Benihana of Tokyo, L.L.C. v. Benihana Inc. et al

Filing 104

OPINION & ORDER re: 89 MOTION to Dismiss filed by Benihana of Tokyo, L.L.C. For the foregoing reasons, the Court denies BOT's motion to dismiss the TACC. The Clerk of Court is respectfully directed to terminate the motion pending at Dkt. 89. SO ORDERED. (Signed by Judge Paul A. Engelmayer on 4/19/2017) (anc)

I.

Background
A.

Factual Summary1

The Court assumes familiarity with the background and procedural history of this case,
including the decision in Benihana of Tokyo, LLC v. Benihana, Inc., 73 F. Supp. 3d 238
(S.D.N.Y. 2014), which dismissed some of BI’s counterclaims in favor of arbitration. The Court
also assumes familiarity with the long and tangled history of legal disputes between these parties
in this Court, including Benihana of Tokyo, LLC v. Angelo, Gordon & Co., L.P., No. 16 Civ.
3800 (PAE), 2017 WL 933111 (S.D.N.Y. Mar. 8, 2017), in Benihana, Inc. v. Benihana of Tokyo,
LLC, No. 15 Civ. 7248 (PAE), 2016 WL 3913599 (S.D.N.Y. July 15, 2016), and Benihana, Inc.
v. Benihana of Tokyo, LLC, 784 F.3d 887 (2d Cir. 2015). The following is a brief summary of
the claims in this case, drawing upon the TACC.
BI2 alleges that, under the March 17, 1995 Amended and Restated Plan of Reorganization
(“ARA”) between BI and BOT, it owns rights to the various Benihana trademarks and service
marks (the “Trademarks”) in the United States, Central America, South America, and the
Caribbean (the “Territory,” as referred to in the ARA), while BOT owns the trademarks and
service marks outside of the Territory. TACC ¶ 9; see also id. ¶ 10 (list of Benihana trademarks
owned by BI). In the ARA, BI and BOT agreed that neither would use the Trademarks in such a
way that could reasonably be expected to reduce the value or the usefulness of the Trademarks to

1

The Court’s summary of the facts is drawn from the TACC, Dkt. 87, and its attached exhibits,
which are incorporated by reference in the TACC. For the purpose of resolving the motion to
dismiss, the Court assumes all well-pleaded facts to be true and draws all reasonable inferences
in favor of pleading party. See Koch v. Christie’s Int’l PLC, 699 F.3d 141, 145 (2d Cir. 2012).
2

For ease of reference, the Court will refer to BI and Noodle Time together as “BI.” Noodle
Time is BI’s wholly-owned subsidiary. It owns the United States trademark registrations for the
various Benihana trademarks. TACC ¶ 10.
2

either party. Id. ¶ 12; see also TACC, Ex. A (“ARA”), § 7.10. Overall, the ARA gives BI the
right to operate Benihana restaurants in the United States, save in Hawaii, where BOT has a
contractual license from BI to do so. Currently, BI owns 66 Benihana restaurants and franchises
11 others within the Territory. For its part, BOT owns or franchises 19 Benihana restaurants
outside the Territory, plus the Hawaii restaurant, located in Honolulu. Id. ¶ 13.
In summary, BI alleges that BOT and Aoki have violated BI’s trademark rights as
secured by the Lanham Act, through (1) statements, images, and other content on BOT’s
website, (2) statements in various press releases, and (3) statements by Keiko Aoki.
For example, as alleged, on or about September 4, 2012, BOT established a website with
the domain name www.benihanaworld.com “to advertise and promote BOT’s business as the
‘world-wide’ leader.” Id. ¶ 14. This domain name, BI alleges, is accessible in the United States
and “perpetuates the false impression stated on BOT’s original (and also still active) website
(benihana-of-tokyo.com/eatertainment.php) that it is BOT that ‘has more than 100 locations
worldwide, in more than 20 countries,’” and wrongly suggests that “BOT owns or operates
Benihana restaurants throughout the world and/or has the right to use the BENIHANA®
Trademarks throughout the world.” Id. ¶¶ 14–15. The website initially featured a rotating globe
featuring various famous global landmarks, including the Statue of Liberty. This, BI alleges,
gave website visitors “the misleading impression that BOT owns or operates Benihana
restaurants” in the United States generally and in New York. Id. ¶¶ 17–18. In fact, BI notes, it
has the exclusive rights to operate Benihana restaurants in the Territory and to use the Benihana
Trademarks there. Id. After BI brought its counterclaims, the Statue of Liberty was removed
from BOT’s rotating globe. Id. ¶ 18.

