Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`
`ESTTA Tracking number:
`
`ESTTA1097713
`
`Filing date:
`
`11/24/2020
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`92075315
`
`Party
`
`Correspondence
`Address
`
`Submission
`
`Filer's Name
`
`Filer's email
`
`Signature
`
`Date
`
`Attachments
`
`Plaintiff
`Peninsula Components, Inc. dba Pencom
`
`RICHARD A. NEBB
`DERGOSITS & NOAH LLP
`ONE EMBARCADERO CENTER, SUITE 350
`SAN FRANCISCO, CA 94111
`UNITED STATES
`Primary Email: rnebb@dergnoah.com
`Secondary Email(s): tmdocketing@dergnoah.com
`415-705-6377
`
`Motion to Dismiss - Rule 12(b)
`
`Richard A Nebb
`
`rnebb@dergnoah.com, tmdocketing@dergnoah.com
`
`/Richard A Nebb/
`
`11/24/2020
`
`Opposition-to-M-Dismiss_Double-Square-1.pdf(85344 bytes )
`Exhibit-1.pdf(189031 bytes )
`Exhibit-2.pdf(47559 bytes )
`
`

`

`Richard A. Nebb
`Dergosits & Noah LLP
`One Embarcadero Center, Suite 350
`San Francisco, CA 94111
`(415) 705-6377 tel
`(415) 705-6383 fax
`rnebb@dergnoah.com
`tmdocketing@dergnoah.com
`
`Attorneys for Petitioner Peninsula Components, Inc.
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`
`
`Registration No. 1,400,893
`July 15, 1986
`
`
`
`
`
`In Re:
`Issued:
`
`
`
`
`
`
`Cancellation No. 92075315
`
`
`Peninsula Components, Inc.
`
`
`Petitioner,
`
`
`
`v.
`
`
`PEM Management, Inc.
`
`
`Respondent/Registrant
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`PETITIONER’S OPPOSITION TO REGISTRANT’S MOTION TO DISMISS
`
`Petitioner has filed the current proceeding since it is possible that the District Court may
`
`not resolve the invalidity issue presented in the Petition in the pending civil action between these
`
`parties. The continued existence on the Principal Register of U.S. Registration 1,400,893
`
`directed to functional matter is an issue of significant importance to competition for fasteners.
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-1-
`
`

`

`PETITIONER HAS PLEADED AN ADEQUATE BASIS
`TO MAINTAIN THE INSTANT CANCELLATION
`
`I.
`
`
`
`In order to withstand a motion to dismiss, the subject Petition for Cancellation
`
`(“Petition”) need only allege such facts as would, if proved, establish that Petitioner is entitled to
`
`bring or maintain the statutory cause of action under 15 U.S.C. § 1064. The Federal Circuit
`
`recently held in Corcamore, LLC v. SFM, LLC, No. 2019-1526 (Fed. Cir. October 27, 2020), that
`
`the analytical framework described by the Supreme Court in Lexmark International, Inc. v. Static
`
`Control Components, Inc., 572 U.S. 118 (2014), is the applicable standard for making such a
`
`determination, although the Federal Circuit could “discern no meaningful, substantive
`
`difference” between the framework described in Lexmark or that set forth by the Federal Circuit
`
`in Expresa Cubana del Tabaco v. General Cigar Co., 753 F.3d 1270 (Fed. Cir. 2014). The
`
`Lexmark test requires that the complainant demonstrate (i) an interest falling within the zone of
`
`interest protected by the statute, and (ii) proximate causation. Lexmark, supra, 572 U.S. at 129-
`
`34. More plainly, the Petition must "state a claim to relief that is plausible on its face" with well-
`
`pleaded factual matter. Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007); see also
`
`TBMP § 503.02 & note 3.
`
`The zone of interest requirement is “not especially demanding” and “the benefit of any
`
`doubt goes to the plaintiff.” The purpose of the zone of interest requirement is to “foreclose[]
`
`suit only when a plaintiff’s interests are so marginally related to or inconsistent with the purposes
`
`implicit in the statue that it cannot reasonably be assumed that Congress authorized that plaintiff
`
`to sue.” Corcamore, supra, at p. 9 (citing Lexmark, supra, 572 U.S. at 130). The proximate
`
`cause requirement evaluates “whether the harm alleged has a sufficiently close connection to the
`
`conduct the statute prohibits.” Corcamore, supra, at p. 10 (citing Lexmark, supra, 572 U.S. at
`
`133).
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-2-
`
`

