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The JS-44 civil cover sheet and the information containel^reirolBilher repla"3e"nor supplementthe 1pfeadings or other papers as required by law, except as provided by local rules of court. This form, approved by theJudicial Conference of the United States in September 1974, is required for use of the Clerk of Court for the purpose ofinitiating the civil docket sheet.

DEFENDANTS \ \ f\ \ St i IS

ATTORNEYS (IF KNOWN)

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Is THIS AN INTERNATIONAL ARBITRATION CASE?

(PLACE AN [x] IN ONE BOXONLY)

TORTS

No B Yes NATURE OF SUIT

ACTIONS UNDER STATUTES

CONTRACT PERSONAL INJURY PERSONAL INJURY FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES

[]110 INSURANCE [ 1310 AIRPLANE[ ] 367 HEALTHCARE/PHARMACEUTICAL PERSONAL , , 625 DRUG RELATED [ ]422 APPEAL

I 1 375 FALSE CLAIMS[ J400 STATE

[1120 MARINE [ ]315 AIRPLANE PRODUCT INJURY/PRODUCT LIABILITY SEIZURE OF PROPERTY 28 USC 158 REAPPORTIONMENT[]130 MILLER ACT LIABILITY [ 1365 PERSONAL INJURY 21 USC 881 [ ] 423 WITHDRAWAL [ ) 410 ANTITRUST[]140 NEGOTIABLE [ ] 320 ASSAULT, LIBEL & PRODUCT LIABILITY [ 1 690 OTHER 28 USC 157 [ 1430 BANKS & BANKINGINSTRUMENT SLANDER [ 1 368 ASBESTOS PERSONAL [ ] 450 COMMERCE

[J 150 RECOVERY OF [ 1330 FEDERAL INJURY PRODUCT [ 1460 DEPORTATIONOVERPAYMENT & EMPLOYERS' LIABILITY PROPERTY RIGHTS [ J470 RACKETEER INFLUENFORCEMENT LIABILITY ENCED & CORRUPTOF JUDGMENT [ J340 MARINE PERSONAL PROPERTY [ J 820 COPYRIGHTS ORGANIZATION ACT

[]151 MEDICARE ACT [ ] 345 MARINE PRODUCT [ 1830 PATENT (RICO)[]152 RECOVERY OF LIABILITY [ ] 370 OTHER FRAUD *T840 TRADEMARK [ 1480 CONSUMER CREDIT

DEFAULTED [ J 350 MOTOR VEHICLE [ ] 371 TRUTH IN LENDING [ J490 CABLE/SATELLITE TVSTUDENT LOANS [ ] 355 MOTOR VEHICLE(EXCL VETERANS) PRODUCT LIABILITY SOCIAL SECURITY [ 1850 SECURITIES/

[]153 RECOVERY OF [ ] 360 OTHER PERSONAL COMMODITIES/OVERPAYMENT INJURY [ ] 380 OTHER PERSONAL LABOR [ ]861 HIA(1395ff) EXCHANGEOF VETERAN'S [ J 362 PERSONAL INJURY- PROPERTY DAMAGE [ ]862 BLACK LUNG (923)BENEFITS MED MALPRACTICE [ ] 385 PROPERTY DAMAGE [ ] 710 FAIR LABOR [ J863 DIWC/DIWW (405(g))

[]160 STOCKHOLDERS PRODUCT LIABILITY STANDARDS ACT [ 1864 SSID TITLE XVISUITS [ I 720 LABOR/MGMT [ J 865 RSI (405(g)) [ ) 890 OTHER STATUTORY

[ ] 190 OTHER PRISONER PETITIONS RELATIONS ACTIONSCONTRACT [ 1463 ALIEN DETAINEE [ J740 RAILWAY LABOR ACT [ ]891 AGRICULTURAL ACTS

11195 CONTRACT [ ] 510 MOTIONS TO [ ] 751 FAMILY MEDICALLEAVE ACT (FMLA)

FEDERAL TAX SUITSPRODUCT ACTIONS UNDER STATUTES VACATE SENTENCELIABILITY 28 USC 2255 [ ] 870 TAXES (U.S. Plaintiff or [ ] 893 ENVIRONMENTAL

[ 1196 FRANCHISE CIVIL RIGHTS [ I 530 HABEAS CORPUS [ ] 790 OTHER LABOR Defendant) MATTERS[ 1535 DEATH PENALTY LITIGATION [ 1871 IRS-THIRD PARTY [ ] 895 FREEDOM OF

[ ]440 OTHER CIVIL RIGHTS [ 1540 MANDAMUS & OTHER [ ] 791 EMPL RET INC 26 USC 7609 INFORMATION ACT

REAL PROPERTY

[)210 LAND

(Non-Prisoner)[ ) 441 VOTING[ ]442 EMPLOYMENT PRISONER CIVIL RIGHTS

SECURITY ACT

IMMIGRATION

[ I 896 ARBITRATION[ ] 899 ADMINISTRATIVE

PROCEDURE ACT/REVIEW OR

CONDEMNATION [ ) 443 HOUSING/ [ J462 NATURALIZATION APPEAL OF AGENCY DECISION[ ]220 FORECLOSURE ACCOMMODATIONS [ ] 550 CIVIL RIGHTS APPLICATION[ J230 RENT LEASE & [ J445 AMERICANS WITH [ j555 PRISON CONDITION [ ] 465 OTHER IMMIGRATION

EJECTMENT DISABILITIES- [ J 560 CIVIL DETAINEE ACTIONS[ J240 TORTS TO LAND EMPLOYMENT CONDITIONS OF CONFINEMENT[ 1245 TORT PRODUCT

LIABILITY

[ ]446 AMERICANS WITHDISABILITIES -OTHER

[ ]290 ALL OTHERREAL PROPERTY

[ ]448 EDUCATION

Checkifdemanded in complaint:

CHECK IF THIS IS A CLASS ACTIONUNDER F.R.C.P. 23

DEMAND $_ OTHER

Check YES onlyifdemandedincomplaintJURY DEMAND: DYES LNO

DOYOU CLAjM THIS CASE IS RELATED TOACIVIL CASE NOW PENDING IN S.D.N.Y.'

