Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 PERSON'S CO., LTD.
Cancellation No. 15,776
February 24, 1989
J.D. Sams, J.E. Rice and R.F. Cissel
On November 10, 1988 the Board granted in part respondent's motion to strike and granted respondent's motion for summary judgment both as to petitioner's petition to cancel respondent's registration and also as to respondent's counterclaim to cancel petitioner's registration. On December 9, 1988 petitioner requested reconsideration of our ruling. On January 3, 1989 respondent filed a brief in opposition to petitioner's request for reconsideration.
Petitioner asserts that the Board's finding that respondent's copying and use in the United States of a mark that petitioner used previously in Japan did not amount to bad faith adoption constitutes error and is also inconsistent with prior holdings of the Board. The finding that respondent had priority of use was in part based on our finding that respondent's adoption and use were not in bad faith. Further, petitioner asserts that the Board failed to address adequately petitioner's claim under Article 10 of the Paris Convention.
As to the holding that respondent's adoption and use were not in bad faith, petitioner argues that this was unjustified in light of the admitted fact that respondent copied petitioner's mark as well as its designs. Citing Women's World Shops, Inc. v. Lane Bryant, Inc., 5 USPQ 2d 1985 (TTAB 1988), petitioner asserts that, where a junior user appropriates a mark with knowledge of prior use by another, such adoption and use are not in good faith. That case dealt with a junior user who was attempting to establish its rights to a concurrent use registration, with the exception to its exclusive rights being the known prior user. There is no analogy to the case at hand, because, in that case, the senior user's first use of its mark was use in commerce in the United States. In the case at hand petitioner's known use was not use in U.S. commerce. Respondent was the first to engage in use of the mark in the United States.
Respondent's use in U.S. commerce in the case at hand cannot be discounted merely because respondent was aware of petitioner's foreign use. Because trademark rights are territorial in nature, respondent did not become a bad faith user by adopting the mark it had seen petitioner use abroad when respondent was aware of no basis for petitioner to assert superior rights to use and registration here. We are aware of no precedent for the proposition that knowledge of a foreign use precludes good faith adoption and use in the United States, except where the foreign mark is famous here or where the use in the United States was a nominal use made solely for the purpose of interfering with the prior foreign user's planned expansion into the United States. There has been no showing that petitioner's mark had even been heard of in the United States prior to respondent's adoption, much less that it had become famous here. Moreover, respondent was unaware of any intentions of petitioner to begin marketing products under the mark in the United States and was advised by counsel that no one had established a claim to the mark here. Under these circumstances respondent's adoption and use are not considered to have been in bad faith.
*2 Petitioner asserts that the court's decision in Davidoff Extension S.A. v. Davidoff International, 221 USPQ 465 (S.D.Fla.1983), supports its position, but the instant case presents factors which differ in several critical respects. In that case a Swiss company was the plaintiff asking for a preliminary injunction against use by a United States company of the plaintiff's mark, which was apparently not only registered in the United States, but also well known here. Plaintiff was on the verge of a large scale national promotional campaign for its products. The court held that under such circumstances defendant's adoption of plaintiff's mark was not in good faith.
In the case at hand, however, the exceptions to the territorial nature of trademark rights which were recognized by the court in the Davidoff case are not present. To begin with, the instant case is before us for final decision on the merits of the issue of registrability under the Lanham Act, rather than for a determination of whether it can be shown that irreparable harm is likely to occur unless an injunction against use issues. More significant is the fact that in the case before us petitioner's mark was not known by any appreciable number of people in the United States. It was certainly not well known or famous. There is no evidence that at the time respondent adopted the mark petitioner had any intention to use the mark in the United States, much less that respondent was aware of such intention. The Davidoff decision takes into account the fame of plaintiff's mark in the U.S. and plaintiff's actual intent to use it here in the immediate future, key elements not present in the case before us.
Petitioner further contends that our opinion fails to explain adequately why petitioner is not entitled to relief under the Paris Convention. Article 10 of the convention assures nationals of signatory countries protection against unfair competition. Petitioner asserts that, as a copier of petitioner's marks and product designs, respondent engaged in dishonest practices within the contemplation of the convention.
As noted by respondent, the Board has no jurisdiction over basic claims of unfair competition. Our jurisdiction extends only to the right to federal trademark registration. Knickerbocker Toy Co. v. Faultless Starch Co., 467 F.2d 501, 175 USPQ 417, (CCPA 1972). There can be no question, however, but that we are bound by the language of the Paris Convention concerning unfair competition as it relates to registration of trademarks in the U.S. In this regard unfair acts within the meaning of the treaty could have a role in determining registrability in the United States. Such acts could preclude a finding of good faith adoption and use under certain circumstances, but to consider the acts of respondent in the case at hand acts of unfair competition within the meaning of the convention would require a significantly different showing than that which is before us. We are unable to find that respondent's conduct here constitutes unfair competition within the meaning of the convention. Respondent, as noted above, was conducting its business in accordance with the advice of counsel and in accordance with the laws as it understood them to be. Simply put, respondent believed (correctly, as it turns out) that its acts in adopting and using the trademark in question in the United States were completely within accepted practice and would lead to a legally protectable right in the mark in the United States. Respondent was not attempting to trade off of petitioner's established goodwill in the United States; petitioner at that time had not sold or advertised its goods here, and the mark was virtually unknown in the United States. This is in distinct contrast to the facts in the case of Vaudable et al. v. Montmartre, Inc., et al., 123 USPQ 357 (N.Y.Sup.Ct., 1959). There an injunction was granted restraining defendant's use of the name of plaintiff's foreign restaurant, which was found to be both famous and prestigious in the United States. To trade off of the established goodwill of another could be considered unfair competition within the meaning of the Paris Convention, but the facts of the case at hand cannot support such a conclusion absent a showing that petitioner's mark was known or used here or that respondent was aware of plans by petitioner to promote it here.
*3 Because petitioner has not identified any error in our decision of November 10, 1988, we stand by it. Petitioner's request that it be changed is denied.
Members, Trademark Trial and Appeal Board