Tapmaster Incorporatedv.Perfect Water Technologies, Inc.

Trademark Trial and Appeal Board

Dec 26, 2012

No. 91199561 (T.T.A.B. Dec. 26, 2012)

Faint Mailed: December 26, 2012 Opposition No. 91199561 Tapmaster Incorporated v. Perfect Water Technologies, Inc. Before Quinn, Zervas and Cataldo, Administrative Trademark Judges. By the Board: Applicant/counterclaim petitioner, (hereinafter “Perfect Water”) has applied to register the mark TAP MASTER in standard character form for, “water treatment equipment, namely, reverse osmosis filtration units; water treatment equipment, namely, cartridge filtration units; water treatment equipment, namely, ultraviolet sterilization units; water filters; water filtering apparatus; and filtering units for water filtering,” in International Class 11.1 Registration has been opposed by opposer/counterclaim respondent, (hereinafter “TMI”) on the grounds of 1 Application Serial No. 85053237, filed Jun. 2, 2010, claiming dates of first use and first use in commerce of Sept. 2, 2002. A disclaimer of “TAP” is of record. UNITED STATES PATENT AND TRADEMARK OFFICE Trademark Trial and Appeal Board P.O. Box 1451 Alexandria, VA 22313-1451 THIS OPINION IS NOT A PRECEDENT OF THE TTAB Opposition No. 91199561 2 priority and likelihood of confusion under Trademark Act § 2(d); and that applicant has made wrongful use of the federal trademark registration symbol (“®”).2 Specifically, TMI has pleaded ownership of Registration No. 27630483 for the mark TAPMASTER in typed form for “mechanically actuated faucet controllers,” in Class 11, and common law rights in the mark TAPMASTER for the same goods and for “potable water faucet related products.” TMI also alleges that on or about May 12, 2010 it demanded Perfect Water cease use of TAP MASTER and its use of the federal registration symbol. In its answer, Perfect Water denied the salient allegations of the complaint, asserted among its affirmative defenses that TMI “admitted” its goods travel in different trade channels and that its faucet controllers are not related to water filtration units, that TMI allowed its registration for water filtration units to expire, and counterclaimed requesting “Registration No. 2763048 be expressly restricted to only those goods specifically enumerated in the registration, namely, ‘mechanically actuated faucet controllers.’” 2 TMI also asserted on the ESTTA coversheet grounds of deceptiveness and false suggestion of a connection under Trademark Act Section 2(a). However, there are no allegations to support the claim in the body of the notice of opposition, and thus any such claims are hereby stricken for failure to state a claim upon which relief can be granted. 3 Registered Sept. 16, 2003, claiming dates of first use and first use in commerce of Jun. 1994. A combined §§ 8 and 15 declaration was accepted and acknowledged Dec. 17, 2009. Opposition No. 91199561 3 This case now comes up on the parties’ cross motions for summary judgment on the claims of likelihood of confusion and misuse of the federal registration symbol. The motions are fully briefed. Cross Motions for Summary Judgment In support of its motion for summary judgment, TMI contends its underlying patents show that water filters are a component of, and have always been used with, its faucet controllers, and that water filters comprise part of a kit that is used as an “add-on” product to its water faucets. Further, TMI contends that its acquisition of now lapsed Registration No. 1528123 for TAPMASTER for “water filtration units for domestic use,” in December 2001 allows it to “tack on” its use of the mark in connection with water filters to that registration’s first use date of July 29, 1988; and that although that registration has since expired, TMI has continued to use the mark in connection with water filters and thus its common law rights in the mark are not extinguished. TMI argues that the parties’ goods travel in the same trade channels, namely, Internet and direct sales, individual homeowners, plumbers, plumbing supply wholesalers/distributors, and hardware stores and retail establishments. TMI contends its mark has acquired significant fame, having been sold in the United States for 17 years with “millions upon millions of dollars” in sales and advertising. Opposition No. 91199561 4 TMI’s summary judgment motion is supported by two declarations. Peter A. Pubben, TMI’s President, describes, among other things, TMI’s history, its patent,4 sales figures, his knowledge of the market and relatedness of the parties’ goods. Ralph Cathcart, TMI’s attorney, introduces, among other things, a copy of TMI’s