Source: https://ipmall.law.unh.edu/content/ttab-trademark-trial-and-appeal-board-1-mastercard-international-incorporated-v-american
Timestamp: 2019-04-20 00:42:20+00:00

Document:
This case now comes up on a motion for partial summary judgment filed by MasterCard International Incorporated. The parties have filed briefs on the motion.
MasterCard International Incorporated (petitioner), a membership corporation of banks and other domestic and foreign financial institutions, seeks cancellation of Registration No. 889,858, issued April 21, 1970, Sections 8 and 15 affidavit filed, now held by American Express Company (respondent), for the mark GOLD CARD for the services of guaranteeing the payment of checks issued by depositors through the issuance of identification cards. In the petition for cancellation, petitioner asserts that one of its purposes is to facilitate the interchange of funds through credit and debit bank cards and travelers checks on a worldwide basis. Petitioner has assertedly been in the bank card business since 1966 and is now a leader in the field. Petitioner has used the marks MASTER CHARGE and MASTERCARD and MASTERCARD II in connection with cards held by over 77 million cardholders issued by more than 16,000 member banks and financial institutions. Over 3.5 million merchants and service establishments participate in petitioner's programs and billions of dollars worth of purchases or cash advances are transacted by petitioner's cardholders yearly.
As grounds for cancellation, petitioner asserts that the term GOLD CARD is the common descriptive name for the single most notable element of the services described in respondent's registration, that is, the card itself. According to petitioner, numerous banks and other businesses that have bank cards, extend credit or offer related services commonly use gold-colored cards and/or the words 'gold' or 'gold card' to describe their programs, services and cards, and petitioner issues to its preferred customers a gold-colored version of its card. Therefore, according to petitioner, the registered mark is not subject to exclusive appropriation and the continued registration thereof impairs petitioner's right to use these words to describe its gold-colored MASTERCARD card. As an additional basis for cancellation, petitioner asserts that, on information and belief, respondent and/or its predecessor in interest, First National Bank of Allentown, has abandoned all right in the term by discontinuing use thereof in connection with its services. As a result thereof, the transfer to respondent American Express Company was an assignment in gross by which no valid rights were transferred. Respondent has denied on its answer the essential allegations of the petition and has asserted as an affirmative defense that the registered mark is distinctive of its services.
In its motion for partial summary judgment, petitioner argues that, as a result of a decision in a civil action involving the parties in the Southern District of New York (American Express Company vs. MasterCard International, Inc., 685 F. Supp. 76, 7 USPQ2d 1829 (1988)), wherein the term GOLD CARD was held generic, the doctrine of collateral estoppel precludes respondent from relitigating that issue herein. In the civil suit, respondent as plaintiff charged that petitioner's use of the words 'gold card' in an advertisement infringed its asserted mark. Respondent asserted common law rights as well its ownership of the registration herein sought to be cancelled. Petitioner as defendant asserted that the term GOLD CARD is generic and sought cancellation of the involved registration on that basis and on the ground that respondent's predecessor abandoned the registered mark and that the assignment was invalid as it did not operate to transfer any goodwill. In dismissing the complaint, the court held that the mark GOLD CARD was generic for respondent's charge card services.
Defendant has asserted several counterclaims. The first is the cancellation of Registration No. 889858 for 'GOLD CARD' issued to the First National Bank of Allentown, and discussed above. As I have indicated, the testimony presented on this trial does not justify cancellation of the registration on the ground of abandonment by the bank.
The other basis alleged for cancellation should be disposed of in the proceeding to cancel this registration pending before the Patent and Trademark Office.
Petitioner argues that collateral estoppel (issue preclusion) requires partial summary judgment in its favor because the identical issue of genericness was actually and necessarily determined by a court of competent jurisdiction and is conclusive in a subsequent suit involving the parties to the prior litigation. Petitioner states that proofs at trial covered all services offered by the parties, that it is 'implicit' that the term is generic for any service accessed by a 'gold card,' and that, in the absence of any limitation, we should construe the court's opinion as a holding of genericness for all financial services associated with respondent's gold card and available to holders thereof. Petitioner's motion is supported by copies of various documents from the civil action.
