CHARLES J. SIRAGUSA, District Judge.
This action involves Pudgie's Pizza, a formerly family-owned pizza business in Elmira, New York, several of whose individual restaurant locations now belong to first cousins, who are descendants of the original owners, and who are challenging each other for the rights to use the Pudgie's name, at least in certain geographic regions, and to franchise others to do so. Now before the Court are the following motions: 1) Defendant's motion [#32] for summary judgment; 2) Plaintiffs' cross-motion [#46] for partial summary judgment; 3) Defendant's motion [#51] to exclude late-produced documents; and 4) Defendant's motion [#56] to strike Plaintiff's cross-motion for partial summary judgment. Defendant's motion to exclude [#51] is granted in part and denied in part. Defendant's motion to strike [#56] is denied. Defendant's motion for summary judgment [#32] and Plaintiffs' cross-motion for partial summary judgment are each granted in part and denied in part. Defendant's summary judgment motion is granted as to Plaintiffs' first and third causes of action, but is denied as to Plaintiffs' second cause of action. Defendant's motion for summary judgment on his counterclaims is also denied. Plaintiffs' cross-motion for partial summary judgment is denied as to their first cause of action, which is being dismissed for lack of standing, but is granted as to their second cause of action, insofar as it alleges fraud, and Defendant's trademark registration is cancelled.
Unless otherwise noted, the following are the undisputed facts of this case. In 1963, brothers Charles "Pudgie" Cleary, Frances Cleary and Michael Cleary, Sr., opened the first of several "Pudgie's" pizza parlors, on the north side of Elmira. This restaurant became known as "Northside Pudgie's."
In 1972, the Cleary brothers formed Pudgie's Pizza Franchising Corporation ("PPFC"), for the purpose of licensing the Pudgie's mark. Subsequently, PPFC entered into numerous franchise agreements, allowing franchisees to use the Pudgie's name in connection with pizza parlors in New York and other states.
In 1973, the Cleary brothers' sister, Bernadette Tarntino ("Bernadette"), entered into a franchise agreement with PPFC to operate a Pudgie's pizza parlor in the Village of Horseheads, which is approximately six miles north of Elmira. As previously mentioned, the Elmira Heights neighborhood lies between the City of Elmira and the Village of Horseheads. In connection with Bernadette's operation of the Horseheads Pudgie's, and since at least the "early 1980s," she advertised that she made deliveries to Elmira Heights. Specifically, the advertisements usually stated: "We deliver to Horseheads, Big Flats and Elmira Heights Limited Areas."
As part of Bernadette's franchise agreement between PPFC, she specifically agreed that the Pudgie's mark, and all rights associated with it, "belong[ed] exclusively to Pudgie's [PPFC]." (Franchise Agreement, Docket Nos. [#46-8] at p. 4, [#33-7] at p. 14). Consequently, during the term of Bernadette's franchise agreement with PPFC, she did not gain any ownership rights in the Pudgie's mark.
In 1978, PPFC obtained a federal registration of the Pudgie's mark, registration number 1102421.
On July 15, 1983, Bernadette renewed her final franchise agreement with FFPC. The franchise agreement was for a term of five years, with an option to renew for another five years.
In 1985, the U.S. Patent and Trademark Office ("PTO") cancelled PPFC's federal registration of the Pudgie's mark, after PPFC failed to file a required declaration. Nevertheless, PPFC continued to operate its chain of Pudgie's Pizza parlors as before.
In 1990, Michael Cleary, Sr., died, owning 50% of the stock in PPFC. Additionally, at the time of Mr. Cleary's death, it appears that he owned two of the Pudgie's locations — Pudgie's Southside and Pudgie's in Mansfield, Pennsylvania.
In July 1993, Bernadette's franchise agreement terminated.
In any event, for many years after the Elmira Heights Pudgie's closed, the parties co-existed peacefully, and even placed their advertisements together, in such a way that it would appear that their two locations, Horseheads and Southside, were merely two locations of the same Pudgie's "pizzeria & sub shop."
In or about 2004, MP Cleary looked into obtaining a new federal registration of the Pudgie's mark.
