Trademark Trial and Appeal Board Electronic Filing System. 39145
`
`ESTTA Tracking number: ESTTA40528
`
`Filing d9-t33
`
`07/29/2005
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`91165620
`
`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 94303-2248
`
`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
`
`MotiontoConsolidateandSuspend.pdf ( 6 pages )
`Declaration.pdf ( 44 pages )
`EXhibit6.pdf ( 271 pages )
`EXhibit7-8.pdf ( 74 pages )
`
`
`
`ESTTA Tracking number: ESTTA40528
`
`Filing d9-t33
`
`07/29/2005
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`91165620
`
`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 94303-2248
`
`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
`
`MotiontoConsolidateandSuspend.pdf ( 6 pages )
`Declaration.pdf ( 44 pages )
`EXhibit6.pdf ( 271 pages )
`EXhibit7-8.pdf ( 74 pages )
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Opposition No. 91 165620
`
`APPLICANT’S MOTION TO
`
`CONSOLIDATE AND SUSPEND
`
`In the Matter of:
`
`Application Serial No.
`For the Mark:
`
`78431602
`NAPSTER MOBILE
`
`Publication Date:
`
`May 17, 2005
`
`SIGHTSOUND TECHNOLOGIES, INC.,
`
`Opposer,
`
`V.
`
`NAPSTER, L.L.C.,
`
`Applicant.
`
`Commissioner of Trademarks
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`
`
`Applicant Napster, LLC (“Applicant”) respectfully moves the Board to consolidate this
`
`Opposition proceeding with two other, virtually identical TTAB proceedings that the Board
`
`previously has ordered be consolidated and suspended, and further moves the Board to suspend
`
`the instant Opposition proceeding pending the final disposition of civil litigation between the
`
`parties.
`
`In support of its Motion, Applicant states as follows.
`
`In this proceeding, SightSound
`
`Technologies,
`
`Inc. (“Opposer”) opposes the registration of the mark NAPSTER MOBILE.
`
`According to Opposer, the instant Opposition “is related to, and should be consolidated with,
`
`Cancellation No. 92044347...and Opposition No. 91165017,” in which Opposer is seeking to
`
`cancel or is opposing certain, other NAPSTER registrations. See Notice of Opposition at 1.1
`
`Previously, in both Cancellation No. 92044347 and Opposition No. 91165017, Applicant
`
`herein filed motions to stay, on the grounds that those proceedings involved issues that were the
`
`subject of civil litigation between the parties pending before the United States District Court for
`
`the Western District of Pennsylvania (the “District Court”) and the United States Bankruptcy
`
`Court for the District of Delaware (the “Bankruptcy Court”).2 On July 13, 2005, over Opposer’s
`
`objections, the Board granted Applicant’s stay motions and ordered Cancellation No. 92044347
`
`and Opposition No. 91165017 be suspended pending final disposition of the District Court action
`
`‘ Opposer’s Petition for Cancellation No. 92044347 and Opposition No. 91165017 are attached
`as Exhibits 1 and 2, respectively, to the Zeller Declaration (“Ze1ler Dec1.”) submitted herewith.
`2 Sg Zeller Decl., Exhs.’ 4 to 7 for Applications Petition for Stay, Reply In Further Support For
`Petition For Stay, and accompanying Declarations and Exhibits in Cancellation No. 92044347.
`
`04635/668906
`
`2
`
`MOTION TO CONSOLIDATE AND SUSPEND
`
`
`
`and litigation before the Bankruptcy Court.3 The Board further ordered that Cancellation No.
`
`92044347 and Opposition No. 91165017 be consolidated.4
`
`The instant Opposition proceeding should be stayed for the same reasons that the Board
`
`previously determined warranted a stay of Cancellation No. 92044347 and Opposition No.
`
`91165017. The instant proceeding also should be consolidated with Cancellation No. 92044347
`
`and Opposition No. 91165017 on the same basis that
`
`the other two proceedings were
`
`consolidated.
