Trademark Trial and Appeal Board Electronic Filing System. 39145
`
`ESTTA Tracking number: ESTTA34984
`
`Filing d9-t33
`
`06/06/2005
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`91165017
`
`Defendant
`Napster, LLC
`Napster, LLC
`§ 455 El Carnino Real
`Santa Clara, CA 95050
`
`Allyn Taylor
`§ DLA Piper Rudnick Gray Cary US LLP
`C
`orrespondence ;
`.
`.
`i 2000 University Avenue
`Address
`g East Palo Alto, CA 94303-224
`
`Submission
`
`Motion to Suspend for Civil Action
`
`Ffler's Name
`
`Michael T. Zeller
`
`Filer's e—mail
`Signature
`
`michaelzeller@quinnernanuel.corn
`/Michael T. Zellerf
`
`Attachments
`
`PetitionforStay.pdf ( 7 pages )
`§ DeclarationPart1.pdf ( 179 pages )
`DeclarationPart2.pdf ( 111 pages )
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Trademark Reg. No.
`Registration Date:
`For the Mark:
`
`78414770
`March 29, 2005
`NAPSTER LIGHT
`
`SIGHTSOUND TECHNOLOGIES, INC,
`
`APPLICANT’S PETITION FOR STAY
`
`Opposition No. 91 165017
`
`Opposer,
`
`V.
`
`NAPSTER, L.L.C.,
`
`Applicant.
`
`
`
`Commissioner of Trademarks
`
`PO. Box 1451
`
`Arlington, Virginia 22313-1451
`
`

`
`Applicant Napster, LLC (“Applicant” or “Registrant”), by its counsel, respectfully moves
`
`the Board to stay the instant proceedings pending the resolution of issues raised by Opposer
`
`SightSound Technologies, Inc. (“Opposer”) in its Opposition that are also currently before the
`
`United States Bankruptcy Court for the District of Delaware and the United States District Court
`
`for the Westem District of Pennsylvania.
`
`In support of its Motion, Applicant states as follows. In these proceedings, Sightsound
`
`opposes the registration of the mark NAPSTER LIGHT (the “Registration”). According to
`
`Opposer, this Opposition “is related to. . Cancellation No. 92044347,” in which the Opposer here
`
`is seeking the cancellation of four issued NAPSTER registrations. E Opposition at 1.’
`
`Applicant filed a Petition for Stay in Cancellation No. 92044347 on May 24, 2005. (Zeller
`
`Decl., Exh. 2.) The Petition for Stay was also served on Opposer on May 24, 2005.
`
`(L4,, 1} 2.)
`
`As with the cancellation proceedings, there are pending court actions that may hear on the issues
`
`raised by the Opposition and therefore warrant the entry of a stay of these opposition
`
`proceedings until their resolution by the courts.
`
`First, on June 3, 2002, Napster, Inc. and its subsidiaries (collectively, “Napster, lnc.”)
`
`filed voluntary petitions for relief under Chapter 11 of Title ll of the United States Code in the
`
`Bankruptcy Court of the District of Delaware (the “Bankruptcy Cou ’’).Z An Asset Purchase
`
`Agreement was entered into on November 15, 2002 between Napster, Inc. and Roxio, Inc.
`
`(“Roxie”), which is Applicant’s parent. ' The Asset Purchase Agreement provided for Roxi0’s
`
`acquisition of substantially all of Napster, Inc.’s tangible and intangible assets, including all
`
`1 Opposer’s Petition for Cancellation No. 92044347 is attached as Exhibit 1 to the Zeller
`Declaration (“Zeller Decl.”) submitted herewith.
`2 The facts stated herein are supported by and set forth in greater detail in the Motion to Reopen
`Chapter 11 Case and Enforce Sale Order _and itsaccornpanying exhibits. _(Z_eIler Decl., Exh. 3.)
`
`04635/656905
`
`.
`
`_
`
`.
`
`2
`
`PETITION FOR STAY
`
`

