ATS Health & Beauty Care Corporationv.LE' ess

Trademark Trial and Appeal Board

Dec 8, 2020

92074012 (T.T.A.B. Dec. 8, 2020)

Bergsman Mailed: December 8, 2020

Cancellation No. 92074012

ATS Health & Beauty Care Corporation

v.

LE’ess

Before Bergsman, Lykos and Pologeorgis,
Administrative Trademark Judges:

By the Board:

This case comes up on Respondent’s motion, filed July 1, 2020, for summary
judgment on res judicata, alternatively known as claim preclusion, and, in the
alternative, a motion to dismiss Petitioner’s fraud claim for failure to state a claim
upon which relief can be granted. The parties fully briefed the motion. For the reasons
set forth below, we grant Respondent’s motion for summary judgment.1
Respondent is the owner of Registration No. 4677062 for the mark ATS, in
standard character form, registered on the Principal Register for the goods listed
below:
Lip liner; massage oil; mascara; varnish-removing
preparations; make-up; hair drying preparations, namely,
hair spray for the purpose of reducing drying time; hair

1 Respondent’s and Petitioner’s change of correspondence address filed July 30, 2020 and August 20,
2020, respectively, are noted. Board has updated the record accordingly.

UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
P.O. Box 1451
Alexandria, VA 22313-1451
General Contact Number: 571-272-8500
THIS ORDER IS NOT A
PRECEDENT OF THE
TTAB
Cancellation No. 92074012
2
creams; hair bleaches; color-removing preparations for
hair; hair mascara; hair waving preparations; bath gels;
bath foam; bath lotions; bath oils for cosmetic purposes;
dandruff creams, not for medical purposes; skin lotions;
skin creams; skin cleansers; liquid perfumes; baby hair
conditioner; depilatories; depilatory wax; liquid
foundations for cosmetic purposes; permanent waving
lotions; pomades for cosmetic purposes; pressed face
powder; hair gel; hair glaze; hair lacquers; hair lotions; hair
mousse; hair balsam; hair spray; hair conditioners; hair
conditioning oils; hair care lotions; hair care creams; hair
tonic; toilet water; grease for cosmetic purposes; cosmetic
nourishing creams; cosmetic gels; dyes for cosmetic
purposes, namely, hair dye; oils for cosmetic purposes;
colorants for toilet purposes, namely, hair colorants; make-
up removing preparations; massage gels other than for
medical purposes; hair preservation treatment
preparations, namely, hair deep conditioners; hair washing
powder; hair fixers in the nature of hair styling
preparations; dandruff lotions, not for medical purposes;
beauty masks, in International Class 3.2

On April 20, 2020, Petitioner, a corporation formed under the laws of Canada and
located in Woodbridge, Ontario, Canada,3 filed a Petition to Cancel Respondent’s
registration on the following grounds:
● Abandonment;4
● Likelihood of confusion;5
● Respondent’s registration is void ab initio because Respondent did not have a
bona fide intent to use its mark on all the products listed in the description of goods
when Respondent submitted its request for extension of protection to the USPTO;6

2 Registered January 27, 2015 under Section 66(a) of the Trademark Act, 15 U.S.C. § 1141f(a),
based on International Registration No. 1201172 registered November 12, 2012.
3 Petition for Cancellation (1 TTABVUE 3).
4 Petition for Cancellation ¶9 (1 TTABVUE 3).
5 Petition for Cancellation ¶¶11-14 (1 TTABVUE 6).
6 Petition for Cancellation ¶16 (1 TTABVUE 6).
Cancellation No. 92074012
3
● Respondent’s registration is void ab initio because “the application giving rise to
such Registration was not filed by a limited company formed under the laws of the
Republic of Korea” and “Registrant is not in fact a corporation formed under the laws
of the Republic of Korea”;7 and
● Fraud.8
In lieu of filing an Answer, Respondent filed the subject motion.
Trademark Rule 2.127(e)(1), 37 C.F.R. § 2.127(e)(1) provides, “A party may not file
a motion for summary judgment until the party has made its initial disclosures,
except for a motion asserting claim or issue preclusion or lack of jurisdiction by the
Trademark Trial and Appeal Board.” In other words, the Board may entertain a
summary judgment motion filed prior to initial disclosures that is based upon res
judicata. See Unrock Network, LLC v. Sulpasso, 115 USPQ2d 1409, 1410 n.5 (TTAB
2015) (motion to dismiss considered as one for summary judgment where it asserts
claim preclusion); Zoba Int’l Corp. v. DVD Format/LOGO Licensing Corp., 98
USPQ2d 1106, 1108 n.4 (TTAB 2011) (same); Compagnie Gervais Danone v. Precision
Formulations LLC, 89 USPQ2d 1251, 1255 n.7 (TTAB2009) (“if a party moves for
summary judgment prior to the deadline for making initial disclosures, it should
indicate in its motion that the disclosures have been made, or are not required
because the motion seeks judgment on claim or issue preclusion or on a jurisdictional
issue”); NH Beach Pizza LLC v. Cristy’s Pizza Inc., 119 USPQ2d 1861, 1862 n.1 (TTAB
2016) (construing motion to dismiss filed in lieu of answer as motion for summary

