American Computer Associates, Inc.v.Model American Computer Corporation

Trademark Trial and Appeal Board

May 10, 2012

No. 92023939 (T.T.A.B. May. 10, 2012)

Mailed: Hearing Date:
May 10, 2012 November 22, 2011

UNITED STATES PATENT AND TRADEMARK OFFICE
_____

Trademark Trial and Appeal Board
_____

American Computer Associates, Inc.

v.

Model American Computer Corporation
_____

Cancellation No. 92023939
_____

Robert Rosenthal of Howard IP Law Group, for American
Computer Associates, Inc.

Peter E. Nussbaum of Wolff & Samson, for Model American
Computer Corporation.
_____

Before Grendel, Bergsman, and Ritchie, Administrative
Trademark Judges.

Opinion by Ritchie, Administrative Trademark Judge:

This is a cancellation proceeding in which American
Computer Associates, Inc. (“Petitioner”) seeks to cancel
Registration No. 1599395, owned by Model American Computer
Corporation (“Respondent”), for MODEL AMERICAN, and design,
as shown below, for “computer hardware, namely processor,
THIS OPINION IS NOT A
PRECEDENT OF THE TTAB
Cancellation No. 92051378
2
keyboard, monitor and memory unit and computer utility
programs”1:

In the petition for cancellation, petitioner asserts
that it uses the MODEL AMERICAN mark and design on its own
computer products. (Pet. Para. 5). Petitioner further
asserts that Respondent has ceased used of the mark on the
goods for which it has registered them for at least three
years with no intent to resume use, thereby resulting in a
legal abandonment of the mark Id. at Para. 11-12.
Respondent filed an answer denying the salient
allegations of the petition. Both parties filed briefs and
Petitioner filed a Reply brief. At the request of
Respondent, an oral hearing was presided over by this panel
on November 22, 2011.
Record and Evidentiary Issues

This case has been languishing for over 15 years. The
petition for cancellation was filed on May 15, 1995. The
parties have filed numerous motions and suspensions. Much
of the testimony in the case is over ten years old. In that
regard, we note that the parties could have been more
expeditious in bringing the case to resolution.

1 Registered on June 5, 1990. Section 8 affidavit accepted.
Renewed twice.
Cancellation No. 92051378
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The record consists of the pleadings; the file of the
involved application; and the following:
1. Petitioner’s testimonial deposition of Arthur R.
Eglington, petitioner’s former counsel, dated November
30, 2000;
2. Petitioner’s testimonial deposition of Roger A.
Hammond, a computer programmer, dated December 4,
2000;
3. Petitioner’s testimonial deposition of Mark A.
Fanelli, petitioner’s founder and president, dated
November 29, 2000;
4. Petitioner’s Notice of reliance, containing
definitions of the term “utility program”;
5. Respondent’s testimonial deposition of Michael Shane,
shareholder in Respondent, and licensee of the MODEL
AMERICAN logo, dated April 4, 2003;
6. Respondent’s testimonial deposition of Rollin Binzer,
a graphic designer, dated April 4, 2003;
7. Respondent’s testimonial deposition of Robert Mull, a
graphic designer, dated September 8, 2003;
8. Respondent’s testimonial deposition of Wayne Morrison,
the receiver in charge of the affairs of respondent,
dated March 31, 2003; and
9. Respondent’s notice of reliance on

Cancellation No. 92051378
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a. Petitioner’s responses to Respondent’s first set
of interrogatories;
b. Copies of documents identified and produced by
Petitioner in response to Respondent’s first set
of interrogatories;
c. A copy of a nonprecedential Board decision
involving a cancellation on the grounds of
abandonment brought against Respondent for
Registration No. 1599395, by a different
petitioner, Zoom Telephonics v Model American
Computer Corp, Canc. 23,672, decision dated
January 20, 1998, and granting summary judgment in
favor of Respondent;
d. The combined Sections 8 and 9 Declaration and
accompanying specimen filed by Respondent for
Registration No. 1599395, dated June 2, 2000;
e. Dictionary definitions of “utility” and
“software”; and
f. The declaration of Marvin Garellek, president of
ICBB, Responent’s sublicense, dated February 18,
1999, as submitted in support of Respondent’s
opposition to Petitioner’s cross-motion for
summary judgment.
Petitioner objected to certain of Respondent’s evidence
by filing a motion to strike with its brief. In particular,
Cancellation No. 92051378
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petitioner moved to strike the declaration of Marvin
Garellek filed with Respondent’s notice of reliance, since
the parties had not stipulated to file evidence via
affidavit or declaration in lieu of testimonial deposition.
Respondent replied in response that Mr. Garellek is a
resident of Canada “who could not be readily deposed during
the course of Respondent’s testimony period.” (resp’s brief
at 46). Parties are encouraged to agree to time-saving
devices such as submitting testimony by declaration. See 37
CFR 2.123(b). However, absent a stipulation, a party may
not simply submit a declaration, which does not entitle the
other party to cross-examination or even objection. See
Tri-Star Marketing LLC v. Nino Franco Supmanti S.R.L., 84
USPQ2d 1912, 1914 (TTAB 2007) (sustaining objection to
declaration absent stipulation of parties); Marshall Field &
Co. v Mrs. Fields Cookies, 25 USPQ2d 1321, 1326 (TTAB 1992)
(sustaining objection to submission of discovery depositions
filed improperly as testimonial depositions). Accordingly,
we grant this motion to strike and we have not considered
the testimony from Marvin Garellek.
Petitioner also filed a motion to strike Ex. 21 to the
testimony of Michael Shane as not being a proper business
record. The exhibit consists of a description of sales from
the sublicense of the mark at issue in this proceeding. As
described by Mr. Shane, “It is a document that, a typical
Cancellation No. 92051378
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document that we would get from Mighty/ICBB, outlining the
sales of the units, the returns of the units, the net sales
by month, how many units were sold, and then multiplying to
see what the balance was or is to Model American. TEOPN on
Model American’s behalf.” (Shane depo. at 37-38). We find
that it was properly established as a business record, and
this motion to strike is denied.