`
`Applicant will not burden the Board by repeating here the briefing and evidence
`
`submitted on the stay motions that were granted in Cancellation No. 92044347 and Opposition
`
`No. 91 l65Ol7.5 Suffice it to say for present purposes, the instant Opposition is based on the
`
`same grounds as, and is nearly identical to, Cancellation No. 92044347 and Opposition No.
`
`91165017, which the Board already has suspended pending final disposition of the District Court
`
`action and litigation before the Bankruptcy Court.
`
`In particular, in all three proceedings before
`
`the Board, Opposer asserts that the transfer of ownership of the marks at issue was invalid, based
`
`in part upon Applicant’s answer and counterclaims in the District Court action. gee Opposition,
`
`111] 2, 4; see all Cancellation No. 92044347, 1H[ 2, 4; Opposition No. 91165017, 111] 2, 4. For this
`
`reason, as the Board previously found with respect to Cancellation No. 92044347 and Opposition
`
`No. 91165017, “the issues before the District Court in the civil case are clearly related to the
`
`3 Zeller Decl., Exh. 3 (Order and Decision, dated July 13, 2005).
`4
`Id.
`5 A—full recitation of the factual and legal grounds supporting a stay of the related proceedings,
`and thus a stay of this Opposition, are set forth in Exhibits 4 to 7 to the Zeller Decl.
`
`04635/668906
`
`3
`
`MOTION TO CONSOLIDATE AND SUSPEND
`
`
`
`issues before the Board herein” and the District Court action “will have a bearing on the issues
`
`before the Board.” Order and Decision, dated July 13, 2005, at 3.6
`
`Additionally,
`
`in all
`
`three proceedings before the Board, Opposer alleges that
`
`the
`
`NAPSTER marks at issue were not validly assigned to Applicant in bankruptcy proceedings.
`
`E Opposition, 1] 5; s_e_e afl Cancellation No. 92044347, 1] 5; Opposition No. 91165017, ‘ll 5. As
`
`the Board previously found with respect to Cancellation No. 92044347 and Opposition No.
`
`91165017, because such issues “regarding the validity of the involved marks and their goodwill”
`
`are the subject of on-going, contested motion practice before the Bankruptcy Court, “any such
`
`determination will have a bearing on the issues before the Board in these proceedings.” Order
`
`and Decision, dated July 13, 2005, at 4.
`
`Applicant respectfully requests that its motion be granted and that the instant Opposition
`
`(1) be consolidated with Cancellation No. 92044347 and Opposition No. 91165017 and (2) be
`
`suspended pending final disposition of the District Court action and litigation before the
`
`Bankruptcy Court.
`
`" Indeed, since the time of the Board’s decision, Opposer herein has made even clearer that its
`proceedings before the Board not only overlap with the District Court action, but were instituted
`to circumvent a stay that the District Court had imposed. _S§ Zeller Dec., Exh. 8 (brief filed by
`Opposer herein with the District Court on July 20, 2005 in which Opposer conceded (at page 7)
`that “since the present litigation had been stayed .
`.
`., SightSound sought recourse in the PTO”).
`
`04635/668906
`
`4
`
`MOTION TO CONSOLIDATE AND SUSPEND
`
`
`
`Respectfully submitted,
`
`Dated: Ju1y29, 2005
`
`By:
`
`/4:,g... f f/—
`
`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 Applicant
`Napster, LLC
`
`04635/668906
`
`5
`
`MOTION TO CONSOLIDATE AND SUSPEND
`
`
`
`Proof of Service
`
`I hereby certify that a true and complete copy of the foregoing Applicant's Motion To
`
`Consolidate and Suspend has been served on William K. Wells by hand serving said copy on
`
`July 25, 2005 to:
`
`William K. Wells
`
`Brian S. Mudge
`Susan A. Smith
`
`KENYON & KENYON
`
`1500 K Street, N.W., Suite 700
`Washington, DC 20005
`Tel.: (202) 2204200
`Fax: (202) 220-4201
`
`04635/665906
`
`_
`
`6
`
`MOTION TO CONSOLIDATE AND SUSPEND
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Application Serial No.