7 Petition for Cancellation ¶¶17 and 18 (1 TTABVUE 6-7).
8 Petition for Cancellation ¶19 (1 TTABVUE 7).
Cancellation No. 92074012
4
judgment on issue preclusion). Because Respondent filed its motion for summary
judgment on the ground of res judicata, the motion is timely.
I. The Record
In support of its motion, Respondent introduced the following evidence:

A. Petitioner’s Petition to Cancel Registration No. 4677062, involved in this
proceeding, in ATS Health & Beauty Care Corporation v. LE’ess
(Cancellation No. 92071116);9

B. The Board’s August 2, 2019 order in Cancellation No. 92071116 (the “Prior
Cancellation Proceeding”) suspending proceedings to give Petitioner time
to obtain U.S. counsel, failing which the Board may enter an order
dismissing the petition for cancellation;10

C. The Board’s September 24, 2019 order in the Prior Cancellation Proceeding
allowing Petitioner time to show cause why default should not be entered
against Petitioner based on its apparent loss of interest in this proceeding;11

D. The Board’s November 13, 2018 order in the Prior Cancellation Proceeding
entering judgment against Petitioner and denying the Petition for
Cancellation with prejudice.12

E. The Director’s March 23, 2020 order in the Prior Cancellation
Proceedingcancelling Registration No. 5120202 for the mark ATS MARINE
SPA owned by Create International;13 and

F. A copy of the “New Holder/Representative of an International Registration”
document for U.S. application Serial No. 79146242 for the mark ATS (now
Registration No. 4677062 at issue here).14
In response to Respondent’s motion for summary judgment, Petitioner introduced
for following evidence:
A. A copy of Registration No. 5120202 for the mark ATS MARINE SPA printed
from the Trademark Status and Document Retrieval System (TSDR);15

9 7 TTABVUE 27-29 and 14 TTABVUE 12-15.
10 7 TTABVUE 31-32.
11 7 TTABVUE 34.
12 7 TTABVUE 36.
13 14 TTABVUE 17.
14 14 TTABVUE 19-20.
15 13 TTABVUE 13-16.
Cancellation No. 92074012
5
B. Petitioner’s Petition to Cancel Registration No. 4677062, involved in this
proceeding, in ATS Health & Beauty Care Corporation v. LE’ess (the Prior
Cancellation Proceeding);16

C. Petitioner’s Petition to Cancel Registration No. 5120202 for the mark ATS
MARINE SPA (Cancellation No. 92071126);17

D. The Board’s November 13, 2018 order in the Prior Cancellation Proceeding
entering judgment against Petitioner and denying the Petition for
Cancellation with prejudice;18 and

E. The Director’s March 23, 2020 order in Cancellation No. 92071126
cancelling Registration No. 5120202 for the mark ATS MARINE SPA
owned by Create International.19

II. Summary Judgment Standard
Summary judgment is appropriate when there are no genuine disputes as to any
material facts, thus allowing the case to be resolved as a matter of law. Fed. R. Civ.
P. 56(a). A factual dispute is genuine if, on the evidence of record, a reasonable fact
finder could resolve the matter in favor of the non-moving party. See Opryland USA
Inc. v. Great Am. Music Show Inc., 970 F.2d 847, 23 USPQ2d 1471, 1472 (Fed. Cir.
1992); Olde Tyme Foods, Inc. v. Roundy’s, Inc., 961 F.2d 200, 22 USPQ2d 1542, 1544
(Fed. Cir. 1992). Evidence on summary judgment must be viewed in a light most
favorable to the non-movant, and all justifiable inferences are to be drawn in the non-
movant’s favor. Lloyd’s Food Prods., Inc. v. Eli’s, Inc., 987 F.2d 766, 25 USPQ2d 2027,
2029 (Fed. Cir. 1993); Opryland USA, 23 USPQ2d at 1472. The non-movant may not
rest on the mere allegations in its pleadings and arguments by its counsel, but must

