There was another court decision in the long running battle between the founders of the restaurant Japonais and a New York man who was first to file a trademark registration application for the JAPONAIS mark with the U.S. Patent and Trademark Office (“USPTO”). See Geisha LLC. v. Tuccillo, 2009 U.S. Dist. LEXIS 20300, Case No. 05-cv-05529 (N.D. Ill. March 13, 2009). The decision was a setback for the Japonais restaurant founders and underscores the importance of businesses taking the steps to seek trademark registrations early for their intended their trademarks and service marks in order to protect their subsequent ability to expand the use of such marks nationwide.
On June 25, 2004 – nine months after the restaurant opened (and two weeks after an article about the restaurant appeared in Time magazine) – a man named Roy Tuccillo, owner of Anchor Frozen Foods, a New York-based frozen seafood supply company, filed an intent-to-use application with the USPTO for the mark JAPONAIS (coincidentally with the same style as the logo created by Geisha having an inverted V in place of the A) in connection with restaurant and lounge services. Tuccillo testified in deposition that he had used his JAPONAIS mark as far back as 2000 when he put it on a store front window where he sold his frozen seafood (Tuccillo offered an undated photo of a unidentified store front window as evidence).
Geisha did not discover Tuccillo’s intent-to-use application until September 2005 – long after the period for Geisha to file an opposition to registration had expired. The PTO issued a Notice of Allowance on August 23, 2005. Geisha’s counsel notified Tucillo’s attorney about Geisha’s rights to the JAPONAIS mark to which Tucillo apparently replied that he intended to use the name in connection with a future restaurant and lounge. Geisha then filed the instant action against Tucillo on September 26, 2005, claiming, among its ten causes of action, false designation of origin under 15 U.S.C. § 1125(a). While the case was proceeding, Geisha opened two additional Japonais restaurants – one in New York City and the other in Las Vegas – using its JAPONAIS design mark.
Geisha’s complaint had also sought declaratory relief that Geisha possessed superior rights in the mark and that Tuccillo’s intended use of the mark would constitute infringement – relief that was preliminarily denied because Tuccillo had not yet used the mark and was not immediately threatening to do so.
On May 2, 2008, however, Tuccillo filed a Statement of Use declaring that he was using the mark in commerce in connection with restaurant and lounge services. Tuccillo’s specimen of use was a menu showing the JAPONAIS mark as well as a photo of the mark etched onto a window. Geisha subsequently moved for summary judgment on its false designation of origin claim arguing that Tuccillo’s conduct in registering and using the mark constituted false designation of origin.
The court denied Geisha’s motion for summary judgment based on genuine disputed issues of material fact, particularly on the issue of whether the geographic reputation of Geisha’s restaurant and the JAPONAIS mark had penetrated the New York area such that Geisha could claim prior common law trademark rights.
The court first analyzed Geisha’s rights in the JAPONAIS mark at the time Tuccillo filed his application. Because Geisha did not apply to register the mark with the USPTO, Geisha was not entitled to the presumption of constructive notice nationwide, and thus must show evidence that its rights extended beyond the Chicago area. While the general rule is that a junior user who is unaware of the senior user’s use may adopt a mark in a geographically distinct area provided that the mark has not been registered, one exception to this rule is where the senior user’s reputation extends beyond the immediate geographic area where the mark is employed.
In analyzing Geisha’s reputation, the court noted that by June 2004, most of Japonais’s publicity had been in the Chicago media and in trade publications and the particular stylized JAPONAIS mark appeared in only three advertisements in Chicago-based publications before Tuccillo filed his application. In the end, the court found that it could not conclude, as a matter of law, based on the evidence in the record that the JAPONAIS mark had obtained such widespread notoriety by June 2004 that Geisha possessed common law rights in the mark in New York at the time Tuccillo filed his application.
The court further noted that Geisha’s expansion to New York and Las Vegas does not create enforceable trademark rights in New York that Tuccillo violated by opening his restaurant because Tuccillo had filed an intent-to-use application giving him an effective date of first use of June 2004 with respect to the JAPONAIS mark despite not actually using it until May 2008 – the wonderful benefit of the intent-to-use trademark laws. Indeed, any party that begins using the mark after an intent-to-use application is filed will be treated as a junior user with respect to such intent-to-use trademark applicant.
The court then eloquently explained an important distinction (often misunderstood) between constructive use and constructive notice (citations omitted):
Constructive notice, obtained when a mark is actually registered on the principal registry, prevents further use of the mark by others. Even senior users may be restricted to the areas they operated in at the time of registration. Constructive use, by contrast, prevents a third party from acquiring any rights in the trademark as of the date the intent-to-use application was filed. Under this doctrine, Tuccillo will have a constructive use date of June 25, 2004, the date he filed the ITU application. Constructive use is subject to two important limitations that are relevant here: first, constructive use is contingent upon actual registration of the mark, and second, constructive use does not bar use of the mark by senior users.
Nonetheless, there was sufficient uncertainty that the court was able to conclude that Geisha was not entitled to judgment as a matter of law on its false designation of origin claim. The court held that Tuccillo could not have violated Geisha’s rights in the mark in New York unless Geisha possessed common law rights in New York prior to the constructive use date of June 25, 2004 – and that the extent of Geisha’s common law rights is a contested issue of material fact that precludes summary judgment.
The court further noted that while Geisha’s expanding use of the Japonais mark in New York would ordinarily not be precluded because it occurred before Tuccillo’s date of registration (i.e., the date of constructive notice), in this case, Geisha had actual notice of Tuccillo’s pending application prior to its expansion. As the court stated, “If constructive notice that Tuccillo possesses rights in the mark bars Geisha from expanding its use of the mark, surely Geisha is under similar constraints where it has actual notice of Tuccillo’s application.” (italics in original). The court added that “It would be inequitable to hold Tuccillo in violation of Geisha’s trademark rights in these circumstances. Geisha did not operate in New York prior to Tuccillo’s filing the ITU application, in which Tuccillo swore he had a bona fide intention to use the mark in the restaurant and lounge industry and that he had no knowledge of any other use of that mark in the industry.”
In the end, the court was unable to conclude, as a matter of law, that Tuccillo had no rights to the JAPONAIS mark or that Tuccillo infringed Geisha’s trademark rights when he opened his restaurant, and therefore, denied Geisha’s motion for summary judgment.