Case 1:14-cv-06967 Document 1 Filed 11/28/14 Page 1 of 16 PageID #: 1

ALTUS 6.1-00 I

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NEW YORK

ALTUS HOLDINGS, INC. and

SRG LOGISTICS, LLC,

Civil Action No.: 14-CV-

Plaintiffs,

DEMAND FOR JURY TRIAL

v.

ADAM SCHWARTZ and

FRESHeTECH, LLC,
Defendants.

COMPLAINT FOR PATENT AND TRADEMARK INFRINGEMENT, BREACH OF

CONTRACT, UNJUST ENRICHMENT, PROMISSORY ESTOPPEL, AND FOR
TORTIOUS INTERFERENCE WITH A PROSPECTIVE ECONOMIC ADV ANT AGE

Plaintiffs ALTUS HOLDINGS, INC. and SRG LOGISTICS, LLC, by and through their
undersigned counsel, hereby file suit against Defendant ADAM SCHWARTZ (hereinafter
"defendant" or "Schwartz"), for design patent and trademark infringement, breach of contract,
unjust enrichment, promissory estoppel, and for tortious interference with prospective economic
advantage. Allegations made on belief are premised on the belief that the same are likely to have
evidentiary support after a reasonable opportunity for further investigation and discovery.
JURISDICTION, VENUE, PARTIES, & NATURE OF THE ACTION
I.

Plaintiff ALTUS HOLDINGS, INC. (hereinafter "Altus") is a New York

Corporation having a place of business located at 33 Thirty-Fourth Street, Brooklyn, New York
11232.
2.

Plaintiff SRG LOGISTICS, LLC (hereinafter "SRG") is New York corporation

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having a place of business located at 33 Thirty-Fourth Street, Brooklyn, New York 11232.
3.

Defendant ADAM SCHWARTZ (hereinafter "Defendant Schwaiiz"), is an

individual doing business at 55 West Church Street, Orlando, Florida 32801; and Defendant
FRESI-IeTECH, LLC is a limited liability company of Florida doing business at 55 West Church
Street, Orlando, Florida 32801.
4.

This action is brought for a controversy amount of over $75,000.00.

5.

Since Defendants are citizens of the State of Florida while Plaintiffs are citizens of

the State of New York there is diversity, and since the amount in controversy is over $75,000.00,
diversity jurisdiction is proper pursuant to 12 U.S.C. 1332.
6.

In addition, this Court has jurisdiction over the subject matter of this action pursuant

to 28 U.S.C. 1331 (federal question), 1338(a) (an action related to a U.S. patent and a U.S.
trademark), 28 U.S.C. 1367 (supplemental jurisdiction over ancillary state law claims), 15 U.S.C.
1121, under the Declaratory Judgment Act, 28 U.S.C. 2201 and 2202, and over the other

claims under the doctrine of pendant jurisdiction.

7.

Further, venue of this action is based upon 28 U.S.C. 1391 because this Court is

located in the judicial district in which a substantial pmi of events or omissions giving rise to the
claim occurred. Moreover, all transactions by Plaintiffs have been conducted in this jurisdiction,
and therefore this Court has jurisdiction and venue over this lawsuit.
COUNT I
COMPLAINT FOR DESIGN PATENT INFRINGEMENT

8.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs of this Complaint with the same force and effect as though the same were
more fully set fo1ih at length herein.

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9.

Defendant Adam Schwartz represented to Plaintiff Altus that he had invented and

designed a new design for a shower radio, and he provided the patent drawings to Altus for
preparing and filing U.S. Design Patent Appln. Serial No. 29/478,643 on January 7, 2014 which
was recently allowed by the U.S. Patent Office. Also, the issue fee has been paid.
10.

On December 31, 2014, Defendant Schwartz assigned ownership of all patent

rights, title, and interest to Plaintiff Altus Holdings, Inc. regarding his design of a shower radio.
Plaintiff Altus now possesses all rights of recovery under U.S. Design Patent Appln. Serial No.
29/478,643, including the right to sue for infringement and recover past damages.
11.

