Poof-Slinky, LLC v. A.S. Plastic Toys Co., Ltd.

Background

Just Play, LLC sued numerous defendants for trademark infringement involving the Slinky toy. The opinion states that Poof-Slinky, LLC was the original plaintiff, but the Slinky trademarks were later assigned to Just Play, LLC, and the court approved substituting Just Play as the plaintiff. The defendants included the A.S. Plastic Toys Co., Ltd. defendants and 33 other defendants represented by attorney Sergei Orel, whom the opinion calls the “Orel Defendants.”

Just Play alleged that the Orel Defendants sold counterfeit Slinky products through Alibaba and AliExpress. During the case, the court issued a temporary restraining order and restrained defendants’ assets. The Orel Defendants later filed an answer and four counterclaims. Just Play moved to dismiss those counterclaims under Rule 12(b)(6), which allows dismissal when a pleading does not state a legally sufficient claim. The motion was unopposed.

The Court’s Analysis

1. Alleged invalidity of the trademarks

The Orel Defendants alleged that Just Play’s Slinky trademarks had become generic because consumers used “slinky” as a noun rather than an adjective. They asked the court to declare the trademarks invalid, cancel them, and award damages, fees, and costs.

The court explained that registered trademarks are presumed not to be generic, meaning that the public understands the mark as identifying the source of a product rather than merely describing the product’s type. The party challenging a registered trademark must overcome that presumption. The Orel Defendants offered no supporting evidence and alleged no facts beyond the conclusory statement that the trademarks had “lost their strength.” The court held that this counterclaim failed.

2. Alleged unlawful taking of property

The Orel Defendants alleged that Just Play caused Alibaba and AliExpress to shut down their online stores and freeze their accounts, which they characterized as an unlawful taking of their money and ability to trade.

The court ruled that they had not alleged the required elements of an unconstitutional taking: that property was taken under state authority without due process or just compensation. The court held that the asset restraint was a court order issued under the Federal Rules of Civil Procedure and the court’s equitable authority, not a taking. The court also noted that the Orel Defendants did not allege that they were denied due process. The court dismissed this counterclaim.

3. Alleged interference with prospective economic advantage

The Orel Defendants alleged that Just Play interfered with their business relationships with Alibaba, AliExpress, and their customers by causing the online stores to shut down.

Under New York law, this claim requires allegations that the claimant had business relations with a third party, the defendant interfered with those relations, the defendant acted for a wrongful purpose or used dishonest, unfair, or improper means, and the defendant’s conduct injured the relationship. The court found that the Orel Defendants did not allege that Just Play acted for a wrongful purpose or used improper means. They also did not identify a specific injury caused by the alleged interference. The court dismissed this counterclaim.

4. Alleged interference with contractual relationships

The Orel Defendants also alleged that Just Play tortiously interfered with their contractual relationships. The court stated that this claim required the same basic elements identified for the prospective-economic-advantage claim, including wrongful or improper conduct and injury. Because the Orel Defendants did not allege that Just Play used wrongful means, the court dismissed this counterclaim as well.

Disposition

The court granted Just Play’s motion to dismiss the Orel Defendants’ counterclaims. The court directed the parties to appear for a telephonic status conference on March 18, 2022, and directed the clerk to terminate the motion.