`
`NAPSTER marks and their associated good will as weil as issued registrations and then-pending
`
`Intent—to-Use appiications. On November 27, 2002, after notice and a lengthy hearing at which
`
`multiple parties appeared, the Bankruptcy Court entered a Sale Order approving the Asset
`
`Purchase Agreement.
`
`The Petition for Canceilation No. 92044347 is predicated on the alleged invalidity of the
`
`assignment of trademark rights that had been accomplished in the Bankruptcy Court, pursuant to
`
`the Bankruptcy Court’s Sale Order on November 27, 2002. fie Petition, fi['[[ 5, 7~8. The current
`
`Opposition is based on the same grounds. E Opposition, 11 5. Because of Opposer’s attack on
`
`the validity of the Bankruptcy Court’s Sale Order —— and the Asset Purchase Agreement that the
`
`Court’s Order approved -- Applicant and Roxio filed a Motion to Reopen Chapter 11 Case and
`
`Enforce Sale Order (the “Motion”) on May 20, 2005 in the Bankruptcy Court. (Zel1er Dec1.,
`
`Exh. 3.) The Motion was served on Opposer herein on May 20, 2005.
`
`(I_<L, 1l 3.) Among other
`
`things, the Motion seeks to reopen the Bankruptcy Court proceeding and seeks an Order by the
`
`Bankruptcy Court enforcing the terms of the Sale Order, including with respect to the NAPSTER
`
`registrations at issue in the Petition for Cancellation. (Zeiler Deci., Exh. 3, atl4—l9.) As a
`
`result, the validity of the assignment that Opposer challenges in these opposition proceedings is
`
`likewise at issue in the Motion before the Bankruptcy Court. (IQ) I
`
`Second, issues raised by the Opposition are also the subject of another pending civil
`
`action between the parties. On January 25, 2005, Opposer sued Appiicant and Roxio in the
`
`United States District Court for the Western District of Pennsylvania (the “District Court”) in an
`
`action for ostensible patent infringement entitled SigktSound Technologies, Inc. v. Roxio, Inc.
`
`and Napster, L.L.C., Case No. 04-1549. (Zeller Deci., Exh. 4.) Applicant and Roxie filed an
`
`04,635/656906
`
`-_
`
`_
`
`_
`
`_
`
`3__
`
`_
`
`_
`
`_
`
`PETITION FOR smv
`
`

`
`Answer and Counterclairns, as well as a First Amended Answer and Counterclaims. (Q, Exh.
`
`5.) The Fourth through Ninth Counterclaims for Relief allege, among other things, that
`
`Opposer’s issuance of a press release stating that the Napster “name” is “synonymous with the
`
`most well-known violation of intellectual property rights” constituted unfair competition, trade
`
`libel, defamation, commercial disparagernent, breach of contract and intentional interference
`
`with prospective contractual relations.
`
`(I_d.) Although the action in the District Court is
`
`currently stayed pending the Patent Office’s re-examination of the patents asserted by Opposer in
`
`the District Court suit, the action remains pending before the District Court. (Zeller Decl., ll 5.)
`
`The Opposition reveals that it overlaps with, and duplicates, issues that are pending
`
`before the District Court. The Opposition asserts that App1icant’s Counterclaims in the District
`
`Court “allegedly aris[e] fiom Opposer’s reference to the name Napster” and thus relies on
`
`Applicant’s Counterclaims as a ‘oasislfor rejection here. Opposition, 1111 2, 4. Furthermore,
`
`Opposer filed with the District Court on February 11, 2005 a motion to dismiss that puts at issue,
`
`in largely identical language, matters asserted in the Opposition. Thus, Opposer’s motion to
`
`dismiss recites the same allegations that Opposer makes in paragraph 3 of the Opposition.
`
`(Zeller Decl., Exh. 6, at 1-2.) Furthermore, Opposer’s motion to dismiss presents to the District
`
`Court precisely the same assignment-in-gross arguments that are alleged in paragraphs 4 and 5 of
`
`the Opposition. (Ze1ler Decl., Exh. 6, at 7-8.)3
`
`Because the issues currently pending before the Bankruptcy Court and the District Court
`
`may have an effect on issues raised in the Opposition, the instant proceedings should be stayed
`
`pending the courts’ detenninations. The Board’s usual practice of staying its proceedings
`
`3 The District Court has not yet ruled on Opposer’s motion to dismiss in those proceedings.
`(Zeller Decl., 1] 6.)
`.
`
`046351656906
`
`:
`
`_
`
`_
`
`_
`
`.
`
`4
`
`_
`
`PETITION FOR STAY
`
`

