ESTTA Tracking number: ESTTA465521 04/04/2012 IN THE ... · Opposer's first objection relates to...

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ESTTA Tracking number: ESTTA465521Filing date: 04/04/2012

IN THE UNITED STATES PATENT AND TRADEMARK OFFICEBEFORE THE TRADEMARK TRIAL AND APPEAL BOARD

Proceeding 92053314

Party Plaintiffadidas AG

CorrespondenceAddress

ANGELO NOTARONOTARO MICHALOS & ZACCARIA PC100 DUTCH HILL ROADORANGEBURG, NY 10962UNITED [email protected], [email protected]

Submission Motion for Summary Judgment

Filer's Name John Zaccaria

Filer's e-mail [email protected]

Signature /J287-839-JZ/

Date 04/04/2012

Attachments Decisions.pdf ( 50 pages )(193672 bytes )

http://estta.uspto.gov

T.T.A.B. NON-PRESIDENTIAL

DECISIONS

TTAB LEXIS 721, *

1 of 3 DOCUMENTS

CitedAs of: Feb 22, 2012

Yamaha Corporation of America v. Wrightwood Enterprises, Inc.

Opposition No. 108,787 to application Serial No. 775/039,316 filed on December 26,1995

Trademark Trial and Appeal Board

2002 TTAB LEXIS 721

August 8, 2002, Hearing

November 22, 2002, Decided

DISPOSITION: [*1]

Decision: The opposition is dismissed.

COUNSEL:

Paul Garrity, Margaret Ferguson and William R. Golden, Jr. of Kelley Drye & Warren for Yamaha Corporation ofAmerica.

Jeffery A. Handelman and Nicholas de le Torre of Brinks Hofer Gilson & Lione for Wrightwood Enterprises, Inc.

JUDGES:

Before Seeherman, Quinn and Bucher, Administrative Trademark Judges.

OPINION BY: QUINN

OPINION:

THIS DECISION IS NOT CITABLE AS PRECEDENT OF THE TTAB Opinion by Quinn, Administrative Trademark Judge:

An application was filed by Wrightwood Enterprises, Inc. to register the mark EVERETT for "pianos." n1

n1 Application Serial No. 75/039,316, filed December 26, 1995, alleging dates of first use of July 14, 1995.

Registration was opposed by Yamaha Corporation of America under Section 2(d) of the Trademark Act on theground that applicant's mark, when applied to applicant's goods, so resembles opposer's previously used markEVERETT for pianos as to be likely to cause confusion.

TTAB LEXIS 721, *

Applicant, although admitting that opposer used the mark EVERETT for pianos in years prior to 1990, went on inits answer to deny the salient allegations of likelihood of confusion. Applicant also set forth affirmative defenses, [*2] including that opposer abandoned its mark and, thus, opposer does not have superior rights in the mark.

The record consists of the pleadings; the file of the involved application; trial testimony, with related exhibits, takenby each party; and official records introduced by applicant's notice of reliance. Both parties filed briefs on the case, andboth were represented by counsel at an oral hearing held before the Board.

Evidentiary Objections

With respect to the record, there are a few evidentiary objections raised by opposer that require our attention beforewe turn to the merits of the opposition.

Opposer's first objection relates to the acceptability of a print-out from the Office's Trademark Electronic SearchSystem (TESS) of opposer's expired Registration No. 1,027,898, which applicant submitted as Exhibit 2 under its noticeof reliance. The Trademark Trial and Appeal Board Manual of Procedure (TBMP) § 707 provides for the introduction ofan official record by way of an electronic copy generated from the Office's database. Accordingly, the expiredregistration was properly introduced, and it has been considered.

Opposer's other objections relate to three [*3] areas of inquiry covered in the testimony deposition taken byapplicant of Terry Lewis, an adverse witness. In total, opposer requests that seventeen pages and three related exhibitsbe stricken. For essentially the reasons set forth by applicant in its brief, the objections are not well taken and are,accordingly, denied. We hasten to add that neither the testimony nor the exhibits sought to be stricken is critical to theoutcome of this case; even if stricken, we would reach the same result on the merits in this case.

The Parties

Opposer is engaged in, inter alia, the manufacture, sale and servicing of pianos. Opposer is a leader in the pianomarket in this country, and annually expends millions of dollars in promoting its pianos. Although the specificinformation relating to market share was designated as "confidential" during a testimonial deposition, the figures appearin opposer's brief. Thus, we view opposer as having waived the "confidential" designation. Opposer's pianos account for25% of the United States piano market in units, and about 35% of the market in dollars.

Little is known about applicant, other than it is a Michigan corporation located in Lansing, [*4] Michigan.

The Issue

As indicated above, the pleaded ground in the notice of opposition is priority and likelihood of confusion, andapplicant, in its answer, denied the allegations relating thereto. Applicant conceded in its brief, however, that "there isno dispute as to likelihood of confusion." (brief, p. 2). Indeed, the parties claim rights in the identical mark, EVERETT,for the identical goods, pianos. Clearly, there is a likelihood of confusion between the marks, and we so find herein. Inre E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973).

It is applicant's contention, however, that opposer abandoned its mark EVERETT for pianos due to discontinueduse of the mark with an intent not to resume use. Thus, applicant maintains, opposer has no superior rights in thepleaded mark and because its claim of priority must fail, opposer cannot prevail on the Section 2(d) ground.

In view of the above, the parties agree that the only issue before us is whether opposer has abandoned its mark and,therefore, whether opposer lacks superior rights in the mark. In this connection, the effect of abandonment has beendescribed as follows:

Once [*5] abandoned, the mark reverts back to the public domain whereupon it may be appropriated byanyone who adopts the mark for his or her own use. Hence a party that is found to have abandoned itsmark is deprived of any claim of priority in the mark before the date of abandonment and may regainrights in the mark only through subsequent use after the time of abandonment.

General Cigar Co., Inc. v. G.D.M., Inc., 988 F.Supp 647, 45 USPQ2d 1481, 1489 (SDNY 1997), quoting Dial-A-Matress Operating Corp. v. Mattress Madness, Inc., 841 F.Supp 1339, 33 USPQ2d 1961, 1972-73 (EDNY 1994).

TTAB LEXIS 721, *

The material facts in the present case are largely undisputed. Rather, the controversy in this case centers on the legalimplications that arise from those facts. Applicant contends that opposer has not sold EVERETT pianos since the early1990's, and that any activities since then do not evidence an intent to resume use of the mark. Opposer acknowledgesthat production of EVERETT pianos ceased in 1989, and that its inventory of new pianos was sold off by 1996. Opposermaintains, however, that it has continued to use its mark and that, even in the event that nonuse for three years [*6] isfound, opposer has an intent to resume use as shown by various business activities and, in large part, by residualgoodwill in the mark EVERETT.

The Record

Opposer's predecessors in interest began manufacturing pianos under the mark EVERETT in 1882. According tothe testimony of Terry Lewis, opposer's senior vice president, opposer acquired the assets of Everett Piano Companylocated in South Haven, Michigan in 1973. n2 These assets included a federal trademark registration, Registration No.1,027,898 for the mark EVERETT for "pianos," n3 that expired in 1996 for failure to renew. Over the years, pianosbearing the mark EVERETT were sold to a variety of classes of purchasers, but the pianos were particularly attractive tomusic departments of educational entities. The record shows that EVERETT pianos were purchased by more than12,000 colleges, universities, music conservatories and similar institutions.

n2 The record includes two testimonial depositions of Terry Lewis. The first was taken by opposer onSeptember 12, 2000, and is identified herein as "dep. 1." The second was taken by applicant on August 9, 2001,with Mr. Lewis as an adverse witness, and is identified as "dep. 2."

[*7]

n3 The registration issued December 23, 1975, asserting dates of first use of March 1882.

After acquiring Everett Piano Company, opposer continued to manufacture pianos under the mark EVERETT at theMichigan plant; at the same plant opposer also manufactured pianos under the YAMAHA mark. Paul Heid, president ofHeid Music Company, a chain of four retail stores in Wisconsin, testified on behalf of opposer. Mr. Heid stated thatwhen opposer acquired the Everett Piano Company, pianos sold under the mark EVERETT had an excellent reputationin the industry, and that the quality of the pianos improved further after opposer's acquisition. Opposer's EVERETTpianos were promoted through product literature, sell sheets, advertisements in trade publications, local newspapers, andon the radio. The pianos were also promoted at trade shows for the piano industry.

Subsequent to opposer's acquisition, in the years 1978-1985, Mr. Lewis testified that there was "a steep decline insales of pianos" industry wide, pointing to reasons such as excess capacity in factories, severe competitive conditionsand generally poor economic conditions. Due to this economic downturn, and the fact that the [*8] South Haven,Michigan plant, in opposer's view, was a very old and inefficient facility, opposer decided to close this plant, andoperations ceased there in April 1986. At the time of this factory's closure, opposer decided to transfer the Michiganplant's production of YAMAHA pianos to opposer's plant in Georgia, where there was excess capacity due to adownturn in opposer's organ business. According to Mr. Lewis, however, "there was not enough excess capacity there tobegin making EVERETT pianos again." (dep 2., p. 25).

Opposer then made a decision to outsource the production of EVERETT pianos, and consequently entered into anoriginal equipment manufacturer agreement with Baldwin Piano and Organ Company ("Baldwin") whereby Baldwinbegan production in early 1987 of EVERETT pianos on behalf of opposer. Reaction to these Baldwin-made pianos was"mixed," Mr. Lewis testifying that "the quality of the piano did not meet the traditional performance standards of theprevious EVERETT piano." (dep. 1, p. 10). Although improvements in the product line were made and opposer andBaldwin remained on good terms, opposer made a decision in the summer of 1989 to end its relationship with Baldwin. [*9] Opposer was not meeting its sales goals for its EVERETT pianos, the market position of EVERETT pianos wasweak, and in late 1989, the contract between opposer and Baldwin was terminated. Manufacturing of EVERETT pianosquickly ceased and, according to Mr. Lewis, opposer has not produced a single EVERETT piano since then. (dep. 1, p.14; dep. 2, p. 41). Opposer continued to manufacture its YAMAHA pianos at the plant in Georgia.

At least two printed publications documented the cessation of production of EVERETT pianos. The Piano Book (2ded. 1990) indicated that "when Yamaha moved its U.S. piano manufacturing to Thomaston, Georgia, Everett did not gowith it." The publication went on to state that "the contract under which Baldwin was manufacturing these pianos forYamaha ended in 1989 and the Everett name and piano line was dropped permanently." The third edition of The Piano

TTAB LEXIS 721, *

Book, published in 1994, included the same information. Another piano reference book, Pierce Piano Atlas (10th ed.1997), stated the following: "Yamaha closed the South Haven plant in September 1986 and moved to Thomaston, GA.Yamaha stopped production of Everett." Although Mr. Lewis acknowledged [*10] these specific statements during hissecond deposition, he went on to assert that there are factual mistakes appearing elsewhere in the publications.

After manufacturing ceased in 1989, opposer continued to sell off the excess inventory of new EVERETT pianosbuilt under the contract with Baldwin. Mr. Lewis testified that "we sold out that inventory over a period of--of years andmonths after that, and again, I can't tell you exactly when that ceased, but we were actively engaged in selling thosepianos sometime after that." (dep. 2, pp. 42-43). Mr. Lewis explained that turnover in piano inventory is slower than inother industries, and, in the specific case of EVERETT pianos, "there was a significant business momentum that tooksome time to disappear." (dep. 2, p. 43). More specifically, Mr. Lewis testified, at his first deposition, that the lastEVERETT pianos were sold "in around 1992." (dep. 1, p. 31). In his second deposition, Mr. Lewis stated that "we soldour last EVERETT piano from inventory roughly around 1992, 1993. I don't have an exact date with me." (dep. 2, p.19).

Regarding the sell-off of inventory, Bill Brandom, opposer's national piano service manager, testified [*11] thatopposer had a substantial inventory of new EVERETT pianos through 1992, and that EVERETT pianos were sold aslate as November 1996. In total, Mr. Brandom indicated that between April 1989 and November 1997 (that is, when thenotice of opposition was filed), opposer sold over 3,000 new EVERETT pianos. Upon closer inspection, we note thatExhibit 38 of Mr. Brandom's deposition reveals that of these 3,000 pianos, virtually all were sold before 1991, with only9 sold in 1992, and only 3 sold after 1992. The last two sales occurred in September and November of 1996; Mr.Brandom explained that "most likely they would have been pianos sitting in one of our warehouses that Sales finally gotaround to selling." (dep., p. 22).

Mr. Heid, identified earlier, and Thomas Hoy, president and owner of five retail music stores and two warehouses,all located in Michigan, testified as to their sales of new EVERETT pianos. When EVERETT pianos were beingmanufactured, both Mr. Heid and Mr. Hoy sold new EVERETT pianos in their stores. Mr. Hoy recalled that he last solda new EVERETT piano in 1989. Mr. Heid testified that the last shipment of new pianos to dealers occurred in 1992,although "I know [*12] we had EVERETT pianos on our sales floor even, you know, for years after they were nolonger manufactured with the EVERETT name on them." Upon further questioning, Mr. Heid quantified these years tobe "two to three years," and identified his last sale of an EVERETT piano ("not the hottest seller") in October 1995.(dep., pp. 22-23; 27).

The bulk of the information relating to sales of used EVERETT pianos also comes from Messrs. Hoy and Heid. Mr.Hoy claimed that his stores have displayed an EVERETT piano on showroom floors every year since 1990, and heestimated that perhaps twenty pianos were on the floors over any one-year period. Messrs. Hoy and Heid also testifiedabout the sale of EVERETT pianos coming off of rent-to-own programs (the customer ultimately converting toownership after a rental period) and rent-to-rent programs (after a rental period and resulting depreciation, the piano isthen sold to another customer). Mr. Hoy indicated that he sold such pianos through the mid-1990's. Mr. Hoy alsotestified as to warranties on opposer's pianos that he sold (whether new, used or in the rental programs), indicating that"we still potentially could have Everett pianos out there [*13] with warranties in existence today, which would--butcertainly even in the late mid '90s, we certainly had Everett pianos out there with service warranties, which was a 10 or12 year parts and warranty on that piano." (dep., p. 28). Mr. Hoy stated that his music company continued to serviceEverett pianos and that "probably most of the warranties would have ended in 1999, or the year 2000." (dep., p. 29).

Mr. Heid recounted that, in addition to pianos coming off of the rent-to-own program, his company sold usedEVERETT pianos. His company would purchase the piano from a seller and then resell it, or, if the seller and Mr. Heidcould not agree on a price, the piano would be sold on a consignment basis. Although Mr. Heid testified that usedEVERETT pianos were sold "every year," he could not estimate how many were sold each year; according to Mr. Heid,"it falls under our radar scope of brand sales." (dep., p. 29). Mr. Heid estimated, however, that his company had anEVERETT piano on its showroom floors in each of the last ten years. (dep., p. 30). Mr. Heid specifically mentioned theEVERETT "Style 11" pianos that were sold to schools, then traded in and resold by Mr. Heid.

Insofar [*14] as service and parts for EVERETT pianos are concerned, Mr. Brandom testified relative thereto. Mr.Brandom's duties, as opposer's national piano service manager, include management of warranty and service support forEVERETT pianos, as well as of parts for such pianos. Although Mr. Brandom acknowledged that no dealer is currentlyselling new EVERETT pianos, he estimated that there are over 200,000 EVERETT pianos still in use today. He furtherestimated that 700-800 EVERETT pianos sold by opposer were still under warranty at the time of his testimony inSeptember 2000. Mr. Brandom further indicated that opposer repairs EVERETT pianos beyond the life of the warrantyperiod in order to maintain good customer service relations. Mr. Brandom also testified that opposer has "a portion of

TTAB LEXIS 721, *

the Yamaha.com Web site that is there for consumers to be able to find out the specific age of their EVERETT piano."(dep., p. 7). According to Mr. Brandom, opposer also maintains an inventory of spare parts for EVERETT pianos. Forparts not kept in inventory, opposer contacts outside entities to manufacture such parts that may be needed. In thisconnection, Mr. Heid indicated that many piano parts are generic, [*15] although some parts are specific to EVERETTpianos. There is no testimony, however, that any of the parts for the EVERETT pianos bears the mark EVERETT. Mr.Brandom stated that opposer annually receives approximately 100-150 service calls for EVERETT pianos. Service isthen arranged by opposer, even after the warranty has expired. Opposer maintains contact with various servicetechnicians with regard to servicing EVERETT pianos, and opposer maintains service manuals for the pianos.

Mr. Lewis testified that opposer has given consideration to manufacturing EVERETT pianos at its plant in Georgia.Nothing was ever brought to fruition, however, "because the piano market actually began to improve during the '90s,and we did not have the excess factory capacity to produce the instrument." (dep. 1, p. 15). Mr. Lewis also confirmedthat no consideration has been given to outsourcing the EVERETT piano. Mr. Lewis indicated that "we did discuss thepossibility of selling EVERETT [pianos] to different distribution channels than the existing Yamaha distributionchannels as an opportunity to expand the market, but our sales and utilization of current factory capacity was so strong,that we were [*16] not sufficiently motivated to go further with that idea." (dep. 1, p. 16). Mr. Lewis testified as toother discussions regarding the use of EVERETT, the most recent of which occurred in 1997 relative to possibleproduction at a factory in China.

Mr. Lewis testified that the life span of an upright console acoustic piano (the type sold under the mark EVERETT)is estimated by the piano manufacturers' trade association at 68 years. Mr. Hoy stated that "older American pianos, likeEverett, were built extremely well, so they hold up for 40, 50, 60 years. They don't have much of an obsolescence. Soinstead of people buying a new one, they are handed down through generations before the piano gets bad enough."(dep., p. 32). Mr. Lewis confirmed that opposer continues to repair and service EVERETT pianos, and that suchactivities extend beyond the warranty period of ten years.

In connection with the life span of pianos, Mr. Lewis went on to say that

the EVERETT trademark was a valuable piano trademark, and piano trademarks have a very long shelflife in the piano industry.

Piano trademarks tend to have a lot of long-term goodwill value associated with the name. Evenbrands that [*17] have remained dormant for years that have been picked up by others have beenrenewed with a high degree of market success because pianos are an instrument that lasts a very, verylong time, have established a reputation over generations of piano teachers and piano technicians. Andthe goodwill associated with some of the better names has lasted a very long time even though the pianosmay have not been continuously manufactured over a sustained period of time. (dep. 1, pp. 16-17)

Insofar as opposer's now-canceled registration of the mark EVERETT for pianos is concerned, it expired in 1996for failure to renew under Section 9 of the Act. Opposer filed an intent-to-use application to register the markEVERETT for pianos on August 29, 1996 (compared with the December 26, 1995 filing date of the involvedapplication).

The Law

Section 45 of the Trademark Act provides, in pertinent part, that a mark is abandoned when the following occurs:

When its use has been discontinued with intent not to resume such use. Intent not to resume may beinferred from circumstances. Nonuse for three consecutive years shall be prima facie evidence ofabandonment. "Use" of a mark means [*18] the bona fide use of that mark made in the ordinary courseof trade, and not made merely to reserve a right in a mark.

A party claiming abandonment has the burden of establishing the case by a preponderance of the evidence.Introduction of evidence of nonuse of the mark for three consecutive years constitutes a prima facie showing ofabandonment and shifts the burden to the party contesting the abandonment to show either evidence to disprove theunderlying facts triggering the presumption of three years nonuse, or evidence of an intent to resume use to disprove thepresumed fact of no intent to resume use. Rivard v. Linville, 133 F.3d 1446, 45 USPQ2d 1374 (Fed. Cir. 1998);Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575, 14 USPQ2d 1390 (Fed. Cir. 1990); Cerveceria

TTAB LEXIS 721, *

Centroamericana S.A. v. Cerveceria India Inc., 892 F.2d 1021, 13 USPQ2d 1307 (Fed. Cir. 1989); and StromgrenSupports, Inc. v. Bike Athletic Company, 43 USPQ2d 1100 (TTAB 1997). The burden of persuasion remains with theparty claiming abandonment to prove abandonment by a preponderance of the evidence. On-line Careline Inc. v.America Online Inc., 229 F.3d 1080, 56 USPQ2d 1471 (Fed. Cir. 2000). [*19]

ANALYSIS

The record establishes, and opposer does not dispute, that opposer ceased production of EVERETT pianos in 1989,and that opposer's last sales of new EVERETT pianos from its inventory of 3,000 pianos occurred in 1996. The specificbreakdown in sales volume, as shown by Exhibit 38 (pages 0001337-38) to Mr. Brandom's testimony, is as follows:1991--53 pianos; 1992--9 pianos; 1993--0 pianos; 1994--1 piano; 1995--0 pianos; and 1996--2 pianos. Thus, theevidence shows that all but 65 of the pianos were sold before 1991; and that only three pianos were sold after 1992. Soas to be clear, only 65 pianos were sold under the EVERETT mark by opposer after 1990; only three were sold after1992; and no pianos were sold after 1996. As noted above, Section 45 of the Act provides that "use" of a mark meansthe bona fide use of that mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.Here, we find that opposer's nonuse of the mark EVERETT for pianos began in 1992, and that the sales of three pianosover the next four years fall short of use of the mark in the ordinary course of trade. These sales are especially negligiblegiven opposer's [*20] prominence in sales and market share in the piano trade.