`For the Mark:
`
`78431602
`NAPSTER MOBILE
`
`Publication Date:
`
`May 17, 2005
`
`SIGHTSOUND TECHNOLOGIES, INC.,
`
`Cancellation No. 91165620
`
`DECLARATION OF MICHAEL T.
`
`ZELLER IN SUPPORT OF
`APPLICANT’S MOTION TO
`
`Opposer,
`
`CONSOLIDATE AND SUSPEND
`
`V.
`
`NAP STER, LLC,
`
`Applicant.
`
`Commissioner of Trademarks
`
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`04635/669234
`
`DECL. ISO MOTION TO CONSOLIDATE AND
`SUSPEND
`
`
`
`1, Michael T. Zeller, do hereby declare 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
`
`Sz'ghtSound 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.
`
`Del.).
`
`I have personal knowledge of the facts stated herein and, if sworn as a witness, could and
`
`would testify competently thereto.
`
`2.
`
`A true and correct copy of Opposer’s Petition for Cancellation No. 92044347 is
`
`attached hereto as Exhibit 1.
`
`3.
`
`A true and correct copy of Opposer’s Opposition No. 91165017 is attached hereto
`
`as Exhibit 2.
`
`4.
`
`A true and correct copy of the Board’s July 13, 2005 Order suspending the
`
`proceedings in Cancellation No. 92044347 and Opposition No. 91165017 is attached hereto as
`
`Exhibit 3.
`
`5.
`
`A true and correct copy of Applicant’s Petition for Stay in Cancellation No.
`
`92044347 is attached hereto as Exhibit 4.
`
`6.
`
`A true and correct copy of Applicant’s Reply in Further Support for Petition For
`
`Stay in Cancellation No. 92044347 is attached hereto as Exhibit 5.
`
`7.
`
`A true and correct copy of Applicant’s Declaration of Michael T. Zeller in
`
`Support of Applicant’s Petition for Stay in Cancellation No. 92044347 is attached hereto as
`
`Exhibit 6.
`
`04635/669234
`
`DECL. ISO MOTION TO CONSOLIDATE AND
`SUSPEND
`
`2
`
`
`
`8.
`
`A true and correct copy of Applicant’s Supplemental Declaration of Michael T.
`
`Zeller in Support of Applicant’s Petition for Stay in Cancellation No. 92044337 is attached
`
`hereto as Exhibit 7.
`
`9.
`
`A true and correct copy of excerpts of Opposer’s Brief in Support of its Motion
`
`for Relief from Stay with Respect to Defamation Counterclaims, filed in SightSound
`
`Technologies, Inc. v. Roxio, Inc. and Napster, L.L.C., Civil Action No. 04-549 (W.D. Pa.), is
`
`attached hereto as Exhibit 8.
`
`I declare under penalty of perjury under the laws of the United States of America that the
`
`foregoing is true and correct.
`
`Executed this 29th day of July, 2005, at Los Angeles, California.
`
`/'
`flat» I .
`mchael T. Zeller
`
`04635/669234
`
`2
`
`SUSPEND
`
`DECL. ISO MOTION TO CONSOLIDATE AND
`
`
`
`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 No.
`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-pending 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 Internet—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 Napsterfinancially benefits from the
`continuing availability of infringingfiles 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. §l060. No
`
`application to register a mark under Section l(b) of the Lanham Act, 15 U.S.C. §l05 l(b), shall
`
`be assignable prior to the filing of an amendment under Section l(c), 15 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. §l05 l(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 l(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 SightS0und Technologies, Inc.
`
`
`
`EXHIBIT 2
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Application Serial No.
