Copelands' Enterprises, Inc. v. CNV, Inc.

• Decision Date: 01 October 1991
• Docket Number: Nos. 90-1451,90-1457,s. 90-1451
• Citation: 20 USPQ2d 1295,945 F.2d 1563
• Parties: COPELANDS' ENTERPRISES, INC., dba Copelands' Sports, Appellant, v. CNV, INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1563

945 F.2d 1563

20 U.S.P.Q.2d 1295

COPELANDS' ENTERPRISES, INC., dba Copelands' Sports, Appellant, v. CNV, INC., Appellee.

Nos. 90-1451, 90-1457.

United States Court of Appeals Federal Circuit.

Oct. 1, 1991.

Douglas E. Olson, Lyon & Lyon, Los Angeles, Cal., argued for appellant, Dale Nelson; Daniel J. Meaney, Jr., Santa Barbara, Cal., of counsel, on brief.

Hamilton Loeb, Paul, Hastings, Janofsky & Walker, Washington, D.C., argued, Thomas A. Lorenzen and William G. Maddox, on brief, Karen E. Silverman, Paul, Hastings, Janofsky & Walker, Washington, D.C., and Allen S. Resnick, Paul, Hastings, Janofsky & Walker, of Los Angeles, Cal., for appellee.

Before RICH, ARCHER and MICHEL, Circuit Judges.

ARCHER, Circuit Judge.

Copelands' Enterprises, Inc. (Copelands) appeals from the final decision of the United States Patent and Trademark Office Trademark Trial and Appeal Board (TTAB or board) in Cancellation No. 16,128 and Opposition No. 75,373 (May 24, 1990). In these cases, the board granted the motion of CNV, Inc. (CNV) for summary judgment, holding that CNV had not "intend[ed] to deceive or mislead the public or the Office" by its "technically improper" use of a trademark registration notice (a circled "R" symbol), see 15 U.S.C. § 1111 (1988), in connection with the marks VUARNET and VUARNET FRANCE prior to their registration in the United States. We vacate and remand.

I

From 1979 until April 1986, Copelands' several retail sporting goods stores in the United States sold genuine VUARNET-brand sunglasses manufactured in France by Sporoptic Pouilloux, S.A. (Pouilloux). At first, the glasses were supplied to Copelands by Schwarz, CNV's predecessor, and from May 1981 until late 1982 by CNV. Copelands also purchased glasses from other sources when CNV was unable to satisfy its requirements. CNV advised Copelands in late 1982 that it would no longer supply VUARNET-brand sunglasses to Copelands and thereafter Copelands obtained VUARNET-brand sunglasses exclusively from other sources, one of which Copelands asserts represented itself to be an authorized distributor in the United States of VUARNET-brand sunglasses by Pouilloux.

On February 3, 1983, CNV's attorney, Michael Lindsey, notified Copelands by mail that (1) the VUARNET mark was registered in the United States for, among other things, sunglasses and other protective glasses, (2) CNV, as the exclusive owner of the VUARNET mark in the United States, had "the sole right to use and control the use of" that mark in connection with sunglasses, and (3) Copelands' unauthorized use of the VUARNET mark constituted trademark infringement. The letter further stated: "On behalf of our client, we hereby demand that you ... cease and desist from any further use of the 'Vuarnet' mark ... in connection with the sale of sunglasses or other protective glasses."

Subsequently, Copelands determined that the VUARNET mark had not been registered in the United States but was then merely the subject of a pending application filed November 22, 1982, naming Pouilloux as applicant. In a letter dated February 23, 1983, Copelands' counsel notified Lindsey of the inaccuracies in his February 3 letter. Included in the Copelands letter were brochures and other sales materials distributed by CNV. These materials illustrated that CNV was using the circled "R" registration symbol with unregistered marks. CNV accompanied the unregistered VUARNET mark with the registration symbol, and in an unregistered V-shaped symbol incorporating the words VUARNET FRANCE (the VUARNET FRANCE mark), CNV accompanied the VUARNET portion of the mark with the registration symbol. The Copelands letter pointed to the legal basis for saying these practices were improper and could preclude registrations. A demand was made that CNV cease such improper use of the registration symbol. The letter stated:

The above usage and marking of the goods with a notice of registration by use of the symbol [circled R] is a fraudulent misuse of the mark and subjects the mark to cancellation, if registered, and will support a refusal to register. We call your attention to the case of Fox-Stanly Photo Products, Inc. v. Otaguro, 333 F.Supp. 1293, (D. [sic, Mass.] 1972), 174 U.S.P.Q. 257, where the Court held that misuse of notice of registration of a mark was unclean hands so as to bar registration.

