Kid Car NY, LLC v. Kidmoto Techs. LLC

• Citation: 518 F.Supp.3d 740
• Decision Date: 09 February 2021
• Docket Number: 19-cv-7929 (PKC)
• Parties: KID CAR NY, LLC, Plaintiff-Counterclaim-Defendant, v. KIDMOTO TECHNOLOGIES LLC and Nelson Nigel, Defendants-Counterclaim-Plaintiffs. Kidmoto Technologies LLC, Third-Party Plaintiff, v. Andrew C. ("Topher") McGibbon, Third-Party Defendant.
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

518 F.Supp.3d 740

KID CAR NY, LLC, Plaintiff-Counterclaim-Defendant,

v.KIDMOTO TECHNOLOGIES LLC and Nelson Nigel, Defendants-Counterclaim-Plaintiffs.

Kidmoto Technologies LLC, Third-Party Plaintiff,

v.Andrew C. ("Topher") McGibbon, Third-Party Defendant.

19-cv-7929 (PKC)

United States District Court, S.D. New York.

Signed February 9, 2021

James Robert McGibbon, Eversheds Sutherland (US) LLP, Atlanta, GA, Alexander Phillip Fuchs, Ronald Walter Zdrojeski, Sutherland Asbill & Brennan, Sarah Chaudhry, Eversheds Sutherland, LLP, New York, NY, for Plaintiff-Counterclaim-Defendant.

James Robert McGibbon, Eversheds Sutherland (US) LLP, Atlanta, GA, Alexander Phillip Fuchs, Sutherland Asbill & Brennan, New York, NY, for Third-Party Defendant.

John H. Ray, III, Ray & Counsel, P.C., Chicago, IL, for Defendants/Third-Party Plaintiff.

Andrew C. McGibbon, Pro Se.

OPINION AND ORDER

Castel, U.S.D.J.

This is an action between competitors in the transportation services market targeting customers with children. Kid Car NY, LLC ("Kid Car") is a transportation company founded by Andrew C. McGibbon that has operated in the New York City metropolitan area since 2006. Kidmoto Technologies LLC ("Kidmoto") is a Kid Car competitor founded by Nelson Nigel, who was formerly a driver for Kid Car.

Kid Car and Kidmoto assert claims and counterclaims alleging infringement of each other's marks and works, and unfair business practices targeting the companies’ customers and drivers. Before the Court is Kidmoto and Nigel's motion to dismiss the Third Amended Complaint (the "Complaint") and Kid Car and McGibbon's partial motion to dismiss the Amended Counterclaims and Third-Party Complaint (the "Counterclaim"). The Court will address each motion in turn.

I. THE MOTION TO DISMISS KID CAR'S THIRD AMENDED COMPLAINT.

A. Kid Car's Complaint

Kid Car has operated a transportation service for customers with children since 2006. (Compl. ¶ 1). The Company's mission is to provide "Safe Transport for Children" with trained drivers and car seats. (Compl. ¶ 11). Kid Car offers a variety of services including "Kid Car Newborn" (rides from the hospital), "Kid Car Airport" (airport rides), "Kid CarPool" (shared rides for kids), and "Kid Car by the Hour" (customer directed service). (Compl. ¶ 12). According to the Complaint, Kid Car has a "well-earned reputation for safe and quality service" and points to favorable reviews and recommendations on websites such as Google and Yelp as well as print and online publications. (Compl. ¶ 18).

Since its formation in 2006, Kid Car has continuously used the unregistered mark "KID CAR" as a trade name and service mark. (Compl. ¶ 13). The Complaint alleges that the words "kid car" have previously been used to describe certain children toys and games but not to describe a transportation service focused on children. (Compl. ¶ 14). According to Kid Car, other competitors in the ride services market for children including the four largest companies, do not use the words "kid" and "car" consecutively on their websites. (Compl. ¶ 15). The Complaint also annexes Google search results for the term "kid car" without quotes. (Compl. ¶ 20 and Ex. A). The search results show that the first two listings and three of the top five results are for Kid Car and none of the other first "51 search results was for the web site of another transportation provider." (Compl. ¶ 20).

In 2015, Kid Car offered consumers the ability to request rides using a mobile phone "app" reservation system. (Compl. ¶¶ 22–23). The first version of the app did not work well, and in January 2016, Kid Car engaged a "provider of generic apps for car transportation services to develop and customize the provider's generic app to Kid Car's unique specification." (Compl. ¶ 25). The new app ("the Kid Car App") was launched in April 2016. (Compl. ¶ 25). The app developer authorized Kid Car to copyright the text on the screens of the Kid Car App. (Compl. ¶ 26). On February 26, 2019, Kid Car received a copyright registration for this text. (Compl. ¶ 26 and Ex. B).