JUDGE DOCKET NUMBER

NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32).

iPLACEAN x INONEBOXONLY)

4 YES (DATE ADMITTED Mo. ' Yr. W )Attorney Bar Code #

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is so Designated.

JUDGE HELLERSTEIN

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

14 CV 3665PHILIPPE NYC I LLC, PHILIPPE IP LLC, AND DAVE60 NYC, INC.,

Plaintiffs,

-against-

RED STIXS LLC, HAMPTON'S RED STLX LLCMORFOGEN MANAGEMENT LLC, MICHAELREDA, DAVID LEE, TEN TWENTY RESTAURANTGROUP LLC, SEAN KEHLENBECK, SHI WEI MEI,CC 78th STREET LLC, MICHAEL GOODMAN,CRYSTAL -NACHRAB, and JOHN and JANE DOESNUMBER ONE THROUGH SIX,

Defendants.

2014 CIV.

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Plaintiffs PHILIPPE NYC I LLC, PHILIPPE IP LLC, AND DAVE 60 NYC, INC., for

their Complaint against the Defendants, allege as follows:

I. NATURE OF THE ACTION

1. This is an action for injunctive relief and damages by the owners and operators of ahigh-end restaurant located on E. 60th St. in New York City offering haute Chinese cuisine in arefined atmosphere, called Philippe by Philippe Chow (the "Philippe" restaurant). Defendants areengaged in operating and promoting a competing restaurant set to open in the Hamptons in time

for the Memorial Day weekend rush, through deceptive and confusing means, constituting unfair

competition in violation of the Lanham Act and common-law, infringement of Philippe's

proprietary rights in photographs of its signature dishes (copyright registrations of which arepending), false advertising, misappropriation of trade secrets, and the violation of and tortious

interference with contractual restraints, which prohibit Philippe's former shareholders from

{00676699.DOCX;2}

soliciting Philippe's employees and competing in a restaurant offering Chinese cuisine, and which

protect the confidentiality of Philippe's proprietary information.

2. Through Defendants Red Stixs LLC and/or Hampton's Red Stix LLC, entities

recently formed by former shareholders of the Philippe restaurant, specifically Stratis Morfogen

and defendants David Lee and Michael Reda, together with defendant Shi Wei Mei, who was

formerly an assistant cook at Philippe, Defendants are promoting and plan to operate a purported

high-end Chinese restaurant business under the name "Red Stixs". According to the promotional

material and advertising widely disseminated by Defendants through social media and otherwise,

Red Stix is set to open in the Village of Water Mill, in the Town of Southampton, New York, on

Friday, May 23, 2014, at premises owned by defendants Ten Twenty Restaurant Group LLC and

Sean Kehlenback, who also hold the liquor license for the premises.

3. Defendants collectively have widely advertised Red Stixs on Twitter, on their

website, and otherwise, as a new restaurant by "the founders and chefs of Philippe Chow," falsely

implying that they are an authorized branch of the Philippe restaurant in Manhattan or endorsed

by Philippe. Among other illegal acts, Defendants have unlawfully used proprietary photographs

of dishes of the Philippe restaurant on their website, www.redstixs.com, without permission,

copied the style and content of Philippe's menu, in some cases copying verbatim menu

descriptions of Philippe's unique dishes referring to preparations by Philippe's "Chef Chow", and

engaged in a course of conduct designed to confuse the public. Defendants seek to and have

engendered confusion that Red Stixs is an authorized branch of the Philippe restaurant in the

Hamptons, with a virtually indistinguishable menu and offering the same dishes and experience as

Philippe in Manhattan. In fact, Red Stixs is nothing but an unauthorized knock-off, attempting to

profit unfairly from the reputation and intellectual property of the Philippe restaurant.

{00676699.DOCX;2 }

4. As more fully explained below, Defendants have thereby engaged, and continue to

engage, in ongoing efforts to unlawfully mislead, confuse and deceive the public and the clients

of the Philippe Restaurant, in order to wrongfully misappropriate and convert to themselves, and

profit from, the name, reputation, trademarks and copyrights of Philippe, as well as all of the

unique, distinctive and special elements that have made the Philippe restaurant a success.

5. By reason of the foregoing, Plaintiffs have no choice but to commence this action

and to seek preliminary and permanent injunctive relief preventing Red Stixs from opening, inorder to protect their vital business interests and the name, reputation and identity of the Philippe

restaurant, and damages caused by Defendants.

II. PARTIES

6. Plaintiff Philippe NYC I LLC ("Philippe NYC") is a New York limited liability

company, which was formed in or about January, 2014 to be the new owner and operator of the

Philippe restaurant, which has been open since 2005. Philippe NYC is owned 67% by Plaintiff

Dave 60 NYC, Inc. ("Dave 60") and 33% by Philippe Equities LLC ("Philippe Equities"), a NewYork limited liability company, which is an affiliate of Merchants Hospitality Inc. ("MHI"), arestaurant management company.

7. Plaintiff Philippe IP LLC ("Philippe IP") is a New York limited liability company,which was formed to hold the intellectual property assets of Philippe NYC, including without

limitation, its copyrighted photographs of its food offerings, trademarks and other intellectual

property, which intellectual property was contributed to Philippe NYC by its former owners, in

connection with the organization of Philippe NYC.

8. Plaintiff Dave 60 is a New York Corporation, which formerly owned the Philippe

restaurant and certain affiliated restaurants, and which currently owns a 67% interest in the

{00676699.DOCX;2} 3

Philippe restaurant through its 67% ownership of Philippe NYC.

9. Defendant Red Stixs LLC is a New York limited liability company. Upon

information and belief, Red Stix LLC was formed in or about May 13, 2014, to own and/or

operate a restaurant called Red Stixs at premises located at 1020 Montauk Hwy., Water Mill, NY

11976. Upon information and belief, Red Stixs LLC is owned by one or more of the defendants,

and/or by an individual named Stratis Morfogen, a former shareholder of Dave 60, who is not

named as a defendant herein solely because he is the subject of an involuntary bankruptcy petitionfiled against him on or about April 17, 2014 in the United States Bankruptcy Court for the

Southern District ofNew York (Case no. 14 - 11070 (SMB)).

