Court: District Court, S.D. New York; February 21, 2012; Federal District Court
BLT Restaurant Group initiated a lawsuit against Laurent Tourondel following his departure from their contractual relationship, which involved his significant role in developing BLT-branded restaurants. Tourondel has since launched his own restaurant ventures with other investors. Presently, the court is addressing three motions: two from the defendants seeking to dismiss parts of the amended complaint due to lack of supplemental jurisdiction and requesting summary judgment on one claim and part of another; and one from the plaintiff seeking permission to file a second amended complaint to add and reorganize claims and provide additional factual details.
The court denied the defendants’ motion to dismiss, granted the plaintiff’s motion to amend, and partly denied the defendants’ motion for summary judgment. The lawsuit, filed in mid-2010, includes eight claims against Tourondel, Michael Cinque, and LT Burger, Inc. BLT alleges that Tourondel breached their contract by using proprietary information to unfairly compete, specifically citing the replication of recipes, dish names, and pricing strategies from BLT restaurants. The plaintiff's first claim is for breach of contract against Tourondel for violating confidentiality provisions. Additionally, a federal claim under the Lanham Act is included, alleging unfair competition through false origin designation and misappropriation of property rights. The plaintiff also asserts deceptive practices under New York law and seeks a declaratory judgment to affirm Tourondel's contractual restrictions on using BLT’s proprietary information.
The fifth claim alleges that Tourondel fraudulently induced the plaintiff to amend their original contract, allowing Tourondel to use the BLT trade name if he left to start his own business, while prohibiting the plaintiff from using the name for new restaurants. The plaintiff seeks reformation of the amended contract to permit its use of the BLT trade name across all restaurants. The sixth claim for unjust enrichment argues that Tourondel tricked the plaintiff into relinquishing its right to the trade name, resulting in Tourondel’s unjust enrichment. The seventh claim asserts that Tourondel breached his fiduciary duty as a consultant by partnering with another financier to open a BLT Burger restaurant in Hong Kong, which allegedly deprived the plaintiff of a lucrative opportunity. The eighth claim requests attorney’s fees and costs based on a contractual provision that allows for such an award in the event of a breach. After the plaintiff filed an amended complaint and the defendants responded, the defendants sought judgment on the pleadings, which the District Court granted concerning the General Business Law, contract-reformation, and unjust-enrichment claims, but denied for other claims. The defendants also moved to dismiss certain state-law claims for lack of subject-matter jurisdiction, arguing that the plaintiff could not meet the requirements for supplemental jurisdiction, except regarding claims related to the defendants' menu. The court disagreed, referencing the Supreme Court's ruling in United Mine Workers v. Gibbs, which established that supplemental jurisdiction is valid if the state and federal claims share a common nucleus of operative fact, as codified in the U.S. Code.
The statute allows district courts to decline jurisdiction over state-law claims even if they meet the Article III 'case or controversy' requirement under certain conditions: (1) the claim involves a novel or complex state law issue, (2) it predominantly overshadows the claims under original jurisdiction, (3) all original jurisdiction claims have been dismissed, or (4) there are exceptional circumstances warranting a jurisdiction decline. Defendants argue that plaintiffs fail to meet the mandatory 'case or controversy' requirement of section 1367(a), which necessitates that federal and state claims arise from a common nucleus of operative fact, meaning the claims should substantially overlap factually.
The court emphasizes that this overlap does not require identical historical events for both claims; rather, substantial evidence shared between the claims suffices. It should be assessed whether the evidence for the federal claim overlaps with that for the state claims. In this case, the sole federal claim concerns unfair competition related to restaurant menus, while the state-law claims involve non-menu issues like the use of recipes and marketing techniques. Defendants contend that these state claims rely on evidence unrelated to the federal claim.
However, the court argues that the analysis should focus on the likelihood of evidence overlap, determining that all claims derive from the parties' collaboration on restaurant operations and subsequent competition after a breakup. Evidence relevant to the federal claim will also pertain to broader issues including restaurant themes, menu terminology, pricing, and recipe similarities. The context of the parties' original relationship and the breach will likely be significant, especially regarding the federal claim's reliance on the plaintiffs' proprietary materials or confidential information, indicating that understanding pre-separation dealings is crucial for the case.
