My Goals Solutions, Inc. v. Zeus Networks, LLC

Background

My Goals Solutions, Inc. and NYC Medical Practice IP Holdings Corp. sued Zeus Networks, LLC. Goals operated under the registered trademark “GOAL AESTHETICS AND PLASTIC SURGERY®”; NYC Med owned that mark and licensed it to Goals. Goals also owned trademarks for “Double BBL” and “FLEXSCULPT.”

The complaint alleged that Zeus proposed a reality-television production about Goldie Martin, also known as “Rollie Pollie,” receiving plastic-surgery procedures from Goals. The plaintiffs alleged that Zeus promised positive exposure and agreed to allow them to review footage for negative portrayals and patient-confidentiality concerns. No written agreement was signed by the plaintiffs and Zeus, but the plaintiffs alleged that they allowed filming and arranged two procedures based on verbal promises and an understanding that a contract would eventually be signed.

The plaintiffs later alleged that Zeus released promotional trailers for “Transforming Rollie” using their locations and trademarks and containing negative comments about their staff. The complaint asserted federal trademark infringement, New York trademark infringement, federal and New York trademark dilution, and deceptive trade-practices and false-advertising claims under New York law.

Before the court were two motions by Zeus: a motion under Federal Rule of Civil Procedure 55(c) to vacate the clerk’s entry of default, and a motion under Rule 12(c) for judgment on the pleadings dismissing the complaint. A judgment on the pleadings tests whether the complaint states legally sufficient claims based on the pleadings and documents properly considered with them.

Default

The court granted Zeus’s motion to vacate the entry of default. It considered whether the default was willful, whether vacating it would prejudice the plaintiffs, and whether Zeus had potentially meritorious defenses.

Zeus attributed its late response to a communication mistake involving its registered agent. The court found that this explanation, even if showing serious negligence, did not establish an intentional or strategic default. The plaintiffs’ concerns about complications from the digital evidence and the delay were also insufficient to show the kind of prejudice required to keep the default in place. Finally, the court found that Zeus had potentially meritorious defenses based on the Appearance Release and the substance of the federal claims. The court also relied on the policy favoring decisions on the merits.

Appearance Release

The Appearance Release was signed by Dr. Sergey Voskin and gave Zeus rights concerning his name, likeness, voice, biographical information, comments, and other personal appearance-related material. It also released certain claims arising from his appearance and included a California choice-of-law provision. The document did not mention Goals or NYC Med.

Zeus argued that the release covered the plaintiffs’ claims and that the plaintiffs were Dr. Voskin’s alter egos. The court rejected that argument at the pleading stage. The release was written in the first person, signed by Dr. Voskin in his individual capacity, and did not identify either corporate plaintiff. The complaint also plausibly alleged that Dr. Voskin and the plaintiffs provided different forms of consideration and maintained separate personal and corporate interests. The court therefore held that the release did not justify dismissing the plaintiffs’ claims on the pleadings.

Trademark Infringement Claims

Counts I and II asserted federal and New York trademark-infringement claims. The court explained that the plaintiffs had to plausibly allege protected marks, use by Zeus in commerce in connection with advertising or the sale of goods or services, lack of consent, and a likelihood that consumers would be confused about source, sponsorship, affiliation, or approval.

The complaint alleged that Zeus used the plaintiffs’ trademarks in promotional videos without authorization. Although the incorporated videos showed the “Goals®” mark only briefly, the court concluded that the surrounding circumstances supported a plausible likelihood of confusion. The videos concerned the plaintiffs’ plastic-surgery services, showed their procedures, employees, and premises, and tagged Goals in a promotional post. Those allegations could lead consumers to believe that the plaintiffs were affiliated with or approved the program. The court therefore denied Zeus’s motion with respect to Counts I and II.

Federal Trademark Dilution

Count IV asserted federal trademark dilution. The court held that the complaint did not plausibly allege that the plaintiffs’ marks were famous among the general consuming public of the United States. Allegations of recognition in the plastic-surgery industry and in New York and elsewhere showed, at most, possible niche fame, which was insufficient for a federal dilution claim.

The court granted Zeus’s motion with respect to Count IV. The plaintiffs were granted leave to move to amend that claim. If they failed to file a timely motion for leave to amend, the claim would be dismissed with prejudice and without further notice.

New York Trademark Dilution

Count III asserted dilution under New York General Business Law section 360-l. Unlike federal law, New York law did not require the mark to be famous. The court found that the plaintiffs plausibly alleged a distinctive mark and a likelihood of dilution by tarnishment. The alleged use of the mark alongside unflattering portrayals, explicit language, and crass behavior could place the mark in an unsavory context and harm its reputation.

The court denied Zeus’s motion with respect to Count III.

Deceptive Business Practices and False Advertising

Count V asserted claims under New York General Business Law sections 349 and 350. The court held that these provisions require harm to consumers or the public at large, not merely harm to the plaintiff’s business or evidence of consumer confusion.

The court found that the complaint focused on the negative portrayal and association of the plaintiffs’ business with the trailers’ content. Although that alleged harm could significantly affect Goals, it was not the type of public harm required under sections 349 and 350. The court granted Zeus’s motion with respect to Count V. As with Count IV, the plaintiffs were granted leave to move to amend; absent a timely motion, Count V would be dismissed with prejudice and without further notice.

Disposition

The court granted Zeus’s motion to vacate the entry of default. It denied Zeus’s motion for judgment on the pleadings with respect to Counts I, II, and III, and granted the motion with respect to Counts IV and V. The plaintiffs were granted 21 days from entry of the opinion and order to move to amend Counts IV and V. The case was referred to Magistrate Judge Stein for general pretrial management.