On July 19, 2004, TruFoods licensed MP Cleary to use the mark. Specifically, TruFoods and MP Cleary entered into a Trademark License Agreement, giving MP Cleary a non-exclusive, perpetual and transferable right to use the Pudgie's mark in connection with MP Cleary's existing businesses, which were as "restaurants, carry out and food service businesses that principally offer pizza, subs or other similar products." The licensing agreement provided that if a third party infringed the Pudgie's mark, and if TruFoods declined to pursue legal action against such third party, that MP Cleary had "the right to commence or defend such litigation."
In 2007, Bernadette Tarntino died, and her three children, Brent Tarntino, Edward Tarntino and Kristen Tarntino, inherited her stock in Pudgie's Pizza Corporation-Horseheads, Inc., which owned and operated the Horseheads Pudgie's. The record indicates that Brent, Edward and Kristen each inherited an equal one-third share of the corporation.
On October 21, 2009, MP Cleary formed a limited liability corporation, MPC Franchise, LLC ("MPC Franchise"), for the purpose of opening Pudgie's pizza parlor franchises. Specifically, MP Cleary, which had licensed the Pudgie's federal mark from TruFoods, gave MPC Franchise a non-exclusive license to use the Pudgie's mark and to license others to do so. Subsequently, MPC Franchise began selling new Pudgie's pizzeria franchises.
While all of the events described above were occurring, the parties maintained their working relationship, and co-existed peacefully. However, beginning in 2010, the parties' working relationship began to unravel, ultimately leading to this lawsuit. Specifically, in or about early 2010, MP Cleary began advertising that Southside Pudgie's would make deliveries to Elmira Heights.
On April 2, 2010, Plaintiffs sent an email to Horseheads Pudgie's, referencing a
On July 2, 2010, Brent Tarntino, in his individual capacity, and with the assistance of his attorney, filed a federal trademark application for the Pudgie's mark with the PTO.
Several aspects of Tarntino's application are significant, for purposes of this Decision and Order. First, Tarntino indicated on the application that he was the "owner" of the Pudgie's mark, and that he first used the mark "[a]t least as early as 01/01/1980."
Tarntino sought the registration because he intended to begin franchising new Pudgie's pizzeria locations.
Brent Tarntino Deposition, Docket No. [#46-7] at p. 35.
It is apparent that Tarntino did not intend to pursue his franchising plan with Pudgie's Pizza Corporation-Horseheads, Inc., the corporation in which he was a one-third owner, along with his siblings. Instead, Tarntino intended to pursue the franchising business on his own. In fact, shortly after obtaining the registration, Tarntino stopped working at the Horseheads Pudgie's, and offered to allow his siblings to buy his interest in that shop.
On June 21, 2011, MP Cleary and MPC Franchise commenced this action against Brent Tarntino, individually. The Complaint alleges that Tarntino obtained his Pudgie's trademark registration by defrauding the PTO, and that he is improperly using the mark in a manner that is creating confusion by, for example, contacting MPC Franchise's franchisees and telling them that he owns the Pudgie's mark. The first cause of action seeks a declaratory judgment that Tarntino has no ownership interest in TruFoods' registered mark. The second cause of action seeks cancellation of Tarntino's mark based on fraud, pursuant to 15 U.S.C. § 1064(3), and on the fact that the mark is confusingly similar to TruFoods' mark.
Tarntino answered [#8] the Complaint and he, along with his two siblings, purport to assert five counterclaims.
The second counterclaim purports to assert a claim for "federal unfair competition," in violation of 15 U.S.C. § 1125(a), based on the fact that Plaintiffs allegedly advertise that they deliver, and do deliver, their food products in unspecified "geographical areas" in which Horseheads Pudgie's and Northside Pudgie's were already using the Pudgie's mark.
The third counterclaim purports to assert a claim for "common law trademark infringement and unfair competition," again based on the fact that Plaintiffs allegedly
In response to the Counterclaims, Plaintiffs denied that they have used the Pudgie's mark "in any geographical areas `served only' by Counterclaim Plaintiffs."
On November 17, 2011, the Honorable Jonathan W. Feldman, United States Magistrate Judge, issued a Scheduling Order [#21], which, in pertinent part, directed that all discovery be completed by April 16, 2012, and that "[a]ll motions to compel discovery ... be filed at least thirty (30) days prior to" that date. The Scheduling Order further directed that the parties file their dispositive motions by May 30, 2012.
