Restivo v. Pennachio

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

Case Number: 21-23388-CIV-MARTINEZ/BECERRA

JOSEPH RESTIVO,

Plaintiff/Counter-Defendant,

v.

CHARLES PENNACHIO,

Defendant/Counter-Plaintiff,

and

RESTORED’ DREAMS, LLC,

Defendant.

_________________________________/

ORDER ON MOTION TO DISMISS

THIS CAUSE comes before the Court on Counter-Defendant Joseph Restivo’s Motion to

Dismiss (“Motion”). (ECF No. 62). The Court has carefully reviewed the Motion and the pertinent

portions of the record. After careful consideration, the Motion is GRANTED in part and

DENIED in part.

I. BACKGROUND

Counter-Plaintiff Charles Pennachio is a career singer, musician, and entertainer.

(Countercl. ¶ 9, ECF No. 61). In 1989, Pennachio co-founded the musical group LINEAR. (See

id. ¶ 14). Pennachio alleges that Counter-Defendant Joseph Restivo was a “hired gun” member of

LINEAR from 1989, when Pennachio hired him, to 1994, when Pennachio fired him. (Id. ¶ 11).

In 2008, Pennachio learned that Restivo and a “Mr. Pauley”—who is also a former member

of LINEAR—were holding themselves out as “LINEAR LINEAR” and were performing music

together. (Id. ¶ 66). Shortly thereafter, Pennachio’s attorney sent a cease-and-desist letter to

Restivo and Pauley, advising them of Pennachio’s ongoing rights to the LINEAR mark. (Id. ¶ 68).

Pennachio alleges that after his lawyers sent the cease-and-desist letter, Pennachio and Restivo

reached an oral agreement in which Restivo promised to “limit his use of LINEAR to factual

references to his prior membership in [the band], and agreed not to use LINEAR, or anything

confusingly similar to LINEAR as a trademark or brad, or in a manner that could confuse

consumers[.]” (Id. ¶¶ 70−71). In exchange, Pennachio promised to not pursue legal action against

Restivo. (Id. ¶ 179).

Restivo began violating that agreement almost immediately, and, as a result, on May 28,

2008, Pennachio filed a trademark infringement, trademark dilution, and violation of publicity

rights lawsuit against Restivo and Pauley in this Court. (Id. ¶¶ 72–73). The parties allegedly

reached an agreement again where Reestivo would limit his use of LINEAR only to reference the

fact that he had been a member of LINEAR in the past, and Pennachio dismissed the lawsuit in

reliance of this promise. (Id. ¶¶ 74–75).

In 2012, Pennachio learned that Restivo had used LINEAR in connection with a musical

performance, in violation of their purported 2008 oral agreement. (Id. ¶ 76). Upon learning of

Restivo’s use of LINEAR, Pennachio sent text messages to Restivo, warning him to stop using the

LINEAR mark. (See id. ¶ 77). On March, 27, 2012, four days after this text exchange, Restivo

filed an application with the United States Patent and Trademark Office (“USPTO”) for

registration of LINEAR as a federal trademark for “Entertainment in the nature of live

performances, Entertainment, namely, live music concerts, Entertainment [sic], live performances

by a musical band.” (Id. ¶ 78). In response, Pennachio’s attorney sent Restivo another cease-and-

desist letter, demanding that Restivo stop his ongoing use of LINEAR and reminding Restivo of

the 2008 oral agreement. (See id. ¶¶ 77−78). In connection with his application, Restivo claimed

a first use in commerce of LINEAR in 1989. (Id. ¶ 82). Pennachio filed a Notice of Opposition

to Restivo’s application in October 2012. (Id. ¶ 100). Despite Pennachio’s Opposition, the

USPTO issued a registration certificate for LINEAR to Restivo on February 19, 2013 (the “2013

Registration”). (Id. ¶ 85).

