Cesari S.R.L. v. Peju Province Winery L.P. et al
Filing
372
MEMORANDUM AND ORDER denying 324 Motion for Summary Judgment. Defendants' motion for summary judgment is denied in its entirety and defendants statute of limitations and laches affirmative defenses are dismissed with prejudice. Summary ju dgment is granted to plaintiff with respect to the extension of this Court's prior collateral estoppel ruling to Peju Partnership. The Clerk of Court is respectfully directed to terminate the motion pending at ECF No. 324. SO ORDERED. (Signed by Judge Naomi Reice Buchwald on 8/3/2022) (mml)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------X
CESARI S.R.L.,
Plaintiff,
MEMORANDUM AND ORDER
- against –
17 Civ. 873 (NRB)
PEJU PROVINCE WINERY L.P., PEJU
FAMILY OPERATING PARTNERSHIP
L.P., and PEJU PROVINCE
CORPORATION,
Defendants.
------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
For the past five and a half years, the Italian winemaker
Cesari S.r.L. (“Cesari” or “plaintiff”) has been embroiled in a
trademark
litigation
against
Napa
Valley-based
vintners
Peju
Province Winery L.P. (“Peju Province”), Peju Family Operating
Partnership
L.P.
(“Peju
Partnership”),
and
Peju
Province
Corporation 1 (collectively, “Peju” or “defendants”). This conflict
dates back to January 2003, when Cesari obtained a United States
federal trademark registration for its “LIANO” wine brand.
By
happenstance, around the same time, Peju Province began promoting
a wine dubbed “LIANA.”
In February 2003, Peju Province submitted
Peju Province Corporation is the general partner of Peju Province and Peju
Partnership.
See ECF No. 58 at 3.
In a joint letter to the Court dated
September 9, 2021, plaintiff sought leave to dismiss Peju Province Corporation
from this action and included a proposed order. ECF No. 298 at 4. Defendants
did not oppose the request. Id. The Court signed plaintiff’s proposed order
on October 5, 2021. ECF No. 299.
1
an application to the United States Patent and Trademark Office
(“USPTO”) to register the LIANA mark.
Province’s
application,
Cesari
filed
Upon learning of Peju
an
opposition
Trademark Trial and Appeal Board (“TTAB”).
prevailed before the TTAB.
with
the
Cesari ultimately
In a decision rendered in July 2004,
the TTAB rejected Peju Province’s trademark application on the
grounds that the proposed LIANA mark was confusingly similar to
Cesari’s registered LIANO mark.
Unbeknownst to Cesari, Peju
Province nevertheless continued to sell its LIANA-branded wine
until 2007, after which the mark lay dormant until 2014.
In 2014, Peju Partnership sought to resurrect the LIANA brand.
Allegedly
unaware
of
its
affiliate’s
prior
attempt,
Peju
Partnership submitted an application to the USPTO to register the
“LIANA” mark in March 2016.
Peju
Partnership’s
In August 2016, Cesari discovered
application
and
thereafter
the
parties
attempted to reach a consensual resolution regarding Peju’s use of
the LIANA brand.
After negotiations failed, on January 30, 2017,
Cesari once again commenced opposition proceedings before the
TTAB. One week later, Cesari brought this action, alleging federal
and state trademark infringement and unfair competition claims
-2-
arising from Peju’s use of the LIANA mark from 2014 through the
filing of the complaint. 2
After years of contentious litigation, defendants now move
for summary judgment, seeking dismissal of all of plaintiff’s
claims as untimely under the applicable statute of limitations and
the equitable doctrine of laches. 3
In its opposition, plaintiff
The First Amended Complaint sets forth two causes of action. See First Am.
Compl. (“FAC”), ECF No. 197. The first cause of action asserts two claims:
trademark infringement under Section 32 of the Lanham Act (15 U.S.C. §
1114(1)(A)), and false designation of origin (also known as “unfair
competition”) under Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)(1)(A)).
Id. ¶¶ 116-31. The second cause of action asserts corresponding claims under
New York state and common law. Id. ¶¶ 187-93. Neither party raised the issue
of choice of law with respect to what state’s substantive law controls and
simply assumed New York law governs. Since courts are “not required to conduct
a choice of law analysis sua sponte, and instead may apply the state law assumed
by the parties in their papers,” the Court will apply New York substantive law
where applicable. Henneberry v. Sumitomo Corp. of Am., 415 F. Supp. 2d 423,
439 n.7 (S.D.N.Y. 2006) (citing Lehman v. Dow Jones & Co., 783 F.2d 285, 294
(2d Cir. 1986) (Friendly, J.)).
2
Defendants also moved for summary judgment on the merits of plaintiff’s federal
unfair competition claim under 15 U.S.C. § 1125(a)(1)(A) and corresponding state
law claims. Defendants’ argument centers on the Supreme Court’s decision in
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014),
which held that to assert a cause of action for false advertising under 15
U.S.C. § 1125(a)(1)(B) — a provision not at issue in this case — a plaintiff
must establish that the defendant proximately caused an injury to a commercial
interest in reputation or sales. Defendants argue that this requirement also
applies to unfair competition claims under 15 U.S.C. § 1125(a)(1)(A) and that
plaintiff has failed to make the requisite showing.
Plaintiff disagrees.
Section 1125(a)(1)(A) imposes liability for infringements of unregistered
marks. This case, however, involves a registered mark, the validity of which
has never been called into question. As such, plaintiff’s infringement claims,
as pled, arise under 15 U.S.C. § 1114(1)(A), the Lanham Act section that governs
violations of registered trademarks.
At oral argument, the Court confirmed
that defendants do not seek dismissal of plaintiff’s Section 1114 claims on the
merits and that a cause of action under Section 1114 was sufficient for
plaintiff’s purposes.
June 14, 2022 Hr’g Tr. at 2:16-24; 4:12-5:24.
Accordingly, there is no need to engage in the debate about the scope of Lexmark,
and we decline to do so. Defendants’ recent letter of July 8, 2022, which cites
an out of Circuit case involving yet another section of the Lanham Act that is
even further afield, does not change our analysis.
3
-3-
seeks dismissal of defendants’ affirmative defenses, arguing that
they fail as a matter of law.
Plaintiff also seeks summary
judgment on an issue previously litigated in this case, which was
reignited
by
defendants’
motion
—
namely,
whether
Peju
Partnership, an entity that was not party to the original TTAB
proceedings, is collaterally estopped from relitigating the TTAB’s
2004 ruling that the LIANA mark was confusingly similar to LIANO. 4
Oral argument on defendants’ present motion was held on June 14,
2022.
For the reasons discussed below, defendants’ motion for
summary judgment is denied in its entirety and the statute of
limitations
and
laches
defenses
are
dismissed.
Plaintiff’s
request for summary judgment on the issue of collateral estoppel
is granted.
RULE 56.1 STATEMENTS
Three Rule 56.1 Statements of Material Facts were filed in
connection with this motion: (1) defendants’ Rule 56.1 Statement
4 This Court previously held that defendant Peju Province Winery, the party to
the 2003-2004 TTAB proceedings, was precluded from relitigating the issue of
likelihood of confusion. Cesari S.r.L. v. Peju Province Winery L.P., No. 17
Civ. 873 (NRB), 2017 WL 6509004, at *3-*5 (S.D.N.Y. Dec. 11, 2017) (granting in
part and denying in part plaintiff’s motion for partial summary judgment). That
ruling, however, did not extend to co-defendants Peju Partnership or Peju
Province Corporation, neither of which were party to the prior TTAB dispute, as
plaintiff had failed to establish, based on the record then before the Court,
the requisite relationship between the entities for the purposes of issue
preclusion. Id.; see also Cesari S.r.L. v. Peju Province Winery L.P., No. 17
Civ. 873 (NRB), 2018 WL 5831315, at *2-*3 (S.D.N.Y. Nov. 7, 2018) (denying
plaintiff’s renewed motion for partial summary judgment).