The parties then engaged in pretrial discovery. For purposes of the pending motions, it is significant that it was not until March 2, 2012, more than three months after the Scheduling Order was issued, that Defendant served his First Set of Interrogatories and First Set of Production of Documents and Things. As part of those demands, Interrogatory No. 3 stated:
At that point in time, neither that interrogatory, nor any of the other interrogatories, nor any pleadings, identified the "geographical areas" to which Defendant was referring. On April 9, 2012, Plaintiffs responded to the interrogatory as follows:
(Docket No. [#51-1] at p. 10). Defendant's Interrogatory No. 4 stated:
(Docket No. [#51-1] at p. 10). On April 9, 2012, Plaintiffs answered the interrogatory as follows:
On April 16, 2012, the discovery period in this action concluded, pursuant to Magistrate Judge Feldman's Scheduling Order. As of that date, Defendant had not served Plaintiffs with a deficiency notice, nor had he filed a motion to compel.
On April 17-18, 2012, beyond the discovery cut-off date established by Judge Feldman, the parties conducted depositions. At that time, Defendant asked questions specifically pertaining to Elmira Heights, including whether Plaintiffs had records of their sales in the Elmira Heights area. In pertinent part, during David Cleary's deposition, he stated that Southside Pudgie's had been "delivering to Elmira Heights since the early '90s."
On April 19, 2012, after depositions were completed, Defendant sent a discovery deficiency letter to Plaintiffs that focused, in large part, on Elmira Heights. For example, with regard to Interrogatory No. 3, the letter asked Plaintiffs to provide their basis for "the allegation that Defendant and/or Counterclaim Plaintiff have not exclusively served any geographical areas outside of Horseheads, New York, 14845, including, for example, the Elmira Heights area."
On May 17, 2012, Plaintiffs advised Defendant that they were working on supplementing the discovery responses: "We are currently in the process of retrieving documents from our clients, after which we will promptly prepare our responses and send you the requested materials."
On May 25, 2012, Plaintiffs served Defendant with supplemental discovery responses. The supplementary response to Interrogatory No. 3, for example, indicated that Plaintiffs sold their products "in all of Elmira, New York including North, South, and East Elmira, West Pine City and Elmira Heights."
On May 30, 2012, Defendant filed the subject motion [#32] for summary judgment.
At around the same time Defendant filed his summary judgment motion, the parties were negotiating a confidentiality agreement concerning Plaintiffs' supplemental discovery.
On June 27, 2012, Plaintiffs filed a motion [#45] to redact customers' personal information from the sales records that were produced. The same day, Plaintiffs filed their opposition to Defendant's summary judgment motion and their cross-motion for partial summary judgment on their first two causes of action. In that regard, MP Cleary indicates that it made deliveries, from the Southside Pudgie's, to the Elmira Heights neighborhood, beginning in the early 1990s (after Northside Pudgie's closed). MP Cleary admits, though, that prior to 2010, Southside Pudgie's did not advertise that it delivered to Elmira Heights.
On July 11, 2012, Defendant filed the subject motion [#51] to preclude Plaintiffs from using the late-produced discovery.
On July 16, 2012, Judge Feldman issued a "Stipulated Consent Order" [#52], pursuant to which the parties agreed that Plaintiffs' customer list would be protected by the aforementioned confidentiality agreement, and that Plaintiff's motion to redact would be withdrawn. The Stipulated Consent Order specifically indicated that Plaintiffs' customer list was "material
On March 21, 2013, counsel for the parties appeared before the undersigned for oral argument. At that time, counsel clarified the nature of their claims for the Court. For example, counsel agreed that the parties are not contesting each other's common-law rights to do business using the Pudgie's name in their traditional locations. That is, Plaintiffs are not contesting Defendant's right to use the Pudgie's name in Horseheads, and Defendant is not contesting Plaintiffs' right to use the Pudgie's mark in Elmira. However, Defendant is contesting Plaintiffs' right to use the Pudgie's mark in advertising in Elmira Heights, though Plaintiffs are not contesting Defendant's right to do so. On that point, there does not appear to be any dispute that since at least the 1990s, Defendant has consistently advertised that it delivers to Elmira Heights, while Plaintiffs did not begin advertising that they would deliver to Elmira Heights until approximately 2010.
