Martahus v. Video Duplication Services, Inc., 93-1007

• Citation: 27 USPQ2d 1846,3 F.3d 417
• Decision Date: 17 August 1993
• Docket Number: No. 93-1007,93-1007
• Parties: Carl M. MARTAHUS, d/b/a Video Cassette Duplication Services, Appellant, v. VIDEO DUPLICATION SERVICES, INC., Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 417

3 F.3d 417

27 U.S.P.Q.2d 1846

Carl M. MARTAHUS, d/b/a Video Cassette Duplication Services, Appellant, v. VIDEO DUPLICATION SERVICES, INC., Appellee.

No. 93-1007.

United States Court of Appeals Federal Circuit.

Aug. 17, 1993.

James B. Niehaus, Thompson, Hine and Flory, Cleveland, OH, argued, for appellant. With him on the brief was Suzanne E. Bretz.

Robert G. Schuler, Emens, Kegler, Brown, Hill & Ritter, A Legal Professional Ass'n, Columbus, OH, argued, for appellee. John L. Gray, Emens, Kegler, Brown, Hill & Ritter, A Legal Professional Ass'n, Columbus, OH, was on the brief.

Before RICH, LOURIE, and CLEVENGER, Circuit Judges.

RICH, Circuit Judge.

Marcorp, Inc. and Carl M. Martahus d/b/a Video Cassette Duplication Services (collectively VCDS) appeal the July 14, 1992 decision of the Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (PTO), Video Duplication Servs., Inc. v. Carl M. Martahus, Cancellation No. 18,991 (TTAB July 14, 1992), granting a petition by Video Duplication Services, Inc. (VDS) to cancel Registration No. 1,432,783 owned by VCDS, ¹ as it relates to the services set forth in International Class

40, i.e., the duplication of video cassette tapes and the transferring of video cassette tapes from one format into another, ² and denying a cross-petition by VCDS to cancel Registration No. 1,641,580 owned by VDS for the same services. We affirm.

I. BACKGROUND

Peter Stock, the current president of VDS, founded VDS in January of 1985 ³ to provide various video duplication services, and VDS made its first documented sale of such services in March of that year. VCDS, which is also in the video duplication business, opened its first office in May of 1985. The earliest-dated invoice of record evidencing a sale of services by VCDS bears an August 7, 1985 date.

VCDS applied for federal registration of the mark "VCDS" on June 20, 1986 (Application Serial No. 73/605,496) for the services of duplicating video cassette tapes and transferring video cassette tapes from one format into another, and the PTO issued Registration No. 1,432,783 for this mark on March 17, 1987. Approximately three years later, in April of 1990, VCDS wrote a letter to VDS demanding that VDS discontinue using the mark "VDS" in its business, arguing that VCDS had superior rights in the similar mark "VCDS." Shortly thereafter, on May 8, 1990, VDS applied for federal registration of the mark "VDS" (Application Serial No. 74/059731), also for the services of duplicating video cassette tapes and transferring video cassette tapes from one format into another.

On May 22, 1990, VCDS again demanded that VDS discontinue using the mark "VDS," this time threatening to pursue legal action against VDS. In response, VDS filed a petition with the PTO on June 4, 1990 to cancel VCDS's registration. On April 16, 1991, during the course of the cancellation proceeding that followed, the PTO issued Registration No. 1,641,580 to VDS for the mark "VDS." VCDS then filed with the PTO a cross-petition for cancellation of VDS's registration.

In its July 20, 1992 decision, the TTAB found, as a factual matter, that VDS had used "VDS," at least as a trade name, prior to VCDS's first service mark use of "VCDS," and accordingly granted VDS's petition. The TTAB also dismissed VCDS's cross-petition since VCDS had failed to establish that it used "VCDS" prior to VDS's first service mark use of "VDS." VCDS asks this court to reverse the TTAB's cancellation of VCDS's registration and order the PTO to cancel VDS's corresponding registration.

II. ANALYSIS

We have jurisdiction over this appeal pursuant to 28 U.S.C. Sec. 1295(a)(4)(B) (1988).

A. Standing

VCDS argues that the TTAB erred in not dismissing VDS's cancellation petition for lack of standing. VCDS contends that VDS took the position in both its main brief and its reply brief before the TTAB that the marks "VDS" and "VCDS" are not confusingly similar, and consequently, by taking this position, VDS lost standing to pursue cancellation of VCDS's registration. We are not persuaded that the TTAB committed any error.

At the outset, we note that VCDS sets forth several arguments to this court regarding certain positions that VDS allegedly adopted in its briefs before the TTAB, yet VCDS has not provided this court with copies of these briefs, or even the relevant portions thereof, to support these allegations. Similarly The allegations and admissions of the parties in their pleadings show that they are not contesting that the parties' services are offered in the same channels of trade, and that the marks are confusingly similar. In addition, the parties have both alleged that their services are identical. [VDS] has also alleged that [VCDS's] mark, as applied to its services, is likely to cause confusion with respect to [VDS's] mark, and [VCDS] has alleged that [VDS's] mark, as applied to its services, is likely to cause confusion with respect to [VCDS's] mark.

