City of New York v. Tavern on the Green International LLC

Background

The City of New York sued Tavern on the Green International LLC (TOGI) concerning TOGI’s use of the City’s federally registered trademark related to the “Tavern on the Green” restaurant in Central Park. In September 2018, the court granted the City summary judgment, meaning it decided that no trial was needed on the claims at issue, on:

- Count I, breach of the parties’ Use Agreement, limited to Section 2.04(c); - Count II, trademark infringement under 15 U.S.C. § 1114(1)(a); - Count III, false designation of origin under 15 U.S.C. § 1125(a); - Count IV, trademark dilution under 15 U.S.C. § 1125(c); and - Count V, common-law unfair competition.

The court also entered judgment for the City on TOGI’s counterclaims. The City later agreed to voluntarily dismiss the remaining portion of Count I and all of Count VI. The City stated that it would not seek actual damages on Counts I through V, but later requested nominal damages of $1 for each successful count.

Arguments about notice and declaratory relief

When the City proposed a final judgment and permanent injunction, TOGI argued that the City had not complied with the Use Agreement’s Section 16.01 writing and delivery requirements. TOGI contended that the City therefore had not properly notified it of a breach and had no right to bring the lawsuit. The City responded that TOGI had waived or abandoned that defense and that the court had already found the City’s notice effective or excused.

The court declined to revisit the notice issue. It characterized TOGI’s argument as an untimely attempt to seek reconsideration of the earlier summary-judgment ruling. The court also found that a declaration stating that TOGI materially breached Section 2.04 would be unnecessary because that breach had already been established. But the court concluded that the City was entitled to a declaration recognizing its right to revoke its consent for TOGI to use the “Tavern on the Green” name in connection with restaurant services. The court relied on the agreement’s provisions allowing the City to revoke consent and pursue other enforcement measures after an uncured material breach.

Nominal damages

The court held that the City was entitled to nominal damages despite not seeking actual damages. It awarded the City $1 on each of Counts I, II, III, IV, and V, for a total of $5.

Permanent injunction

A permanent injunction is a court order intended to prevent future violations. The court explained that such relief requires a showing of irreparable injury, inadequate legal remedies, a balance of hardships favoring equitable relief, and consistency with the public interest. The court had already determined that an injunction was warranted on Count I because the agreement involved valuable trademark rights and the parties had agreed that a breach would cause the City immediate and irreparable injury.

The court did not find additional injunctive relief necessary for Counts II through V because the injunction based on Count I broadly prohibited TOGI from using the City’s mark in connection with restaurant services or the sale of restaurant franchises. The court also declined the City’s requests concerning pending trademark applications and periodic compliance certifications.

Order and disposition

The court ordered that:

The Clerk was directed to enter judgment for the City on Counts I through V and close the case. The opinion was signed by Richard J. Sullivan, United States Circuit Judge, sitting by designation.