Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 DAK INDUSTRIES, INC.
DAIICHI KOSHO CO., LTD.
Opposition Nos. 85,916; 86,029
April 18, 1995
Before Sams, Rice and Simms
Administrative Trademark Judges
By the Board:
J.D. Sams, J.E. Rice and R.L. Simms
on the Principal Register for laser discs and compact discs featuring recorded music and graphics in International Class 9, and for song index books and catalogues featuring laser discs, compact discs and song index books in International Class 16. [FN1]
Registration has been opposed by DAK Industries, Inc. on the ground that applicant's mark, as applied to the identified goods, so resembles opposer's previously used and registered marks DAK and the stylized mark DK shown below
as to be likely to cause confusion, to cause mistake, or to deceive. Opposer has claimed ownership of several registrations for the aforementioned marks for retail store and catalog services in the field of electronic goods; [FN2] magnetic recording tapes for prerecorded and blank audio tape cassettes, prerecorded and blank audio tape cassettes, open reel audio tape, video tape, and accessories for the foregoing, namely, batteries, headphones, AC adapters and tape recorders. [FN3]
In its answer to the amended notice of opposition, applicant denied all the salient allegations therein. In addition, applicant asserted, among other claims, counterclaims for partial cancellation of opposer's pleaded Registration Nos. 1,148,203 and 1,162,534 on the ground of abandonment of certain goods listed in those registrations. Applicant's counterclaims read, in relevant part, as follows:
First Counterclaim Cancellation of Registration No. 1,148,203
24. Upon information and belief, Dak has ceased use of Reg. No. 1,148,203 in connection with the following goods set forth in the registration: open reel audio tape. In the past, for a period of exceeding two years, Dak has ceased use of Reg. No. 1,148,203 in connection with at least the following goods set forth in the registration: magnetic recording tape for prerecorded and blank audio tape cassettes, video tape, bulk tape, batteries and A.C. adapters. At the very least, this registration should be partially cancelled for abandonment.
25. Daiichi Kosho has standing to bring this counterclaim since Reg. No. 1,148,203 is being asserted against it in this Amended Opposition so that the existence of Reg. No. 1,148,203 is causing damage to Daiichi Kosho.
26. Upon information and belief, Dak ceased use of Reg. No. 1,162,534 in connection with the following goods set forth in the registration: open reel audio tape. In the past, for a period of exceeding two years, Dak ceased use of Reg. No. 1,162,534 in connection with at least the following goods set forth in the registration: prerecorded and blank audio tape cassettes, video tape, batteries and A.C. adapters. At the very least, this registration should be partially cancelled for abandonment.
*2 27. Daiichi Kosho has standing to bring this counterclaim since Reg. No. 1,162,534 is being asserted against it in this Amended Opposition so that the existence of Reg. No. 1,162,534 is causing damage to Daiichi Kosho.
Opposer has filed an answer denying the allegations contained in the counterclaims.
This consolidated proceeding now comes up for consideration of opposer's motion for judgment on the pleadings and/or summary judgment and the parties' stipulated motions to extend discovery and trial dates. The motion for judgment on the pleadings and/or summary judgment has been fully briefed by the parties. [FN4]
As a procedural matter, opposer's filing is entitled "Motion for Judgment on the Pleadings and/or Summary Judgment." We note, however, that opposer devotes much of its brief to the argument that applicant's pleading fails to state a counterclaim of abandonment upon which relief can be granted under Section 18 of the Trademark Act, 15 U.S.C. § 1068, and Fed.R.Civ.P. 12(h)(2). Indeed, both parties have made arguments pertaining to the sufficiency of applicant's pleadings for partial cancellation of opposer's pleaded registrations on the ground of abandonment.
When a motion for failure to state a claim upon which relief can be granted is filed after an answer, but prior to trial, the motion may be construed as a motion for judgment on the pleadings. See Fed.R.Civ.P. 12(h)(2); Western Worldwide Enterprises Group Inc. v. Qinqdao Brewery, 17 USPQ2d 1137, 1139 (TTAB 1990); see also 2A James WM. Moore et al., Moore's Federal Practice ¶ 12.23 (2d ed. 1985). In view thereof, and inasmuch as the parties devote much of their arguments to the sufficiency of the pleadings, we will treat opposer's filing as a motion for judgment on the pleadings. See Western Worldwide, supra at 1139 n. 5; Selva & Sons, Inc. v. Nina Footwear, Inc., 705 F.2d 1316, 217 USPQ 641 (Fed.Cir.1983). Accordingly, all exhibits submitted outside the pleadings are hereby excluded and will not be considered by the Board in determining the sufficiency of the allegations set forth in applicant's counterclaims for partial cancellation. See Fed.R.Civ.P. 56(a)-(b); Western Worldwide, supra.
