Zanella Ltd. v. Nordstrom, Inc.

                                   UNITED STATES PATENT AND TRADEMARK OFFICE
                                   Trademark Trial and Appeal Board
                                   P.O. Box 1451
                                   Alexandria, VA 22313-1451



                         Mailed:    May 13, 2009


                         Opposition No. 91177858

                         Zanella Ltd.

                                     v.

                         Nordstrom, Inc.


By the Board:

On October 23, 2008, the Board entered an order in this case

that, inter alia, denied applicant’s motion for summary

judgment on its counterclaim for cancellation with respect

to Registration Nos. 1519894, 1990695, 1992385, and 2453062.

That order was designated as non-precedential.       On further

consideration, we have decided to re-designate the October

23, 2008 order as a precedent of the Board.



Attached is a copy of the October 23, 2008 order, marked

with the indication “THIS DECISION IS A PRECEDENT OF THE

T.T.A.B.”
 Opposition No. 91177858




                                   UNITED STATES PATENT AND TRADEMARK OFFICE
 Goodman                           Trademark Trial and Appeal Board
                                   P.O. Box 1451
THIS DECISION IS                   Alexandria, VA 22313-1451
A PRECEDENT OF
  THE T.T.A.B.

                          Mailed: October 23, 2008
           Designated as a Precedent of TTAB: May 13, 2009

                           Opposition No. 91177858

                           Zanella Ltd.

                                     v.

                           Nordstrom, Inc.


 Before Hohein, Zervas and Bergsman, Administrative
 Trademark Judges

 By the Board:

 This case now comes up on the following motions:

      1) applicant’s motion to amend its answer to add a
         counterclaim, filed January 15, 2008; and

      2) applicant’s motion for summary judgment, filed
         January 15, 2008.

      We turn first to applicant’s motion to amend.

      Consistent with Fed. R. Civ. P. 15(a), the Board

 liberally grants leave to amend pleadings at any stage of

 the proceeding when justice requires, unless entry of the

 proposed amendment would violate settled law or be

 prejudicial to the rights of the adverse party.      See

 Commodore Electronics Ltd. v. CBM Kabushiki Kaisha, 26



                               1
Opposition No. 

91177858 USPQ2d 1503

 (TTAB 1993).   Trademark Rule 2.106(b)(2)(i)

governs counterclaims for cancellation of pleaded

registrations in Board opposition proceedings.   Such claims

must be pleaded promptly after the grounds are learned if

not known at the time the answer is filed.    See TBMP §

313.04 (2d ed. rev. 2004) and cases cited therein.

Additionally, Fed. R. Civ. P. 13(f) addresses counterclaims

and allows a party to move for leave to assert a

counterclaim if the counterclaim was originally omitted

“through oversight, inadvertence, or excusable neglect, or

when justice requires.”    In deciding whether to grant leave

to add an omitted counterclaim under Rule 13(f), the same

standards governing Rule 15(a), as set forth above, apply.

See e.g., See’s Candy Shops Inc. v. Campbell Soup Co. (

12 USPQ2d 1395

, 1396 (TTAB 1989) (reading Rule 13(f) in

conjunction with Rule 15(a)).

     Applicant's proposed counterclaim of fraud has been
sufficiently pleaded, and entry thereof would not violate

settled law.   Moreover, we find the claim to have been

promptly made, inasmuch as it is based on information

applicant obtained from discovery on November 21, 2007 in

conjunction with the information received on December 28,

2007 when applicant obtained file histories for opposer’s

pleaded registrations after it had filed its answer.    The

Board finds no prejudice to opposer in allowing the




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Opposition No. 91177858

amendment as three and a half months remain with respect to

the discovery period.   See TBMP § 507.02.

     Accordingly, applicant’s motion for leave to amend its

answer to add a counterclaim of fraud is granted.

     We now turn to the motion for summary judgment based

on applicant’s counterclaim of fraud with respect to

opposer’s five pleaded registrations.

     A party is entitled to summary judgment when it has

demonstrated that there are no genuine issues as to any

material facts, and that it is entitled to judgment as a

matter of law.   Fed. R. Civ. P. 56(c).   The evidence must

be viewed in a light favorable to the nonmoving party, and

all justifiable inferences are to be drawn in the

nonmovant's favor.   Lloyd’s Food Products Inc. v. Eli’s

Inc., 

987 F.2d 766

, 

25 USPQ2d 2027, 2029

 (Fed. Cir. 1993).

     Fraud in procuring a trademark registration occurs

when an applicant for registration knowingly makes false,

material representations of fact in connection with an

application to register or, in the case of maintaining a

registration, when a registrant makes false, material

representations of fact in connection with an affidavit of

continued use under Section 8.    Torres v. Cantine

Torresella S.r.l., 

808 F.2d 46

, 

1 USPQ2d 1483, 1484

 (Fed.

