Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 COMMODORE ELECTRONICS LIMITED
v.
CBM KABUSHIKI KAISHA
Opposition No. 86,336
February 3, 1993
Before Seeherman, Quinn and Hohein
Members
Opinion by Hohein
Member
An application been has filed by CBM Kabushiki Kaisha to register the mark "CBM" for, among other things, "television apparatus, radios, tape recorders, C.D. players, telephone apparatus, facsimile machines, video tape recorders, blank video tapes, blank audio tapes, electro photographic copying apparatus, liquid crystal display panels, calculating machines, cash registers, clinical thermometers, [and] copying machines" in International Class 9 and "fountain pens, ball-point pens, mechanical pencils, note books, envelopes, [and] typewriters" in International Class 16. [FN1]
Registration has been opposed by Commodore Electronics Limited on the sole ground that applicant's mark so resembles the mark "CBM," which opposer alleges to have previously used and registered for "computer systems and their parts and fittings thereof," [FN2] as to be likely, when applied to applicant's goods, to cause confusion, mistake or deception. [FN3]
Applicant, in its answer, has admitted the issuance of opposer's pleaded registration, but has denied the other allegations contained in the notice of opposition.
This case now comes up on (i) opposer's motion, received on November 2, 1992, for leave to amend its opposition, as set forth in an accompanying amended notice of opposition, and (ii) applicant's motion, received on November 5, 1992, to strike the amended notice of opposition or, in the alternative, for summary judgment "on the amended notice of opposition". Each party has timely filed a brief in opposition to the other party's motion.
Opposer, by its motion, seeks leave to add the following (set forth in paragraph 7 of its amended pleading) as a new and additional ground for its opposition:
7. Upon information and belief Applicant did not have a bona fide intention to use the mark in commerce on the specified services when it filed this and its other applications covering CBM and JCBM for the many goods specified therein.
Noting that under Fed.R.Civ.P. 15(a), "leave shall be freely given when justice so requires," opposer asserts that amendment is warranted since, through discovery, it "learned that Applicant did not have a single document to establish a bona fide intention to use CBM in commerce on any of the many goods covered in its various applications to register both CBM and JCBM, each in many classes".
Applicant, in response, argues that allowance of the amendment would be prejudicial and further contends, in support of its motion, that if leave is allowed, the amendment "must either be stricken for failure to state a claim upon which relief can be granted or denied on summary judgment". As to the assertion of prejudice, applicant maintains that opposer failed to seek leave to amend within a reasonable time after knowledge of the facts giving rise to the proposed claim first came to opposer's attention. Specifically, applicant insists that it responded to opposer's discovery requests on July 16, 1992, thereby providing opposer with knowledge of a possible additional ground for opposition, but that opposer, without giving any reason, delayed the filing of the motion for leave to amend for three and one half months. Applicant also notes that while the discovery period is currently scheduled to close on November 5, 1992, it did not receive the motion until November 2, 1992. Consequently, if the motion is subsequently granted, applicant contends that it will be deprived of the opportunity to take any discovery with respect to the new claim.
*2 Even if opposer's motion is not regarded as prejudicial, applicant urges that the amendment sought by opposer must be stricken for failure to state a claim upon which relief can be granted or that summary judgment dismissing the new claim must be entered. Among other things, applicant asserts that although reference in the proposed amendment to its application to register the mark "JCBM" is irrelevant to this proceeding, it nevertheless has filed a statement of use in connection with that application which, as shown by the accompanying copies of such documents in applicant's Exhibit A, has been accepted by the Patent and Trademark Office. [FN4]
Applicant further argues that:
Opposer has provided no support for its contention that the lack of documents during an opposition to registration of an "intent to use" application is tantamount to failure to have a bona fide intention to use a mark in commerce when that application was filed. In effect, without any proof whatsoever, Opposer is claiming that Applicant fraudulently signed a Declaration attesting to the bona fide intent to use its mark in commerce. Clearly, such an allegation cannot stand.
....
The very fact that Applicant has the capability of producing the goods listed in this application (see attached Exhibit "A") should, in and of itself[,] be sufficient to defeat opposer's new claim.
