Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 PERSON'S CO., LTD.
Cancellation No. 15,776
November 10, 1988
By the Board:
J.D. Sams, J.E. Rice and R.F. Cissel
This cancellation proceeding was brought by Person's Co., Ltd., a Japanese corporation, against Larry Christman, a citizen of the United States of America. Person's seeks to cancel Christman's registration [FN1] of the mark "PERSON'S" for wearing apparel. The grounds asserted for cancellation are abandonment; likelihood of confusion with petitioner's mark, "PERSON'S," used and registered for luggage, clothing and accessories; fraud in the procurement of respondent's registration; and unfair competition within the meaning of the Paris Convention, Article 6 bis. Petitioner asserts ownership of U.S.Reg. No. 1,354,062, issued almost a year after respondent's registration issued. [FN2] Petitioner's registered mark is "PERSON'S" for, inter alia, various items of apparel.
Respondent denied the essential elements presented by the petition to cancel his registration and counterclaimed for cancellation of petitioner's registration. As grounds for the counterclaim respondent claims prior use, likelihood of confusion, and that petitioner's registration was obtained fraudulently, by means of a false declaration that petitioner owned the mark and that petitioner knew of no one else who had superior rights to the mark. Petitioner's answer to the counterclaim was a denial combined with the assertion of petitioner's rights under the Paris Convention.
This case now comes up on respondent's motion for summary judgment under Rule 56, F.R.C.P., and respondent's motion to strike the affidavit of Alan Zelnick, counsel for petitioner, and portions of the affidavit of Takaya Iwasaki, petitioner's president and founder. Respondent contends that the objected-to affidavit evidence should be disregarded, that there are no genuine issues of material fact in dispute, and that based on the undisputed facts established by the record in this case respondent is entitled to judgment as a matter of law on all the issues raised by the petition for cancellation as well as the counterclaim for cancellation of petitioner's registration because of respondent's priority and the likelihood of confusion which both parties agree exists. Respondent argues that the affidavits and exhibits of record clearly establish that he was the first to use the mark in commerce in the United States; that he has not abandoned his mark; that his registration was not obtained by means of a fraudulent declaration; and that petitioner is not entitled to relief under the Paris Convention in that the Board has no jurisdiction over such claim, and that, in any event, petitioner's mark was not "famous" in the United States prior to respondent's adoption and use. Respondent asserts that absent prior fame in the United States, petitioner's use of the mark in Japan cannot preclude respondent's good faith adoption and use of the mark here, and that his mere knowledge of petitioner's use of the mark in Japan does not color his adoption and use here with bad faith.
*2 The purpose of summary judgment is judicial economy, that is, to save the time and expense of a useless trial where no genuine issue of material fact remains and more evidence than is already available in connection with the summary judgment motion could not reasonably be expected to change the result. See: Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739, 624, 222 USPQ 741 (Fed.Cir.1984), citing Exxon Corp. v. National Foodline Corp., 579 F.2d 1244, 1246, 198 USPQ 407,408 (CCPA 1978). The question of likelihood of confusion has been consistently held by the U.S. Court of Appeals for the Federal Circuit to be one of law, and unquestionably may be resolved by way of summary judgment under appropriate circumstances. See, e.g., Sweats Fashions, Inc. v. Pannill Knitting Company, Inc., 833 F.2d 1560, 3 USPQ2d 1793 (Fed.Cir.1987).
The only aspect of the claim based on likelihood of confusion which is in issue in the case before us is who has priority. Both parties concede that confusion is likely in light of the identity of the marks and partial identity of the goods with which they are used.
We hold, based on the evidence presently before us, that petitioner has not demonstrated that facts material to the pleaded issues are in dispute, and that, based on the undisputed facts, respondent is entitled to judgment as a matter of law as to both petitioner's claim for cancellation of respondent's registration and respondent's plea for cancellation of petitioner's registration.
To begin our analysis we first must explain its evidentiary basis. Respondent has, as stated above, objected to the affidavit of petitioner's counsel, Alan Zelnick, and to portions of the affidavit of petitioner's president, Takaya Iwasaki. The basis of the objection is the assertion that petitioner has not complied with Rule 56(e) of the Federal Rules of Civil Procedure, in that Mr. Zelnick's affidavit is merely argument and is not a statement of facts based on his own personal knowledge, except for the statements concerning settlement negotiations, which are inadmissable under Federal Rule of Evidence 408. Portions of the affidavit of Mr. Iwasaki are also asserted to be improper because they are either hearsay or not based on the affiant's personal knowledge. Respondent views parts of the Iwasaki affidavit as improper argument, speculation and conclusions, and seeks to have those portions stricken.
