Truong Giang Corp.v.Sunny Wong

Trademark Trial and Appeal Board

Jul 7, 1999

No. 92022241 (T.T.A.B. Jul. 7, 1999)

Paper No. 75
GDH/gdh
THIS DISPOSITION IS NOT
CITABLE AS PRECEDENT OF THE TTAB JULY 7, 99
U.S. DEPARTMENT OF COMMERCE
PATENT AND TRADEMARK OFFICE
_____
Trademark Trial and Appeal Board
_____
Truong Giang Corp. a/k/a TG Corp.
v.
Sunny Wong d/b/a PC Teas Company
_____
Cancellation No. 22,241
_____
I. Morley Drucker and Muriel C. Haritchabalet of Fulwider Patton
Lee & Utecht, LLP for Truong Giang Corp. a/k/a TG Corp.
Roy S. Gordet, Esq. for Sunny Wong d/b/a PC Teas Company.
_____
Before Hohein, Hairston and Chapman, Administrative Trademark
Judges.
Opinion by Hohein, Administrative Trademark Judge:
Truong Giang Corp. a/k/a TG Corp. has petitioned to
cancel the registration owned by Sunny Wong d/b/a PC Teas Company
for the mark "DIETERS’ HERBAL DRINK" and design (which is often
referred to by the parties as just the "Three Daughter(s)" or
"Three Ballerina" mark), as shown below,
Cancellation No. 22,241
2
for "tea".1 As grounds for cancellation, petitioner alleges
preliminarily that, on September 8, 1991, the parties entered
into an agreement in which petitioner authorized respondent to
manufacture certain diet tea products for distribution and sale
by petitioner; that in connection therewith, petitioner "approved
a certain Design of Three Dancing Ballerinas for use as
Petitioner’s trademark" for "packaging of the diet tea product";
that on June 3, 1992, the parties "jointly announced that the
diet tea product, San Chien Chin Slim Tea, Three Daughter or
Three Ballerina Tea (its legal Chinese/English description) and
trademark belonged entirely to the Petitioner"; that,
"[n]othwithstanding the foregoing facts and without any
authorization from the Petitioner," respondent on August 20, 1992
"applied for ... registration of the [subject] trademark,
Dieter’s [sic] Herbal Drink Natural Green Leaf Brand for Women
and Men, and a Design of Three Dancing Ballerinas for use in
connection with tea," claiming September 30, 1991 as his dates of
first use of such mark; and that, on June 15, 1993, such
application matured into the registration which is the subject of
this proceeding and issued to respondent.
Petitioner further alleges that, on December 11, 1992,
it "filed application Serial No. 74/339,152 for the trademark
Design of Three Dancing Ballerinas for use in connection with

1 Reg. No. 1,776,684, issued on June 15, 1993 from an application filed
on August 20, 1992, which sets forth dates of first use of September
30, 1991; affidavit §8 accepted. The words "NATURAL GREEN LEAF BRAND
FOR WOMEN & MEN" and "DIETERS' DRINK HERBAL" are disclaimed and the
Chinese characters are translated as "THREE BALLET DANCERS".
Cancellation No. 22,241
3
dieter’s [sic] herbal teas"; that its application "has been
rejected on the grounds that it is confusingly similar to the
mark shown" in the subject registration; and that respondent
obtained such registration fraudulently in that: he falsely
stated in the underlying application that he was the owner of the
subject mark when such mark in fact was at all times owned solely
by petitioner; the false statement was made with the intent to
induce the U.S. Patent and Trademark Office ("PTO") to grant a
registration to respondent; and the PTO, as a result of
reasonable reliance upon such statement, granted the subject
registration. In addition, petitioner alleges that, "in view of
the fact that Registrant was not the true owner of the trademark
on the application filing date," he "did not have the right to
apply for the registration of the same and that Registration No.
1,776,684 should be viewed as void ab initio."
Respondent, in his answer, admits that the parties
entered into an agreement on September 8, 1991, but denies the
remaining salient allegations of the petition to cancel.
Respondent also alleges that he is the true owner of the subject
mark and that, inasmuch as petitioner has never had any rights
therein, petitioner is without standing to maintain this
proceeding even though petitioner "was, for a limited period, a
mere distributor of the goods, manufactured by Registrant,
bearing the Trademark."2

2 While respondent, in his answer, also asserts as affirmative defenses
that, "[a]ssuming arguendo that Petitioner acquired any alleged rights
in the Trademark," petitioner is barred by the doctrines of waiver,
laches, estoppel, acquiescence and unclean hands, such equitable
defenses not only have not been properly pleaded, in that the facts
Cancellation No. 22,241
4
The record consists of the pleadings; the file of the
involved registration; and, as petitioner’s case-in-chief, the
February 28, 1996 deposition, with exhibits, of Ly Coi (a/k/a
Hung Tam Ly), who is the owner and president of petitioner, a tea
wholesaler; the deposition, with exhibits, of Ken Wong, who is
the owner of Asia Company, an importer and exporter of ginseng
tea;3 and a notice of reliance on a registration issued to Asia
Company.4 Respondent, a tea manufacturer and wholesaler, has
furnished as part of his case-in-chief the April 30, 1996 through
May 1, 1996 deposition, with exhibits, of himself; the April 24,
1996 deposition, with exhibits, of Ly Coi; and the depositions,
with exhibits, of Daniel Wu, who is an attorney with whom Ly Coi

constituting each defense have not been alleged, but in any event the
defenses, with the exception of unclean hands, were neither tried nor
raised in the briefs. Furthermore, equitable defenses, including
unclean hands, are not available against a claim of fraud, since it is
in the public interest to prohibit registrations procured or
maintained by fraud. See, e.g., Treadwell’s Drifters Inc. v. Marshak,
18 USPQ2d 1318, 1320 (TTAB 1990), recon. denied, 18 USPQ2d 1322 (TTAB
1990); and Bausch & Lomb Inc. v. Leupold & Stevens Inc., 1 USPQ2d
1497, 1499 (TTAB 1986). Similarly, inasmuch as such defenses are
likewise unavailable against a claim of abandonment, since it is in
the public interest to remove registrations of abandoned marks from
the register; see e.g., Treadwell’s Drifters Inc. v. Marshak, supra at
1320 (TTAB 1990), recon. denied, 18 USPQ2d 1322 (TTAB 1990); and TBC
Corp. v. Grand Prix Ltd., 12 USPQ2d 1311, 1313 (TTAB 1989); it follows
that equitable defenses, including unclean hands, should not be
available against a claim that a registrant’s lack of ownership of the
subject mark renders the registration void ab initio, since such
claim, like abandonment, involves an absence of proprietary rights in
a mark. No further consideration, therefore, will be given to
respondent’s putative affirmative defenses.
3 Nothing in the record indicates that Ken Wong is related in any way
to either respondent or another witness, Teresa Wong.
4 The registration, which issued on December 14, 1993 for the mark
"KINGINSENG" for "tea," is stated in the notice of reliance to be
relevant "since it shows ownership of a registration for tea by a
company whose principal, Mr. Ken Wong, testified is not the
manufacturer of the tea product, but rather only is the importer,
distributor and seller of the tea product in the USA."
Cancellation No. 22,241
5
formerly consulted on behalf of petitioner,5 and Teresa Wong, who
is a certified Cantonese interpreter.6 By a stipulated motion,
respondent has also submitted as trial testimony the discovery
deposition, with exhibits, which he took of Thomas Shu, who is
the president of ABC Tea House, a tea importer and packager.
Respondent, in addition, has filed notices of reliance on (a)
selected portions of the February 28, 1995 through March 2, 1995
discovery deposition, with exhibits, of Ly Coi; (b) petitioner’s
responses to certain of respondent’s interrogatories; (c) a
declaration of Ly Coi submitted in support of petitioner’s motion
for summary judgment;7 and (d) copies of two articles from
general circulation publications.8 Petitioner, as rebuttal, has
furnished the June 20, 1996 deposition, with an exhibit, of Ly
Coi; the deposition, with an exhibit, of Anna Silva, who is an
attorney who assisted in the prosecution of the application which
matured into respondent’s subject registration; and the
depositions, with exhibits, of Lynn Perry, who is the attorney

