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`I
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`TTAB
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`IN THE UNITED STATES PATENT AND TRADEMARK OFl~..,..
`
`/
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In re Registration No. 1,744,449
`Registered January 5, 1993
`
`......................................................................--x=
`
`CROTON WATCH COMPANY, INC.,
`
`2
`
`74%es<, 51/
`
`Petitioner,
`
`Cancellation No. 92047936
`
`NUR AHMAD,
`
`PETITIONER’S RESPONSE TO RESPONDENT’S
`
`MOTION TO SUSPEND CANCELLATION
`
`PROCEEDINGS OR, IN THE ALTERNATIVE,
`MOTION TO DISMISS PETITION FOR CANCELLATION
`
`FOR FAILURE TO PLEAD FRAUD WITH SPECIFICITY
`
`Petitioner Croton Watch Company, Inc (“Petitioner”), by and through its attorneys
`
`Ostrolenk, Faber, Gerb & Soffen, LLP, pursuant to § 502.02(b) of the Trademark Trial and Appeal
`
`Board Manual of Procedure, hereby responds to Respondent’s Motion to Suspend Cancellation
`
`Proceedings or, in the Alternative, Motion to Dismiss Petition for Cancellation for Failure to Plead
`
`Fraud with Specificity (“Respondent’s Motion”). Petitioner respectfixlly requests that Respondent’s
`
`Motion be denied in its entirety for the reasons discussed below. —
`10-01-2007
`9
`\!( Tfitlfc/TM Mail Rcpl. El‘.. 336
`
`1.
`
`STATEMENT OF FACTS
`
`ll 5. Patent
`
`*
`
`The current cancellation action before the Board is simple and straightforward.
`
`There is no dispute that Respondent Nur Ahmad (the “Respondent”) is the current record owner of
`
`U.S. Registration No. 1,744,449 of the mark BELLAGIO for “jewelry and watches” in Class 14 (the
`
`“Registration”). In October 2006, Respondent filed a Complaint (the “Complaint”) in the United
`
`{00873309.1}
`
`

`
`States District Court for the Central District of California against Respondent (the “Civil Action”)
`
`alleging, inter alia, that Petitioner had infringed the Registration. _S_§§ Declaration of Natu J. Patel
`
`in Support of Respondent Nur Al1rnad’s Motion to Suspend Cancellation Proceedings or, in the
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`Alternative, Motion to Dismiss Petition for Cancellation for Failure to Plead Fraud with Specificity
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`(the “Patel Dec.”) at 1l 1, Ex. A.
`
`In its answer to the Complaint in the Civil Action (the “Answer”), Petitioner asserted
`
`various affirmative defenses. §e_e Patel Dec. at Ex. C. However, Petitioner did not assert any
`
`counterclaim to cancel the Registration. Id. Nor did Petitioner even specifically mention the fraud
`
`that Respondent had committed upon the United States Patent and Trademark Office. Id.
`
`This is because Respondent did not learn about such fraud until during the course of
`
`discovery in the Civil Action. During the discovery period in the Civil Action, Petitioner learned
`
`that Respondent had never used the mark BELLAGIO in the Registration for the “watches” covered
`
`by the Registration in the ordinary course of business and not merely to obtain or preserve registered
`
`rights. See Declaration of Peter S. Sloane (the “Sloane Dec.”). Petitioner also learned that
`
`Respondent had engaged in naked licensing of the Registration. Accordingly, Petitioner filed the
`
`instant cancellation action based upon claims of fraud and abandonment.
`
`Specifically, in the Petition for Cancellation, filed on August 6, 2007, Petitioner
`
`alleged that Respondent had fraudulently procured the Registration, and had later fraudulently
`
`maintained the Registration in filing his Declaration of Use, his Declaration of Incontestability, and
`
`his Renewal Application. Petitioner also alleged that Respondent had abandoned the mark in the
`
`Registration through naked licensing and non-use.
`
`Simply put, the Board should deny the motion to suspend proceedings because
`
`cancellation of the Registration is not an issue presently before the court in the Civil Action.
`
`{00873309. 1}
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`