-4-
(“SOF”), ECF No. 330, (2) plaintiff’s counter Rule 56.1 Statement
(“Counter SOF”), ECF No. 351, and (3) defendants’ reply Rule 56.1
Statement (“Reply SOF”), ECF No. 363.
Both parties’ submissions
were problematic. Many of defendants’ statements were not material
or
were
not
plaintiff’s
supported
counter
substantiation
or
by
the
evidence
statements
are
deny
argumentative
cited,
basic
and
many
facts
assertions.
of
without
The
Court
disregarded all such improper statements.
Further, plaintiff’s hearsay objections to the defendants’
supporting
declarations
and
materials
are
without
merit.
Declarations are admissible forms of evidence under Federal Rule
of Civil Procedure 56, and plaintiff has not shown that any
declarant lacks personal knowledge or is incompetent to testify
about
the
matters
56(c)(1)(A).
defendants,
discussed
With
the
respect
Court
therein.
to
“has
the
the
See
Fed.
R.
advertisements
discretion
to
Civ.
P.
cited
by
consider
unauthenticated . . . evidence where it is apparent that the party
may be able to authenticate and establish the admissibility of
those documents at trial.”
Bhd. Mut. Ins. Co. v. Ludwigsen, No.
16 Civ. 6369 (CS), 2018 WL 4211319, at *5 n.6 (S.D.N.Y. Sept. 4,
2018) (citations omitted).
the
promotional
materials
Defendants could easily authenticate
at
trial.
-5-
Finally,
defendants’
objection to the declaration of Stewart Gitler submitted in support
of plaintiff’s opposition is rejected for the reasons set forth in
n.12 infra.
In light of the foregoing, where the Court relies on facts
drawn from any of the 56.1 Statements, it has done so because the
record evidence duly supports the statements, no rule of evidence
bars admission, and the opposing party has not disputed the facts
or has not done so with citations to admissible evidence.
FACTUAL BACKGROUND
A.
The Parties and Their Marks
Cesari S.r.L., an Italian wine producer that sells its wine
globally, including in the United States, has sold wine under the
brand name “LIANO” since 1989.
SOF ¶¶ 1, 5; Counter SOF ¶ 1.
In
January 2003, Cesari obtained a federal trademark for “LIANO” for
the sale of wine in International Class 33.
SOF ¶ 4.
Peju Province Winery L.P. is a family-owned and operated
winery founded by Anthony and Herta Peju and located in Napa,
California.
Id. ¶ 2.
In December 2012, Peju Family Operating
Partnership L.P. was formed as part of a corporate restructuring
“to convey ownership of the Peju winery business” to the Peju
daughters, Ariana and Lisa.
Decl. of Ariana Peju in Opp. to Pl.
Mot. for Partial Summary Judgment ¶ 2, ECF No. 32.
One of Peju’s
wine brands was “LIANA,” a portmanteau of the daughters’ names.
-6-
SOF ¶ 40.
In 2003 and then again in 2016, Peju attempted to
register the LIANA mark with the USPTO.
Those attempts, and what
transpired during the years in between, are discussed in detail
below.
B.
Defendants’ First Attempt to Trademark “LIANA”
In 2003, Peju Province began promoting a 2002 Late Harvest
Chardonnay under the brand “LIANA.”
2003,
Peju
Province
submitted
SOF ¶ 20.
an
On February 4,
application
(the
“2003
Application”), signed by Anthony Peju, to the USPTO to register
the mark “LIANA” on an intent-to-use basis for the sale of wine in
International Class 33.
Id. ¶ 6.
On September 3, 2003, the USPTO
filed a notice that the 2003 Application would be published for
opposition on September 23, 2003.
Decl. of Joel G. MacMull in
Support of Defs. Mot. for Summary Judgment (“MacMull Decl.”), Ex.
A., ECF No. 325.
Shortly thereafter, Cesari learned of Peju
Province’s Application through a trademark watch alert.
Decl. of
Gianmaria Cesari (“Cesari Decl.”) ¶ 5, ECF No. 348.
Believing the proposed LIANA mark would be damaging to its
registered LIANO mark, Cesari Decl. ¶ 5, Cesari filed an opposition
to the 2003 Application with the TTAB on October 20, 2003, SOF ¶
8.
Peju Province subsequently served Cesari with its answer to
the opposition.
SOF ¶ 9.
On February 7, 2004, Cesari moved for
judgment on the pleadings on the grounds that the marks were
-7-
virtually identical and that Cesari, having registered its LIANO
mark in January 2003, had uncontested first use of the registered
mark in commerce.
MacMull Decl., Ex. F.
On March 2, 2004, Peju
Province filed its opposition to Cesari’s motion, arguing, inter
alia, that the LIANA mark is used only in the United States and
that there is no likelihood of confusion between the two marks.
MacMull Decl., Ex. G.
On July 20, 2004, the TTAB granted summary judgment in favor
of Cesari, finding that “[t]here is no genuine issue of fact as to
[Cesari’s] priority.”
Cesari S.r.L. v. Peju Province, 2004 WL
1703103, at *2 (T.T.A.B. 2004). The TTAB also concluded that there
is a likelihood of confusion between the marks because the marks
are “almost
identical,”
“there
is
no
genuine
issue
that
the
parties’ goods are identical,” and “neither [Cesari’s] pleaded
registration nor [Peju’s] application has restrictions as to the
channels of trade or purchasers.”
Id.
Peju Province failed to
appeal or otherwise challenge the TTAB’s ruling and elected not to
submit
a
revised
application
narrowing
its
target
market.
Thereafter, on September 28, 2004, the USPTO issued a “Notice of
Abandonment”
for
the
2003
Application,
stating
that
“[t]he
trademark application . . . was abandoned on 07-20-2004 as a result
-8-
of the Trademark Trial and Appeal Board proceedings.”
MacMull
Decl., Ex. H.
Despite the TTAB’s ruling and the deemed abandonment of the
2003 Application, the next year, Peju Province began commercial
sales of its LIANA-branded 2002 Late Harvest Chardonnay. SOF ¶ 22.
Peju produced approximately 350 cases of the wine, which almost
entirely sold out by 2007.
Decl. of Kandiss Schulz in Support of
Defs. Mot. for Summary Judgment (“Schulz Decl.”), Ex. A, ECF No.
328.
C.
Defendants’ Second Attempt to Trademark “LIANA”
In the summer of 2014, Peju published a newsletter announcing
“the return of Liana” with a new 2013 vintage, “the first [Lianabranded]
vintage
since
2002.”
Pl.
Judgment, Ex. 4 at 70, ECF No. 24.
Mot.
for
Partial
Summary
The following year, Peju
Partnership acquired a new winery that began doing business as
Liana Estates.
SOF ¶¶ 25-26.
In January 2016, Ariana Peju asked
Peju’s then-trademark counsel, Scott Gerien, to investigate the
availability of the “LIANA” trademark.
Id. ¶ 27.
Ms. Peju
maintains that at that time, she was unaware of Peju Province’s
2003 Application and the prior dispute with Cesari before the TTAB.
Decl. of Ariana Peju in Support of Defs. Mot. for Summary Judgment
(“Ariana Peju Decl.”) ¶ 20, ECF No. 326.
-9-
After completing an initial trademark search, Mr. Gerien
informed Ms. Peju that the LIANA mark was unregistered and opined
that although there were several other marks encompassing the word
“LIANA,” there were sufficient differences to overcome opposition.
Ariana Peju Decl., Ex. A at 2.
The next month, Ms. Peju again
asked Mr. Gerien to investigate the LIANA mark among several other
potential marks.
Ariana Peju Decl., Ex. B at 1.
The list of
results from Mr. Gerien’s subsequent trademark search included
Cesari’s LIANO mark.
Decl. of Valeria Calafiore Healy dated
January 24, 2022 in Support of Cesari’s Opp. to the Peju Defs.
Mot. for Summary Judgment (“Healy Decl.”), Ex. 10, ECF No. 349.
