Embarcadero Technologies, Inc. v. Delphix Corp.

• Court: Trademark Trial and Appeal Board
• Decision Date: 21 January 2016
• Docket Number: Opposition 91197762
• Parties: Embarcadero Technologies, Inc. v. Delphix Corporation Cancellation No. 92055153

Embarcadero Technologies, Inc.
v.
Delphix Corporation

Cancellation No. 92055153

Opposition No. 91197762

United States Patent and Trademark Office, Trademark Trial and Appeal Board

January 21, 2016

Before Quinn, Mermelstein and Lykos, Administrative Trademark Judges.

By the Board:

This case comes up on Respondent's motion for summary judgment in Cancellation No. 92055153 on the pleaded claim that Respondent fraudulently averred use in commerce of its DELPHIX mark prior to registration. We also address Petitioner's cross-motion to amend its petition for cancellation to add various claims, including the related claim that the application underlying the subject registration was void for nonuse prior to registration. Both motions are contested.

On January 14, 2009, Respondent filed an application based on Trademark Act Section 1(b), 15 U.S.C. § 1051(b), to register the mark shown below

Image Omitted.

for "computer software for use in database management; database management software for managing database storage and provisioning functions" in International Class 9 (application Serial No. 77649689). On August 12, 2009, Respondent filed its statement of use alleging January 31, 2009 as its date of first use of the mark and March 1, 2009 as its date of first use of the mark in commerce.

On October 1, 2009, the USPTO issued an Office action finding Respondent's specimen of use unacceptable. On January 25, 2010 - within six months of issuance of the notice of allowance - Respondent timely filed a request for an extension of time to file the statement of use for six months, or until July 28, 2010. On February 3, 2010, Respondent filed its response to the Office action, with an accompanying substitute specimen and declaration averring that the substitute specimen was in use in commerce prior to the expiration of the original filing deadline for filing the statement of use. Respondent continued to allege January 31, 2009 as the date of first use of the mark, and substituted December 3, 2009 as its date of first use of the mark in commerce. On February 24, 2010, the USPTO issued a notice of acceptance of Respondent's statement of use. Registration No. 3768914 issuedMarch30, 2010.

On February 9, 2012, Petitioner filed its petition to cancel Registration No. 3768914 pleading, among other claims, fraud based on Respondent's averment of use in its statement of use.

Respondent filed an answer denying the salient allegations of the petition, and pleading various affirmative defenses. Pursuant to the Board's July 26, 2013 order granting the parties' consented scheduling motion, discovery closed December 21, 2013. Respondent filed its motion for summary judgment on August 11, 2014, prior to the opening of Petitioner's testimony period.^[1]RESPONDENT'S MOTION FOR SUMMARY JUDGMENT ON FRAUD

Summary judgment is an appropriate method of disposing of cases in which there is no genuine dispute with respect to any material fact, thus leaving the case to be resolved as a matter of law. See Fed. R. Civ. P. 56(c)(1). A party moving for summary judgment has the burden of demonstrating the absence of any genuine dispute as to a material fact, and that it is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The evidence of record and all justifiable inferences that may be drawn from the undisputed facts must be viewed in the light most favorable to the non-moving party. See Lloyd's Food Products Inc. v. Eli's Inc., 987 F.2d 766, 25 U.S.P.Q.2d 2027 (Fed. Cir. 1993).

When a moving party's motion for summary judgment is supported by evidence sufficient to indicate that there is no genuine dispute as to any material fact and the moving party is entitled to judgment, the burden shifts to the nonmoving party to demonstrate the existence of a genuine dispute regarding at least one material fact which requires resolution at trial. The nonmoving party, however, may not rest on the mere allegations of its pleadings and assertions, but must designate specific portions of the record or produce additional evidence showing the existence of a genuine dispute as to a material fact for trial. See Barmag Barmer Maschinenfabrik AG v. Murata Machinery, Ltd., 731 F.3d 831, 221 U.S.P.Q. 561, 564 (Fed. Cir. 1984) ("The party opposing the motion must point to an evidentiary conflict created on the record at least by a counter statement of a fact or facts set forth in detail in an affidavit by a knowledgeable affiant.").