`
`pending the outcome of a civil action that may have a bearing on the issues before the Board, as
`
`is the situation here, is codified at 37 C.F.R. § 2.1 l7(a):
`
`“Whenever it shall come to the attention of the Trademark Trial and Appeal Board that a
`
`party or parties to a pending case are engaged in a civil action or another Board
`
`proceeding which may have a bearing on the case, proceedings before the Board may be
`
`suspended until termination of the civil action or other Board proceeding.”
`
`§§ Trademark Trial and Appeal Board Manual of Procedure § 5 l0.02(a) (“[o]rdinarily, the
`
`Board will suspend proceedings in the case before it if the final determination of the other
`
`proceeding will have a bearing on the issues before the Board”). §_ep also The Other Telephone
`
`Co. v. Connecticut Nat’l Telephone Co., 181 U.S.P.Q. 779, 781-82 (Cornm’r of Patents 1974);
`
`Townley Clothes, Inc. V. Goldring, Inc., 100 U.S.P.Q. 57, 58 (Comrn’r of Patents 1953) (“it is
`
`deemed the sounder practice to suspend the [Trademark] Office proceedings pending termination
`
`of the Court action”).
`
`= The most logical and efficient course of action here is to suspend these proceedings until
`
`the Bankruptcy Court and the District Court resolve the issues that Opposer also asserts here.
`
`Applicant respectfully requests that its motion be granted and that the instant opposition
`
`proceedings be suspended pending the completion of the relevant proceedings before the
`
`Bank1'1_1ptc_y Court and before the District Court.
`
`04635/656906
`
`‘5
`
`__
`
`_
`
`,,P_ETI_TIO_N Fo_R STAY
`
`

`
`Respectfully submitted,
`
`Dated: June 6,2005
`
`By:
`
`
`.;@»,a..
`p .
`
`QUINN EMANUEL URQUHART
`OLIVER & HEDGBS, LLP
`Michael T. Zeller
`
`Michael E. Williams
`
`865 South Figueroa Street, 10th Floor
`Los Angeles, Caiifomia 90017
`Telephone: (213) 443—3000
`Facsimile: (213) 443~3100
`
`Attorneys for Applicant
`Napster, LLC
`
`04635/656906 _
`
`6
`
`-
`
`-
`
`PETITION FOR STAY
`
`

`
`Proof of Service
`
`I hereby certify that a true and complete copy of the foregoing Respondent and Registrant
`
`Napster, LLC’s Petition for Stay has been served on William K. Wells by mailing said copy on
`
`June 6, 2005, Via First Class Mail, postage prepaid to:
`
`Wiliiam K. Wells
`
`Brian S. Mudge
`Susan A. Smith
`
`KENYON & KENYON
`
`1500 K Street, N.W., Suite 700
`Washington, DC 20005
`Tel.: (202)220-4200
`
`Fax: (202) 220-4201
`
`04635/656906
`
`7
`
`PETITION FOR STAY
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Trademark Reg. No.
`Registration Date:
`For the Mark:
`
`78414770
`March 29, 2005
`NAPSTER LIGHT
`
`SIGHTSOUND TECHNOLOGIES, INC.,
`
`V.
`
`NAPSTER, L.L.C.,
`
`Opposer,
`
`Applicant.
`
`Opposition No. 91165017
`
`DECLARATION OF MICHAEL T.
`ZELLER IN SUPPORT OF
`
`APPLICANT’S PETITION FOR STAY
`
`Commissioner of Trademarks
`P.O. Box 1451
`
`Arlington, Virginia 22313 -1451
`
`04635/657116
`
`1
`
`DECL. ISO PETITION FOR STAY
`
`

`
`1, Michael T. Zeller, do hereby decla.re and state as follows:
`
`1.
`
`I am a member of the State Bars of California, New York and Illinois and am
`
`counsel for Napster, LLC in these proceedings and for Napster, LLC and Roxio, Inc. in
`
`SightSound Technologies, Inc. v. Roxio, Inc., and Napster, L.L.C., Civil Action No. 04-1549
`
`(W.D. Pa.), and In re: Enco Recovery Corp. f/k/a/ Napster, Inc., No. 02-11573 (PJW) (Bankr. D.
`
`De1.).
`
`I have personal knowledge of the facts stated herein and, if sworn as a witness, could and
`
`would testify competently thereto.
`
`2.
`
`According to Opposer, the current Opposition is related to Opposer’s Petition for
`
`Cancellation No. 92044347, which seeks the cancellation of four issued NAPSTER registrations.
`
`A true and correct copy of the Petition for Cancellation No. 92044347 is attached hereto as
`
`Exhibit 1. Applicant filed a Petition for Stay of the Cancellation proceedings on May 24, 2005.
`
`The Petition for Stay was also served on Opposer on May 24, 2005. A true and correct copy of
`
`the Petition for Stay is attached hereto as Exhibit 2.
`
`3.
`
`On May 20, 2005, Applicant and Roxio filed a Motion to Reopen Chapter 11
`
`Case and Enforce Sale Order (“the Motion”) in In re: Enco Recovery Corp. f/k/a/ Napster, Inc.
`
`A true and correct copy of the Motion and its accompanying exhibits are attached hereto as
`
`Exhibit 3. The Motion was served on Petitioner herein on May 20, 2005. Among other things,
`
`the Motion seeks to reopen the Bankruptcy Court proceedings and seeks an Order by the
`
`Bankruptcy Court enforcing the transfer of assets, including with respect to the NAPSTER
`
`registrations at issue in the Petition for Cancellation. As a result, the validity of the assignment
`
`that Opposer in these proceedings is also at issue in the Motion before the Bankruptcy Court.
`
`04635/657116
`
`2
`
`DECL. ISO PETITION FOR STAY
`
`