Turning now to the motion for judgment on the pleadings, opposer contends that applicant's counterclaims fail to state a claim of abandonment under Section 18 of the Trademark Act, 15 U.S.C. § 1068, upon which relief can be granted, and that applicant merely alleged abandonment as a conclusion. In support thereof, opposer relies on Procter & Gamble v. Sentry Chemical, 22 USPQ2d 1589 (TTAB 1992), for the position that a proper pleading of partial cancellation of a registration based upon abandonment of certain goods listed therein must allege: (1) that the owner of the registration is not using or has never used its mark on certain goods, (2) that the owner has no intention to resume or to commence use of the involved mark(s) for certain identified goods recited in the registration, and (3) that the restriction sought is commercially significant. See Procter & Gamble, supra.
*3 In response, applicant contends that the pleadings state a claim of abandonment upon which relief can be granted, and that opposer's reliance on Procter & Gamble is misplaced. Specifically, applicant maintains that Procter & Gamble merely states how a claim of abandonment is properly established, rather than the requirements for sufficient pleading of the same. Furthermore, applicant maintains that it has sufficiently set forth a claim of abandonment under Section 45 of the Trademark Act, 15 U.S.C. § 1127, by alleging that opposer has ceased using the involved marks for particular goods listed in the registrations.
Opposer is relying on case law which has recently been overruled by this Board. In Eurostar, Inc. v. "Euro-Star" Reitmoden GmbH & Co. KG, Spezialfabrik Fur Reitbekleidung), ___ USPQ2d ___ (Cancellation No. 21,589, decided December 22, 1994), the Board expressly overruled Procter & Gamble, supra, and Alberto-Culver Co. v. F.D.C. Wholesale Corp., 16 USPQ2d 1597 (TTAB 1990) (and subsequent cases) to the extent that those cases hold that: "(i) the Board will exercise its discretion to grant a petition for partial cancellation or a request for restriction even in the absence of pleading and proof that such partial cancellation or restriction will avoid a finding of likelihood of confusion and (ii) Section 18 may be invoked by the Board only when tied to a properly pleaded ground for opposition or cancellation (e.g. abandonment)." Id at p. 15 (a copy of the decision is enclosed herewith for each party).
The Board now takes the position that, in a case involving likelihood of confusion, a claim for partial cancellation by restriction or modification of the goods or services listed in a plaintiff's pleaded registration is an equitable remedy under Section 18 of the Trademark Act, not tied to a ground to cancel. [FN5] Id. at 15. In such cases, the Board will not exercise its authority under Section 18 to permit an action for partial cancellation by restriction or modification of the goods listed in an application or registration where such a claim is divorced from the question of likelihood of confusion. Id. at 11. A party seeking to avoid a likelihood of confusion finding by restricting the identification of goods listed in an adverse party's pleaded registration must now allege (and later prove) that (i) a finding of likelihood of confusion will be avoided by entry of the restriction sought in the petition to cancel, and (ii) the opponent is not using its mark on the goods or services sought to be excluded by the proposed restriction. Id. at 18.
After careful review of the pleadings, we find that this case is distinguishable from Eurostar. Applicant herein does not seek to have opposer's pleaded registrations restricted by addition of wording that identifies opposer's goods with greater particularity, in terms of type, use, customers, trade channels, etc. Rather, applicant seeks to have deleted from opposer's registrations one or more of the goods listed in the identification of goods, on the grounds that opposer is no longer using and has no intent to resume use of its mark on those goods--notwithstanding type, use, customers, traded channels, etc. This is, in essence, a straight-forward claim of abandonment. Because applicant seeks to strike from opposer's registrations goods specifically listed therein, applicant need not plead (as was required in Eurostar) that a finding of likelihood of confusion will be avoided by the restriction it seeks.
*4 In order to prevail on a counterclaim for partial cancellation (i.e., deletion of particular goods or services from the recitation of goods and services included in the registration) on the ground of abandonment, a party must allege (and eventually prove): (1) standing or a commercial interest in the outcome of the proceeding and (2) abandonment of the mark, as to the particular goods or services, as the result of nonuse or other conduct by the registrant. See Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213 USPQ 185 (CCPA 1982). An allegation of nonuse of the mark for two consecutive years constitutes a prima facie claim of abandonment. See Trademark Act § 45, 15 U.S.C. § 1127; Burroughs Wellcome Co. v. Warner-Lambert Company, 203 USPQ 191, 198 (TTAB 1979) (Introduction of evidence of two years of nonuse shifts the burden to the party contesting abandonment to show excusable nonuse that would negate presumptive intent not to resume use); see generally 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 17.06, p. 17-28 (3d ed. 1992).
