S.D.N.Y. Notes Intra-Circuit Split Re Trademark Infringement Claims Under N.Y. Deceptive Trade Practices Statute

Per Karam Prasad, LLC v. Cache, Inc., Slip Copy, 2007 WL 2438396 (S.D.N.Y . Aug 27, 2007) (NO. 07 CIV. 5785 (PAC)):

Prasad alleges that "unlawful use of [its] trademark and trade dress is a consumer-oriented deceptive practice that is materially misleading and injurious to consumers, to Plaintiff, and to the public interest." (Am.Compl.¶ 22.) The Court finds that this is insufficient as a matter of law. Although there is a split in this Circuit regarding infringement claims under § 349, the "the majority [of courts] have held that trademark cases are outside the scope of this general consumer protection statute." Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F.Supp.2d 410, 413 n. 2 (S.D.N.Y.2002). As Judge Marrero explained:

Claims that arise out of a trademark infringement action, and disputes between competitors where the core of the claim is harm to another business as opposed to consumers, both constitute situations which courts have found to reflect a public harm that is too insubstantial to satisfy the pleading requirements of § 349. See, e.g., Sports Traveler, 1997 WL 137443, at *3 (noting that "[t]he courts of this Circuit have held that trademark infringement actions alleging only general consumer confusion do not threaten the direct harm to consumers that is required to state a claim under Section 349."); Winner Int'l v. Kryptonite Corp., No. 95 Civ. 247, 1996 WL 84476, at *3 (S.D.N.Y. Feb. 27, 1996) (noting that "Courts routinely reject such attempts to fashion Section 349 ... claims from garden variety disputes between competitors" where the gravamen of the complaint is harm to another business); Fashion Boutique of Short Hills, 1992 WL 170559, at *4 (dismissing a claim under § 349 where the "alleged harm to [the claimant's] business far outweighs any incidental harm to the public at large."). Gucci, 277 F.Supp.2d at 273-74.


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