Towers v. Advent Software, Inc.

• Decision Date: 06 September 1990
• Docket Number: No. 90-1097,90-1097
• Citation: 913 F.2d 942,16 U.S.P.Q.2d 1039
• Parties: , 16 U.S.P.Q.2d 1039 Frederic C. TOWERS, Appellant, v. ADVENT SOFTWARE, INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 942

913 F.2d 942

59 USLW 2184, 16 U.S.P.Q.2d 1039

Frederic C. TOWERS, Appellant, v. ADVENT SOFTWARE, INC., Appellee.

No. 90-1097.

United States Court of Appeals, Federal Circuit.

Sept. 6, 1990.

Helen Hill Minsker, of Beveridge, DeGrandi & Weilacher, Washington, D.C., argued for appellant. With her on the brief was John T. Roberts.

James L. Warren, of Pillsbury, Madison & Sutro, San Francisco, Cal., argued for appellee. With him on the brief were Kevin M. Fong and Marina H. Park.

Before MARKEY, Circuit Judge, ^* BENNETT, Senior Circuit Judge, and CONTI, Senior District Judge. ^**

BENNETT, Senior Circuit Judge.

Frederic C. Towers (Towers) has appealed the decision of the Trademark Trial and Appeal Board of the Patent and Trademark Office (Board) dismissing Towers' petition for cancellation of a trademark registration owned by Advent Software, Inc. (Advent). We affirm.

BACKGROUND

Advent is the owner of Registration No. 1,347,405 for the mark THE PROFESSIONAL PORTFOLIO for computer programs for use in the field of financial management. The registration claimed a date of first use in December 1983.

Towers alleged in his petition for cancellation that he had used the mark THE PROFESSIONAL PORTFOLIO SYSTEM since November 1982 in connection with his computer-based portfolio valuation system marketed under the term VALPORT. THE PROFESSIONAL PORTFOLIO SYSTEM is not a registered mark. Towers also alleged that contemporaneous use of the terms is likely to result in confusion, mistake, or deception and that because he had used his designation first, Advent's registration should be cancelled.

The Board first held that, assuming Towers had trademark rights in THE PROFESSIONAL PORTFOLIO SYSTEM, there was a likelihood of confusion between the parties' marks. The Board found that Towers' and Advent's products were legally identical and that both were marketed to the same customers through the same trade channels. The parties have not challenged on appeal the Board's "likelihood of confusion" determination.

The Board then considered the priority of acquisition of trademark rights. The Board stated that under Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317, 209 The Board observed that the terms were quite similar and that the registrant was seeking to "play both sides of the street" by arguing that its own mark was valid but Towers' term was merely descriptive and without secondary meaning. However, the Board also observed that Towers had in no way sought to challenge the registration on the basis that Advent's mark was merely descriptive of its product. Therefore, the Board felt obligated to treat Advent's registered mark as functioning as a trademark.

USPQ 40 (CCPA 1981), a petitioner in a trademark cancellation proceeding who alleges likelihood of confusion under section 2(d) of the Lanham Act (15 U.S.C. Sec. 1052(d) (1988)) must establish that the term he claims to be his mark is distinctive of his goods, whether inherently or through the acquisition of secondary meaning. The Board found that Towers' term was descriptive, rather than suggestive, and thus was not inherently distinctive. The Board also found that based on Towers' limited use of THE PROFESSIONAL PORTFOLIO SYSTEM, Towers had not shown that the term had acquired secondary meaning prior to December 1983, when Advent began to use its mark. Therefore, the Board held that Towers had not established a valid cause of action to cancel Advent's registration pursuant to section 2(d) of the Lanham Act.

ISSUES

1. Whether the Board clearly erred in finding Towers' term THE PROFESSIONAL PORTFOLIO SYSTEM to be descriptive of computer-based portfolio valuation systems.

2. Whether the Board erred in requiring Towers to show that his unregistered term was distinctive of his goods.

DISCUSSION

A. Descriptiveness

Whether a mark is descriptive is a question of fact. In re Bed & Breakfast Registry, 791 F.2d 157, 160, 229 USPQ 818, 819 (Fed.Cir.1986). The findings of the Board on factual issues cannot be set aside unless clearly erroneous. Stock Pot Restaurant, Inc. v. Stockpot, Inc., 737 F.2d 1576, 1578-79, 222 USPQ 665, 666-67 (Fed.Cir.1984). In this case, the Board did not clearly err in finding the term THE PROFESSIONAL PORTFOLIO SYSTEM was descriptive of computer-based portfolio valuation systems.