Cir. 1986).   A party making a fraud claim is under a heavy

burden of proof because fraud must be shown by clear and



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Opposition No. 91177858


convincing evidence, leaving nothing to speculation,

conjecture, or surmise.     Any doubt must be resolved against

the party making the claim.     Smith International, Inc. v.

Olin Corp., 209 USPQ (TTAB 1981).

Registration No. 15270031

       With respect to opposer's pleaded registration for the




mark                                        for “men's wearing

apparel, namely raincoats, mantels, jackets, shirts,

blouses, waistcoats, trousers, pants, socks, stockings,

ties, scarves, hats, swimwear, vests and underwear” in

International Class 25, there is no dispute and hence no

genuine issue of material fact that opposer has not used

and was not using the mark in connection with “mantles,

blouses, waistcoats, socks, stockings, ties, scarves, hats,

swimwear or underwear” at the time of filing the

application and at the time opposer filed a combined

affidavit of continued use under Sections 8 and 15 of the

Trademark Act.    Statements regarding the use of the mark on

the identified goods are material to issuance of a

1
  Formerly, application Serial No. 73662076. The registration
issued on February 28, 1989, with a combined Section 8 and
Section 15 affidavit respectively accepted and acknowledged on
October 26, 1995.


                                4
Opposition No. 91177858

registration.   Herbaceuticals Inc. v. Xel Herbaceuticals

Inc., 

86 USPQ2d 1572

, 1576 (TTAB 2008).

     There is also no dispute and thus no genuine issue of

material fact that opposer knew or should have known that it

was not using the mark in connection with “mantles,

blouses, waistcoats, socks, stockings, ties, scarves, hats,

swimwear or underwear.”   See Standard Knitting Ltd. v.

Toyota Jidosha Kabushiki Kaisha, 

77 USPQ2d 1917

, 1928 (TTAB

2006) (“opposer is charged with knowing what it is signing”

and failing to make an appropriate inquiry is a “‘reckless

disregard for the truth’”).

     Accordingly, there is no question that the registration

would not have issued nor the combined Sections 8 and 15

affidavit been respectively accepted and acknowledged but
for the material misrepresentation, since the USPTO will not

issue a registration or maintain a registration covering

goods upon which the mark has not been used.   Medinol Ltd.

v. Neuro Vasx Inc., 

67 USPQ2d 1205

, 1208 (TTAB 2003).

     In view thereof, we find that opposer’s false material

misrepresentations made in connection with its application

and in connection with the combined Sections 8 and 15

affidavit were fraudulent with respect to 

Registration No. 1527003

.

     Applicant’s motion for summary judgment is therefore

granted with respect to 

Registration No. 1527003

.   The




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Opposition No. 91177858

counterclaim to cancel 

Registration No. 1527003

 is granted

and 

Registration No. 1527003

 will be cancelled in due

course.




Registration Nos. 1519894, 1990695, 1992385, and 2453062

     With respect to these pleaded registrations, the

following facts are not in dispute:

     

Registration No. 15198942

 (formerly application Serial

No. 73662018) for the mark ZANELLA, in standard character

form, was filed under Section 1(a) based on an allegation of

use on the following International Class 25 goods:      “men’s

wearing apparel, namely raincoats, mantels, jackets, shirts,

blouses, waistcoats, trousers, pants, socks, stockings,

ties, scarves, hats, swimwear, vests and underwear.”      On

August 31, 1995, after its mark registered, opposer filed an

amended combined Sections 8 and 15 affidavit of continued

use alleging use on all the goods stated in the

registration.   Opposer admits that it has never used the

mark in connection with “men’s socks, stockings, ties,

scarves, hats, swimwear, vests and underwear.”      On November

14, 2003, opposer filed a Section 7 request to amend its

registration to delete the goods on which it had never used

the mark.   As amended, the identification of goods is as


2
  Issued on January 10, 1989; combined Section 8 and Section 15
affidavit respectively accepted and acknowledged on October 26,
1995; Section 7 amendment filed on November 14, 2003 and entered
on January 2, 2004.


                                6
Opposition No. 91177858

follows:   “men’s wearing apparel, namely raincoats, jackets,

shirts, trousers, pants, vests.”
                             3
     

Registration No. 1990695

 (formerly application Serial

No. 74548674), for the mark ZANELLA in standard character

form and 

Registration No. 19923854

 (formerly application

Serial No. 74548675) for the mark




                                    were both filed under

Section 1(a) alleging use of the marks on “women’s

clothing, namely shorts, skirts, dresses, blouses, pants,

jackets, coats, vests, scarves, hats, swimwear, raincoats,

socks and underwear” in International Class 25.      Opposer

admits that it has never used the marks on “scarves, hats,

swimwear, socks and underwear.”      On September 7, 2001,

opposer filed combined Sections 8 and 15 affidavits of

continued use for both of the registrations, deleting the

goods on which it had not used the marks.      As corrected,

the identification of goods for both registrations is as

3
  Issued on August 6, 1996; combined Section 8 and Section 15
affidavit respectively accepted and acknowledged on September 27,
2001; Section 8 affidavit accepted and Section 9 renewal granted
on July 22, 2006.
4
  Issued on August 13, 1996; combined Section 8 and Section 15
affidavit respectively accepted and acknowledged on October 5,



