Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 DAK INDUSTRIES, INC.
v.
DAIICHI KOSHO CO., LTD.
Opposition Nos. 85,916; 86,029
January 4, 1993
Issued: September 30, 1992
Before Cissel, Seeherman and Hanak
Members
Opinion by Cissel
Member
On January 29, 1990 Daiichi Kosho Co., Ltd., a Japanese corporation, filed application Serial No. 74/023,423 to register the mark shown below
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
on the Principal Register for what were subsequently identified by amendment as "laser discs and compact discs featuring recorded music and graphics" in class 9, and "song index books and catalogues featuring laser discs, compact discs and song index books" in class 16. First use on June 3, 1989 was claimed. English translations of the Japanese word "karaoke" were given as "empty orchestra" and "sing-along". The word was disclaimed apart from the mark as shown.
On September 6, 1991 a timely notice of opposition was filed by DAK Industries, Inc., which is located in Canoga Park, California. As grounds for opposition, opposer pleaded prior use and registration of the mark "DAK" for "magnetic recording tape for prerecorded and blank audio tape cassettes, open reel audio tape, video and bulk tape, and accessories for the foregoing, namely, batteries, headphones, A.C. adapters, and tape recorders;" [FN1] for "catalog services in the field of electronic goods;" [FN2] for "retail store services in the field of electronic goods;" [FN3] and of the mark shown below
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
for "prerecorded and blank audio tape cassettes, open reel audio tape, video tape, and accessories for the foregoing, namely, batteries, headphones, A.C. adapters and tape recorders." [FN4] Opposer also asserts prior use of this "DK" mark in connection with retail services for electronic goods, catalog services for electronic goods, laser discs and compact discs featuring recorded music, and for catalogs featuring laser discs and compact discs. Opposer's claim is that applicant's mark, as used with the goods set forth in the application, so resembles opposer's earlier-used and registered marks that confusion is likely.
On December 30, 1991 applicant filed its answer, which denied the essential allegations in the complaint, and counterclaimed for cancellation or partial cancellation of Registration Nos. 1,148,203; 1,584,036; and 1,162,534 based on allegations of abandonment. The affirmative defenses of laches, estoppel and acquiescence were also asserted by applicant. Opposer denied the allegations of the counterclaim and denied that the asserted defenses applied.
On May 26, 1992 opposer's motion to consolidate Opposition No. 85,916 with Opposition No. 86,029 was granted. In Opposition No. 86,029 opposer opposed Daiichi Kosho's application Serial No. 74/116,473 to register the same mark for the following goods:
Class 9: compact disc players (with manual or automatic changer); laser disc players (with manual or automatic changer); controllers for automatic disc changer; stereo mixing amplifiers; graphic decoders for CD-graphics; automatic coin boxes (for coins and/or bills) for activating equipment; wireless remote controllers and receivers; pitch controllers (for varying pitch of playback of recorded music); video displays and video projectors; audio cassette tapes featuring recorded music.
*2 Class 16: song books, song lyric books, song binders; catalogues and brochures for audio and video equipment; prerecorded music and printed music supplies.
The application was based on intent to use the mark in commerce. No translation was provided with this application however, although a disclaimer of "KARAOKE" was filed with application Serial No. 74/116,473 by preliminary amendment.
The opposition to this application was brought on the same grounds, with the same registrations pleaded. A similar answer and counterclaim for cancellation or partial cancellation of three of petitioner's four pleaded registrations were made.
This consolidated proceeding now comes up on opposer's motion for summary judgment on the asserted defenses of laches, estoppel and acquiescence. Opposer contends that no facts material to this issue are disputed, and that, based on the undisputed facts, opposer is entitled to judgment on this issue as a matter of law. In support of the motion copies of twenty-two pieces of correspondence between the attorneys for the parties were submitted. The letters, beginning in February of 1989, show that opposer was aware of applicant's intent to use its mark in the United States, but that negotiations took place wherein opposer and applicant were unable to develop a satisfactory agreement regarding applicant's use.
Opposer argues that the Court's decision in National Cable Television Association, Inc. v. American Cinema Editors Inc., 937 F.2d 1572, 19 USPQ2d 1424 (Fed.Cir.1991), which states that as far as protesting the issuance of a registration is concerned, laches cannot start to run prior to the date the mark is published for opposition, effectively precludes applicant from asserting the defense in these cases, where both notices of opposition were timely filed, and where negotiations were conducted in good faith all along, even before the mark was used by applicant.
Applicant responded to opposer's motion for summary judgment with a legal memorandum and the declarations, with attachments, of Kazutoshi Shirai, manager of applicant's legal section; Robert Kunstadt, its attorney, and Ilene Tannen, also counsel to applicant. Applicant argues that there are issues of material fact which are disputed and about which applicant requires further discovery. Such discovery is necessary, according to Mr. Kunstadt, to provide applicant with information about opposer's awareness of applicant's activities during the period preceding the institution of these opposition proceedings. Applicant contends that inaction by opposer at various points in the negotiations between the parties gave applicant a reasonable belief that opposer would not assert any claims against applicant.
