GREENBERG, Circuit Judge.
This matter comes on before this Court on an appeal from a summary judgment in favor of appellees, Benihana, Inc., and its subsidiary, Noodle Time Inc., in an action brought against them by appellant, Benihana of Tokyo, Inc.
We only need summarize the facts of this case. Rocky Aoki founded appellant Benihana of Tokyo, Inc. in 1963. The success of the Benihana undertaking led appellant to open numerous Benihana restaurants. Though the parties have set forth the Benihana corporate history at length in their briefs, it is sufficient for our purposes to indicate that the Benihana interests subsequently incorporated appellee Benihana, Inc. and that appellant and appellee entered into an "Amended and Restated Agreement and Plan of Reorganization" ("ARA") governing their relationship. A dispute over the application and meaning of the ARA is at the heart of this case.
The ARA provided for the sale, transfer, and assignment of restaurants and related assets, including trademarks, from appellant to appellee or to its wholly owned subsidiary within a geographical area that the ARA called and to which we refer as the "Territory." The trademarks were listed on a schedule in the ARA and included "BENIHANA" and an accompanying flower design. The ARA specified that appellee's Territory was "the United States (including its territories and possessions), Central America, South America and the islands of the Caribbean [S]ea," a largely Western Hemisphere area. But appellant retained the ownership of the Benihana trademarks in the rest of the world. Significantly, appellant and appellee agreed that neither party would make any use of the trademarks that reasonably could be expected to diminish the trademarks' value or usefulness to the other party. Specifically, the ARA provided:
J.A. at 93.
On or about April 23, 2010, appellee filed an application with the World Intellectual Property Organization ("WIPO") seeking to register the BENIHANA trademark in Iceland, Iran, Monaco, Singapore, Ukraine, Vietnam, and Zambia, countries outside of its Territory. On July 5, 2010, appellee followed this initial application with a second WIPO application seeking to register the Benihana flower design trademark in several countries outside its Territory, including Iceland, Iran, Monaco, Ukraine, and Zambia.
Appellant objected to these trademark registration applications and consequently filed this action against appellee on December 3, 2010. In response, on January 28, 2011, appellee submitted a "Request for the Recording of a Renunciation" with the WIPO, renouncing registration of the Benihana flower design trademark in countries outside of its Territory. In February 2011, appellee filed a second "Request for the Recording of a Renunciation" with the WIPO, similarly renouncing registration of the BENIHANA trademark in countries outside of its Territory.
In addition to formally renouncing the applications for the registrations, appellee has filed an affidavit in this action executed by its attorney stating that it "will not pursue international registration of trademark rights in the countries located in [appellant's] [t]erritory as defined in the ARA." J.A. at 277. In a March 2014 email exchange between the parties' attorneys, appellee confirmed that it would not file international, national, or other applications in an attempt to register trademarks in the area reserved to appellant in the ARA.
As we have indicated, on December 3, 2010, appellant filed its complaint in this action in the District Court alleging that appellee breached the ARA by seeking to register the trademarks with the WIPO.
On January 9, 2012, appellant filed a second amended complaint alleging breach of contract, conversion, and false designation of origin, and again seeking declaratory relief. On February 14, 2014, appellee moved for summary judgment on all of appellant's claims, and by an opinion and order entered on July 22, 2014, followed by a judgment entered on July 23, 2014, the District Court granted appellee's motion. In reaching its result the Court indicated that appellee's filing of the applications for registration was not a use within the meaning of the ARA and that appellant had not shown that appellee had damaged it within the meaning of the ARA. Appellant has filed a timely appeal.
Appellant is a New York corporation with its principal place of business in New York City. Benihana, Inc. is a Delaware corporation and its subsidiary, Noodle Time, Inc., is a Florida corporation, but each appellee has its principal place of business in Florida. The District Court had jurisdiction under 28 U.S.C. §§ 1331, 1332, and 1338. We have jurisdiction under 28 U.S.C. § 1291.
Our standard of review of the District Court's grant of summary judgment is plenary.
We will affirm an order for summary judgment in a breach of contract action turning on the meaning of the contract when the contract is unambiguous and the moving party was entitled to judgment as a matter of law.
Under New York law, which the parties agree is applicable, an action for breach of contract requires proof of (1) a contract, (2) performance of the contract by one party, (3) breach by the other party, and (4) damages.
Where there is a dispute over the meaning of a contract, "the threshold question is whether the contract is ambiguous."
After our consideration of this matter, we are unwilling to hold that appellee did not use the trademarks when it filed the registration applications with the WIPO. Indeed, we think that a reasonable person might conclude that an entity attempting to register a trademark is using it. After all, if you base an application on something, here trademarks, are you not using the thing on which you base your application? Consequently, though the District Court thought otherwise, we are not certain that the appellee did not use the trademarks when it filed its applications, and, accordingly, will not join in its conclusion on this point. But neither do we reject the District Court's conclusion that filing an application for registration of a trademark is not a use within the meaning of the ARA. Instead, we do not decide whether the filing of an application for registration of a trademark is a use of the trademark as we have no need to decide this issue.
The ARA only prohibits a party's use of trademarks without consent of the other party outside of the user's territory if the use "could reasonably be expected to reduce the value or usefulness of the Trademarks to the other party." As the District Court observed, appellant has not demonstrated how appellee's applications to register the trademarks had that effect, particularly when it is remembered that appellee abandoned the registration processes before their completion. Appellant certainly has had the opportunity to make this showing, but even on this appeal at oral argument, when we raised the reduction in value or usefulness question, appellant was unable to explain how appellee's actions reduced the value or usefulness to it of its interest in the trademarks or otherwise damaged it. For example, appellant did not claim that it could not open a restaurant or lost customers in restaurants outside of appellee's Territory attributable to appellee's filing of the applications for registration of trademarks outside of its Territory.
We realize that appellant argues that it should be entitled at least to nominal damages because New York law ordinarily allows an award of nominal damages against a party breaching a contract even if the breach has not caused the other party to suffer actual damage.
Appellant requested that the District Court issue a declaratory judgment indicating that the ARA only transferred trademarks to appellee within the area of appellee's Territory. We agree with that Court that the issuance of a declaratory judgment was not warranted because there is no current conflict between the parties with respect to the places where the parties may register the ARA trademarks. The absence of a dispute is obvious because appellee has withdrawn its trademark registration applications and expressly has stated that it will not file trademark registration applications in the area reserved to appellant. Moreover, appellant is not suggesting that it intends to file an application for a trademark registration in appellee's Territory.
The Declaratory Judgment Act, 28 U.S.C. § 2201, "creates a remedy by which federal courts may declare the rights and other legal relations of any interested party seeking such a declaration when there is a case of actual controversy."
For the foregoing reasons, we will affirm the District Court's order of July 22, 2014, and judgment of July 23, 2014.