Vincent's of Mott Street, Inc. v. Quadami, Inc. , 423 F. App'x 46 ( 2011 )

10-3154-cv
Vincent’s of Mott Street, Inc. v. Quadami, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 24th day of May, two thousand eleven.
5
6 PRESENT: RICHARD C. WESLEY,
7 GERARD E. LYNCH,
8 DENNY CHIN,
9 Circuit Judges.
10
11
12
13 VINCENT’S OF MOTT STREET, INC., VINCENT GENEROSO,
14
15 Plaintiffs-Counter-Defendants-Appellants,
16
17 -v.- 10-3154-cv
18
19 QUADAMI, INC.,
20
21 Defendant-Counter-Claimant-Appellee.
22
23
24 FOR APPELLANTS: RICHARD J. MAGID, Whiteford, Taylor &
25 Preston, LLP, Baltimore, MD (Steven
26 Edward Tiller, Whiteford, Taylor &
27 Preston, LLP, Baltimore, MD; Jean Marie
28 Graziano, Law Office of Jean Marie
29 Graziano, Brooklyn, NY, on the brief).
30
31 FOR APPELLEE: CHARLES PALELLA, Kurzman Karelsen &
32 Frank, LLP, New York, NY.
33
1 Plaintiffs-Counter-Defendants-Appellants Vincent’s of
2 Mott Street, Inc. and Vincent Generoso (collectively
3 “Appellants”) appeal from a judgment entered October 7,
4 2009, in the United States District Court for the Eastern
5 District of New York (Townes, J.), which granted summary
6 judgment in favor of Defendant-Counter-Claimant-Appellee
7 Quadami, Inc. (“Appellee”), dismissing all of Appellants’
8 claims and ordering the cancellation of Appellants’
9 registration of two service marks.
10 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
11 AND DECREED that the judgment of the district is AFFIRMED.
12 BACKGROUND
13 Because we write for the parties, who are familiar with
14 the facts and procedural history, we recount only those
15 facts necessary for our decision.
16 In 1904, members of the Siano family opened the
17 restaurant Vincent’s Clam Bar at 119 Mott Street in Little
18 Italy, New York (the “Mott Street Restaurant”). The Sianos
19 owned and operated the Mott Street Restaurant until 1979,
20 when they sold the restaurant, along with the use of the
21 name “Vincent’s Clam Bar” and the reputation and good will
2
1 associated with it, to Andrew DeLillo.1 Prior to 1985,
2 DeLillo opened additional restaurants outside of Manhattan
3 under the name Vincent’s Clam Bar including a restaurant
4 located in Carle Place, Long Island (the “Carle Place
5 Restaurant”).
6 In 1985, the Mott Street Restaurant filed for Chapter
7 11 bankruptcy. In a bankruptcy sale, DeLillo sold the Mott
8 Street Restaurant to a group of purchasers including
9 Appellants. The sale was governed by the terms of a
10 bankruptcy court-approved stipulation (the “Stipulation”)
11 entered into by DeLillo and Appellants. Three clauses of
12 the Stipulation — the “Names Clause,” the “Non-Affiliation
13 Clause,” and the “Ownership Clause” — are relevant to this
14 appeal. First, Appellants agreed that they “shall use and
15 operate [the Mott Street Restaurant] under the names
16 VINCENT’S CLAM BAR, VINCENT’S CLAM BAR OF MOTT AND HESTER
17 STREETS, and/or MOTT AND HESTER RESTAURANT” (collectively
18 “Vincent’s Marks”). Second, Appellants agreed not to
19 represent that they are affiliated or connected with any
1
For purposes of this appeal, “Andrew DeLillo” or “DeLillo”
refers to DeLillo both in his personal capacity and as principal of
his corporate interests. We also use “DeLillo” to refer to those
corporate entities through which DeLillo engaged in the various
transactions relevant to this appeal.
3
1 “other business” known by either the Vincent’s Marks or
2 “facsimiles thereof.” Finally, Appellants agreed and
3 acknowledged that Andrew DeLillo was the sole owner of the
4 Vincent’s Marks and that he retained the sole and exclusive
5 right to use the marks. J.A. at 201–02.
6 Appellants state that they began using the name “The
7 Original Vincent’s Clam Bar” shortly after taking over the
8 Mott Street Restaurant in 1985, with “Established 1904” and
9 “From Little Italy” written next to the name in smaller
10 print. By 1989, Appellants had dropped the reference to
11 “clam bar” and had begun to identify the Mott Street
12 Restaurant as “The Original Vincent’s Established 1904”
13 (“Original Vincent’s Mark”).