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`Furthermore, the Board should deny the motion to dismiss the Petition for Cancellation because the
`
`claims of fraud asserted therein were pleaded with adequate specificity.
`
`II.
`
`ARGUMENT
`
`A.
`
`Respondent’s Motion to Suspend Should be Denied Because the Relief Sought
`in the Civil Action is Different than the Relief Sought before the Board
`
`As Respondent avers, “[w]henever 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 the other Board proceeding.” 37 C.F.R. §
`
`2.1l7(a) (emphasis added). However, the rule does not impose a requirement. Indeed, the Board
`
`should exercise its discretion to deny the motion to suspend because the claims asserted in the Civil
`
`Action are not the same as those raised in the instant cancellation action. Seg Hako-Med USA Inc.
`
`
`v. Axiom Worldwide Inc., 2006 U.S. Dist. LEXIS 91889, at *4 (M.D. F1. 2006) (affirming the
`
`Magistrate Judge's Report and Recommendation which found that the party’s “pending petition to
`
`cancel the registration has no bearing on the court’s analysis of the trademark infringement claim”).
`
`A copy of the decision in Hako-Med is attached as Exhibit 1 for the convenience of the Board.
`
`The Civil Action is a trademark infringement case based, in part, upon rights that
`
`Respondent claims in the Registration. Patel Dec. at Ex. A. In answering the Complaint in the Civil
`
`Action, so as not to waive the claim, Respondent did assert the affirmative defense of invalidity.
`
`Patel Dec. at Ex. C. However, Respondent never asserted a counterclaim to specifically cancel the
`
`Registration. Id.
`
`Indeed, Respondent only learned about the facts sufficient to support a claim to
`
`cancel the Registration, based upon fraud and abandonment, during discovery of the Civil Action
`
`{00873309. 1}
`
`

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`and after the deadline to amend the pleadings in the Civil Action had already passed. As a result,
`
`Respondent has did not have an opportunity to plead a claim to cancel the Registration in the Civil
`
`Action.
`
`Respondent speculates that the district court “will most likely” consider the issues of
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`fraud that Petitioner will raise in proving its affirrnative defense of invalidity. Respondent’s Motion
`
`at p. 5. However, there is no guarantee that the court will in fact consider such issues even if raised
`
`by Petitioner. The Board need not suspend these proceedings based upon the mere possibility that
`
`the court will consider the issues of fraud and abandonment that Petitioner has expressly asserted in
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`this cancellation action.
`
`Moreover, even if the Court does consider such issues, and finds that Petitioner has
`
`demonstrated that the Registration is invalid through fraud or abandonment, it would only support
`
`one of Petitioner’s affirmative defenses. This would be sufficient to result in dismissal of the
`
`Complaint in the Civil Action. However, it would not necessarily result in cancellation of the
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`Registration. E Riverside Memorial Mausoleum Inc. v. UMET Trust, 581 F.2d 62, 68 (3rd Cir.
`
`1978) ("A counterclaim may entitle the defendant in the original action to some amount of
`
`affirrnative relief; a [affirrnative] defense merely precludes or diminishes the plaintiffs recovery.);
`
`Fed. Deposit Ins. Corp. v. F.S.S.S., 829 F. Supp. 317, 322 at n.ll (D. Alaska 1993)(explaining that
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`affirmative defenses challenge the alleged underlying liability while counterclaims are separate and
`
`independent of the plaintiffs claims).
`
`Indeed, the prayer for relief in the Answer to the Complaint seeks only dismissal of
`
`the Civil Action. Patel Dec. at Ex. C. It contains no specific request to cancel the Registration. For
`
`that, Petitioner respectfully requests that the Board allow Petitioner to move forward with this action
`
`so that it may obtain the relief that it now seeks in canceling the Registration for fraud and
`
`{oos733o9.1}
`
`

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`abandonment. If anything, such a finding by the Board would obviate the need for the court in the
`
`Civil Action to consider the claim of trademark infringement. & Morton-Norwich Products Inc.
`
`v. J.L. Prescott Co., 216 U.S.P.Q. 1120, 1 123 (D.S.C. 1981)(finding that if the Patent and Trademark
`
`Office cancels the plaintiffs registration, the count for trademark infringement would have to be
`
`dismissed).
`
`B.
`
`Respondent’s Motion to Dismiss the Fraud Claims Should be
`Denied Because Petitioner Pled Fraud with the Reguisite Specificig
`
`For purposes of determining Respondent’s motion to dismiss with regard to
`
`Petitioner’s claims of fraud, the Board must accept as true all material allegations in the Petition for
`
`Cancellation, and must construe the Petition for Cancellation in favor of Petitioner. §e_e Ritchie v.
`
`Simpson, 170 F.3d 1092, 1097, 50 U.S.P.Q.2d 1023, 1027 (Fed. Cir. 1999), citing, Jewelers
`
`Vigilance Committee, Inc. v. Ullenberg Com. , 823 F.2d 490, 492, 2 USPQ2d 2021, 2022 (Fed. Cir.
`
`l 987).
`
`Petitioner does not dispute that, with regard to allegations of fraud, the sufficiency
`
`of its claims is governed by Fed. R. Civ. P. 9(b). 37 C.F.R. § 2.116(a). However, the sufficiency
`
`of a pleading under “Rule 9(b) must be read in conjunction with Rule 8 which only requires a short
`
`and plain statement of the claim.” Gaffrig Performance Indus., Inc. v. Livorsi Marine, Inc., 2001
`
`U.S. Dist. LEXIS 8481, at * 11 (N .D. Ill 2001). A copy of the decision in Gaffrig Performance is
`
`attached as Exhibit 2 for the convenience of the Board.
`
`In moving to dismiss the Complaint,
`
`Respondent attempts to burden Petitioner with alleging more than the short and plain statement
`
`necessary to adequately make out a claim for fraud and, in doing so, puts form over substance.
`
`Indeed, the Gaffrig Performance case, cited by Respondent in Respondent’s Motion
`
`at p. 7, states that “Plaintiff need not set forth all of the specific facts and circumstances surrounding
`
`{oos733o9.1;
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`