Opposer's nonuse of the mark EVERETT for pianos since 1992 constitutes a prima facie showing of abandonment.Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213 USPQ 185 (CCPA 1982); and Colgate-Palmolive Co.v. Sanford Chemical Co., 162 USPQ 424 (TTAB 1969). The burden thus shifts to opposer to show evidence of an intentto resume use to disprove the presumed fact of no intent to resume use. We find that the circumstances surroundingopposer's nonuse warrant a finding that the nonuse was accompanied by an intent not to resume use of the markEVERETT.

As noted above, Mr. Lewis testified that after 1989 no new pianos were produced under the EVERETT mark. Thiswas a result of a decision made by opposer to cease production. Sales made after the cessation in production consistedonly of the sell off of leftover inventory, virtually all of which occurred by the end of 1990. In addition, Mr. Lewisindicated that after the sell off of inventory, opposer did not actively advertise and promote the EVERETT brand; inpoint of fact, out of a considerable amount of advertising expenditures since [*21] that time, opposer has not spent anymoney in promoting pianos bearing the EVERETT mark. Further, opposer did not license use of the EVERETT mark toany third party, and opposer did not enter into any agreement with a third party to manufacture pianos under the markEVERETT. (dep. 2, p. 43-44). The last trade show at which an EVERETT piano was exhibited was in January 1989.Simply put, after opposer stopped production of EVERETT pianos and the inventory was sold off, the record is devoidof evidence to show that the mark was used on pianos in the ordinary course of trade.

Due to a downturn in the piano market, opposer made a conscious decision to stop production of EVERETT pianosin 1989. The cessation in 1989 was total in nature, with apparently no thought given to scaling production to correspondwith the reduced market demand. When opposer later considered resumption of production of EVERETT pianos at itsGeorgia factory in light of an improved piano market in the 1990's, opposer decided against it because of the lack of anyexcess capacity at the factory. Thus, it is particularly telling that, in the face of an improved market, opposer chose touse the manufacturing capacity [*22] it did have to produce pianos under marks other than EVERETT. When theGeorgia factory did have excess capacity in the mid-1990's, opposer made a decision not to resume production ofEVERETT pianos because, in Mr. Lewis' words, opposer "did not want to disrupt traditional channels of distribution."Mr. Lewis also testified that opposer, in 1993-94, gave thought to producing a digital piano under the EVERETT mark.Opposer chose not to go forward with the idea due to prohibitive expense and uncertain market potential. In 1997,opposer considered production of EVERETT pianos at one of its factories located in China. Opposer declined to gofurther with this idea, however, because it had an existing contractual obligation to use another mark. Although Mr.Lewis testified that it is "possible" that in the future opposer may consider having EVERETT pianos manufactured inChina, no further specifics were given.

The record reveals that when opportunities arose to use the EVERETT mark after 1989, even during times of animproved piano market, opposer made a business decision not to do so. Such deliberate decisions, made on at least fouroccasions, during the period of nonuse are not those [*23] that a reasonable businessman would make pursuant to aplan to resume use of the mark. Rivard v. Linville, supra at 1337. These business decisions undercut opposer's rights inthe mark and any goodwill that might have attached to the mark in connection with pianos. n4

TTAB LEXIS 721, *

n4 Further, opposer does not suggest, nor has it submitted any evidence, to indicate that it has deferredproduction of EVERETT pianos because of this litigation which has been pending since 1997.

Further, considerations regarding resumption of use were sporadic and appear to be casual in nature, with nospecific details given about the depth of such discussions. The "considerations" are vague, and there is nodocumentation, as, for example, business plans or marketing studies relative thereto. In short, there are no concrete plansto resume use at any time in the future. See: Imperial Tobacco Ltd. v. Philip Morris Inc., supra at 1394 ["the LanhamAct was not intended to provide a warehouse for unused marks"].

A significant aspect of opposer's arguments in response to the claim of abandonment relates to the presence ofEVERETT in the piano aftermarket by way of dealers' sales of used pianos, and of opposer's [*24] sales of parts, aswell as by the servicing of EVERETT pianos. Opposer argues that notwithstanding cessation of production ofEVERETT pianos in 1989, the mark continues to be in use and that, in any event, there remains considerable residualgoodwill in the EVERETT mark.

With respect to opposer's provision of parts and repair services for previously sold EVERETT pianos, it wouldappear that such activities are not done under the EVERETT mark. As Mr. Heid testified, many piano parts forEVERETT pianos are generic. Moreover, it does not appear that any parts, including those specific to EVERETTpianos, bear the mark EVERETT, either directly on the part or on the packaging for the part. As to the repair services,again the record is devoid of any evidence showing use of the EVERETT mark in connection with the repair services.Thus, although opposer offers parts and repair services for its EVERETT pianos, the mark EVERETT has not been usedin connection with either. Further, the use of EVERETT on opposer's web page is merely a reference so that an owner ofa EVERETT piano can determine its age.

Opposer also relies upon subsequent sales of used EVERETT pianos by dealers such as Messrs. [*25] Heid andHoy. We recognize that when a manufacturer who owns a trademark is an active participant in the aftermarket for itsgoods, and continues to advertise, promote, and exploit the goodwill in the mark to the exclusion of others,abandonment generally will not be found. See discussion, infra. Residual goodwill, however, is not sufficient to avoid afinding of abandonment where the goodwill is generated through subsequent sales of a product by distributors orretailers. Societe des Produits Marnier Lapostolle v. Distillerie Moccia S.R.L., 10 USPQ2d 1241, 1244 n. 5 (TTAB1989). Further, residual goodwill in a mark by virtue of a long shelf life and continued sales by retailers is of littlemoment here. Opposer cannot rely on some residual goodwill through post-abandonment sales of used EVERETTpianos by distributors or dealers. Parfums Nautee Ltd. V. American International Industries, 22 USPQ2d 1306, 1309(TTAB 1992). The sales by Messrs. Hoy and Heid do not inure to opposer's benefit, such that these sales show use of themark by opposer in the ordinary course of trade. Further, there is little information relative to the volume of such sales;other [*26] than stating that used EVERETT pianos have been sold, no specific number has been made of record. Whatevidence we do have suggests very limited sales, with Mr. Heid remarking that his sales "fell under his radar scope."

The three publications on pianos submitted by applicant, which state that production of EVERETT pianos hadceased, suggest that there was a perception in the industry that the mark had been abandoned. In response to opposer'spoint that there is residual goodwill in the EVERETT mark among service technicians and piano teachers, we wouldpoint out that these classes of individuals may be the ones most likely to be aware of the subject publications that statethe mark is no longer used by opposer. Although we recognize the probative limitations of the printed publicationsrelied upon by applicant, these publications tend to support the view that use of the EVERETT mark was discontinuedwith an intent not to resume use.

Opposer's self-serving testimony that opposer never intended to abandon the mark is simply outweighed by theobjective evidence supporting the conclusion that the mark was abandoned with an intent not to resume use. See:Imperial Tobacco Ltd. V. Philip Morris Inc., supra. [*27] Given the entirety of the circumstances herein, any goodwillremaining in the EVERETT mark simply does not overcome the evidence bearing on opposer's lack of an intent toresume use of the mark. The record falls short of establishing that reasonable constancy of effort in marketingEVERETT pianos which would constitute persuasive evidence of an intention to resume use of the mark in the ordinarycourse of trade after 1990 when virtually all of the inventory of EVERETT pianos had been sold. The evidence simplydoes not establish that opposer is an active participant in the use of the mark EVERETT.

In arguing that it has not abandoned the EVERETT mark, opposer cites to several cases in support of its position,most of which appear in its reply brief. Opposer chose to highlight two of the cases during oral argument and, thus,these cases bear discussion, with the caveat, however, that "as is true with most issues of trademark law, thedetermination of abandonment is peculiarly dependent on the facts of each particular situation and remarks in prior

TTAB LEXIS 721, *

opinions are of little help." Sterling Brewers, Inc. v. Schenley Industries, Inc., 441 F.2d 675, 169 USPQ 590, 593 (CCPA1971). [*28]

The first case is American Motors Corporation v. Action-Age, Inc., 178 USPQ 377 (TTAB 1973) wherein the Boardfound a likelihood of confusion between opposer's mark RAMBLER for cars and applicant's mark SCRAMBLER foroff-highway recreational vehicles. In deciding the case, the Board considered applicant's affirmative defense thatopposer had abandoned its RAMBLER mark. The Board noted that production of RAMBLER brand automobiles ceasedin mid-1970, and went on to make the following findings of fact relative to the abandonment claim:

While opposer does not presently employ the mark RAMBLER on its new automobiles, approximatelytwo hundred to two hundred and fifty of its dealers display the mark RAMBLER on signs in theirwindows or on their windows; about sixty dealers incorporate the mark RAMBLER in their companynames or trade names; over two million RAMBLER automobiles are currently registered for vehiclelicenses throughout the United States; opposer distributes a wide range of automobile accessories andreplacement parts for the RAMBLER cars in cartons and envelopes prominently displaying theRAMBLER mark; and automobiles bearing the mark RAMBLER are presently [*29] being sold inSouth Africa, Mexico and Australia.

Based on the evidence before it, the Board found no abandonment:

While opposer has discontinued the use of RAMBLER as a trademark for vehicles produced by opposerover the past few years, the record falls short of establishing any abandonment thereof. [footnote omitted]In fact, there is a considerable reservoir of goodwill in the mark RAMBLER in this country that inures toopposer as a consequence of the large number of RAMBLER vehicles still on the road; opposer'sactivities in supplying RAMBLER parts and accessories to owners of these vehicles; and the use bydealers of the term RAMBLER as a portion of their corporate or business names and their maintenanceof RAMBLER signs on their premises.

The facts in the present case, quite simply, are not as compelling as those in the cited case. The uses of the markRAMBLER by American Motors Corporation represented significant ongoing commercial activity. There is noevidence herein that opposer uses the mark EVERETT in the same manner or to the same extent. Dealers (the recordincludes evidence of only two) for opposer's used pianos do not display the mark EVERETT on [*30] any signs ordisplays; no dealers appear to use EVERETT as part of their names; and parts supplied by opposer for EVERETTpianos do not bear the EVERETT mark, and are not shipped in packaging bearing the mark. Further, and in any event,the record is silent as to the scope of revenue generated by sales of replacement parts and the rendering of repairservices, and therefore opposer has not shown that its activities are of the breadth of the activities in American Motors.Moreover, the period of nonuse in the present case is at least four years longer than that in American Motors.

The second case is Ferrari S.p.A. Esercizio Fabbriche Automobili e Corse v. McBurnie, 11 USPQ2d 1843 (SD Cal1989). The court there found that although production of DAYTONA SPYDER automobiles ceased in 1974, thetrademark owner continued to manufacture and sell and to license the manufacture and sale of mechanical and bodyparts for the automobile. The court also noted that the owner maintained original molds and tooling for the cars, and thatthe cars have continued to be driven, serviced, restored, sold and exhibited by Ferrari customers. The court concludedthat the mark DAYTONA [*31] SPYDER remained in the public eye, and that the goodwill symbolized by the markwas still strongly associated with Ferrari.

We view the facts in Ferrari to be distinguishable from the ones in the present case. Quite simply, opposer'sostensible level of activity under the EVERETT mark does not rise to the levels undertaken by Ferrari. As the recordindicates, many piano service and replacement parts, including those for EVERETT pianos, are generic, and there is noindication that the parts supplied by opposer herein bear the trademark at issue. Opposer itself has done very little in theway of deliberate and continuous business activity to keep the EVERETT mark in the public eye.

Lastly, opposer accuses applicant of being an opportunist, with an intent to trade upon opposer's goodwill in themark EVERETT. Opposer points to the fact that applicant originally was named "Everett Piano Company" with anaddress in South Haven, Michigan, that is, the town in which opposer's EVERETT pianos were manufactured. Opposeralso points out that applicant filed its involved application a mere three days after opposer's registration expired for

TTAB LEXIS 721, *

failure to file a renewal. Suffice it to say that, [*32] based on opposer's cessation of production of EVERETT pianos in1989, de minimis sales after 1990, and the expiration of opposer's registration in 1995, it was reasonable for applicant tobelieve that opposer's mark was abandoned and now available for adoption by it. As succinctly stated by ProfessorMcCarthy: "Once abandoned, a mark may be seized immediately and the person so doing may build up rights againstthe whole world." 2 J.T. McCarthy, McCarthy on Trademarks and Unfair Competition, § 17:2 (4th ed. 2001).

In sum, we find that opposer has abandoned the mark EVERETT for pianos and that, therefore, it does not havesuperior rights in the mark. Accordingly, opposer has not established one of the necessary elements of a claim oflikelihood of confusion. See: American Standard Inc. v. AQM Corporation, 208 USPQ 840, 841 (TTAB 1980).

Legal Topics:

For related research and practice materials, see the following legal topics:Trademark LawProtection of RightsAbandonmentIntentional NonuseTrademark LawProtection ofRightsRegistrationRenewalTrademark LawU.S. Trademark Trial & Appeal Board ProceedingsOppositionsGrounds

16 of 21 DOCUMENTS

Sharkskins Surf Gear, Inc. v. San Jose Sharks

Opposition Nos. 87,081 and 87,082 to applications Serial No. 74/74/150, 576 and 74/150,905, filed on March 25, 1991


1996 TTAB LEXIS 45

September 21, 1995, Hearing

October 29, 1996, Decided

COUNSEL:[*1]

Jack L. Slobodin of Fish & Richardson for Sharkskins Surf Gear, Inc.

Anthony L. Fletcher of Hutton & Williams for San Jose Sharks.

JUDGES: Before Simms, Cissel and Seeherman, Administrative Trademark Judges.

OPINION BY: CISSEL

OPINION:

Opinion by Cissel, Administrative Trademark Judge:

Applicant, a California general partnership hereinafter sometimes referred to as "Sharks," operates the NationalHockey League expansion team known as the San Jose Sharks. On March 25, 1991, Sharks filed the above-referencedapplications to register the mark shown below [SEE ILLUSTRATION IN ORIGINAL] on the Principal Register for"clothing--namely, shirts, jerseys, sweaters, sweatshirts, t-shirts, jackets, pants, sweatpants, warm-up suits, shorts, caps,hats, socks, nightshirts, scarves, mittens and cloth bibs," in Class 25; and "entertainment services--namely, providingprofessional ice hockey exhibitions," in Class 41. Both applications were based on applicant's assertion that it possesseda bona fide intention to use the mark in commerce in connection with the stated goods and services.

Following publication under Section 12 of the Act, timely notices of opposition were filed by Sharkskins Surf Gear,[*2] Inc., referred to hereinaftersometimes as "Sharkskins." As grounds for opposition, opposer asserted prior use andregistration n1 of the mark shown below [SEE ILLUSTRATION IN ORIGINAL] for "surf clothing, namely, t-shirts,jackets, pants, warm-up suits, wetsuits, shoes and shorts," in Class 25, and that applicant's mark, as used with applicant'sgoods and services, so resembles opposer's mark that confusion is likely. Applicant's answer to the notice of oppositiondenied the essential allegations made by opposer.

Page 1

n1 Reg. No. 1,649,561, issued to Ken Oliver on July 2, 1991, and was subsequently assigned to opposer.

On May 27, 1993, applicant moved for leave to amend its answer to assert a counterclaim for cancellation ofopposer's pleaded registration, and for summary judgment on the counterclaim. The counterclaim asserted thatSharkskins' application which resulted in the pleaded registration was void ab initio because the use of the mark prior tothe filing of the application by opposer's founder was not bona fide use in the ordinary course of trade. Thecounterclaim further asserted that the pleaded registration should be canceled because it was obtained by means of[*3]false statements made by opposerin the application.

The Board consolidated the two opposition proceedings and allowed applicant's counterclaim, but deniedapplicant's motion for summary judgment on it. Opposer then answered the counterclaim, denying both the allegationthat opposer had failed to satisfy the "use in commerce" requirement of Section 1(a) of the Act and the charge that theregistration was obtained by means of false statements.

A trial was conducted in accordance with the Trademark Rules of Practice. Testimony and evidence weresubmitted. Both parties filed briefs, and then presented their arguments at an oral hearing before the Board onSeptember 21, 1995.

The record before the Board in this consolidated proceeding is voluminous. Opposer's record includes thetestimony, with exhibits, of the following individuals: Ken Oliver, opposer's founder; Sandra Getsey, a waterskier inCalifornia; Sam Hom, a customer of opposer; Douglas Scherr, a former classmate of the former counsel for opposer;Peter Robinson, president of a surf shop called Surf Plus; Barry O'Brien, general manager of an audio and video storenamed Performance Audio; and Edgar Leis, Mr. Oliver's auto[*4] mechanic. Applicant made of recordthe testimonyand related exhibits of Matthew Levine, vice president of development for applicant; William Frederick, a graphicdesigner; Fred Scalera, vice president for licensing of NHL Enterprises, Inc.; and Sharon Itkin, Richard Sotis, ZeldaFletcher, and Patrick Cumerford, each of whom purchased on behalf of applicant a variety of shirts bearing differentdesigns of sharks. Applicant also made of record, by notice of reliance, some of opposer's answers to applicant'sinterrogatories and portions of the discovery deposition of Ken Oliver.

As a threshold issue in connection with the counterclaim, opposer has challenged applicant's standing to make sucha claim. We agree with applicant, however, that applicant has standing to petition for the cancellation of the registrationwhich opposer has asserted against registration of applicant's mark.Syntex (USA) Inc. v. E. R. Squibb & Sons Inc., 14USPQ2d 1879 (TTAB 1990).

The issues on the merits of the counterclaim are whether opposer's registration should be canceled either becauseopposer failed to meet the use in commerce requirement of the Act prior to filing its application, or[*5] becauseopposer made falsestatements as to the goods on which the mark had been used in commerce. In the alternative, opposeralso raised, for the first time in its brief in reply to applicant's brief on the counterclaim, and then again at the oralhearing, the issue of whether the Board should amend the registration under the provisions of Section 18 of the Act tostrike from the goods listed in the registration all but "t-shirts." In the event that we decide that opposer's registrationshould be canceled, we must determine whether opposer has nonetheless established that it has priority of use overapplicant. If the registration survives, or if opposer is otherwise entitled to claim priority, then we must determinewhether confusion is likely in view of the similarity of the marks in their entireties and the relationship between thegoods and services of the parties.

We first take up the counterclaim of applicant to cancel opposer's pleaded registration. As we noted above, thepleading has two prongs. The first basis asserted for the counterclaim for cancellation is that when Ken Oliver appliedto register his mark on the basis of use of the mark in commerce, he had not yet actually[*6] used the mark incommerce. After careful consideration of the record before us and the relevant authorities, we agree with applicant thatopposer's use of the mark was an insufficient basis for filing an application based on use in commerce.

Page 21996 TTAB LEXIS 45, *2

The Trademark Law Revision Act of 1988 became effective on November 16, 1989, prior to the August 10, 1990filing date of the applications. The revised Act still provides that the owner of a trademark which is used in commercemay apply to register it based on that use. The Act requires that such an application must include a statement specifyingwhen the mark was first used in commerce, and that the mark is in use in commerce as of the filing of the application."Commerce" is defined in Section 45 of the Act as "commerce which may be lawfully regulated by Congress." "Use incommerce" is defined by the same section in the revised Act as "the bona fide use of a mark in the ordinary course oftrade, and not made merely to reserve a right in a mark." Section 45 goes on to state that a mark shall be deemed to be inuse in commerce on goods when it is placed on the goods and the goods are "sold or transported in commerce."

