Trademark 'squatter' enjoined from using JAPONAIS mark

United States of America
In Tuccillo v Geisha NYC LLC (Case 09-CV-2022, July 22 2009), the US District Court for the Eastern District of New York has granted the defendant and counterclaimant a preliminary injunction enjoining the plaintiff from making any further use of the trademark JAPONAIS in New York, Chicago or Las Vegas pending the final outcome of the action.
In 2003 Geisha NYC LLC was formed by a restaurateur and developer who envisioned opening an 'edgy', Asian-fusion restaurant in Chicago. After raising nearly $3 million in capital, in September 2003 Geisha opened the Japonais restaurant in Chicago. The restaurant quickly received strong reviews in regional and national publications. In 2006 Geisha opened a Japonais restaurant in New York and entered into talks with the Mirage Hotel and Casino in Las Vegas to operate a restaurant under the JAPONAIS mark in Las Vegas. Geisha filed trademark applications for the trademark JAPONAIS with the US Patent and Trademark Office in late 2005 and early 2006.
The plaintiff, Roy Tuccillo, owns a US registration for the mark JAPONAIS for “restaurant and lounge services”. Tuccillo applied for the registration of the mark on June 25 2004 on an intent-to-use basis. A registration was granted on March 17 2009 after Tuccillo submitted a statement of use declaring a first use in commerce on April 1 2008. 
Tuccillo brought this action against Geisha on May 12 2009, alleging trademark infringement of his registered mark. Geisha counterclaimed for cancellation of Tuccillo’s registration and alleged trademark infringement, unfair competition and dilution of its common law rights in the JAPONAIS mark. In particular, Geisha alleged that Tuccillo was a trademark registration 'squatter' and that he had committed fraud in the prosecution of his trademark registration because:
  • he had falsely stated that, as of the date of his application, he was unaware of anyone else using the JAPONAIS mark; and
  • when he filed his statement of use, he was not, in fact, using the JAPONAIS mark in commerce. 
Geisha then moved for a preliminary injunction to prevent any further use by Tuccillo of the JAPONAIS mark.
The court concluded that Tuccillo was “completely lacking in credibility on all the critical disputed issues in this litigation” and granted the preliminary injunction. First, Geisha introduced an expert in logo development, who analyzed the JAPONAIS mark as used by Geisha since 2003 and the stylized logo applied for by Tuccillo.  
Noting that Tuccillo’s mark was identical to the mark used by Geisha, down to the font used and the removal of the 'bars' on the letter 'A', the expert indicated that it would have been impossible for Tuccillo to have independently developed the mark without knowledge of Geisha’s use of its JAPONAIS mark. This evidence, along with evidence that Tuccillo had no clear reason why he chose the JAPONAIS name and a finding that Tuccillo had previously been found to have intentionally copied - and applied for the registration of - a logo in use by another party, convinced the court that Tuccillo was aware of Geisha’s restaurant when he filed the application for the registration of the JAPONAIS mark.
The court then considered Tuccillo’s statement of use, which included as specimens a photograph of a sign in a store window and a copy of a menu using the mark. After submitting evidence obtained by an investigator that there was no Japonais restaurant operating at the address provided in the menu, Geisha further indicated that as of the May 2 2008 filing date of the statement of use, Tuccillo had no permit to operate a restaurant from the county board of health, and did not have any permit until March 2009. Moreover, the court found that Tuccillo had likely purchased the window sign shown in his specimen purely for the purpose of obtaining a trademark registration. Thus, the court held that Geisha would be likely to prevail in cancelling Tuccillo’s registration on the basis of fraud.
Moreover, the court found that Geisha would be likely to prevail on its trademark infringement claim, at least based on Geisha’s use of the mark in Chicago, Manhattan and Las Vegas, and associated common law rights. The court also disregarded any possible common law rights that Tuccillo may have acquired, as any use of the mark by Tuccillo was in bad faith and, therefore, was incapable of generating trademark rights. The court determined that due to Geisha’s investment of approximately $2 million in promoting its Japonais restaurants, Geisha would be irreparably harmed if Tuccillo were allowed to continue his use of the JAPONAIS mark. The balance of hardships was also found to be strongly in Geisha’s favour, as Geisha had invested nearly 200 times as much money in the mark as had Tuccillo. As a result, the court granted Geisha’s motion for a preliminary injunction, preventing Tuccillo from making any further use of the JAPONAIS mark in New York, Chicago or Las Vegas.
Although it appears that Geisha may ultimately prevail in its trademark dispute with Tuccillo, this situation could have been avoided had Geisha timely filed an application for its signature trademark. Even though Geisha initially opened a restaurant in a single location, its failure to file a trademark application to secure its rights ultimately led to an unfortunate and expensive legal battle. 

The JAPONAIS mark has also been involved in other proceedings in the United States (for further details please see "No infringement if operating agreement authorizes use of mark" and "False designation action dismissed, but fight for JAPONAIS continues".
Susan M Natland and Jeffrey H Larson, Knobbe Martens Olson & Bear LLP, Irvine

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