Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA569816
`ESTTA Tracking number:
`11/08/2013
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`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91212237
`Plaintiff
`Golding Farms Foods, Inc.
`WILLIAM J UTERMOHLEN
`OLIFF & BERRIDGE PLC
`277 SOUTH WASHINGTON STREET, SUITE 500
`ALEXANDRIA, VA 22314
`UNITED STATES
`email@oliff.com, mhayes@oliff.com, wutermohlen@oliff.com
`Motion to Dismiss - Rule 12(b)
`William J. Utermohlen
`wutermohlen@oliff.com,mhayes@oliff.com,email@oliff.com
`/William J. Utermohlen/
`11/08/2013
`Motion to Dismiss Counterclaims FINAL.pdf(24044 bytes )
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`Proceeding
`Party
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`Correspondence
`Address
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`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`Opposition No.: 91212237
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`Mark: NATURE'S HEALTHIEST
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`Serial No.: 85/782,647
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`GOLDING FARMS FOODS, INC.,
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` Opposer,
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` v.
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`NATURE'S HEALTHIEST CERTIFICATION,
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` Applicant.
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`MOTION TO DISMISS COUNTERCLAIMS AND TO STRIKE CERTAIN DEFENSES
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`Applicant asserts three fraud counterclaims alleging that Opposer's Registration No.
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`2,073,197 was obtained in 1995, maintained in 2003, and renewed in 2007 through declarations
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`allegedly falsely claiming use of the mark. All of these counterclaims are conclusory, without
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`recitation of any supporting facts, and fail to meet the required standards for pleading, including
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`under Fed. R. Civ. P. 9(b) and Twombly/Iqbal. Accordingly, they should be dismissed under Fed. R.
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`Civ. P. 12(b)(6).
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`Applicant has also pled a fourth counterclaim of abandonment of Opposer's NATURALLY
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`HEALTHY mark through the same alleged lack of use. This fails to state a claim upon which relief
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`can be granted because no facts have been pled supporting a reasonable inference of abandonment.
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`In addition, Applicant has pled an "unclean hands" defense reciting that Opposer's
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`Application No. 86/046,752 was filed based on a false allegation of use of the mark and an
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`abandonment defense relying on the same assertions as the abandonment counterclaim. These
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`defenses should be stricken under Fed. R. Civ. P. 12(f) for inadequate pleading, as detailed below.
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`1
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`I.
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`Applicant Has Not Properly Pled Fraud
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`A.
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`The Applicable Standard
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`Under Trademark Rule 2.116(a), the Federal Rules of Civil Procedure apply to TTAB
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`pleadings. Fraud is subject to a heightened pleading standard under Fed. R. Civ. P. 9(b):
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`In alleging fraud or mistake, a party must state with particularity the circumstances
`constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's
`mind may be alleged generally.
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`The purposes of this heightened requirement "include providing notice, weeding out baseless claims,
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`preventing fishing expeditions and fraud actions in which all facts are learned after discovery, …
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`serving the goals of Rule 11," and protecting those whose reputation would be harmed as a result of
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`being subject to fraud charges. Asian and Western Classics B.V. v. Selkow, 92 USPQ2d 1478, 1479
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`(TTAB 2009) (citing cases collected in Wright & Miller, Federal Practice & Procedure: 5A § 1296
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`n.11); Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1329 n.6 (Fed. Cir. 2009). See also
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`King Automotive, Inc. v. Speedy Muffler King, Inc., 667 F.2d 1008, 212 USPQ 801, 803 (CCPA
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`1981) ("the pleadings [must] contain explicit rather than implied expression of the circumstances
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`constituting fraud").
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`Moreover, although "knowledge" and "intent" may be averred generally, the Federal Circuit
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`"requires that the pleadings allege sufficient underlying facts from which a court may reasonably
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`infer that a party acted with the requisite state of mind." Exergen Corp., 575 F.3d at 1327 & n.4.
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`Even where the lesser pleading standard of Rule 8(a)(2) is applicable, the Supreme Court similarly
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`requires that a complaint allege enough facts to allow the court to draw a reasonable inference of
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`liability. Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. 662
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`(2009). To do so, the claimant must allege sufficient facts to state a plausible claim, which facts
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`must be more than "[t]hreadbare recitals of the elements of a cause of action, supported by mere
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`2
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`conclusory statements." Caymus Vineyards v. Caymus Medical Inc., 107 USPQ2d 1519, 1522
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`(TTAB 2013) (quoting Iqbal, 129 S. Ct. 1937, 1949-50, in turn citing Twombly, 550 U.S. at 555).