Applicant's actions to pursue the acquisition of [a] registration ... by means of defending this Opposition, i.e.[,] responding to interrogatories, motions, discovery requests, etc., also indicate Applicant's firm bona fide intention to use the mark.
In particular, applicant notes that according to the report of the Trademark Review Commission, a bona fide intention to use a mark at the time the application for registration thereof is filed simply means an intention that is firm, even though it may be contingent upon the outcome of a future event such as market research or product testing, and that an applicant therefore need not have taken concrete steps to create and introduce a new product, provided that in fact it intends to use the mark. Applicant accordingly requests that either opposer's motion be denied or that applicant's motion to strike or for summary judgment be granted.
Opposer, in reply to applicant's motion and in further support of the motion for leave to amend, points out that applicant neglected to mention that on August 27, 1992, opposer filed a motion for summary judgment. Besides seeking summary judgment on its claim of priority of use and likelihood of confusion, opposer also asserted that the opposed application was not filed in good faith since applicant "could produce not one piece of paper from its files to establish any real intention to use CBM on any of the many goods covered in the opposed classes". Opposer correctly notes that the summary judgment motion was denied on October 1, 1992, with the Board indicating among other things that summary judgment on the issue of whether the opposed application had been filed in good faith was inappropriate inasmuch as such issue had not been pleaded in the notice of opposition. Opposer further states that in the brief time since the Board issued its decision, it has been seeking a settlement with applicant and that, in the past month, the parties have exchanged correspondence to that effect.
*3 Thus, opposer contends that it has not unreasonably delayed the filing of its motion for leave to amend. Opposer additionally states that it "has no objection to extending the discovery and testimony deadlines in order not to prejudice Applicant" and that applicant, with its response to the motion, "served a second set of interrogatories and a first request for admissions". In view thereof, and apparently assuming that the additional allegations in its amended pleading state a new claim upon which relief can be granted, [FN5] opposer maintains that its motion should be granted and applicant's motion should be denied since "[t]he good faith intention to use is an area for factual dispute that should be decided on the merits--not on motion unbuttressed by evidence, simply because Applicant says the allegation is unfounded".
In interpreting the provision of Fed.R.Civ.P. 15(a) that leave to amend a pleading "shall be freely granted when justice so requires," the Supreme Court noted in Foman v. Davis, 331 U.S. 178, 182 (1962), that:
If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claims on the merits. In the absence of any apparent or declared reason-- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.--the leave sought should, as the rules require, be "freely given".
The Board, consistent therewith, has recognized that "amendments to pleadings should be allowed with great liberality at any stage of the proceeding where necessary to bring about a furtherance of justice unless it is shown that entry of the amendment would violate settled law or be prejudicial to the rights of any opposing parties". American Optical Corp. v. American Olean Tile Co., Inc., 168 USPQ 471, 473 (TTAB 1971). Thus, in deciding opposer's motion for leave to amend, the Board must consider whether there is any undue prejudice to applicant and whether the amendment is legally sufficient. See, e.g., Cool-Ray, Inc. v. Eye Care, Inc., 183 USPQ 618, 621 (TTAB 1974).
We agree with opposer that, in light of its prior filing of a motion for summary judgment on its originally pleaded claim, the filing of the motion for leave to amend cannot be considered to be dilatory or otherwise unduly delayed. Specifically, in light of the pendency of its summary judgment motion, which if granted would have disposed of this case, and the consequent suspension of proceedings herein during the disposition of such motion, opposer was justified in delaying the filing of a motion for leave to amend pending the Board's ruling. Once the Board denied the summary judgment motion and resumed proceedings, opposer promptly sought leave to amend, filing the motion therefor within, approximately, one month of the Board's denial of summary judgment. Moreover, applicant plainly will not be prejudiced by allowance of a new claim since not only did sufficient time remain in the discovery period for applicant to serve (as it did) additional discovery requests, but opposer has indicated its agreement to allow applicant further time to conduct any follow up discovery with respect to the new claim sought to be added.