The revisions which took[*7] effect in 1989 codified forthe first time in the United States a second basis for filingan application to register: the bona fide intent to use a mark in commerce. Prior to then, an application had to be basedon use, although the use could be so-called "token use." That practice allowed an applicant to satisfy the requirement foruse of the mark in commerce by making a minimum amount of bona fide sales or shipments in commerce, followed byactivity showing an ongoing effort to market the goods.

As applicant in the instant case noted, this Board has held that the revised Act eliminated token use as a basis forregistration. The revision required an application to be based on either the assertion of a bona fide intention to use themark in commerce or "commercial use of the type common to the industry in question."Paramount PicturesCorporation v. James E. White d/b/a R.I. Productions, 31 USPQ2d 1768, 1774 (TTAB 1994).

Thus an issue in the case at hand is whether opposer made use of the mark in commerce within the meaning of theAct as revised, i.e., whether Mr. Oliver's use of the mark prior to filing the application constituted commercial use of thetype common[*8] to the industryin question, or was merely token use, made only to reserve a right in the mark, andtherefore insufficient to support an application based on use.

We concur with applicant that opposer at most made token use of the mark prior to the filing date of the applicationwhich resulted in opposer's registration, and that such use falls short of the standard set forth in the revised Act as aproper basis for an application based on use.

The record shows that Mr. Oliver designed the mark in late 1989. By the filing date of the application to register it,August 10, 1990, he had printed the mark on shirts in his home in Washington, D.C., but the only sales or transportationof shirts bearing the mark were a handful of gifts or private sales to his father and to his "direct friends." (Oliverdiscovery dep., p. 66). It appears that at least some of these people lived in suburban Maryland or Virginia, i.e., acrossstate lines from Mr. Oliver's home in the District of Columbia. His testimony is somewhat unclear, but at least some ofthe goods bearing the mark may have been shipped or delivered to his friends in these jurisdictions, whereas some ofthese friends apparently came[*9] into the District, paid for the shirts, and then returned with them to either Virginia orMaryland.

In addition to these activities involving goods bearing the mark prior to the filing of the application, Mr. Oliver hadalso obtained an order for "almost seven dozen" t-shirts bearing the mark from Full Bore Sports, a surf shop in CollegePark, Maryland. These shirts were not delivered until the next winter, in January of 1991, however, and payment forthem was not received until February of that year.

The sale of shirts to Full Bore Sports clearly meets the criteria for a genuine commercial use of the type common tothe particular industry. The order was placed, goods bearing the mark were delivered to another state, and payment wasmade. This use of the mark plainly could have been the basis for a valid application for registration based on use. Theproblem for opposer in this regard is that this use in commerce took place well after the application for registration hadbeen filed. The soliciting and placing of the order were all that had been accomplished as of the filing date of theapplication. These two activities do not, by themselves, constitute a completed sale in the ordinary[*10] course ofcommerce.


We therefore must turn to the sales and gifts Mr. Oliver made to his father and his friends if he is to be held to haveused the mark in commerce prior to filing the application. As we indicated above, we find these activities provide aninsufficient basis for filing a use-based application. Four or five of the dozen shirts he claims he sold to friends andfamily before he filed the application were admittedly given away, without charge. These transfers of possession ofgoods, as well as the ones for which his friends actually paid money, were plainly not ordinary commercial transactions.

In fact, Mr. Oliver apparently did not intend any of these sales or gifts made out of his home to be regular businesstransactions. As he put it, "I wasn't a business at this time. So I didn't want to sell actually..." (discovery dep. p. 70). Inhis testimonial deposition (p. 18) he sheds further light on what he was trying to accomplish by selling and giving theshirts to his family and friends in early August of 1990: "My basic first intent was to fulfill the requests of the trademarkboard...I purposely had read the application for a trademark myself and understood it to[*11] be that I needed to sellsome shirts, an unstated amount, in interstate commerce, so I wanted to make sure I fulfill that--fulfilled that part of theapplication... there was a minimal amount of sales at that time, basically to get my mark out there and to do theinterstate commerce."

It is difficult to imagine a clearer case of pre-application activity "merely to reserve a right in a mark" by attemptingto meet the minimum technical requirements for registering it. The sales and gifts to friends and family may not havemet even the previous standard for use in commerce that had allowed for token use. They certainly did not meet thenew, stricter standard for use in commerce established by the revisions to the Act which took effect well before theapplication here in question was filed. Thus, applicant's counterclaim for cancellation must be granted on this basis.

The second basis for applicant's counterclaim to cancel opposer's registration is that opposer made false statementsin its application when Mr. Oliver listed, in addition to the t-shirts on which opposer claimed to be using its mark,jackets, pants, warm-up suits, wetsuits, shoes and shorts, on which the mark had never[*12] been used. His testimonyisquite clear that he had only used the mark on t-shirts when he executed and then filed the application to register; that themark has still never been used on shoes; but that it was eventually used on the remaining goods listed in the applicationsome time after the application had been filed.

Although the counterclaim does not actually use the word "fraud," both parties have argued the case as if thereference in the pleading to "false statements" should be interpreted as a reference to fraud, and we have accordinglydone so. Based on the record before us on this issue, however, we cannot conclude that fraud was committed.

The legal principles controlling our holding in this regard are not disputed. Fraud in the procurement of a trademarkregistration occurs when an applicant knowingly makes a false representation of a material fact in an attempt to obtain aregistration to which he is not otherwise entitled.Giant Food Inc. v. Standard Terry Mills, Inc., 229 USPQ 955 (TTAB1986).It must be established not just that the representation was false, but also that it was made with the intention ofdeceiving the Office. A false representation[*13] based on amisunderstanding or confusion does not constitute fraud.Bausch and Lomb Inc. v. Leupold and Stevens Inc., 1 USPQ2d 1497 (TTAB 1986).Fraud on the Patent and TrademarkOffice must be strictly proved ("to the hilt") with clear and convincing evidence.Kasco Corp. v. Southern Saw ServiceInc., 27 USPQ2d 1501 (TTAB 1993).

The testimony of Mr. Oliver shows that he did not fully understand the legal principles and requirements of theLanham Act, but it does not lead us to conclude that he possessed the intent to deceive which would be necessary for usto find that he committed fraud. He plainly misunderstood what the application called for. He admitted that he listedboth the goods which he believed he had already moved in interstate commerce and the goods which he intended to sellin interstate commerce in the future.

His explanation of what he thought was appropriate to put down on the application form would not be credible if itwere asserted by a professional in the field of intellectual property law, but he was acting for himself at that time,without the benefit of legal counsel.


His thinking was apparently that he knew he had used the mark[*14] in commerce on the t-shirts, which entitledhim to register, and he knew that he was going to use it on the other items listed as soon as the business got to that level,so he thought he should indicate on the application form what he wanted to have the registration cover. The applicationform, however, specifically instructed him to check either the box indicating that he had used the mark in commerce orthe box stating his intention to do so, but not both boxes, so he went with the former, because he knew he had used themark and he believed he had satisfied the minimum requirements for registration. His suggestion in his testimony thathe thought he could apply based on a combination of his use and his intent to use strikes us as justification he developedafter the fact, but the general tone as well as the specific statements in his testimony show him to have lacked theintention of willfully misrepresenting material facts in order to obtain a registration to which he knew he was notentitled. To the contrary, Mr. Oliver remained convinced that he was entitled to registration of his mark, in that he hadprinted it on the aforementioned shirts sold or given to his friends and family.[*15] That he was mistaken does notmake him guilty of fraud.

As we noted above, opposer raised, for the first time in its brief on the counterclaim (p. 11), the question ofwhether, in light of Mr. Oliver's mistake of listing goods in the application that had not yet been sold, the Board shouldamend the registration under Section 18 of the Act to reflect that the registration should have issued only for "t-shirts."Opposer would have the Board "construe Sharkskins' application as a hybrid ITU and use-based application, enteringwhatever declaration or amendment is necessary for the registration to advise the public of its status."

In view of the fact that the counterclaim for cancellation must be granted because opposer had not used the mark incommerce, even on t-shirts, prior to filing the application, we do not need to address this untimely request.

Because opposer's registration must be canceled, priority becomes an issue. The record, as discussed above inconnection with the counterclaim, shows that opposer has priority by virtue of obtaining the order from Full Bore Sportsin August of 1990 (use analagous to trademark use), and by its technical trademarkuse when it delivered[*16] thatorder in January of 1991. The earliest date upon which applicant may rely for priority is March 25, 1991, which is thedate on which its intent-to-use applications were filed, so opposer has established its priority. SeeZirco Corp. v. AT&T,21 USPQ2d 1542 (TTAB 1991).

We therefore turn to the issue of whether confusion is likely to result from applicant's use of its mark in connectionwith the goods and services set forth in the opposed applications in view of opposer's prior use of its mark on t-shirts.The testimony and evidence before the Board, when considered in light of the relevant authorities on this issue, lead usto conclude that confusion is not likely.

The court inIn re E. I. DuPont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973),identified thirteenfactors which in a given case may be appropriate to consider in determining whether confusion is likely. The oneswhich are relevant to the case at hand are discussed below.

To begin with, we find that the goods of the parties here are legally identical. Although opposer's void registrationcategorized opposer's productsas "surf clothing," opposer cannot rely on the registration.[*17] Opposer can rely,however, on its prior use on t-shirts, and we can consider opposer's goods as such, without any limitation which mightbe implied by the word "surf." In any event, the record shows that opposer's t-shirts are and always have been ordinaryt-shirts bearing opposer's mark, rather than specialized gear in which to go surfing. These goods may be accuratelydescribed simply as sportswear or active leisure wear. In view of the fact that the description of the goods in theopposed application includes "clothing--namely...t-shirts," without any limitation which could exclude such products, oreven t-shirts used only in connection with surfing, the goods on which opposer uses its mark must be deemed to beincluded within the identification of goods in the application. We therefore have treated the goods of the parties as ifthey share the same trade channels and ultimate purchasers, notwithstanding the evidence and testimony that applicant'sproducts are marketed in connection with its professional hockey team activities. SeeCanadian Imperial Bank ofCommerce v. Wells Fargo Bank, 811 F.2d 1490, 1 USPQ2d 1813, 1816 (Fed. Cir. 1987).


While applicant's goods as[*18] stated in the application include the goods of opposer, this is not the case withrespect to the entertainment services identified in the second application which is being opposed. Although it is apparentfrom this record as well as from common experience that professional sports organizations such as applicant, which isan expansion team in the National Hockey League, can be expected to sponsor or authorize collateral merchandise,including clothing such as t-shirts bearing the team's logo, the reverse is not necessarily so; that is, opposer hasestablished no basis for the Board to conclude that purchasers of t-shirts expect the clothing companies which producethem also to render entertainment services in the nature of professional sports exhibitions.

This point leads directly into opposer's argument that this is a classic case of reverse confusion. It is opposer'scontention that although applicant may not have intended to create confusion with opposer's mark by subsequentlyadopting a similar mark, applicant in fact did so, and by swamping the market with goods typically marketed inconjunction with the services of a professional sports team, applicant, as the junior user, has[*19] overwhelmed themarket for products bearing opposer's mark, so that the goods of opposer, the senior user, are mistakenly assumed toemanate from, or to be sponsored or authorized by, the junior user, applicant.

The legal principle of reverse confusion has been judicially acknowledged for more than twenty years. SeeBig OTire Dealers, Inc. v. Goodyear Tire and Rubber Co., 408 F.Supp 1219, 189 USPQ 17 (D.C. Colo. 1976);aff'd andaward modified,561 F.2d 1365, 195 USPQ 417 (10th Cir. 1977),cert. dismissed,434 U.S. 1052 (1978).Reverseconfusion is inapplicable in the instant case, however, because the marks of these parties are not so similar, when theyare considered in their entireties, that confusion is likely. This is particularly so in view of the widespread use of sharkdesigns on clothing, as decorations and as trademarks. In addition, the record shows that a number of businesses haveregistered or applied to register shark designs and/or triangle designs as trademarks for clothing. Especially in light ofthe popularity of shark images onthese products, the marks at issue in the case before us are not so similar thatconfusion is likely, [*20] either in the form of reverse confusion or in the traditional sense.

Moreover, there are a substantial number of people in the market for goods associated with the Sharks hockey teamwho are familiar with Sharks' mark. These people would not confuse the Sharks' mark with Sharkskins' mark, whichcombines the word "SHARKSKINS" and the shark head design, without any elements related to hockey. The testimonyand exhibits of Mr. Levine and Mr. Scalera show that the San Jose Sharks, as a relatively new National Hockey Leagueteam, developed and executed a marketing plan for its services and goods which has resulted in substantial sales andrenown associated with the mark it seeks to register.

Although both parties go to great lengths to describe the marks and provide facts and analysis as to why they areeither similar or dissimilar, and both parties make all the expected arguments relative to the manner and context inwhich the marks will be considered by prospective purchasers of the goods and services which are involved in this case,we find a few of the well recognized principles for resolving the issue of whether marks are similar are applicable to thissituation.

Although these[*21] marks may not be compared by potential purchasers on a side-by-side basis, and onlygeneral, rather than specific, impressions of them will be formed and retained over time, the marks possess significantdifferences which are sufficient to keep them from being confused in the marketplace. Notwithstanding opposer'scharacterization of them as nearly identical, these marks create significantly different commercial impressions becauseof differences in their appearances and the fact that one has wording in it and the other does not. Opposer's mark is thehead of a two-toned, black and white shark, with its mouth open wide, enclosed entirely within the triangle design. Alsowithin this three-sided border are two words "SHARK," spelled out from left to right, and "SKINS," which reads fromtop to bottom. These words may also be perceived as one term, "SHARKSKINS," which is, of course, opposer'scorporate name. Both words share the same initial letter "S" in the top left corner of the triangle. Opposer's mark can bedescribed accurately as "SHARKSKINS" and the design of a shark's head. Theword component, whether considered asone word or two, plays a significant part in creating the commercial[*22] impression the mark generates, especially inview of the suggestive connotation of "SHARKSKINS," or even just "SKINS" in connection with clothing. "SKINS"may be understood by clothing shoppers to refer to the outer layer of protection afforded by opposer's clothing. The


American Heritage Dictionary (Houghton Mifflin, 1976 edition) shows that "SHARKSKIN" literally means the skin ofa shark, but the term is also used in reference to Leather made from such skin, as well as to a textile fabric, made fromrayon and acetate, which features a smooth, shiny surface. In any event, the literal portion of opposer's mark cannot beignored. It plays a substantial role in the creation of the commercial impression of the mark.

Applicant's mark differs substantially from opposer's mark when the two are considered in their entireties.Although applicant's mark does include a triangle design, the entire mark is not contained within that triangle, as is thecase with opposer's mark. Although applicant's mark features the design of a shark, the design is quite different from theshark headdesign in opposer's mark. Perhaps most significant is the fact that applicant's mark has no words. Instead[*23] of a two-toned shark's head with its mouth "agape," as opposer characterizes it, applicant's mark depicts almostthe whole body of an entirely black shark, complete with flippers and the characteristic dorsal fin on its back, appearingto emerge from within a triangular frame with a hockey stick being snapped in two by the force of its now-closed jaws.The opposite ends of the hockey stick, the back fin, one flipper, and most of the shark's mouth are all outside thetriangle. The overall impression is one of violent movement and aggression, and the connection to the sport of hockey isclearly represented by the hockey stick clenched between the exaggerated teeth of the animal. Applicant's markunequivocally relates to hockey, but it does so graphically, without any wording. Moreover, there is absolutely noreference to or suggestion of sharkskins or skins in applicant's mark.

As we stated above, when we consider these marks in their entireties, as we must, in view of the significance of thedifferences discussed above, we find that they are unlikely to be confused. This is especiallyso in light of the number ofshark designs, references to sharks, and triangle designs used on shirts[*24] sold by other entities in different locationsaround the United States, and the fact that so many other entities besides applicant and opposer have registered orsought to register trademarks referring to sharks with words or designs.

The testimony and attached exhibits of Patrick Cumerford, Sharon Itkin, Richard Sotis and Zelda Fletcher revealthirty examples of such designs actually used on shirts purchased in different places as geographically disparate as KeyWest, Florida; Carmel, California; and Coney Island, New York. Shown below and on the following pages are but a fewof the exhibits to their testimony.

[SEE ILLUSTRATIONS IN ORIGINAL]

This record also contains evidence that a number of different entities throughout the United States have applied toregister or have registered trademarks in the field of clothing which consist of or include the designs of sharks, the word"Sharks," triangles, or combinations of these elements. The testimony of Mr. Levine and the exhibits attached to it, aswell as the registrations and drawings from several applications, made of record bymeans of applicant's notice ofreliance, provide a number of such examples. Applicant reproduces[*25] an entire page in its brief (p. 34) showing twodozen marks in this category featuring triangle designs wherein the triangle points down, as it does in both opposer'smark and applicant's mark. The word marks which consist of or include "Shark" are too numerous to list here. A few ofthe marks combining the word "Shark" with shark designs are shown below. Three of these also feature triangledesigns.

[SEE ILLUSTRATIONS IN ORIGINAL]

Evidence that the applications to register these marks were made or that these registrations were issued shows thatthe particular marks were adopted, but it is not evidence that the marks shown in the respective applications andregistrations have been in use, much less that the use and promotion of them has been so extensive that the consumingpublic has become so familiar with the appearance of "Shark," shark designs, and triangle devices in clothing marks thatthey readily differentiate between such marks based on subtle differences among them.

The evidence of third-party uses of designs and marks featuring these elements, however, confirms ourjudgmentthat the particular marks at issue in the case at hand are not likely to cause confusion[*26] when they are used


by these parties in connection with their respective goods and services. While we do not have specific informationrelating to the extent of use and promotion of the designs and marks shown on the t-shirts purchased by applicant'switnesses, the large number of them, as well as the large number of such marks which have been the subjects ofapplications and registrations, indicates the popularity of the elements in question. Whether applicant's mark resemblesopposer's mark more closely than it resembles the third-party designs or marks is not the issue here. The existence of somany third-party marks and designs which include the same elements as the marks of applicant and opposer mitigatesagainst finding that the inclusion of the same elements is an appropriate basis for finding that confusion is likely.

Moreover, fans or others who closely follow professional hockey and who, as a result of applicant's extensive salesand promotional efforts, want t-shirts showing support for the San Jose Sharks hockey team, will recognize applicant'slogo and look for shirts showing a sharkand a hockey stick. There is little chance that these purchasers will selectopposer's[*27] shirts. Although it features a representation of a shark, opposer's shark is a different shark, without ahockey stick, and the term "SHARKSKINS" is a prominent feature of opposer's mark. Even someone who is personallyunfamiliar with the team's logo, if he wants to purchase a shirt indicating support for the team, either for himself or as agift for someone else, would likely expect the mark on such goods to make at least some reference to hockey. Theabsence of such a reference in opposer's mark, as well as the inclusion of the word "SHARKSKINS," would tip off sucha potential purchaser who might otherwise be confused.

Opposer argues that applicant fell short of its duty to avoid this conflict by failing to conduct a design search, andthat this is a factor which should be weighed against applicant in resolving the issue of whether confusion is likely.Aside from the fact that the law imposes no absolute duty to conduct a trademark search prior to adopting a mark, thisrecord is clear that applicant did conduct a proper search prior to adopting the mark herein opposed. The application toregisteropposer's mark had only been filed three days before that search, however, so opposer's[*28] mark did not turnup. Applicant's position is that not only was it diligent in looking for potential confusion, but also that because themarks are not similar, even if applicant had been aware of opposer's mark, applicant would have proceeded to adopt,promote and use its mark anyway, all in good faith.

In any event, based on the record before us, we cannot impute bad faith or negligence amounting to bad faith toapplicant based on its alleged failure to exercise due care in avoiding potential conflicts with the prior-used marks ofothers.