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`Defendant’s alleged fraud, but merely sketch the fraudulent scheme.” E. at pp. 11-12. In its five-
`
`page Petition for Cancellation, Petitioner has more than adequately sketched out the fraudulent
`
`scheme.
`
`The purpose of the specificity requirement of Rule 9 is to ensure that Respondent is
`
`provided with sufficient notice to formulate responsive pleadings. E. at p. 12 (“By no stretch of the
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`imagination is the fraud so vaguely alleged that the Defendant is unable to formulate effective
`
`responsive pleadings.”). It is unquestionable that the Petition for Cancellation placed Respondent
`
`on sufficient notice of the fraud alleged against him. All Respondent need have done in response
`
`was to deny the claims of fraud if they were in fact false. Respondent’s claim that he can only
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`speculate as to the underlying facts, Respondent’s Motion at p. 8, is disingenuous and self-serving.
`
`Respondent argues that Petitioner has not pleaded its Petition with sufficient
`
`particularity pursuant to Rule 9(b) because it did not state the “who, what, when, where and how
`
`relating to the circumstances surrounding the alleged fraud.” Respondent’s Motion p. 5-9. Review
`
`of the Petition for Cancellation makes clear that the “who” is Respondent, the “what” is the claim
`
`that Respondent falsely alleged use of his mark for watches, the “when” is when filing the use-based
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`application and when maintaining the Registration, and the “where” is before the United States
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`Patent and Trademark Office. $9 Roberts v. Francis, 128 F.3d 647, 651 (8th Cir. 1997) (holding
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`that the plaintiffs fraud allegations were well pleaded because they included the time, place and
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`contents of the alleged fraud).
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`As for the “how,” those facts are peculiarly within the knowledge of Respondent.
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`While a party pleading a claim of fraud may not do so on information belief, an exception to this
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`general rule lies when the facts underlying the fraud are peculiarly in the other party’s knowledge.
`
`
`GMA Accessories Inc. v. Idea Nuova lnc., 157 F. Supp. 2d 234, 243 (S.D.N.Y. 2000); see als_o
`
`{00873309. 1}
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`

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`Gaffrig Performance, supra, at p. 12 (stating that registrant was well aware of when, where, how,
`
`why, and who made the fraudulent misrepresentations because they centered on the application for
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`trademark registration).
`
`Those cases where fraud claims were found to be insufficiently pled typically dealt
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`with allegations that the registrant made false and fraudulent representations in the declaration to its
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`underlying application that it was the owner of the mark sought to be registered and that no other
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`person or entity had the right to use the mark in commerce. S_ee, e_g, GMA Accessories, gag, 157
`
`F. Supp. 2d at 243. The present case is more closely analogous to Medinol Ltd. v. Neuro Vasx Inc.,
`
`67 U.S.P.Q.2d 1205 (T.T.A.B. 2003) and its progeny, which find that knowingly false claims of use
`
`made to the U.S. Patent and Trademark Office are sufficient to support fraud claims.
`
`In Medinol, petitioner merely alleged that, at the time respondent had submitted its
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`statement of use, it had not used the mark at issue on or in connection with one of the two goods in
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`the registration and that, consequently, the registration was procured by respondent’s knowingly false
`
`or fraudulent statements, that said false statements were made with the intent to induce the PTO to
`
`grant the registration, and, reasonably relying upon the truth of such false statements, the PTO did,
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`in fact, grant the registration to the registrant. 67 U.S.P.Q.2d at 1206. These allegations are no
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`different in form or substance from the fraud claims pled by Petitioner in the Petition for
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`Cancellation and, consequently, the motion to dismiss the fraud claims must fail. §§§ a_sg Louis
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`Vuitton Malletier v. Dooney & Bourke, Inc., 2006 U.S. Dist. LEXIS 71091, at *l5-17 (S.D.N.Y.
`
`2006) (finding that the defendant sufficiently pled fraud by “identifying filings containing allegedly
`
`false representations regarding material facts, knowledge or belief on the part of [the plaintiff] that
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`the representations were false, an intention to induce the PTO to register/or renew the mark in
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`reliance on the misrepresentation, reasonable reliance on the part of the PTO, and damage
`
`{00873309.1}
`
`

