MPC Franchise, LLC v. Tarntino
MPC Franchise, LLC v. Tarntino
Opinion of the Court
DECISION AND ORDER
INTRODUCTION
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 Plaintiffs 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 El-mira 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, “belonged] 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, Tru-Foods 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 Tru-Foods 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.
Q. In [your] ninth affirmative defense ... you say [about the] plaintiffs — that’s my clients the Clearys and their companies: ‘Plaintiffs’ claims are barred in whole or in part by the doctrine of unclean hands.’ Can you explain factually what you’re saying here?
A. Sure. I believe that the chicken guy, I don’t even know who he is, it’s so funny to me, the chicken guy—
Q. Help me out. I don’t know who you’re talking about.
A. I don’t either. I don’t know who he is. But his entity registered under the United States Patent and Trademark Office is restaurants — [sic]
Q. Are you talking about TruFoods?
A. TruFoods. Whoever he is. So the TruFoods guy can’t grant marks. And to me it sounds like, and I’ve never seen any of this information, nobody has ever showed me anything, but from what they’re saying, is that they received permission or, I guess I don’t know the real word, some sort of a contract with the chicken guy to sell pizza, pasta and subs. And to me that’s not — that’s impossible. There’s nothing that says the chicken guy can grant marks. I looked through all of the USPTO stuff and it never says the chicken guy can give anybody rights.
Q. Okay.
A. So I don’t understand how these guys are running around saying we have the rights to pizza, pasta and subs. Show me. There’s no, I looked, there’s — show me pizza, pasta and submarine sandwiches and this can go away.
Q. And in your sentence, these guys are running around doing this, are you talking about the Clearys or are you talking about the TruFoods guys?
A. The Clearys. The Clearys are claiming the chicken guy gave them pizza, pasta and submarine sandwich rights.
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 Horse-heads 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 al
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:
Describe in detail the factual basis for, and identify any documents relating to, supporting or evidencing your allegation that the Defendant and/or Counterclaim Plaintiff [sic] have not exclusively served any geographical areas outside of Horse-heads, New York, 14845.
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:
Objection. Defendants’ Interrogatory is overly broad, unduly burdensome, oppressive, vague and ambiguous. Additionally, Plaintiffs cannot respond because they do not understand this Interrogatory. Furthermore, the Interrogatory seeks information which is irrelevant and not reasonably calculated to lead to admissible evidence.
(Docket No. [#51-1] at p. 10). Defendant’s Interrogatory No. 4 stated:
Describe in detail, and identify any documents relating to, supporting, or evidencing, the manner in which MPC and/or MPCF has promoted or does promote goods or services in connection with the “PUDGIE’S” mark in the United States including, without limitation, the geographical scope of sales or deliveries of such goods or services, the channels of trade through which such goods or services are sold, and the nature and sophistication of the purchasers of such goods or services.
(Docket No. [# 51-1] at p. 10). On April 9, 2012, Plaintiffs answered the interrogatory as follows:
Plaintiffs used the “PUDGIE’S” mark to promote goods and services, both locally and nationally in all forms of media, including newspapers, radio, televisions, phone books, web/internet, bulk mail, and highway signage.
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 Feld-man, 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 El-mira 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 Plaintiffs 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.
DISCUSSION
Rule 37
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, “[pjursuant 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-
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.
That’s the laughable part here. That’s what’s funny. Okay. Here’s the thing. So let me just — I tried to be clear and I went somewhere wrong. I have no, zero, evidence, proof of any kind of advertising, any phonebooks, never seen one time ever your clients [‘advertisements] come into Elmira Heights. Now, I know they have this point-of-sale [computer] system that’s funny. And I’m sure they’ve snuck deliveries up there as much as they can. The first time — the second I seen the words El-mira Heights on their first flyer ever, your clients received a phone call from me. So please don’t show me receipts. Show me proof. Show me a radio ad. Show me something besides their stupid point-of-sale system that says, oh, we’ve been going there but [Horseheads Pudgie’s] didn’t know.
(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 Elmi-ra Heights.
Rule 56
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’ Standing
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 Tru-Foods’ 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 nonexclusive 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(i).”) (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)(WP), 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
Cancellation of Tarntino’s Registration
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.