Shortly thereafter, on February 27, 2013, Pennachio filed a Petition for Cancellation of the

2013 Registration (“Cancellation Proceedings”).1 (Id. ¶ 103; ECF No. 16-3 at 1–15). The

Cancellation Proceedings lasted nearly four years, and, in January 2017, the Trademark Trial and

Appeal Board (“TTAB”) granted Restivo’s motion for judgment and dismissed Pennachio’s

Cancellation petition “with prejudice.” (ECF 16-3 at 20). In the Cancellation petition, Pennachio

argued that he was the prior user of LINEAR. (See ECF No. 16-3 at 12−15). However, the TTAB

did not address the merits of Pennachio’s claims. Instead, the TTAB granted Restivo’s motion for

judgment because Pennachio “failed to take any testimony or submit any evidence during his

assigned testimony period.” (ECF No. 16-3 at 20).

In 2018, Restivo filed a Declaration of Use under Section 8 of the Trademark Act in

connection with the 2013 Registration, and he submitted three specimens purporting to show his

continued use in commerce of LINEAR. (Id. ¶ 86). Pennachio alleges that the specimens were

1 Although courts generally limit their consideration to the pleadings when ruling on a motion to

dismiss, courts ruling on a motion to dismiss may take notice of the public record, because such

documents are “not subject to reasonable dispute” and are “capable of accurate and ready

determination[.]” Horne v. Potter, 392 F. App’x. 800, 802 (11th Cir. 2010) (quoting Fed. R. Evid.

201(b)). A pleading filed in another court meets this criterion. Universal Express, Inc. v. U.S.

SEC, 177 F. App’x 52, 53 (11th Cir. 2006) (judicial notice of public records, such as court filings,

is proper). Pennachio does not dispute the authenticity of the TTAB documents attached to

Restivo’s Motion to Dismiss and the Second Amended Complaint. Accordingly, the Court takes

judicial notice of these documents, (ECF Nos. 16-3, 40-2, 40-3, 40-4, 40-5, and 40-6), and

considers them for purposes of this motion to dismiss.

inadequate because they did not reflect Restivo’s use of LINEAR in commerce as a trademark.

(Id. ¶¶ 87−91). In 2019, Restivo filed a Declaration of Incontestability under Section 15 of the

Trademark Act in connection with the 2013 Registration, based on Restivo’s purported continued

use in commerce of LINEAR during the five years following registration. (Id. ¶ 92). Regarding

Restivo’s Sections 8 and 15 filings, Pennachio also alleges that “Restivo’s representations were

false, as reflected in the completely inadequate 2018 Specimens[,]” (id.), and that “LINEAR was

neither owned by nor being used by Restivo” at the time Restivo filed the Section 8 and 15

declarations in 2018 and 2019, (id. ¶¶ 123, 124). Pennachio also alleges that “Restivo knew that

Pennachio had the sole and exclusive right to use [LINEAR] in commerce” at the time of filing

the application for and renewal of the registration. (Id. ¶ 137). Pennachio insists that “[b]ased on

[Restivo’s] status as a former member of the Linear musical group, Restivo knew that Pennachio

was the exclusive owner of the LINEAR mark.” (Id. ¶ 140). Accordingly, Pennachio alleges that

Restivo made fraudulent filings and statements to the USPTO. (Id. ¶ 106).

In 2019, Restivo filed a new application (the “2019 Application”) with the USPTO for the

LINEAR mark, this time for “[c]lothing, namely, shirts, sweaters, blouses, jackets, slacks, hats and

baseball caps,” and for “[a]dvertising services, namely, promoting the brands, goods and services

of others; endorsement services, namely, promoting the goods and services of others.” (Id. ¶ 94).

In October 2020, Pennachio filed a Notice of Opposition to this application, which is currently

pending before the TTAB. (Id. ¶ 107).