pleaded registration,5 copies of Perfect Water’s written responses to TMI’s discovery requests, a printout from TMI’s website, a licensing agreement with VitaCraft Corp., permitting use of TAPMASTER in connection with “water filters for domestic use and components therefor, including filters and prefilters,”6 and the result of his Internet searches showing water faucets containing water filters.7 In support of its response and cross motion for summary judgment, Perfect Water contends that TMI took the opposite position during the prosecution of its registration, arguing that the goods in the now lapsed Registration No. 1528123 for “water filtration units for domestic use,” were not related to its faucet controllers, and thus should be estopped from 4 Among other things, Mr. Pubben introduces evidence relating to channels of trade, advertising and promotion, consumer awareness, and policing of the mark. 5 Also attached to the declaration was a copy of Perfect Water’s application. The application was already of record as the involved application in this proceeding and need not have been submitted as evidence. See Trademark Rule 2.122(b). 6 The attachment is marked “Highly Confidential” and submitted under seal, thus we refer to it only generally here. 7 Among other things, Mr. Cathcart introduces evidence relating to channels of trade, sales volume and sales figures under seal, licensing, and consumer awareness. Opposition No. 91199561 5 arguing in this proceeding that the goods are related, and the Pubben declaration should have “no credibility whatsoever.” Perfect Water contends that TMI does not have priority with respect to water filters, because the mere fact that TMI’s “end products” contain a screening filter device as a component part does not establish use of the mark in connection with “water filters.” Perfect Water argues that it is “well known” that reverse osmosis filtration units, such as its own, remove soluble impurities from drinking water, while TMI has previously stated its particle screens do not treat water, “but rather merely handle water in a particular way.” Further, Perfect Water contends TMI previously argued in defense of its own application that its goods move in specialized channels of trade, but now argues the exact opposite. Perfect Water contends that TMI does not have sufficient evidence of the purported fame of its mark because it has offered no survey or expert opinion evidence to suggest that its class of customers is the same, or that customers for mechanically-actuated faucet controllers extends to the market for water filtration systems. In support of its response and cross motion, Perfect Water submitted the declaration of Jon V. Sigona, its president, explaining the steps taken once Perfect Water was notified about its improper use of the federal registration symbol, and introduced information about reverse osmosis filtration and water filtration systems, the underlying application file for Opposition No. 91199561 6 TMI’s lapsed registration, apparently provided in response to Perfect Water’s discovery requests, and product information and certain other discovery responses provided by TMI. In reply, TMI argues that Perfect Water’s “file wrapper estoppel” defense is misplaced and fails to mention that opposer petitioned to cancel the registration and acquired all rights to Registration No. 1528123 in settlement of that cancellation. TMI notes that the Board had previously instructed in Goodyear Tire and Rubber Co. v. A.J. Industries Corp., 165 USPQ 665 (TTAB 1970) that the defense of “file wrapper estoppel” is a patent concept inapplicable to trademark cases, and has upheld that ruling in subsequent cases, as recently as 2009. TMI contends Perfect Water’s fraudulent intent in misuse of the federal registration symbol is manifest in its admitted continued use of the symbol and its failure to notify the USPTO about that misuse when it applied for its own trademark registration. In response to the cross motion for summary judgment, TMI contends it can show instances of actual confusion between the marks. TMI submits a second declaration of its attorney, Ralph Cathcart, to introduce its evidence of actual confusion under seal, and website evidence purporting to show Perfect Water’s continued misuse of the federal registration symbol in connection with its mark on its website during the prosecution of these cross motions for summary judgment. Opposition No. 91199561 7 In reply, Perfect Water argues that “all evidence” demonstrates that the goods are not similar, that TMI has no rights with respect to water filtration