Sarkis' Cafe, Inc. v. Sarks in the Park, LLC
55 F. Supp. 3d 1034
N.D. Ill.2014Background
- Gallagher sold SITP to Erin Knapp in March 2012; prior ownership included Gallagher with Alomia.
- Jaffe claimed to be Sarkis’ owner and granted SITP permission in May 2009 to use Sarkis’ marks and IP under a licensing-like arrangement.
- SITP opened in Chicago’s Lincoln Park around July 10, 2009; SITP employees were trained at Sarkis, with Jaffe approving training.
- Sarkis published articles praising SITP as Sarkis’ Lincoln Park outpost, suggesting public endorsement of SITP by Sarkis.
- Sarkis informed Gallagher on July 18, 2009 that SITP’s use of Sarkis’ marks would infringe Sarkis’ rights, but Gallagher proceeded with sale to Knapp.
- Sarkis filed claims for trademark infringement and related relief; SITP counterclaims seek declaratory judgment of non-infringement and cancellation of Sarkis’ trademark, along with third-party misrepresentation and contract claims against Gallagher and Jaffe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are SITP’s declaratory judgment and Sarkis’ claims duplicative? | Declaratory judgment duplicative of the Complaint. | Counts provide independent relief and clarifications not duplicative. | Count I (declaratory judgment) dismissed as duplicative. |
| Is SITP’s cancellation counterclaim maintainable in court? | Cancellation duplicative and lacks jurisdiction. | Cancellation based on fraud is a valid, standalone remedy; §1119 grants court authority. | Cancellation counterclaim not dismissed; court has jurisdiction and rules on merits later. |
| Should affirmative defenses be stricken under Rule 12(f) as pleaded? | Defenses are insufficiently pled under Twombly-Iqbal. | Twombly-Iqbal should not apply to affirmative defenses; defenses are adequately pleaded. | Majority defenses stricken; several defenses may be amended; others stricken with prejudice; leave to replead some. |
| Should third-party claims be stricken or allowed under supplemental jurisdiction? | Strike third-party claims for judicial economy and fairness. | Claims arise from the same case and controversy; supplemental jurisdiction appropriate. | Third-party claims preserved; denial of motion to strike under 28 U.S.C. § 1367(c). |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must allege plausible claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard; threadbare recitals insufficient)
- Intervisual Comm., Inc. v. Volkert, 975 F. Supp. 1092 (N.D. Ill. 1997) (declaratory judgment standards for existing disputes)
- Specht v. Google Inc., 747 F.3d 929 (7th Cir. 2014) (authority to cancel a trademark registration under §1119)
- Central Mfg., Inc. v. Brett, 492 F.3d 876 (7th Cir. 2007) (cancellation appropriate when rights to a mark are invalid)
- American Hosp. Supply Corp. v. Fisher Scientific Co., 713 F. Supp. 1108 (N.D. Ill. 1989) (validity does not preordain outcome of fraud-on-the- PTO claims)
- Louis Vuitton S.A. v. Lee, 875 F.2d 584 (7th Cir. 1989) (burden of proof on lack of good faith or willful infringement)