Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01468/USCOURTS-caed-2_05-cv-01468-9/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:44 Trademark Infringement

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1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

NIKE, INC., an Oregon corporation, )

) 2:05-cv-1468-GEB-JFM

Plaintiff, )

)

v. ) ORDER

)

NIKEPAL INTERNATIONAL, INC., )

a California corporation, )

)

Defendant. )

)

Pending are cross motions for summary judgment. For the

following reasons, Plaintiff’s motion is denied and Defendant’s motion

is denied in part and granted in part. 

BACKGROUND

Plaintiff Nike, Inc. is an Oregon corporation engaged in the

design, development and distribution of footwear and other products

whose beginnings date back to 1968. (Def.’s Response to Pl.’s

Statement of Undisputed Facts (“SUF”) ¶¶ 1, 2, 10.) Plaintiff adopted

the mark “NIKE” to brand its footwear products in 1971. (Id. ¶ 5.)

Defendant NikePal International, Inc. is a California corporation that

began doing business in 1998 providing import, export and distribution

services of products such as syringes, valves and cardboard boxes. 

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(Pl.’s Response to Def.’s SUF ¶¶ 44, 46.) In September 2000,

Defendant filed an application for registration of its service mark

“NIKEPAL” with the United States Patent and Trademark Office (“PTO”). 

(Id. ¶ 1.) Plaintiff thereafter filed, in the Trademark Trial and

Appeal Board (“TTAB”) of the PTO, a Notice of Opposition to the

registration of Defendant’s mark. (Pl.’s Mot. for Partial Summ. J.

(“Pl.’s Mot.”) at 11:2-3; Def.’s Mot. for Partial Summ. J. (“Def.’s

Mot.”) at 5:26-27; see also Supplemental Decl. of Gina Durham in Supp.

of Pl.’s Mot. (“Suppl. Durham Decl.”) ¶ 2, Ex. 2.) Plaintiff alleged

in the opposition proceeding before the TTAB that Defendant’s mark,

NIKEPAL, was likely to cause confusion with Plaintiff’s own mark,

“NIKE,” and that “use of the mark NIKEPAL in connection with

[Defendant’s] services dilutes the distinctiveness of [Plaintiff’s]

mark . . . .” (Decl. of Gina Durham in Supp. of Pl.’s Mot. (“Durham

Decl.”) ¶ 6, Ex. F at 2; see also Pl.’s Response to Def.’s SUF ¶ 3.) 

The TTAB dismissed Plaintiff’s opposition “on the grounds of

likelihood of confusion and dilution.” (Pl.’s Response to Def.’s SUF

¶ 7; Durham Decl. ¶ 6, Ex. F at 14, 16.) 

Plaintiff subsequently instituted the instant action in

which it seeks, inter alia, reversal of the TTAB’s decision to grant

registration to Defendant under 15 U.S.C. § 1071(b) on the grounds

that Defendant’s mark is likely to cause confusion with Plaintiff’s

mark and that Defendant’s mark dilutes Plaintiff’s mark (Count I). 

(Amended Complaint (“Compl.”) ¶ 39.) As additional, or alternative,

grounds for reversing the TTAB’s decision and denying registration to

Defendant’s mark, Plaintiff also seeks a determination that

Defendant’s application is void ab initio (Count VI) and that

Defendant committed fraud on the PTO in connection with its

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Both parties also object to the admissibility of certain 1

evidence in support of the motions. (See Def.’s Opp’n to Pl.’s Mot.

(“Def.’s Opp’n”) at 14:6-8; Def.’s Reply to Pl.’s Consolidated Reply &

Opp’n to Cross-Motion for Partial Summ. J. (“Def.’s Reply”) at 15:6-14;

Pl.’s Reply to Its Mot. & Opp’n to Def.’s Mot. (“Pl.’s Reply”) at 11:5-

7; Pl.’s Evidentiary Objections and Requests to Strike.) However, since

the evidentiary objections and motion to strike are not pertinent to the

issues decided herein, they are not reached. 

The standards for summary judgment are well known and need not 2

be repeated here.

3

application (Count VII). (Id. ¶¶ 59, 61; Pl.’s Mot. at 25:2-7.) 

