Source: http://ipmall.info/content/ttab-trademark-trial-and-appeal-board-1-perma-ceram-enterprises-inc-v-preco-industries
Timestamp: 2019-04-22 14:15:18+00:00

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*1 PERMA CERAM ENTERPRISES, INC.
An application has been filed by Preco Industries Limited to register the mark PORCELAINCOTE for "plastic finishes for professional use for the resurfacing of porcelain, enamel, concrete, masonry, metal and wood." [FN1] Applicant seeks registration of its mark on the Principal Register under the provisions of Section 2(f) of the Act, 15 U.S.C. 1052(f).
Registration has been opposed by Perma Ceram Enterprises, Inc. on the ground that applicant's mark, when applied to applicant's goods, so resembles opposer's previously used mark PORCELAINCOTE for "a chemical composition for professional use for the resurfacing of bathtubs, toilets and wall tile" as to be likely to cause confusion.
Applicant, in its answer, admits that there is a likelihood of confusion in this case. Applicant denies, however, the other salient allegations of the opposition, including opposer's allegation of priority of use.
This case now comes up on applicant's motion for summary judgment. In moving for summary judgment applicant sets forth two bases, namely (i) that applicant is the prior user of the identical mark on similar or nearly identical goods; and (ii) that opposer's use of its mark is "unlawful" since opposer misappropriated and used its mark with actual knowledge that applicant previously used the same mark on the same or similar goods. The motion is accompanied by numerous exhibits, including materials from a prior Board proceeding (including testimony and the final decision) wherein applicant was successful in cancelling a Supplemental Register registration of opposer's pleaded mark, and declarations and related exhibits.
As often stated, the purpose of summary judgment is one of judicial economy, that is, to save the time and expense of a useless trial where no genuine issue of material fact remains and more evidence than is already available in connection with the summary judgment motion could not reasonably be expected to change the result. See: Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739 F.2d 624, 222 USPQ 741 (Fed.Cir.1984).
*2 In the instant case, there is no genuine issue of material fact regarding the pleaded ground of likelihood of confusion. Both parties contend, and we agree, that their contemporaneous use of the identical mark for identical or virtually identical goods is likely to cause confusion. [FN4] Rather than a controversy about likelihood of confusion, this case comes down to a priority of use contest--but not the classic priority contest that turns on who used the mark first chronologically. Instead, this case turns on the priority of acquisition of acquired distinctiveness (also commonly referred to as secondary meaning). Applicant, as the moving party under Fed.R.Civ.P. 56, has the initial burden of proving that there is no genuine issue of material fact as to this matter. See: Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548 (1986). Simply stated, we find that applicant has failed to discharge its initial burden of demonstrating the absence of a genuine issue of material fact on the question of the priority of acquired distinctiveness.
Applicant, on the one hand, asserts that it first used its mark in connection with various chemical resurfacing products on November 28, 1966, a date prior to any first use date which opposer could establish. Opposer, on the other hand, alleges first use in 1977, but goes on to contend that, in view of the merely descriptive or deceptively misdescriptive nature of applicant's mark, there is a material fact question about whether applicant's acquisition of trademark rights by way of acquired distinctiveness predates the time that opposer's mark acquired distinctiveness. Since the evidence of record raises numerous genuine issues of material fact regarding the specific dates on which the parties' respective marks acquired distinctiveness or secondary meaning, the entry of summary judgment at this juncture is inappropriate.
Our view of the priority issue in this case is based on the fact that neither party's mark is inherently distinctive. Our conclusion about the infirmity of each of the marks is supported by the application history of the marks. Applicant originally attempted to register on the Principal Register the mark PORCELAINCOTE for "a finish for resurfacing enamel fixtures." [FN5] The mark successfully was opposed by a trade association of the porcelain enamel industry on the ground that applicant's mark was deceptively misdescriptive when applied to applicant's goods because the goods did not provide a porcelain or porcelain enamel finish. [FN6] The Board sustained the opposition on December 24, 1981.