Cancellation of Trademark/Service Mark Due to Fraud
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:
Generally, a party alleging that a registration was fraudulently obtained must prove the following elements by clear and convincing evidence: 1. A false representation regarding a material fact[;] 2. The person making the representation knew or should have known that the representation was false (“scienter”)[;] 3. An intention to induce the listener to act or refrain from acting in reliance on the misrepresentation^] 4. Reasonable reliance on the misrepresentation^ and] 5. Damage proximately resulting from such reliance.
Patsy’s Italian Restaurant, Inc. v. Banas, 658 F.3d 254, 270-271 (2d Cir. 2011) (citations omitted).
Since direct evidence of deceptive intent is rarely available, subjective intent to deceive can be inferred from indirect and circumstantial evidence. However, a party alleged to have committed fraud may rely on good faith as a defense: Fraud will not lie if it can be proven that the statement, though false, was made with a reasonable and honest belief that it was true. The alleged fraudulent misstatements must be more than an error or inadvertence, and instead must show a deliberate attempt to mislead the USPTO. Indeed, fraud on the USPTO implies some intentional deceitful practice or act designed to obtain something. A party moving to cancel a trademark based on fraud on the USPTO bears the burden to prove the fraud by clear and convincing evidence.
* * *
The party alleging fraud carries a heavy burden of proof, and, in deciding whether fraud has been committed, the Court has no room for speculation, inference or surmise and, obviously, any doubt must be resolved against the charging party.
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 Tarnti-no’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 asso-ciátion[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 Hor-seheads 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, Tarn-tino 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]lain-tiff 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 [plaintiffs] 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 can-celled based on fraud pursuant to 15 U.S.C. § 1064.
Cancellation of Service Mark Due to Likelihood of Confusion
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 Tarnti-no’s mark, the subject statute, 15 U.S.C. § 1052(d), states, in pertinent part:
No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it [cjonsists of or comprises a mark which so resembles a mark registered in the Patent and Trademark Office, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceived]
15 U.S.C.A. § 1052(d) (West 2014) (emphasis added). Under this provision,
cancellation of a registration for a trademark is appropriate if there is a likelihood of confusion between that trademark and another mark registered in the PTO. 15 U.S.C. § 1052(d). To determine whether there is a likelihood of confusion, a court must balance the eight factors set forth by the Second Circuit in Polaroid Corporation v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961), which are: (1) strength of the trademark; (2) similarity of the marks; (3) proximity of the products and their competitiveness with one another; (4) evidence that the senior user may “bridge the gap” by developing a product for sale in the market of the alleged infringer’s product; (5) evidence of actual consumer confusion; (6) evidence that the imitative mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of consumers in the relevant market. Star Indus., Inc. v. Bacardi & Co., Ltd., 412 F.3d 373, 384 (2d Cir. 2005).
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 Tru-Foods’ mark is for “chicken restaurants,” while his mark is for pizzerias.
In a proceeding seeking the cancellation of a trademark or opposing an application for registration, “likelihood of confusion' is determined only as to the regis-trability of the applicant’s mark exactly as shown in the application and only as to the goods listed, regardless of actual usage. Similarly, if [the party contesting the registration] relies on its own federal registration, its rights are determined as of the format and goods in that registration, regardless of the reality of actual usage.
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’ Claim for Unfair Competition
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 Counterclaim for Federal Trademark Infringement
Defendant’s first counterclaim alleges that Plaintiffs violated his federally-registered trademark, by doing business in El-mira 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 Counterclaim for a Declaration of “Non-Infringement”
Defendant’s fourth counterclaim seeks a declaratory judgment that Defendant is
Defendant’s Remaining Counterclaims
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 — Z, 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 Hor-seheads 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.
CONCLUSION
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. Plaintiffs 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.
. See, Docket No. [# 46-7] at p. 42.
. See, Docket No. [# 46-7] at p. 42.
. See, Docket No. [# 46-7] at p. 42.
. See, e.g., Tarntino Aff. [# 32-1] at ¶¶ 4-5.
. See also, Denison Mattress Factory v. Spring-Air Co., 308 F.2d 403, 409 (5th Cir. 1962) ("Of course, the licensee acquires only the right to a limited use of the trademark and the control, right and title to the product remains in the licensor.”).