Kid Car's Complaint alleges that it has promoted its services by engaging in extensive marketing efforts, receiving favorable media coverage, and engaging in brand partnerships. Until "relatively recently" Kid Car did not engage in significant "web advertising" and instead focused on direct promotions. (Compl. ¶ 15). These efforts include marketing calls, visits or emails directed to hospital maternity wards, doctor's offices, nursery schools, activity centers, hotels and public parks in Manhattan and Brooklyn. (Compl. ¶ 15). Kid Car has also been "favorably profiled in the New York Times, The Washington Post, The Daily News, The New York Post, Columbia College Today, AM New York, MOMMY Poppins, and on CBS 2 and Fox 5 News." (Compl. ¶ 16). The Company has appeared in advertising campaigns on behalf of American Express and in a product endorsement for Safeguard, a provider of car restraints for children. (Compl. ¶ 16).

Kidmoto is a competitor of Kid Car started by one its former drivers, Nelson Nigel. (Compl. ¶ 1). Nigel, the CEO of Kidmoto, drove for Kid Car starting in September 2015 and was terminated in May 2017 after Kid Car became aware of Kidmoto's operations. (Compl. ¶¶ 8, 27, 34).

Kidmoto does business under various names that all contain the word "Kidmoto." (Compl. ¶ 29). The Complaint alleges that in May 2016 Nigel changed the name of an existing LLC to "Kidmoto, LLC" and later that year changed its name again to "Kidmoto Technologies, LLC." (Compl. ¶ 29). The Complaint asserts that the Kidmoto name was intended to create consumer confusion with the "KID CAR" mark and take advantage of Kid Car's reputation. (Compl. ¶ 30).

In July 2019, Kid Car became aware that Kidmoto used the "Kid Car" mark in its Google Adwords. (Compl. ¶ 37). By purchasing Adwords from Google, Kidmoto's advertisement is "placed before the results of natural searches by prospective customers." (Compl. ¶ 38). The Complaint alleges that Kidmoto's resulting advertisements on Google used the text "Kid Car" in its ad's "headline," which is displayed in bold blue lettering and is a hyperlink to Kidmoto's website. (Compl. ¶ 39). Exhibit D to the Complaint shows instances of allegedly infringing use of the "KID CAR" mark in Kidmoto advertisements or posts on Google, Facebook and Youtube. (Compl. Ex. D). Kid Car also states that "Kidmoto used variants of [p]laintiff's corporate name, ‘Kid Car NY, LLC’ " in posts on Plurk and Reddit. (Compl. ¶ 42).

Kid Car further alleges that Kidmoto copied the Kid Car App starting "at or about the time [Kidmoto] launched its service." (Compl. ¶ 32). The Complaint annexes screenshots comparing the Kid Car App with Kidmoto's app. (Compl. Ex. C).

Kid Car's Complaint asserts claims against Kidmoto and Nigel under the Lanham Act, 15 U.S.C. § 1125(a) for unfair competition (Count I); 17 U.S.C. § 501, et seq. for copyright infringement (Count II); and New York common law for unfair competition (Count III), trademark infringement (Count IV) and unjust enrichment (Count V).

B. Rule 12(b)(6) Standard

Rule 12(b)(6) requires a complaint to "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In assessing the sufficiency of a pleading, a court must disregard legal conclusions, which are not entitled to the presumption of truth. Id. Instead, the Court must examine the well-pleaded factual allegations, which are accepted as true, and "determine whether they plausibly give rise to an entitlement to relief." Id. at 678–79, 129 S.Ct. 1937. "Dismissal is appropriate when ‘it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law.’ " Parkcentral Global Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198, 208–09 (2d Cir. 2014) (quoting Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000) ).

A court reviewing a Rule 12(b)(6) motion "does not ordinarily look beyond the complaint and attached documents in deciding a motion to dismiss brought under the rule." Halebian v. Berv, 644 F.3d 122, 130 (2d Cir. 2011) (citing Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008) ). A court may, however, "consider ‘any written instrument attached to [the complaint] as an exhibit or any statements or documents incorporated in it by reference ... and documents that the plaintiffs either possessed or knew about and upon which they relied in bringing the suit.’ " Stratte-McClure v. Morgan Stanley, 776 F.3d 94, 100 (2d Cir. 2015) (first alteration in original) (quoting Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir. 2000) ).

C. Discussion

1. Lanham Act and Common Law Trademark and Unfair Competition Claims.

Kid Car has not registered "KID CAR" as a service mark and trade name with the United States Patent and Trademark Office ("PTO") and, hence asserts no claim under section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1). It asserts, instead, a claim under section 43(a) of the Lanham Act, which prohibits a person from using "any word, term, name, symbol, or device, or any combination thereof" that is "likely to cause confusion ... as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities ...." 15 U.S.C. § 1125(a). "Section 43(a) is a broad federal unfair competition provision which protects unregistered trademarks similar to the way that section 32(1) ... protects registered marks." Chambers v. Time Warner, Inc., 282 F.3d 147, 155 (2d Cir. 2002). To prevail on a claim under section 43(a) "plaintiff must demonstrate that it has a valid mark entitled to protection and that the defendant's use of it is likely to cause confusion." Time, Inc. v. Petersen Pub. Co., 173 F.3d...