*1 THIS OPINION IS CITABLE AS PRECEDENT OF THE T.T.A.B.
Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
MILLIKEN & COMPANY
IMAGE INDUSTRIES, INC.
Cancellation Nos. 21,430 and 21,431
May 10, 1996
Before Rice, Simms, and Seeherman
Administrative Trademark Judges
Opinion by Rice
Administrative Trademark Judge
In these consolidated proceedings, Milliken & Company seeks to cancel two registrations issued to Image Carpets, Inc. (now by change of name Image Industries, Inc. [FN1]), namely, a registration for the mark "WEARLON" for carpeting, [FN2] and a registration for the mark "WEARLON +" for carpet fibers incorporated in carpeting having soil, stain and wear resistant properties. [FN3]
In each proceeding, petitioner asserts prior use and registration of the mark "WearOn", in the form shown below,
Respondent, in its amended answer to the petitions for cancellation, essentially denies the salient allegations contained therein, and asserts the affirmative defenses of laches and acquiescence. In addition, respondent asserts two counterclaims. In the first, respondent seeks cancellation of petitioner's registration essentially on the ground that prior to the filing date of petitioner's application, petitioner did not make any shipment of carpeting with the mark "WearOn" affixed thereto pursuant to a bona fide sale in interstate commerce; that because petitioner failed to comply with the affixation requirement of Section 45 of the Act prior to the filing of its application, the dates of first use and first use in commerce specified in the application were false and fraudulent; and that petitioner's misstatement of its dates of use was intentional and willful. In its second counterclaim, which is a counterclaim for partial cancellation to restrict petitioner's identification of goods, respondent asserts that prior to the filing of petitioner's application, and for more than two years thereafter, petitioner did not use the mark "WearOn" for any goods except carpet tile with nylon fiber; that petitioner thereby abandoned the mark "for any use except carpet tile made with nylon fiber"; that the differences between carpet tile, the goods of petitioner, and residential broadloom carpeting, the goods of respondent, are commercially significant because the nature and uses, customers, channels of distribution, and methods of installation of the two types of products differ substantially, so that there is no likelihood of confusion; and that respondent has prior rights with respect to broadloom carpeting. Accordingly, respondent asks that if the Board finds likelihood of confusion with respect to the marks of the parties as applied to the goods currently specified in their involved registrations, the Board restrict petitioner's identification of goods to "carpet tile manufactured of nylon fiber" and also restrict respondent's identifications of goods to "residential broadloom carpeting manufactured of polyester fiber."
*2 This case now comes up on (1) petitioner's motion, filed July 17, 1995, for summary judgment in its favor, both on its own claim and on the counterclaims, and (2) respondent's motion, filed September 1, 1995, to "Strike New, Undisclosed Evidence and to Further Exclude Its Use; and Motion to Strike Respondent's [sic] New Arguments, to File a Surreply and Take Additional Discovery." Both parties have briefed both motions, and have submitted evidence with respect to petitioner's motion for summary judgment.
We turn first to petitioner's motion for summary judgment. The burden is on a party moving for summary judgment to show the absence of any genuine issue of material fact and that it is entitled to judgment as a matter of law. See Rule 56(c) of the Federal Rules of Civil Procedure. The evidence of record and any inferences which may be drawn from the underlying undisputed facts must be viewed in the light most favorable to the nonmoving party. See Olde Tyme Foods Inc. v. Roundy's Inc., 961 F.2d 200, 22 USPQ2d 1542 (Fed.Cir.1992).
Having carefully considered the materials and arguments offered by the parties in connection with petitioner's summary judgment motion, we conclude that there are, at a minimum, genuine issues of material fact as to the commercial impressions created by the marks of the parties [cf. Olde Tyme Foods Inc. v. Roundy's Inc., supra]; the strength of petitioner's mark; the reasonableness of petitioner's delay in filing its petitions to cancel; whether there was detrimental reliance by respondent on the delay; and, for purposes of respondent's counterclaim on the ground of fraud, whether petitioner's display of carpeting with "WearOn" fiber at the June 1986 NEOCON trade show resulted in the placement and shipping of orders therefor prior to the filing date of petitioner's application, whether the customer who, on June 11, 1986, ordered Metro Square carpeting with "WearOn" fiber was exposed in any way (such as, at the trade show, or through other exposure to carpet samples bearing the mark) to the "WearOn" mark, and, if there was in fact no valid use of the mark prior to the filing date of the application, [FN5] whether petitioner knew that its application allegation of use of the mark in commerce was false. [FN6] Accordingly, petitioner's motion for summary judgment cannot be granted insofar as the issues of likelihood of confusion, laches, and fraud are concerned.
