Opinion ID: 612451
Heading Depth: 1
Heading Rank: 15

Heading: Prohibiting Appellants and Patsy's Pizzeria From Using Solely PATSY'S

Text: The district court entered an injunction prohibiting appellants and Patsy's Pizzeria from using solely the term PATSY'S. No party requested such an injunction as relief. Generally, where neither party has requested the injunctive relief the district court intends to grant, the parties must receive an opportunity to be heard. See Starter, 170 F.3d at 299. In the present case, the district court instructed the parties to address the propriety of such an injunction in their post-trial papers. Neither party requested this particular injunction only because it represented a compromise between their respective positions, an anathema to both. It was not the lack of notice, but rather the lack of interest in such relief, that left the injunction with the appearance of sua sponte relief. Also, the considerations pro and con are rehashes of years of arguments that need to come to an end. We are completely confident that a remand would be unilluminating, delay the termination of this litigation needlessly, and merely lead to more fruitless, overlitigated proceedings. In all other respects, the injunction is entirely within the district court's discretion. Appellants argue that: (i) the district court failed to make the findings required by Fed.R.Civ.P. 65(d)(1)(A); (ii) the issuance of the injunction is not narrowly tailored because it went beyond the scope of the party's claims, which did not involve the right to use PATSY'S in Manhattan; and (iii) the injunction is inconsistent with the district court's finding that appellants have the right to use PATSY'S for restaurant services. None of these arguments has any merit whatsoever. With regard to (i), the district court's injunction was sufficiently tailored. While the prime focus of the litigation may not have been on the right to use PATSY'S in Manhattan, Patsy's Pizzeria's counter-claim seeking cancellation of appellants' registrations necessarily required the consideration of a likelihood of confusion between the marks in Manhattan. As a result, the injunction did not go beyond the scope of the issues tried in the case. As for (ii), the district court's reasons for the injunction are adequate to provide meaningful appellate review. The jury found that there was a likelihood of confusion between Patsy's Pizzeria's marks and Patsy's Italian Restaurant's '836 Registration for the stylized mark PATSY'S PR for restaurant services and the '866 Registration for PATSY'S for restaurant services not including pizza. And, as noted by the district court, there was substantial evidence in the record indicating an exceeding degree of consumer confusion. Patsy's Italian Rest. IV, 575 F.Supp.2d at 470. In addition, the district court weighed the parties' rights with the harm to the public due to a likelihood of confusion, and determined that the injunction met a sufficient balance. With regard to (iii), while I.O.B. Realty can no longer protect its rights to the name Patsy's due to the long period of use by Patsy's Italian Restaurant, see Patsy's Brand III, 317 F.3d at 216-17; Patsy's Italian Rest. IV, 575 F.Supp.2d at 470, that fact does not alter the likelihood of confusion by consumers. Having allowed the consumer confusion to develop, no party can now complain about the district court's attempt to minimize the confusion. This is particularly true given our earlier admonition to the parties that both sides... would be well advised to minimize the risk of confusion by identifying their restaurants by the complete names: `Patsy's Italian Restaurant' and `Patsy's Pizzeria.' Patsy's Brand III, 317 F.3d at 221. Appellees argue that the injunction was an abuse of discretion because it included the original location in East Harlem as well as the licensees in Manhattan, which were not parties to the litigation. They argue that there was no finding of likelihood of confusion with regard to those locations, claiming it is unusual to enjoin a senior user without such a finding. We disagree. Rule 65(d)(2) provides that an injunction binds both the parties and anyone who is in active concert or participation with [the parties.] Fed.R.Civ.P. 65(d)(2)(c). Both I.O.B. Realty and Patsy's Inc. were parties to the instant litigation. Because the Manhattan locations are authorized to use I.O.B. Realty's marks through the franchise agreements with Patsy's Inc., they are in active concert or participation with I.O.B. Realty and Patsy's Inc. insofar as the injunction involves the use of the PATSY'S mark, see Fed.R.Civ.P. 65(d)(2)(C). Furthermore, as the owner of the mark, I.O.B. Realty was perfectly able to represent the other locations' interests in using the mark. As a result, it was not an abuse of discretion to enter an injunction binding the Manhattan Patsy's Pizzeria locations. Nor did the district court abuse its discretion by enjoining the senior user. While doing so may be unusual, this is not the typical case. As noted above, Patsy's Pizzeria's counterclaim seeking cancellation of appellants' registrations necessarily required the consideration of a likelihood of confusion between the marks in Manhattan. As a result, there was substantial evidence in the record indicating an exceeding degree of consumer confusion, Patsy's Italian Rest. IV, 575 F.Supp.2d at 470, and the jury found that there was a likelihood of confusion between Patsy's Pizzeria's marks and Patsy's Italian Restaurant's '836 and '866 Registrations. Furthermore, as noted, I.O.B. Realty can no longer protect its rights against Patsy's Italian Restaurant, see Patsy's Brand III, 317 F.3d at 216-17; Patsy's Italian Rest. IV, 575 F.Supp.2d at 470, and thus I.O.B. Realty's failure to enforce its rights contributed to the consumer confusion. Given these facts, we do not believe that the district court erred by evaluat[ing] ... the legitimate interests of the senior user, the junior user, and the consuming public, Am. Footwear Corp. v. Gen. Footwear Co. Ltd., 609 F.2d 655, 664 (2d Cir.1979) and concluding that, in order to strike the proper balance of these interests, the senior user must also be enjoined from using solely the name PATSY'S.