10. Upon information and belief, Defendant Hampton's Red Stix LLC, is a recently

formed New York limited liability company, formed to hold the liquor license for the Red Stixs

restaurant, and/or to hold an ownership interest in the restaurant.

11. Defendants David Lee ("Lee") and Michael Reda ("Reda") are citizens and

residents of New York. As discussed below, Lee and Reda were, together with Stratis Morfogen

and chef Philippe Chow, the founding shareholders of the Philippe restaurant, then owned by

Dave 60. Reda and Lee sold their shares in Dave 60 in or about May, 2011 for millions of

dollars.

12. Upon information and belief Defendant Morfogen LLC is a New York limited

liability company purportedly formed by Stratis Morfogen ("Morfogen") to hold his 30%ownership interest in Dave 60, which share interest was forfeited by reason of Morfogen's breach

of certain indemnification obligations owed to Dave 60. As discussed below, Morfogen LLC and

Morfogen are subject to various noncompete, nonsolicitation confidentiality restrictions in theDave 60 shareholders agreement, which restrain his ability to act in connection with the Red Stixs

{00676699.DOCX;2 } 4

restaurant. Morfogen and Morfogen LLC are part of the group promoting Red Stixs, and may

have an ownership interest therein, as is evidenced by the fact that he obtained the website for

Red Stixs in his own name.

13. Upon information and belief Defendant CC 78 LLC ("CC 78") is a New Yorklimited liability company formed by Morfogen to operate a restaurant called Cucina Ciano located

on 78 Street in New York City. As described further herein, CC 78 has been used by Morfogen

and the other defendants to promote Red Stixs through the use of its Twitter account and other

media contacts, and is thereby a co-conspirator and a vehicle through which the Defendants have

distributed their false, misleading and infringing promotional materials.

14. Defendant Ten Twenty Restaurant Group LLC ("Ten Twenty") is, uponinformation and belief, a New York limited liability company controlled by defendant Sean

Kehlenbeck, a New York resident believed to be a long-time acquaintance of Morfogen. Upon

information and belief, Ten Twenty is an owner of Red Stixs together with other disclosed and

undisclosed principals. Kehlenbeck and Ten Twenty has allowed a New York State liquor license

issued to them for the Trata Restaurant, at 1020 Montauk Hwy., Water Mill, NY, the same

location as Red Stixs, to be used for the Red Stixs restaurant and its undisclosed principals.

15. Defendant Shi Wen Mei, also known as "Skinny Mei," is, upon information and

belief, a New York resident who is the Chef at Red Stixs and an owner of an interest in Red Stixs

LLC. Mei formerly worked for Plaintiffs in the Philippe restaurant as a cook, where he had

access to and learned the recipes and techniques used at Philippe.

16. Defendant Michael Goodman, is upon information and belief, a New York

resident who is Defendants Reda, Lee and Morfogen's long time accountant who formed Red Stix

LLC and/or Hampton's Red Stix LLC, and who has aided and abetted the remaining defendants

{00676699.DOCX;2} 5

in the unlawful conduct described herein.

17. Defendants John and Jane Does numbers one through six are fictitious names,

which will be amended to reflect the owners of member interests in Red Stixs LLC or other co

conspirators with the remaining Defendantswhen their identities become known to Plaintiffs.

III. JURISDICTION AND VENUE

18. This Court has jurisdiction over the subject matter of this lawsuit under the theLanham Act, 15 U.S.C. 1116(a), and the Federal Copyright Act, title 17 of the United StatesCode. Thus, this Court has original federal question jurisdiction pursuant to 28 U.S.C. 1331.This Court also has original jurisdiction over Plaintiffs' claims of unfair competition pursuant to28 U.S.C. 1338(b), as such claims are joined in this action with substantial and related claimsunder the trademark laws.

19. This Court may exercise supplemental jurisdiction over all related state law claimsunder 28 U.S.C. 1367.

20. Venue is proper in this district pursuant to 28 U.S.C. 1391(b) because it is a

district in which one or more of the defendants reside, and all defendants are residents of the State

of New York and subject to personal jurisdiction in this State, and a substantial part of the eventsgiving rise to the claims herein occurred in this District.

IV. GENERAL ALLEGATIONS

Background

21. The Philippe restaurant was founded in 2005 by chef Philippe Chow, together with

Morfogen and Defendants Reda and Lee, and owned by the corporation they formed, Dave 60.

The restaurant was initially a huge success, combining a fine dining experience with high-end

{00676699.DOCX;2 }

Chinese style food in a modern and sophisticated setting.

22. Shortly thereafter, however, under Morfogen's management, ill-conceived

decisions were made and the business expanded too rapidly, with the creation of affiliates to open

new restaurants in Miami and Boca Raton, Florida, as well as in Jericho and East Hampton, New

York. To fund this ill-fated and ill-conceived expansion, Morfogen encumbered the assets of the

Restaurant, and stripped funds from the business, resulting in the restaurant not having the cash

available to meet its tax obligations to New York City and state taxing authorities.

23. Furthermore, under Morfogen's management, the Philippe restaurant and its

affiliates became embroiled in expensive and time-consuming litigation, including, among others,

a lawsuit by the owners of a restaurant with which Chef Philippe Chow was formerly affiliated,

called "Mr Chow's", alleging trademark infringement, deceptive practices and related claims, in

the Federal District Court in Florida (Chow et al. v. Chau, et al., Civ Case no. 1:09 cv. 21893

(WHM)).

24. In a case with allegations strikingly similar to the Defendants' current attempt to

take advantage of Philippe unfairly and illegally for their new venture, the plaintiffs in the Mr.

Chow litigation alleged that Morfogen had engaged in a pattern and practice of attempting to

confuse the public and steal the patrons of successful restaurants in the same field. Thus,

observing the widely known and successful "Sea Grill" overlooking the skating rink in

Rockefeller Center in New York City, Morfogen opened a seafood restaurant in New York City

under the name "Sea Grill of The Aegean" which he promoted as "Sea Grill's Restaurant." After

he was sued by the owners of the real "Sea Grill," Morfogen had to agree to stop using that or any

confusingly similar name.