`
`4.
`
`On January 25, 2005, Petitioner sued Respondent and Roxio in the United States
`
`District Court for the Western District of Pennsylvania (the “District Court”) in an action for
`
`ostensible patent infringement entitled Sig/ztSound Technologies, Inc. v. Roxio, Inc. and Napster,
`
`L.L. C., Case No. 04-1549. A true and correct copy of the Complaint in that action is attached
`
`hereto as Exhibit 4. Respondent and Roxio filed an Answer and Counterclaims, as well as a First
`
`Amended Answer and Counterclaims. A true and correct copy of the original and First
`
`Amended Answer and Counterclaims are attached hereto as Exhibit 5.
`
`5.
`
`The Fourth through Ninth Counterclaims for Relief in the First Amended Answer
`
`and Counterclaims allege, among other things, that Opposer’s issuance of a press release stating
`
`that the NAPSTER “name” is “synonymous with the most well-known violation of intellectual
`
`property rights” constituted unfair competition, trade libel, defamation, commercial
`
`disparagement, breach of contract, and intentional interference with prospective contractual
`
`relations. Although the action in the District Court is currently stayed pending the Patent
`
`Office’s re-examination of the patents asserted by Petitioner in the District Court suit, the action
`
`remains pending before the District Court.
`
`6.
`
`Petitioner filed with the District Court on February 11, 2005 a motion to dismiss
`
`that puts at issue, in largely identical language, matters asserted in the Opposition. A true and
`
`correct copy of the motion to dismiss is attached hereto as Exhibit 6. Thus, Petitioner’s motion
`
`to dismiss recites (at pages 1 to 2) the same allegations Petitioner makes in paragraph 3 of the
`
`Petition for Cancellation. Furthermore, Petitioner’s motion to dismiss (at pages 7 to 8) presents
`
`to the District Court the same assignment-in-gross arguments that are alleged in paragraphs 4 and
`
`04635/657116
`
`3
`
`DECL. ISO PETITION FOR STAY
`
`

`
`5 of the Opposition. The District Court has not yet ruled on Petitioner’s motion to dismiss in
`
`those proceedings.
`
`I declare under penalty of perjury under the laws of the United States of America
`
`that the foregoing is true and correct.
`
`Executed this 6th day of June, 2005, at Los Angeles, California.
`
`’
`I
`0*; / '
`
`far
`
`Michael T. Zeller
`
`04635/657116
`
`4
`
`DECL. ISO PETITION FOR STAY
`
`

`
`EXHIBIT 1
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2575170
`June 4, 2002
`NAPSTER
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2841431
`May 11, 2004
`NAPSTER
`
`Trademark Registration N 0.
`Registration Date:
`For the Mark:
`
`2843786
`May 18, 2004
`NAPSTER
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2843405
`May 18, 2004
`NAPSTER & Design
`
`SightSound Technologies, Inc.,
`
`Petitioner,
`
`v.
`
`Napster, LLC,
`
`Respondent.
`
`Commissioner of Trademarks
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`Cancellation No.
`
`'
`
`PETITION FOR CANCELLATION
`
`SightSound Technologies, Inc., a corporation organized under the laws of the State of
`
`Delaware, having a place of business at 311 South Craig Street, Suite 205, Pittsburgh, PA 15213
`
`(“Petitioner”), believes that it is or will be damaged by Registration Nos. 2575170, 2841431,
`
`2843786, and 2843405, and hereby petitions to cancel the same, with knowledge concerning its
`
`own actions and on information and belief concerning all other matters.
`
`

