Urban Intelligence Inc. v. Spring Scaffolding LLC

CourtDistrict Court, E.D. New York
DecidedMarch 31, 2025
Docket1:23-cv-01789
StatusUnknown

This text of Urban Intelligence Inc. v. Spring Scaffolding LLC (Urban Intelligence Inc. v. Spring Scaffolding LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Urban Intelligence Inc. v. Spring Scaffolding LLC, (E.D.N.Y. 2025).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ----------------------------------------------------x

URBAN INTELLIGENCE INC.

Plaintiff,

v. MEMORANDUM AND ORDER 23-CV-1789 (RPK) (PK) SPRING SCAFFOLDING LLC,

Defendant.

----------------------------------------------------x

RACHEL P. KOVNER, United States District Judge: Urban Intelligence Inc. brought this action against Spring Scaffolding LLC, alleging trade dress infringement under the Lanham Act and New York common law. Its original complaint also contained a claim for patent infringement, which it dropped over the course of the suit. Spring Scaffolding, in turn, brings twelve counterclaims against Urban Intelligence. Seven are at issue here: a claim for tortious interference with prospective economic advantage (Amended Counterclaim I), and six declaratory judgment claims related to three design patents held by Urban Intelligence (Amended Counterclaims VII–XII). Urban Intelligence moves to dismiss (1) the counterclaims based on the design patents as moot, in light of its tendering Spring Scaffolding a covenant not to sue; and (2) the claim for tortious interference for failure to state a claim. For the reasons that follow, Urban Intelligence’s motion is granted. BACKGROUND Urban Intelligence Inc. and Spring Scaffolding LLC both design, manufacture, and sell sidewalk sheds and scaffolding to customers in the New York City market. Am. Answer & Counterclaims ¶¶ 72–76 (Dkt. #78). Urban Intelligence alleges that its competition-winning design significantly differs from traditional sidewalk scaffolding, with distinctive features including a lack of cross bracing, umbrella-like arches, and white color. See Second Am. Compl. (“SAC”) ¶¶ 10–11, 13–14 (Dkt. #39). Urban Intelligence holds three design patents related to its sidewalk sheds: patent numbers D958,410, D958,411, and D958,412. See Am. Answer &

Counterclaims ¶¶ 83, 105. Urban Intelligence initiated this suit against Spring Scaffolding in March 2023, originally claiming that Spring Scaffolding’s competing sidewalk sheds infringed Urban Intelligence’s trade dress in violation of the Lanham Act and New York common law and that Spring Scaffolding had infringed one of the patents held by Urban Intelligence. See generally Compl. (Dkt. #1); First Am. Compl. (Dkt. #18). Spring Scaffolding alleges that, between October 2022 and September 2023, Urban Intelligence sent “threatening letters” to many of Spring Scaffolding’s clients, asserting that Spring Scaffolding’s sidewalk sheds violated Urban Intelligence’s trade dress and patents and threatening litigation. Am. Answer & Counterclaims ¶¶ 91–93. At some point prior to June 20, 2023, Urban Intelligence also published an industry newsletter accusing Spring Scaffolding of “engag[ing] in

the illegal installation of white scaffolding, deliberately copying Urban Umbrella’s patented design elements.” Id. ¶¶ 94–96. On June 26, 2023, Spring Scaffolding moved for a pre-motion conference in advance of an anticipated motion to dismiss Urban Intelligence’s claims, including its patent infringement claim. See Spring Scaffolding Mot. for a Pre-Mot. Conf. (Dkt. #21). On August 11, 2023, Urban Intelligence notified Spring Scaffolding that it planned to withdraw its claim for patent infringement. See Decl. of Serge Krimnus ¶ 7 (Dkt. #29). On August 31, 2023, with leave of court, Urban Intelligence then filed a second amended complaint that omitted the patent infringement claim. See SAC. The Court denied Spring Scaffolding’s motion to dismiss the remaining trade dress infringement claims. See Sept. 30, 2024 Mem. & Order (Dkt. #130). On September 29, 2023, Spring Scaffolding answered the second amended complaint and brought counterclaims. See Answer & Counterclaims (Dkt. #60). Six related to the patents held