Opposer predicates a good deal of its case against applicant on the contention that not only is confusion likely, ithas already occurred a number of times. While we agree that under some circumstances evidence of instances of actualconfusion may be extremely persuasive that confusion is likely, the testimony and evidence concerning actual confusionwhich opposer has made of record in the case at hand do not convince us, in light of the previously discussed popularityof shark images and the differences between these marks in their entireties, that confusionin the marketplace for thesegoods is likely.

Applicant would have us disregard a[*29] large part of the testimony about actual confusion on the ground that itis inadmissible hearsay. The testimony of Ken Oliver, Sam Hom, Peter Robertson, and Edgar Leis is attached on thatground. In essence, each of these individuals testified concerning statements that they alleged were made to them bypeople who were not called to testify. The statements showed that some people mistook opposer's shirts as indicationsthat the wearers of them were fans of the Sharks hockey club. Other parts of this testimony concerned questions as towhether applicant was the source of shirts bearing opposer's trademark, or whether opposer was trying to copyapplicant's mark to create a product that would sell because of the apparent association with the Sharks team.

Although the testimony in question here does concern statements by the witnesses of what they say was said tothem by other people who were not called to testify, the witnesses' testimony is admissible because the out-of-courtdeclarations are not being asserted to establish the truth of the statements made therein. Moreover, these statements,even ifthey did constitute hearsay, would be allowed in as exceptions to the hearsay rule[*30] in order to show thestates of mind of the people who made them.


Although the testimony of Mr. Hom is somewhat vague, he stated that he wears clothing bearing opposer's markevery day of the week, and that "the first thing" people he encounters say to him is "Hey, that's the San Jose Sharks."Mr. Hom stated that this happens on average five out of every seven days.

Mr. Oliver's testimony is that while wearing t-shirts bearing his mark, he has been approached by strangers whohave said things like "Hey, San Jose Sharks, go Sharks," and "Are you a hockey fan?" Other people, he testified,apparently distinguished between applicant's mark and opposer's mark, but only after questioning whether or not theywere related. A third type of comment Mr. Oliver heard, he testified, showed that the people who were looking at hisshirt realized that it was not a Sharks shirt, but these people expressed the opinion that opposer would get into troublefor copying applicant's mark.

Mr. Leis, opposer's auto mechanic, testified that his business is located close to Mr. Oliver's and that he has stickersbearing opposer'smark on his desk at work and on his race car. He testified that on one occasion[*31] a customer sawthe stickers on his desk and asked where he got the neat looking Shark stickers. When Mr. Leis asked what he meant,the customer responded "the San Jose Shark Stickers, the ones on the counter." He also testified that people seeingopposer's stickers on his race car have asked him how he got the San Jose Sharks to sponsor his car.

Mr. Robertson testified that he runs a surf shop in Santa Rosa, California, and that customers there presented with adecal bearing opposer's mark have asked him "if the Sharkskins decal had anything to do with the new hockey team inSan Jose." Another person inquired if the decal was a copy of the Sharks logo.

Two of the witnesses, Sandra Getsey and Douglas Scherr, testified that they themselves were confused. Applicantdoes not attack their testimony as hearsay, but instead argues that it is not evidence that there has been actual confusionin the marketplace for t-shirts. As with the Oliver, Hom, Leis and Robertson testimony, this testimony does not showthe diversion of sales of t-shirts from one party to the other, but it nevertheless shows that someone thought the markswere similar.

Ms. Getsey, the water-skier, testified that she[*32] mistook clothes Mr. Oliver was wearing and banners flyingfrom the dock on which he was standing as indications that he was a "wild" fan of the San Jose Sharks. Although herassumption was incorrect, her mistake did not result in the sale of the product of either applicant or opposer under thefalse assumption that the goods came from the other party.

Further, at pages 14 and 15 of her deposition, she testified that if she wanted to buy a San Jose Sharks t-shirt, shewould buy one that said "SHARKSKINS" on it. This testimony reveals that she is not particularly aware of orconcerned about words used in logos. She may not be a typical consumer capable of exercising ordinary care. Evenopposer does not contend that the word "SHARKSKINS" is similar to applicant's design mark.

Douglas Scherr was a surgical intern at George Washington University at the time of his testimony about meetingopposer's then-counsel at a college reunion. The lawyer wore one of his client's shirts bearing the mark opposer hadregistered. Mr. Scherr knew his former classmate lived in California, and mentioned that he hadn't knownthat his friendwas a San Jose Sharks fan.

Again, as with the testimony of every[*33] witness on this issue, Mr. Scherr testified that confusion took place,but it was not in the ordinary commercial setting where the source of the goods of the parties was confused because ofthe similarity of the marks used on them.

Another witness who testified on the issue of confusion was Barry O'Brien, the manager of an audio store. He hadno experience in the retail clothing field, but nonetheless opined that customers for t-shirts would be likely to beconfused by the marks in question. This testimony is only unfounded speculation on his part. It has little persuasivevalue.

In a similar sense, the testimony of applicant's witness Mr. Frederick is not persuasive. Whether or not a


professional graphic artist specializing in sports marketing thinks these marks are likely to cause confusion when theyare used on t-shirts is not determinative.

In summary on the issue of actual confusion, the testimony and evidence argued by opposer to demonstrate actualconfusion does not clearly indicate that confusion is likely. The testimony is not inadmissible hearsay, but it does notconvince us that confusionis likely to occur in circumstances where purchasing decisions are actually being[*34]made. Whatever confusion occurred was tiny in comparison to the opportunities for confusion created by the size ofapplicant's marketing operation. That isolated incidents took place in non-purchasing situations showing that somepeople were reminded of applicant's mark by opposer's mark, or that the marks generated questions or suspicions abouta connection between opposer's mark and the mark of applicant does not prove that confusion is likely in themarketplace where clothing is sold. In view of the significant differences between these marks in their entireties, theevidence concerning actual confusion is at most de minimis, and does not alter our conclusion that confusion isunlikely. n2

n2 We note that even the dissenting member of the Board would find no likelihood of confusion betweenopposer's mark and applicant's use of its mark in connection with its entertainment service of conducting hockeygames. In finding confusion likely with respect to t-shirts, she relies heavily on the reputed instances of actualconfusion, wherein some people mistakenly believed opposer's clothing was associated with the San JoseSharks, but she does not acknowledge that some of this confusion may have here sought to be registered.Additionally, while the dissent invokes the principle of resolving doubt in favor of the prior user, we do not findthat the circumstances of this case, including the minimal use by opposer just two months before applicant'sfiling, justify application of this doctrine, which normally applies when a party has built up at least somegoodwill in its mark over a reasonable period.

[*35]

For the reasons set forth above, the oppositions to the two applications in this consolidated proceeding aredismissed, but the counterclaim to cancel Registration No. 1,649,561 is granted.

CONCUR BY:

SEEHERMAN [IN PART]

DISSENT BY:

SEEHERMAN (IN PART)

DISSENT:

Seeherman, Administrative Trademark Judge, concurring in part and dissenting in part:

I must dissent from that portion of the majority opinion which finds that applicant's intended use of its mark for theidentified Class 25 clothing items is not likely to cause confusion with opposer's mark for t-shirts. In this case, becauseof the overwhelming sales and promotion by applicant, I believe that applicant's use of its mark is likely to causereverse confusion, by which opposer's goods will be assumed to emanate from or be sponsored by applicant.

In any determination of likelihood of confusion, one of the major factors to be considered is the similarity of theparties' goods. Here, as the majority has recognized, the goods of the parties are identical. Opposer uses its Shark designmark on t-shirts, while applicant seeks to register its Shark design mark for the same goods, t-shirts, as well as for suchclosely related items of apparel[*36] as shirts, sweatshirts, shorts, sweatpants, warm-up suits and caps. It iswell-established that when marks would appear on virtually identical goods or services, the degree of similaritynecessary to support a conclusion of likely confusion declines.Century 21 Real Estate Corp. v. Century Life of


America, 970 F.2d 874, 23 USPQ2d 1698, 1700 (Fed. Cir. 1992).

As for the marks, they convey the same overall commercial impression, that of a boldly drawn, cartoon-like,ferocious shark shown in an inverted triangle border. Although I recognize that there are specific differences in themarks which are apparent when they are compared, it must be remembered that under actual marketing conditionsconsumers do not have the luxury to make side-by-side comparisons between marks, and instead they must rely on hazypast recollections.Dassler KG v. Roller Derby Skate Corp., 206 USPQ 255 (TTAB 1980)

In this case, there is substantial evidence to support the conclusion that the marks convey similar overallcommercial impressions. As the majority opinion shows, the record is replete with instances in which people mistookopposer's mark for thatof the applicant.[*37] Although these occurrences may not be examples of classic actualconfusion, in the sense that none of the people involved had actually purchased opposer's t-shirt in the belief that theywere purchasing applicant's clothing, at the very least the testimony shows that the various members of the publicviewed the marks as being confusingly similar.

Moreover, it must be remembered that the goods involved here are t-shirts and other inexpensive clothing items.The purchasers of such items are the public at large. Moreover, t-shirts are frequently purchased on impulse, without agreat deal of thought and care. Thus, under the general purchasing conditions for these goods, consumers are not likelyto notice the differentiating details in the marks which are pointed out in the majority opinion.

In particular, consumers are unlikely to engage in an analysis of whether the addition of the word SHARKSKINSin opposer's mark, or the absence of a hockey stick, means that opposer's mark identifies a source different from thesource of applicant's t-shirts. To the extent that consumers note these differences at all, they are likely to assume that themarks are variants of oneanother, both of[*38] which identify clothing emanating from a single source. Thus, even thehockey fan posited by the majority opinion, who looks for a shirt showing a shark and hockey stick, is still likely, uponencountering t-shirts bearing opposer's design mark, to believe that this t-shirt emanates from opposer. And, I wouldpoint out, there is testimony that shows even hockey fans have assumed that opposer's mark is the applicant's.

More importantly, the purchasers of the parties' t-shirts are not only "fans or others who closely follow professionalhockey." Majority opinion, p. 26. One who is not himself a hockey fan may purchase a t-shirt for a friend or relativewho is such a fan; such purchasers, because of the similar commercial impression of the parties' marks, are likely toconfuse one for the other, and will not note or recognize the significance of the presence of the word SHARKSKINS orthe absence of a hockey stick in opposer's mark.

The evidence of third-party registrations of "shark" marks does not persuade me that the marks involved herein arenot likely to be confused. The third-party registrations are probative that the word "shark" and shark designs have asignificancein connection[*39] with casual clothing, and particularly with t-shirts and beach wear. As a result, the factthat two marks both contain a design of a shark may not be a sufficient basis on which to find likelihood of confusion.SeeTektronix, Inc. v. Daktronics, Inc., 187 USPQ 588 (TTAB 1975).However, in this case the similarity between themarks is not simply that they both contain shark designs. Rather, there is an overall similarity, including the similarity inthe way the sharks are depicted, the style of the drawing, and the fact that both marks use an inverted triangle border.

Moreover, as the Court stated inAMF Inc. v. American Leisure Products, Inc., 474 F.2d 1403, 177 USPQ 268,269 (CCPA 1973)with respect to third-party registrations:

We have frequently said that little weight is to be given such registrations in evaluating whether there islikelihood of confusion. The existence of these registrations is not evidence of what happens in themarket place or that customers are familiar with them nor should the existence on the register ofconfusingly similar marks aid an applicant to register another likely to cause confusion, mistake or to[*40] deceive. [citations omitted].


I would also point out that applicant's mark is far more similar to opposer's than any of the third-party marks are.

As for the third-party uses, in general, evidence of extensive third-party use of a particular element can show thatthe public has come to distinguish among marks containing such an element, and that they look to other parts of a markto identify source. In this case, however, the evidence of third-party use consists of t-shirts which were purchased atsome stores located at beach-type resort locations, e.g. Key West, Florida; Point Pleasant Beach, New Jersey; andConey Island, New York. There is no information regarding the amount of sales or advertising of these third-party uses,or even as to whether they are sold anywhere but the particular stores in which the t-shirts were purchased. Thus, thereis insufficient evidence regarding the exposure of these uses to the public from which to conclude that the public wouldconcentrate on other elements of shark marks in order to distinguish among them. SeeAMF Inc. v. American LeisureProducts, Inc., supraat177 USPQ 268, 270("We think [the[*41] listing of trademarks in various trade magazines]should be treated in a similar manner as are third-party registrations. They give no indication as to actual sales, when themark was adopted, customer familiarity with the marks, etc.")

I would also add that the marks shown in the third-party uses which have been submitted are not as similar toopposer's and applicant's marks as these marks are to each other.

I also believe that the majority gives too little weight to the evidence of actual confusion. As I have alreadyacknowledged, the incidents testified to are not classic examples of actual confusion, in which a purchaser attempts tobuy one party's product thinking it is that of another, or has bought goods under this misapprehension and then writes acomplaining letter to the other party. Although the incidents did not occur in an actual commercial setting, at least oneof the persons who was confused testified that he might have purchased opposer's t-shirt thinking it was that of theapplicant. n3 Further, Ms. Getsey and Mr. Scherr are potential purchasers of the goods, and therefore, despite thefactthat their confusion did not occur in the context of a commercial transaction,[*42] I believe that their testimonyevidences actual confusion.

n3 The majority minimizes Ms. Getsey's testimony, stating that she may not be a typical consumer whoexercises ordinary care, and that she is not particularly concerned about the source of these goods because,according to the majority, "she testified that if she wanted to buy a San Jose Sharks t-shirt, she would buy onethat said 'Sharkskins' on it." Majority opinion, p. 30. I do not read her testimony this way. During crossexamination, she was asked a number of questions about why she had believed the logo she saw on opposer'sbanner was that of the San Jose Sharks, and what she remembered of the San Jose Sharks logo. The questionabout whether, if she saw a logo that had SHARKSKINS on it, came up in the context of this exchange, and herresponse was that she didn't remember that the logo had any words on it. "And when I go to buy something forhim [her fiance, a San Jose Sharks fan] as a present that's a logo, I can't say that I stare at a logo, and I don'tthink any of my friends do." Dep. p. 14. This statement supports my view that consumers are not likely toengage in a careful scrutiny of the logo when they purchase a t-shirt, and are not likely to note the presence orabsence of the word SHARKSKINS.

[*43]

Moreover, I disagree with the majority that the evidence of actual confusion is de minimis. It is generallyrecognized that evidence of actual confusion is notoriously difficult to obtain. In this case, opposer's sales under itsmark have been relatively low, amounting to approximately $ 100,000. Moreover, Mr. Oliver's testimony is that sinceapplicant has entered the field, opposer's business has decreased substantially. Therefore, given the limited situations inwhich there has been an opportunity for confusion to occur, I think that the evidence of actual confusion that has beenput forth is significant.

The insidious result of the reverse confusion engendered by applicant's use of its shark design mark is the negativeimpact it has had on opposer's business. There is ample evidence that stores have been reluctant to carry opposer's


products because of the similarity of its logo to that of applicant. Although there is no question that applicant adopted itsmark in good faith, a period of seven months elapsed from the time it conducted its trademark search until it filed itsintent-to-use application. Well prior to that date opposer had adopted its mark, had made use analogousto[*44]trademark use, and had even filed an application for its mark which applicant would have been aware of had itconducted a follow-up search before filing its application. In these circumstances, I think we should invoke thewell-established trademark principle that, if there is any doubt on the issue of likelihood of confusion, such doubtshould be resolved in favor of the prior user.San Fernando Electric Mfg. Co. v. JFD Electronics Components Corp.,196 USPQ 1 (CCPA 1977).The DuPont factors favoring opposer in this case should, at the very least, raise such adoubt. Accordingly, I would sustain the opposition with respect to the application in Class 25.

Legal Topics:

For related research and practice materials, see the following legal topics:Trademark LawLikelihood of ConfusionSimilarityAppearance, Meaning & SoundGeneral OverviewTrademarkLawProtection of RightsRegistrationFraudulent RegistrationTrademark LawU.S. Trademark Trial & Appeal BoardProceedingsOppositionsGrounds

GRAPHIC:

Illustration 1, no caption; Illustration 2, no caption; Illustrations 3 and 4, no caption; Illustrations 5, 6 and 7, nocaption; Illustrations 8 and 9, no caption; Illustrations 10, 11 and 12, no caption; Illustrations 13, 14 and 15, no caption.


TTAB LEXIS 64, *

Parametric Technology Corporation v. PLMIC, LLC PLMIC, LLC v. Parametric Technology Corporation

Opposition No. 91174641 to application Serial No. 78835516 filed on March 13, 2006 Opposition No. 91177168 to application Serial No. 76662967 filed July 13, 2006


2010 TTAB LEXIS 64

February 12, 2010, Decided

DISPOSITION: [*1]

Decision: Opposition No. 91174641 is sustained as to both the non-use and priority and likelihood of confusionclaims and Opposition No. 91177168 is dismissed.

COUNSEL:

Thomas V. Smurzynski of Lahive & Cockfield LLP for Parametric Technology Corporation.

Edward A. Haffer of Sheehan Phinney Bass & Green P.A. for PLMIC LLC.

JUDGES: Before Holtzman, Kuhlke and Taylor, Administrative Trademark Judges.

OPINION BY: TAYLOR

OPINION:

THIS OPINION IS NOT A PRECEDENT OF THE TTAB Opinion by Taylor, Administrative Trademark Judge:

In Opposition No. 91174641 of these consolidated proceedings, Parametric Technology Corporation (hereinafterPTC) has opposed the application of PLMIC, LLC (hereinafter PLMIC) for the mark FLEXPLM n1, in standardcharacters, for "Cooperative advertising and marketing of products and services by way of solicitation, customer serviceand providing marketing information via websites on a global computer network." n2 Preliminarily, we note that theBoard, on January 30, 2009, granted PTC's motion to amend its notice of opposition "to conform to evidence," in viewof PLMIC's tacit assent to the motion as demonstrated by its filing of an answer to the amended notice of opposition. [*2] By the amended notice of opposition, PTC adds the following allegations to the notice of opposition:

8. Applicant, PLMIC, LLC, through its predecessor-in-title, filed application Serial No. 78/835,516 onMarch 13, 2006, on the basis of use, claiming that the mark was first used on July 13, 2003 and first usedin interstate commerce on July 20, 2004. 9. In fact, the mark was first put into use in commerce after the filing date of the application. The dates offirst use and first use in commerce set out in the filed application were false.

TTAB LEXIS 64, *

We find these additional allegations sufficient to raise a claim of nonuse, i.e., that the application is void becausealthough based on use in commerce, the mark was not "put into use" in commerce until after the filing date of theapplication. However, based on the arguments set forth in the motion and the parties' briefs on the case, we revisit themotion for the purpose of clarifying the issues before us in Opposition No. 91174641. In its motion and briefs on thecase, PTC argues that PLMIC's application is invalid because the dates of use set forth in the application are "false andfraudulent." PTC further argues, in its initial [*3] brief as plaintiff in Opposition No. 91174641, that "the application[Serial No. 78835516] should be held invalid as a use-based application filed before use had begun [and, i]f necessary[,]the application should be held invalid on the basis of fraud." (PTC's br. p. 9). In response, PLMIC argues that PTC'sallegation of fraud is invalid because PLMIC's predecessor-in-interest

made no "knowing" misstatement of fact. He filed as a layman without any legal assistance. His mistakewas not a mistake of fact; it was a mistake of law -- namely, what constituted trademark usage. Nor washis mistake "material." Although the dates he cited were incorrect, his actual first use date -- at least asearly as March 31, 2005 ... preceded by roughly one year his filing date of March 13, 2006.(PLMIC's initial br. p. 12).

To the extent that the parties are arguing a fraud claim, we point out that the amended notice of opposition fails to state avalid claim of fraud inasmuch as such a claim was not set forth with particularity, in that the pleading does not allege thePLMIC acted with an intent to deceive the United States Patent and Trademark Office (USPTO), or that a known [*4] representation of a material matter was made to the USPTO to procure a registration. See Fed. R. Civ. P. 9(b); and In reBose Corp., 580 F.3d 1240, 91 USPQ2d 1938 (Fed. Cir. 2009) (Intent is a required element for a claim of fraud.).

n1 Both PTC and PLMIC have referred to their respective marks interchangeably as FLEXPLM and FlexPLM.Except where quoted, we have referred to each party's mark as FLEXPLM.n2 Application Serial No. 78835516 filed March 13, 2006 and asserting July 13, 2003 as the date of first use ofthe mark anywhere and July 20, 2004 as the date of first use of the mark in commerce.