We come to a different conclusion with respect to respondent's counterclaim to restrict petitioner's identification of goods. As respondent recognizes (at pages 50-51 of its brief in opposition to petitioner's motion for summary judgment), the Board no longer requires that a petition for partial cancellation be tied to a ground for cancellation, but does require that a party seeking to restrict an opponent's broadly worded identification of goods, in a case involving likelihood of confusion, plead and prove (1) that entry of the proposed restriction will avoid a finding of likelihood of confusion, and (2) that the opponent is not using its mark on the goods or services that will be effectively excluded by the proposed restriction. See DAK Industries Inc. v. Daiichi Kosho Co., 35 USPQ2d 1434 (TTAB 1995), and Eurostar Inc. v. "Euro-Star" Reitmoden GmbH & Co. KG, 34 USPQ2d 1266 (TTAB 1994). However, respondent asserts that neither case holds that a petition for partial cancellation can no longer be based on a ground for cancellation. It is respondent's position that petitioner, albeit it claims that it now uses its mark in connection with nylon fiber sold in residential broadloom carpet, previously abandoned its mark for such goods (by failing to expand into that market for more than two years after issuance of petitioner's registration), giving respondent priority as to that category, and that "respondent's priority in the residential broadloom carpet category and the fact that a likelihood of confusion will be avoided by the proposed modifications are the bases for its partial cancellation counterclaim."
*3 Because petitioner's registration was more than five years old at the time of the filing of petitioner's petitions to cancel respondent's registrations, [FN7] the Section 2(d) ground of priority of use and likelihood of confusion is not available as a ground for cancellation of petitioner's registration. See Section 14 of the Act, 15 U.S.C. § 1064. The ground of abandonment is a ground that is available at any time. However, this is not a case where the identification of goods in the registration which is the subject of the counterclaim specifically lists a number of different items, and the counterclaimant seeks to have a number of the specified items deleted on the ground of abandonment of use of the mark on those items. Cf. DAK Industries Inc. v. Daiichi Kosho Co., supra. Rather, here there is only one item specified in the identification of goods, namely, nylon fiber sold only in finished carpeting, and there is no genuine issue that petitioner has from the beginning and still does use its mark in connection with the identified goods (albeit respondent questions whether the manner of use at the time of the filing of petitioner's application, on July 17, 1986, was a "technical" trademark use sufficient to serve as a basis for registration). In this context, respondent seeks, via the asserted ground of abandonment, to further restrict the identification to nylon fiber sold only in carpet tiles, thus excluding nylon fiber sold in residential broadloom carpeting. Respondent maintains that petitioner did not commence using its mark on nylon fiber sold in residential broadloom carpeting until late 1991 at the earliest, a date more than four years after the issuance of petitioner's registration and long subsequent to respondent's November 28, 1986 date of first use of its mark in the residential broadloom carpeting category.
Even assuming arguendo that petitioner did not expand into the residential broadloom carpeting category until late 1991 (a matter which petitioner strongly disputes), we conclude that upon the law and the facts, respondent does not have a legally sufficient claim for partial cancellation on the ground of abandonment. The situation in this case is analogous to the situation in Proctor & Gamble Co. v. Sentry Chemical Co., 22 USPQ2d 1589 (TTAB 1992). Proctor & Gamble, an opposition proceeding, came up on cross motions for summary judgment on applicant's counterclaim for partial cancellation. By that counterclaim, applicant sought to restrict the identification of goods in opposer's pleaded registration to the trade channels (namely, grocery stores, discount stores and club stores) through which opposer's goods were sold at the time of the filing of opposer's application for registration. The opposer's registration had issued in 1958, and there was no dispute that in the 1980's, well prior to applicant's request for restriction, opposer had expanded its trade channels to include institutional and industrial trade channels. The applicant argued, however, that the propriety of its requested restriction must be judged by the use made by opposer at the time of the filing of opposer's application, not at the time of the filing of the request for restriction, and that as between the parties, applicant was the first to use its mark in institutional and industrial trade channels. The Board ruled in favor of opposer, stating, at page 1593:
*4 In seeking a restriction of opposer's registration under Section 18, applicant is asking, in essence, for an equitable remedy. We must ask, therefore, whether equity demands that, in determining whether to limit opposer's registration, we look to the nature of the use made by opposer as of the time it sought registration of its "MR. CLEAN" mark or, instead, to the use made by opposer as of the time applicant sought to restrict opposer's registration. We believe equity demands we look to the latter date.