14 Appellee purchased the Carle Place Restaurant from
15 DeLillo in 1983 and the rights to the “Vincent’s Clam Bar”
16 name from DeLillo in 1992. Through a purchase agreement and
17 assignment of trademark, DeLillo sold to Appellee all
18 rights, title, interests and claims in the “Vincent’s Clam
19 Bar” and “Vincent’s Clam Bar of Mott and Hester Streets”
20 names and “any all [sic] variations thereto and derivatives
21 thereof,” including “all trademarks, names, service marks”
22 and the good will associated with the names. Id. at
4
1 358–59.2 Additionally, as DeLillo’s successor-in-interest,
2 Appellee became subject to the terms of the Stipulation.3
3 At an unspecified point, but no later than February 1993,
4 Appellee began using the name “The Original Vincent’s
5 Established 1904” at the Carle Place Restaurant.
6 On February 11, 1993, Appellee filed an application
7 with the United States Patent and Trademark Office (“PTO”)
8 to register for restaurant services the marks THE ORIGINAL
2
The Purchase Agreement contains the statement “[i]t is the
intention of this Agreement that any and all rights transferred to
Andrew DeLillo, Sr. pursuant to the terms of the 1979 Agreement be
hereby transferred by him to the Transferee [Appellee] pursuant to the
terms of this Agreement.” J.A. at 357. Furthermore:
Simultaneously and with the execution and delivery of
this Agreement the [sellers/assigness] do hereby
convey, sell, transfer, assign, set over and deliver
to Transferee [Appellee], and its successor and
assigns, all of their respective rights (including the
right to sue for past infringement), title, interests
and claims in, to, relating to or arising under (i)
the names “Vincent’s Clam Bar of Mott and Hester
Streets,” and any all [sic] variations thereto and
derivatives thereof, together with all trademarks,
tradenames, service marks, copyrights, registrations
thereof and applications for registration therefor
(“the Trademarks”), (ii) the good will associated
therewith (“the Goodwill”), and (iii) the recipes for
the sauce and the shrimpballs currently being served
at Vincent’s Clam Bar of Mott & Hester Streets, 119
Mott Street, New York, New York and Vincent’s Clam Bar
of Mott & Hester Streets, 187 Old Country Road, Carle
Place, New York 11514 (“the Recipes”), for the
purchase price set forth in Paragraph 2 hereof.
Id. at 358–59.
3
“This stipulation will bind and inure to the heirs, assigns,
representatives, successors in interest and/or lessees of the parties
hereto.” J.A. at 206.
5
1 VINCENT’S ESTABLISHED 1904 and VINCENT’S CLAM BAR.
2 Appellants opposed Appellee’s application, and in 2002 the
3 Trademark Trial and Appeal Board (the “Trademark Board” or
4 “TTAB”) denied Appellee’s application.
5 On July 31, 2001, before the Trademark Board issued its
6 decision, Appellant Generoso filed an application with the
7 PTO to register the service marks THE ORIGINAL VINCENT’S
8 ESTABLISHED 1904 and VINCENT’S SINCE 1904 for restaurant
9 services. Generoso did not submit the Stipulation to the
10 PTO, nor did he disclose the ongoing PTO litigation
11 regarding Appellee’s attempted registration of similar
12 marks. The PTO granted Generoso’s application on February
13 8, 2005.
14 Appellants allege that the Carle Place Restaurant now
15 uses the name “The Original Vincent’s Clam Bar Established
16 1904.” Based on their registration of the Original
17 Vincent’s Mark, Appellants initiated the present action,
18 raising, among other things, federal and state trademark-
19 infringement claims. Both sides moved for summary judgment,
20 which the district court granted to Appellee in full. The
21 court also ordered the PTO to cancel the registration of
22 Appellants’ two service marks. On Appellants’ motion for
6
1 reconsideration, the district court entered a July 6, 2010
2 order withdrawing a single footnote from its original
3 memorandum and order. The court denied Appellants’ motion
4 in all other respects.
5 DISCUSSION
6 Appellants argue that the district court erred in (1)
7 relying on the Stipulation, rather than trademark law, to
8 determine their trademark infringement claims; (2)
9 concluding that Appellee’s use of “original” and “since
10 1904” was not false advertising; and (3) failing to
11 separately analyze Appellants’ common law unfair competition
12 claim. We reject all of Appellants’ arguments.4
13 1. Federal and State Trademark Infringement
14 As is clear from its two opinions, the district court’s
15 core holding is that the Stipulation precludes Appellants
16 from claiming ownership of the Original Vincent’s Mark
17 notwithstanding Appellants’ registration of that mark.
