Source: https://ipmall.law.unh.edu/content/ttab-trademark-trial-and-appeal-board-1-cerveceria-india-inc-v-cerveceria-centroamericana-sa
Timestamp: 2019-04-20 00:19:24+00:00

Document:
Willard M. Hanger, Richard G. Kline and John M. Rommel for Cerreceria India, Inc.
Burns, Doane, Swecker & Mathis for Cerreceria Centroamericana, S.A.
The record consists of the pleadings; respondent's responses to certain of petitioner's requests for admissions, respondent's answers with documents to certain of petitioner's interrogatories, excerpts from the Trademark Manual of Examining Procedure and The St. Martin's Roget's Thesaurus, and the file history of Registration No. 1,134,265 for 'MEDALLION', all relied upon by petitioner; the file of petitioner's abandoned application Serial No. 211,011 for 'MEDALLA', allowed in evidence by stipulation of the parties; petitioner's responses to certain of respondent's interrogatories and the file history of petitioner's abandoned application Serial No. 211,013 for 'MEDALLA' design,' relied upon by respondent; and the testimony, with exhibits, of petitioner's witness Carlos A. Robert and Israel Hilerio Gago, respectively petitioner's executive vice president and controller, and of Howard M. Rosenberg, the general manager of a wine and beer wholesaler and importer, and of respondent's witness Carlos Castillo, respondent's export manager and the vice president of its U.S. subsidiary.
*2 The parties have fully briefed the case, and were represented at an oral hearing before the Board.
Petitioner or its predecessor has manufactured and sold beer under the trademark 'MEDALLA' in Puerto Rico since November 1978. Between 1978 and 1985 petitioner or its predecessor has sold in excess of six million cases of 'MEDALLA' beer in Puerto Rico and neighboring islands. The mark was registered in Puerto Rico in 1979. In 1979, petitioner's predecessor applied to register 'MEDALLA' (Serial No. 211,011) and the 'MEDALLA design' mark (Serial No. 211,013) in the United States. Both marks were refused registration on the grounds of likelihood of confusion, the Patent and Trademark Office having cited as a Section 2(d) reference respondent's registration which is the subject of this proceeding.
Fraud implies some intentional deceitful practice or act designed to obtain something to which the person practicing such deceit would not otherwise be entitled. Specifically, it involves a willful withholding from the Patent and Trademark Office by an applicant or registrant of material information or fact which, if disclosed to the Office, would have resulted in disallowance of the registration sought or to be maintained. Intent to deceive must be 'willful.' If it can be shown that the statement was a 'false misrepresentation' occasioned by an 'honest' misunderstanding, inadvertence, negligent omission or the like rather than one made with a willful intent to deceive, fraud will not be found. Fraud, moreover, will not lie if it can be proven that the statement, though false, was made with a reasonable and honest belief that it was true or that the false statement is not material to the issuance or maintenance of the registration. It does appear that the very nature of the fraud requires that it be proven 'to the hilt' with clear and convincing evidence. There is not room for speculation, inference or surmise and, obviously, any doubt must be resolved against the charging party.
First International Services Corp. v. Chuckles Inc., 5 USPQ2d 1628, 1634 (TTAB 1988); Smith International, Inc. v. Olin Corp., 209 USPQ 1033, 1043- 44 (TTAB 1981).
Petitioner asserts that there is no evidence supporting the position that respondent made shipments of 'MEDALLA DE ORO' beer to the United States prior to the filing of its application. [FN4] Respondent has, in its response to petitioner's interrogatories, stated that it made shipments of 'MEDALLA DE ORO' malt beverage to the United States prior to its application filing date of September 7, 1972, and has submitted documents evidencing shipments of beer to California. Petitioner recognizes that respondent has produced three vendor report forms for the California Board of Equalization reporting beer shipped from respondent into California in 1972, but points out that the brand of beer is not identified on these forms and implies that the report might refer to another brand of beer exported by respondent to the United States.
*3 As the above-quoted language indicates, a finding of fraud cannot be based on speculation, inference or surmise. In the face of respondent's uncontradicted evidence of shipments to the United States, petitioner's surmises regarding the vendor reports cannot support a finding of fraud.
Petitioner also argues that respondent made fraudulent statements regarding its use, asserting that respondent's claimed uses did not represent bona fide commercial transactions, and that it had not obtained label approval from the U.S. Treasury Department so the use in commerce was not lawful.
Petitioner's claim of fraud on this point, too, must fail. The issue which we must consider here goes beyond whether respondent's use was bona fide or was with label approval, to whether petitioner has proven that respondent knowingly withheld material information from the Office when it filed its application. Pennwalt Corp. v. Sentry Chemical Co., 219 USPQ 542 (TTAB 1983). Petitioner asserts that because respondent was not paid for its shipments to the parties identified in the California vendor reports, the shipments to the United States constituted sham transactions. However, the statute refers to goods being sold or transported in defining use in commerce. See, 15 USC 1127. The mere fact that these particular parties did not pay respondent for the goods is not sufficient even to show that the transactions were not bena fide, let alone that respondent's statements regarding its use were fraudulent.