`

`There is no doubt that on its face the Petition meets these requirements.
`
`
`
`A.
`
`Harm is Proximately Caused by Registrant’s Continued Assertion
`of a Functional Product Configuration Against Petitioner
`
`
`As noted in paragraph 18 of the Petition, Registrant has twice asserted the ‘893
`
`Registration against Petitioner in federal civil actions in attempts to bar Petitioner from making
`
`and selling floating fastener products having the product configuration shown in the ‘893
`
`Registration, and such actions have harmed Petitioner’s commercial business interests. As noted
`
`in Registrant’s brief, the first action was brought in 2007 and the second, currently pending
`
`action was brought in 2019. (Registrant’s Brief, at 2-4). In the 2007 action, the alleged
`
`infringement of the ‘893 Registration was by an older, first product sold by Petitioner, and
`
`Petitioner discontinued selling the first product per the 2008 Agreement referenced by
`
`Registrant. In the pending civil action, the alleged infringement of the ‘893 Registration was by
`
`a different, second product. Thus, by virtue of Registrant’s actions in actively asserting
`
`exclusive rights in the ‘893 Registration, rights that are clearly within the zone of interest
`
`contemplated by the statute, Petitioner has suffered and continues to suffer harm due to the cloud
`
`on its ability to offer the same or similar functional product feature in a fastener product without
`
`fear of suit by Registrant based upon the rights at issue here.
`
`
`B.
`
`Petitioner is a Competitor Having a Significant Commercial Interest in the
`Product Configuration of the ‘893 Registration
`
`
`
`
`The Petition describes Petitioner and Registrant’s exclusive licensee as manufacturers
`
`and industrial suppliers “of mechanical hardware and components to various industries, in direct
`
`competition with each other.” (Petition, at ¶¶ 1-2). This factual allegation of direct competition
`
`supports Petitioner’s sufficient commercial interest in bringing and maintaining this cancellation
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-3-
`
`

`

`proceeding to invalidate the ‘893 Registration as directed to functional matter for “floating
`
`fasteners.”
`
`The present cancellation action falls squarely within the zone of interest of the statutory
`
`cause of action. For purposes of this motion, Petitioner’s allegations must be taken as true.
`
`Moreover, Registrant has implicitly admitted that the parties are direct competitors in its moving
`
`papers, through its discussion on eleven of the thirteen pages of its brief about the commercial
`
`relationship between the parties including the prior and currently pending civil litigation. It is
`
`well-settled by this Board’s jurisprudence that because Petitioner is a competitor of Registrant,
`
`Petitioner presumptively has an interest in the outcome of the proceedings beyond the general
`
`public. Grote Indus., Inc. v. Truck-Lite Co., LLC, 126 USPQ2d 1197, 1201 (TTAB 2018)(direct
`
`competitor has standing to bring cancellation and opposition proceedings against product
`
`configuration marks); Poly-America, L.P. v. Illinois Tool Works Inc., 124 USPQ2d 1508, 1512
`
`(TTAB 2017)(petitioner is required to be in a position to have a right to use the mark in question,
`
`for example, by showing that it is engaged in the manufacture or sale of the same or related good
`
`as those listed in the challenged registration); Plyboo America, Inc. v. Smith & Fong Co., 51
`
`USPQ2d 1633 (TTAB 1995)(no issue as to standing since opposer is a competitor who has used
`
`the mark).
`
`
`
`Petitioner and other similarly situated competitors have a commercial interest in making
`
`and supplying fasteners that include the functional feature claimed as a trademark by Registrant.
`
`Competitors in this industry, including both Petitioner and Registrant, have a commercial interest
`
`in being able to provide any and every customer-desired fastener product, including a fastener
`
`having the functional feature described in the ‘893 Registration. The square-in-square feature of
`
`the ‘893 Registration provides utilitarian advantages as described and/or shown in Paragraphs 4-
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-4-
`
`

