IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`TTAB
`
`Anvil Knitwear, Inc.,
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`Opposer,
`
`V.
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`Success Ware Inc.,
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`Applicant.
`
`Consolidated: Opposition No. 91 155386
`Opposition No. 91159232
`
`:
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`APPLICANT’S RESPONSE IN OPPOSITION TO OPPOSER’S OPPOSITION TO
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`APPLICANT’S MOTION FOR RECONSIDERATION OF THE BOARD’S JULY 25,
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`2008 DECISION AND ORDER AND OPPOSE OPPOSER’S REQUEST FOR OTHER
`RELIEF
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`Applicant, hereby responds and objects to Opposer’s (Anvil Knitwear, Inc.’s) response in
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`opposition to Applicant’s motion for reconsideration and objects to Opposer’s request for other
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`relief. Applicant will set forth below why Applicant’s Reconsideration on Motion should be
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`granted.
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`1.
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`APPLICANT HAD PROVIDED A BASIS FOR THE RECONSIDERATION AND
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`HAD NOT RAISED A NEW ISSUE
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`In the Board’s decision of July 25, 2008, the Board acknowledged that no genuine issue
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`of material of fact exists regarding the first two factors (the present proceeding involves the same
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`parties as were in the prior litigation before the Board, and that there has been a final judgment
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`on the merits of the claims), however, the third factor (the second claim based on the same set of
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`transactional facts as the first) remains an issue with respect to the purpose of establishing claim
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`1
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`llllllllllllllllllllllllllllllllllllllllllllllllll
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`U9-23-2008
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`preclusion.
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`In this action, there is no dispute between the parties and the Board regarding the
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`first two factors (1) and (2):
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`the parties (Success Ware Inc. and Anvil Knitwear, Inc.) are
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`identical in both actions before the Board and the litigation resulted in a valid final judgment on
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`the merit. Thus, the case reduces to an analysis of the transactional facts involved in the two
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`causes of action. Courts have defined transaction in terms of “core of operative facts,” or the
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`“same operative facts or the same nucleus of operative facts,” and based upon the same, or nearly
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`the same factual allegations. Jet Inc. v. Sewage Aeration Systems, 223 F.3d 1360, 55 USPQ.2d
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`1854, 1856 (Fed. Cir. 2000) Claim is deemed to have “identity” with previously litigated matter,
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`for purposes of claim preclusion, if it is based on same, or nearly same, factual allegations
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`arising from same transaction or occurrence. See Restatement (Second) of Judgments §24.
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`Krarville v. Ryan, 90 F.3d 195 (7th Cir.1996) Applicant asserts, this instant action and claims are
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`based upon the same transactional facts as the prior trademark action taken before the Board
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`(Consolidated Proceeding: Opposition No. 782,711 and Cancellation No. 30,393) and the latest
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`action before District Court, the Central District of California. Applicant, therefore, did not
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`raise a new argument but substantiated through record and Opposer’s own words that the same
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`transactional facts exist with this instant action and prior Board proceeding (Consolidated
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`Proceeding: Opposition No. 782,711 and Cancellation No. 30,393).
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`With regards to the records and prior proceeding before the Board, Applicant can
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`substantiate and had substantiated that this instant action involves the same or nearly the same
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`transactional facts. As noted above Courts have defined transaction in terms of “core of
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`operative facts,” or the “same operative facts or the same nucleus of operative facts,” and based
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`upon the same, or nearly the same factual allegations. Opposer has stated and presented before
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`the Board that this instant action and the prior Board proceeding presents the same nucleus of
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`2
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`operative facts and is based upon the same, or nearly the same factual allegations, as noted in
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`Opposer’s Motion to Admit Testimony From A Prior Proceeding dated August 22, 2008.
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`In
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`Opposer’s motion Opposer states the following:
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`“As explained below, the trial testimony and, exhibits thereto, form the prior
`proceeding sought
`to be admitted are relevant and material
`to this consolidated
`opposition, because the parties in both proceedings are the same, the marks of Applicant
`Success Ware Inc. (“Success Ware”) at issue in this matter are highly similar to those of
`the prior proceeding, and he grounds for opposition are the same as Opposer is relying on
`the same marks in support of its claims. Focus 21 Int ‘I Inc. v. Pola Kasei Kogyo
`Kabushiki Kaisha, 2 U.S.P.Q.2d 1316 (T.T.A.B. 1992)
`(granting motion to admit
`testimony and exhibits fonn prior proceeding where the parties are identical, the marks
`are highly similar and the ground for opposition are the same).” (Opposer’s Motion at pg.
