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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, LLC
and
BRETT C. MARUT
Defendants.
Civil Action No.
ECFCASE
COMPLAINT FOR DECLARATORY
JUDGMENT UNDER 28 U.S.C. 2201 AND
UNFAIR COMPETITION
DEMAND FOR JURY TRIAL
:_,)
NOW COMES Plaintiff, CHAOS COMMERCE, INC. ("CHAOS"), through its attorney,
and files this Complaint for Declaratory Judgment under 28 U.S.C. 2201and Unfair
Competition 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 Street
Brooklyn, NY 11213
718 604-2605
Marut Enterprises, LLC ("Marut")
1855 W. Katella Avenue, STE 365
Orange, CA 92867
Brett C. Marut ("B Marut")
1259 19
1
h Street, Suite #1
Santa, Monica, CA 90401
Complaint and Demand for Jury Trial
Chaos Commerce, Inc. v. Marut Enterprises, LLC et al.
Page 1
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JURISDICTION AND VENUE
1. 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 this
action 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
3.
4.
5.
6.
1400(b).
On information and belief, Marut is subject to this Court's specific and general
personal jurisdiction, pursuant to due process and/or the New York Long Arm
Statute, due to at least its business presence in this forum by selling through major
companies 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 general
jurisdiction, including from regularly doing or soliciting business, engaging in
other persistent courses of conduct, and/or deriving substantial revenue from
goods 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 for
MANGROOMER.
Complaint and Demand for Jury Trial
Chaos Commerce, Inc. v. Marut Enterprises, LLC eta!.
Page2
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7.
8.
9.
10.
11.
On information and belief, Marut is merely the operating name of B Marut and
they are actually one and the same. B Marut has total control over Marut and the
aforementioned patents have issued in the name of B Marut but are freely used by
Marut.
BACKGROUND
Chaos is a leading online source for a wide range of products from electronics to
software to clothing. Everyday, at least one new product is featured at a huge
discount for 24 hours. There are many different products featured on the Chaos's
web 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 of
Daily Steals LLC.
In order to maintain a continuing stream of different products, Chaos has a highly
confidential list of suppliers of products, and the success of Plaintiffs business is
based on the highly confidential of suppliers.
Marut and B Murat, through their attorney, sent a letter dated July 22, 2013
directed to a buyer for Chaos and to "DAIL YSTEALS" asserting that a product,
MENSHA VER, being sold by Chaos through its web site, \V\vw.dailysteals.com
was infringing U.S. Patent No. 7,856,725; U.S. Patent No. D611,653; and
registered trademark MANGROOMER. A true copy of the letter is shown in
Ex. A.
Complaint and Demand for Jury Trial
Chaos Commerce, Inc. v. Marut Enterprises, LLC et al.
Page 3
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12.
13.
14.
The letter dated July 22, 2013 demanded that all sales cease a complete
accounting of sales, suppliers, etc. relating to MENSHA VER with the threat of
legal action by Murat and B Murat.
On July 24, 2013, a response in behalf ofDailySteals was sent to the attorney
pointing 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 reasons
were pointed out as to why the assertion of trademark infringement was wrong.
The letter informed the attorney that Chaos (DailySteals) had no prior notice of
the patents and that DailySteals was not selling the accused products or intended
to 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 and
acknowledged that no additional sales of the accused products would be made;
however, none of the arguments relating to invalidity were addressed beyond a
statement that he thought the patents and trademark were infringed, valid, and
enforceable. The letter again demanded information relating to suppliers,
quantities sold, distributers, etc. with the threat of legal action. The deadline set
by the attorney was the next day. A true copy of the July 25, 2013 letter is shown
in 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 obtain
highly confidential information from Chaos as well as money for no valid reason.
Complaint and Demand for Jury Trial
Chaos Commerce, fnc. v. Marut Enterprises, LLC et al.
Page4
Complaint and Demand for Jury Trial
Chaos Commerce, Inc. v. Marut Enterprises, LLC et al.
Page 5
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COUNT SIX
25. Chaos repeats and incorporates herein the allegations set forth in paragraphs 1
through 14 above
26. The Defendants are engaged in unfair competition by threatening to sue Chaos on
the aforementioned patents and registered trademark even though not one of these
are infringed by Chaos.
