chaos v. marut (mangroomer) - complaint

7/27/2019 Chaos v. Marut (MANGROOMER) - Complaint

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UNITED STATES DISTRJCT COURT LEvY, M.J.FOR THE EASTERN DISTRICT OF NEW YORK

CHAOS COMMERCE, INC.,Plaintiff,VS .

MARUT ENTERPRISES, LLCand

BRETT C. MARUTDefendants.

Civil Action No.ECFCASE

COMPLAINT FOR DECLARATORYJUDGMENT UNDER 28 U.S.C. 2201 ANDUNFAIR COMPETITION

DEMAND FOR JURY TRIAL

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NO W COMES Plaintiff, CHAOS COMMERCE, INC. ("CHAOS"), through its attorney,and files this Complaint for Declaratory Judgment under 28 U.S.C. 2201and UnfairCompetition along with a Demand for Jury Trial. In support thereof CHAOS states as follows:

The Plaintiff is:

The Defendants are:

PARTIES IN THIS COMPLAINT

Chaos Commerce, Inc. ("CHAOS")1529 Dean StreetBrooklyn, NY 11213718 604-2605

Marut Enterprises, LLC ("Marut")1855 W. Katella Avenue, STE 365Orange, CA 92867Brett C. Marut ("B Marut")1259 191h Street, Suite #1Santa, Monica, CA 90401

Complaint and Demand for Jury TrialChaos Commerce, Inc. v. Marut Enterprises, LLC et al.

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JURISDICTION AND VENUE1. This is an action for Declaratory Judgment under 28 U.S.C. 2201, along with an

action for unfair competition. This court has subject matter jurisdiction over thisaction pursuant to 28 U.S.C. Sec. 1338(a) and 28 U.S.C. Sec. 1331.

2. Venue is proper in this judicial district under 28 U.S.C. 1391(b), (c) and

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1400(b).On information and belief, Marut is subject to this Court's specific and generalpersonal jurisdiction, pursuant to due process and/or the New York Long ArmStatute, due to at least its business presence in this forum by selling through majorcompanies including, at least, Walmart, Bed Bath & Beyond, and Target,according to the web site of Marut.On information and belief, Marut, directly and/or through intermediaries,advertise at least through interactive web sites, offers to sell, sold and/or

distributed its products, in this Judicial District.In addition, and on information and belief, Marut is subject to the Court's generaljurisdiction, including from regularly doing or soliciting business, engaging inother persistent courses of conduct, and/or deriving substantial revenue fromgoods and services provided to individuals in this Judicial District.On information and belief, B Marut owns U.S. Patent No. 7,856,725 and U.S.Patent No. D611,653, and Marut owns the registered trademark forMANGROOMER.

Complaint and Demand for Jury TrialChaos Commerce, Inc. v. Marut Enterprises, LLC eta!.Page2


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On information and belief, Marut is merely the operating name ofB Marut andthey are actually one and the same. B Marut has total control over Marut and theaforementioned patents have issued in the name ofB Marut but are freely used byMarut.

BACKGROUNDChaos is a leading online source for a wide range of products from electronics tosoftware to clothing. Everyday, at least one new product is featured at a hugediscount for 24 hours. There are many different products featured on the Chaos'sweb site: \vv.w.dailvsteals.com.Chaos owns and has includes Daily Steals LLC, the operator of the web site,\V\VW.dailvsteals.com, and Wholesale Plus Wireless LLC, the previous owner ofDaily Steals LLC.In order to maintain a continuing stream of different products, Chaos has a highlyconfidential list of suppliers of products, and the success of Plaintiffs business isbased on the highly confidential of suppliers.Marut and B Murat, through their attorney, sent a letter dated July 22, 2013directed to a buyer for Chaos and to "DAILYSTEALS" asserting that a product,MENSHAVER, being sold by Chaos through its web site, \V\vw.dailysteals.comwas infringing U.S. Patent No. 7,856,725; U.S. Patent No. D611,653; andregistered trademark MANGROOMER. A true copy of the letter is shown inEx. A.