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`proximately resulting from such reliance”). A copy of the decision in Louis Vuitton is attached as
`
`Exhibit 3 for the convenience of the Board.
`
`C.
`
`Dismissal of the Complaint in its Entirety is Inappropriate
`Inasmuch as Petitioner has Asserted Claims other than Fraud
`
`Respondent’s Motion is titled, in part, Motion to Dismiss Petition for Cancellation
`
`for Failure to Prove Fraud with Specificity. However, review of the contents of Respondent’s
`
`Motion makes it clear that Respondent seeks only to dismiss those four counts of the Petition for
`
`Cancellation alleging fraud upon the U.S. Patent and Trademark Office and not any of the other two
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`numbered counts.
`
`Respondent’s Motion states that, if this proceeding is not suspended, the Board
`
`should dismiss the “four fraud claims” because Petitioner has not plead them with particularity.
`
`Respondent’s Motion at p. 2. The Conclusion section in Respondent’s Motion likewise asks the
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`Board to dismiss the “fraud claims.” Respondent’s Motion at p. 9.
`
`Beyond the fraud claims, however, Petitioner has alleged in its Petition for
`
`Cancellation that Respondent abandoned his registered rights through naked licensing (Count V) and
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`non-use (Count VI). Respondent has not requested dismissal of those claims in Respondent’s
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`Motion. Accordingly, it would be improper to dismiss the Petition for Cancellation in its entirety.
`
`To the extent that Respondent has moved to dismiss the four fraud claims, but failed
`
`to answer or otherwise respond to the two abandonment claims, Petitioner is simultaneously moving
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`for a default judgment against Respondent.
`
`D.
`
`Dismissal of the Fraud Claims “With Prejudice” would be Improper
`
`In the Conclusion section of Respondent’s Motion, Respondent requests that the
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`{00873309. 1}
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`

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`Board dismiss Petitioner’s fraud claims “with prejudice” for failure to plead fraud with specificity.
`
`Respondent’s Motion at p. 9. At the very least, in the event that the Board finds that Petitioner has
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`failed to plead fraud with the requisite specificity, Petitioner should be provided with leave to file
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`an amended Petition for Cancellation. Where no amended complaint is submitted in response to a
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`motion to dismiss, and the Board finds, upon determination of the motion, that the complaint is
`
`defective, the Board generally allows the plaintiff time to file an amended pleading. & T.B.M.P.
`
`§ 503.03, citing, Intellimedia Sport Inc. v. Intellimedia Corp, 43 U.S.P.Q.2d 1203, 1208 (T.T.A.B.
`
`1997)(allowed petitioner time to perfect fraud claim).
`
`Indeed, were Petitioner to learn additional facts during the course of discovery in this
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`cancellation action supporting any claim for fraud committed by Respondent upon the United States
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`Patent and Trademark Office, Petitioner should not be foreclosed from raising the issue before the
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`Board.
`
`IV.
`
`CONCLUSION
`
`Based on the foregoing, Petitioner respectfully requests the Board deny Respondent’s
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`Motion in its entirety.
`
`Dated: October 1, 2007
`
`New York, New York
`
`"Express Mail" mailing label No. EV604794687US
`Date of Deposit:
`October 1 2007
`
`Respect
`
`Su
`
`d’
`
`I hereby certify that this paper or fee is bein depos'ted with the
`United States Postal Service "Express MailgPost Olffice to Ad-
`dressee" service under 37 CFR l.l0 on the date indicated above
`and is addressed to the Commissioner for Trademarks, P.O. Box
`1451, Alexandria, Virginia 22313-1451.
`
`.
`Max Moskowitz
`Peter S - Sloane
`. " eron S. Reuber
`
`Angela M. Martucci
`
`
`
`(Si8"aW<=>
`
`{0O873309.l}
`
`OSTROLENK, FABER, GERB & SOFFEN, LLP
`1180 Avenue of the Americas
`
`New York, New York 10036-8403
`
`Telephone: (212) 382-0700
`
`Attorneys for Petitioner
`
`