The Board observed that, in this case, Towers' term was essentially the generic term "portfolio valuation system" with the addition of the word "professional" and the deletion of the word "valuation." The Board found that the word "professional" served to convey information immediately to the purchaser that the product possesses professional capabilities and hence is able to meet the needs of investment professionals. According to the Board, the absence of the word "valuation" did not preclude a finding that the term was descriptive. Towers' term informed prospective purchasers that his software assisted in the management of portfolios, as opposed to doing any one of the thousands of other functions performed by computer software. The Board also relied on deposition testimony of an employee of a licensee, who testified that the term "describes [the product] as a portfolio system." In addition, Mr. Towers, who in response to the question "In your mind does THE PROFESSIONAL PORTFOLIO SYSTEM describe what VALPORT is?" replied, "Well, portfolio system clearly does."

Towers first argues that "portfolio system" encompasses much more than a portfolio valuation system, so the term is not merely descriptive. However, as set forth above, ample evidence supports the Board's finding that Towers' term directly conveys information concerning the function, characteristics, purpose or use of his product, and that therefore the term is descriptive. See In re Abcor Dev. Corp., 588 F.2d 811, 813, 200 USPQ 215, 217 (CCPA 1978).

Towers' principal argument is based on the similarity between his term and Advent's mark. He argues that because the Patent and Trademark Office permitted registration of Advent's mark without a showing of secondary meaning, that term is at least suggestive of the software product. Towers asserts that because his term is so similar, it is also at least suggestive. Towers' argument is unpersuasive. As the Board recognized, Towers chose not to challenge Advent's registration under section 2(e) as being descriptive; therefore, the Board treated Advent's term as functioning as a trademark. The degree of descriptiveness of Advent's mark was not at issue. Moreover, the contexts in which the marks are used are different. Advent uses THE PROFESSIONAL PORTFOLIO as its primary mark. Towers uses THE PROFESSIONAL PORTFOLIO SYSTEM as tag-line descriptor following its primary VALPORT mark. Finally, we note that while the marks are superficially similar, Advent's registered mark omits the word "system." The terms are different as a whole and are used differently by the parties to designate their goods. Towers cannot rely on the PTO's act of registering Advent's mark to support the argument that his own term is not descriptive.

B. Requirement That Towers' Unregistered Term Be Distinctive

The basis for Towers' petition for cancellation is the allegation under section 2(d) of a likelihood of confusion between Advent's mark and his own "mark ... previously used." ¹ The Board held that Towers had not established a valid cause of action for cancellation under section 2(d) because Towers had not shown that his term was distinctive of his goods. The Board relied on Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317, 209 USPQ 40 (CCPA 1981). That case involved a trademark registration opposition proceeding. The CCPA held that "if an opposer's alleged means of trade designation is not distinctive--does not identify source--then there is no basis upon which to compare such a thing with the applicant's mark to determine whether confusion as to source is likely." Id. at 1321, 209 USPQ at 44. The court reasoned as follows:

[T]he proper focus of Sec. 2(d) is not on "mark" or "trade name," but upon the phrase, "likely * * * to cause confusion, or to cause mistake or to deceive." We also observe that the inquiry is not simply whether confusion is likely, but whether confusion as to source is likely. Further, the issue is not merely whether public confusion as to source is likely, but whether the identification of source results from trade identity rights in opposer which the law will recognize.

Under section 2(d), as utilized in an opposition, confusion, or a likelihood thereof, is not recognized where one claiming to be aggrieved by that confusion does not have a right superior to his opponent's, or where he has not proved that that which he claims identifies him as the source of goods or services actually does so.

Id. at 1322, 209 USPQ at 44-45 (citations omitted). Accord Sweats Fashions, Inc. v. Pannill Knitting Co., 833 F.2d 1560, 1566, 4 USPQ2d 1793, 1798 (Fed.Cir.1987); Avtex Fibers, Inc. v. Gentex Corp., 223 USPQ 625, 626 (TTAB 1984). Under the rule of Otto Roth, a party opposing registration of a trademark due to a likelihood of confusion with his own unregistered term cannot prevail unless he shows that his term is distinctive of his goods, whether inherently or through the acquisition of secondary meaning or through "whatever other type of use may have...