`
`The name and address of the current owner of Registration Nos. 2575170, 2841431,
`
`2843786, and 2843405 is Napster, LLC, a limited liability company organized under the laws of
`
`the State of Delaware, with an address at 455 El Camino Real, Santa Clara, California 95050
`
`(hereinafter referred to as “Respondent”).
`
`As grounds for this Petition, it is alleged that:
`
`1.
`
`Respondent is the owner of record of the marks listed in Registration Nos.
`
`2575170, 2841431, 2843786, and 2843405 (the “Napster Marks”). Respondent acquired the
`
`Napster Marks through assignments, from Napster, Inc. (the original Applicant) to Roxio, Inc.
`
`(the parent of Respondent) and then from Roxio, Inc. to Respondent.
`
`2.
`
`In a currently-pendin g federal court lawsuit between Petitioner and Respondent,
`
`the Respondent filed counterclaims against Petitioner asserting causes of action for, inter alia,
`
`trade libel, defamation, and commercial disparagement, allegedly arising from Petitioner’s
`
`reference to the name Napster. More particularly, Respondent asserts that the following
`
`statement is false: “Napster, whose name had been synonymous with the most well—known
`
`violation of intellectual property rights .
`
`.
`
`. .”
`
`3.
`
`Napster, Inc. (the original Applicant) was embroiled in a highly publicized battle
`
`with the music industry arising from its operation of an Intemet-based “service” that facilitated
`
`rampant music piracy. Nearly twenty record companies sued Napster, Inc. for contributory and
`
`vicarious copyright infringement and related causes of action, and this action was soon joined by
`
`a class of music publishers. The court found a likelihood of success on the merits of the
`
`copyright infringement claim and issued a preliminary injunction against Napster, Inc., and
`
`stated in its opinion that Napster “contributed to illegal copying on a scale that is without
`
`precedent...” A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 927 (N.D. Cal. 2000).
`
`

`
`(emphasis added). In upholding the injunction (with modification) against Napster, Inc., the
`
`Ninth Circuit confirmed the rampant infringement that Napster, Inc. was engaged in:
`
`Napster, by its conduct, knowingly encourages and assists the
`infringement ofplaintiffs’ copyrights.
`
`. properly found that Napster materially
`.
`The district court .
`contributes to direct infringement.
`
`Napster’s failure to police the system’s “premises,” combined
`with a showing that Napster financially benefits from the
`continuing availability of infringing files on its system, leads to
`the imposition of vicarious liability.
`
`A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1020, 1022, 1024 (9th Cir. 2001) (emphasis
`
`added). Thus, two federal courts have stated unequivocally that Napster, Inc. was an infringer of
`
`intellectual property rights (namely, copyrights).
`
`4.
`
`In asserting that the Napster name (and, hence, each of the Napster Marks) was
`
`not associated with violation of intellectual property rights, Respondent has rejected the goodwill
`
`associated with the prior user, Napster, Inc., including the reputation that Napster, Inc. earned for
`
`facilitating copyright infringement on an unprecedented scale. As such, Respondent has
`
`admitted that it acquired the Napster Marks without the goodwill associated with the business.
`
`5 .
`
`Trademarks cannot be validly assigned without the goodwill of the business. A
`
`sale of a trademark divorced from its goodwill is an “assignment in gross,” which operates to
`
`pass no rights to the purported assignee. Thus, the Napster Marks were not validly transferred
`
`from Napster, Inc. to the Respondent (or to its parent, Roxio, Inc.). As the Napster Marks are no
`
`longer used by the assignor, Napster, Inc., they have been abandoned. Accordingly, Registration
`
`Nos. 2575170, 2841431, 2843786, and 2843405 are subject to cancellation.
`
`

