Borders Group Inc., the bankrupt book retailer, sued Next Jump Inc. for trade-secret misappropriation and trademark infringement over the use of a website.
Borders contends it had a contract with New York-based Next Jump to operate the Borders rewards site and that Next Jump, armed with a Borders client list, set up the OO.com website to gain customers.
“There is a danger of imminent, irreparable harm to the debtors’ estates” as a result of Next Jump’s use of the list and infringement of Borders’ trademarks, lawyers for the company said in a complaint filed yesterday in U.S. Bankruptcy Court in Manhattan. Borders asked a New York bankruptcy judge to award punitive damages in the case.
Borders, based in Ann Arbor, Michigan, filed for protection from creditors Feb. 16, listing debt of $1.29 billion and assets of $1.28 billion. The company is liquidating its assets.
The retailer lost business as customers switched to e- readers such as Amazon.com Inc. (AMZN)’s Kindle, introduced in 2007. Barnes & Noble invested in its own Nook device to attract customers.
Officials of Next Jump weren’t immediately available to comment on the lawsuit.
The case is Borders Group Inc. v. Next Jump Inc., 11ap2567, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The bankruptcy case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York (Manhattan).