In a June 24, 2011 decision by Justice Bucaria the court partially granted a motion to dismiss. The lawsuit involved the licensing of patents for dispensing items such as lipstick, sunscreen and certain pharmaceutical products. Plaintiff sublicensed the patents but ran out of money and didn’t pay the royalty fees. Defendants’ position was that the non-payment of the royalties terminated the sublicense agreement.

Plaintiff brought claims against the individuals from whom it sublicensed the patents as well as other interested parties. Defendants brought a number of counterclaims including a claim for unfair competition based on plaintiffs’ maintaining a website advertising the products for which they no longer held a license. Plaintiffs’ motion to dismiss those claims was granted because defendants failed to state the elements of an unfair competition claim to satisfy either palming off or misappropriation, the two theories of a common law unfair competition claim.

Versadial Inc. Donaldson, Sup Ct, Nassau County, June 24, 2011, Bucaria, J, Index No. 11974/10