OU ‘According to his deposition, Mr. McColgan consulted corporate records that allowed him
to declare that the ONE TOUCH mark had been in continuous use from July 7, 1994 through
July 7, 1999. Pl.’s 56.1 4 11. McColgan also testified that prior to July 1997, the predecessor
companies of Aero had inventory in company warehouses and offices bearing the ONE TOUCH
mark. PI.’s 56.1 13.

ANALYSIS

After a federal trademark has been in force for five years, the registration becomes
incontestable if the registrant files a Section 15 declaration claiming five years of continuous use
of the mark. See 15 U.S.C. § 1065. An incontestable trademark is conclusive evidence of the
validity of a registered mark, the registrant’s ownership of the mark, and the registrant’s
exclusive right to use the mark in commerce in relation to the goods recited. 15 U.S.C. §
1115().

However, an incontestable mark is subject to a defense “[t]hat the registration or the
incontestable right to use the mark was obtained fraudulently.” 15 U.S.C. § 1115(b)(1). To
prove that an incontestable right to use the mark was obtained fraudulently, the registrant must:
(1) have made a “a false representation as to a material fact,” (2) know or believe that the
representation is false, (3) intend “to induce action in reliance on the misrepresentation.” Zee
Dip, Inc. v. Dometic Corp., 900 F. Supp. 1004, 1009 (N.D. Ill. 1995).

Defendants first argue that Plaintiffs’ interrogatory response stated that the first use of the
ONE TOUCH mark was at some point in 1997. Thereafter, Aero superseded the original

Tesponse with a supplemental response stating that Plaintiffs’ first use of the ONE TOUCH mark


Jaly 1997, Kevin McColgan began working for Imaginair, Inc., which later became known as
Aero. Def.’s 56.17. On July 7, 1999, McColgan, then Aero’s president, executed a declaration
stating that U.S. Registration No. 1,839,444 “has been in continuous use in interstate commerce
for five consecutive years from the date of the registration to the present, on or in connection
with all of the goods in each of the classes recited in the registration.” Pl.’s 56.1 | 4.

On July 16, 1999, Aero filed its “Combined Declaration Under Sections 8 and 15” with
the PTO. Aero’s combined declaration does not state that McColgan had personal knowledge of
the facts in the declaration. Pl.'s 56.1 48. On November 15, 1999, the PTO accepted and
acknowledged Aero’s declaration; and the PTO’s records indicate that Aero’s registration for the
ONE TOUCH mark is valid and incontestable. PI.’s 56.1 45, { 1.

In Plaintiffs’ Response to Defendants’ Third Set of Interrogatories, Plaintiffs stated that
“Aero’s first use of the ONE TOUCH mark was at some point in 1997.” Def.’s 56.1 7 9.
Thereafter, Aero superseded the original response with a supplemental response. Pl.’s 56.1 4 7.
The supplemental response stated that Plaintiffs’ first use of the ONE TOUCH mark “occurred
on November 1, 1991, by the RMF/DLO Group. . . . [T]he first use of the ONE TOUCH mark by
Imaginair was at some point in 1997.” Def.’s 56.1 { 10.

McColgan was also deposed by the parties. During his deposition, McColgan indicated
that he reviewed, for the purposes of his deposition, all uses of the ONE TOUCH mark by Aero
since he started with the company in 1997. PI.’s 56.19. McColgan also testified that the
predecessor companies of Aero, Imaginair and the RMF/DLO Group, were unorganized and that
only some of the records relating to sales prior to 1997 were maintained by Imaginair before

McColgan joined the company. Def.’s 56.1 12.



occurred in 1991 by one of Aero’s predecessor companies. Defendants do not dispute this fact in

their reply.

Defendants also claim that McColgan lack . sufficient, personal knowledge of the facts

upon which to base his declaration. According to D fendants McColgan claimed that he had

personal knowledge of the facts in the deri bt q
|

unfamiliar with what had occurred pit to his arrival in 1997.

t testified at his deposition that he was

However, Plaintiffs point out that a ‘declaration can be made on the basis of information
and belief. See Trademark Manual of Examining Procedures § 804.01(b). Here, McColgan did
not declare that he had personal knowledge of the facts in the declaration; but, rather, McColgan
testified at his deposition that he consulted corporate records to make his declaration before the
PTO. Once again, Defendants do not dispute this argument in their reply.

Lastly, Defendants contend that the Section 15 affidavit declaration by McColgan was
false because he did not have sufficient information upon which he could determine that the
ONE TOUCH mark was used continuously for five years. According to Defendants, the records
McColgan consulted were insufficient to show that the quantity, continuity, and quality of use of
the ONE TOUCH mark by Aero over the five-year period from July 7, 1994 until July 7, 1999
was continuous.

McColgan, at his deposition, testified that he reviewed corporate files to declare that the
ONE TOUCH mark had been used continuously over the relevant five-year period. Defendants
concede in their reply that these corporate files consisted of unsold inventory and some old
advertising materials. This unsold inventory, bearing the ONE TOUCH mark, was kept in

company warehouses and offices.