If, in considering the question of restriction of a registration under Section 18, we were to look to the nature of the use made by the registrant as of the time it sought registration of its mark, as opposed to the time a restriction to the registration is sought, we would be injecting into the trademark registration system a strain of uncertainty. Any normal expansion of commerce, in the form of either a new product formulation or a new trade channel for the registrant's goods, would bring with it the question of whether such expansion was protected by the existing registration or whether, to the contrary, the registration was vulnerable to a restriction under Section 18. This is not the result intended by Section 18.
Here, opposer has, indisputably, used its mark "MR. CLEAN" on all purpose cleansers in consumer trade channels and in industrial and institutional trade channels and has done so since a time prior to appellant's request for restriction of opposer's registration. The recitation of goods in its longstanding registration is "sudsing cleaner, cleanser, and detergent," a term that aptly describes all the products to which its "MR. CLEAN" mark has been applied, irrespective of the trade channels in which the various cleaners are sold.
Thus, the evidence on applicant's summary judgment motion fails to establish the first requisite for a holding of abandonment: that opposer had not, as of the filing date of the request for restriction, commenced using its mark on cleaners sold in industrial and institutional trade channels. Because applicant has failed to establish the non-use by opposer of its mark "MR. CLEAN" on products sold in industrial and institutional trade channels as of that date, opposer is entitled to judgment on applicant's counterclaim for partial cancellation ...
That applicant may have used "CAPTAIN CLEAN" on cleaning products sold in industrial and institutional trade channels from a time prior to opposer's sale of "MR. CLEAN" products in those trade channels is a legally insufficient basis for sustaining the counterclaim for partial cancellation here ... [FN8]
For the reasons set forth in the quoted portions of Procter & Gamble, and because we find that there is no genuine issue of fact for trial as to petitioner's use of its mark on nylon fiber sold in residential broadloom carpeting as of April 28, 1994, the date of respondent's request for partial cancellation, and that petitioner is entitled to judgment as a matter of law on this issue, [FN9] petitioner's motion for summary judgment on respondent's counterclaim for partial cancellation is granted.
*5 This brings us to respondent's motion to "Strike New, Undisclosed Evidence and to Further Exclude Its Use; and Motion to Strike Respondent's [[[[sic] New Arguments, to File a Surreply and Take Additional Discovery." Respondent's complaint is that petitioner's reply brief on the summary judgment motion contains arguments not raised in petitioner's initial brief on the motion, and also that petitioner's reply brief relies on "important new evidence" not disclosed during discovery and not submitted with petitioner's initial brief on the motion, namely, 1986-1991 sales figures for residential broadloom carpeting sold by petitioner in conjunction with the mark "WearOn", which sales figures are (in respondent's view) relevant to respondent's counterclaim for partial cancellation; evidence of an asserted instance of actual confusion; and the August 22, 1995 declaration of a retail carpet store owner who states that he carries both respondent's residential broadloom carpeting made of WEARLON fiber and petitioner's residential broadloom carpeting made of "WearOn" fiber.
We do not find respondent's motion to be well taken. In this regard, we note, inter alia, that it is not improper to assert new arguments in a reply brief; that respondent's Document Request No. 4, the discovery request to which respondent points in support of its claim that the sales figures in question should have been supplied to respondent during discovery, does not seek information broken down as to types of carpeting; that for the reasons stated in our decision on petitioner's motion for summary judgment, it is immaterial, for purposes of respondent's counterclaim for partial cancellation, whether petitioner was using its mark in conjunction with residential broadloom carpeting during the years 1986-1991, the critical question being whether petitioner was doing so by April 28, 1994 (a time period for which petitioner did provide discovery broken down into categories); that the letter offered by petitioner as evidence of an instance of actual confusion is dated May 3, 1994, and a copy thereof was sent to respondent by petitioner on June 10, 1994; that as to the declaration by the retail carpet store owner, respondent's complaint that this witness was not identified during discovery is not supported by an identification of any specific discovery request asking for his identification; that the Board does not require that a party respond to a discovery request asking for the identification of persons it plans to call as witnesses, except in the case of an expert witness; and that petitioner's motion for summary judgment on the issue of likelihood of confusion has been denied.
In summary, respondent's motion to "Strike New, Undisclosed Evidence and to Further Exclude Its Use; and Motion to Strike Respondent's [sic] New Arguments, to File a Surreply and Take Additional Discovery" is denied. Petitioner's motion for summary judgment is granted only with respect to respondent's counterclaim for partial cancellation, judgment is entered in petitioner's favor on that counterclaim, and this case will go forward on petitioner's Section 2(d) claim and on respondent's counterclaim for cancellation on the ground of fraud. [FN10]
*6 Trial dates herein, beginning with petitioner's testimony period as plaintiff in the cancellation, are reset as shown below:
IN EACH INSTANCE, a copy of the transcript of testimony together with copies of documentary exhibits, must be served on the adverse party WITHIN THIRTY DAYS after completion of the taking of testimony. Rule 2.125.
