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The Fife and Drum, Inc. v. Delbello Enterprises, LLC

United States District Court, D. New Jersey

November 1, 2019

THE FIFE AND DRUM, INC., Plaintiff,
v.
DELBELLO ENTERPRISES, LLC d/b/a IL PORTICO RISTORANTE ITALIANO, Defendant.

          NORMAN ELLIOT LEHRER SUITE Attorney for Plaintiff The Fife And Drum, Inc.

          AHMED M. SOLIMAN SOLIMAN & ASSOCIATES, P.C. Attorney for Defendant DelBello Enterprises, LLC d/b/a Il Portico Ristorante Italiano.

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This is a service mark infringement case between two restaurants using the same name: “Il Portico.” The Court conducted a one-day bench trial on May 13, 2019. For the reasons discussed below, the Court finds that Plaintiff has failed to prove that Defendant infringed on its trademark. Even if Plaintiff were able to prove its claim of trademark infringement, injunctive relief would be barred by the equitable doctrine of laches. Accordingly, Judgment will be entered for the Defendant.

         BACKGROUND

         The Court takes its facts from the trial record, including those facts stipulated by the parties. Plaintiff, Fife and Drum, Inc., opened a restaurant named “Il Portico Ristorante” in October 1988 in Tappan, New York (the “Tappan Il Portico” or “TIP”). TIP has operated continuously as an Italian fine dining restaurant since 1988. Fife and Drum, Inc.'s owner is Giuseppe Peppe Pinton, who has a separate career as a soccer coach and scout. On June 12, 1990, Plaintiff obtained Federal Service Mark Registration No. 1, 601, 605 for the mark “IL PORTICO” for restaurant services (the “Mark”). Plaintiff timely filed the appropriate declarations and the parties agree that Plaintiff's registration became incontestable in 2010.[1] Since 1990, Plaintiff has renewed its registration, and for the time period at-issue, the Mark was in full force and effect and Plaintiff remains its owner.

         In addition to this Mark, Plaintiff registered the domain name “ilportico.com” in May 1998. Plaintiff has continuously operated this domain name since then. Plaintiff also operates two toll free telephone numbers for the restaurant: a national number at 1-888-ILPORTICO and a New Jersey number at 1-800-ILPORTICO. Plaintiff advertises TIP in numerous publications, mostly in New Jersey.[2] A number of publications have featured TIP, including a Zagat survey, which named TIP as one of America's Top 1, 000 Italian Restaurants in 2008. Pinton testified that as a restauranteur, he paid attention to dining publications and newspaper reviews.

         Tappan, New York is approximately 300 feet from Bergen County, New Jersey. As a result, most of TIP's customers come from New Jersey. Close to the Hudson River, Tappen is north of the George Washington Bridge but south of the Tappen Zee Bridge, both of which span the Hudson. Geographically, Bergen County encompasses the state's northeast corner and is generally northwest of the five boroughs of New York City. Some customers who previously lived in the area visit TIP when they return. TIP also serves customers visiting from across the country, and even across the world. Pinton also testified that his activities and travels as a coach and scout helped spread the reputation and renown of his restaurant beyond its immediate geographical area, including the southern parts of New Jersey.

         Around May 1995, IEJ Corporation (“IEJ”), a Pennsylvania corporation based in Bensalem, Pennsylvania, opened an Italian fine dining restaurant in Philadelphia named “Il Portico” (the “Philadelphia Il Portico” or “PIP”).[3] Alberto DelBello a/k/a/ Ilyas Shah, was the principal of IEJ, and the owner and chef of PIP. DelBello is also the principal owner of Defendant, DelBello Enterprises.

         PIP operated continuously until mid-2012. Between May 1995 and mid-2012, newspapers and other publications advertised and reviewed PIP.[4] DelBello appeared on local, national, and international television in connection to PIP. During this time, IEJ also maintained a website for PIP at “ilportico.com, ” where customers could make reservations.[5] Defendant also maintained a profile on the website “OpenTable” to manage reservations at PIP.

