Opinion
Civil Action No. 3:05-cv-00766 (JCH).
July 11, 2006
RULING ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT [Doc. No. 23]
I. INTRODUCTION
The plaintiff, Frank J. Carpenteri ("Carpenteri") brings the present action against defendants Guiseppe Marini ("Marini") and Chicken Joe's, LLC, formerly known as Garden Catering — Cos Cob, LLC. Carpenteri asserts the following causes of action: (1) infringement of a federally registered trademark in violation of 15 U.S.C. § 1114; (2) false designation of origin and unfair competition in violation of 15 U.S.C. § 1125(a); (3) trademark dilution in violation of 15 U.S.C. § 1125(c); (4) state common law trademark infringement and unfair competition; and (5) unfair competition in violation of the Connecticut Unfair Trademark Practices Act ("CUTPA"). The defendants also assert counterclaims, which are not at issue in the present motion. The defendants have moved for summary judgment on all of Carpenteri's claims, arguing principally that Carpenteri lacks ownership of the trademarks and service marks at issue.
II. STANDARD OF REVIEW
In a motion for summary judgment, the burden lies on the moving party to establish that there are no genuine issues of material fact in dispute and that it is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); SCS Communications, Inc. v. Herrick Co., 360 F.3d 329, 338 (2d Cir. 2004). The moving party may satisfy this burden "by showing — that is pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir. 2002) (per curiam) (internal quotation marks and citations omitted); accord Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995).
A court must grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact. . . ." Miner v. City of Glens Falls, 999 F.2d 655, 661 (2d Cir. 1993) (internal quotation marks and citation omitted). A dispute regarding a material fact is genuine "`if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir. 1992) (quotingAnderson, 477 U.S. at 248), cert. denied, 506 U.S. 965 (1992). After discovery, if the nonmoving party "has failed to make a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof," then summary judgment is appropriate. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The court resolves "all ambiguities and draw[s] all inferences in favor of the nonmoving party in order to determine how a reasonable jury would decide." Aldrich, 963 F.2d at 523 (internal citation omitted). Thus, "`[o]nly when reasonable minds could not differ as to the import of the evidence is summary judgment proper.'" Id. (quoting Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991), cert. denied, 502 U.S. 849 (1991)); see also Suburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788 (2d Cir. 1992) ("Viewing the evidence in the light most favorable to the nonmovant, if a rational trier could not find for the nonmovant, then there is no genuine issue of material fact and entry of summary judgment is inappropriate."). "`If, as to the issue on which summary judgment is sought, there is any evidence in the record from which a reasonable inference could be drawn in favor of the opposing party, summary judgment is improper.'" Security Ins. Co. of Hartford v. Old Dominion Freight Line, Inc., 391 F.3d 77, 82-83 (2d Cir. 2004) (quoting Gummo v. Village of Depew, 75 F.3d 98, 107 (2d Cir. 1996)).
When a motion for summary judgment is supported by sworn affidavits or other documentary evidence permitted by Rule 56, the nonmoving party "may not rest upon the mere allegations or denials of the [nonmoving] party's pleading." Fed.R.Civ.P. 56(e); Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995). Rather, "the [nonmoving] party's response, by affidavits or as otherwise provided in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial" in order to avoid summary judgment. Id. "The non-movant cannot escape summary judgment merely by vaguely asserting the existence of some unspecified disputed material facts, or defeat the motion through mere speculation or conjecture." Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990) (internal quotations and citations omitted). Similarly, a party may not rely on conclusory statements or an argument that the affidavits in support of the motion for summary judgment are not credible. Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir. 1993).
For the purposes of the instant motion, the court accepts facts undisputed by the parties as true and resolves disputed facts in favor of the plaintiff where the plaintiff provides evidence to support his allegations.