3

BI alleges that other statements on the same website misstated BOT’s geographic rights
to operate Benihana restaurants. For example, it alleges that “BOT inaccurately identifies the
areas controlled by BOT” so as to state that BOT ‘now control[s] the territories of Hawaii,
Canada, Mexico, Europe, the Middle East, Australia, Asia, and Africa,’” id. ¶ 19 (modifications
in original), and that “BOT ‘operates privately with franchisees all around the world that emulate
and carry out the vision of Rocky Aoki,’” id. ¶ 21. In fact, BI alleges, “BOT does not have the
right to operate Benihana restaurants ‘all around the world.’” Id. BI further alleges that
statements on BOT’s website “make it unclear that BOT’s rights are separate and distinct from
those of BI, which has exclusive ownership of the BENIHANA® Trademarks in the Territory
and the exclusive right to operate Benihana restaurants within the Territory.” Id. ¶ 23. BOT’s
website further states that it is “‘the originator of the unique hibachi cooking style and
‘eatertainment’ created in the United States,’” which, BI alleges, gives the “false impression that
BOT owns and operates Benihana restaurants within the United States where the brand was first
launched in 1964, has some sort of partnership with BI in operating such restaurants, or that BI
operates as a BOT franchisee or licensee.” Id. ¶ 24. This, BI alleges, “causes customer
confusion and damages the Benihana brand and image within the Territory.” Id.
BI also alleges violations in connection with BOT’s opening of a restaurant “named KOA
(presumably using [counter defendant] Keiko Ono Aoki’s initials),” in connection with which
BOT issued a press release, held special events, and made statements on its website. Id. ¶ 27.
As alleged, BOT’s press release confused customers by conflating its rights to the Benihana
brand with BI’s rights. For example, the press release referenced a “‘Benihana restaurant chain’
with ‘over 100 locations in 15 countries’ that is now in its ‘50th year’” so as to imply that that
chain was “BOT, the entity purportedly opening KOA.” Id. BI also alleges that, in celebrating

4

the 50th anniversary of the Benihana restaurants, BOT assembled “a Japanese hip-hop dance duo
dubbed the ‘Beni-Girls’” and promoted itself with the statement that “both hip-hop dance and
Benihana were created in New York.” Id. ¶ 28. The intended effect of this, BI alleges, was to
“create confusion and the knowingly false impression that BOT is in fact the entity operating the
Benihana restaurants located in New York, and that BOT owns the goodwill and history of ‘the
Benihana restaurant chain,’ which according to the BOT/KOA press release, has ‘over 100
locations in 15 countries.’” Id. BI also alleges that BOT and Aoki created a website called
“Keiko Aoki Inner Makeup,” which purported to offer sushi catering services in New York City,
“featuring a ‘live performance’ by a ‘veteran sushi chef’ fully clad in a Benihana uniform,
bearing the BENIHANA® logo.” Id. ¶ 30 & Ex. H.
B.

Procedural Background

The Court describes here only background relevant to BI’s counterclaims.
On January 13, 2014, BOT filed the original complaint in this action. Dkt. 1. On March
20, 2014, BI filed an answer with a broad set of counterclaims against BOT. Dkt. 7. On May 2,
2014, BOT filed a motion to voluntarily dismiss its complaint, Dkt. 24, and a motion to dismiss
BI’s counterclaims, or, in the alternative, to stay this action and compel arbitration of BI’s
counterclaims, Dkt. 28. On July 22, 2014, the Court issued a decision in which it denied BOT’s
motion to dismiss, but granted its motion to compel arbitration of certain of BI’s counterclaims
and denied its motion to compel arbitration of others. Dkt. 42. As to the claims that the Court
did not order be resolved in arbitration, on July 31, 2014, BI filed amended counterclaims. Dkt.
43. Later, on November 3, 2014, the Court granted leave for BI to file Second Amended
Counterclaims, Dkt. 58, Ex. A. Dkt. 60. On February 18, 2015, the Court stayed discovery in
this case pending the arbitration. Dkt. 68.