In the present litigation, Pennachio has brought eight Counterclaims against Restivo. The

First, Second, and Third Counterclaims relate to Restivo’s 2013 Registration for the mark LINEAR

in connection with entertainment services. The Fourth, Fifth, Sixth, and Seventh Counterclaims

relate to Restivo’s allegedly infringing use of the mark LINEAR. Finally, the Eighth Counterclaim

seeks relief for Restivo’s breach of the alleged 2008 oral agreement to cease using LINEAR as a

trademark.

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a complaint that “fail[s] to state a claim

upon which relief can be granted” will be dismissed. To survive dismissal, a complaint must

provide “a short and plain statement of the claim showing that the pleader is entitled to relief.”

Fed. R. Civ. P. 8(a)(2). At this stage, “the question is whether the complaint ‘contains sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on its face.’” Worthy v.

Phenix City, 930 F.3d 1206, 1217 (11th Cir. 2019) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009)). In ruling on a motion to dismiss, the Court “accepts the factual allegations in the

complaint as true and construes them in the light most favorable to plaintiff.” Speaker v. U.S. HHS

CDC & Prevention, 623 F.3d 1371, 1379 (11th Cir. 2010). A complaint that merely provides

“labels and conclusions or a formulaic recitation of the elements of a cause of action” or

“unadorned, the-defendant-unlawfully-harmed me accusation[s]” is insufficient to survive a Rule

12(b)(6) motion to dismiss. Worthy, 930 F.3d at 1217 (internal quotations and citations omitted).

“Where a complaint pleads facts merely consistent with a defendant’s liability, it stops short of the

line between possibility and plausibility of entitlement to relief.” Hernandez v. GM Fin. Co., No.

19-cv-20136, 2019 U.S. Dist. LEXIS 42690, at *4–5 (S.D. Fla. Mar. 13, 2019) (citing Iqbal, 556

U.S. at 678) (internal quotations omitted).

III. DISCUSSION

The Court will first address Pennachio’s First, Second, and Third Counterclaims (the

“Registration Counterclaims”), which all relate to Restivo’s 2013 Registration for the mark

“LINEAR” in connection with entertainment services. Then, the Court will turn to Pennachio’s

Fourth, Fifth, Sixth, and Seventh Counterclaims (the “Infringement Counterclaims”), which relate

to Restivo’s allegedly infringing use of the LINEAR mark. Lastly, the Court will address

Pennachio’s Eighth Counterclaim for breach of the alleged 2008 oral agreement.2

A. The Registration Counterclaims are Subject to Partial Dismissal Only

Restivo moves for partial dismissal of the First Counterclaim for declaratory relief,

paragraphs 119(a) and (h), and for dismissal of the Second and Third Counterclaims for relief

arguing that they are barred by res judicata or claim preclusion. He further argues the fraud

allegations in the Second and Third Counterclaims are not sufficiently pled. Finally, Restivo

maintains that partial dismissal of the Third Counterclaim is appropriate because this Court does

not have authority to adjudicate a pending application before the USPTO. After careful

consideration, Restivo’s Motion as to the Registration Counterclaims is granted in part and denied

in part, as stated herein.

i. Claim preclusion

Claim preclusion or res judicata bars re-litigation of matters adjudicated in a prior

proceeding if: (1) the prior decision was rendered by a court of competent jurisdiction; (2) there

was a final judgment on the merits; (3) both cases involved the same parties or their privies; and

(4) both cases involve the same causes of action. See Israel Discount Bank Ltd. v. Entin, 951 F.2d

2 Restivo also moved to dismiss the Counterclaim in its entirety arguing that it is a shotgun

pleading, but this argument is without merit. Restivo maintains that the Counterclaim is a shotgun

pleading because it “incorporates prior allegations and conclusions which are immaterial and

irrelevant to the respective claim.” (Mot. Dismiss at 18). A shotgun pleading is one that “contains

multiple counts that each adopt the allegations of all preceding counts.” McDonough v. City of

Homestead, 771 F. App’x 952, 955 (11th Cir. 2019) (emphasis added). Pennachio does not do

this. In each of his counterclaims, Pennachio only adopts the allegations set forth in paragraphs 1

through 115, which outline the general facts applicable to all claims. Notably, Restivo’s amended

complaint is a shotgun pleading that adopts and incorporates all previous allegations into each

claim, but Pennachio did not seek dismissal on this ground, so the issue is not before the Court.