However, according to Ms. Peju, Mr. Gerien did not explicitly
identify
Cesari’s
registration.
reiterated
LIANO
Ariana
his
mark
Peju
position
as
Decl.
that
a
¶
Peju
potential
10.
obstacle
Rather,
likely
Mr.
could
to
Gerien
overcome
opposition, noting only that there was “some higher than normal
risk” with the mark.
Ariana Peju Decl., Ex. B.
On March 11, 2016, Peju Partnership submitted an application
(the “2016 Application”), again signed by Anthony Peju, to register
the mark “LIANA” on an intent-to-use basis for the sale of wines
and spirits in International Class 33, the same class cited in the
2003 Application.
SOF ¶ 29; see MacMull Decl., Ex. L.
-10-
The USPTO
published the 2016 Application for opposition on August 2, 2016.
SOF ¶ 30.
As in 2003, soon after publication, Cesari received a
trademark watch alert for the 2016 Application, Counter SOF ¶ 31,
and promptly acted on the information.
On August 31, 2016, Cesari
filed a request for an extension of time to oppose the 2016
Application, which was granted.
SOF ¶ 32.
Cesari then sent Peju
a cease-and-desist letter, demanding that Peju terminate its use
of the LIANA mark and withdraw the 2016 Application.
Decl., Ex. F.
Ariana Peju
Between November 2016 and January 2017, Cesari and
Peju engaged in negotiations in an attempt to consensually resolve
Cesari’s objections to Peju’s use of the LIANA mark.
SOF ¶ 34.
In the midst of these negotiations, the fact of the 2003 TTAB
proceedings came to light, see Ariana Peju Decl., Ex. I, and
communications eventually broke down, SOF ¶ 35.
On January 30, 2017, Cesari filed an opposition to the 2016
Application, citing its first-in-time priority and the TTAB’s
prior ruling against Peju’s 2003 Application.
SOF ¶ 36.
then commenced this action on February 6, 2017. 5
Id. ¶ 37.
Cesari
Peju
nevertheless continued the production and sale of its LIANA-
The next day, Cesari moved to suspend the TTAB proceedings pending the
disposition of this action.
See Cesari S.r.L. v. Peju Family Operating
Partnership L.P., Opp. No. 91232542 (T.T.A.B. 2017) at Doc. No. 4. The TTAB
granted Cesari’s motion on March 14, 2017. Id. at Doc. No. 5.
5
-11-
branded wines through July 2018, 6 when in response to plaintiff’s
pending preliminary injunction motion defendants ceased using the
LIANA mark and rebranded their winery.
No. 82.
July 16, 2018 Letter, ECF
On March 6, 2019, Peju filed a notice with the TTAB
“expressly
abandon[ing]”
the
2016
Application
with
prejudice.
Healy Decl., Ex. 12.
LEGAL STANDARD
Summary judgment is appropriate when “the movant shows that
there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
56(a).
Fed. R. Civ. P.
On a motion for summary judgment, the initial burden rests
with the moving party to make a prima facie showing that no
material fact issues exist for trial.
Catrett, 477 U.S. 317, 323 (1986).
“[t]o
defeat
summary
judgment,
See Celotex Corp. v.
Once that showing is made,
the
non-movant
must
produce
specific facts” to rebut the movant’s showing. Wright v. Coughlin,
132 F.3d 133, 137 (2d Cir. 1998) (citing Celotex, 477 U.S. at 322).
In ruling on a summary judgment motion, a court “must resolve all
ambiguities,
rationally
be
and
credit
drawn,
in
all
factual
favor
of
the
inferences
party
that
opposing
could
summary
As the resolution of this motion does not turn on the amount of sales, cost
of goods sold, or net profit, we will not attempt to specify any such numbers
or amounts.
6
-12-
judgment.”
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202
(2d Cir. 2007) (internal quotation marks and citation omitted).
DISCUSSION
Defendants
seek
summary
judgment
dismissing
all
of
plaintiff’s claims on the grounds that they are time-barred under
the applicable statute of limitations and by laches.
Mem. of Law
of Peju Province Winery L.P. and Peju Family Operating Partnership
L.P. in Support of Their Mot. for Summary Judgment (“Def. Br.”) at
3, 21, ECF No. 331.
Plaintiff counters that defendants’ statute
of limitations and laches defenses fail as a matter of law.
Pl.
Cesari S.r.L.’s Opp. to the Peju Defs. Mot. for Summary Judgment
(“Pl. Opp. Br.”) at 1, ECF No. 350.
In addition, plaintiff seeks
summary
whether
judgment
on
the
issue
of
this
Court’s
prior
collateral estoppel ruling against Peju Province should extend to
Peju Partnership.
Id.
The Court first addresses plaintiff’s
collateral estoppel argument.
The Court then turns to defendants’
statute of limitations and laches defenses.
A.
Collateral Estoppel
In light of the TTAB’s 2004 ruling rejecting Peju Province’s
trademark application, one of the earliest issues litigated in
this suit was whether defendants were precluded from relitigating
the issue of likelihood of confusion.
plaintiff’s case.
This issue is pivotal to
To prevail on an infringement claim under
-13-
Section 1114(1)(A) of the Lanham Act, “a plaintiff must show,
first, that its mark merits protection, and, second, that the
defendant’s use of a similar mark is likely to cause consumer
confusion.”
Int’l Info. Sys. Sec. Certification Consortium, Inc.
v. Sec. Univ., LLC, 823 F.3d 153, 160 (2d Cir. 2016).
It is
undisputed that plaintiff’s registered LIANO trademark is valid.
SOF ¶ 4. 7
Thus, plaintiff’s infringement claims turn on whether
there is a likelihood of confusion between the parties’ marks.
In a Memorandum and Order dated December 11, 2017 addressing
plaintiff’s first motion for partial summary judgment, this Court
held
that
Peju
proceedings,
Province
was
Winery,
precluded
the
from
party
to
the
relitigating
2003
the
TTAB
TTAB’s
determination that the LIANA mark was confusingly similar to LIANO.
Cesari S.r.L. v. Peju Province Winery L.P., No. 17 Civ. 873 (NRB),
2017 WL 6509004, at *3-*5 (S.D.N.Y. Dec. 11, 2017) (the “2017
Order”).
In reaching that conclusion, the Court relied on the
Supreme Court’s decision in B&B Hardware, Inc. v. Hargis Indus.,
Inc., 575 U.S. 138, 160 (2015), which held that “[s]o long as the
other ordinary elements of issue preclusion are met, when the
Moreover, “[a] certificate of registration with the [Patent and Trademark
Office] is prima facie evidence that the mark is registered and valid.” Lane
Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 345 (2d Cir.
1999). Plaintiff has produced a copy of its USPTO certificate. See Compl.,
Ex. 1, ECF No. 1.
7
-14-
usages adjudicated by the TTAB are materially the same as those
before the district court, issue preclusion should apply.”
*3.
Id. at
Rejecting defendants’ attempt to identify divergences in use,
this Court concluded that each party uses its “mark in ways that
are materially the same as the usages adjudicated by the TTAB.”
Id. at *3-*4.
Specifically, “Cesari registered its trademark,
LIANO, with respect to ‘wines’ in International Class 33” and
“Cesari has continued to use its LIANO mark on wines.”
Id. at *3.
Likewise, “Peju Province applied to register its mark, LIANA, with
respect to ‘wine’ in International Class 33,” and “Peju Province
has used its LIANA mark on the 2002, 2013, 2014, and 2015 LIANA
vintages and the 2014 Liana Estates vintage.” Id. Further, “[t]he
specific trade channels and classes of consumers that purportedly
characterize the LIANA mark’s usage are among the reasonable trade
channels and usual classes of consumers the TTAB considered.”
at *4 (internal quotation marks and citations omitted).
Id.
As such,
upon concluding the ordinary elements of issue preclusion were
satisfied with respect to Peju Province, this Court held that Peju
Province was precluded from relitigating the issue of likelihood
of confusion.