In 1978, Carpenteri became the owner of and began operating a restaurant and catering store called Garden Catering in Old Greenwich, Connecticut ("GC Old Greenwich"). During the 1990's, Marini was employed at this store, and he ultimately became store manager. In or about August 1993, Carpenteri's wife, Diane Carpenteri, with Marini and one other individual, formed a corporation called Garden Catering, Inc. ("GC, Inc.") for the purpose of opening a second Garden Catering store. In January 1994, GC, Inc. opened a store in Cos Cob, Connecticut, which was named Garden Catering Too ("GC Too"). Diane Carpenteri was the majority shareholder in Garden Catering, Inc., but did not participate in the operations of GC Too. Frank Carpenteri assumed responsibility for all of the organization, planning, and work required to set up GC Too and provided most of the funds needed to open this store. Carpenteri Aff. ¶ 11-14. Marini was responsible for the day-to-day operations of GC Too, including managing the records, although Carpenteri was also involved in the operations. Carpenteri sent several employees from the Old Greenwich store to work at GC Too, chose menu items and suppliers for GC Too, made certain maintenance decisions, consulted on day-to-day business matters, paid for advertising, handled larger catering orders, and inspected GC Too once or twice per week to ensure that the store and the products being sold met his quality standards.
Carpenteri, in his Local Rule 56(a)2 Statement, asserts that the parties dispute whether GC, Inc. operated GC Too. However, he provides no citations for this assertion. Moreover, in his response to the defendants' material fact number 4 and in his affidavit, Carpenteri asserts that GC, Inc. was set up to "in order to own and operate a second Garden Catering location in Cos Cob," the location of GC Too, although he then asserts that he was a "de facto" owner of GC Too. The court therefore concludes that GC, Inc. was the legal owner of GC Too at the time of its opening.
Two of the marks at issue were first used at GC Too while it was owned by GC, Inc. The mark HIGH SCHOOL SPECIAL, which Carpenteri created and approved, was first used on April 1, 1994. The mark HOME OF THE HIGH SCHOOL SPECIAL was first used in or about September 1994. Also in September 1994, Carpenteri began using the HIGH SCHOOL SPECIAL mark at GC Old Greenwich.
In 1995, GC, Inc. underwent a series of corporate reformations, from which it emerged as Garden Catering — Cos Cob, LLC ("GC — Cos Cob, LLC"). Counsel for both plaintiff and defendants confirmed at oral argument that the assets owned by GC, Inc. just prior to the reformations were identical to those owned by GC — Cos Cob, LLC immediately following the reformations. At the LLC's inception, Diane Carpenteri owned 51 percent of its shares, and Marini owned 49 percent.
Also in 1995, two other marks at issue in this case, BAD BOY SPECIAL and GOD FATHER SPECIAL, were first used at GC Too. In January 1996, another mark at issue, BABY SPECIAL, was first used at GC Old Greenwich, which was owned by Carpenteri. This mark was later used at GC Too.
In 1999, Carpenteri opened two new Garden Catering stores. The first, located on Hamilton Avenue in Greenwich, has been using the marks HIGH SCHOOL SPECIAL, BABY SPECIAL, BAD BOY SPECIAL, AND GOD FATHER SPECIAL since its opening and continues to do so today. The second, on Bruce Park Avenue, used these marks from December 1999 to sometime after August 2000.
In August 2000, Diane Carpenteri sold all of her shares in GC — Cos Cob, LLC to Marini and another individual, and she also resigned as a member of GC — Cos Cob, LLC. This transaction left Marini holding 80 percent of the GC — Cos Cob, LLC shares. The Share Purchase Agreement made no mention of the marks at issue in this case, nor to the general "goodwill" of GC — Cos Cob, LLC. Its only mention of trademark rights was a handwritten provision stating that the buyers were not permitted to "transfer the name of Garden Catering of GC — Cos Cob, LLC, or transfer the LLC to another location" without Diane Carpenteri's consent. Marini Aff. Supp. Mot. Summ. J., Ex. B, Share Purchase Agreement [Doc. No. 23-4].