. See, Docket No. [# 33-7] at p. 4.
. Defendant's Rule 56.1 Statement [#32-2] at ¶ 17. There is no indication in the record that when M.P. Cleary, Inc. began using the Pudgie's mark in March 1990, it was pursu
. In 1991, PPFC purchased Michael Cleary’s stock in PPFC. However, it appears from the record that Michael Cleary’s ownership of the Southside Pudgie’s and Mansfield, Pennsylvania, Pudgie's pre-dated the formation of PPFC.
. See, Docket No. [# 46-7] at p. 38, Tarnti-no Dep. at p. 50 (Brent Tarntino testified at deposition that his mother’s franchise agreement ended on July 15, 1993). At oral argument, Tarntino’s attorney argued that Bernadette’s franchise agreement actually ended after only five years, in 1988. See, Docket No. [# 68], transcript of oral argument, at pp. 21-22. In that regard, it appears that Tarntino is attempting to rely on the fact that the franchise agreement between PPFC and Bernadette indicated that the initial five-year period of the agreement would end in 1988. See, Def. Opposing Stmt, of Facts [# 57-1] at ¶ 7. However, that contention is contradicted by Tarntino’s deposition testimony, and is not otherwise supported in the record. For example, while Defendant's Opposing Stmt, of Facts contends that "no new franchising agreement was 'executed and issued’ as was required by ¶ 2 of the Agreement,” he cites no evidence in the record for support. Docket No. [# 57-1] at ¶ 7. Regardless, it is well settled that a party may not attempt to avoid summary judgment by submitting proof that contradicts his earlier sworn testimony. See, e.g., Hayes v. New York City Dept. of Corrections, 84 F.3d 614, 619 (2d Cir. 1996) ("[A] party may not create an issue of fact by submitting an affidavit in opposition to a summary judgment motion that, by omission or addition, contradicts the affiant’s previous deposition testimony.”). Moreover, even assuming that Tarntino’s deposition testimony was actually incorrect as to the date the franchise agreement ended, which has not been shown, his testimony nevertheless shows that he “believed” as of the date he applied for the trademark registration that the franchise agreement remained in place until 1993.
. David Cleary testified that PPFC dissolved in the “early 1990s.” Docket No. [# 33-2] at p. 11. The record indicates that PPFC was still in existence at least at late as April 19, 1991. See, Docket No. [# 34] at p. 6, Docket No. [# 58] at p. 5 (The date that PPFC repurchased Michael P. Cleary, Sr.’s shares of PPFC stock). The online records of the New York Secretary of State indicate that PPFC was dissolved on September 29, 1993. see, http://appext20.dos.ny.gov/corp_public/ CORPSEARCH.ENTITY_INFORMATION?p_ nameid=387279&p_corpid=329870&p_ entity_name=pudgie'% 20pizza% 20franchis-ing&p_name_type=% 25&_search_type=BE-GINS&p_srch_results_page=0. The Court takes judicial notice of the Secretary of State’s records.
. At the latest, MP Cleary began using the Pudgie’s mark at the Southside Pudgie’s in 1990. Defendant did not begin using the
. See, Plaintiffs'/Counterclaim Defendants' Stmt, of Facts [# 46-2] at ¶ 9, which the opposing party admitted, see, Docket No. [# 57-1] at ¶ 9.)
. See, Tarntino Aff. [# 32-1] at ¶ 7 ("[Another Pudgie’s pizza parlor — the location known as 'Northside Pudgie's,’ — also delivers and advertises to Elmira Heights.”).
. See, Tarntino Aff. [# 32-1] at ¶ ¶ 5-7.
. The record indicates that for several years, Horseheads Pudgie’s and Southside Pudgie’s placed their advertisements together, within a single advertisement. Typically, in those advertisements, Horseheads Pudgie's indicated that it delivered to "Horseheads, Big Flats & Elmira Heights (Limited Areas)”, while Southside Pudgie’s indicated that it delivered to "Southside, Pine City, West Elmira & Elmi-ra Northside.” See, e.g., Docket No. [# 32-1] at p. 25; see also, Docket No. [# 35] at p. 4.