Substantial overlap exists between the facts and evidence for the federal and state claims, necessitating that the plaintiff litigate these claims in a single suit. The defendants' reliance on the Lyndonville case is deemed misplaced, as that case involved a narrow federal claim that did not require evidence related to state-law claims. The court noted that, similar to Rosario, the history of the parties' relationship and the defendant’s operation of new restaurants post-departure is relevant to both the federal unfair competition claim and the state-law claims. The plaintiff meets the Article III test under section 1367(a), and no statutory exceptions under section 1367(c) to assert supplemental jurisdiction are applicable, as the state-law claims do not present novel issues and do not substantially predominate over the federal claim. Joint adjudication is favored for promoting judicial efficiency due to the substantial overlap in evidence. Consequently, the motion for partial dismissal based on lack of subject-matter jurisdiction is denied.
Additionally, the plaintiff seeks to amend its complaint to add factual allegations and new claims, substituting Think Burger, LLC for LT Burger, Inc. The defendants consent to the substitution but oppose other amendments. Although the plaintiff may not amend as a matter of right, Rule 15(a) encourages courts to freely grant leave to amend when justice requires, allowing the plaintiff to test claims on the merits if they rely on proper subjects of relief.
Leave to amend should be granted freely unless there are substantial reasons to deny it, such as undue delay, bad faith, failure to cure deficiencies, undue prejudice, or the futility of the amendment. The futility of an amendment must be assessed against the standard applied in a Rule 12(b)(6) motion to dismiss. Defendants claim that proposed amendments are futile due to a lack of subject-matter jurisdiction; however, this argument has been previously rejected, as defendants have not demonstrated that the new claims differ from existing ones in a way that affects jurisdiction. Additionally, defendants argue that some proposed claims fail to state a cognizable claim. To survive dismissal, a complaint must contain sufficient factual matter to present a plausible claim for relief, moving beyond mere conclusory statements or legal conclusions. While the court accepts factual allegations as true and draws reasonable inferences in favor of the plaintiff, it is not obligated to accept unreasonable inferences or legal conclusions inconsistent with the allegations. A complaint must provide more than speculative assertions to raise a right to relief above the speculative level. The court's review is confined to the complaint and certain attached or integral documents, without considering external evidence. The proposed Second Amended Complaint introduces some narrative and rhetorical changes but largely reiterates prior allegations against Tourondel, including misappropriation of proprietary information, copying of preparation techniques, and the improper luring of a personal assistant. It also claims that Tourondel destroyed confidential information by returning a laptop after erasing its hard drive.
Plaintiff presents four updated contract breach claims against Tourondel. The first claim alleges misappropriation of confidential information related to the opening of a steak restaurant in the Manrey Hotel, claiming Tourondel copied dishes, presentation styles, and decor from BLT steak restaurants. The second claim focuses on a burger restaurant in Sag Harbor, alleging Tourondel replicated BLT's dish combinations, names, and ingredients, also asserting similar misconduct at another burger location in the Manrey Hotel. The third claim addresses Tourondel's failure to return a laptop containing confidential information upon leaving BLT, with allegations that he erased the data before returning the device after the lawsuit began. The fourth claim alleges Tourondel used an in-house magazine to promote his own restaurant line, which the plaintiff contends copies BLT’s promotional strategies, including sending the magazine to BLT locations to divert customers.
Additionally, a fifth claim against all defendants asserts unfair competition, arguing that BLT's burger menu is a unique, unregistered trademark under 15 U.S.C. 1125(a) and that Tourondel's burger offerings infringe upon this trademark by creating confusion about the origin of the products. The complaint states that the similarities between the menus mislead the public into believing there is an affiliation with BLT, potentially harming BLT's reputation and customer base due to the perceived inferior quality of LT Burger. Lastly, the plaintiff repleads a fiduciary breach claim, contending that Tourondel, in his role as a consultant post-departure, owed a duty of loyalty to BLT regarding its Hong Kong establishment, BLT Burger HK, operated under license by Dining Concepts.
Plaintiff alleges that Tourondel breached his fiduciary duty in 2010 by promoting the establishment of a new BLT Burger with Dining Concepts for his benefit, excluding the plaintiff. Despite plaintiff's warning that Dining Concepts was contractually restricted from excluding BLT, Dining Concepts suggested a partnership that included both BLT and Tourondel, which plaintiff accepted, but Tourondel refused. As a result, the project did not proceed, causing BLT to lose a business opportunity. The plaintiff seeks a declaratory judgment preventing Tourondel from using BLT's proprietary and confidential information—including recipes and marketing materials—in opening a new restaurant, as he allegedly intends to open an American brasserie connected to Cassa N.Y. Hotel and Residences in 2011. Additionally, the plaintiff requests attorney’s fees and costs.