18 According to the district court, Appellants’ federal and
19 state trademark-infringement claims fail the first prong of
4
We review the district court’s grant of summary judgment de
novo, “resolv[ing] all ambiguities and draw[ing] all permissible
factual inferences in favor of the party against whom summary judgment
is sought.” Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003)
(internal quotation marks omitted).
7
1 Gruner + Jahr USA Publishing v. Meredith Corp., 991 F.2d
2 1072 (2d Cir. 1993). In substance, we agree with that
3 analysis.
4 Though federal registration of a mark is prima facie
5 evidence of ownership, that evidence is rebuttable. See 15
6 U.S.C. § 1115(a). In particular, as is the case here,
7 parties may allocate rights in a trademark through private
8 agreement. Times Mirror Magazines, Inc. v. Field & Stream
9 Licenses Co., 294 F.3d 383, 395 (2d Cir. 2002). Provided
10 the agreement does not violate public policy — and in this
11 case there is no contention that it does — courts will give
12 effect to agreements governing ownership and use of the mark
13 without recourse to trademark law. See id. at 395–96.
14 Thus, principles of contract interpretation govern the
15 present dispute.5
16 Here, the Stipulation governs the rights of the parties
17 with regard to the names used for their respective
18 restaurants. By its plain language, the Stipulation
19 requires Appellants to use one of the three Vincent’s Marks
5
The district court determined and the parties agree that New
York law governs interpretation of the Stipulation. Without deciding
the question, we accept this conclusion and interpret the Stipulation
under New York law. Accordingly, we apply familiar New York
principles of contract interpretation.
8
1 and precludes Appellants from claiming affiliation with
2 other restaurants using either any of the three Vincent’s
3 Marks or “facsimiles thereof.” Furthermore, it provides
4 that DeLillo or his successors-in-interest, here Appellee,
5 solely own the Vincent’s Marks. Thus, under the
6 Stipulation, Appellee owns the Vincent’s Marks, and
7 Appellants have the unlicensed right (and obligation) to use
8 them.
9 Over the years, however, both parties have slightly
10 changed the names of their restaurants; Appellants’ names no
11 longer exactly reflect the three agreed-upon Vincent’s
12 Marks. Furthermore, though Appellants’ name change (which
13 occurred no later than 1989) appears to have breached the
14 Stipulation, neither DeLillo nor Appellee ever sued for
15 breach of contract. Nevertheless, we are persuaded that
16 neither Appellants’ change of name nor Appellee’s failure to
17 sue on the basis of that name change renders the Stipulation
18 irrelevant. Appellants have only slightly modified their
19 restaurant’s name; the name “Vincent’s” still predominates.
20 Appellants admit that they added “Original” and “Established
21 1904” to their restaurant’s name to strengthen consumer
22 association of Appellants’ restaurant with the Siano
9
1 family’s restaurant. This is precisely the type of conduct
2 that is covered by the Stipulation.
3 The Stipulation allows the parties to share the claim
4 of lineage to the Sianos’ restaurant, but Appellants’ right
5 is only one of unlicensed use, not ownership. Appellee is
6 the sole owner of the Vincent’s Marks. It would
7 fundamentally change the relationship the Stipulation
8 established between the parties if, through minor
9 alteration, Appellants could claim ownership of a close
10 variation of the Vincent’s Marks.
11 Appellants’ thorough discussion of the doctrine of
12 tacking and its “continuing commercial impression” test
13 fails to explain why trademark law should inform our
14 interpretation of the Stipulation in the first instance.
15 Indeed, we concur with the Trademark Board’s observation
16 that “here we are not dealing with a typical trademark
17 situation, but one in which general trademark principles
18 have been turned on their heads by the bankruptcy
19 stipulation.” J.A. at 1204 n.20 (TTAB Maj. Op.).6 In this
6
“As this court has frequently observed, Trademark Board
decisions, while not binding on courts within this Circuit, are
nevertheless to be accorded great weight under general principles of
administrative law requiring deference to an agency’s interpretation
of the statutes it is charged with administering.” ITC Ltd. v.
Punchgini, Inc., 482 F.3d 135, 159 (2d Cir. 2007) (internal quotation
marks omitted).
