Turbo Sportswear, Inc. v. Marmot Mountain Ltd.

                                    UNITED STATES PATENT AND TRADEMARK OFFICE
   THIS DECISION IS                 Trademark Trial and Appeal Board
                                    P.O. Box 1451
CITABLE AS PRECEDENT                Alexandria, VA 22313-1451
     OF THE TTAB

 lms                              Mailed:   November 21, 2005

                                  Opposition Nos. 91157260
                                                  91157625

                                  Turbo Sportswear, Inc

                                             v.

                                  Marmot Mountain Ltd.


 Before Seeherman, Quinn and Walters,
 Administrative Trademark Judges.

 By the Board:

       Two applications filed by Marmot Mountain Ltd. to

 register the marks shown below
                      1                           2




 1
   Serial No. 76112629 was filed on August 18, 2002, and is based
 on applicant’s assertion of a bona fide intention to use the mark
 in commerce for goods in four classes (18, 20, 22 and 25).
 Opposer has opposed only classes 18 and 25.
 2
   Serial No. 76112630 was also filed on August 18, 2002, and is
 based on applicant’s assertion of a bona fide intention to use
 the mark in commerce for goods in four classes (18, 20, 22 and
 25). Opposer has opposed only classes 18 and 25.
Opposition Nos. 91157260 & 91157625


have been opposed by Turbo Sportswear, Inc., claiming

priority of use and ownership of seven federal registrations

all containing the stylized mountain design shown below




for numerous clothing items.    Opposer alleges that

applicant’s use of its stylized mountain designs in

connection with the goods identified in the applications in

classes 25 and 18 is likely to cause confusion, mistake, or

to deceive.   Applicant denied all the salient allegations of

the notices of opposition in its answers.

     This consolidated3 case now comes up on applicant’s

motion, filed May 31, 2005, to amend its answers in both

oppositions to add counterclaims to cancel five of opposer’s

pleaded registrations,4 namely, 

Registration No. 2515997,

issued on December 11, 2001; 

Registration No. 2197424,

issued on October 20, 1998, Section 8 affidavit filed May

18, 2005; 

Registration No. 2111782,

 issued on November 11,

1997, Section 8 affidavit filed November 6, 2003;


3
    On August 27, 2004 opposer filed a motion to consolidate the
two proceedings which was granted by the Board on September 24,
2004.
4
    All of the registrations sought to be cancelled are for goods
in Class 25.


                                2
Opposition Nos. 91157260 & 91157625

Registration No. 2069384,

 issued on June 10, 1997, Section 8

affidavit filed August 23, 2002; and 

Registration No. 1907447,

 issued on July 25, 1995, and renewed on December

30, 2004.5   In response, opposer has moved to amend two of

its pleaded registrations to delete certain goods.      The

motions are fully briefed.

     As grounds for the motions to amend its answers to add

the counterclaims, applicant states that it recently learned

through the testimony deposition of Nate Kestenman,

opposer’s Vice President (taken April 27, 2005), that

“Opposer’s pleaded registrations may have been either

fraudulently issued or maintained” (motion p. 1) and

therefore applicant seeks to cancel opposer’s registrations

based on fraud.   For instance, in paragraph 1 of its

proposed counterclaim, after noting that the goods listed in

Registration No. 2515997

 include suits and sports jackets,

applicant alleges (paragraph 2) that Mr. Kestenman testified

that the mark “was never used on the items ‘suits’ and

‘sports jackets’”; and alleges (paragraph 3) that

“Registration No. 2515997 was procured by Opposer’s

knowingly false or fraudulent statements, which statements


5
    In its original notices of opposition, opposer also pleaded
ownership of (i) 

Registration No. 2186355,

 issued on September 1,
1998, which opposer voluntarily surrendered on May 13, 2005, and
which was cancelled on October 5, 2005; and (ii) 

Registration No. 2088369,

 issued on August 12, 1997, which was cancelled under
Section 8 on May 15, 2004. Applicant does not seek to cancel
these registrations.


                                3
Opposition Nos. 91157260 & 91157625


were made with the intent to induce authorized agents of the

U.S. Patent and Trademark Office to grant said registration,

and, reasonably relying upon the truth of said false

statements, the U.S. Patent and Trademark Office did, in

fact, grant said registration to Opposer.”   As for the three

registrations applicant seeks to cancel based on allegedly

inaccurate Section 8 and Section 15 affidavits, applicant

alleges, as an example, again pointing first to the scope of

the goods in the declaration, and then to Mr. Kestenman’s

asserted testimony, that “Registration No. 2197424 has been

maintained by Opposer’s knowingly false or fraudulent

statements, which statements were made with the intent to

induce authorized agents of the U.S. Patent and Trademark

Office to approve the Declaration of Use and

Incontestability under Sections 8 and 15 of the Trademark

Act, and, reasonably relying upon the truth of said false

statements, the U.S. Patent and Trademark Office did, in

fact, approve Opposer’s Declaration….” (paragraph 7).