*4 The problem in granting the relief opposer seeks lies with whether the allegations sought to be added state a claim upon which relief can be granted. Applicant, by its request to strike the proposed amendment, is essentially arguing that the amendment would not withstand a motion to dismiss under Fed.R.Civ.P. 12(b)(6), which is a test solely of the legal sufficiency of the facts and claim underlying the amendment to the notice of opposition. Here, in order to set forth a properly pleaded new ground for opposition, opposer need only allege in its amended pleading such facts as would, if proven, establish both its standing to challenge applicant's right to registration and a further statutory ground for opposition to the application. See, e.g., Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213 USPQ 185, 188 (CCPA 1982).
Section 1(b) of the Trademark Act provides in pertinent part that: "A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may apply to register the trademark under this Act...." Aside from the fact that the amendment proposed by opposer erroneously refers to "services" rather than to goods, such amendment fails to set forth any facts which would give applicant fair notice of why opposer believes that applicant lacked the bona fide intent required by Section 1(b) to use the mark "CBM" when it filed the involved application. Nevertheless, it is apparent from opposer's argument that the factual basis underpinning its assertion of a lack on the part of applicant of a bona fide intent to use is the absence of any documentary evidence to support applicant's professed intent.
The determinative issue raised by the parties' motions therefore becomes whether the absence of any documents evidencing applicant's claimed intention to use its mark may be sufficient to constitute objective proof of a lack of a bona fide intention to use. As the various reports and other legislative history regarding the Trademark Law Revision Act of 1988 make clear, [FN6] it was the intent of Congress in enacting Section 1(b) that the bona fide requirement thereof focus on an objective good-faith test to establish that an applicant's intent is genuine. [FN7] Although the term "bona fide" is not defined in the statute, [FN8] due to the impossibility of identifying every factor which might be determinative of whether an applicant's intent is indeed bona fide at every stage of the registration process, a requirement of "good faith" ("under circumstances showing the good faith of such person") was included in Section 1(b) to emphasize the importance of the concept of bona fide intent. [FN9] The term "bona fide" in Section 1(b) must, furthermore, be read in conjunction with the revised definition of "use in commerce" in Section 45 of the Trademark Act, which the Trademark Law Revision Act of 1988 amended to require that such use be "in the ordinary course of trade, and not made merely to reserve a right in a mark". [FN10]
*5 It should be apparent, in consequence of the above, that in evaluating an applicant's bona fide intent to use a mark in commerce on the basis of a myriad of objective factors, certain circumstances may support or confirm the bona fide nature of an applicant's intent while others may cast doubt thereon or even completely disprove it. Although admittedly a close question, we hold that absent other facts which adequately explain or outweigh the failure of an applicant to have any documents supportive of or bearing upon its claimed intent to use its mark in commerce, the absence of any documentary evidence on the part of an applicant regarding such intent is sufficient to prove that the applicant lacks a bona fide intention to use its mark in commerce as required by Section 1(b). An allegation to such effect, therefore, states a claim upon which relief can be granted. [FN11]
Turning next to applicant's alternative request that, if the Board allows the new claim opposer seeks leave to add, the Board should enter summary judgment dismissing the claim, we find that summary judgment is inappropriate since applicant has failed to establish the absence, as required by Fed.R.Civ.P. 56(c), of a genuine issue of material fact. The evidence submitted by applicant, consisting of the statement of use it filed in connection with its application for the mark "JCBM" and the acceptance thereof by the Patent and Trademark Office, is inferentially some evidence that applicant, despite the absence of any documents pertaining to its intent to use the mark "CBM," [FN12] had the capacity, with respect to the application involved in this proceeding, to produce or otherwise market the numerous goods in International Class 9 for which it is seeking registration of both of its marks. The evidence is arguably an indication that applicant has been acting in good faith since it tends to show that applicant is actually engaged in the trade for many of the International Class 9 goods listed in its intent-to-use application for the mark "CBM" and is not merely trying to reserve a right in that mark.
