Kid Car NY, LLC v. Kidmoto Technologies LLC

Background

Kid Car NY, LLC operates a transportation service for customers with children and has used the unregistered “KID CAR” mark since 2006. Its complaint alleged that Kidmoto Technologies LLC, founded by former Kid Car driver Nelson Nigel, used “Kid Car” in online advertising and copied text from the screens of Kid Car’s transportation app. Kid Car brought claims under the federal trademark statute, the federal copyright statute, and New York law for unfair competition, trademark infringement, and unjust enrichment.

Kidmoto’s counterclaims alleged that Kid Car used the registered “KIDMOTO” mark as a Google advertising keyword and then used “Kid Car” in the resulting advertisements. Kidmoto also alleged that Kid Car and Andrew C. McGibbon hacked Kidmoto’s website, attacked a blog with spam, harassed drivers, and interfered with Kidmoto’s business relationships.

The parties filed motions to dismiss under Rule 12(b)(6), which tests whether the pleaded facts, assumed to be true at this stage, state a legally plausible claim. The court therefore addressed whether the allegations were sufficient to continue, not whether either side had ultimately proved its claims.

Kid Car’s Claims

The court denied the motion to dismiss Kid Car’s federal trademark claim, New York common-law trademark claim, and New York unfair-competition claim. Kid Car alleged that “KID CAR” was not generic for transportation services for children and that, even if descriptive, it had acquired distinctiveness through years of use, marketing, media coverage, consumer reviews, and other allegations. The court also found that Kid Car plausibly alleged that Kidmoto acted in bad faith, as required for the New York unfair-competition claim.

The court denied the motion to dismiss Kid Car’s copyright claim. Kid Car alleged ownership of a registered copyright covering the text on its app screens and alleged that Kidmoto copied that text. The court concluded that the complaint plausibly alleged that the selection and arrangement of information on the screens contained enough originality to be protected at this stage. The court noted that a fuller factual record could lead to a different conclusion.

The court granted the motion to dismiss Kid Car’s unjust-enrichment claim. Kid Car alleged only that the parties were competitors and did not allege the kind of relationship that could have caused reliance or inducement. The conclusion states that Kidmoto’s motion was granted as to Count V and otherwise denied.

Kidmoto’s Counterclaims

The court denied the motion to dismiss Kidmoto’s federal trademark claim and New York common-law trademark claim. Kidmoto alleged that it owned the registered “KIDMOTO” mark, that Kid Car used “KIDMOTO” as a Google keyword, that Kid Car’s resulting advertisements used “Kid Car,” and that at least one customer was confused. Those allegations were enough to plead a possible likelihood of consumer confusion at the motion-to-dismiss stage. The court also declined to resolve Kid Car’s claimed prior-use defense because the counterclaims did not establish the necessary facts about Kid Car’s continuous and deliberate use of its mark.

The court granted in part the motion to dismiss Kidmoto’s New York unfair-competition claim. The court allowed the claim to proceed to the extent it was based on Kidmoto’s trademark-infringement allegations. But it dismissed the portions based on alleged hacking of Kidmoto’s website, the alleged spam attack on a blog, and alleged harassment of drivers because the counterclaims did not plausibly connect those actions to Kid Car or show the required bad faith.

The court granted the motion to dismiss Kidmoto’s claim for tortious interference with prospective business advantage. The counterclaim generally referred to drivers rather than identifying particular business relationships. Its allegations about two drivers also did not adequately plead the required wrongful conduct or injury. The conclusion states that Kid Car’s motion was granted as to Count V, granted in part as to Count IV, and otherwise denied.

Disposition

Judge P. Castel granted Kidmoto and Nigel’s motion to dismiss Kid Car’s Third Amended Complaint as to Count V and otherwise denied it. He granted Kid Car and McGibbon’s motion to dismiss Kidmoto’s Amended Counterclaims as to Count V, granted it in part as to Count IV, and otherwise denied it. The order did not state that any dismissal was with or without prejudice.