Furthermore, there is no evidence of record concerning PLMIC's intent with regard to the dates of use set forth inthe application and, therefore, there is insufficient evidence to meet the elements of a fraud claim. Thus, we do not findthat the issue of fraud was tried by the implied consent of the parties. n3 Accordingly, to the extent that PTC's motion toamend the notice of opposition [*5] to conform to the evidence sought to add a claim of fraud, the motion is denied.

n3 We add that even if we were to address PTC's claim of fraud as argued, it most likely would be dismissedinasmuch as a misunderstanding of what constitutes use in commerce is not necessarily fraud. See In re Bose,supra. See also Smith Int'l, Inc. v. Olin Corp., 209 USPQ 1033, 1043 (TTAB 1981)("If it can be shown that thestatement was a 'false misrepresentation' occasioned by an 'honest' misunderstanding, inadvertence, negligentomission or the like rather than one made with a willful intent to deceive, fraud will not be found." (citationsomitted)).

Thus, we turn to PTC's pleaded claims of priority and likelihood of confusion and nonuse of the mark as of thefiling date of PLMIC's application. In the amended notice of opposition, PTC has alleged that since before any use byapplicant of its mark, it has continuously used the mark FLEXPLM in the field of computer software for productlifestyle [*6] management and the automation of design information; the establishment and control of workflows,shared workspaces and production processes in the nature of product design and creation; product configuration anddata management; collaboration and process control; the visualization and digital mockup of designs, and use insoftware configuration and development, along with user guides sold with such software as a unit; and technical supportservices, namely, troubleshooting of computer software problems via telephone; updating of computer software;maintenance of computer software, namely, error correction services for computer software; consultation and softwareimplementation services; and product development for others; that it is the owner of Application Serial No. 76662967,filed July 13, 2006, for the mark FLEXPLM for the goods and services noted above; that the services recited in

TTAB LEXIS 64, *

PLMIC's application Serial No. 78835516 are similar to the goods and services offered by PTC under its trademarkFLEXPLM; and that applicant's FLEXPLM mark, when used in connection with the services recited in the application,will so resemble PTC's FLEXPLM mark as to cause confusion, or to cause mistake, [*7] or to deceive.

As noted earlier in this decision, PTC also has alleged that PLMIC, through it predecessor-in-title, filed applicationSerial No. 78835516 on March 13, 2006, on the basis of use, claiming that the mark was first used on July 13, 2003 andfirst used in interstate commerce on July 20, 2004, but that the mark, in fact, was first put into use after the filing date ofthe application; and that the dates of first use and first use of the mark in commerce set out in the application were false.

In response to the allegation that "[t]he services recited in application Serial No. 78/835,516, are similar to thegoods and services offered by Opposer under its trademark FLEXPLM," PLMIC, in its answer, has admitted "[m]ost, ifnot all, of the particular subject matter described by Opposer [PTC] for its Class 9 uses and its Class 42 uses is subjectmatter with respect to which Applicant (or its predecessor in interest, Mr. Silvestri) has used the mark FLEXPLM..."PLMIC otherwise has denied the salient allegations of the amended notice of opposition. n4

n4 PLMIC also requested relief in the form of attorney's fees. PLMIC is advised, however, that the Board iswithout authority to award attorney's fees. See Trademark Rule 2.127(f).

[*8]

In Opposition No. 91177168 PLMIC, in turn, has opposed the application of PTC to register the mark FLEXPLM,in standard characters, for "computer software for -- product lifestyle management and the automation of designinformation; the establishment and control of workflows, shared workspaces and production processes in the nature ofproduct design and creation; product configuration and data management, collaboration and process control; thevisualization and digital mockup of designs, and use in software configuration and development, along with user guidessold with such software as a unit" in International Class 9; and "technical support services, namely, troubleshooting ofcomputer problems via telephone; updating of computer software; maintenance of computer software, namely, errorcorrection services for computer software, software implementation services and consultation rendered in connectiontherewith, and product development for others" in International Class 42. n5 PLMIC, in its amended notice ofopposition, alleges that it is seeking registration of FLEXPLM at the USPTO for use in connection with "cooperativeadvertising and marketing of products and services by way [*9] of solicitation, customer service and providingmarketing information via websites on a global computer network (Amended opp. P3); that its predecessor-in-interest,Mr. Silvestri, first used FLEXPLM at least as early as March 31, 2005 in connection with the above listed services(Amended opp. P4); that PTC's mark FLEXPLM is identical in sound and appearance to PLMIC's mark FLEXPLM(Amended opp. P8); that "[m]ost, if not all, of the particular subject matter described by Applicant [PTC] for its Class 9uses and its Class 42 uses is subject matter with respect to which Opposer [PLMIC] (or its predecessor in interest, Mr.Silvestri) has used the mark FLEXPLM, with Mr. Silvestri having done so since at least as early as March 31, 2005"(Amended opp. P9.2); and that "Applicant's [PTC] use of FLEXPLM so resembles Opposer's [PLMIC] use ofFLEXPLM as to make it likely to cause confusion or mistake or to deceive as to the affiliation, connection, orassociation of Applicant [PTC] with Opposer [PLMIC], or as to origin, sponsorship, or approval of services, goods, orcommercial activities." (Amended opp. P10).

n5 Application Serial No. 76662967, filed July 13, 2006, and alleging December 2005 as the date of first use ofthe mark anywhere and in commerce.

[*10]

PTC, in its answer to the amended notice of opposition, admits:

a. it first used its FLEXPLM mark in May 2005 (Amended opp. P7, Answer P7); b. its mark FLEXPLM is identical in sound and appearance to PLMIC's mark FLEXPLM (Amended opp.P8, Answer P8);

TTAB LEXIS 64, *

c. its use of the mark FLEXPLM is similar to PLMIC's use of the mark FLEXPLM (Amended opp. P9,Answer P9); and d. it is opposing PLMIC's application for registration of FLEXPLM, Opposition No. 91174641, and isasserting in its opposition at paragraph 4 that the services of PLMIC are similar to PTC's goods andservices (Amended opp. P9.1, Answer P9.1).

PTC has otherwise denied the essential allegations of the amended notice of opposition. THE RECORD

The record consists of the pleadings and the files of application Serial Nos. 78835516 (the subject of OppositionNo. 91174641) and 76662967 (the subject of Opposition No. 91177168). In addition, PTC submitted the testimonydeposition, with Exhibits 1-11, of Sumant Mauskar, PTC's senior vice-president, Global Services; and PLMIC submittedthe testimony deposition, with Exhibits 1-7 n6, of Jason Silvestri, PLMIC's sole member, owner and head of operations, [*11] and the testimony deposition, with Exhibit No. 8, of Graeme Noseworthy, senior marketing manager of MonsterWorldwide, former marketing programs manager of AimNet Solutions, and brother-in-law of Jason Silvestri, PLMIC'sowner and head of operations.

n6 Exhibit Nos. 5-7, including PLMIC's responses to PTC's first set of interrogatories (Ex. 6) and first requestfor production of documents (Ex. 7) were made of record by PTC during cross examination. As noted above,exhibit 5, consisting of the application for registration filed in Serial No. 78835516, is of record by rule. As such,its submission during the testimony period was duplicative.

Both PTC and PLMIC filed briefs and reply briefs. FINDINGS OF FACT

PTC

In support of its claim of priority, PTC took the testimony of its senior vice-president, Global Services, SumantMauskar. According to Mr. Mauskar, PTC has been in business for about 20 years. (Mauskar test. p. 8). PTC producessoftware, including software to help companies who [*12] develop products, design and manage the information relatedto those products, and provides services for implementing that software for Product Lifecycle Management ("PLM").(Mauskar test. p. 7). Mr. Mauskar testified that FLEXPLM, one of PTC's products, "is built for managing informationcreated during the design of apparel and footwear for companies in that space, including retailers like J.C. Penney whichhave their own private branch." (Mausker test. pp. 8-9). The services associated with the FLEXPLM mark are servicesto implement the software and to configure the standard software for the unique needs of the customer, as well asproviding support and/or training. (Mausker test. p. 9). The term FLEXPLM was first used to describe PTC's softwareand related services as described above in a Statement of Work (SOW) contract executed on May 26, 2005. (Mauskertest. p. 13, exhs. 1 and 2). Mr. Mausker specifically testified that:

Q. This one [Exhibit 2] I will ask you to identify. A. Sure. That's a Statement of Work that we executed with Timberland for implementing FlexPLM. Q. It looks from Page 1 that you are described as the author. A. Correct. Q. What [*13] does that mean? That you authored this Statement of Work? A. I authored this Statement of Work.

TTAB LEXIS 64, *

Q. What does this Statement of Work do? A. The Statement of Work basically outlines what work we are going to be performing for this client. Q. Did you provide this work that is described in this statement to the client? A. Yes, we did. Q. Does this Statement of Work describe what that work was? A. Yes. n7 ***Q. What is the date of this Statement of Work? A. The execution date is 26th of May. Q. What year? A. 2005. ***Q. Is this the first use of the term "FlexPLM" by PTC to describe this software and these services? A. In a contract, yes. Q. Was there any other discussion before this of the term "FlexPLM"? A. Right. We were discussing the use of the term prior to that internally as we were trying to figure outthe name for the product upon acquisition, and this was one of the first places where we used the term tocapture the name that we were going to use.(Mausker test. pp. 11-14, exhs. 1 and 2).

Mr. Mausker further testified that the SOW "is the pattern for how FlexPLM software and services are provided [*14] to customers." (Mausker test. p. 26). Mr. Mausker also testified as to PLM's continuous use of the FLEXPLM mark forthe identified software and services since May of 2005, particularly stating that PLM "did about half a million dollars insoftware and about 7 million in services"; in 2006 the software license revenue was "around" 2 million and the servicerevenue in the 13-14 million dollar range; in 2007 about 4 million in software revenue and approximately 13 million inservices revenue; and for 2008, estimated the software revenue at around 5 million and the service revenue around 10million. (Mausker test. pp. 25-26). As regards the marketing of PLM's software and services, Mr. Mausker testified thatPLM calls on customers directly using a sales force, advertises in magazines, attends industry events and engages inmarketing activities with consulting companies that "operate in the same space [field]." (Mausker test. p. 26).

n7 The Statement of Work was submitted as "Confidential Attorney's Eyes Only." Accordingly, we will discloseonly the specifics that were discussed in Mr. Mausker's non-confidential testimony. Suffice it to say that thework described in the Statement reflects the type of software and services identified as being performed underPTC's FLEXPLM mark.

[*15]

PLMIC

To support its claim of priority, PLMIC took the depositions of Jason Silvestri, its sole manager and member, andJohn Graeme Noseworthy, the former marketing programs manager for AimNet Solutions and Mr. Silvestri's brother-in-law.

TTAB LEXIS 64, *

Mr. Silvestri testified that from 2002 to 2005, he had a sole proprietorship called Top Of The Food Chain (TOTFC),which dealt with search engine optimization and marketing, i.e., creating websites and website interfaces to be moresearch engine friendly. He further testified that in 2006, "I started PLMIC, and the business was the same pretty much asTop of The Food Chain, but the difference is there. Top Of The Food Chain dealt with any clients who came in. And weused search engines as the key to advertising. Whereas, the PLMIC deals with product lifecycle management insupporting market places, and that deals with, we use our own outlets as the prominent advertising platform instead ofusing search engines." (Silvestri test. p. 6). According to Mr. Silverstri, product lifecycle management (PLM) is asoftware-based methodology used to control data and information of products through the entire lifecycle process.(Silvestri test. p. 7). [*16] Mr. Silvestri stated that he first used the term FLEXPLM "no later than March 2005" whenhe purchased and registered, as sole-proprietor of the Top Of The Food Chain, a website domain, FlexPLM.com; n8 andthat the FLEXPLM mark was used in connection with "cooperative advertising of marketing and of products andservices by way of solicitation, customer service and providing marketing information via websites" at the time theapplication was filed. (Silvestri test. pp. 7-9). n9 Mr. Silvestri explained that he was certain that the availability ofFLEXPLM advertising solutions was posted on the Internet in March 2005 because while he offered the services ofFlexPLM Advertising Solutions (which he indicated entailed the "goods and services description here [set forth ininvolved application Serial No. 78835516]") to a company called AimNet Solution via Graeme Noseworthy, a formermarketing manager of AimNet and Mr. Silvestri's brother-in-law, they declined, but he made a sale of another service,namely search engine marketing optimization services. (Silvestri test. pp. 12-13). Mr. Silvestri indicated that he had norecords of the advertising of the FLEXPLM advertising services on the [*17] Internet because his computer crashed andthe records could not be retrieved by the Geek Squad located in Best Buy. (Silvestri test. pp. 14-17, exh. 2). Mr. Silvestritestified that the first sale of FLEXPLM services was made by PLMIC in September 2006 to Management Roundtablelocated in Waltham, Massachusetts. (Silvestri test. p. 17).

n8 Mr. Silvestri particularly testified as follows:

Q Have you ever used the term FlexPLM?A Yes.Q When was the first time you used it?A As early as July 20, 2004, but no later than March 2005.***Q With respect to the March 2005 date, how did you use the term FlexPLM?A As a sole proprietorship [sic] of Top of the Food Chain, I posted to the internet a certainavailability to certain services with my FlexPLM Advertising Solutions.Q And this occurred in March 2005.A This occurred March 2005. This was done over our website, FlexPLM.Q Any possibility if could have been earlier than that?A It could have been as early as February, actually I don't know for sure.(Silvestri test. pp. 7-8).

n9 Mr. Silvestri also testified that he originally filed the application for registration of the FLEXPLM mark, butthat the mark (and application) was later assigned to PLMIC. (Silvestri test. p. 9).

[*18]

Mr. Silvestri also explained that he filed the involved application Serial No. 78835516 without consulting a lawyerand chose July 20, 2004 as the date of first use in commerce because he registered a domain called FlexPLM andthought that "registering a domain was a proper use of trying to claim rights to a trademark." (Silvestri test. p. 18).

Mr. Silvestri introduced a copy of the specimen submitted with his application for registration of the FlexPLM mark(shown below) and, when asked how it compared to what was posted on the Internet in March of 2005, responded thatthe "FlexPLM advertising was the same," except that "Logo Recognition Solutions and Interface Adapter were actually

FlexPLM solutions that were added after but before the specimen here." (Silvestri test. pp. 19-20). .

TTAB LEXIS 64, *

Mr. Silvestri also introduced a "specimen" (reproduced in part below), "produced" in connection with thisproceeding, of the website using FLEXPLM Solutions in October of 2007. (Silvestri test. p. 20, exh. 4). .

When asked when did PLMIC begin advertising the services identified under the FlexPLM mark [*19] in the mannershown on Exhibit 4, Mr. Silvestri responded "February 2006, February 8th, I am pretty sure. We launched a brand-newwebsite, and on that were these solutions, and on the home page, in fact, in plain sight, we had our FlexPLMAdvertising Solutions." (Silvestri test. p. 21).

PLMIC relied upon the testimony of Mr. Noseworthy to corroborate its asserted first use date. Mr. Noseworthytestified that he had "done business" with Jason Silvestri "beginning on or around February of 2005." (Noseworthy test.p. 5). When asked what were the circumstances, Mr. Noseworthy on direct examination testified:

A Jason originally came to AimNet to talk about a service that at the time he called FlexPLM. It wasn'tan appropriate fit for AimNet, so we ended up talking about some other things ... ***Q FlexPLM? A FlexPLM, which he was bringing to me to try to pitch to the rest of the company to help them get inthe door, which is perfectly reasonable, but at the time, it wasn't an appropriate fit for the company.

I ended up asking him about some of the other things he was doing, which included search engineoptimization, search engine marketing, and he did a great job. [*20] Perfect fit. Q You say this occurred at least as early as February 2005? A Yes. I started the project of looking to build a new website in December of 2004, and by January of2005, I was trying to do it, but at that time it was still building websites was still a new thing to me.When Jason came in, my God, I really need your help with this. And it was in February that he started tohelp me work on the website.(Noseworthy test. pp. 6-7).

On cross-examination, Mr. Noseworthy testified with respect to PLMIC's solicitation of service s:

Q When you said that Jason [Silvestri] pitched the FlexPLM services to you in 2005, in what way did hedo that? Did he come in and speak with you? Did he call you? Did he write to you? Did he e-mail you? A Well, I tell you, I remember it clearly because, and it is somewhat tricky to say this with Jason sittingin the room, but I would never have imagined he was capable of this at the time. I simply had no ideaJason had this kind of knowledge. He originally called me and had asked me to look at a web page, andover the phone, he walked me through it and said it was something he would like an opportunity to comeand talk [*21] to me about at AimNet, and honestly, I just was stunned....

So when he brought it to me over the phone and showed me the link, and we went through it on hiswebsite, I remember saying to him, stop, you need to come in and sit down and talk to me about this. Iunderstand what you are showing me, but I don't understand how it applies to AimNet. You need to comein.

TTAB LEXIS 64, *

Later he came in, and we sat in my office at AimNet in Holliston, Massachusetts, and he wentthrough it, and I remember, again, he went through it on the computer showing me the website, whichagain I remember being struck, very impressed with like, wow, this is fantastic, and it was then that I saidto him, this is great, this is interesting. I think you have something here. This is a great thing. It is not agreat fit for AimNet......

We went into search engine marketing and search engine optimization, which in and of itself Jasonwas not just pitching a service but again educating me like he did on FlexPLM. It was the studentteaching the teacher. I was stunned.

That is part of the reason I remember seeing the site. I remember him talking to me on the phone,and I remember him coming in to speak with me at my office [*22] in Holliston.(Noseworthy test. pp. 9-12).

DISCUSSION

At the outset, we note that there is no dispute as to likelihood of confusion. In this regard, PTC, in its main brief,states that "[e]ach party acknowledges that the marks and the services to which they are applied are confusingly similar.The dispute is over which party has priority." (PTC's br. p. 4). Similarly, PLMIC, in its initial brief under the heading"STATEMENT OF THE ISSUES," states that "[i]n this case of Consolidated Oppositions, should PLMIC's Oppositionbe sustained because of its priority of use of FLEXPLM?" (PLMIC'S br. p. 4). Both PTC's and PLMIC's briefsotherwise are silent with regard to the issue of likelihood of confusion.

In view of the foregoing, we find that the parties have conceded that there is a likelihood of confusion between theirrespective marks. Thus, as regards the priority of use and likelihood of confusion claims set forth in each of theconsolidated oppositions, the sole issue to be determined is priority. As a related matter, PLMIC filed, concurrently withits main brief, a motion to amend its application to assert March 31, 2005 as the date of first use and date of first [*23] use in commerce of its FLEXPLM mark. Last, we note that Opposition No. 91174541 is before us on the additionalclaim of nonuse, i.e., that PLMIC's application is void ab initio because PLMIC had not made trademark use of theFLEXPLM mark at the time it filed its use-based application. Opposition No. 91174641

1. Application allegedly void ab initio

An application is void ab initio if the applied-for mark was not in use in commerce at the time of the filing of theapplication. See Section 1(a) of the Trademark Act, 15 U.S.C. § 1051 (a); and Intermed Communications, Inc. v.Chaney, 197 USPQ 501 (TTAB 1977) (application void where the INTERMED mark had never been used in the UnitedStates on or prior to the filing date in association with the services described in the application).

PTC asserts that Mr. Silvestri, PLMIC's predecessor-in-interest, filed involved application Serial No. 78835516 onthe basis of Section 1(a) of the Lanham Act and that Section 1(a) provides for an application by the "owner of atrademark used in commerce." n10 Neither dates, i.e., the date of first use of the FLEXPLM mark anywhere and the date[*24] of first use of the FLEXPLM mark in commerce, asserted by Mr. Silvestri in the application, PTC contends, were"uses" of the mark. n11

n10 15 U.S.C. § 1051(a)(1). PTC also relies on the definition of "use in commerce" in Section 45 of the Act, setforth infra.n11 PLMIC now asserts March 2005 as its date of first use of the FLEXPLM mark anywhere and in commerce.The originally asserted use dates, i.e., July 13, 2003 (the date PLMIC's predecessor-in-interest thought of usingthe mark) and July 20, 2004 (the date of registration of the domain name www.flexplm.com [mistakenlyreferenced in the Silvestri test. as www.plmic.com]) were, according to PLMIC, a result of "a good faith mistakeas to what constitutes trademark usage." (PLMIC's br. p. 11); see also (Silvestri test., exh. 7, req. 3).

