June 2009 Issue

TTAB Cases

Zanella Ltd. v. Nordstrom, Inc.,
Opp. No. 91177858 (TTAB Oct. 23, 2008)
Redesignated as precedential (May 13, 2009)

ABSTRACT
The TTAB denied Applicant’s motion for summary judgment to cancel several of Opposer’s pleaded registrations on the ground of fraud where Opposer proactively corrected misstatements in the identification of goods in postregistration filings before the proceeding commenced.  Citing University Games Corp. v. 20Q.net Inc., 87 USPQ2d 1465 (TTAB 2008), the TTAB held that “opposer’s 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.”  Because Applicant’s evidence consisted solely of Opposer’s discovery responses and the file histories of the registrations, it failed to rebut this presumption.

CASE SUMMARY

FACTS
Applicant Nordstrom, Inc. filed an intent-to-use application for the mark ZELLA for women’s athletic apparel.  Opposer Zanella Ltd. filed an opposition alleging priority and likelihood of confusion based, in part, on five pleaded registrations for the mark ZANELLA for a wide variety of men’s and women’s clothing.

In discovery, Applicant learned through Opposer’s full file histories and admissions that Opposer never used the registered marks on several of the goods identified in those registrations.  Thereafter, Applicant moved to amend its answer to include a counterclaim to cancel Opposer’s pleaded registrations on the ground of fraud and moved for summary judgment on the counterclaim. 

The TTAB granted Applicant’s motion to amend its answer, finding that Applicant had stated a claim and promptly filed its motion upon discovery of the information underlying the counterclaim.  The TTAB then considered Applicant’s motion for summary judgment.

ANALYSIS
In support of its summary judgment motion, Applicant argued that Opposer had a history of making false claims and delays in correcting the registrations spanning a number of years.  Applicant asserted that such conduct evidenced a reckless disregard of the truth and fraud. 

Opposer argued that the registrations as maintained were not fraudulent because it corrected misstatements in the identification of goods before Applicant used its mark and before the commencement of the opposition. 

The TTAB determined that Opposer made false statements regarding its use of its marks in connection with some of the goods listed in each of the applications that matured into the pleaded registrations.  In regard to one of the marks, Opposer again identified goods for which the mark was not being used in its combined Section 8 and 15 affidavit of continued use.  Because under Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ2d 1205 (TTAB 2003), the registration or renewal would not have issued but for the misrepresentation, the TTAB granted Applicant’s summary judgment to cancel the registration.

In regard to the four other pleaded registrations, however, the TTAB found that Opposer either (1) filed a combined Section 8 and 15 affidavit of continued use that deleted the goods on which it had not used the mark, or (2) filed a Section 7 request to amend its registration to delete the goods on which it had not used the marks after filing a combined Section 8 and 15 affidavit.

The TTAB found that Opposer’s “timely proactive corrective action . . . prior to any actual or threatened challenge to the registrations creates a rebuttable presumption that opposer did not intend to deceive the [PTO],” citing University Games.  Because Applicant only submitted Opposer’s discovery responses and the file histories of the registrations as evidence, the TTAB found it had not overcome this presumption.  Accordingly, a genuine issue of material fact remained regarding Opposer’s fraudulent intent and the TTAB denied Applicant’s motion for summary judgment.

The TTAB issued its original decision on October 23, 2008, designating it as nonprecedential.  On May 13, 2009, however, the TTAB redesignated the decision as a precedent of the TTAB.

CONCLUSION
This decision provides valuable guidance to U.S. trademark registration owners on steps to take to possibly avoid Medinol fraud.  Under Zanella, if a registrant corrects misstatements in the identification of goods or services in a postregistration filing (e.g., Section 8 declaration or Section 7 amendment to registration) prior to an actual or threatened challenge to the registration, it may at least raise a rebuttable presumption that it did not intend to deceive the PTO, and possibly avoid a finding of fraud.