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MPC Franchise, LLC v. Tarntino

United States Court of Appeals, Second Circuit

June 27, 2016

MPC Franchise, LLC; MP Cleary, Inc., Plaintiffs-Appellees,
v.
Brent Tarntino, Defendant-Appellant. [1]

          Submitted: January 11, 2016

         Appeal from a judgment of the United States District Court for the Western District of New York (Siragusa, J.), granting summary judgment to Plaintiffs-Appellees, companies that own pizza restaurants in Elmira, New York, by the general name of "Pudgie's, " on their Lanham Act claim seeking cancellation of Defendant-Appellant Brent Tarntino's ("Tarntino") federal trademark registration for the PUDGIE'S mark in connection with pizza restaurants, on the ground that Tarntino obtained the mark by fraud. Because we find no genuine issue of material fact that Tarntino fraudulently procured his mark, we conclude that summary judgment to Plaintiffs-Appellees was appropriate, and therefore AFFIRM the judgment of the district court cancelling Tarntino's mark.

          Jeffrey Zucker, Fischer Zucker, LLC; Philadelphia, P.A., for Plaintiffs-Appellees.

          Michael H. Zhu, Michael H. Zhu, Esq. PC; New York, N.Y., for Defendant-Appellant.

          Before: Straub, Livingston, and Chin, Circuit Judges.

          Debra Ann Livingston, Circuit Judge.

         This case involves a dispute over the mark for a chain of pizza restaurants by the general name of "Pudgie's, " which started out as a small family business, but waxed and waned over the decades as the original founders passed their interests on to subsequent generations and once-convivial family relationships soured. Defendant Brent Tarntino ("Tarntino") appeals from a judgment of the United States District Court for the Western District of New York (Siragusa, J.), granting summary judgment to Plaintiffs-Appellees MPC Franchise, LLC ("MPC Franchise") and MP Cleary, Inc. ("MP Cleary") (collectively, "Plaintiffs") - entities owned principally by Tarntino's cousins, David Cleary and Robert Cleary - on Plaintiffs' claim that Tarntino fraudulently obtained his federal trademark registration for the PUDGIE'S mark in connection with restaurants that principally serve pizza, pasta, and submarine sandwiches.

         I. Background

         A. Facts

         The dispute over the PUDGIE'S mark traces back more than fifty years to the town of Elmira, New York, just north of the Pennsylvania border. In 1963, three brothers - Charles "Pudgie" Cleary, Francis Cleary, and Michael Cleary, Sr. - opened up a pizza parlor on the north side of Elmira and named it Pudgie's, after one of the three brothers. The following year, the three brothers opened a second Pudgie's location, this time on the south side of Elmira. The two locations came to be known as "Pudgie's Northside" and "Pudgie's Southside, " respectively. Pudgie's Northside and Pudgie's Southside experienced continued success, prompting the three brothers in 1972 to form the Pudgie's Pizza Franchising Corporation ("PPFC") for the purpose of offering and selling franchises for additional Pudgie's pizza parlor locations. PPFC then registered the PUDGIE'S mark with the United States Patent and Trademark Office ("PTO"). See PUDGIE'S, Registration No. 1, 102, 421 (Sept. 12, 1978).

         The three brothers had a sister, Bernadette Tarntino, who, in 1973, purchased a franchise from PPFC and opened a Pudgie's location in Horseheads, New York, located several miles north of Elmira. The location came to be known as "Pudgie's Horseheads." To manage Pudgie's Horseheads, Bernadette Tarntino formed a corporation named Pudgie's Pizza Corporation - Horseheads ("PPCH").

         In 1985, the PTO cancelled PPFC's federal trademark registration of the PUDGIE'S mark after PPFC failed to file a required declaration. For several years, however, PPFC continued to operate its franchises as before.

         In 1990, Michael Cleary, Sr. died owning 50% of the stock in PPFC, as well as all of MP Cleary, which in turn owned Pudgie's Southside and another Pudgie's location in Pennsylvania. These interests passed on to his sons, David and Robert Cleary, as well as his wife, Rosa Cleary. PPFC began to deteriorate, however, sometime in the early 1990s. On September 29, 1993, PPFC officially dissolved, and another franchisor did not immediately take its place. As a result, the restaurants that were operating as franchisees of PPFC just prior to PPFC's dissolution became independently run operations.

         The chain of Pudgie's pizza restaurants that got their start in Elmira, New York, was not the only chain of restaurants in the nation to use the name "Pudgie's" in connection with restaurants and food services. In the New York City metropolitan area, there was a chain of restaurants principally serving fried chicken that also went by the name of "Pudgie's" (or, more specifically, "Pudgie's Famous Chicken"). In 2002, Arthur Treacher's, Inc. ("Arthur Treacher's"), the entity that operated the Pudgie's Famous Chicken restaurants at the time, obtained a federal trademark registration for the "PUDGIE'S" mark in connection with "[r]estaurant[s] and carry[-]out restaurant services." PUDGIE'S, Registration No. 2, 565, 298 (April 30, 2002). Arthur Treacher's later assigned its interest in the PUDGIE'S mark to PAT Franchise Systems, Inc. ("PAT"). MP Cleary learned of PAT's mark in 2004, when it looked into obtaining a new federal trademark registration for the PUDGIE'S mark. Shortly thereafter, MP Cleary and PAT reached an agreement regarding the mark, pursuant to which PAT granted MP Cleary a "non-exclusive, perpetual and transferable license to use and display the PUDGIE'S mark . . . in connection with MP Cleary's existing and future restaurants, " while PAT "retain[ed] the right to use the [PUDGIE'S mark] solely in connection with its 'Pudgie's Famous Chicken' business." J.A. 196. PAT then assigned its interest in the PUDGIE'S mark to TruFoods, LLC ("TruFoods") in 2008. In 2009, David and Robert Cleary formed MPC Franchise to begin franchising Pudgie's pizza restaurants.

         Meanwhile, Bernadette Tarntino died in 2007, leaving a one-third stake in PPCH to each of her three children, one of whom is Defendant-Appellant Tarntino. On July 12, 2010, Tarntino filed an application with the PTO seeking a federal trademark registration for a mark "consist[ing] of the word 'Pudgie's' displayed in a custom font, " for use in connection with "[p]izza parlors" and "[r]estaurant services featuring pizza, pasta, and subs." J.A. 526–27 (emphasis omitted). Tarntino certified in his application that "[t]o the best of his[] knowledge and belief[, ] no other person, firm, corporation, or association has the right to use the [PUDGIE'S] mark, " either in "identical form" or "in such near resemblance . . . as to be likely . . . to cause confusion, or to cause mistake, or to deceive."[2] J.A. 531. Because applicants for federal trademark registrations generally must include a "specimen" representative of the mark's actual use in the marketplace, see 37 C.F.R. ยง 2.56, Tarntino also submitted with his application a photograph of a Pudgie's pizza box that he ...


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