Defendant Schwartz is now selling said shower radio to the public without the

permission or consent of the owner Plaintiff Altus, in violation of said patent rights owned by
Altus which Defendant Schwartz assigned to Plaintiff Altus.
12.

Defendant Schwartz's actions are in violation of the Patent Act, 35 U.S.C. 100,

et seq., and has caused and is causing damage to the Plaintiff Altus.
13.

Therefore, Plaintiff Altus is entitled to recover from the Defendant the damages

sustained by Plaintiff as a result of the Defendant's wrongful acts in an amount subject to proof at
trial, including an accounting for profits and damages.
14.

Upon information and belief, the Defendant's infringement of Plaintiff Altus's

patent has exceeded $1 million in sales, and has been willful and deliberate, entitling Plaintiff
Altus to increased damages under 35 U.S.C. 284 and to attorney's fees and costs incurred in
prosecuting this action under 35 U.S.C. 285.
15.

Defendant's infringement of Altus's exclusive rights under said design patent will

continue to damage Altus, causing irreparable harm for which there is no adequate remedy at law,
unless it is enjoined by this Court.

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COUNT II
COMPLAINT FOR TRADEMARK INFRINGEMENT

16.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs of this Complaint with the same force and effect as though the same were
more fully set forth at length herein.
17.

Plaintiff Altus is the owner of federal trademark appln. Serial No. 86/135,136, filed

on December 4, 2013, for the trademark SPLASH SHOWER TUNES for wireless audio speakers,
now Registration No. 4,556,026, which has been used as a trademark on said shower radios to sell
them to the public.
18.

Defendant Schwartz is using the SPLASH SHOWER TUNES trademark to sell

said shower radios to the public without the permission of Altus, and without payment to Altus,
and in violation of said trademark rights owned by Altus.
19.

Defendant Schwartz's actions are in violation of the Trademark Act, 15 U.S.C.

l 125(a), and have caused and are causing damages of over $500,000 to the Plaintiff Altus.
Therefore, Altus is entitled to an accounting for profits and damages, and an injunction to stop said
unlawful sales by Defendant Schwartz.
COUNT III
COMPLAINT FOR TRADEMARK INFRINGEMENT OF FRESHeTECH

20.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs of this Complaint with the same force and effect as though the same were
more fully set forth at length herein.
21.

A Hong Kong company called Sam Direct Global Trade Co., Limited knew that

another party owned the trademark FRESHeTECH, and that company improperly filed a

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trademark application to register the trademark in the U.S. Trademark Office on December 2, 2013.
22.

Plaintiff Altus and Defendant Schwartz agreed to pay the Hong Kong company to

assign the FRESHeTECH trademark application to Plaintiff Altus.

23.

However, Defendant Schwartz improperly advised the Hong Kong company to

assign the trademark to his company, FRESHeTECH, LLC of Florida, instead of to Altus.
24.

Defendant Schwartz breached the agreement and Defendant Schwartz started to use

the trademark FRESHeTECH on behalf of his company, FRESHeTECH, LLC of Florida.

25.

Defendant Schwartz has been and is continuing to use the FRESHeTECH

trademark to sell said shower radios to the public without the permission of Altus, and without
payment to Altus, and in violation of said trademark rights owned by Altus.
26.

Defendant Schwartz's actions are in violation of the Trademark Act, 15 U.S.C.

l 125(a), and have caused and are causing damages of over $500,000 to the Plaintiff Altus.
Therefore, Altus is entitled to an accounting for profits and damages, and an injunction to stop said
unlawful sales by Defendant Schwartz.
COUNT IV
BREACH OF CONTRACT FOR NON-DELIVERY OF PRODUCTS PAID FOR

27.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs of this Complaint with the same force and effect as though the same were
more fully set forth at length herein.
28.

On or about March 6, 2014, Plaintiff SRG LOGISTICS, LLC agreed to purchase

and Defendant Adam Schwartz agreed to sell 8,000 units of shower radios, for a deposit of
$61,425, and the 8,000 units were to be delivered to Plaintiff SRG. Plaintiff SRG timely paid
Defendant Adam Schwartz the deposit of $61,425, but Defendant refused to deliver to SRG the

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8,000 units, as agreed upon between the parties.