In the present case, applicant's counterclaims for partial cancellation of opposer's pleaded registrations on the ground of abandonment are legally sufficient. Applicant has pleaded standing by virtue of its position as party defendant in this opposition proceeding. (Applicant's Countercl. ¶¶ 25 and 27); see General Mills, Inc. v. Nature's Way Products, Inc., 202 USPQ 840, 841 (TTAB 1979); Syntex (U.S.A.) Inc. v. E.R. Squibb & Sons Inc., 14 USPQ2d 1879, 1880 (TTAB 1990). Furthermore, applicant has adequately set forth a claim of abandonment by specifically alleging that opposer has ceased use of the marks in connection with certain goods listed in the registrations for a period exceeding two years. (Applicant's Countercl. ¶¶ 24 and 26).
Accordingly, opposer's motion for judgment on the pleadings is denied.
Stipulations to Extend Dates
Finally, the parties' stipulations (filed May 19, 1994, July 19, 1994, October 24, 1994, and January 17, 1995) to extend discovery and trial dates are granted to the extent that proceedings herein are considered to have been suspended pending disposition of the motion for judgment on the pleadings. See Trademark Rule 2.127(d).
Proceedings herein remain suspended pending the Board's determination on the pending motion to compel.
Administrative Trademark Judges, Trademark Trial and Appeal Board
FN1. Application Serial No. 74/023,423, filed January 29, 1990, alleging a date of first use anywhere and date of first use in commerce of June 3, 1989. The English translations of the word "karaoke" are "empty orchestra" and "sing-along." The word is disclaimed apart from the mark as shown.
FN2. Registration No. 1,584,036 for the mark DAK for "retail store services in the field of electronic goods," date of first use anywhere and date of first use in commerce of April 1987. Registration issued February 20, 1990.
Registration No. 1,570,338 for the mark DAK for "catalog services in the field of electronic goods," date of first use anywhere and date of first use in commerce of October 1967. Registration issued December 5, 1989.
FN3. Registration No. 1,148,203 for the mark DAK for "magnetic recording tape for prerecorded and blank audio tape cassettes, open reel audio tape, video and bulk tape, and accessories for the foregoing, namely, batteries, headphones, A.C. adapters, and tape recorders." Registration issued March 10, 1981, Section 8 & 15 affidavits filed.
Registration No. 1,162,534 for the stylized mark DK for "prerecorded and blank audio tape cassettes, open reel audio tape, video tape, and accessories for the foregoing, namely, batteries, headphones, A.C. adapters and tape recorders." Registration issued July 28, 1981, Section 8 & 15 affidavits filed.
FN4. Consideration of reply briefs is discretionary on the part of the Board. See Zirco Corp. v. American Telephone and Telegraph Co., 21 USPQ2d 1542 (TTAB 1991); Avon Products, Inc. v. MarCon, Ltd., 225 USPQ 977 (TTAB 1985). In this case, the Board has considered opposer's reply brief in reaching a decision on the motion for judgment on the pleadings.
FN5. Section 18 provides as follows:
In such proceedings the Commissioner may refuse to register the opposed mark, may cancel the registration, in whole or in part, may modify the application or registration by limiting the goods or services specified therein, may otherwise restrict or rectify with respect to the register the registration of a registered mark, may refuse to register any or all of several interfering marks, or may register the mark or marks for the person or persons entitled thereto, as the rights of the parties hereunder may be established in the proceedings: Provided, that in the case of the registration of any mark based on concurrent use, the Commissioner shall determine and fix the conditions and limitations provided for in subsection (d) of section 2 of this Act. However, no final judgment shall be entered in favor of an applicant under section 1(b) before the mark is registered, if such applicant cannot prevail without establishing constructive use pursuant to section 7(c).
In order to implement the amendments to Section 18, the Patent and Trademark Office promulgated Trademark Rule 2.133(d) which reads:
A plaintiff's pleaded registration will not be restricted in the absence of a counterclaim to cancel the registration in whole or in part, except that a counterclaim need not be filed if the registration is the subject of another proceeding between the same parties or anyone in privity therewith.