DM Enterprises & Distributors, Inc.v.Ruta Maya Royalty, Ltd.

Trademark Trial and Appeal Board

May 28, 2004

No. 92029327 (T.T.A.B. May. 28, 2004)

Mailed: May 28, 2004
UNITED STATES PATENT AND TRADEMARK OFFICE
_____
Trademark Trial and Appeal Board
______
DM Enterprises & Distributors, Inc.
v.
Ruta Maya Royalty, Ltd., substituted for Timothy J. Sheehan1
_____
Cancellation No. 92029327
_____
Jesus Sanchelima of Sanchelima & Associates, P.A. for DM
Enterprises & Distributors, Inc.
Merrily S. Porter of Law Offices of James O. Houchins for
Ruta Maya Royalty, Ltd., substituted for Timothy J. Sheehan.
_____
Before Quinn, Chapman and Holtzman, Administrative Trademark
Judges.
Opinion by Chapman, Administrative Trademark Judge:
DM Enterprises & Distributors, Inc. (a Florida
corporation) has filed a petition to cancel a registration
on the Principal Register issued to Timothy J. Sheehan (an
1 The registration sought to be cancelled herein has been
assigned by the original registrant, Timothy J. Sheehan, to Ruta
Maya Royalty, Ltd. (a Texas limited partnership) and the
assignment has been recorded by the Assignment Branch of the
USPTO on March 11, 2002 at reel 2457, frame 0716. Ruta Maya
Royalty, Ltd. is accordingly substituted as the respondent in
THIS DISPOSITION IS
NOT CITABLE AS PRECEDENT
OF THE TTAB
Cancellation No. 92029327
2
individual, residing in Texas), now owned by Ruta Maya
Royalty, Ltd., for the mark CUBITA for “coffee.”2
Petitioner alleges the following as grounds for its
petition to cancel:
(1) Petitioner is a Florida corporation and is using
the mark CUBITA in commerce. Petitioner claims a prior
right to use the mark by having acquired said rights
from its predecessor in interest who licensed the mark
to the Registrant.
(2) Petitioner has recently filed an intent-to-use
[sic- use-based] trademark application for CUBITA and
Design, for coffee in international class 30, for which
serial number 74,697,908 [sic- 75697908] and a filing
date of May 4, 1999 has been assigned. Petitioner’s
application has been rejected by the Examiner based on
the previous registration of registrant’s mark, CUBITA.
(3) Registrant’s above identified mark so resembles
Petitioner’s mark as to be likely, when used in
connection with registrant’s goods cited in its
registration, to cause confusion or to cause mistake as
to the source or sponsorship of the goods in question.
(4) For the aforesaid reasons, Petitioner is being
damaged by the registration of the mark identified
above.
Informationally, petitioner’s application Serial No.
75697908 is for the mark shown below
for “coffee.” The application was filed on May 4, 1999,
this proceeding. See Fed. R. Civ. P. 25(c), and TBMP §512.01 (2d
ed. June 2003).
2 Registration No. 2252228, issued June 15, 1999, from an
application filed on February 16, 1994. The claimed date of
first use and first use in commerce is March 1, 1994.
Cancellation No. 92029327
3
based on petitioner’s claimed date of first use on February
13, 1994.
In his answer, the original registrant “admits only
that its registered mark, CUBITA, resembles the mark
Petitioner seeks to register,” and denies the remaining
allegations of the petition to cancel. In addition, he
asserts the following:
Further, Registrant believes that the entity which
Petitioner characterizes as its “predecessor-in-
interest” fraudulently misrepresented ownership and use
of the mark to Registrant. Specifically, Petitioner’s
“predecessor-in-interest” claimed to be the owner of
the mark CUBITA and fraudulently induced Registrant
into reliance on that representation, resulting in
Registrant agreeing to enter into a licensing agreement
with said “predecessor-in-interest.”