The Trademark Manual of Examining Procedure at Section 902.03 provides that fraudulent intent and purpose in using a federal registration symbol is a basis for refusal of registration. Thus, we believe that the pending application can be opposed for registration for the above reasons.

....

We hereby demand that you promptly and immediately cease and desist from using the notice of registration of the mark VUARNET by use of the notice of registration symbol [circled R] and that you promptly advise the Examiner in charge of United States Trademark Application Serial No. 403,393 of the intentional and fraudulent misuse of that pending mark.

Although Lindsey sent Copelands' letter to CNV, CNV did not respond to that letter. CNV continued to accompany the unregistered VUARNET and VUARNET FRANCE marks with the registration symbol.

The VUARNET mark was federally registered in May 1984. Pouilloux assigned the registered mark to CNV in December 1984 and the assignment was recorded in the Patent and Trademark Office in January 1985. CNV applied for registration of the VUARNET FRANCE mark in May 1985, and that mark was published for opposition in November of 1986.

On December 31, 1986, Copelands filed a petition to cancel the registration of the VUARNET mark and an opposition to CNV's application for registration of the VUARNET FRANCE mark. ¹ In the cancellation proceeding, Copelands alleged that CNV's misuse of the registration symbol justified the cancellation of the VUARNET mark registration. In its opposition to the registration of the VUARNET FRANCE mark, Copelands asserted that CNV's registration symbol misuse justified a refusal of registration of that mark. CNV filed motions for summary judgment in these proceedings on August 6, 1987. ² Considering only the declarations of record, the board, in both proceedings, granted CNV summary judgment on Copelands' registration symbol misuse claim. See TTAB Orders dated April 22, 1988. In both proceedings, the board denied Copelands' request for reconsideration of the grant of summary judgment. ³ See TTAB Orders dated August 31, 1988.

II

A. The issue before us in both proceedings is whether the board properly granted CNV's motion for summary judgment on Copelands' claim that CNV had misused the registration symbol. Summary judgment is appropriate when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); SRI Int'l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1116, 227 USPQ 577, 581 (Fed.Cir.1985) (in banc). "The movant bears the burden of demonstrating absence of all genuine issues of material fact." SRI, 775 F.2d at 1116, 227 USPQ at 581; Armco, Inc. v. Cyclops Corp., 791 F.2d 147, 149, 229 USPQ 721, 722-23 (Fed.Cir.1986).

The moving party need not "produce evidence showing the absence of a genuine issue of material fact"; rather, "the burden on the moving party may be discharged by 'showing'--that is, pointing out to the district court--that there is an absence of evidence to support the nonmoving party's case."

Avia Group Int'l v. L.A. Gear Calif., 853 F.2d 1557, 1560, 7 USPQ2d 1548, 1551 (Fed.Cir.1988) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986)).

A nonmovant, on the other hand, "must do more than merely raise some doubt as to the existence of a fact; evidence must be forthcoming from the nonmovant which would be sufficient to require submission to the jury of the dispute over the fact." Avia Group, 853 F.2d at 1560, 7 USPQ2d at 1550. However, the evidence must be viewed in a light most favorable to the nonmovant and all reasonable inferences must be drawn in its favor. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); SRI, 775 F.2d at 1116, 227 USPQ at 581. The nonmoving party "need only present evidence from which a jury might return a verdict in [its] favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986).

B. The owner of a trademark registered in the United States may display with the mark a notice of that registration, such as the registration symbol consisting of "the letter R enclosed within a circle." 15 U.S.C. § 1111. The improper use of a registration notice in connection with an unregistered mark, if done with intent to deceive the purchasing public or others in the trade into believing that the mark is registered, is a ground for denying the registration of an otherwise registrable mark. See Federated Foods, Inc. v. Fort Howard Paper Co., 544 F.2d 1098, 1101, 192 USPQ 24, 27 (CCPA 1976); see also Johnson Controls, Inc. v. Concorde Battery Corp., 228 USPQ 39, 44 (TTAB 1985); Libbey-Owens-Ford Glass Co. v. Plastron, Inc., 80 USPQ 591, 592 (Comm'r Pat.1949); Weil & Durrse v. United Piece Dye Works, 70 USPQ 36, 37 (Comm'r Pat.1946). In Johnson Controls, the board set forth its position as follows:

The improper use of the registration symbol by an applicant will defeat applicant's right to registration only in those cases where it is conclusively established that the misuse of the symbol was occasioned by an intent to deceive the purchasing public or others in the trade into believing that the mark was registered.

228 USPQ at 44. The Trademark Manual of Examination Procedures, § 902.04, as amended by Rev. 6, Examination Guide 26-83 (1983), requires denial of registration "[i]f there is clear evidence of fraud in the use of the registration symbol on specimens in an application." See also Trademark Manual of Examination Procedures, ...