Eastman Kodak Co. v. Bell & Howell Document Management Products Co., 92-1482

• Decision Date: 02 June 1993
• Docket Number: No. 92-1482,92-1482
• Citation: 994 F.2d 1569,26 USPQ2d 1912
• Parties: EASTMAN KODAK COMPANY, Appellant, v. BELL & HOWELL DOCUMENT MANAGEMENT PRODUCTS COMPANY, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1569

994 F.2d 1569

26 U.S.P.Q.2d 1912

EASTMAN KODAK COMPANY, Appellant, v. BELL & HOWELL DOCUMENT MANAGEMENT PRODUCTS COMPANY, Appellee.

No. 92-1482.

United States Court of Appeals Federal Circuit.

June 2, 1993.

Richard D. Rochford, Jr., Nixon, Hargrave, Devans & Doyle, of Rochester, NY, argued for appellant. With him on the brief was James D. Kole. Also on the brief was Kathleen F. Tranelli, Eastman Kodak Co., Rochester, NY.

Howard B. Rockman Welsh & Katz, Ltd., Chicago, IL, argued for appellee. With him on the brief was Kathleen A. White.

David Goldberg, Cowan, Liebowitz & Latman, P.C., of New York City, was on the brief for the amicus curiae, Xerox Corp.

Before MICHEL, Circuit Judge, SMITH, Senior Circuit Judge, and SCHALL, Circuit Judge.

MICHEL, Circuit Judge.

Eastman Kodak Company (Kodak) appeals from the decision of the Trademark Trial and Appeal Board (Board) of the Patent and Trademark Office (PTO) in an intent-to-use application proceeding under the Lanham Act, as amended by the Trademark Law Revision Act of 1988, 15 U.S.C. §§ 1051-1127 (1992), ¹ Eastman Kodak Co. v. Bell & Howell Document Management Prods. Co., Nos. 86,083, 86,093, and 86,101 (TTAB June 8, 1992). In its decision, the Board denied Kodak's motion for summary judgment, granting summary judgment for Bell & Howell Document Management Products Company (B & H) on the issue of descriptiveness, and dismissing the oppositions "without prejudice to the filing of a petition to cancel the registration issued after a statement of use has been filed," id., slip op. at 6. Because we hold that, in the circumstances of an intent-to-use application proceeding, the Board's actions are permissible under the statute, we affirm.

BACKGROUND

On October 12, 1990, B & H filed intent-to-use applications, under 15 U.S.C. § 1051(b), to register the numbers "6200," "6800" and "8100" on the Principal Register as trademarks for microfilm reader/printers. After initial examination of the applications, the trademark examining attorney approved the applications for publication in the PTO's Official Gazette.

Section 1051(b) allows an applicant who alleges a bona fide intent to use a mark to file an application seeking registration on the Principal Register. If, upon examination, the mark appears registrable, the PTO publishes it for opposition. 15 U.S.C. § 1062(a). If no opposer is successful, the PTO issues a notice of allowance. Id. § 1063(b)(2). The applicant then has six months ² in which to file a statement that verifies that the mark is in use in commerce, the date of first use in commerce, the goods and services in connection with the mark are used in commerce, and the manner in which the mark is being used. Id. § 1051(d)(1). The statement of use is then subject to another examination, in which the PTO considers how the mark is used and, if it is still satisfied that, as used, the mark is registrable, issues a certificate of registration. Id.

Kodak, a competitor of B & H in the manufacture and marketing of business equipment products, including microfilm reader/printers, timely filed a notice of opposition to registration of each of the three marks. Kodak alleged that the marks would be used solely as model designators for the reader/printers and therefore would be merely descriptive. Kodak argued that B & H had not shown that the marks had acquired secondary meaning and that, therefore, registration of the marks would be improper. The three opposition proceedings were consolidated before the Board.

B & H moved for summary judgment on the grounds that there were no genuine issues of material fact regarding the alleged mere descriptiveness of its applied-for number marks and, alternatively, that Kodak had no standing to oppose B & H's applications. Kodak filed a cross-motion for summary judgment. The Board determined that Kodak did have standing to oppose and that conclusion is not contested in this appeal.