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`Pleading on "information and belief" is permitted under Rule 9(b) when essential
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`information lies uniquely within another party’s control, but only if the pleading sets forth the
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`specific facts upon which the belief is reasonably based. Exergen Corp., 575 F.3d at 1330. The
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`Board emphasized this point in Asian and Western Classics:
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`[A]llegations [based solely upon information and belief] fail to meet the Fed. R. Civ. P. 9(b)
`requirements as they are unsupported by any statement of facts providing the information
`upon which petitioner relies or the belief upon which the allegation is founded (i.e., known
`information giving rise to petitioner’s stated belief, or a statement regarding evidence that is
`likely to be discovered that would support a claim of fraud).
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`92 USPQ2d at 1479 (emphasis in original).
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`The failure to recite the words "on information and belief" does not lower the pleading
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`standard where the allegations of fraud are implicitly based on such information. See Exergen
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`Corp., 575 F.3d at 1330-31 n.7 (quoting Romani v. Shearson Lehman Hutton, 929 F.2d 875, 878 (1st
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`Cir.1991) ("Where allegations of fraud are explicitly or … implicitly … based only on information
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`and belief, the complaint must set forth the source of the information and the reasons for the
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`belief.")).
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`B.
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`The Insufficient Pleading
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`Applicant's First through Third Counterclaims fail to meet the heightened pleading
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`standards for alleging fraud under Fed. R. Civ. P. 9(b) in that its allegations (i) do not plead fraud
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`with sufficient particularity, (ii) do not plead sufficient facts to infer scienter, (iii) incorrectly
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`assert that "reckless disregard for the truth" is sufficient for a finding of fraud, and (iv)
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`incorrectly assert that an alleged incorrect date of first use constitutes fraud.
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`3
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`First, Applicant's First through Third Counterclaims fail to plead the allegations of fraud
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`with sufficient particularity. Each of Applicant's First through Third Counterclaims follow the
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`same format in alleging that Opposer falsely alleged use in 1995, 2003, and 2007, at the times
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`Opposer initially alleged use, submitted a declaration under Sections 8 and 15, and renewed the
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`registration, respectively. The allegations of the First Counterclaim are representative:
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`Opposer's pleaded Registration No. 2,073,197, issued June 24, 1997, and renewed June 9,
`2007 was obtained fraudulently. Opposer submitted the application for registration of the
`mark, NATURALLY HEALTHY, on October 12, 1995 supported by a declaration
`signed on October 5, 1995 by Ernest G. Golding, president of Opposer. The application
`was assigned serial number 75/004589 by the PTO. The application serial number
`75/004589 claimed a first use of the mark and a firt [sic] use in commerce of the mark of
`August 4, 1995 for goods in international classes 29, 30, and 32 and claimed use of the
`mark at the time of filing the application. The signer of the declaration/application
`falsely claimed use of the mark, NATURALLY HEALTHY, in connection with jams and
`jellies in international class 29; salad dressing, molasses, maple syrup, steak sauce, salsa,
`hot sauce, relish, mustard, barbecue sauce, cocktail sauce, tarter [sic] sauce in
`international class 30; and fruit juices, bottled liquid bloody mary mix, syrups for making
`fruit drinks in international class 32. The signer of the declaration/application knew, or
`he had a reckless disregard for the truth thereof, that these claims of first use and
`continued use of Opposer's mark, NATURALLY HEALTHY, in connection with the
`above goods were false and were made with the intention to deceive the PTO and induce
`the PTO in reliance thereon to issue Registration No. 2,073,197.
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`Applicant's Answer, Affirmative Defenses and Counterclaims to Notice of Opposition (hereafter
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`"Answer and Counterclaims") ¶ 18.
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`Applicant conclusorily alleges that the claim of use of the marks with the recited goods
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`was "false," but provides no plausible factual basis to infer that Applicant has any knowledge of
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`what products Opposer was or was not selling under the NATURALLY HEALTHY mark in
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`1995, 2003, or 2007.1 Applicant's unsupported allegations are implicitly made on "information
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`1 The PTO's electronic file history contains specimens of use for at least jelly and honey in 1995
`(the cover letter indicates three specimens were submitted); jelly, jam, honey and bloody mary
`mix in 2003 and jam, honey and bloody mary mix in 2007.