5

On September 1, 2016, the Court granted BI leave to file the TACC. Dkt. 86. On
September 30, 2016, BI filed the TACC. Dkt. 87. On October 14, 2016, BOT filed a motion to
dismiss and, in support, a memorandum of law (“BOT Br.”) and the Declaration of Joseph L.
Manson III, attaching the ARA and License Agreement at issue in these cases. Dkts. 89–91.3
On October 28, 2016, BI filed a memorandum of law in opposition, Dkt. 92; on November 4,
2016, BOT filed a reply memorandum of law, Dkt. 94. On December 16, 2016, BOT asked the
Court to stay discovery pending resolution of its motion to dismiss the TACC, Dkt. 97; on
December 22, 2016, BI filed a letter in opposition, Dkt. 99. On January 18, 2017, the Court
issued an order declining to stay discovery. Dkt. 101. On April 6, 2017, at the parties’ request,
the Court granted an extension of time to complete depositions to April 28, 2017. Dkt. 103.
II.

Applicable Legal Standards
To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead “enough

facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). A claim will only have “facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint is properly
dismissed where, as a matter of law, “the allegations in a complaint, however true, could not
raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558.
In considering a motion to dismiss, a district court must “accept[] all factual claims in the
complaint as true, and draw[] all reasonable inferences in the plaintiff’s favor.” Lotes Co. v. Hon
Hai Precision Indus. Co., 753 F.3d 395, 403 (2d Cir. 2014) (quoting Famous Horse Inc. v. 5th

3

It appears an inadvertently truncated version of the License Agreement was attached to the
Declaration of Joseph L. Manson III, Dkt. 91, Ex. B. The complete License Agreement is
available at Dkt. 7, Ex. 1.
6

Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010)) (internal quotation marks omitted). However,
“the tenet that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678. “Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “[R]ather,
the complaint’s factual allegations must be enough to raise a right to relief above the speculative
level, i.e., enough to make the claim plausible.” Arista Records, LLC v. Doe 3, 604 F.3d 110,
120 (2d Cir. 2010) (quoting Twombly, 550 U.S. at 555, 570) (internal quotation marks, citation,
and alteration omitted) (emphasis in Arista Records).
III.

Discussion
The TACC brings three counterclaims against BOT and Aoki: for (1) trademark

infringement, under § 32 of the Lanham Act, 15 U.S.C. § 1114, TACC ¶¶ 33–39; (2) false
designation of origin and unfair competition under § 43 of the Lanham Act, 15 U.S.C. § 1125(a),
TACC ¶¶ 40–46, and (3) trademark dilution, under § 43 of the Lanham Act, 15 U.S.C. § 1125(c),
TACC ¶¶ 47–53. BI seeks injunctive relief and costs for corrective advertising, as well as
attorneys’ fees and costs.
Although § 32 of the Lanham Act concerns registered marks, whereas § 43 concerns
unregistered, common law marks, see Virgin Enters. Ltd. v. Nawab, 335 F.3d 141, 146 (2d Cir.
2003), claims under these provisions are subject to the same analysis, id.; see also Louis Vuitton
Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 114–16 (2d Cir. 2006). As such, “to prevail
on a trademark infringement, false designation of origin, or unfair competition claim under
[these provisions], a plaintiff must show, first, that he or she has a valid mark that is entitled to
protection, and, second, that the defendant’s actions are likely to cause confusion as to the origin
or sponsorship of the defendant’s goods.” LVL XIII Brands, Inc. v. Louis Vuitton Malletier S.A.,