5 Mr. Wu’s testimony was pursuant to a written waiver of the attorney-
client privilege by Ly Coi on behalf of himself and petitioner with
respect to the matters testified to in this proceeding.
6 The record reveals that Ms. Wong is not related to respondent in any
manner and, as noted previously, there is no indication that she is
related to Ken Wong.
7 Such declaration, it should be pointed out, is essentially of no
probative value inasmuch as it is admissible only for what it shows on
its face and not for the truth of the matters stated therein. See,
e.g., American Speech-Language-Hearing Ass’n v. National Hearing Aid
Society, 224 USPQ 798, 801 (TTAB 1984); Jetzon Tire & Rubber Corp. v.
General Motors Corp., 177 USPQ 467, 468 (TTAB 1973) at n. 3; and TBMP
§707.
8 According to respondent, such "excerpts are relevant to this
proceeding because they establish the proclivity of persons to
interchangeably use the words 'patent' and 'trademark'."
Cancellation No. 22,241
6
who principally prosecuted such application, and Patty Chu, who
is a certified Cantonese interpreter. In addition, petitioner
has filed notices of reliance on (a) certain additional portions
of the above-noted discovery deposition, with exhibits, of Ly
Coi;9 (b) selected portions of its July 26, 1994 discovery
deposition, with exhibits, of respondent; (c) certified copies of
petitioner’s application to register a Three Ballerina design
mark for a dieters’ herbal drink and respondent’s registration of
its "PCT" logo for teas; and (d) copies of various U.S. Food and
Drug Administration ("FDA") official records. Briefs have been
filed,10 but an oral hearing was not requested.

9 Trademark Rule 2.120(j)(4) provides that "[i]f only a part of a
discovery deposition is submitted and made of record by a party, an
adverse party may introduce under a notice of reliance any other part
of the deposition which should in fairness be considered so as to make
not misleading what was offered by the submitting party." Although
petitioner’s notice of reliance fails to comply with the requirement
of such rule that "[a] notice of reliance filed by an adverse party
must be supported by a written statement explaining why the adverse
party needs to rely upon each additional part listed in the adverse
party’s notice," we have exercised our discretion in favor of
considering the additional excerpts offered by petitioner inasmuch as
they serve to fill in the picture with respect to the portions made of
record by respondent.
10 Petitioner, in its reply brief, raises the meritless objection that
respondent’s trial brief, which petitioner correctly notes was due by
April 6, 1998, was not timely filed. Respondent’s brief, however, is
considered to have been timely filed inasmuch as it bears a properly
signed certificate of mailing, pursuant to Patent Rule 1.8 and
Trademark Rule 2.1, which is dated April 6, 1998 and petitioner has
not submitted any evidence which suggests that the stated mailing date
of the brief to the PTO is inaccurate and should thus be disregarded.
As to the several evidentiary objections asserted by respondent
in its trial brief, respondent reiterates that it "objects to the
introduction of the transcript and all of the accompanying exhibits of
the testimony of Patty Chu dated June 20, 1996 on the grounds that the
testimony and exhibits formed part of Petitioner’s case in chief and
this deposition was taken during the rebuttal phase ...." While we
agree with respondent that such evidence would properly form part of
petitioner’s case-in-chief, we also concur with petitioner that, to
the extent that the evidence serves "as rebuttal to the translations
introduced by Registrant at Theresa [sic] Wong’s deposition on May 1,
Cancellation No. 22,241
7
The issues to be decided in this proceeding are whether
petitioner or respondent is the owner of the mark in dispute and,
if ownership thereof lies with petitioner, whether the involved
registration, which in any event would be void ab initio since it
was not filed in the name of the owner of the subject mark, was
obtained by fraud in that respondent knew, or should have known,
that he was not the owner of such mark. As to the former, it is