An inference, however, can also be drawn from such evidence in favor of opposer. Specifically, in light of the goods shared by the opposed application and applicant's application for the mark "JCBM," an inference can be made that it is the latter mark for which applicant had a bona fide intention to use and not the mark "CBM," given the fact that the first and only mark for which applicant has commenced use in connection with the goods is the mark "JCBM". Inasmuch as this inference, as with all inferences to be drawn from the undisputed facts, must be viewed in the light most favorable to the nonmoving party, applicant is not entitled to the entry of summary judgment in its favor. See, e.g., Olde Tyme Foods Inc. v. Roundy's Inc., 961 F.2d 200, 22 USPQ2d 1542, 1544-45 (Fed.Cir.1992).
Moreover, "[a]s a general rule, the factual question of intent is particularly unsuited to disposition on summary judgment". Copelands' Enterprises Inc. v. CNV Inc., 945 F.2d 1563, 20 USPQ2d 1295, 1299 (Fed.Cir.1991). The fact that applicant, for purposes of its motion, admits that it does not have a single document regarding its intent to use the mark "CBM" is a factor to be considered in deciding the issue of whether applicant's intent is bona fide. Another factor to be evaluated, as discussed previously, is the fact that applicant, in connection with its application for registration of the mark "JCBM," submitted an accepted statement of use covering many of the same goods as those listed in International Class 9 of its opposed application for registration of the mark "CBM". While these factors are circumstances which must be carefully weighed to resolve the issue of applicant's intent, the proper function of the Board on summary judgment is not to try factual issues but to determine, instead, if there are any genuine issues of material fact to be tried. Summary judgment on the new claim in this case is thus not warranted because the material factual issue of whether applicant's intent is bona fide or not remains, in light of the inferences in favor of opposer from the undisputed facts, genuinely in dispute.
*6 In consequence of the above, opposer's motion is granted to the extent that the amended notice of opposition is deemed to be amended so as to set forth (in paragraph 7 thereof) the following claim that applicant lacks a bona fide intention to use the mark "CBM" in commerce:
7. Upon information and belief Applicant did not have a bona fide intent to use the mark in commerce on the specified goods when it filed this and its other applications covering CBM and JCBM for the many goods specified therein because Applicant does not have a single document to establish a bona fide intention to use CBM in commerce on any of the many goods covered in its various applications to register both CBM and JCBM.
As such, the amended notice of opposition is accepted and applicant's motion is denied. Fed.P.Civ.P. 15(a) and 56(c). Proceedings herein are resumed; applicant is allowed thirty days from the mailing date of this order [FN13] to file an answer to the amended notice of opposition, as deemed to be further amended; and trial dates, including a discovery period for applicant directed solely to the new claim that it lacks a bona fide intention to use the mark "CBM" in commerce for the goods in International Classes 9 and 16 of its involved application, are rescheduled as set forth in the accompanying trial order.
E.J. Seeherman
T.J. Quinn
G.D. Hohein
Members, Trademark Trial and Appeal Board
FN1. Ser. No. 74/060,412, filed on May 17, 1990, which alleges a bona fide intention to use the mark in commerce.
FN2. Reg. No. 1,230,957, issued on March 15, 1983, which sets forth dates of first use of July 1978; combined affidavit §§ 8 and 15.
FN3. Although applicant's application sets forth goods in five international classes, registration of applicant's mark is opposed only as to the goods identified in International Classes 9 and 16.
FN4. The statement of use indicates that application Ser. No. 74/095,114, which is for the mark "JCBM," was filed on September 7, 1990; that applicant is using the mark for "TELEVISION APPARATUS, RADIOS, FACSIMILE MACHINES, PRINTERS FOR COMPUTERS, CALCULATING MACHINES AND CLINICAL THERMOMETERS"; and that the mark was first used in commerce on September 1, 1991. Applicant received the acceptance of its statement of use on September 8, 1992.
FN5. No argument is advanced by opposer concerning the legal sufficiency of its amended pleading.
FN6. A thorough compilation of such history appears in United States Trademark Association, The Trademark Law Revision Act of 1988 (1989).