Standing

Petitioner has asserted that it is involved in selling
computer products and services (Fanelli depo. at 94) and
that it has filed an application to register the mark MODEL
AMERICAN (Eglington depo. at 145-149). Petitioner has
therefore established its interest as a competitor. See
Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d
1024, 213 USPQ 185 (CCPA 1982); Cerveceria Modelo S.A. de
C.V. v. R.B. Marco & Sons Inc., 55 USPQ2d 1298 (TTAB 2000);
and Hartwell Co. v. Shane, 17 USPQ2d 1569 (TTAB 1990).
Accordingly, we find that petitioner here has shown that it
has a reasonable belief of damage and a real interest in
this proceeding. Therefore it is not a mere intermeddler,
and has established its standing. 15 U.S.C. §1064.
Abandonment
Petitioner asserts that Respondent has abandoned the
mark in its Registration No. 1599395 by ceasing use of the
Cancellation No. 92051378
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mark for the goods for which it is registered for a period
of at least three years prior to the commencement of this
cancellation proceeding with no intent to resume use. (Pet.
at Para. 11-12). Section 14(3) of the Trademark Act, (15
U.S.C. §1064(3), lists, as one of the grounds for
cancellation, abandonment, and Section 45 of the Act, 15
U.S.C. §1127, in pertinent part, defines “abandonment” of a
mark as follows:
When its use has been discontinued with
intent not to resume such use. Intent
not to resume may be inferred from
circumstances. Nonuse for 3 consecutive
years shall be prima facie evidence of
abandonment. “Use” of a mark means the
bona fide use of such mark made in the
ordinary course of trade, and not made
merely to reserve a right in a mark.

