United States District Court, D. Massachusetts
XIAO WEI YANG CATERING LINKAGE IN INNER MONGOLIA CO. LTD et al., Plaintiffs,
INNER MONGOLIA XIAO WEI YANG USA, INC. et al., Defendants.
MEMORANDUM AND ORDER
J. CASPER, UNITED STATES DISTRICT JUDGE.
Xiao Wei Yang Catering Linkage in Inner Mongolia Co., LTD.
(“Linkage”) and Fei Xie (“Xie”)
(collectively, “Plaintiffs”) have filed this
lawsuit against Defendants Inner Mongolia Xiao Wei Yang USA,
Inc., d/b/a Xiao Wei Yang and/or Little Lamb Restaurant
(“Xiao Wei USA”), Cheng Xu (“Xu”) and
Yonghua Qin (“Qin”) (collectively,
“Defendants”). D.1. The Court previously allowed
Defendants' motion for summary judgment as to the claims
for breach of contract (Count I), breach of the implied
covenant of good faith and fair dealing (Count II),
fraudulent inducement (Count III), unjust enrichment (Count
IV), D. 81. Defendants now move for summary judgment as to
the remaining claims against them, namely for trademark
infringement (Count V), false designation of origin under 15
U.S.C. § 1125(a) (Count VI), trademark dilution under
Mass. Gen. L. c. 110H (Count VII), unfair competition (Count
VIII) and unfair and deceptive trade practices under Mass.
Gen. L. c. 93A (Count IX) and their counterclaims against
Plaintiffs, alleging breach of contract (Counterclaim I),
breach of the covenant of good faith and fair dealing
(Counterclaim II), breach of fiduciary duty (Counterclaim
III), misrepresentation (Counterclaim IV), conversion
(Counterclaim V) and unjust enrichment (Counterclaim VI). D.
90; D. 180. For the reasons stated below, the Court ALLOWS
Defendants' motion as to Plaintiffs' remaining claims
and DENIES Defendants' motion with respect to their
counterclaims against Plaintiffs. The Court also DENIES
Defendants' request for attorney's fees, D. 180 at
19-20, without prejudice.
Standard of Review
judgment is proper when there is no genuine dispute as to any
material fact and the undisputed facts establish that the
moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). “A fact is material if it carries
with it the potential to affect the outcome of the suit under
the applicable law.” Santiago-Ramos v. Centennial
P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000)
(quoting Sánchez v. Alvarado, 101 F.3d 223,
227 (1st Cir. 1996)). A genuine dispute of material fact
occurs when the factual evidence “is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). The moving party carries the burden of
establishing the absence of a genuine dispute of material
fact and that it is entitled to judgment as a matter of law.
Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir.
2000). If the movant satisfies this burden, the non-moving
party may not merely refer to allegations or denials in her
pleadings. Anderson, 477 U.S. at 256. Instead, he
“must, with respect to each issue on which he would
bear the burden of proof at trial, demonstrate that a trier
of fact could reasonably resolve that issue in her
favor.” Borges ex rel. S.M.B.W. v. Serrano-
Isern, 605 F.3d 1, 5 (1st Cir. 2010). “As a
general rule, this requires the production of evidence that
is ‘significant[ly] probative.'” Id.
(quoting Anderson, 477 U.S. at 249) (alteration in
original). The Court must “view the record in the light
most favorable to the nonmovant, drawing reasonable
inferences in his favor.” Noonan v. Staples,
Inc., 556 F.3d 20, 25 (1st Cir. 2009).
initial matter, the Court notes that Defendants contend that
Plaintiffs did not comply with Local Rule 56.1. D. 188 at 1.