Restivo’s Motion is denied.

311, 314 (11th Cir. 1982); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1550 (11th Cir. 1990). A

TTAB ruling is afforded preclusive effect if the elements of res judicata are established. B&B

Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 152 (2015). If a party invoking the res

judicata doctrine establishes all four elements, “the court then determines whether the claim in the

new suit was or could have been raised in the prior action; if the answer is yes, res judicata applies.”

Vernon v. Ziel, No. 18-24054-CIV, 2020 WL 4501802 (S.D. Fla. June 15, 2020) (citing In re

Justice Oaks II, 898 F.2d at 1552).

Restivo argues that Pennachio’s ownership claims are barred by res judicata because the

TTAB dismissed Pennachio’s cancellation proceedings with prejudice in 2017. Pennachio’s

response is two-fold. First, Pennachio argues that, as previously held by the undersigned,

Pennachio is not prohibited from asserting priority of use as a defense to Restivo’s claims of

infringement. Second, he contends that even if he is prohibited from asserting priority in support

of his Counterclaims—rather than only as a defense to the infringement claims—the Motion to

Dismiss still fails because Pennachio is challenging Restivo’s ownership of the LINEAR mark

based, not only the 2013 Registration, but also on Restivo’s allegedly fraudulent Section 8 and 15

filings made in 2018 and 2019. The Court agrees with Pennachio’s second argument.

In the TTAB’s order dismissing the Cancellation Proceedings, the authenticity of which

Pennachio does not dispute, the TTAB dismissed Pennachio’s petition for cancellation of the 2013

Registration with prejudice for failure to submit any evidence. Pennachio’s primary argument in

the Cancellation Proceedings was that he was the common law owner of the LINEAR mark

because he had been using the mark since 1987. As previously stated, a TTAB ruling has

preclusive effects if all other elements of res judicata are met. B&B Hardware, 575 U.S. at 152.

Here, the TTAB’s dismissal with prejudice constituted a final judgment on the merits. See Ziel,

2020 WL 4501802, at *5 (citing Citibank, N.A. v. Data lease Fin. Corp., 904 F.2d 1498, 1501–02

(11th Cir. 1990) (holding that the TTAB’s order dismissing the opposition “with prejudice”

satisfies the requirement of a final judgment on the merits). Moreover, there is no dispute that the

same parties were involved in both the TTAB proceeding and the matter before the Court.

The fourth element of res judicata is where this case turns. In his First Counterclaim,

Pennachio seeks, inter alia, a declaration that “Restivo does not own a valid trademark, or have

any legitimate interest or rights in the name “LINEAR.” (Countercl. ¶ 119(a), (h)). The Second

Counterclaim alleges a “False and/or Fraudulent Registration and/or Renewal of United States

Trademark Registrations.” (See id. at 35 (emphasis added)). In particular, Pennachio alleges that

“[t]hrough the false and fraudulent statements and declarations of Restivo (and his trademark

counsel), Restivo procured the [2013] Registration for LINEAR.” (Id. ¶ 121). He also alleges,

however, that “[s]eparate and apart from the fraud . . . upon the USPTO in 2012, LINEAR was

neither owned by nor being used by Restivo at the time that he filed a Section 8 Declaration of

Use on March 2, 2018” and “at the time he filed a Section 15 Declaration of Incontestability on

April 18, 2019.” (Id. ¶¶ 123–24). Lastly, in the Third Counterclaim, Pennachio seeks to cancel or

transfer the LINEAR Mark, as well as Restivo’s pending 2019 Application for LINEAR in

connection with clothing and advertising services, to him. In all three counterclaims, Pennachio

is attempting to relitigate the validity of the 2013 Registration, which has already been decided by

the TTAB. The TTAB’s findings denying cancellation of the 2013 Registration are accorded

preclusive effect, so Pennachio is barred from relitigating the registration of the LINEAR mark in