In opposing the motion respondent contends, among other things, that the court specifically declined to rule on the question of genericness of the registered mark, while it did rule on the abandonment claim, holding that the testimony presented on this claim did not justify cancellation on the ground of abandonment. Because the issue of genericness with respect to the check guarantee services of this registration was not decided by the court, the 'actual litigation' prong of the test for applying collateral estoppel, respondent argues, has not been met and respondent cannot be precluded from litigating that issue herein.
We fully agree with respondent that the court's decision cannot operate to preclude litigation of the issue of genericness of the registered mark with respect to check guarantee services. The court specifically referred that matter to this Office. (Indeed, petitioner even states in its principal brief, 3, that the issue of genericness of the services set forth in the registration was referred by the court to this Office.) Moreover, as respondent has pointed out, the fact that a term has been held to be generic for one service does not necessarily preclude its use as an valid trademark for another. See In re Seats, Inc., 757 F.2d 274, 225 USPQ 364, 367 (Fed. Cir. 1985), Polo Fashions, Inc. v. Extra Special Products, Inc., 451 F. Supp. 555, 200 USPQ 161, 165 (S.D.N.Y. 1978), Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 189 USPQ 759, 768 (2d Cir. 1976) and In re Minnetonka Inc., 3 USPQ2d 1711, 1713 (TTAB 1987).
*3 While neither party has specifically sought judgment herein on the basis of the court's holding on the issue of the alleged abandonment of the registered mark, a question is raised as to whether the court's opinion in this regard operates to preclude relitigation of that issue. Petitioner is allowed until February 13, 1990 in which to show cause why partial summary judgment should not be entered against it with respect to that asserted ground for cancellation.
Petitioner's motion for partial summary judgment is denied. Proceedings remain suspended pending petitioner's reply, as ordered above.
This case now comes up on the motion for summary judgment of MasterCard International Incorporated (opposer). The parties have filed briefs on this motion.
MasterCard has opposed the application of American Express Company (applicant) to register the term GOLD CARD for charge card services and hotel and motel reservation services. [FN1] In the opposition, opposer asserts that it is an incorporated association of banks and other domestic and foreign financial institutions whose purpose is, among other things, to facilitate the interchange of funds through credit and debit bank cards and travelers checks on a worldwide basis. Opposer asserts that it is a leader in the bank card business, which it entered in 1966. Opposer uses the marks MASTER CHARGE and MASTERCARD and MASTERCARD II. MASTERCARD cards have been issued to over 77 million cardholders by over 16,000 member banks and financial institutions. Over 3.5 million merchants and service establishments participate in opposer's programs. Billions of dollars worth of purchases and cash advances are transacted by opposer's cardholders annually, according to the pleading.
Opposer asserts that applicant's mark GOLD CARD consists of two descriptive components, 'GOLD' being merely descriptive of the color of applicant's card and a common element in marks describing and/or identifying a quality or characteristic of a bank card, credit or related services, and the generic word 'CARD,' disclaimed by applicant. The composite, according to opposer, merely describes a bank card, credit card or related cards which are gold in color. Opposer asserts that numerous banks, businesses and other organizations that have bank cards or offer credit or other related services to customers commonly use gold-colored cards and/or the words 'gold' or 'gold card' to describe their programs, services and cards, usually offered to more credit-worthy or 'upscale' customers. Opposer states that it has introduced a gold-colored version of its MASTERCARD card, issued to preferred customers. Accordingly, because the term sought to be registered assertedly does not function to identify applicant's services and distinguish them from those of other card issuers, and because opposer has the right to describe its gold MASTERCARD by the words 'gold card,' a registration to applicant will impair opposer's right to use these common descriptive terms in the field of bank card, credit extension and related services. Applicant has denied the essential allegations of the opposition and has asserted as an affirmative defense that its mark is distinctive of its services.
*4 Proceedings in this opposition were suspended pending the outcome of Opposition No. 65,623, also involving these parties. That case in turn had been suspended pending the outcome of civil litigation in which the parties were involved in the Southern District of New York. (American Express Company v. MasterCard International Incorporated, 685 F. Supp. 75, 7 USPQ2d 1829 (S.D.N.Y. 1988)).