`For the Mark:
`
`Publication Date:
`
`78414770
`NAPSTER LIGHT
`
`March 29, 2005
`
`SightSound Technologies, Inc.,
`
`Opposer,
`
`v.
`Napster, LLC,
`
`Applicant.
`
`Commissioner of Trademarks
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`Opposition No.
`
`'
`
`NOTICE OF OPPOSITION
`
`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
`
`(“Opposer”), believing it will be damaged by registration of the mark NAPSTER LIGHT
`
`claimed in Serial No. 78414770 (the “Application”), hereby opposes the same, with knowledge
`
`concerning its own actions and on information and belief concerning all other matters.
`
`The listed name and address of the current owner of the Application 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 (the “Applicant”).
`
`This opposition is related to, and should be consolidated with, Cancellation No.
`
`92044347 filed by Opposer against the Applicant’s registrations for the NAPSTER marks.
`
`
`
`As grounds for this opposition, it is alleged that:
`
`1.
`
`Applicant is the owner of record of the mark listed in the Application (the
`
`“Mark”). Applicant acquired the dominant element‘ of the Mark — NAPSTER — through
`
`assignments, from Napster, Inc. (the original Applicant) to Roxio, Inc. (the parent of Applicant)
`
`and then from Roxio, Inc. to Applicant.
`
`2.
`
`In a currently—pending federal court lawsuit between Opposer and Applicant, the
`
`Applicant filed counterclaims against Opposer asserting causes of action for, inter alia, trade
`
`libel, defamation, and commercial disparagement, allegedly arising from Opposer’s reference to
`
`the name Napster. More particularly, Applicant 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. was embroiled in a highly publicized battle with the music industry
`
`arising from its operation of an Internet—based “service” that facilitated rampant music piracy.
`
`Nearly 20 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., ll4 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:
`
`The LIGHT component of the Mark is a weak and descriptive modifier of the primary
`1
`element, NAPSTER.
`
`
`
`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 Napsterfinancially 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, the Mark, as the dominant element
`
`thereof is NAPSTER) was not associated with violation of intellectual property rights, Applicant
`
`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, Applicant has admitted that it acquired the NAPSTER mark without the goodwill
`
`associated with the business. Therefore, Applicant had no right to use the NAPSTER mark or
`
`any variants thereof.
`
`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 mark was not validly transferred
`
`from Napster, Inc. to the Applicant (or to its parent, Roxio, Inc.). As the NAPSTER mark is no
`
`longer used by the assignor, Napster, Inc., it has been abandoned. Accordingly, the Application,
`
`which pertains to a close variant of the NAPSTER mark, should be rejected.
`
`
`
`6.
`
`Opposer would be injured by the registration of the Application because, inter
`
`alia, Opposer’s fair use rights to refer to the Napster name would be adversely affected by
`
`Applicant’s registration of the NAPSTER mark as reflected in the Application.
`
`7.
`
`Furthermore, the assignment of the NAPSTER mark from the original owner was
`
`invalid under 15 U.S.C. §l060 as there has been a substantial change in the services marketed
`
`and/or rendered under the Mark, and, accordingly, there was no transfer of the goodwill to which
`
`the mark 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.
`
`Applicant’s goods under the Mark are so different from the prior services that the goodwill was
`
`not legally assigned, and, accordingly, to allow registration of the Mark would work a deception
`
`upon the public. Whether the new product is better or worse than the original service is wholly
`
`immaterial; the substitution of a product for a different service worked a forfeiture on whatever
`
`trademark rights Applicant attempted to acquire.
`
`WHEREFORE, the Opposer prays that the Board reject Application Serial No.
`
`78414770 and that registration of the Mark therein sought for the goods therein specified be
`
`denied and refused, and that the Board sustain this opposition.
