Case Name: AMERICAN LAVA CORPORATION, Appellant, v. MULTRONICS, INC., Appellee
Court: United States Court of Customs and Patent Appeals
Jurisdiction: United States
Decision Date: 1972-06-08
Citations: 461 F.2d 836
Docket Number: Patent Appeal No. 8652
Parties: AMERICAN LAVA CORPORATION, Appellant, v. MULTRONICS, INC., Appellee.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 461
Pages: 836–845

Head Matter:
59 CCPA
AMERICAN LAVA CORPORATION, Appellant, v. MULTRONICS, INC., Appellee.
Patent Appeal No. 8652.
United States Court of Customs and Patent Appeals.
June 8, 1972.
Charles H. Lauder, St. Paul, Minn., attorney of record, for appellant.
Rupert J. Brady, Washington, D. C., attorney of record, for appellee.
Before RICH, ALMOND, BALDWIN, and LANE, Judges, and ROSENSTEIN, Judge, United States Customs Court, sitting by designation.

Opinion:
RICH, Judge.
This appeal is from the decision of the Trademark Trial and Appeal Board, 161 USPQ 164, adhered to on reconsideration, granting appellee's petition to cancel appellant's registration of MUL-TI-CAP as a trademark for capacitors. Appellee's petition for cancellation asserts that it is the owner of the unregistered trademarks MULTICAP and MULTI-CAP for multi-tap capacitors, that it adopted and used these marks "long prior" to the date of first use claimed in appellant's registration, that it had "continuously used" both trademarks since the date it adopted them, and that the concurrent use of appellant's trademark and appellee's trademarks is likely to result in confusion, mistake, or deception. We affirm.
Appellant has used its mark on multilayer, miniaturized, block-type ceramic capacitors, whereas appellee has used the mark on multi-iap capacitors of various internal configurations but all of relatively gigantic size. One capacitor unit sells for $7,455. To say that the goods of the parties "are the same," as appel-lee asserted, is somewhat like that saying toothpicks and telephone poles are the same because they are both pieces of wood. Nevertheless, we agree with the board that, because
The description of goods as set forth in the registration under attack [namely, "CAPACITORS"] comprehends the goods of petitioner ", the goods of the parties must be considered substantially the same. [Emphasis ours.]
Furthermore, (1) appellant's mark is identical to one of appellee's marks, and appellant's mark and appellee's other mark are practicably indistinguishable, and (2) appellant concedes priority in appellee.
Appellant's argument is essentially this: since petitioner in a cancellation action must prove that it is actually using any trademarks on which it relies at the time it files the petition for cancellation and since appellee concedes that it had not "used" (in the trademark sense) the marks on which it relies for over two years at the time it filed the petition in this case, the board erred in granting the petition. Appellant relies principally on Old Monk Olive Oil Co. v. Southwestern Coca-Cola Bottling Co., 28 C.C.P.A. 1091, 118 F.2d 1015 (1941). There being no- dispute about the facts, we are presented with a question of law.
Appellee submits on the record which contains, however, its memorandum in opposition to appellant's request for reconsideration before the board, in which appellant made the same argument, based on the same principal authority, it is making here. In its memorandum ap-pellee relied principally upon the opinion of Assistant Commissioner Leeds in Grove Laboratories, Inc. v. Wolf, 115 USPQ 416 (1957), which stated that the Old Monk case "proceeded under the 1905 Act which contained no specific provision concerning excusable nonuse, and the language of the decision is not controlling in a proceeding under the 1946 Act." According to Assistant Commissioner Leeds,
Ordinarily, a petitioner for cancelation must show that he is using the mark at the time his petition is filed if the petition, as here, alleges abandonment. This, however, is not and cannot be an inflexible rule of law, although some of the language of the Commissioner in the Arrow case [Ar row Importing Co. v. Driesen, 74 USPQ 66 (1947), opinion by First Assistant Commissioner Frazer applying the Old Monk doctrine] might mislead the reader into the belief that it is.