The record consists of the pleadings; the file of
respondent’s registration; the testimony, with exhibits, of
Raul Diaz, petitioner’s president; the testimony, with
exhibits, of Timothy John Sheehan, the original registrant;
respondent’s notice of reliance filed December 6, 2002 on
petitioner’s answers to respondent’s interrogatory Nos. 1-
14; and petitioner’s notices of reliance filed January 21,
2003 on (i) respondent’s answer to petitioner’s
interrogatory No. 8, and (ii) respondent’s documents
produced in response to petitioner’s document request Nos.
4, 12 and 15.3
3 Generally, a party may not make documents obtained from another
party of record by way of notice of reliance. See Trademark Rule
2.120(j)(3)(ii). However, respondent did not object to
Cancellation No. 92029327
4
Both parties filed briefs on the case. Neither party
requested an oral hearing.
According to petitioner’s president, Mr. Raul Diaz, DM
Enterprises & Distributors, Inc. (located in Florida), is in
the business of distributing supermarket products; one of
the names under which petitioner does business is Universal
Brands; and one of the products it distributes is CUBITA
brand coffee.
Mr. Diaz also testified that in February 1999
petitioner paid $7000 to Ms. Leni Alonzo and Mr. Michael
(Miguel) Angel (husband and wife) to purchase their
purported rights to the mark CUBITA for coffee, including a
Florida state registration of the mark CUBITA;4 that
petitioner purchased these rights from the husband and wife
after learning that Ms. Leni Alonzo and Constante Importing
Co., Inc. (Timothy Sheehan, president) had entered into a
license agreement in 1995 wherein she was the licensor and
owner of the trademark CUBITA; that petitioner’s first use
is February 19945 through its predecessor in interest, Ms.
petitioner’s notice of reliance on said produced documents, and
respondent accordingly stipulated the documents into the record.
See TBMP §704.11 (2d ed. June 2003).
4 The assignment document submitted by petitioner is a photocopy
of a trademark assignment form filed with the Florida Division of
Corporations that Florida state Registration No. T96000000068 and
rights in the mark CUBITA (along with the goodwill) were assigned
from Ms. Alonzo to petitioner. (Petitioner’s Exhibit No. 3.)
5 In petitioner’s application, the claimed date of first use is
February 13, 1994; while in petitioner’s answers to respondent’s
Cancellation No. 92029327
5
Leni Alonzo as licensor of the mark, with use by Timothy
Sheehan inuring to the benefit of the licensor; and that
petitioner’s own first use of the mark occurred in July
1999.
Mr. Diaz further testified that petitioner sold
approximately 1650 boxes (24 8-oz. packages per box) of
CUBITA brand coffee in 1999, and about 2000 boxes in 2000
(costing approximately $72,000); that since 1999 petitioner
has advertised the mark through radio, television,
newspapers, and promotions -- including a joint promotional
event with Sedanos Supermarkets; and that petitioner filed
its application for the mark CUBITA and design for coffee,
but the involved registration was cited against petitioner’s
application.
In answering respondent’s interrogatory No. 11
regarding the basis for petitioner’s claim of a prior right
to use of the mark CUBITA, petitioner stated that
“Registrant’s use inured to the benefit of his licensor and
owner of the mark”; and in identifying the geographical area
of petitioner’s use of the mark, it stated “Florida, New
York and Chicago” (answers to respondent’s interrogatory
Nos. 5(c) and 12).
Mr. Sheehan, the original registrant, testified that he
imports wholesale and retail coffee; that he is exclusively
interrogatory Nos. 9 and 10, petitioner stated its first use is
Cancellation No. 92029327
6
in that business, which he began in 1990; that he is a
principal in several entities that are in the coffee
business (i.e., Ruta Maya Importing, Ltd. imports coffee,
Constante Importing retails coffee); that he filed an
intent-to-use application in February 1994, and he first
used the mark CUBITA for coffee in Texas on February 14,
1994; that his use has been continuous since that date; that
his use of the mark for these goods has expanded to
Colorado, North Dakota, South Dakota and Illinois; that
respondent has had a presence on the Internet since 1996;
and that respondent sells its coffee through two major
distributors who sell to grocery stores, and, in addition,
very occasionally respondent sells directly to restaurants.