1996," it constitutes proper rebuttal and has accordingly been
considered for such limited purpose. As to respondent’s further
objection thereto on the ground that it "was denied the right to
cross-examine translator Chu" because, "as an ’expert,’ all
conversations and activities of translator Chu are open to discovery,"
we note that, not only had the discovery period in this proceeding
been closed since October 4, 1994, but in any event respondent
attended the deposition and had a full and fair opportunity to cross-
examine the witness with respect to any alleged bias. Moreover, as
petitioner points out in reply, the translations produced by the
witness and offered as exhibits were made long prior to petitioner’s
retaining of the witness to act as an interpreter at petitioner’s
depositions of Ly Coi and, therefore, could not have been "affected by
conversations she may have participated in as an interpreter" for
petitioner. Respondent’s further objection is thus without merit.
With respect to respondent’s objection to the introduction of a
version of the parties’ "Joint Announcement," which was identified as
Exhibit 53 to the Chu deposition, "on the grounds that this version of
the document with Mr. Ly’s signature was not produced in response to
document requests and was produced at a time after Registrant’s right
to make further discovery demands had expired ...," we observe that,
not only has respondent failed to substantiate the discovery requests
to which such document was allegedly responsive, but more importantly
respondent itself introduced the very same document as Exhibit 27 of
the excerpts from its discovery deposition of Ly Coi which it made of
record by a notice of reliance. Respondent’s objection is
consequently moot.
Finally, respondent objects to consideration of Exhibit 43 to the
deposition of Lynn Perry, contending that such document "is protected
by the attorney client privilege [and] that [it] was inadvertently
produced by Registrant’s former counsel and should have been returned
pursuant to a protective order issued by the Board in this case."
Suffice it to say, however, that even if respondent had substantiated
its claim that the document was inadvertently produced, the attorney-
client privilege would be considered to have been waived in connection
with a document prepared in furtherance of a fraud on the PTO. In any
event, irrespective of whether the document is regarded as forming
part of the evidentiary record herein, consideration thereof makes no
difference in the outcome of this case.
Cancellation No. 22,241
8
necessary to keep in mind certain general principles regarding
the question of ownership of a mark as between a manufacturer and
a distributor of the goods bearing the disputed mark.
Specifically, while the issue of which party is the owner of a
mark as applied to goods made by a manufacturer for sale by a
distributor is often difficult to resolve, it is the use of the
mark, rather than its conception, that determines ownership.
See, e.g., Cutting Tools, Inc. v. Custanite Corp., 220 USPQ 1006,
1009 (TTAB 1984).
Furthermore, as the Board observed in Lutz Superdyne,
Inc. v. Arthur Brown & Bro., Inc., 221 USPQ 354, 362 (TTAB 1984):
[I]t has been held that the question of
ownership of a mark as between the
manufacture[r] of the product to which the
mark is applied and the exclusive distributor
of the product is a matter of agreement
between them, and that in the absence of an
agreement, there is a legal presumption that
the manufacturer is the owner of the mark.
See: Far-Best Corporation v. Die Casting
"1D" Corporation, 165 USPQ 277 (TTAB 1970),
and Audioson Vertreibs-GmbH v. Kirksaeter
Audiosonics, Inc., 196 USPQ 453 (TTAB 1977).
.... Further, it has also been held that a
party need not be a manufacturer of goods in
order to own and register a trademark. As
stated by the Board in In re Expo ’74, 189
USPQ 48 (1975),
There is no question but that
a party need not be a manufacturer
of goods to own and register a
trademark. In fact, any person in
the normal channels of distribution
including a manufacturer, a
contract purchaser who has the
goods manufactured for him, and a
retailer or merchant ... can be the
owner of a trademark "in commerce"
if he applies or has someone in his
behalf apply his own trademark to
goods to which he has acquired
ownership and title and sells or
Cancellation No. 22,241
9
merely transports such goods in
commerce as his own product with
the mark, as applied thereto,
serving to identify the particular
product as emanating from the
shipper or seller in his own
capacity.
See also: Lasek & Miller Associates v.
Rubin, 201 USPQ 831 (TTAB 1978); Amica Mutual
Insurance Company v. R. H. Cosmetics Corp.,
204 USPQ 155 (TTAB 1979); and cases cited
therein.
Thus, a party may properly claim ownership of a mark when the
mark is applied to the goods at the party’s instruction. For
instance, if a party contracts with a manufacturer to have goods
produced for the party and instructs the manufacturer to place
the mark on the goods, that is the equivalent of the party itself
placing the mark on its own goods. See, e.g., Target Stores,
Inc. v. Trupp, 158 USPQ 614, 614-15 (TTAB 1968).
To the same effect, as set forth in 2 J. McCarthy,
McCarthy on Trademarks & Unfair Competition §16:46 (4th ed. 1999)
(footnotes omitted), it is stated that:
It is clear that one need not actually
manufacture goods in order to acquire and own
a valid trademark for the goods. That is,
one who only distributes goods made by
another can be the "owner" of a trademark
which the distributor places on the goods to
identify the distributor. This type of mark
is known as dealer's mark or a merchant's
mark. ....
A plethora of decisions have ...
[upheld] the validity of a dealer's mark. As
the Third Circuit stated, "It is well
established that a distributor may own the
trademark in goods it does not manufacture."
In some contexts, such a mark is known as a
"private brand."
....
Cancellation No. 22,241
10
The Trademark [Trial and Appeal] Board
has indicated that the merchant’s control
over manufacturing source is not a relevant
element .... The Board has stated
expansively that a merchant can be the owner
of a trademark, "if he applies or has someone
in his behalf apply his own trademark to
goods to which he has acquired ownership and
title and sells or merely transports such
goods in commerce." It would seem proper
that the merchant’s "control" per se is not a
critical inquiry. ....
Moreover, as indicated in §16:48 of such treatise (footnotes
omitted):
(2) When a dealer buys goods from a
manufacturer and applies or has someone else
apply the dealer's own "merchant's mark" to
the goods, the dealer, not the manufacturer,
is the owner of such a trademark. If the
dealer orders the manufacturer to place the
mark on the product prior to delivery, then
the manufacturer is acting as a "licensee" of
the dealer.
"[A] key issue" in such a situation, the treatise points out, "is
who was the initial owner of the mark." Id.
Turning first to the issue of ownership, since if
respondent is the owner of the disputed mark, petitioner cannot
prevail on either of its claims, we find from the credible
evidence of record that, as of the filing date of the application
which matured into respondent's registration and at all other
relevant times herein, petitioner was the owner of the "DIETERS'
HERBAL DRINK" and design mark (hereinafter the "Three Ballerina"
mark) rather than respondent. The record, in this regard,
reveals that petitioner's president, Ly Coi, whose ethnic
background is Chinese, immigrated to the United States from
Vietnam in 1979. Mr. Ly, as he is often referred to by the
parties herein, finished his schooling in Vietnam and, while he
Cancellation No. 22,241
11
knows Chinese and primarily conducts business therein, he does
not read or write English, although he has learned to speak at
least some English.
Following his arrival in the United States, Mr. Ly
worked several menial jobs before becoming, around 1982 or 1983,
a sales agent in Los Angeles for Asia Company selling, inter
alia, Korean ginseng tea products. While Mr. Ly still
distributes such products for Asia Company, around 1986 or so he
spoke to its owner, Ken Wong, about having his own brand of tea
to sell. Asia Company, however, has never done such private
labeling, according to Ken Wong, since it does not have the
equipment necessary for packaging a private label brand.
Petitioner, which was incorporated in 1984 and is owned
by Mr. Ly, sells tea in addition to such goods as facial cream
and ointment. Petitioner, however, does not manufacture the tea
which it has sold nor does it process or pack tea for other
companies. Instead, petitioner purchases the raw materials for
its brand of tea, which it sells under the "Three Ballerina"
mark, and lets tea processors, unrelated to petitioner, do the
packaging or processing of such materials for it. In particular,
since switching processors from respondent’s firm, known by such
names as PC Teas Co. (and variants thereof), PCT, PCT Company and
Prestige Chinese Teas Company, to ABC Tea House, Mr. Ly has
personally determined the composition of petitioner’s "Three
Ballerina" tea, which consists principally of senna tea, and the
formula has not changed. Originally, however, Mr. Ly relied upon
respondent’s knowledge as an herbalist to provide the formula and
Cancellation No. 22,241
12
procure the ingredients for such tea, which included stevia
leaves (a food additive not approved by the FDA). Mr. Ly also
relied upon respondent to supply tea for petitioner inasmuch as
he did not know where to obtain the raw materials to make the
product and petitioner lacked the machinery to do its own
processing.
Mr. Ly first contacted and began doing business with
respondent after seeing a newspaper ad for respondent’s teas
sometime in 1990 or by January 1991. After serving for at least
several months as a distributor of two brands of respondent’s
teas, Mr. Ly told respondent around April 1991 that he would like
for petitioner to have its own brand of tea to distribute
exclusively. Respondent agreed to process such tea for
petitioner and the parties, at a personal meeting in April 1991,
discussed the need for the tea boxes to have petitioner’s
corporate logo appear thereon along with a post office box
number, which Mr. Ly obtained, to which customers could send any
letters to petitioner concerning the diet tea product.
Respondent, acting as agent for petitioner, thereafter
had a graphics designer in Hong Kong, namely, Amy Lui of Co-Joyce
Limited, create four different designs, which featured from one
to four dancing ladies or ballerinas, for use as a mark for a
dieters’ herbal drink. Mr. Ly, in May 1991, was asked by
respondent to select one of those designs as the trademark for
the diet tea product11 and, on behalf of petitioner, he chose the