systems, that no evidence indicates that TMI’s mark is famous, and that established principles of equity under 15 U.S.C. § 1069 prevent TMI from succeeding with arguments that completely contradict its express prior position before the USPTO. Perfect Water contends that TMI acknowledged VitaCraft had discontinued use of the mark TAPMASTER for water filtration units for domestic use, and thus there is no evidence showing TMI has any rights for “water filtration units for domestic use.” Perfect Water provides a copy of certain of TMI’s interrogatory responses in support of its arguments. Summary judgment is only appropriate when there is no genuine dispute as to any material facts and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). The evidence must be viewed in a light favorable to the nonmoving party, and all justifiable inferences are to be drawn in the nonmovant’s favor. Opryland USA Inc. v. The Great American Music Show, Inc., 970 F.2d 847, 23 USPQ2d 1471 (Fed. Cir. 1992). When the moving party has supported its motion with sufficient evidence which, if unopposed, indicates there is no genuine dispute of material fact, the burden then shifts to the non-moving party to demonstrate the existence of a genuine Opposition No. 91199561 8 dispute of material fact to be resolved at trial. Enbridge, Inc. v. Excelerate Energy LP, 92 USPQ2d 1537, 1540 (TTAB 2009). Further, merely because both parties have moved for summary judgment does not necessarily mean that there are no genuine disputes of material fact, and does not dictate that judgment should be entered. See University Book Store v. University of Wisconsin Board of Regents, 33 USPQ2d 1385, 1389 (TTAB 1994). Standing TMI attached a copy of its pleaded registration as Exhibit B to the Cathcart declaration. There is no genuine dispute with regard to TMI’s standing for summary judgment. See Cunningham v. Laser Golf Corp., 222 F.3d 943, 55 USPQ2d 1842 (Fed. Cir. 2000); Trademark Rule 2.122(d)(1). Perfect Water’s standing to assert its counterclaim is inherent in its position as defendant in the opposition. See M. Aron Corp. v. Remington Products, Inc., 222 USPQ 93 (TTAB 1984). Likelihood of Confusion Claim We find at a minimum that there are genuine disputes of material fact as to the relatedness of the parties’ respective goods and the channels of trade of such goods. Accordingly, TMI’s motion for summary judgment, and Perfect Water’s cross-motion for summary judgment on TMI’s pleaded claim of likelihood of confusion are denied. Opposition No. 91199561 9 Misuse of Federal Registration Symbol TMI argues that applicant admits it continued to use the federal registration symbol for more than two years after TMI’s principal objected to Perfect Water’s misuse of the symbol. TMI contends such continued use shows Perfect Water’s intent, or reckless disregard of the truth, for knowingly deceiving the public, and that Perfect Water’s denial of such allegation in its answer to the notice of opposition reflects a conscious and deliberate decision to engage in trademark notice misuse. In response, Perfect Water contends that upon being informed of improper use of the federal registration symbol by TMI, it immediately corrected use on its website, and continued to use up its existing stock of already printed materials showing use of the symbol, since the products would only be obtained after a purchase was made, and its application had been approved for publication with a specimen showing its use of the federal registration symbol. Perfect Water contends that the even if it acted negligently or recklessly with regard to its use of the federal registration symbol, its use does not rise to the level of fraud that would sustain a denial of registration for its application. Improper use of the federal registration symbol by an applicant can defeat an applicant's right to registration where misuse of the symbol is occasioned by an intent to deceive the purchasing public or others in the trade into believing that Opposition No. 91199561 10 the mark was registered. Wells Fargo & Co. v. Lundeen & Associates, 20 USPQ2d 1156, 1157 (TTAB 1991). See generally, 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:146 (Westlaw update Nov. 2012). However, “mistaken” misuse may overcome a claim of fraudulent misuse of the federal registration symbol. See Brown Shoe Co. v. Robbins, 90 USPQ2d 1752, 1757 (TTAB 2009). Such inquiries are fact intensive, however, and are “particularly unsuited to disposition on summary judgment.” Copelands’ Enterprises Inc. v. CNV Inc., 20 USPQ2d 1295, 1299 (Fed. Cir. 1991). In this case, in view of Perfect