While there are certainly argumentative statements and conclusions in these objected-to affidavits, they also contain many factual statements which the affiants are clearly qualified to make based upon their personal knowledge. As petitioner correctly notes, the assertion that some of the statements must be excluded because they concern settlement negotiations is without merit because there was, at the time referred to in the affidavit, no pending formal dispute to which the communications related. Additionally, Mr. Zelnick's statements regarding the contents of documents which he personally reviewed are appropriate for his affidavit and can be considered. Mr. Iwasaki's statements concerning what U.S. buyers told him are hearsay and have not been considered. Likewise, that some of the Japanese magazines in which his company advertised using the mark were circulated within the United States is not established by his statement. Nothing in the record establishes that he had personal knowledge of this when he made the statement and there is no corroborating evidence in support of his statement.
*3 We have therefore considered only the appropriate parts of the Zelnick and Iwasaki affidavits, the factual statements made of the affiants' personal knowledge. The hearsay and mere argument have been disregarded. Other evidence considered includes the affidavits and associated exhibits of respondent, Larry Christman; of Douglas Smith, owner of Screen Graphics, a Seattle, Washington company; of James Cagle, Secretary of Buffalo Jeans Corporation in Eugene, Oregon; of Jerry Misegadis, President of Mr. Rags, Ltd.; of Michael Robinson, President of Jelley's, Inc.; and of Kim Robertson, sole proprietor of Broadway Sun Studios. The discovery deposition of respondent also is part of the record before us for purposes of resolving respondent's motion for summary judgment.
When all the evidence properly of record is considered, the following undisputed facts are apparent:
Petitioner is a large, successful Japanese corporation founded by Mr. Iwasaki in 1979. Mr. Iwasaki himself first used the mark "PERSON'S" on clothing in 1977. He formed petitioner two years later. Petitioner has used the mark "PERSON'S" in Japan on clothing and other goods and in connection with its own retail store services from the incorporation of the business in 1979 through the time when the testimony of Mr. Iwasaki was given. There is no admissable evidence that establishes that the mark was known outside of Japan, much less that it was then or even has since become a famous trademark in the United States. It is beyond dispute, however, that the petitioner and its mark are very well known and successful in Japan.
Respondent is a U.S. citizen residing in Seattle, Washington. As an employee of a wholesaler of sportswear, in 1981 respondent took a business trip to Japan. While in Tokyo he visited one of petitioner's retail stores, became aware of petitioner's mark and its products, and actually purchased some of the products of petitioner bearing the mark. He returned home with them and decided to market similar clothing items under the same mark in the United States. He had no knowledge that petitioner either was marketing its goods under the mark in commerce with the United States or had the intention of doing so in the future. He consulted with legal counsel and, being advised that no one had yet established a claim to the mark in the United States, developed designs for his own "PERSON'S" brand sportswear line based on petitioner's products he had seen in Japan. In February of 1982 he had the first items in his new line produced by Silver Screen Graphics. These were one hundred sixty sweat shirts with the mark "PERSON'S" appearing in large letters on them. In April of 1982 one hundred forty-four of these sweat shirts were sold to Buffalo Jeans in Oregon. From then on either Mr. Christman or his corporation, Team Concepts, Ltd. periodically sold various goods of his design bearing the mark. Many of the designs were apparently copied from petitioner's line.
*4 In November of 1982, according to Mr. Iwasaki, petitioner began to sell its goods bearing the mark to American buyers in Japan. Petitioner has no records of these particular sales, which were subsequent to the documented sales of goods bearing the mark in the U.S. by respondent.
In 1983 respondent developed and had manufactured several additional clothing designs, some of which were copied from petitioner's designs and all of which bore either the mark "PERSON'S" or a copy of petitioner's design mark. In April of 1983 respondent filed an application for U.S. trademark registration. The registration issued in September, 1984.
In the interim between respondent's first use and the issuance of his registration, petitioner began expansion from selling under the mark only in Japan to marketing its goods under the mark in the United States. Petitioner eventually retained an export trading company for this purpose and engaged in substantial commerce with the United States.
Petitioner's application for U.S. trademark registration was filed in June of 1984. The registration issued in 1985. At the time the application was made petitioner believed it had the exclusive right to use the mark in the United States. Respondent had similarly believed himself to be the owner of the right to use and register the mark in the U.S. when he had applied to register it, over a year prior to petitioner's application.
Subsequent to the issuance of both registrations, in early 1986, petitioner's advertising in the U.S. became known to respondent, both parties became aware of confusion in the marketplace, and in September of 1986 Person's initiated this action to cancel Christman's registration.
The various affidavits agree as to other facts and present conflicting views as to still other occurrences, but the facts as stated above do not appear to be seriously disputed by the parties.
