ZAO Gruppa Predpriyatij OSTv.ZAO Odessky Konjatschnyi Zawod ZAO Odessky Konjatschnyi Zawod v. ZAO Gruppa Predpriyatij OST

Trademark Trial and Appeal BoardFeb 8, 2012

No. 91161570 (T.T.A.B. Feb. 8, 2012)

Mailed: February 8, 2012 UNITED STATES PATENT AND TRADEMARK OFFICE _____ Trademark Trial and Appeal Board ______ ZAO Gruppa Predpriyatij OST v. ZAO Odessky Konjatschnyi Zawod _____ Opposition No. 91161570 to application Serial No. 78240612 filed on April 22, 2003 _____ ZAO Odessky Konjatschnyi Zawod v. ZAO Gruppa Predpriyatij OST _____ Cancellation No. 92047126 against Registration No. 2885912 _____ Carla C. Calcagno of Calcagno Law and Maria Eliseeva of Houston Eliseeva, LLP for ZAO Gruppa Predpriyatij OST.1 1 Review of the proceeding files reveals an appointment of associate counsel on March 13, 2009, and a request to direct correspondence to Maria Eliseeva at Houston Eliseeva, LLP, 4 Militia Drive, Suite 4, Lexington, Massachusetts 02421. In view thereof, Gruppa’s correspondence address has been updated to reflect that request. Nonetheless, the Board also forwards a copy of this decision to the prior address of record, namely, Carla Calcagno, Calcagno Law, 2300 M Street NW, Suite 800, Washington, DC 20037. THIS OPINION IS NOT A PRECEDENT OF THE TTAB Opposition No. 91161570; Cancellation No. 92047126 2 Julie B. Seyler of Abelman Frayne & Schwab for ZAO Odessky Konjatschnyi Zawod. ______ Before Seeherman, Grendel and Kuhlke, Administrative Trademark Judges. Opinion by Kuhlke, Administrative Trademark Judge: On April 22, 2003, ZAO Odessky Konjatschnyi Zawod (Odessky) applied to register on the Principal Register the mark SHUSTOFF, in typed form, for goods ultimately identified as “alcoholic beverages except beers, namely aperitifs with a distilled alcoholic liquor base; distilled liquors; distilled spirits; wines; whisky; vodka; gin; prepared alcoholic cocktails; liqueurs; distilled beverages; bitters, namely schnapps and liqueurs; rum; liqueurs and spirits in the nature of digestives; spirituous alcoholic extracts,” in International Class 33. The application was filed based on an allegation of an intention to use the mark in commerce under Section 1(b) of the Trademark Act, 15 U.S.C. §1051(b). On July 28, 2004, ZAO Gruppa Predpriyatij OST (Gruppa) opposed registration of Odessky’s mark SHUSTOFF under Section 2(d) of the Trademark Act, 15 U.S.C. §1052(d), on the ground of likelihood of confusion with its applied-for and subsequently registered mark SHUSTOV and design. Gruppa’s pleaded Registration No. 2885912 is for the mark shown below for goods ultimately identified as “alcoholic beverages, namely distilled spirits, distilled rice spirits, Opposition No. 91161570; Cancellation No. 92047126 3 aperitif wines, alcoholic aperitif bitters, alcoholic honey drink, peppermint schnapps; alcoholic fruit-based beverages; sake; gin; rum; liqueurs, whiskey; brandy; vodka.”2 3 The underlying application for Registration No. 2885912 was filed on May 23, 2003 under Section 44 of the Trademark Act, 15 U.S.C. §1126, asserting a priority date under Section 44(d) of December 11, 2002. The registration issued under Section 44(e) on September 21, 2004. On January 11, 2005, Odessky filed its answer in which it denied the salient allegations and challenged Gruppa’s rights in its asserted mark. On February 22, 2007, Odessky petitioned to cancel (Cancellation No. 92047126) Gruppa’s Registration No. 2885912 on the ground that Gruppa committed fraud in the 2 Gruppa’s original complaint asserted its application. After the application issued into a registration, Gruppa moved to amend its complaint to assert its registration. The Board granted this motion on December 18, 2008. 3 Throughout this opinion, all references to the SHUSTOV mark are to this bell design mark. Opposition No. 91161570; Cancellation No. 92047126 4 procurement of its registration.4 In addition, on February 16, 2010, Odessky moved to amend the pleadings to conform to the evidence by adding a claim of abandonment, which we address infra. The opposition and cancellation proceedings were consolidated on November 9, 2007. EVIDENTIARY ISSUES We first address the evidentiary issues that were deferred until this final decision. Motion to Strike Snell Testimony During its rebuttal testimony period, on February 19, 2010, Odessky took the testimony of Mr. Thomas C. Snell. Odessky presented Mr. Snell as an expert witness. Gruppa moves to strike the testimony because Odessky did not disclose him in response to a discovery request.5 Odessky did not present argument in response to Gruppa’s motion to strike. In support of its motion to strike the deposition, Gruppa argues that “the information proffered in said testimony was not identified or produced in discovery, and was knowingly withheld by Applicant in violation of its duty 4 On April 15, 2008, the Board struck from the petition Odessky’s other asserted claims of non ownership and “bad faith” and its similar affirmative defenses in its answer challenging Gruppa’s then-application asserted in the opposition. 5 Gruppa asserted its objection during the testimony deposition and preserved this objection in its brief on the case. Opposition No. 91161570; Cancellation No. 92047126 5 to disclose and supplement disclosure.” Gr. Br. pp. 11-12. Gruppa’s Interrogatory No. 25 and Odessky’s response read as follows: Interrogatory No. 25: Identify each person whom Applicant expects to call as an expert witness at trial, state the subject matter on which the expert is expected to testify, and state the substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion. Response: Applicant has not yet determined if it will call any expert witnesses at trial. By this interrogatory, Gruppa expressly requested that Odessky identify each person whom Odessky expected to call as an expert at trial, to state the subject matter on which the expert was expected to testify, and state the substance of the facts and opinions to which the expert was expected to testify and a summary of and the grounds for each opinion. Applicant failed to identify any persons in response to the interrogatory. The Snell deposition was not taken during Odessky’s case in chief but rather was taken on the last day of Odessky’s extended rebuttal period. Odessky did not supplement any of its discovery responses prior to the taking of the expert testimony on February 19, 2010, nor provide any forewarning to Gruppa of the expert testimony to be taken. Gruppa Br. p. 12. Opposition No. 