`

`10, 12-17, 24-25 and 28-29 of the Petition, and by providing trademark protection to Registrant
`
`for this feature, free and fair competition will be impaired. The U.S. Supreme Court has clearly
`
`held on multiple occasions that “copying of the functional features of an unpatented product is
`
`lawful.” Cooper Indus. v. Leatherman Tool Group, Inc., 532 U.S. 424, 441 (2001). Registrant
`
`cannot use trademark law to prevent competitors from using functional features, and in fact,
`
`competitors “may copy [registrant’s] goods slavishly down to the minutest detail: but he may not
`
`represent himself as the [registrant] in their sale.” Bonito Boats, Inc. v. Thunder Craft Boats,
`
`Inc., 489 U.S. 141, 157 (1989).
`
`
`
`II.
`
`
`THE BOARD NEED NOT CONSIDER CONTRACTUAL ESTOPPEL ISSUES
`
`A. The Contractual Estoppel Issues Raised by Registrant
`Have Been Fully Briefed in the Pending Civil Litigation
`
`The Board need not consider the external evidence related to the contractual estoppel
`
`issues raised by Registrant in its motion to dismiss. In general, the Board will not consider
`
`matters external to the Petition such as an affirmative defense based upon contractual estoppel,
`
`and Petitioner need not submit proofs in response to a motion to dismiss representing a facial
`
`attack on the pleadings - it is the sufficiency of the factual allegations in the Petition itself that is
`
`at issue. Fed.R.Civ.Proc. 12(d); TBMP 503.04; Advanced Cardiovascular Systems Inc. v.
`
`SciMed Life Systems Inc., 988 F.2d 1157, 26 USPQ2d 1038, 1041 (Fed. Cir. 1993); Covidien LP
`
`v. Masimo Corp., 109 USPQ2d 1696, 1697 n.3 (TTAB 2014); Compagnie Gervais Danone v.
`
`Precision Formulations LLC, 89 USPQ2d 1251, 1255-56 (TTAB 2009). Registrant
`
`acknowledges this procedural limitation. (Registrant’s Brief, at p. 5).
`
`However, in this case, the Board also need not consider contractual estoppel at this time
`
`for another significant reason. The contractual estoppel issues raised by Registrant here in its
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-5-
`
`

`

`motion to dismiss have already been fully briefed in the pending civil litigation between the
`
`parties, based on Plaintiff/Registrant’s motion for summary judgment on Defendant/Petitioner’s
`
`affirmative defense of invalidity of the ‘893 Registration. Registrant’s brief on this issue from
`
`the civil litigation is attached hereto as Exhibit 1. Although plaintiff’s pending summary
`
`judgment motion was brought at a time when pre-trial discovery was thought to be nearly
`
`concluded, various discovery issues as well as the Covid-19 virus have slowed the pace of the
`
`District Court litigation, and the District Court mooted all pending summary judgment motions
`
`until such time as ordered by the court. (See Exhibit 2, Court Order). The District Court has yet
`
`to issue a new scheduling order.
`
`Thus, the Board should wait for a decision on the merits of Registrant’s summary
`
`judgment motion by the District Court on a fully developed factual record and need not consider
`
`the contractual estoppel issues in the context of Registrant’s motion to dismiss based upon a
`
`factual attack of the Petition.
`
`
`
`B. Consideration of Factual Issues Regarding Contractual Estoppel
`Would Be Premature
`
`
`
`Petitioner further notes that Registrant has not filed an answer, and the initial discovery
`
`conference has not been conducted. Therefore, no factual discovery has yet taken place, and any
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`factual and legal issues that may arise from the 2008 Settlement Agreement between the parties
`
`or any other source are not ripe for consideration on this motion to dismiss, which must be
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`decided on the basis of the factual allegations in the Petition and nothing more.
`
`
`
`
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-6-
`
`