     In response, opposer contends that applicant’s motion

to amend its answers is untimely; that the testimony

applicant relies upon does not support an allegation of

fraud; and that, in connection with its motion to amend its

registrations, opposer contends that applicant is not

prejudiced by the presence of some goods in the

registrations if they are not currently sold under the mark



                             4
Opposition Nos. 91157260 & 91157625


but, so as not to delay these proceedings further, opposer

is willing to amend two of its registrations to delete goods

that are not currently being marketed under the respective

marks.

     Trademark Rule 2.107(a) and Fed. R. Civ. P. 15(a)

encourage the Board to look favorably on motions to amend,

stating that “leave shall be freely given when justice so

requires.”   Nevertheless, if allowance of the amendment

would cause undue prejudice or be futile, amendment will be

denied.   See Foman v. Davis, 

371 U.S. 178, 182

 (1962); and

W.R. Grace & Co. v. Arizona Feeds, 

195 USPQ 670

, 671 (TTAB

1977).

     In this case, the counterclaims to cancel opposer’s

pleaded registrations are compulsory counterclaims.      See

Trademark Rule 2.106(b)(2)(i).    To be timely, a counterclaim

must be brought as part of defendant’s answer or promptly

after the grounds therefor are learned.   Thus, in the

present case, we must determine whether applicant knew of

the grounds at the time it filed its answers and, if not,

whether applicant filed its counterclaims promptly upon

learning of those grounds.

     Applicant states that “the grounds for cancellation of

Opposer’s pleaded registrations not only could not have been

known to the Applicant when its answer was filed, but for

the most part, such grounds did not yet exist” (motion p. 3)



                              5
Opposition Nos. 91157260 & 91157625


because it was Mr. Kestenman’s testimony, when compared with

opposer’s Section 8 and Section 15 affidavits, that raised

the issue.   Applicant states that the grounds for

cancellation became known during the testimony deposition of

opposer’s vice-president, Mr. Kestenman, which was taken on

April 27, 2005.

     In particular, as to 

Registration No. 2515997,

 (the

underlying application was based on a claim of use in

commerce), applicant asserts that Mr. Kestenman testified

that he did not think the mark was ever used on suits and

sports jackets, and he did not recall whether it was ever

used on underwear.   As to 

Registration No. 2197424,

applicant contends that Mr. Kestenman testified that opposer

did not use the mark on shirts or shorts, and that he did

not recall use on rainwear, although just a week prior to

this testimony, opposer filed a Section 8 affidavit that

included those items.   With respect to the other three

registrations (Nos. 2111782, 2069384 and 1907447), applicant

contends that there are direct inconsistencies between Mr.

Kestenman’s testimony and the Section 8 affidavits regarding

use of the respective marks in connection with certain

listed items.

     Opposer counters this argument by stating that

applicant was aware of what goods the marks were being used

on when it received opposer’s responses to its



                              6
Opposition Nos. 91157260 & 91157625


interrogatories in 2003, but that the motion to amend was

not filed until the case was in the middle of opposer’s

testimony period, and therefore the motion is untimely.

       Opposer also appears to take the position that, even if

there is an inconsistency between the goods on which it

claimed use of the marks, and the goods on which it actually

used the marks, such nonuse is de minimis.    It argues that,

of the 17 items listed in the various registrations and

discussed during the testimony of Mr. Kestenman, applicant

asserts that opposer was not using the marks on only a few

of the items identified in the registrations.    Opposer

further states that when opposer received applicant’s motion

to amend its answers to add the counterclaims, opposer

researched the accuracy of Mr. Kestenman’s testimony and

discovered that some of the goods listed in 

Registration No. 2515997

 are currently not sold under the mark.    Therefore,

opposer asserts that these goods will be deleted from the

registration when the Section 8 and 15 affidavits for the

registration are due, but so as not to further delay these

proceedings, opposer is willing to amend this registration

now.

       Opposer states that further inquiry also revealed that

Mr. Kestenman’s testimony regarding 

Registration No. 2197424

was inaccurate, and that all of the listed goods in that

registration are currently sold under the mark.



                               7
Opposition Nos. 91157260 & 91157625


     As to 

Registration No. 2111782,

 opposer argues that

applicant mischaracterized Mr. Kestenman’s testimony.