91161570; Cancellation No. 92047126 6 In view thereof, the Snell deposition is stricken.6 We hasten to add that consideration of this deposition would not have changed the result. Odessky’s Motion To Strike Gruppa’s Notice of Reliance On December 15, 2009, the Board deferred consideration of Odessky’s substantive objections to Gruppa’s notice of reliance on its own responses to Odessky’s interrogatories nos. 1(b) and 7(a).7 A party cannot normally submit its own responses to discovery under a notice of reliance except to make not misleading partial responses submitted by the inquiring party. See Trademark Rule 2.120(j)(5): ...an answer to an interrogatory, or an admission to a request for admission, may be submitted and made part of the record only by the receiving or inquiring party except that, if fewer than all of the written disclosures, answers to interrogatories, or fewer than all of the admissions, are offered in evidence by the receiving or inquiring party, the disclosing or responding party may introduce under a notice of reliance any other written disclosures, answers to interrogatories, or any other admissions, which should in fairness be considered so as to make not misleading what was offered by the receiving or 6 We note that the current rules require that disclosure of expert testimony “must occur in the manner and sequence provided in Federal Rule of Civil Procedure 26(a)(2) [and] [i]f the expert is retained after the deadline for disclosure of expert testimony, the party must promptly file a motion for leave to use expert testimony.” Trademark Rule 2.120(a)(2).” However, this change applies to proceedings that were filed on or after November 1, 2007. Cf. Jules Jurgensen/Rhapsody Inc. v. Baumberger, 91 USPQ2d 1443, 1444 (TTAB 2009). 7 In compliance with that Board order, on January 4, 2010, Gruppa resubmitted its notice of reliance further clarifying that it is relying on its responses to interrogatories nos. 1(b) and 7(a) which consist only of documents under Fed. R. Civ. P. 33(d) and properly show the Bates numbers. Opposition No. 91161570; Cancellation No. 92047126 7 inquiring party. The notice of reliance filed by the disclosing or responding party must be supported by a written statement explaining why the disclosing or responding party needs to rely upon each of the additional written disclosures or discovery responses listed in the disclosing or responding party’s notice, and absent such statement the Board, in its discretion, may refuse to consider the additional written disclosures or responses. Under a notice of reliance, Odessky submitted Gruppa’s response to Interrogatory No. 6(a). The interrogatory and response read as follows: Interrogatory No. 6(a): State the reasons why [Gruppa] adopted the trademark SHUSTOV. Response: [Gruppa] objects to these interrogatories numbered 6(a)-(c) on the ground that they are vague, ambiguous, overly broad, unduly burdensome ... (a) [Gruppa] adopted the trademark SHUSTOV to serve as a brand name for its vodka in the United States because it has been using that mark in many countries for years and wishes to maintain a common identity for its vodka worldwide. By its notice of reliance, Gruppa states that its responses to interrogatories nos. 1(b) and 7(a) submitted under Trademark Rule 2.120(j)(5) should be considered: ...so as to make not misleading what was offered by the receiving or inquiring party. Specifically, Applicant has relied on [Gruppa’s] response to Interrogatory No. 6(a) to show that [Gruppa] essentially has admitted that it has “no bona fide intent to use” the mark on the goods listed in the registration certificate in the United States, other than vodka. Applicant’s interpretation in its Notice of the import of [Gruppa’s] answer to Interrogatory No. 6(a) is both misleading and incorrect. These documents reflect that prior to the filing of the application that matured into [Gruppa’s] registration, and with these interrogatory Opposition No. 91161570; Cancellation No. 92047126 8 responses, [Gruppa] produced documents showing that [Gruppa] and its predecessors already were manufacturing, advertising, and promoting a wide variety of SHUSTOV alcoholic beverages, not just vodka. This supports [Gruppa’s] bona fide intent to use the mark in the United States on all the goods listed in the registration certificate, not just vodka. Amended NOR (January 4, 2010). Odessky argues that the response to interrogatory no. 6(a) is not misleading and the responses to interrogatories nos. 1 and 7 “bear no relationship or other connection to Interrogatory No. 6(a) and as such neither clarify nor rebut Interrogatory No. 6(a).” Od. Mot. to Strike p. 6 (November 6, 2009). Further, Odessky argues that “[a]lmost every single document is in Russian and none have been translated into English [and] foreign language documents that are unaccompanied by a certified English translation should be stricken from the record because they are unintelligible and thus evidence of very little, if anything at all.” Id. Gruppa responds that Odessky’s “construction of the interrogatory response read in a vacuum is misleading. Based on [Gruppa’s] discovery production, Odessky well knows that throughout this case, in its discovery responses and in its testimony, [Gruppa] has submitted evidence to show that it intended, and still intends, to use its mark on all the other products listed in its application, including vodka. ... As [Gruppa] already manufactures and sells a wide variety of products under the SHUSTOV mark, [Gruppa] clearly Opposition No. 91161570; Cancellation No. 92047126 9 is able to export these same goods to the United States. This evidence is relevant to the Board’s construction of its response to 6(a).” Gr. Response to Mot. To Strike pp. 7-8 (December 3, 2009). As to the issue of the foreign language, Gruppa argues that “most if not all of the foreign language documents were supported by the testimony at the [Nataliya] Rybina deposition [and] ... [i]t is simply wrong to say that all the documents are in Russian. Some of the documents have English translations and some bear English translations directly on their face.” Id. Subsequently, on January 27, 2010, Odessky filed a notice of reliance, which included a chart analyzing Gruppa’s document responses to interrogatories nos. 1(b) and 7(a). We find that Gruppa’s submission is appropriate to the extent that it provides the full context of Gruppa’s response to Interrogatory No. 6(a). As to the lack of translation, we