`
`CERTIFICATE OF SERVICE
`
`It is hereby certified that a true and correct copy of the foregoing PETITIONER’S
`
`RESPONSE TO RESPONDENT’S MOTION TO SUSPEND CANCELLATION
`
`PROCEEDINGS, OR, IN THE ALTERNATIVE, MOTION TO DISMISS PETITION FOR
`
`CANCELLATION FOR FAILURE TO PLEAD FRAUD WITH SPECIFICITY was served by
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`First—C1ass mail, postage prepaid, upon attorney for Respondent, this 1st day of October, 2007 as
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`follows:
`
`Natu J. Patel, Esq.
`The Patel Law Firm, P.C.
`
`2532 Dupont Drive
`Irvine, California 92612
`
`Peter S. Sloane
`
`{00873309.1}
`
`

`
`(cvmo
`
`

`
`Page 1
`
`LEXSEE 2006 US DIST LEXIS 9 I 889
`
`9 A
`
`nalysis
`As of: Oct 01, 2007
`
`HAKO-MED USA, INC., et al., Plaintiffs, vs. AXIOM WORLDWIDE, INC., et al.,
`Defendants.
`
`Case No. 8:06-CV-1790-T-27EAJ
`
`UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF
`FLORIDA, TAMPA DIVISION
`
`2006 U.S. Dist. LEXIS 91889
`
`December 19, 2006, Decided
`
`PRIOR HISTORY: Hako—Med United States v. Axiom
`Worldwide, 2006 U.S. Dist. LEXIS 94240 (M.D. Fla.,
`Nov. 15, 2006)
`
`[*1] For Hako—Med USA, Inc., a foreign
`COUNSEL:
`corporation, Hako—Med GMBH, a foreign corporation,
`Achim Hansjurgens, E-MOS Civil Unlimited Corpora-
`tion Fed Rep Germany, Plaintiffs: Craig M. Rappel,
`Robert Rappel, LEAD ATTORNEYS, Rappel Health
`Law Group, P.L., Vero Beach, FL.
`
`Inc., a Florida corporation,
`For Axiom Worldwide,
`James Gibson, Jr., Nicholas Exarhos, Defendants: David
`Z. Petty, LEAD ATTORNEY, McAndrews, Held &
`Malloy, Chicago,
`IL; Mitchell C. Robiner, LEAD
`ATTORNEY, Akerman Senterfitt, Tampa, FL; Patrick J.
`Arnold, Jr., LEAD ATTORNEY, McAndrews, Held &
`Malloy, Ltd., Chicago, IL.
`
`JUDGES: James [*2] D. Whittemore, United States
`District Judge.
`
`OPINION BY: James D. Whittemore
`
`OPINION
`
`ORDER
`
`BEFORE THE COURT is the Report and Rec-
`ommendation submitted by the Magistrate Judge rec-
`ommending that Defendants' Motion for Preliminary
`Injunction (Dkt.2) be granted in part and denied in part
`(Dkt. 50). Defendants have filed objections to the Report
`and Recommendation (Dkt. 55), to which Plaintiffs have
`responded (Dkt. 58).
`
`Standard of Review
`
`a Florida corporation,
`Inc.,
`For Axiom Worldwide,
`James Gibson, Jr., Nicholas Exarhos, Counter Claimants:
`David Z. Petty, LEAD ATTORNEY, McAndrews, Held
`& Malloy, Chicago,
`IL; Mitchell C. Robiner, LEAD
`ATTORNEY, Akerman Senterfitt, Tampa, FL; Patrick J.
`Arnold, Jr., LEAD ATTORNEY, McAndrews, Held &
`Malloy, Ltd., Chicago, IL.
`
`The District Court is required to "make a de novo
`determination of those portions of the magistrate's report
`or .
`.
`. recommendation to which objection is made." 28
`USC. § 636(b)(l). The District Court may "accept, re-
`ject or modify in whole or in part, the findings or rec-
`ommendations made by the magistrate." 28 U.S.C. §
`636(b)(1)(C).
`
`For Hako—Med USA, Inc., a foreign corporation, Hako-
`Med GMBH, a foreign corporation, Achim Hansjurgens,
`E-MOS Civil Unlimited Corporation Fed Rep Germany,
`Counter Defendants: Craig M. Rappel, Robert Rappel,
`LEAD ATTORNEYS, Rappel Health Law Group, P.L.,
`Vero Beach, FL.
`
`Discussion
`
`Defendants have filed four objections to the Report
`and Recommendation, which the Court addresses in turn.
`
`Because the first
`evaluated together.
`
`two objections are related,
`
`they are
`
`