7

--- F. Supp. 3d. ---, No. 14 Civ. 4869 (PAE), 2016 WL 4784004, *21 (S.D.N.Y. Sept. 13, 2016)
(citing, inter alia, Virgin Enters., 335 F.3d at 146).
As for the first element, that the mark is entitled to protection, a certificate of registration
with the Patent and Trademark Office is prima facie evidence that the mark is registered, valid
and entitled to protection, and that the registrant owns the mark and has the exclusive right to use
the mark in commerce. Coach, Inc. v. Horizon Trading USA Inc., 908 F. Supp. 2d 426, 433
(S.D.N.Y. 2012) (citations omitted). Here, BI alleges that it is the exclusive registrant and owner
of the Benihana trademarks in the United States. TACC ¶¶ 10–11. Therefore, BI has adequately
pleaded the first element.
As for the second element, the likelihood of confusion, courts in the Second Circuit
generally look to the factors set forth in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492,
495 (2d Cir. 1961), and, in doing so, “district courts must be careful to maintain a focus on the
ultimate issue of the likelihood of consumer confusion,” Malletier v. Burlington Coat Factory
Warehouse, Corp., 426 F.3d 532, 538 (2d Cir. 2005). These factors include “the strength of [the
mark], the degree of similarity between the two marks, the proximity of the products, the
likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of
defendant’s good faith in adopting its own mark, the quality of defendant’s product, and the
sophistication of the buyers.” Polaroid, 287 F.2d at 495.
To establish the second element, a plaintiff must show that “numerous ordinary prudent
purchasers are likely to be misled or confused as to the source of the product in question because
of the entrance in the marketplace of the defendant’s mark,” Gruner + Jahr Printing & Publ’g
Co. v. Meredith Corp., 991 F.2d 1072, 1077 (2d Cir. 1993), “or that there may be confusion as to
[the] plaintiff’s sponsorship or endorsement of the [defendant’s] mark,” Hormel Foods Corp. v.

8

Jim Henson Prods., Inc., 73 F.3d 497, 502 (2d Cir. 1996). “Affiliation confusion exists where
use of a ‘unique and recognizable identifier’ could lead consumers to ‘infer a relationship’
between the trademark owner and the new product.” De Beers LV Trademark Ltd. v. DeBeers
Diamond Syndicate, Inc., 440 F. Supp. 2d 249, 274 (S.D.N.Y. 2006) (quoting Star Indus., Inc. v.
Bacardi & Co., 412 F.3d 373, 384 (2d Cir. 2005)).
Claims for trademark dilution brought under federal law entitle the owner of a “famous,
distinctive mark” to an injunction against use of a mark that is likely to cause dilution of that
famous mark, either by (1) “blurring” or (2) “tarnishment.” See Starbucks Corp. v. Wolfe’s
Borough Coffee, Inc., 588 F.3d 97, 105 (2d Cir. 2009) (citing 15 U.S.C. § 1125(c)). Dilution by
blurring is “an association arising from the similarity between a mark or trade name and a
famous mark that impairs the distinctiveness of the famous mark,” id. (quoting 15 U.S.C.
§ 1125(c)(2)(B)); it may be found “regardless of the presence or absence of actual or likely
confusion, of competition, or of actual economic injury,” id. (quoting 15 U.S.C. § 1125(c)(1)).
The touchstone of a blurring action is to prevent “the whittling away of an established
trademark’s selling power through its unauthorized used by others.” Id. (quoting Mead Data
Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1031 (2d Cir. 1989)). Dilution by
tarnishment, in contrast, is an “association arising from the similarity between a mark or trade
name and a famous mark that harms the reputation of the famous mark.” Starbucks, 588 F.3d at
110 (quoting 15 U.S.C. § 1125(c)(2)(C)). “A trademark may be tarnished when it is linked to
products of shoddy quality, or is portrayed in an unwholesome or unsavory context, with the
result that the public will associate the lack of quality or lack of prestige in the defendant’s goods
with the plaintiff’s unrelated goods.” Id. (quoting Hormel Foods, 73 F.3d at 507).