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Opposition No. 91177858


follows:    “women's clothing, namely shorts, skirts,

dresses, blouses, pants, jackets, coats, vests, raincoats.”5

     

Registration No. 24530626

 (formerly application Serial




No. 76021021) for the mark                                was

filed under Section 1(a) alleging use in connection with

“women’s and men’s clothing, namely, shorts, skirts,

blouses, pants, jackets, coats, vests, scarves, hats,

swimwear, raincoats, socks, underwear, mantels, shirts,

waistcoats, trousers, stockings and ties” in International

Class 25.   Opposer admits that it has never used the mark

in connection with “scarves, hats, swimwear, socks,

underwear, mantles, waistcoats, stockings and ties.”      On

December 6, 2006, opposer filed a combined Sections 8 and

15 affidavit for this registration and deleted the goods on

which it was not using its mark.     The identification of


2001; Section 8 affidavit accepted and Section 9 renewal granted
on July 22, 2006.
5
  It is noted that the Office’s TARR database does not reflect
opposer’s deletion of “scarves, hats, swimwear, socks and
underwear” with respect to 

Registration No. 1990695

.




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Opposition No. 91177858


goods now reads as follows:    “women’s and men’s clothing,

namely, shorts, skirts, blouses, pants, jackets, coats,

vests, raincoats, shirts, trousers.”7

     Opposer argues that the registrations as maintained

are not fraudulent because they “were corrected prior to

Applicant’s use of its mark and prior to this proceeding”

and the corrections to its previous statements were made

voluntarily.   Opposer also submits that at a minimum, this

action raises a genuine issue of material fact as to

opposer’s fraudulent intent.

     In response, applicant submits that opposer has

“demonstrated a history of false claims and delays in

correcting [the registrations] spanning a number of years”

and “did not attempt to correct its registrations until the

‘occasion arose.’”   Applicant asserts that such conduct

“evidences at least the same reckless disregard for the

truth” that supports “a finding of fraud.”

     We find that opposer’s timely proactive corrective

action with respect to these registrations raises a genuine

issue of material fact regarding whether opposer had the

intent to commit fraud.    In particular, opposer’s

6
  Issued May 22, 2001; Section 8 and Section 15 filed December 6,
2006; Section 8 accepted and Section 15 acknowledged February 12,
2007.
7
  Likewise, it is noted that the Office’s TARR database does not
reflect opposer’s deletion of “scarves, hats, swimwear, socks,



                                9
Opposition No. 91177858


action in correcting any false statements prior to any

actual or threatened challenge to the registrations creates

a rebuttable presumption that opposer did not intend to

deceive the Office.             See University Games Corp. v. 20Q.net

Inc., 

87 USPQ2d 1465

, 1468 (TTAB 2008).                   In this case, we

find that applicant’s evidence submitted in support of the

motion for summary judgment, namely, opposer’s discovery

responses and the file histories of the registrations, fails

to rebut the presumption of no intent to commit fraud on the

Office.      Accordingly, we find a genuine issue of material

fact remains with respect to whether opposer had the intent

to commit fraud on the USPTO with respect to these

registrations.

      In view thereof, applicant’s motion for summary

judgment is denied with respect to Registration Nos.

1519894, 1990695, 1992385, and 2453062.

      Proceedings herein are resumed.

      Opposer is allowed until THIRTY DAYS from the mailing

date of this order to file an answer to the counterclaim.

      Discovery and trial dates are reset as follows:

THE PERIOD FOR DISCOVERY TO CLOSE:                          February 3, 2009

30-day testimony period for
plaintiff in the opposition to close:                           May 4, 2009

30-day testimony period for defendant in the opposition
and as plaintiff in the counterclaim to close:                  July 3, 2009

underwear, mantles, waistcoats, stockings and ties” with respect
to 

Registration No. 2453062

.


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Opposition No. 91177858



30-day testimony period for defendant
In the counterclaim and its rebuttal testimony
As plaintiff in the opposition to close:                September 1, 2009

15-day rebuttal testimony period for plaintiff
In the counterclaim to close:                            October 16, 2009

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

Brief for plaintiff in the opposition shall be due:     December 15, 2009

Brief for defendant in the opposition and as
plaintiff in the counterclaim shall be due:               January 14, 2010

Brief for defendant in the counterclaim and its reply
brief (if any) as plaintiff in the opposition
shall be due:                                            February 13, 2010

Reply brief (if any) for plaintiff in the
counterclaim shall be due:                               February 28, 2010


       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.l25.

       Briefs shall be filed in accordance with Trademark

Rules 2.128(a) and (b).                An oral hearing will be set only

upon request filed as provided by Trademark Rule 2.l29.




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