25. The Mr Chow's case resulted in a jury verdict finding false advertising and unfair

{00676699.DOCX;2} 7

competition through deceptive conduct against Morfogen, assessing a judgment against Dave 60for $520,000 and Morfogen personally for $500,000, which the Eleventh Circuit for the United

States Court of Appeals affirmed. In its January 10,2014 Decision, the Eleventh Circuit stated:

There was evidence of false advertising and unfair competition whichcaused damage to TC Ventures, Inc., the operator of the Mr. Chowrestaurant on 57th Street, as well as to Michael Chow individually. Forexample, Mr. Chow presented evidence of a number of potentiallydeceptive public statements attributable to Stratis Morfogen and toDave 60 NYC, Inc. (the corporate operator of the Philippe restaurant on60l Street, of which Morfogen is an officer) including statements thatPhilippe Chau was the "mastermind" and "architect" of the menu... Finally,Mr. Chow did present evidence that would support an award ofdamages against Stratis Morfogen and in favor of Michael Chow. Asdiscussed above, there was evidence of a number of statements attributableto Morfogen that the jury could view as false advertising and deceptiveconduct. (Emphasis Added)

26. Due to the false statements and mismanagement attributable to Morfogen, Dave

60, which remains the 67% owner of the Philippe restaurant, is subject to pay a $520,541judgment to TC Ventures, Inc., the operator of the Mr. Chow restaurant on 57th Street in NewYork.

27. Under Morfogen's management, the Philippe restaurant became subject to othersubstantial litigation, including lawsuits under the Fair Labor Standards Act for violations of the

wage and hour laws concerning its employees.

28. Eventually, under Morfogen's management, the Restaurant's affiliates in Miami,

South Beach, West Hollywood, and Boca Raton, Florida, and in East Hampton, and Jericho, New

York all filed for bankruptcy. Only the flagship New York location remained. Because

Morfogen mismanaged Dave 60, many of the creditors of the affiliates made claims against Dave

{00676699.DOCX;2 }

60, and some even obtained judgments.

29. In or about May, 2011, defendants Reda and Lee sold their interests to new

investors, who together own 55% of Dave 60. As a result, Morfogen's interest in Dave 60 was

30% and chef Philippe has a 15% interest. Due to Morfogen's track record, which included

numerous judgments and personal tax deficiencies against him, and his abject mismanagement ofDave 60, the new investors in the business concluded that the only way to prevent the Philippe

restaurant from filing for bankruptcy, like all of its other affiliates that Morfogen managed, was to

engage a more robust professional management team to rehabilitate the Philippe restaurant and

assume a portion of its substantial liabilities.

30. Accordingly, during the summer of 2013 Dave 60 entered into negotiations with

MHI, a professional restaurant management company, with respect to a transaction pursuant to

which MHI would acquire an ownership interest in the Philippe restaurant in exchange for the

assumption of specific liabilities, and MHI would assume management control of the Philippe

restaurant in New York City, the sole remaining Philippe restaurant.

31. In or about October, 2013, the shareholders of Dave 60, including Morfogen,

reached agreement with MHI. Pursuant to the agreement, MHI, by its nominee Philippe Equities,

agreed to assume and pay approximately $2.5 million of the liabilities of Dave 60, and the assets

of Dave 60 used in the operation of the restaurant were contributed to a newly formed New York

limited liability company, plaintiff PhilippeNYC. PhilippeNYC, in turn, is owned 67% by Dave

60 and 33% by Philippe Equities, the managing member. Merchants Hospitality Inc manages the

Philippe restaurant pursuant to a management agreement.

32. In connection with the transaction with MHI, the shareholders of Dave 60 entered

into an Amended and Restated Shareholders Agreement, Dated October 22, 2013 (the "Amended

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Shareholders Agreement"), which, among other things, includes provisions barring thesolicitation of employees, noncompetition, and confidentiality, binding on each shareholder and

any affiliates of each shareholder. Morfogen specifically agreed to cease any involvement in the

management of Philippe. As is alleged further below, as a signatory to the Amended

Shareholders Agreement Morfogen, and his personal limited liability company which purportedly

holds his shares in Dave 60, defendant Morfogen LLC, have breached the Amended Shareholders

Agreement by reason of their affiliation with Red Stix, and the other Defendants have tortiously

interfered with Dave 60's contractual relations with Morfogen and Morfogen LLC in that regard.

33. In connection with the MHI transaction and Amended Shareholders Agreement,

Dave 60 also entered into a separate Indemnification and Release Agreement with Morfogen (the"Indemnification Agreement"). Pursuant to the Indemnification Agreement, Morfogen, as the"Indemnifying Party" agreed specifically to indemnify and hold harmless the Company and each

of the other shareholders (each, an "Indemnified Party") and their respective Affiliates, amongother things, from claims or actions that may be brought against Dave 60 arising out of or

resulting from any action taken by the indemnifying party that resulted in a material breach of

contract or violation of applicable law.

34. By a letter dated November 15, 2013, the Philippe restaurant received notice from

the New York State Department of Labor, Division of Labor Standards, of alleged Labor Law

violations arising out of the alleged failure to pay minimum wage and overtime in accordance

with New York State Labor Law to several "back of the house" or kitchen workers during the

period December 1, 2005 through January 4, 2010, when Morfogen was the President and/or CEO

of the Company, and the failure to keep adequate records for daily and weekly hours during that

period. The Department of Labor demanded that the Company pay $1,565,655.07, together withpotential interest and civil penalties, bringing the potential liability to in excess of $3,000,000 (the

{00676699.DOCX;2} 10

"Department of Labor Claim").

35. By a letter dated November 20, 2013, MHI sent Morfogen a letter advising him of

the Department of Labor Claim, enclosing a copy of the Demand for Payment and Notice of

Labor Law Violation, and demanding that Morfogen indemnify and hold harmless the Company

with respect to the Department of Labor Claim pursuant to Article II of the Indemnification

Agreement.