The primary concern of both parties, however, concerns the right to use the Pudgie's name to franchise additional locations.
Following oral argument, the Court reserved decision for a time to allow the parties to further explore settlement. On April 22, 2013, the parties notified the Court that they had been unable to reach a settlement.
Before considering the merits of the subject motions for summary judgment, the Court must consider whether to exclude the supplemental discovery that Plaintiffs produced two months after the close of discovery. Rule 37(c) provides, in pertinent part, that "[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." A district court has discretion whether to grant a Rule 37(c) motion, and in that regard should consider "(1) the [non-moving] party's explanation for the failure to comply with the disclosure requirement; (2) the importance of the testimony of the precluded witnesses; (3) the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony; and (4) the possibility of a continuance." Design Strategy, Inc. v. Davis, 469 F.3d 284, 296 (2d Cir.2006) (citations and internal quotation marks omitted). The movant is not required to show that the opposing party acted with bad faith. Id.
Defendant has moved to preclude two types of evidence: Plaintiffs' sales records for Elmira Heights, and documents concerning Plaintiffs' communications with
Defendant argues that the Court should preclude Plaintiffs' supplemental disclosures, in May and June of 2012, as "untimely," since, "[p]ursuant to the Court's Scheduling Order, discovery in this case closed on April 16, 2012."
Completely apart from the manner in which discovery was conducted, however, the Court has considered the Design Strategy factors set forth above, and finds that preclusion is not warranted. For example, Plaintiffs' explanation for the late production of the sales records is reasonable. In that regard, Plaintiffs attribute their late production to two things: First, they did not know, until after Brent Tarntino's deposition, which occurred after the court-ordered
Additionally, Plaintiffs maintain that the Elmira Heights sales records are important to their defense of Defendant's counterclaims, because they refute the suggestion that Southside Pudgie's only began selling in Elmira Heights in 2010 or 2011.
Furthermore, the delay in providing Southside Pudgie's Elmira Heights delivery records is not particularly prejudicial to Defendant. As to this point, Defendant was aware, well before this action was commenced, that Southside Pudgie's claimed to be making deliveries to Elmira Heights for many years, and in fact, that it claimed to have been doing so even before Horseheads Pudgie's began delivering to Elmira Heights.
(Docket No. [#46-7] at p. 37, Tarntino Dep. at p. 46) (emphasis added). The late-produced sales receipts merely quantify what Tarntino already claimed to know, namely, that Southside Pudgie's had been making deliveries to Elmira Heights.
Lastly, the possibility of a continuance favors denial of the motion to preclude. That is to say, the Court could grant Defendant the opportunity to conduct additional limited discovery regarding the late-produced documents prior to trial, if warranted. However, there does not appear to be any need for such additional discovery at the present time in connection with the pending summary judgment motions. In that regard, Defendant's papers make only vague references to the possible need to conduct additional discovery.
For all of the foregoing reasons, Defendant's motion to preclude[#51] is granted with regard to the late-produced communications between Plaintiffs and TruFoods, and is denied with regard to Southside Pudgie's delivery records concerning Elmira Heights.
Summary judgment may not be granted unless "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The underlying facts contained in affidavits, attached exhibits, and depositions, must be viewed in the light most favorable to the non-moving party. U.S. v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). Summary judgment is appropriate only where, "after drawing all reasonable inferences in favor of the party
A party cannot demonstrate a triable issue of fact based on mere speculation or conjecture. See, e.g., U.S. v. Potamkin Cadillac Corp., 689 F.2d 379, 381 (2d Cir. 1982) ("[I]n order to defeat a motion for summary judgment, the opposing party must set forth specific facts showing that there is a genuine issue for trial. Such an issue is not created by a mere allegation in the pleadings, nor by surmise or conjecture on the part of the litigants.") (emphasis added; citations and internal quotation marks omitted); see also, D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998) ("The non-moving party may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that its version of the events is not wholly fanciful.") (emphasis added); Woodman v. WWOR-TV, Inc., 411 F.3d 69, 75 (2d Cir.2005) ("In determining whether a genuine issue of material fact exists for trial, we are obliged carefully to distinguish between evidence that allows for a reasonable inference ... and evidence that gives rise to mere speculation and conjecture.") (citation and internal quotation marks omitted).