In response, defendants' motion to dismiss under Rule 12(b)(6) argues against the breach of contract claims related to the use of proprietary information. They contend that the relevant contractual provisions do not support the plaintiff's claims, stating that the information in question mostly resides in the public domain and is not classified as "Confidential Information." They further assert that the contractual language is ambiguous, particularly regarding the definitions of "proprietary materials" and "confidential information." The court finds that the ambiguity in the contract precludes a dismissal based solely on defendants’ interpretation, and it cannot rule out the possibility that Tourondel misappropriated confidential information when creating his menus and designing his restaurants, thus indicating a potential breach of contract.
Dismissal of the pleading is not warranted, as it was previously determined by Judge Daniels that the plaintiff's allegations of misappropriated secret recipes form a cognizable claim, which the defendants seem to acknowledge. This ruling remains binding, as it sets the law of the case, and defendants have not provided sufficient grounds to overturn it. The court declines to adopt a partial dismissal approach for claims that combine both cognizable and non-cognizable breaches. The ambiguity of "proprietary information" in the contract also prevents dismissal of related claims.
Regarding the third contract claim related to the theft of a laptop, the court finds the allegation of injury is adequately stated, as deprivation of the laptop itself suffices for a breach claim. Defendants' argument that the laptop's loss did not deprive the plaintiff of necessary confidential information raises factual issues inappropriate for resolution at this procedural stage. Furthermore, defendants’ assertions about pre-trial discovery findings should be addressed in a summary-judgment context rather than opposing an amendment. The court notes that defendants’ claims of prejudice from the plaintiff's amendments are unconvincing.
Delay in discovery is partly attributed to the defendants' request for partial summary judgment, which the court granted, resulting in a stay of deposition discovery. Defendants raise concerns about a new allegation related to establishing a restaurant in Panama, arguing that this will lead to burdensome overseas discovery. However, there is no evidence indicating that this discovery will be significantly prolonged or costly, and the court has means to prevent undue delays. Consequently, the court grants the plaintiffs’ motion to file a second amended complaint.
Regarding the defendants' motion for partial summary judgment, they seek clarification on Tourondel’s contractual obligations concerning the use of the plaintiff's confidential information, specifically related to breach-of-contract claims tied to the use of the plaintiff's menu. They also seek summary judgment on the plaintiff's Lanham Act claim, which is based solely on the same menu use. The court outlines the standards for Rule 56 motions, noting that summary judgment is appropriate only if there is no genuine dispute over material facts and the moving party is entitled to judgment as a matter of law. The moving party must identify evidence demonstrating the absence of a genuine issue of material fact, while the court's role is to assess whether factual issues remain to be tried, resolving ambiguities in favor of the non-moving party.
The excerpt outlines principles regarding the burden of proof in legal motions, particularly in the context of summary judgment. If the movant does not fulfill their initial burden, the motion will fail regardless of whether the opposing party presents evidence. Conversely, if the movant meets their burden, the opposing party must demonstrate a genuine issue of material fact related to any challenged claim element. The opposing party cannot rely solely on allegations or conclusory statements; they must provide specific evidence to support their claims of a factual dispute.
The document then transitions to the specifics of a contract dispute involving BLT Management LLC, focusing on the claim that Tourondel breached a contractual prohibition against using confidential information by creating menus similar to those of BLT's restaurants. The core of the disagreement centers on the interpretation of section 8.11 of the operating agreement, with both parties relying on the contract’s text and limited deposition testimony rather than additional evidence. The operating agreement, which involves JL Holdings, James Haber, Laurent Tourondel, and Keith Treyball, defines their roles and responsibilities in managing the LLC, which operates several New York City restaurants. The agreement specifies the ownership interests of the members and assigns managerial responsibilities to Haber and Tourondel, who have fiduciary duties towards the LLC.
Tourondel was compensated with an annual salary as an Employee Member of the LLC, with provisions for outside income from one specified non-LLC restaurant. Both Tourondel and Treyball held the Employee Member designation, with Tourondel serving as the Executive Chef responsible for back-of-house operations, while Treyball managed front-of-house activities. They were jointly tasked with decisions regarding decor, menu, publicity, and daily management of the restaurants, including hiring and termination of personnel and future restaurant concepts.