Id. at *3-*5.
However, the Court declined to extend its ruling to Peju
Partnership and Peju Corporation, neither of which participated in
-15-
the original TTAB dispute, because the record before the Court at
that time did not establish a sufficient connection between the
various Peju entities for the purposes of collateral estoppel.
Id. at *5.
As the Court observed, “the strongest connection
between any of these entities is disputed; Cesari contends that
Anthony and Herta Peju are the general partners of Peju Province,
whereas defendants assert that Peju Corporation is the sole general
partner.”
Id.
Moreover, Peju Partnership was not formed until
2012. Id. at *2. The Court explained that to extend the preclusive
effect of the TTAB judgment to the co-defendants, “Cesari must
show either that (a) Peju Corporation and/or Peju Partnership
controlled Peju Province in the TTAB litigation, or (b) Peju
Province is controlling Peju Corporation and/or Peju Partnership
in the instant litigation.”
Id. at *5.
Cesari again raised the issue of collateral estoppel in a
renewed motion for partial summary judgment filed on May 4, 2018.
See ECF No. 51.
Concluding plaintiff’s additional allegations
still did not suffice to link the Peju entities for the purposes
of issue preclusion, 8 this Court denied plaintiff’s renewed motion.
8 In a sparse Rule 56.1 Statement filed alongside its motion, plaintiff asserted
that Peju Corporation is the general partner of both Peju Province and Peju
Partnership, that Anthony and Herta Peju are the directors of Peju Corporation,
and that Anthony and Herta Peju own and manage Peju Partnership. See ECF No.
51-2.
-16-
Cesari S.r.L. v. Peju Province Winery L.P., No. 17 Civ. 873 (NRB),
2018 WL 5831315, at *2-*3 (S.D.N.Y. Nov. 7, 2018).
Not only in
their oppositions to plaintiff’s summary judgment motions but also
throughout
the
years
that
followed,
defendants
consistently
maintained that Peju Province and Peju Partnership were distinct
entities and that plaintiff failed to establish the requisite
control needed to extend this Court’s collateral estoppel ruling. 9
Now, after more than five years of litigation, defendants
have reversed position.
In their moving brief on the present
motion, defendants concede for the purposes of this litigation
that Peju Province and Peju Partnership “are effectively one and
the same entity because, inter alia, they share common ownership
and control.”
Def. Br. at 11 n.5.
In her declaration submitted
in support of defendants’ motion, Ariana Peju states that Peju
Province and Peju Partnership “exercise joint control over their
respective Liana-branded products” and “share common ownership and
9 During the six-and-a-half-hour discovery conference held on June 9, 2021,
counsel for defendants stated for the first time that defendants might be
willing to stipulate to the issue of “the interrelationship and the control of
the three [defendants].” June 9, 2021 Hr’g Tr. at 27:2-7, ECF No. 289. However,
as reported to the Court in a joint status update letter filed on September 9,
2021, Peju clarified that any such stipulation could not be used for the purposes
sought by Cesari in this case, namely, “to hold the remaining defendant Peju
[Partnership] liable under the collateral estoppel and related theories Cesari
has plead [sic] in its complaint, as amended.” ECF No. 298 at 4. Such a caveat
would make defendants’ proposed stipulation meaningless. Given this bait-andswitch, it would not be too cynical to conclude that the raising of the proposed
stipulation during oral argument was a diversionary tactic to dissuade the Court
from addressing the issue during the conference.
-17-
control.”
Ariana Peju Decl. ¶¶ 7, 8.
Ms. Peju explains that she
and her sister Lisa “are trustees and beneficiaries of a trust
that is the majority shareholder in both” Peju Province and Peju
Partnership.
Id. ¶ 8.
She also states that “[t]o this day,
certain business decisions, including those sometimes involving
branding
and
marketing
of
both
[Peju
Province]
and
[Peju
Partnership] wines are often made with one or more family members
sharing information and collaborating.”
Id.
Ms. Peju identifies
herself, her father, her mother, and her sister as the “decision
makers at both” Peju Province and Peju Partnership.
Id. ¶ 9.
Defendants make no effort to hide the impetus behind this
about-face.
In
their
motion,
defendants
invoke
statute
of
limitations and laches defenses on behalf of both Peju Province
and Peju Partnership.
However, since Peju Partnership did not
exist prior to December 2012 and did not use the LIANA brand until
2014, that defendant could not assert timeliness defenses unless
it could claim Peju Province’s longevity as its own.
Thus,
defendants now concede a single enterprise-type connection between
the two Peju entities in order to argue that “a finding of terminal
delay by this Court as to [Peju Province] also applies with equal
force to [Peju Partnership].”
Def. Br. at 11 n.5.
-18-
In its opposition brief, plaintiff contends that defendants’
concession and invocation of their affirmative defenses on behalf
of both Peju entities “is sufficient as a matter of law to
establish the requisite control” needed “to extend [the Court’s]
collateral estoppel ruling to Peju Partnership.”
12.
The Court agrees.
Pl. Opp. Br. at
Defendants’ concession, illuminated by the
color Ms. Peju provides in her supporting declaration, confirms
that there is a sufficient identity between Peju Province and Peju
Partnership
such
that
the
latter
may
be
bound
by
judicial
determinations made against the former.
At oral argument, defense counsel unsuccessfully attempted to
backtrack, stating:
I acknowledge now it may be poor language in footnote - what was it footnote 5? . . . But I do want to maintain
that what we are talking about in terms of the
commonality
is
specifically
referenced
in
the
declaration so that has its limitations, and that’s my
fault. I understand that there is maybe some loose
language in there.
June 14, 2022 Hr’g Tr. at 24:19-25:2, ECF No. 369.
There is
nothing inartful about defendants’ admission, however, and Ms.
Peju’s declaration does not articulate any limits to the connection
between the two co-defendants, other than to say that they are not
literally the same entities.
Defendants
also
tried
Ariana Peju Decl. ¶ 6.
to
argue
that
footnote
5
notwithstanding, plaintiff has not proven that Peju Province is
-19-
controlling Peju Partnership in this suit, per this Court’s 2017
Order.
June 14, 2019 Hr’g Tr. at 9:24-11:7; see Cesari, 2017 WL
6509004 at *5. Defendants’ reliance on that language is misplaced.
The explanation of the required showing for issue preclusion set
forth in the 2017 Order was made in the context of what the Court
knew at the time, which was precious little about the overlap in
operations and decision-making authority between the two entities.
However, demonstrating control in the instant litigation is but
one way of establishing privity such that a non-party may be bound
by a judgment rendered in another proceeding.
As the Second Circuit explained in Expert Elec., Inc. v.
Levine, whether there is an identity between parties for the
purposes of collateral estoppel “is a factual determination of
substance, not mere form.
Generally speaking, one whose interests
were adequately represented by another vested with the authority
of representation is bound by the judgment, although not formally
a party to the litigation.”
554 F.2d 1227, 1233 (2d Cir. 1977)
(citations omitted), cert. denied, 434 U.S. 903 (1977); see also
Alpert’s Newspaper Delivery Inc. v. The New York Times Co., 876
F.2d 266, 270 (2d Cir. 1989) (rejecting argument that “literal
privity
must
exist
among
the
parties
for
them
identical” for collateral estoppel purposes).
-20-
to
be
termed
Thus, collateral
estoppel may be appropriate where “the party bound is in substance
the one whose interests were at stake in the prior litigation.”
Expert Elec., Inc., 554 F.2d at 1233.
The
record
establishes
evidence
that
Peju
presently
Province
before
and
the
Peju
Court
clearly
Partnership
are
“effectively one and the same,” Def. Br. at 11 n.5, with the same
interests at stake and the same authority of representation in
both the 2003 TTAB proceedings and the present action. In addition
to the details supplied by Ms. Peju, the Court notes that Anthony
Peju signed both the 2003 Application submitted by Peju Province
and the 2016 Application submitted by Peju Partnership, and that
the same website was used to promote the LIANA wines marketed by
Peju
Province
starting
in
between
2014.