`1 and 2)
`.
`.
`. Furthermore the grounds for Anvil’s opposition to the marks at issue in this
`proceeding are the same as the Prior Proceeding. In both proceedings, Anvil asserts that it
`is owner of U.S. trademark registrations for Anvil mark and design for clothing including
`t-shirts; that it has priority use of its Anvil marks which are strong and represent valuable
`goodwill; and that Success Ware’s marks consisting of the anvil design are highly similar
`as to be likely to cause confusion, mistake or deception.” (Opposer’s Motion at pg. 4)
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`Therefore, Opposer has admitted this instant action as being based upon the same nucleus of
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`operative facts,” and based upon the same, or nearly the same factual allegations of the Prior
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`Proceeding before the Board. Opposer further admits the mark in this proceeding evokes the
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`same commercial impression as the marks involved in the prior proceeding. Through Opposer’s
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`own words, Applicant has also shown that this instant action has “identity” with the previous
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`litigated matter since it emerged from the same core of operative facts as the prior proceeding
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`before the Board. A claim has “identity” with a previously litigated matter if it emerges from the
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`same “core of operative facts” as that earlier action. Colonial Penn Lz'fe Ins. Co. v. Hallmark Ins.
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`Admin. Inc., 31 F.3d 445,447 (7‘h Cir. 1994) Notwithstanding,
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`two claims are one for the
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`purposes of res judicata if they are based on the same, or nearly the same, factual allegations.
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`Brzostowski v. Laidlaw Waste Systems, Inc., 49 F.3d 337 (7‘h Cir. 1995) Therefore, Applicant
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`believes to have met the requirements of res judicata: (1) there has been a judgment on the merits
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`3
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`in an earlier action; (2) identity of the parties or privies are identical; and (3) the second claim is
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`based on the same set of transactional facts as the first. Parklane Hosiery Co. v. Shore, 439 U.S.
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`322, 326 n.5, 99 S.Ct. 465 (1979) Jet Inc. v. Sewage Aeration Systems, 223 F.3d 1360, 55
`
`USPQ.2d 1854, 1856 (Fed. Cir. 2000) Once these elements are satisfied, claim preclusion “bars
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`not only those issues which were actually decided in a prior suit, but also all issues which could
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`have been raised in that action.” Brzostowski v. Laidlaw Waste Systems, Inc., 49 F.3d 337,338
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`(7‘}‘ Cir. 1995) Therefore, this instant action should be barred. Moreover, there exist no genuine
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`issues of material of fact with respect to this proceeding before the Board as substantiated by
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`Opposer Anvil Knitwear, Inc. willingness to substitute the testimony and exhibits of the Prior
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`Proceeding before the Board without any further testimony as noted in Opposer’s same
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`document submitted before the Board dated August 22, 2008. When no genuine issues of
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`material of fact exist, summary judgment must be granted. Celotex Corp. v. Catrett, 477 U.S.
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`317, 106 S.Ct. 2584 (1986)
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`With respect to this instant action, prior proceeding before the Board, and the prior
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`proceeding before District Court, the claims involving the anvil design were based upon the
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`same transactional facts. In the District Court action, the Plaintiffs (Paynes) brought a Copyright
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`Infringement Action, which involved the anvil design marks of Success Ware Inc. in the prior
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`consolidated proceeding before the Board and the anvil design mark in this instant action.
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`(S_e§
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`Applicant’s Reconsideration dated August 23, 2008 at Exhibit A, Amended Complaint at Exhibit
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`A-2) On March 19, 2007, Opposer answered to the amended complaint and filed a counterclaim
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`(trademark infringement action) which joined Success Ware Inc. (“Applicant”) as a counter-
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`defendant pursuant to Fed. R. Civ. P. l3(h) and 20(a).
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`In the counterclaim Opposer alleged the
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`counterclaims arise out of the same transaction and occurrences as the prior proceeding before
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`4
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`the Board (_S_ge_ Applicant’s Reconsideration dated August 23, 2008, pg. 4 and 5; also see lbid at
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`Exhibit B, Counterclaim at pg. 5 1[6) and joined the Appeal on the Decision of the prior
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`proceeding before the Board as Related.