COUNT SEVEN
27. Chaos repeats and incorporates herein the allegations set forth in paragraphs 1
through 14 above.
28.
29.
The Defendants are misusing their rights under the aforementioned patents, and
registered trademark and should be held responsible for reasonable attorney costs
and 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 all
issues in this lawsuit.
Complaint and Demand for Jury Trial
Chaos Commerce, Inc. v. Marut Enterprises, LLC et al.
Page 6
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PRAYER FOR RELIEF
WHEREFOR, Plaintiff respectfully requests this Court to:
a.
b.
c.
d.
e.
f.
g
h.
1.
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 MENSHA VER.
Find the Defendants, individually, and/or jointly engaged in unfair competition.
Find the Defendants, individually, and/or jointly are liable for all reasonable
attorney 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 PLAINTIFF
CHAOS COMMERCE, INC.
J r . . . - ; ) ~
David Fink
4238
Fink & Johnson
7519 Apache Plume
Houston, TX 77071
Tel.: 713 729-4991
Fax.: 713 729-4951
F [email protected]
Attorney for the Plaintiff
Complaint and Demand for Jury Trial
Chaos Commerce, Inc. v. Marut Enterprises, LLC et al.
Page 7
EX. A
THOMAS J. TEDESCO
ATTORNEY AT LAW
1855 WEST KATEI.I.A AVE., SUITE 30S
OKANGB, CAX.IPOBlii'IA 92867
VIA EMAIL AND OVERNIGHT DELIVERY
July 22,2013
Nochum Waldroop
DAILY STEALS
2010 Atlantic A venue
Brooklyn. NY 11233
NOTICE TO IMMEDIATELY CEASE AND DESIST
Re: Marut Enterprises, LLC I Mangroomer/Mangroomer.com
TE:I.EPHONE
1714) 7711693
I"ACSI .. IJ.E
17141 7712689
Infringement by "DailySteals.com, Nochum Waldroop", and all affiliated and
associated entities
Dear Mr. Waldroop:
This office represents Brett Marut and Marut Enterprises, LLC in its litigation matters. As
you are well aware, Marut Enterprises, LLC manufactures and distributes an electric back hair
shaver 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 its
products late last year which you received on November 16,2012. At that time no agreement was
reached regarding your purchase of any Mangroomer products because the price point(s) were not
acceptable to you and my client was not satisfied that you could move an acceptable volume of
product.
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 work
something 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 of your email dated November 20,2012 to Mr.
Marut for your reference. In light of the fact that an agreement could not be reached with my
client, you apparently choose to purchase, sell, and distribute illegal, counterfeit product which
directly infringes my client's patents.
Our investigation has confirmed that you have offered for sale and distributed an "Electric
Back 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 on
July 18,2013. By this letter demand is hereby made that you immediately remove the accused
product from any and all websites. This means that in addition to removing the product from
DailySteals.com, be sure to notify and have the product removed from any and all associated
sites.
Nochum Waldroop
D A I L Y S ~ A L S
July 22,2013
Page2
In addition to patent infringement, the accused product is being marketed and sold in a
manner which violates the Lanham Act. In particular, the accused product is being marketed and
sold in a manner which confuses an ordinary purchaser into believing that the accused product
originates from Marut Enterprises. The following are just a few blatant examples: (i) the silver-
grey color of the accused pioduct is identical to the silver-grey color of my client's
Mangroomer shaver; (ii) your MENSHA VER trademark on the accused product has the MEN
in red and the word SHAVER in black, which looks exactly like my client's use of the word
MAN in red and the word GROOMER in black (the shades of red and black used on the
respective products are identical), (iii) the photographs and images on the packaging of the
accused product are either lifted directly from the photographs and images on my client's
packaging, 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. Such
customer confusion will cause my client to suffer significant harm. Your violation of the Lanham
Act is very serious, and could result in an award of trebled damages and attorneys fees if we can
show that your infringement is sufficiently egregious.
In light ofthe above, my clients hereby demand that you, Nochum Waldroop, Daily Steals, as
well 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 infringing
product. You must cease all marketing, sales, importation and distribution of any kind.
