TTAB - Trademark Trial and Appeal Board - *1 GARRI PUBLICATION ASSOCIATES, INC. v. DABORA, INC. Cancellation No. 16,759 December 16, 1988

Trademark Trial and Appeal Board

Patent and Trademark Office (P.T.O.)

 

*1 GARRI PUBLICATION ASSOCIATES, INC.

v.

DABORA, INC.

Cancellation No. 16,759

December 16, 1988

 

J.E. Rice, L.E. Rooney and R.L. Simms

 

 

Members

 

 

 A petition has been filed by Garri Publication Associates, Inc. to cancel the registration of the mark "HORSE WORLD" and design (horse disclaimed) for magazines. [FN1] (See below)

 

 

HORSE WORLD

 

 As grounds for cancellation, petitioner has alleged that it has used the mark "HORSE WORLD" for magazines directed to horsebreeds and horse shows for all breeds of horses and all riding disciplines since long prior to the use by registrant; [FN2] that the subject registration was obtained fraudulently since, on information and belief, the magazine was not sold in interstate commerce at the time of filing the application therefor but only in Tennessee; that on information and belief, long prior to filing the application, registrant or its predecessors abandoned the mark by discontinuing publication of a magazine called "HORSE WORLD"; and that the continued existence of the registration casts a cloud on petitioner's right to continue to use and expand the use of the mark "HORSE WORLD".

 

 

 Respondent denied these allegations and affirmatively pleaded that the petition fails to state a claim upon which relief can be granted since the petition was filed after the registration had attained five years; that fraud has not been pleaded with sufficient particularity and petitioner has not properly pleaded abandonment.

 

 

 Along with its answer, respondent filed a motion which is in part, one for summary judgment and, in part, a motion to dismiss.

 

 

 Registrant asserts that the petition and allegation of prior use are untimely, having been filed after the fifth anniversary of the registration; that abandonment has not been properly pleaded; and that the fraud allegation is insufficient but, even if it were not, it is rebutted by the documentary evidence submitted with the declaration of registrant's president, David L. Howard.

 

 

 In his declaration, Mr. David L. Howard, President of Dabora, Inc. since December 1979, states that, on December 21, 1979, registrant purchased all right, title and interest to the magazine "HORSE WORLD" with the good will and the registration thereof (Regn. No. 702,280 which expired in August 1980); that beginning in February 1980, registrant continued the regular publication of "HORSE WORLD" with the February/March 1980 issue; that in 1982 the magazine, which had been published six times a year, started monthly publication, except for January. Mr. Howard attests that he has personal knowledge derived from the business records of registrant's predecessors that HORSE WORLD has been in continuous publication and distribution in interstate commerce since 1959 and, based on his personal knowledge, was in use in interstate commerce when the application was filed; that the February/March 1981 issue (Exhibit C to the affidavit is a photocopy of the front cover and pages 2 and 88 thereof) was disseminated to over 2,000 subscribers throughout the United States and that advertisers in the magazine are located throughout the U.S.

 

 

  *2 In response to registrant's motion, petitioner filed a motion to amend the petition by substituting new paragraphs for paragraphs 8 and 9, which are the abandonment and fraud allegations. Petitioner asserts that, if the motion to amend is granted, registrant's motion for summary judgment will have been rendered moot.

 

 

 Registrant filed a response to the motion to amend arguing that it is not a proper response to a motion for summary judgment; that petitioner's attorney fails to set forth specific facts showing that there is a genuine issue for trial or give reasons why petitioner cannot properly respond to the motion.

 

 

 In addition, registrant filed a brief in opposition to the motion to amend asserting, inter alia, that the amended pleading fails to state a valid claim. Registrant also asks that, if the motion to amend is granted, its opposing brief be treated as a motion to dismiss for failure to state a claim.

 

 

 Contrary to petitioner's argument, a motion to amend a pleading does not render moot a motion for summary judgment. Rule 15(e) provides, in part, that "(w)hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him."

 

 

 The affidavit with supporting exhibits of Mr. Howard is sufficient to establish that registrant had made use of its mark in interstate commerce prior to the filing of its application. Since petitioner has failed to refute that showing or otherwise raise a genuine issue of fact, registrant's motion for summary judgment is granted as to this matter.

