The Vill. Tavern v. Catbird Hosp.

1

THE VILLAGE TAVERN, INC., Plaintiff, v. CATBIRD HOSPITALITY, LLC, and JASON SAMUEL CANCILLA, Defendants.

CIVIL No. 1:21-cv-00228-MR

United States District Court, W.D. North Carolina, Asheville Division

August 16, 2022

MEMORANDUM OF DECISION AND ORDER

Martin Reidinger Chief United States District Judge

THIS MATTER is before the Court on the Plaintiff's Motion for Default Judgment [Doc. 9].

I. PROCEDURAL BACKGROUND

The Plaintiff, The Village Tavern, Inc., commenced this action against the Defendants, Catbird Hospitality, LLC and Jason Cancilla, asserting claims for trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C §§ 1114 and 1125(a); a claim for unfair competition under North Carolina law; and a claim for unfair and deceptive trade practices under North Carolina General Statute section 75-1.1 (“Chapter 75”). [Doc. 1].

Each Defendant was properly served with the Summons and Complaint but failed to answer or otherwise defend. Accordingly, the Court entered default against both Defendants on October 15 2021. [Doc. 7]. The Plaintiff now moves for entry of a default judgment pursuant to Rule 55 of the Federal Rules of Civil Procedure. [Doc. 9]. Having been fully briefed, this matter is ripe for disposition.

II. STANDARD OF REVIEW

Rule 55 of the Federal Rules of Civil Procedure provides for the entry of a default when “a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). Once a defendant has been defaulted, the plaintiff may then seek a default judgment. If the plaintiff's claim is for a sum certain or can be made certain by computation, the Clerk of Court may enter the default judgment. Fed.R.Civ.P. 55(b)(1). “In all other cases, the [plaintiff] must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b)(2).

“The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact . . . .” Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). A defendant, however, “is not held . . . to admit conclusions of law.” Id. (alteration in original) (quoting Nishimatsu, 515 F.2d at 1206). The Court therefore must determine whether the alleged facts state a claim for relief. GlobalSantaFe Corp. v. Globalsantafe.com, 250 F.Supp.2d 610, 612 n.3 (E.D. Va. 2003).

III. PLAINTIFF'S FACTUAL ALLEGATIONS

The well-pleaded factual allegations of the Plaintiff's Complaint having been deemed admitted by virtue of the Defendants' default, the following is a summary of the relevant facts.

The Plaintiff, The Village Tavern, Inc. (“Village”), is a corporation organized and existing under the laws of the State of North Carolina, with its principal office located in Winston-Salem, North Carolina. [Doc. 1 at ¶ 1]. Defendant Catbird Hospitality, LLC (“Catbird”) is a limited liability company organized and existing under the laws of the State of North Carolina, with its principal office in Cashiers, North Carolina. [Id. at ¶ 2]. Defendant Jason Cancilla (“Cancilla”) is a citizen and resident of the State of North Carolina, residing in Sapphire, North Carolina. [Id. at ¶ 3].

Since 1984, Village has been operating its restaurant in Winston-Salem, North Carolina under the trademark “VILLAGE TAVERN.” [Id. at ¶ 6]. Over the past thirty-eight years, Village has extensively advertised such mark, and it is now “highly recognizable” to the public as a “unique venue for high quality food and service.” [Id. at ¶¶ 28-29]. During that same period Village has expanded its business, opening a second location in Winston-Salem, two additional locations in North Carolina, and four locations in other states. [Id. at ¶ 8].

Since 1990, Village has owned the federally registered trademark VILLAGE TAVERN®, U.S. Reg. No. 1,599,993. [Id. at ¶ 9; see also Doc. 12 (official United States Patent and Trademark Office (“USPTO”) registration)]. Village's now incontestable ownership of the VILLAGE TAVERN mark guarantees Village the exclusive right to use such mark in connection with restaurant services nationwide. [Doc. 1 at ¶ 10].

Catbird and Cancilla operate a restaurant in Cashiers, North Carolina. [Id. at ¶ 12]. The Defendants' restaurant operates under the names “The VILLAGE TAVERN” and “Cashiers VILLAGE TAVERN.” [Id.]. The exterior of such restaurant features at least two prominent signs displaying the words “VILLAGE TAVERN” in black capital letters, as in the Plaintiff's registered trademark. [Id. at ¶ 14]. The Defendants also employ the same mark on their website, as part of the restaurant's online menu. [Id. at ¶ 15].