first note that Odessky did not move to compel Gruppa to provide translations during the discovery period. We further note that in its January 27, 2010 notice of reliance, Odessky has provided a substantive analysis of these documents, indicating that Odessky apparently provided its own translation. Nonetheless, for purposes of submission to the Board, Gruppa would need to provide a Opposition No. 91161570; Cancellation No. 92047126 10 translation for the documents to be considered. See Johnson & Johnson v. Obschestvo’s ogranitchennoy; otvetstvennostiu “WDS”, 95 USPQ2d 1567, 1570 fn. 3 (TTAB 2010). In view thereof, Odessky’s motion to strike is granted to the extent that the documents in Russian submitted under the January 4, 2010 notice of reliance have not been considered. As noted above, Gruppa reintroduced several of these documents through the testimony of its witness, Nataliya Rybina, which was presented through an interpreter. Generally, Ms. Rybina testified as to what they were, what the pictures in the documents depicted, and, to a limited extent, translations of the text. During Ms. Rybina’s testimony, applicant asserted objections to certain documents written in Russian based on the absence of official translations. Applicant did not maintain these objections in its main brief on the case. Applicant’s reference to these objections in footnote 2 of its reply brief is too late to maintain them.8 Kohler Co. v. Baldwin Hardware Corp., 82 USPQ2d 1100, 104 (TTAB 2007). Moreover, in addition to the fact that certain relevant text was translated by the same person providing interpretation of 8 On page 20 of its main brief, Odessky states that Gruppa “sought to introduce a range of exhibits, many of which are in Russian (and no English translations have been provided) ... However, when the hundreds of pages are reviewed in detail it becomes apparent ...” This general statement is not sufficient to preserve the objection and Odessky considers and discusses Opposition No. 91161570; Cancellation No. 92047126 11 the testimony, applicant provides some of its own translations and relies on certain of these documents. In view thereof, to the extent Odessky’s objections to the exhibits from the Rybina deposition were not waived they are overruled. We note, however, that the probative value of these documents is limited due to the absence of complete translations, official or otherwise. Odessky’s objections to Ms. Rybina’s competency to testify as to various matters were maintained in its main brief and have been considered in determining the probative value of her testimony. In view of the above, the record consists of: (1) the files of the subject application and registration; (2) Gruppa’s Notices of Reliance on (i) a status and title copy of its registration and the underlying application, (ii) Odessky’s responses to Gruppa’s first set of requests for admissions and certain interrogatories, (iii) dictionary definitions regarding the suffixes OV and OFF, (iv) Gruppa’s responses to Interrogatories Nos. 1(b) and 7(a) (only the documents in English); (3) Gruppa’s testimony deposition with exhibits of Nataliya Rybina (Rybina), Gruppa’s former employee; (4) Odessky’s Notices of Reliance on (i) two Certificates of Label Approvals (COLAs) for labels incorporating Gruppa’s SHUSTOV and bell design mark for some of these documents on the merits, in addition to providing Opposition No. 91161570; Cancellation No. 92047126 12 vodka, (ii) Gruppa’s response to Interrogatory No. 6(a), (iii) third-party registrations, (iv) printouts from the Alcohol and Tobacco Tax and Trade Bureau (TTB) website and the USPTO Identification of Goods and Services Manual, and (v) dictionary definitions. PETITION TO CANCEL Inasmuch as the opposition relies on Gruppa’s registration for priority, we first consider Odessky’s petition to cancel that registration. STANDING Odessky has established its standing based on Gruppa’s opposition to Odessky’s application, wherein Gruppa relies first on its application and subsequently on its issued registration at issue in this proceeding. Finanz St. Honore B. V. v. Johnson & Johnson, 85 USPQ2d 1478, 1479 (TTAB 2007). In addition, by its answer Gruppa “admits that [Gruppa] has opposed Application No. 78240612 for SHUSTOFF.” Answer to Pet. ¶32. FRAUD On April 15, 2008, the Board clarified that Odessky’s petition to cancel “will go forward on the fraud claim only.”9 Board Order, p. 9. “Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material its own translations of certain terms. Opposition No. 91161570; Cancellation No. 92047126 13 representations of fact in connection with his application.” In re Bose Corp., 91 USPQ2d 1938, 1939 (Fed. Cir. 2009), quoting, Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48, 1 USPQ2d 1483, 1484 (Fed. Cir. 1986). A party seeking cancellation of a trademark registration for fraudulent procurement bears a heavy burden of proof. W.D. Byron & Sons, Inc. v. Stein Bros. Mfg. Co., 377 F.2d 1001, 1004, 153 USPQ2d 49, 750 (CCPA 1967). Indeed, “the very nature of the charge of fraud requires that it be proven ‘to the hilt’ with clear and convincing evidence. There is no room for speculation, inference or surmise and, obviously, any doubt must be resolved against the charging party.” Smith Int’l, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981); see also Asian and Western Classics B.V. v. Selkow, 92 USPQ2d 1478 (TTAB 2009). There is “a material legal distinction between a ‘false’ representation and a ‘fraudulent’ one, the latter involving an intent to deceive, whereas the former may be occasioned by a misunderstanding, an inadvertence, a mere negligent omission, or the like.” In re Bose Corp., 91 USPQ2d at 1940, quoting, Kemin Indus., Inc. v. Watkins Prods., Inc., 192 USPQ 327, 329 (TTAB 1976). In other words, deception must be willful to constitute fraud. In re Bose Corp., 91 USPQ2d at 1940. Thus, a trademark 9 We address Odessky’s motion to add an abandonment claim infra. Opposition No. 91161570; Cancellation No. 92047126 14 registration is obtained fraudulently only if the applicant knowingly makes a false, material representation with the intent to deceive the USPTO. In re Bose Corp., 91 UPSQ2d at 1941. In this regard, the Federal Circuit stated the following: Subjective intent to deceive, however difficult it may be to prove, is an indispensable element in the analysis. Of course, “because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. But