9

Measured against these standards, the TACC plausibly alleges acts of trademark
infringement, false designation of origin and unfair competition, and trademark dilution under
the Lanham Act. BI has alleged that BOT has used various Benihana marks—owned by BI—in
ways that would cause consumers confusion about whether BI or BOT was the operator of
Benihana restaurants in America; whether BI had undertaken advertising campaigns that in fact
BOT undertook, such as the “Beni-Girls” campaign; and whether BI was offering products that
in fact were offered by BOT, such as the “Keiko Aoki Inner Makeup” in-home sushi catering
service in New York City. The alleged conduct is of a nature that, if established, could support
liability under the statute.
BOT’s motion to dismiss mainly makes two different arguments.
First, it argues, BI has not stated Lanham Act claims because BOT’s alleged conduct was
a legally protected, and hence not an actionable, “use” of the Trademarks. See BOT Br. at 10–
12. For a statement to constitute actionable “commercial advertising or promotion” under § 43
of the Lanham Act requires that the statement be “(1) commercial speech; (2) for the purpose of
influencing consumers to buy defendant’s goods or services; and (3) although representations
less formal than those made as part of a classic advertising campaign may suffice, they must be
disseminated sufficiently to the relevant purchasing public.” Boule v. Hutton, 328 F.3d 84, 90–
91 (2d Cir. 2003) (internal modifications and citation omitted). Relevant here, statements in
response to a reporter’s solicitation for comment on a matter of public concern and inextricably
intertwined with the reporter’s coverage of the topic and in the news article generally cannot be a
basis for liability under the Lanham Act, as such discussion is protected by the First Amendment,
when on “an issue of public importance and occur[ing] in a forum that has traditionally been
granted full protection under the First Amendment.” Id. at 91.

10

Invoking this principle, BOT argues that BI’s claims to the extent based on statements
made in media interviews cannot support Lanham Act liability. That argument fails, because the
TACC does not bring claims based on statements made in newspaper articles. Its claims instead
are based on statements BOT made in press releases and in advertising on its and Keiko Aoki’s
websites. It fails, too, because the TACC does not allege statements on matters of public
importance. See TACC ¶¶ 14–30. The statements at issue were instead routine instances of
commercial speech intended to promote BOT’s products or service and disseminated to the
public. These fall within the meaning of “use” under the Lanham Act.
BOT next argues that its use of the marks was permitted by contract—the ARA. On this
premise, BOT argues, while BI may bring claims for breach of contrast, under a line of Lanham
Act case law, BI cannot bring claims under the Lanham Act unless BI pleads a sufficiently grave
breach of that contract to rise to the level of justifying rescission or pleads at least a breach of the
ARA. See BOT Br. at 5–9.
This line of case law aligns with § 32 of the Lanham Act, which provides for liability
only for a person who acts “without the consent of the registrant,” 15 U.S.C. § 1114(1).4 It holds
that where a valid contract gives a party (the licensee) a right use the trademarks of another (the
licensor), the existence of the contractual license may bar the licensor from bringing Lanham Act
claims against the licensee, except where the licensee’s contract breach was so grave as to
support rescission of the contract. The foundational Second Circuit case so holding is Affiliated

4

The TACC adequately alleges that BI is the registrant of the Benihana trademarks, TACC
¶¶ 10–11, giving it rights under § 32 of the Lanham Act, which gives “the registrant” with
remedies for trademark infringement, 15 U.S.C. § 1114, and § 43, which makes liable “any
person who believes that he or she is or is likely to be damaged” by the relevant unlawful
conduct, 15 U.S.C. § 1125(a). As for trademark dilution, the “owner” of a relevant mark may
bring a claim for such under 15 U.S.C. § 1125(c). BOT does not dispute the adequacy of the
TACC’s allegations as to these elements.
11

