Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 VO-TOYS, INCORPORATED
February 6, 1989
By the Board:
J.D. Sams, R.L. Simms and G.D. Krugman
Vo-Toys, Inc., a New York corporation, has petitioned to cancel the registration held by Bounce, Inc., a Colorado corporation, of the mark KONG for dog toys. [FN1] In its amended complaint, petitioner asserts that it manufactures, distributes and sells a line of pet products including toys for dogs and cats; that, although respondent sold a dog toy long before petitioner, respondent long ago ceased using the mark KONG in connection with its goods with the intention to abandon that mark; that petitioner subsequently adopted the mark before respondent recommenced its use of that mark; that in 1985 respondent filed a civil suit against petitioner and others in the United States District Court for the District of Colorado in which in alleged inter alia trademark infringement of its Registration No. 1,145,509 (not the registration herein sought to be cancelled); that, in a consent judgment, respondent's complaint was dismissed with prejudice, its trademark was held abandoned and its pleaded Registration No. 1,145,509 was ordered cancelled; and that respondent's mark used in connection with its goods so resembles petitioner's mark as to be likely to cause confusion.
In its answer, respondent has denied many of the allegations of the amended petition but has admitted that petitioner is a manufacturer, distributor and seller of pet products; that petitioner's use of the mark KONG was derived from respondent because petitioner was a distributor for respondent's predecessor, or petitioner's use constituted an infringement of respondent's common law rights; that respondent has not ceased use of its mark with intent to abandon but has on the contrary always used the mark KONG on its toys; and that respondent's sales under the mark have been continuous since prior to November 25, 1981. Respondent has also charged that petitioner is guilty of unclean hands and fraud in that, on information and belief, petitioner still markets its toys in the same packaging it used when it was a distributor for respondent's predecessor.
Petitioner's motion for summary judgment is supported by an affidavit of its president, copies of pages of a deposition taken in connection with the civil litigation, a copy of the consent judgment, and discovery responses. It is petitioner's position that, as a result of the consent judgment entered into in resolution of the civil litigation brought by respondent against petitioner and others, there is no genuine issue with respect to petitioner's prior use of the mark KONG in connection with rubber dog toys, and that judgment as a matter of law should be entered in petitioner's favor.
In the consent judgment (captioned 'Final Judgment on Consent') issued August 27, 1985, the court as a finding of fact stated:
7. The alleged trademark KONG (U.S. Trademark Reg. No. 1,145,509) is no longer being used by plaintiff [respondent herein] and has been abandoned since plaintiff long ago ceased using the mark on its products.
*2 As a conclusion of law, the court stated that respondent's registration should be cancelled from the Principal Register. The court ordered:
4. U.S. Trademark Registration No. 1,145,509 'KONG' is abandoned and the Commissioner of Patents and Trademarks is ordered to cancel said registration from the Principal Register of the United States Patent and Trademark Office.
In support of petitioner's own use, the affidavit of its president establishes that it sold rubber dog toys under the trademark KONG continuously since early 1981. Invoices in support of petitioner's sales since January 28, 1982 have been furnished. It is petitioner's position that, when a mark has been abandoned, as it has been determined herein, the mark becomes available for adoption and use by others. Here, petitioner began selling KONG toys before the litigation between the parties and continued to sell after the litigation terminated, so that it allegedly has superior rights.
Respondent has filed a combined brief in opposition to the motion and in support of its own motion for summary judgment. Respondent, we believe correctly, states the issue on these motions as the effect of the consent judgment on its right to maintain the registration herein sought to be cancelled. It is respondent's position that the consent judgment which cancelled its earlier trademark registration either (1) left respondent's common law rights in place or (2) cut off all respondent's rights but did not 'legitimize' use of the mark KONG by petitioner, which was derived from respondent and not based on independent noninfringing activities of petitioner. Construed in either manner, respondent would have maintained its common law rights or should be considered to have immediately developed new common law rights after the consent judgment. (August 28, 1985, the day after the consent judgment, is the date of first use recited in its amended registration, the subject of this cancellation proceeding.)