. Defendant/Counterclaim Plaintiffs indicate that Plaintiffs/Counterclaim Defendants began advertising that Southside Pudgie's delivered to Elmira Heights in 2011. See, e.g., Docket No. [# 57-1] at ¶ 27. However, the record indicates that Plaintiffs/Counterclaim Defendants actually began such advertisements earlier than 2011. For example, the record contains a copy of an advertisement, containing coupons, for Southside Pudgie's, in which the coupons indicate that they expire on "11-30-10.” See, Docket No. [# 36] at p. 3.
. Bui see, Docket No. [# 49] at p. 24 (Robert Cleary indicated that between 2000 and 2006, approximately, Plaintiffs’ website indicated that they made deliveries to Elmira Heights).
. See, Docket No. [# 32-1] at p. 25, yellow pages advertisement for both the Horseheads and Southside Pudgie’s, with the caption at top, “Elmira’s First & Finest Pizzeria & Sub Shop Since 1963.” (emphasis added, showing that the ad represented the locations to be a "pizzeria & sub shop,” singular).
. Id.
. Although it does not seem particularly relevant, the record suggests that Plaintiffs decided to obtain a new registration following
.The Court may take judicial notice of the PTO’s website. See, Rockland Exposition, Inc. v. Alliance of Automotive Service Providers of New Jersey, 894 F.Supp.2d 288, 301, n. 6 (S.D.N.Y. 2012) ("Here, the USPTO Trademark Electronic Search System (“TESS”) indicates that AASP submitted the application described above, and therefore, the service mark application is part of the USPTO public record.”).
. See, Docket No. [#46-8] at p. 14. Contrary to the suggestion of Brent Tarntino at his deposition, Treachers’ trademark registration, number 2565298, was not limited to a "chicken restaurant.”
. See, http://assignments.uspto.gov/ assignments/q?db=tm&rno= 1543938
. See, http://assignments.uspto.gov/ assignments/q?db=tm&rno=1543938
. See, http://assignments.uspto.gov/ assignments/q?db=tm&rno=1543938
. See, http://assignments.uspto.gov/ assignments/q?db=tm&rno= 1543938
. See, http://assignments.uspto.gov/ assignments/q?db=tm&rno=1543938
. See, Docket No. [# 49] at p. 12.
. See, http://assignments.uspto.gov/ assignments/q?db=tm&rno=1543938
. See, Docket No. [# 46-8] at p. 15.
. See, Docket No. [# 46-8] at p. 18.
. See, Docket No. [# 46-7] at p. 28.
. Defendant indicates that Plaintiffs began advertising that Southside Pudgie’s delivered to Elmira Heights in 2011. See, e.g., Docket No. [# 57-1] at ¶ 27. However, the record indicates that Plaintiffs/Counterclaim Defendants actually began such advertisements earlier than 2011. For example, the record contains a copy of an advertisement, containing coupons, for Southside Pudgie’s, in which the coupons indicate that they expire on "11 — 30— 10.” See, Docket No. [# 36] at p. 3.
.See, Docket No. [# 33-1], Brent Tarntino Dep. at p. 57 ("[I] call[ed] Rob the second I seen it.”).
. See, Docket No. [# 49] at p. 24 ("[W]e have been delivering there when there was a Heights store and you guys came in sometime after the Heights was closed.”). This information is included not for the truth of Robert Cleary’s statement, but to show the existence and nature of the dispute between the parties.
. See, Docket No. [# 46-13] at p. 28.
. See, Docket No. [# 46-13] at p. 6.
. See, Docket No. [# 46-13] at p. 6.
. See, Docket No. [# 46-13] at p. 10.
. See, Docket No. [# 46-7] at p. 30.
. See, Docket No. [# 46-7] at p. 30.
. See, Docket No. [# 46-7] at p. 30. Moreover, when Tarntino was asked if he saw any difference between his personal use of the mark and his family's corporation's use of the mark, he responded, "Not really.” See, Docket No. [# 46-7] at p. 28. Tarntino also claimed that he did not know whether he and
. See, Docket No. [# 46-7] at p. 27.