Pursuant to Local Rule 56.1, the party opposing a motion for
summary judgment must “include a concise statement of
the material facts of record as to which it is contended that
there exists a genuine issue to be tried, with page
references to affidavits, depositions and other
documentation.” Local Rule 56.1. Plaintiffs have failed
to do so consistently here. In disputing certain of
Defendants' statement of material facts, they have
“objected” or otherwise pointed to non-probative
exhibits which do not constitute a sufficient basis for this
Court to find a disputed issue of fact. See D. 187;
see also Change Climate, Inc. v. Massachusetts Bay
Transp. Auth., 202 F.R.D. 43, 53 (D. Mass. 2001) (noting
that “[t]he facts in genuine dispute must be
significantly probative in order for the court to deny
summary judgment; ‘conclusory allegations, improbable
inferences, and unsupported speculation will not
suffice'”) (quoting Cadle Co. v. Hayes,
116 F.3d 957, 960 (1st Cir.1997)). Although the Court
declines to strike Plaintiffs' statement of facts, it has
only considered those portions that point to specific,
admissible facts contradicting the material facts assertions
made by Defendants.
Summary of Undisputed Material Facts
Linkage and the Cooperation Agreement
following facts are taken primarily from the parties'
statement of material facts and supporting materials, and are
undisputed unless otherwise noted. D. 182; D. 187. It is also
based upon the requests for admissions (No. 1-7, 9-10, 12-13
and 15) from Plaintiffs, D. 140, which this Court (Kelley,
M.J.) declared admitted. D. 153. Defendant Xiao Wei USA, a
Massachusetts corporation, operated, at times relevant to
this action, as the “Little Lamb” restaurant in
Boston. D. 182 ¶ 2. Defendants Xu and Qin, who are
married, serve as the President and Treasurer/Secretary,
respectively of Xiao Wei USA. Id. ¶¶ 3, 5.
On July 6, 2011, Xu and Qin entered into an agreement with
Linkage that lead to the formation of Xiao Wei USA. (the
“Cooperation Agreement”). Id.
¶¶ 9A-9G; D. 184-1 ¶ 1. It is this Cooperation
Agreement that lays at the core of Plaintiffs' trademark
infringement claims and Defendants' defenses to same.
undisputed that Linkage is the owner of trademark
Registration No. 3, 550, 357 (the “Trademark”)
registered with the United States Patent Trademark Office
(“USPTO”). D. 182 ¶ 6; D. 1-1. Under the
Cooperation Agreement, in relevant part, Linkage agreed to
“fully support [Xu] in promoting and developing
restaurant franchise market under the trademarks
‘Little Lamb' and ‘Happy
Grassland'” and also “appoint[ed] [Xu] [as]
its exclusive agent of restaurant franchise market in the
United States under the trademarks ‘Little Lamb'
and ‘Happy Grassland.'” D. 184-1 ¶ 9;
see D. 184-2. The Cooperation Agreement also
indicates that Xu was “permitted to operate solely or
jointly with other third party franchise restaurants under
the above trademarks.” Id. Furthermore, the
Cooperation Agreement noted that Xu was obligated to
“open at least one restaurant/store or secure at least
one franchise within [one] after the 1[st] “Little
Lamb” store opening date” and if Xu failed to do
so, “the right mentioned in Term 9 will be void.”
Id. ¶ 10. The Defendants Xu and Qin and Jiarong
Yu (“Yu”), a representative of Linkage, executed
the Cooperation Agreement. Id. at 6. Plaintiff Xie,
an employee of Linkage, was not a party to the Cooperation
Agreement. See D. 184-1.
2, 2013, Defendants Xu and Qin opened the Little Lamb
restaurant located at 326 Cambridge Street in Boston,
Massachusetts. D. 182 ¶ 9I; D. 153. Plaintiff Linkage
announced the opening of the Little Lamb restaurant in Boston
in its corporate newsletter and included a photograph of the
Trademark. D. 182 ¶ 9 H; D. 187 ¶ 9 H; D. 184-4 at
2-3. It further promoted the opening of the Boston Little
Lamb restaurant on its website. D. 182 ¶ 51.
