M.Z. Berger & Co. v. Swatch AG

• Decision Date: 04 June 2015
• Docket Number: No. 2014–1219.,2014–1219.
• Citation: 114 U.S.P.Q.2d 1892,787 F.3d 1368
• Parties: M.Z. BERGER & CO., INC., Appellant v. SWATCH AG (Swatch SA) (Swatch Ltd.), Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

787 F.3d 1368

114 U.S.P.Q.2d 1892

M.Z. BERGER & CO., INC., Appellant

v.SWATCH AG (Swatch SA) (Swatch Ltd.), Appellee.

No. 2014–1219.

United States Court of Appeals, Federal Circuit.

June 4, 2015.

Robert Thomas Smith, Katten Muchin Rosenman LLP, Washington, DC, argued for appellant. Also represented by Howard Robert Rubin, Daniel Lipton ; Samson Helfgott, Jessica Megan Garrett, New York, N.Y.

Jeffrey A. Lindenbaum, Collen IP, Ossining, N.Y., argued for appellee. Also represented by Jess M. Collen.

Before LOURIE, CHEN, and HUGHES, Circuit Judges.

Opinion

CHEN, Circuit Judge.

M.Z. Berger & Co., Inc. (Berger) appeals from the Trademark Trial and Appeal Board (Board) decision to sustain an opposition on grounds that Berger, at the time of its application for the mark “iWatch,” lacked a bona fide intent to use the mark in commerce under Section 1(b)(1) of the Lanham Act, 15 U.S.C. § 1051(b)(1). See Swatch AG v. M.Z. Berger & Co., 108 U.S.P.Q.2d (BNA) 1463 (T.T.A.B.2013) (Opinion ). The Board concluded that Berger merely intended to reserve a right in the mark and thus lacked the requisite intent. Because substantial evidence supports the Board's determination, we affirm.

I. Background

Berger is a business that manufactures, imports, and sells watches, clocks, and personal care products. On July 5, 2007, it filed an intent-to-use application at the Patent and Trademark Office (PTO), seeking to register the mark “iWatch” for over thirty different goods, each of which belongs to one of three general categories: watches, clocks, and goods related to watches and/or clocks (e.g., clock dials, watch bands, and watch straps).¹

The application included a declaration which states that Berger has “a bona fide intention to use or use through [Berger's] related company or licensee the mark in commerce on or in connection with the identified goods and/or services.” Joint Appendix (J.A.) 1022.

The PTO approved the application for publication on May 21, 2008. On October 22, 2008, Swatch AG (Swatch) filed a Notice of Opposition on the basis that “iWatch” is confusingly similar to its mark, “Swatch.” Swatch later added a claim opposing the mark on ground that Berger lacked a bona fide intent to use the mark in commerce at the time Berger filed the application.

The Board assessed whether Berger had the requisite intent to use the iWatch mark by separately considering each of the three general categories of goods. Opinion at 1475. With respect to Berger's intent to use the iWatch mark on two of the categories, clocks and goods related to watches/clocks, the Board considered the testimony of Berger's owner and CEO, Bernard Mermelstein. Id. Mr. Mermelstein not only created the iWatch mark and instructed that the trademark application be filed, but he was Berger's sole witness designated under Federal Rule of Civil Procedure 30(b)(6). Id. The Board thus treated Mr. Mermelstein's testimony as representing the views of the company at the time the application was filed. Id.

Although the trademark application recited watches, clocks, and goods related to clocks and watches as the goods Berger intended to sell with the proposed mark, Mr. Mermelstein testified that Berger never intended for the mark to be used for any goods other than watches:

Q. Are there other products other than watches that you anticipate for use with the iWatch mark?

A. No.

J.A. 847. Mr. Mermelstein further testified:

Q. At the time you filed the application you didn't expect the iWatch mark to be used for clocks and personal care products?

A. No. Correct.

J.A. 848.

Berger's paralegal who filed the application, Monica Titera, testified that Mr. Mermelstein instructed her to register the mark only for watches and clocks. J.A. 979. When asked why the other related goods were identified in the application, Ms. Titera claimed that the list was “standard” and used to “leave all doors open.” J.A. 985. Based on Mr. Mermelstein's and Ms. Titera's testimonies, the Board concluded that Berger lacked a genuine intent to use the mark on clocks and related goods. Opinion at 1475.