Water’s response, we find there are genuine disputes of material fact regarding the misuse claim which make it unsuitable for disposition on summary judgment. Accordingly, TMI’s motion for summary judgment, and Perfect Water’s cross-motion for summary judgment on TMI’s pleaded claim of misuse of the federal registration symbol are denied.8 8 The parties are advised that, unless they enter a proper stipulation allowing the summary judgment submissions into evidence for trial, the evidence submitted in connection with the motions for summary judgment is of record only for consideration of those motions. To be considered at final hearing, any such evidence must be properly introduced in evidence during the appropriate trial period. See, e.g., Drive Trademark Holdings LP v. Inofin, 83 USPQ2d 1433, 1438 n.14 (TTAB 2007); Levi Strauss & Co. v. R. Josephs Sportswear Inc., 28 USPQ2d 1464 (TTAB 1993). The fact that we have identified certain issues in dispute should not be construed as a finding that these are necessarily the only issues which remain for trial. Opposition No. 91199561 11 Counterclaim TMI contends that Perfect Water’s counterclaim fails to state a claim upon which relief can be granted, because it seeks to restrict the scope of the pleaded registration, without seeking to “cancel the registration in whole or in part” as required by Trademark Rule 2.133(d). Further, TMI argues, the marks are legally identical, the goods are closely related, and the counterclaim serves merely to highlight that confusion is likely between the parties’ respective marks. We construe the motion as one to dismiss the counterclaim. A motion to dismiss for failure to state a claim upon which relief can be granted is a test solely of the legal sufficiency of a complaint. In order to withstand such a motion, a pleading need only allege such facts as would, if proved, establish that petitioner is entitled to the relief sought, that is, that 1) opposer has standing to maintain the proceeding, and 2) a valid ground exists for opposing the subject application. Young v. AGB Corp., 152 F.3d 1377, 47 USPQ2d 1752, 1755 (Fed. Cir. 1998); Fair Indigo LLC v. Style Conscience, 85 USPQ2d 1536, 1538 (TTAB 2007). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Specifically a complaint, or counterclaim, “must contain sufficient factual Opposition No. 91199561 12 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Doyle v. Al Johnson’s Swedish Restaurant & Butik, Inc., 101 USPQ2d 1780, 1782 (TTAB 2012) quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In the context of inter partes proceedings before the Board, a claim has facial plausibility when the plaintiff pleads factual content that allows the Board to draw a reasonable inference that the plaintiff has standing and that a valid ground for the opposition or cancellation exists. Cf. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007). Apart from specifying that sufficient factual matter be “well-pleaded” and, when so pleaded be accepted as true, the Court also explains that “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” and are not accepted as true. Iqbal 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). Under Section 18 of the Trademark Act, the Board has the authority to restrict, or to modify, the goods identified in a registration.9 A party seeking to prevail on a restriction or modification under Section 18 must 9 Section 18 of the Trademark Act provides: §1068. Action of Director in interference, opposition, and proceedings for concurrent use registration or for cancellation In such proceedings the Director may refuse to register the opposed mark, may cancel the registration, in whole or in part, may modify the application or registration by limiting the goods or services specified therein, may Opposition No. 91199561 13 plead, and prove, (i) that a finding of likelihood of confusion will be avoided by entry of the restriction sought in the petition to cancel, and (ii) the opponent is not using its mark on the goods sought to be excluded by the proposed restriction. Eurostar, Inc. v. “EuroStar” Reitmoden GmbH & Co. KG, 34 USPQ2d 1266, 1271 (TTAB 1994). We find Perfect Water’s pleading of the counterclaim, is insufficient. Perfect Water appears to be seeking to restrict TMI’s pleaded registration “to only those goods enumerated in the registration, namely, ‘mechanically actuated faucet controllers.’” This does not on its face appear to state a claim for relief or to seek restriction of the goods in a otherwise restrict or rectify with respect to the register the registration of a registered mark, may