TTAB LEXIS 64, *

As regards the March 2005 date of first use PLMIC now seeks to assert, PTC contends that "Mr. Silvestri was onlyable to show in his testimony that he spoke to his brother-in-law [*25] about his idea for a services that his brother-in-law's employer might be interested in. ... Mr. Silvestri does not claim that he rendered any services related to histrademark application in March 2005." (PTC's br. pp. 9-10). PLMIC further contends that Mr. Silvestri testified that thefirst time he did render services was in September, 2006, a year and a half after the events of March 2005 and sixmonths after he filed his use-based application.

In sum, PTC maintains that "[s]ince the use-based application was based on a false claim of use in commerce, andno use in commerce ever did occur before the filing date, the application is invalid." (PTC's br. p. 10). n12

n12 PTC also points out that PLMIC has not amended its application to seek registration based on an intent touse the mark in commerce and, that if it did, the application should be struck down on the basis of fraud. SincePLMIC did not seek to amend its application to one based on intent-to-use, this argument is moot and will not befurther considered.

[*26]

PLMIC, on the other hand, contends that while "it is true that PLMIC's first consummated sale of FLEXPLMservices did not occur until September 2006 [,]" (PLMIC's br. p. 7), the activities of its predecessor-in-interest, Mr.Silvestri, in March of 2005 constitute "use in commerce." PLMIC specified the Silvestri activities as posting, at least asearly as March 2005 (and possibly February 2005), the mark FLEXPLM on the Internet as an advertisement of"already-available" services and attempting to sell, within March 2005, those services to AimNet.

In making this claim, PLMIC focuses on the definition of "use in commerce" under Section 45 of the Lanham Act,15 U.S.C. § 1127, which reads, in pertinent part:

The term "use in commerce" means a bona fide use of a mark in the ordinary course of trade, and notmade merely to reserve a right in a mark. For purposes of this Act, a mark shall be deemed to be in use incommerce -- (1) ... (2) on services when it is used or displayed in the sale or advertising of services and the services arerendered in commerce, or the services are rendered in more than one State or in the United States and a[*27] foreign country and the person rendering the services is engaged in commerce in connection withthe services.15 U.S.C. § 1127.

PLMIC argues, in essence, that a holding by the Board in In re Cedar Point, 220 USPQ 533, 536 (TTAB 1983),that the "actual rendering of services in commerce" is necessary to constitute use for purposes of registration is nolonger binding because it was decided before the 1988 amendment to the definition of "use in commerce" under § 45.We find this argument unavailing. The 1988 amendment actually raised the standard for use by requiring that the use be"the bona fide use of a mark in the ordinary course of trade, and not merely to reserve a right in the mark," i.e., tokenuse of a mark would no longer satisfy the use requirement and qualify a mark for registration. See e.g., AycockEngineering Co. v. Airflite Inc. 560 F.3d 1350, 90 USPQ2d 1301, 1306 (Fed. Cir. 2009) citing to Blue Bell, Inc. v.Jaymar-Ruby, Inc., 497 F.2d 433, 437, 182 USPQ 65 (2d Cir. 1974). Indeed, the Board made clear in the post 1988decision, Sinclair Oil Corporation v. Sumatra Kendrick, 85 USPQ2d 1032, 1034 (TTAB 2007), [*28] that

[u]se of the mark in connection with promotional, advertising or other activities undertaken prior to theactual rendering of the recited services does not constitute actual "use in commerce" of identifiedservices sufficient to support the filing of a use-based application. See In re Port Authority of New York,3 USPQ2d 1453 (TTAB 1987); In re Cedar Point, Inc., 220 USPQ 533 (TTAB 1983).

PLMIC also argues that "the second sentence of the definition [of "use in commerce"] operates similarly to a "safe-harbor" provision. That is, according to PLMIC, "if one has 'used or displayed in the sale or advertising of services and

TTAB LEXIS 64, *

the services are rendered in commerce,' then one shall be 'deemed' to have used the mark in commerce." This "safeharbor," however, PLMIC asserts, is not the only way that one might meet the definition. "One might meet the definitionby satisfying its first sentence. That is, if one has made a 'bona fide use of the mark in the ordinary course of trade, andnot merely to reserve a right in the mark,' then this too qualifies as 'use in commerce.'" (PLMIC's br. pp. 10-11). Mr.Silvestri met the standard of the first [*29] sentence of the definition, PLMIC maintains, because: "(a) he was ready,willing and able to sell FLEXPLM services in March 2005; and (b) he in fact made a bona fide attempt to sellFLEXPLM services to AimNet in March 2005, while also engaging in related Internet advertising." n13 (PLMIC's br. p.11). PLMIC further maintains that the legislative history of the 1988 amendment supports this construction, inasmuch asCongress intended "use in commerce" to be interpreted with "flexibility to encompass various genuine, but lesstraditional, trademark uses such as those made in test markets, infrequent sales of large or expensive items ...."

n13 PLMIC also contends that, contrary to PTC's assertion, its position on "use" is supported by AycockEngineering Co. v. Airflite Inc., supra. We disagree. Aycock makes clear that the requirement for service markuse did not materially change post 1989. Notably, the court observed, and PLMIC did not disagree, that underboth the 1970 and current versions of the law, a mark is in "use in commerce" when it is used in the sale oradvertising of services and the services are rendered in commerce. (Id.) PLMIC asserts that "Aycock makesunmistakably clear that services are 'rendered' when they are 'offered' to the public openly and notoriously."(PLMIC rebuttal br. p. 6) While that may be so, what constitutes "offered" and "openly and notoriously" isdetermined by specific facts on a case by case basis. Moreover, that the court stated that Mr. Aycock failed tooffer its services, as identified, to "a single customer" merely emphasized Aycock's failure to offer the identifiedservices to anyone at all and does not support PLMIC's claim that an offer to a single potential consumer, in andof itself, constitutes an open and notorious public offering. Nor are we persuaded that Aycock supports PLMIC'sproposition that services are rendered "when they are 'offered' over the Internet, through which the offer may beconsidered at any time by virtually anyone in the entire world." In the absence of specific information regardingsuch Internet postings, e.g., the specifics of the posting and whether the mark is used as a source indicatortherein, length of time posted, and whether and to what extent the posting was viewed, there is no way todetermine if there is sufficient exposure to establish an open and notorious offering of services.

[*30]

First, there is nothing in the structure of the definition that leads us to read the first and second sentence in thealternative as opposed to the conjunctive such that the introductory clause of the definition stands alone. Moreover, evenif Congress intended the 1988 amendment to result in a more flexible definition of "use in commerce," PLMIC does notengage in a less traditional service mark use.

We find that PLMIC's posting of its FLEXPLM mark on the Internet as advertising of its being "ready, willing andable" to provide its identified services and its unsuccessful attempt to sell its services to a single potential purchaser,simply do not constitute "use in commerce" as defined under the Act. See Sinclair Oil Corporation v. SumatraKendrick, supra. While such activities may constitute the advertising and promotion of PLMIC's services, they do notencompass the rendering of those service. In that regard, the record reflects that PLMIC's first technical service markuse in commerce in connection with its cooperative advertising and marketing services was when they were rendered toManagement Roundtable in September 2006, almost one and one-half year after [*31] PLMIC's activities of March2005 and almost six months after the filing date of the PLMIC's involved use-based application.

Because PLMIC was not rendering its identified services at the time it filed its use-based application, PLMIC'sapplication is void ab initio. n14

n14 In view thereof, PLMIC's motion to amend its dates of use is moot and need not be further considered.

2. Priority

Although PTC has prevailed on its claim of non-use, and accordingly, we have found PLMIC's application void abinitio, for sake of completeness, we nevertheless consider PTC's claim that it is the prior user of the FLEXPLM mark.

TTAB LEXIS 64, *

We assume for purposes of this determination that the March 13, 2006 filing date of the application is valid, and thatPLMIC made use of the mark as of that date.

To establish priority on a likelihood of confusion claim brought under Trademark Act § 2(d), a party must provethat, vis-a-vis the other party, it owns "a mark or trade name previously used in the United States ... and not [*32] abandoned...." 15 U.S.C. § 1052(d). A party may establish its own prior proprietary rights in a mark through ownershipof a prior registration, actual use or through use analogous to trademark use which creates a public awareness of thedesignation as a trademark identifying the party as a source. See Trademark Act §§ 2(d) and 45, 15 U.S.C. §§ 1052(d)and 1127. See also T.A.B. Systems v. PacTel Teletrac, 77 F.3d 1372, 37 USPQ2d 1879 (Fed. Cir. 1996), vacating PacTel Teletrac v. T.A.B. Systems, 32 USPQ2d 1668 (TTAB 1994). Priority is an issue in this case because PTC does notown a subsisting registration upon which it can rely under § 2(d). See King Candy Co., Inc. v. Eunice King's Kitchen,Inc., 496 F.2d 1400, 182 USPQ 108 (CCPA 1974).

Herein, PTC asserts common law rights in the FLEXPLM mark. In order for a plaintiff to prevail on a claim oflikelihood of confusion based on its ownership of common law rights in a mark, the mark must be distinctive, inherentlyor otherwise, and plaintiff must show priority of use. See Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317,209 USPQ 40 (CCPA 1981). [*33] PLMIC has not questioned the distinctiveness of PTC's asserted mark and, in fact,seeks to register the identical mark for concededly similar services. We therefore find that the mark is distinctive. See The Chicago Corp. v. North American Chicago Corp., 20 USPQ2d 1715 (TTAB 1991). See also Wet seal Inc. v. FDManagement Inc., 82 USPQ2d 1629 (TTAB 2007).

As regards priority, the record establishes through the testimony of PTC's vice-president, Global Services, SumantMausker, and corresponding exhibits, that PTC first used, on May 26, 2005, FLEXPLM as a trademark in connectionwith software that helps companies who develop products, design and manage the information related to those products,and as a service mark in connection with the provision of services for implementing that software, as well as providingsupport and/or training. This date is prior to the March 13, 2006 filing date of PLMIC's application which is the earliestdate on which PLMIC is entitled to rely. The record shows, as we found earlier, that PLMIC did not make use of themark prior to that date.

It is well established that in the absence of testimony or other proof which demonstrates [*34] that the actual use ofthe mark an applicant seeks to register is prior to the filing date of its involved application, the earliest date upon whichan applicant can rely in an opposition proceeding is the filing date of the involved application. See e.g., Lone Star Mfg.Co. Inc. v. Bill Beasley, Inc., 498 F.2d 906, 182 USPQ 368, 369 (CCPA 1974); and Zirco Corp. v American Tel & Tel.Co., 21 USPQ2d 1542, 1544 (TTAB 1991); and Miss Universe, Inc. v. Drost, 189 USPQ 212, 213 (TTAB 1975). Thus,priority rests with PTC.

Because PTC has priority and because a likelihood of confusion exists between the parties' respective marks,registration by PLMIC is barred by Section 2(d). OPPOSITION NO. 91177168

Priority

We have determined in Opposition No. 91174641 that the activities comprising PLMIC's March 2005 use of itsFLEXPLM mark do not constitute technical trademark use and, thus, are not sufficient to establish use as a basis forPLMIC's application to register the mark. However as stated earlier, PLMIC, as plaintiff herein, may establish its priorproprietary rights in its pleaded FLEXPLM mark through use analogous to trademark [*35] use. T.A.B. Systems v.PacTel Teletrac, supra.

However, as set forth in Herbko International Inc. v. Kappa Books Inc., 308 F.3d 1156, 64 USPQ2d 1375, 1378(Fed Cir. 2008):

Before a prior use becomes an analogous use sufficient to create proprietary rights, the petitioner[opposer] must show prior use sufficient to create an association in the minds of the purchasing publicbetween the mark and the petitioner's [opposer's] goods [or services]. Malcolm Nicol & Co. v. WitcoCorp., 881 F.2d 1063, 1065, 11 USPQ2d 1638, 1639 (Fed. Cir. 1989). A showing of analogous use doesnot require direct proof of an association in the public mind. T.A.B. Systems v. PacTel Teletrac, 77 F.3d1372, 1375, 37 USPQ2d 1879, 1882 (Fed. Cir. 1996). Nevertheless, the activities claimed to create such

TTAB LEXIS 64, *

an association must reasonably be expected to have a substantial impact on the purchasing public beforea later user acquires proprietary rights in a mark. Id.

Within this framework we consider PLMIC's evidence of its predecessor's March 2005 activities which it asserts, atthe least, constitute analogous trademark use so as to [*36] establish priority for purposes of this opposition. PLMICprimarily relies on the testimony of Jason Silvestri, who states that in March 2005, he posted on the Internet as anadvertisement the ability to provide certain services described as FLEXPLM Advertising Solutions and, shortlythereafter, he attempted to sell those services to AimNet Solutions. Mr. Silvestri further explained that he has no recordsof his advertising of the FLEXPLM services on the Internet because of a computer crash and subsequent inability toretrieve the documents.

As corroborating evidence, PLMIC introduced the testimony of John Noseworthy, who states that he did businesswith Jason Silvestri beginning "on or around February 2005" and that Mr. Silvestri pitched the FLEXPLM services bycoming in to his office and going through the website. Mr. Noseworthy also stated that FLEXPLM services were "not agreat fit for AimNet."

The Federal Circuit has summarized the requirements for establishing use analogous to trademark use as follows:"[W]hether is it sufficiently clear, wide spread and repetitive to create the required association in the minds of thepotential purchasers between the mark as an indicator [*37] of a particular source and the service to become availablelater. T.A.B. Systems v. PacTel Teletrac, 37 USPQ2d at 1882. The analogous trademark use also must be shown to havea substantial impact on the purchasing public, and the user must establish intent to appropriate the mark. Id.

The meager evidence of record does not establish PLMIC's use of FLEXPLM as use analogous to trademark usewhich has created an association of FLEXPLM with PLMIC dating back to March 2005. First, concerning the Internetposting, the evidence lacks specifics regarding key elements needed to establish such an association. For example, thereis no evidence as to how long the website was made available to the public and how many, if any, discrete hits thewebsite received on a daily, weekly, monthly basis. Moreover, there is no testimony as to whether PLMIC participatedin "key word" advertising or other paid website advertising. Contrary to PLMIC's contention, PLMIC's mere presenceon the Internet quite simply does not result in sufficient exposure of the FLEXPLM mark to create the requiredassociation in the minds of potential purchasers between the mark FLEXPLM as an indicator of the [*38] source of thecooperative advertising and marketing services to be provided by PLMIC. Moreover, the record reveals that in the yearand a half from the time PLMIC posted the "availability" of its FLEXPLM services on the Internet and the first sale byPLMIC of its cooperative advertising and marketing services under the FLEXPLM mark in September 2006, PLMICsolicited a single potential purchaser. There is no question that that single exposure to PLMIC's FLEXPLM mark had noimpact whatsoever on the perception of the purchasing public. In short, PLMIC's evidence falls far short of establishingthat potential purchasers make an association in their minds between the FLEXPLM mark as a source indication andPLMIC's cooperative advertising and marketing services. Thus, the earliest date that PLMIC may rely on for purposesof priority is September 2006. This date is subsequent to the July 13, 2006 filing date of PTC's application.

Furthermore, as regards PTC's asserted date of first use of its FLEXPLM mark, our primary reviewing court hasnoted that, "[i]n the usual case the decision as to priority is made in accordance with the preponderance of the evidence." Hydro-Dynamics, Inc. v. George Putnam & Company Inc., 811 F.2d 1470, 1 USPQ2d 1772, 1773 (Fed. Cir. 1987).[*39] However, where an applicant seeks to prove a date earlier than the date alleged in its application, a heavierburden has been imposed on the applicant than the common law burden of preponderance of the evidence. The "proofmust be clear and convincing. This proof may consist of oral testimony, if it is sufficiently probative. Such testimonyshould not be characterized by contradictions, inconsistencies, and indefiniteness, but should carry with it conviction ofits accuracy and applicability." Elder Mfg. Co. v. International Shoe Co., 194 F.2d 114, 118, 39 C.C.P.A. 817, 1952Dec. Comm'r Pat. 133, 92 USPQ 330, 332 (CCPA 1952). PTC now seeks to prove May 26, 2005, a date which is earlierthan the December 2005 first use date alleged in its application, as its date of first use in commerce. We find that PTChas established that it first used the mark FLEXPLM in commerce in connection with its identified software and relatedservices on May 26, 2005 by clear and convincing evidence. PTC's witness, Sumant Mausker, was familiar with PTC'sactivities and his testimony was clear as to PTC's first use of the FLEXPLM mark in commerce on May 26, 2005.Moreover, Mr. Mausker's testimony was corroborated by documentary evidence [*40] in the nature of a statement ofwork for goods and services provided to Timberland. Further, Mr. Mausker was specific concerning sales and the extentof marketing of goods and services bearing the FLEXPLM mark. Lastly, Mr. Mausker has testified to PTC's continueduse of the mark in commerce.

In sum, because PLMIC did not establish that it had made trademark use or use analogous to trademark use prior toeither May 26, 2005, when PTC commenced use of its mark, or the July 13, 2006 filing date, we find that PLMIC failedto establish the requisite priority. Accordingly, it cannot succeed on its Section 2(d) claim.

TTAB LEXIS 64, *

Legal Topics:

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5 of 6 DOCUMENTS

PositiveAs of: Apr 04, 2012

Krause Publications, Inc. v. Chester L. Krause

Opposition No. 91160072 to application Serial No. 76504857 filed on April 2, 2003


2007 TTAB LEXIS 656

March 30, 2006, Oral Hearing

February 15, 2007, Decided

SUBSEQUENT HISTORY:Affirmed by Krause v. Krause Publs., Inc., 257 Fed. Appx. 317, 2007 U.S. App. LEXIS 28399 (Fed. Cir., 2007)

DISPOSITION:[*1]

DECISION: The opposition is sustained on the ground of non-use and dismissed on the ground of fraud.Registration to applicant is refused.

COUNSEL:

Brian G. Gilpin of Godfrey & Kahn, S.C. for Krause Publications, Inc.

John A. Clifford of Merchant & Gould P.C. for Chester L. Krause.

JUDGES: Before Seeherman, Hairston and Zervas, Administrative Trademark Judges

OPINION BY: ZERVAS

OPINION:

THIS OPINION IS NOT A PRECEDENT OF THE T.T.A.B.

Opinion by Zervas, Administrative Trademark Judge:

Page 1

Applicant, Chester L. Krause, seeks registration on the Principal Register of the mark KRAUSE (in standardcharacter form) under Section 1(a) of the Trademark Act,15 U.S.C. § 1051(a), for "museum services" in InternationalClass 41. n1 The application contains an allegation of first use and first use in commerce in 1959. Applicant has entereda claim of acquired distinctiveness under Section 2(f) of the Trademark Act,15 U.S.C. § 1052(f), pursuant to adeclaration dated October 30, 2003, which claims in relevant part "[t]hat the mark KRAUSE has become distinctive ofthe services herein through substantially exclusive and continuous use in commerce for[*2] at least the five yearsimmediately before the date of this statement." Also, applicant has entered the following statement in the application:"The name 'KRAUSE' identifies a living individual, 'Chester L. Krause', the Applicant herein."

n1 Application Serial No. 76504857, filed April 2, 2003.

Opposer, Krause Publications, Inc. ("KPI"), filed a timely notice of opposition to registration of applicant's mark. Inthe notice of opposition, opposer has pleaded ownership of Registration No. 2573101 n2 for the mark KRAUSEPUBLICATIONS (in typed or standard character form) for goods and services in four International Classes, and thatRegistration No. 2573101 was the subject of a cancellation proceeding, No. 92-041171, brought by applicant herein.Notice of opposition, PP 2 and 7. (On November 18, 2006, long after opposer filed the notice of opposition in this case,the Board ordered cancellation of the goods and services in three of the four International Classes in Registration No.2573101; the International[*3] Class 41 services, namely, "entertainment services in the nature of competitions andawards in the field of cutlery," survived the cancellation proceeding.) Additionally, opposer has pleaded that it "hasbeen using the mark KRAUSE PUBLICATIONS in commerce since at least as early as 1969 in connection with variouspublishing activities, including periodicals and books about antique automobiles, automobile restoration, andautomobile collecting.".

n2 Registration No. 2573101 issued May 28, 2002.