`

`III.
`
`LACHES CANNOT BE DETERMINED ON
`REGISTRANT’S FACIAL ATTACK OF THE PETITION
`
`Registrant’s motion to dismiss also raises laches, another affirmative defense, as grounds
`
`for granting its motion. (Registrant’s Brief at pp. 11-12.) Laches requires a factual inquiry that is
`
`not appropriate for a motion to dismiss based solely on the allegations of the Petition. Advanced
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`Cardiovascular Systems, supra, 988 F.2d at 1161 (dismissal under Rule 12(b)(6), based solely
`
`upon the complainant’s pleading, is not readily applicable to the determination of laches; the
`
`mere passage of time does not constitute laches). While there are court decisions which grant
`
`dismissal under Rule 12(b)(6) on the basis of laches, in a case such as this where Registrant’s
`
`motion represents a facial attack, it is only appropriate to grant dismissal when the factual bases
`
`for the affirmative defense are set forth in the Petition. Williams v. Clarence M. Kelley Det.
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`Servs., Inc., 2012 U.S. Dist. LEXIS 172895, 2012 WL 6085121, at *2 (D. Kan. 2012) (declining
`
`to consider the defendants' laches defense because defendants made factual assertions"which
`
`invite[ ] the court to decide defendants' Rule 12(b)(6) motion on the basis of matters outside the
`
`pleadings.")
`
`In the present proceeding, the equitable defense of laches places upon the Registrant the
`
`burden to establish that, from the allegations of the Petition, (1) there was an unexplained and
`
`inexcusable delay in Petitioner’s exercise of its right to seek cancellation of a functional
`
`trademark registration, and (2) that Registrant has been prejudiced by Petitioner’s delay. A
`
`review of the Petition fails to reveal facts sufficient to conclusively establish either prong of the
`
`laches defense.
`
`There are no facts pleaded in the Petition which establish the date when Petitioner
`
`actually became aware of the existence of the ‘893 Registration. Thus, it is not possible to
`
`determine from the Petition the amount of time that passed between the date of Petitioner’s
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-7-
`
`

`

`actual knowledge of the ‘893 Registration and the date upon which this proceeding was
`
`commenced.1
`
`There are also no facts pleaded in the Petition from which the Board could determine that
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`any delay in exercising Petitioner’s right to seek cancellation was inexcusable or could not be
`
`explained.
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`Finally, there are no facts pleaded in the Petition from which the Board could conclude
`
`that Registrant suffered prejudice resulting from the delay.
`
`Registrant’s argument that the Petition is barred by the doctrine of laches should not be
`
`considered because it relies upon external evidence and not on the factual allegations of the
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`Petition. Registrant cannot point to any place in the Petition that would support a conclusion that
`
`Registrant has indeed been prejudiced by delay, or that such delay in commencing this
`
`proceeding was inexcusable and unexplained. Thus, Registrant has not carried its burden of
`
`proving that both unreasonable delay and prejudice to Registrant were established on the
`
`pleading, and Registrant’s motion under Rule 12(b)(6) on the basis of laches must be denied.
`
`
`
`V.
`
`CONCLUSION
`
`Registrant’s arguments based upon lack of standing are without merit. Registrant
`
`discusses the affirmative defenses of contractual estoppel and laches in its motion, but these
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`defenses rely upon external evidence, not on the allegations of the Petition, and should not be
`
`considered for a facial attack on the pleading. Further, the contractual estoppel issues have been
`
`
`1 The Board should be aware that Petitioner has pleaded invalidity/functionality defenses
`to Registrants’ two civil actions to enforce the ‘893 Registration. Petitioner submits that these
`are facts that should not be considered in connection with Registrant’s motion to dismiss because
`the facts are external to the Petition, but Petitioner would present such facts to overcome
`Registrant’s affirmative defense of laches at the appropriate time in this proceeding.
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-8-
`
`

`

`fully briefed to the District Court and need not be considered by the Board at this time. The
`
`motion to dismiss should be denied in its entirety.
`
`
`
`Dated: November 24, 2020
`
`
`
`
`
`
`
`
`
`
`
`
`
` /Richard A Nebb/
`Richard A. Nebb
`
`Dergosits & Noah LLP
`One Embarcadero Center, Suite 350
`San Francisco, CA 94111
`(415) 705-6377 tel
`(415) 705-6383 fax
`rnebb@dergnoah.com
`tmdocketing@dergnoah.com
`
`Attorneys for Petitioner
`Peninsula Components, Inc.
`
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-9-
`
`

`

`CERTIFICATE OF SERVICE
`
`I hereby certify that on November 24, 2020, a true and complete copy of the following document:
`
`Petitioner’s Opposition to Registrant’s Motion to Dismiss
`incl. Exhibits 1 and 2
`
`has been served by email on the counsel of record as follows:
`
`
`
`
`
`
`
`
`Gregory J. Gore, Esq. (trademark@pemnet.com)
`Joe Konieczny, Sr., Esq. (jkonieczny@ryderlu.com)
`Penn Engineering & Manufacturing Corp.
`5190 Old Easton Rd
`Danboro, PA 18916
`
`/s/ Richard A. Nebb
`Richard A. Nebb
`
`
`Cancellation Proceeding 92075315
`Petitioner’s Opposition to Registrant’s
`Motion to Dismiss
`
`-10-
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Exhibit 1
`Exhibit 1
`
`