by Urban Intelligence: one claim seeking a declaration of non-infringement and one claim seeking a declaration of invalidity and unenforceability for each of the three patents at issue. See id. ¶¶ 188–236. In response, on October 25, 2023, Urban Intelligence tendered to Spring Scaffolding a “Covenant Not to Sue,” which unilaterally agreed to refrain from making any claims for patent infringement against Spring Scaffolding based on the three patents challenged by Spring Scaffolding. See Covenant Not to Sue (Dkt. #100-1). Urban Intelligence contended that this covenant mooted the six counterclaims related to its patents. See Urban Intelligence Mot. for a Pre-Mot. Conf. 1 (Dkt. #74). On January 9, 2024, with leave of court, Spring Scaffolding filed the operative amended answer and counterclaims. See Am. Answer & Counterclaims. In total, Spring Scaffolding brings

twelve counterclaims—the seven at issue in this order are Spring Scaffolding’s claim for tortious interference with prospective economic advantage, based on the infringement allegations in the letters sent by Urban Intelligence to Spring Scaffolding’s customers and the industry newsletter (Amended Counterclaim I), and the same six claims related to the Urban Intelligence’s three patents as pleaded in its original set of counterclaims (Amended Counterclaims VII–XII). See id. ¶¶ 115–132, 194–242. The Court then set a briefing schedule for Urban Intelligence’s motion to dismiss Spring Scaffolding’s tortious interference and patent-related counterclaims. See Feb. 5, 2024 Order. After Urban Intelligence served its motion to dismiss, see Urban Intelligence Ltr. (Dkt. #91), and Spring Scaffolding served its opposition brief, see Spring Scaffolding Ltr. (Dkt. #97), on April 10, 2024, concurrently with the service of its reply brief, Urban Intelligence tendered Spring Scaffolding an amended version of its covenant not to sue that addressed the purported deficiencies identified by Spring Scaffolding’s opposition, see Am. Covenant Not to Sue (Dkt. #103-1). Urban

Intelligence also provided alongside its reply brief, for the first time, examples of the letters sent by Urban Intelligence to some of Spring Scaffolding’s customers. See Example Urban Intelligence Customer Ltrs. (Dkt. #103-2). Because of these new matters, the Court permitted Spring Scaffolding to file a short sur-reply. See Apr. 16, 2024 Order. Spring Scaffolding attached to its sur-reply an additional letter sent by Urban Intelligence to a different Spring Scaffolding customer. See Brookfield Props. Cease-and-Desist Ltr. (Dkt. #107-2). To summarize, Urban Intelligence currently moves to dismiss (1) the counterclaims seeking declarations related to Urban Intelligence’s design patents as moot, in light of its tendering Spring Scaffolding the amended covenant not to sue based on the patents; and (2) the claim for tortious interference with prospective economic advantage for failure to state a claim. See Urban

Intelligence Mem. of L. in Supp. of Mot. to Dismiss Counterclaims (Dkt. #101). LEGAL STANDARD I. Rule 12(b)(1) Federal Rule of Civil Procedure 12(b)(1) permits a defendant to move to dismiss a complaint for “lack of subject-matter jurisdiction.” “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Lyons v. Litton Loan Servicing LP, 158 F. Supp. 3d 211, 218 (S.D.N.Y. 2016) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). When considering a motion to dismiss under Rule 12(b)(1), a court “must take all uncontroverted facts in the complaint . . . as true, and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain’s Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014).

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Urban Intelligence Inc. v. Spring Scaffolding LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/urban-intelligence-inc-v-spring-scaffolding-llc-nyed-2025.