Further, Plaintiff seeks injunctive and monetary relief on the grounds

of trademark and service mark infringement based on likelihood of

confusion in violation of 15 U.S.C. § 1114 (Count II); federal unfair

competition in violation of 15 U.S.C. § 1125(a) (Count III); federal

trademark dilution in violation of 15 U.S.C. § 1125(c) (Count IV); and

a violation of California Business and Professions Code section 14330

on the grounds that Defendant’s actions are likely to injure

Plaintiff’s business reputation or dilute the distinctiveness of

Plaintiff’s mark (Count V). (Id. ¶¶ 41, 45, 51, 55.)

Plaintiff moves for summary judgment on Counts I, IV, V, VI,

and VII. (Notice of Pl.’s Mot. for Summ. J. at 1:24-28, 2:1-5.) 

Defendant counter moves for summary judgment on the same Counts except

for Count VII (Plaintiff’s fraud claim). (Def.’s Mot. at 1:26, 2:1- 1

8.)

DISCUSSION2

I. Void ab initio and fraud on the PTO claims (Counts VI and VII) 

Both parties move for summary judgment on Plaintiff’s claim

that Defendant’s application to the PTO was void ab initio and

Plaintiff moves for summary judgment on its claim that Defendant

committed fraud on the PTO. (Pl.’s Mot. at 25:4-7; Def.’s Mot. at

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25:27-28.) Specifically, Plaintiff argues that Defendant’s

application “is void ab initio because at the time that [Defendant]

filed its application to register its . . . mark, it had not actually

used the mark in connection with all of the services it set forth in

its application.” (Pl.’s Mot. at 25:9-11.) Further, Plaintiff claims

that Defendant’s “actions amounted to fraud on the PTO” because its

statements “were knowingly false and material and [Defendant] intended

the PTO to rely upon those statements.” (Id. at 27:14-17.) 

Defendant argues that Plaintiff “improperly seeks to raise

new issues in this . . . [p]roceeding that it did not raise or

litigate below in the TTAB . . . .” (Def.’s Opp’n at 27:22-23; Def.’s

Mot. at 26:7-9.) Plaintiff rejoins that the void ab initio and fraud

“theories” were raised in the TTAB proceedings even though they “may

not have been fully developed into legal theories.” (Pl.’s Reply at

20:21-23.) Plaintiff points to its Notice of Opposition (filed in the

TTAB proceeding) where it alleged that the “[a]pplicant was not using

the mark NIKEPAL for Applicant’s services in the ordinary course of

trade prior to the September 6, 2000 filing date of the opposed

application.” (Suppl. Durham Decl. ¶ 2, Ex. 2 at 2.) 

In order for Plaintiff to have raised the legal issue in the

TTAB proceedings, the issue must have been considered on its merits. 

We are satisfied that Congress did not intend, by

setting up review in this court, to transfer the

functions of the Patent Office to the District

Court . . . . The court benefits from, and is

entitled to, the trained and experienced

determinations of the Patent Office on these

questions which more often than not involve

problems both intricate and subtle. We will not

pass upon those claims which have not first been

considered on the merits by the Patent Office. 

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Plaintiff raises the additional argument that even if it “had 3

altogether failed to raise [the fraud on the PTO] issue in the TTAB

proceeding, [Plaintiff] would still be allowed to bring a fraud claim in

this Court.” (Pl.’s Reply at 21:22-27, n.16.) As support, Plaintiff

cites to 15 U.S.C. § 1064(3) which provides that “a petition to cancel

a registration of a mark . . . may be filed . . . [a]t any time if . .

. its registration was obtained fraudulently.” However, a “petition”

under 15 U.S.C. § 1064(3) does not refer to a proceeding before a

federal district court. See 37 C.F.R. § 2.111(a) (“[a] cancellation

proceeding is commenced by the filing of a timely petition . . .,

together with the required fee, in the [PTO].”). 