FN7. For instance, the Senate Judiciary Committee Report on S. 1883, which ultimately became the Trademark Law Revision Act of 1988 (Public Law 100- 667, November 16, 1988), indicates among other things that:
Although "bona fide" is an accepted legal term, it can be read broadly or narrowly, subjectively or objectively, by a court or the Patent and Trademark Office. In connection with this bill, "bona fide" should be read to mean a fair, objective determination of the applicant's intent based on all the circumstances. To avoid abuse of the intent-to-use system, the committee amended the first paragraph of proposed Section 1(b) of the Act to require that applicant's bona fide intention must reflect the good-faith circumstances surrounding the intended use.
An applicant's bona fide intention to use a mark must reflect an intention that is firm, though it may be contingent on the outcome of an event (that is, market research or product testing). Thus, an applicant could, under certain circumstances, file more than one intent-to-use application covering the same goods and still have the requisite bona fide intention to use each mark. However, if a product has already been marketed under one mark and an applicant continues to maintain additional applications for marks intended for use on or in connection with the same product, this may call into question the bona fide nature of the intent. In addition, an applicant's bona fide intent must reflect an intention to use the mark in the context of the legislation's revised definition of "use in commerce," that is, use "in the ordinary course of trade, ... and not [made] merely to reserve a right in a mark". This bona fide intention must be present for all the goods or services recited in the application.
Senate Judiciary Comm.Rep. on S. 1883, S.Rep. No. 515, 100th Cong., 2d Sess. 24-25 (1988), reprinted in United States Trademark Association, The Trademark Law Revision Act of 1988 176-77 (1989).
FN8. We judicially notice, however, that Blacks's Law Dictionary (5th ed. 1979) at 160 defines such term as:
In or with good faith; honestly, openly, and sincerely; without deceit or fraud. .... Truly; actually; without simulation or pretense. Innocently; in the attitude of trust and confidence; without notice of fraud, etc. Real, actual, genuine, and not feigned. .... See also Good faith.
Likewise, Webster's Third New International Dictionary (1976) at 250 defines "bona fide" as "1: made in good faith without fraud or deceit ...: legally valid ... 2: SINCERE ...: made with earnest or wholehearted intent ... 3: not specious or counterfeit: GENUINE...."
FN9. United States Trademark Association, The Trademark Law Revision Act of 1988 342 (1989) at comment to Section 1(b). The comment highlights the intent and history of such section. Id. at 339.
FN10. See, e.g., USTA Testimony before the Subcommittee on Courts, Civil Liberties and the Administration of Justice of the House Judiciary Committee on September 8, 1988, United States Trademark Association, The Trademark Law Revision Act of 1988 230 (1989). The revision is designed to eliminate the practice of token use.
FN11. We hasten to emphasize, however, that even if an opposer pleads and submits proof, either on a motion for summary judgment or during its initial testimony period, which is sufficient to establish a prima facie case for its claim of a lack by the applicant of the statutorily required bona fide intent to use its mark in commerce, the applicant may, of course, elect to try to rebut the opposer's prima facie case by offering additional evidence concerning the factual circumstances bearing upon its intent to use its mark in commerce.
FN12. Although neither opposer's motion nor its response to applicant's motion includes a copy of opposer's discovery requests and applicant's responses thereto, it is plain from applicant's motion that, for purposes of summary judgment only, applicant concedes that it has no documents relating to its asserted bona fide intention to use its mark in commerce.
FN13. See Patent Rule 1.7, as made applicable by Trademark Rule 2.1, for a response date falling on a Saturday, Sunday or federal holiday.
*7 February 3, 1993
Mark B. Harrison
Spencer & Frank
1111 Nineteenth Street, N.W.
Washington, DC 20036
Patricia Hatry
Davis & Gilbert
1740 Broadway
New York, NY 10019
G. Douglas Hohein
Member, Trademark Trial and Appeal Board
In accordance with the Trademark Rules of Practice, trial dates are reset as indicated below. 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.
THE PERIOD FOR DISCOVERY TO CLOSE: (for defendant as to the new March 23,
claim) 1993
Testimony period for party in position of plaintiff to close: May 24,
(opening thirty days prior thereto) 1993
Testimony period for party in position of plaintiff to close: July 23,
(opening thirty days prior thereto) 1993
Rebuttal testimony period to close: (opening fifteen days prior September
thereto) 7, 1993
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 2.129(a).