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`(fig Applicant’s Reconsideration dated August 23,
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`2008 pg. 4 and see also Ibid at Exhibit E) However, the Court agree with Opposer regarding
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`the litigation of the anvil design marks of Success Ware Inc. before the Board and allowed
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`Opposer to move for summary judgment based upon the prior proceeding before the Board
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`without discovery.
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`(fie Applicant’s Reconsideration dated August 23, 2008, at pg. 6)
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`Furthermore,
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`in the same proceeding before the Court Opposer reiterated in an opposition
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`response to dropping Success Ware Inc. from the action, “. . .the claims against Success Ware and
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`the Paynes arise out of the “same transaction, occurrences, or series of transactions or
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`occurrences.” As such, joinder is proper under Rule 20(a).
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`( See attached Exhibit A, Defendant
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`and Counterclaimant Anvil Knitwear, Inc...Opp. To Mtn to Drop Counter-Defendant with
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`Declaration w/o Exhibits at pg. 6-7) The Court agreed with Anvil Knitwear, Inc. in the June 22,
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`2007 Order and denied the Paynes Motion to Drop Success Ware Inc.
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`(See attached Exhibit B,
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`District Court’s Order of June 22, 2007) and a final judgment has been entered on that Order.
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`(See attached Exhibit C, District Court Docket Sheet at Entry #56 and also E Applicant’s
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`Reconsideration dated August 23, 2008 at Exhibit D, Certified Copy of Final Judgment) Thus,
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`the transactional facts and issues between the anvil design marks of Success Ware Inc. involving
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`this instant action and the prior proceeding before the Board had been decided by District Court
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`prior to this Board making its Decision. Furthermore, since the District Court Decision is final,
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`valid, and on the merit preclusion exists. Preclusion can rest only on a judgment that is final,
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`valid, and on the merits. (Wright, Miller & Cooper pp. 132, 4435) Therefore, this Board should
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`accept the final judgment of District Court since the Court’s final judgment was based upon the
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`5
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`

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`same factual allegations regarding the anvil design marks of Success Ware Inc. in this instant
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`action and the prior proceeding before the Board, the full faith statute and clause should apply.
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`The Board as an Administrative Tribunal, which follows procedures similar to those employed
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`by the Courts may consider a State or Federal Courts Decision under the Full Faith and Credit
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`Statute and Clause. Astoria Fed. Sav. & Loan Ass ’n v. Solimino, 501 U.S. 104, 107, 111 S. Ct.
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`2166, 115 L. Ed. 2d 96 (1991) (See Discussion on Full Faith and Credit Statute and Clause at
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`Applicant’s Reconsideration dated August 23, 2008, pp. 7-8)
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`Applicant asserts the voluntary dismissal in the proceeding before District Court bars
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`these instant Board Proceedings because the voluntary dismissal by Opposer before District
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`Court was a second voluntary dismissal. The First Voluntary Dismissal by Anvil Knitwear, Inc.
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`against Success Ware Inc. and its anvil design mark occurred in the consolidated proceeding
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`(Cancellation No. 30,393 and Opposition No. 117,782) before the Board. During the
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`Consolidated Proceeding, Counsels for Defendant submitted a Petition to Reset Testimony
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`Times,
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`to reset
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`to the Cancellation Proceeding. The interlocutory attorney cancelled the
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`consolidated proceeding in the November 30, 2001 Board Order and reset to the cancellation
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`proceeding.‘ Therefore, when the interlocutory attorney cancelled the Consolidated Proceeding,
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`resetting to the Cancellation Proceeding, Defendant voluntarily dismissed the Opposition
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`Proceeding; Opposition No. 117,782, against Success Ware Inc. along with Success Ware Inc.’s
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`“anvil design” mark in question in the proceedings before the Board.2 (_Se_e Applicant’s Motion
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`Res Judicata dated December 30, 2006, pgs.2-8 and pg. 13-19) This argument went unopposed
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`‘ Counsel for Opposer later acknowledged that the interlocutory attorney granted the petition.
`3Consolidated proceedings do not lose their separate identity because of consolidation and each
`proceeding retains its separate character requiring an entry of a separate identity judgement.
`TBMP §511 [See Wright & Miller, Federal Practice and Procedure, §2382 (1971]
`6
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`by Opposer and the Board already accepted the argument in the Board’s July 25, 2008 Order.