11 In this regard, Mr. Ly testified in his discovery deposition that:
"Since I met him, then I know that Sunny Wong just did his own
products, and then after ... dealing with each other about two, three
Cancellation No. 22,241
13
"Three Ballerina" mark because he liked it the best. Petitioner
paid respondent, who also arranged (with Mr. Ly’s approval) for
the printing of tea boxes, bags, labels and inserts bearing the
"Three Ballerina" mark which Mr. Ly had selected, $150.00 as the
fee for the design of such mark. In addition, since Mr. Ly had
requested that respondent register the mark, petitioner paid
respondent $350.00 as the initial fee for registration thereof,
which respondent arranged to have done through his trademark
counsel, Lynn Perry, of the San Francisco law firm then known as
Townsend & Townsend.
Respondent, after receiving a September 20, 1991 letter
from Ms. Perry stating that she understood that petitioner was a
distributor for respondent and advising that it would cost a
minimum of $1,300.00 to prepare and prosecute the application for
registration, secured Mr. Ly’s approval to proceed and paid, by a
PC Teas Co. check dated the same date, the requested retainer of
$650.00 to have the application for registration prepared. While
respondent faxed Mr. Ly a copy of Ms. Perry’s letter, which
included his own notations in Chinese regarding the letter’s
contents,12 Mr. Ly testified, as to respondent’s description of

months later, ... I proposed that I wanted to do my own diet tea. And
then Sunny Wong say, fine, if you want to do it yourself, then I’ll
give you the designs ...." (Ly Coy disc. dep. at 51.)
12 Specifically, in reference to Ms. Perry’s statements that "I will
need to explain the relationship between TG Corporation and you" and
that "I understand from our telephone conversation that this company
is a distributor of the tea," respondent wrote in Chinese to Mr. Ly
that: "Relationship between TG Company and PCT Company, after
registered, subject ’Three Daughters’ Tea’ will be distributed in full
authority by TG Company." (Petitioner’s exhibit 8; and Respondent’s
exhibits 284 and 285.)
Cancellation No. 22,241
14
the parties’ relationship, that "when I saw that, I was not very
happy" because "[i]t’s like the trademark was owned by Truong
Giang and PCT together" rather than petitioner. (Ly Coy Feb. 28,
1996 test. dep. at 38-39.) Sometime thereafter, according to Mr.
Ly, and perhaps not until as late as April, May or June 1992, he
asked respondent "to put a hold on the registration" of the mark
because "I wanted my attorney to register" it. (Id. at 39.)
Respondent, however, sent Mr. Ly a fax in Chinese on
September 21, 1991 acknowledging that the registration of the
mark was to be petitioner’s; noting that petitioner had already
paid respondent $500.00 in connection with the mark; indicating
that respondent was willing to pay $300.00 of the $1,300.00
estimated minimum cost of registration; and requesting payment,
less a set-off for advertising paid for by petitioner, for the
balance thereof. Specifically, such fax stated (emphasis added
in bold; underlined terms in English in original):
(2) Pertaining to TG Corp’s registration of
Three Daughters, all the registration is
handled by the big law firm of Townsend
& Townsend. The fee is $1,300.00
(minimum). Mr. [Sunny] Wong of our
company has promised that ... our
company is willing to be responsible for
$300.00, with the remaining $1,000.00 to
be borne by Truong Giang. Mr. Ly of
Truong Giang has already paid a deposit
of $500.00, the balance of $500.00 still
needs to be paid. However, the amount
of $415.00 for advertisements placed
several times at Sing Tao [newspaper]
can be deducted from this $500.00. ....
Please send a check in the amount of
$85.00 for the balance. ....
The parties, in the meantime, finalized their supply
arrangement by signing, on September 8, 1991, a two-page "Sales
Cancellation No. 22,241
15
Agreement" (written entirely in English) which provides, among
other things, that:
This sales agreement is made on Sept 1,
1991 between Mr Ly Hung-Tam, director of
Truong Giang Corp., as buyer (hereinafter
called Party-A) ... and Mr Sunny Wong,
president of P.C. Teas Co, as seller (herein-
after called Party-B), ... in which Party-A
will order and buy exclusively from Party-B
the Dieters Herbal Drink and Party-B will
make and sell exclusively the Dieters Herbal
Drink to Party-A under the following terms
and conditions:-
1. Tea product called Dieters Herbal Drink
to be made by Party-B based on Party-A’s
order.
....
8. Party-B is willing to help sales of this
Dieters Herbal Drink in all American
Health Food Stores locally and abroad for
Party-A. Profit sharing is 30% goes to
Party-B and 70% goes to Party-A ....
9. This agreement will last for three years
after the date of both Party-A and Party-
B signature were given thereon. It will
be automatically renewed for a further
term should there be no termination ...
called for by either party three months
before its expiry [sic].
(Petitioner’s exhibit 12; and Respondent’s exhibits 221 and 231.)
The sales agreement, however, is silent as to which party is the
owner of any marks for the tea product called "DIETERS’ HERBAL
DRINK." Instead, it merely states the terms under which
respondent would process or supply such tea product to
petitioner. Moreover, while not claiming that he was forced to
sign such agreement, Mr. Ly indicated that he was told by
respondent that the duration of the sales agreement was for two
years rather than the three years stated therein. Mr. Ly signed
Cancellation No. 22,241
16
the sales agreement on petitioner’s behalf, without reading it or
having it translated, because he trusted respondent.
Mr. Ly, prior to expiration of the agreement, became
dissatisfied with respondent as petitioner’s exclusive supplier
due to both the very high cost of the tea product and learning
that, not only did the tea contain an ingredient (stevia leaves)
which the FDA had warned could not legally be imported into the
United States, but that one or two of petitioner’s customers in
Santa Ana, Texas had returned the "Three Ballerina" tea to
petitioner after drinking some and experiencing diarrhea. Mr.
Ly, however, did not return the complained of tea to respondent,
since the amount involved was only five to ten boxes, choosing
instead to call respondent several times just to tell him about
the nature of the customer complaints.
With respect to registration of the mark, respondent
sent Mr. Ly a fax on November 23, 1991 which, among other things,
advised Mr. Ly in Chinese that (emphasis added in bold;
underlined portions in English in original):
3) There will be a letter from attorney
LYNN PERRY of TOWNSEND & TOWNSEND, which is
responsible for registering 3-Daughter for
Truong Giang, for your signature. She will
adhere to our agreement: a letter to you for
your consideration and decision regarding the
principle that 3-Daughter belongs to Truong
Giang, PCT ... is only responsible for the
quality control of 3-Daughter production.
(Petitioner’s exhibits 13 and 30.) Mr. Ly testified that, upon
receiving such fax, he "was very happy" because "what it says
..., written personally by Mr. [Sunny] Wong, was that the
registration of the three daughter [mark] was owned by Truong
Cancellation No. 22,241
17
Giang" and that "PCT was only the processor" or manufacturer.
(Ly Coy Feb. 28, 1996 test. dep. at 56-57.) A subsequent fax,
dated January 20, 1992, from respondent to Mr. Ly noted, however,
that registration of petitioner’s mark would be delayed until the
beginning of February 1992. The reason for the delay, according
to Mr. Ly, was that Ms. Perry was ill.
Since, after several more months, the "Three Ballerina"
mark had still not been registered, Mr. Ly went to see a lawyer,
Daniel Wu, in Los Angeles "because I wanted to have him do the
trademark registration for my three daughters". (Id. at 61.)
Mr. Wu’s requested fee of $3,000.00 for such services, however,
was too high for Mr. Ly’s liking, so he declined to retain Mr. Wu
to file an application for registration. Nevertheless, Mr. Wu
was concerned about the matter of ownership of the mark and
advised Mr. Ly that petitioner and respondent memorialize their
understanding with respect thereto in writing. Mr. Wu suggested,
in particular, that the parties prepare a joint announcement, to
be written on stationery bearing petitioner’s letterhead, in
order to provide petitioner with protection for its ownership
interest.
While it is disputed whether Mr. Wu or one of the
employees in his law office actually prepared an initial draft of
a joint announcement by the parties, Mr. Ly took Mr. Wu’s advice
and sent respondent an initial draft, written in Chinese on
petitioner’s letterhead stationery, of a joint announcement
acknowledging that petitioner was the owner of the "Three
Ballerina" mark and that respondent was the processor or supplier
Cancellation No. 22,241
18
of the product sold under such mark. Respondent modified the
announcement, in a manner which Mr. Ly found to be even more
agreeable, and on June 3, 1992 signed and returned to petitioner
by mail an original copy thereof, with modifications included,
which he had written in Chinese on a sheet of petitioner’s
letterhead stationery that Mr. Ly had faxed to him. Mr. Ly then
signed such original on behalf of petitioner and placed it in his
safe deposit box. Although Mr. Ly neglected to extend the
courtesy of sending respondent a copy of the joint announcement
which was signed--as evidenced by petitioner’s exhibits 17 and 53
and respondent’s exhibit 27--by both himself and respondent, it
is clear that the parties mutually agreed to the terms thereof.
The joint announcement agreed to by the parties, as
indicated by the translation thereof furnished by respondent,
provides in relevant part that (emphasis added in bold;
underlined portions in English in original):13

