Case 1:20-cv-01360-MKB-SJB Document 1 Filed 03/13/20 Page 1 of 18 PageID #: 1

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF NEW YORK

MMS TRADING COMPANY PTY

LTD., d/b/a CONNETIX TILES, an
Australian private company, Case No.:

Plaintiff, COMPLAINT FOR: (1)

DECLARATORY RELIEF; (2)
v. TRADE LIBEL; AND (3)
INTENTIONAL
HUTTON TOYS, LLC, a New York INTERFERENCE
limited liability company, 18th AVENUE TOYS LTD,
a New York corporation, and YAACOV SCHWARTZ, Jury Trial Demanded
an individual,
Filed:
Defendants.

Plaintiff MMS Trading Company Pty Ltd., d/b/a Connetix Tiles (hereinafter known as

“Plaintiff” or “Connetix”) by its undersigned counsel, as and for its Complaint against Defendants,

Hutton Toys, LLC, 18th Avenue Toys Ltd., and Yaacov Schwartz, with knowledge as to itself and

its own acts, and otherwise upon information and belief, hereby alleges and states as follows:

INTRODUCTION

1. This action arises out of Defendants Hutton Toys, LLC’s (“Hutton Toys”), and 18th

Avenue Toys Ltd.’s (“18th Ave”) efforts to eliminate competition in the crowded and competitive

magnetic tile toy market. Connetix, Hutton Toys, and 18th Ave are competitors in the magnetic

tile toy market. As part of an anti-competitive scheme which continues to date, despite the

obvious functional nature of Hutton Toys’ and 18th Ave’s magnetic tiles, Hutton Toys and/or 18th

Ave illicitly registered a copyright. Additionally, 18th Ave, and/or its principal, Yaacov Schwartz

(“Schwartz”) also own the complained of Design Patent, the subject of which is essentially the

copyrighted material. The copyright registration is invalid as the copyright claims functional

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features of the magnetic tiles. Based on this improperly secured copyright registration, Hutton

Toys then notified online marketplace Amazon.com of Hutton Toys’ purported rights and

succeeded in having Connetix’s magnetic tile toys product listings taken down. The removal of

the Amazon.com listings has resulted in a severe loss of sales and goodwill for Connetix. Hutton

Toy’s bad faith conduct and efforts in attempting to eliminate its competition industrywide

constitute unfair competition and tortious behavior.

PARTIES TO THE ACTION

2. Plaintiff Connetix is an Australian private company with its principal place of

business at 2 Linton Rd, Attadale, Western Australia 6156. Connetix is an importer of consumer

goods, including the popular magnetic tile toy brand Connetix® TILES.

3. Upon information and belief, Defendant Hutton Toys is a New York limited

liability company having its principal place of business at 1510 56th Street, Brooklyn, New York.

Hutton Toys is a competitor of Connetix in the magnetic tile toy market.

4. Upon information and belief, Defendant 18th Ave is a New York corporation having

its principle place of business at 5506 18th Ave, Brooklyn, New York 11204. 18th Avenue is a

competitor of Connetix in the magnetic tile toy market.

5. Upon information and belief, Defendant Schwartz is an individual residing in New

York, the Principal of 18th Ave, and the owner of record of United States Design Patent D713,891

(the “’891 Patent”)

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JURISDICTION AND VENUE

6. This action arises under the Copyright laws of the United States 17 U.S.C. Ch. 1 –

13; the Patent Laws of the United States, 35 U.S.C. §§ 101, et seq.; the Declaratory Judgment

Act, 28 U.S.C. §§ 2201(a) and 2202; and New York common law.

7. This Court has jurisdiction over the parties and the subject matter of this action

pursuant to 28 U.S.C. §§ 1331, 1332, and 1338. Pursuant to § 1367, this Court has supplemental

jurisdiction over the claims not brought under a federal statute because those claims are related

to, and form part of the same case or controversy, as the federal question claims. Complete

diversity exists because Plaintiff Connetix is an Australian private company with a principal place

of business in Australia, Defendant Hutton Toys is a New York limited liability company with a

principal place of business in Kings County, New York, Defendant 18th Ave is a New York

corporations with a principal place of business in Kings County, New York, and Defendant

Schwartz is an individual residing in Kings County, New York, the principal of 18th Ave, and the

owner of record of the ‘891 Patent. Plaintiff claims the amount in controversy in this case exceeds

$75,000.

8. This Court has personal jurisdiction over Defendants as Defendants’ Hutton Toys

and 18th Ave are registered to do business in New York and their principal places of business are

in New York. Additionally, Defendant Schwartz is a citizen of New York residing at 1853 54th

Street, Brooklyn, New York. Moreover, Hutton Toys and 18th Ave market their products in New

York, and their products are sold in New York.

9. Venue is proper under 28 U.S.C. §§ 1391(b). Defendants market their products in

this district, the alleged acts have occurred or are occurring in this district, and Defendants are

subject to personal jurisdiction in this district.

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FACTUAL BACKGROUND
The Crowded Market for Magnetic Tile Toys

10. The market for magnetic tile toys is crowded and competitive. Valtech LLC

launched its brand of magnetic tiles, MAGNA-TILES® in 1997, Laltitude, LLC’s

PICASSOTILES® were first made available for sale in April 2013, Magformers, LLC introduced

its brand of magnetic tiles, MAGFORMERS® in 2006 and MagWorld demonstrated its own

magnetic building tiles in 2014. (See the true and accurate copy of the Complaint in the matter

of Laltitude, LLC, v. 18 Avenue Toys, Ltd., and Yaacov Schwartz, United States District Court,

Central District of California, Docket No.: 2:16-cv-06562 attached hereto as Exhibit A.)

11. Hutton Toys claims a date of first publication for their magnetic tiles as May 1,

2015.

12. 18th Ave claims a date of first publication for their magnetic tiles as of May 1, 2015.

13. The Connetix® TILES were first introduced in Australia in 2019.

14. The Connetix® TILES were first made available for sale in the U.S. in May 2019.

15. Consumers quickly took notice of Connetix® TILES as evidenced by a high volume

of sales on Amazon.com.

16. Industrywide, the designs of the various magnetic tile toys on the market are similar

because so many of the core features of the designs are purely functional. For example, the

corners are rounded to avoid sharp edges that could injure the target market, children. The interior

lattice of the tiles includes pockets to hold magnets that help bind different tiles together. The

tiles include rivets to fasten the two halves of the tiles together.

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Hutton Toys’ History of Infringement and Bad Faith Conduct

17. 18th Ave has been named as a defendant in previous infringement actions pertaining

to similar magnetic tile toy controversies, including being named defendant in a 2014 suit brought

by Valtech, LLC for infringement of Valtech, LLC’s decade-old MAGNA-TILES® products.

(See Exhibit A and the true and accurate copy of the Complaint in the matter of Valtech, LLC, v.

18 Avenue Toys, Ltd., and Toys 4 USA, Inc., United States District Court, Northern District of

Illinois, Docket No.: 1:14-cv-00134 attached hereto as Exhibit B.)

18. Allegations previously levied against 18th Ave have also included claims of unfair

business practices, intentional interference, and trade libel in relation to its’ magnetic tile toys.

19. The validity of Hutton Toys’ copyright registration VA-1-998-106 has also been

previously challenged. (See Exhibit A.)

20. Upon information and belief, Hutton Toys and/or 18th Ave regularly file fraudulent

infringement complaints to Amazon with the sole intent to hinder competition in the crowded

magnetic tile toy space, despite their knowledge that VA-1-998-106 is invalid and not infringed

upon.

Hutton Toys’ Anticompetitive Use of D713,891

®
21. On May 27, 2013 (over a decade after Valtech’s MAGNA-TILES entered the

market), Schwartz filed an application for a design patent that eventually issued as United States

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Patent No.: D713,891 on September 23, 2014. The ‘891 patent, claims the following designs:

22. It is well-established that design patent protection is limited to an “original and

ornamental design.” 35 U.S.C. § 171(a). However, the drawings in the ‘891 patent, do not include

any ornamental designs distinct from the functional features of the magnetic tiles, namely,

rounded edges, internal lattice structure, and pockets for magnets. Schwartz was well aware of

the crowded nature of the magnetic tile toy market, and was aware that he was not the original

creator of the functional aspects claimed in the ‘891 patent. Despite this awareness, Schwartz

persisted in seeking design patent protection with the sole, bad faith intent to stifle competition

in the crowded market space.

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Hutton Toys’ Anticompetitive Use of VA 1-998-106

23. On March 30, 2016, Hutton Toys and/or 18th Ave registered with the United States

Copyright Office Registration number VA 1-998-106 for a work entitled “SHAPE MAGS.” The

copyright includes the following designs:

24. Hutton Toys’ and/or 18th Ave’s copyright registration VA-1-998-106 is invalid as

copyright protection is only available for “original works of authorship” (17 U.S.C. § 102) and

excludes “useful articles” that do not have “pictorial, graphic, or sculptural features” that “can be

identified separately from, and are capable of existing independently of, the utilitarian aspects of

the article” (17 U.S.C. § 101). Copyright registration VA 1-998-106 claims only functional

features of the magnetic tiles and is thus invalid.

25. Upon information and belief, Connetix asserts that Hutton Toys and 18th Ave were

well aware of the crowded nature of the magnetic tile toy market, and that they were not the

original creator of the functional features claimed in VA 1-998-106, including the rounded

corners, internal lattice, pockets for magnets, etc.

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26. Hutton Toys’ and/or 18th Ave’s copyright registration lists the year of completion

for their magnetic tiles as 2014, and the date of first publication of Hutton Toys’ and/or 18th Ave’s

magnetic tiles as May 1, 2015 – both dates are much later than the launch and sale of many other

similar magnetic tile toys. Still, Hutton Toys and/or 18th Ave sought copyright protection with

the intent to stifle competition, not to protect novel ornamental designs that they had created.

(See the true and accurate copy of Hutton Toys’ correspondence to Plaintiff, enclosing the

copyright registration, attached hereto as Exhibit C.)

27. On or about November 2, 2019, Hutton Toys sent a copyright complaint to

Amazon.com based on alleged infringement of copyright registration VA 1-998-106. Upon

information and belief, Connetix alleges that Hutton Toys made these copyright infringement

allegations despite the knowledge that it had no enforceable rights in VA-1-998-106 and despite

the knowledge that Connetix’s magnetic tile products did not infringe on any protectable features

of Hutton Toys’ products. Connetix further alleges, upon information and belief, that Hutton Toys

made these allegations with the intent of depriving Connetix of marketing and sales channels to

harm Connetix’s place in the market, and thus acted in objective bad faith.

28. On or about November 2, 2019, without vetting the veracity of the content of

copyright registration VA 1-998-106, Amazon removed Connetix product listings “Amazon

ASIN B07T629BPJ” and “Amazon ASIN B07R88MB6H.”