5

Gold Seal Co. v. Weeks, 129 F. Supp. 928, 937 (D.D.C. 1995); see also

Mitchell Cosmetics Sarl v. Pramil S.R.L., 2005 WL 3273371, at *2-3

(D.D.C. Aug. 29, 2005); see generally J. Thomas McCarthy, McCarthy on

Trademarks and Unfair Competition, § 21.21 (4th ed. 2006). In this

case, neither the void ab initio nor the fraud on the PTO claims were

discussed, or even mentioned, in Plaintiff’s brief before the TTAB;

nor were they mentioned in the TTAB’s decision. (Decl. of Catherine

Ashley Straight in Supp. of Def.’s Mot. (“Straight Decl.”) ¶¶ 5, 6,

Ex. 15, Ex. 16; Durham Decl. ¶ 6, Ex. F.) Furthermore, Plaintiff’s

Notice of Opposition does not mention these equitable “theories.” 

(Durham Suppl. Decl. ¶ 2, Ex. 2 at 2.) 

Accordingly, since the void ab initio and fraud on the PTO

claims were not raised before the TTAB, Plaintiff’s motion for summary

judgment on these claims is denied. Defendant’s motion for summary 3

judgment on the void ab initio claim is granted.

II. Dilution

A. Federal anti-dilution claim (Count IV)

Plaintiff argues it is entitled to summary judgment on its

federal dilution by blurring claim. (Pl.’s Mot. at 12:20-21,

14:20–21.) Defendant counters that it is entitled to summary judgment

on this issue because Plaintiff cannot establish that its mark is

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A court may consider the following factors in determining 4

whether a mark is famous: 

The duration, extent, and geographic reach of

advertising and publicity of the mark, whether

advertised or publicized by the owner or third

parties[;] [t]he amount, volume, and geographic

extent of sales of goods or services offered under

the mark[;] [t]he extent of actual recognition of

the mark[; and] [w]hether the mark was registered

under the Act of March 3, 1881, or the Act of

February 20, 1905, or on the principal register.

15 U.S.C. § 1125(c)(2)(A). 

A court may consider the following factors in determining 5

whether a mark or trade name is likely to cause dilution by blurring: 

(continued...)

6

famous or that Defendant’s mark causes dilution by blurring. (Def.’s

Mot. at 11:22-24, 13:25-26.) 

On October 6, 2006, the Trademark Dilution Revision Act

(“TDRA”) went into effect, thereby amending the previous anti-dilution

statute. Under the TDRA:

[T]he owner of a famous mark that is distinctive,

inherently or through acquired distinctiveness,

shall be entitled to an injunction against another

person who, at any time after the owner's mark has

become famous, commences use of a mark or trade

name in commerce that is likely to cause dilution

by blurring or dilution by tarnishment of the

famous mark, regardless of the presence or absence

of actual or likely confusion, of competition, or

of actual economic injury.

15 U.S.C. § 1125(c)(1). A “famous” mark is one that “is widely

recognized by the general consuming public of the United States as a

designation of source of the goods or services of the mark's owner.” 

Id. § 1125(c)(2)(A). The TDRA defines dilution by blurring as an 4

“association arising from the similarity between a mark or trade name

and a famous mark that impairs the distinctiveness of the famous

mark.”5

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(...continued) 5

The degree of similarity between the mark or trade

name and the famous mark[;] [t]he degree of

inherent or acquired distinctiveness of the famous

mark; [t]he extent to which the owner of the famous

mark is engaging in substantially exclusive use of

the mark; [t]he degree of recognition of the famous

mark; [w]hether the user of the mark or trade name

intended to create an association with the famous

mark[; and][a]ny actual association between the

mark or trade name and the famous mark.

 15 U.S.C. § 1125(c)(2)(B).

7

In support of its motion, Plaintiff submitted, inter alia,

survey evidence (the “Johnson survey”) that allegedly indicates that a

substantial majority of laboratory equipment purchasers think of NIKE

when encountered with Defendant’s website, “nikepal.com.” (Def.’s

Response to Pl.’s SUF ¶ 71; Decl. of Philip Johnson in Supp. of Pl.’s

Mot. (“Johnson Decl.”).) Plaintiff contends that the survey supports

certain factors relevant to the dilution claim, specifically that NIKE

is a highly recognized mark and that there is an actual association

between Plaintiff and Defendant’s mark. (Pl.’s Mot. at 14:12-13,

16:17-20, 17:1-2.) Further, Plaintiff claims that Defendant “has

offered no evidence to rebut the Johnson [survey].” (Pl.’s Reply at

13:12-13.) 