. See, Docket Nos. [# 46-2] at HV 34-36, [# 57-1] at ¶¶ 34-36. On this point, Tarntino denies that the record indicates a connection between his decision to obtain the registration and his decision to stop working at the Horse-heads Pudgie's and pursue franchising. See, Docket No. [# 57-1] at ¶ 34. However, Tarn-tino’s deposition testimony clearly indicates such a connection. See, e.g., Docket No. [# 46-7] at p. 30, Tarntino Deposition at pp. 16-20; see also id. at p. 17 ("Q. What caused you to change, to stop working at that business? A. Well, I plan on franchising other Pudgie’s.”); id. at p. 20 ("Q. Did you register the trademark Pudgie’s in July 2010 with the goal of opening up this franchise company that you’re planning to open? A. Absolutely.”).
. See, Docket No. [# 46-7] at p. 20. For example, Daniel Miller, a franchisee of MPC Franchise, LLC, who was operating a Pudgie’s restaurant, indicated that on March 28, 2011, Tarntino called him and informed him of “his recent ownership of the Pudgie's name as of mid February 2011.” Id..; see also, Docket No. [# 46-13] at p. 22 (email from Daniel Miller to Plaintiffs describing his telephone conversation with Tarntino).
. Id.
. Plaintiff’s Complaint expressly sets forth only the former basis for cancellation, not the latter. Plaintiffs subsequently moved to amend the Complaint to add, as a grounds for cancellation, that Tarntino’s mark is confusingly similar to TruFoods’ mark. However, Magistrate Judge Feldman found that the motion was moot, since the parties agreed that the Complaint, as already drafted, was broad enough to encompass the latter basis for cancellation. See, Docket No. [# 64], Transcript, at pp. 3-8.
. Except where otherwise necessary, for simplicity, the Court will hereinafter refer to "Defendant/Counterclaim Plaintiffs” as simply "Defendant.”
. The First Counterclaim actually refers to "Counterclaim Plaintiffs' federally registered trademark,” which makes it sound as if Brent Tarntino and his siblings, and/or their corporation, Pudgie’s Pizza Corporation-Horse-heads, Inc., own the '745 mark. However, that is inaccurate, and disconcerting, since Brent Tarntino in his individual capacity is the registrant of the '745 registration, not Pudgie’s Pizza Corporatitin-Horseheads, Inc., and one of Plaintiff’s contentions in this action is that Brent Tarntino defrauded the USPTO, in part, by applying for a trademark in his individual capacity.
. See Brent Tarntino Affidavit ¶ 7, indicating that Horseheads Pudgie’s and Northside Pudgie’s had a “long-standing co-existence agreement,” pursuant to which both shops delivered food to Elmira Heights.
. See, e.g., Answer to Counterclaims [# 13] at ¶ 95.
. Docket No. [#46-7] atp. 15.
. Docket No. [# 46-7] at p. 14.
. Docket No. [# 46-7] at p. 15.
. The use of the terms "exclusively .served” seems odd, since Defendant/Counterclaim Plaintiffs already admitted that they did not exclusively serve Elmira Heights. That is, they contend that they and the Northside Pudgie’s both made deliveries to Elmira Heights.
. See, Docket No. [# 51-1] at p. 36.
. Docket No. [# 54-1] at p. 10.
. Docket No. [# 54-1] at p. 12.
. Docket No. [# 64] at pp. 7-8.
. Docket No. [# 51-1] at p. 45.
. The Notice of Motion [# 32] is incorrectly labeled as a “Notice of Motion to Compel.’’
. Specifically, Tarntino is referring to his mother’s use of the mark in connection with her franchise agreement with PPFC.
. Dopket No. [# 43].
. See, Docket No. [# 68], transcript of oral argument at p. 28.
. See, Docket No. [# 51-2] at p. 2.
. Nor did Defendant make his Rule 37(c) motion returnable before Magistrate Judge Feldman, even though it was clearly the intention of this Court's Referral Order [# 9] that motions concerning discovery disputes be made returnable before the Magistrate Judge. See, Defendant’s Notice of Motion, Docket No. [# 51], If Defendant had done so, this preclusion issue might have been addressed at the same time as the other similar matters that Judge Feldman addressed on August 28, 2012. See, Docket No. [# 64], Transcript of appearance on August 28, 2012.
. Docket No. [# 46-7] at p. 37, Tarntino Dep. at pp. 42-44.