Plaintiffs are asserting three claims under the Lanham Act: 1) a claim for a declaratory judgment setting forth the parties' respective rights, including ownership of the Pudgie's mark, in light of TruFoods' and Tarntino's concurrent registration of the marks; 2) a claim to cancel Tarntino's federal registration, because it was obtained by fraud and because it is confusingly similar to TruFoods' mark; and 3) a claim that Tarntino is committing "trademark infringement and unfair competition" with regard to TruFoods' mark, in connection with his use of his registered mark to franchise new restaurants. Defendant maintains that Plaintiffs have standing to pursue only the second cause of action, and even then, only with regard to the portion of the claim based on fraud.
The Court agrees that Plaintiffs, as non-exclusive licensees, lack standing to pursue claims concerning ownership or infringement of TruFoods' registered mark. In that regard, the Second Circuit recently clarified that licensees do not have statutory standing to pursue infringement claims under 15 U.S.C. § 1114. Federal Treasury Enterprise Sojuzplodoimport v. SPI Spirits Limited, 726 F.3d 62 (2d Cir.2013). On this point, the Circuit Court indicated that statutory standing under 15 U.S.C. § 1114 is available "only to `registrants' of the trademarks at issue, a term the Act defines as embracing the actual registrant's `legal representatives, predecessors, successors and assigns,'" which terms do not include exclusive licensees, let alone non-exclusive licensees, who lack an ownership interest in the mark. Id. at pp. 73-79; see also, id. at p. 78 ("A plaintiff therefore must show that its `license' amounts, in fact, to an assignment to establish entitlement to sue under Section 32(l).") (citations omitted).
Here, the license agreement between TruFoods and MP Cleary grants MP Cleary the right to use the mark, but also clearly indicates that TruFoods retains ownership of the mark.
The Second Circuit further held that those who lack statutory standing to sue for infringement, "also lack standing to seek th[o]se remedies [that amount to] `ownership-bolstering' relief under the Lanham Act," such as a "declaratory judgment of ownership." Federal Treasury Enterprise Sojuzplodoimport v. SPI Spirits Limited, 726 F.3d at 84. In this action, Plaintiffs' first cause of action seeks such a declaratory judgment. Accordingly, Defendant is also entitled to summary judgment on Plaintiffs' first cause of action.
The Court does not agree, however, that Plaintiffs lack statutory standing with regard to either their second cause of action, which seeks cancellation of Tarntino's mark pursuant to 15 U.S.C. § § 1052(d) & 1064, or that portion of their third cause of action which alleges unfair competition, pursuant to 15 U.S.C. § 1125(a). In that regard, claims under both 15 U.S.C. § 1064 and 15 U.S.C. § 1125(a) may be brought "by any person" who believes that they are being injured. See, 15 U.S.C. § 1064 ("A petition to cancel a registration of a mark ... may ... be filed as follows by any person who believes that he is or will be damaged...."); 15 U.S.C. § 1125(a)(1) (Indicating that action may be brought "by any person who believes that he or she is or is likely to be damaged by such act."); see also, Federal Treasury Enterprise Sojuzplodoimport v. SPI Spirits Limited, 726 F.3d at 72 (Observing that claims for infringement under 15 U.S.C. § 1114(1) may be brought only by "registrants," which "contrasts with Section 43 of the Act, which allows suits `by any person who believes that he or she is or is likely to be damaged' by the defendant's actions.") (italics in original, citation omitted); Zip Intern. Group, LLC v. Trilini Imports, Inc., No. 09-CV-2437 (JG)(VVP), 2011 WL 2132980 at *3 (E.D.N.Y. May 24, 2011) ("[A]ny plaintiff who can demonstrate that it has the potential for a commercial or competitive injury, or, in other words, that the false designation of defendant's product is likely to cause plaintiff to suffer a loss in sales, has standing to bring
The Court will next consider Tarntino's motion for summary judgment as to Plaintiffs' second cause of action, for cancellation, and Plaintiffs' cross-motion for summary judgment on that same claim. Plaintiffs maintain that Tarntino's mark should be canceled for two reasons. First, they contend that pursuant to 15 U.S.C. § 1064, Tarntino's registration should be canceled because he obtained it by defrauding the PTO. Second, they contend that pursuant to 15 U.S.C. § 1052(d), Tarntino's registration should be canceled because it creates a likelihood of confusion with TruFoods' previously registered mark.