`
`Please address all future communications regarding this opposition to the following
`
`attorney of record for Opposer:
`
`William K. Wells
`KENYON & KENYON
`
`1500 K Street, N.W., Suite 700
`
`Washington, DC 20005
`Tel.: (202) 220-4200
`Fax: (202) 220-4201
`email: wwells@kenyon.com
`
`
`
`Please charge the filing fee of $300.00, 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 Opposer SightS0und Technologies, Inc.
`
`
`
`EXHIBIT 3
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`Trademark Trial and Appeal Board
`P.O. Box 1451
`
`Alexandria, VA 22313-1451
`
`11
`
`Mailed:
`
`July 13, 2005
`
`91165017
`Opposition No.
`Cancellation No. 92044347
`
`SIGHTSOUND TECHNOLOGIES,
`
`INC.
`
`v.
`
`NAPSTER, LLC
`
`Peter Cataldo, Attorney:
`
`This case now comes before the Board for consideration
`
`of the motions filed by Napster, LLC (in its capacity as
`
`applicant in Opposition No. 91165017 and respondent
`
`in
`
`Cancellation No. 92044347)
`
`to suspend the above referenced
`
`proceedings pending the disposition of a civil action
`
`involving the parties herein, as well as a bankruptcy
`
`proceeding involving,
`
`inter alia, Napster, LLC.
`
`The motions
`
`are fully briefed.1 The Board has carefully considered the
`
`arguments of both parties with regard to the above motions.
`
`However, an exhaustive review of those arguments would only
`
`serve to delay the Board's disposition thereof.
`
`The Board
`
`turns then to the motions to suspend.
`
`1 In addition, Napster, LLC filed a reply brief with regard to
`its motion for suspension in Cancellation No. 92044347 which the
`Board has entertained. Consideration of reply briefs is
`discretionary on the part of the Board.
`See Trademark Rule
`2.l27(a).
`
`
`
`Opposition No. 91165017 and Cancellation No. 92044347
`
`Motions to Suspend
`
`Napster, LLC has filed essentially identical motions to
`
`suspend proceedings in both of the above Board cases pending
`
`the outcome of
`
`(1)
`
`a civil action involving the parties
`
`hereinz; and (2)
`
`a motion to reopen Chapter 11 case and
`
`enforce sale order brought by Napster, LLC and its parent in
`
`a Chapter 11 bankruptcy proceeding involving Napster,
`
`Inc.3
`
`It is settled that whenever it comes to the attention
`
`of the Board that one or more of the parties to a case
`
`pending before it are involved in a civil action,
`
`proceedings before the Board may be suspended until final
`
`determination of the civil action.
`
`See Trademark Rule
`
`2.117(a); and General Motors Corp. V. Cadillac Club Fashions
`
`Inc., 22 USPQ2d 1933 (TTAB 1992).
`
`Suspension of a Board
`
`case is appropriate even if the civil case may not be
`
`dispositive of the Board case,
`
`so long as the ruling will
`
`have a bearing on the rights of the parties in the Board
`
`case.
`
`See Trademark Rule 2.117(a).
`
`See also, for example,
`
`Martin Beverage Co. v. Colita Beverage Corp , 169 USPQ 568
`
`(TTAB l97l).
`
`Inc.
`2 Civil Action No. 04-1549, styled Sightsound Technologies,
`v. Roxio,
`Inc. and Napster, L.L.C., was filed on January 25, 2005
`in the United States District Court for the Western District of
`Pennsylvania.
`
`3 In re: Enco Recovery Corp. f/k/a Napster, Inc., No. 02-11573
`(PJW) brought
`in the United States Bankruptcy Court for the
`District of Delaware.
`
`
`
`Opposition No. 91165017 and Cancellation No. 92044347
`
`In this case,
`
`the parties to the instant opposition and
`
`cancellation include the parties to Civil Action No. 04-
`
`1549.