. While it may be true that prior to this lawsuit the Clearys were aware that Brent Tarntino was angry that Southside Pudgie’s had begun including Elmira Heights in its advertisements, see, Defendant’s Reply Brief [# 55] at p. 2, such fact does not suggest that Clearys knew that Defendant’s references to ‘‘geographical areas that have been served only by the Counterclaim Plaintiffs,” in his pleading and discovery demands, meant El-mira Heights. To the contrary, the record indicates that Elmira Heights was never “served only” by Horseheads Pudgie’s. Specifically, Defendant agrees that, at the very least, Northside Pudgie’s was also making deliveries to Elmira Heights. Nor is there any indication in the record that prior to this lawsuit, Tarntino claimed to have the exclusive rights to used the Pudgie’s name in Elmi-ra Heights. Consequently, in the Court's view there would have been no reason for Plaintiffs to think that "geographical areas that have been served only by the Counterclaim Plaintiffs” meant Elmira Heights.
. Defendant correctly states that the documents are important to Plaintiffs' case, but incorrectly suggests that such fact favors preclusion. See, Def. Memo in Support of Motion to Preclude [# 51-2] at pp. 8-9. In Patterson v. Balsamico, 440 F.3d 104, 117-118 (2d Cir. 2006), the Second Circuit indicated that if the evidence was important to the party opposing preclusion, such fact would weight against preclusion.
. See, e.g., Docket No. [# 46-9] at p. 9. (sale dated 12/07/01).
. See, Docket No. [# 49] at p. 24, email dated April 2, 2010 from Robert Cleary ("We have always delivered to part of the heights ... The fact of the matter is three Pudgie's
. See, Def. Reply Memo of Law [# 55] at pp. 6-7.
. See, Docket No. [# 68], transcript of oral argument at p. 17 ("The Court: So, you’re saying your problem with the Clearys is their advertising, you don’t care if people [in Elmi-ra Heights] call [Southside Pudgie’s to order food]? A. That's correct.”).
. See, Docket No. [# 68], transcript of oral argument at pp. 27-28.
. See, Docket No. [#46-8] at pp. 16-20, [# 34-1] at pp. 2-6. The licensing agreement has other features that illustrate TruFoods'
. MPC also lacks standing, since MP Cleary could not endow MPC Franchise with any greater rights than it received from TruFoods.
. In that regard, the Second Circuit in Federal Treasury Enterprise Sojuzplodoimport observed that it had already rejected an analogous argument in Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27, 32, n. 3 (2d Cir. 1982), wherein a licensee, who did not otherwise have standing under the Copyright Law, unsuccessfully argued that it had standing to sue pursuant to its licensing agreement with the copyright owner. See, Federal Treasury Enterprise Sojuzplodoimport, 726 F.3d at 83-84.
. PI. Memo of Law [#46-4] at pp. 15, 18.
. Tarntino listed himself as the “applicant” and “owner” of the mark: “Brent M. Tarnti-no, a citizen of the United States, having an address of 241 Sawdey Road, Horseheads, New York 14845, United States.” See, Docket No. [# 49] at pp. 17-23. The application further indicates that the entity applying for the registration is an "individual.” Id. at p. 18. Tarntino’s application makes no mention of Pudgie’s Pizza Corporation-Horseheads, Inc., the entity which actually owns the Hor-seheads Pudgie's.
. Brent Tarntino, in his individual capacity, never used the mark, and therefore could not have rights to the mark that were superior to the rights of Pudgie’s Pizza Corporation-Hor-seheads, Inc.
. See, Def. Memo of Law [# 32-3] at pp. 6-7.
. Def. Memo of Law [# 32-3] at p. 7.
. Def. Memo of Law [#32-3] at pp. 11-12.
. See, Def. Memo of Law [# 32-3] at pp. 4-7.
. See, Def. Memo of Law [# 57] at pp. 7-8 ("Despite the Plaintiffs’ misguided arguments, Tarntino did not state in his trademark application that he was the only entity with the right to use the Pudgie’s mark, and, more importantly, he was not required to so state. Instead, Tarntino was only required to declare in his trademark application that, to the best of his knowledge and belief, no other entity had the right to use the mark in commerce in such a way as to cause confusion, mistake or to deceive.”).