36. Morfogen refused to honor his indemnification obligation. Accordingly, Dave 60

commenced litigation in the Supreme Court of the State of New York, County of New York

against Morfogen and Morfogen LLC to enforce the Indemnification Agreement, and seeking a

declaratory judgment that under that agreement, Morfogen's failure to indemnify Dave 60 resultsin the forfeiture of his shares of Dave 60. That litigation has been stayed by the involuntary

bankruptcy filing by Morfogen's creditors.

Morfogen Commences Litigation and Seeks to Harm Philippe

37. Morfogen and Morfogen LLC retaliated by commencing a separate action against

Dave 60, Philippe, MHI, and other parties, seeking, among other things, a preliminary injunctionand motion for a temporary receiver to compel the current management of Philippe to make profit

distributions to Morfogen, rather than exercising its business judgment to retain such funds in thebusiness to provide for the large department of Labor claim and its defense, the claim that

Morfogen refused to indemnify. Morfogen also made numerous spurious allegations concerning

alleged improprieties with respect to the Philippe restaurant's liquor license, which Morfogen

communicated directly to the New York State liquor authority as well, jeopardizing the Philipperestaurant's liquor license.

{00676699.DOCX;2 } 11

38. After several appearances and the submission of voluminous papers, Morfogen's

application for provisional remedies, including a preliminary injunction and the imposition of atemporary receiver, were denied by the Hon. Arthur Engoron of the New York State Supreme

Court, New York County, on April 11, 2014. Among other things, Justice Engoron expressed

skepticism as to why Morfogen would go to such lengths to seek to harm the very restaurant

business in which he was a substantial owner.

39. Morfogen, through his counsel, even appeared in court in a separate article 78

proceeding between Philippe and the New York State liquor authority, in which Morfogen is not a

party and has no standing, to argue in favor of the cancellation of Philippe's liquor license. It is

only now that Morfogen's involvement with the other Defendants in Red Stixs has come to light

that the true motive for Morfogen's allegations has become apparent, as Morfogen would

apparently like to see Philippe fail so that he can misappropriate the concept of the restaurant for

himself and his partners, which include other former owners and employees of the Philippe

restaurant.

40. Under MHI's management, the Philippe restaurant has flourished, its liabilities

have been substantially paid down, and the restaurant has returned to profitability.

Defendants Seek to Misappropriate Philippe's Intellectual Property and Trade Secrets

41. The unique experience of the Philippe restaurant is accomplished through specially

developed recipes, methods, processes, and techniques, which relate not only to the preparation

and presentation of the food and menu, but to the look and feel of a modern dining room. This

compilation of processes, methods and techniques was painstakingly developed by the Philippe

restaurant over a period of several years since its opening in 2005. These processes, methods,

techniques and styles constitute trade secrets of Philippe.

{00676699.DOCX;2} 12

42. Several of Philippe's dishes have become well known signature dishes associated

with the Philippe brand. As discussed further below, Red Stixs and the Defendants have

misappropriated these menu characteristics and certain descriptions, virtually word for word in

certain instances, going so far as to include in its description for Pork Soup and crabmeat soup

dumplings the terms "Chef Chow's broth", and, for a dish called Nine Seasons Spicy Prawns,

"Chef Chow's famous spicy sweet and sour sauce". Of course, Chef Chow, meaning Philippe

Chow, the founding head chef of Philippe, is not associated with Red Stixs at all.

43. Also a part of the dining experience at Philippe is a central area of the dining room

dedicated to a demonstration of the ancient art of hand-pulled noodle-making. This noodle-

pulling show has always been a part of the Philippe experience and, predictably, Red Stixs'

promotional material indicates that it intends to copy this element of the dining experience.

44. Upon information and belief, Morfogen, Reda and Lee, hatched their scheme to rip

off the Philippe restaurant style, theme, trade secrets and intellectual property at some point when

Morfogen's separate restaurant in Manhattan, called Cucina Ciano, owned by his entity, defendant

CC 78, began to fail. Recently, that restaurant was sued by its landlord for violations of its lease

and a warrant of eviction was obtained. At the same time, Morfogen's attempt to force his way

back into the management of Philippe though litigation against the present management of the

restaurant has failed, with the denial of his applications for preliminary injunctive relief or theappointment of a receiver.

45. Morfogen, together with Defendants Reda and Lee, who had been his former co-

shareholders in Dave 60 until they sold out in 2011, apparently recruited Defendant Mei, a former

assistant chef of Philippe, who had left in or around 2012 to care for a sick relative, to join theirscheme. Upon information and belief, Defendants did so knowing that Morfogen and Morfogen

{00676699.DOCX;2 } 13

LLC have contractual restrictions precluding them from soliciting former employees of Philippe,

from using Philippe's confidential information, and from competing in the Chinese or Asian food

business. Thus, the Defendants have not only conspired to compete unfairly with deceptive

advertising, and infringing Philippe's copyrighted photographs of its dishes, they have tortiously

interfered with the Dave 60's contractual relations with Morfogen.

46. As Plaintiffs have recently discovered, Defendants sought to further their plan of

capitalizing on the success of Philippe by creating and relying on false advertising and consumer

confusion. Defendants, in opening their Water Mill restaurant, and, upon information and belief,

planning to open additional Red Stixs restaurants in other locations including Manhattan, have

intentionally created confusion and passed off their restaurant as being affiliated or associated

with the Philippe restaurant.

47. Defendants have used the Twitter account and other marketing databases of

Morfogen's Cucina restaurant, CC 78, to distribute their false and misleading advertising and

promotional materials, including copyrighted photographs of Philippe's menu items, word for

word descriptions of dishes on the Philippe menu, and misleading statements designed to confuse

consumers into believing that Red Stixs is affiliated or authorized by Philippe.

48. Upon further information and belief, Defendants have used the services of the

same contractor who built the kitchen and dining elements at Philippe to create their new Red

Stixs restaurant, and a further effort to confuse the public as to the affiliation of Red Stixs with

Philippe.

49. The Philippe restaurant and its predecessors engaged in reasonable steps to protect

the trade secrets and other intellectual property used in operating the Philippe restaurant though

policies, procedures, training and other measures designed and intended to protect them under the

{00676699.DOCX;2} 14

circumstances. Among other things, the Amended Shareholders Agreement of Dave 60 includes

a provision protecting against any shareholder or affiliate of any shareholder disseminating or

otherwise disclosing any confidential, nonpublic or proprietary information concerning the

business.