Mr. Sheehan also testified that his then-application
was suspended because of a prior pending application (Serial
No. 74448582, filed October 19, 1993 by Ms. Leni Alonzo
based on her assertion of a bona fide intention to use the
mark CUBITA for coffee); that respondent contacted Ms.
Alonzo (and her husband Mr. Angel); and that because they
represented that they were using the mark for coffee, in
1995 he (as president of Constante Importing Co., Inc.)
entered into a trademark license agreement.
He further testified that shortly after he entered into
the license agreement, the prior pending application owned
February 14, 1994.
Cancellation No. 92029327
7
by Ms. Alonzo was abandoned and he could find no evidence of
any use whatsoever of the mark by Ms. Alonzo (or Mr. Angel);
that, to the contrary, he found evidence the mark was not
used; that specifically, in a January 1994 letter from Mr.
Sanchelima (petitioner’s attorney) to an agency of the Cuban
government, Mr. Sanchelima stated that he could find no
evidence that Leni Alonzo was in the coffee business (dep.,
pp. 32-34);6 that Mr. Angel sent Mr. Sheehan a letter
including a list of hundreds of trademarks (primarily Cuban
names) for a wide variety of goods and services (for
example, rum, sugar, cigars, coffee, perfume, magazines,
travel and tour services, international trade company,
hotels, casinos and home sales),7 upon receipt of which Mr.
Sheehan then became concerned that there was a political or
trademark scheme in which he did not want to be involved;
that after Mr. Sheehan obtained his registration, Mr. Angel
contacted Mr. Sheehan offering to sell rights in the mark
CUBITA for $10,000, and stating that otherwise he would sell
it to a party in Miami; that Mr. Sheehan was also called by
Mr. Sanchelima regarding the $10,000 offer; and that Mr.
Sheehan met with Mr. Sanchelima and Mr. Raul Diaz, but found
petitioner had not only adopted the mark, but the artwork
used by respondent.
6 A copy of this letter was not made of record.
7 A copy of this letter was not made of record, but the multi-
page trademark list is Exhibit No. 13 to the Sheehan deposition.
Cancellation No. 92029327
8
Mr. Sheehan explained that given this information, he
would never have entered into a license agreement with Ms.
Alonzo and he considers the trademark license was obtained
Cancellation No. 92029327
9
by Ms. Alonzo through fraud (dep., pp. 31 and 44-45); and
that petitioner has not claimed use earlier than
respondent’s even though petitioner is relying on a
predecessor in interest who claimed to have used the mark
prior to respondent’s first use.
Respondent’s answer to petitioner’s interrogatory No. 8
shows respondent’s sales of the goods under the mark CUBITA
were $21,780 in 1995; $43,100 in 1996; $4,876 in 1996; and
$2,148 in 1998.
The registration petitioner seeks to cancel is entitled
to the prima facie presumptions under Section 7(b) of the
Trademark Act, 15 U.S.C. §1057(b), of the validity of the
registration, of respondent’s ownership of the registered
mark, and of respondent’s right to exclusive use of the mark
in commerce in connection with the identified goods.
Petitioner thus has the burden of submitting sufficient
evidence to rebut these presumptions.
In Board proceedings, our primary reviewing Court has
held that the plaintiff must establish its pleaded case
(e.g., priority and likelihood of confusion), as well as its
standing, and must generally do so by a preponderance of the
evidence. See Cunningham v. Laser Golf Corp., 222 F.3d 943,
55 USPQ2d 1842, 1848 (Fed. Cir. 2000); Martahus v. Video
Duplication Services Inc., 3 F.3d 417, 27 USPQ2d 1846, 1850
(Fed. Cir. 1993); Magic Wand Inc. v. RDB Inc., 940 F.2d 638,
Cancellation No. 92029327
10
19 USPQ2d 1551, 1554 (Fed. Cir. 1991); and Cerveceria
Centroamericana, S.A. v. Cerveceria India Inc., 892 F.2d
1021, 13 USPQ2d 1307, 1309 (Fed. Cir. 1989).