VCDS claims that VDS took the position in its registration application that the marks "VDS" and "VCDS" are not confusingly similar, yet VCDS also has not provided this court with a copy, or even the relevant portions, of that application. Clearly, without having before us the documentation to which VCDS refers, we cannot adequately assess the accuracy or legitimacy of VCDS's allegations; mere attorney arguments unsubstantiated by record evidence are suspect at best. Consequently, we accept as accurate the TTAB's characterization of the record below. In particular, we accept as accurate the following found at pages 6-7 of the TTAB's opinion:

Although the TTAB also acknowledged that VDS did set forth certain arguments in its reply brief to the TTAB which could be considered inconsistent with VDS's initial petition, ⁴ the TTAB held that it could not interpret these arguments as representing an unequivocal change of position with respect to the issue of likelihood of confusion, and thus, that it would not read them as constituting a withdrawal of VDS's petition. The TTAB went on to state at pages 7-8 of its opinion:

Accordingly, in view of [VDS's] registration for VDS and its priority of use; [VDS's] pleading of likelihood of confusion in its amended petition; the admissions of [VCDS] that the marks are confusingly similar and the services are offered in the same channels of trade; and [VCDS's] allegation that the parties' services are identical, which allegation is supported by the evidence of record; [VDS's] petition to cancel [VCDS's] registration in Class 40 is granted.

We see no error in the TTAB's reasoning, and VCDS has failed to present us with any evidence that the TTAB's holding is contrary to the record developed below. Furthermore, given the facts of this case, the TTAB's conclusion that it could not read VDS's allegedly inconsistent comments as a withdrawal of VDS's cancellation petition seems highly appropriate. It is axiomatic that, if a likelihood of confusion exists between the two marks at issue, as VCDS has maintained since it first demanded that VDS discontinue use of the "VDS" mark, then VCDS's registration should be cancelled if the facts establish that VDS used "VDS" as a trade name or a service mark prior to VCDS's first use of "VCDS" as a service mark. In essence, VCDS put its own registration at risk when it filed a petition to cancel VDS's registration arguing likelihood of confusion. Moreover, VDS's allegedly inconsistent comments, when read as a whole and in context with all of the activities preceding VDS's submittal of its reply brief to the TTAB, suggest little more than an admission that, although VDS was not certain that a likelihood of confusion existed, VDS nonetheless believed that it was entitled to priority if such a likelihood was found.

For the foregoing reasons, we cannot say that the TTAB erred as a matter of law in holding that VDS has standing to pursue cancellation of VCDS's registration.

B. The Board's Priority Decision

Registration of service marks is provided for by 15 U.S.C. Sec. 1053 (1988). Registration is barred, however, if a service mark consists of or comprises a mark which so resembles a mark or trade name previously used in the United States by another, and not abandoned, as to be likely, when used in connection with the services of the applicant, to cause confusion, to cause mistake, or to deceive. See 15 U.S.C. Sec. 1052(d) (1988). Pursuant to 15 U.S.C. Sec. 1064 (1988), a party may seek cancellation of an issued registration on the basis of such prior use. Although this court has not previously addressed either the burden or standard of proof in cancellation proceedings for service mark registrations, we discern no reason to differentiate them from trademark and certification mark registration cancellations. See Midwest Plastic Fabricators, Inc. v. Underwriters Labs., Inc., 906 F.2d 1568, 1570-71, 15 USPQ2d 1359, 1361 (Fed.Cir.1990); Cerveceria Centroamericana, S.A. v. Cerveceria India, Inc., 892 F.2d 1021, 1023, 13 USPQ2d 1307, 1309 (Fed.Cir.1989). Thus, since service mark registrations are presumed valid, one seeking cancellation of such a registration must rebut this presumption by a preponderance of the evidence as in any other cancellation proceeding. See Cerveceria Centroamericana, 892 F.2d at 1023, 13 USPQ2d at 1309; Dan Robbins & Assocs., Inc. v. Questor Corp., 599 F.2d 1009, 1014, 202 USPQ 100, 105 (CCPA 1979); 15 U.S.C. Sec. 1057(b).

(1) Trade Name/Service Mark Distinction

The TTAB found that both parties admitted that there is a likelihood of confusion between their marks and that these marks are registered for identical services offered in the same channels of trade. Neither party contests this aspect of the TTAB's decision, and therefore we limit our review of the TTAB's decision to whether the TTAB's determinations regarding priority of use as to the respective marks were in error. We review any factual findings underlying a...