2005
and
Further,
2007
notably
and
by
Peju
Partnership
absent
from
Ms.
Peju’s
declaration is any disavowal of joint control over the present
litigation.
At bottom, defendants cannot ask the Court to find such
interconnectedness between the Peju entities for the purposes of
their
affirmative
defenses,
but
not
for
issue
preclusion.
Accordingly, the collateral estoppel ruling set forth in the 2017
Order
extends
to
defendant
Peju
Partnership
such
that
Peju
Partnership, like Peju Province, is precluded from relitigating
-21-
the TTAB’s determination that Peju’s LIANA mark is likely to cause
confusion with Cesari’s LIANO mark. 10
B.
Statute of Limitations
Turning to the heart of defendants’ motion, defendants seek
dismissal of all of plaintiff’s claims as time-barred under the
applicable
statute
of
limitations.
“Because
the
statute
of
limitations is an affirmative defense, the defendant bears the
burden of establishing by prima facie proof that the limitations
period
has
expired
since
the
plaintiff’s
claims
accrued.”
Szymanski v. Local 3, Int’l Bhd. of Elec. Workers, 577 F. App’x
52, 53 (2d Cir. 2014) (quoting Overall v. Estate of Klotz, 52 F.3d
398, 403 (2d Cir. 1995)).
limitations
period
competition claims.
for
The Lanham Act establishes no specific
trademark
infringement
or
unfair
See 15 U.S.C. §§ 1114(1)(A), 1125(a)(1)(A).
On a motion for summary judgment, “a district court may grant summary judgment
to any party – including a non-movant,” First Fin. Ins. Co. v. Allstate Interior
Demolition Corp., 193 F.3d 109, 115 (2d Cir. 1999), so long as the moving party
had notice and an opportunity to respond, such that it is not prejudiced,
Bridgeway Corp. v. Citibank, 201 F.3d 134, 139 (2d Cir. 2000); see Fed. R. Civ.
P. 56(f)(1),(3). Where “the [moving] party either cannot claim to have been
surprised by the [granting of summary judgment to a non-movant] or if,
notwithstanding its surprise, the party had no additional evidence to bring, it
cannot plausibly argue that it was prejudiced by the lack of notice.” Bridgeway,
201 F.3d at 140.
Further, “the likelihood of prejudice is greatly reduced,
even when summary judgment is based upon issues raised by the nonmoving party,
if the moving party speaks to those issues in the course of the district court
proceedings.” Id. Here, given defendants’ opportunistic change of heart at
this late stage, they can hardly claim surprise at plaintiff’s resurrection of
this previously litigated issue. Moreover, defendants do not contend that they
have additional evidence to bring. There is thus no prejudice to defendants in
granting plaintiff’s request for summary judgment.
10
-22-
Accordingly,
Second
Circuit
“courts
have
looked
to
the
most
analogous state statute of limitations: [New York’s] six-year
statute of limitations for fraud claims.”
Charles Atlas, Ltd. v.
DC Comics, Inc., 112 F. Supp. 2d 330, 334 (S.D.N.Y. 2000) (citing
Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187, 192 (2d Cir.
1996)). 11
In general, “a plaintiff’s cause of action accrues when
he discovers, or with due diligence should have discovered, the
injury that is the basis of the litigation.”
480 F.3d 140, 149 (2d Cir. 2007).
Guilbert v. Gardner,
However, a plaintiff is not
“obligated to sue until its right to protection has ripened such
that plaintiff knew or should have known, not simply that defendant
Both sides have assumed that New York’s statute of limitations controls.
See FAC ¶¶ 30-34; Def. Br. at 11. Although neither party raises the issue, New
York’s borrowing statute, N.Y. C.P.L.R. § 202, arguably may compel application
of a different state law. Under C.P.L.R. § 202, “when a nonresident plaintiff
sues upon a cause of action that arose outside of New York, the court must apply
the shorter limitations period . . . of either: (1) New York; or (2) the state
where the cause of action accrued.” Thea v. Kleinhandler, 807 F.3d 492, 497
(2d Cir. 2015) (internal quotation marks and citation omitted).
Typically,
“[t]he burden is on [d]efendants to show . . . that [p]laintiff’s cause of
action ‘accrued’ outside New York.” Estate of Mantle v. Rothgeb, 537 F. Supp.
2d 533, 541 n.14 (S.D.N.Y. 2008). Defendants have made no such showing. In
any event, the Court’s present ruling would be the same even if applying the
statute of limitations period of the other potentially applicable forum,
California, the site from where the LIANA-branded wines were marketed, packaged,
and sold. California courts apply a three-year statute of limitations to Lanham
Act claims, which begins to run upon a plaintiff’s “actual or constructive
knowledge of the wrong.”
Karl Storz Endoscopy America, Inc. v. Surgical
Technologies, Inc., 285 F.3d 848, 857 (9th Cir. 2002). As discussed herein,
the earliest infringements for which plaintiff seeks recovery date back to
August 17, 2014 — just under two and a half years prior to the commencement of
this action — when Peju Partnership made its first sales of the 2013 vintage
LIANA wine. See Healy Decl., Ex. 1 at 2. For the reasons explained below, the
Court concludes that plaintiff had neither actual nor constructive knowledge of
defendants’ infringing conduct prior to that date.
11
-23-
was using the potentially offending mark, but that plaintiff had
a provable infringement claim against defendant.”
ProFitness
Physical Therapy Ctr. v. Pro–Fit Orthopedic & Sports Physical
Therapy, 314 F.3d 62, 70 (2d Cir. 2002).
Defendants
argue
that
plaintiff’s
Lanham
Act
claims
are
barred under New York’s six-year statute of limitations because
plaintiff had notice that defendants were using the LIANA mark as
early as 2003, when defendants began advertising their 2002 vintage
LIANA-branded wine. Def. Br. at 11-13. This argument is meritless
for two reasons.
First, defendants have failed to show that
plaintiff knew or reasonably should have known that defendants
continued using the LIANA mark after their trademark application
was rejected by the TTAB and deemed abandoned by the USPTO in 2004.
Second,
and
infringing
relatedly,
conduct
plaintiff’s
starting
in
claims
2014,
when
arise
solely
defendants
from
began
marketing new vintages of wine branded with the LIANA label, and
thus are not barred by the applicable statute of limitations.
1. Cesari Did Not Have Notice of Peju’s
Conclusion of the 2003 TTAB Proceedings
Conduct
After
the
Defendants fail to show that Cesari had notice of Peju’s
infringing
conduct
because:
(a)
defendants
offer
no
evidence
establishing actual or constructive knowledge; (b) Cesari did not
have a duty of inquiry to continue monitoring Peju’s conduct after
-24-
Cesari prevailed before the TTAB; and (c) even if Cesari had such
a duty (which it did not), reasonable diligence would not have
revealed Peju’s infringements.
(a)
Actual or Constructive Knowledge
Defendants’ primary argument in support of their statute of
limitations defense is that plaintiff knew or should have known
that they were using the LIANA mark in a potentially infringing
way as early as 2003. In support, defendants identify six examples
of advertisements, filings, and other documents that purportedly
demonstrate Cesari’s actual or constructive knowledge of Peju’s
continued use of the LIANA mark:
(1) a July 15, 2003 advertisement for a LIANA-branded
wine on its website www.peju.com;
(2) the October 3, 2003 trademark watch alert that
notified Cesari of Peju’s filing of the 2003 Application;
(3) the December 12, 2003 answer that Peju served to
Cesari in response to Cesari’s opposition to the 2003
Application;
(4) a December 19, 2003 article published by USA Today
featuring a LIANA-branded wine;
(5) a March 2, 2004 letter from Peju’s trademark counsel
to Cesari’s trademark counsel; 12 and
Cesari’s trademark counsel, Stewart Gitler, disclaims ever receiving this
letter. Decl. of Attorney Stewart L. Gitler (“Gitler Decl.”) ¶¶ 9-10, ECF No.