Opposer filed, on November 29, 1984, an application to register on the Principal Register the mark PORCELAINCOTE for "a chemical composition for professional use for the resurfacing of bathtubs, toilets and wall tiles." [FN7] In response to alternative refusals that its mark was merely descriptive or deceptively misdescriptive, opposer amended its application to seek registration on the Supplemental Register, claiming that the mark had been in lawful use in interstate commerce in connection with the goods for the year preceding the date of the filing of the amendment (June 14, 1985). The Examining Attorney then refused registration on the ground that PORCELAINCOTE was incapable of registration, but this refusal was withdrawn and opposer was granted Supplemental Register Registration No. 1,378,640 on January 14, 1986.
*3 Opposer's Supplemental Register registration became the subject of a cancellation proceeding brought by applicant. [FN8] The ground for cancellation was that opposer did not have "exclusive use" of its mark prior to the date of amendment to the Supplemental Register due to applicant's use of PORCELAINCOTE on goods competitive with opposer's goods. The Board agreed and the petition was granted on August 16, 1990. The registration was cancelled on May 28, 1991.
Applicant's PORCELAINCOTE mark has become distinctive by reason of applicant's substantially exclusive and continuous use of the mark in commerce on the goods set forth in the application for at least the twenty years (i.e., since about November 30, 1966) immediately before the filing of the application, with the exception of Registration No. 1,378,640 which has been cancelled pursuant to proceedings brought by applicant.
The Board also notes that opposer has a pending application seeking registration on the Principal Register of PORCELAINCOTE for "a chemical composition for the resurfacing of bathtubs, toilets and wall tile by professionals." [FN10] The Examining Attorney initially refused registration on the ground that opposer's mark is merely descriptive. This refusal has been maintained and opposer's application currently is under suspension pending the final disposition of this opposition proceeding.
In view of the Board's prior decision in Opposition No. 62,077, and the fact that applicant currently is seeking registration under Section 2(f), it is apparent that applicant's mark is not inherently distinctive. See: Congoleum Corp. v. Armstrong Cork Co., 218 USPQ 528, 535 (TTAB 1983) [generally a claim under Section 2(f) is a concession that a mark is nondistinctive]; see also: In re Professional Learning Centers Inc., 230 USPQ 70, 71 (TTAB 1986). With respect to opposer's mark, we note that opposer asserts use of the identical mark on identical or nearly identical goods. We further note that opposer's mark was previously registered on the Supplemental Register. [FN11] We are thus left to conclude, as noted above, that neither party's mark is inherently distinctive.
We recognize that opposer has failed to challenge registration on any basis other than likelihood of confusion and that applicant has not raised as an affirmative defense that opposer lacks proprietary rights in its mark due to its descriptive or misdescriptive nature. Notwithstanding these omissions, given the Section 2(e) history surrounding each mark, the winner in this case will be the one who establishes the earlier date of acquired distinctiveness under Section 2(f).
Respondent's argument that petitioner must prove "priority of secondary meaning" (that is, that petitioner's mark ... had acquired secondary meaning as applied to its goods prior to respondent's first use of its mark) in order to establish its prior rights herein is not persuasive. We have held above that petitioner's mark is not and was not, at the time of its first use, merely descriptive, as applied to petitioner's goods, within the meaning of Section 2(e)(1). Moreover, while the doctrine of "priority of secondary meaning" has been applied to priority determinations in civil actions for trademark infringement involving the right to use (see: McCarthy, supra, at § 16:12), it has never been applied to priority determinations in proceedings before the Board involving the right to register, nor do we see any reason in law or in equity why it should be. Cf. Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317, 209 USPQ 40 (CCPA 1981) (where the court held, in essence, that an opposer who opposes registration under Section 2(d) based upon his use of a descriptive term must prove, inter alia, that he has proprietary rights in that term, but made no mention of any requirement for proof of "priority of secondary meaning" such as respondent urges here).