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`Therefore, this is not a new argument before the Board. However, Opposer argument of not
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`having an opportunity to respond before the Board’s Order lacks merit. Applicant’s motion has
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`been before the Board for almost two years and Opposer had every opportunity to respond prior
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`to the Board’s Order, and thus, due to Opposer’s negligence defaulted.
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`The Second Voluntary Dismissal of the claim by Anvil Knitwear, Inc. against Success
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`Ware Inc. occurred before District Court by way of the counterclaim (trademark infringement
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`action). The court accepted the counterclaim into the proceeding, which involved the same
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`issue(s), claims and transactional facts as the prior consolidated proceeding (Cancellation No.
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`30,393 and Opposition No. 117,782), litigated before the Board. District Court allowed Anvil
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`Knitwear, Inc. to move for summary judgment based upon the anvil design marks of Success
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`Ware Inc. being litigated before the Board. Upon ‘receiving summary judgment against the
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`Paynes, Anvil Knitwear,
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`Inc. dropped and voluntarily dismissed the counterclaim against
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`Success Ware Inc.
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`(gag Applicant’s Reconsideration dated August 23, 2008 at Exhibit E,
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`Voluntary Dismissal of Counterclaim with Order) This voluntary dismissal of the counterclaim
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`was substantiated in the final judgment of the Court dated August 14, 2007, of which a certified
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`copy is attached. (§(fi Applicant’s Reconsideration dated August 23, 2008 at Exhibit 2, Final
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`Judgment and attached Exhibit C, District Court Docket Sheet 56) Accordingly, Federal Rules of
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`Civil Procedures Rule 41 provides that a second voluntary dismissal “operates as an adjudication
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`upon the merits.” Semtek Intern, Inc. Lockheed Martin Corp., 531 U.S. 497, 508, 121 S. Ct.
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`1021, 1026, (2001) Preclusion can rest only on a judgment that is valid, final, and on the merits.
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`(Wright, Miller & Cooper pp. 132, 4435) Claim preclusion prevents parties and those in privity
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`with them from raising claims for relief, or defenses that could have been raised in the prior
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`7
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`litigation, even though such claims were never actually litigated in the prior case. Parklane
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`Hosiery Co., v. Shoe, 439 U.S. 322, 326, 99 S.Ct. 645 (1997). Therefore, claim preclusion
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`should apply with respect to this instant action before the Board since this instant action is a third
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`action against Success Ware Inc. (Applicant) res judicata applies. Res Judicata (claim and/or
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`issue preclusion) should bar re-litigating any matter that could have been litigated in the prior
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`actions.
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`THE ISSUE OF INTERLOCUTORY ATTORNEY’S CONDUCT AND
`II.
`APPLICANT’S COUNTERCLAIM REMAIDNS TO BE ADDRESSED.
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`The motion with respect to the interlocutory attomey’s conduct should not have been
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`considered as moot since her conduct involves an important relevant factor with respect to the
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`issues in Applicant's Counterclaim. Applicant responded to Opposer’s claims by way of the
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`counterclaim which had been accepted as timely filed by the Board. However, upon the
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`consolidation of this proceeding the prior interlocutory attorney changed her stance and
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`dismissed the counterclaim as improper.
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`CONCLUSION
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`For the reasons set forth above, Applicant has presented and substantiated that the claims
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`in this instant action and prior consolidated proceeding are based upon the same transactional
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`facts and all three elements of res judicata have been met, claim preclusion exist. Once these
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`requirements have been satisfied a later suit should be bared Brzostowski v. Laidlaw Waste
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`Systems, Inc., 49 F.3d 337,338 (7th Cir. 1995) Moreover, the moving party is entitled to summary
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`judgment as a matter of law, if there is no genuine issue to any of material of fact, Fed. R. Civ. P.
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`Rule 56(c). Anderson et. al., v. Liberty Lobby Inc., ET. AL, 477 U.S. 242, 106 S. Ct. 2205
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`

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`(1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548 (1986). Therefore, the Board’s
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`decision should be reversed and summary judgment granted to Applicant as a matter of law.
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`Dated: September 21, 2008
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`Respectfully submitted,
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`SUCCESS WARE, INC.
`
`/7.