The cited National Cable case is argued by applicant to be inapplicable to the case at hand because the facts in that case revealed no acquiescence and no reliance by the other party. In the instant case, argues applicant, the facts are that opposer dropped out of negotiations and for six months did not respond to applicant's correspondence, which applicant took to indicate opposer's lack of interest in pursuing the matter. Applicant contends that opposer's awareness, silence and inaction indicated that opposer did not regard applicant's use of applicant's mark as a problem for it, and that applicant's subsequent actions and expenditures were based on reliance upon opposer's inaction. Opposer filed a brief responsive to applicant's opposition to its motion.
*3 Opposer's motion for summary judgment on applicant's asserted defenses of laches, acquiescence and estoppel is granted. The Court's rulings in the cited National Cable case, as well as in James Burrough, Ltd. v. La Joie, 462 F.2d 570, 174 USPQ 329 (CCPA 1972), which the Court cited with approval in National Cable, make it clear that in an opposition proceeding, laches cannot begin to run until the mark is published for opposition. Contrary to applicant's argument, we are bound by the Court's ruling in National Cable. Laches was asserted there as a defense before the Board, and the Court affirmed the Board's holding that the defense could not be asserted. The Court could not have been clearer: the period which we consider in determining whether a plaintiff unduly delayed in bringing an action before the Board begins with the publication of the mark in the Official Gazette. Before then, no opposition is possible.
As to Opposition No. 86,029, that period lasted only ten days. The mark in the other opposed application was published April 9, 1991, opposer was granted an extension of time to oppose, and the notice of opposition was filed prior to the expiration of this period. In neither case was the delay between publication and opposition undue or prejudicial to applicant's rights.
Even if we employed the analysis which we used prior to the Court's instruction in National Cable, the facts of this case do not establish that opposer delayed unnecessarily in objecting to applicant's use of its mark, or to its attempts to register it, or that a delay resulted in applicant's reliance on opposer's delay to its detriment.
The parties began corresponding regarding applicant's intent to use its mark in February of 1989. As part of an ongoing exchange of letters, on March 15, 1989 applicant sought a consent from opposer to applicant's use in restricted channels of trade (to restaurants and nightclubs, etc). In May opposer agreed in principle to this use of applicant's mark, but asked applicant for a draft agreement. In early June applicant sent the draft agreement, which for the first time mentioned registration, rather than just use. In this proposed agreement applicant's use was limited to "other than for direct sales to the home user market." (Paragraph 2). With no response from the opposer by December, applicant advised opposer that applicant intended to go forward with its plans to use its mark as had been previously "outlined," which included the restriction as to trade channels. The opposed applications were filed in January and November of the following year, without any limitation as to trade channels. As noted above, both were timely opposed.
There is no basis for assertion of acquiescence or estoppel as defenses. Acquiescence and estoppel require some affirmative act by opposer which led applicant to reasonably believe that opposer would not oppose applicant's registration of its mark. There is no genuine issue that opposer's activities do not constitute an affirmative act which could support the assertion of acquiescence and estoppel.
*4 Moreover, even if we had evidence of opposer's action or inaction which demonstrated to applicant opposer's willingness to permit applicant to use its mark, the use which the parties had been negotiating was limited, as discussed above, whereas the right to register sought by applicant through the opposed applications has no restriction as to trade channels. The undisputed facts do not show that opposer could be barred by any of these equitable defenses from objecting to the unrestricted registration of applicant's mark.
Applicant's assertion that it requires discovery prior to resolution of opposer's motions for summary judgment is without merit. Facts as to opposer's intent, knowledge and awareness of applicant's activities during the period preceding the institution of these opposition proceedings could not possibly have any bearing on whether or not applicant had any reason to conclude that opposer's actions demonstrated opposer's consent to applicant's use and registration of applicant's mark. Any facts concerning opposer's acts which were interpreted by applicant in this way would necessarily be known to applicant, or else it could not have used them as the basis for concluding that opposer had decided not to object to applicant's registration of its mark.
In summary, we find that no facts material to the defense of laches, acquiescence and estoppel are disputed. Based on the undisputed facts, opposer is entitled to a judgment in its favor as a matter of law on these defenses. Accordingly, the consolidated proceedings will go forward, without further consideration of the defenses, in accordance with the attached trial order.
R.F. Cissel
E.J. Seeherman
E.W. Hanak
FN1. Reg. No. 1,148,203 issued March 10, 1981.
FN2. Reg. No. 1,570,338, issued December 5, 1989.
FN3. Reg. No. 1,584,036 issued February 20, 1990.
FN4. Reg. No. 1,162,534 issued July 28, 1981.
September 30, 1992
Robert M. Kunstadt
Pennie & Edmonds
1155 Avenue of the Americas
New York, NY 10036
In accordance with the Trademark Rules of Practice, trial dates are set 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. Rule 2.125.
THE PERIOD FOR DISCOVERY TO CLOSE November 13, 1992
Testimony period for party in position of plaintiff to close January 12, 1993
(opening thirty days prior thereto)
Testimony period for party in position of defendant to close March 13, 1993
(opening thirty days prior thereto)
Rebuttal testimony period to close April 27, 1993
(opening fifteen days prior thereto)
*5 Briefs shall be filed in accordance with Rule 2.128(a) and (b).
An oral hearing will be set only upon request filed as provided by Rule 2.129.
Robert D. Hornbaker
Freilich, Hornbaker and Rosen
A Professional Corporation
10960 Wilshire Boulevard-# 1434
Los Angeles, CA 90024
Robert F. Cissel
Attorney, Trademark Trial and Appeal Board