Timex Grp. USA, Inc. v. Focarino, Case No. 1:12-cv-1080

CourtUnited States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
Decision Date17 December 2013
Docket NumberCase No. 1:12-cv-1080
PartiesTIMEX GROUP USA, INC., Plaintiff, v. MARGARET A. FOCARINO, Commissioner of Patents, Defendant.

TIMEX GROUP USA, INC., Plaintiff,
v.
MARGARET A. FOCARINO, Commissioner of Patents, Defendant.

Case No. 1:12-cv-1080

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division

Dated: December 17, 2013


MEMORANDUM OPINION

At issue on cross-motions for summary judgment in this 15 U.S.C. § 1071(b)(1) action seeking review of a decision from the Patent and Trademark Office ("PTO")'s Trademark Trial and Appeal Board ("TTAB") is whether the TTAB erred in denying registration for the term "INTELLIGENT QUARTZ" in connection with Timex watches on the ground that the term is descriptive. More specifically, the two questions presented here are:

i. Whether the TTAB's determination that INTELLIGENT QUARTZ is descriptive is supported by substantial evidence in the administrative record; and
ii. Whether, on the basis of the record as a whole, including the administrative record and the new evidence submitted to the district court, plaintiff has met its burden of showing that INTELLIGENT QUARTZ is suggestive and thus deserving of trademark protection.

For the reasons that follow, the TTAB erred in denying registration; INTELLIGENT QUARTZ is suggestive rather than descriptive and thus merits trademark protection. Accordingly, plaintiff's motion for summary judgment must be granted, and defendant's motion for summary judgment must be denied.

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I.

Plaintiff Timex Group USA, Inc. ("Timex"), a Delaware corporation and well-known American watch manufacturer, filed an intent-to-use application on October 29, 2010 for the term INTELLIGENT QUARTZ in connection with watches.1 In an Office Action issued on December 15, 2010, the PTO Trademark Examining Attorney refused to register INTELLIGENT QUARTZ on the ground that it was merely descriptive of a characteristic or feature of the identified goods. Plaintiff filed a response on January 10, 2011, arguing that the words INTELLIGENT and QUARTZ, when used together, are suggestive rather than descriptive because they do not immediately convey to the consumer any characteristics or features of the relevant Timex watches. The PTO Examining Attorney disagreed, and on February 5, 2011, issued a Final Office Action denying registration. A subsequent Office Action, on August 16, 2011, denied plaintiff's request for reconsideration. Plaintiff then appealed this ruling to the TTAB, arguing that the PTO erred in finding the term descriptive. Thereafter, on July 26, 2012, the TTAB affirmed the Examining Attorney's refusal to register the term INTELLIGENT QUARTZ as a trademark. In re Timex Group USA, Inc., No. 85164601 (T.T.A.B., July 26, 2012) [hereinafter Timex].

In affirming the Examining Attorney's ruling, the TTAB concluded that the term is merely descriptive, stating that "consumers and prospective consumers viewing the mark INTELLIGENT QUARTZ as applied to watches will understand the mark to mean that the watch contains a quartz component controlled by a computer chip." Id. at 10. In support of this finding, the TTAB rejected Timex's argument that consumers would need to "stop and consider" what INTELLIGENT and QUARTZ mean when combined, and concluded instead that "[t]he

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mark does not convey any multiple meanings, double entendre or incongruity." Id. at 11. As such, the TTAB held that "the individual components of the mark, the words 'Intelligent' and 'Quartz' retain their descriptive meaning when used in connection with watches with a quartz component controlled by a computer chip." Id. at 11-12.

Thereafter, on September 25, 2012, plaintiff filed this action seeking review of the TTAB's decision pursuant to 15 U.S.C. § 1071(b)(1), arguing that the TTAB erred in finding that the term INTELLIGENT QUARTZ is merely descriptive. Plaintiff seeks (i) reversal of the TTAB's decision, (ii) a declaration that the term INTELLIGENT QUARTZ is suggestive, (iii) an Order requiring the PTO to approve the application for registration, and (iv) any other relief deemed proper. The parties have filed cross-motions for summary judgment that have been fully briefed and argued. The motions present the question whether the TTAB erred in finding that the term INTELLIGENT QUARTZ is descriptive rather than suggestive.

II.

