GCCA, LLC v. MACCG LLC

Background

GCCA owned U.S. Trademark Registration No. 4,583,405 for the TAVERNA KYCLADES word and design marks used with restaurant services. MACCG operated a TAVERNA KYCLADES restaurant in Manhattan’s East Village. Mr. Ardian Skenderi owned 50 percent of both GCCA and MACCG, but GCCA was a separate limited liability company, and Mrs. Caterina Skenderi owned the other 50 percent of GCCA.

The parties agreed orally to open and operate the East Village restaurant with profits and losses divided equally between Mr. Skenderi and Mr. William Pappas. The court found that the agreement allowed MACCG to use the TAVERNA KYCLADES marks for that restaurant, but did not transfer ownership of the marks or create an irrevocable license. No written assignment, license, operating agreement, or term sheet was executed.

After disputes about the quality of the East Village restaurant’s food and services, Mr. Skenderi told the Pappas family that he would retake control or withdraw the TAVERNA KYCLADES name. GCCA sent cease-and-desist letters in January and March 2020. MACCG continued using the marks. The court found that consumers were confused about the relationship between the East Village restaurant and GCCA’s Astoria and Bayside restaurants, and that complaints about the East Village restaurant harmed the other restaurants’ reputations.

Trademark Infringement

The court held that GCCA owned valid, registered, and incontestable TAVERNA KYCLADES marks. It applied the eight factors used in the Second Circuit to evaluate likely consumer confusion, including the strength and similarity of the marks, the relationship between the services, actual confusion, the defendant’s conduct, and the sophistication of consumers.

The court found that the marks were strong, identical, and used for identical restaurant services in the same marketplace. It also credited evidence of actual customer confusion. MACCG’s continued use after GCCA terminated its permission was found to be willful and intentional infringement. The court concluded that GCCA proved its claim under 15 U.S.C. § 1114 and that the infringement caused irreparable harm to GCCA’s business, reputation, and goodwill.

Federal and Common-Law Unfair Competition

The court also found that MACCG’s continued use of the marks falsely suggested that the East Village restaurant was authorized, sponsored, or affiliated with GCCA. It held that this conduct violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), because it was likely to mislead consumers about the source, sponsorship, or affiliation of the restaurant services.

Under New York common law, the court found that MACCG acted in bad faith by continuing to use the marks after its permission ended and by appropriating GCCA’s marks and goodwill in a way likely to cause confusion. GCCA therefore prevailed on its common-law unfair-competition claim as well.

Trademark Dilution

The court rejected GCCA’s dilution claim under 15 U.S.C. § 1125(c). A dilution claim requires proof that the mark is famous—meaning widely recognized by the general consuming public of the United States. Although the marks had favorable publicity, reviews, and recognition, the court found insufficient evidence that they were famous beyond the New York City region. GCCA therefore failed to establish trademark dilution.

Defenses and Counterclaims

The court rejected MACCG’s argument that the marks had been orally assigned to it. It found no credible evidence of an assignment, no written document, and no agreement on the basic terms of any transfer. The court also found that the marks were owned by Ardian Corporation when the alleged assignment supposedly occurred and that Mrs. Skenderi had not authorized such a transfer.

The court rejected MACCG’s defenses based on unclean hands, equitable estoppel, waiver, abandonment, and delay. It found that GCCA had continued using the marks, had maintained quality control while MACCG had permission to use them, and had promptly asserted its rights when the quality of the East Village services became unacceptable.

MACCG’s counterclaims sought a declaration of non-infringement and cancellation of GCCA’s trademark registration. The court found that MACCG failed to prove fraud in GCCA’s registration and failed to prove an irrevocable right to use the marks. It stated that the counterclaims should be dismissed.

Relief and Disposition

GCCA did not seek damages and requested only injunctive relief. The court found that MACCG’s continued infringement caused irreparable harm, that monetary damages were inadequate, and that the balance of hardships and public interest supported an injunction. The opinion states that MACCG had no right to continue using GCCA’s registered marks.

The court concluded that GCCA proved violations of 15 U.S.C. § 1114, 15 U.S.C. § 1125(a), and New York common-law unfair competition. GCCA failed to prove dilution under 15 U.S.C. § 1125(c). The opinion directed GCCA to submit a proposed judgment within seven days and allowed MACCG three days afterward to submit objections or a counter-judgment.