2013.3 See Ziel, 2020 WL 4501802, at *5.

3 This finding is in line with the Court’s previous holding in its Order denying Restivo’s motion

for a temporary restraining order or preliminary injunction. (ECF No. 50). There, the Court held

that Pennachio was not precluded from raising prior use as a defense to the infringement claims,

This preclusive effect, however, does not result in dismissal of the First, Second, and Third

Counterclaims in their entirety. This is so because Pennachio’s counterclaims are also based on

an argument that was not raised, nor could it have been raised, at the time Pennachio filed his

cancellation petition with the TTAB in 2017; namely, that Restivo committed fraud upon the

USPTO in 2018 and 2019 when he made his Section 8 and 15 filings. Consequently, these claims

are not precluded by the TTAB decision issued in 2013.

To be clear, the Court reiterates its holding. Pennachio is limited to bringing the

Registration Counterclaims based only on the purported fraud committed upon the USPTO in 2018

and 2019, but he cannot premise his counterclaims on the purported fraud committed prior to or in

relation to the 2013 Registration itself. Whether these claims are meritorious is a question for

another day, but, at this early stage, it cannot be said that the claims based on the allegedly

fraudulent Section 8 and 15 Declarations are barred by res judicata.4 Accordingly, the Registration

Claims survive dismissal in part.

because those claims require the Court to determine if Defendant infringed on the LINEAR Mark,

rather than the validity of the registration of the mark. As the Court held, the infringement claims

are entirely different issues than what the TTAB had to decide, which was registration. See Ziel,

2020 WL 4501802, at *6.

4 Restivo also maintains in his Reply that the Second and Third Registration Counterclaims cannot

survive because Pennachio has not pled fraud with sufficient particularity, and instead, has only

pled that the specimens filed in support of the 2018 and 2019 filings were merely “inadequate”.

(Reply at 2–5). The Court is unconvinced. A litigant seeking cancellation of a mark based on

fraud on the USPTO must allege that (1) the challenged statement was a false representation

regarding a material fact; (2) the person making the representation knew that it was false; (3) the

person making the representation had the intent to deceive the USPTO; (4) reasonable reliance on

the misrepresentation; and (5) damage proximately resulting from such reliance. Sovereign

Military Hospitaller, 702 F.3d 1279, 1289 (11th Cir. 2012) (Angel Flight of Ga., Inc. v. Angel

Flight Am., Inc., 522 F.3d 1200, 1209 (11th Cir. 2008). Pennachio meets these requirements. He

alleges that Restivo’s representations of continuous use of the LINEAR mark in commerce during

the five years following registration were false, (Counterclaim ¶¶ 86, 92, 136); that Restivo knew

they were false because Pennachio based on his status as a former member of the Linear band, the

oral agreement he entered into with Pennachio before and after Pennachio filed the first lawsuit

ii. Pending Application

As to the Third Counterclaim, Restivo also contends that it should be dismissed because

district courts do not have the authority to transfer a pending application. Citing out-of-circuit

case law, Pennachio responds that the Court has authority to cancel or transfer the pending

application because there is a “sufficient nexus” between the pending application and a registered

mark at issue in the case, i.e., the 2013 Registration. Restivo does not dispute that this “sufficient

nexus” exception exists, but he argues that the 2013 Registration is not at issue here, and thus there

is no “nexus” with the pending application.