347. Defendants argue the Gitler Declaration is inadmissible because plaintiff
did not disclose Mr. Gitler as a witness as required by Fed. R. Civ. P. 26.
Reply SOF ¶ 12. The Court disagrees. The sole purpose of the Gitler Declaration
is to refute the assertions defendants made for the first time in connection
with the present motion in support of their statute of limitations and laches
defenses. Gitler Decl. ¶ 4. Since the use of Mr. Gitler’s testimony is “solely
12
-25-
(6) a July 21, 2004 article published by the Sacramento
Bee featuring a LIANA-branded wine.
Def. Br. at 12.
These examples are utterly insufficient.
First and foremost, as the below timeline makes plain, every
single one of defendants’ examples (the numbered and shaded boxes)
predates the USPTO’s notice of abandonment of the 2003 Application,
and all but one was published before the issuance of the TTAB’s
ruling rejecting the 2003 Application.
None of these examples reveal Peju’s intention to continue
using the LIANA brand regardless of how the TTAB ruled on their
trademark application.
At most, they show Peju was using the mark
at the time the 2003 Application was pending.
Such a showing is
for impeachment,” plaintiff was not obligated to identify Mr. Gitler as a
witness under Rule 26. Fed. R. Civ. P. 26(a)(1)(A)(i).
-26-
hardly sufficient to establish actual knowledge or to place Cesari
on constructive notice that Peju would continue using the LIANA
mark despite its defeat before the TTAB.
(b)
Duty of Inquiry
Furthermore, while defendants are correct that as a general
matter a trademark owner has a duty to actively police its mark
against infringers, see Black Diamond Sportswear, Inc. v. Black
Diamond Equipment, Ltd., No. 06-3508, 2007 WL 2914452, at *3 (2d
Cir. Oct. 5, 2007), there are limits to that guiding principle.
Importantly, “[a]bsent actual knowledge,” a trademark owner is
chargeable only “with such knowledge as he might have obtained
upon inquiry, provided the facts already known by him were such as
to put upon a man of ordinary intelligence the duty of inquiry.”
Advanced Cardiovascular Systems, Inc. v. Scimed Life Systems,
Inc., 988 F.2d 1157, 1162 (Fed. Cir. 1993) (quoting Johnston v.
Standard Mining Co., 148 U.S. 360, 370 (1893)).
As such, to
“constitute a legal imputation of knowledge,” as defendants urge,
Def. Br. at 13, infringing conduct must be sufficiently public and
widespread such that the trademark owner reasonably should have
been on alert.
Compare Black Diamond, 2007 WL 2914452 at *3
(concluding plaintiff had duty of inquiry and failed to undertake
reasonable due diligence where defendant “marketed its products in
-27-
widely distributed catalogues, at yearly trade shows in which
[plaintiff and defendant] both participated, and through retail
stores
nationwide,
including
in
[plaintiff’s]
home
state
of
Vermont.”); with Borghese Trademarks, Inc. v. Borghese, No. 10
Civ. 5552 (JPO), 2013 WL 143807, at *9 (S.D.N.Y. Jan. 14, 2013)
(refusing to conclude that plaintiff knew or should of known of
infringements, noting “[i]t is one thing to expect a company to
monitor for infringements; it is quite another to expect it to
spot several isolated minutes of infomercial footage over several
years.”).
The facts known to Cesari in the wake of the 2003 TTAB
proceedings did not create a duty of inquiry obligating Cesari to
continue monitoring Peju’s conduct.
At that time, Cesari knew
that Peju had applied to register the LIANA mark for the sale of
wine, that the TTAB had rejected Peju’s application on the grounds
that the LIANA mark was confusingly similar to Cesari’s registered
LIANO trademark, that Peju had not appealed or otherwise challenged
the TTAB’s ruling, and that the USPTO had subsequently deemed
Peju’s application abandoned.
Given these circumstances, it was
entirely reasonable for Cesari to assume that Peju would cease
using the LIANA mark.
-28-
In rebuttal, defendants spill much ink arguing that the TTAB’s
ruling did not legally enjoin them from using the LIANA mark in
commerce, the implication being that Peju was free to use the brand
as it wished and that Cesari should not have assumed otherwise.
Def. Br. at 7-10 (citing Beasley v. Howard, 14 F.4th 226 (3d Cir.
2021)). 13
Not so.
“While a successful [TTAB] opposition only acts
to prevent registration and not use, as a practical matter, it
puts the defendant on notice that, at the least, the plaintiff is
not going to sleep on its rights, and indeed . . . goes even
further and puts the defendant on notice that the opposer also
protests its use of the confusingly similar mark.”
Citibank, N.A.
v. Citytrust, 644 F. Supp. 1011, 1014 (E.D.N.Y. 1986) (quoting
Alfred Dunhill of London, Inc. v. Kasser Distillers Prods. Corp.,
350 F. Supp. 1341, 1367 (E.D. Pa. 1972), aff’d 480 F.2d 917 (3d
Cir. 1973)).
Here, the TTAB proceedings put Peju on notice that
the LIANA mark was deemed to be confusingly similar with that of
a first-in-time registrant, that the registrant actively opposed
Peju’s use of the mark, and that Peju was not permitted to
Beasley has no bearing on this case. There, after the TTAB dismissed the
plaintiff’s petitions to cancel the defendant’s registered trademark, the
plaintiff brought a civil suit for trademark infringement. 14 F.4th at 229.
This gave rise to the question of whether res judicata precluded the plaintiff
from litigating his infringement claim in federal court. Id. In concluding
that claim preclusion did not apply, the Court explained that questions of
infringement or unfair competition exceed the scope of the TTAB’s jurisdiction,
so the TTAB could never have granted the plaintiff the relief he sought in
federal court. Id. at 233-34.
13
-29-
trademark the name.
Thus, when Peju continued to use the LIANA
mark in blatant disregard for the TTAB’s ruling, it did so at its
own risk.
position
In arguing otherwise, defendants take the untenable
that
although
Cesari
defeated
Peju’s
trademark
application, the burden was on Cesari to continue monitoring Peju’s
conduct, seemingly indefinitely, lest Cesari be deemed to “sleep
on its rights.”
Def. Br. at 14.
The Court cannot and will not
endorse such an inequitable allocation of burdens or reward such
defiance of authority.
(c)
Reasonable Diligence
Even if Cesari had a duty of inquiry, which it did not,
reasonable diligence would not have revealed Peju’s use of the
LIANA mark because there was nothing to discover.
From the
conclusion of the TTAB proceedings in 2004 until 2014, Peju’s use
of the LIANA mark was minimal to nonexistent.
Peju’s records show
that it produced roughly 350 cases of its 2002 LIANA-branded wine,
which it began selling commercially in 2005 and which almost
entirely sold out by 2007.
See Schulz Decl., Ex. A.
Such sales
were so minimal that it appears not even Anthony Peju knew about
them at the time.
See Decl. of Anthony Peju in Support of Defs.
Mot. for Summary Judgment ¶ 11, ECF No. 327 (“I have come to learn
in recent days that PPW’s first LIANA-branded wine, a 2002 Late
-30-
Harvest
Chardonnay,
was
beginning in 2005.”).
available
for
sale
on
www.peju.com
Moreover, it is undisputed that Peju did
not sell any LIANA-branded wine from 2008 until August 2014.
Healy Decl., Exs. 1-4.
See
In the summer of 2014, Peju published a
newsletter announcing “the return of Liana” and proclaiming that
the “2013 vintage will be the first vintage since 2002.”
24-4.
ECF No.
In fact, the Liana Estates winery was not formally launched
until 2016.
SOF ¶ 25.
In this regard, Peju’s conduct bears no resemblance to the
facts in Charles Atlas, Ltd. v. DC Comics, Inc., 112 F. Supp. 2d
330 (S.D.N.Y. 2000), the primary case upon which defendants rely.
