351 F. Supp. 3d 680
S.D. Ill.2018Background
- The City owns the Tavern on the Green restaurant marks; TOGI purchased certain rights in a 2011 Use Agreement that allowed TOGI limited use of "Tavern on the Green" for products and for restaurants only when combined with geographic differentiators and subject to marketing and disclaimer restrictions.
- The Use Agreement reserved to the City the right to operate restaurants in NYC and barred TOGI from attempting to register the Restaurant Mark alone; it required notice and a 20-business-day cure period for material breaches and stipulated that a likelihood of consumer confusion would be presumed in enforcement actions.
- Between 2015–2017 the City sent letters complaining TOGI (and its agent MBB) used marketing language and images referencing Central Park and the NYC restaurant, and that some product specimens lacked the required disclaimers.
- The City sued in February 2017 for breach of contract, trademark infringement, false designation, dilution, unfair competition, and violations of NY General Business Law; TOGI counterclaimed for breach of contract and good-faith violations.
- On cross-motions for summary judgment, the Court found TOGI breached Section 2.04(c) (impermissible references to Central Park/the restaurant) but did not grant summary judgment to the City on alleged breaches of Section 3.04(a) (disclaimer failures).
- The Court granted summary judgment to the City on Lanham Act claims (infringement, false designation, dilution) and common-law unfair competition as to liability, denied summary judgment on the NYGBL claims, denied TOGI’s motion, and awarded the City summary judgment on TOGI’s counterclaim; damages and injunctive scope were deferred to an inquest.
Issues
| Issue | Plaintiff's Argument (City) | Defendant's Argument (TOGI) | Held |
|---|---|---|---|
| Did TOGI materially breach the Use Agreement by marketing that referenced Central Park/the famous NYC restaurant (Section 2.04(c))? | City: TOGI and its agent used language/pictures invoking Central Park and the restaurant, violating the express prohibition and causing confusion. | TOGI: City failed to comply with the contract's notice-and-cure provision before suing; some uses were authorized or harmless. | Held: City prevailed. Court found breaches of 2.04(c); City's suit was timely under the contract because it gave notice and allowed cure or filed suit after cure period; an exception for futility excused slight procedural lapses re: later notice. |
| Did TOGI breach the Use Agreement by failing to use required disclaimers on product specimens/packaging (Section 3.04(a))? | City: TOGI repeatedly failed to include required disclaimers on product materials and PTO submissions. | TOGI: Some challenged items were pre-existing inventory allowed to be sold off; factual disputes exist about particular specimens and application use. | Held: Denied summary judgment to City on Section 3.04(a). Genuine disputes of fact (e.g., whether bottles were preexisting inventory) preclude summary judgment. |
| Did TOGI infringe, falsely designate origin, or dilute the City's federally registered Restaurant Mark (Lanham Act)? | City: Registered mark valid; agreement presumes likelihood of confusion; TOGI’s use of identical name and promotional references causes confusion and dilution. | TOGI: Offered no meaningful opposition on trademark claims at summary judgment. | Held: City entitled to summary judgment on liability for trademark infringement, false designation, and dilution; damages reserved for inquest. |
| Did the City breach the agreement or the implied covenant of good faith and fair dealing (TOGI counterclaim)? | City: Disputes TOGI's factual allegations; any statements by City counsel were not actionable and did not constitute a material impairment of contract rights. | TOGI: City counsel made statements and took positions that frustrated TOGI’s contractual benefits and interfered with franchising value. | Held: Court granted summary judgment for City on TOGI’s counterclaim. Unsupported, conclusory testimony and mere statements do not show actionable conduct or a material impairment of contract rights. |
Key Cases Cited
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment standard; court must view evidence favorably to nonmovant)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment requires no genuine dispute of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (party moving for summary judgment may point to absence of evidence for nonmovant)
- Harsco Corp. v. Segui, 91 F.3d 337 (elements of breach of contract under New York law)
- Process Am., Inc. v. Cynergy Holdings, LLC, 839 F.3d 125 (material breach excuses performance)
- LJL 33rd Street Assocs., LLC v. Pitcairn Props. Inc., 725 F.3d 184 (scope of implied covenant of good faith and fair dealing)
- Wolff & Munier, Inc. v. Whiting-Turner Contracting Co., 946 F.2d 1003 (futility/waiver may excuse contractual notice conditions)
- Roach v. Morse, 440 F.3d 53 (injunctive relief standard in trademark context)
- Starbucks Corp. v. Wolfe's Borough Coffee, Inc., 588 F.3d 97 (dilution by blurring standard under Lanham Act)