The statutory authority allowing district courts to cancel registrations is 15 U.S.C. § 1119,

which states that “[i]n any action involving a registered mark the court may determine the right to

registration, order the cancelation of registrations, in whole or in part, restore canceled

registrations, and otherwise rectify the register with respect to the registrations of any party to the

action.” By its plain language the statute seems to imply that Section 1119 only applies to a

“registered mark.” See Buccallati Holding Italia SPA v. Laura Buccellati, LLC, No. 13-cv-21297,

2014 WL 11880856, at *5 (S.D. Fla. Jan. 3, 2014). Other courts agree with this interpretation.

See, e.g., id. (citing GMA Accessories, Inc. v. Idea Nuova, Inc., 157 F. Supp. 2d 234, 241 (S.D.N.Y.

2000)). But an exception exists. A district court “may exercise authority over a trademark

application as long as that application is sufficiently similar (such as in sound, look, and meaning)

against him, (id. ¶¶ 68–75, 137, 140); that Restivo intentionally made the fraudulent statements

because at the time he made the filings, he knew Pennachio had been the one in continuous use of

the mark, (id. ¶ 140); that “the United States Patent and Trademark Office would not have

registered the mark LINEAR had it known that Restivo was not using the mark in United States

commerce[,]” (id. ¶ 139); and, finally, that Pennachio has been and continues to be damaged and

harmed by Restivo’s continued registration and renewal of the mark LINEAR, (id. ¶ 141). These

factual allegations are sufficient to lead to an inference that Restivo intentionally defrauded the

USPTO.

to the registered trademark at issue in the underlying litigation.” D.B.C. Corp. v. Nucita

Venezolana, C.A., 464 F. Supp. 3d 1323, 1332 (S.D. Fla. 2020).

Restivo’s only argument in favor of his position is that “the ‘only registered mark at issue’

cannot be litigated” because claim preclusion bars the cancellation or transfer of this registration.

(Reply at 6, ECF No. 66). Although Restivo is correct that Pennachio is barred from contesting

the registration of the LINEAR mark in 2013, the mark itself is still at issue because the claims of

the purportedly fraudulent renewal are still pending. Because Restivo does not contest that the

pending application is sufficiently related to the registered mark at issue in this case, the Court

need not determine the issue at this time. Restivo’s Motion to Dismiss the Third Counterclaim is

therefore denied.

Accordingly, the Court finds that Pennachio’s First, Second, and Third Counterclaims

survive only as to the claims premised upon the 2018 and 2019 allegedly fraudulent declarations.

Res judicata prohibits Pennachio from relitigating the registration of the LINEAR mark in 2013,

but not his renewals. Restivo’s Motion is therefore granted in part and denied in part as to these

three counterclaims.

B. The Infringement Counterclaims Are Not Subject to Dismissal

Restivo moves for dismissal of the Fourth, Fifth, Sixth, and Seventh Counterclaims arguing

that these claims are barred by the doctrine of laches and issue preclusion. As to the Seventh

Counterclaim, Restivo also advances that the claim is preempted pursuant to 15 U.S.C. §

1125(c)(6). The Court addresses each argument in turn below.

i. Laches

Restivo argues that Pennachio’s Fourth, Fifth, Sixth, and Seventh Counterclaims are time-

barred by the applicable statute of limitations and the defense of laches. Restivo argues that

Pennachio indicated in his Counterclaims that he was aware of Restivo’s infringing use of

LINEAR in 2012, but he did not file a claim for infringement until 2022 and that this prejudicial

ten-year delay bars all of Pennachio’s Infringement Counterclaims under the Lanham Act and

analogous Florida statutes. Pennachio counters that he did not delay asserting his rights because

he filed an opposition to Restivo’s then-pending trademark application in 2012, and he filed a

Petition for Cancellation of the 2013 Registration, which was litigated until 2017.

