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`Marks.
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`27.
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`Tile has also acquired common law rights in the use of the Tile Marks throughout
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`the United States.
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`28.
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`Tile’s federal trademark registrations were duly and legally issued, are valid and
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`subsisting, and constitute prima facie evidence of Tile’s exclusive ownership of the Tile Marks.
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`29.
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`Tile has invested significant time, money, and effort in advertising, promoting, and
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`developing the Tile Marks throughout the United States and the world. Tile has also implemented
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`an Authorized Reseller Network in order to guarantee that Tile products sold to consumers meet
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`high standards of quality control. As a result of such actions, Tile has established substantial
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`goodwill and widespread recognition in its Tile Marks, and those marks have become associated
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`exclusively with Tile and its products by both customers and potential customers, as well as the
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`general public at large.
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`C. Defendants’ Infringing and Improper Conduct
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`30.
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`Defendants have sold and are currently selling Tile products on several retail
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`platforms, including, but not limited to, Amazon.com.
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`31.
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`32.
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`Defendants offer for sale and sell Tile products using the Tile Marks.
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`Tile has never authorized or otherwise granted Defendants permission to use the
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`Tile Marks in the sale of its products or otherwise.
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`33.
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`Defendants are falsely advertising that the Tile products they list for sale on
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`Amazon.com and other websites are “new” despite the fact that they are in fact used, counterfeit,
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`or liquidation product.
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`34.
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`Indeed, a quick review of the feedback received on their Amazon page makes this
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`clear:
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`35.
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`Defendants’ literally false advertisement of a used or liquidation product as a “new”
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`product is detrimental to Tile as consumers do not receive the product that they believe that they
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`are obtaining and such false advertising by Defendants results in less sales of actual “new” Tile
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`product.
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`36.
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`Similarly, there is evidence that the Tile product being offered for sale by
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`Defendants is stolen or counterfeit Tile product. Again, a review of Defendants’ Amazon feedback
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`makes this clear:
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`37.
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`As demonstrated above, Defendants are not trained in Tile products and often ship
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`the incorrect Tile product to a customer resulting in a poor experience with the Tile brand.
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`38. Moreover, Defendants advertise and/or infer that their Tile products come with a
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`manufacturer’s warranty when they do not. Again, Defendants are falsely advertising the terms of
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`Tile’s warranty.
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`39.
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`Tile warrants that its products will be free from defects in materials and
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`workmanship for a period of one year. Tile’s warranty does not apply to products purchased from
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`unauthorized resellers such as Defendants.
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`40. Warranty information is important to consumers as is evidenced by the Defendants’
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`listing on their Amazon pages that their Tile products come with a manufacturer’s warranty.
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`41.
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`Defendants’ continued advertisement and sale of used, liquidation, counterfeit or
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`potentially stolen Tile product as “new” as well as its false promise of a full Tile warranty has
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`harmed, and continues to harm, Tile as well as the consuming public.
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`D. The Likelihood of Confusion and Injury Caused by Defendants’ Actions
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`42.
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`43.
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`Defendants’ actions substantially harm Tile through their false advertising.
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`Defendants’ actions substantially harm Tile and its consumers who ultimately
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`purchase Defendants’ Tile products believing them to be the same genuine, warranted products
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`that they would receive from Tile or an Authorized Reseller.
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`44.
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`Defendants’ conduct results in consumer confusion as well as the dilution of Tile’s
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`goodwill and trade name as consumers are not receiving the products they believe they are
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`purchasing.
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`45.
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`The sale of Tile products by unauthorized resellers interferes with Tile’s ability to
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`control the quality and reputation of products bearing the Tile Marks.
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`46.
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`As a result of Defendants’ actions, Tile is suffering the loss of the enormous
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`goodwill it created in the Tile Marks.
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`47.
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`Defendants are likely to continue to commit the acts complained of herein, and
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`unless restrained and enjoined, will continue to do so, all to Tile’s irreparable harm.