`
`By:
`
`I V
`_
`
`\‘eva Payne, President
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`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that on September 21, 2008, a copy of the foregoing,
`APPLICANT’S RESPONSE IN OPPOSITION TO OPPOSER’S OPPOSITION TO
`
`APPLICANT’S MOTION FOR RECONSIDERATION OF THE BOARD’S JULY 25, 2008
`DECISION AND ORDER AND OPPOSE OPPOSER’S REQUEST FOR OTHER RELIEF
`was served via “Express Mail” to the Trademark Trial and Appeal Board, P.O. Box 1451,
`Alexandria, V_22313—l451 and “First Class Mail”, postage prepaid, on Anvil Knitwear, Inc.’s
`Counsels at the following address:
`
`James D. Weinberger
`FROSS ZELNICK LEHRMAN & ZISSU, P.C.
`At First Avenue & 48m Street
`
`866 United Nations Plaza
`New York, NV. 10017 \,
`
`,
`
`,
`
`/'
`
`K
`
`\
`
`\
`'
`U
`\Reva Payne
`
`W
`
`\ .
`
`A
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`

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`EXHIBIT A
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`

`
`y_a
`
`JAMES D. WEINBERGER admitted ro hac vice)
`FROSS ZELNICK LE
`N & ZI SU, P.C.
`2 866 United Nations Plaza
`New York, New York 10017
`3 Telephone: 212) 813-5900
`Facsimile: (_ 12) 813-5901
`4 E-mail: jwe1nberger@frosszelnick.com
`
`5 CHRISTOPHER C. LARKIN (SBN: 119950)
`SEYFARTH SHAW LLP
`6 2029 Century Park East, Suite 3300
`Los Angeles, California 90067-3063
`7 Telephone: E310 277-7200
`310 201-5219
`Facsimile:
`8 E—mail: clarkin
`seyfarth.com
`
`9 Attorneys for Defendant and Counterclaimant
`ANVIL KNITWEAR, INC.
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`
`
`10
`11
`12
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`13
`14
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`15
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`16
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`17
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`18
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`’
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`vs.
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`Plaintiffs,
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`ANVIL KNITWEAR, INC.,
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`Defendant.
`
`PAYNE and LUCRETIA M. Case No. CV—06-8100-SVW(SSx)
`DEFENDANT AND
`COUNTERCLAIMANT ANVIL
`KNITWEAR, INC.’S MEMORANDUM
`OF POINTS AND AUTHORITIES IN
`OPPOSITION TO 1 MOTION TO
`DROP COUNTER-
`FENDANT
`SUCCESS WARE INC. AND/OR
`SEVER COUNTERCLAIMS
`AGAINST SUCCESS WARE AND (2)
`MOTION TO DISMISS COUNTER-
`19 AND RELATED COUNTERCLAIMS CLAIM AS TO PLAINTIFFS
`j_______J
`
`Time: 1:30 Pm.
`
`Date: June . 1, 2007
`Courtroom: 6
`Hon. Stephen V. Wilson
`
`20 l
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`21 '
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`22
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`23
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`24
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`25
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`26
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`27
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`(Fo(I5:<4x5 2 1
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`

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`1
`
`TABLE OF CONTENTS
`
`2 TABLE OF AUTHORITIES ..................................................................................... .. ii
`
`3 PRELIMINARY STATEMENT ............................................................................... .. 1
`
`4 STATEMENT OF FACTS ........................................................................................ .. 1
`
`5 A.
`
`The Parties’ Prior Proceedings in the TTAB and the
`
`6
`
`TTAB Appeal in the Central District of California ........................................ .. 2
`
`7 B.
`
`The Instant Action ........................................................................................... .. 3
`
`8 ARGUMENT ............................................................................................................. .. 4
`
`9 I.
`
`THE MOTION TO DROP SUCCESS WARE SHOULD BE DENIED ....... .. 4
`
`10
`
`l I
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`12
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`13
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`14
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`15
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`16
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`17
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`18
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`19
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`20
`
`A.
`
`B.
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`Success Ware’s Improper Pro Se Appearance ..................................... .. 4
`
`The Motion to Drop Success Ware Can And Should
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`Be Denied on Substantive Grounds As Well ........................................ .. 5
`
`II.
`
`THE PAYNES’ MOTION TO DISIVIISS SHOULD ALSO BE DENIED .... .. 8
`
`A.