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`4
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`and belief," but no facts are pled that would provide a reasonable basis for such a belief.
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`Accordingly, Applicant's First, Second and Third Counterclaims all fail to meet the Rule 9(b)
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`standard, as well as the Twombly/Iqbal standard.
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`Second, the First, Second and Third Counterclaims fail to allege sufficient facts from
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`which the Board could reasonably infer that Opposer acted with the requisite state of mind. No
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`facts are pled from which one could infer, even assuming that Opposer's statements as to use
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`were false, that Opposer, and Opposer's representatives who signed the declarations, knew they
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`were false or acted with reckless disregard for their truth. There is "a material legal distinction
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`between a 'false' representation and a 'fraudulent' one, the latter involving an intent to deceive."
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`In re Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009) (quoting Kemin Indus., Inc. v. Watkins
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`Prods., Inc., 192 USPQ 327, 329 (TTAB 1976)).
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`Third, reckless disregard for the truth is not a legally sufficient basis for a fraud claim. In
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`Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 98 USPQ2d 1665 (2011), the
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`Supreme Court held that such a standard was insufficient to establish inducement of patent
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`infringement, instead requiring actual knowledge or "willful blindness." If reckless disregard is
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`insufficient for inducement, it clearly cannot meet the higher standard necessary to allege fraud.
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`See Ritchie, Is "Willful Blindness" the New "Recklessness" After Global-Tech?, 21 Fed. Cir.
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`B.J. 165 (2011); cf. In re Bose Corp., 580 F.3d at 1246 n.2 (expressly not resolving--prior to the
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`Global-Tech decision--whether reckless disregard is sufficient).
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`Finally, the First Counterclaim alleges fraud based on allegedly false dates of first use.
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`Such a claim is insufficient because the only issue affecting validity is whether there was use on
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`or before the date of the filing of the application, not when that use began. See In re W.R. Case
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`& Sons Cutlery Co., 12 USPQ2d 1544, 1546 (TTAB 1989).
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`5
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`II.
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`Applicant's "Unclean Hands" Defense Should Be Stricken
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`The Notice of Opposition notes that Opposer has filed an application to register
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`NATURALLY HEALTHY for bottled water and related goods, based on common law use back
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`at least to 2010. Such application was only filed on August 23, 2013 and thus postdates
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`Applicant's November 19, 2012 intent to use application. Applicant nonetheless purports to
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`assert a "defense" to the Opposition based on the filing of such application:
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`Opposer has engaged in unclean hands with respect to its pleaded application serial
`number 86/046,752, filed August 23, 2013, for registration of the mark, NATURALLY
`HEALTHY, for bottled drinking water, bottled water, distilled drinking water, still water,
`water beverages, claiming a date of first use and first use in commerce of June 26, 2010
`and current use of the mark. The declaration supporting the application was signed by
`Opposer's attorney, William J. Utermeohlen [sic]. The signer of the declaration falsely
`claimed use of Opposer's mark, NATURALLY HEALTHY, in connection with bottled
`drinking water, bottled water, distilled drinking water, still, water, water beverages. The
`signer of the declaration knew, or had a reckless disregard for the truth thereof, that these
`claims of use of Opposer's mark, NATURALLY HEALTHY, in connection with the
`above goods were false and were made with the intention to deceive the PTO and induce
`the PTO in reliance thereon to issue a registration for Opposer's mark, NATURALLY
`HEALTHY, for the above goods. Applicant intends to file a Notice of Opposition
`against application serial number 86/046,752 upon publication of the mark for opposition
`and to request consolidation of that Opposition with the instant Opposition and institute
`an additional counterclaim herein requesting denial of application serial number
`86/046,752.
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`Answer and Counterclaims ¶ 16.
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`Leaving aside Applicant's recitation of its future intent, this alleged defense is irrelevant
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`to the issues in this proceeding and should be stricken. Application No. 86/046,752 is not
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`directly asserted as a basis for this opposition because it does not have priority over Applicant's
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`application. Opposer does rely on its underlying common law usage of NATURALLY
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`HEALTHY with water, but that basis does not depend on the existence of Application No.
