Incontestable - November 2009 - City of Carlsbad v. Shah

Finnegan's monthly review of essential decisions, key developments, evolving trends in trademark law, and more.

November 2009 Issue

Civil Cases

City of Carlsbad v. Shah,
2009 WL 3398785 (S.D. Cal. Oct. 20, 2009)

ABSTRACT
The Southern District of California found the absence of objective evidence of defendant’s intent to use his marks in commerce at the time the applications were filed to be sufficient proof of a lack of a bona fide intent for a grant of summary judgment declaring the applications invalid and authorizing the PTO to deny registration to defendant.

CASE SUMMARY

FACTS
Plaintiff City of Carlsbad (“City”) announced at a public meeting that it had selected the name THE CROSSINGS AT CARLSBAD for its new golf course. That same day, and in the following weeks and months, defendant Shah, who had attended the meeting but had no formal relationship with the City or experience in the golfing industry, registered domain names containing the mark and filed a series of intent-to-use applications for the marks THE CROSSINGS AT CARLSBAD and TCAC for clothing, golf balls, golf courses, golf clubs, and golf tees. After the City presented the official logo for the golf course at a subsequent public meeting, defendant filed an intent-to-use application for a nearly identical logo. The City subsequently filed its own applications for the marks.

The City sued Shah, alleging copyright infringement, cybersquatting, and unfair competition, and sought a declaratory judgment as to who holds trademark rights in the various marks at issue. Shah counterclaimed, seeking a declaration that his rights were superior to the City’s and an injunction prohibiting the City from using the marks.

At issue before the court was the City’s motion for partial summary judgment, contending that Shah’s claim for relief for declaratory judgment regarding trademark rights presented no genuine issue of material fact.

ANALYSIS
In response to the City’s motion for summary judgment, Shah, relying on prior TTAB and Federal Circuit cases, contended that the factual question of his intent was inappropriate for summary judgment. Shah relied heavily on the TTAB’s statement in Commodore Electronics Ltd. v. CBM Kabushiki Kaisha, 26 U.S.P.Q.2d 1502 (T.T.A.B.1993) that “as a general rule, the factual question of intent is particularly unsuited to disposition on summary judgment.” The court noted, however, that more recent TTAB cases indicated that summary judgment would be appropriate if an applicant fails to produce any documentary evidence of bona fide intent to use a mark. Specifically, the court held that Shah must produce either (1) objective documentary evidence of his intent to use the marks in commerce or (2) a valid explanation as to why no evidence was produced under a totality of the circumstances analysis.

Shah expressly acknowledged in his interrogatory answers that he had no evidence of his intent to use the marks other than the applications themselves. Instead, Shah directed the court to his own statements in those applications, declaring an intent to use the marks, as proof of such intent. The court was not persuaded, however, finding Shah’s statements to be subjective, rather than objective, evidence of intent and thus not sufficient to defeat the motion for summary judgment.

The court was equally unmoved by Shah’s proffer of facts explaining the lack of documentary evidence. Shah contended that he made a business decision not to proceed with commercial activities until a legal dispute over the mark had been resolved. The court noted that this did not explain the failure to have any such documentary evidence of his intent at the time the applications were filed.

Consequently, the court found Shah’s failure to produce any documentary evidence of his intent to use the mark in commerce sufficient to grant summary judgment in favor of the City. The court ordered the PTO to deny registration to defendant’s pending applications, declared plaintiff the rightful owner of the marks, and authorized the PTO to register the plaintiff’s pending applications.

CONCLUSION
This decision highlights the importance of documenting activities taken in furtherance of an applicant’s intention to use an applied-for mark in commerce. If challenged, mere testimony will not be sufficient. Objective evidence such as business plans, purchase orders, invoices, bank statements, and written correspondence should be preserved and maintained.