`
`Judge Collins’ Refusal to Treat This Action and the TTAB Appeal as
`
`Related Cases Is Not a Basis for Dismissal of the Counterclaims ....... .. 9
`
`B.
`
`Res Judicata Cannot Bar the Counterclaims ........................................ .. 9
`
`1.
`
`The Paynes’ Motion to Dismiss Based on the Affirmative
`
`Defense of Res Judicata Should be Treated as One
`
`Brought under Fed. R. Civ. P. l2(b)(6) ...................................... .. 9
`
`2.
`
`Res Judicata is Not Present Here ............................................. .. 10
`
`21 CONCLUSION ........................................................................................................ .. I2
`
`22
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`23
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`24
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`25
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`26
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`27
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`28
`
`KFUUSIMIS Z I
`
`

`
`TABLE OF AUTHORITIES
`
`Cases
`
`\OOO\10\UI-l>UJl\)
`
`10
`
`11
`
`13
`
`15
`
`16
`
`17
`
`18
`
`19
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`20
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`22
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`23
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`24
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`25
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`26
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`27
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`28
`
`Ali v. Mid-Atlantic Settlement Servs., Inc.,
`233 F.R.D. 32 (D.D.C. 2006) .......................................................................... .. 8
`
`Andersen Cor . v. Therm-0-Shield Int 7, Inc.,
`226 U.
`.P.Q. 431 (T.T.A.B. 1985) .................................................................. .. 6
`
`~
`Byrd v. Farnsworth, Sa erstein & Seligman,
`No. C 96-2313- RW, 1996 WL 721683 (N.D. Cal. Dec. 9, 1996) ............. .. 10
`
`Carano v. Vina Concha Y Toro S.A.,
`67 U.S.P.Q.2d 1149 (T.T.A.B. 2003) .............................................................. .. 6
`
`City ofMartinez v. Texaco_Tradin & Transp., Inc.,
`353 F.3d 758 (9th C1r. 2003§.................................................................... .. 10-11
`
`Conley v. Gibson,
`355 U.S. 41 (1957) ........................................................................................ .. ‘10
`
`Electronic Water Conditioners, Inc. v. Turbomag Corp.,
`221 U.S.P.Q. 162 (T.T.A.B. 1984) .................................................................. .. 6
`
`Enterprise Rent-A —Car Co. v. Advanta e Rent-A-Car Inc.,
`62 U.S.P.
`.2d 1857 (T.T.A.B. 002),
`ajfd, 300 .3d 1333 (Fed. Cir. 2003 ............................................................. .. 5
`
`Frank Keevan & Son, Inc. v. Callier Steel Pipe & Tube, Inc.,
`107 F.R.D. 665 (S.D. Fla. 1985) .................................................................. .. 7-8
`
`Karlsson v. Rabinowitz
`318 F.2d 666 (4111 Cir. 1963) ........................................................................... .. 8
`
`Kelly Services Inc. v. Greene ’s Tem oraries Inc.,
`25 U.S.P.Q.2d 1460 (T.T.A.
`. 1992) .............................................................. .. 6
`
`Moore v. City of Costa Mesa,
`886 F.2d 260 (9th CH. 1989) ......................................................................... .. 10
`
`NL Indus., Inc. v. Ka lan,
`792 F.2d 896 f9th Cir. 1986) ........................................................................... 10
`
`Nowell v. Nowell,
`384 F.2d 951 (5th Cir. 1967) ........................................................................... .. 8
`
`Paramount Pictures Cor . v. White
`31 U.S.P.Q.2d 17 8 (T.T.A.I3. 1994) .............................. .; .............................. .. 6
`
`Person ’s Co. v. Christman,
`900 F.2d 1565 (Fed. Cir. 1990) .................................................................... .. 5-6
`
`Ross v. Analytical Tech. Inc.
`51 U.S.P.Q.2d 1269 (T.T.A.B. 1999) .............................................................. .. 6
`
`(F()U5!i4l5 2 )
`
`

`
`1 Russell v. Landrieu,
`621 F.2d 1037 (9th Cir. 1980) ....................................................................... .. 10
`
`Trans 0, Inc. v. A ‘ac Transmission Parts Corp.,
`68 F.2d 1 01 (9th Cir 1985) ....................................................................... .. 6-7
`
`.