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`86/046,752. Even if the declaration was false, as recited, it could thus not amount to "unclean
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`hands" somehow undermining the contentions that Opposer does assert.
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`6
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`If Opposer's application had priority and was asserted in support of the opposition,
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`Applicant might be able to assert counterclaims attacking the application, but could not do so by
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`affirmative defenses. See Trademark Rule 2.106(a)(2)(ii); Continental Gummi-Werke AG v.
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`Continental Seal Corp., 222 USPQ 822, 825 (TTAB 1984); W. R. Grace & Co. v. Arizona
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`Feeds, 195 USPQ 670, 671 (Comm'r 1977) (affirmative defenses stricken because they would be
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`a collateral attack on validity of registration, which can only be asserted by counterclaim).
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`To the extent such an "unclean hands" defense were theoretically viable (which Opposer
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`denies), it would essentially be a fraud claim and would thus require satisfaction of Fed. R. Civ.
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`P. 9(b) and the standard of Twombly/Iqbal, and should also be dismissed for the same reasons
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`asserted above with respect to the First to Third Counterclaims.
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`III. Applicant Has Not Properly Pled Abandonment
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`Applicant's Fourth Counterclaim alleges that Opposer has abandoned its mark with
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`respect to the same goods that are the subject of the claim of fraud:
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`Opposer has abandoned its mark, NATURALLY HEALTHY, by having discontinued
`use of the mark with intent not to resume such use and/or by non-use of the mark for
`three consecutive years with respect to the following goods indicated in Registration No.
`2,073,197: jams and jellies in international class 29; salad dressing, molasses, maple
`syrup, steak sauce, salsa, hot sauce, relish, mustard, barbecue sauce, cocktail sauce, tarter
`[sic] sauce in international class 30; and fruit juices, bottled liquid bloody mary mix,
`syrups for making fruit drink in international class 32. Pursuant to Section 18 of the
`Trademark Act, Registration No. 2,073,197 should be cancelled in part or modified by
`limiting the goods therein to those in connection with which the mark has not been
`abandoned.
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`Answer and Counterclaims ¶ 24.
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`In order to set forth a cause of action to cancel a registration on the basis of
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`abandonment, a plaintiff must allege the ultimate facts which make out a prima facie case of
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`abandonment. See Otto International Inc. v. Otto Kern GmbH, 83 USPQ2d 1861, 1863 (TTAB
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`2007). Similarly, to satisfy Twombly/Iqbal a plaintiff must allege well-pleaded factual matter and
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`provide more than "[t]hreadbare recitals of the elements of a cause of action, supported by mere
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`conclusory statements." Caymus Vineyards, 107 USPQ2d at 1522. All Applicant's abandonment
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`counterclaim supplies is the conclusory recitation of the elements of a cause of action as to the
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`recited goods. No facts are pled that would raise a reasonable inference of abandonment as to any of
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`those goods. Accordingly, the Fourth Counterclaim should be dismissed.
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`Applicant makes a similar conclusory allegation of abandonment as a defense in ¶ 15 of
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`the Answer and Counterclaims. That defense should be stricken for the same reasons, and
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`because it constitutes a collateral attack on Opposer's registration without being made part of a
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`counterclaim.
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`IV. Conclusion
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`For the foregoing reasons, the Board should dismiss Applicant's counterclaims and strike
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`Applicant's defenses in paragraphs 15 and 16 of the Answer.
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`Dated: November 8, 2013
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`/William J. Utermohlen/
`William J. Utermohlen
`William P. Berridge
`OLIFF & BERRIDGE, PLC
`277 South Washington Street
`Suite 500
`Alexandria, VA 22314
`tel: 703-836-6400
`fax: 703-836-2787
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`Attorneys for Opposer
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`8
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`CERTIFICATE OF SERVICE
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`This is to certify that on this 8th day of November, 2013, a copy of the foregoing
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`MOTION TO DISMISS COUNTERCLAIMS AND TO STRIKE CERTAIN DEFENSES
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`was served by first class mail, postage prepaid, to:
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`Joseph J. Orlando, Esq.
`Stewart J. Bellus, Esq.
`Frederick J. Dorchak, Esq.
`BUCKNAM AND ARCHER
`1077 Northern Boulevard
`Roslyn, NY 11576
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`/William J. Utermohlen/
`Attorney for Opposer
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`9