`
`2006 U.S. Dist. LEXIS 91889, *
`
`Page 2
`
`1. The Report and Recommendation incorrectly
`found that Defendants’ pending Petition to Cancel
`Plaintiffs’ U.S. Registration No. 2,390,719 (the
`[*3]
`719 Registration) had no bearing on its analysis of the
`trademark infringement claim.
`
`the
`2. Plaintiffs did not present any evidence at
`hearing to rebut Defendants’ defense that the 719 regis-
`tration is invalid because it is misdescriptive.
`
`In order to prevail on a claim of trademark in-
`fringement, plaintiff must show that it has a valid trade-
`mark. Leigh v. Warner Bros., Inc. 212 F.3d 1210, 1216
`(11th Cir. 2000). A rebuttable statutory presumption of
`validity is accorded to marks registered under the Lan-
`ham Act, 15 U.S.C. ss l057(b),
`ll15(a), but
`this pre-
`sumption may be overcome by establishing the generic
`or descriptive nature of the mark." Vision Center v. Op-
`ticks, Inc., 596 F.2d 111, 119-20 (5th Cir. 1979) ' (hold-
`ing plaintiff could not demonstrate a substantial
`likeli-
`hood of success on the merits where name was descrip-
`tive and therefore invalid); Hiram Walker & Sons v.
`Penn-Md. Corp., 79 F.2d 836, 839 (2nd Cir. 1935)
`(same). Accordingly, Defendants allege as an affirmative
`defense and as a counterclaim that Plaintiffs‘ trademark
`
`is "descriptive
`invalid because it
`"VASOPULSE" is
`and/or deceptively [*4] misdescriptive and has not ac-
`quired secondary meaning." (Dkt. 48 at 35, 39). Defen-
`dants have also filed a petition to cancel this mark that is
`pending before the Trademark Trial and Appeal Board
`(TTAB), which was introduced as evidence during the
`preliminary injunction hearing. (Dkt. 52 at 13).
`
`The Eleventh Circuit adopted as binding
`1
`precedent, all decisions the former Fifth Circuit
`made prior to October 1, 1981. Bonner v. City of
`Prichard, 661 F.2d 1206, 1209 (1 1th Cir. 1981).
`
`The Magistrate Judge acknowledged that Plaintiff
`had filed a petition for cancellation on these grounds, but
`found that "the pending petition to cancel the registration
`has no bearing on the court's analysis of the trademark
`infringement claim." (Dkt. 50 at 11, n.7).
`3 The Magis-
`trate Judge did, however, determine that the mark was
`more suggestive than descriptive, and thus entitled to a
`greater amount of protection. (Dkt. 50 at 12-13). The
`Court agrees that the mark “VASOPULSE" is suggestive
`rather than descriptive [*5] because it does not describe
`what the machine actually does, 3 nor is there evidence
`that the term "vasopulse" is used by third parties or that
`another seller would naturally use the term "vasopulse"
`in marketing and selling an electrotherapy machine.
`
`2 On a motion for preliminary injunction, the
`Plaintiff must show a substantial
`likelihood of
`
`success on the merits of his claim as well as any
`affirmative defenses. See eg, N. Am. Prods.
`
`v. Moore, 196 F. Supp. 2d 1217, 1227
`Corp.
`(M.D.Fla. 2002); DSC Comms. Corp.
`v. DGI
`Techs., Inc., 81 F.3d 597, 601-02 (5th Cir. 1996).
`
`For instance, as Defendants point out in their
`3
`opposition brief and objections, "VASOPULSE"
`does not describe a characteristic or quality of
`Plaintiffs product because Plaintiffs machine
`does not treat blood vessels.
`
`the Court does not accept Defendant's
`Moreover,
`contention that the mark is "deceptively misdescriptive."
`To the extent that this is a viable affirmative defense to a
`
`trademark infringement [*6] claim, Defendants have not
`shown it is applicable. “ In order to assess whether a term
`is deceptively misdescriptive,
`the Court
`considers
`whether: (1) the term is misdescriptive of the character,
`quality, function, composition or use of the goods; (2)
`whether prospective purchasers are likely to believe that
`the misdescription actually describes the goods; and (3)
`whether the misdescription is likely to affect the decision
`to purchase. In re Budge Mfg. Co., lnc., 857 F.2d 773,
`775 (Fed. Cir. 1988).
`
`4 Defendant has cited no authority, nor has the
`Court
`located any,
`in which deceptive misde-
`scription has been used as a defense in a trade-
`mark infringement action. It is more commonly
`used in opposition to a petition for trademark
`registration. As the Magistrate Judge suggested
`during the hearing,
`it
`is unusual
`that a party
`would infringe on a mark that it believes is de-
`ceptively misdescriptive. (Dkt. 56 at 173-74).
`
`introduced evidence showing
`Defendants have not
`that a prospective purchaser, such [*7]
`as a medical
`doctor or other health care professional, is likely to be-
`lieve that the term VASOPULSE actually describes the
`function of Plaintiffs’ machine or
`that
`the name
`
`their decision to purchase
`VASOPULSE would affect
`Plaintiffs’ machine. Absent any evidence that the misde-
`scription deceived the public,
`the mark is evaluated
`merely as descriptive. See e.g., Schmidt v. Honeysweet
`Hams, lnc., 656 F. Supp. 92, 95 n.
`1 (N.D. Ga. 1986). As
`set forth above, this argument fails.
`
`3. The Report and Recommendation erroneously
`found that a plaintifl may establish a likelihood of confu-
`sion on their trade dress infringement claim by demon-
`strating a likelihood of confusion on their trademark
`infringement claim. 5
`
`The Eleventh Circuit has held that a likelihood of
`
`confusion on a trademark infringement claim establishes
`a likelihood of confusion with respect to the trade dress
`infringement claim because essentially the same seven
`factors are considered in both analyses. John H. Harland
`
`