`

`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 1 of 16
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF PENNSYLVANIA
`
`
`
`Penn Engineering & Manufacturing Corp.
`
`
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`
` v.
`
`
`
`
`
`
`
`
`
`Peninsula Components, Inc.,
`
`
`
`
`
`
`
`
`
`Defendant.
`
`
`
`
`
`:
`:
`:
`:
`:
`:
`:
`:
`:
`
`No.: 2:19-CV-00513-GEKP
`
`BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
`ON DEFENDANT’S AFFIRMATIVE DEFENSE OF INVALIDITY OF
`THE DOUBLE SQUARE MARKS BASED ON FUNCTIONALITY
`
`
`
`
`
`
`
`

`

`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 2 of 16
`
`
`
`
`
`I.
`
`
`II.
`
`
`III.
`
`Table of Contents
` Introduction ......................................................................................................................... 1
`
`Statement of Facts ................................................................................................................ 1
`
`Legal Standard for Summary Judgment .............................................................................. 5
`
`
`IV. Arguments ............................................................................................................................ 6
`
`The Court May Interpret the Plain Language of the Mutual Release to Preclude
`A.
`Defendant’s Invalidity Claim as a Matter of Law ...................................................................... 6
`
`Defendant’s Invalidity Claim in the 2007 Lawsuit Clearly Falls Within the Scope of the
`B.
`Mutual Release ............................................................................................................................ 7
`
`Defendant’s Invalidity Claim Does Not Qualify as a Claim That Was Excluded from
`C.
`the Mutual Release ...................................................................................................................... 9
`
`
`V.
`
`
`
`
`
`
`
`
`Conclusion ......................................................................................................................... 12
`
`
`
`i
`
`

`

`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 3 of 16
`
`
`
`Table of Authorities
`
`Cases 
`A.W. v. Jersey City Pub. Schs.,
` 486 F.3d 791 (3d Cir. 2007) ............................................................................................ 5
`Alli v. Decker,
` 650 F.3d 1007 (3d Cir. 2011) ..................................................................................... 8, 11
`Anderson v. Liberty Lobby, Inc.,
` 477 U.S. 242 (1986) ....................................................................................................... 5
`Beer Nuts, Inc. v. King Nut Co.,
` 477 F.2d 326 (6th Cir. 1973) ........................................................................................... 8
`Berckeley Inv. Grp. Ltd. v. Colkitt,
` 455 F.3d 195 (3d Cir. 2006) ............................................................................................ 5
`Camico Mut. Ins. Co. v. Heffler, Radetich & Saitta LLP,
` 587 F. App'x 726 (3d Cir. 2014) ...................................................................................... 8
`Celotex Corp. v. Catrett,
` 477 U.S. 317 (1986) ....................................................................................................... 5
`City of Hope National Medical Center v. Genentech, Inc.,
` 43 Cal.4th 375 (2008) ..................................................................................................... 7
`Coltec Indus., Inc. v. Hobgood,
` 280 F.3d 262 (3d Cir. 2002) ............................................................................................ 6
`Doe v. Abington Friends Sch.,
` 480 F.3d 252 (3d Cir. 2007) ............................................................................................ 5
`Edwards v. Comstock Insurance Co.,
` 205 Cal. App. 3d 1164 (1988) .......................................................................................... 6
`EPA Real Estate Partnership v. Kang,
` 12 Cal. App. 4th 171 (1992) ............................................................................................ 6
`Esbensen v. Userware International, Inc.,
` 11 Cal. App. 4th 631 (1993) ............................................................................................ 7
`Factory Direct, Inc. v. Anatomical Global, Inc.,
` 2011 WL 13232143 (W.D. Ok. Jun. 10, 2011) .................................................................. 9
`In re Cendant Corp. Prides Litigation,
` 233 F.3d 188 (3d Cir. 2000) ............................................................................................ 6
`In re Columbia Gas Sys., Inc.,
` 50 F.3d 233 (3d Cir. 1995) .............................................................................................. 6
`Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp.,
` 475 U.S. 574 (1986) ....................................................................................................... 5
`Mech. Plastics Corp. v. Titan Techs., Inc.,
` 823 F. Supp. 1137 (S.D.N.Y. 1993) .................................................................................. 8
`MWS Wire Indus., Inc. v. California Fine Wire Co.,
` 797 F.2d 799 (9th Cir. 1986) ........................................................................................... 8
`Nabisco Inc. v. Wm. Wrigley Jr. Co.,
` 40 U.S.P.Q.2D 1251 (TTAB 1996) ................................................................................ 12
`Ontel Prods. Corp. v. Mindscope Prods.,
` 220 F. Supp. 3d 555 (D.N.J. 2016) ................................................................................... 8
`
`
`
`ii
`
`