In Charles Atlas, the plaintiff, a bodybuilding instructor who
used a comic strip story in his advertisements, alleged that the
defendant misappropriated his story in one of defendant’s comic
books.
112 F. Supp. at 331-32.
The comic book at issue was first
published by the defendant in 1991 and the disputed portrayals
reappeared in several miniseries that came out in the following
years.
Id. at 332-33.
Plaintiff did not learn of the alleged
infringement until 1998 and so did not bring suit until 1999.
at 332.
Id.
In concluding that the “[p]laintiff could have, with
reasonable diligence, discovered the alleged infringement upon
[the
book’s]
publication
or
shortly
-31-
thereafter,”
the
Court
observed
that
“[t]he
allegedly
infringing
material
was
a
nationwide mass-market publication by DC Comics, the industry
leader,” and plaintiff “was a large advertiser in DC comic books,
even at the time that the infringing work appeared.”
Id. at 331-
33 (internal quotation marks and citation omitted).
By contrast, here, Peju was not even selling, let alone
publicly promoting and advertising, any LIANA-branded wine for the
vast majority of time that Cesari was supposedly sleeping on its
rights.
The handful of advertisements to which defendants cite
are far cries from the sort of widespread, industry marketing
campaigns at issue in cases such as Charles Atlas and Black
Diamond.
Defendants identify two articles that referenced the
LIANA wine, both of which were printed in American publications
that do not focus on wine.
One is a USA Today article dated
December 19, 2003, which mentions the LIANA wine in a single
sentence (ironically, about “niche and obscure wines”).
Decl., Ex. J.
MacMull
The other is an article from the Sacramento Bee, a
regional newspaper circulated in the Northern Sacramento Valley,
which merely lists the LIANA wine among the winners of a Long
Beach, California wine competition.
Id.
The Sacramento Bee
article is dated July 21, 2004, which is just one day after the
TTAB
issued
its
ruling
rejecting
-32-
the
2003
Application.
Additionally, defendants point to a single advertisement of the
LIANA-branded wine on Peju’s website, which predates the TTAB’s
ruling by a year.
Defendants do not indicate how long the
advertisement ran or how many people saw it.
As such, even if
Cesari had investigated Peju’s conduct earlier, it would not have
discovered anything actionable. 14
In sum, the record demonstrates that plaintiff did not know,
had no obligation to investigate, and with reasonable diligence
would not have known, that it had a ripe trademark infringement
claim until August 2014 at the earliest, a date well within the
applicable statutory window.
Accordingly, defendants’ statute of
limitations defense fails as a matter of law.
2. Plaintiff’s Claims Arise from Conduct That Began in 2014
Defendants’ statute of limitations defense fails for the
additional reason that the claims asserted in plaintiff’s First
Amended Complaint arise entirely within the statutory period.
Plaintiff commenced this suit on February 6, 2017.
Even if
defendants could show that plaintiff had actual or constructive
knowledge of defendants’ infringing conduct dating back to the
2003 TTAB proceedings – which, as explained above, they cannot –
Plaintiff maintains that it never saw any of these advertisements, see Cesari
Decl. ¶ 9, and there is no basis in the record to question Cesari’s denial of
knowledge. Rather, the record is that Cesari promptly sprang into action each
time it learned of Peju’s efforts to trademark the LIANA brand.
14
-33-
the statute of limitations defense would only “operate to bar
monetary recovery for conduct which a fact-finder determines to be
beyond the six-year period prior to the time of filing” the
complaint; “it does not bar recovery within the statutory period.”
Broecker v. Widows Sons Grand Chapter the King’s Guard Inc., No.
21 Civ. 6309 (CJS), 2021 WL 5309716, at *6 (W.D.N.Y. Nov. 15,
2021). 15 So at most, plaintiff would be barred from seeking damages
for infringements that occurred prior to February 6, 2011. 16
It is undisputed that defendants’ first sale of wine with the
resurrected LIANA brand occurred in August 2014.
Ex. 1 at 2.
See Healy Decl.,
Moreover, the Liana Estates winery did not commence
operations until the fall of 2016.
SOF ¶ 25.
In total, “[Peju
Partnership] sold, offered for sale, distributed and advertised
wines using LIANA for 22 months from the fall of 2016 until July
2018.”
profits
Id. ¶ 52.
calculated
Accordingly, plaintiff seeks disgorgement of
based
on
“the
total
infringing
sales
[plaintiff] has been able to estimate were actually made by the
To the extent defendants take the position that plaintiff’s alleged failure
to timely sue for claims from 2003 to 2005 prevents it from suing for any
subsequent, albeit related, acts of infringement, they are wrong as a matter of
law. See Gucci America, Inc. v. Guess?, Inc., 868 F. Supp. 2d 207, 246 (S.D.N.Y.
2012) (“[T]he statute of limitations defense only applies to bar monetary
recovery beyond the statutory period.”).
15
16
Or, as discussed supra at n.11, February 6, 2014, if California law controls.
-34-
Peju defendants from 2014 to the present date.”
FAC ¶ 181.
Plaintiff does not claim damages before that time.
The single case defendants offer in rebuttal is a Fourth
Circuit decision that directly undermines defendants’ argument.
In Lyons P’ship, L.P. v. Morris Costumes, Inc., the district court
had
ruled
that
since
some
of
the
alleged
acts
of
copyright
infringement occurred outside the applicable limitations period,
subsequent
infringing
activity
that
occurred
limitations period was time barred as well.
(4th Cir. 2001).
within
the
243 F.3d 789, 797
In so holding, the district court assumed that
defendants’ actions comprised “one act of infringement.”
Id.
Reversing, the Fourth Circuit explained that “a party does not
waive the right to sue for infringements that accrue within three
years of filing by not asserting related claims that accrued beyond
three years.”
Id. (internal quotation marks, alteration, and
citation omitted).
“This well-established rule recognizes that
the statute of limitations does not shield the defendant from
liability
for
wrongful
acts
actually
committed
during
the
limitations period, and its rationale applies equally to trademark
infringement claims brought under the Lanham Act.”
Id.
Here, it is undisputed that defendants took actions in August
2014 and thereafter that gave rise to the claims asserted in the
-35-
First Amended Complaint, and plaintiff does not seek damages for
any
conduct
outside
the
applicable
lookback
plaintiff’s claims thus are timely.
window.
All
of
Accordingly, defendants’
statute of limitations defense is dismissed and summary judgment
is denied.
C.
Laches
In the same vein as their statute of limitations argument,
defendants assert that plaintiff’s claims are barred as unduly
delayed under the equitable doctrine of laches. Defendants’ effort
to rely on a laches bar fails for two fundamental and independent
reasons.
First,
defendants
cannot
satisfy
the
threshold
requirement of every assertion of a laches defense — namely, that
the party invoking laches come to court with clean hands.
See
Hermes Intern. v. Lederer de Paris Fifth Ave., Inc., 219 F.3d 104,
107 (2d Cir. 2000) (“Th[e] good-faith component of the laches
doctrine is part of the fundamental principle that ‘he who comes
into equity must come with clean hands.’”) (quoting Precision
Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S.
806, 814-15 (1945)).
Second, when, as the Court holds here, the
applicable statute of limitations did not expire prior to the
filing of the complaint, the burden remains on the defendant to
prove all elements of the laches defense: (1) “that plaintiff had
knowledge of defendant’s use of its marks,” (2) “that plaintiff
-36-
inexcusably delayed in taking action with respect thereto,” and
(3) “that defendant will be prejudiced by permitting plaintiff
inequitably to assert its rights at this time.”
Saratoga Vichy
Spring Co. v. Lehman, 625 F.2d 1037, 1040 (2d Cir. 1980) (citation
omitted); see Ikelionwu v. United States, 150 F.3d 233, 238 (2d
Cir. 1998) (“[I]f the applicable legal statute of limitations has
not expired, there is rarely an occasion to invoke the doctrine of
laches and the burden remains on the defendant to prove all
elements of the defense.”).
