# Restivo v. Pennachio

> District Court, S.D. Florida · September 20, 2022

URL: https://www.frixlaw.com/law-library/cases/10121033

## Case

- **Court:** District Court, S.D. Florida
- **Decided:** September 20, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10121033

## How later opinions describe it (automated extraction)

- holding that the TTAB’s order dismissing the opposition “with prejudice” satisfies the requirement of a final judgment on the merits

## Opinion text

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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10121033. Public record. Not legal advice.