refuse to register any or all of several interfering marks, or may register the mark or marks for the person or persons entitled thereto, as the rights of the parties hereunder may be established in the proceedings: Provided, that in the case of the registration of any mark based on concurrent use, the Director shall determine and fix the conditions and limitations provided for in subsection (d) of section 2 of this Act [15 USC 1052(d)]. However, no final judgment shall be entered in favor of an applicant under section 1(b) [15 USC 1051(b)] before the mark is registered, if such applicant cannot prevail without establishing constructive use pursuant to section 7(c) [15 USC 1057(c)]. Trademark Act § 18, 15 U.S.C. § 1068. Trademark Rule 2.133(b) implements Section 18 as applicable here: (b) If, in an inter partes proceeding, the Trademark Trial and Appeal Board finds that a party whose application or registration is the subject of the proceeding is not entitled to registration in the absence of a specified restriction to the application or registration, the Board will allow the party time in which to file a motion that the application or registration be amended to conform to the findings of the Board, failing which judgment will be entered against the party. Opposition No. 91199561 14 particular manner in terms of type, use, channels of trade or other proper restriction that would avoid a likelihood of confusion. See e.g., Penguin Books Ltd. v. Eberhard, 48 USPQ2d 1280, 1286 (TTAB 1998) (applicant's attempt to restrict opposer's registration for computer programs to “computer programs except computer programs for maintenance management” was rejected as it did not serve to avoid likelihood of confusion since proposed restriction failed to delineate different users or different channels of trade). It is particularly so in this case because Perfect Water appears to be seeking to restrict TMI’s pleaded registration to its present identification of goods, that is, no meaningful restriction at all. Accordingly, TMI’s motion to dismiss the counterclaim is granted. It is the Board’s policy, however, to allow amendment of pleadings found to be insufficient upon challenge under Fed. R. Civ. P. 12(b)(6), particularly where the challenged pleading is the initial pleading. See Intellimedia Sports Inc. v. Intellimedia Corp., 43 USPQ2d 1203, 1208 (TTAB 1997). In view thereof, Perfect Water is allowed until January 27, 2013 to submit an amended counterclaim for restriction or modification under Section 18, if appropriate. TMI is allowed until 30 days from the filing of any such amended counterclaim to file an answer thereto. Summary Opposition No. 91199561 15 TMI’s motion and Perfect Water’s cross-motion for summary judgment as to likelihood of confusion and misuse of the federal registration symbol are denied. TMI’s motion to dismiss the counterclaim is granted. Perfect Water is allowed until January 27, 2013 to submit an amended counterclaim for restriction or modification under Section 18, if appropriate. TMI is allowed until 30 days from the filing of any such amended counterclaim to file an answer thereto. Schedule Proceedings are resumed. Remaining Disclosure and trial dates are reset as set out below.: Discovery Closes CLOSED Plaintiff's Pretrial Disclosures Due March 15, 2013 30-day testimony period for plaintiff's testimony in the opposition to close April 29, 2013 Defendant/Counterclaim plaintiff's pretrial disclosures due May 14, 2013 30-day testimony period for defendant in the opposition and as plaintiff in the counterclaim to close June 28, 2013 Counterclaim defendant's disclosures and its rebuttal disclosures as plaintiff in the opposition due July 13, 2013 30-day testimony period for defendant in the counterclaim and its rebuttal testimony as plaintiff in the opposition to close August 27, 2013 Counterclaim plaintiff's rebuttal disclosures due September 11, 2013 15-day rebuttal period for plaintiff in the counterclaim to close October 11, 2013 Opposition No. 91199561 16 Brief for plaintiff in the opposition due December 10, 2013 Brief for defendant in the opposition and as plaintiff in the counterclaim due January 9, 2014 Brief for defendant in the counterclaim and its reply brief, if any, as plaintiff in the opposition due February 8, 2014 Reply brief, if any, for plaintiff in the counterclaim due February 23, 2014 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. Trademark Rule 2.l25. Briefs shall be filed in accordance with Trademark Rules 2.l28(a) and (b). An oral hearing will be set only upon request filed as provided by Trademark Rule 2.l29. ***