According to respondent, the following facts supported by a declaration of its president as well as discovery requests and other documents of record, are established and are not in dispute. Respondent first used the mark KONG for pet toys and has continuously done so since 1977. At that time and continuously the mark was molded into the bottom of every toy. During 1980 and 1981 Kings Imports was an exclusive distributor for respondent's predecessor until Kings Imports went out of business in September 1981. King Imports arranged for labels to be printed and sent those labels to respondent, who shipped the goods upon order directly to customers. When Kings Imports went out of business, petitioner bought the stock or inventory, including some of respondent's toys. Petitioner continued to market those toys and ordered additional products from respondent. In late 1982 and early 1983, respondent noticed a drop in the orders from petitioner and began to have products returned to respondent which were not made by it. Upon further investigation, respondent discovered that petitioner was having 'counterfeit' products made abroad and sold under the trademark KONG in packages substantially identical to the old packages except for some changes in the wording. Respondent sent a cease and desist letter to petitioner and notified the trade of the problem. In view of the actual confusion and the loss of business, respondent eventually (in 1984) changed the mark on the packages but continued to have the mark KONG molded into the bottom of the toys. At the same time, respondent continued to sell in bulk to the professional dog market (K-9, police, etc.) black rubber toys so molded. Despite respondent's continuous sales of toys with the mark KONG molded thereon (but sold with other marks on the packages), respondent's president testified in April 1985 during a deposition conducted in the civil litigation that respondent stopped using the mark KONG and made name changes because of actual confusion. The suit was settled by a consent judgment prepared by plaintiff's attorney and signed by respondent's attorney, who was an officer of respondent, without consultation with respondent's president regarding the consequences thereof. According to respondent, it had no intention to abandon the mark KONG and continued to sell toys during this entire period with the mark molded onto the goods. Respondent has more recently re-introduced the black rubber toys with the mark KONG on the packages (called header cards).
*3 With regard to the effect of the consent judgment, respondent argues that finding No. 7 quoted above is erroneous and that the effect of the consent judgment should be limited to the trademark registration which was ordered cancelled (not the registration herein sought to be cancelled). Since the court's order did not speak about common law rights or respondent's right to reregister, and because any ambiguity or uncertainty in the findings of fact should assertedly be construed in a manner most favorable to respondent, respondent urges us to give little weight to the consent decree drafted by petitioner's attorney. Moreover, respondent notes that the consent judgment is silent with respect to any trademark rights of petitioner.
In a reply brief, petitioner argues that respondent's contentions are an attempt to relitigate the issues settled by the consent decree and that the Board should not and cannot overturn or find error with the consent judgment and its findings. Petitioner also contends, we think correctly, that, in view of the court's finding of abandonment through non-use, no common law rights survived the entry of the consent judgment.
While we might sympathize with respondent's plight in this case, we believe that we are constrained to view the consent judgment as an estoppel on any claim by respondent to the use of the mark prior to August 27, 1985, the date of the consent judgment finding abandonment by respondent. If the consent judgment did not truly reflect the facts, respondent should not have entered into it or should have requested the court to amend the judgment when the true facts were discovered.
Because there can be no dispute, in view of petitioner's affidavit, that petitioner sold goods under the mark continuously since early 1981, long prior to any rights which, in view of the consent judgment, respondent is entitled to claim, we believe that petitioner's motion for summary judgment is well taken. That is to say, there is no genuine issue with respect to petitioner's priority. Nor can there be any doubt that confusion is not only likely but inevitable when identical marks are used on the same products. Accordingly, petitioner's motion for summary judgment is granted; respondent's motion for summary judgment is denied; the petition for cancellation is granted; and respondent's registration will be cancelled in due course.
J. D. Sams
R. L. Simms
G. D. Krugman
Members, Trademark Trial and Appeal Board
FN1. Registration No. 1,443,417, issued June 16, 1987.