Sometime after the Defendants' restaurant opened, Village received a written complaint from “at least one” person who was dissatisfied with the food and service at the Defendants' restaurant. [Id. at ¶ 16]. Having received such complaint and knowing that it had not granted the Defendants permission to use the VILLAGE TAVERN mark, Village sent the Defendants a cease and desist letter on June 16, 2021. [Id. at ¶¶ 17, 30]. Such letter informed the Defendants that Village is the federally registered owner of the VILLAGE TAVERN mark and demanded that the Defendants cease their use of such mark in connection with the operation of their restaurant. [Doc. 1-1 (cease and desist letter)].

The Defendants did not respond to Village's letter. [Doc. 1 at ¶ 19]. In light of the Defendants' lack of responsiveness, Village contacted Cancilla via email on July 20, 2021. [Id.]. Cancilla replied to Village's email that same day. [Id.]. In his reply, Cancilla thanked Village for its “patience” and explained that “[n]ew signage ha[d] been ordered with a name change.” [Id.]. Expressing a desire to eliminate any confusion, Cancilla claimed to have already taken down the restaurant's website and noted that he would take down the Google listing, if he could gain ownership of such listing. [Id.]. Cancilla disclaimed any intent to confuse consumers, positing that he used the words “VILLAGE TAVERN” in reference to the local expression that Cashiers, North Carolina is a “village.” [Id.]. Recognizing, however, that confusion was occurring, Cancilla promised to remove all existing signage “[i]f new signage [was] not in place by the end of [July 2021].” [Id.].

Despite Cancilla's promises, the Defendants' signage remained in place, with the words “VILLAGE TAVERN” prominently displayed, through at least August 12, 2021. [Id. at ¶¶ 14, 20-21]. Moreover, despite Cancilla's assertion that the restaurant website had been taken down prior to July 20, 2021, such website remained accessible in August 2021. [Id. at ¶ 22]. Thereafter, Village made repeated attempts to contact the Defendants, without success. [Id. at ¶ 23]. On August 19, 2021, Village filed the instant action.

IV. DISCUSSION

A. Trademark Infringement and False Designation of Origin^[1]

Section 32 of the Lanham Act provides that the registrant of a trademark may bring a civil action against:

[a]ny person who shall, without the consent of the registrant . . . use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive[.]

15 U.S.C. § 1114(1)(a). Section 43(a) of the Act provides that a registrant may bring a civil action against:

[a]ny person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.

15 U.S.C. § 1125(a)(1)(A).

“Both infringement and false designation of origin have five elements.” Lamparello v. Falwell, 420 F.3d 309, 313 (4th Cir. 2005). To prevail on such causes of action, a plaintiff must establish:

(1) that it owns a valid mark; (2) that the defendant used the mark “in commerce” and without plaintiff's authorization; (3) that the defendant used the mark (or an imitation of it) “in connection with the sale, offering for sale, distribution, or advertising” of goods or services; and (4) that the defendant's use of the mark is likely to confuse consumers.

Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144, 152 (4th Cir. 2012) (quoting 15 U.S.C. § 1114(a)) (citing Louis Vuitton Malletier S.A. v. Haute Diggity Dog,LLC, 507 F.3d 252, 259 (4th Cir. 2007); People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 364 (4th Cir. 2001)).

Here the Plaintiff's factual allegations, which are deemed admitted by virtue of default, establish that the Plaintiff is the registered owner of the VILLAGE TAVERN mark for use in connection with restaurant services. Despite the Plaintiff's registered ownership of the VILLAGE TAVERN mark, the Defendants used the mark, displaying it on a website and various restaurant signs. Such use occurred “in commerce” because the Defendants displayed the mark on the internet, a channel of interstate commerce. See Int'l Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Estrangers a Monaco, 329 F.3d 359, 363-64 (4th Cir. 2003) (holding that “commerce” for purposes of the Lanham Act “is coterminous with that commerce that Congress may regulate under the Commerce Clause of the United...