Immediately remove the infringing product from listing on any and all websites, including
but 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 acquired
by any of you (Nochum Waldroop, Daily Steals), and any and all other associated and/or
affiliated entities and individuals in the last three (3) years;
3. You must provide a complete accounting of all infringing product sold or distributed by
each of you, Nochum Waldroop, Daily Steals, and any and all other associated and/or
affiliated entities and individuals in the last three (3) years (including the number of units
sold 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 associated
and/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 addresses
and the like of all persons and/or entities that have offered to sell, or have sold, and/or
provided to any of you (Nochum Waldroop, Daily Steals) and any and all other associated
and/or affiliated entities and individuals with infringing product;
Nochum Waldroop
DAILY STEALS
July 22, 2013
Page3
6. You must provide the names, addresses, phone numbers, fax numbers, e-mail addresses
and the like of all persons and/or entities to which any of you (Nochum Waldroop, Daily
Steals) and any and all other associated and/or affiliated entities and individuals has sold
or distributed infringing product;
7. You must provide all purchase orders, invoices, bills of lading, and documentation of like
kind relating to your (Nochum Waldroop, Daily Steals) and any and all other associated
and/or affiliated entities and individual's purchase and/or acquisition of infringing
product.
I demand that you immediately cease from selling and/or distributing the infringing
Electric Back Hair Shaver. In addition, I request that you provide me with the above information
and documentation on or before July 26, 2013. Please be advised that all of my clients' legal
rights and remedies are expressly reserved. Nothing contained herein shall in any way be deemed
a waiver of any legal claims, rights and/or remedies of any kind. Your prompt attention and
cooperation is respectfully requested. Please direct all correspondence in this matter directly to
me.
TI:kp
Enclosure
From: Nochum Waldroop [mailto:[email protected]
Sent: Tuesday, November 20, 2012 11:53 AM
To:MANGROOMER
SUbject: Re: Daily Steals
Hi 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 more
established 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 out of this
world. At the current price, we'd be lucky to sell100 units and we'd still lose money. Our
customers are deal junkies, and they won't get their "fix" by saving $5 on such an item. It's just
not an impulse buy.
I really hope we can work something out, since you have some other products that I like even
more (the back hair shaver, which is just genius). That's something that we can be a bit more
flexible with, since it's a unique product.
Best,
Nochum Waldroop
Daily Steals Buyer
[email protected]
718-604-2605 ext 145
EX.B
DAVID FINK
FINK & JOHNSON
ATTORNEYS AND COUNSELORS AT LAW
7519 APACHE PLUME
HOUSTON, TX 77071
Telephone (713) 729-4991
Fax (713) 729-4951
e-mail: [email protected]
DAVID FINK (NY and CT only)
Thomas J. Tedesco, Esq. TELEFAX: 714 771-2689
1855 West Katella Avenue
Orange, CA 92867
July 24, 2013
Re: Marut Enterprises, LLC/Mangroomer
Dear Mr. Tedesco:
This office represents DailySteals. I am responding to your letter dated July 22, 2013 sent
to 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 trademark
MAN GROOMER.
Contrary to your assertion, samples of the MAN GROOMER were never sent to anyone
at DailySteals. Kindly check your facts better.
Please consider the following:
U.S. PATENT NO. 7,856,725
The product fails to comply with the Marking Statute even under the more liberal 35
U.S.C. 287(a).
It appears that this patent was allowed only after the only independent claim was limited
to "no more than 135 degrees"; however, nothing in the specification support this critical
limitation. In fact, the specification says the angle can be between ""90-180 degrees' and
preferably "135-150 degrees". Clearly, the preferred maximum angle is 150 degrees, not 135
degrees. 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 evidence
for success in the market place is for an electric shave, not a passive shaver. None of the claims
include 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 is
invalid.
Thomas J. Tedesco, Esq.
July 24, 2013
Page 2
U.S. DESIGN PATENT D611,653
The 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 patent
number, 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 to
establish patentability. Hence, the design patent is invalid even though the prior application for
the '725 Patent was pointed out to the PTO. The Examiner does not determine if a design is for
functional, rather than being ornamental.
MAN GROOMER
Unfortunately, I need to point out some critical facts to you. The words
"MAN GROOMER and MENSHA VER do not sound or look like each other.
Your argument that the coloring of the words is critical is contrary to the Trademark
Examiner'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 by
DailySteals originated from your client.