29. On November 6, 2019, counsel for Hutton Toys contacted Connetix by email

accusing Connetix of infringing copyright registration VA-1-998-106. Hutton Toys demanded

that Connetix provide documents relating to the sale and purchase of the alleged “infringing

products,” gross revenue obtained by the sale of the alleged “infringing products” and

documentation regarding inventory of the alleged “infringing product.” (See Exhibit C).

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30. Connetix has lost, and continues to lose, considerable sales and goodwill as a result

of the removed product listings. Connetix has received many inquiries from customers regarding

the availability of the Connetix® TILES sets that were removed from Amazon.com based on

Hutton Toys’ bad faith copyright complaints. Additionally, the unsold inventory is a financial

loss to Connetix.

31. Connetix further alleges, upon information and belief, that Hutton Toys

intentionally waited until just before the holiday season to initiate a complaint with Amazon in

an attempt to enhance the harm to Connetix sales channels and prevent Connetix from availing

itself of a particularly lucrative time period in the market, in objective bad faith.

32. Hutton Toys’ anticompetitive use of VA-1-998-106 has also disrupted Connetix’s

relationship with its distributors and resellers.

33. Connetix has suffered and continues to suffer irreparable injury due to Defendants’

actions for which there is not adequate remedy at law. The balance of hardships favors Connetix

and the public interest would not be disserved by the implementation of an injunction.

FIRST CAUSE OF ACTION

(Declaration of Copyright Invalidity)

(Hutton Toys and 18th Ave)

(17 U.S.C. §§ 101 et seq.: 28 U.S.C. §2201)

34. Connetix re-alleges, re-avers and incorporates by reference, as if fully set forth in

this paragraph, the allegations of paragraphs 1 through 33 above.

35. The VA-1-998-106 copyright registration is invalid under 17 U.S.C. §101, et seq,

for failure to claim a copyright-eligible original work of authorship and as the VA-1-998-106

copyright registration is directed to a useful article and does not contain any copyrightable

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features separable from the utilitarian features of the article.

36. Therefore, as a result, there is a justiciable controversy between Connetix, Hutton

Toys, and 18th Ave as to the validity of the VA-1-998-106 copyright registration, and as to

Connetix’s right to make, sell, import or use its Connetix® TILES products.

37. Connetix is entitled to a declaratory judgment pursuant to 28 U.S.C. §2201 that the

VA-1-998-106 copyright registration is invalid.

SECOND CAUSE OF ACTION

(Declaration of Non-infringement of Copyright)

(Hutton Toys and 18th Ave)

(17 U.S.C. § 501; 28 U.S.C. § 2201)

38. Connetix re-alleges, re-avers and incorporates by reference, as if fully set forth in

this paragraph, the allegations of paragraphs 1 through 37 above.

39. Connetix’s products do not infringe and have not infringed the VA-1-998-106

copyright registration pursuant to 17 U.S.C. § 501.

40. By virtue of the foregoing, there is a justiciable controversy between Connetix,

Hutton Toys, and 18th Ave as to Connetix’s right to make, sell, import, or use its Connetix®

TILES products.

41. Connetix is entitled to a declaratory judgement pursuant to 28 U.S.C. § 2201 that it

is not infringing and has not infringed copyright registration VA-1-998-106.

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THIRD CAUSE OF ACTION

(Trade Libel)

(Hutton Toys)

42. Connetix re-alleges, re-avers and incorporates by reference, as if fully set forth in

this paragraph, the allegations of paragraphs 1 through 41 above.

43. Through the copyright takedown requests sent to Amazon, Hutton Toys published

untrue statements of fact, including the statements that the Connetix® TILES infringed Hutton

Toys’ copyright rights, and that Hutton Toys had the right to demand that Amazon remove

Connetix’s product listings.

44. Hutton Toys’ statements were false in that, among other things, (a) Hutton Toys

did not have enforceable copyright rights in VA-1-998-106; and (b) the Connetix ® TILES did

not and do not infringe any copyrights in VA-1-998-106.

45. Hutton Toys’ knew its statements were false or were made with reckless disregard

for the truth in that Hutton Toys knew that they were not the original authors or creators of the

features claimed in VA-1-998-106, as evidenced by the several infringement claims brought

against them regarding the very products they herein allege were infringed upon, as well as the

mere fact that many similar magnetic tile toys predated Hutton Toys’ products and its copyright

registration.

46. Hutton Toys’ statements were not mere statements of opinion.

47. As a direct and proximate result of the wrongful acts and bad faith conduct of

Hutton Toys, Connetix has suffered and will continue to suffer general damages, including lost

profits in an amount greater than $75,000.

48. Upon information and belief, Connetix alleges that Hutton Toys has engaged in the

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conduct alleged herein with a conscious and intentional disregard of rights of Connetix, and with

an intent to harass, injure or annoy, such as to constitute oppression, fraud, or malice, thereby

entitling Connetix to punitive damages in an amount appropriate to punish or make an example

of Hutton Toys.

FOURTH CAUSE OF ACTION

(Intentional Interference with Prospective Economic Advantage)

(Hutton Toys)

49. Connetix re-alleges and incorporates by reference, as if fully set forth in this

paragraph, the allegations of paragraphs 1 through 48.

50. At all times relevant hereto, Connetix had existing relationships with existing and

potential customers, all of which had and have a substantial probability of resulting in economic

benefit to Connetix. Hutton Toys was aware of these relationships, and of the probable economic

advantage to Connetix.

51. As alleged above, Hutton Toys engaged in wrongful acts and conduct including,

but not limited to, demanding that Amazon take down product listings for Connetix® TILES based

on alleged infringement of copyright VA-1-998-106, even though they knew that VA-1-998-106

to be invalid and not infringed upon.

52. These wrongful acts and conduct of Hutton Toys were intended to interfere, and

did interfere, with such relationships, thereby causing Connetix to lose the economic advantages

to which it was entitled. It is extremely likely that these relationships would have resulted in

significant economic advantage to Connetix had Hutton Toys not improperly interfered with them.

53. As a direct and proximate result of Hutton Toys’ wrongful acts and conduct,

Connetix has suffered and will continue to suffer general and special damages, including lost

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profits in an amount greater than $75,000.

54. Upon information and belief, Connetix based thereon, alleges that Hutton Toys has

engaged in the conduct alleged herein with a conscious disregard for the rights of Connetix, and

with an intent to harass, injure or annoy, such as to constitute oppression, fraud, or malice.

FIFTH CAUSE OF ACTION

(Intentional Tortious Interference with Contract)

(Hutton Toys)

55. Connetix re-alleges, re-avers and incorporates by reference, as if fully set forth in

this paragraph, the allegations of paragraphs 1 through 54 above.

56. Connetix, at all relevant times, had existing contractual relations with

Amazon.com, distributors and resellers, as well as existing and potential customers, all of which

had and had substantial probability of resulting in economic benefit to Plaintiff, whereby Connetix

would derive economic benefit of selling Connetix® TILES in exchange for payment. Connetix,
at well, at all relevant times, had a reasonable expectancy of profit to be derived as a result of its

contractual relations with the distributors and resellers.

57. At all relevant times, Hutton Toys knew of the contractual relationships existing

between Connetix and the distributors and resellers, and Hutton Toys knew of Connetix’s

reasonable expectation of profit based upon such existing contractual relationships.

58. Hutton Toys intentionally procured Amazon.com’s breach of that contract without

justification by demanding that Amazon.com take down Plaintiff’s product listings for its

Connetix’s product, based upon alleged infringement of copyright VA-1-998106 even though it

knew copyright VA-1-998106 was neither valid, nor infringed upon.

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59. These intentional acts of Hutton Toys in procuring Amazon.com’s breach of its

contract with Plaintiff caused Plaintiff to lose economic advantages to which Plaintiff was entitled,

and which would have resulted in future economic advantages to Plaintiff had Defendant not

intentionally interfered.
60. Beginning with the takedown request to Amazon based on VA-1-998-106, and

continuing to present, Hutton Toys made false and misleading threats of copyright infringement

with the intent to interfere with Connetix’s contractual relationships with their distributors and

resellers. This conduct has interfered, and continues to interfere, with the sales and marketing of

the distributors and resellers of Connetix® TILES, thereby causing Connetix serious economic

harm.

61. Hutton Toys, as alleged above, engaged in intentional, wrongful acts and conduct

including, but not limited to, demanding that Amazon take down Connetix’s product listings for

Connetix® TILES based on alleged infringement of copyright registration number VA-1-998-106

despite their knowledge that VA-1-998-106 was invalid and not infringed upon.

62. As a direct result of Hutton Toys’ wrongful acts and conduct, Connetix has suffered

and will continue to suffer general and special damages, including lost profits in an amount

greater than $75,000.

63. Upon information and belief, Connetix based thereon, alleges that Hutton Toys has

engaged in the conduct alleged herein with a conscious disregard for the rights of Connetix, and

with an intent to harass, injure or annoy, such as to constitute oppression, fraud, or malice.

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SIXTH CAUSE OF ACTION

(Declaration of Design Patent Invalidity and Unenforceability)

(Schwartz)

(35 U.S.C. §§ 171 et seq.; 28 U.S.C. § 2201 and 2202)

64. Connetix re-alleges, re-avers and incorporates by reference, as if fully set forth in

this paragraph, the allegations of paragraphs 1 through 60 above.

65. Connetix seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 and 2202 to

settle an actual controversy between the parties to the above-entitled proceeding with respect to

the validity and unenforceability of United States Design patent D713,891. (A true and accurate

copy of the ‘891 Patent is attached hereto as Exhibit D.)

66. Upon information and belief, Connetix states that the ‘891 Patent is invalid and

unenforceable under 35 USCS §§ 101, 102, 103, and 112 for one or more of the following

reasons:

A. The ‘891 patent is invalid under 35 U.S.C. §101 for failure to claim design patent

eligible ornamental features as the ‘891 patent is directed to functional features.

B. The purported invention claimed in the patent was known or used by others in this

country, or patented or described in a printed publication in this or a foreign

country, prior to its purported invention by the alleged inventor as illustrated by

Hutton Toys’ late entry into the field.

C. The purported invention claimed in the patent was patented or described in a printed

publication in this or a foreign country or was in public use or on sale in this

country, more than one year prior to the date of the application for a patent in the

United States.

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D. The purported invention claimed in the patent was described in patents granted on

applications for patents by others filed in the United States before the purported

invention by the alleged inventor.

E. The alleged inventor did not invent the subject matter sought to be patented.

F. Before the inventor made the alleged invention claimed in the patent, the invention

was made in this country by others who have not abandoned, suppressed, or

concealed it.

G. The differences between the subject matter sought to patented and the prior art and

such that the subject matter sought to be patented as a whole would have been

obvious at the time the alleged invention was made to a person having ordinary

skill in the art to which the subject matter pertains.