Plaintiffs contend that Tarntino obtained his federal trademark registration by defrauding the PTO. Specifically, Plaintiffs maintain that Tarntino intentionally lied, in his declaration attached to his Trademark Application, by making the following statements: 1) "the mark was first used at least as early as 01/01/1980"; 2) "he/she believes the applicant
15 U.S.C. § 1064 provides that "any person who believes that he is or will be damaged" may file a petition "to cancel a registration of a mark" for which "registration was obtained fraudulently." The principles applicable to such a claim are well settled:
Patsy's Italian Restaurant, Inc. v. Banas, 658 F.3d 254, 270-271 (2d Cir.2011) (citations omitted).
Haggar Intern. Corp. v. United Co. for Food Industry Corp., 906 F.Supp.2d 96, 107-108 (E.D.N.Y.2012) (citations and internal quotation marks omitted).
The Court will first consider Tarntino's misstatement that he began using the Pudgie's mark in 1980. Obviously, that statement was untrue when it was made, because Tarntino was a young child in 1980, and was not using the Pudgie's mark. Tarntino contends, however, that he subjectively believed the statement was true, because his mother was using the mark in 1980, and he thought that he inherited his mother's rights concerning use of the mark. Plaintiffs contend that Tarntino's misstatement about having used the Pudgie's mark in 1980 was calculated, and fraudulent, because Tarntino selected a date that was prior to TruFoods' date of first use, which was in 1982. Indeed, Tarntino has not provided any alternative explanation for how he settled on the otherwise seemingly random date of 1980. However, even assuming arguendo that Tarntino intentionally lied to the USPTO about the date of first use of the mark, several courts have held that such a misrepresentation is not a "material misrepresentation" that would support a claim for cancellation based on fraud, where, as in
Plaintiffs further maintain that Tarntino's registration application was fraudulent because, in completing it, he intentionally lied both about the ownership of the mark, and about the existence of other "person[s], firm[s], corporation[s], or association[s] ha[ving] the right to use the [identical] mark in commerce" under circumstances likely to cause confusion. In the instant case, those two misrepresentations are related, because when Tarntino misstated that he personally owned the mark, he not only failed to inform the PTO that the true owner was Pudgie's Pizza Corporation-Horseheads, Inc., of which he was only a one-third shareholder, but he also failed to disclose that Pudgie's Pizza Corporation-Horseheads, Inc. had rights to use the mark that were superior to his.
In moving for summary judgment on this fraud claim, Tarntino initially attempted to focus the argument on TruFoods, and away from Plaintiffs' use of the mark. In that regard Tarntino maintained that he subjectively believed he had superior rights to the Pudgie's mark, based on his opinion that TruFoods' registered trademark did not pertain to "pizza, pasta and subs."
Nevertheless, Tarntino maintains that despite all of the foregoing, Plaintiffs cannot establish that he intended to defraud the PTO, since he subjectively did not intend to commit fraud. However, the Court disagrees, since Defendant has not come forward with evidence from which a reasonable inference could be drawn that he had a good-faith belief either that he owned the Pudgie's mark or that there were no other persons entitled to use the mark, whose current use of the mark would result in confusion. To the contrary, the record indicates that Tarntino had no good faith basis whatsoever to claim that he owned the Pudgie's mark. Instead, Tarntino was well aware that he was merely a one-third owner of the Horseheads Pudgie's corporation. Tarntino's misstatement of ownership was not a mistake, but instead, was part of his long-term plan to sell his interest in the Horseheads Pudgie's and begin his own franchising business. To be clear on that point, Tarntino was not attempting to register the mark on behalf of the corporation in which he was a part owner; he registered it for himself. Nor did Tarntino have any good faith basis for failing to disclose that his close family members had been using the Pudgie's mark for decades, or that he was already engaged in a dispute with them over the use of the mark in Elmira Heights. In that regard, the Court observes that MP Cleary's use of the Pudgie's mark was in fact senior to that of the Horsehead's Pudgie's, and that even if Tarntino did not fully understand that fact, he still had no good faith basis to believe that he had any superior rights to the mark.