Tourondel's agreement restricted him from owning or managing other restaurant businesses and from interfering with BLT's operations during his tenure. Central to the dispute is section 8.11, titled “Confidentiality/Proprietary Rights/Return of Company Property," which outlines two categories of information: “Confidential Information” and “Proprietary Materials.”
Section 8.11(a) details the types of confidential information accessible to Employee Members, including business plans, financial reports, and trade secrets. Section 8.11(b) addresses Proprietary Rights, stating that Employee Members have no claims to inventions or works created prior to the agreement that relate to the company’s business. Any such prior inventions incorporated into new products during their tenure grant BLT a nonexclusive, royalty-free, irrevocable license to use these inventions. Further development made during employment is categorized as “Proprietary Materials.”
All discoveries, inventions, ideas, concepts, designs, formulas, proposals, projects, programs, products, processes, systems, techniques, and improvements related to the Company's business or research, conceived or developed by the Employee Member during their Membership Interests, are the exclusive property of the Company. The Employee Member assigns all rights to these Proprietary Materials to the Company and acknowledges that original works created during this time qualify as "works made for hire" under the U.S. Copyright Act. The Employee Member must cooperate to secure and maintain rights to these Proprietary Materials, including patents and copyrights. Upon leaving the LLC, the Employee Member is required to return all Company property, including records and any Confidential Information obtained during their membership, and is prohibited from disclosing or using such Confidential Information for personal benefit. These obligations persist even after the Employee Member departs. Additionally, specific provisions allow for the transfer of trademarks to Tourondel upon his departure, with stipulations that BLT can only use these trademarks for pre-existing restaurants or those under construction at the time. Furthermore, Tourondel is to provide compensated consulting services to BLT after leaving the LLC in connection with its restaurant-management agreements. Defendants argue that Tourondel's use of a similar menu does not constitute a breach of contract.
Defendants interpret section 8.11 of the contract as distinguishing between “Confidential Information” and “Proprietary Materials.” They argue that BLT menus, being publicly available, cannot be classified as confidential information, and contend that the only restriction on Tourondel's use of information from BLT applies under section 8.11(c), which pertains to confidential information. In contrast, section 8.11(b) regarding proprietary information does not impose restrictions and merely establishes ownership for BLT, allowing for potential claims under intellectual property laws. They assert that plaintiffs’ ownership does not confer contractual rights to prevent Tourondel from using the menus, and they argue that public policy opposes restricting the use of publicly available information without copyright or similar protections.
In response, the plaintiff argues that section 8.11(a) does not limit confidential information to non-public materials and cites three categories of materials, noting that only the last category explicitly requires non-publicity. The plaintiff posits that the menus fall under the first category, which includes “pricing strategy and information,” thus justifying protection against copying by Tourondel. The plaintiff contends that Tourondel's contractual agreement limits his use of even public information, effectively treating section 8.11(a) as a non-compete clause.
The court notes that under New York law, contract claims cannot be resolved by summary judgment if the dispute hinges on ambiguous terms. Ambiguity arises when language allows for multiple reasonable interpretations, though summary judgment may still be granted if parol evidence clearly elucidates the meaning.
The parties dispute whether "confidential information" can include publicly available material, with the plaintiff's argument deemed indefensible due to the clear meaning of "confidential" as inherently secretive. Definitions from reputable dictionaries reinforce this interpretation. Specific examples of "confidential information" in subsections 8.11(a)(i) and (ii) align with the common understanding of the term, encompassing documents typically kept private in business contexts, such as internal financial analyses and strategic plans. The plaintiff argues that the phrase "but not made publicly available" in subsection (iii) suggests that materials in subsections (i) and (ii) remain protected even if disclosed. However, this interpretation is rejected, as the explicit examples in (i) and (ii) do not require such a qualifier; confidentiality is implicit. Subsection (iii) serves as a catchall and does require the absence of public disclosure to qualify for protection. The plaintiff's reading would undermine the coherence of subsection 8.11(a), as it would contradict the need for confidentiality in the specifically listed documents while imposing it on a broad category of property.