Courts may apply the equitable defense of estoppel by laches to bar claims for trademark

infringement brought under the Lanham Act. Kason Indus. v. Component Hardware Grp., Inc.,

120 F.3d 1199, 1203 (11th Cir. 1997). A defendant must establish three elements to assert laches

as a defense: “(1) a delay in asserting a right or claim; (2) that the delay was not excusable; and

(3) that there was undue prejudice to the party against whom the claim is asserted.” Id. Although

the Lanham Act does not contain a statute of limitations, this Circuit “applies the period for

analogous state law claims as the touchstone for laches.” Id. (citing AmBrit, Inc. v. Kraft, Inc.,

812 F.2d 1531, 1545 (11th Cir. 1986)); see Commodores Entm’t Corp. v. McClary, 879 F.3d 1114,

1141 (11th Cir. 2018). In Florida, this period is four years. Fla. Stat. § 95.11(3), (6).

The only claims Pennachio is allowed to proceed on are those based on the allegedly

fraudulent Section 8 and 15 filings made by Restivo in 2018 and 2019. It is unclear at this early

stage in the proceedings when Pennachio discovered the facts that gave rise to these claims. The

Court therefore cannot determine whether there was in fact a delay. Accordingly, Restivo’s motion

to dismiss is denied on this basis.

ii. Issue Preclusion

Restivo once again argues before this Court that Pennachio is not allowed to relitigate the

issue of priority of use because this has already been decided by the TTAB. This argument fails

at this juncture.

Issue preclusion requires four elements: “(1) the issue at stake must be identical to the one

involved in the prior litigation; (2) the issue must have been actually litigated in the prior suit; (3)

the determination of the issue in the prior litigation must have been a critical and necessary part of

the judgment in that action; and (4) the party against whom the earlier decision is asserted must

have had a full and fair opportunity to litigate the issue in the earlier proceeding.” I.A. Durbin,

Inc. v. Jefferson Nat'l Bank, 793 F.2d 1541, 1549 (11th Cir. 1986) (citations omitted). In trademark

infringement cases, where the elements of issue preclusion are met and the usages adjudicated by

the TTAB are materially the same as those before the district court, issue preclusion should apply.

B&B Hardware, 135 S. Ct. at 1310.

At this stage, the Court cannot find that the issue of priority was identical to the one

involved in the prior litigation or that the issue was “actually litigated” in the TTAB proceeding.

To begin with, the TTAB proceeding sought to cancel a registration, whereas the issues in these

counterclaims involve trademark infringement. Thus, based on the TTAB documents before the

Court at this juncture, it does not appear that the issues are identical. Moreover, Restivo contends

that Pennachio actively litigated this issue before the TTAB for four years, and that he filed various

motions arguing the issue of priority. But, at this time, the Court is not privy to the entire record

before the TTAB and cannot make a determination as to whether the issue of priority was actually

litigated. In the documents before the Court, which include the TTAB’s decision on Pennachio’s

motion for summary judgment and the order on dismissal of the cancellation proceedings, the

TTAB does not make a determination as to the issue of priority. In fact, in its order on summary

judgment, the TTAB finds that “this is not a simple case, that the record suffer[ed] from significant

evidentiary gaps, and that all material facts in [that] proceeding are disputed.” (ECF No. 40-6 at

8). In the Order dismissing the Cancellation Proceedings, the TTAB does not address the issue of

priority. The Court does not suggest that these TTAB orders cannot be the basis for issue

preclusion, but merely holds that, without the benefit of the full record, including the documents

submitted by Pennachio in the cancellation proceeding and the arguments made, the Court cannot

grant dismissal of the Infringement Counterclaims based on issue preclusion.

iii. Preemption

Next, Restivo argues, without citing to any authority, that the Seventh Counterclaim for

trademark dilution is preempted by the Federal Trademark Dilution Act (“FTDA”), 15 U.S.C. §

1125(c)(6).

The FTDA provides that “[t]he ownership by a person of a valid registration . . . on the

principle register under this chapter shall be a complete bar to an action against that person, with

respect to that mark, that—(A) is brought by another person under the common law or a statute of

a State; and (B)(i) seeks to prevent dilution by blurring or dilution by tarnishment; or (ii) asserts

any claim of actual or likely damage or harm to the distinctiveness or reputation of a mark, label,

or form of advertisement.” 15 U.S.C. § 1125(c)(6).