`

`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 4 of 16
`
`
`
`Parsons v. Bristol Development Co.,
` 62 Cal.2d 861 (1965) ...................................................................................................... 7
`Petroleos Mexicanos v. Intermix S.A.,
` 97 U.S.P.Q.2d 1403 (T.T.A.B. 2010) .............................................................................. 12
`Ritchie v. Simpson,
` 170 F.3d 1092 (Fed. Cir. 1999) ...................................................................................... 12
`Salehi v. Surfside III Condo. Owners Ass'n,
` 200 Cal. App. 4th 1146 (2011) ......................................................................................... 7
`SKF USA Inc. v. Okkerse,
` 922 F. Supp. 2d 432 (E.D. Pa. 2014) ................................................................................ 6
`United States v. Mezzanatto,
` 115 S. Ct. 797 (1995) ...................................................................................................... 8
`Welding Eng'rs Ltd. v. NFM/Welding Eng'rs, Inc.,
` 352 F. Supp. 3d 416 (E.D. Pa. 2018) ................................................................................ 5
`Winet v. Price,
` 4 Cal. App. 4th 1159 (1992) ............................................................................................ 6
`
`Statutes
`15 U.S.C. §1052 ........................................................................................................................ 7, 15
`28 U.S.C. §2201 ............................................................................................................................ 12
`CA Civ. Code § 1635 .................................................................................................................... 10
`Cal. Code Civ. Proc. § 1856 ......................................................................................................... 11
`Fed. R. Civ. P. 56 ............................................................................................................................ 9
`
`Secondary Sources
`Ballentine’s Law Dict., 3d ed. 2010 ............................................................................................. 12
`The Law Dictionary (featuring Black’s Law Dictionary Free
`Online Legal Dictionary 2nd Ed.), What is CLAIM?, November 22, 2019,
`https://thelawdictionary.org/claim/A.............................................................................................10
`The Law Dictionary (featuring Black’s Law Dictionary Free
`Online Legal Dictionary 2nd Ed.), What is CAUSE OF ACTION?,
`November 22, 2019, https://thelawdictionary.org/cause-of-action/..............................................10
`
`
`
`
`iii
`
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`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 5 of 16
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`I.
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`INTRODUCTION
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`In 2007, plaintiff sued1 defendant for infringement of inter alia two registered U.S.
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`trademarks (the “Double Square Marks”), which protects the product configuration of a portion
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`of two of plaintiff’s fasteners. As its ninth affirmative defense, defendant alleged that the
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`Double Square Marks are invalid because the protected product configurations2 are functional
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`(defendants “Invalidity Claim”). The 2007 Lawsuit was settled in 2008 when the parties
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`executed a written settlement agreement (“2008 Settlement Agreement) containing a mutual
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`general release in which the parties released each other from all claims, demands, damages,
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`liabilities, costs, attorneys’ fees, expenses and causes of action known or unknown occurring
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`prior to its effective date. Now, in this case, plaintiff has sued defendant for infringing once
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`again the Double Square Marks based on a different product. Despite the mutual release and
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`waiver in 2008, defendant wants to re-assert the same Invalidity Claim. Because defendant did
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`not expressly reserve the right to re-assert the Invalidity Claim, and the Invalidity Claim could
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`have been brought as a declaratory judgment claim in the 2007 litigation, or as a petition to
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`cancel in the U.S. Trademark Office long prior to the effective date of the 2008 Settlement
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`Agreement, defendant is contractually estopped from re-asserting the Invalidity Claim in this
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`litigation.
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`II.
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`STATEMENT OF FACTS
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`Plaintiff is one of the leading designers and manufacturers of industrial fastening
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`solutions in the U.S. Plaintiff employs over 1700 people world-wide and has annual revenue in
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`excess of $400,000,000. One of its very popular products is a floating, self-clinching nut as
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`1 The lawsuit is subsequently referred to as the “2007 Lawsuit” and is described in greater detail in Section II.
`2 The Double Square Marks refer to the configuration or shape of a portion of two of plaintiff’s floating, self-