Following the sale of Diane Carpenteri's shares, GC Too used the marks at issue continuously until around November 2003. At that time, the store's name was changed to Chicken Joe's, and GC — Cos Cob, LLC became Chicken Joe's, LLC. Chicken Joe's continues to use the marks at issue. Rule 26(f) Report, Statement of Undisputed Facts, ¶ 11 [Doc. No. 14]. Also in November 2003, Carpenteri obtained a federal trademark registration for HOME OF THE HIGH SCHOOL SPECIAL.
IV. DISCUSSION
A. Ownership Requirement
The primary dispute between the parties concerns whether Carpenteri owns the marks at issue. Ownership by the plaintiff is required for all of Carpenteri's claims, whether asserted under the federal Lanham Act (Counts I-III) or state law (Counts IV-V).
A trademark infringement claim under 15 U.S.C. § 1114 may stand only if the plaintiff both registered and owned the trademark. See 15 U.S.C. § 1114; Lane Capital Management, Inc. v. Lane Capital Management, Inc., 192 F.3d 337, 344 (2d Cir. 1999) (internal citation omitted) ("To prevail on an infringement claim, a plaintiff must establish that it possesses a valid, legally protectible mark . . ."). At oral argument, the plaintiff's attorney conceded that mark ownership is required for a trademark infringement claim asserted pursuant to section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), even though not every other type of unfair trade practice claim that may be asserted pursuant to section 43(a) requires ownership. See Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 478-79 (2d Cir. 2005). A trademark dilution claim, such as that in Count III, also requires ownership. See 15 U.S.C. § 1125(c).
Connecticut common law claims for trademark infringement, although infrequently discussed in the caselaw, similarly require ownership by a plaintiff. See Heath v. Micropatent, 1999 WL 1328140, at *5 (Conn.Super. Dec. 30, 1999) (holding that trademark must be owned by the plaintiff but that unregistered mark does not preclude common law trademark claim) (citingPirone v. MacMillan, Inc., 894 F.2d 579, 581-82 (2d Cir. 1990) (New York law)); Republic Oil Co. v. Levy, No. CV94 053 87 57, 1995 WL 94533 (Conn.Super. Feb. 27, 1995) (holding, with respect to case brought by gasoline distributor, "It is difficult to understand how the plaintiff at common law can bring an action for trademark or trade name infringement when it does not allege it owns the trademark or even allege it has an exclusive right to distribute the product.").
Because Carpenteri proffers no evidence or theory of unfair competition in support of his CUTPA claim aside from those he proffers to support his trademark infringement claims, the CUTPA claim cannot stand unless Carpenteri shows a genuine issue of material fact as to whether he can prove trademark infringement. See Robert M. Langer, John T. Morgan, David L. Belt, 12 Conn. Practice Series § 4.10 (2005) (citing Murphy v. Provident Mutual Life Ins. Co., 923 F.2d 923, 929 (2d Cir. 1990); Mohegan Tribe of Indians of Connecticut v. Mohegan Tribe and Nation, Inc., 255 Conn. 358, 360 n. 4 (2001)). Therefore, in this particular case, ownership of the marks is also required for the CUTPA claim to succeed. For the same reason, even though the state common law cause of action for unfair competition "is a general tort covering many activities that may be harmful to commercial interests," Prime Publishers, Inc. v. American-Republican, Inc., 160 F.Supp.2d 266, 284 (D.Conn. 2001) (citing Connecticut State Medical Society v. Board of Examiners in Podiatry, 203 Conn. 295 (1987)), Carpenteri's unfair competition claim is premised solely on his allegations of trademark infringement and therefore depends upon his ability to establish that he owned the marks at issue.