Linkage's representative, Yu, also visited the Little
Lamb restaurant in Boston in September 2012. D. 182 ¶
9K. On December 29, 2013, Linkage filed two specimens, which
consisted of photographs of a restaurant fixture and menu
from the Little Lamb restaurant with the USPTO. D. 182 ¶
9J; D. 183-5 at 51-52. Although the term of the Cooperation
was for five years (until July 6, 2016), D. 184-1 at 6,
Defendants ceased using the Trademark in February 2016, D.
182 ¶ 59; D. 184 ¶ 14, and changed the name of the
restaurant from Little Lamb to “Hulun Beir.” D.
182 ¶ 60; D. 184 ¶ 14.
Xie and the Jointly Investment
August 12, 2011, Defendants Xu and Qin, entered into a
Jointly Investment and Business Agreement (the “Jointly
Agreement” as the parties reference it) with Plaintiff
Xie. D. 184-5. The Jointly Agreement contemplated the parties
“jointly” developing the Little Lamb restaurant
in Boston under its Trademark, D. 184-5. The Jointly
Agreement recognized that Xu and Qin had “obtained
exclusive right to the [Little Lamb] restaurant franchise and
the exclusive right to operate any and all marketing and
business operations associated with [Little Lamb] restaurant
franchise system.” D. 184-5 ¶ 1. It also provided
that Xie had “completed the initial technical training
required by ‘Linkage,' and  the preparation and
investigation in relevant restaurants operations in
China.” Id. Defendants contracted to open at
least three Little Lamb restaurant chains in the U.S. within
three years after setting up Xiao Wei Yang USA, Inc. D. 184-5
¶ 2. Xie agreed to invest $100, 000 in exchange for 15%
share of the first Little Lamb restaurant. Id.
¶ 3. The parties to this agreement each agreed to be
investors and operation managers of the Little Lamb
restaurant to be compensated by “salary according to
the position, business profit and the local law and
regulation, bonus and promotion.” Id. ¶
6. It further provides that Xie was obligated to travel
promptly to the United States to participate in the
development of the Boston Little Lamb restaurant requiring
Xie to participate in the “completion of the business
and related qualification[, ]” engage in comprehensive
training by Linkage, pass the English proficiency examination
and apply for entry visa at the U.S. Embassy. Id.
¶ 5. Defendants Xu and Qin were obligated, under the
Jointly Agreement, to work with Xie's attorney to assist
Xie in applying for a United States entry visa. D. 184-5
¶ 5. The Jointly Agreement also provided that for
“any issue or conflict not addressed in
[Agreement's] terms, all three parties shall negotiate
friendly to resolve.” D. 184-5 ¶ 6.
allege that Defendants have infringed the Trademark and press
their remaining claims regarding same. Defendants contend
that Xie misrepresented his skills, received salary, food and
transportation and then absconded with the Little Lamb
restaurant's property without, among other things,
sharing in the losses of the restaurant and going to work for
other franchises in other cities.
instituted this action on January 16, 2015. D. 1. Defendants
originally moved to dismiss all counts. D. 8. The Court
denied that motion to dismiss without prejudice as to Counts
I, II, III and IV (the “contract claims”), and
denied the motion to dismiss as to the remaining claims with
prejudice. D. 26. As to the contract claims, the Court
granted limited discovery solely on the forum-selection
clause issue and noted that it would allow for a renewed
motion to dismiss once discovery had been completed.
Id. Thereafter, Defendants filed a renewed motion to
dismiss the contract claims, D. 63, which the Court converted
into a motion for summary judgment. The Court allowed that
motion as supplemented, D. 73, as to Counts I-IV. D. 81.
Defendants have now moved for summary judgment with respect
to the remaining Counts V, VI, VII, VIII, and IX (the
“trademark infringement claims”) and
Defendants' counterclaims against Plaintiffs. The Court
heard the parties on the motion and took the matter under
advisement. D. 116.