such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement.” ... When drawing an inference of intent, “the involved conduct, viewed in light of all the evidence ... must indicate sufficient culpability to require a finding of intent to deceive.” In re Bose Corp., 91 USPQ2d at 1941 (citations omitted). It must be determined whether an applicant’s false statements “represent ‘a conscious effort to obtain for his business a registration to which he knew it was not entitled.’” In re Bose Corp., 91 USPQ2d at 1942, quoting Metro Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336, 41 USPQ2d 1369, 1373 (Fed. Cir. 1997). Unless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim. In re Bose Corp., 91 USPQ2d at 1942. Odessky specifically pleads that Gruppa “when it filed its application for SHUSTOV only had the intention to use Opposition No. 91161570; Cancellation No. 92047126 15 the mark SHUSTOV on vodka.” Pet. ¶21. Further, Gruppa’s statement that it intended to use the SHUSTOV mark on the other recited goods “was a willful false statement and a material misstatement of fact.” ¶23. In addition, “when it amended [the identification of goods in] its application for SHUSTOV, [Gruppa] only had the intention to use the mark SHUSTOV on vodka [and such amendment] was a willful false statement and a material misstatement of fact.” ¶¶25, 27. Odessky also alleged that Gruppa’s “affirmative actions show that [Gruppa] has and had an intention to use the mark SHUSTOV only on vodka.” ¶30. Odessky alleges that the subject registration “would not have issued for distilled rice spirits, aperitif wines, alcoholic honey drink, peppermint schnapps; alcoholic fruit-based beverages; sake; gin; rum; liqueurs; whisky; or brandy had [Gruppa] not fraudulently claimed that it intended to use the mark SHUSTOV on said goods.” ¶31. Odessky argues that, based on the evidence of record, Gruppa has never manufactured or sold distilled rice spirits, peppermint schnapps, sake, gin and rum anywhere in the world, it is questionable if they manufacture or sell wine, and they sell whisky under a different mark. According to Odessky, Gruppa’s response to Interrogatory No. 6(a) that it adopted the SHUSTOV mark “to serve as a brand name for its vodka in the United States” establishes that Opposition No. 91161570; Cancellation No. 92047126 16 Gruppa did not have a bona fide intent to use the mark for the remaining goods. Further, Odessky contends that Gruppa’s asserted ability to manufacture a wide range of alcoholic products supports a finding of fraud in that a “sophisticated and knowledgeable producer of a well-defined line of non-alcoholic and alcoholic beverages ... did not mistakenly list goods on which it had no use or intent to use – rather it did so deliberately and deceptively in order to acquire a placeholder for the most expansive trademark rights it felt it could get.” Od. Br. p. 19. Essentially, Odessky argues that because the record does not contain documents evidencing plans to market each of the listed goods in the United States and that Gruppa has not manufactured certain of the goods for sale anywhere in the world (e.g., sake, rum and gin), this supports a finding of deceptive intent. Gruppa argues that “based on the evidence of record, a reasonable factfinder could only find that [Gruppa] did have such bona fide intent [and] ... even were such intent absent, which it is not, [Odessky] has [not] established anything close to the Bose subjective standard.” Gr. Reply Br. p. 16. In particular, Gruppa argues that its ability to produce and market all of the listed goods supports its intent to use the mark. With regard to its response to Interrogatory No. 6(a), Gruppa asserts that “one poorly Opposition No. 91161570; Cancellation No. 92047126 17 worded response does not suffice to contradict all the other testimony and evidence of record.” Gr. Reply Br. p. 20. We begin by determining if the statement of bona fide intention to use the mark on each of the goods except vodka at the time Gruppa filed its application and subsequent amendment was false. Although Gruppa’s application was based on Section 44 of the Act, a bona fide intention to use the mark on the identified goods is a requirement for such an application, Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575, 14 USPQ2d 1390, 1392 n. 3 (Fed. Cir. 1990), In re Unisearch Ltd., 21 USPQ2d 1559 (Comm’r Pats. 1991), and therefore Section 1(b), the intent-to-use basis for an application, and the case law interpreting that provision, is instructive. Section 1(b) provides that “[a] person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may request registration of its trademark on the principal register...” Trademark Act Section 1(b)(1), 15 U.S.C. §1051(b)(1). A bona fide intent is “a good faith intention to eventually use the mark in a real and legitimate commercial sense.” Lane Ltd. v. Jackson International Trading Co., 33 USPQ2d 1351, 1355 (TTAB 1994), quoting, H. Rep. No. 100-1028, 11th Cong.2d Sess. (1988). The Board has held that “...the determination of whether an applicant has a bona fide intention to use the Opposition No. 91161570; Cancellation No. 92047126 18 mark in commerce is to be a fair, objective determination based on all the circumstances.” Lane, 33 USPQ2d at 1355. The Board also has stated that the requirement that an applicant must have a bona fide intent to use the mark in commerce “must be read in conjunction with the revised definition of ‘use in commerce’ in Section 45 of the Trademark Act, which the Trademark Law Revision Act of 1988 amended to require that such use be ‘in the ordinary course of trade, and not made merely to reserve a right in a mark.’” Commodore Electronics Ltd. v. CBM Kabushiki Kaisha, 26 USPQ2d 1503, 1507 (TTAB 1993). An “applicant’s mere statement of subjective intention, without more, would be insufficient to establish applicant’s bona fide intention to use the mark in commerce.” Lane, 33 USPQ2d at 1355. The absence of any documentary evidence on the part of an applicant regarding such intent constitutes objective proof sufficient to establish that the applicant lacks a bona fide intention to use its mark in commerce. See Spirits International N.V. v. S.S. Taris Zeytin Ve Zeytinyagi Tarim Satis Kooperatifleri Birligi, 99 USPQ2d 1545 (TTAB 2011); Boston Red Sox Baseball Club LP v. Sherman, 88 USPQ2d 1581, 1587 (TTAB 2008). As noted above, Odessky contends that Gruppa “has failed to produce a single document evidencing its claimed intention to use the