13 To the same effect, the translation of such agreement offered by
petitioner as its exhibit 16 states, in pertinent part, that (emphasis
added in bold; underlined portions in English in original):
TRUONG GIANG CORP.
....
Truong Giang Corp. of Los Angeles (and) PRESTIGE
CHINESE TEAS COMPANY jointly announce:
The Chinese (and) English writing method in
the boxes and the trademark of the "3-Daughter
Slim Tea" belong entirely to Truong Giang Corp.
Prestige Chinese Teas Company is only responsible
for producing and packaging the designated
quantity of "3-Daughter Slim Tea" for Truong
Giang Corp. It is hereby jointly stated.
[(Signature) ....] (Signature)
Truong Giang Corp. Prestige Chinese Teas Co.
....
Cancellation No. 22,241
19
TRUONG GIANG CORP.
....
Joint Statement from
Truong Giang Trading Company of Los Angeles
Prestige Chinese Teas Company of San
Francisco
Regarding the "Three Daughters’ Slim Tea"
introduced to the market by Truong Giang
Trading Company of Los Angeles, the format of
its Chinese and English specifications and
trademark on its box package entirely belongs
to the property of Truong Giang Trading
Company of Los Angeles. Prestige Chinese
Teas Company is only in charge of producing
and packaging "Three Daughters’ Slim Tea" in
the quantity specified by Truong Giang
Trading Company of Los Angeles. Hereby a
joint statement is especially made.
(Signature ....) (Signature)
Truong Giang Corp. Prestige Chinese Teas Co.
....
Date: Jun. 3, 1992 Date: Jun. 3, 1992
(Respondent’s exhibit 305.) Petitioner, upon receiving the
original of the above document by mail from respondent, testified
that he called respondent to tell him that "I had received it and
that I was very happy." (Ly Coy Feb. 28, 1996 test. dep. at 67.)
Petitioner also testified that, when he sent respondent the
initial draft of the joint announcement, he told respondent that
the purpose thereof "was to protect ... Truong Giang in the
future [in] that it owned ... the three daughter" mark. (Id.)
It is clear from the joint announcement that, as of
June 3, 1992, the parties’ were in agreement that petitioner was

Date: Jun. 3, 1992 Date: Jun. 3, 1992
(Petitioner’s exhibit 33.)
Cancellation No. 22,241
20
the owner of the "Three Ballerina" mark and respondent was merely
the manufacturer of the tea sold thereunder.14 Neither party
disputes the substance of the joint announcement, although
respondent maintains that he signed it solely at Mr. Ly’s
insistence that such an announcement would help petitioner sell
more of the "Three Ballerina" tea. Respondent, as the joint
announcement plainly states, simply supplied the tea and
packaging therefor to petitioner, based upon the quantities
ordered by petitioner, and had no ownership interest in the
"Three Ballerina" mark. While petitioner, for the reasons
mentioned earlier, ultimately ceased buying any tea and packaging
from respondent by no later than sometime in early 1993 and came
to rely, instead, entirely on ABC Tea House as its supplier, at

14 Although, in his brief, respondent maintains that the parties never
entered into any binding agreement other than their September 8, 1991
sales contract, it is pointed out that, as to the legal effect of the
parties’ joint announcement, one of respondent’s own witnesses, Mr.
Wu, testified on direct examination that:
Q. Okay. Well ... would you say it’s fair to say
that you were considering this joint announcement to have
the same function as an agreement?
A. I think an announcement is an agreement. It does
have that certain kind of effect. Because what really
prompted me to suggest that is both party [sic] are holding
themselves out to the general public selling this product,
and I don’t want [it] to be misunderstood by the general
public ... [as to] who is the actual owner.
And that is why I suggested that action should be
taken. .... And it’s my experience dealing with these
Chinese from Vietnam or Southeast Asia, that ... they don’t
know about the system too well out here, and they may
procrastinate. .... So to protect Mr. Ly, and also make
sure everything is well understood by all parties, I
suggest that document.
(Wu dep. at 28-29.)
Cancellation No. 22,241
21
no time did it ever relinquish ownership of the "Three Ballerina"
mark.15
Section 1(a) of the Trademark Act provides that "[t]he
owner of a trademark used in commerce may apply to register his
or her trademark under this Act ...." Inasmuch as respondent, as
of the August 20, 1992 filing date of his underlying use-based
application, was not the owner of the "Three Ballerina" mark for
tea, the resulting registration for such mark was and is void ab
initio. See, e.g., Huang v. Tzu Wei Chen Food Co. Ltd., 849 F.2d
1458, 7 USPQ2d 1335, 1336 (Fed. Cir. 1988).
Nevertheless, even if consideration arguably were not
to be given to the parties’ joint announcement due to the fact
that respondent, although knowing orally of Mr. Ly’s agreement
with the provisions thereof, never received a courtesy copy from
petitioner which was countersigned by Mr. Ly, we would still find
that petitioner, rather than respondent, was and is the true
owner of the subject mark for tea. We note, in this regard, that
in situations in which where there is an absence of any written
contractual provision or agreement that plainly specifies who is
the owner of a mark, a tribunal should weigh the following
factors, which are set forth in 2 J. McCarthy, McCarthy on
Trademarks & Unfair Competition §16:48 (4th ed. 1999) (the

