Ledo Pizza System, Inc. v. Ledo's, Inc., 1:20-cv-07350

This case involves a trademark dispute between Ledo Pizza Systems Inc. / Ledo Pizza Carryouts, Inc. (plaintiffs), who operate franchised pizza restaurants mainly in the Mid-Atlantic and Southeast, and Ledo’s Inc. (defendant), a single-location, family-run pizzeria in Countryside, Illinois.
The origin of the "LEDO" mark traces back to 1955 in Maryland, but a separate Illinois restaurant named “Ledo’s Pizza” started in 1961, claiming a different origin for the name (from founding families’ surnames).
In 1986, the original Maryland restaurant assigned the “Ledo Pizza” trademark rights to Carryouts via written agreement, reserving a license for its own continued use. This assignment, and subsequent related agreements, led to multiple litigations and settlements within and between the founding families.
Plaintiffs sued in 2020 after discovering defendant shipped pizzas nationwide, asserting trademark infringement and related claims. Defendant counterclaimed, raising senior user, intermediate user, and fraud arguments, and sought cancellation of plaintiffs’ registration.
Cross-motions for summary judgment were filed on these core legal issues, as well as on various affirmative defenses and counterclaims.

Issue	Plaintiffs’ Argument	Defendant’s Argument	Held
Validity of 1986 trademark assignment	The 1986 agreement validly transferred mark and goodwill to Carryouts	Assignment invalid (assignment in gross, no goodwill transferred)	Assignment valid; goodwill transferred; plaintiffs are senior users
Fraud on the USPTO (trademark registration)	No intent to deceive, and there was a legitimate chain of title/use	1986 agreement is invalid; false statements about exclusive use; intent to deceive USPTO	Defendant lacked standing and didn’t show intent or materiality; summary judgment for plaintiffs
Intermediate junior user status in Illinois	Defendant not entitled as plaintiffs are senior users and mark was registered	Defendant is good-faith, continuous user in limited area since 1961	Defendant is an intermediate junior user in its local trade area (extent to be determined)
Abandonment by naked licensing	No loss of quality control; Restaurant’s use was within reasonable oversight	Plaintiffs did not exercise sufficient quality control over Restaurant	No evidence of abandonment; summary judgment for plaintiffs

Visa, U.S.A., Inc. v. Birmingham Tr. Nat. Bank, 696 F.2d 1371 (Fed. Cir. 1982) (transfer of a trademark is void if goodwill does not transfer)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary judgment standard: non-movant must show more than metaphysical doubt)
Quiksilver, Inc. v. Kymsta Corp., 466 F.3d 749 (9th Cir. 2006) (continuous use is required for "innocent use" trademark defense)
Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir. 1991) (familial relationships can relax formalities in licensor-licensee arrangements)
Lexmark Int’l Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) (establishing standing and requirement of concrete, particularized injury in trademark cases)