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The letter dated July 22, 2013 demanded that all sales cease a completeaccounting of sales, suppliers, etc. relating to MENSHAVER with the threat oflegal action by Murat and B Murat.On July 24, 2013, a response in behalf ofDailySteals was sent to the attorneypointing out specific reasons why the U.S. Patent No. 7,856,725, and the U.S.Patent No. D611 ,653 are invalid and unenforceable. In addition, specific reasonswere pointed out as to why the assertion of trademark infringement was wrong.The letter informed the attorney that Chaos (DailySteals) had no prior notice ofthe patents and that DailySteals was not selling the accused products or intendedto sell any additional accused products. A true copy of the letter dated July 24,2013 shown in Ex. B.The attorney for Marut and B Murat responded the next day, July 25, 2013 andacknowledged that no additional sales of the accused products would be made;

however, none of the arguments relating to invalidity were addressed beyond astatement that he thought the patents and trademark were infringed, valid, andenforceable. The letter again demanded information relating to suppliers,quantities sold, distributers, etc. with the threat of legal action. The deadline setby the attorney was the next day. A true copy of the July 25, 2013 letter is shownin Ex. C. The attorney did, however, extend the deadline in response to a request.thus, Murat and B Murat through "strong arm" tactics are endeavoring to obtainhighly confidential information from Chaos as well as money for no valid reason.

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COUNT SIX

25. Chaos repeats and incorporates herein the allegations set forth in paragraphs 1through 14 above

26. The Defendants are engaged in unfair competition by threatening to sue Chaos onthe aforementioned patents and registered trademark even though not one of theseare infringed by Chaos.

COUNT SEVEN

27. Chaos repeats and incorporates herein the allegations set forth in paragraphs 1through 14 above.28.

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The Defendants are misusing their rights under the aforementioned patents, andregistered trademark and should be held responsible for reasonable attorney costsand fees by Chaos to resolve the threats of litigation by the Defendants.

JURY DEMAND

Pursuant to Fed. R. Civ. P. 38, Plaintiff respectfully demands a jury trial as to allissues in this lawsuit.

Complaint and Demand for Jury TrialChaos Commerce, Inc. v. Marut Enterprises, LLC et al.Page 6


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PRAYER FOR RELIEF

WHEREFOR, Plainti ff respectfully requests this Court to:a.

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Enter Judgment on this Complaint against both Defendants.Find U.S. Patent No. 7,856,725 invalid and unenforceable.Find U.S. Patent No. 7,856,725 is not infringed by MENSHAVER.Find U.S. Patent No. D611m653 is invalid and unenforceable.Find U.S. Patent No. D611m653 is not infringed by MENSHAVER.Find that the trademark MANGROOMER is not infringed by MENSHAVER.Find the Defendants, individually, and/or jointly engaged in unfair competition.Find the Defendants, individually, and/or jointly are liable for all reasonableattorney costs and fees by Chaos to resolve the threat to its business.Award Chaos such other and further relief as this Court deems just and equitable.

THE PLAINTIFFCHAOS COMMERCE, INC.

J r . . . - ; ) ~David Fink4238Fink & Johnson7519 Apache PlumeHouston, TX 77071Tel.: 713 729-4991Fax.: 713 729-4951F [email protected] for the Plaintiff

Complaint and Demand for Jury TrialChaos Commerce, Inc. v. Marut Enterprises, LLC et al.Page 7


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EX. A


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THOMAS J. TEDESCOATTO R N EY AT L A W

1855 W E S T KATEI. I .A AVE., SUITE 3 0SO K A N G B , CAX.IPOBlii ' IA 92867

VIA EMAIL AND OVERNIGHT DELIVERYJuly 22,2013Nochum WaldroopDAILY STEALS2010 Atlantic A venueBrooklyn. NY 11233

NOTICE TO IMMEDIATELY CEASE AND DESISTRe: Marut Enterprises, LLC I Mangroomer/Mangroomer.com

TE : I . E P H O N E1714) 7711693

I "ACSI . . J. E17141 771 2689

Infringement by "DailySteals.com, Nochum Waldroop", and all affiliated andassociated entitiesDear Mr. Waldroop:

This office represents Brett Marut and Marut Enterprises, LLC in its litigation matters. Asyou are well aware, Marut Enterprises, LLC manufactures and distributes an electric back hairshaver under the registered trademark Mangroomer; the shaver is manufactured under Mr.Marut' s U.S. Design Patent No. 0611,653 and United States utility patent No. 7,856,72511.In fact, as you will recall, Marut Enterprises, LLC sent you samples of some of itsproducts late last year which you received on November 16,2012. At that time no agreement wasreached regarding your purchase ofany Mangroomer products because the price point(s) were notacceptable to you and my client was not satisfied that you could move an acceptable volume ofproduct.However, as your email correspondence with my client confirms, you had/have great

interest in the Mangroomer back hair shaver; your email states, "I really hope we can worksomething out, since you have some other products that I like even more (the back hair shaver,which is just genius)". I have enclosed a copy ofyour email dated November 20,2012 to Mr.Marut for your reference. In light of the fact that an agreement could not be reached with myclient, you apparently choose to purchase, sell, and distribute illegal, counterfeit product whichdirectly infringes my client's patents.