15
While respondent makes much of the fact that only he knew the
initial formula for the tea he exclusively processed and packaged for
petitioner as a dieters’ herbal drink, nothing in the record suggests
that, by omitting stevia leaves from the formula and using senna tea,
petitioner so changed the dieters’ herbal drink product that the
inherent and identifiable character thereof was no longer the same.
See, e.g., Ralston Purina Co. v. On-Cor Frozen Foods, Inc., 746 F.2d
801, 223 USPQ 979, 982 (Fed. Cir. 1984), citing E.I. du Pont de
Nemours & Co. v. G.C. Murphy Co., 199 USPQ 807, 813 (TTAB 1978).
Cancellation No. 22,241
22
"McCarthy factors"), in resolving the issue of a mark’s ownership
(footnotes omitted):16
1. Which party invented or created the mark.
2. Which party first affixed the mark to the
goods sold.
3. Which party’s name appeared on packaging
and promotional materials in conjunction with
the mark.
4. Which party exercised control over the
nature and quality of the goods on which the
mark appeared.
5. To which party did customers look as
standing behind the goods, e.g., which party
received complaints for defects and made
appropriate replacement or refund.
6. Which party paid for advertising and
promotion of the trademarked product.
The above factors, on balance, demonstrate in this case
that petitioner is the owner of the subject mark. While the
record reveals, as noted previously, that as to the first
McCarthy factor, respondent arranged for a graphics designer in
Hong Kong to provide four designs for possible use as a trademark
for the diet tea to be exclusively distributed by petitioner, it
was petitioner’s principal, Mr. Ly, who selected the "Three
Ballerina" mark and consequently, from a practical standpoint,
can be considered to have "created" such mark for petitioner.
Thus, while respondent also assisted in the creation of the
concept for the product, testifying that his firm conceived the
name "Dieters’ Herbal Drink," it was Mr. Ly of petitioner who had

16 As the cited treatise further points out: "No one of these factors
is per se determinative, but they are merely illustrative of the
questions that must be asked in the absence of contractual
arrangements between the parties". Id.
Cancellation No. 22,241
23
the final or ultimate approval over the product’s name since, as
he requested, the product was to be exclusively distributed by
petitioner.
As to the second McCarthy factor, the record again
reflects, as mentioned earlier, that respondent acted as
petitioner’s agent in arranging to have various packaging
materials, including fliers and inserts, printed for petitioner
with the "Three Ballerina" mark. Thus, while respondent, for
example, testified that his firm wrote the package directions for
brewing the dieters’ herbal drink tea, such assistance was
rendered as part of respondent’s development of the product for
petitioner. Packaging inserts and fliers, while created and paid
for by respondent, originally displayed petitioner’s "TG" logo
next to the "Three Ballerina" mark and made no mention of
respondent’s firm. On the whole, therefore, this factor favors
petitioner. This is because the record shows that it was only in
later versions, which were created after the issue of ownership
became openly disputed and respondent had learned of petitioner’s
filing of an application, Ser. No. 74/339,152, on December 11,
1992 to register a "Three Ballerina" design for dieters’ herbal
teas, that respondent’s "PCT" logo was featured adjacent to such
mark. Moreover, only one such flier or insert, which was printed
principally in Spanish for circulation to respondent’s Mexican
consumers, lists in English respondent’s name and a post office
box address to which dissatisfied customers could request "with
proof of purchase ... a full money back refund." (Respondent’s
exhibit 257.)
Cancellation No. 22,241
24
The third McCarthy factor strongly favors petitioner
inasmuch as the labels initially used on cases containing boxes
of the tea sold under the "Three Ballerina" design not only
prominently displayed petitioner’s "TG" logo, but notably stated
that such goods are "CUSTOM MANUFACTURED BY PCT FOR TG CORP."
(Respondent’s exhibits 251 and 253.) Likewise, some of the
individual tea boxes originally used featured the "Three
Ballerina" mark, petitioner’s "TG" logo and the phrase "CUSTOM
MANUFACTURED BY PCT FOR TG CORP." in addition to setting forth a
post office box address for petitioner directly below its name.
(Respondent’s exhibit 236.)17 Similarly, other tea boxes
displayed the "Three Ballerina" mark; stated that the goods were

17 In particular, with respect to such exhibit, respondent at his trial
deposition on April 30, 1996 conceded that the display of petitioner’s
"TG" logo on the tea boxes was at Mr. Ly’s request and further
admitted that:
Q. And why was that [sic] placed on the box the
words "Custom manufactured by PCT for TG Corp., P.O. Box
166, Monterey Park, California 91754"?
A. This is according to the terms of the ... sales
agreement because he had enjoyed a limited exclusivity ...
of ... the sale of the tea.
Q. Why were those words which I just quoted which
appear on Exhibit 236 ... placed on this box?
A. Because he sell it to other people, and then when
they have any questions, they come back to him and through
him he come back to me.
Q. So the idea was that if there were any
complaints, customers would go to TG Corp.; is that
correct?
A. And come back to me finally because we --
Q. But it would first go to TG Corporation right?
A. Yes.
(Respondent’s April 30, 1996 trial dep. at 129-30.)
Cancellation No. 22,241
25
"IMPORTED BY TRUONG GIANG CORP."; and listed a post office box
address for petitioner immediately below its name.18
(Petitioner’s exhibit 6.) Other tea boxes displayed the subject
mark along with petitioner’s name and California location.
(Respondent’s exhibit 8.) Clearly, it is petitioner’s name
and/or logo which would be associated with the "Three Ballerina"
mark on the packaging for the herbal diet tea sold by petitioner
since respondent, in view of the manner in which his name appears
thereon, would be regarded merely as a manufacturer or processor
of petitioner’s goods.
The fourth McCarthy factor, however, is neutral.
Neither party, in any meaningful sense, exercised any kind of
continuing quality control over the diet tea drink marketed under
the "Three Ballerina" mark other than simply relying upon the
supplier thereof to furnish a quality product. Although
respondent paid for a laboratory to do an initial analysis of the
dieters’ herbal drink in order that the ingredients listed on the
packaging thereof would meet FDA nutritional labeling
requirements, neither party thereafter conducted periodic
laboratory or other quality control tests on product samples.
Instead, each party simply trusted the reputation of the
particular suppliers or manufacturers of the goods involved.
Petitioner relied upon its processors, including respondent, to

