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July 18, 1996


The opinion of the court was delivered by: PECK


 TO THE HONORABLE ALLEN G. SCHWARTZ, United States District Judge:

 Presently before the Court is plaintiff Buti's motion for summary judgment on all claims in the complaint and in Impressa Perosa's counterclaims. *fn1" For the reasons set forth below, I recommend that the Court grant plaintiff Buti's summary judgment motion as to Impressa Perosa's federal trademark counterclaims since Impressa Perosa did not "use" Fashion Cafe in the United States prior to Buti's trademark registration and use. I further recommend that plaintiff Buti be awarded a declaratory judgment that Impressa Perosa does not have any trademark in the name "Fashion Cafe" in the United States, and thus that plaintiff Buti did not infringe on any such rights. Finally, I recommend that the Court dismiss Impressa Perosa's state law counterclaims without prejudice.


 While certain facts are hotly disputed, summary judgment is not precluded because the disputed facts are not material to the legal issues necessary to decide the pending motion. Indeed, even assuming the version of the facts most favorable to defendant, Buti still is entitled to summary judgment as a matter of law. As both parties' agree, the "factual crux of this case is whether the defendant used the name 'Fashion Cafe' in commerce, as defined by the trademark statute, 15 U.S.C. § 1127, before the plaintiff began using the name in commerce." (Def's S.J. Br. at 2.)

 Plaintiff Buti's Miami Beach and New York Fashion Cafes

 In May 1993, plaintiff Tommaso Buti opened a restaurant named the "Fashion Cafe" in Miami Beach, Florida. *fn2" (Buti 3(g) P 1; Buti Aff. P 2.) Buti maintains that he chose the name to identify with South Beach's flourishing modeling industry and to capitalize on his associations with the fashion industry (he is married to fashion model Daniela Pestova). (Buti S.J. Br. at 2; Buti 3(g) PP 2-3; Buti Aff. P 4; Buti Dep. at 68-69.)

 Buti maintains that when he opened his Miami "Fashion Cafe," he had never heard of or patronized the defendant's Milan "Fashion Cafe." (Buti 3(g) P 4; Buti Aff. P 3.)

 In June-July 1994, "Buti commenced plans to open a franchise of theme restaurants, similar to Hard Rock Cafe or Planet Hollywood, but focusing on the fashion model industry instead of rock and roll or film." (Buti 3(g) P 7; Buti Aff. PP 5, 8, 9.) Buti hired the law firm of Stroock Stroock & Lavan ("Stroock") to perform a trademark search of the "Fashion Cafe" name. (Buti 3(g) P 8; Buti Aff. PP 5-6; Affidavit of Steven Pokotilow, a Stroock partner, P 3.) After Stroock reported that there was no use or registration of the "Fashion Cafe" mark in the United States, Buti filed an application with the U.S. Patent and Trademark Office for registration of the mark "Fashion Cafe." (Buti 3(g) PP 9-10; Pokotilow Aff. PP 4-5; Buti Aff. P 6.)

 In early December 1994, Buti publicized the ground-breaking for the New York Fashion Cafe, including promotion by "supermodels" Claudia Shiffer, Elle Macpherson, Naomi Campbell and Christy Turlington. (Buti 3(g) P 11; Buti Aff. PP 11, 13.) *fn3" This generated thousands of television, newspaper and magazine articles worldwide. (Buti 3(g) P 12; Buti Aff. P 13; Buti S.J. Mtn. Ex. E: Affidavit of Celia A. Maiset, PP 4-5 & attachments thereto.)

 Plaintiff Buti's Fashion Cafe restaurant opened in New York on April 7, 1995. (Buti 3(g) P 13; Buti Aff. P 8; see Defs' 3(g) PP 11-12.) The New York Fashion Cafe features a "fashion model motif" with fashion photographs displayed, fashion shows on large-screen televisions, and a large camera lens as the restaurant's entrance. (Buti 3(g) P 13; Buti Aff. P 9; see Defs' 3(g) PP 11-12.) "A key feature of [plaintiff's] Fashion Cafe restaurants is the marketing of an extensive line of apparel and souvenirs bearing the Fashion Cafe logo. The restaurants also serve high quality American cuisine in an elegant setting." (Buti Aff. P 10.) Buti invested over ten million dollars to open and operate the New York Fashion Cafe, which in its first year of operation had sales exceeding ten million dollars. (Buti 3(g) PP 15, 16; Francesco Buti Aff. PP 4, 6.) Buti has opened another Fashion Cafe in New Orleans, and several others are under construction. (Buti 3(g) P 18; Francesco Buti Aff. P 7.)

 Defendant Santambrogio's Milan Fashion Cafe

 Giorgio Santambrogio is an officer and 33% owner of defendant Impressa Perosa, an Italian company. *fn4" (Santambrogio Aff. at p. 1; Santambrogio Dep. at 111.) Santambrogio has ownership interests in several businesses including the Fashion Model Management modeling agency located in Milan, Italy, and two restaurants/cafes in Milan known as the Fashion Cafe and the Grand Fashion Cafe. (Santambrogio Aff. at p. 2.) The Fashion Cafe is a "bar with a cafeteria," not a restaurant, which opened in Milan in 1987; the Grand Fashion Cafe is a restaurant which opened in Milan for one night in October 1994 and then formally opened on February 17, 1995. (Santambrogio Aff. at p. 2; Santambrogio Dep. at 101, 122, 172, 185-89, 231; Defs' 3(g) P 15; Buti 3(g) P 19, 28.) This litigation centers on the Milan "Fashion Cafe" bar-cafeteria, not the 1995 Milan Grand Fashion Cafe restaurant. (See Santambrogio Dep. at 228.)