There are two elements to an abandonment claim: non-use
and an intent not to resume use. A plaintiff must show both
of these elements unless it can show three years of nonuse,
which prima facie establishes abandonment, in which case the
burden shifts to the defendant to show either that it has
used the mark, or that it has an intent to resume use. See
Cerveceria Centroamericana S.A. v. Cerveceria India Inc.,
892 USPQ2d 1307, 1309 (Fed. Cir. 1989).
Respondent does not deny that due to its financial
difficulties at the time, a court of the State of
Massachusetts appointed a receiver for the company on
February 18, 1992 (Morrison depo at 7-9, Ex. 1), and that
Cancellation No. 92051378
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Respondent has been prohibited by order of the court from
undertaking business, including use of the mark in
Registration No. 1599395, since that date. Id. at 20.
However, Respondent has presented evidence that it had
licensed the mark prior to the entry of receivership
to a company called Advanced Computer Concepts, which
continued to sell off inventory under the mark during the
time period 1992-1993. (Shane depo at 15). Respondent also
submitted evidence of a court-approved license for the mark,
entered into by the receiver, on behalf of Respondent, with
licensee The Entrepreneur’s Office Products Network Limited
(“TEOPN”) on August 31, 1992. (Morrison depo. at 18-19, and
Exhibit 4). This license agreement includes a provision
requiring “quality control” (Section 1.3). It allows TEOPN
to sublicense the mark. (Section 1.2). The term of the
license is through December 31, 2012, and is renewable.
(Section 5.1). The license contemplates royalties of 3%.
(Section 3.1-3.3).
Mr. Shane testified that “immediately” after the TEOPN
license was completed and approved by the court, TEOPN began
“test marketing some notebooks with a 900 concept to
recruit, to learn about and recruit entrepreneurs to sell
the notebook with Model American logo.” (Shane depo. at 22).
According to Mr. Shane’s testimony, in the 1992-1993 time
period, TEOPN test-marketed notebook computers under the
Cancellation No. 92051378
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MODEL AMERICAN mark. However, the concept did not come to
fruition economically, and the company decided to table that
marketing strategy, possibly for a later date. Id. at 23-
24. Meanwhile, TEOPN sought sublicensees. Id. at 25.
TEOPN executed a sublicense agreement with a company
called Mighty Information Company on February 21, 1995.
(Shane depo. at 29, and Ex. 16) Mighty subsequently changed
its name to ICBB. Id. at 25-26; 37-38. The sublicense
includes many of the same provisions as the license
agreement between Respondent and TEOPN. Id. at Ex. 16. The
parties agreed that Mighty/ICBB would sublicense the MODEL
AMERICAN mark for its “Plan A Business Plan and Marketing
Plan software packages.” (Section 1.1.). This is the
product on which ICBB continues to use the mark. (Shane at
37-38; 54). The receiver attests to having received
“approximately $9,054.24” in revenue on behalf of Respondent
and its creditors via the sublicense during the course of
the receivership. (Morrison at 34 and Exs. 9A and 9B). He
also advised the court that he saw this cancellation
proceeding and the previous one by Zoom Telephonics (now
resolved in favor of Respondent) as impeding “the cash flow
to the estate.” Id. at 32-34. Mr. Shane testified that
royalties from the sublicense began in 1995 (Shane depo. at
27).
Cancellation No. 92051378
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Petitioner asserts that despite the aforementioned
testimony and evidence, Respondent abandoned the mark during
the 1992-1995 time period. In particular, Petitioner
alleges that even if we were to find some use of the mark by
the sublicensee on its Plan A product, it would not inure to
the benefit of Respondent, since the Plan A software is not
a “computer utility program” as contemplated by the
identification of goods.
Petitioner submitted several definitions of “utility
programs” with its notice of reliance. These are
exemplified by the following:
utility program: “a program that performs a
specific task related to the management of
computer functions, resources, or files, as
password protection, memory management, virus
protection, and file compression.” American
Heritage Dictionary (4th ed. 2000).
utility program: “a program designed for general
support of the processes of a computer”
Ultralingua, Inc. www.ultralingua.com (2007).
Petitioner also submitted witness testimony, stating
that the Plan A product would not fall under the definition
of a “utility software program.” (Fanelli depo. at 75 (no
“utility software programs” found with Plan A product).
However, Respondent, to the contrary, presented testimony
Cancellation No. 92051378
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from two witnesses that indeed it does. (Morrison depo. at
47-48 (“To me, utility refers to something that is a
benefit, and a computer program would be a beneficial
computer program.”); and Shane depo. at 54-55 (“I certainly
heard it called computer utility software”). The record is
not clear on this point, and the burden is on Petitioner to
prove its case. The specimen of record shows the following
from the packaging of the Plan A software, as submitted with
Petitioner’s Section 8 affidavit:

Cancellation No. 92051378
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With an unclear definition as to what constitutes a
“computer utility program,” and testimony from several
witnesses that this product meets the definition, we find
that it does.
Accordingly, we find that, for the reasons discussed,
Petitioner has not proven its case that Respondent abandoned
the MODEL AMERICAN mark between the three-year period from
the date Respondent entered receivership and ceased
operation in February 1992 until this cancellation was
instituted in May 1995. Although Respondent ceased its own
use of the mark immediately, within the year it licensed the
mark to TOEPN. TOEPN test-marketed the mark on notebook
computers to entrepreneurs in the 1992-1993 time period.
TOEPN then sublicensed the mark to Mighty/ICBB on February
21, 1995 for use on its “Plan A Business Plan and Marketing
Plan software packages.” Respondent received payments under
the sublicense, beginning that same year. For these
reasons, we find that the use of the mark was never
discontinued by those whose actions inure to the benefit of
Respondent during the relevant time period.
Even if we were to find three years of nonuse, thereby
shifting the burden to Respondent, we still would find that
at all relevant times Respondent intended to resume use of
the mark. (Shane depo. at 24 (Respondent considering re-
establishing market for notebooks “to this day”; Morrison
Cancellation No. 92051378
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depo. at 28, 40). Our primary reviewing court gives us
guidance in this regard. We find that in examining
Respondent’s actions regarding its decision to license the
mark, as well as its filing of Section 8 and 9 affidavits,
“common sense” dictates that Respondent indeed intended to
keep the brand alive. Crash Dummy Movie LLC¸ 601 F3d 1387,
94 USPQ2d 1315, 1317 (Fed. Cir. 2010) (“[C]ommon sense
supports the conclusion that Mattel would not have recorded
Tyco’s trademark assignment with the USPTO in 1998 unless it
intended to use the CRASH DUMMIES mark within the
foreseeable future.”).
Nevertheless, Petitioner not having set forth a prima
facie case of abandonment, the cancellation is denied.
Decision: The petition to cancel is dismissed.