29.

This agreement constituted a binding sales contract pursuant to the UCC.

30.

Defendant Schwartz has failed to deliver to SRG or its designee Altus the 8,000

shower radios, and Defendant Schwartz has failed to return said funds of $61,425 to SRG due to
the non-delivery, which SRG has demanded from Defendant Schwartz. Therefore, Defendant
Schwaitz has breached the aforementioned sales contract.
31.

To date, Plaintiffs are not in possession of the 8,000 shower radios while Defendant

is in possession of both, the 8,000 shower radios and Plaintiffs money totaling $61,425.
32.

As a result of Defendant Schwmtz' s failure to deliver the 8,000 shower radios to

the Plaintiffs, Plaintiffs have suffered damages in the amount of $61,425 together with costs,
disbursements and interest.
COUNT IV
UNJUST ENRICHMENT

33.

Plaintiffs repeat, reiterate and re-allege each and every allegation contained in the

previous paragraphs of this Complaint with the same force and effect as though the same were
more fully set forth at length herein.
34.

Plaintiffs transferred $61,425 to the Defendant in order to purchase the 8,000

shower radios.
35.

Defendant Schwartz received the funds of $61,425 from Plaintiffs but Plaintiffs

have not received the 8,000 shower radios, as agreed upon.

36.

To date, Defendant Schwartz is in possession of both, the money and the 8,000

shower radios while Plaintiffs have received nothing in return.

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37.

As a result, Defendant Schwartz has been unjustly enriched in the amount of

$61,425 together with costs, disbursements and interest. Therefore, Plaintiff SRG hereby demands
the return of the $61,425 together with costs, disbursements and interest, because Schwartz has
failed to deliver said 8,000 shower radios to Plaintiff SRG or to Plaintiff Altus.

COUNTY
PROMISSORY ESTOPPEL
38.

Plaintiffs repeat, reiterate and re-allege each and every allegation contained in the

previous paragraphs of this complaint with the same force and effect as though the same were
more fully set forth at length herein.
39.

On information and belief, Defendant Schwartz made promises, statements and

representations that he would deliver the 8,000 shower radios to Plaintiff SRG or to Plaintiff Altus
for the Plaintiffs.
40.

In reliance on said promises, Plaintiff SRG made a payment of $61,425 to

Defendant with the intent to receive the benefits of Defendant's promises.

41.

Defendant accepted Plaintiff's payments but never provided anything that was

promised to Plaintiffs. Specifically, Defendant has not delivered the 8,000 shower radios to the
Plaintiffs.
42.

Plaintiffs sustained damages due to their reliance on promises made by Defendant

because they detrimentally changed their position by making said payments to Defendant.
43.

As a result, Plaintiffs have suffered damages in the amount of $61,425, together

with costs, disbursements and interest.

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COUNT VI
TORTIOUS INTERFERENCE WITH PLAINTIFFS' PROSPECTIVE
ECONOMIC ADVANTAGE WITH AMAZON.COM

44.

Plaintiffs repeat, reiterate, and re-allege each and every allegation contained in the

previous paragraphs of this Complaint with the same force and effect as though the same were
more fully set forth at length herein.
45.

In order to state a claim for tortious interference with prospective economic

advantage, a plaintiff must show: (!) it had a business relationship with a third party; (2) the
defendant knew of that relationship and intentionally interfered with it; (3) the defendant acted
solely out of malice, or used dishonest, unfair, or improper means; and (4) the defendant's
interference caused injury to the relationship.
46.

Plaintiffs had a business relationship with Amazon.com and Plaintiffs sold many of

their shower radio products on Amazon.com.

47.

Defendant Schwartz knew of Plaintiffs' business relationship with Amazon.

Consequently, Defendant Schwartz illegally interfered with Plaintiffs' business with Amazon by
sending false written notices to Amazon which illegally stated that Plaintiff was selling counterfeit
products on Amazon, and as a result SRG no longer had the right to sell said shower radios on
Amazon.
48.