CAUSES OF ACTION

Count I

False Association/False Designation of Origin, infringement of Trade Name and FederalUnfair Competition under 15 U.S.C. 1125(a)

50. Plaintiffs repeat and reallege paragraphs 1 through 49 of this Complaint if set forth

at length herein.

51. Defendants' use of the name "Philippe Chow" in the Red Stixs publicly

disseminated promotional material and advertising, on the Internet, through social media and

otherwise, and including specifically their use of the trade name "Philippe Chow" in the phrase

"the founders and chefs of Philippe Chow are proud to announce the opening of Red Stixs,"

together with their copying of copyrighted photographs of Philippe's signature dishes, use of a

strikingly similar menu containing descriptions of dishes lifted verbatim from Philippe's menu,

and appropriation of all the other distinctive elements associated with the Philippe restaurant,

constitute a false designation of origin and/or a false description or representation, and an

infringement of Philippe's trade name, which is likely to deceive and mislead consumers, and has

actually deceived and misled consumers, into believing that the Defendants' goods and services

originate with Plaintiffs, or are otherwise affiliated with, licensed, sanctioned or endorsed by

Plaintiffs.

52. Upon information and belief, newspapers have published stories reflecting a

mistake as to the affiliation of Philippe and the defendants with respect to RedStix, which was the

{00676699.DOCX;2} 15

result ofdefendants' conduct.

53. Defendants' unlawful actions constitute violations of 15 U.S.C. 1125(a).

54. Plaintiffs have no control over the nature and quality of the services offered by

Defendants and any failure, neglect, or default by Defendants in providing their services will and

does reflect negatively on Plaintiffs as the believed source or origin thereof, hampering efforts by

Plaintiffs to continue to protect their reputation for high quality services, resulting in either a loss

of sales, a diminution in Plaintiffs' reputation, and the need for considerable expenditures to

promote their services and engage in corrective advertising, all to the irreparable harm of

Plaintiffs.

55. Defendants' acts have caused irreparable damage to and, unless enjoined, willcontinue to rapidly damage Plaintiffs. Plaintiffs have no adequate remedy at law for these wrongs

and injuries. Plaintiffs are, therefore, entitled to a preliminary and permanent injunctionrestraining and enjoining Defendants and their agents, servants, employees and attorneys and allpersons acting in concert with them, from continuing to use Philippe and Philippe Chow in a

misleading, confusing, and infringing manner.

56. As a direct and proximate result of Defendants' false association, false designation

and unfair competition, Plaintiffs have also incurred substantial and material damages in an

amount to be determined at trial but believed to be in excess of $10 million.

Count II

Copyright Infringement under 17 U.S.C. 501

57. Plaintiffs repeat and reallege paragraphs 1 through 56 of this Complaint as if set

forth at length herein.

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58. Plaintiff Philippe IP owns the copyright for numerous photographs of iconic dishes

on the Philippe menu (the "Philippe Dish Photographs"), for which it has recently soughtregistration. Upon the issuance of the relevant United States Certificates of Copyright

Registration the registration numbers will be made available.

59. Philippe IP's Philippe Dish Photographs copyright is valid and enforceable.

60. Defendants have infringed Philippe IP's Philippe Dish Photographs copyright in

violation of 17 U.S.C. 501 by using them to promote the Red Stixs restaurant, including on the

Red Stixs website and other promotional materials distributed by Defendants. The photographs

originally posted on the RedStix website, and distributed through Twitter accounts of defendants,

contain the Philippe name embedded in them.

61. Defendants' acts have caused irreparable damage to and, unless enjoined, willcontinue to rapidly damage Plaintiffs. Plaintiffs have no adequate remedy at law for these wrongs

and injuries. Plaintiffs are, therefore, entitled to a preliminary and permanent injunctionrestraining and enjoining Defendants and their agents, servants, employees and attorneys and allpersons acting in concert with them, from infringing Plaintiff Philippe IP's Philippe Dish

Photographs.

62. Defendants have willfully infringed Philippe IP's Philippe Dish Photographs

copyright.

63. Plaintiffs are also entitled to recover damages sustained as a result of Defendants'

unlawful conduct, including actual damages, or alternatively at Plaintiffs' election, statutory

damages.

Count III

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False Advertising under 15 U.S.C. 1125(a)

64. Plaintiffs repeat and reallege paragraphs 1 through 63 of the Complaint as if set

forth at length herein.

65. Defendants are direct competitors to the Philippe restaurant. They share common

clientele and a common target audience, particularly given the large number of Philippe's

customers who travel to the Hamptons area of eastern Long Island in the summer season and/or

have second homes there.

66. Defendants' advertisements and promotions, and their factual representations on

line, distributed social media, in print media, and in person, are false and misleading.

67. The advertisements and promotions have deceived, or have the capacity to deceive,

consumers.

68. The deception likely had or likely may have a material effect on purchasing

decisions. The Philippe trade name and business has been or will be weakened as a result of

clients, prospective clients and the public wrongfully interpreting the Red Stixs restaurant as

being affiliated with Philippe.

69. Defendants' misrepresentations and false advertising affects interstate commerce.

70. Plaintiffs have been and will continue to be injured as a result of Defendants' falseadvertising.

71. Defendants used and continue to use in commerce false or misleading descriptions

of fact, or false and misleading representations of fact, which in commercial advertising or

promotion misrepresent the nature, characteristics, qualities, or origin of Defendants' services.

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72. Defendants' false advertising has caused or will cause the Philippe restaurant to

lose clients and prospective clients, and to incur increased promotional costs, as a result of

Defendants' false and misleading representations.

73. Philippe will continue to suffer irreparable injury unless Defendants arepermanently enjoined by this Court.

Count IV

Dilution of Famous Trademark (15 U.S.C. 1125(c))

74. Plaintiffs incorporate paragraphs 1 through 73 of this Complaint as if fully set forth

herein.