Our investigation has confirmed that you have offered for sale and distributed an "ElectricBack Shaver" ('accused product") which directly infringes my client's design and utility patents.Most recently, you advertised and sold the accused product on the DailySteals.com website onJuly 18,2013. By this letter demand is hereby made that you immediately remove the accusedproduct from any and all websites. This means that in addition to removing the product fromDailySteals.com, be sure to notify and have the product removed from any and all associatedsites.


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Nochum WaldroopD A I L Y S ~ A L SJuly 22,2013Page2

In addition to patent infringement, the accused product is being marketed and sold in amanner which violates the Lanham Act. In particular, the accused product is being marketed andsold in a manner which confuses an ordinary purchaser into believing that the accused productoriginates from Marut Enterprises. The following are just a few blatant examples: (i) the silvergrey color of the accused pioduct is identical to the silver-grey color ofmy client'sMangroomer shaver; (ii) your MENSHA VER trademark on the accused product has the MENin red and the word SHAVER in black, which looks exactly like my client's use of the wordMAN in red and the word GROOMER in black (the shades of ed and black used on therespective products are identical), (iii) the photographs and images on the packaging of heaccused product are either lifted directly from the photographs and images on my client'spackaging, or copies of same. There are other similarities that would lead to customer confusion,but the above-mentioned three are easily the clearest and most damaging examples. Suchcustomer confusion will cause my client to suffer significant harm. Your violation of he LanhamAct is very serious, and could result in an award of rebled damages and attorneys fees if we canshow that your infringement is sufficiently egregious.In light ofthe above, my clients hereby demand that you, Nochum Waldroop, Daily Steals, aswell as any and all affiliated entities, promptly cooperate in the following respects:1. You must immediately cease and desist from the sale and/or distribution of all infringingproduct. You must cease all marketing, sales, importation and distribution ofany kind.Immediately remove the infringing product from listing on any and all websites, includingbut not limited to DailySteals.com, as well as any and all other web sites and sources;2. You must provide a complete accounting of all infringing product purchased or acquiredby any of you (Nochum Waldroop, Daily Steals), and any and all other associated and/oraffiliated entities and individuals in the last three (3) years;3. You must provide a complete accounting of all infringing product sold or distributed byeach of you, Nochum Waldroop, Daily Steals, and any and all other associated and/oraffiliated entities and individuals in the last three (3) years (including the number of unitssold and the total revenues received);4. You must provide a complete accounting of the number of infringing products ("Electric

Back Shaver) in your (Nochum Waldroop, Daily Steals) and any and all other associatedand/or affiliated entities and individual's possession; please do not attempt to quickly"dump" your current inventory as this will only cause additional damages;5. You must provide the names, addresses, phone numbers, fax numbers, e-mail addressesand the like of all persons and/or entities that have offered to sell, or have sold, and/orprovided to any of you (Nochum Waldroop, Daily Steals) and any and all other associatedand/or affiliated entities and individuals with infringing product;


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Nochum WaldroopDAILY STEALSJuly 22, 2013Page3

6. You must provide the names, addresses, phone numbers, fax numbers, e-mail addressesand the like ofall persons and/or entities to which any ofyou (Nochum Waldroop, DailySteals) and any and all other associated and/or affiliated entities and individuals has soldor distributed infringing product;7. You must provide all purchase orders, invoices, bills of lading, and documentation of likekind relating to your (Nochum Waldroop, Daily Steals) and any and all other associatedand/or affiliated entities and individual's purchase and/or acquisition of infringingproduct.