18 Although the parties, and respondent in particular, spend an
inordinate amount of time arguing over the significance of whose bar
code actually appears on the tea boxes, suffice it to say that since
the bar code (and associated numbers) printed on the product packaging
would be incomprehensible (without a bar-code reader) to most buyers,
Cancellation No. 22,241
26
deliver a quality product and respondent likewise trusted his
sources as to the quality of the ingredients used to make the tea
which he processed and packaged for petitioner pursuant to the
parties’ September 8, 1991 sales agreement.
With respect to which party customers looked to as
standing behind the goods, the record shows that it was
petitioner, acting through Mr. Ly, who received and investigated
the relatively few complaints from customers about the tea sold
under the "Three Ballerina" mark. Although respondent testified
that he was always willing to refund any money paid by a customer
dissatisfied with the product which he processed exclusively for
petitioner, the record fails to show, except for a flier or
package insert directed to Mexican consumers, that purchasers
were even aware of respondent’s money-back guarantee or how to
reach respondent. Instead, as respondent had advised Mr. Ly, the
initial boxes used as packaging for the "Three Ballerina" tea set
forth petitioner’s name and a post office box so that customers
could contact petitioner, rather than respondent, concerning any
problems with the product. The fifth McCarthy factor, therefore,
plainly favors petitioner.
Finally, as to the sixth McCarthy factor, the record
demonstrates that both parties paid for advertising and promotion
of the "Three Ballerina" diet tea product. Petitioner, virtually
as soon as such product was brought to market around September
1991, spent $40.00 a week on an ad therefor in a local (Los
Angeles area) Indochinese newspaper which ran once a week for a

it would at best be indicative, as testified to by respondent, of only
Cancellation No. 22,241
27
period of four weeks. Although petitioner did not do any
television advertising during the time it was purchasing "Three
Ballerina" tea from respondent, in the period between March 1995
and September or October 1995, petitioner spent about $1,800.00
per month to advertise such tea, along with other products, on
television. Petitioner also advertised the "Three Ballerina" tea
in movie theaters and on the radio.
Respondent, however, also promoted such product, along
with his other teas, by displaying the goods at various trade
shows at which he paid a fee to be an exhibitor. Respondent, in
addition, distributed price lists for the various tea blends
which he sold, including the "DIETERS [sic] HERBAL DRINK"
distributed by petitioner, but these lists did not display or
otherwise refer to the "Three Ballerina" mark. Moreover, while
respondent paid to list the "DIETERS [sic] HERBAL DRINK" in a
list of manufacturers’ brand names published in the November 1993
issue of the trade magazine Health Food Business, the "Three
Ballerina" mark is not illustrated or otherwise mentioned.
Respondent testified, however, that to advertise the "Three
Ballerina" tea, he spent approximately $1,000.00 thereon during
the last three months of 1991, $4,000.00 therefor in 1992 and,
due to a decline in sales, only about $2,000.00 to do so in 1993.
The sixth McCarthy factor, therefore, is neutral, especially
since neither party furnished any actual examples of their
asserted advertising of the "Three Ballerina" mark.

the manufacturer of the tea rather than the owner of the subject mark.
Cancellation No. 22,241
28
Accordingly, of the six McCarthy factors, four favor
petitioner and the other two are neutral. None of the McCarthy
factors points towards respondent as the owner of the "Three
Ballerina" mark, while two of the four factors on petitioner’s
side strongly favor petitioner as the owner of such mark.19 We
conclude, therefore, that even in the absence of consideration of
the parties’ joint announcement, it is petitioner who, at all
relevant times, was and is the true owner of the "Three
Ballerina" mark. Respondent’s involved registration, as
explained earlier, was and is void ab initio.
This brings us to consideration of the issue of fraud.
Section 1(a)(1)(A) of the Trademark Act provides, in pertinent
part, that an application for registration "must be verified by
the applicant" and must include "a statement to the effect that
the person making the verification believes himself, or the firm,
corporation, or association in whose behalf he makes the
verification, to be the owner of the mark sought to be registered
...." As our principal reviewing court has noted in Torres v.
Cantine Torresella S.r.l., 808 F.2d 46, 1 USPQ2d 1483, 1484 (Fed.
Cir. 1986):

19 Although respondent stresses that he was the only party who carried
product liability insurance for the goods which he processed or
packaged for petitioner, we find that such fact is not probative of
respondent’s asserted ownership of the disputed mark inasmuch as it
was prudent for respondent, as the manufacturer of the goods, to carry
such insurance irrespective of which party was the actual owner of the
mark. Respondent, in fact, conceded on cross-examination that it is a
good and normal business practice for a manufacturer to have product
liability insurance since, "as a manufacturer, you should have that to
protect you, [and] protect everybody concerned." (Respondent’s May 1,
1996 trial dep. at 195.)
Cancellation No. 22,241
29
Fraud in procuring a trademark
registration ... occurs when an applicant
knowingly makes false, material
representations of fact in connection with
his application. See Le Cordon Bleu, [S.A.
v. BPC Publishing Ltd.,] 451 F.Supp. [63,]
... 72 n.14, 202 USPQ [147,] ... 154 n.14
[(S.D.N.Y. 1978)]; Schwinn Bicycle Co. v.
Murray Ohio Manufacturing Co., 339 F.Supp.
973, 983, 172 USPQ 14, 21 (M.D. Tenn. 1971),
aff’d, 470 F.2d 975 [176 USPQ 161] (6th Cir.
1972). "[T]he obligation which the Lanham
Act imposes on an applicant is that he will
not make knowingly inaccurate or knowingly
misleading statements in the verified
declaration forming a part of the application
for registration." Bart Schwartz
International Textiles, Ltd. v. Federal Trade
Commission, 289 F.2d 665, 669, 129 USPQ 258,
260 (CCPA 1961) (emphasis in original). ....
Here, it is clear from the record that respondent had
been requested by Mr. Ly to register the "Three Ballerina" mark
for petitioner; respondent had agreed to do so; he had been
advised by his trademark counsel that only the owner of such mark
was entitled to apply for its registration;20 and he had

20 In particular, Ms. Perry, who testified that it was her normal
practice to determine what entity owned a mark before filing an
application for registration thereof, sent respondent a fax on
September 19 or 20, 1991 which, in addition to requesting a $650.00
retainer to file an application for registration of the "Three
Ballerina" mark and noting that further costs would be a minimum of
$700.00, set forth the following:
Presumably the owner of the mark will be
Sunny Wong, dba PC Teas Company, but let me know
if this is not accurate. Finally, I will need to
explain the relationship between TG Corporation
and you. I understand from our telephone
conversation that this company is a distributor
of the tea. If this is not accurate, please let
me know. We will also need to disclose to the
Trademark Office if this company is licensed to
use the mark. If the company is, it will be
advisable to have a written license.
(Petitioner’s exhibit 42.) Subsequently, on April 9, 1992, Ms. Perry
again sent respondent a fax regarding ownership of such mark and the
execution of a license agreement, stating that:
Cancellation No. 22,241
30
acknowledged in writing that petitioner was the owner thereof on
several occasions, including the revised joint announcement which
he signed on June 3, 1992.21 Respondent, nevertheless, willfully
persisted in having Ms. Perry register the "Three Ballerina" mark
in his name even after agreeing to Mr. Ly’s request, made by
April, May or June 1992, to defer registration of the mark
(because Mr. Ly desired to have his attorney register it instead)
and returning the money Mr. Ly had paid towards registration (by
applying it to a fee petitioner owed respondent for their sharing
of a trade show booth).