Tarntino cannot defeat summary judgment merely by claiming, in conclusory fashion, that he believed he owned the mark, without offering any evidence to support such a belief. See, City of New York v. Tavern on the Green, L.P., 427 B.R. 233, 243 (S.D.N.Y.2010) ("[T]he Debtors have adduced no facts which would permit a reasonable fact finder to conclude that LeRoy's conduct was anything but a deliberate attempt to mislead the PTO.") (emphasis added); Mears v. Montgomery, 2004 WL 964093 at *19 ("[P]laintiff has established that Montgomery knowingly misstated the ownership of the Mark, and defendants have failed to present any evidence that creates a material dispute as to this fact."). Similarly, even assuming arguendo that Tarntino individually had the right to use the mark, he has not produced evidence tending to show how he could have honestly believed that Plaintiffs, or even his siblings, did not have a right to use the mark that was at least equal to his. See, City of New York v. Tavern on the Green, 427 B.R. at 242, 243 ("The deliberate omission in a trademark application of information regarding another's right to use the mark applied for is a material omission justifying cancellation of that mark.... Even viewing the claim of fraud through the prism of the [plaintiff's] heightened evidentiary burden, the [defendants] have adduced no facts which would permit a reasonable fact finder to conclude that [their] conduct was anything but a deliberate attempt to mislead the PTO."). Accordingly, Tarntino's registration is cancelled based on fraud pursuant to 15 U.S.C. § 1064.
Alternatively, Plaintiffs maintain that the Court should cancel Tarntino's mark pursuant to 15 U.S.C. § 1052(d), due to a likelihood of confusion. At the outset, the Court observes that this claim was not included in Plaintiffs' Complaint [#1]. Subsequently, though, Plaintiffs moved to amend/correct their second cause of action, "to broaden the grounds for cancellation." See, Docket No. [#27-1] at p. 1. The Proposed Amended Complaint did not specifically reference § 1052(d), but it did reference 15 U.S.C. § 1064 generally, which itself references § 1052, and alleged that: "Among other things, Tarntino's registration created a likelihood of confusion between Tarntino's registered mark and TruFoods' prior registration of a nearly identical mark." Proposed Amended Complaint [#27-2] at ¶ 48. Magistrate Judge Feldman ruled that amendment was unnecessary, since the original complaint was already broad enough to encompass
Turning to the merits of Plaintiffs' alternate claim for cancellation of Tarntino's mark, the subject statute, 15 U.S.C. § 1052(d), states, in pertinent part:
15 U.S.C.A. § 1052(d) (West 2014) (emphasis added). Under this provision,
Quality Service Group v. LJMJR Corp., 831 F.Supp.2d 705, 712-713 (S.D.N.Y. 2011).
Plaintiffs maintain that cancellation of Tarntino's mark is required under this provision, since TruFoods has priority, and since there is a likelihood of confusion between TruFoods' registered mark and Tarntino's registered mark. Defendant's response to this aspect of Plaintiffs' motion is rather brief, and consists essentially of two arguments. First, Defendant maintains that there is no likelihood of confusion between the two marks, since TruFoods' mark is for "chicken restaurants," while his mark is for pizzerias.
Jim Beam Brands Co. v. Beamish & Crawford Ltd., 937 F.2d 729, 734 (2d Cir. 1991) (quoting 2 J. McCARTHY, TRADEMARKS AND UNFAIR COMPETITION § 32:31, at 737-38 (2d ed.1984), other citation omitted). Consequently, the fact that TruFoods actually uses the Pudgie's mark primarily in connection with "chicken restaurants" is irrelevant. Instead, the Court must compare the services listed in Plaintiffs' and Defendant's registrations, which as already stated, are "restaurant and carry out restaurant services" and "pizza parlors; Restaurant services featuring pizza, pasta and subs," respectively. Based upon such comparison, for purposes of considering whether a likelihood of confusion exists under 15 U.S.C. § 1052(d), the Court finds that the two identical marks are for essentially the same services, which strongly supports a likelihood of confusion. Defendant has not otherwise attempted to show the absence of a likelihood of confusion between his mark and TruFoods' mark.