Hospital Prods., Inc. v. Merdel Game Mfg. Co., 513 F.2d 1183 (2d Cir. 1975). There, the
Second Circuit held, when a license agreement “controls the rights of the respective parties in the
use of the [trademark],” for a licensor to bring a Lanham Act claim for trademark infringement,
it must first “demonstrate conduct” by the licensee “sufficiently grave to warrant rescission of
that agreement”; otherwise, the licensor’s remedies sound in breach of contract. Id. at 1186; see
also IMG Fragrance Brands, LLC v. Houbigant, Inc., 679 F. Supp. 2d 395, 407 (S.D.N.Y. 2009)
(plaintiffs may bring only breach of contract claims when alleged breaches of relevant license
agreement did not rise to the level permitting rescission of the agreement, even though alleged
conduct, absent a license arrangement, “would normally constitute trademark infringement”
(citing Affiliated Hospital Prods., 513 F.2d at 1186)).
To assess whether these principles apply, courts have therefore closely examined the
terms of the relevant contract. They have inquired whether the agreement in fact conveyed a
license to the alleged infringer, so as to permit a contract claim to proceed based on breach of the
license agreement. Thus, for example, in Affiliated Hospital Prods., the Second Circuit noted
that the trademark infringement action was based on species of trademark uses that the license
agreement expressly permitted. The Second Circuit accordingly limited the plaintiff licensee’s
recovery to contract damages unless it could show that the defendant licensee’s conduct had been
grave enough to justify rescission of the contract. See Affiliated Hospital Prods., 513 F.3d at
1186 (“Absent grounds for rescission, [licensee] has had since March 2, 1970 the right to use the
[trademark], and [licensor] has only the right to compensatory damages for breach of the
agreement.”); see also Sterling Drug Inc. v. Bayer AG, 792 F. Supp. 1357, 1371 n.12 (S.D.NY.
1992) (“where trademark rights have been conveyed by contract, both contract and trademark
law apply in determining the parties’ rights and may provide separate grounds for relief”), aff’d

12

in part and vacated in part, 14 F.3d 733 (2d Cir. 1994). Where, however, the agreement does
not convey rights to the licensor with respect to certain uses,5 the licensee has been held not to
have waived its right to pursue Lanham Act claims for infringement. See, e.g., Brennan’s Inc. v.
Dickie Brennan & Co. Inc., 376 F.3d 356, 365–67 (5th Cir. 2004) (as to uses outside of those
contemplated by license under agreement, trademark claims barred only if contract language
precludes such a suit “for uses outside of those contemplated and permitted in the agreement”;
contract at issue did not do so, thereby permitting plaintiff to bring Lanham Act claims).
Measured under these standards, BOT’s argument that the ARA is a license agreement of
the sort addressed in Affiliated Hospital Prods., so as to leave BI with contract but not Lanham
Act remedies, is unpersuasive. Simply put, the ARA is not a license agreement. It does not give
BOT any license whatsoever to use the marks at issue within BI’s geographic area—the Territory
(roughly, the Americas). The ARA instead effects a worldwide geographic division which
allocates trademark rights exclusively to BI in certain geographic areas and trademarks rights
exclusively to BOT in others. The relevant provision reads, in its entirety, as follows:
Section 7.10 Trademarks. Each of BOT and Benihana [BI]
acknowledge that, from and after the Effective Time, Benihana will own the
Trademarks in the Territory and BOT will continue to own the Trademarks outside
of the Territory. Accordingly, each of BOT and Benihana agree that, without the
prior written consent of the other, neither will make any use of the Trademarks
which could reasonably be expected to reduce the value or usefulness of the
Trademarks to the other party. In addition, each of BOT and Benihana shall be
responsible for the proper registration and maintenance of the Trademarks and the
prosecution of infringements or potential infringements of the Trademarks in the
territories where such party has an interest in the Trademarks. Each of BOT and
Benihana agrees to notify the other promptly of any infringement or potential
infringement of the Trademarks of which such party becomes aware and to
cooperate with the other party in any action taken to prosecute any such
infringement. The obligations of this Section shall survive the Closing for an
indefinite period.
5

Such an agreement is often referred to as a “consent to use” agreement. See 3 McCarthy on
Trademarks and Unfair Competition § 18:79 (4th ed. 2017).
13