With respect to the third category of goods, watches, the Board also concluded that Berger lacked a genuine plan to commercialize the iWatch mark on such goods. The Board considered the documentary evidence of record but found that such evidence did not demonstrate intent because the documents related solely to prosecution of the trademark application. As for the testimonial evidence presented by Berger, the Board found that Berger's employees failed to tell a consistent story about the company's intent at the time the application was filed. The Board lastly considered the company's long history in the watch business, but found that Berger's inaction with respect to a potential iWatch product diminished the value of such evidence.

The only documents relating to the potential use of the mark consisted of: (i) a trademark search performed by the paralegal; (ii) an internal email describing the substance of a discussion between the paralegal with the trademark examining attorney concerning the application; and (iii) a series of internal emails forwarding images of watches and a clock bearing the iWatch mark. Id. at 1472–73.

The Board agreed with Swatch that the documentary evidence only related to the trademark application and thus did not evidence a genuine intent to commercialize certain watches using the iWatch mark. It found that the trademark search was performed only a few days prior to the filing of the application.² The Board found that the forwarded images were also prosecution-driven because they appeared to have been created and submitted to the PTO in response to the examining attorney's request for additional information on how Berger planned to use the mark. Id. at 1472, 1473–74 (noting that the images were created shortly before they were submitted to the PTO in response to the request).

Moreover, the Board found there was conflicting testimony among Berger employees regarding what the images actually depicted. Some employees testified that the images were pictures of actual mockup watches and clocks. Id. at 1473. On the other hand, Mr. Mermelstein testified that no such mockups were ever made and that the images were generated for purposes of advancing the trademark application. J.A. 867–68. And although Berger employees claimed that creating physical models and renderings was a normal part of its product development process, Berger did not present any physical or documentary evidence relating to the iWatch mark beyond the images submitted to the PTO. Opinion at 1474.

Based on Mr. Mermelstein's admissions and the timing of the creation of the documents, the Board concluded that the documentary evidence did not establish that Berger had a bona fide intent to use the mark in commerce.Id. at 1474–75.

The Board then considered the remaining evidence, which consisted of Berger employee testimony, and likewise found that it failed to establish that Berger genuinely intended to use the mark in commerce. For example, Berger's vice president of merchandising, Brenda Russo, generally recalled having discussed the iWatch mark for a few minutes with a buyer during a discussion in a Berger showroom. See id. at 1476. But this testimony conflicts with that of Mr. Mermelstein, who denied that Berger had discussions regarding the iWatch mark with anyone outside the company. J.A. 849 (“Q. Has the iWatch mark been discussed outside of your office except with respect to the counsel in this proceeding? A. No.”).

Ms. Russo's testimony also appears to contradict representations Berger made to the PTO during prosecution of the trademark application. In particular, the examiner rejected the mark as descriptive because the “i” in iWatch could be interpreted as a well-established reference to “interactive.” J.A. 50. In response to that rejection, Berger alleged:

The “i” does not refer to any particular feature of the watches or clocks. The “i” is purely arbitrary. The images we previously submitted were just mock-ups to show a buyer. However, the buyer decided that models which previously had interactive features were too expensive. Thus, there will be no interactive features on any models.

J.A. 75. Ms. Russo, who was the only Berger witness who claimed to have met with a buyer, testified to the contrary. She recalled mentioning to the buyer that the watch would have certain technological features, and when asked at her deposition whether that buyer expressed concern about the cost of the iWatch watch, she answered “no.” See Opinion at 1476. Because the evidence relating to Ms. Russo's discussion with the buyer conflicted with Berger's statement during prosecution, the Board chose not to credit the alleged meeting as demonstrating bona fide intent. Id.

The Board considered that some of Berger's employees testified to having attended internal brainstorming sessions and merchandising meetings about the iWatch mark, none of which were documented in the record. But there was testimony from Mr. Mermelstein that suggested any alleged meetings would not have been particularly meaningful. For example, he testified that, as of 2010, three years after the application was filed, Berger had yet to figure out what type of watch it intended to sell with the iWatch mark, or even whether such a watch would have any particular features. J.A. 846. Mr. Mermelstein also stated that, at the time of the filing, Berger had little more than an aspiration to reserve rights in the mark in case it later decided to develop an associated watch:

Q. Okay. And how did you come up with that mark?

A. I think that I came up with the mark because of the advent of technology and information gathering around the globe over the last I guess few years, I thought that if we decided to do a—either a technology watch or information watch or something that would have that type of characteristics that would be a good mark for it.

J.A. 845 (emphasis added).

Finally, the Board considered the fact...