Defendant contends that the survey is “fatally flawed”

because it was only directed to Defendant’s website which is not “a

service mark which is in issue in this action” and because it was

administered by telephone and thus “the survey could NOT possibly

present Defendant’s service mark in the context in which Defendant

uses its mark.” (Def.’s Opp’n at 22:21, 27-28; 23:1, 2-4.) Defendant

also claims the “survey was not directed to the general consuming

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public of the United States” and that only a “small number of persons

were surveyed.” (Id. at 22:16-17, 22.) 

Plaintiff counters that “[t]he Johnson Study demonstrates a

stunning level of recognition of the NIKE mark . . . .” (Pl.’s Reply

at 13:11-12.) Plaintiff also argues that “nikepal.com” is the address

of Defendant’s website and “[c]onsumers encounter the website

[featuring] syringes sold by [Defendant], searching for Defendant on

the world wide web and in other ways.” (Id. at 13:23-25, 14:1.) 

Further, Plaintiff claims “[i]t is disingenuous for [Defendant] to

suggest that a telephone survey is an inappropriate means for an

expert to gather evidence in this case” because Defendant “accepts

telephonic orders from its United States customers” and thus the

Johnson study is “replicating the marketplace.” (Id. at 17:23-25, n.

14.) 

“The Ninth Circuit has stated that surveys in trademark

cases are to be admitted as long as they are conducted according to

accepted principles.” E. & J. Gallo Winery v. Gallo Cattle Co., 967

F.2d 1280, 1292 (9th Cir. 1992). Furthermore, “it is routine to admit

a relevant survey; any technical unreliability goes to weight, not

admissibility.” Id.; see also Southland Sod Farms v. Stover Seed Co.,

108 F.3d 1134, 1143 (9th Cir. 1997) (“Defendants’ . . .

objections–that the survey was only conducted in Southern California

and asked leading questions–go only to the weight, and not the

admissibility, of the survey.”). 

Treatment of surveys is a two-step process. 

First, is the survey admissible? That is, is

there a proper foundation for admissibility, and

is it relevant and conducted according to accepted

principles? This threshold question may be

determined by the judge. Once the survey is

admitted, however, follow-on issues of

methodology, survey design, reliability, and the

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experience and reputation of the expert, critique

of conclusions, and the like go to the weight of

the survey rather than admissibility. These are

issues for a jury, or, in a bench trial, for a

judge. 

Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1263 (9th

Cir. 2001) (internal citations omitted). 

Defendant does not argue that the Johnson survey is

inadmissible. (See Def.’s Opp’n at 22:21, 27-28; 23:1, 2-4.) 

Instead, Defendant’s contentions concern issues of “methodology,

survey design, reliability, . . . critique of conclusions, and the

like” and therefore speak to its technical unreliability. Clicks

Billiards, Inc., 251 F.3d at 1263. However, not all surveys, even

when admissible, raise questions of fact that would defeat a motion

for summary judgment. This is not meant to “suggest[] that the

presence of a survey will always preclude summary judgment.” Id. at

1263-64. The question is whether the Johnson survey is “so badly

flawed that it cannot be used to demonstrate the existence of a

question of fact on the [dilution claim].” Universal City Studios,

Inc. v. Nintendo Co., 746 F.2d 112, 118 (2d Cir. 1984) (emphasis

added).

Defendant’s contention that the survey is limited to

Defendant’s website name and conducted only by telephone may diminish

its weight, but it does not indicate the Johnson survey is “so badly

flawed that it cannot be used to demonstrate the existence of a

question of fact on the [dilution claim].” Id. Further, Defendant’s

assertion that the survey is flawed because, among other reasons, the

“survey was not directed to the general consuming public of the United

States” has not been supported by authority. The survey targeted

laboratory research professionals which included a targeted sample of

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Defendant’s customer base and potential consumers that Mr. Johnson

asserts Defendant “describes as its target industries.” (Pl.’s Mot.,

Decl. of Philip Johnson at 4.) “‘To be probative and meaningful . . .

surveys . . . must rely upon responses by potential consumers of the

products in question.’” Universal City Studios, Inc., 746 F.2d at 118

(internal citation omitted). Similarly, although Defendant argues

that only a “small number of persons were surveyed[,]” Defendant does

not point to any authority suggesting that a survey of 301 laboratory

research professionals is fatally flawed. 