The board, however, did not rely on the Grove opinion. Because its opinion on reconsideration is not reported, we reproduce the relevant portions therefrom:
It is a fundamental concept in the law of trademarks that prior use of a mark, unless abandoned, will vitiate any claim to an exclusive right to the use of that mark by a later user. See: Columbia Mill Co. v. Alcorn, 150 U.S. 460, 14 S.Ct. 151 [37 L.Ed. 1144] (1893); Field Enterprises Educational Corporation v. Core Industries, Incorporated, 161 USPQ 243 (DC NY, 1969). That is to say, non-use, without abandonment, does not mean that the right to use has been destroyed as a matter of law. In the particular case, albeit petitioner had not used "MULTICAP" as a mark for its goods for a period in excess of two years, the evidence indicated no intent to abandon the said mark. As indicated by Justice Holmes in Beech-Nut Packing Co. v. P. Lorillard, 273 U.S. 629, 47 S.Ct. 481 [71 L.Ed. 810] (1926) this non-use without abandonment "does not end at once the preferential right of the proprietor to try it again upon goods of the same class with improvements that renew the proprietor's hopes".
In the Old Monk case there was no evidence submitted concerning "intent". In that case, the party relied upon evidence previously taken in a prior suit between the parties, evidence relating to matters five years prior to the institution of the second suit. That case is clearly distinguishable because we do have evidence which clearly shows no intent to abandon.
Since petitioner's prior right to use "MULTICAP" was not lost at the time petitioner filed its petition for cancelation, and since respondent's registration is inimical to petitioner's right to use "MULTICAP" for capacitors, petitioner is necessarily damaged by respondent's registration.
OPINION
I. The Vse-at-the-Time-of-Petition Doctrine
Old Monk was, as Assistant Commissioner Leeds pointed out, a case decided under the 1905' Act. The Old Monk Olive Oil Company had sought cancellation of the appellee's registration of "Old Monk" for various soft drinks on the ground that it was "invalid under the confusion in trade clause of section 5 of said trademark act." It offered no fresh evidence, relying instead on testimony and exhibits introduced five years earlier in an opposition proceeding between the same parties and on an official copy of an application of its own then pending in the Patent Office. However, this court refused to consider the application for reasons which are not relevant here. The remaining evidence it found insufficient to establish that appellant had been injured by ap-pellee's registration, answering in the affirmative the question "whether, in order for appellant to succeed, it was incumbent upon it to establish use of its trade-mark upon [its goods] on or about the filing date of its petition." Since such proof was clearly lacking, this court affirmed the decision of the Commissioner refusing cancellation. Finally, in a paragraph upon which appellant has placed great emphasis, this court stated:
In conclusion we would observe that no question of abandonment by appellant of its mark is here involved, but only the question of its use on or about the time of the filing of its petition for cancellation. If it was not using its mark at that time, it was not injured by the existence of appellee's registration. [Emphasis ours.]
In evaluating the present strength of the holding in the Old Monk case, it should first be noted that none of the three cases on which the opinion» relies supports the proposition that there is a use-at-the-time-of-filing requirement independent of the non-abandonment requirement. The statement in Model Brassiere Co. v. Bromley-Shepard Co., 18 C.C.P.A. 1294, 1298, 49 F.2d 482, 485 (1931), that "In [a petition for cancellation] it is clear that [^e petitioner] should show such facts as would show his ownership and use [of a trademark] at the time the petition was filed" was, as this court acknowledged in the Old Monk opinion, "to a great extent obiter dictum." No authority at all was cited for the proposition in the Model Brassiere case. In Skene v. Marinello Co., 50 U.S.App.D.C. 265, 270 F. 701 (1921), our predecessor in jurisdiction over trademark appeals clearly felt that appellant's failure to prove continued use of the mark in the particular circumstances of that case raised an inference of abandonment and that appellant had not overcome that inference. In American Cyanamid Co. v. Synthetic Nitrogen Products Corp., 19 C.C.P.A. 1235, 58 F.2d 834 (1932) , this court held that proof that the petitioner was using its mark in interstate commerce on or about the filing date of its petition was sufficient to establish that it had been "damaged" by the registration which it sought to cancel. The Old Monk case itself seems to have been the first in which the sufficient condition was transformed into a necessary condition, independent of the proposition that one who has abandoned a mark cannot prevent its subsequent adoption and registration by another, and appellant has not cited any opinion by this or any other court following Old Monk or applying a similar rule.