B. Priority of Use
The standard test for trademark ownership is priority of use.See, e.g., Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 468 (2d Cir. 2005). Although federal registration is prima facie evidence of ownership, see 15 U.S.C. § 1057(b), registration does not wipe out the common law rights derived from first use in commerce of a mark, see 2 J. Thomas McCarthy,McCarthy on Trademarks and Unfair Competition § 16:18.1 (internal citations omitted) [hereinafter McCarthy on Trademarks].
A certificate of registration of a mark upon the principal register provided by this chapter shall be prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate, subject to any conditions or limitations stated in the certificate.
15 U.S.C. § 1057(b).
As a preliminary matter, the defendants concede that Carpenteri has raised a genuine issue of material fact with respect to the ownership of the BABY SPECIAL mark only. Defs.' Reply Mem. Supp. Mot. Partial Summ. J. at 2 n. 2 [Doc. No. 34]. Therefore, the court denies summary judgment on all claims alleging use of the BABY SPECIAL mark. The remainder of the discussion applies only to the other marks at issue.
Carpenteri does not argue that he, as an individual, was the first person to use the remaining marks at issue. Rather he argues that he should be treated as a senior user because he was the "de facto owner" of Diane Carpenteri's shares of the corporation and LLC that owned GC Too, at the times that GC Too first used the marks. The court disagrees. All of the marks in question, except for BABY SPECIAL, were first used at stores legally owned and operated by GC, Inc. or GC — Cos Cob, LLC. Even if Carpenteri had legally owned the shares of these entities that his wife held at the time of the first use of each of the marks, such ownership would not give him a personal ownership interest over shares owned by the corporate entities for purposes of an infringement claim. Although there is evidence that Carpenteri was involved in the operations of the Cos Cob store, neither the plaintiff's "de facto" ownership of GC, Inc. or GC — Cos Cob, LLC, nor Diane Carpenteri's legal ownership of those entities, was "so complete that he [or she] and the corporation equitably constituted a single entity," as required to impute ownership of a mark first used by a corporation to an individual shareholder. Smith v. Coahoma Chem. Co., 264 F.2d 916, 920 (C.C.P.A. 1959); see Daytona Automotive Fiberglass v. Fiberfab, Inc., 475 F.Supp. 33, 36 (W.D.Pa. 1979) (citing Coahoma Chem.); 2 McCarthy on Trademarks § 16:36 at 16-59 (citing cases) (stating that, "[i]f a corporation is using a mark, then a principal officer and shareholder is not the `owner,'" although "[i]t is presumed . . . that a real person who owns all the stock of a corporation controls the corporation so that use of the mark by the corporation inures to the benefit of the real person, who is presumed to be the `owner' of the mark") (emphasis in original). Therefore, Carpenteri's argument that he owned the marks as the "de facto" owner of the entities that first used the marks must fail.
Carpenteri also argues that he is the outright "de facto" owner of the marks, based upon his personal oversight of GC Too's operations and his approval of the use of the marks at that store. The court discusses that argument infra in connection with the related companies doctrine. To the extent that Carpenteri argues, separately from a related companies argument, that he had de facto ownership of the marks at issue even though he, personally, was not the senior user thereof, the court finds no authority for such a position.
Moreover, Carpenteri's assertion that he "came up with the idea for the HIGH SCHOOL SPECIAL meal, Carpenteri Aff. ¶ 16, does not establish that he owned the mark. Invention itself does not give rise to trademark rights. 2 McCarthy on Trademarks § 16:11.
C. Related Companies Doctrine
Carpenteri argues, in the alternative, that the court should recognize him as having trademark rights because he approved the use of the marks at issue at GC Too and controlled the nature and quality of products sold at GC Too. The related companies doctrine permits trademark ownership by a licensor who exercises substantial control over the mark's use by a licensee, based upon use by the licensee. See, e.g. I.H.T. Corp. v. News World Communs., Inc., No. 83 Civ. 3862-CSH, 1984 U.S. Dist. LEXIS 15260, at *18-19 (S.D.N.Y. 1984).