Under the rule of Otto Roth [Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317, 209 USPQ 40 (CCPA 1981) ], a party opposing registration of a trademark due to a likelihood of confusion with his own unregistered term cannot prevail unless he shows that his term is distinctive of his goods, whether inherently or through the acquisition of secondary meaning or through "whatever other type of use may have developed a trade identity." Otto Roth, 640 F.2d at 1320, 209 USPQ at 43. The Otto Roth rule is applicable to trademark registration cancellation proceedings as well.
*5 Section 2(d) bars registration, or serves as a basis for cancellation, if there is a likelihood of confusion as to source. As to an unregistered term, such a likelihood of confusion results when there are trade identity rights in the prior user's term. Those trade identity rights arise when the term is distinctive either inherently or through the acquisition of secondary meaning.
Towers, id. at 1401-1402. [FN12] We further note that the Federal Circuit, in that same year, indicated its belief in Cicena Ltd. v. Columbia Telecommunications Group, 900 F.2d 1546, 14 USPQ2d 1401 (Fed.Cir.1990), that the Second Circuit would reject the doctrine of secondary meaning "in the making" and would require, in false designation of origin actions, priority of secondary meaning as the governing law in order for a plaintiff to prevail under Section 43(a) of the Act.
While neither party has noted or discussed any of the cases mentioned above, it is apparent that the controlling law, as set forth by our reviewing court (and contrary to the Board's earlier dicta in Henry Siegel), is that where the mark relied upon by a plaintiff in support of its priority of use and likelihood of confusion claim is merely descriptive (or deceptively misdescriptive), then the plaintiff must establish priority of acquired distinctiveness. As noted above, the priority contest in the instant case is not solely one of who used the mark first chronologically--rather, the test is which party first achieved secondary meaning in its mark. See: J.T. McCarthy, Trademarks and Unfair Competition, § 16:12 (2d ed. 1984). Inasmuch as applicant's motion and evidence go solely to priority in the classic sense (i.e., first to use chronologically), it is clear that genuine issues of material fact remain as to priority of acquired distinctiveness. Accordingly, applicant's motion for summary judgment is denied.
We note that opposer contends, in arguing against summary judgment on the question of priority, that the Board's decision in December 1981, holding applicant's mark to be deceptively misdescriptive, precludes applicant from claiming acquired distinctiveness prior to that date. The Board feels compelled to comment on this contention in an effort to fully apprise the parties about the specific priority question which remains to be tried in this case.
In order to fully understand the preclusive effect, if any, of the Board's prior decision, we must discuss the doctrines of claim preclusion (res judicata) and issue preclusion (collateral estoppel).
Under the doctrine of claim preclusion, the entry of a final judgment "on the merits" of a claim (or cause of action) in a proceeding serves to preclude the relitigation of the same claim in a subsequent proceeding involving the same parties or their privies. Claim preclusion extends to those claims or defenses that could have been raised in the prior action. See: Chromalloy American Corp. v. Kenneth Gordon, Ltd., 736 F.2d 694, 222 USPQ 187 (Fed.Cir.1984); Flowers Industries Inc. v. Interstate Brands Corp., 5 USPQ 1580, 1583 (TTAB 1987). See also: 1B Moore's Federal Practice, § 0.405(1) (2d ed. 1984). Inasmuch as there has been no assertion by opposer in a prior proceeding against applicant of the same claim asserted herein, and opposer does not purport to be a privy of the plaintiff in the earlier proceeding, the principles of claim preclusion are not applicable in this case. Thus, if the judgment in the prior proceeding has any preclusive effect on the priority question in this case, the effect must be one of issue preclusion.
