United States District Court, D. Massachusetts
MEMORANDUM & ORDER
Talwani United States District Judge.
October 7, 2019, Cognitive Edge Pte Ltd. (“Cognitive
Edge”) and Code Genesys, LLC, Spryng.io
Anthrocomplexity, LLC, Spryng.io, LLC, and Spryng.io EU Ltd.
(collectively, “Code Genesys”) entered into a
Settlement Agreement to resolve their dispute relating to the
action Code Genesys, LLC v. Cognitive Edge PTE LTD,
Civ. A. 1:18-cv-12509-IT (“Related Action”), and
voluntarily dismissed that action. One week later, Cognitive
Edge brought this action, asserting that Code Genesys is in
breach of the Settlement Agreement and is harming Cognitive
Edge through disparaging statements, Compl. [#1], and sought
a Temporary Restraining Order and Preliminary
Injunction [#3], asking the court to order Code Genesys
to follow the joint disclosure provisions of the Settlement
Agreement and to refrain from posting web pages or to
otherwise communicate in a matter disparaging Cognitive Edge
during the pendency of the action. The court granted
Cognitive Edge a Temporary Restraining Order
(“TRO”) [#15] on October 15, 2019. After Code
Genesys entered an appearance in the case, and did not oppose
an extension of the TRO, the court extended the TRO to
November 12, 2019. Order Extending TRO [#23]. The court heard
argument on the Motion for Preliminary Injunction
[#3] on November 6, 2019.
due consideration, the court GRANTS Cognitive Edge's
Motion for Preliminary Injunction [#3] as set forth
Genesys opposed the Motion for Preliminary
Injunction [#3] on the sole ground that the court lacks
subject matter jurisdiction. See Opp'n to Mot.
for Prelim. Inj. [#28]. Code Genesys argues that under
Kokkonen v. Guardian Life Ins. Co. of America,
absent an “independent basis for federal jurisdiction,
” enforcement of settlement agreements is generally a
matter for state courts. 511 U.S. 375, 382 (1994).
court agrees that in this case, there must be an independent
basis for jurisdiction. The subject matter jurisdiction
challenge fails, however, as the Amended Complaint
[#26] asserts a federal claim of False Advertising under 15
U.S.C. § 1125(a)(1)(B) (“the Lanham Act”).
Am. Compl. 9-11 (Count IV) [#26].
The Merits of the Motion for Preliminary Injunction
succeed on a motion for preliminary injunction, a plaintiff
“must establish that he is likely to succeed on the
merits, that he is likely to suffer irreparable harm in the
absence of preliminary relief, that the balance of equities
tips in his favor, and that an injunction is in the public
interest.” Winter v. Nat. Res. Def. Council,
Inc., 555 U.S. 7, 20 (2008). The first factor, the
likelihood of success on the merits, “is the main
bearing wall of the four-factor framework.”
Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102
F.3d 12, 16 (1st Cir. 1996) (internal citations omitted). The
party seeking the preliminary injunction bears the burden of
“providing a factual basis sufficient to justify a
preliminary injunction.” Aspect Software, Inc. v.
Barnett, 787 F.Supp.2d 118, 121 (D. Mass. 2011) (relying
on Nieves-Marquez v. Puerto Rico, 353 F.3d 108, 120
(1st Cir. 2003) .
Code Genesys's Opposition [#28] focused entirely
on the court's lack of subject matter jurisdiction, the
facts presented by Cognitive Edge are uncontroverted for the
purpose of this motion. Cognitive Edge states that on October
10, 2019, three days after the Settlement Agreement was
reached in the Related Action, Cognitive Edge learned from
its customers and network members that they had received an
email from Spryng.io with a link to its website. Snowden Aff.
¶ 10 [#4-5]. The email contained links to a Spryng.io
website maintained by Code Genesys. Id. ¶ 11.
The linked web pages contained content and statements
relating to “claims about the ownership of the
Spryng.io platform and the technology underlying the
platform”; “negative comments about Cognitive
Edge's patents”; and comments which suggested that
this court “considered the merits of the parties'
dispute” and agreed with Code Genesys's position.
Id. Cognitive Edge asserts that its counsel
attempted to contact Code Genesys about this content, asking
Code Genesys to remove the content and to make corrective
disclosures, and that Code Genesys made changes but that the
web pages continued to make false statements and to disparage
Cognitive Edge. Id. ¶ 13; Counsel Aff.,
Exhibits A-C [##4-2, 4-3, 4-4]; Am. Compl. ¶ 43 [#26].
Code Genesys has not disputed any of these facts.
Likelihood of Success on the Merits
Edge asserts that it is likely to succeed on the merits of
its breach of contract claims and Lanham Act claims because
Code Genesys materially breached the Settlement
Agreement's non-disparagement and public disclosure
provisions, and in doing so, caused confusion in the market.
Mem. in Supp. of Mot. for Prelim. Inj. 11 [#4]; Snowden Aff.
[#4-5]. “A plaintiff can succeed on a false advertising
claim by proving either that an advertisement is false on its
face or that the advertisement is literally true or ambiguous
but likely to mislead and confuse consumers.”
Clorox Co. P.R. v. Proctor & Gamble Commercial
Co., 228 F.3d 24, 33 (1st Cir. 2000).
Affidavit [#4-5], Snowden explains that the
non-disparagement and public disclosure provisions of the
Settlement Agreement were key aspects to the Agreement.
Snowden Aff. ¶¶ 6-8 [#4-5]. Snowden asserts that
Code Genesys violated these provisions through
misrepresentations made to the market, and that the
misrepresentations, relating to the circumstances surrounding
the Settlement Agreement, the Related Action, and the
validity of Cognitive Edge's patents, are likely to
confuse consumers. Id. ¶ 11. Based on these
uncontroverted facts, Cognitive Edge has met its ...