Petitioner has established its standing to bring this
case as it has proven that it applied to register the mark
CUBITA and design for coffee; and that its application was
refused registration based on the involved registration. See
Cunningham v. Laser Golf Corp., supra.
The parties’ word marks -– CUBITA -- are identical,8
and the goods -– coffee -- are identical. We therefore find
that there is a likelihood of confusion in this case where
the identical word mark is used by both petitioner and
respondent on the same goods. See In re E. I. du Pont de
Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973).
The question here is one of priority of use and, as
explained above, it is petitioner who bears the burden of
proving its priority.
The record shows that Ms. Leni Alonzo filed an intent-
to-use-based application in October 1993; that Mr. Timothy
Sheehan (the original registrant) filed an application in
February 1994 and first used the mark CUBITA for coffee in
February 1994; that Ms. Alonzo (licensor) and Mr. Sheehan
(Constante Importing Co., Inc. as licensee) entered into a
trademark license agreement on March 21, 1995, which
Cancellation No. 92029327
11
8 We note that there is a design feature in petitioner’s applied-
for mark.
Cancellation No. 92029327
12
terminated on May 31, 1996 (paragraph X.A. of respondent’s
Exhibit No. 12); that Ms. Alonzo’s application was abandoned
in 1995; that Mr. Sheehan’s application matured into
Registration No. 2252228 on June 15, 1999; that in February
1999 petitioner purchased the rights of Ms. Alonzo in the
mark CUBITA (including a Florida state registration); and
that petitioner itself first used the mark in July 1999.
Petitioner’s theory that it has priority is based on
Ms. Alonzo’s prior application filed in 1993; the licensee’s
(Constante Importing Co., Inc.) asserted assignment of its
rights in the mark CUBITA to Ms. Alonzo in paragraph X.B. of
the license agreement; and petitioner’s acquisition of Ms.
Alonzo’s rights by assignment in 1999. Noting that
respondent has not previously asserted that the trademark
license agreement was improperly obtained by the licensor,
petitioner concludes that it is entitled to claim as its
priority date the date on which the original registrant (Mr.
Timothy Sheehan) first used the mark CUBITA, or February 14,
1994.
We will assume (without deciding) that Mr. Sheehan’s
use of the mark CUBITA for coffee during the time of the
trademark license agreement from March 21, 1995 to May 31,
1996 inured to the benefit of Ms. Alonzo as the licensor.
We will also assume (without deciding) that petitioner
Cancellation No. 92029327
13
acquired the ownership rights of Ms. Alonzo in the mark
CUBITA for coffee in February 1999.
However, we find petitioner’s assertion of February 14,
1994 as its first use is not substantiated in the record.
Petitioner’s argument (brief, p. 5) that Ms. Alonzo had
legal rights in the mark superior to respondent’s rights “by
virtue of her application’s previous filing date and the
nationwide constructive use provisions of Section 7 [of the
Trademark Act]” is incorrect. The nationwide constructive
use provision of Section 7(c), 15 U.S.C. §1057(c), is
contingent upon registration of the mark on the Principal
Register, but Ms. Alonzo’s application was abandoned and did
not register. Thus, no rights accrued to petitioner from
Ms. Alonzo’s abandoned application.
With regard to the asserted assignment of the
licensee’s rights in the mark CUBITA for coffee, paragraph
X.B. of the trademark license agreement reads as follows:
All rights which have been acquired by
virtue of use of the trademark “Cubita”
under this License shall automatically
become assigned to and Licensee does
hereby assign to Licensor all right,
title and interest it might otherwise
have acquired in and to this mark by
virtue of use thereof or operation under
this License Agreement.