`
`2006 U.S. Dist. LEXIS 91889, *
`
`Page 3
`
`Co. v. Clarke Checks, lnc., 71 1 F.2d 966, 981 (1 1th Cir.
`1983); Gen. Motors Corp. v. Phat Cat Carts,
`lnc., No.
`06—cv—900, 2006 US. Dist. LEXIS 75803, at *1, 2006
`WL 2982869, *5 (M.D.Fla.
`[*8] Oct. 18, 2006). How-
`ever, Defendants contend that the first factor in each of
`
`the respective inquiries -- strength of the trade dress and
`strength of the mark -—must be evaluated separately when
`the trade dress does not involve the use of the mark. Spe-
`cifically, Defendants argue that unlike their website, the
`EPS8000/NVP8500
`does
`not
`use
`the
`trademark
`VASOPULSE.
`
`The Report and Recommendation denied
`5
`Plaintiffs‘ motion for preliminary injunction as to
`the trade dress infringement claim. Plaintiffs have
`not objected to this determination.
`
`The Court finds that a determination on this issue is
`
`finding on the
`unnecessary, given the Magistrate's
`threshold issue that Plaintiffs’ trade dress was not inher-
`
`Inc. v. Kraft, 1nc., 812 F.2d
`ently distinctive. AmBrit,
`1531, 1535-36 (11th Cir. 1986) (noting inherent dis-
`tinctiveness is determined at the outset); Callaway Golf
`Co.
`v. Golf Clean, 1nc., 915 F. Supp. 1206, 1212
`(M.D.Fla. 1995) (addressing this issue first). The Court
`agrees that [*9] Plaintiffs have not sufficiently shown
`that the overall appearance of their machine is inherently
`distinctive. (Dkt. 50 at 22-23). Because the Magistrate
`correctly determined that Plaintiffs’ product was not in-
`herently distinctive and had not acquired a secondary
`meaning,
`the remaining two elements of a trade dress
`claim -- likelihood of confusion and whether the trade
`
`dress in non—functional —- need not be assessed. See e.g.,
`AmBrit, lnc., 812 F.2d at 1535, 1539 n.36 (stating that a
`plaintiff must prove all
`three elements of a trade dress
`claim and noting that the inherent distinctiveness analy-
`sis is concerned with determining whether a threshold
`level of distinctiveness has been reached, whereas the
`strength of the mark analysis is more thorough).
`
`4. The Report and Recommendation incorrectly
`states that Dr. Hansjurgens "testified at length concern-
`ing the accused’s device's alleged infringement," to the
`extent
`this finding could be construed to mean that
`Plaintififs met the second part of the two-part test for
`patent infringement. “
`
`The Report and Recommendation correctly observed
`that the two—step analysis for patent infringement claims
`is: (1) construction [*10] of the claims to determine the
`scope and meaning of the asserted claims; and (2) com-
`parison of the properly construed claims with the alleg-
`edly infringing device. P.N.A. Constr. Techs.,
`Inc.
`v.
`McTech Group,
`Inc., 414 F. Supp. 2d 1228,
`1235
`(N.D.Ga. 2006). The Magistrate Judge also correctly
`found that Plaintiffs had failed to present a proposed
`claims construction and, as a result,
`the analysis could
`not proceed further. Therefore,
`the Report and Recom-
`mendation did not find or otherwise imply that Dr.
`Hansjurgens'
`testimony was sufficient
`to establish the
`second portion ofthe inquiry.
`
`The Report and Recommendation denied
`6
`Plaintiffs‘ motion for preliminary injunction as to
`the patent infringement claim. Plaintiffs have not
`objected to this determination.
`
`Conclusion
`
`After careful consideration of Report and Recom-
`mendation in conjunction with an independent examina-
`tion of the file, the Court is of the opinion that the Report
`and Recommendation should be adopted, except to the
`extent [*1 1] modified herein. Accordingly, it is
`
`ORDERED AND ADJUDGED that
`
`1) The Report and Recommendation (Dkt. 50) is
`adopted, except
`to the extent modified herein, and is
`made a part of this order for all purposes, including ap-
`pellate review.
`
`2) Plaintiffs' Motion for Preliminary Injunction (Dkt.
`2) is GRANTED IN PART as set forth in the the Report
`and Recommendation (Dkt. 50 at 25).
`
`3) Plaintiffs are directed to post bond in the amount
`of $ 25,000.00.
`
`DONE AND ORDERED in chambers on this 19th
`day of December, 2006.
`
`JAMES D. WHITTEMORE
`
`United States District Judge
`
`