Opposer argues that collateral estoppel (issue preclusion) precludes this litigation because the issue of genericness was actually and necessarily determined by a court of competent jurisdiction and is conclusive in a subsequent suit involving the parties to the prior litigation. Finally, it is opposer's position that there was no limitation placed on the Court's holding of genericness and that the holding pertains to all services available to cardholders and associated with or accessed by applicant's cards.
In opposition to opposer's motion, applicant argues that the decision of the District Court should not be given preclusive effect because it was based on law contrary to the law of the Court of Appeals for the Federal Circuit, the Board's reviewing tribunal. More particularly, applicant contends that, because the District Court relied on the pre-Lanham Act decision of Radio Corporation of America v. Decca Records, Inc., 51 F. Supp. 493, 58 USPQ 531 (S.D.N.Y. 1943), a case assertedly based on a 'per se' rule against color marks, and because that precedent is contrary to the law in the Federal Circuit that 'there is no inherent bar to trademark registration of the color of goods, when the color is an overall color rather than in a form of a design' (In re Owens-Corning Fiberglas Corp., 774 F.2d 1116, 227 USPQ 417 (Fed. Cir. 1985)), the Board should refuse to follow that decision.
*5 This reason presented by applicant in an attempt to avoid the preclusive effect of the judgment is without merit. Aside from the fact that this case involves no claim of color, it is clear that the District Court Judge did not rely exclusively on Radio Corporation of America but rather relied on appropriate Second Circuit precedent and other case law in making the determination that 'gold card' was generic for opposer's charge card services.
Applicant also argues that, despite opposer's request in the civil action that this opposition be sustained by the Court and that registration of applicant's mark be denied, the Court did not grant such relief and did not decide the issue of alleged genericness of the term 'GOLD CARD' with respect to the hotel and motel reservation services in Class 42. Moreover, applicant argues, the Court apparently did not consider such services in deciding the merits of the civil action. Applicant argues therefore that there is an outstanding issue before the Board as to whether the term 'GOLD CARD' functions as a mark when used in connection with hotel and motel reservation services because this issue was not actually litigated by the federal court but rather was specifically reserved for the Board.
Defendant [opposer] has alleged an action for declaratory judgment. This claim has been disposed of with the dismissal of the complaint and by reserving to the Patent and Trademark Office the issues regarding Registration No. 889,858 [not the subject of this opposition proceeding]. This is also true regarding the application to register Serial No. 191,889 and Serial No. 309,812 [involved herein]. This counterclaim is dismissed.
It appears, therefore, that the Court recognized that there were other issues involved in this opposition proceeding than the question of genericness of the term with respect to charge card services. In this regard, a term which is generic for one product or service may be able to function as a trademark for a related but different product or service. See In re Seats, Inc., 757 F.2d 274, 225 USPQ 364, 367-68 (Fed. Cir. 1985), Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 189 USPQ 759, 768 (2d Cir. 1976), Polo Fashions, Inc. v. Extra Special Products, Inc., 451 F. Supp. 555, 200 USPQ 161, 165 (S.D.N.Y. 1978) and In re Minnetonka Inc., 3 USPQ2d 1711, 1713 (TTAB 1987). See also Litton Industries, v. Litronix, Inc., 577 F.2d 709, 198 USPQ 280, 282 (CCPA 1978) and Parker Brothers v. Tuxedo Monopoly, Inc., 225 USPQ 1222, 1224 (TTAB 1984), app. dis'd., 757 F.2d 254, 226 USPQ 11 (Fed. Cir. 1985).
In sum, because the Court's decision holding the mark sought to be registered generic for card charge services is entitled to preclusive effect, opposer's motion for summary judgment is granted to the extent that applicant's application seeks registration of the term of 'GOLD CARD' for charge card services. However, because we agree with applicant that it cannot be precluded from litigating the issue of descriptiveness or genericness of this term with respect to hotel and motel reservation services in Class 42, opposer's motion for summary judgment cannot be granted in its entirety. Accordingly, trial dates, including time for discovery, are set as indicated in the accompanying trial order. This case shall go forwrd on the issue of descriptiveness or genericness of the term 'GOLD CARD' for hotel and motel reservation services.

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