Moreover, where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file" and "requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. at 324. That is, the moving party may discharge its burden by showing that there is an absence of evidence to support the nonmoving party's case. Id. at 325; Copelands' Enters. Inc. v. CNV Inc., 945 F.2d 1563, 20 U.S.P.Q.2d 1295, 1298 (Fed. Cir. 1991).

Fraud in procuring a trademark registration occurs when an applicant knowingly makes false, material representations of fact in connection with its application with the intent to deceive the USPTO. In re Bose Corp., 580 F.3d 1240, 91 U.S.P.Q.2d 1938, 1941 (Fed. Cir. 2009). The standard for finding intent to deceive is stricter than the standard for negligence or gross negligence, and evidence of deceptive intent must be clear and convincing. Id.

Respondent moves for summary judgment on Petitioner's fraud claim, contending that, even if there was an inaccuracy in the statement of use, there is no evidence that the inaccuracy resulted from an intent to deceive the USPTO. Respondent argues that Petitioner's initial disclosures and pretrial disclosures identify no documents or witnesses with knowledge of facts supporting a fraud claim, and that Petitioner "has not produced a single document, witness, or discovery response" supporting its fraud claim.

Respondent submits the declaration of its CEO and founder, Jedidiah Yueh, who avers that he created a unique software product and used the mark in accordance with industry practice; that Respondent first installed the software bearing the mark for a customer in December 2009; that at another unspecified point in 2009, Respondent installed the DELPHIX software; that the mark was also used on a user manual provided to both customers in 2009, and then the manual was submitted as a specimen supporting Respondent's amended statement of use; that he signed the amendment to the statement of use; that because the manual was in use with software installed for customers, he believed then and still believes that Respondent used the mark in commerce as of December 3, 2009; that Respondent had ten customers by September 2010, and that customer testimonials were part of Respondent's presentation at a September 2010 trade conference.

Respondent also submits its September 2010 press release describing existing customers for the DELPHIX software, and excerpts from Mr. Yueh's discovery deposition in which he avers Respondent was the first company to offer database virtualization, a concept invented by Mr. Yueh and the subject of patent applications; that even now no other companies offer the type of database virtualization solution that Respondent offers; and that the September 2010 presentation at the trade conference was intended to increase Respondent's customer base.^[2]

To support its opposition to the motion for summary judgment, Petitioner submits Respondent's responses to Petitioner's request for the production of documents, the declaration of attorney Angelique Riordan, and excerpts from the Yueh deposition. The Riordan declaration avers that Respondent's document production includes no sales documents such as purchase orders or shipment confirmations of Respondent DELPHIX software. The excerpts from the Yueh deposition state that Yueh is a graduate of Harvard University, that before founding Respondent, he was the founder of a different company with general responsibilities for marketing and trademarks; and that he selected the prior company's trademark and sought to register it. With respect to Respondent's fraudulent intent in filing its statement of use, Petitioner contends (Response, p. 10):

Delphix's president and CEO Jedidiah Yueh appears to have been acting pro se when he signed and submitted both Statements of Use. That fact makes no difference – an applicant is responsible for ensuring that accurate information is transmitted to the USPTO. Mr. Yueh is a highly educated Harvard graduate, who has started at least two businesses, with previous trademark experience. Mr. Yueh is well aware of the importance of reading and verifying the accuracy of documents he signs. With his extensive business experience, including trademark responsibilities and previous dealings with USPTO and the filing of trademark applications Mr. Yueh could not have reasonably believed that Delphix's two claimed "installations" constituted use in commerce of software goods

Respondent filed a reply brief noting that Petitioner relies on only two facts about Respondent's CEO – that Mr. Yueh studied at Harvard and has a general awareness of trademarks – to inappropriately infer that Respondent filed its statement of use with the necessary fraudulent intent. Respondent contends that it has discharged its burden for summary judgment by showing that there is an absence of evidence to support Petitioner's claim.

While the Board must view Respondent's motion for summary judgment on Petitioner's pleaded claim of fraud in a light most favorable to...