SHUSTOV mark in the United States” on any goods, other than vodka. Opposition No. 91161570; Cancellation No. 92047126 19 Br. pp. 19-20. Odessky’s analysis of Gruppa’s evidence is that it shows an absence of documentary evidence of Gruppa’s intent to use the mark on goods other than vodka. Odessky further relies on Gruppa’s response to Interrogatory No. 6(a) and Gruppa’s COLA’s for only vodka to support its position. Much of Gruppa’s evidence is in the testimony of Nataliya Rybina and the accompanying exhibits. In 1999 or 2000, Ms. Rybina worked for a law firm and Gruppa was a client. In 2004, she went to work for Gruppa as head of its Department of Intellectual Property until 2008. Rybina Test. pp. 10-11, 104. Gruppa started producing alcoholic beverages in Russia in 1995 and started producing alcoholic beverages for sale in Russia under the SHUSTOV mark in Cyrillic lettering in early 2000. Id. p. 13. Gruppa has a large capacity for output, approximately 7 million decaliters of alcohol per year. Id. at 14. Gruppa is the third largest manufacturer of alcoholic beverages in Russia, Id. pp. 14, 96, and its Cyrillic version of the SHUSTOV mark is sold in Russia in connection with a variety of alcoholic beverages. Id. pp. 15-17. The brand is “well known” in Russia. Id. p. 15. In Russia, Gruppa sells vodka, brandy, liqueurs, bitters, Opposition No. 91161570; Cancellation No. 92047126 20 balsam,10 and low-alcohol content mixed drinks. Id. p. 22. Gruppa exports vodka, cognac, liqueurs, sweet alcoholic drinks and balsam. Id. p. 34. Gruppa has attempted to manufacture rice distilled spirits and sake. Id. p. 76-77, 79. Gruppa worked with a Japanese company to develop capacity to make distilled rice spirits. Id. p. 126. Under the SHUSTOV mark Gruppa manufactures bitters, alcoholic honey drink, aperitifs, liqueurs, drinks with rum or gin, vodka and brandy. Gruppa manufactures whisky under a different mark. Id. pp. 79-81. Gruppa produces concentrate-based wine. Id. p. 36-37, 88-89. Gruppa manufactures a peppermint flavored low-alcoholic drink. Id. p. 138. Ms. Rybina testified that Gruppa intended to use the mark on all of the goods listed in the registration. Id. p. 81, 84-85. Specifically, she testified that “At the time [Gruppa filed its application it] had an extensive experience in producing a variety of alcoholic beverages, and it was believed that this experience will be used for marketing Shustov brand ... there was an understanding that all the products of the company could be used for exports.” Id. pp. 90-91. As part of her regular duties beginning in 2004 she attended many weekly meetings concerning exports, 10 Balsam is an alcoholic drink that incorporates honey. Rybina Test. p. 32. Opposition No. 91161570; Cancellation No. 92047126 21 including exports to the United States. Id. pp. 92, 189- 190. Certain efforts have been made to market their goods in the United States, for example, attempts to develop appropriate bottle sizes for the U.S. market. Id. p. 92. Gruppa has developed bottles and packaging for alcoholic products for sale internationally. Id. pp. 43-48, Exh. 6, Bates Nos. 30-33 (“In Russia Shustov vodka is bottled in .5- liter bottles. The distributors asked us to bottle it into 1-liter bottles for the United States, which is actually quite difficult.” Id. p. 93). Gruppa sought distributors for its SHUSTOV brand in the United States. Id. p. 140, see also Od. NOR, Gruppa’s COLAs filed by its distributor in 2005 and 2006 for vodka. In 2004, they found a distributor in the United States to sell SHUSTOV branded products. Id. p. 140. Gruppa has an existing distribution network for U.S. sales of alcoholic products under its other brand JEWEL OF RUSSIA. Od. NOR, Rybina Test. p. 140. Gruppa has created English language versions of its SHUSTOV labels for vodka and balsam. Rybina Test. pp. 46-49, Exh. No. 6, Bates nos. 31-33. Gruppa has used the SHUSTOV mark in its English or Cyrillic version in Russia and Germany on many of the listed goods. Id. pp. 42-44, 76-80. As to sales in the United States, Ms. Rybina testified that it was “possible that there were some trials but not full-scale sales” in 2007, but she did not “know for sure whether [there were Opposition No. 91161570; Cancellation No. 92047126 22 sales] in the United States.” Id. p. 109. According to Ms. Rybina, Gruppa has not marketed in the United States yet because it is expensive and distributors will not deal with them until they resolve the trademark dispute and they have to accommodate new bottles. Id. pp. 97-98. As to these referenced facts we find Ms. Rybina’s testimony to be competent. During her time as outside counsel, from 2000-2003, she filed the Russian application upon which the subject Section 44 registration is based. Id. p. 122. From 2004 until, at least, 2008 she has been involved in Gruppa’s trademark matters. Odessky points to her testimony that she was not directly involved in marketing to the United States; however, as head of the Department of Intellectual Property we find her competent to testify about Gruppa’s activities and intentions with regard to its SHUSTOV mark. Further she testified that she received regular reports from the export department relating to use abroad. Id. p. 35. As revealed on cross examination, she testified that her responsibilities regarding the SHUSTOV mark were “Filing an application, correspondence with foreign attorneys related to acquiring rights on the territories of those countries.” Id. p. 144. While the documentary evidence does not include specific written marketing plans for use of the mark on each of the individual alcoholic beverages, there is documentary Opposition No. 91161570; Cancellation No. 92047126 23 evidence that sufficiently supports and corroborates Ms. Rybina’s testimony as to Gruppa’s intent to use the SHUSTOV mark as to all of the listed goods. The documentary evidence here consists primarily of documents showing Gruppa’s use of the SHUSTOV mark (and its Cyrillic form) in Russia and Germany.11 While the COLA’s filed in 2005 and 2006 support an intention to use the mark on vodka in the United States, the intention to use the mark on vodka is not in issue with respect to the fraud claim. However, when viewed in the context of the Rybina testimony regarding the breadth of product offerings in Russia and the scaled approach to introducing products we do not, as Odessky would have us do, draw an adverse inference from the COLA’s. COLA’s only for vodka do not support an inference of