Testimony period for petitioner as plaintiff in the July 8, 1996
(opening thirty days prior thereto)
Testimony period for respondent as defendant in the Sept. 6, 1996
cancellation and as plaintiff in the counterclaim to close
(opening thirty days prior thereto)
Testimony period for petitioner as defendant in the Nov. 5, 1996
counterclaim and its rebuttal testimony as plaintiff in the
cancellation to close
(opening thirty days prior thereto)
Rebuttal testimony period for respondent as plaintiff in the Dec. 20, 1996
counterclaim to close
(opening fifteen days prior thereto)
Briefs shall be due as follows:
Brief for petitioner as plaintiff in the cancellation shall be Feb. 18, 1997
Brief for respondent as defendant in the cancellation and as March 20, 1997
plaintiff in the counterclaim shall be due
Brief for petitioner as defendant in the counterclaim and its April 19, 1997
reply brief as plaintiff in the cancellation shall be due
shall be due
An oral hearing will be set only upon request filed as provided by Rule 2.129.
Administrative Trademark Judges, Trademark Trial and Appeal Board
FN1. The records of the Patent and Trademark Office ("PTO") show that a change of respondent's name from Image Carpets, Inc. to Image Industries, Inc. was recorded in the PTO's Assignment Branch, with respect to both of respondent's registrations, at reel 1062, frame 0069. Accordingly, the records of this proceeding have been amended to reflect the change of name.
FN2. Registration No. 1,475,121, issued February 2, 1988 from an application filed November 28, 1986, claiming first use and first use in commerce on November 18, 1986; affidavit Sec. 8 accepted. This registration is the subject of Cancellation No. 21,430.
FN3. Registration No. 1,636,990, issued March 5, 1991 from an application filed February 26, 1990, claiming first use and first use in commerce on January 29, 1990. This registration is the subject of Cancellation No. 21,431.
FN4. Registration No. 1,429,265, issued February 17, 1987 from an application filed July 17, 1986, claiming first use and first use in commerce on June 1, 1986; affidavit Sec. 8 accepted; affidavit Sec. 15 received.
FN5. In this regard, respondent is reminded that it is not necessary that the mark be affixed to the goods themselves when they are sold or shipped in commerce, it being sufficient for purposes of Section 45 if the mark is used on displays associated with the goods and the goods are then sold or transported in commerce to customers who were exposed to such use.
FN6. We note that even if petitioner's registration were to be cancelled on the ground of fraud, petitioner could rely on its trade show use and other promotional uses of its mark in an effort to prove use analogous to trademark use since prior to respondent's date of first use. See T.A.B. Systems v. Pactel Teletrac, 77 F.3d 1372, 37 USPQ2d 1879 (Fed.Cir.1996).
FN7. Under Section 14 of the Act, a registration which is more than five years old may be cancelled only on certain specified, limited, grounds. The filing by a plaintiff of an opposition or a petition for cancellation in which plaintiff relies on ownership of a registration of its pleaded mark tolls, during the pendency of the proceeding, the running of the Section 14 five-year period for purposes of determining the grounds upon which a counterclaim may be based. See TBMP § 308.02(c)(1). The Trademark Trial and Appeal Board Manual of Procedure (TBMP) (Stock No. 903-022-00000-1) is available for a fee from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. (Telephone (202) 512-1800).
FN8. Although Procter & Gamble was overruled in Eurostar, to the extent that it is inconsistent with Eurostar, the quoted portion of Procter & Gamble was not overruled. That is, while, as a result of Eurostar, a request to restrict a broadly worded identification of goods in a likelihood of confusion case need no longer be tied to a ground for cancellation such as abandonment, so that a pleading of abandonment in such cases is now superfluous, both Procter & Gamble (involving a claim of abandonment) and Eurostar require that the party seeking such a partial cancellation plead and prove, inter alia, that the opponent is not, at the time of the request for restriction, using its mark on the goods sought to be excluded by the proposed restriction.
FN9. Indeed, respondent's very pleading of its counterclaim for partial cancellation is legally insufficient as a matter of law, because there is no allegation that petitioner had not, as of the filing date of the counterclaim, commenced using its mark in connection with nylon fiber sold in residential broadloom carpeting.
FN10. The parties are advised that our decision on petitioner's motion for summary judgment is interlocutory in nature. An appeal may be taken within two months after the entry of a final decision in this case. See Copelands' Enterprises Inc. v. CNV Inc., 887 F.2d 1065, 12 USPQ2d 1562 (Fed.Cir.1989).