Based on these facts it is clear that respondent was the first to use the mark in the United States. Petitioner's use of the mark in Japan did not have an effect on U.S. commerce and cannot form the basis for holding that petitioner has priority here. See: Le Blume Import Co. v. Coty, 293 F. 344 (2nd Cir.1923); Techex, Ltd. v. Dvorkovitz, 220 USPQ 81, 83 (TTAB 1983), and cases cited therein. It is a well-recognized and long-standing legal principle that the right to register in the United States is based on either ownership of a foreign registration of the mark in question (pursuant to the provisions of Section 44 of the Trademark Act of 1946), which petitioner has not asserted, or use in the United States, and it is clear from the evidence before us that respondent used the mark in the United States prior to petitioner's first use in commerce between Japan and the United States. A foreign mark which has become famous in the United States may serve as a bar to another's adoption of the same mark here, but there is no admissible evidence that petitioner's mark was even well known in the U.S., much less that it was famous here at the time of its adoption by respondent. See: Vaudauble v. Montmarte, Inc., 20 Misc.2d 757, 193 NYS2d 332, 123 USPQ 357 (NY Sup.Ct.1959). Petitioner, as the junior user of the mark, simply has no basis upon which to claim priority.
*5 As to the claim of each party that the registration of the other was procured by means of the fraudulent declaration that that party owned the mark and knew of no one else with superior rights to registration, we find in both instances that the declarations in the applications do not constitute fraud. In each case the declarant had an understanding that the relevant facts and the relevant law entitled no one else to the registration. There is no evidence that either party was engaging in knowing, willful and misleading conduct designed to procure a registration to which that party was otherwise not entitled. Respondent was of course aware of petitioner's use Japan, but he was aware of no use by petitioner of the mark in the United States and was unaware of any intention or plans of petitioner to use its mark outside of Japan. As such, he was of the opinion that he was free to adopt and use the mark. Even if he had been mistaken in reaching this conclusion, his declaration would not have constituted fraud. Neither party has shown that the other's declaration was an intentional misstatement designed to procure a registration to which the party knew it was not entitled. There has been no showing that either party had the intent to deceive the Patent and Trademark Office. Cool-Ray, Inc. v. Eye Care, Inc., 183 USPQ 618 (TTAB 1974). As such, the claim of each party based on fraud is denied.
The evidence also clearly establishes that respondent has not abandoned use of the mark. Respondent has had intermittent sales of products bearing the mark, but periods between sales have never been long enough to create a presumption of abandonment, inventories of various items of stock bearing the mark have never been totally exhausted, and there is nothing which supports petitioner's argument that respondent had the intent to abandon use of the mark. To the contrary, Mr. Christman has consistently maintained that his intention and the intention of his corporation, Team Concepts, Ltd., was to continue use of the mark. Both parties offered evidence that respondent has tried to sell his rights to petitioner. This position is inconsistent with intending to voluntarily give up such rights.
The Paris Convention claim of petitioner is that respondent's use of "PERSON'S" constitutes "an imitation of well-known mark, prohibited under Article 6(b) bis of the Paris Convention." Petitioner's arguments are based on the alleged bad faith in respondent's adoption of the mark and the contention that petitioner's mark was "well known" in the United States when respondent adopted it. As respondent points out, bad faith constitutes more than just copying. Proving bad faith requires showing that the copying was with the intent of trading upon the good will or reputation of another. At the time respondent adopted and used petitioner's mark in the United States, petitioner operated solely in Japan and had no reputation or good will here off of which respondent could have intended to trade. Moreover, there is no evidence that petitioner's mark was well known in the United States at the time respondent adopted it, so petitioner's claim under Article 6 bis of the convention is not well taken.
*6 In summary, there is no genuine dispute as to facts which are material to the claims of petitioner and respondent in the petition and the counterclaim, respectively. Petitioner claims that respondent's credibility and his intent in adopting the same mark which he knew was being used in Japan by petitioner are important issues which cannot be resolved prior to trial, but these "issues" are not material to the pleaded basis for the petition to cancel respondent's registration or to the counterclaim for cancellation of the registration of petitioner. Petitioner asserted fraud, abandonment, likelihood of confusion based on petitioner's alleged priority, and that the Paris Convention bars respondent's registration. There is no dispute as to genuine issues of fact material to these issues. Based on the undisputed facts we conclude that respondent's declaration in his application was not fraudulent; that he established priority over petitioner by using the same mark on the same products in the United States before petitioner used it here; that confusion is likely because of the identity of the goods and the marks of the parties; that because petitioner's mark was not well known in the United States at the time respondent began using it here, the Paris Convention does not provide petitioner with a proper basis for cancellation of respondent's registration; and that respondent's claim that petitioner procured its registration by fraud must be denied because it is without factual or legal support.
Accordingly, respondent's motion to strike is granted only to the extent indicated above; respondent's motion for summary judgment is granted both as to petitioner's petition to cancel respondent's registration and as to respondent's counterclaim to cancel petitioner's registration; the petition to cancel respondent's Registration No. 1,297,698 is dismissed; the counterclaim to cancel petitioner's Registration No. 1,354,062 is granted; and Registration No. 1,354,062 will be cancelled in due course.
J. D. Sams
J. E. Rice
R. F. Cissel
Members, Trademark Trial and Appeal Board
FN1. Registration No. 1,297,698, issued September 25, 1984.
FN2. August 13, 1985.