 Impressa Perosa registered the Fashion Cafe trademark in Italy in April 1988. (Santambrogio Aff. at 9; Santambrogio Aff. Ex. C; Santambrogio Dep. at 55, 61; Buti 3(g) P 21.) Santambrogio maintains that he purchased the name "Fashion Cafe" from Impressa Perosa two to four years ago so that he could develop the business "all over the world." (Santambrogio Dep. at 39-40.) *fn5"

 When Santambrogio visited the U.S., he promoted his Milan Fashion Cafe by giving to models free T-shirts, small gift items with the Milan Fashion Cafe name, business cards and "vouchers" for free food and beverages. (Santambrogio Dep. at 220-21; Santambrogio Aff. at p. 3.) Santambrogio maintains that he distributed "literally thousands of T-shirts, cards, and key chains with the [Milan] Fashion Cafe name and logo to persons associated with the modeling and fashion industry which entitled them to free meals at the Fashion Cafe(s) in Milan . . ." (Santambrogio Aff. at p. 9; see also Affidavit of Faith Kates, at p. 2.)

 Santambrogio had a "fantasy" "in his brain" that he would approach American hotel chains such as Hilton or Sheraton and try to expand his Milan restaurant into a United States chain, but he admits that he never approached any of the hotel chains about his idea. (Santambrogio Dep. at 161-62, 319-20.) *fn6"

 When Impressa Perosa heard of Buti's plans to open the New York Fashion Cafe, Impressa Perosa attempted to register the name Fashion Cafe in the United States in December 1994, after Buti had registered his name with the Patent and Trademark Office. (Buti 3(g) P 29; Santambrogio Dep. at 64, 250; Santambrogio Aff. at p. 6.)

 Buti's Knowledge of the Milan Cafe

 Buti claims that when he "opened the Fashion Cafe restaurant in Miami Beach [in 1993], [he] had never visited the Fashion Cafe in Milan, nor was [he] aware of its existence." (Buti Aff. P 3; Buti 3(g) P 4.) Buti further testified that he had never discussed his Miami restaurant with Santambrogio. (Buti Dep. at 22.)

 Santambrogio responds that "Mr. Buti's statement that he never visited the Fashion Cafe in Milan, Italy is simply false because I, and hundreds of other persons, personally witnessed his presence there on more than one occasion." (Santambrogio Aff. at p. 3; see also id. at p. 2, 4, 9.) This testimony, however, is directly contradicted by Santambrogio's deposition testimony in which he admits that he never saw Buti (or Buti's wife) in the Milan Fashion Cafe. (Santambrogio Dep. at 147-48.)

 Santambrogio's Threat of Litigation and This Lawsuit

 On January 19, 1995 -- one month after the groundbreaking for the New York Fashion Cafe and its attendant worldwide publicity -- counsel for Impressa Perosa wrote to Buti demanding that Buti "cease and desist" from using the "Fashion Cafe" name, and threatened litigation if Buti did not comply. (Santambrogio Aff. at p. 6 & Ex. A; Buti 3(g) P 30.) Buti filed this declaratory judgment action in response. (Buti 3(g) P 31; Buti Aff. P 14.)

 Plaintiff Buti's complaint seeks, inter alia, a declaratory judgment that "Defendant does not have rights in the trademark 'Fashion Cafe' for restaurant services or clothing in the United States" and that "Plaintiffs do not infringe trademark rights of Defendant, if such rights exist, . . ." (Cplt., "Wherefore" PP A-B.)

 Defendant Impressa Perosa asserts six counterclaims. The first counterclaim, for misappropriation and false designation of origin, alleges that Buti deliberately and willfully violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125, by infringing on defendant's rights in the name "Fashion Cafe." (Counterclaims PP 23-51.) Defendant's second counterclaim alleges that Buti's trademark application contained false and fraudulent declarations (i.e., that no one else was using that mark), which damaged defendant. (Counterclaims PP 52-58.) The third counterclaim alleges that Buti misappropriated defendant's concepts and the name "Fashion Cafe." (Counterclaims PP 59-65.) The fourth counterclaim alleges that Buti engaged in unfair and deceptive business practices in violation of N.Y. General Business Law § 349 et seq. (Counterclaims PP 66-73.) The fifth counterclaim alleges unfair competition. (Counterclaims PP 74-78.) Finally, the sixth counterclaim seeks injunctive relief for violation of the Lanham Act, 15 U.S.C. § 1115, and N.Y. General Business Law § 349. (Counterclaims PP 79-84.)



A. Buti Should Be Granted Summary Judgment on Buti's Federal Trademark Claim and Defendant's First Counterclaim (Under 15 U.S.C. § 1125)

 The central issue on plaintiff's declaratory judgment claim, and on defendant's first counterclaim for misappropriation and false designation of origin pursuant to Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), is whether plaintiff or defendant has ...

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