Opposer claims that Mr. Kestenman testified that opposer was

not currently marketing certain goods, not that the mark was

not used on the goods; and that, with respect to

Registration No. 2069384,

 Mr. Kestenman testified he “did

not recall” use of the mark for boots, not that it was not

being used.

     Finally, as to 

Registration No. 1907447,

 opposer states

that its subsequent research indicates that it is not

selling leather down coats every season and those goods

should have been deleted when it filed its Section 8

affidavit; and, so as not to further delay these

proceedings, opposer is willing to amend its registration to

delete those goods.

     After reviewing the submissions of the parties, we find

that the testimony of Mr. Kestenman provides information

that may be relevant to applicant’s pleading of fraud with

respect to each of the five registrations, and that such

information was not previously available to applicant.     In

particular, opposer’s answers to interrogatories, which

dealt only with whether the marks were in use on the goods

at the time the responses were provided, would not have

apprised applicant that the marks were not in use on all of

the goods at the times the applications for registration



                             8
Opposition Nos. 91157260 & 91157625


were filed,6 or that the marks were not in use on all of the

goods at the times the Section 8 affidavits were

subsequently filed.    Thus, applicant would not have been

aware, at the time that it received opposer’s answers to its

interrogatories, that a claim of fraud might lie.

Therefore, the motion to amend the answers to assert the

counterclaims based on fraud is timely.     Trademark Rule

2.106(b)(2)(i).

     The next question we must consider is whether the

proposed amendment to add the counterclaims would be futile.

A statement in a use-based application that the applied-for

mark is being used on all of the goods listed in the

application, or in a Section 8 affidavit or in a Section 9

application for renewal, that the mark is being used on all

of the goods listed in the registration, when that statement

is false, may give rise to a valid ground of fraud. See

Medinol Ltd. v. Neuro Vasx Inc., 

67 USPQ2d 1205

, 1208 (TTAB

2003).   Opposer is advised that if applicant is able to

establish the elements of fraud even as to one of the goods

listed in opposer’s single-class registration, the entire

registration is subject to cancellation.      Fraud cannot be

cured merely by deleting from the registration those goods

on which the mark was not used at the time of the signing of



6
    All of the underlying applications were based on Section 1(a)
of the Trademark Act, asserting use of the mark in commerce.


                                9
Opposition Nos. 91157260 & 91157625


a use-based application or a Section 8 affidavit.       Thus,

applicant’s proposed counterclaims are not futile.

     Accordingly, because applicant’s motion to amend its

answers to add counterclaims to cancel five of opposer’s

seven pleaded registrations is timely and the counterclaims

state a valid claim, the motion is granted.      Applicant’s

amended answers and counterclaims for cancellation of

Registration Nos. 2515997; 2197424; 2111782; 2069384; and

1907447 are accepted.

     Opposer is allowed until thirty days from the mailing

date of this order to file its answers to the

counterclaims.7

     As to opposer’s motion to amend two of its

registrations to delete certain goods, although the

amendments are limiting in nature, because they are

contested by applicant, the propriety of the amendments will

be deferred until final decision and decided in connection

with the determination of the counterclaims.      See Medinol,

supra (amendment of an identification to delete goods cannot

cure fraud).

     Proceedings are resumed and trial dates are reset as

indicated below.   Discovery and testimony periods are being

reopened in view of the counterclaims.

    THE PERIOD FOR DISCOVERY TO CLOSE:              3/01/2006
7
  An answer should be filed in each opposition file so each
proceeding can retain its separate character.


                               10
Opposition Nos. 91157260 & 91157625



    30-day testimony period for
    plaintiff in the opposition to close:                            5/30/2006

    30-day testimony period for defendant in the opposition
     and as plaintiff in the counterclaims to close:                 7/29/2006

    30-day testimony period for defendant in the counterclaims
    and its rebuttal testimony as plaintiff in the
    opposition to close:                                             9/27/2006

    15-day rebuttal testimony period for plaintiff in the
    counterclaims to close:                                         11/11/2006

    Briefs shall be due as follows:
    [See Trademark rule 2.128(a)(2)].

    Brief for plaintiff in the opposition shall be due:              1/10/2007

    Brief for defendant in the opposition and as
    plaintiff in the counterclaims shall be due:                     2/09/2007

    Brief for defendant in the counterclaims and its reply
    brief (if any) as plaintiff in the opposition
    shall be due:                                                    3/11/2007

    Reply brief (if any) for plaintiff in the
    counterclaims shall be due:                                      3/26/2007


     In each instance, a copy of the transcript of

testimony, together with copies of documentary exhibits,

must be served on the adverse party within thirty days after

completion of the taking of testimony.                       Trademark Rule

2.125.

     An oral hearing will be set only upon request filed as

provided by Trademark Rule 2.129.


                                            .o0o.


                                             11