. See, Def. Memo of Law [# 32-3] at p. 16 (”[T]heir use of the Pudgie’s mark is likely to cause confusion.... [I]t is undisputed that several of the Polaroid factors weigh strongly in favor of confusion. First, the mark being used by the parties are identical and used in connection with identical goods and services. Second, there have been recent instances of actual confusion. Third, purchasers of pizza products such as those sold by the parties are ordinary, rather than sophisticated, consumers.”). The record indicates that Tarntino was disputing Plaintiffs’ right to advertise in Elmira Heights as early as April 2010, which was several months before he filed his trademark application in July 2010. See, Docket Nos. [# 49] at pp. 17, 24.
. Id.
. For example, Defendant argues: "Tarntino has testified that he has a good faith belief that TruFoods does not have the right to grant use of the Pudgie’s mark for pizza, pasta and subs, and therefore MFC and PMCF could not have pizza, pasta and submarine sandwich rights.” Def. Memo of Law [#32-3] at p. 6 (emphasis added). Tarntino makes no attempt to explain why, even if TruFoods did not have the right to grant rights with regard to pizza, pasta and subs, his cousins would nevertheless not have common law rights to use the mark at least equal to his, when they had been using the mark even longer than he had been.
. See, Def. Memo of Law [# 32-3] at p. 3 ("Plaintiffs have developed no evidence [disproving] that the two marks can co-exist or that consumers would be confused by the separate uses of the mark for different types of restaurants by Tarntino and TruFoods.”). Defendant admits that there is an obvious likelihood of confusion between Horseheads Pudgie’s use of the mark and Plaintiffs' use of the mark. See, Def. Memo of Law [# 32-3] at pp. 16-17 ("[I]n light of the identical nature of the marks, the fact that the parties are in direct competition in Elmira Heights, the lack of consumer sophistication, and the instances of actual confusion, it is clear that a fair-minded trier of fact could only come to the conclusion that there is a likelihood of confusion.”).
. See, Def. Memo of Law [# 57] at pp. 12-14; id. at p. 13 ("While Plaintiffs point to the 2001 Arthur Treacher’s Trademark Registration as evidence of use of the [mark] beginning in 1982, the earliest date that the regis
. See, Docket No. [# 46-2] at ¶ 16.
. See, Docket No. [# 57-rl] at ¶ 16. In one of their submissions [# 63], Plaintiffs contend that Defendant “has produced no evidence that calls into question the date of first use on TruFoods' trademark registration.” Id. at p.
. Docket No. [# 63-2] at ¶ 3.
. See, Def. Memo of Law, Docket No. [# 43-3] at pp. 12-14.
. See, id.
. Plaintiffs' memo of law [# 46-4] jumps from explaining why Plaintiffs are entitled to partial summary judgment on their first and second causes of action to explaining why Defendant is not entitled to summary judgment on any of his counterclaims. It does not address Defendant's motion for summary judgment as to Plaintiffs' third cause of action, on which they did not move for partial summary judgment.
.In Defendant’s reply memo of law [# 50], he correctly observed that "Plaintiffs [had] not even addressfed] the common law unfair competition claim in their response.” Id. at p. 7. Despite being alerted to that fact, Plaintiffs still did not address that claim in their reply. Consequently, it appears to the Court that Plaintiffs intentionally chose not to address that claim, and instead focused their attention on their second cause of action, for cancellation, which they viewed as their most important claim. Indeed, the bulk of the parties’ submissions is concerned with the cancellation claim, while the other claims are given relatively little attention or discussion.
.Some of Defendant's arguments on these claims are based on the existence of his federal registration. See, e.g., Def. Memo of Law [#32-3] at p. 18. However, since the Court is cancelling Defendant's registration, those particular arguments are now moot.
. Answer with Counterclaims [# 8] at ¶ 105.
. See, Def. Memo of Law [# 32-3] at p. 17.
Reference
- Full Case Name
- MPC FRANCHISE, LLC, and MP Cleary, Inc. v. Brent TARNTINO, Defendant Brent Tarntino and Pudgie's Pizza Corporation-Horseheads, Inc., Counterclaim v. MPC Franchise, LLC and MP Cleary, Inc., Counterclaim
- Cited By
- 13 cases
- Status
- Published