H. The ‘891 patent is unenforceable as multiple inventions (at least four) are disclosed

within the ‘891 patent as illustrated by Fig. 2, 7, 11 and 16 as follows:

I. By definition, design patents must include only a single claim and a single

design/invention. Therefore, the ‘891 Patent is invalid because the ‘891 Patent

includes more than one design/invention.

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67. In light of the foregoing, there is a justiciable controversy between Connetix and

Schwartz as to the validity of the ‘891 patent, and as to Connetix’s right to make, sell, import, or

use its Connetix® TILES products.

68. Connetix is entitled to a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and

2202 that the ‘891 patent is invalid.

PRAYERS FOR RELIEF

WHEREFORE, Plaintiff prays for judgment as follows:

1. For costs of suit incurred herein;

2. For a declaration that copyright registration VA-1-998-106 is invalid;
3. For a declaration that United States Design Patent D713,891 is invalid;

4. For an award representing the disgorgement of the amount of ill-gotten gains

through Hutton Toys’ unjust business practices;

5. For money damages to compensate Plaintiff for the harm caused by Hutton Toys’
trade libel, including lost profits;
6. For money damages to compensate Plaintiff for the harm caused by Hutton Toys’

intentional interference with contract, including lost profits;

7. For money damages to compensate Plaintiff for the harm caused by Hutton Toys’
intentional interference with prospective economic advantages, including lost profits;

8. For an Order that Hutton Toys’ withdraw any Amazon.com takedown request
regarding Plaintiff and/or its product;

9. A preliminary injunction requiring Hutton Toys to withdraw any Amazon.com

takedown request regarding Plaintiff and/or its product and preventing Hutton Toys from
conducting any future takedown requests with Amazon.com with respect to Plaintiff;

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10. A permanent injunction requiring Hutton Toys to withdraw any Amazon.com

takedown request regarding Plaintiff and/or its product and preventing Hutton Toys from
conducting any future takedown requests with Amazon.com with respect to Plaintiff;

11. A judgment finding that this is an exceptional case and awarding Plaintiff’s
attorneys’ fees pursuant to 35 U.S.C. § 285;
12. For punitive damages in an amount appropriate to punish or make an example

of Defendants; and,

13. For such other and further relief as the court may deem just, necessary, and
proper.

Date: March 13, 2020

Purchase, New York

LITTLETON PARK JOYCE UGHETTA &

KELLY LLP

/s/ Bruce Ainbinder

Bruce Ainbinder, Esq. (BA8580)
4 Manhattanville Road, Suite 202
Purchase, NY 10577
(914) 417-3400/3404

Attorneys for Plaintiff MMS Trading

Company Pty Ltd., d/b/a Connetix Tiles.

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JS 44 (Rev. /1) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS DEFENDANTS

MMS TRADING COMPANY LTD, d/b/a CONNETIX TILES HUTTON TOYS, LTD., 18TH AVENUE TOYS LTD., and YACCOV
SCHWARTZ

(b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant Kings
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
Littleton Park Joyce Ughetta & Kelly LLP
4 Manhattanville Road, Purchase, NY
914-417-3400

II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
u 1 U.S. Government u 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State u 1 u 1 Incorporated or Principal Place u 4 u 4
of Business In This State

u 2 U.S. Government u 4 Diversity Citizen of Another State u 2 u 2 Incorporated and Principal Place u 5 u 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a u 3 u 3 Foreign Nation u 6 u 6

Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only)
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
u 110 Insurance PERSONAL INJURY PERSONAL INJURY u 625 Drug Related Seizure u 422 Appeal 28 USC 158 u 375 False Claims Act
u 120 Marine u 310 Airplane u 365 Personal Injury - of Property 21 USC 881 u 423 Withdrawal u 376 Qui Tam (31 USC
u 130 Miller Act u 315 Airplane Product Product Liability u 690 Other 28 USC 157 3729(a))
u 140 Negotiable Instrument Liability u 367 Health Care/ u 400 State Reapportionment
u 150 Recovery of Overpayment u 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS u 410 Antitrust
& Enforcement of Judgment Slander Personal Injury u 820 Copyrights u 430 Banks and Banking
u 151 Medicare Act u 330 Federal Employers’ Product Liability u 830 Patent u 450 Commerce
u 152 Recovery of Defaulted Liability u 368 Asbestos Personal u 840 Trademark u 460 Deportation
Student Loans u 340 Marine Injury Product u 470 Racketeer Influenced and
(Excludes Veterans) u 345 Marine Product Liability LABOR SOCIAL SECURITY Corrupt Organizations
u 153 Recovery of Overpayment Liability PERSONAL PROPERTY u 710 Fair Labor Standards u 861 HIA (1395ff) u 480 Consumer Credit
of Veteran’s Benefits u 350 Motor Vehicle u 370 Other Fraud Act u 862 Black Lung (923) u 490 Cable/Sat TV
u 160 Stockholders’ Suits u 355 Motor Vehicle u 371 Truth in Lending u 720 Labor/Management u 863 DIWC/DIWW (405(g)) u 850 Securities/Commodities/
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u 196 Franchise Injury u 385 Property Damage u 751 Family and Medical u 891 Agricultural Acts
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(specify)
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
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VI. CAUSE OF ACTION Brief description of cause:
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VII. REQUESTED IN u CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P. JURY DEMAND: u Yes u No
VIII. RELATED CASE(S)
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DATE SIGNATURE OF ATTORNEY OF RECORD
03/13/2020 Bruce Ainbinder (BA8580)
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE

 CERTIFICATION
Case 1:20-cv-01360-MKB-SJB OF ARBITRATION
Document ELIGIBILITY
1-1 Filed 03/13/20 Page 2 of 2 PageID #: 20
Local Arbitration Rule 83. provides that with certain exceptions, actions seeking money damages only in an amount not in excess of $150,000,
exclusive of interest and costs, are eligible for compulsory arbitration. The amount of damages is presumed to be below the threshold amount unless a
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&DVHLV(OLJLEOHIRU$UELWUDWLRQ

I, __________________________________________, counsel for____________________________, do hereby certify that the above captioned civil action is ineligible for
compulsory arbitration for the following reason(s):

monetary damages sought are in excess of $150,000, exclusive of interest and costs,

the complaint seeks injunctive relief,

the matter is otherwise ineligible for the following reason

DISCLOSURE STATEMENT - FEDERAL RULES CIVIL PROCEDURE 7.1

Identify any parent corporation and any publicly held corporation that owns 10% or more or its stocks:

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RELATED CASE STATEMENT (Section VIII on the Front of this Form)

Please list all cases that are arguably related pursuant to Division of Business Rule 50.3.1 in Section VIII on the front of this form. Rule 50.3.1 (a) provides that “A civil case is “related”
to another civil case for purposes of this guideline when, because of the similarity of facts and legal issues or because the cases arise from the same transactions or events, a
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“Presumptively, and subject to the power of a judge to determine otherwise pursuant to paragraph (d), civil cases shall not be deemed to be “related” unless both cases are still
pending before the court.”

NY-E DIVISION OF BUSINESS RULE 50.1(d)(2)

1.) Is the civil action being filed in the Eastern District removed from a New York State Court located in Nassau or Suffolk
County? Yes ✔ No

2.) If you answered “no” above:

a) Did the events or omissions giving rise to the claim or claims, or a substantial part thereof, occur in Nassau or Suffolk
County? Yes ✔ No

b) Did the events or omissions giving rise to the claim or claims, or a substantial part thereof, occur in the Eastern
District? ✔ Yes No

c) If this is a Fair Debt Collection Practice Act case, specify the County in which the offending communication was
received:______________________________.

If your answer to question 2 (b) is “No,” does the defendant (or a majority of the defendants, if there is more than one) reside in Nassau or
Suffolk County, or, in an interpleader action, does the claimant (or a majority of the claimants, if there is more than one) reside in Nassau or
:FT


















/P
Suffolk County?___________________________________
(Note: A corporation shall be considered a resident of the County in which it has the most significant contacts).

BAR ADMISSION

I am currently admitted in the Eastern District of New York and currently a member in good standing of the bar of this court.

✔ Yes No

Are you currently the subject of any disciplinary action (s) in this or any other state or federal court?

Yes (If yes, please explain ✔ No

I certify the accuracy of all information provided above.

Signature: ____________________________________________________
/DVW0RGLILHG
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CaseCase
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1 MARSHA E. DIEDRICH (State Bar No. 093709)

CASONDRA K. RUGA (State Bar No. 237597)
2 EVAN W. WOOLLEY (State Bar No. 286385)
ALSTON & BIRD LLP
3 333 South Hope Street, Sixteenth Floor
Los Angeles, California 90071
4 Telephone: (213) 576-1000
Facsimile: (213) 576-1100
5 Email: [email protected]
[email protected]
6 [email protected]
7
Attorneys for Plaintiff
8 LALTITUDE, LLC
9
10
UNITED STATES DISTRICT COURT
11
CENTRAL DISTRICT OF CALIFORNIA
12
LALTITUDE, LLC, a California Case No.:
13 corporation,
14 Plaintiff, COMPLAINT FOR: (1)
DECLARATORY RELIEF; (2)
15 v. UNFAIR BUSINESS PRACTICES,
Cal. Bus. & Prof. Code § 17200; (3)
16 18TH AVENUE TOYS, LTD., a New York TRADE LIBEL; AND (4)
corporation, and YAACOV SCHWARTZ, INTENTIONAL INTERFERENCE
17 an individual.
18 Defendants. Filed: August 31, 2016
19
20
21
22
23
24
25
26
27
28

COMPLAINT
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1 Plaintiff Laltitude, LLC (“Plaintiff” or “Laltitude”) hereby alleges and states as