I demand that you immediately cease from selling and/or distributing the infringingElectric Back Hair Shaver. In addition, I request that you provide me with the above informationand documentation on or before July 26, 2013. Please be advised that all ofmy clients' legalrights and remedies are expressly reserved. Nothing contained herein shall in any way be deemeda waiver ofany legal claims, rights and/or remedies ofany kind. Your prompt attention andcooperation is respectfully requested. Please direct all correspondence in this matter directly tome.

TI:kpEnclosure


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From: Nochum Waldroop [mailto:[email protected]: Tuesday, November 20, 2012 11:53 AMTo:MANGROOMERSUbject: Re: Daily StealsHi Brett,I thought I'd take the opportunity to explain how we develop our pricing a bit. ..I like the scruff sculptor, a lot. But when I look online and see what is essentially the same thing(minus the whisker belly, which according to reviews doesn't work well), from a far moreestablished and recognized manufacturer (ConAir), for $33.99, I just can't justify spending$29.80 per unit. For us to move the quantities that you expect, the price has to be outof thisworld. At the current price, we'd be lucky to sell100 units and we'd still lose money. Ourcustomers are deal junkies, and they won't get their "fix" by saving $5 on such an item. It's justnot an impulse buy.I really hope we can work something out, since you have some other products that I like evenmore (the back hair shaver, which is just genius). That's something that we can be a bit moreflexible with, since it's a unique product.

Best,Nochum WaldroopDaily Steals [email protected] ext 145


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EX.B


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DAVID FINKFINK & JOHNSON

ATTORNEYS AND COUNSELORS AT LA W7519 APACHE PLUMEHOUSTON, TX 77071Telephone (713) 729-4991

Fax (713) 729-4951e-mail: [email protected]

DAVID FINK (NY and CT only)

Thomas J. Tedesco, Esq. TELEFAX: 714 771-26891855 West Katella AvenueOrange, CA 92867

July 24, 2013

Re: Marut Enterprises, LLC/MangroomerDear Mr. Tedesco:

This office represents DailySteals. I am responding to your letter dated July 22, 2013 sentto Nochum Waldroop concerning Marut Enterprises.You are wrong that DailySteals by its sale of MENSHA VER has any liability for

infringing the U.S. Patent No. 7,856,725, or U.S. Design Patent No. D611,653, or the trademarkMAN GROOMER.Contrary to your assertion, samples of the MAN GROOMER were never sent to anyoneat DailySteals. Kindly check your facts better.Please consider the following:

U.S. PATENT NO. 7,856,725The product fails to comply with the Marking Statute even under the more liberal 35U.S.C. 287(a).

It appears that this patent was allowed only after the only independent claim was limitedto "no more than 135 degrees"; however, nothing in the specification support this criticallimitation. In fact, the specification says the angle can be between ""90-180 degrees' andpreferably "135-150 degrees". Clearly, the preferred maximum angle is 150 degrees, not 135degrees. Only a preferred range is provided. Hence, the patent is invalid.

The patent shows a power switch and compartment for batteries, and all of the evidencefor success in the market place is for an electric shave, not a passive shaver. None of the claimsinclude the critical feature of being an electric shaver. Thus, an important limitation shown,described and relied on for patentability has been omitted from the claims. Hence, the patent isinvalid.


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Thomas J. Tedesco, Esq.July 24, 2013Page 2

U.S. DESIGN PATENT D611,653The product fails to comply with the Marking Statute even under the more liberal 35

U.S.C. 287(a). The product does say "PATENTED DESIGN"; however, there is no patentnumber, or web site shown.Based on the disclosure in the '725 Patent, it is obvious that the design in D611 ,653 is

functional, and not ornamental. This is also based on the publications submitted to the PTO toestablish patentability. Hence, the design patent is invalid even though the prior application forthe '725 Patent was pointed out to the PTO. The Examiner does not determine if a design is forfunctional, rather than being ornamental.MAN GROOMER

Unfortunately, I need to point out some critical facts to you. The words"MAN GROOMER and MENSHAVER do not sound or look like each other.

Your argument that the coloring of the words is critical is contrary to the TrademarkExaminer's addition to the file:"The mark consists of standard characters without claim to any particular font,style, size, or color."

If this limitation were invalid, then the Trademark Examiner should have been disputed.ADDITIONAL ISSUES

Despite our accusation, nothing presented by DailySteals states that the products sold byDailySteals originated from your client.