However, the Court finds that on the current record there is an issue of fact with respect to TruFoods' prior use of the mark. On this point, TruFoods' application indicates that it began using the mark in 1982. "Allegations in a trademark application of a date of use, however, are not evidence of such use." Tzu Wei Chen Food Co., Ltd. v. Chia-Chi Enterprises, Inc., No. 94-1527, 1995 WL 714589 at *2 (Fed.Cir.1995) (table) (citing 37 C.F.R. § 2.122(b)(2) (1994)); see also, 3 J. THOMAS McCARTHY, McCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 20:17 (4th ed., updated Mar. 2014) ("The allegation of a date of first use in a use-based application for registration is not evidence of a date of first use on behalf of an applicant or registrant. This is because an applicant is not required to introduce evidence of the date of first use of the mark or of the date of first use of the specimens submitted with the application. In inter partes proceedings, a trademark registration resulting from a use-based application is proof of use only as of its filing date, not of the date of first use alleged in the application.") (footnotes omitted).
In this action, Plaintiffs initially relied solely on TruFoods' 2001 trademark application as evidence that TruFoods began using the mark in 1982.
Plaintiffs' third cause of action alleges that Defendant committed unfair competition by fraudulently obtaining his registration of the mark and by falsely claiming ownership of the mark, in violation of the Lanham Act, 15 U.S.C. § 1125(a), and common law. Defendant has moved for summary judgment on this claim.
Defendant's first counterclaim alleges that Plaintiff's violated his federally-registered trademark, by doing business in Elmira Heights. However, for the reasons already discussed, Defendant's federal registration is cancelled, because he obtained it by fraud. Consequently, Defendant's first counterclaim is dismissed.
Defendant's fourth counterclaim seeks a declaratory judgment that Defendant is
Defendants second, third and fifth counterclaims assert claims for federal unfair competition, common-law trademark infringement and unfair competition and injury to business reputation under New York General Business Law § 360-l, respectively.
Plaintiffs oppose all of those claims on the grounds that Defendant has never had the exclusive right to use the Pudgie's mark in Elmira Height, since Northside Pudgie's also does business there, and since Plaintiffs have made deliveries there for years. Plaintiffs indicate that although they did not begin advertising that they delivered to Elmira Heights until 2010-2011, they had in fact been selling pizzas there for years, as shown by their delivery records.
Defendant's claims are all based on the contention that as between Pudgie's Horseheads and Pudgie's Southside, the former was the first to use the Pudgie's mark in Elmira Heights. On the other hand, Plaintiffs insist that they "have been delivering into Elmira Heights since at least as early as the closing of the Pudgie's Elmira Heights restaurant in the early 1990's (which is the same time that Defendant Pudgie's and Pudgie's Northside began delivering to Elmira Heights)." Neither party disputes that if Defendant actually had prior rights in Elmira Heights, there would be a likelihood of confusion. However, there are triable issues of fact as to whether Defendant has senior rights to use the Pudgie's mark in Elmira Heights. Consequently, Defendant's motion for summary judgment on his second, third and fifth counterclaims is denied.
Defendant's motion [#51] to exclude late-produced documents is granted in part
Defendant's motion for summary judgment [#32] is granted as to Plaintiffs' first and third causes of action, but is denied as to Plaintiffs' second cause of action. Defendant's motion for summary judgment on his counterclaims is also denied.
Plaintiffs' cross-motion for partial summary judgment [#46] is denied as to their first cause of action, which is being dismissed for lack of standing, but is granted as to their second cause of action, insofar as it alleges fraud, and Defendant's trademark registration is cancelled. Plaintiff's application for summary judgment on its second cause of action, on the alternate basis of prior use and likelihood of confusion, is denied.
Lastly, Defendant filed a motion [#56] to strike Plaintiffs' cross-motion for summary judgment, as untimely filed. On August 28, 2012, the Honorable Jonathan W. Feldman, United States Magistrate Judge, denied that application from the bench. See, Transcript of Appearance [#64] at p. 8. The Clerk of the Court is directed to terminate that motion as denied.
SO ORDERED.