`
`6.
`
`Petitioner is being injured by the continued presence on the Principal Register of
`
`Registration Nos. 2575170, 2841431, 2843786, and 2843405 because, inter alia, Petitioner’s fair
`
`use rights to refer to the Napster name are being adversely affected by Respondent’s continued
`
`registration of the Napster name as reflected in the registered Napster Marks.
`
`7.
`
`Furthermore, the intent to use applications underlying Registration Nos. 2841431,
`
`2843786, and 2843405 were improperly transferred in violation of 15 U.S.C. §lO60. No
`
`application to register a mark under Section 1(b) of the Lanham Act, 15 U.S.C. §l05 1(b), shall
`
`be assignable prior to the filing of an amendment under Section l(c), l5 U.S.C. §l05 l(c), to
`
`bring the application into conformity with Section 1(a), 15 U.S.C. §l05l(a), or the filing of the
`
`verified statement of use under Section l(d), 15 U.S.C. §l05l(d), except for an assignment to a
`
`successor to the business of the applicant, or portion thereof, to which the mark pertains, if that
`
`business is ongoing and existing.
`
`8.
`
`The applications underlying Registration Nos. 2841431, 2843786, and 2843405
`
`were filed by Napster, Inc. based upon an intent to use the marks under Section 1(b) of the
`
`Lanham Act. These applications were still pending and no amendment to allege use (or
`
`statement of use) had been filed when they were transferred by the original owner, Napster, Inc.,
`
`to Roxio, Inc. (Napster, LLC’s parent) on November 27, 2002. To the extent that the business of
`
`Napster, Inc. was ongoing and existing at the time of the assignment, Roxio, Inc. was not a
`
`successor to the business of the original applicant, Napster, Inc. Accordingly, the applications
`
`underlying Registration Nos. 2841431, 2843786, and 2843405 were void as of the date of
`
`attempted assignment from Napster, Inc. to Roxio, Inc., and Registration Nos. 2841431,
`
`2843786, and 2843405 are subject to cancellation.
`
`

`
`9.
`
`These applications were again improperly transferred when, on June 13, 2003,
`
`Roxio, Inc. transferred them to its subsidiary, Napster, LLC. On that date, the applications were
`
`still pending and no amendment to allege use (or statement of use) had been filed. Accordingly,
`
`Registration Nos. 2841431, 2843786, and 2843405 are subject to cancellation.
`
`10.
`
`Finally, the assignment of Registration Nos. 2575170, 2841431, 2843786, and
`
`2843405 was invalid under 15 U.S.C. §l060 as there has been a substantial change in the
`
`services marketed and/or rendered under the Napster Marks, and, accordingly, there was no
`
`transfer of the goodwill to which the marks pertained. Where a transferred mark is to be used on
`
`a new and different product or service, any goodwill that the mark itself might represent cannot
`
`legally be assigned. Respondent’s services under the Napster Marks are so different from the old
`
`services that the goodwill was not legally assigned, and to allow continued use and registration
`
`of the marks would work a deception upon the public. Whether the new service is better or
`
`worse than the original is wholly immaterial; the substitution of one service for a different one
`
`worked a forfeiture on whatever trademark rights Respondent attempted to acquire.
`
`WHEREFORE, Petitioner prays this Petition for Cancellation be sustained in
`
`favor of Petitioner and that Registration Nos. 2575170, 2841431, 2843786, and 2843405 be
`
`canceled.
`
`Please address all future communications regarding this cancellation to:
`
`William K. Wells
`
`KENYON & KENYON
`
`1500 K Street, N.W., Suite 700
`
`Washington, DC 20005
`Tel.: (202) 220-4200
`Fax: (202) 220-4201
`
`

`
`Please charge the filing fees of $4,200.00, and any other fees associated with this
`
`proceeding to Deposit Account 11-0600.
`
`Respectfully submitted,
`
`s/ William K. Wells
`
`William K. Wells
`
`Brian S. Mudge
`Susan A. Smith
`KENYON & KENYON
`
`1500 K Street, N.W., Suite 700
`
`Washington, DC 20005
`Tel.: (202) 220-4200
`Fax: (202) 220-4201
`
`Counsel for Petitioner SightSound Technologies, Inc.
`
`

`
`EXHIBIT 2
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Trademark Reg. No.
`Registration Date:
`For the Mark:
`
`2575170
`June 4, 2002
`NAPSTER
`
`Trademark Reg. No.
`Registration Date:
`For the Mark:
`
`2841431
`May 11, 2004
`NAPSTER
`
`Trademark Reg. No.
`Registration Date:
`For the Mark:
`
`2843786
`May 18, 2004
`NAPSTER
`
`Cancellation No. 92044347
`
`Trademark Reg. No.
`Registration Date:
`For the Mark:
`
`2843405
`May 18, 2004
`NAPSTER & Design
`
`RESPONDENT AND REGISTRANT
`NAPSTER, LLC’S PETITION FOR
`STAY
`
`SIGHTSOUND TECHNOLOGIES, INC.,
`
`v.
`
`NAPSTER, LLC,
`
`Petitioner,
`
`Respondent.
`
`Commissioner of Trademarks
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`04535/652302
`
`I
`
`PETITION FOR STAY
`
`