 

 

 Accordingly, judgment is entered for registrant on the issue of fraud.

 

 

 Turning to the sufficiency of the abandonment allegation, we note that in order to state a claim upon which relief can be granted, a plaintiff must allege facts which, if proved, would establish that it has standing to challenge its adversary's right of registration and that there is a statutory ground for challenging the registration. See Lipton Industries, Inc. v. Ralston Purina Co., 213 USPQ 185 (CCPA 1985) Standing is a preliminary question directed solely to establishing the real interest of a party. See American Speech--Language Hearing Association v. National Hearing and Society, 224 USPQ 790 (TTAB 1985). Petitioner's allegation that it has used and is using the mark "HORSE WORLD" for magazines related to horses, riding and horse shows, would, if proved, establish petitioner's interest in the existing registration to be far beyond that of a mere intermeddler.

 

 

 As to the question of whether or not petitioner has properly pleaded a statutory ground for cancellation, priority of use (if that is what petitioner intended to plead in paragraph 4 of the petition) is not a ground for cancellation of a registration which is more than five years old. [FN3]

 

 

  *3 Paragraph 9 does not set forth a properly pleaded ground for cancellation under Section 14(c) insofar as petitioner pleads that the mark was abandoned long prior to the filing of the application for registration. Under Section 14(e), a petition to cancel may be filed at any time if the registered mark has been abandoned. The petition contains no such allegation.

 

 

 Accordingly, the motion to dismiss is well taken as to paragraphs 4 and 9. However, it is the Board's practice, where appropriate, to permit a party to amend a defective pleading. We therefore will now consider petitioner's motion to amend.

 

 

 As originally pleaded, paragraphs 8 and 9 read as follows:

   8. Registration No. 1,195,711 has been fraudulently obtained by the Registrant, since Registrant's mark "HORSEWORLD" is for a magazine concerned only with "Saddle Bred" horses and which upon information and belief, was not sold in interstate commerce at the time of filing of the application which resulted in Registration No. 1,195,711 but to the contrary were wholly rendered within only the state of Tennessee. As such, the Registrant did not qualify the mark for Federal Registration and, therefore, Registration No. 1,195,711 is invalid.

   9. Upon information and belief, long prior to the filing (sic) the application which mark issued into Registration No. 1,195,711, Registrant or its predecessors in interest, abandoned the mark by discontinuing publication of a magazine called "HORSE WORLD".

As amended, paragraphs 8 and 9 now read:

   8. The registrant entered into an arrangement in 1983 with the petitioner  (see Exhibit 1) wherein Registrant consented to Petitioner's use of the Registered Mark "HORSEWORLD", which constitutes a "naked license" in that control by the Registrant was nonexistent, whereby Registrants (sic) Trademark and Trademark Registration for the mark "HORSEWORLD" were abandoned.

   9. The Registered Trademark "HORSEWORLD" has become a common descriptive name for magazines in that third parties are using the claimed mark in association with the same or related goods so that the public is not likely to associate the mark with a single source.

 

 

 Exhibit 1, referred to in paragraph 8 of the amended petition and attached thereto, is a "Stipulation of Discontinuance and Settlement" in Civil Action 4 83 61 in the United States District Court for the Eastern District of Tennessee between Dabora, Inc. d/b/a HORSEWORLD, plaintiff and Garri Publication Associates, Inc. d/b/a EASTERN HORSE WORLD, defendant.

 

 

 The agreement specifies that Garri (petitioner herein) shall have the right to use its logo on a magazine and newspaper, that the letters in the word E A S T E R N shall be of the same size as the letters in the words "HORSE WORLD"; that the logo shall include the words "Serving The East Coast Horse World" and that Garri shall cease and desist from use of the logo as previously used. Dabora agreed to discontinue the action with prejudice. The agreement further provides that nothing therein should prevent Dabora from instituting action to enforce the stipulation and the stipulation is not deemed to be a waiver by defendant of all defenses it may have to the action.