Defendants have not satisfied this
burden of proof.
1. Bad Faith
First, defendants’ laches defense fails because Peju did not
use the LIANA mark in good faith.
As discussed above, between
2005 and 2007, Peju continued to use the LIANA mark despite actual
knowledge of Cesari’s first-in-time registered trademark, Cesari’s
opposition to Peju’s use of the LIANA mark, and the TTAB’s ruling
that Peju’s mark was likely to cause confusion with Cesari’s mark.
Although the TTAB’s ruling may not have legally enjoined Peju from
using the LIANA mark, Peju dirtied its hands when it flouted the
legal conclusion of a judicial authority and disregarded its duty
as a second comer “to avoid all likelihood of consumers confusing
it with the product of the first comer.”
Nikon, Inc. v. Ikon
Corp., 803 F. Supp. 910, 922 (S.D.N.Y. 1992); see Thursday LLC v.
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DNVB, Inc., No. 20 Civ. 9142 (AKH), 2021 WL 2689061, at *5
(S.D.N.Y. June 29, 2021) (concluding plaintiff sufficiently stated
claim for unfair competition under New York law, which required
showing of bad faith or intent, where plaintiff alleged, inter
alia, defendant “began using the marks despite the USPTO’s refusal
to register their mark due to the likelihood of confusion with the
[plaintiff’s] Marks”).
With respect to Peju’s second attempt to register the LIANA
mark, Peju again acted in bad faith.
Even assuming the Peju
daughters were unaware of the original dispute with Cesari when
they sought to resurrect the LIANA brand in 2014, Peju was put on
notice of Cesari’s registered mark and opposition in August 2016,
when Cesari filed a request for an extension of time to oppose the
2016 Application.
See Ariana Peju Decl., Ex. E.
Cesari then sent
Peju a cease-and-desist letter in November 2016.
January
2017,
Cesari
apprised
Peju
of
Id., Ex. F.
the
TTAB’s
In
prior
determination that the LIANA mark was likely to cause confusion
with Cesari’s mark.
Id., Ex. I.
use the LIANA mark.
It wasn’t until July 2018 — one and a half
years
after
this
action
was
Peju nevertheless continued to
commenced
terminated its use of the LIANA brand.
ECF No. 82.
-38-
—
that
Peju
finally
See July 16, 2018 Letter,
In their reply, defendants argue, without citing to any
authority from the Second Circuit, that the unclean hands doctrine
requires a showing of fraudulent intent and that no such showing
has been made here.
Mem. of Law of Peju Province Winery L.P. and
Peju Family Operating Partnership L.P. in Further Support of their
Mot. for Summary Judgment (“Def. Reply Br.”) at 7, ECF No. 362.
To the contrary, “[a]ny willful act concerning the cause of action
which rightfully can be said to transgress equitable standards of
conduct is sufficient.”
at 815.
Precision Instrument Mfg. Co., 324 U.S.
Further, although “prior knowledge of a senior user’s
mark does not in itself imply bad faith . . . actual or constructive
knowledge may signal bad faith.”
Nikon, 803 F. Supp. at 924.
In more ways than one, the foregoing demonstrates that Peju
does not “possess a right which is firmly planted in good faith.”
Id.
Peju “took a calculated risk in utilizing [the] mark and the
aid of a court of equity should not be invoked on behalf of one
who lost such a gamble.”
Fusco Group, Inc. v. Loss Consultants
Int’l, Inc., 462 F. Supp. 2d 321, 330 (N.D.N.Y. 2006) (internal
quotation marks and citation omitted).
2. Laches Elements
Even if defendants could demonstrate good faith, their laches
defense still fails because they have not established any of the
three required elements.
First, as discussed above, defendants
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have not shown that Cesari had actual or constructive knowledge of
Peju’s infringing use of the LIANA mark in the aftermath of the
2003
TTAB
proceedings.
That
defendants’ laches defense.
alone
is
sufficient
to
defeat
Second, Cesari did not inexcusably
delay in taking action against Peju’s infringing conduct.
Upon
discovering each of Peju’s applications to register the LIANA
trademark, Cesari promptly and diligently commenced opposition
proceedings.
Furthermore, defendants cannot claim a delay for any
period in which they made no infringing use of the LIANA mark.
Contrary to defendants’ position, plaintiff need not prove that
defendants abandoned the LIANA mark as a matter of law; extensive
non-use of the mark is sufficient to toll any laches delay.
See
Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway &
Sons, 523 F.2d 1331, 1343 (2d Cir. 1975) (noting district court
excluded from laches delay all years of non-use and restarted
laches analysis only upon infringer’s re-entry in the market).
As
discussed above, Peju sold out of its initial batch of LIANAbranded wine in 2007.
From 2008 until 2014, Peju did not sell any
wine bearing the LIANA label and defendants offer no evidence
showing that they utilized or publicly promoted the LIANA brand
during that period.
-40-
Third, defendants have failed to establish that they were
prejudiced
by
the
timing
of
plaintiff’s
lawsuit.
Cesari’s
opposition to Peju’s 2003 Application put Peju on notice that
Cesari contested Peju’s use of the LIANA mark.
See Broecker, 2021
WL 5309716, at *7 (“[B]ased on Plaintiffs’ TTAB opposition . . .
Defendants were clearly on notice that Plaintiffs[] contested
their registration and use of the . . . Mark.”); Tri-Star Pictures,
Inc.
v.
Unger,
(“Plaintiffs’
14
F.
warning
Supp.
2d
letters
339,
placed
360-361
(S.D.N.Y.
Defendants
on
Plaintiffs’ objections to his use of the [mark].”).
1998)
notice
of
As such, any
subsequent investment or expenditure of resources Peju made in
connection with developing the LIANA brand was at its own risk.
See Alfred Dunhill, 350 F. Supp. at 1367 (concluding “the defendant
acted at its own peril when it continued to use the mark after”
receiving
plaintiff’s
notice
of
opposition
to
defendant’s
trademark application”); Fitzpatrick v. Sony-BMG Music Ent., Inc.,
No. 07 Civ. 2933 (SAS), 2008 WL 84541, at *3 (S.D.N.Y. Jan. 8,
2008) (rejecting laches defense where defendants “were actively
involved in a dispute over the trademark, and were therefore on
notice that any expansion of their business around the disputed
trademark was risky”); Floralife, Inc. v. Floraline Int’l, Inc.,
633 F. Supp. 108, 113 (N.D. Ill. 1985) (“[A] notice of opposition
-41-
sufficiently informs the registrant of the trademark holder’s
objections and renders unreasonable any detriment the registrant
may suffer in reliance on the plaintiff’s delay in filing suit.”).
Even if Cesari had delayed in filing suit against Peju, which it
did not, it was unreasonable for Peju to rely on that delay and
any detriment Peju suffered was of its own making.
As a final point, the facts of this case undermine defendants’
contention that they would have chosen another brand name had
Cesari brought suit earlier.
In 2005, despite Cesari’s objection
to Peju’s application to register the LIANA trademark and the
TTAB’s ruling that the LIANA mark was likely to cause confusion,
Peju sold several hundred cases of its LIANA-branded wine.
Decl., Ex. A.
Schulz
Then in 2016, when Cesari objected to Peju’s renewed
trademark application, Peju refused to cease and desist from using
the infringing mark even after this action was commenced.
348.
ECF
For the foregoing reasons, defendants’ laches defense fails
as a matter of law and summary judgment is denied.
CONCLUSION
Defendants’ motion for summary judgment is denied in its
entirety
and
affirmative
defendants’
defenses
are
statute
dismissed
of
limitations
with
and
prejudice.
laches
Summary
judgment is granted to plaintiff with respect to the extension of
-42-
this Court’s prior collateral estoppel ruling to Peju Partnership.
The Clerk of Court is respectfully directed to terminate the motion
pending at ECF No. 324.
SO ORDERED.
Dated:
New York, New York
August 3, 2022
__________________________
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
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