MANHATTAN (CN) – A company claims two former employees swiped its design for a “stylish” electronic toilet seat that’s “germ resistant … easy to use and environmentally friendly.” And it says the culprits expect millions of dollars in profits from the hot seat.
Tribeca Technology Solutions, which designed and distributed Intelliseat for several years, says its features include a heated seat, adjustable water pressure and temperature, hygienic filtered water and a multi-function remote control.
Tribeca claims that lead defendant David Goldberg, who worked for it until June 2010, breached an agreement that protected the Intelliseat.
“On information and belief, defendants have secured orders for at least 6,000 Intelliseat units per month from Costco and are expecting profits on those sales of $7.2 million,” according to the complaint in New York County Court.
(Tribeca’s math is curious. Costco advertised the Intelliseat online this morning for $199.99. Six thousand units would go for $1.2 million. At that price, the $7.2 million in “profits” would account for 6 months of gross sales. Amazon advertised the Intelliseat this morning for $299.99.)
Tribeca sued Goldberg, Scott Simon, their company American Medical Data Management and its alter egos AMDM LLC and AMDM Inc. It also sued Edward Schapiro, the investor behind the defendants’ enterprise.
“In blatant disregard and in direct contravention of his obligations under the agreement, defendant Goldberg formed American Medical Data Management … and, with the substantial assistance of defendants Simon and Schapiro, is actively engaged in the manufacture, marketing and sale of Intelliseat direct to Costco Wholesale, to the public at large on his AMDM LLC website and otherwise. On information and belief, defendants have secured orders for at least 6,000 Intelliseat units per month from Costco and are expecting profits on those sales of $7.2 million,” the complaint states.
In March 2010, Tribeca hired IZEN Co., of Korea, to make the Intelliseat for sale in the United States, Canada and Korea.
According to the complaint, Goldberg signed the agreement on Tribeca’s behalf as “Managing Director,” and agreed to keep order-related information confidential.
But Tribeca says Goldberg breached the agreement and rerouted Tribeca’s manufacturer and clients to his new business.
“In or about March 2010, TTS-NY [Tribeca Technology Solutions] secured a purchase order from Costco Wholesale for an initial order of Intelliseats. Unbeknownst to TTS-NY, Goldberg was planning to steal and not long thereafter (and perhaps contemporaneously) did steal the Intelliseat business for a new venture he set up and is currently operating with defendants Simon and Schapiro,” the complaint states. (Parentheses in complaint.)
Tribeca says Goldberg secured orders from Costco, ordered sample Intelliseats from Korea and signed a supplier agreement with Izen, while still working for Tribeca. And it says Goldberg used Tribeca’s New York-based insurance broker to ship the samples.
“In May 2010, while Goldberg was still employed by TTS-NY, he caused the TTS-NY/Izen memorandum of understanding to be re-executed in the name of AMDM Inc. So important was that new MOU between AMDM and Izen that it was the subject of a ‘signing ceremony’ on May 27, 2010 with Izen President Steve Chung in Vienna, Virginia. Izen President Chung assisted and was complicit in the defendants’ illegal efforts in May 2010 by, among other things, facilitating the formation of AMDM Korea Inc., and arranging office space for that company in Korea,” according to the complaint.
Chung and Izen are not named as defendants.
Tribeca says the defendants tried to sell the Intelliseat through Costco in Korea, Canada and Los Angeles, and also tried to sell it in Russia.
Tribeca claims that “Goldberg even secured the assistance of other unwittingly TTS-NY personnel, using them to secure background information on bathroom fixture maker competitors Kohler and Trane.”
Goldberg breached the contract in which he agreed to protect confidential information on Tribeca’s business and to refrain from soliciting Tribeca’s clients for 6 months after termination, according to the complaint.
“Goldberg’s relationship with TTS-NY was terminated on or about June 10, 2010 for reasons unrelated to TTS-NY’s Intelliseat business. Defendant Simon too was terminated at or about that time. The separation was not amicable. By email dated June 25, 2010, TTS-NY informed defendant Goldberg it had learned that he had been contacting TTS-NY customers and vendors in direct violation of his written agreement,” the complaint states.
Tribeca claims that Goldberg’s new company started manufacturing and selling Intelliseats as early as August 2010.
Tribeca seeks more than $7 million in damages for breach of contract, misappropriation, breach of fiduciary duty and conspiracy. And it wants the defendants enjoined from making and selling the Intelliseat.
It is represented by Steven Altman.