no bona fide intent to use the mark in commerce for the other goods listed in the identification. See, e.g., Rybina Test. p. 22 (“Q. And when they first started using the Shustov brand for alcoholic beverages, did they produce a wide variety of alcoholic beverages at that time? A. Not immediately. It gained momentum as time went by. But the experience of 11 As noted in the Board order of November 28, 2011, Gruppa’s Section 8 affidavit filed in Registration No. 2885912 is of record, however, the evidentiary value of this matter has limitations and our determination does not rely on it. Trademark Rule 2.122(b)(2). Opposition No. 91161570; Cancellation No. 92047126 24 producing such beverages was held by the company even before Shustov.”) The evidence submitted establishes that Gruppa is capable of manufacturing and exporting all of the listed goods and already manufactures and to a limited extent exports many of them under the SHUSTOV mark (in Cyrillic and English lettering) in Russia, Germany and other countries. In addition, Gruppa exports alcoholic products to the United States under other marks, e.g., JEWEL OF RUSSIA. Moreover, the COLA’s from 2005 and 2006 show efforts by Gruppa to market its alcoholic beverages in the United States beginning with vodka. Based on their scaled approach to rolling out SHUSTOV branded products in Russia, where the variety of products “gained momentum as time went by,” we may infer Gruppa intended a similar approach as to its export market. This case is quite different from the facts presented in Honda Motor Co. v. Winkelmann, 90 USPQ2d 1660, 1664 (TTAB 2009), where the individual applicant sought to register the mark V.I.C. for “vehicles for transport” but provided no evidence to demonstrate “that he manufactures vehicles in Germany or elsewhere.” By contrast, the facts here are more similar to those in Lane, 33 USPQ2d 1351, where the evidence that the applicant “was engaged in the tobacco marketing business” supported a bona fide intention to use the mark in Opposition No. 91161570; Cancellation No. 92047126 25 commerce. This is not to say that “capability” alone is necessarily sufficient; however, the existence of a successful ongoing concern coupled with testimony and documentary evidence regarding its efforts to export under the subject mark and success in exporting other brands to the United States under its other marks combine to create a totality of circumstances that support a bona fide intention to use. In short, the evidence points to “a good faith intention to eventually use the mark in a real and legitimate commercial sense” as to all of the goods listed in the identification and does not reveal that the application was made “merely to reserve a right in a mark.” Lane, 33 USPQ2d at 1355; Commodore, 26 USPQ2d at 1507. Odessky has the initial burden of demonstrating by a preponderance of the evidence that Gruppa lacked, on the filing date of the application and subsequent amendment to the identification of goods, a bona fide intent to use the mark on the identified goods. Spirits, 99 USPQ2d 1545. As discussed above, we find that the record contains documentary evidence indicating Gruppa’s bona fide intention to use the mark in connection with the subject goods. To the extent Odessky has satisfied its initial burden of proving that Gruppa did not and does not have a bona fide intention to use its applied-for mark on or in connection with certain alcoholic beverages due to an absence of more Opposition No. 91161570; Cancellation No. 92047126 26 specific marketing plans, such that the burden shifts to Gruppa to come forward with evidence which would adequately explain or outweigh the failure to provide such documentary evidence, the Rybina testimony and accompanying exhibits satisfy this burden. Based on the evidence of record we find that Gruppa had a bona fide intent to use the mark on each of the alcoholic beverages at the time it filed its application and amendment to the identification of goods, and, as such the statement as to its intent was not false. Further, assuming arguendo that the statement was false, i.e., Gruppa did not have a bona fide intention to use the SHUSTOV mark on the listed alcoholic beverages, other than vodka, Odessky has not met its burden of proof to establish that such false statement was done with an intent to deceive. As to the intent element, there is no direct evidence of intent and this record does not support an inference of willful intent. ABANDONMENT On February 16, 2010, during its extended rebuttal trial period, Odessky moved to add the claim of abandonment and a decision on this amendment was deferred for final disposition. We must decide two questions: whether Odessky delayed too long to assert this claim, and whether the claim of abandonment was tried by consent. Opposition No. 91161570; Cancellation No. 92047126 27 Turning first to the question of delay, by way of background, Gruppa opposed Odessky’s application on July 28, 2004, asserting ownership of application Serial No. 76519958. Thereafter, on September 21, 2004, Gruppa’s asserted application issued into Registration No. 2885912. Odessky petitioned to cancel this registration on February 22, 2007 on the ground of fraud. The Board, in an order dated April 15, 2008, found that Odessky’s petition to cancel was not subject to the compulsory counterclaim rule under Trademark Rule 106(b)(2) because, although the underlying application was pleaded in the opposition, Gruppa, at that time, had not amended the opposition to assert the newly issued registration. On December 18, 2008, the Board granted Gruppa’s motion to amend its notice of opposition to assert its issued Registration No. 2885912. On February 12, 2009, Odessky filed an answer to the amended complaint. Thus, as of December 18, 2008, any claim against Gruppa’s asserted registration falls within the compulsory counterclaim rule. Trademark Rule 2.106(b)(2)(i) provides as follows: A defense attacking the validity of any one or more of the registrations pleaded in the opposition shall be a compulsory counterclaim if grounds for such counterclaim exist at the time when the answer is filed. If grounds for a counterclaim are known to the applicant when the answer to the opposition is filed, the counterclaim shall be pleaded with or as part of the answer. If grounds for a counterclaim are learned during the course of the opposition Opposition No. 91161570; Cancellation No. 92047126 28 proceeding, the counterclaim shall be