Cesari S.R.L. v. Peju Province Winery L.P.

Background

Cesari S.R.L. owns a federal registration for the LIANO mark for wine. Peju Province Winery L.P. used and sought to register the similar LIANA mark. In 2004, the Trademark Trial and Appeal Board granted Cesari summary judgment, finding that the marks were almost identical, the goods were identical, and LIANA was likely to cause consumer confusion with LIANO. Peju Province did not appeal that ruling.

Peju later resumed using LIANA. Peju Family Operating Partnership L.P. applied to register the mark in 2016, and Cesari opposed the application and sent a cease-and-desist letter. Cesari filed this federal action in February 2017, asserting federal and New York trademark infringement and unfair-competition claims based on Peju’s use of LIANA beginning in 2014. Peju continued using the mark until July 2018. Peju Province Corporation had previously been dismissed from the action by an order entered in October 2021.

Motions and issues

The remaining defendants sought summary judgment—judgment without a trial—arguing that all of Cesari’s claims were barred by the statute of limitations and by laches, an equitable defense based on unreasonable delay that harms the opposing party. Cesari opposed that motion, sought dismissal of those defenses, and sought summary judgment on whether the 2004 Trademark Trial and Appeal Board finding should also bind Peju Family Operating Partnership.

Collateral estoppel

Collateral estoppel, also called issue preclusion, prevents a party from relitigating an issue already decided in an earlier proceeding when the parties’ interests and representation are sufficiently connected. The court had previously ruled that Peju Province could not relitigate whether LIANA was likely to cause confusion with LIANO, but had not extended that ruling to Peju Family Operating Partnership.

The court held that the defendants’ current position established the necessary connection. In seeking to use Peju Province’s history to support their timeliness defenses, the defendants conceded that Peju Province and Peju Family Operating Partnership were effectively one enterprise with common ownership and control. Evidence also showed that the entities shared decision-makers and used the same website to promote LIANA wines. The court therefore granted Cesari summary judgment on extending the prior ruling to Peju Family Operating Partnership. Both Peju Province and Peju Family Operating Partnership were precluded from relitigating that LIANA was likely to cause confusion with LIANO.

Statute of limitations

The Lanham Act does not set a specific limitations period for these claims, so the court applied New York’s analogous six-year period. The court held that the defendants did not prove that Cesari knew or reasonably should have known that Peju would continue using LIANA after the 2004 Trademark Trial and Appeal Board ruling and the abandonment of Peju’s application.

The advertisements, articles, trademark filings, and correspondence identified by the defendants showed use of LIANA while the 2003 application was pending, but did not show that Peju intended to continue using the mark after losing before the Trademark Trial and Appeal Board. The court also found that Cesari had no duty to keep monitoring Peju because it was reasonable for Cesari to assume that Peju would stop using a mark that had been rejected as confusingly similar. In addition, Peju’s use between 2005 and 2007 was limited, and there were no LIANA-branded wine sales from 2008 through August 2014.

The court further held that Cesari’s claims arose from conduct beginning in 2014, within the applicable limitations period. Cesari did not seek damages for conduct before that period. The court therefore dismissed the defendants’ statute-of-limitations defense with prejudice and denied summary judgment on that ground.

Laches

The court also rejected laches. It first held that Peju could not satisfy the requirement that a party seeking equitable relief act in good faith. Peju continued using LIANA after learning of Cesari’s registered mark, Cesari’s opposition, and the Trademark Trial and Appeal Board’s finding of likely confusion. Peju also continued using LIANA after receiving notice of Cesari’s objections in connection with the 2016 application and after this lawsuit began.

The court separately held that the defendants failed to prove the elements of laches: Cesari’s knowledge of the infringing use, an inexcusable delay, and prejudice caused by that delay. Cesari promptly opposed both of Peju’s trademark applications, and the long period when Peju did not use LIANA did not count as delay. The defendants also had notice that Cesari objected to the mark, so any later investment in the LIANA brand was made at their own risk. The court dismissed the laches defense with prejudice.

Disposition

The court denied the defendants’ motion for summary judgment in its entirety. It dismissed the statute-of-limitations and laches affirmative defenses with prejudice, granted Cesari summary judgment on extending the prior collateral-estoppel ruling to Peju Family Operating Partnership, and directed the Clerk of Court to terminate the pending motion.