Falsely accusing a company of wilful infringement of a patent or trademark is a serious
matter, and you should check your facts more carefully before sending such a letter. More so
when 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
EX.C
Vl./ L.JI L.Ul J/ lfl\J J L. 1 J flY! L/-11"1 Ut'l' ll
FAX No. 7147712689
Thomas J. Tedesco, Esq.
LAW OFFICES OF THOMAS]. TEDESCO
1855 W. Katella Avenue, Suite 365
Orange, Califol'Oia 92867
TEL (714) 7711693
'FAX (714) 771-2689
F.AX COVER SHEET
DATE: July 25, 2013
FIRM: FINK & JOHNSON
ATTENTION: David Fink, Esq.
FAXNO.: (713) 729-4951
FROM: 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
[ ] For 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 is intended only for the use of the individwU. or entity named above,
and may be confidential, m:l.y be attorney-client privileged and may <XmSti.tute inside :infozmation. If tfu: .reader oft:Ws
message is :aot the intended recipient, yoc. are advised not to read the attachments and you &Ie hereby :aotifiecl that my
dissemination, dist:ributi.on. or copy of this lelec:QPy ill STRICTLY pxoln"bited. lfyml jn e.aox,
please immediately notify 1.\11 by telep:bm;t.ll! to atta.nge fbt the tetut:o. of thll! docwnect. 1baiUc yotL
J UL/ L:JI LUl jfljjU 1L: i !'M LAW OFFICES
FAX No. 7147712689
T:e:OMAS J. TEDESCO
ATTOI'{NEY A"t LAW
WEST ....... TELLA .... VE_, &VIT!!:
OBAFGE, ().A.I:,X:Ji'ORN.U.. 9BB87
VIA EMAIL. FACSIMILE AND
July 25, 2013
David Fink. Esq.
FINK & JOHNSON
7519 Apache Plum.e
Houston, TX 77071
Re: Marut LLC I Mangroomer/Mangroomer.ooro
P. 002
T-=:LE: ... HONZ:
C7141 ?71-ISQ3
I"-'\$ I MILE
,,.1...,1 ,.,.,_eeali
Infringement by .. DailySteals.com, Nochum Waldroop", and all affili$ed and
associated entities
DearMr. Fink:
I am writing in response to your fax letter July 24, 2013. I am glad to see that your
clients will no longer engage in the sale or distribution of the MENSHA VER or any other product
that infringes my clients' intellectual property rights.
I understand it is your_clients' position that they did not violate my patents and
trademark, and even if they did, 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. Nochum Waldroop and DailySteals directly infringed on my clients' patents and 1radero.ark
when they purchased and placell the :MENSHA VER in the S'b:eam of commerce. The only
real issue is whether they were .. innocent infringers o:r whether they knowingly violated
my clients' intellectual property rights.
In light of the foregoing, I am once again requesting the following: .
1. Provide the names, addresses, phone numbers, fax numbers, e-mail addresses and the like
of all persons and/or entities that Nochum Waldroop and/or DailySteals acquired or
purchased the "MENSHA VER from. .
2. Provide copies of any and all purchase orders, invoices, bills oflading, and documentation
oflike kind relating to Nochum Waldroop and/or DailySteals purchase and/or acquisiti<?n
of the MENSHA VER.
3. Confirm the number of:MENSHA VER back hair shavers remaining in your clients'
inventory and 1:hat the product will be destroyed or" disposed of so that it cannot be re-sold
or distributed.
JUL/i:J/LUJj/lliU JL:ib fM LAW UFflCES
David Fink, Esq.
July 25) 2013
Page2
FAX No. 7147712689 P. 003
As I am sure that you understand, my clients' primary objective is to protect and preserve
its intellectual property rights and ensure that any product tliat infringes said rights is promptly
removed :from the market place.
Once agairi, I request that I be provided with the above information and documentation no
later than July 26,2013. Please be advised that all of my clients' legal :rights and remedies are
expressly reserved. Nothing contained herein shall in any way be deemed a waiver of'any legal
claims, rigb.ts and/or e m e d i ~ s of any kind.
Please feel free to call me should you wisht6 discuss any of the foregoing.
c;r9-
".Qtomas T. Tedesco, Esq.
TT:k:p