`
`In addition, Sightsound Technologies,
`
`Inc. asserts in
`
`both its notice of opposition and petition for cancellation
`
`that the transfer of ownership of the marks at issue herein
`
`to Napster, LLC are invalid, based in part upon Napster,
`
`LLC’s contentions in its answer and counterclaim in Civil
`
`Action No. 04-1549. Thus,
`
`the issues before the District
`
`Court
`
`in the civil case are clearly related to the issues
`
`before the Board herein. Any determination or discussion of
`
`Napster LLC’ rights to its involved marks in the civil
`
`action will have a bearing on the issues before the Board.
`
`Moreover,
`
`to the extent that a civil action in a Federal
`
`district court
`
`involves issues in common with those in a
`
`proceeding before the Board,
`
`the decision of the Federal
`
`district court is binding upon the Board, while the decision
`
`of the Board is not binding upon the court.
`
`See, for
`
`example, Goya Foods Inc. V. Tropicana Products Inc , 846
`
`F.2d 848,
`
`6 USPQ2d 1950 (2d Cir. 1988); and American
`
`Bakeries Co. V. Pan—O—Go1d Baking Co., 650 F Supp 563,
`
`2
`
`USPQ2d 1208 (D.Minn. 1986).
`
`Further,
`
`in its motion to reopen and enforce sale order
`
`in Chapter 11 Case No. 02-11573, Napster, LLC seeks a
`
`determination regarding the validity of the assignment of
`
`the involved marks and their goodwill to Napster, LLC and
`
`
`
`Opposition No. 91165017 and Cancellation No. 92044347
`
`its parent.4 In accordance with the above discussion, any
`
`such determination will have a bearing on the issues before
`
`the Board in these proceedings.
`
`In view of the foregoing, and in the interest of
`
`judicial economy and consistent with the Board's inherent
`
`authority to regulate its own proceedings to avoid
`
`duplicating the effort of the court and the possibility of
`
`reaching an inconsistent conclusion, proceedings herein are
`
`suspended pending final disposition of
`
`(1)
`
`the civil action
`
`involving the parties; and (2) Napster, LLC’s pending motion
`
`to reopen and enforce sale order in Chapter 11 Case No. 02-
`
`11573.
`
`Within twenty days after the final determination of the
`
`civil action and the bankruptcy proceeding,
`
`the interested
`
`party should notify the Board so that this case may be
`
`called up for appropriate action. During the suspension
`
`period the Board should be notified of any address changes
`
`for the parties or their attorneys.
`
`Proceedings Consolidated
`
`When cases involving common questions of law or fact
`
`are pending before the Board,
`
`the Board may order the
`
`consolidation of the cases.
`
`See Fed. R. Civ. P. 42(a);
`
`Regatta Sport Ltd. V. Telux—Pioneer Inc , 20 USPQ2d 1154
`
`Inc. has
`4 It is noted in addition that Sightsound Technologies,
`submitted filings in opposition to Napster, LLC’s motion in the
`bankruptcy proceeding.
`
`
`
`Opposition No. 91165017 and Cancellation No. 92044347
`
`(TTAB 1991); and Estate of Biro V. Bic Corp., 18 USPQ2d 1382
`
`(TTAB 1991).
`
`In determining whether to consolidate
`
`proceedings,
`
`the Board will weigh the savings in time,
`
`effort, and expense which may be gained from consolidation,
`
`against any prejudice or inconvenience which may be caused
`
`thereby.
`
`See, for example, Wright & Miller, Federal
`
`Practice and Procedure: Civil 2d §2383 (1999); and Lever
`
`Brothers Co. V. Shaklee Corp., 214 USPQ 654 (TTAB 1982).
`
`Consolidation is discretionary with the Board, and may be
`
`ordered upon motion granted by the Board, or upon
`
`stipulation of the parties approved by the Board, or upon
`
`the Board's own initiative.5 See, for example, Hilson
`
`Research Inc. v. Society for Human Resource Management, 27
`
`USPQ2d 1423 (TTAB 1993); and Reg
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