`Webb v. World Savin s & Loan Ass ’n,
`No. C98-0338
`JJ, 1998 WL 410885 (N.D. Cal. July 14, 1998) ................... .. 10
`
`Statutes
`
`15 U.S.C. § 1067 .................................................................................................. .. 5, 11
`
`15 U.S.C.§1068 .................................................................................................. .. 5, 11
`
`15 U.S.C. § 1070 .................................................................................................. .. 5, 11
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`15 U.S.C. § 1071(b)(1) .............................................................................................. .. 2
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`15 U.S.C. § 1092 .................................................................................................. .. 5, 11
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`15 U.S.C. § 1125(a) ................................................................................................... .. 6
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`Rules
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`Fed. R. Civ. P. 4(h) .................................................................................................... .. 4
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`Fed. R. Civ. P. 4(m) ................................................................................................... .. 7
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`Fed. R. Civ. P. 8(c) .................................................................................................... .. 1
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`Fed. R. Civ. P. 12(b) .......................................................
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`.................................... .. 9-10
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`Fed. R. Civ. P. 13 ....................................................................................................... .. 3
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`Fed. R. Civ. P. 20(a) .......................................................................................... .. 4, 6, 7
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`Fed. R. Civ. P. 26(1) ................................................................................................... .. 4
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`Local Rule 83-1.3 ........................................................................................... .. 4, 5-6, 9
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`Local Rule 83-2.10.1 ..................................................................................... .. 1, 2, 5, 8
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`Defendant and counterclaimant Anvil Knitwear, Inc. (“Anvil”) submits this
`memorandum of points and authorities in opposition to motions filed in this action
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`and captioned as follows: (1) “Motion by Plaintiffs-to Drop Success Ware Inc.
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`or/and Sever Counter-Claim for Misjoinder of Claims”'(the “Motion to Drop
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`Success Ware”) and (2) “P1aintiffs’ Motion to Dismiss Anvil Knitwear, Inc.’s
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`Counter-Claim, Res Judicata Pursuant to Fed. R. Civ. P. 8(c)” (the “Paynes’ Motion
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`to Dismiss” and, together, the “Motions”). For the reasons set forth herein, both
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`motions should be denied.
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`PRELIMINARY STATEMENT
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`The instant motions, filed in the name of Plaintiffs Reva Payne and Lucretia
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`Payne (the “Paynes”) — but in part seeking relief on behalf of their company Success
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`Ware Inc. (“Success Ware”) — are all based on the same misunderstanding of the
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`parties’ past litigation before the Trademark Trial and Appeal Board, as well as
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`misunderstanding of the proper procedure under the Federal Rules of Civil
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`Procedure and this Court’s Local Rules. Once the Court wades through the morass
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`of both Motions, it becomes clear that: (1) Success Ware cannot appear in this case
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`absent having retained counsel in accordance with Local Rule 83-2.10.1; (2)
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`Success Ware has in any event been properly joined in this action; (3) Anvil’s
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`counterclaim is entirely proper under the Federal Rules of Civil Procedure as to both
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`the Paynes and Success Ware; and (4) res judicata does nor bar such counterclaim.
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`As such, the Motions should be denied.
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`STATEMENT OF FACTS
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`Anvil is a manufacturer of sportswear, principally shirts, and uses the brand
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`name ANVIL as well as numerous designs incorporating anvils on the products it
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`sells. (See Counterclaims of Anvil Knitwear, lnc., -filed March 19, 2007, M 8-16).
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`The Paynes are principals of Success Ware, a company that also uses certain anvil
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`designs on clothing. (Id. 111] 4-7, 23-24).
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`(Fl)05X4|5 2)
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`A.
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`The Parties’ Prior Proceedings in the TTAB and the
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`TTAB Appeal in the Central District of California
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`The litigation history between the parties goes back to March 2000, when
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`Anvil initiated two proceedings before the Trademark Trial an.d Appeal Board of the
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`United States Patent and Trademark Office (the “TTAB”), the first to oppose an
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`U.S. federal trademark application for an anvil design filed by Success Ware, and
`the second to cancel a U.S. federal trademark registration for an anvil design that
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`Success Warehad previously obtained, all based on Anvil’s prior rights in its anvil
`designs. (Exhibit A to the Declaration of James D. Weinberger (“Weinberger
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`Decl.”), at 1-4). These proceedings were eventually consolidated and, after several
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`years, were resolved in Anvil’s favor by a TTAB ruling on June 22, 2004, in which
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`it sustained Anvil’s opposition and cancelled Success Ware’s registration (the
`“TTAB Ruling”). (Id. at 7-21).‘
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`On August 23, 2004, Success Ware filed a pro se action (through its principal
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`Reva Payne) in this Court, captioned Success Ware Inc. v. Anvil Knitwear, Inc., No.