As for the lack of label approval asserted by petitioner, petitioner has not shown that respondent failed to obtain such label approval, nor did respondent make any statements whatsoever regarding label approval in its application. On this record, therefore, petitioner has not demonstrated that respondent committed fraud in connection with any of the statements in its application.
Petitioner also asserts that respondent committed fraud in connection with its declaration pursuant to Section 8 of the Trademark Act, specifically that respondent falsely stated that the mark was still in use, and that the declaration was executed by its attorney so as to deceive the Patent and Trademark Office that the rules regarding execution of the document had been followed.
Respondent's declaration under Section 8 was executed and filed on November 13, 1979. At that time, the statute required the registrant to file an affidavit showing that the mark was still in use, or that its nonuse was excusable. Petitioner does not assert that respondent was not using its mark anywhere, only that it was not using the mark in international trade between Guatemala and the United States. Petitioner argues that the phrase 'still in use' in the declaration must refer to the nature of use averred in the application for registration.
Petitioner's position is incorrect. At the time respondent's declaration was filed, the practice of the Patent and Trademark Office Post Registration Section was that any use, even use only in a foreign country, was sufficient to meet the requirements of Section 8. See also, H. Rep. 542, accompanying H. R. 6260, 97th Cong., 2d Sess. 10 (1982) regarding amendment of Section 8 from 'still in use' to 'use in commerce.' Thus, respondent could have reasonably relied on such an interpretation and based its Section 8 declaration on use of the mark outside the United States. Certainly petitioner has not proved fraud in this respect.
Brian J. Leitten, Agent for Trademarks for Alfredo Cofino Castillo and CERVECERIA CENTROAMERICANA, S.A.
Signed this 13th day of November, 1979.
Petitioner's final ground for cancellation is that respondent has abandoned the registration by virtue of nonuse. The record shows that respondent made extremely limited shipments of 'MEDALLA DE ORO' malt beverage to the United States in 1971 (1 shipment), 1972 (3 shipments), 1975 (1 shipment) and 1977 (1 shipment). The documentation of record also shows that the shipments were of very small quantities (47.25 gallons in 1972 and 4.375 gallons in 1975). [FN6] Respondent made no other shipments of this beer to the United States until 1986.
We are prompt to launch another beer named MEDALLA DE ORO and with the wondering of what the most efficient way to market a beer in the United States is, we are planning to market this beer through an established and reputable beer importer as your company.
Enclosed I am sending a six pack MONTE CARLO BEER, which is the same quality in product and packaging as the MEDALLA DE ORO BEER I offered in the letter dated October 22. Samples of MEDALLA for U.S. Market will be available in one month.
The packaing of MEDALLA is being redesigned specifically for the U.S. Market. When it is ready, the local MEDALLA will look similar.
November 5, 1985 letter to Carlton Importing Co.
*5 We are prompt to launch a brand called MEDALLA DE ORO, which is popular in Guatemala. (Ask Pete about its logo); we can offer it to you as importer for the West Coast, depending on the quantities of your proposed orders. At the present we have a few major importers interested in MEDALLA, so please let me know what you think, soon.
Enclosed please find a couple of labels from the first run. Colors and quality of paper have been improved.
January 23, 1986 letter to Markstein Distribution.
Respondent takes the position that the burden is on petitioner to make a prima facie showing of abandonment, and argues that because petitioner has not shown that there was a two year period when respondent failed to use the mark petitioner has not met its burden. In particular, respondent argues that it was incumbent on petitioner to show that respondent had made no use of its mark for a two-year period in either interstate commerce or commerce between Guatemala and the United States. Although respondent is correct that petitioner offered no direct evidence that respondent failed to use its mark in interstate commerce between 1978 and 1984, [FN7] we find that the record as a whole is sufficient to make out a prima facie case of abandonment during this period, during which time respondent ceased exporting 'MEDALLA DE ORO' beer to the United States. Respondent's activities with regard to the mark commencing in 1984 demonstrate a new, separate use.
We also find that respondent has failed to rebut this prima facie case. Respondent has not given any details regarding any possible use of its mark between 1978 and 1984. It has not indicated any manufacturing of 'MEDALLA DE ORO' beer in the United States, or any use of the mark on products shipped in interstate commerce. Carlos Castillo, respondent's Export Manager since 1981 and Vice President of its U.S. subsidiary which was incorporated in 1982, testified that he knew from company records that some quantities of 'MEDALLA DE ORO' beer had been exported to the U.S. market. However, in view of respondent's interrogatory response, which listed no shipments to the United States between 1977 and 1986, such testimony does not show that there was any use of the mark after 1977 and before the later commercial venture began. Nor are we persuaded that the mark was not abandoned during this period by Castillo's testimony that he observed 'MEDALLA DE ORO' beer for sale in Los Angeles 'probably in 1978' and in Washington, D.C. in either 1979 or 1980. Mr. Castillo's testimony is, to say the least, vague. Aside from the vagueness of the dates, he could not remember the location nor did he testify to the circumstances under which he saw the products.