On the issue of mere descriptiveness, the Board stated that it "believe[s] that it is possible for a numerical designation, which functions only in part to designate a model or grade, to be inherently distinctive and registrable without a showing of secondary meaning." Eastman Kodak, slip op. at 5 (citing Neapco Inc. v. Dana Corp., 12 USPQ2d 1746, 1748 (TTAB 1989)). Due to the nature of intent-to-use applications, the number marks at issue had not been used at the time of the opposition proceeding. Accordingly, the Board held that it could not determine whether the numerical designations "are merely descriptive or if they are registrable without a showing of secondary meaning." Id. The Board concluded that in such situations, where the descriptiveness issue could not be resolved until use had begun, the opposition should be dismissed without prejudice to the initiation of a cancellation proceeding against the mark if the mark is registered after the statement of use is filed. Consequently, the Board denied Kodak's motion for summary judgment, granted B & H summary judgment on the descriptiveness issue, and dismissed the oppositions without prejudice. As a result, B & H received a notice of allowance.

DISCUSSION

The principal issue in this case is whether the Board's implied creation of a presumption in favor of the applicant for a numerical mark intended for use as more than a model designator is a reasonable interpretation of the Board's authority under the Lanham Act. We hold that it is.

Under the Chevron doctrine, established in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), "[w]hen a court reviews an [administrative] agency's construction of the statute which it administers, it is confronted with two questions." Id. at 842, 104 S.Ct. at 2781. The first is whether Congress has directly addressed the precise question at issue. If so, then the agency "must give effect to the unambiguously expressed intent of Congress," id. at 843, 104 S.Ct. at 2782, and the court must, of course, review the agency's interpretation accordingly. If, however, "the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. (emphasis added). ³ In order to uphold the agency's interpretation, the court need not conclude that it was the only permissible construction or even the construction the court would have reached on its own reading of the statute. Id. n. 11. The agency's interpretation must merely be "reasonable." See id. at 866, 104 S.Ct. at 2793; see also Pauley v. BethEnergy Mines, Inc., --- U.S. ----, ----, 111 S.Ct. 2524, 2535, 115 L.Ed.2d 604 (1991) (applying "reasonableness" standard); IRS v. Fair Labor Relations Auth., 494 U.S. 922, 928, 110 S.Ct. 1623, 1627, 108 L.Ed.2d 914 (1990) (same); Zenith Elec. Corp. v. United States, 988 F.2d 1573, 1582-83 (Fed.Cir.1993) (same); DeCosta v. United States, 987 F.2d 1556, 1558 (Fed.Cir.1993) (same).

I.

In the instant case, the Board's decision to grant B & H summary judgment and dismiss Kodak's opposition without prejudice, necessarily involved the Board's concluding that numerical designators are presumptively not merely descriptive under Lanham Act section 2(e), 15 U.S.C. § 1052(e), when applied for in an intent-to-use application under section 1(b), 15 U.S.C. § 1051(b). Section 1(b) sets forth the requirements for filing an intent-to-use application. See 15 U.S.C. § 1051(b). Section 2(e) precludes registration of a trademark on the Principal Register that, inter alia, "[c]onsists of a mark which ... when used on or in connection with the goods of the applicant is merely descriptive or deceptively misdescriptive of them." Id. § 1052(e). The statute on its face neither requires nor precludes the Board's interpretation.

Nor does the legislative history of the Trademark Law Revision Act of 1988 speak directly to this issue. The legislative history does demonstrate that Congress intended most marks applied for in an intent-to-use application (intent-to-use mark) to be reviewed for descriptiveness in the initial examination/pre-use stage of the intent-to-use application process. For example, Senate Report 515 states that "the absence of specimens at the time the application is filed will not affect examination on numerous fundamental issues of registrability (that is, descriptiveness, geographic or surname significance, or confusing similarity)." S.Rep. No. 515, 100th Cong., 2d Sess. 32 (1988), reprinted in 1988 U.S.C.C.A.N. 5577, 5595. With respect to the examination of the statement of use, which is filed after a notice of allowance has been issued, the Report states:

The Patent and Trademark Office's examination of the statement of use will be only for the purpose of determining issues that could not have been fully considered during the initial examination of the application, that is, whether the person filing the statement of use is the applicant, whether the mark as used corresponds to the drawing submitted with the application, whether the goods or services were identified in the application and not subsequently deleted, and whether the mark, as displayed in the specimens or facsimiles, functions as a mark.

Id. at 34, 1988 U.S.C.C.A.N. at 5596 (emphasis added). As the highlighted phrase shows, Congress did intend the PTO to confirm, after the filing of the statement of use, that the intent-to-use mark, as displayed and used, actually "functions as a mark." Indeed, the statute provides: "Subject to examination and acceptance of the statement of use, the mark shall be registered.... Such examination may include an examination of the factors set forth in subsections (a) through (e) of section 1052." 15 U.S.C. § 1051(d)(1) (emphasis added). And the legislative history itself emphasized that "[t]his provision [of the statute] permits the [PTO] to raise issues of registrability that might not be evident...