2 follows:
3 INTRODUCTION
4 1. This action arises out of Defendants Yaacov Schwartz’s and 18th Avenue
5 Toys, Ltd.’s (“18th Ave”) efforts to eliminate its competition in the crowded and
6 competitive market for magnetic tile toys. Laltitude and 18th Ave are competitors in the
7 magnetic tile toy market. Despite Laltitude’s earlier entry into the market, Mr. Schwartz
8 and 18th Ave registered a copyright and applied for a design patent after Laltitude’s
9 magnetic tiles were already for sale. The copyright registration and design patent is
10 invalid because each claims functional features of the magnetic tiles. Based on its
11 improperly secured copyright registration and design patent, 18th Ave has notified
12 online marketplace Amazon.com of its purported rights and has succeeded in having
13 Laltitude’s product listings for its magnetic tile toys taken down. The removal of its
14 Amazon.com listings has resulted in a loss of sales and goodwill for Laltitude. 18th
15 Ave’s conduct and efforts in attempting to eliminate its competition in the magnetic tile
16 toy market crosses the line between fair competition and tortious behavior.
17 PARTIES TO THE ACTION
18 2. Plaintiff Laltitude is a California corporation with its principal place of
19 business in Diamond Bar, California. Laltitude is an importer of consumer goods,
20 including the popular magnetic tile toy brand PICASSOTILES®.
21 3. On information and belief, Defendant 18th Ave is a New York corporation
22 with its principal place of business at 5506 18th Avenue, Brooklyn, New York 11204.
23 18th Ave is a competitor to Laltitude in the magnetic tile toy market.
24 4. On information and belief, Defendant Yaacov Schwartz is an individual
25 residing in New York. Mr. Schwartz is the principal of 18th Ave and the owner of record
26 of United States Design Patent D713,891.
27 JURISDICTION AND VENUE
28 5. This action arises under the Copyright Laws of the United States, 17
1
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1 U.S.C. §§ 101, et seq.; Patent Laws of the United States, 35 U.S.C. §§ 1, et seq.; the
2 Declaratory Judgment Act, 28 U.S.C. §§ 2201(a) and 2202; and California common
3 law.
4 6. This Court has jurisdiction over the parties and the subject matter of the
5 action pursuant 28 U.S.C. §§ 1331, 1332, and 1338. Pursuant to 28 U.S.C. § 1367, this
6 Court has supplemental jurisdiction over the claims not brought under a federal statute
7 because those claims are related to, and form part of the same case or controversy as
8 the federal question claims. Complete diversity exists because Plaintiff Laltitude is a
9 California corporation with a principal place of business in California, Defendant 18th
10 Ave is a New York corporation with a principal place of business in New York, and
11 Yaacov Schwartz is an individual residing in New York. The amount in controversy
12 exceeds $75,000.
13 7. This Court has personal jurisdiction over 18th Ave because 18th Ave
14 markets its products in California and its products are sold in California.
15 8. This Court has personal jurisdiction over Yaacov Schwartz because as the
16 principal of 18th Ave he participates in the marketing and selling of 18th Ave products
17 in California. On information and belief, Mr. Schwartz licensed United States Design
18 Patent D713,891 to 18th Ave in connection with 18th Ave’s marketing and selling of
19 products, including in California.
20 9. Venue is proper under 28 U.S.C. §§ 1391(b). Mr. Schwarz and 18th Ave
21 markets their products in this district, the alleged acts have occurred or are occurring in
22 this district, and Mr. Schwartz and 18th Ave is subject to personal jurisdiction in this
23 district.
24 FACTUAL BACKGROUND
25 The Crowded Market for Magnetic Tile Toys
26 10. The market for magnetic tile toys is crowded and competitive. Valtech
27 LLC launched its brand of magnetic tiles, MAGNA-TILES® in 1997.
28 11. Laltitude’s PICASSOTILES® were first made available for sale in April
2
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1 2013.
2 12. Consumers quickly took notice of PICASSOTILES®, with the first review
3 on Amazon.com posted on May 24, 2013.
4 13. The first Amazon.com review of the 18th Ave magnetic tiles was posted on
5 August 5, 2013, months after Laltitude’s PICASSOTILES® entered the market.
6 14. On June 14, 2014, MagWorld demonstrated its own magnetic building tiles
7 at the Japan Toy Fair. On information and belief, Laltitude alleges that 18th Ave’s
8 current magnetic building tiles design is substantially similar to MagWorld’s pre-
9 existing original magnetic building tiles design, which was already made available to
10 the public in June 2014, prior to 18th Ave’s current version of its magnetic building tiles.
11 15. As demonstrated in the below table, the various magnetic tile toys appear
12 to have similar designs:
13
14
15
16
17
18
19
20
21
22 Valtech MAGNA-TILES® 1 Laltitude PICASSOTILES® 2
23
24
25
26
27
1
Product image from <http://www.magnatiles.com/wp-content/uploads/04300_1-600x472.jpg>
28 2
Product image from <http://www.picassotiles.com/product-page/b58a79ed-4cfb-1b51-a320-9a36634a7bb4>.
3
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1
2
3
4
5
6
7
8
9 18th Ave PLAYMAGS® 3 MagWorld4
10 16. The designs of the various magnetic tile toys are similar because so many
11 of the core features of the designs are purely functional. The corners of the tiles are
12 rounded to avoid sharp edges that could injure children. The interior of the tiles include
13 a lattice that provides structural integrity. The edges of the interior lattice include
14 pockets to hold the magnets that help bind different tiles together. The tiles include
15 rivets to fasten the two halves of the tiles together. The tiles are manufactured through
16 plastic injection molding, and this includes solid points that correspond to the injection
17
18
19
20
21
22
23
24
25
26
27 3
Product image from <http://playmags.net/wp-content/uploads/2014/09/rocket-222x300.jpg>.
4
Product image from <http://www.magworldtoys.com/wp-content/uploads/2016/03/Rainbow_14_Piece_00010-
28 180x180.jpg>.
4
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1 points. The annotated figure below is illustrative of these functional features:5

2 18th Ave’s Anticompetitive Use of D713,891
3 17. On May 27, 2013 (over a month after PICASSOTILES® entered the
4 market, and over a decade after Valtech’s MAGNA-TILES® entered the market),
5 Yaacov Schwartz, principal of 18th Ave, filed an application for a design patent that
6 eventually issued as D713,891 on September 23, 2014. The design patent, entitled
7 “Magnetic board game,” claims the following designs:
8
9
10
11
12
13
14
15
16
17
18
19 18. Design patent protection is limited to an “original and ornamental design.”
20 35 U.S.C. § 171(a). The drawings in D713,891, however, do not include ornamental
21 designs distinct from the functional aspects of the magnetic tiles including rounded
22 edges, internal structural lattice, and pockets for magnets. Mr. Schwartz and 18th Ave
23 were well aware of the crowded nature of the magnetic tile toy market, and that it was
24 not the original creator of the functional features claimed in D713,891 including the
25 rounded corners, internal lattice, and pockets for magnets. Despite this knowledge, Mr.
26 Schwartz and 18th Ave persisted in seeking design patent protection not to protect novel
27
28 5
Product image from < http://www.picassotiles.com/product-page/b58a79ed-4cfb-1b51-a320-9a36634a7bb4>.
5
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1 ornamental designs that it had created, but rather to stifle competition with ill-gotten
2 patent rights.
3 19. On March 23, 2016, counsel for Mr. Schwartz and 18th Ave contacted
4 Laltitude by email and U.S. mail accusing PICASSOTILES® of infringing D713,891.
5 The communication enclosed a copy of D713,891. Mr. Schwartz and 18th Ave
6 requested that Laltitude discontinue the sale of PICASSOTILES® and remove the
7 product listings from pages like Amazon.com. Mr. Schwartz and 18th Ave warned
8 Laltitude that it could be liable for damages, costs, and attorneys’ fees.
9 20. On information and belief, Laltitude alleges that Mr. Schwartz and 18th
10 Ave contacted Amazon.com with takedown requests for various PICASSOTILES®
11 listings based on alleged infringement of D713,891. On information and belief,
12 Laltitude alleges that Mr. Schwartz and 18th Ave made these design patent infringement
13 allegations despite their knowledge that they had no enforceable rights in D713,891 and
14 despite their knowledge that Laltitude’s magnetic tile products actually predated 18th
15 Ave’s products. Laltitude further alleges on information and belief that Mr. Schwartz
16 and 18th Ave made these allegations with the intent of depriving Laltitude of marketing
17 and sales channels to harm Laltitude’s place in the market, and thus acted in objective
18 bad faith. On information and belief, Laltitude alleges that Amazon.com did not remove
19 Laltitude’s PICASSOTILES® listings in response to this request.
20 18th Ave’s Anticompetitive Use of VA 1-998-106
21 21. With Amazon.com unresponsive to Mr Schwartz’s and 18th Ave’s
22 frivolous claims of design patent infringement, 18th Ave continued searching for ways
23 to interfere with its competition in the magnetic tile toy market.
24 22. On March 30, 2016, 18th Ave registered with the United States Copyright
25 Office Registration Number VA-1-998-106 for a work entitled “SHAPE MAGS.” The
26 copyright claims include the following designs:
27 ///
28 ///
6
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22 Copyright protection is only available for “original works of authorship” (17
23 U.S.C. § 102) and excludes “useful articles” that do not have “pictoral, graphic,
24 or sculptural features” that “can be identified separately from, and are capable of
25 existing independently of, the utilitarian aspects of the article” (17 U.S.C. § 101).
26 Copyright registration VA-1-998-106, however, claims only functional features
27 of the magnetic tiles and is thus invalid. Laltitude alleges on information and
28 belief that 18th Ave was well aware of the crowded nature of the magnetic tile toy
7
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1 market, and that it was not the original creator of the functional features claimed
2 in VA-1-998-106 including the rounded corners, internal lattice, and pockets for
3 magnets. The copyright registration VA-1-998-106 lists the year of completion
4 for its tiles as 2014, and the date of first publication of 18th Ave’s magnetic tiles
5 as May 1, 2015 – both dates are later than the launch of Laltitude’s
6 PICASSOTILES® in April 2013. Despite this knowledge, 18th Ave persisted in
7 seeking copyright protection not to protect novel ornamental designs that it had
8 created, but rather to stifle competition with ill-gotten copyrights.
9 23. On April 5, 2016, counsel for 18th Ave contacted Laltitude by letter and
10 email accusing Laltitude of infringing copyright registration VA-1-998-106 and design
11 patent D713,891. 18th Ave demanded that Laltitude immediately cease and desist the
12 sale of certain PICASSOTILES® products and that if Laltitude did not immediately
13 comply 18th Ave would seek relief in federal court.
14 24. On April 8, 2016, 18th Ave sent a copyright complaint to Amazon.com
15 based on alleged infringement of copyright registration VA-1-998-106. Laltitude
16 alleges on information and belief that 18th Ave made these copyright infringement
17 allegations despite the knowledge that it had no enforceable rights in VA-1-998-106
18 and despite the knowledge that Laltitude’s magnetic tile products actually predated 18th
19 Ave’s products. Laltitude further alleges on information and belief that 18th Ave made
20 these allegations with the intent of depriving Laltitude of marketing and sales channels
21 to harm Laltitude’s place in the market, and thus acted in objective bad faith.
22 25. On April 13, 2016, Amazon removed Laltitude’s product listings “Amazon
23 ASIN B019S91TUI”, “Amazon ASIN B01C9AP64I” for the PICASSOTILES® 42
24 piece set.
25 26. On June 9, 2016, 18th Ave sent further copyright complaints to
26 Amazon.com to remove PICASSOTILES® product listings “B00APVXSM6” and
27 “B00AU56C5W” for the 100 piece and 60 piece sets.
28 27. On June 13, 2016, Amazon.com removed Laltitude’s product listings
8
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1 “B00AU56C5W”, “B00APVXSM6”, “B01C9AP64I”, and “B00APVXSM6”.