`
`Respondent Napster, LLC (“Respondent” or “Registrant”), by its counsel, respectfully
`
`moves the Board to stay the instant proceedings pending the resolution of issues raised by
`
`Petitioner SightSound Technologies, Inc. (“Petitioner”) in its Petition for Cancellation that are
`
`currently before the United States Bankruptcy Court for the District of Delaware and the United
`
`States District Court for the Western District of Pennsylvania.
`
`In support of its Motion, Respondent states as follows. In these proceedings, Petitioner
`
`seeks cancellation of four NAPSTER registrations, namely, Registration Nos. 2575170,
`
`2841431, 2843786 and 2843405 (collectively, the “NAPSTER Registrations”). There are
`
`pending civil actions that may bear on the issues before the Board and therefore warrant the entry
`
`of a stay of these cancellation proceedings until the resolution of the relevant issues by the
`
`courts.
`
`First, on June 3, 2002, Napster, Inc. and its subsidiaries (collectively, “Napster, Inc.”)
`
`filed voluntary petitions for relief under Chapter 1 1 of Title 1 1 of the United States Code in the
`
`Bankruptcy Court of the District of Delaware (the “Bankruptcy Court”).‘ After several months
`
`of collaborative efforts by the Bankruptcy Court, the appointed Bankruptcy Trustee, and the
`
`Official Committee of Unsecured Creditors, an Asset Purchase Agreement was entered into
`
`between Napster, Inc. and Roxio, I.nc. (“Roxio”), which is Respondent’s parent. The Asset
`
`Purchase Agreement provided for Roxio’s acquisition of substantially all of Napster, Inc.’s
`
`tangible and intangible assets, including the marks, good will and rights underlying the
`
`NAPSTER Registrations (whether as an issued registration or as then-pending Intent to Use
`
`1 The facts stated herein are supported by and set forth in greater detail in the Motion to Reopen
`Chapter 11 Case and Enforce Sale Order and its accompanying exhibits, attached as Exhibit 1 to
`the Zeller Declaration (“Zeller Decl.”) submitted herewith.
`
`04635/652302
`
`2
`
`PETITION FOR STAY
`
`

`
`applications). On November 27, 2002, after notice and a lengthy hearing at which multiple
`
`parties appeared, the Bankruptcy Court entered a Sale Order approving the Asset Purchase
`
`Agreement.
`
`The Petition for Cancellation is specifically predicated on the alleged invalidity of the
`
`assignment of the NAPSTER Registrations that had been accomplished in the Bankruptcy Court,
`
`pursuant to the Bankruptcy Court’s Sale Order on November 27, 2002. §§§ Petition, fifll 5, 7-8.
`
`Indeed, eliminating any question that Petitioner is attacking the Bankruptcy Court’s Sale Order
`
`in these proceedings, the Petition for Cancellation identifies the allegedly unlawful transfer of the
`
`challenged ITU applications as having occurred “when they were transferred by the original
`
`owner, Napster, Inc., to Roxio, Inc. (Napster, LLC’s parent) on November 27, 2002”--the date of
`
`the Bankruptcy Court’s Sale Order approving their transfer pursuant to the Asset Purchase
`
`Agreement. Petition, {l 8 (emphasis added).
`
`Because Petitioner has collaterally attacked the validity of the Bankruptcy Court’s Sale
`
`Order and the Asset Purchase Agreement that it approved, Respondent and Roxio filed a Motion
`
`to Reopen Chapter 11 Case and En force Sale Order (the “Motion”) on May 20, 2005. (Zeller
`
`Decl., Exh. 1.) The Motion was served on Petitioner herein on May 20, 2005.
`
`(LCL, 1] 2.) Among
`
`other things, the Motion seeks to reopen the Bankruptcy Court case and seeks an Order by the
`
`Bankruptcy Court enforcing the terms of the Sale Order, including with respect to the NAPSTER
`
`Registrations at issue in the Petition for Cancellation. (Zeller Decl., Exh. 1, 14-19.) As a result,
`
`the validity of the assignment that Petitioner challenges in these proceedings is at issue in the
`
`Motion before the Bankruptcy Court. (@
`
`04635/652302
`
`3
`
`PETITION FOR STAY
`
`