BLT has failed to show a triable dispute regarding the definition of "confidential information" as stipulated in section 8.11(a), which applies strictly to information not made public by the plaintiff. The defendants contend that the menu they utilize does not breach Tourondel's contractual obligations for two reasons: first, the menu is publicly available and therefore not confidential; second, even if the information could be deemed "proprietary," the contract does not prohibit the use of proprietary materials. Consequently, the breach claim hinges on whether Tourondel used any confidential information, which could include non-public marketing studies or proprietary data from BLT in creating his competing menus. While plaintiffs must prove that Tourondel utilized protected information, the defendants' motion for summary judgment fails to address this evidentiary issue and instead relies solely on the non-confidential nature of the menus, which does not resolve the breach claim. Additionally, the defendants must establish that the contractual ban on using corporate information is limited to "confidential information" without ambiguity, as no parol evidence is presented to support their interpretation. Thus, the absence of conclusive evidence or clarity regarding section 8.11 undermines the defendants' argument against the breach claims.
The excerpt examines the obligations of a former Employee Member regarding proprietary materials and the implications for contractual interpretation. Subsection 8.11(b)(iv) mandates that upon leaving BLT, the Employee Member must return all devices and documents related to the Company, prohibiting retention or sharing of these materials. Subsection 8.11(e) further emphasizes the requirement to surrender all Company Property, including confidential information and any data acquired during employment. This suggests that the former Employee Member cannot use any proprietary materials after termination, including the BLT menu, which could constitute a breach of contract if utilized.
The document also addresses the defendants' motion for summary judgment concerning a claim under section 43(a) of the Lanham Act, which pertains to alleged unfair competition through the use of the BLT menu. The claim centers on the defendants’ appropriation of aspects of the business model reflected in the menu, including dish selection, naming, and pricing, as potential trade dress infringement. While the claim's specifics are not thoroughly defined in earlier pleadings, the plaintiff focuses on the trade dress theory in their response. The defendants counter this claim by asserting that the rights to the BLT trademarks and associated goodwill were assigned to Tourondel as per the contract. The court denies the defendants' motion for summary judgment regarding the contract claims related to the menus, indicating that the ambiguous terms about proprietary materials preclude a definitive ruling.
Plaintiff's departure from the LLC resulted in the loss of goodwill associated with the business, impacting his ability to claim trade dress protection. Defendants argue that trade dress validity requires proof of both distinctiveness and non-functionality, asserting that the menu is functional and that plaintiff cannot demonstrate otherwise. The court notes that defendants do not challenge the premise that a restaurant's menu can constitute protectible trade dress if it is non-functional. Case law supports the idea that a restaurant may have a protectible interest in the appearance of its premises and menu. However, defendants’ menus do not physically resemble plaintiff’s; instead, they contain similar dishes, names, descriptions, and prices. The question of whether this similarity constitutes trade dress infringement is not addressed, as it is not raised by defendants.
Defendants also argue that the assignment of the BLT trademarks, which included goodwill, precludes plaintiff from claiming trade dress protection in his restaurant business. The court disagrees, citing the common-law prohibition against assigning trademarks in gross to prevent consumer confusion, a principle upheld by the Lanham Act. Additionally, the assignment of trademarks must be connected to a legitimate business to avoid misleading the public.
An impermissible assignment in gross can be avoided if the assignor transfers business assets and trademarks to the assignee, provided the assignee will use them for similar products or services. Trademark assignments may also comply with common-law standards if the assignor conveys the business's goodwill instead of its assets. Under the Lanham Act, registered trademarks can be assigned with goodwill that is exclusively associated with the trademark, not necessarily the entire business's goodwill.
Complexities arise when a trademark owner assigns it and the assignee subsequently licenses it back to the assignor. Such arrangements may be valid if the assignee retains sufficient quality control to prevent public confusion.
In the specific case discussed, a contract stipulated that upon Tourondel's departure from BLT, he would assign the registered marks to the plaintiff, who would then license them back for use in existing and upcoming restaurants. The assignment included goodwill associated with the marks, although it was unclear whether this referred to the entire business's goodwill or just that linked to the trademarks. The assignment ensures the plaintiff cannot claim non-contractual rights to the BLT identity, which is protected solely through contractual means. The plaintiff retains a contractual right to use the trademarks for restaurants active or under construction at the time of Tourondel's exit, but this right arises from the licensing agreement and does not confer ownership rights or the ability to enforce intellectual-property claims under the Lanham Act.