2 28. Laltitude was not provided a copy of copyright registration VA-1-998-106
3 until July 11, 2016.
4 29. As of July 2016, Laltitude had discontinued sales of the first generation
5 PICASSOTILES® 42-piece set due to 18th Ave’s claims of design patent and copyright
6 infringement. The remaining unsold inventory of the 42-piece set is a financial loss to
7 Laltitude.
8 30. Laltitude has lost sales and goodwill as a result of the removed product
9 listings. Laltitude has received several inquiries from customers regarding the
10 availability of PICASSOTILES® sets that were removed from Amazon.com based on
11 18th Ave’s copyright and design patent complaints.
12 31. Mr. Schwartz’s and 18th Ave’s anticompetitive use of D713,891 and VA-
13 1-998-106 has also disrupted Laltitude’s relationship with its distributors and resellers.
14
15 FIRST CAUSE OF ACTION
16 (Declaration of Copyright Invalidity Against Defendant 18th Ave)
17 (17 U.S.C. §§ 101 et seq.; 28 U.S.C. § 2201)
18 32. Laltitude re-alleges and incorporates by reference, as if fully set forth in
19 this paragraph, the allegations of paragraphs 1 through 32 above.
20 33. The VA-1-998-106 copyright registration is invalid under 17 U.S.C. § 101
21 for failure to claim a copyright-eligible original work of authorship. The VA-1-998-
22 106 copyright registration is directed to a useful article and does not contain any
23 copyrightable features separable from the utilitarian features of the article.
24 34. By virtue of the foregoing, there is a justiciable controversy between
25 Laltitude and 18th Ave as to the validity of copyright no. VA-1-998-106, and as to
26 Laltitude’s right to make, sell, import, or use its PICASSOTILES® products.
27 35. Laltitude is entitled to a declaratory judgment that copyright no. VA-1-
28 998-106 is invalid.
9
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1 SECOND CAUSE OF ACTION

2 (Declaration of Noninfringement of Copyright Against Defendant 18th Ave)
3 (17 U.S.C. § 501; 28 U.S.C. § 2201)
4 36. Laltitude re-alleges and incorporates by reference, as if fully set forth in
5 this paragraph, the allegations of paragraphs 1 through 36 above.
6 37. Laltitude’s products do not infringe and have not infringed the VA-1-998-
7 106 copyright registration.
8 38. By virtue of the foregoing, there is a justiciable controversy between
9 Laltitude and 18th Ave as to Laltitude’s right to make, sell, import, or use its
10 PICASSOTILES® products.
11 39. Laltitude is entitled to a declaratory judgment that it is nit infringing and
12 has not infringed copyright no. VA-1-998-106.
13
14 THIRD CAUSE OF ACTION
15 (Declaration of Design Patent Invalidity Against Defendant Yaacov Schwartz)
16 (35 U.S.C. §§ 171 et seq.; 28 U.S.C. § 2201)
17 40. Laltitude re-alleges and incorporates by reference, as if fully set forth in
18 this paragraph, the allegations of paragraphs 1 through 40 above.
19 41. Design patent D713,891 is invalid under 35 U.S.C. § 101 for failure to
20 claim design patent-eligible ornamental features. The D713,891 patent is directed to
21 functional features.
22 42. By virtue of the foregoing, there is a justiciable controversy between
23 Laltitude and Yaacov Schwartz as to the validity of design patent D713,891, and as to
24 Laltitude’s right to make, sell, import, or use its PICASSOTILES® products.
25 43. Laltitude is entitled to a declaratory judgment that design patent D713,891
26 is invalid.
27 ///
28 ///
10
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1 FOURTH CAUSE OF ACTION

2 (Declaration of Noninfringement of Design Patent Against Defendant Yaacov
3 Schwartz)
4 (35 U.S.C. § 289; 28 U.S.C. § 2201)
5 44. Laltitude re-alleges and incorporates by reference, as if fully set forth in
6 this paragraph, the allegations of paragraphs 1 through 44 above.
7 45. Laltitude’s products do not infringe and have not infringed design patent
8 D713,891.
9 46. By virtue of the foregoing, there is a justiciable controversy between
10 Laltitude and Yaacov Schwartz as to Laltitude’s right to make, sell, import, or use its
11 PICASSOTILES® products.
12 47. Laltitude is entitled to a declaratory judgment that it is nit infringing and
13 has not infringed design patent D713,891.
14
15 FIFTH CAUSE OF ACTION
16 (Unfair Business Practices Against All Defendants)
17 (Cal. Bus. & Prof. Code §§ 17200 et seq.)
18 48. Laltitude re-alleges and incorporates by reference, as if fully set forth in
19 this paragraph, the allegations of paragraphs 1 through 48 above.
20 49. As alleged above, Mr. Schwartz and 18th Ave engaged in wrongful acts
21 and conduct including but not limited to: (a) demanding that Amazon.com take down
22 Laltitude’s product listings for PICASSOTILES® based on alleged infringement of
23 design patent D713,891 even though it knew D713,891 to be invalid and not infringed;
24 and (b) demanding that Amazon.com take down Laltitude’s product listings for
25 PICASSOTILES® based on alleged infringement of copyright registration number VA-
26 1-998-106 even though it knew VA-1-998-106 to be invalid and not infringed.
27 50. Through the above acts, Mr. Schwartz and 18th Ave has engaged in both
28 unfair and fraudulent business acts or practices within the meaning of California’s
11
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1 Unfair Practices Act, California Business and Professions Code section 17200 et seq.
2 51. Mr. Schwartz’s and 18th Ave’s conduct constitute an unfair business
3 practice because they deprive Laltitude of sales and marketing channels. By
4 disseminating false representations and unlawful demands, Mr. Schwartz and 18th Ave
5 has and continues to significantly threaten and harm competition, These harms and
6 demands imposed on Laltitude and its distributors far outweigh whatever benefits Mr.
7 Schwartz and 18th Ave might gain by making demands without a legal right to do so,
8 52. Mr. Schwartz’s and 18th Ave’s activities constitute a fraudulent business
9 practice because, as discussed above, Mr. Schwartz’s and 18th Ave’s representations
10 and threats of patent and copyright infringement were false and misleading. Mr.
11 Schwartz and 18th Ave knew that the features claimed in design patent D713,891 and
12 copyright registration VA-1-998-106 were functional, and thus ineligible for design
13 patent and copyright protection. The takedown requests to Amazon.com invoking these
14 alleged copyright and patent rights were bad faith attempts to deprive Laltitude of
15 marketing and sales channels.
16 53. Amazon.com, as an Internet service provider under the Digital Millennium
17 Copyright Act with a copyright infringement safe harbor dependent on swift removal
18 of allegedly infringing content, is likely to be deceived and was deceived by Mr.
19 Schwartz’s and 18th Ave’s fraudulent threats and representations made in its takedown
20 requests.
21 54. Laltitude has suffered an injury-in-fact under Cal. Bus. & Prof. Code §
22 17204. Amazon.com relied on Mr. Schwartz’s and 18th Ave’s bad faith assertions and
23 removed numerous product listings for PICASSOTILES®, including Amazon.com
24 listing numbers “ASIN B019S91TUI,” “ASIN B01C9AP64I,” “B00APVXSM6,” and
25 “B00AU56C5W.” In addition, Laltitude has had to expend attention, time and
26 resources to prepare extra advertising and incur extra marketing costs to make up for
27 the lost marketing opportunities as a result of Mr. Schwartz’s and 18th Ave’s takedown
28 requests. Finally, Laltitude’s brand and goodwill has suffered injury as a result of Mr.
12
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1 Schwartz’s and 18th Ave’s allegations.

2 55. Laltitude is informed and believes, and based thereon alleges, that Mr.
3 Schwartz and 18th Ave has engaged in the conduct alleged herein with a conscious
4 disregard of Laltitude’s rights, and with an intent to vex, injure, or annoy such as to
5 constitute oppression, fraud, or malice, thereby entitling Laltitude to punitive damages
6 in an amount appropriate to punish or make an example of Mr. Schwartz and 18th Ave.
7 56. Furthermore, Mr. Schwartz and 18th Ave has profited and in the future will
8 profit unjustly from their unjust business practices. Accordingly, pursuant to Cal. Bus.
9 & Prof. Code § 17203, Laltitude seeks an award representing the amount of ill-gotten
10 gains that must be disgorged by Mr. Schwartz and 18th Ave.
11
12 SIXTH CAUSE OF ACTION
13 (Trade Libel Against All Defendants)
14 57. Laltitude re-alleges and incorporates by reference, as if fully set forth in
15 this paragraph, the allegations of paragraphs 1 through 57 above.
16 58. Through the design patent and copyright takedown requests sent to
17 Amazon.com, Mr. Schwartz and 18th Ave published untrue statements of fact, including
18 the statements that Laltitude’s PICASSOTILES® infringed Mr. Schwartz’s design
19 patent rights; that PICASSOTILES® infringed 18th Ave’s copyright, and that Mr.
20 Schwartz and 18th Ave had the right to demand that Amazon.com remove Laltitude’s
21 product listings.
22 59. Mr. Schwartz ‘s and 18th Ave’s statements were false in that, among other
23 things, (a) Mr. Schwartz did not have enforceable design patent rights in D713,891; (b)
24 Laltitude’s PICASSOTILES® did not infringe any design patent rights; (c) 18th Ave
25 did not have enforceable copyrights in VA-1-998-106; and (d) Laltitude’s
26 PICASSOTILES® did not infringe any copyright in VA-1-998-106.
27 60. Mr. Schwartz and 18th Ave knew its statements were false or made with
28 reckless disregard for the truth in that Mr. Schwartz and 18th Ave knew that they were
13
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1 not the original authors or creators of the features claimed in D713,891 and VA-1-998-
2 106, and that Laltitude’s PICASSOTILES® actually predated Mr. Schwartz’s and 18th
3 Ave’s design patent and copyright.
4 61. Mr. Schwartz’s and 18th Ave’s statements were not mere statements of
5 opinion.
6 62. As a direct and proximate result of the wrongful acts and conduct of Mr.
7 Schwartz and 18th Ave, Laltitude has suffered and will continue to suffer general
8 damages, including lost profits in an amount at trial.
9 63. Laltitude is informed and believes, and based thereon alleges, that Mr.
10 Schwartz and 18th Ave has engaged in the conduct alleged herein with a conscious
11 disregard of Laltitude’s rights, and with an intent to vex, injure, or annoy such as to
12 constitute oppression, fraud, or malice, thereby entitling Laltitude to punitive damages
13 in an amount appropriate to punish or make an example of Mr. Schwartz and 18th Ave.
14
15 SEVENTH CAUSE OF ACTION
16 (Intentional Interference with Prospective Economic Advantage Against All
17 Defendants)
18 64. Laltitude re-alleges and incorporates by reference, as if fully set forth in
19 this paragraph, the allegations of paragraphs 1 through 64 above.
20 65. At all times relevant hereto, Laltitude had existing relationships with
21 existing and potential customers, all of which had and have a substantial probability of
22 resulting in economic benefit to Laltitude. Mr. Schwartz and 18th Ave was aware of
23 these relationships, and of the probable economic advantage to Laltitude.
24 66. As alleged above, Mr. Schwartz and 18thh Ave engaged in wrongful acts
25 and conduct including but not limited to: (a) demanding that Amazon.com take down
26 Laltitude’s product listings for PICASSOTILES® based on alleged infringement of
27 design patent D713,891 even though they knew D713,891 to be invalid and not
28 infringed; and (b) demanding that Amazon.com take down Laltitude’s product listings
14
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1 for PICASSOTILES® based on alleged infringement of copyright registration number