`
`Second, issues raised by the Petition for Cancellation also are the subject of another
`
`pending civil action between the parties. On January 25, 2005, Petitioner sued Respondent and
`
`Roxio in the United States District Court for the Western District of Pennsylvania (the “District
`
`Court”) in an action for ostensible patent infringement entitled SightSound Technologies, Inc. v.
`
`Roxio, Inc. and Napster, L.L.C., Case No. 04-1549. (Zeller Decl., Exh. 2.) Respondent and
`
`Roxio filed an Answer and Counterclaims, as well as a First Amended Answer and
`
`Counterclaims.
`
`(I_d., Exh. 3.) The Fourth through Ninth Counterclaims for Relief allege, among
`
`other things, that Petitioner’s issuance of a press release stating that the Napster “name” is
`
`“synonymous with the most well-known violation of intellectual property rights” constituted
`
`unfair competition, trade libel, defamation, commercial disparagement, breach of contract and
`
`intentional interference with prospective contractual relations.
`
`(lgl_.) Although the action in the
`
`District Court is currently stayed pending the Patent Office’s re-examination of the patents
`
`asserted by Petitioner in the District Court suit, the action remains pending before the District
`
`Court. (Zeller Decl., 1l 4.)
`
`The Petition for Cancellation reveals that it overlaps with, and duplicates, issues that are
`
`pending before the District Court. The Petition for Cancellation acknowledges that
`
`Respondent’s Counterclaims in the District Court “allegedly aris[e] from Petitioner’s reference
`
`to the name Napster” and relies on Respondent’s Counterclaims filed in the District Court as a
`
`basis for cancellation here. Petition for Cancellation, 111] 2, 4. Furthermore, Petitioner filed with
`
`the District Court on February 11, 2005 a motion to dismiss that puts at issue, in largely identical
`
`language, matters asserted in the Petition for Cancellation. Thus, Petitioner’s motion to dismiss
`
`in the District Court recites the same allegations Petitioner makes in paragraph 3 of the Petition
`
`04635/652302
`
`4
`
`PETITION FOR STAY
`
`

`
`for Cancellation. (Zeller Decl., Exh. 4, at 1-2.) Furthermore, Petitioner’s motion to dismiss
`
`presents to the District Court the same assignment—in-gross arguments that are alleged in
`
`paragraphs 4 and 5 of the Petition for Cancellation. (Zeller Decl., Exh. 4, at 7-8.)2
`
`Because the issues currently before the Bankruptcy Court and the District Court may
`
`have an effect on issues raised in the Petition for Cancellation, the instant proceedings should be
`
`stayed pending the courts’ determinations. The Board’s usual practice of staying its proceedings
`
`pending the outcome of a court action that may have a bearing on the issues before the Board, as
`
`is the situation here, is codified at 37 C.F.R. § 2.1 l7(a):
`
`“Whenever it shall come to the attention of the Trademark Trial and Appeal Board that a
`
`party or parties to a pending case are engaged in a civil action or another Board
`
`proceeding which may have a bearing on the case, proceedings before the Board may be
`
`suspended until termination of the civil action or other Board proceeding.”
`
`§e§ Trademark Trial and Appeal Board Manual of Procedure § 510.02(a) (“[o]rdinarily, the
`
`Board will suspend proceedings in the case before it if the final determination of the other
`
`proceeding will have a bearing on the issues before the Board.”). E ali The Other Telgphone
`
`Co. v. Connecticut Nat’l Telghone Q, 181 U.S.P.Q. 779, 781-82 (Comm’r of Patents 1974);
`
`Townley Clothes, Inc. v. Goldring, lI_r_1_g, 100 U.S.P.Q. 57, 58 (Comm’r of Patents 1953) (“it is
`
`deemed the sounder practice to suspend the [Trademark] Office proceedings pending termination
`
`of the Court action.”).
`
`The most logical and efficient course of action is for the Board to suspend these
`
`proceedings until the Bankruptcy Court and the District Court resolve the issues that Petitioner
`
`2 The District Court has not yet ruled on Petitioner’s motion to dismiss in those proceedings.
`(Zeller Decl., 1] 5.)
`
`04635/652302
`
`5
`
`PETITION FOR STAY
`
`

`
`also asserts here. Respondent respectfully requests that the Board grant its motion and stay the
`
`instant cancellation proceedings pending the completion of the relevant proceedings before the
`
`Bankruptcy Court and before the District Court.
`
`Respectfully submitted,
`
`Dated: May 24,2005
`
`By:
`
`11.»... 7. ;¢
`
`QUINN EMANUEL URQUHART
`OLIVER & HEDGES, LLP
`Michael T. Zeller
`Michael E. Williams
`
`865 South Figueroa Street, 10th Floor
`Los Angeles, California 90017
`Telephone: (213) 443-3000
`Facsimile: (213) 443-3100
`
`Attorneys for Respondent
`Napster, LLC
`
`04635/552302
`
`6
`
`PETIT