The summary judgment standard is too well-settled to merit extended discussion, and the parties do not dispute the standard. Summary judgment should not be granted when the non-moving party has "set forth specific facts showing that there is a genuine issue for trial" through "affidavits or as otherwise provided." Rule 56, Fed. R. Civ. P. A genuine factual dispute exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby. Inc., All U.S. 242, 248 (1986).

III

Plaintiff has filed this action under 15 U.S.C. § 1071(b)(1), which allows trademark applicants dissatisfied with the TTAB's decision either to appeal to the Court of Appeals for the

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Federal Circuit or to file an action in district court.2 Where, as here, the plaintiff files an action in the district court, the district court '"sits in a dual capacity,' serving on one hand as the finder of fact with respect to new evidence presented by the parties, and on the other as an appellate reviewer of facts found by the TTAB." Glendale Intern. Corp. v. U.S. Patent & Trademark Office, 374 F. Supp. 2d 479, 485 (E.D. Va. 2005). On review, federal district courts have the power to modify the TTAB decision and declare that the plaintiff's mark is entitled to registration.3

When acting as an appellate reviewer in an action under § 1071(b)(1), a district court reviews the TTAB's findings of fact deferentially and must uphold those findings of fact if they are supported by "substantial evidence" under the Administrative Procedure Act ("APA").4 The TTAB's finding that a term is descriptive is a finding of fact subject to review under the substantial evidence standard. See 2 McCarthy on Trademarks and Unfair Competition § 11.3 (4th ed. 2013) [hereinafter McCarthy]. And substantial evidence, the Supreme Court teaches, is

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"more than a mere scintilla of evidence" and requires "such relevant evidence as a reasonable mind would accept as adequate to support a conclusion." In re Pacer Technology, 338 F.3d 1348, 1349 (Fed. Cir. 2003) (quoting Consol. Edison v. N.I.R.B., 305 U.S. 197, 229 (1938)). Further, as the Federal Circuit has noted, "a review for substantial evidence 'involves examination of the record as a whole, taking into account evidence that both justifies and detracts from an agency's decisions.'" On-Line Careline, 229 F.3d at 1086 (quoting Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 487-88 (1951)). Thus, a finding of fact by the TTAB will not be "upset unless it is not supported by substantial evidence." 3 McCarthy § 21:21 (citing Dickinson v. Zurko, 527 U.S. at 165). Moreover, "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Id. (quoting Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620 (1966)). In sum, as the Federal Circuit instructs, the TTAB's decision "may not be reversed . . . even if [the reviewing court] would have viewed the facts differently if sitting as the tribunal of original jurisdiction," provided that substantial evidence supports the TTAB's ruling. DuoProSS Meditech Corp. v. Inviro Med Devices. Ltd, 695 F.3d 1247, 1252 (Fed. Cir. 2012). If the evidence before the TTAB supports two conclusions, "the Board's decision to favor one over the other . . . must be sustained . . . as supported by substantial evidence." Id.

By contrast, where a district court in a § 1071(b)(1) action acts as a finder of fact with regard to new evidence submitted by the parties, the district court reviews this new evidence de novo and makes findings of fact on whether the putative mark warrants trademark protection.5 Of course, in reviewing newly-submitted evidence, a district court must bear in mind that the

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plaintiff has the "laboring oar to establish error by the [TTAB]" by a preponderance of the evidence, because plaintiff "does not start over to prosecute his application before the district court unfettered by what happened in the PTO." Fregeau v. Mossinghoff, 776 F.2d 1034, 1036-38 (Fed. Cir. 1985). Thus, the plaintiff's evidence must be sufficient to establish by a preponderance of the evidence, based on the record as a whole, including the administrative record, that the proffered mark warrants trademark protection.

Accordingly, the analysis in this case proceeds as follows. First, the TTAB's finding of fact—viz., the TTAB's conclusion that the term INTELLIGENT QUARTZ is merely descriptive—must be reviewed deferentially pursuant to the substantial evidence standard. Next, the new evidence submitted by the parties must be reviewed de novo to determine what findings of fact are warranted by this new evidence. Finally, in the event that the new evidence warrants findings that contradict, or are inconsistent with, the TTAB's factual findings, the district court must then consider whether the record as a whole establishes that plaintiff has borne its burden of proving by a preponderance of the evidence that the term INTELLIGENT QUARTZ is suggestive in connection with Timex...

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