Defendants incorrectly argue that the assignment of trademarks and goodwill prevents the plaintiff from asserting intellectual-property rights beyond the business name, including the protection of trade dress in the menus. The contract's ambiguity regarding the scope of goodwill suggests it may only pertain to the name, not other business elements. Plaintiff's claim focuses on the similarity of menu items and their presentation, rather than the names BLT or Bistro Laurent Tourondel. Defendants provide no legal basis for their assertion that they can use confusingly similar business elements after the trademark assignment. A hypothetical scenario is presented to illustrate that if the plaintiff had chosen a different name but maintained distinctive menus, defendants would still be prohibited from copying those menus despite having rights to the original name.
Regarding the Lanham Act claim, defendants argue that the plaintiff cannot prove the non-functionality of the menu, which is necessary for trade dress protection. They assert that the menu is inherently functional; however, the standards for functionality indicate that a feature is functional if it is essential to the article's use or affects its cost or quality. This argument is deemed largely unpersuasive, as the necessary legal standards for assessing functionality are acknowledged.
The High Court's reference to "aesthetic functionality" indicates that a functional feature is one whose exclusive use would disadvantage competitors in a non-reputation-related manner. In assessing the trade dress claims, the court finds that BLT's highlighted menu features cannot be definitively classified as functional. While the defendants did not adequately demonstrate that their menu's exclusive use would disadvantage competitors, the court notes that the fanciful names and descriptions used by both parties are not essential to the operation of the restaurant and do not impact the cost or quality of the food. The defendants' failure to address the combined effect of these elements—central to the plaintiff's argument for non-functionality—prevents them from succeeding in their motion for summary judgment. Consequently, the court denies the defendants’ motion to dismiss, grants the plaintiff's motion to amend, and denies the defendants’ motion for partial summary judgment except regarding a specific unambiguous contract portion. The plaintiff's Second Amended Complaint is considered served, and the defendants must respond within twenty-one days. The court does not address claims previously dismissed by Judge Daniels related to deceptive acts, contract reformation, and unjust enrichment, noting that relevant jurisdictional statutes do not apply in this context.
The excerpt addresses the interpretation of sections 1367(a) and (c) regarding the relationship between federal and state claims. The Second Circuit has referenced the United Mine Workers decision, suggesting that the statutory standards for pendent jurisdiction align closely with those previously defined by the Supreme Court. Although the Seventh Circuit has characterized section 1367 as requiring only a "loose factual connection" between claims, the Second Circuit has not definitively adopted this view. In Jones v. Ford Motor Credit Co., the Second Circuit found the requirements for jurisdiction over permissive counterclaims satisfied despite differing factual bases, relying on the common origin of the claims. The excerpt acknowledges uncertainty about the "loose factual connection" standard's viability in the Second Circuit, while noting some initial endorsement of it in other cases.
The analysis further involves a contract referenced in the case, which, although not attached to the complaint, is integral to it, as indicated by its inclusion in the defendants' summary-judgment motion. The contract distinguishes between "confidential or proprietary information" and "proprietary materials." The defendants' claims regarding the authorship and originality of the magazine are identified as factual disputes inappropriate for resolution under a Rule 12(b)(6) motion. The court emphasizes that the label a plaintiff assigns to a claim does not limit its legal theory; the substance of the claim is what matters. Under federal pleading rules, the nomenclature of a claim is not determinative, as noted in relevant case law.
Requests to clarify the contract's meaning, particularly regarding limitations on Tourondel's business pursuits, were granted based on their cost-efficiency and potential to resolve the case, as noted in the Endorsed Order dated August 23, 2011. However, this does not prevent the plaintiff from refining its pleadings during this time. Defendants claimed that discovery could be extended by a year, but this assertion lacked substantiation and was deemed unrealistic. The court recognizes the claims as presented in the Second Amended Complaint, following the plaintiff's motion to amend. Defendants' Rule 56 motion is directed towards the first and second claims of this complaint, which mirror part of the plaintiff's prior multipart contract claim.
The contract specifies "Non-NYC percentage interests" concerning profits from BLT restaurants outside New York, allocated equally between JL Holdings and Tourondel. Tourondel is allowed a passive ownership interest of up to 5% in other restaurant companies. Defendants argue that intellectual property principles do not protect BLT’s menus from imitation. The definition of "confidential" includes terms that imply secrecy and the potential for harm if disclosed.
The legal standing for trademark infringement actions under the Lanham Act is debated, as only the "registrant" or their legal representatives can bring such actions. Courts are divided on whether exclusive licensees have standing, with some allowing it if they possess a sufficient interest in the trademark. Regardless, the plaintiff lacks standing under the existing license, and the absence of quality control provisions in the contract does not need further examination, as this issue was not raised by any party.