10
1 unusual circumstance, we see no problem with the district
2 court’s common-sense observation that, in the context of
3 this case, both parties’ name changes are sufficiently minor
4 that their use remains governed by the Stipulation. We
5 further note that this reading is consistent with both the
6 majority and dissenting Trademark Board decisions. See J.A.
7 at 1201, 1205 (TTAB Maj. Op.); see also id. at 1212 (TTAB
8 Dis. Op.) (“[Appellants’] arguments . . . that they are
9 somehow not bound by the language of the [Stipulation] . . .
10 can be given no weight.”).
11 Appellants’ contention that the Stipulation is
12 ambiguous is without merit. The Names Clause is consistent
13 with the Non-Affiliation Clause. Under these two clauses,
14 Appellants may use any of the Vincent’s Marks (even if that
15 use implies affiliation) but may not otherwise claim
16 affiliation to other Vincent’s restaurants.7 The co-
17 existence of these two clauses does not create ambiguity in
18 the Stipulation; the district court had no reason to consult
19 parol evidence.
7
To the extent Appellants are concerned about the false
impression of affiliation created by the use of one of the two
Vincent’s Marks that contain the name “Vincent’s,” Appellants are free
to use the third option – “MOTT AND HESTER RESTAURANT” – which reduces
the risk that Appellants’ restaurant will be perceived as claiming
affiliation with other Vincent’s restaurants.
11
1 Despite Appellee’s failure to sue for breach of
2 contract, Appellants may not rely on the defenses of laches
3 or statute of limitations to support the conclusion that the
4 Stipulation no longer governs. The district court concluded
5 only that the Stipulation precluded Appellants from claiming
6 ownership of the Original Vincent’s Mark, not that Appellee
7 had a valid counterclaim for breach of contract.8 Thus,
8 these defenses are irrelevant to the infringement claims
9 Appellants brought against Appellee.
10 In sum, the district court correctly held that
11 Appellants failed to establish their trademark-infringement
12 claims. The Stipulation rebuts the prima facie evidence,
13 established through registration, that Appellants own the
14 Original Vincent’s Mark. Likewise, the Stipulation
15 precludes Appellants from claiming ownership of the mark
16 through priority of use. Without ownership of a protectable
17 mark, Appellants cannot sustain their infringement claims.
18 In light of the above discussion, and for substantially
19 the same reasons stated in the district court’s September
8
In holding that Appellants have no claim against Appellee for
infringement, we should not be taken to imply that Appellee has any
claim against Appellants, a question not before us. We do, however,
note the TTAB’s conclusion that the Original Vincent’s Mark has “no
owner.” See J.A. at 1205 n.22; J.A. at 1208.
12
1 28, 2009 Memorandum and Order, we affirm the district
2 court’s decision to order the PTO to cancel Appellants’
3 registrations for the service marks THE ORIGINAL VINCENT’S
4 ESTABLISHED 1904 and VINCENT’S SINCE 1904.
5 2. False Advertising and False Designation of Origin
6 We agree with the district court that Appellants’ false
7 advertising and false designation of origin claims under 15
8 U.S.C. § 1125(a) are without merit. Through the 1992
9 purchase agreement and trademark assignment, Appellee
10 acquired from DeLillo all of DeLillo’s rights, title, and
11 interests in the Vincent’s Marks, including “any all [sic]
12 variations thereto” and the “good will associated
13 therewith.” DeLillo purchased these rights from members of
14 the Siano family, and the Stipulation recognized DeLillo’s
15 sole ownership of these rights with respect to the Vincent’s
16 Marks. Appellee acquired the right to leverage the good
17 will that the Sianos established at the actual, original
18 Vincent’s Clam bar located in Little Italy. Thus, Appellee
19 may advertise that its restaurant hails from Little Italy
20 and carries on the Siano family tradition without running
21 afoul of the false designation of origin and false or
22 misleading description of fact provisions of 15 U.S.C. §
131 1125(a).
2 3. Common Law Unfair Competition Claim
3 Appellants contend that the district court erred in
4 holding that, because they do not own the Original Vincent’s
5 Mark, Appellants’ common law unfair competition claim must
6 also fail. Although the district court analyzed this claim
7 on summary judgment, we decline to address the merits of
8 this claim on appeal. As Appellants’ counsel correctly
9 noted at oral argument, Appellants did not plead a common
10 law unfair competition cause of action.
11 For the foregoing reasons, the judgment of the district
12 court is hereby AFFIRMED.
13
14
15 FOR THE COURT:
16 Catherine O’Hagan Wolfe, Clerk
17
18
14