ARA § 7.10.
This provision does not give BOT any rights to use the Benihana marks within the United
States. Quite the contrary, it recognizes that within the Territory, BI alone owns the Benihana
trademarks. Within that Territory, BI has the exclusive duty of assuring “the proper registration
and maintenance of the Trademarks” and of prosecuting infringements of the marks. And while
the ARA requires BI and BOT (1) not to use the marks in manners that would decrease their
value or usefulness without the other’s written consent and (2) to cooperate in the prosecution of
infringing conduct, these provisions do not say or imply that BI or BOT has any right, within the
other’s territory, to use, control, or assign the marks. The ARA is thus a prohibitory document
with respect to use of the marks. And, because it affords BOT no usage rights whatsoever in
BI’s territory—and vice versa—it lacks various hallmarks of a licensing agreement or consent to
use agreement: It does not set out the metes and bounds of permitted versus prohibited uses.
And it lacks any remedial provisions.
In sum, the ARA does not give BOT any trademark rights within the United States or
waive any of BI’s rights as to that geographic area. BI is at liberty to pursue Lanham Act claims
against BOT for acts of trademark infringement within BI’s Territory.6

6

BI and BOT have entered into a separate License Agreement, Dkt. 7, Ex. 1, pursuant to ARA §
8.02(d), which granted “BOT rights to use the Trademarks in the Territory in connection with the
‘Benihana of Tokyo’ Restaurant located in Honolulu, Hawaii and . . . perpetual, exclusive rights
to own or operate ‘Benihana of Tokyo’ restaurants in the State of Hawaii. . . .” ARA § 8.02(d).
But that agreement is irrelevant here, because BOT’s alleged acts of infringement do not relate to
the BOT restaurant in Hawaii that is the subject of that License Agreement. BOT is not
otherwise a licensee in the Territory of any of the trademarks. That the parties (pursuant to the
ARA) entered into a License Agreement for the Hawaii restaurant confirms that the ARA itself
does not give BOT any license to use the trademarks in the Territory or restrict BI’s right to
relief under the Lanham Act within the Territory. Indeed, the License Agreement sets forth a
detailed scheme of permissible uses and of remedies, stating, for example, “Licensee [BOT] will
use such Marks only in the manner and to the extent specifically permitted in this Agreement. . . .
14

BOT relies on cases far afield. For example, it cites G&F Licensing Corp. v. Field &
Stream Licenses Co., LLC, No. 09 Civ. 10197 (LTS) (GWG), 2010 WL 2900203, at *4
(S.D.N.Y. July 16, 2010), for the proposition that parties who agree to advise each other of
infringing activities and to cooperate to fight infringement thereby waived Lanham Act claims
against each other. BOT Br. at 8. G&F Licensing held nothing of the sort. The plaintiff there
was clearly the licensee of the defendant, and therefore could, at most, bring a claim for
infringement under the Lanham Act on behalf of the trademark owner licensor but could not
assert the licensor’s ownership rights against the trademark owner licensor itself. G&F
Licensing, 2010 WL 2900203 at *4. Here, by contrast, BOT is not BI’s licensee.
In sum, the ARA is of quite a different character from the licensing agreements that have
been held to limit licensors—barring rescission-level breaches—to contract damages. Because
BI has not granted BOT any license to use the marks within BI’s Territory as relevant here, BI is
not limited to bringing breach of contract claims. It is at liberty to pursue Lanham Act claims, as
it has done.
For the reasons above, the Court holds that BI, as owner of the Benihana Trademarks
within the United States, has stated Lanham Act claims against BOT for its allegedly infringing
uses of those trademarks within the United States.
CONCLUSION
For the foregoing reasons, the Court denies BOT’s motion to dismiss the TACC. The
Clerk of Court is respectfully directed to terminate the motion pending at Dkt. 89.

Licensee shall appropriately indicate the ownership of the marks whenever they are used by
Licensee. . . . Any and all advertising, publicity, signs, decorations, furnishings, equipment or
other matter employing in any way whatsoever the words ‘Benihana’, ‘Benihana of Tokyo,’ or
the ‘flower’ symbol shall be submitted to [BI] for its approval prior to publication or use.”
License Agreement Art. 5.2.
15