75. Plaintiffs' common-law trademark and trade name "Philippe by Philippe Chow" is

famous and became famous before Defendants began using "Philippe Chow" in its promotional

material in connection with the Red Stixs restaurant.

76. By the conduct alleged hereinabove, Defendants have caused substantial dilution

of Plaintiffs' famous trademark and trade name "Philippe by Philippe Chow" by lessening the

capacity of Plaintiffs' market name to identify and distinguish Plaintiffs' restaurants.

77. Unless enjoined by this Court, Defendants will continue their illegal conductalleged above, which will cause further and more substantial such dilution.

78. Defendants conduct as alleged herein will cause Plaintiffs severe and irreparable

harm for which they have no adequate remedy at law, in that the full extent of the harm

proximately caused by Defendants' conduct will be difficult or impossible to ascertain.

Count V

Common Law Tradename Infringement and Unfair Competition

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79. Plaintiffs incorporate paragraphs 1 through 78 of this Complaint as if fully set forth

herein.

80. Plaintiffs own and enjoy common law rights in connection with the Philippetradename, whichrights are superior to any rights which Defendants may claim therein.

81. Defendants' use of the names Chef Chow, Philippe Chow, or Philippe by Philippe

Chow and other confusingly similar variations thereof, to promote their restaurant services is

likely to, and has actually caused confusion as to source or origin, and consumers are likely to

associate Defendants' services with, and as originating from, Plaintiffs.

82. Defendants' conduct alleged hereinabove will cause Plaintiffs severe and

irreparable harm for which they have no adequate remedy at law, in that the full extent of the

harm proximately caused by Defendants' conduct can never be ascertained.

83. Plaintiffs will continue to suffer irreparable injury unless Defendants arepermanently enjoined by this Court.

84. As a direct and proximate result of Defendants' infringement, Plaintiffs have

incurred substantialand material damages in an amount to be determined at trial.

85. Defendants' conduct was wanton, willful and malicious, so as to justify theimposition of punitive damages.

Count VI

Misappropriation of Trade Secrets under New York Law

86. Plaintiffs incorporate paragraphs 1 through 85 of this Complaint as if fully setforth

{00676699.DOCX;2} 20

herein.

87. The recipes, business plans, business strategies, techniques, operational and

management processes and procedures, design of the menu, names of dishes, and other

confidential business information of Philippe constitutes trade secrets protected by the common

law ofNew York.

88. The aforementioned trade secrets give Plaintiffs an advantage over their

competitors.

89. Philippe has acted at all times to reasonably protect from disclosure of these trade

secrets, through policies procedures training and other appropriate means, including without

limitation, by virtue of the confidentiality provisions of the Dave 60 Amended Shareholders

Agreement.

90. By their actions, Defendants used improper means to acquire the trade secrets of

Philippe in violation ofNew York law.

91. Defendants' misappropriation of Plaintiffs' trade secrets is ongoing. Plaintiffs will

continue to suffer irreparable injury unless Defendants are permanently enjoined by this Court.

92. As a direct and proximate result of Defendants' misappropriation of trade secrets,

Plaintiffs have incurred substantial and material damages in an amount to be determined at trial.

Count VII

Breach of Contract against Defendant Morfogen LLC by Solicitation Of Employees

{00676699.DOCX;2} 21

93. Plaintiffs incorporate by reference paragraphs 1 through 92 of this Complaint as

though fully set forth herein.

94. Defendant Morfogen LLC is a party to the Amended Shareholders Agreement of

Dave 60 effective as of October 22, 2013. Pursuant to the Amended Shareholders Agreement,

Morfogen LLC, the holder of the 30% interest in Dave 60 formerly held individually by Stratis

Morfogen, agreed, in paragraph 7.1 thereof, on behalf of itself and any affiliates, to certain

restrictions on soliciting or hiring employees of Dave 60 or Philippe, including (i) during the timethat such shareholder or an affiliate of such shareholder is a shareholder of the Company [Dave60], (ii) during the two-year period after such an employee ceases to be employed by Dave 60 orPhilippe, or (iii) with respect to any employee who was employed by Dave 60 or Philippe at thetime when the shareholder ceases to be a shareholder, during the two-year period after such

shareholder ceases to be a shareholder

95. Morfogen LLC breached the nonsolicitation provisions of paragraph 7.1 of the

Amended Shareholders Agreement by soliciting, hiring, engaging contracting or retaining

defendant Mei and, upon information belief, otherpersons formerly employed by Philippe and/or

Dave 60.

96. Defendant Morfogen LLC further agreed in paragraph 7.2 of the Amended

Shareholders Agreement to certain restrictions on competition and interference.

97. By reason of the foregoing, Plaintiffs have been irreparably harmed.

98. Plaintiffs are entitled to a preliminary and permanent injunction enjoiningDefendants from soliciting, hiring, or retaining any Philippe employees hired in violation of the

nonsolicitation provisions in the Amended Shareholders Agreement.

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Count VII

Breach of Contract against Defendant Morfogen LLC by Violation of Noncompete Clause ofthe Amended Shareholders Agreement

99. Plaintiffs incorporate by reference paragraphs 1 through 98 of this Complaint as

though fully set forth herein.

100. Defendant Morfogen LLC breached the noncompetition/noninterference

provisions of paragraph 7.2 of the Amended Shareholders Agreement, which, among other things,

provides that it or any affiliates will not, "...directly or indirectly, own, manage or participate in

the ownership, management or control of or be employed are engaged by or otherwise affiliated

or associated as a consultant, independent contractor or otherwise with, any corporation,

partnership, limited liability company, proprietorship, firm, association, or other business entity

engaged in the Chinese or Asian or Pan-Asian restaurant business or any other business consisting

of the preparation of sale, distribution and/or marketing of Chinese, Asian or Pan-Asian food in

the territory of the United States (i) during the time that such Shareholder, or an affiliated of suchShareholder, is a shareholder of the Company and (ii) during the two-year period after suchShareholder, or affiliate of such Shareholder, ceases to be a shareholder of the Company."

101. Upon information and belief, Morfogen LLC is a member of or otherwise affiliated

or associated with or acting in participation with RedStix LLC and/or its affiliates, in connection

with the establishment and operation of a restaurant offering or intending to offer Chinese and

Asian food. Upon further information and belief, Morfogen LLC has participated in such

activities either while it was a shareholder of Dave 60, or within two years after it ceased to be a

shareholder of Dave 60.