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`COUNT I
` (Trademark Infringement in Violation of 15 U.S.C. § 1114)
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`48.
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`Tile hereby realleges each and every allegation contained in the foregoing
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`paragraphs as if fully set forth herein.
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`49.
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`50.
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`This is a claim for federal trademark infringement under 15 U.S.C. § 1114.
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`The acts of Defendants alleged herein constitute the use in commerce, without the
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`consent of Tile, of a reproduction, counterfeit, copy, or colorable imitation of the Tile Marks in
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`connection with the sale, offering for sale, distribution, or advertising of goods, which use is likely
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`to cause confusion or mistake, or to deceive consumers, and therefore infringes Tile’s rights in the
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`Tile Marks, all in violation of the Lanham Act.
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`51.
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`Defendants have used, and continue to use, the Tile Marks in the sale of non-
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`genuine Tile products that are not subject to Tile’s warranty and that are not “new” as Defendants
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`advertise.
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`52.
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`Defendants’ infringing activities are likely to cause, are actually causing, and are
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`willful and intended to cause, confusion, mistake, and deception among members of the trade and
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`the general consuming public as to the origin and quality of such products, and constitute
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`trademark infringement under 15 U.S.C. § 1114.
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`53.
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`Defendants’ use of the Tile Marks as described herein demonstrates an intentional,
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`willful, and malicious intent to trade on the goodwill associated with the Tile Marks, thereby
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`causing immediate, substantial, and irreparable injury to Tile.
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`54.
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`As a direct and proximate result of Defendants’ actions, Tile has been, and
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`continues to be, damaged by Defendants’ activities and conduct. Defendants have profited
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`thereby, and, unless their conduct is enjoined, Tile’s reputation and goodwill will continue to suffer
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`irreparable injury that cannot adequately be calculated or compensated by money damages.
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`Accordingly, Tile is entitled to injunctive relief pursuant to 15 U.S.C. § 1116.
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`COUNT II
`(Unfair Competition and False Advertising in Violation of 15 U.S.C. § 1125(a))
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`55.
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`Tile hereby realleges each and every allegation contained in the foregoing
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`paragraphs as if fully set forth herein.
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`56.
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`This is a claim for federal trademark infringement under 15 U.S.C. § 1125(a).
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`57.
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`Tile engages in interstate activities designed to promote its goods and services sold,
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`as well as the goodwill associated with the Tile Marks, throughout the United States.
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`58.
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`The Tile Marks have been, and will continue to be, known throughout the United
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`States as identifying and distinguishing Tile’s products and services.
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`59.
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`By selling or distributing products using the Tile Marks as alleged herein,
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`Defendants are engaging in unfair competition, false advertising, and/or falsely representing
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`sponsorship by, affiliation with, or connection to Tile and its goods and services in violation of 15
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`U.S.C. § 1125(a).
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`60.
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`By advertising or promoting products using the Tile Marks as alleged herein,
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`Defendants are misrepresenting the nature, characteristics, geographic origin, and/or qualities of
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`its goods and services in violation of 15 U.S.C. § 1125(a).
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`61.
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`Defendants’ actions demonstrate an intentional, willful, and malicious intent to
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`trade on the goodwill associated with the Tile Marks, thereby causing immediate, substantial, and
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`irreparable injury to Tile.
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`62.
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`By selling and advertising products under the Tile Marks as alleged herein, Tile is
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`entitled to a judgment of three times its damages and Defendants’ ill-gotten profits, together with
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`reasonable attorneys’ fees, pursuant to 15 U.S.C. § 1117(a).
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`63.
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`As a direct and proximate result of Defendants’ actions, Tile has been, and
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`continues to be, damaged by Defendants’ activities and conduct. Defendants have profited
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`thereby, and unless their conduct is enjoined, Tile’s reputation and goodwill will continue to suffer
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`irreparable injury that cannot adequately be calculated or compensated by money damages.
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`Accordingly, Tile is entitled to injunctive relief pursuant to 15 U.S.C. § 1116.