In the notice of opposition, opposer claims as follows:

3. On information and belief, Applicant has never used, is not currently using, and has no plans to use theterm "Krause" as a trademark in interstate commerce in connection with the Alleged Services [that is,"museum services"]. In a sworn deposition in Cancellation Action No. 92-041171, Applicant admittedthat he has never used nor does he have plans to use the term "Krause" in connection with "museumservices." Rather, Applicant stated he has a private[*4] collection of automobiles that is not open to thepublic and may be viewed on an invitation basis only. Applicant stated that he does not charge anadmission fee to view his collection. Further, Applicant testified that he does not advertise and promotehis private collection to the general public because he does not want the responsibility of operating amuseum with staff, regular business hours, advertising ...

4. On information and belief, Applicant has fraudulently and falsely stated that he has used the term"Krause" as a trademark in interstate commerce and has fraudulently and falsely stated the dates of firstuse and first use in commerce in the above identified application. Namely, Applicant admitted in a sworndeposition in Cancellation Action No. 92-0411171 that his use of the term "Krause Auto Collection" isfor a personal hobby activity of recent vintage and Applicant's use is not trademark use at all, much lesstrademark use of the term since 1959. Applicant's specimen of use in connection with the subjectapplication is a picture of him standing next to a sign reading "Krause Auto Collection." According to hissworn deposition testimony: the sign was erected just[*5] four or five years ago; business cards


identifying Applicant as the founder of the "Krause Auto Collection" were first printed after October2002; and "Krause Auto Collection" letterhead has been used for around five years or so. These are nottrademark uses, and more importantly, Applicant has never used the word "KRAUSE" to identify anygoods or services sold in interstate commerce, particularly in connection with the Alleged Services."

Opposer further claims (i) that applicant fraudulently and falsely stated in his Section 2(f) declaration that applicanthas used "Krause" since as early as 1959 and that "Krause" has become distinctive of applicant's services by virtue ofapplicant's substantially exclusive and continuous use of the term for at least five years; and (ii) that it "has been usingthe mark KRAUSE PUBLICATIONS in commerce since at least as early as 1969 in connection with various publishingactivities, including periodicals and books about antique automobiles, automobile restoration, and automobilecollecting"; and that "Applicant's use of the term for which he is seeking registration is therefore likely to causeconfusion, or to cause mistake, or to deceive consumers[*6] familiar with KPI's prior use of a mark incorporating theterm 'Krause,' KRAUSE PUBLICATIONS." Notice of opposition, PP 7 and 9. Trademark Act Section 2(d),15 U.S.C. §1052(d).

Applicant, in his answer, has admitted that opposer is the current owner of record of Registration No. 2573101.Applicant has also admitted that opposer has been using the mark KRAUSE PUBLICATIONS in commerce since atleast as early as 1969 in connection with various publishing activities, including periodicals and books about antiqueautomobiles, automobile restoration, and automobile collecting. Applicant has denied the remaining salient allegationsof the notice of opposition.

Both opposer and applicant have filed briefs in this case. An oral hearing was held on March 30, 2006.

Evidentiary Issues

Several evidentiary issues require our attention before we address the merits of opposer's claims.

First, opposer, with its first notice of reliance, submitted excerpts from applicant's June 16 - 17, 2004 discoverydeposition taken in the prior cancellation proceeding. This discovery deposition was not made of record in the priorproceeding. Because it is not an official document,[*7] and no other means are available to opposer to enter thisdiscovery deposition into the record in the present proceeding by means of the notice of reliance procedure, it is notproperly of record. See Trademark Rule 2.120(j),37 C.F.R. § 2.120(j); TBMP § 704.09 (2d ed. rev. 2004). We thereforedo not further consider the excerpts from applicant's June 16 - 17, 2004 deposition.

Second, opposer also submitted with its first notice of reliance excerpts from the January 6, 2005 discoverydeposition of Roger A. Case, opposer's designatedFed. R. Civ. P. 36witness in this proceeding. n3 Because thediscovery deposition of a person designated underFed. R. Civ. P. 30(b)(6)to testify on behalf of a party may only beoffered in evidence by an adverse party, the excerpts from Mr. Case's deposition are not properly of record. SeeTrademarkRule 2.120(j); and TBMP § 704.09 (2d ed. rev. 2004). We hence do not further consider the excerpts fromMr. Case's deposition.

n3 In its notice of reliance, opposer states that the deposition was from the prior proceeding. However, thedeposition itself bears the case caption for the present proceeding.

[*8]

Third, opposer has moved to strike (underFed. R. Evid. 702) the testimonial deposition of Dr. Lyndel I. King,Director and Chief Curator of the Weisman Art Museum at the University of Minnesota, who is applicant's designatedexpert on the definition of a "museum" and on whether applicant's institution qualifies as a "museum." Opposermaintains that Dr. King's testimony will not assist the Board in understanding or analyzing the evidence or in


determining an issue of fact; and that her testimony was not scientific, technical or otherwise based on specializedknowledge. Motion at p. 1. According to opposer, Dr. King's experience lies with tax-exempt, not-for-profit public artmuseums and in accrediting museums for the American Association of Museums, and not with museums of the typewhich applicant maintains he has, i.e., a museum which isnota tax-exempt, not-for-profit enterprise; that because Dr.King has relied on a common dictionary definition of "museum" in providing her testimony, the Board does not requireher testimony; that there is no foundation for much of her testimony as required underFed. R. Evid. 702because she hasnever met or interviewed applicant, or visited[*9] his alleged museum, and did not know much about it, including itslocation, whether it was open to the public, and how long it had been in operation; and that in preparing for hertestimony, she only reviewed two DVDs concerning applicant, an auction catalog and a draft pamphlet featuring fewerthan two dozen Jeeps. Further, opposer maintains that Dr. King did not have the "factual foundation and the requisiteprofessional experience" to conclude that applicant's collection of vehicles qualifies as an automobile museum becauseshe admitted in her deposition that "automobile museums are not my specialty" and because she has visited only oneautomobile museum. Motion at pp. 2 - 4.

Applicant, in response, argues that Dr. King is qualified to provide an expert opinion on the definition of a"museum" and on whether applicant's institution qualifies as a "museum." Response to motion at p. 6. Further, applicantmaintains that Dr. King's testimony will assist the Board in determining that applicant has been providing museumservices, and that the materials reviewed by Dr. King -- including applicant's notebooks and photographs - are sufficientto enable her to render an opinion. As to Dr.[*10] King's admission that "automobile museums are not my specialty,"and her qualifications as an expert, applicant maintains that "particular facts regarding the nature of automobiles in [the]museum" are not the basis for her testimony -- the basis is whether "applicant's establishment qualifies as a museum."Response to motion at p. 9.

Fed. R. Evid. 702indeed provides that if "specialized knowledge" will assist the trier of fact to understand theevidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training oreducation may testify thereto under certain circumstances. Applicant has established that Dr. King has the necessaryknowledge, experience and education, and the "specialized knowledge" that will assist us in determining what isencompassed in "museum services" and whether applicant has provided "museum services." She has a doctorate in arthistory and a degree from the Museum Management Institute, and over twenty-five years of professional experience inthe museum field. Dr. King has presented lectures on the subjects of art and museum studies, has authored variousmaterials pertaining to museums, including articles in[*11] Museum NewsandInternational Museum Journaland achapter for a museum studies textbook. Also, she has coordinated and directed numerous exhibitions and museumprograms, is a member of several national and international museum societies, is a Board member of the AmericanAssociation of Museums wherein she makes recommendations to a central committee regarding the accreditation ofmuseums, and belongs to the Association of Art Museum Directors. King dep. pp. 5-8; response to motion at p. 4.

Further, we do not deem applicant's statement "automobile museums are not my specialty" inimical to Dr. King'squalifications to testify on the matters for which her testimony has been offered in this case. The definitions of"museum" discussed below do not distinguish between automobile and non-automobile museums, and opposer has notargued that automobile museums have any particular concerns that mandate consideration different from othermuseums. Also, Dr. King's failure to visit applicant's facilities or to know specific information such as whether it hashours of operation does not require that we exclude her testimony. Thus, opposer's challenges to applicant's witness arenot well [*12] taken and opposer's motion to strike is denied. We have, however, in considering Dr. King's testimony,given it the weight it is due in light of the concerns raised by opposer in its motion.

The Record

The record consists of the pleadings; the file of the involved application; the trial testimony, with related exhibits,of applicant taken on April 14, 2005; and the June 27, 2005 trial testimony, with related exhibits, of Dr. King. Also,pursuant to opposer's two notices of reliance, the record includes the following: applicant's answers to opposer's first setof interrogatories; portions of applicant's answers to opposer's requests for admissions; applicant's responses and


objections to opposer's first document requests; n4 excerpts of applicant's March 17, 2004 discovery depositiontestimony from the prior proceeding along with certain exhibits thereto, including a copy of Registration No. 2573101,which was asserted by opposer in its notice of opposition; applicant's August 24, 2004 trial deposition testimony fromthe prior proceeding; and various trial exhibits from the prior proceeding. n5

n4 Documents produced in response to a request for production of documents may not be made of record bynotice of reliance. See TrademarkRule 2.120(j)(3)(ii). Opposer is not attempting to rely on any documentsprovided by applicant -- the response states in part that applicant does not have documents responsive to certainrequests and provides some limited information about applicant, e.g., that he has not accepted cash donations"from persons who have been provided 'museum services.'" Response to document request nos. 42 and 46.

[*13]

n5 On September 1, 2005, opposer withdrew, with applicant's consent, its Exhibits 19 and 20 consisting ofcorrespondence between applicant's and opposer's attorneys concerning discovery requests, filed with its secondnotice of reliance. Accordingly, we do not further consider Exhibits 19 and 20.

Pursuant to applicant's notice of reliance, certain additional exhibits from the prior proceeding are in the record.

Background

Applicant began his professional career as a carpenter. Applicant was a coin collector, and, in 1952, began amonthly collector's newspaper namedNumismatic News. In 1961, applicant began publishing a periodical namedCoinsMagazine. Three years later, in 1964, applicant formally incorporated his publishing operations under the name "KrausePublications, Inc.," which was located in Iola, Wisconsin. This company -- KPI - is the opposer in the currentproceeding. KPI grew and eventually became a major publisher of hobby magazines. For nearly fifty years, applicantwas KPI's president and/or chairman of the Board. Between 1988 and 1995, applicant arranged for[*14] KPI and itsEmployee Stock Ownership Plan to acquire KPI in a series of stock transactions. After KPI had been acquired, applicantbecame an employee of KPI. In 2002, the KPI Employee Stock Ownership Plan sold its shares to F&W Publications,and applicant was terminated as a KPI employee.

Applicant has been the subject of numerous articles and books on collecting, and has coauthoredThe StandardCatalog of World Coins. Applicant received the Farran Zerbe Award of the American Numismatic Association("ANA") in 1977, ANA's Numismatist of the Year award in 1999 and ANA's Lifetime Achievement Award. Inconnection with car collecting, applicant has received "The Friend of Automotive History Award" and, in 1995, the"Collector Car Hobby's Person of the Year" award, known as the "Meguiar's Award." Also, in 2004, the Society ofAutomotive Historians featured applicant and his vehicle collection in a film entitled "A Walk Through AutomotiveHistory With Chet Krause."

Further, in 1972 or 1973, in conjunction with the launch of a KPI publication calledOld Cars, applicant foundedthe Iola (Wisconsin) Old Car Show. The show is an annual event that attracts approximately 140,000 people[*15] overfour days. Applicant has displayed his vehicles in the show each year since the car show began.

Standing

As noted above, the record contains a copy of Registration No. 2573101 for the mark KRAUSE PUBLICATIONS,and applicant has admitted that opposer is the current owner of this registration. In view thereof, we find that opposerhas established its standing to oppose registration of applicant's mark. SeeCunningham v. Laser Golf Corp., 222 F.3d943, 55 USPQ2d 1842 (Fed. Cir. 2000); Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213 USPQ 185


(CCPA 1982).

Non-Use

We turn now to opposer's allegation in paragraph 4 of the notice of opposition that applicant has not used KRAUSEin commerce in connection with "museum services." n6 An application is void ab initio if the applied-for mark was notin use in commerce at the time of the filing of the application. See Section 1(a) of the Trademark Act,15 U.S.C. §1051(a); Intermed Communications, Inc. v. Chaney, 197 USPQ 501 (TTAB 1977)(application void where theINTERMED mark had never been used in the United States on or prior to the[*16] filing date in association with theservices described in the application);Justin Industries, Inc. v. D.B. Rosenblatt, Inc., 213 USPQ 968 (TTAB 1981)(application void where application filed before first order or sale and delivery of goods under the mark occurred).However, because applicant's activities prior to the filing date of his application are relevant to whether he wasproviding museum services at the time he filed his application, we consider his activities beginning from the time hemaintains he first used KRAUSE in connection with "museum services," i.e., in 1959. Applicant purchased his firstvehicle for his vehicle collection -- a 1924 Model T truck -- in the spring of 1959. n7

n6 The parties' arguments in their respective briefs as to what facts are undisputed are noted and have beenconsidered.n7 Opposer notes that applicant's testimony conflicts with the 1961 date on the title for the vehicle. Thedifference in dates does not affect our analysis of opposer's claim.

[*17]

He restored the truck in the fall of 1959. After the restoration, "the truck had a sign on it identifying what it was andwho owned it, and ... 'Chet Krause,' was on the sign." Krause April 14, 2005 dep. p. 15. Applicant used this vehicle inparades "around the county ... and [in] Stevens Point as well, which is out of the county."Id. When not in use, applicantoften let the vehicle "sit outside" because applicant did not have "a proper cover for it," or he maintained the vehicle in abarn next to what was then his home.Id. at pp. 28 and 30.

Applicant acquired an additional vehicle in 1961, namely, a Model T Roadster. He did not acquire any additionalvehicles until the mid-1970s when KPI, and not applicant in his individual capacity, began purchasing vehicles.Between 1974 and 1984, KPI acquired thirty-three vehicles, and sold all but five in 1985. KPI acquired more vehiclessoon after the 1985 sale. Also, The Krause Foundation, established by applicant, acquired vehicles. n8 In 2002, KPI andthe Krause Foundation owned approximately 55 vehicles. Through the 1990s, applicant purchased additional vehiclesand engines, and in 2002, applicant purchased many of the vehicles[*18] owned by KPI.

n8 According to applicant, the Krause Foundation currently owns one or two vehicles.

In 2003, applicant began to sell portions of his collection. He sold about forty to fifty military vehicles to a museumin the Netherlands in 2003. On June 5, 2004, applicant auctioned approximately 155 cars, trucks, tractors and gasolineengines that were in his personal collection, and retained approximately six automobiles after the auction. Applicantreceived about $ 2 million for the vehicles that he sold in the auction. Currently, applicant's collection consists of "fiveor seven automobiles ... four half and three-quarter ton Dodge items" and sixteen Jeeps.Id. at pp. 32, 92.

As noted above, applicant initially maintained his 1924 Model T truck in a barn adjacent to his home. In the 1970s,applicant moved the two vehicles in his collection to a steel building on KSI property located on East State Street in


Iola, Wisconsin. The area where the vehicles were stored was not opened to the general public[*19] because it wasalso used in connection with the business operations of KPI. In 1996, applicant purchased five acres of land located onAanstad Road in Iola, Wisconsin, and applicant built a warehouse on the land to store his vehicles. In 1997,approximately 30 vehicles owned both by KPI and applicant were moved into the new warehouse. Other buildings werebuilt later on applicant's Aanstad Road property and additional vehicles were moved into the buildings. After the June2004 auction, applicant sold the buildings but has leased one building back.

When he owned the Aanstad Road buildings, applicant allowed members of the general public into these buildingsprovided they obtained his permission or the permission of one of two of KPI's employees whose duties involvedmaintaining the collection of vehicles. One employee was a mechanic and the other was a "housekeeper who washedcars, kept the grease off the floor."Id. at p. 25. Applicant and KPI did not, and applicant does not, maintain regularhours for public viewing of applicant's and/or KPI's vehicles.

Further, applicant has testified that he did not advertise his collection. ("Let me say, we never placed paidadvertising and[*20] mentioned the collection."Id. at p. 42.) No federal, state, county or local tourism agencies orchambers of commerce have listed, featured or advertised applicant's alleged museum at any point between 1959 and2003, and currently do not do so. The auctioneers who conducted the June 2004 auction of applicant's vehicles did,however, mail a brochure advertising the auction to approximately 20,000 people.

Applicant did not have a dedicated space or a sign showing his collection until 1998. In 1997 or 1998, applicanterected a large sign with "Krause Auto Collection" on it in front of "a group of three buildings that housed thecollection," on the Aanstad Road property.Id. at p. 16. Applicant installed the sign because "the [R]epublican [P]artywas having a big shindig out there [and applicant] did open it up for use for that kind of a meeting, and it was ratherdark around there, and with no identification around, [applicant] put the sign up so they'd be sure to know where theevent was taking place."Id. at pp. 18 - 19.

Applicant testified that "Krause Auto Collection" became a formal name in the "middle, late '90s"; and that hebegan using "Krause Auto Collection"[*21] on business cards in 2002, and later on letterhead. Krause March 17, 2004dep. at pp. 137 and 139. n9 Applicant also used the phrase "Krause Auto Collection" on a brochure, which applicantcreated in 2001 and made available to visitors to the vehicle collection.

n9 Exhibit 114 to applicant's April 14, 2005 deposition is applicant's business card, showing "Krause AutoCollection" in prominent letters, with the designation "Chet Krause[,] Founder" appearing on the card.

Applicant further testified that people, including car clubs, have been continuously coming to see his automotivecollection since he began collecting vehicles. Approximately one thousand persons have viewed applicant's collectionon an annual basis prior to the 2004 auction. Applicant has not received any revenue in connection with his allegedmuseum; does not charge admission; and has only received spare vehicle parts and accessories as donations fromvisitors.

At the present time applicant leases one building for his collection. He does[*22] not have any employees, and tosee his collection visitors must call his "retirement office" in Iola, Wisconsin to make an appointment - no regularviewing hours are maintained. Visitors must come to his office to get a key or arrange a meeting with applicant. In thisbuilding, applicant maintains four or five cars, sixteen Jeeps, two Iola fire trucks, a 1924 Model T, a 1938 REOSpeedwagon, and a 1912 horse-drawn fire engine. Additionally, there are seven military vehicles, for a total of thirtyvehicles. Applicant includes information on the vehicles located in his leased building that identifies the vehicle andprovides some facts about the vehicle.


Applicant also testified that he has collected items in addition to vehicles, and that he has a collection of U.S. andforeign coins; n10 Wisconsin bank notes from 1836 - 1865, scrip (which applicant states is a substitute for currencyissued by a private individual as opposed to a government); bank notes issued by national banks (beginning in 1862);political tokens; copper mining shares of stock; and stamps. He has over 20,000 pieces of world paper money andnearly 3,000 pieces of depression era scrip, and "a specimen of every United[*23] States stamp there is baringprobably two or three dozen of the very earliest ones." Krause April 14, 2005 dep. at p. 128, 131. Coins in his collectionhave been used as photographic subjects for articles in applicant's publications.

n10 Applicant stated that his foreign coins "aren't that valuable. As a lot, they're valuable, but individual pieces,it takes thousands of them to make some money." Krause April 14, 2005 dep. p. 72.

Applicant testified that his coins, as well as coins owned by opposer, were kept in safety deposit boxes in a bank,and that "we made extra effort to project the image that we didn't own large collections of coins or stamps because thoseare always subject to being stolen. And so we didn't want to let that out ... when somebody wanted one of an especiallyhigh value, I would go get it and bring it to them." Krause August 24, 2004 dep. p. 472 - 473. Currently, applicant'snumismatic collection is stored in a vault and in safety boxes at a bank; the public can call applicant and arrange[*24]a time to see the collection.