*6 Under the doctrine of issue preclusion, issues which are actually and necessarily determined by a court of competent jurisdiction are normally conclusive in a subsequent suit involving the parties to the prior litigation. Restatement (Second) of Judgments § 27 (1980);; Mother's Restaurant, Inc. v. Mama's Pizza, Inc., 723 F.2d 1566, 221 USPQ 394 (Fed.Cir.1983); International Order of Job's Daughters v. Lindeburg & Co., 727 F.2d 1087, 220 USPQ 1017 (Fed.Cir.1984). It is not necessary that both the party asserting the preclusive effect of the prior judgment and the party against whom it is asserted be persons bound by the judgment. Uziel Gal, et al. v. Israel Military Industries of the Ministry of Defense of The State of Israel, 230 USPQ 669 (TTAB 1986), aff'd unpublished opinion, No. 87-1076 (Fed.Cir. June 24, 1987). A nonparty to the prior action may invoke the doctrine of issue preclusion against one who was a party to that action unless it appears that the party against whom the doctrine is asserted did not have a full and fair opportunity to litigate the issue or unless the Court finds that it is otherwise unfair to permit the use of estoppel. See: 1B Moore's Federal Practice § 0.441(2) (2d ed. 1984).
We find that issue preclusion is not applicable in the instant case. Applicant, in its earlier application, sought registration on the Principal Register without resort to the benefits of Section 2(f). Moreover, applicant did not raise acquired distinctiveness as a defense to the earlier claim of deceptive misd escriptiveness. [FN13] Thus, in the earlier proceeding, the issue of the acquired distinctiveness, if any, of applicant's mark at that time was not raised, litigated and actually determined. Accordingly, the prior Board judgment does not bar, under the doctrine of issue preclusion, the instant application which claims the benefits of Section 2(f). More specifically, the prior judgment has no issue preclusion effect on applicant's attempt to prove acquired distinctiveness as of a date prior to the Board's decision in December 1981.
To sum up, applicant is not precluded from establishing acquired distinctiveness prior to December 1981 in its attempt to defeat opposer's claim of priority of acquired distinctiveness and, thus, obtain a registration based on its present application.
In order to clearly set forth the issue for trial in accordance with the above discussion, the Board believes that the parties should amend their pleadings. That is to say, in order for opposer to have a valid claim under Section 2(d) in this case, opposer must plead (and later prove) that the merely descriptive (or deceptively misdescriptive, as the case may be) term PORCELAINCOTE, as applied to opposer's goods, had acquired distinctiveness or secondary meaning prior to any establishment by applicant of acquired distinctiveness or secondary meaning for the term PORCELAINCOTE for its goods. Likewise, applicant should amend its answer to assert, as an affirmative defense, that opposer's pleaded mark PORCELAINCOTE is merely descriptive (or deceptively misdescriptive) and that opposer's mark failed to acquire distinctiveness prior to the time that applicant's mark had acquired distinctiveness. Opposer is allowed until twenty days from the date hereof in which to accordingly amend its opposition; applicant is allowed until twenty days from the date of service of the amended opposition in which to file an amended answer in accordance with the above discussion.
*7 Trial dates, including the period for discovery, are rescheduled as indicated in the accompanying trial order.
FN1. Application Serial No. 73/732,669, filed June 6, 1988, alleging first use dates of November 30, 1966. In its summary judgment papers applicant states that applicant has changed its name to Fosroc Inc. A check of the Assignment Branch records of the Office shows that the change-of-name documents have not been recorded with respect to the involved application. Applicant should consider filing the change-of-name documents with the Assignment Branch and advise the Board when and if it has done so, to insure that, in the event applicant ultimately prevails in this proceeding, the registration will issue in the correct name. See: Rule 2.187. In any event, a copy of the change of name documents should be furnished to the Board so the caption of this proceeding may be changed accordingly.