Minute Order Form (06/97)

United States District Court, Northern District of Illinois

=F
stor Motte Judge John W. Darrah “than Assigned Judge
CASE NUMBER 02 C 2590 DATE 12/11/2003
CASE Aero Products International vs. Intex Recreation Corp
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]
DOCKET ENTRY:
(1) Qo Filed motion of [ use listing in “Motion” box above.]
(2) i) Brief in support of motion due
(3) a Answer brief to motion due___. Reply to answer briefdue___.
(4) Oo Ruling/Hearingon___setfor____at
(5) ao Status hearing{held/continued to] [set for/re-set for]on__——ssetfor__—_at
(6) Qa Pretrial conference[held/continued to] [set for/re-set for]on___setfor_—sat_— ts
{7) Qa Trial[set for/re-set for]on___—_—__at |
(8) a [Bench/Jury trial] [Hearing] held/continued to at
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) OLocal Rule 41.1 OFRCP41(a)(1) (© FRCP41(a)(2).

(0) [Other docket entry) In Court hearing held. For the reasons stated in the attached memorandum
opinion and order, defendants motion for revocation of the incontestability status of the "one touch"
trademark [69-1] is denied. Enter Memorandum Opinion and Order.

(il) [For further detail see order attached to the original minute order.)
W | Nonotices required, advised in open court.

No notices required.

Notices mailed by judge's staff.

Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magisirate judge.

courtroom
MF deputy’s
initials

a 2 Pateltime received ii
=D." central Clede’s Office

oy



- *Plaintfts argue that it can be inferred that the ONE TOUCH mark was used continuously,
in commerce, because inventory and advertising bearing the mark existed in company
warehouses and offices. Defendants fail to present any affidavits, depositions, answers to
interrogatories, or admissions on file to demonstrate that this combination of inventory and
advertising of the ONE TOUCH mark did not exist from July 7, 1994 until July 7, 1999. In
deciding a motion for summary judgment, all inferences drawn from the facts must be construed
in the light most favorable to the non-moving party.

Defendants also fail to present any authority that this combination of inventory and
advertising is insufficient, as a matter of law, to prove that the mark was not used continuously
for the five-year period. A genuine issue of material fact exists as to whether the ONE TOUCH
mark was used continuously from July 7, 1994 until July 7, 1997.

CONCLUSION
For the foregoing reasons, the Defendants’ Motion for Revocation of the Incontestability

Status of the “ONE TOUCH” Trademark is denied.

Dated yy 2003 Mae

trae
Uni ah vate ARR Judge



- UNITED STATES DISTRICT COURT DOCKETED
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION DEC 1 2 2003

AERO PRODUCTS INTERNATIONAL, INC.,

a Florida corporation, and

ROBERT B. CHAFFEE, an individual,
Plaintiffs,

ve No: 02 C 2590

a California corporation;
QUALITY TRADING, INC.,
a California corporation; and
WAL-MART STORES, INC.,

)
)
)
)
)
)
)
INTEX RECREATION CORPATION., ) Judge John W. Darrah
)
)
)
)
a Delaware corporation, )
)
)

Defendants.

MO! IE

The Plaintiffs, Aero Products International, Inc. (“Aero”) and Robert B. Chaffee, filed
suit against the Defendants, Intex Recreation Corporation (“Intex”), Quality Trading, Inc.
(“Quality Trading”), and Wal-Mart Stores, Inc. (“Wal-Mart”). Presently before the Court is the
Defendants’ Motion for Revocation of the Incontestability Status of the “ONE TOUCH”
Trademark. For the following reasons, the Defendants’ motion is denied.

LE iT. ARD

Summary judgment is appropriate when no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co.
y. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir. 1994). “One of the principal

purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims

\v



or defenses .+++” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, although the
moving party on a motion for summary judgment is responsible for demonstrating to the court
why there is no genuine issue of material fact, the non-moving party must go beyond the face of
the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to
demonstrate, through specific evidence, that a genuine issue of material fact exists and to show
that a rational jury could return a verdict in the non-moving party’s favor. Celotex, 477 U.S. at
322-27; Anderson y. Liberty Lobby, Inc., 477 U.S. 242, 254-56 (1986); Matsushita Elec. Indus.
Ca. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Waldridge v. American Hoechst Corp.,
24 F.3d 918, 923 (7th Cir. 1994).

Disputed facts are material when they might affect the outcome of the suit. First Ind.
Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary
: judgment, a court must view all inferences to be drawn from the facts in the light most favorable
to the opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185
F.3d 726, 731 (7th Cir. 1999), However, a metaphysical doubt will not suffice. Matsushita, 475
U.S. at 586. If the evidence is merely colorable or is not significantly probative or is no more
than a scintilla, summary judgment may be granted. Anderson, 477 U.S. at 249-250.

* BACKGROUND

The undisputed facts, for the purposes of this motion, taken from the parties’ Local Rule
56.1(a) & (b) statements of material facts (referred to herein as “P].’s 56.1" and “Def’s 56.1") and
exhibits, are as follows.

On June 14, 1994, Aero was issued, by the United States Patent and Trademark Office

(the “PTO”), U.S. Registration No. 1,839,444 for the “ONE TOUCH” mark. Pl.’s 56.193. In