This is further to our telephone conversation of April
8, 1992. I attach to this letter a copy of the trademark
application which I sent to you ... [in] December ... 1991.
As I mentioned in our telephone conversation, two different
people cannot be owners of a trademark as the rule is that
a trademark cannot serve two owners. For this reason, I
have
made you the owner of the trademark, but this trademark can
be enforced in favor of your business associate, Mr. Ly
Hung Tam. Please sign and return the application to me for
filing in the Trademark Office.
I am also attaching to this letter an addendum to the
[sales] agreement dated September 8, 1991 which clarifies
paragraph 8 and adds exclusivity. Please have the addendum
signed and return a copy to me for my records.
Finally, I am enclosing the original License Agreement
that I sent ... [on] December 4, 1991, with the revisions
you and I discussed concerning exclusivity and pricing to
reflect the terms of the September 8, 1991 Sales Agreement.
Both parties should sign the revised License Agreement as
well as the Addendum and return a copy to me for my files.
(Respondent’s exhibits 222 and 269.)
21 For instance, as previously mentioned, respondent sent Mr. Ly a fax
on September 21, 1991 referring to petitioner’s registration of the
mark and stated, in a fax sent to Mr. Ly on November 23, 1991, that
pursuant to "our agreement," the "3-Daughter [mark] belongs to Truong
Giang. (Petitioner’s exhibits 13 and 30.)
Cancellation No. 22,241
31
In particular, respondent not only knew that Mr. Ly had
not signed or returned either the original or the revised version
of a license agreement22 which respondent had authorized Ms. Perry
to prepare,23 but more importantly, respondent also admitted that

22 As respondent obviously knew, given his command of English, such
agreement provided that respondent was the owner of the subject mark
and that petitioner’s principal, Mr. Ly, was only a licensee. In
particular, the license agreement, which named "Sunny Wong, doing
business as PC Teas Company and PCT, ... (’Licensor’) and Hung-Tam Ly,
an individual ... (’Licensee’)," provided among other things that:
Licensor is the owner of the trademark DIETERS’ HERBAL
DRINK and the package design including the words, "NATURAL
GREEN LEAF BRAND FOR WOMEN & MEN DIETERS’ HERBAL DRINK &
Cup and Ballerina Design for" tea (the "Mark), and all
applications and Registrations pertaining thereto. ....
THEREFORE, in consideration of $1.00 and other ...
consideration, ... Licensor and Licensee hereby agree:
1. Licensor hereby grants Licensee an exclusive
license to use the Mark for tea in the United States (the
"Territory") ....
2. The term of this License shall be three years
....
3. Licensor shall produce and package tea, bearing
the Mark (the "Product"), as required by Licensee. ....
....
6. Licensee acknowledges Licensor’s ownership of and
rights in the Mark and agrees to take no action contrary to
such ownership and rights. ....
7. Licensor may, in its sole discretion, attempt to
register the Mark in the Territory or elsewhere, but shall
have no obligation to do so. Licensor shall in the near
future file an application to register the Mark in the
United States, however. ....
....
(Petitioner’s exhibit 18 and respondent’s exhibit 266.)
23 Curiously, like the parties’ sales agreement, the versions of the
license agreement forwarded by respondent to petitioner were not
translated from English into Chinese so that Mr. Ly could read them
before signing. Yet the record reveals that it typically was
respondent’s practice to provide Mr. Ly with at least a cursory
translation of any other English language documents which were
Cancellation No. 22,241
32
he never gave a copy of the parties’ June 3, 1992 joint
announcement, which he had revised and signed, to Ms. Perry, even
though such announcement plainly is directly at odds with his
claims of ownership of the "Three Ballerina" mark and that
petitioner was just an exclusive distributor of the tea sold
under such mark. Respondent’s explanation for his deliberate
behavior, which we find to be inexcusable in view of his fluency
in both English and Chinese, was that the joint announcement was
written in Chinese. Specifically, as respondent testified on
cross-examination:
Q. So you never showed the joint
announcement document to Lynn Perry at any
time, is that correct?
A. Yeah, because it’s in Chinese.
Q. You never translated it for her?
A. No.
(Respondent’s May 1, 1996 dep. at 240.)
The PTO, therefore, was not only falsely and materially
advised that petitioner, whose name appeared on the specimens
filed as part of respondent’s application for registration of the
"Three Ballerina" mark, was a licensee of respondent, but
respondent knew that Mr. Ly had refused to sign any license
agreement and thus knew, or plainly should have known, that a
license agreement had not in fact been entered into by the

exchanged as part of the parties’ business dealings. Given the
critical nature of both a sales agreement and a license agreement, the
inference that must be drawn from the failure of respondent to apprise
Mr. Ly of the substantive contents of such documents is that, at the
very least, respondent intended to keep Mr. Ly--and hence petitioner--
less than fully informed in order to secure a more advantageous
business position.
Cancellation No. 22,241
33
parties.24 Respondent also knew, or should have known, in light
of the joint announcement which he revised, signed and sent to
Mr. Ly and which Mr. Ly had told him he was very happy with, that
respondent was not the owner of the "Three Ballerina" mark.
While respondent was understandably upset upon learning that
petitioner was having ABC Tea House package such product, in what
respondent regarded as a breach by petitioner of the parties’
sales agreement under which respondent was to be petitioner’s
exclusive supplier, respondent’s remedy was a suit to enforce the
parties’ contract rather than to take petitioner’s mark and
register it as his own.
We consequently find that respondent, by advising the
PTO that petitioner was his licensee and claiming under oath that
he was the owner of the "Three Ballerina" mark when he knew or
plainly should have known otherwise, made knowingly false and
material representations of fact in connection with his
application which induced the PTO to issue him the subject
registration for the "Three Ballerina" mark. Such registration
was accordingly procured by fraud.
Decision: The petition to cancel is granted on both
grounds and Reg. No. 1,776,684 will be cancelled in due course.
G. D. Hohein

24 Although not pleaded as part of petitioner’s claim of fraud, we find
that such facts and the question of fraud which they raise were tried
by the express or implied consent of the parties as an additional
basis for petitioner’s claim of fraud. The pleadings are accordingly
deemed to be amended to so conform to the evidence. Fed. R. Civ. P.
15(b).
Cancellation No. 22,241
34
P. T. Hairston
B. A. Chapman
Administrative Trademark Judges,
Trademark Trial and Appeal Board