Falsely accusing a company of wilful infringement of a patent or trademark is a seriousmatter, and you should check your facts more carefully before sending such a letter. More sowhen such a letter is sent to an employee, not an executive of the company.

The first notice of any asserted patent rights owned by your client was your letter. Hence,even if DailySteals had any liability under the patent rights, your letter was the starting point.

DailySteals is not planning to sell the MENSHA VER in the future.If you have any questions, or comments, kindly sent them to me.

Very truly yours,

David Fink


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EX.C


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Vl. / L.JI L.Ul J/ lfl\J JL. 1J flY! L/-11"1 Ut'l' ll FAX No . 7147712689

Thomas J. Tedesco, Esq.LAW OFFICES OF THOMAS]. TEDESCO

1855 W. Katella Avenue, Suite 365Orange, Califol'Oia 92867TEL (714) 7711693'FAX (714) 771-2689

F.AX COVER SHEET

DATE: July 25, 2013FIRM: FINK & JOHNSONATTENTION: David Fink, Esq.FAXNO.: (713) 729-4951FROM: Thomas J. Tedesco, Esq.REGARDING: Marut Entezpises, LLCIDaflySteals

This Document is Sent:[ ] Per your request[ :K ] For your info:tmation/:record[ lt ] For your immediate attention[ ] Fo r your review, please contact the sender

Orighlal DaCUlllent:[ ) Will not follow[ lC] Will follow via first class wail[ lC I Will follow via. e-mail[ 1 Will follow via overD4:ht delivery

TOTAL 3 PAGES INCLUDING COVER SHEET

P. 00!

The information coutllined.in tbis a ~ ~ e is intended only for the use of the individwU. or entity named above,andmaybe confidential,m:l.y be attorney-client privileged and may


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J UL/ L:JI LUl j f l j jU 1L: i !'M LAW OFFICES FAX No. 7147712689

T:e:OMAS J. TEDESCOATTOI ' {NEY A"t LAW

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VIA EMAIL. FACSIMILE AND u . s . ~July 25, 2013David Fink. Esq.FINK & JOHNSON7519 Apache Plum.eHouston, TX 77071

Re: Marut n t e r p r i s e s ~ LLC I Mangroomer/Mangroomer.ooro

P. 002

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Infringement by ..DailySteals.com, Nochum Waldroop", and all affili$ed andassociated entitiesDearMr. Fink:

I am writing in response to your fax letter t e d July 24, 2013. I am glad to see that yourclients will no longer engage in the sale or distribution of he MENSHAVER or any other productthat infringes my clients' intellectual property rights. I understand it is your_clients' position that they did not violate my c l i ~ t s patents andtrademark, and even i f heydid, they .are innocent infringers.Contrary to ypur clients' claims and "defenses"1he simple facts are as follows:

1. My cliet$ have valid and enforceable patents and trademarks.2. NochumWaldroop and DailySteals directly infringed on my clients' patents and1radero.arkwhen they purchased and placell the :MENSHAVER in the S'b:eam ofcommerce. The onlyreal issue is whether they were .. nnocent infringers o:r whether they knowingly violatedmy clients' intellectual property rights.In light of he foregoing, I am once again requesting the following: .

1. Provide the names, addresses, phone numbers, fax numbers, e-mail addresses and the likeof all persons and/or entities that Nochum Waldroop and/or DailySteals acquired orpurchased the "MENSHAVER from. .2. Provide copies of any and allpurchase orders, invoices, bills oflading, and documentationoflike kind relating to Nochum Waldroop and/or DailySteals purchase and/or acquisiti


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JUL/i:J/LUJj/lliU JL:ib fM LAW UFflCES

David Fink, Esq.July 25) 2013Page2

FAX No. 7147712689 P. 003

As I am sure that you understand, my clients' primary objective is to protect and preserveits intellectual property rights and ensure that any product tliat infringes said rights is promptlyremoved :from the market place. Once agairi, I request that I be provided with the above information and documentation nolater than July 26,2013. Please be advised that all of my clients' legal :rights and remedies areexpressly reserved. Nothing contained herein shall in any way be deemed a waiver of'any legalclaims, rigb.ts and/or r e m e d i ~ s ofany kind.Please feel free to call me should you wisht6 discuss any of he foregoing.

c;r9-.Qtomas T. Tedesco, Esq.TT:k:p

chaos v. marut (mangroomer) - complaint

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