pleaded promptly after the grounds therefor are learned. A counterclaim need not be filed if it is the subject of another proceeding between the same parties or anyone in privity therewith. Odessky argues that Gruppa’s testimonial deposition taken on October 29, 2009 of Natalia Rybina revealed “entirely new evidence” that Gruppa “has not only not used the registered trademark SHUSTOV in connection with any of the goods specified in the cancellation, but appears not to have used the SHUSTOV mark on vodka for a substantial period of time, and in fact may well have discontinued use of the SHUSTOV mark in the United States for a period of 3 years or more, after having made only limited test marketing sales.” Od. Mot. p. 2 (February 16, 2010). Thus, Odessky’s position is that its motion to amend is timely because it was made sufficiently soon after learning of new facts through Ms. Rybina’s deposition. Odessky never acknowledged actual use of the mark by Gruppa on vodka, only a bona fide intent to use. Under Imperial Tobacco, 14 USPQ2d 1390, three years of nonuse subsequent to the issuance of Gruppa’s Section 44-based registration on September 21, 2004 would have constituted a prima facie showing of abandonment, i.e., a showing of nonuse from the registration date until September 21, 2007. In fact, apparently Odessky itself had investigated Gruppa’s use of SHUSTOV on vodka in April, 2009. In an untimely Opposition No. 91161570; Cancellation No. 92047126 29 motion for summary judgment filed on April 3, 2009, Odessky states “[Gruppa] has failed to make of record any evidence that it is using [SHUSTOV] on any goods. In an online search on the Internet database, [Odessky] found no use of [the SHUSTOV] mark by [GRUPPA] on any goods ... [and Gruppa] ... did not put in any evidence of actual use of the registered trademark on any goods.” Id. pp. 7, 10 fn. 2. Given Odessky’s statements in its April 3, 2009 motion, it is simply not plausible that the Rybina testimony in October 2009 presented “entirely new evidence” as to Gruppa’s use of the mark on vodka. Based on these statements, it appears that Odessky had sufficient knowledge to plead an abandonment claim at least as early as April 3, 2009. Even assuming that Odessky did not have sufficient information to bring the abandonment claim on that date, and the information gleaned from the Rybina testimony was “newly discovered” evidence, the Rybina testimony was taken on October 29, 2009, and over three months elapsed before Odessky filed its motion to add the abandonment ground. Odessky’s argument that the testimony transcript “was not certified until November 30, 2009” and “after reviewing the contents” of the deposition it promptly filed its motion to amend, on February 16, 2010, is not persuasive. Odessky was present at the October 29, 2009 deposition and was aware of the “newly discovered” evidence Opposition No. 91161570; Cancellation No. 92047126 30 at that time. Further, even if we were to accept that Odessky was not aware of the contents of the testimony deposition until November 30, 2009 (and we do not accept this), Odessky still waited over two months from receiving the transcript to file its motion. In short, under the circumstances of this case, Odessky did not promptly file its motion to amend to add a compulsory counterclaim. Further, we find that the issue of abandonment was not tried by implied consent under Fed. R. Civ. P. 15(b). Implied consent to the trial of an unpleaded issue can be found only where the nonoffering party (1) raised no objection to the introduction of evidence on the issue, and (2) was fairly apprised that the evidence was being offered in support of the issue. There must be no doubt that the non-moving party was aware that the issue was being tried. TBMP §507.03(b) (3d ed. 2011) and cases cited therein. First, Odessky argues that “the issue of whether [Gruppa] had a bona fide intent to use is intimately related to the issue of use in commerce ... [and Gruppa] was well aware that any evidence it adduced at trial which would demonstrate its intention to use the SHUSTOV mark in commerce, or explaining its non-use, would also have direct bearing on the issue of ‘use’ in commerce ... [thus, Gruppa] cannot claim it was ‘surprised’ by [Odessky’s] reliance on [Gruppa’s] own testimony to prove that not only did [Gruppa] Opposition No. 91161570; Cancellation No. 92047126 31 lack the requisite bona fide intention to use the SHUSTOV mark in commerce, but its failure to make such use constituted statutory abandonment of the SHUSTOV mark.” Od. Br. pp. 28-29. Odessky asserts that the “entwinement of the issues of intent, use and abandonment put [Gruppa] on fair notice that such a pleading could be introduced if no evidence of use of the mark on any product was made of record.” Id. In response, Gruppa argues that “the abandonment claim is not based on the same transactional facts as those implicated by the fraud claim. First, the abandonment claim relates to all the goods listed in the application. Gruppa’s intentions towards vodka, however, were never previously in dispute. Second, the fraud claim related only to Opposer’s intentions at the time the application was filed in May 2003. The transactional facts relating to abandonment all necessarily follow after the registration issued.” Gr. Br. pp. 30-31. In support of its position, Odessky relies on Paramount Pictures Corp. v. White, 31 USPQ2d 1768 (TTAB 1994). That case involved a motion for summary judgment where the defendant did not object to opposer’s motion for summary judgment as being based, in part, on an unpleaded issue, but rather treated the issue on its merits. Id. at 1772. Further, in that case, the notice of opposition included Opposition No. 91161570; Cancellation No. 92047126 32 allegations that the applicant had not made bona fide commercial use of his mark in commerce and the Board stated that such allegations could be “construed to comprehend” the “no use on goods in trade” ground. Id. Clearly, in this case, the allegations of no bona fide intent to use the mark on certain of the goods in the registration, and explicit allegations that Gruppa had a bona fide intent to use the mark on vodka, cannot be “construed to comprehend” a claim of abandonment as to all of the goods, regardless of whether evidence of use would serve to defend against a claim of no bona fide intent to use. Next, Odessky contends that Gruppa “opened the door” to such a claim when Gruppa, on direct examination, posed