         In 2012, PIP discontinued operations in Philadelphia under the name “Il Portico” and instead used the name “Tiramisu” at the same physical location until its permanent closure in 2016. Therefore, from mid-2012 when PIP closed until the time of this bench trial, there has not been a Philadelphia restaurant named “Il Portico.” DelBello testified that his intention was always to reopen “Il Portico” at a different location closer to his home in Bensalem, Pennsylvania. In a similar vein, DelBello eventually closed Tiramisu in Philadelphia and moved it to the Philadelphia suburbs closer to his home.

         DelBello did open another restaurant named “Il Portico” in Burlington, New Jersey in 2016 (the “Burlington Il Portico” or “BIP”).[6] Burlington is in Burlington County which borders on its easternmost edge the Delaware River and extends southwest across the south central part of the state. Burlington, the town, is northeast of Philadelphia and southwest of Trenton, New Jersey. The Burlington-Bristol Bridge spans the Delaware from Burlington to Bristol, Pennsylvania.

         BIP and its alleged trademark infringement are the subject of this suit. On August 25, 2016, Defendant registered the domain name “ilporticorestaurant.com.” DelBello explained the four-year gap between discontinuing PIP and opening BIP by asserting that it took that long to locate a property, renovate it to his specifications, form several New Jersey corporations, and obtain a liquor license, among other things.

         DelBello testified he was advised to create several New Jersey corporations in order to obtain a liquor license for BIP. Other than the different legal entities, DelBello testified that BIP and PIP share the same owner, decorations, furniture, customers, chef, and menus. DelBello testified that he transferred the rights to the name “Il Portico” from PIP to BIP. Plaintiff disagrees, noting that IEJ traded as “Il Portico” but abandoned any rights to the name when it stopped using it in 2012. Plaintiff further notes that Defendant offered no evidence of assignment of rights to the name “Il Portico.” During the time that PIP was in operation, Plaintiff did not sue Defendant for trademark infringement. Giuseppe Peppe Pinton and Fife and Drum, Inc. have successfully asserted Plaintiff's trademark rights against two other restaurants using the name “Il Portico” in Hanover and Carlstadt, New Jersey in 1995 and 1998 respectively.[7] Pinton, the sole witness for Plaintiff, explained that while PIP was in operation, he was unaware of its existence, and therefore had no occasion to assert Plaintiff's trademark rights against PIP. Instead, Pinton testified that he did not learn of PIP's existence until after filing this suit against BIP. Pinton further testified that none of his customers or friends from the southern part of New Jersey mentioned PIP to him.

         Since BIP opened in 2016, Pinton testified that TIP had received at least one phone call intended for BIP. Pinton also described an incident in which a driver mistakenly headed toward BIP to attend an event at TIP and had to call TIP for directions. Pinton further described conversations with his customers who commented on Pinton opening another restaurant in New Jersey. Pinton believes that the confusion between TIP and BIP is due to increased use of the Internet and mobile navigation software.

         Pinton testified that he did not begin to use the Internet to search for possibly infringing restaurants until 2014 or 2015. The Parties agree, and Pinton testified to the fact that there are no other restaurants in the United States or New Jersey using the name “Il Portico” besides TIP and BIP.

         On May 23, 2017, Plaintiff filed its complaint with five claims: (1) trademark infringement; (2) trademark counterfeiting; (3) false designation of origin; (4) New Jersey statutory trademark counterfeiting; and (5) common law trademark infringement. Plaintiff's complaint requested an injunction barring Defendant's use of the Mark, actual and statutory damages, and attorneys' fees, costs, and interest. On August 16, 2017, Plaintiff filed its first amended complaint (the “FAC”). The claims remained the same in the FAC. Plaintiff now seeks only injunctive relief and has waived claims for actual and statutory damages, attorneys' fees, costs, and interest.[8]

         The parties did not engage in any dispositive motion practice relevant to this Opinion. Instead, the Court scheduled a bench trial for February 25, 2019. The parties prepared pretrial documents and motions in limine. The Court decided the parties' motions in limine in a February 19, 2019 Order and excluded certain exhibits. The Court rescheduled the bench trial for May 13, 2019.