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`COUNT III
`(Unfair and Deceptive Trade Practices, N.Y. Gen. Bus. Law § 349)
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`Tile hereby realleges each and every allegation contained in the foregoing
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`64.
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`paragraphs as if fully set forth herein.
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`65.
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`As detailed above, Defendants’ sale of potentially stolen Tile products to
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`consumers constitutes an unfair and deceptive business practice.
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`66.
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`Defendants’ offering for sale and sale of potentially stolen Tile Products is directed
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`at consumers, who seek to purchase high-quality Tile products.
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`67.
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`Consumers would not purchase Tile products from Defendants if they knew that
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`such products were potentially stolen Tile products.
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`68.
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`69.
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`As a proximate result of Defendants’ misconduct, Tile has suffered actual damages.
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`Defendants have refused to desist from these wrongful acts, and therefore
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`Defendants have indicated that they intend to continue their unlawful conduct, unless restrained
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`by this Court.
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`RELIEF REQUESTED
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` WHEREFORE, Plaintiff Tile, Inc. prays for judgment in its favor and against Defendants
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`providing the following relief:
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`1.
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`Finding that, (i) as to Count I, Defendants’ unauthorized sale of Tile products
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`infringes on Tile’s registered trademarks, in violation of 15 U.S.C. § 1114; (ii) as
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`to Count II, Defendants’ unauthorized sale of Tile products constitutes unfair
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`competition and false advertising, in violation of 15 U.S.C. § 1125(a); as to Count
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`III, Defendants’ sale of potentially stolen Tile products constitutes unfair and
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`deceptive practices in violation of N.Y. Gen. Bus. Law § 349; resulting in
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`Defendants, their officers, agents, servants, employees, attorneys, and any other
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`persons or entities acting in concert or participation with Defendants, including but
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`not limited to any online platform such as Amazon.com or any other website,
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`website host, website administrator, domain registrar, or internet service provider,
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`being preliminarily and permanently enjoined from:
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`a. using the Tile Marks or any other of Tile’s intellectual property;
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`b. acquiring, or taking any steps to acquire, any Tile products acquired in violation
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`of Tile’s Authorized Reseller Agreements, or through any other improper or
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`unlawful channels;
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`c. selling, or taking any steps to sell, any Tile products unless Defendants can
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`substantiate with documentary evidence that the specific Tile products they are
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`listing for sale were not acquired in violation of Tile’s Authorized Reseller
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`Agreements, or through any other improper or unlawful channels;
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`d. engaging in any activity constituting unfair competition with Tile;
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`e. inducing, assisting, or abetting any other person or entity in engaging in or
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`performing any of the business activities described in the paragraphs above.
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`2.
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`Award Tile its damages suffered as a result of Defendants’ acts and treble said
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`damages as provided by law pursuant to 15 U.S.C. § 1117 and N.Y. Gen. Bus. Law
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`§ 349(h);
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`3.
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`Award Tile statutory damages up to $2,000,000.00 per Tile Mark infringed
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`pursuant to 15 U.S.C. § 1117.
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`4.
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`Award Tile its reasonable attorneys’ fees in bringing this action pursuant to 15
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`U.S.C. § 1117 and N.Y. Gen. Bus. Law § 349(h));
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`5.
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`Award Tile pre-judgment and post-judgment interest in the maximum amount
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`allowed under the law;
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`6.
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`7.
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`Award Tile the costs incurred in bringing this action; and
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`Grant Tile such other relief as this Court deems just and proper.
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`DEMAND FOR JURY TRIAL
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`Tile hereby requests a trial by jury on all causes of action so triable.
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`Dated: New York, New York
`April 10, 2020
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`K&L GATES LLP
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`/s/ Nicole M. Kozin
`Nicole M. Kozin
`599 Lexington Avenue
`New York, New York 10022
`Tel.: (212) 536-4007
`Fax: (212) 536-3901
`Email: nicole.kozin@klgates.com
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`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
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