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`04-cv-07046-ABC-CT (C.D. Cal.), in which it sought to appeal the TTAB Ruling
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`under 15 U.S.C. § 107l(b)(l), which provides “remedy by a civil action if
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`commenced within such time frame after such decision,” namely 60 days.
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`(Weinberger Decl. Exh. 1j).2 (Case No. 04-CV-7046 is hereinafter referred to as the
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`“TTAB Appeal”).
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`On September 17, 2004 and before issue wasjoined, Judge Collins ofthis
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`Court sua sponte ordered Success Ware to retain counsel in the TTAB Appeal by
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`October 1, 2004 in accordance with L.R. 83-2.10.1. (Weinberger Decl. Exh. Q at 1-
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`2). When Success Ware failed to comply with that order by October 1, 2004, the
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`1 Much of the Motion to Dro Success Ware relates to perceived procedural
`errors made by the TTAB, all 0 which were resolved against Success Ware in the
`TTAB Ruling. (Weinberger Decl. Exh. A). None of these issues are relevant here.
`2 The complaint was entitled “Complaint in District Court Ag ealing Decision of
`Trademark Trial and A7pEeal Board in nter Partes§Consolidate i)Proc_eedingE15
`U.S.C.A. § l07l(b); 3
`.F.R. § 2.]4S(c)(l), 2.14 (d)] (De Novo Review).’
`Id.)
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`(F()()5ltfll5 2 )
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`Court issued a second order requiring compliance by October 22, 2004. (Id. at 2).
`Success Ware did not retain counsel then, either.
`(1d.). Anvil then filed a motion to
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`dismiss based on Success Ware’s failure to comply with the Court’s orders. (Id.)
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`At the hearing on such motion, the Court issued a tentative order dismissing the
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`complaint pursuant to Anvil’s motion, but gave Success Ware one last chance to
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`comply with its prior orders to retain counsel, this time by January 3, 2005. (1d.)
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`Success Ware did not retain counsel by that date, and the Court on January 10, 2005
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`issued an order dismissing the TTAB Appeal without prejudice. (Id. at 2-5).
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`Success Ware never retained counsel in the TTAB Appeal and the action was never
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`reinstated. (Weinberger Decl. Exh. l_3_).
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`B.
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`The Instant Action
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`On February 1, 2007, following an application to proceed in forma pauperis,
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`Plaintiffs initiated the instant action in which they claimed that various anvil designs
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`used by Anvil on clothing infringed their rights under copyright in certain anvil
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`designs. (Complaint, 111] 4-14). The anvil designs pled in the Complaint and for
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`which Plaintiffs have copyright registration certificates in their own names are the
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`same designs that are the subject of the various Success Ware trademark
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`applications over which Anvil and Success Ware have been litigating before the
`TTAB and this Court.
`(_ Compare Complaint, Exh. A with Weinberger Decl. Exh. _A_
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`20 at 3).
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`01 I
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`On March 19, 2007, Anvil answered the Complaint, and pursuant to Fed. R.
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`Civ. P. 13 simultaneously filed Counterclaims against the Paynes for trademark
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`infringement, unfair competition, and related claims under federal and state law (the
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`“Counterclaims”). The basis for the Counterclaims is that, to the extent the Paynes
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`claim in this action that Anvil’s use of its anvil designs infringes rights under
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`copyright owned by the Paynes, then that same use by Anvil is the basis for claims
`of trademark infringement and unfair competition against not only the Paynes, who
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`are the principals of Success Ware, but Success Ware as well. (Counterclaims, 1H[ 3-
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`{FUUSK-1l5 I l
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`41). As such, pursuant to Fed. R. Civ. P. 20(a), Anvil joined Success Ware as a
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`party to the Counterclaims. (Id.)
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`Contemporaneously with the filing of the Counterclaims, Anvil served the
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`Paynes with their pleading by first class mail. (Weinberger Decl. 1] 6). Serving
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`Success Ware pursuant to Fed. R. Civ. P. 4(h), however, has proven more difficult.
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`Anvil’s process server attempted first to serve Succes