As a result Defendant Schwartz's illegal actions, Amazon stopped Plaintiff SRG

from listing its products on Amazon.com, which has interfered with the sales by SRG on Amazon,
causing substantial lost sales to SRG.
49.

By interfering with PlaintiffSRG's relationship with Amazon, Defendant Schwartz

acted with the sole purpose of harming Plaintiffs or used dishonest, unfair or improper means in

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doing so. In all cases, the Defendant Schwartz caused injury to SRO's relationship with Amazon
and caused Plaintiffs a loss of prospective sales revenues on Amazon.
50.

Such unlawful interference with the business of Plaintiff SRO by Defendant

Schwartz has caused lost sales of at least $1,000,000, and Plaintiff SRO is entitled to compensation
for all of the lost sales and damages caused by Defendant Schwartz.
PRAYER FOR RELIEF

WHEREFORE Plaintiffs Altus Holdings, Inc. and SRO Logic respectfully request this
Court to enter judgment in their favor against Defendant Schwaitz granting the following relief:
1.

Finding Plaintiff Altus' allowed U.S. Design Patent Appln. Serial No. 29/478,643
valid and infringed by Defendant Schwartz;

2.

That preliminary and permanent injunctions be entered enjoining and restraining the
Defendant Schwartz his officers, agents, servants, employees, privies, successors and
assigns, and all persons in active concert, participation and combination with
Defendant Schwartz, from selling or causing to be sold or inducing others to sell, or
using or causing to be used or inducing others to use, any shower radio or product
covered by or coming within the scope of or otherwise infringing said allowed U.S.
Design Patent Appln. Serial No. 29/478,643 as provided for in 35 U.S.C. 283, or
including said trademarks SPLASH SHOWER TUNES and FRESHeTECH;

3.

Requiring Defendant Schwaitz to deliver up to be impounded during the pendency

of this action, all infringing shower radios or products in his possession or under his
control, and to withdraw all materials, including advertising and promotional
materials, cartons and containers and, thereafter, to deliver up for destruction all such
copies, as well as molds and any other material for making such design;

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4.

An order requiring the Defendant Schwartz to account for and to pay over to the
Plaintiffs all proceeds made by Defendant Schwartz by reason of the wrongful act of
patent infringement and trademark infringement complained of herein, and pay to
Plaintiffs all damages incurred by Plaintiffs by such wrongful acts including lost
profits and not less than a reasonable royalty as may be determined by an accounting,
and that said damages be trebled pursuant to 35 U.S.C. 284 and 15 U.S.C. 1117 in
view of the flagrant and willful nature of Defendant's conduct;

5.

An order requiring Defendant Schwartz to pay Plaintiffs their costs and

disbursements in this action;

6.

Declaring this case exceptional by reason of Defendant Schwartz's willful

infringement and awarding Plaintiffs their attorney's fees incurred in prosecuting this
action as provided for in 35 U.S.C. 285 and 15 U.S.C. 1117;

7.

That a permanent injunction be entered to stop Defendant Schwartz from violating

the trademark rights of Plaintiff Altus;

8.

For a judgment for the payment to Plaintiff SRG of $61,425, plus costs,
disbursements and interest;

9.

For a judgment for damages to Plaintiff Altus for its lost sales on Amazon caused by
the tortious interference of Defendant Schwartz;

I 0.

That an injunction be entered to stop Defendant Schwartz from tortiously interfering

with Plaintiff Altus's sales on Amazon; and

11.

Granting Plaintiffs such other and further relief as the Court may deem just, equitable,
and proper.

10

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DEMAND FOR JURY TRIAL

Plaintiffs demand a trial by jury on all issues of fact in this case.

Respectfully submitted,

By:

s/Ezra Sutton/
EZRA SUTTON (ES-2189)
EZRA SUTTON, P.A.
Plaza 9 Bldg., 900 U.S. Hwy. 9
Woodbridge, New Jersey 07095
(Ph.) 732-634-3520
Email: esutton@ezrasutton.com
Attorneys for Plaintiffs

Dated: November 26, 2014

11

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EXHIBITS
TO THE
COMPLAINT

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