the question “Why has [Gruppa] not yet commenced full production and export of the [SHUSTOV] products into the United States?” Odessky continues by asserting that Gruppa’s consent to trial on this claim is further supported by Gruppa’s failure to object to Odessky’s questions on this issue on cross examination. Id. Based on the circumstances of this case, we find that the claim of abandonment was not tried by implied consent. The evidence allegedly bearing on the issue of abandonment could be interpreted as going to the issue of bone fide intent to use in the fraud claim. “Under such circumstances, we cannot say that applicant was fairly Opposition No. 91161570; Cancellation No. 92047126 33 apprised that the evidence was being introduced in support of the unpleaded” abandonment claim. Micro Motion Inc. v. Danfoss A/S, 49 USPQ2d 1628, 1629 (TTAB 1998). In view thereof, Odessky’s motion to amend the pleading to assert a claim of abandonment is denied. We add that this record does not support a claim of abandonment and amendment to add such a claim would, in any event, be futile. Sunnen Products Co. v. Sunex International Inc., 1 USPQ2d 1744, 1746 (TTAB 1987) (motion filed after close of trial to amend to add defense under Fed. R. Civ. 15(b) denied inasmuch as evidence in record does not support defense). Any nonuse of Gruppa’s mark pending the outcome of litigation to determine the right to such use constitutes excusable nonuse sufficient to overcome any inference of abandonment. Penthouse International, Ltd. v. Dyn Electronics, Inc., 196 USPQ 251 (TTAB 1977). In view of the defenses asserted in its January 11, 2005 answer to Gruppa’s July 28, 2004 notice of opposition, challenging Gruppa’s trademark rights in the SHUSTOV mark, the subsequent petition to cancel, filed on February 22, 2007, and the resulting cloud of uncertainty as to whether Gruppa’s rights in the mark would survive the proceedings, Gruppa was justified in postponing its use of the mark pending the outcome of these proceedings. Opposition No. 91161570; Cancellation No. 92047126 34 In view of the above, the petition to cancel is dismissed. NOTICE OF OPPOSITION/LIKELIHOOD OF CONFUSION In view of our decision dismissing the petition to cancel Gruppa’s registration, we proceed to consider Gruppa’s opposition against Odessky’s application Serial No. 78240612 for the mark SHUSTOFF for “alcoholic beverages except beers, namely aperitifs with a distilled alcoholic liquor base; distilled liquors; distilled spirits; wines; whisky; vodka; gin; prepared alcoholic cocktails; liqueurs; distilled beverages; bitters, namely schnapps and liqueurs; rum; liqueurs and spirits in the nature of digestives; spirituous alcoholic extracts.” Odessky has not presented argument against the merits of the opposition other than to simply state that if the Board cancelled Gruppa’s registration the opposition would be moot because Gruppa relies solely on the registration to establish priority. Standing/Priority Because Gruppa has made its registration of record and has shown that the registration is valid and subsisting and owned by Gruppa, Gruppa has established its standing to oppose Odessky’s application for the mark SHUSTOFF and priority is not in issue. See Cunningham v. Laser Golf Opposition No. 91161570; Cancellation No. 92047126 35 Corp., 222 F.3d 943, 55 USPQ2d 1842 (Fed. Cir. 2000); King Candy Co., Inc. v. Eunice King’s Kitchen, Inc., 496 F.2d 1400, 182 USPQ 108 (CCPA 1974). Likelihood of Confusion Our likelihood of confusion determination under Section 2(d) is based on an analysis of all of the probative facts in evidence that are relevant to the factors set forth in In re E. I. du Pont de Nemours and Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973). See also, In re Majestic Distilling Co., Inc., 315 F.3d 1311, 65 USPQ2d 1201 (Fed. Cir. 2003). Odessky has essentially conceded that there is a likelihood of confusion between the parties’ marks as used on their respective goods. We also find that the record supports such a conclusion. As to the factor of the relatedness of the goods, many of the goods listed in Odessky’s application are identical to those listed in Gruppa’s registration, including distilled spirits, bitters and vodka. In view thereof, we find the goods to be identical in part. Tuxedo Monopoly, Inc. v. General Mills Fun Group, 648 F.2d 1335, 209 USPQ 986 (CCPA 1981) (it is sufficient for a determination of likelihood of confusion if the relatedness is established for any item encompassed by the identification of goods in the application). Further, inasmuch as the identifications of goods are identical in Opposition No. 91161570; Cancellation No. 92047126 36 part, we must presume, for purposes of the likelihood of confusion analysis, that the trade channels and classes of purchasers are identical. Hewlett-Packard Co. v. Packard Press Inc., 281 F.3d 1261, 62 USPQ2d 1001 (Fed. Cir. 2002). We turn next to consider the marks. At the outset of this consideration, it is noted that “when marks would appear on virtually identical goods or services, the degree of similarity necessary to support a conclusion of likely confusion declines.” Century 21 Real Estate Corp. v. Century Life of America, 970 F.2d 874, 32 USPQ2d 1698 (Fed. Cir. 1992). We find the most prominent element of Gruppa’s mark is the word SHUSTOV. The bell design is subordinate, placed behind the wording, and, generally, wording dominates over a design element inasmuch as potential consumers use the word to call for the goods. In re Appetito Provisions Co. Inc., 3 USPQ2d 1553, 1554 (TTAB 1987). We also find that Odessky’s mark SHUSTOFF is similar in sound and appearance to SHUSTOV, the dominant element in Gruppa’s mark. Based on the evidence of record we find that the marks are highly similar in sound, appearance, connotation and overall commercial impression. In view of the above, we conclude that because the marks are similar, the goods identical and there is a presumed overlap in the channels of trade and classes of purchasers, there is a likelihood of confusion. In view Opposition No. 91161570; Cancellation No. 92047126 37 thereof, and because Gruppa’s priority is not in issue, Gruppa has proven its claim under Section 2(d) of the Trademark Act. Decision: The petition to cancel is dismissed and the opposition is sustained and registration to Odessky is refused.

ZAO Gruppa Predpriyatij OST v. ZAO Odessky Konjatschnyi Zawod ZAO Odessky Konjatschnyi Zawod v. ZAO Gruppa Predpriyatij OST