2 VA-1-998-106 even though they knew VA-1-998-106 to be invalid and not infringed.
3 67. The wrongful acts and conduct of Mr. Schwartz and 18th Ave were
4 designed to interfere, and did interfere, with such relationships, thereby causing
5 Laltitude to lose the economic advantages to which it was entitled. It is extremely likely
6 that these relationships would have resulted in significant economic advantage to
7 Laltitude had Mr. Schwartz and 18th Ave not improperly interfered with them.
8 68. As a direct and proximate result of Mr. Schwartz’s and 18th Ave’s wrongful
9 acts and conduct, Laltitude has suffered and will continue to suffer general and special
10 damages, including lost profits in an amount to proven at trial.
11 69. Laltitude is informed and believes, and based thereon alleges, that Mr.
12 Schwartz and 18th Ave has engaged in the conduct alleged herein with a conscious
13 disregard of Laltitude’s rights and with an intent to vex, injure, or annoy such as to
14 constitute oppression, fraud, or malice, thereby entitling Laltitude to punitive damages
15 in an amount appropriate to punish or make an example of Mr. Schwartz and 18th Ave.
16
17 EIGHTH CAUSE OF ACTION
18 (Intentional Interference with Existing Contractual Relations Against All Defendants)
19 70. Plaintiff re-alleges and incorporates by reference, as if fully set forth in this
20 paragraph, the allegations of paragraphs 1 through 70 above.
21 71. At all times relevant hereto, Laltitude had existing contractual relations
22 with distributors and resellers whereby Laltitude would derive and economic benefit of
23 selling PICASSOTILES® in exchange for payment.
24 72. At all times relevant hereto, Laltitude had a reasonable expectancy of profit
25 to be derived as a result of its contractual relations with the distributors and resellers.
26 73. At all times relevant hereto, Mr. Schwartz and 18th Ave knew of the
27 contractual relationships existing between Laltitude and the distributors and resellers,
28 and Mr. Schwartz and 18th Ave knew of Laltitude’s reasonable expectation of profit
15
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1 based upon such existing contractual relationships.

2 74. Beginning with the takedown request to Amazon.com based on design
3 patent D713,891, and continuing to the present, Mr. Schwartz and 18th Ave made false
4 and misleading threats of patent and copyright infringement specifically design to
5 interfere with Laltitude’s contractual relationships with the distributors and resellers.
6 This conduct has interfered with Laltitude’s distributors’ and resellers’ sales and
7 marketing of PICASSOTILES®, thereby causing Laltitude serious economic harm.
8 75. As alleged above, Mr. Schwartz and 18th Ave engaged in wrongful acts
9 and conduct including but not limited to: (a) demanding that Amazon.com take down
10 Laltitude’s product listings for PICASSOTILES® based on alleged infringement of
11 design patent D713,891 even though they knew D713,891 to be invalid and not
12 infringed; and (b) demanding that Amazon.com take down Laltitude’s product listings
13 for PICASSOTILES® based on alleged infringement of copyright registration number
14 VA-1-998-106 even though they knew VA-1-998-106 to be invalid and not infringed.
15 76. As a direct and proximate result of Mr. Schwartz’s and 18th Ave’s
16 wrongful acts and conduct, Laltitude has suffered and will continue to suffer general
17 and special damages, including lost profits in an amount to proven at trial.
18 77. Laltitude is informed and believes, and based thereon alleges, that Mr.
19 Schwartz and 18th Ave has engaged in the conduct alleged herein with a conscious
20 disregard of Laltitude’s rights and with an intent to vex, injure, or annoy such as to
21 constitute oppression, fraud, or malice, thereby entitling Laltitude to punitive damages
22 in an amount appropriate to punish or make an example of Mr. Schwartz and 18th Ave.
23
24 PRAYERS FOR RELIEF
25 WHEREFORE, Plaintiff prays for judgment as follows:
26 ON ALL CAUSES OF ACTION
27 1. For costs of suit incurred herein; and
28 2. For such other and further relief as the court may deem necessary and
16
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1 proper.
2
3 ON THE FIRST CAUSE OF ACTION
4 3. For a declaration that 18th Ave’s copyright registration VA-1-998-106 is
5 invalid.
6
7 ON THE SECOND CAUSE OF ACTION
8 4. For a declaration that 18th Ave’s copyright registration VA-1-998-106 is
9 not infringed by Laltitude.
10
11 ON THE THIRD CAUSE OF ACTION
12 5. For a declaration that Yaacov Schwartz’s United States Design Patent
13 D713,891 is invalid.
14
15 ON THE FOURTH CAUSE OF ACTION
16 6. For a declaration that Yaacov Schwartz’s United States Design Patent
17 D713,891 is not infringed by Laltitude.
18
19 ON THE FIFTH CAUSE OF ACTION
20 7. For an award representing the disgorgement of the amount of ill-gotten
21 gains through Mr. Schwartz’s and 18th Ave’s unjust business practices.
22 8. For punitive damages in an amount appropriate to punish or make an
23 example out of Mr. Schwartz and 18th Ave.
24
25 ON THE SIXTH CAUSE OF ACTION
26 9. For money damages to compensate Laltitude for the harm caused by Mr.
27 Schwartz’s and 18th Ave’s trade libel, including lost profits.
28 10. For punitive damages in an amount appropriate to punish or make an
17
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1 example out of Mr. Schwartz and 18th Ave.

2
3 ON THE SEVENTH CAUSE OF ACTION
4 11. For money damages to compensate Laltitude for the harm caused by Mr.
5 Schwartz’s and 18th Ave’s intentional interference, including lost profits.
6 12. For punitive damages in an amount appropriate to punish or make an
7 example out of Mr. Schwartz and 18th Ave.
8
9 ON THE EIGHTH CAUSE OF ACTION
10 13. For money damages to compensate Laltitude for the harm caused by Mr.
11 Schwartz’s and 18th Ave’s intentional interference, including lost profits.
12 14. For punitive damages in an amount appropriate to punish or make an
13 example out of Mr. Schwartz and 18th Ave.
14
15 DATED: August 31, 2016 MARSHA E. DIEDRICH
CASONDRA K. RUGA
16 EVAN W. WOOLLEY
ALSTON & BIRD LLP
17
18 /s/ Casondra K. Ruga
Casondra K. Ruga
19 Attorneys for Plaintiff
LALTITUDE LLC
20
21
22
23
24
25
26
27
28
18
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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

)
VALTECH, LLC, )
)
Plaintiff, )
) Civil Action No.: 1:14-cv-00134
v. )
) TRIAL BY JURY DEMANDED
)
)
18TH AVENUE TOYS LTD. and )
TOYS 4 USA INC., )
)
)
Defendants. )
)

SECOND AMENDED COMPLAINT

Plaintiff, Valtech, LLC (“Valtech”), alleges the following in support of its Second

Amended Complaint against Defendants, 18th Avenue Toys Ltd. and Toys 4 USA Inc.

(collectively, “Defendants”), which is filed in accordance with the Court’s order dated November

25, 2014 (Dkt. No. 56):

NATURE OF THE ACTION

1. This is an action brought by Valtech arising under the trademark laws of the

United States. Valtech seeks an injunction and damages against Defendants for infringement of

Valtech’s federal trade-dress rights.

THE PARTIES

2. Plaintiff Valtech, LLC, is an Illinois limited liability company having its principal

place of business at 6200 River Road, Hodgkins, Illinois 60525.

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3. On information and belief, Defendant 18th Avenue Toys Ltd. (“18ATL”) is a

New York corporation having its principal place of business at 5506 18th Avenue, Brooklyn,

New York 11204.

4. On information and belief, Defendant Toys 4 USA Inc. (“Toys 4 USA”) is a New

York corporation having its principal place of business at 1172 59th Street, Brooklyn, New York

11219.

JURISDICTION

5. This Court has personal jurisdiction over Defendants because they have both sold

the accused infringing products to customers in Illinois.

6. This Court has subject matter jurisdiction over Valtech’s federal claims pursuant

to 28 U.S.C. §§ 1331 and 1338(a), and 15 U.S.C. § 1121.

7. Venue in this Court is based upon 28 U.S.C. § 1391(b)(2), (3).

FACTUAL BACKGROUND

8. In 1997, Valtech introduced a line of opaque, plastic building blocks in various

shapes and colors with magnetic strips along their edges under the brand Magna-Tiles®.

Valtech sells these products under the name “Magna-Tiles® Solid Colors.” These products are

sold in sets containing varying numbers of blocks in assorted shapes and colors, and in sets

containing multiple pieces of a single type of block.

9. In 2002, Valtech expanded its Magna-Tiles® brand to include transparent, plastic

building blocks in various shapes and colors with magnetic strips along their edges, which are

sold under the name “Magna-Tiles® Clear Colors.” These products are also sold in sets

containing varying numbers of blocks in assorted shapes and colors and in sets containing

multiple pieces of a single type of block.

2
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10. Rudolph Valenta, the owner of Valtech, owns a federal registration for the mark

MAGNA-TILES for use in association with manipulative toys, namely, blocks and puzzles.

(U.S. Reg. No. 2,654,320.)

11. Valtech sells its Magna-Tiles® Clear Colors in at least the following shapes and

sizes (note: these blocks are sold in additional colors beyond those depicted below; dimensions

are approximate; and the blocks are not shown to scale):

Magna-Tiles® 6” x 6” Square (shown in blue)

3
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Magna-Tiles® 3” x 3” Square (shown in red and blue)

Magna-Tiles® 2 ¾” x 2 ¾” x 3 ¾” Right Triangle (shown in green and purple)

Magna-Tiles® 2 ¾” x 2 ¾” x 2 ¾” Equilateral Triangle (shown in orange)

4
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Magna-Tiles® 5 ½” x 5 ½” x 2 ¾” Isosceles Triangle (shown in red)

12. As seen above, each Magna-Tiles® Clear Colors block features a unique and

stylish interior lattice design that is visible through the transparent surface of the block. This

distinctive lattice design is used in all of the Magna-Tiles® blocks, although the exact structure

of the lattice differs depending on the shape of a given block. Each Magna-Tiles® Clear Colors

block also features smooth, single-planar surfaces and corner rivets. These features give the

Magna-Tiles® Clear Colors line a unique, integrated appearance.

13. The distinctive lattices, smooth, single-planar surfaces, corner rivets, and colorful,

transparent nature of the Magna-Tiles® Clear Colors blocks are non-functional design elements

that serve as indicators of origin for these products.