Restivo contends that because he is the owner of the LINEAR mark, Pennachio’s dilution

claims are preempted. His argument inherently fails because the validity of his ownership in the

LINEAR mark is still at issue in this case. Although Pennachio cannot contest the validity of the

2013 Registration itself, his claims for fraud upon the USPTO in 2018 and 2019 survive dismissal

and are pending before this Court. Thus, Restivo’s Motion is denied.

For the foregoing reasons, Restivo’s Motion to Dismiss is denied as to the Fourth, Fifth,

Sixth, and Seventh Counterclaims. These claims may proceed.

C. The Eighth Counterclaim is Not Subject to Dismissal

Finally, Restivo also moves to dismiss Pennachio’s Eighth Counterclaim for breach of

contract on the basis that the purported oral agreement between the parties is barred by the statute

of frauds. Pennachio alleges that in 2008, he and Restivo entered into an oral agreement in which

Restivo “agreed not to use LINEAR, or anything confusingly similar to LINEAR, as a trademark

or brand, or in a manner that could confuse consumers into believing that he was a current member

of LINEAR, or that he currently was associated with LINEAR.” (Countercl. ¶ 181). In exchange,

Pennachio agreed not to pursue legal action against Restivo. (Id. ¶ 179).

Florida’s statute of frauds provides that “[n]o action shall be brought . . . upon any

agreement that is not to be performed within the space of 1 year from the making thereof . . . unless

the agreement or promise upon which such action shall be brought, or some note or memorandum

thereof shall be in writing and signed by the party to be charged therewith[.]” Fla. Stat. § 725.01.

Thus, “[u]nder well-settled Florida law, the statute of frauds bars the enforcement of a contract

where the parties intended and contemplated that performance of the agreement would take longer

than one year.” Dwight v. Tobin, 947 F.2d 455, 459 (11th Cir. 1991); see also First Realty Inv.

Corp. v. Gallagher, 345 So. 2d 1088, 1089 (Fla. 3d DCA 1977) (“recognizing that “[t]he primary

factor to be utilized in determining whether or not an oral contract is to be performed within the

one-year limitation of the statute is, of course, the intent of the parties.”). “The intent of the parties

may be inferred from the ‘surrounding circumstances’ or the ‘object to be accomplished.’”

Dwight, 947 F.2d at 459. But, “[c]ourts in this district have held that the intent of the parties is a

factual inquiry which makes a determination of the applicability of the statute of frauds improper

on a motion to dismiss.” Hugues v. Priderock Capital Partners, LLC, 2018 WL 3699348, at*2

(S.D. Fla. May 31, 2018) (collecting cases).

Restivo asserts that the oral agreement is unenforceable pursuant to the statute of frauds

because the parties intended the alleged oral promise to last into perpetuity. The general rule,

however, is that an “an oral contract for an indefinite time is not barred by the Statute of Frauds.

Only if a contract could not be performed within one year would it fall within the statute.” Byam

v. Klopcich, 454 So. 2d 720, 721 (Fla. 4th DCA 1984) (emphasis added). There is nothing in the

Counterclaim to suggest that the oral agreement cou/d not be performed within one year and, at

this stage, the Court is unable to determine from the pleadings whether the parties intended the

contract to be performed within one year. This factual inquiry 1s more appropriately left for a later

day. Pennachio’s Eighth Counterclaim therefore survives dismissal.

For the foregoing reasons, it is

ORDERED AND ADJUDGED that Restivo’s Motion to Dismiss, (ECF No. 62), is

GRANTED in part and DENIED in part, as stated herein. Restivo shall file an answer to the

Counterclaim within fourteen days from this Order.

DONE AND ORDERED in Chambers at Miami, Florida, this 20th day of September, 2022.

JOSE E. MARTINEZ

ED STATES DISTRICT GE

Copies provided to:

Magistrate Judge Becerra

All Counsel of Record

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