Further, in rebuttal petitioner has made of record the testimony of the general manager of a Washington, D.C. beer importer and wholesaler, Mr. Rosenberg, who stated that approximately 10 to 12 years ago he became expert in imported beers, learning about each product and the companies that make them. While he was aware that respondent makes 'MEDALLA DE ORO' brand beer, to his knowledge this brand was never available for sale in Washington, D.C. Further, the 'MEDALLA DE ORO' brand was not on a list, excerpted from the November, 1987 Maryland--Washington Beverage Journal, of beers and ales available in Washington, nor was this brand listed in the 1985 Modern Brewing Age Blue Book, which lists five other brands for respondent.
*6 Respondent is in a unique position to have information and documentation about its own use of the mark in the United States. However, rather than make such information of record, or provide an explanation as to why it is unavailable, respondent has instead chosen to rely on vague references by Mr. Castillo as to his observance of 'MEDALLA DE ORO' beer in 1978 and in 1979 or 1980, and to argue about how the evidence should be interpreted.
Taking into consideration the entire record, it is our view that respondent abandoned its mark by virtue of its nonuse after 1977. While, beginning in 1984, it undertook activities to again use the mark in the United States, these latter efforts represent a new and separate use, and cannot serve to cure its abandonment during the period when petitioner commenced its use of the mark 'MEDALLA'. See, AmBRIT Inc. v. Kraft Inc., 805 F.2d 974, 1 USPQ2d 1161 (11th Cir. 1986); Mission Dry Corp. v. Seven-Up Co., 193 F.2d 201, 86 USPQ 263 (CCPA 1951). Respondent has not demonstrated that reasonable constancy of effort in marketing its 'MEDALLA DE ORO' beer which would constitute persuasive evidence of an intention to resume meaningful commercial use of the mark after 1977. See, Sodima v. International Yogart Co., 662 F. Supp. 839, 3 USPQ2d 1641 (D. Ore. 1987), citing General Mills Inc. v. Frito-Lay Inc., 176 USPQ 148 (TTAB 1972).
Decision: The petition to cancel on the grounds of fraud is denied, but the petition is granted on the ground on abandonment.
FN1. Registration No. 972,984, issued November 13, 1973 from an application filed September 7, 1972 and asserting first use in April 1967 and first use in commerce with the United States in January 1971; Section 8 affidavit accepted.
FN2. These allegations were in petitioner's amended petition for cancellation, filed December 22, 1986. Petitioner moved to amend its petition to correct certain typographical errors and to conform the wording in its allegations to language contained in the Trademark Act. The motion was granted, but no further answer by respondent was deemed necessary because the basic issues remain the same.
FN3. Respondent also alleged certain affirmative defenses, but because it did not refer to them during the course of the proceeding or in its brief, we have considered them to have been waived.
FN4. While petitioner's brief refers to the registration's being void ab initio for respondent's failure to make bona fide use prior to filing the application, it is apparent from the petition to cancel (as well as the grounds available under Section 14(c) of the Trademark Act) that the actual ground asserted is fraud.
FN5. Petitioner has also argued that the Section 8 declaration was defective because Mr. Leitten was not an appropriate party to sign it. However, this possible defect of the document, as opposed to fraud in its execution, is not an appropriate ground for cancellation under Section 14. And, as was pointed out in the August 18, 1986 Commissioner's decision on the petition filed by petitioner herein to revoke the acceptance of respondent's Section 8 declaration, it is Office policy not to rescind the acceptance of a Section 8 declaration even if there was Examiner error in its initial acceptance.
FN6. Petitioner, in interrogatories to respondent, had asked respondent to identify all documents referring to its shipments to the United States, to which respondent answered 'Existing documents will be produced in lieu of an answer to this interrogatory.' Respondent submitted documents referring only to the 1972 and 1975 shipments, stating in its brief that by responding to the interrogatory in this manner it needed to submit only those documents which were in existence, and that if petitioner were dissatisfied with such a responde its alternative was to file a motion to compel.
1. All shipments originated by the Registrant of MEDALLA DE ORO beer traveling within the United States prior to November, 1979 have been shipments of MEDALLA DE ORO beer from Guatemala to a destination in the United States. If denied state the reasons therefore, identify all documents supporting the reasons for denial and provide copies of the identified documents.
Objected to as irrelevant to any issue in this proceeding. There is no requirement that Registrant make a distinction between shipments in foreign commerce and shipments in domestic commerce, since both types of shipments fall within the definition of use in commerce.
Similar requests for admissions were made with regard to shipments prior to March 1986 and for the period between February 1977 and November 13, 1979. Respondent made similar objections to all of them.
Respondent argues that if petitioner were dissatisfied with these responses it could have filed a motion to compel, and that since it did not petitioner cannot use respondent's objections to infer anything about respondent's use or nonuse of the mark in interstate commerce. Respondent is correct that petitioner's recourse when faced with respondent's objections was a motion to compel, and because such a motion was not filed, we have not considered nonuse to have been admitted.

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