We find several problems with this matter. We do not
agree with petitioner that this paragraph constitutes an
assignment of the rights in the mark CUBITA which the
Cancellation No. 92029327
14
licensee had prior to the date of the license agreement. On
its face, this paragraph includes two references to “under
this License”. By a straightforward reading of this
paragraph, Constante Importing Co., Inc. assigned only the
rights it acquired during the term of the license, or
starting on March 21, 1995. We do not interpret this
paragraph in the agreement as an assignment of Constante
Importing Co., Inc.’s (or Mr. Sheehan’s) rights in the mark
resulting from his use of the mark prior to the license
agreement (i.e., from February 14, 1994 until March 21,
1995).9
Our interpretation of this paragraph is consistent with
other evidence of record. Specifically, we have the
testimony of Mr. Sheehan (a signatory to the license as
president of Constante Importing Co., Inc.) that he was not
giving up his rights in the mark CUBITA. Further, there is
nothing in the record from Ms. Alonzo as the other signatory
to this license agreement to contradict this testimony.
According to petitioner’s interpretation, Ms. Alonzo
received all of Mr. Sheehan’s rights in the mark CUBITA.
However, it is inconsistent that she would require and he
9 We note that the license agreement defines “Licensed Products”
as “coffee, as well as promotional materials used in connection
with coffee and including T-shirts and posters” and it defines
“Licensed Territory” as “all forty-seven (47) of the states in
the continental United States and specifically excluding the
State of Florida and by definition, excluding the states of
Hawaii and Alaska.” (Paragraphs I.A. and I.B.)
Cancellation No. 92029327
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would assign all rights in the mark CUBITA (not only the
rights of the licensee, but also his own rights), but
nonetheless, he would maintain his own pending application
for the mark (filed in February 1994). There is nothing in
the record to show that Ms. Alonzo requested that Mr.
Sheehan assign his application to her as the licensor.
An additional problem with petitioner’s conclusion that
this paragraph is clearly an assignment of all rights,
including prior rights, in the mark CUBITA to Ms. Alonzo as
licensor is that the wording thereof is flawed in that it
does not include an assignment of the goodwill of the
trademark. See 2 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition, §18:2 (4th ed. 2001), and cases and
authorities therein.
For the reasons explained above, we find that
petitioner has not established its priority based on the
trademark license agreement.
Finally, we now address whether petitioner has
established priority of use through its purchase of Ms.
Alonzo’s rights in the mark. The assignment of Ms. Alonzo’s
rights to petitioner, at best, gives petitioner rights as of
the date the trademark license agreement commenced, or March
21, 1995. As explained above, we will assume that Mr.
Sheehan’s use of the mark inured to the benefit of Ms.
Alonzo from March 21, 1995 to May 31, 1996. But,
Cancellation No. 92029327
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importantly, there is no evidence of record that Ms. Alonzo
made any use of the mark prior to the first use of Mr.
Sheehan on February 14, 1994. That is, the record is devoid
of any evidence, either as testimony of witnesses (e.g., Ms.
Alonzo) or any documents (e.g., invoices or sales orders),
regarding use of the mark (or even plans to use or license
the mark) by Ms. Alonzo prior to February 14, 1994. We have
only the general and unsubstantiated testimony of
petitioner’s president that he negotiated with Mr. Angel and
bought rights in the mark CUBITA based on the license
agreement with Constante Importing Co., Inc. But there is
no documentary evidence of use by Ms. Alonzo of the mark
CUBITA for coffee at any time. The uncorroborated testimony
of Mr. Diaz is insufficient to establish use of the mark
CUBITA for coffee prior to respondent’s use.10 Therefore,
even through petitioner’s acquisition of Ms. Alonzo’s
rights, the earliest date to which petitioner is entitled
thereunder is March 21, 1995.
Petitioner’s direct first use of the mark occurred in
July 1999, which is also subsequent to respondent’s first
use in February 1994.
10 We note that there is conflicting testimony from Mr. Sheehan
that shortly after he signed the license agreement with Ms.
Alonzo, he could find no previous use by Ms. Alonzo of the mark
CUBITA for coffee; and moreover, that he received a copy of a
1994 letter from petitioner’s attorney to an agency of the Cuban
government that he (the attorney) could find no evidence of the
mark being used and it concerned the attorney because Ms. Alonzo
did not appear to be in any coffee business.
Cancellation No. 92029327
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On this record, petitioner has not proven priority of
use of the mark.
Decision: The petition to cancel is denied.