To the extent that the Ninth Circuit's recent ruling inDept. of Parks and Recreation v. Bazaar del Mundo Inc., 2006 U.S. App. LEXIS 12907, at *13-*14 (9th Cir. May 24, 2006), may suggest otherwise, this court disagrees in light of the authorities on the related companies doctrine that are cited in the text of this ruling. As discussed in the text, the "use in commerce" requirement for mark registration may be satisfied by a licensee's use of the mark, assuming that the licensor/applicant for registration has exerted sufficient control over the nature and quality of the products or services on which the mark is used.
Where a registered mark or a mark sought to be registered is or may be used legitimately by related companies, such use shall inure to the benefit of the registrant or applicant for registration, and such use shall not affect the validity of such mark or of its registration, provided such mark is not used in such manner as to deceive the public. If first use of a mark by a person is controlled by the registrant or applicant for registration of the mark with respect to the nature and quality of the goods or services, such first use shall inure to the benefit of the registrant or applicant, as the case may be.15 U.S.C. § 1055; see Secular Organizations for Sobriety, 213 F.3d 1125, 1130-31 (9th Cir. 2000) ("In order for SOS to prevail on its trademark claim, it must demonstrate that it was the first user of the disputed marks or, in the alternative, that if SOS-West was using the marks first, it was doing so as a related entity and the benefits of any such use should therefore inure to SOS Inc."); 2-6 Anne Gilson Lalonde, Karin Green, Jerome Gilson, 2Trademark Protection and Practice § 6.01[3] [5] (2006) [hereinafter Gilson on Trademark Protection and Practice]; 2 McCarthy on Trademarks § 18:46 ("Ownership rights in a trademark or service mark can be acquired and maintained through the use of the mark by a controlled licensee even when the first and only use of the mark was made, and is being made, by the licensee."). The Lanham Act defines "related company" as "any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used." 15 U.S.C. § 1127. In certain cases, an individual may control the nature and quality of the goods or services in connection with which a mark is used even if he or she does not own the company that is using the marks. See 2 McCarthy on Trademarks § 18:51 at 18-89.
Section 1055 of Title 15 of the United States Code applies only to trademarks for which a person has applied for or received federal registrations. See 15 U.S.C. § 1055; 2-6 Gilson on Trademark Protection and Practice § 6.01[5] (2006). Carpenteri provides no evidence that he registered or sought registration of the marks HIGH SCHOOL SPECIAL, BAD BOY SPECIAL, and GOD FATHER SPECIAL, so the related companies doctrine does not apply to these marks.
Although the Complaint alleges that Carpenteri applied for a federal registration for HIGH SCHOOL SPECIAL, he draws the court's attention to no evidence that would support this allegation.
Although Carpenteri registered the mark HOME OF THE HIGH SCHOOL SPECIAL in 2003, the related companies does not apply to this mark either. Although Carpenteri has averred that, between April 1994 and August 2000, he regularly inspected Garden Catering Too to make sure that the store and products being sold there met his quality standards, Carpenteri Aff. ¶ 19, he has not proffered evidence that any written or unwritten arrangement, for example, a licensing agreement, existed between Carpenteri individually and GC, Inc. or GC — Cos Cob, LLC concerning ownership of the mark.
It bears noting that Carpenteri has not proffered evidence that he had any authority separate from his position within or as an agent of GC, Inc. or GC — Cos Cob, LLC to control the nature and quality of products offered under the marks at issue.
V. CONCLUSION
For the foregoing reasons, the court GRANTS in part and DENIES in part the defendants' motion for partial summary judgment. The court grants partial summary judgment for the defendants with respect to all counts of the Complaint, insofar as they are premised upon use of the marks HIGH SCHOOL SPECIAL, BAD BOY SPECIAL, GOD FATHER SPECIAL, and HOME OF THE HIGH SCHOOL SPECIAL. It denies the defendants' motion for summary judgment with respect to any claims alleging use of the mark BABY SPECIAL.
SO ORDERED.