Second, as Assistant Commissioner Leeds pointed out, Old Monk was decided under the Trademark Act of 1905, and the Trademark Act of 1946 evidences a more lenient attitude toward nonuse than the 1905 Act. See 15 U.S. C. § 1059(a) recognizing the principle of excusable nonuse in connection with registration renewals. Proof that a mark has not been used for two or more consecutive years makes out a prima facie case that it has been abandoned, 15 U.S. C. § 1127, definition of "Abandonment of mark," but the inference of abandonment is readily rebutted by a showing similar to that permitted under 15 U.S. C. § 1059(a). See, e. g., Sterling Brewers, Inc. v. Schenley Industries, Inc., 58 C.C.P.A. 1172, 441 F.2d 675, 169 USPQ 590 (1971), the COOK'S GOLDBLUME case.
Finally, the present statute, whatever may have been the ease with the Trademark Act of 1905, clearly does not contemplate the result dictated by the Old Monk opinion. According to 15 U.S.C. § 1052, "Trade-marks registrable on principal register,"
No trade-mark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—
* -X- -X* -X-
(d) Consists of or comprises a mark which so resembles a mark registered in the Patent Office or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when applied to the goods of the applicant, to cause confusion, or to cause mistake, or to deceive . [Emphasis ours.]
The statute says nothing about nonuse at this point. If the mark has not been abandoned by the first user, it will preclude registration if the other conditions are met. The rule for which appellant contends, on the other hand, would allow the second user of a mark to register it during a period of excusable nonuse by the first user, but register it subject to an implicit condition subsequent allowing the first user to cancel the second user's registration upon restablishing its own use of the mark at any time prior to the second user's registration having become incontestable.
For the foregoing reasons, we will no longer follow Old Monk insofar as it holds that a petitioner in a cancellation proceeding must show use of the mark on which it relies at the time of its petition, in addition to the statutory requirement that the mark on which the opposer relies has not been abandoned at that time. Accordingly, priority in appellee being conceded, this case presents only two questions: First, did appellee establish trademark rights in the marks MULTICAP and MULTI-CAP and second, if it did, did it thereafter abandon such rights?
II. Did Appellee Establish Trademark Rights in its Marks ?
Appellee is a manufacturer of, inter alia, antenna systems for the shore ends of long distance, low- to medium-frequency, ship-to-shore coi .munication facilities. It used the maris MULTICAP and MULTI-CAP in two installations prior to appellant's first use of its mark. In the first, which was a wholly intrastate operation, operating difficulties were encountered, and one or the other of the marks was used on approximately six variations of the capacitor units used with the antenna. However, only one such unit was finally turned over to the United States Navy when it accepted the antenna system. The second installation, also for the United States Navy, was in Guam. For that installation, appellee sold the government a total of four "MULTICAP" capacitor units at a total price of $29,820. The mark was used on the units themselves, on the boxes in which they were shipped, in the manuals which were provided to instruct the Navy communications personnel in the operation of the newly upgraded antenna system, and in various documents relating to that installation. We think that there can be no question but that, had appellee sought registration of its marks immediately after this activity, it would have been accepted as sufficient to support the registrations. See Community of Roquefort v. Santo, 58 C.C.P.A. 1303, 1307-08, 443 F.2d 1196, 1199-1200, 170 USPQ 205, 208 (1971).
III. Did Appellee Abandon its Marks?
Appellee eoncededly sold no MULTICAP or MULTI-CAP capacitor units between June 1965, when it completed work on the installation in Guam, and February 1968, when testimony on its behalf was taken. This was a period of over two years, and 15 U.S.C. § 1127 provides that "Nonuse for two consecutive years shall be prima facie abandonment." Thus, it was plainly incumbent upon appellee to rebut the inference of abandonment arising from its failure to use the marks during that period.
Appellee's president testified that "the customers [for the NORD antenna system, in which it used the MULTICAP capacitor units] are the United States Government, foreign governments, and at the present a limited commercial use." He further testified that appellee was then "trying to market the NORD antenna system to ship-to-shore operators in the United States, particularly to the oil companies who have transports, and companies of this type," but that the market for the NORD system was limited "because of the fact the antenna is primarily used with LF, which is low frequency, and these frequencies are predominantly controlled by the United States military." As stated previously, both installations in which capacitor units bearing the trademark MULTI-CAP were used were United States Navy facilities.