102. By reason of the foregoing, Morfogen LLC has breached the restrictive covenant

in the Amended Shareholders Agreement.

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103. By reason of the foregoing, plaintiffs have been irreparably harmed.

104. Plaintiffs are entitled to a preliminary and permanent injunction enjoiningdefendant Morfogen LLC from competing with Philippe in violation of the Amended

Shareholders Agreement.

105. By reason of the foregoing plaintiffs have also suffered damages in an amount to

be determined at trial.

Count VIII

Breach of Contract against Defendant Morfogen LLC by Violation of The ConfidentialInformation Provisions of the Amended Shareholders Agreement

106. Plaintiffs incorporate by reference paragraphs 1 through 105 of this Complaint as

though fully set forth herein.

107. By reason of the participation of Defendant Morfogen LLC with the other

Defendants in the establishment and operation of Red Stixs, Morfogen LLC breached the

provisions of paragraph 7.3 of the Amended Shareholders Agreement, providing that no

shareholder, including an affiliate of a shareholder, will "directly or indirectly, either while he or

it is a Shareholder of the Company [Dave 60] or at any time thereafter, publish, disseminate,distribute or otherwise disclose any confidential, nonpublic or proprietary information which in

any way is related to her concerns the Company, Newco [Philippe] or their respective businesses("Confidential Information").

108. By reason of the foregoing, plaintiffs have suffered irreparable harm.

109. Plaintiffs are entitled to a preliminary and permanent injunction against MorfogenLLC precluding it from using or disseminating any Confidential Information of Philippe or Dave

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60.

110. By reason of the foregoing, plaintiffs have also suffered damages in an amount to

be determined at trial.

Count IX

Tortious Interference with Contract

111. Plaintiffs incorporate by reference paragraphs 1 through 110 hereinabove as

though fully set forth herein.

112. Upon information and belief, Defendants other than Morfogen LLC were aware of

the obligations of Morfogen LLC in the Amended Shareholders Agreement, including without

limitation, the obligations contained in paragraphs 7.1, 7.2 and 7.3 thereof described above.

113. Defendants' actively induced Morfogen LLC to breach said provisions, and

tortiously interfered with the contract rights of Dave 60 with Morfogen LLC, carried out by

means of unlawful and illegal conduct, as alleged herein. By reason of the foregoing, Plaintiffs

have been damaged in an amount to be determined at trial.

DEMAND FOR JURY TRIAL

Plaintiffs demand a jury trial as to all issues so triable.

WHEREFORE, Plaintiffs demand judgment against Defendants as follows:

i. On Count I, for a preliminary andpermanent injunction restraining andenjoiningDefendants and their agents, servants, employees and attorneys and all persons

{00676699.DOCX;2} 25

acting in concert with them, from opening their Red Stixs restaurant business while

they are continuing to use the name "Philippe Chow" in their website, promotional

materials, advertising, or menus, or otherwise falsely or deceptively indicating that

the Red Stixs restaurant is affiliated with or endorsed by Plaintiffs, and for

damages in an amount to be proved at trial but believed to be in excess of $10

million;

ii. On Count II, for a preliminary and permanent injunction restraining and enjoining

Defendants and their agents, servants, employees and attorneys and all persons

acting in concert with them, from infringing and continuing to use unlawfully

Plaintiffs' copyright in photographs ofmenu items, and for damages in an amount

to be proved at trial;

iii. On Count III, for a preliminary and permanentinjunction restraining and enjoiningDefendants and their agents, servants, employees and attorneysand all persons

acting in concert with them, from opening their Red Stixs restaurantwhile they are

continuing to use the name "Philippe Chow" in their promotional material and

advertising or otherwise giving the false impression that the Red Stixs restaurant is

affiliated with or endorsed by Plaintiffs, and for damages in an amount to be

proved at trial;

iv. On Count IV, for damages in an amount to be determined at trial;

v. On Count V, for a preliminary and permanent injunction restraining and enjoiningDefendants and their agents, servants, employees and attorneys and all persons

acting in concert with them, from opening their Red Stixs restaurant business while

{00676699.DOCX;2} 26

they are continuing to use thename "Philippe Chow" in theirwebsite, promotional

materials, advertising, ormenus, or otherwise falsely or deceptively indicating that

the Red Stixsrestaurant is affiliated withor endorsed by Plaintiffs, and for

damages in an amount to be proved at trial;

vi. On Count VI, for a preliminary and permanent injunction restraining and enjoiningDefendants andtheiragents, servants, employees and attorneys andall persons

acting in concert with them, from opening their Red Stixs restaurant business while

theyare continuing to use the name "Philippe Chow" in theirwebsite, promotional

materials, advertising, or menus, or otherwise falsely or deceptively indicating that

the Red Stixsrestaurant is affiliated withor endorsed by Plaintiffs, and for

damages in an amount to be proved at trial;

vii. On Count VII, for a preliminary and permanent injunction restraining andenjoining Morfogen LLC and their agents, servants, employees andattorneys andallpersons acting in concert with them, from soliciting, hiring, employing or

retainingany former employees of Philippehired in violation of the Amended

Shareholders Agreement;

viii. On Count VIII, for a preliminary and permanent injunction restraining andenjoining Morfogen LLC and their agents, servants, employees and attorneys andall persons acting in concert with them, from using the Confidential Information of

Philippe as defined in the Amended Shareholders Agreement;

ix. On Count IX, for damages in an amount to be determined at trial;

x. On All Counts, for punitive damages, attorney's fees and costs; and

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xi. For all other relief as to which this Court deems just and equitable.

Dated: New York, New YorkMay 22,2014

{00676699.DOCX;2 }

By:

ROBINSON BROGLEINWANDGREENE GENOVESE & GLUCK P.C.

A. Mitchell Greene, Esq.Lawrence S. Hirsh, Esq.

Ath-875 Third Avenue, 9in FloorNew York, New York 10021(212) 603-6300Attorneysfor Plaintiffs

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