Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 WMA GROUP, INC., BY CHANGE OF NAME FROM WESTERN MEDIA ASSOCIATES, INC.
WESTERN INTERNATIONAL MEDIA CORPORATION
Opposition No. 89,521
September 13, 1993
Before Sams, Simms and Quinn
Opinion by Simms
This case comes up on a motion to dismiss or, in the alternative, for summary judgment, filed by Western International Media Corporation (applicant) and on responses filed by Western Media Associates, Inc., now WMA Group, Inc. (opposer).
In this proceeding, opposer, a corporation organized and existing under the laws of California, opposed applicant's application to register the mark WESTERN INTERNATIONAL MEDIA and design for certain services in classes 35 and 42. Among other things, opposer asserts that it has used the mark WESTERN MEDIA ASSOCIATES and owns California service mark registrations of the mark for certain services, and that applicant's mark so resembles opposer's mark as to be likely to cause confusion.
In applicant's motion to dismiss, applicant argues that the opposition fails to state a claim or, in the alternative, that summary judgment for applicant should be entered. Essentially, applicant argues that, at the time opposer filed the notice of opposition, it was a suspended corporation under the laws of the state of California and that it lacked the capacity to initiate these proceedings. More particularly, applicant states that on or about May 1, 1992, opposer was suspended as a California corporation by the California Franchise Tax Board and that, since that date, opposer has not been revived as an active corporation. Relying upon Fed.R.Civ.P. 17(b), [FN1] applicant argues that under Section 23301 of California's Revenue and Taxation Code, a corporation suspended by the Franchise Tax Board is prohibited from exercising its "corporate powers, rights and privileges." Applicant refers to several California state cases holding that, under the laws of California, a corporation which has been suspended for failure to pay franchise taxes is prohibited from suing, from defending a suit or from appealing from an adverse decision. While a corporation whose powers have been suspended may apply for a certificate of revivor upon payment of all applicable taxes, interest and penalties, opposer has assertedly not done so. Applicant argues that even if opposer becomes a revived corporation, it still should be precluded from maintaining this action because it was a suspended corporation during the time for filing the opposition. Applicant cites other state court cases holding that, when a suspended corporation commences an action during its suspension, the statute of limitations continues to run. By analogy, because opposer was not a revived corporation by the deadline for filing an opposition, opposer may not continue this action, applicant argues. Applicant requests dismissal of this opposition with prejudice.
In opposition to applicant's motion, [FN2] opposer's counsel states that opposer
*2 has been revived from its previous brief suspended status, such suspension having been based on the misapplication of its annual franchise fee.
Opposer's counsel indicates that opposer's name has been changed to WMA Group, Inc. (WMA); [FN3] that WMA is the same corporate entity as was formerly known as Western Media Associates, Inc.; that WMA holds all the rights, including the trademark rights, of the predecessor; and that the sole reason for the change of name was applicant's "wrongful act" and "bad faith litigation tactic" of taking opposer's name during the period of suspension. Opposer has submitted a copy of the certificate of amendment changing its corporate name. Moreover, opposer argues that the issue of the effect of the suspension and revivor under California law is disputed and cannot be placed before the Board for resolution. Because the "corporate existence" continues, and because any change of corporate name does not affect opposer's rights to its common law and state-registered trademarks, opposer requests that applicant's motion to dismiss be denied.
While opposer's response seems to indicate that opposer obtained a revived status, the affidavit of opposer's president submitted with the response indicates that opposer's attempts to revive the corporation were denied by the California Franchise Tax Board because of "non-consent" by the California Secretary of State. He further indicates that opposer was unable to obtain the necessary certificate of revivor in a timely fashion and that opposer has been "restored to good standing" under the new name WMA Group, Inc. Applicant's counsel also indicates that opposer filed a "new corporate charter."
In any event, the parties have disputed the effect of suspension on a party's right to sue and be sued. Applicant has referred the Board to treatises on California procedure and practice indicating that, during the period of a corporation's suspension, the corporation may be sued but is not permitted to sue or to defend an action. However, at least one court has held that a corporation which has been suspended for failure to pay taxes and file returns may nevertheless prosecute or defend an action. In any event, on revival, a corporation may proceed with the prosecution or defense of the action. Except where the statute of limitations has run, revivor is given a retroactive effect.
Whether we view this case as one involving a revived corporation or the formation of a new corporate entity which now has the rights of its predecessor, we believe that applicant's motion to dismiss should be denied. First, it appears that, but for the action of applicant's president, opposer would have been in the position of a revived corporation maintaining this action in the name of Western Media Associates, Inc. We agree with opposer that applicant should not obtain dismissal of this action by the tactic its president employed. More importantly, however, this case involves, as we understand it, a situation where an entity which originally filed the notice of opposition has, in effect, changed its name. The new entity (WMA) has all of the rights originally pleaded by Western Media Associates, Inc. Because the same party who filed the opposition is the party now challenging applicant's right to register, albeit under a different name, we believe that there is no merit in applicant's motion to dismiss. That is to say, regardless of the technical corporate status of the opposer under California law, it seems to us that opposer as a continuing business is an organization that stands to be damaged by registration to applicant. See Jewelers Vigilance Committee Inc. v. Ullenberg Corp., 2 U.S.P.Q.2d 2021, 2024 (Fed.Cir.1987). See also Arbrook, Inc. v. La Citrique Belge, 184 USPQ 505 (TTAB1974); Davidson v. Instantype, Inc., 165 USPQ 269 (TTAB1970) and Pyco, Inc. v. Pico Corp., 165 USPQ 221 (TTAB1969). Accordingly, applicant's motion is denied.
*3 Applicant is allowed until October 4, 1993 in which to submit an answer to the notice of opposition.
Members, Trademark Trial and Appeal Board
FN1. That rule provides:
The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized.
FN2. In view of the circumstances set forth in opposer's motion to accept its response, we consider opposer's response to have been timely filed. More particularly, opposer's states that the delay in filing a response to applicant's motion was occasioned by "obstructive measures" of applicant's president who, during the period of suspension of opposer's corporation, incorporated a new entity using opposer's corporate name--Western Media Associates, Inc. This presented difficulties for opposer in its attempt to be restored to active status. (On this point, it is applicant's position that, since opposer was a suspended corporation, the trade name was available for use and registration by others and that applicant was within its rights to "capture the name for its new company.")
FN3. In view of the change of opposer's corporate name, the caption of this proceeding is amended accordingly.