14. Valtech has invested a significant amount of time and money publicizing its

Magna-Tiles® Clear Colors products over these many years, and has built up a substantial

amount of goodwill in the product-design trade dress of its Magna-Tiles® Clear Colors.

5
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15. As a result, consumers have come to identify Valtech as the source of the Magna-

Tiles® Clear Colors products based on the unique appearance of the blocks. In particular, the

public has come to identify Valtech as the source of magnetic blocks having the distinctive

shapes, sizes, colors, transparency, corner rivets, smooth, single-planar surfaces, and interior

lattice designs that characterize the Magna-Tiles® blocks.

16. On information and belief, Defendants have sold and/or are selling transparent,

colorful, plastic building blocks in various sizes and colors having smooth, single-planar

surfaces with magnetic strips along their edges, some of which, on information and belief, have

corner rivets, all under the brand names “Magnetic Stick N’ Stack” and “Playmags”

(collectively, “Defendants’ Products”).

17. On information and belief, Defendants sell the Magnetic Stick N’ Stack blocks in

at least the following shapes and sizes (note: these blocks may be sold in additional colors

beyond those depicted below; dimensions are approximate; and the blocks are not shown to

scale):

6
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Magnetic Stick N’ Stack 6” x 6” Square (shown in red)

Magnetic Stick N’ Stack 3” x 3” Square (shown in orange)

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Magnetic Stick N’ Stack 2 ¾” x 2 ¾” x 3 ¾” Right Triangle (shown in green)

Magnetic Stick N’ Stack 2 ¾” x 2 ¾” x 2 ¾” Equilateral Triangle

(shown in blue and orange)

Magnetic Stick N’ Stack 5 ½” x 5 ½” x 2 ¾” Isosceles Triangle (shown in blue)

8
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18. On information and belief, Defendants sell the Playmags blocks in at least the

following shapes and sizes (note: these blocks may be sold in additional colors beyond those

depicted below; dimensions are approximate; and the blocks are not shown to scale):

Playmags 3” x 3” Square (shown in green)

Playmags 2 ¾” x 2 ¾” x 2 ¾” Equilateral Triangle (shown in purple)

9
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Playmags 5 ½” x 5 ½” x 2 ¾” Isosceles Triangle (shown in yellow)

19. On information and belief, Defendants’ Products are sold in sets containing

varying numbers of blocks in assorted shapes and colors.

20. As shown above, Defendants are selling transparent, colorful, magnetic blocks of

the same size and shape as Valtech’s Magna-Tiles® Clear Color blocks. Moreover, Defendants’

Products contain an internal lattice design, and have smooth, single-planar surfaces, such that

Defendants’ Products are confusingly similar, and nearly identical, to the design of Valtech’s

Magna-Tiles® Clear Colors blocks.

21. To the ordinary observer, Defendants’ Products look exactly like, and are likely to

be mistaken for, Valtech’s Magna-Tiles® Clear Colors blocks. When viewed side-by-side

(ignoring differences in color), Defendants’ Products are virtually indistinguishable from

Valtech’s Magna-Tiles® Clear Colors blocks, as shown below:

10
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Magna-Tiles® Magnetic Stick N’ Playmags

(Plaintiff) Stack (Defendants)
(Defendants)

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Magna-Tiles® Magnetic Stick N’ Playmags

(Plaintiff) Stack (Defendants)
(Defendants)

22. Other companies sell magnetic building blocks that lack these similarities with

Valtech’s Magna-Tiles® Clear Colors blocks. For example, on information and belief, the

ExcellerationsTM Building Brilliance® Magnetic Shapes blocks, manufactured by Excelligence

Learning Corporation of Monterey, California, are sold in at least the shapes and sizes depicted

below. These blocks feature unique central designs that do not closely replicate the internal

lattices present in the Magna-Tiles® Clear Colors blocks. The ExcellerationsTM blocks also do

not have smooth, single-planar surfaces, but rather feature recessed central surfaces. Moreover,

the ExcellerationsTM blocks do not have corner rivets, and are sold in certain unique shapes

(note: these blocks may be sold in additional colors beyond those depicted below; dimensions are

approximate; and the blocks are not shown to scale).

12
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ExcellerationsTM 2 ½” x 2 ½” Square (shown in blue)

ExcellerationsTM 2 ½” x 2 ½” x 2 ½” Equilateral Triangle (shown in yellow)

ExcellerationsTM 2 ½” x 2 ½” x 3 ½” Right Triangle (shown in red)

13
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ExcellerationsTM 4 ¾” x 4 ¾” x 2 ½” Isosceles Triangle (shown in green)

ExcellerationsTM 5 ¼” x 2 ½” Double Square (shown in yellow)

14
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23. In several respects, the packaging of the Playmags blocks sold by Defendant Toys

4 USA (“Playmags Packaging”) is identical, or at least confusingly similar, to the packaging

used by Valtech for its Magna-Tiles® Clear Colors blocks (“Magna-Tiles® Packaging”), as

shown below:

Magna-Tiles® Packaging Playmags Packaging

(Plaintiff) (Defendant)

24. Defendants’ Products are sold in the same marketing channels as Valtech’s

Magna-Tiles® blocks, including in toy stores, in general retail stores, and on the Internet.
15
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25. On information and belief, Defendants designed Defendants’ Products with

knowledge of Valtech’s Magna-Tiles® Clear Colors and with the intent to copy Valtech’s trade

dress to obtain consumer recognition and interest based upon the success and reputation of

Valtech’s Magna-Tiles® Clear Colors.

26. On information and belief, Toys 4 USA has sold and continues to sell Playmags

products in packaging confusingly similar to the Magna-Tiles® Packaging with full knowledge

of the Magna-Tiles® Packaging and with the intent to copy such trade dress and pass off its

products as those of Valtech, and to create consumer confusion.

27. The advertising and sale of Defendants’ Products are likely to cause confusion,

mistake, and/or deception to customers and potential customers that Defendants’ Products

originate from the maker of the Magna-Tiles® Clear Colors, or that Defendants’ Products are

affiliated with, sold with the permission of, or approved, sponsored, or licensed by the maker of

the Magna-Tiles® Clear Colors products.

28. In selling their Products, Defendants trade on the goodwill Valtech has

established in the Magna-Tiles® Clear Colors trade dress and place the valuable reputation of the

Magna-Tiles® Clear Colors line of products in the hands of third parties over whom Valtech has

no control.

COUNT I:
PRODUCT-DESIGN TRADE-DRESS INFRINGEMENT
IN VIOLATION OF 15 U.S.C. § 1125(a)
AGAINST BOTH DEFENDANTS

29. Valtech hereby re-alleges and incorporates by reference the allegations of

Paragraphs 1–28 of this Complaint as if set forth fully herein.

30. Valtech is the owner of trade dress rights in the Magna-Tiles® Clear Colors

product design. This trade dress is non-functional.

16
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31. Valtech’s trade dress in the Magna-Tiles® Clear Colors product design has

acquired secondary meaning among relevant consumers throughout the United States.

32. Valtech’s trade dress in the Magna-Tiles® Clear Colors products has been and

continues to be known throughout the United States as identifying and distinguishing Valtech’s

magnetic block products.

33. Defendants’ conduct described above constitutes infringement of Valtech’s rights

in the Magna-Tiles® Clear Colors product-design trade dress and unfair competition in violation

of the Lanham Act, 15 U.S.C. § 1125(a).

34. Valtech is informed and believes that Defendants’ infringement of the Magna-

Tiles® Clear Colors product-design trade dress has been willful.

35. Valtech has been and will continue to be irreparably harmed and damaged by

Defendants’ conduct, and Valtech lacks an adequate remedy at law to compensate for this harm

and damages.

COUNT II:
PACKAGING TRADE-DRESS INFRINGEMENT
IN VIOLATION OF 15 U.S.C. § 1125(a)
AGAINST DEFENDANT TOYS 4 USA INC.

36. Valtech hereby re-alleges and incorporates by reference the allegations of

Paragraphs 1–35 of this Complaint as if set forth fully herein.

37. Valtech is the owner of trade-dress rights in the Magna-Tiles® Packaging. This

trade dress is non-functional.

38. The Magna-Tiles® Packaging is inherently distinctive as it comprises arbitrary

design elements, including the choice of fonts, colors, and wording. Alternatively, the Magna-

Tiles® Packaging has acquired secondary meaning among relevant consumers throughout the

United States.

17
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Page 19 PageID #:240 #: 59
of 22 PageID

39. Valtech’s trade dress in the Magna-Tiles® Packaging has been and continues to

be known throughout the United States as identifying and distinguishing Valtech’s magnetic

block products.

40. The conduct of Toys 4 USA described above constitutes infringement of

Valtech’s rights in the Magna-Tiles® Packaging trade dress and unfair competition in violation

of the Lanham Act, 15 U.S.C. § 1125(a).

41. Valtech is informed and believes that Toys 4 USA’s infringement of the Magna-

Tiles® Packaging trade dress has been willful.

42. Valtech has been and will continue to be irreparably harmed and damaged by

Toys 4 USA’s conduct, and Valtech lacks an adequate remedy at law to compensate for this

harm and damages.

PRAYER FOR RELIEF

WHEREFORE, Valtech prays for the following relief:

47. A finding that Defendants have engaged in unfair competition.

48. A finding that Defendants have infringed Valtech’s trade dress.

49. An injunction permanently enjoining Defendants and their directors, officers,

agents, servants, employees, and all other persons in active concert or privity or in participation

with them, from:

a. directly or indirectly infringing or misappropriating Valtech’s trade dress;

b. continuing to advertise, promote, sell, or offer to sell any products or services that

infringe or misappropriate Valtech’s trade dress;

c. continuing to advertise, promote, sell or offer to sell any products or packaging

that are likely to cause consumer confusion or misunderstanding as to the source,

18
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Page 20 PageID #:240 #: 60
of 22 PageID

sponsorship, approval, or certification of Defendants’ goods and/or as to the

affiliation, connection, or association with or certification by Valtech;

d. assisting, inducing, or aiding or abetting any other person or entity in engaging in

any of the activities prohibited in subparagraphs a through c above.

50. An order requiring the impounding and destruction of all inventory and

advertisements in the possession of Defendants that infringe Valtech’s trade dress and all means

of making the same.

51. An order requiring Defendants to file with the Court and serve on Valtech within

thirty (30) days after service of the Court’s order as herein prayed a report (or other form of

proof) in writing under oath setting forth in detail the manner and form in which Defendants

have complied with the Court’s injunction.

52. A judgment entered for Valtech and against Defendants, jointly and severally, for

all damages sustained by Valtech for Defendants’ acts of trade-dress infringement,

misappropriation, and unfair competition, including but not limited to Defendants’ profits and

costs, and attorneys’ fees.

53. An accounting from Defendants for all gains, profits, and advantages derived

from their acts of unfair competition, trade-dress infringement and/or other violations of the law

as alleged herein.