`
`

`
`Page 1
`
`LEXSEE 2001 U.S. DIST. LEXIS 8481
`
`!»‘az:§
`Caution
`
`As of: Sep 29, 2007
`
`GAFFRIG PERFORMANCE INDUS., INC., Plaintiff, v. LIVORSI MARINE, INC.,
`Defendant.
`
`CAUSE NO. 99C7778
`
`UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
`
`ILLINOIS, EASTERN DIVISION
`
`2001 U.S. Dist. LEXIS 8481
`
`June 22, 2001, Decided
`June 25, 2001, Docketed
`
`SUBSEQUENT HISTORY: Injunction granted at Gaf-
`frig Performance Indus. v. Livorsi Marine, Inc., 2003
`U.S. Dist. LEXIS 23018 (N.D. 111., Dec. 19, 2003)
`
`[*1] Defendant's Motion for Sum-
`DISPOSITION:
`mary Judgment DENIED.
`
`CASE SUMMARY:
`
`PROCEDURAL POSTURE: Plaintiff sued defendant
`
`for trademark infringement, false designation of origin
`under federal
`law, and consumer fraud and deceptive
`trade practices under state law. Defendant answered and
`counter-claimed against plaintiff alleging the
`same
`causes of action. Defendant, as counter-plaintiff, moved
`for summary judgment.
`
`OVERVIEW: The predecessor to plaintiff was in the
`business of selling marine products. Defendant acquired
`the right to use the predecessor's trademark on speed-
`ometers. Prior to the predecessor being involuntarily
`dissolved, plaintiff was formed by the predecessor's prin-
`cipal. Defendant was granted a trademark using the prin-
`cipal's name on products beyond speedometers. The
`trademark became incontestable. Plaintiff had used the
`
`name to identify its products under the predecessor com-
`pany prior to entering into the agreement with defendant.
`Defendant's summary judgment motion was denied.
`Plaintiff asserted that defendant had obtained the trade-
`
`defendant's argument that plaintiff had not pleaded fraud
`with the required particularity. The court
`found that
`plaintiff had complied with the requirements of Fed. R.
`Civ. P. 9(b) when read in conjunction with Fed. R. Civ.
`P. 8. Plaintiff also raised an issue of genuine fact as to
`whether defendant had performed under the terms of the
`agreement. There was also an issue as to whether the
`incontestable trademark could be challenged.
`
`OUTCOME: Defendant's motion for summary judg-
`ment was denied.
`
`LexisNexis(R) Headnotes
`
`Civil Procedure > Discovery > Methods > General
`Overview
`
`Civil Procedure > Summary Judgment > Standards >
`Genuine Disputes
`Civil Procedure > Summary Judgment > Standards >
`Materiality
`[HNI] A motion for summary judgment shall be granted
`if the pleadings, depositions, answers to interrogatories,
`and admissions on file, together with the affidavits, if
`any, show that there is no genuine issue as to any mate-
`rial fa

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