         A bench trial was conducted on May 13, 2019. In addition to receiving various exhibits, the Court heard testimony from Pinton, DelBello, and Denise Norkus. Norkus is DelBello's wife, business partner, and former manager of PIP. The parties submitted proposed findings of fact and conclusions of law on July 18, 2019. On August 8, 2019, Plaintiff submitted responsive proposed findings of fact and conclusions of law. Therefore, the matter is ripe for final adjudication.

         Analysis

         A. Subject Matter Jurisdiction

         This Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. §§ 1331 and 1338.

         B. Bench Trial Opinion Standard

         This Opinion constitutes the Court's Findings of Fact and Conclusions of Law pursuant to Rule 52(a)(1). Pierre v. Hess Oil Virgin Islands Corp., 624 F.2d 445, 450 (3d Cir. 1980) (holding that to be in compliance with Rule 52(a), findings of fact and conclusions of law do not need to be stated separately in a court's memorandum opinion); see also Ciolino v. Ameriquest Transp. Services, Inc., 751 F.Supp.2d 776, 778 (D.N.J. 2010) (issuing an opinion which constituted the courts findings of fact and conclusions of law).

         C. Bench Trial Opinion

         Plaintiff's sole claim in this action is that Defendant infringed on its service mark, “IL PORTICO, ” for use in restaurant services. Defendant disagrees, arguing that Plaintiff has not shown any likelihood of confusion, a required element of Plaintiff's claim. In the alternative, Defendant argues that Plaintiff is barred from asserting this claim by the equitable doctrine of laches.

         The relevant statute, 15 U.S.C. § 1127, states:

The term “service mark” means any word, name, symbol, or device, or any combination thereof-
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act, to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown. Titles, character names, and other distinctive features of radio or television programs may be registered as service marks notwithstanding that they, or the programs, may advertise the goods of the sponsor.

         For registrability and protection purposes, trademarks and service marks are treated identically. See 15 U.S.C. § 1053 (“Subject to the provisions relating to the registration of trademarks, so far as they are applicable, service marks shall be registrable, in the same manner and with the same effect as are trademarks, and when registered they shall be entitled to the protection provided herein in the case of trademarks. Applications and procedure under this section shall conform as nearly as practicable to those prescribed for the registration of trademarks.”); Park n'Fly v. Dollar Park & Fly, 469 U.S. 189, 192 n. 1 (1985) (“The Trademark Act of 1946 (Lanham Act), 60 Stat. 427, as amended, 15 U.S.C. § 1051 et seq., generally applies the same principles concerning registration and protection to both trade and service marks.”) (citing 15 U.S.C. § 1053). Therefore, in determining the merits of Plaintiff's Lanham Act claim for service mark infringement, the Court may rely on law regarding either trademark or service mark infringement.

         1. Trademark Infringement

         To prove infringement, a plaintiff must “demonstrate that (1) it has a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion.” A&H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000) (citing Commerce Nat'l Ins. Servs., Inc. v. Commerce Ins. Agency, Inc., 214 F.3d 432, 437 (3d Cir. 2000)). “If a mark is both federally registered and ‘incontestible,' see 15 U.S.C. §§ 1058, 1065, the mark is presumed to meet the first two requirements.” Express Servs. v. Careers Express Staffing Servs., 176 F.3d 183, 185 (3d Cir. 1999). The parties do not dispute the Plaintiff has established the first two elements. The only disputed issue is whether Plaintiff has demonstrated a likelihood of confusion by a preponderance of the evidence.

         A likelihood of confusion exists when “the consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark.” Ford Motor Co. v. Summit Motor Products Inc., 930 F.2d 277, 292 (3d Cir. 1991) (quoting Scott Paper Co. v. Scott's Liquid Gold Inc., 589 F.2d 1225, 1229 (3d Cir. 1978)).

         In A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., the Third Circuit held that “whether or not the goods directly compete, the Lapp factors should be employed to test for likelihood of confusion.” 237 F.3d 198, 215 (3d Cir. 2000) (citing Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983)). To determine the likelihood of confusion, the Court will consider the following ten factors:

(1) The degree of similarity between the owner's mark and the alleged infringing mark;
(2) The strength of the owner's mark;
(3) The price of the goods and the other factors indicative of the care and attention expected of consumers ...

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