54. An order requiring that all gains, profits, and advantages derived by Defendants

from their acts of unfair competition, trade-dress infringement and/or other violations of the law

as alleged herein, be deemed to be in constructive trust for the benefit of Valtech.

19
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03/13/20 of 21
Page 21 PageID #:240 #: 61
of 22 PageID

55. An order for such other, further, and different relief as the Court deems proper

under the circumstances, including punitive damages if appropriate pursuant to the evidence of

record.

JURY DEMAND

Valtech hereby demands a trial by jury on all matters and issues so triable.

Dated: December 9, 2014 Respectfully submitted,

By: /Patrick J. Arnold Jr./

Patrick J. Arnold Jr.
Caroline A. Teichner
MCANDREWS, HELD & MALLOY, LTD.
500 West Madison Street, 34th Floor
Chicago, Illinois 60661
T: (312) 775-8000
F: (312) 775-8100
[email protected]
[email protected]

Attorneys for Plaintiff,

Valtech, LLC

20
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Page 22 PageID #:240 #: 62
of 22 PageID

CERTIFICATE OF SERVICE

I, Patrick J. Arnold Jr., an attorney, hereby certify that on December 9, 2014, a copy of

the foregoing was filed electronically. Notice of this filing will be sent to the parties of record by

operation of the Court’s electronic filing system. Parties may access this filing through the

Court’s system.

/s/ Patrick J. Arnold Jr.

Patrick J. Arnold Jr.
Case 1:20-cv-01360-MKB-SJB Document 1-4 Filed 03/13/20 Page 1 of 12 PageID #: 63




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 Case 1:20-cv-01360-MKB-SJB Document 1-6 Filed 03/13/20 Page 1 of 2 PageID #: 82

AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT

for the
Eastern District
__________ of of
District New York
__________

MMS TRADING COMPANY PTY LTD, d/b/a )

Connetix Tiles, an Australian private company )
)
)
Plaintiff(s) )
)
v. Civil Action No.
)
HUTTON TOYS, LLC, a New York limited liability )
company, 18th AVENUE TOYS LTD., a New York )
corporation, and YACCOV SCHWARTZ, an )
individual )
Defendant(s) )

SUMMONS IN A CIVIL ACTION

To: (Defendant’s name and address) YACCOV SCHWARTZ

1835 54 STREET
BROOKLYN, NEW YORK 11204

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are: Bruce Ainbinder, Esq.
Littleton Park Joyce Ughetta & Kelly LLP
4 Manhattanville Road, Suite 202
Purchsae, New York 10577
914-417-3400

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.

%06(-"4
$
1"-.&3
CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk
 Case 1:20-cv-01360-MKB-SJB Document 1-6 Filed 03/13/20 Page 2 of 2 PageID #: 83

AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No.

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any)

was received by me on (date) .

u I personally served the summons on the individual at (place)

on (date) ; or

u I left the summons at the individual’s residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date) , and mailed a copy to the individual’s last known address; or

u I served the summons on (name of individual) , who is

designated by law to accept service of process on behalf of (name of organization)
on (date) ; or

u I returned the summons unexecuted because ; or

u Other (specify):
.

My fees are $ for travel and $ for services, for a total of $ 0.00 .

I declare under penalty of perjury that this information is true.

Date:
Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

 Case 1:20-cv-01360-MKB-SJB Document 1-7 Filed 03/13/20 Page 1 of 2 PageID #: 84

AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT

for the
Eastern District
__________ of of
District New York
__________

MMS TRADING COMPANY PTY LTD, d/b/a )

Connetix Tiles, an Australian private company )
)
)
Plaintiff(s) )
)
v. Civil Action No.
)
HUTTON TOYS, LLC, a New York limited liability )
company, 18th AVENUE TOYS LTD., a New York )
corporation, and YACCOV SCHWARTZ, an )
individual )
Defendant(s) )

SUMMONS IN A CIVIL ACTION

To: (Defendant’s name and address) HUTTON TOYS, LLC

THE LIMITED LIABILITY COMPANY (VIA NEW YORK SECRETARY OF STATE)
207 WEST 25TH STREET
9TH FLOOR
NEW YORK, NEW YORK, 10001

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are: Bruce Ainbinder, Esq.
Littleton Park Joyce Ughetta & Kelly LLP
4 Manhattanville Road, Suite 202
Purchsae, New York 10577
914-417-3400

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.

%06(-"4
$
1"-.&3
CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk
 Case 1:20-cv-01360-MKB-SJB Document 1-7 Filed 03/13/20 Page 2 of 2 PageID #: 85

AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No.

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any)

was received by me on (date) .

u I personally served the summons on the individual at (place)

on (date) ; or

u I left the summons at the individual’s residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date) , and mailed a copy to the individual’s last known address; or

u I served the summons on (name of individual) , who is

designated by law to accept service of process on behalf of (name of organization)
on (date) ; or

u I returned the summons unexecuted because ; or

u Other (specify):
.

My fees are $ for travel and $ for services, for a total of $ 0.00 .

I declare under penalty of perjury that this information is true.

Date:
Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

 Case 1:20-cv-01360-MKB-SJB Document 1-8 Filed 03/13/20 Page 1 of 2 PageID #: 86

AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT

for the
Eastern District
__________ of of
District New York
__________

MMS TRADING COMPANY PTY LTD, d/b/a )

Connetix Tiles, an Australian private company )
)
)
Plaintiff(s) )
)
v. Civil Action No.
)
HUTTON TOYS, LLC, a New York limited liability )
company, 18th AVENUE TOYS LTD., a New York )
corporation, and YACCOV SCHWARTZ, an )
individual )
Defendant(s) )

SUMMONS IN A CIVIL ACTION

To: (Defendant’s name and address) 18TH AVENUE TOYS LTD (VIA NEW YORK SECRETARY OF STATE)
5506 - 18TH AVENUE
BROOKLYN, NEW YORK, 11204

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are: Bruce Ainbinder, Esq.
Littleton Park Joyce Ughetta & Kelly LLP
4 Manhattanville Road, Suite 202
Purchsae, New York 10577
914-417-3400

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.

%06(-"4
$
1"-.&3
CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk
 Case 1:20-cv-01360-MKB-SJB Document 1-8 Filed 03/13/20 Page 2 of 2 PageID #: 87

AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No.

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any)

was received by me on (date) .

u I personally served the summons on the individual at (place)

on (date) ; or

u I left the summons at the individual’s residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date) , and mailed a copy to the individual’s last known address; or

u I served the summons on (name of individual) , who is

designated by law to accept service of process on behalf of (name of organization)
on (date) ; or

u I returned the summons unexecuted because ; or

u Other (specify):
.

My fees are $ for travel and $ for services, for a total of $ 0.00 .

I declare under penalty of perjury that this information is true.

Date:
Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

 Case 1:20-cv-01360-MKB-SJB Document 1-9 Filed 03/13/20 Page 1 of 1 PageID #: 88
AO 120 (Rev. 08/10)

Mail Stop 8 REPORT ON THE

TO:
Director of the U.S. Patent and Trademark Office FILING OR DETERMINATION OF AN
P.O. Box 1450 ACTION REGARDING A PATENT OR
Alexandria, VA 22313-1450 TRADEMARK

In Compliance with 35 U.S.C. § 290 and/or 15 U.S.C. § 1116 you are hereby advised that a court action has been
filed in the U.S. District Court for the Southern District of New York on the following
G Trademarks or G
✔ Patents. ( G the patent action involves 35 U.S.C. § 292.):

DOCKET NO. DATE FILED U.S. DISTRICT COURT

1:20-cv-1360 March 13, 2020 For the Eastern DistrictDistrict
for the Southern of NewofYork
New York
PLAINTIFF DEFENDANT
MMS TRADING COMPANY PTY LTD., d/b/a HUTTON TOYS, LLC, 18TH AVENUE TOYS LTD., and
CONNETIX TILES YAACOV SCHWARTZ

PATENT OR DATE OF PATENT

HOLDER OF PATENT OR TRADEMARK
TRADEMARK NO. OR TRADEMARK
1 D713,891 9/23/2014 YAACOV SCHWARTZ

In the above—entitled case, the following patent(s)/ trademark(s) have been included:
DATE INCLUDED INCLUDED BY
G
Amendment G Answer G Cross Bill G Other Pleading
PATENT OR DATE OF PATENT
HOLDER OF PATENT OR TRADEMARK
TRADEMARK NO. OR TRADEMARK
1

In the above—entitled case, the following decision has been rendered or judgement issued:
DECISION/JUDGEMENT

CLERK (BY) DEPUTY CLERK DATE

Copy 1—Upon initiation of action, mail this copy to Director Copy 3—Upon termination of action, mail this copy to Director
Copy 2—Upon filing document adding patent(s), mail this copy to Director Copy 4—Case file copy
 Case 1:20-cv-01360-MKB-SJB Document 1-10 Filed 03/13/20 Page 1 of 1 PageID #: 89
O AO 121 (6/90)
TO:

Register of Copyrights REPORT ON THE

Copyright Office FILING OR DETERMINATION OF AN
Library of Congress ACTION OR APPEAL
Washington, D.C. 20559 REGARDING A COPYRIGHT

In compliance with the provisions of 17 U.S.C. 508, you are hereby advised that a court action or appeal has been filed
on the following copyright(s):
COURT NAME AND LOCATION
G
✔ ACTION G APPEAL Eastern District of New York
DOCKET NO. DATE FILED 225 Cadman Plaza East
1:20-cv-1360 March 13, 2020 Brooklyn, MA 11201
PLAINTIFF DEFENDANT
MMS TRADING COMPANY PTY, LTD., d/b/a HUTTON TOYS, LLC, 18TH AVENUE TOYS, LTD., and
CONNETIX TOYS YAACOV SCHWARTZ

COPYRIGHT
TITLE OF WORK AUTHOR OR WORK
REGISTRATION NO.

1 VA 1-998-106 SHAPE Mags 18th Avenue Toys, Ltd.

In the above-entitled case, the following copyright(s) have been included:

DATE INCLUDED INCLUDED BY
G Amendment G Answer G Cross Bill G Other Pleading
COPYRIGHT
TITLE OF WORK AUTHOR OF WORK
REGISTRATION NO.

3 .

In the above-entitled case, a final decision was rendered on the date entered below. A copy of the order or judgment
together with the written opinion, if any, of the court is attached.
COPY ATTACHED WRITTEN OPINION ATTACHED DATE RENDERED

G Order G Judgment G Yes G No

CLERK (BY) DEPUTY CLERK DATE

1) Upon initiation of action, 2) Upon filing of document adding copyright(s), 3) Upon termination of action,
mail copy to Register of Copyrights mail copy to Register of Copyrights mail copy to Register of Copyrights
DISTRIBUTION:
4) In the event of an appeal, forward copy to Appellate Court 5) Case File Copy