Nonetheless, Defendant’s criticisms of the Johnson survey do

show that genuine issues of material fact exist as to the weight it

should be given. 

[A] reasonable juror might ultimately [find] that

the survey” d[oes or does] not [support

Plaintiff’s contention that its mark was diluted]. 

But the juror could only have done so after

considering conflicting evidence and deciding what

weight to accord the survey . . . . This

undertaking describes the proper role for a trier

of fact; it is not the role of a district court at

the summary judgment stage where the issue is

whether a triable issue of fact even exists. 

Clicks Billiards, Inc., 251 F.3d at 1263. Accordingly, both parties’

motions for summary judgment on Count IV are denied because the

Johnson survey creates genuine issues of material fact as to factors

bearing on the federal dilution claim. 

B. California anti-dilution claim (Count V)

Plaintiff seeks summary judgment on its California antidilution claim (Count V) arguing that since Defendant’s “use of

NIKEPAL is causing a likelihood of dilution of the distinctive quality

of [Plaintiff’s] famous NIKE mark [under the federal anti-dilution

statute,] [Plaintiff] is also entitled to summary judgment under

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California’s anti-dilution statute [].” (Pl.’s Mot. at 18:1-5.) 

Defendant argues that “[t]he evidence [it] produced with respect to

Plaintiff’s federal claim for dilution . . . is compelling evidence

for a finding in Defendant’s favor on [this claim].” (Def.’s Mot. at

25:16-17.) The same factual disputes that prevent granting summary

judgment on the federal dilution claim also apply to the anti-dilution

claim under California law. See Cal. Bus. & Profs. Code § 14330. 

Therefore, the parties’ motions for summary judgment on Count V are

denied. 

C. Reversal of the TTAB decision (Count I)

Plaintiff seeks summary judgment on its claim that the

TTAB’s decision on dilution is erroneous and must be reversed because

under the TDRA, “use and registration of the NIKEPAL mark is likely to

cause dilution” and “the TTAB’s decision, under either version of the

anti-dilution statute, is not supported by findings which withstand

[analysis under] the substantial evidence rule.” (Pl.’s Mot. at

18:24, 19:2-4.) Defendant opposes Plaintiff’s motion and moves for

summary judgment seeking to have the TTAB’s decision affirmed on the

grounds that its findings are in accordance with the TDRA and are

“supported by substantial evidence.” (Def.’s Opp’n at 8:20-21, 11:5-

6, 10:19-21; Def.’s Mot. at 8:14-15, 27-28.) 

Plaintiff has introduced new evidence concerning the TTAB

decision. A party appealing a TTAB decision to a federal district

court under 15 U.S.C. § 1071(b)(1), is permitted to introduce new

evidence. See CAE, Inc. v. Clean Air Eng’g, Inc., 267 F.3d 660, 674

(7th Cir. 2001). When new evidence is introduced, “the district

court’s review of the TTAB’s decision is considered de novo [even

though] the district court must . . . afford deference to the fact

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findings of the TTAB.” Id.; see also Louis Altman, Callmann on Unfair

Competition, Trademarks and Monopolies § 26:57 (4th ed. 2006) (“When

review of a [TTAB] decision takes place in a federal district court,

the proceeding takes the form of a trial de novo, in which the fact

findings of the Board are entitled to deference, but the parties are

free to submit additional evidence.”). 

Plaintiff has introduced as new evidence, inter alia, the

Johnson survey, from which “divergent ultimate inferences may

reasonably be drawn” that bear on the TTAB’s decision on the dilution

issue. Miller v. Glen Miller Prods., Inc., 454 F.3d 975, 988 (9th

Cir. 2006). Therefore, neither movant prevails on its motion for

summary judgment on Count I. 

CONCLUSION

For the stated reasons, Plaintiff’s motion for partial

summary judgment is denied as to all claims. Defendant’s motion for

partial summary judgment on Count VI (Plaintiff’s void ab initio

claim) is granted and is denied as to all other claims.

Dated: February 27, 2007

 

GARLAND E. BURRELL, JR.

United States District Judge

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