FN2. In addition to objecting to summary judgment on the issue of priority, opposer attempts to raise three new grounds about which it contends that issues of fact remain. Opposer asserts that applicant is precluded from obtaining a registration under the doctrine of issue preclusion (i.e., collateral estoppel); that applicant committed fraud in the prosecution of its involved application; and that applicant abandoned the mark it presently seeks to register. The problem with opposer's assertions is that these grounds were not pleaded in the opposition and, thus, of course, they formed no part of applicant's motion for summary judgment. To state the obvious, a party may not avoid summary judgment by contending that genuine issues of material fact exist as to issues not raised in the pleadings. Inasmuch as the three grounds mentioned above were not pleaded, no consideration will be given to the merits relative thereto except to the extent that opposer's issue preclusion argument bears on the priority question (see discussion, infra). If opposer intends to pursue these newly raised claims, it should file a motion for leave to amend its pleading, if appropriate, which is accompanied by the amended pleading. See: Fed.R.Civ.P. 15(a); Trademark Rule 2.107. See also: Fed.R.Civ.P. 11.
FN3. Opposer has objected to applicant's reply brief and also requests leave to file a surrebuttal brief. To the extent that applicant's reply brief clarifies the issues in this case, we have considered the brief. We hasten to add that, with or without the reply brief, the result on applicant's motion for summary judgment is the same. Moreover, we see no reason to allow opposer to file another brief, and accordingly deny its request to do so.
FN4. In saying this, we assume, of course, that opposer has proprietary trademark rights in the mark PORCELAINCOTE.
FN5. Applicant Serial No. 73/150,346, filed November 30, 1977.
FN6. Opposition No. 62,077, styled Porcelain Enamel Institute, Inc. v. Preco Industries, Ltd.
FN7. Application Serial No. 73/511,191.
FN9. Registration also was refused under Section 2(d) on the basis of opposer's then-registered mark. This bar was removed, of course, upon cancellation of opposer's registration.
FN10. Application Serial No. 74/098,429, filed September 19, 1990, alleging dates of first use of November 16, 1976.
FN11. We recognize that Section 27 was amended by the Trademark Law Revision Act of 1988 to include a provision that a Supplemental Register registration does not constitute an admission that the registered mark has not acquired distinctiveness. The general rule has not changed, however, that a registrant owner of a Supplemental Register registration impliedly admits that the registered term was descriptive (or deceptively misdescriptive) at least at the time of the registrant's first use of the term. 1 J.T. McCarthy, Trademarks and Unfair Competition, § 19:8F (2d ed. 1984). See also: Richard L. Kirkpatrick, The Supplemental Register Under The Trademark Law Revision Act: Additions, Deletions and Omissions, 79 TMR 248, 251-52 (1989). That is to say, there is nothing in amended Section 27 to prevent a Supplemental Register registration from being deemed an admission that the subject matter is not inherently distinctive. Opposer may still show, of course, that its mark acquired distinctiveness prior to applicant's date of acquired distinctiveness.
FN12. In its opinion, the Court cited one exception to the general rule set forth in Otto Roth. That exception involves the situation where a plaintiff alleging likelihood of confusion owns a Supplemental Register registration. The Court stated that "Likelihood of confusion can be found even if a term is merely descriptive and does not identify source: Registration on the Supplemental Register is sufficient, and a showing of trade identity rights in the form of secondary meaning is unnecessary." Towers, id., citing In re Clorox Co., 578 F.2d 305, 198 USPQ 337 (CCPA 1978) and In re Research & Trading Corp., 793 F.2d 1276, 230 USPQ 49 (Fed.Cir.1986). That clearly is not the case in the instant proceeding since opposer's registration on the Supplemental Register was cancelled.
FN13. Although the application did not include a Section 2(f) claim, the defense of acquired distinctiveness clearly could have been raised. See: The Coca-Cola Co. v. The Seven-Up Co., 497 F.2d 1351, 182 USPQ 207 (CCPA 1974); Colonial Arms Corp. v. Trulock Firearms Inc., 5 USPQ2d 1678 (TTAB 1987).
*8 In accordance with the Trademark Rules of Practice, trial dates are set as indicated 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.

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