Basically, appellee's case is that its customers had come to recognize the MULTICAP trademark, that it had maintained the capability of producing further capacitor units of the types it previously called MULTICAPS (including storing of labels bearing that trademark), and that it had been actively, though unsuccessfully, attempting to sell further units of those types. Appellee's president testified that, at the time his testimony was taken, appellee had "proposals [for the sale of antenna systems incorporating MULTICAP capacitor units] that have been out for the last six to eight months with several commercial customers, as well as the Government," and that appellee had "excellent prospects" for additional sales of MULTI CAP capacitor units in the then "near future." He explained that
We have been in rather extended litigation with the United States Navy for the last eighteen months over the NORD Antenna System contract, and all of our business seems to have stopped until the litigation was settled. That litigation was settled last month and we now anticipate a fairly large quantity of antenna system orders where Multicaps will be used.
He then detailed considerable promotional and sales negotiating activity in the immediate past. Similarly, appellee's former vice-president testified that he had "engaged in talks" with Navy personnel concerning the upgrading of two other antenna systems on Guam, which upgrading would have employed MULTI-CAP capacitor units, that the commanding officer of another Navy communications installation where appellee later installed an antenna system not employing MULTICAP capacitor units remonstrated with him for not having used the MULTICAP capacitor units, referring to them by name, and that he later discussed changing the latter system over to the use of MULTICAP capacitor units with personnel at U. S. Naval Headquarters in Washington, D. C.
Concededly, all this talk had not led to further sales by the time appellee took testimony. However, appellee's former vice-president had an explanation for that which we find very reasonable:
At the present time the Vietnam war, that is where all the money is going. The Government has held up as much as possible spending on improving antenna systems.
This same witness testified convincingly that his work placed him in a position to know if any Government contracts for antenna systems of the type in which MULTICAP capacitor units might be employed had been let and that, to his knowledge, no such contracts had been let.
Appellant's strongest point is, perhaps, that appellee installed a NORD antenna system for the United States Navy between the time of the Guam work and the taking of testimony in this case, the capacitor units in which it did not designate as MULTICAPS. As 15 U.S.C. § 1127 says, abandonment of a mark "may be inferred from circumstances." However, appellee's former vice-president testified that the Navy wanted "immediate shipment" for that job, that it would have taken them "Thirty to sixty days, depending upon the components being available," to make up capacitor units of the type which they had previously designated MULTICAP, and that "the only reason the Multicaps were not included in the unit was as an expedient in order to get the unit delivered and in operation at the time they wanted it Furthermore, there is testimony that, while the MULTI CAP units used in the Guam installation were a resounding success, the capacitor units used on the later, hurried job were unsatisfactory. Thus, it is quite understandable that ap-pellee would not have wanted to use the same marks on both units. On the whole, and taking into consideration the previously set forth evidence of intent to resume use, we are persuaded to accept appellee's explanation as excuse for this nonuse of the marks.
Appellant makes many redundant arguments in its brief, some of which are not relevant to the question before us, which is whether its registration should be cancelled because its continuance on the register is inimical to appellee's rights, in particular the argument that under Hanover Star Milling Co. v. Metcalfe, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916), and United Drug Co. v. Rectanus Co., 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918), it could not be stopped from using its trademark by appellee under the circumstances of this case. That may well be true, but it is not determinative of the issue in this cancellation proceeding. It is also irrelevant that its capacitors are only 0.250" long, 0.050" wide and 0.050" or less thick while one set of appellee's capacitor units fills a large crate and sells for thousands of dollars, so long as its registration describes the goods broadly as "capacitors," which is as descriptive of appellee's goods as it is of appellant's. A cancellation proceeding is not a suit for unfair competition, and it should not be argued as though it were. The issues are much narrower.
For the foregoing reasons, we find that appellee did not abandon its trademark MULTICAP and MULTI-CAP prior to the taking of testimony in February 1968. Accordingly, the decision of the board is affirmed.
Affirmed.
. Principal Register, No. 814,367, registered Sept. 6, 1966, on application filed Sept. 16, 1965, claiming first use Sept. 3, 1965.
. The specific allegations and the proof are that appellee adopted its marks less than eleven months before appellant adopted its mark, but appellant does not contest priority. Appellee alleges that it applied April 8, 1966, Ser. No. 243,700, to register MULTICAP for capacitors, and that the registration herein sought to be can-celled was cited as a reference against it.
. Appellee is a corporation of the State of Maryland having its office in Rock-ville, Md., and the first installation was at Annapolis, Md.
. 15 U.S.C. § 1127 also provides that For the purposes of this Act a mark shall be deemed to be used in commerce (a) on goods when it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto and the goods are sold or transported in commerce .
Thus appellee's use of the marks in communications with prospective purchasers, while evidence of non-abandonment, is not itself trademark use of the marks.