`clinching nuts.
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`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 6 of 16
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`shown below:
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`See exh. 1. The floating, self-clinching nut comprises an inner, floating nut captured within an
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`outer retainer. A portion of two versions of this nut was intentionally designed with a unique
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`square-in-square shapes to distinguish the nut from the floating, self-clinching nuts of its
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`competitors. These shapes are trademarks (Double Square Marks) and are protected by
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`plaintiff’s U.S. Trademark Reg. No. 1,400,893 (“the ‘893 Registration”) and U.S. Trademark
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`Reg. No. 3,404,061 (“the ‘061 Registration”), which protect the unique configuration or shape of
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`a portion of its floating, self-clinching nut. See exhs. 2 and 3. The Double Square Marks
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`comprise the product configurations depicted in solid lines in the drawings shown below, which
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`are taken from the ‘893 Registration and ‘061 Registration, respectively;
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`U.S. Trademark Reg. No. 1,400,893 U.S. Trademark Reg. No. 3,404,061
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`The dotted lines depict the location of the marks on a fastener and do not comprise any part of
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`the mark itself.
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`2
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`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 7 of 16
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`For many years, defendant has tried to imitate and trade off the goodwill of plaintiff
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`through various illegal marketing tactics. For example, on August 17, 2007, plaintiff had to file
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`a trademark and patent infringement complaint against defendant in the U.S. District Court for
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`the Northern District of California. Civil Docket for Case #: 3:07-cv-04231-CRB (the “2007
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`Lawsuit”). The amended complaint alleged, among other things, infringement of the Double
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`Square Marks shown above. See exh. 4 at ¶¶65-74. In its amended answer, defendant alleged
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`that the ‘893 Registration and the ‘061 Registration are invalid because the product
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`configurations shown therein are functional.3 See exh. 5 at ¶103. Litigation ensued over the next
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`fourteen months and concluded when the parties entered into the 2008 Settlement Agreement
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`effective September 24, 2008. See exh. 6 filed under seal. The 2008 Settlement Agreement,
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`among other things, barred claims known or unknown to the parties as of the effective date of the
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`agreement. See 2008 Settlement Agreement §§10-11. The release set forth in paragraphs 10
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`(“Mutual Release”) and 11 from the 2008 Settlement Agreement states:
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` 10. Mutual Release. Upon receipt by Plaintiff Penn Engineering of the last
`payment of the Total Settlement Payment as described in Paragraph 2 above (the
`“Release Effective Time”), the Parties and their past, present, and future affiliates,
`parents, successors, subsidiaries, related entities, divisions, and distributors,
`hereby fully and forever release and discharge the other parties and their past,
`present, and future affiliates, parents, successors, subsidiaries, related entities,
`divisions, and distributors and their respective current and former officers,
`directors, employees, representatives, agents, successors and assigns (the
`“Released Parties, Entities, and Individuals”) from all claims, demands, damages,
`liabilities, costs, attorneys’ fees, expenses and causes of action known or
`unknown occurring prior to the Effective Date; provided, however, that this
`release does not apply to claims arising from acts, statements, omissions, matters,
`events, transactions, or occurrences subsequent to the Effective Date.
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` 11. Claims Known and Unknown. The Parties acknowledge and agree
`that this release applies to all claims for injuries, damages, or losses to person and
`property, real or personal (whether those injuries, damages, or losses are known
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`3 15 U.S.C. §1052(e)(5) prohibits registration of functional marks.
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`3
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`Case 2:19-cv-00513-GEKP Document 43-1 Filed 11/22/19 Page 8 of 16
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`or unknown, foreseen or unforeseen, or patent or latent) that the parties may have
`against each other as of the Effective Date and hereby waive application of
`California Civil Code Section 1542, which the parties have read and which
`provides as follows:
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`A GENERAL RELEASE DOES NOT EXTEND