 

 

  *4 In response to the motion to amend, registrant argues that, if the allegations of paragraph 8 are taken as true, petitioner has again failed to state a claim. That is, if the agreement in question were a license, as petitioner claims it is (with which claim registrant disagrees), petitioner would be estopped from challenging the validity of registrant's mark under the doctrine of licensee estoppel.

 

 

 With respect to registrant's position, petitioner argues, that there can be no licensee estoppel because the license was terminated prior to the filing of the cancellation petition.

 

 

 With regard to the foregoing, assuming arguendo that there was a license, we note that a licensee is estopped to challenge the licensor's rights in the licensed mark during the time that the license is in force. Upon termination of the license, the licensee is no longer hampered by the estoppel to the extent that the licensee is then free to challenge the licensor's title on the basis of facts which arose after the expiration of the license. See Professional Golfers Association of America v. Bankers Life & Casualty Company, 186 USPQ 447 (CA5 1975).

 

 

 Inasmuch as petitioner's pleading relates to the validity of the alleged license, petitioner's argument that the alleged license was terminated prior to the filing of the petition is irrelevant. Under these facts, petitioner would be estopped to contest the validity of the license. [FN4] See Professional Golfers Association, supra.

 

 

 In view thereof, we find that the allegation of paragraph 8 fails to state a claim on which relief can be granted.

 

 

 It is not clear what petitioner intended to plead in amended Paragraph 9. If it is intended as a pleading that the mark has become a "common descriptive name" for magazines, it is a defective pleading because it does not plead that third parties are using the term "HORSE WORLD" as the descriptive name of their goods rather than as a trademark therefor. On the other hand, if it is intended as a pleading that the mark has been abandoned because it has been so commonly used by others as to have lost its significance as a indication of origin, the pleading is still defective because petitioner has not pleaded abandonment as a result of such third-party use, nor that such third-party use has been made with registrant's knowledge and acquiescence. See Johanna Farms, Inc. v. Citrus Bowl, Inc., et al, 199 USPQ 16 (DCEDNY 1978).

 

 

 In light of the foregoing, we find that paragraph 9 also fails to state a claim on which relief may be granted. Since no purpose would be served by allowing an amendment to assert pleadings which we have found to be defective, the motion to amend is denied.

 

 

 Accordingly, registrant's motion for summary judgment is granted on the pleading of fraud; registrant's motion to dismiss the remaining allegations of the original petition is granted; and petitioner's motion to amend the petition is denied

 

 

  *5 In view of the foregoing, the petition for cancellation is dismissed.  [FN5]

 

 

J.E. Rice

 

 

L.E. Rooney

 

 

R.L. Simms

 

 

Members, Trademark Trial and Appeal Board

 

 

FN1. Regn. No. 1,195,711 issued May 18, 1982 to Dabora, Inc., based on an application filed April 17, 1981 claiming use since 1942.

 

 

FN2. The pleading states that "Petitioner, prior to registration, in most geographically distinct market areas, has used the mark HORSE WORLD long prior to the use by registrant ...". To the extent that petitioner may be asserting concurrent rights, it is noted that such are not considered except in the context of a concurrent use proceeding.

 

 

FN3. Indeed, if the registration were less than five years old, the pleading would still be defective unless coupled with an allegation of likelihood of confusion.

 

 

FN4. Although it is not necessary to our decision on the motion to amend, we note that the agreement between the parties was entered in settlement of civil litigation and we seriously doubt that it could be interpreted as a license under any circumstances. Moreover, since that agreement provides for enforcement thereof by Dabora (registrant), it is clear that Garri does not have the power to terminate it if, indeed, the documents alleged to have terminated the agreement could be so read.

 

 

FN5. Petitioner has raised the question, in its brief in response to registrant's opposition to petitioner's motion to amend, of "unclean hands" on the part of registrant in filing its Section 15 affidavit after the petition to cancel was filed, saying that registrant knew about the petition when it filed its affidavit. Registrant denies the charge and submits several declarations to that effect "to eliminate any doubt about the veracity of the party who signed the affidavit on behalf of registrant".

   An allegation of "unclean hands" does not constitute a ground for cancellation. Even if it did, petitioner has not pleaded "unclean hands". Accordingly, we have not considered the question.

 

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