In contending that the foregoing activities by applicant do not constitute "museum services," opposer relies on twodefinitions of "museum." First, opposer cites the definition set forth in20 U.S.C. § 9172n11 which is "a public orprivate nonprofit agency or institution organized on a permanent basis for essentially educational or aesthetic purposes,that utilizes a professional staff, owns or utilizes tangible objects, cares for the tangible objects, and exhibits the tangibleobjects to the public on a regular basis." Second, opposer cites the definition in45 C.F.R. § 1180.2, n12 which requiresthat a "museum" be organized on a permanent basis and use a professional staff, and that:

1. An institution which exhibits objects to the general public for at least 120 days a year shall be deemedto meet this requirement; and

2. An institution which exhibits objects by appointment may meet this requirement if it can establish, inlight of the facts under all the relevant circumstances, that this method of exhibition does notunreasonably restrict the accessibility of the institution's exhibits to the general public.

[*25]

n1120 U.S.C. § 9172pertains to the Institute of Museum and Library Services, formed within the NationalFoundation on the Arts and the Humanities, which provides, inter alia. Financial assistance.n1245 C.F.R. § 1180.2pertains to the Institute of Museum and Library Services.

Applicant challenges opposer's definitions, and maintains that opposer's definitions are limited to tax-exemptentities. Applicant relies on a definition of "museum" fromMerriam-Webster Online Dictionary, accessed fromwww.webster.com, as "an institution devoted to the procurement, care, study, and display of objects of lasting interestor value." Brief at p. 23; Exhibit 125 to King dep. Dr. King testified that theMerriam-Websterdefinition is an accuratedefinition.

We do not apply the restrictive definitions of "museum" proposed by opposer, which include requirements such


that the "institution" be a non-profit entity, that there be a "professional staff," or, in the case ofSection 1180.2[*26] ,that the institution be open a particular amount of time per year. The definitions of "museum" in20 U.S.C. § 9172and45 C.F.R. § 1180.2specify those qualifications an entity must possess to gain the specific benefits described in relatedstatutory sections. Rather, we are guided by the less restrictive definition of "museum" fromMerriam-Webster OnlineDictionary, submitted by applicant. n13

n13 Dr. King has defined a "museum" as "an institution or organization that collects, preserves and interpretsobjects of cultural artistic significance." King dep. at p. 9. Of note is her requirement that the "objects" in theinstitution be of "artistic significance." We find her definition to be unnecessarily restrictive as well.

Because most of the parties' briefs and the evidence of record concern applicant's vehicle collection, we firstaddress applicant's contentions regarding his vehicle collection. The evidence of record shows that applicant has been along time collector[*27] of vehicles, individually and through his company, KPI, and was willing, as are mostcollectors, to share his interests in vehicles and to show his vehicles to those who were interested in such vehicles.When his activities are considered as a whole, we find, however, that applicant was not providing museum services atthe time he filed his application on April 2, 2003.

For the first fifteen years during which applicant maintains he offered "museum services," applicant owned a totalof two vehicles. He maintained these vehicles initially on his private property and later on KPI's property, and showedthem to individuals who asked to see them. Applicant occasionally participated in parades with his vehicles, andprovided ownership and identifying information about his vehicles through signs placed on the vehicles.

In the mid 1970s, applicant's company, KPI, rather than applicant himself, began acquiring vehicles. Applicant andKPI maintained their vehicles in a building owned by KPI, but not one dedicated to the collection; they were maintainedin a KPI facility where other critical company operations were ongoing, namely, packaging and shipping. It was notuntil 1997 that applicant[*28] purchased a parcel of property and constructed a building to house his collection.

From 1998 until the time that applicant filed his application in 2003, applicant and opposer owned numerousvehicles that were eventually maintained in three buildings on property owned by applicant. Members of the publicwere welcome to visit the collection, and did visit the collection, but to view the collection they had to make anappointment with applicant or one of the two individuals who took care of the collection. Both of these individuals werein KPI's employment, not applicant's employment, and applicant has described their positions as a mechanic and a"housekeeper who washed cars, kept the grease off the floor." Krause April 14, 2005 dep. p. 25. In view of their limitedduties, we do not consider these two KPI employees to be the equivalent of museum curators. Also, there is noindication in the record as to whether these individuals, or any other individuals other than applicant himself, providedtours of the collection.

Significantly, it was not until 1998 that applicant installed a sign to identify the location of the collection. The sign,placed in front of the buildings housing the[*29] collection, only bore the words KRAUSE AUTO COLLECTION. Itdid not indicate that the collection was open to the general public or the time when the collection could be viewed, it didnot invite the public in to view the collection, and it did not indicate that KRAUSE AUTO COLLECTION was amuseum. There is no indication in the record that either KPI or applicant installed any other signs identifying orpromoting the collection or directing persons to the location of the collection. Further, applicant has testified that thereason the sign was installed was so that those persons who were attending a "shindig" would know where the eventwas taking place.Id. at pp. 18 - 19.

In the forty-seven years that applicant has maintained his collection, he never once advertised his collection and, ofcourse, never advertised it as a museum. Hence, no information was made available to the public regarding any hours


when the collection could be viewed, how to arrange to view the collection or even that the general public could viewthe collection. Also, applicant has not pointed to any of the many articles that he entered into evidence -- which discussapplicant's personal accomplishments at[*30] length - that also mention applicant's vehicle collection or that heoperates a vehicle museum. Applicant only had one brochure, which was created in 2001, and which was handed topersons visiting the collection. The brochure has KRAUSE AUTO COLLECTION written on it in prominent letters andidentifies the vehicles that were in the collection, but did not identify the collection as part of a "museum. There is notestimony that applicant used the brochure in connection with any promotional efforts.

The record contains other evidence which suggests that applicant maintained a personal collection rather than amuseum. Dr. King acknowledged that applicant's collection of vehicles is not included on the list of accreditedmuseums in Wisconsin listed by the American Association of Museums; and that applicant is not a member of theAssociation of Art Museum Directors. See Exhibit 126 to King's dep.; King Dep. pp. 18 - 19, 30. Applicant stated thathe did not charge for admission and was not given monetary donations. n14 Also, applicant testified that the collection"wasn't meant to make money ... it was a great big loss." Krause April 14, 2005 dep. p. 40. This "big loss" suggests thatapplicant's[*31] accumulation of vehicles was due to a passion for collecting, and not an activity of an institutiondevoted to the procurement, care, study, and display of objects of lasting interest or value.

n14 In response to opposer's interrogatory no. 27, applicant states that he only received vehicle parts asdonations.

Most telling, however, is the fact that there is no evidence in the record that applicant ever identified his facility asa museum or indicated that his collection was part of a museum collection.

The testimony of Dr. King, applicant's designated expert on the topic of what constitutes a museum, has onlylimited probative value on the issue of whether applicant was providing museum services at the time applicant filed hisapplication. She never visited applicant's collection and hence could not speak firsthand about the collection,particularly as it existed in 2003. Also, there are no copies of, and no testimony regarding, the specific "documents,photographs, materials related to the Krause collection[*32] ... in Iola, Wisconsin" she viewed prior to her depositionso that we can determine precisely on what she based her opinion.Id. at p. 22. She did not know when the photographsshe viewed had been taken, although she stated it was her understanding that they were taken in the year prior to herdeposition, which would have been in 2004, not in 2003, when applicant filed his application.Id. As noted above, theultimate question in connection with opposer's claim of non-use is whether applicant had used the mark in connectionwith museum services in 2003 when he filed his application. Dr. King simply did not have sufficient knowledge ofapplicant's collection in 2003.

Further, we do not find Dr. King's testimony regarding the differences between a personal collection and a museumcollection persuasive. Dr. King testified that she, in connection with her personal collection of Navajo rugs located inher home, does not provide museum services because her collection does not have an educational purpose. Sheexplained that her collection does not "have labels beside the things that are in my home saying this is a Navaho rug thatcame from this reservation and was -- was made at[*33] such-and-such a time"; and that "they're purely for my privatepleasure and they ha -- and they don't have any educational function."Id. at 34. She explained that "in the last 50 years Ithink the educational part of museums in this country, at least, has become equal to the preserving and the collecting";that "traditionally museums were about preserving and collecting and not so much about education"; and that "[i]n thelast 50 years I would say that making sure that -- that a museum does have some interpretation available ... has becomemore and more important."Id. at 35. It follows from Dr. King's comments that if she had placed informative materialnext to the items in her collection of Navajo rugs, she too would be providing museum services. There can be no disputethat by doing so she still would not be providing museum services. Clearly, something more is needed to constitute therendering of such services.


In view of the foregoing, we conclude that applicant was not providing museum services in connection with hisvehicle collection when he filed his application in 2003.

We now address applicant's contentions regarding his numismatic and stamp collections. The[*34] record showsthat while they were shown to the public on request, they were not advertised and were maintained in a vault. In fact,applicant stated that "we made extra effort to project the image that we didn't own large collections of coins or stampsbecause those are always subject to being stolen." Krause August 24, 2004 dep. at pp. 472 - 473. Thus, applicant'scollection was not "devoted to the care, study and display of objects of lasting interest or value." We find thatapplicant's activities with respect to his stamp and coin collections never constituted museum services, and thereforeapplicant was not providing museum services in connection with his stamp and numismatic collections at the time hefiled his application.

Because applicant was not providing museum services at the time he filed his application, applicant's application isvoid ab initio, and the opposition is sustained on the ground of nonuse.

Fraud

We next consider opposer's fraud claims. Opposer has alleged that applicant has committed fraud on the Office inconnection with both his application and his Section 2(f) declaration. In the application, opposer asserts that applicantfraudulently and falsely[*35] stated (i) that he has used KRAUSE as a trademark in interstate commerce, and (ii) thedates of first use and first use in commerce. In his Section 2(f) declaration, opposer asserts that applicant fraudulentlyand falsely stated that (i) he has used KRAUSE in connection with "museum services" since at least as early as 1959,and (ii) KRAUSE has become distinctive of applicant's services by virtue of applicant's substantially exclusive andcontinuous use of the term for at least five years, i.e., since October 30, 1998.

Fraud in obtaining a trademark registration occurs "when an applicant knowingly makes false, materialrepresentations of fact in connection with his application."Torres v. Cantine Torresella S.r.l, 808 F.2d 46, 1 USPQ2d1483, 1484 (Fed. Cir. 1986); Mister Leonard Inc. v. Jacques Leonard Couture Inc., 23 USPQ2d 1064, 1065 (TTAB1992)("Thus, according to Torres, to constitute fraud on the PTO, the statement must be (1) false, (2) a materialrepresentation and (3) made knowingly."). The false material representation of fact may be one the applicant madeknowingly or one which it should have known to be false. SeeMedinol Ltd. v. Neuro Vasx Inc., 67 USPQ2d 1205(TTAB 2003)[*36] ("A trademark applicant commits fraud in procuring a registration when it makes materialrepresentations of fact in its declaration which it knows or should know to be false.").

Fraud must be proven with clear and convincing evidence, and any doubt must be resolved against a finding offraud. SeeGiant Food, Inc. v. Standard Terry Mills, Inc., 229 USPQ 955 (TTAB 1986)and cases cited therein.Furthermore, fraud will not lie if it can be proven that the statement, though false, was made with a reasonable andhonest belief that it was true. SeeWoodstock's Enterprises Inc. (California) v. Woodstock's Enterprises Inc. (Oregon),43 USPQ2d 1440 (TTAB 1997).

We turn first to opposer's claim that applicant fraudulently and falsely stated the dates of first use and first use incommerce in the application. If a mark was in use at the time an application is filed, a claim of first use, even if false, isnot fraud. SeeWestern Worldwide Enterprises Group Inc. v. Qinqdao Brewery, 17 USPQ2d 1137, 1141 (TTAB 1990)("The Board repeatedly has held that the fact that a party has set forth an erroneous date of first use does not constitutefraud[*37] unless, inter alia, there was no valid use of the mark until after the filing of the[Section 1(a)] application.");Colt Industries Operating Corp. v. Olivetti Controllo Numerico S.p.A., 221 USPQ 73, 76 (TTAB 1983)("TheExamining Attorney gives no consideration to alleged dates of first use in determining whether conflicting marks shouldbe published for opposition."). Thus, because fraud cannot lie based on false claimed dates of first use, opposer's claimof fraud regarding the dates of first use and first use in commerce set forth in the application is legally insufficient.

We now turn to opposer's claims that applicant fraudulently and falsely stated (i) in his application that he has used


KRAUSE as a trademark in interstate commerce; (ii) in his Section 2(f) declaration that he has used KRAUSE inconnection with "museum services" since at least as early as 1959; and (iii) in his Section 2(f) declaration that KRAUSEhas become distinctive of applicant's services by virtue of applicant's substantially exclusive and continuous use of theterm for at least five years. We have already found that applicant was not using KRAUSE as a mark for "museumservices" at[*38] the time applicant filed his application, i.e., on April 2, 2003. Thus, applicant's statements in hisapplication that he has used KRAUSE as a trademark in interstate commerce, and in his Section 2(f) declaration that (i)KRAUSE has become distinctive of applicant's services by virtue of applicant's substantially exclusive and continuoususe of KRAUSE for a five year period, beginning on October 30, 2003, and (ii) applicant has used KRAUSE inconnection with museum services since at least as early as 1959, are false. Also, all three statements are material to theregistration of the mark. If the examining attorney had known that the mark was not in use in interstate commerce at thetime the application was filed, the application would have been refused as void ab initio; if the examining attorney hadknown that the mark was not in use since 1959 and for the five years preceding the filing of the Section 2(f) declaration,and because applicant had not submitted any other evidence of acquired distinctiveness, the examining attorney wouldnot have accepted the Section 2(f) claim. Thus, but for the false statements of use of the mark, the examining attorneywould not have allowed the application.[*39] SeeAmerican Hygienic Laboratories, Inc. v. Tiffany & Co., 12 USPQ2d1979 (TTAB 1989); McCarthy, J. Thomas,McCarthy on Trademarks, § 31:67 (4th ed. 2004).

We therefore consider whether applicant knew or should have known that his statements regarding use of KRAUSEas a trademark in the application and declaration were false or misleading. In reaching our decision, we considerapplicant's intent -- an intent to deceive must be "willful." "If it can be shown that the statement was a 'falsemisrepresentation' occasioned by an 'honest' misunderstanding, inadvertence, negligent omission or the like rather thanone made with a willful intent to deceive, fraud will not be found. Fraud, moreover, will not lie if it can be proven thatthe statement, though false, was made with a reasonable and honest belief that it was true ...."First InternationalServices Corp. v. Chuckles Inc., 5 USPQ2d 1628, 1634 (TTAB 1988), citing Smith International, Inc. v. Olin Corp., 209USPQ 1033, 1043-44 (TTAB 1981).

Opposer maintains, in relevant part, that applicant's "intent to misrepresent the services" can be determined from"surrounding circumstances[*40] and related statements." Brief at p. 25. Opposer points to applicant's March 17, 2004deposition, in which he stated:

... to organize as a museum, you then must spend 5 percent of your assessed valuation ... every year, andthat could be in hiring docents or advertising, ... whatever. And so, also, you must maintain certain hoursthat you're open and all that sort of thing and advertise it. And I didn't want that kind of -- I wanted acollection. It was a private collection, and if I wanted to show it to somebody, I'd show it to them. So itwas organized as a collection ...

Subsequently, in his April 14, 2005 deposition, when asked what museum services he provided in 1959, applicantreplied:

Well, I had a collection of automobiles, and certainly I had a -- not a substantial collection of coins like Ihave today or have had, but those cars were there to see and to use for parade purposes.

And a collection, if we can just get 'auto collection' and 'museum services' as synonymous, in my case,they were certainly there for visitors to see, and the locals all knew they were there. They would comeby. I remember the former postmaster was kind of a self-appointed[*41] tour guide of our institution.He would bring his friends by and show them all this stuff. They certainly were there to look at. KrauseApril 14, 2005 dep. at pp. 29 - 30.

From applicant's testimony, opposer maintains that prior to the filing of the application, "Applicant did not believe hiscollection was a museum service; he believed that his collection was simply a private collection available for viewing


upon specific request." Brief at p. 26.

Opposer implies that applicant knew that he was not providing museum services, and that applicant filed hisapplication simply out of spite. Specifically, opposer asserts that applicant desired "to punish or damage KPI for the saleof the company by the ESOP to F&W."Id. According to opposer, applicant was "quite upset" over the sale; "expressedthat he felt as if his name was 'stolen' from him"; and that the filing of the present application "with a priority date justprior to that held by KPI would likely allow applicant to file infringement claims against [opposer], and allow him to'get back' at the company for the sale undesired by him." Brief at p. 27. We find that opposer has not met its "heavyburden of proof" in showing[*42] fraud.W.D. Byron & Sons, Inc. v. Stein Bros, Mfg. Co., 377 F.2d 1001, 1554C.C.P.A. 1442, 153 USPQ 749 (CCPA 1967). There is no proof in the record that applicant did not personally believethat he was not providing museum services when he filed his application or when he signed his declaration underSection 2.41(b). We construe applicant's statement in his March 17, 2004 deposition that he "wanted a collection ... [i]twas a private collection, and if I wanted to show it to somebody, I'd show it to them. So it was organized as a collection..." as meaning that he did not want to operate a "formal" museum such as a not-for-profit museum, in light of theoperating parameters that are needed to gain such a status. Further, his subsequent comment that "if we can just get 'autocollection' and 'museum services' as synonymous" is simply a statement of his belief that his exhibition of his autocollection to those in the general public who ask to see the collection, along with providing information regarding theitems in the collection, qualifies as museum services. n15 Because opposer had a good faith belief that his activitiesconstituted the rendering of museum services, the element of[*43] intent that is necessary to prove fraud is missing.SeeBart Schwartz Int'l Textiles Ltd. v. Federal Trade Comm'n, 289 F.2d 665, 48 C.C.P.A. 933, 1961 Dec. Comm'r Pat.335, 129 USPQ 258, 260 (CCPA 1961)("[T]he obligation which the Lanham Act imposes on an applicant is that he willnot makeknowinglyinaccurate orknowinglymisleading statements in the verified declaration forming a part of theapplication for registration.");Maids to Order of Ohio, Inc. v. Maid-to-Order, Inc., 78 USPQ2d 1899, 1907 (TTAB2006)("[W]e find that Ms. Kern had a reasonable basis for her belief that MTO had used/was using the mark MAID TOORDER in interstate commerce for cleaning services at the time of filing the application, the Section 8 declaration, andthe application for renewal. It was not unreasonable for Ms. Kern, as a layperson, to believe that the above activitiesconstituted use of the MAID TO ORDER mark in interstate commerce."). Further, the fact that we have found thatapplicant did not use his mark for museum services as of the filing date of his application has no effect on our findingon this issue. While opposer has shown that applicant was not using his mark in interstate commerce[*44] for museumservices as of the filing of his application, opposer has not proved the element of intent, and therefore its claims of fraudconcerning applicant's statements regarding use of KRAUSE as a trademark in the application and declaration must fail.

n15 When asked what the difference is between having a collection and providing museum services, applicanttestified;

"Museum services" is merely a word out of a catalog that exists where you apply for a mark. It'sunder that. This, I think shouldn't be confused here as a museum that's a 501(c)(3). You canorganize a museum under 501(c)(3) whereby they dictate lots of things that you should do inorder to do that. I prefer to be a private collector, and if you want to substitute "museum" for"collection," you can. I prefer not to use the term 'museum' because I believe, in the generalpublic, museums are a collection of art, art museums, if you will. That's always specified.Although there are many kinds of museums, and the private museums far outnumber the501(c)(3) museums, and those rules do not apply to a private museum.

Krause April 14, 2005 dep. p. 23.

[*45]


Thus, for the reasons set forth in the preceding paragraphs, opposer's claims of fraud are dismissed.

Likelihood of Confusion

In view of our finding that applicant was not using KRAUSE in connection with "museum services" at the time hefiled his application, we need not reach the question of likelihood of confusion.

Legal Topics:

For related research and practice materials, see the following legal topics:Trademark LawForeign & International ProtectionsApplicationsTrademark LawSubject MatterDistinctivenessAcquiredDistinctivenessTrademark LawU.S. Trademark Trial & Appeal Board ProceedingsOppositionsStanding


ESTTA Tracking number: ESTTA465521 04/04/2012 IN THE ... · Opposer's first objection relates to...

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