16 13 TTABVUE 21-23.
17 13 TTABVUE 25-28.
18 13 TTABVUE 30.
19 13 TTABVUE 32.
Cancellation No. 92074012
6
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 Fed. R. Civ. P. 56(c);
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Freki Corp. N.V. v. Pinnacle Entm’t,
Inc., 126 USPQ2d 1697, 1700 (TTAB 2018).
The Board may not resolve genuine disputes as to material facts on summary
judgment; we may only ascertain whether genuine disputes as to material facts exist.
See Lloyd’s Food Prods., 25 USPQ2d at 2029; Olde Tyme Foods, 22 USPQ2d at 1542.
In the case before us, Respondent, as the party moving for summary judgment, has
the initial burden of showing that there are no disputes as to the facts supporting its
claim of res judicata and that Respondent is entitled to judgment as a matter of law
on the undisputed facts.
III. Res Judicata
Under the doctrine of res judicata (or claim preclusion), the entry of a final
judgment “on the merits” of a claim (i.e., cause of action) in a proceeding serves to
preclude the relitigation of the same claim in a subsequent proceeding between the
parties or their privies, even in those cases where the prior judgment was the result
of a default or consent. See Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322 (1955);
Chromalloy Am. Corp. v. Kenneth Gordon, Ltd., 736 F.2d 694, 222 USPQ 187, 189-
190 (Fed. Cir. 1984); John W. Carson Found. v. Toilets.com, 94 USPQ2d 1942, 1946
(TTAB 2010); Flowers Indus., Inc. v. Interstate Brands Corp., 5 USPQ2d 1580, 1583
(TTAB 1987).
A second suit is barred by res judicata or claim preclusion if
Cancellation No. 92074012
7
(1) the parties (or their privies) are identical;
(2) there has been an earlier final judgment on the merits of a claim; and
(3) the second claim is based on the same set of transactional facts as the first.
Jet, Inc. v. Sewage Am. Sys., 223 F.3d 1360, 55 USPQ2d 1854, 1856 (Fed. Cir. 2000).
See also Sharp Kabushiki Kaisha v. ThinkSharp, Inc., 448 F.3d 1368, 79 USPQ2d
1376, 1378 (Fed. Cir. 2006).
We may apply res judicata in a subsequent action based on the same claims that
the parties raised, or could have raised, in the prior action. Int’l Nutrition Co. v.
Horphag Research Ltd., 220 F.3d 1325, 55 USPQ2d 1492, 1494 (Fed. Cir. 2000);
Chutter, Inc. v. Great Concepts, LLC, 119 USPQ2d 1865, 1868 (TTAB 2016). Claim
preclusion operates to bar subsequent assertion of the same transactional facts in the
form of a different cause of action or theory of relief. Generally, this principle rests on
the assumption the parties could have requested all the forms of relief in the first
action. Young Engineers Inc. v. U.S. Int’l Trade Commission, 721 F.2d 1305, 219
USPQ 1142, 1151 (Fed. Cir. 1983). See also Brown v. Felsen, 442 U.S. 127, 131 (1979)
(res judicata “prevents litigation of all grounds for, or defenses to, recovery that were
previously available to the parties, regardless of whether they were asserted or
determined in the prior proceeding”); 18 Charles A. Wright, et. al., FEDERAL
PRACTICE and PROCEDURE § 4402 (3d ed. April 2018) (claim preclusion forecloses
“any litigation of matters that never have been litigated because of a determination
that they should have been advanced in an earlier suit.”).
Cancellation No. 92074012
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The Supreme Court in Kremer v. Chem. Constr. Corp., 456 U.S. 461, 485 n.26
(1982) stated that “so long as opposing parties had an adequate opportunity to litigate
disputed issues of fact, res judicata is properly applied to decisions of an
administrative agency acting in a ‘judicial capacity.’” The corollary is that when a
party did not have an opportunity to litigate disputed issues, a decision to permit
such litigation is favored. Sharp Kabushiki Kaisha, 79 USPQ2d at 1379.
Default judgments can give rise to res judicata. Int’l Nutrition Co., 55 USPQ2d at
1494, citing Riehle v. Margolies, 279 U.S. 218, 225 (1929); Young Engineers,
219 USPQ at 1151; Wells Cargo, Inc. v. Wells Cargo, Inc., 606 F.2d 961, 203 USPQ
564, 566 (CCPA 1979).
As noted above, in this proceeding, Petitioner seeks to cancel Registration No.
4677062 for the mark ATS on the following grounds:
● Abandonment (Respondent “either has never used the ATS mark in commerce
in the U.S. in connection with some or all of the goods identified in the Registration,
or has ceased using the ATS mark on some or all of the goods identified in the
Registration.”);20
● Respondent’s registration is void ab initio because Respondent did not have a
bona fide intent to use its mark on all the products listed in the description of goods
when Respondent submitted its request for extension of protection to the USPTO;21
● Respondent’s registration is void ab initio because “the application giving rise to
such Registration was not filed by a limited company formed under the laws of the

20 Petition for Cancellation ¶9 (1 TTABVUE 3).
21 Petition for Cancellation ¶16 (1 TTABVUE 6).
Cancellation No. 92074012
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Republic of Korea” and “Registrant is not in fact a corporation formed under the laws
of the Republic of Korea”;22 and
● Fraud (i.e., “The Registration therefore was issued in reliance by the PTO upon
what were, on information and belief, material, false statements knowingly made by
Registrant’s predecessor-in-interest for the purpose of obtaining the Registration,
and now is being maintained by Registrant despite false statements having been
made to the PTO concerning Registrant and/or its place of corporate registration, if
any.”).23
Petitioner sought to cancel Registration No. No. 4677062 for the mark ATS in the
Prior Cancellation Proceeding on the ground of abandonment (“Registrant has
abandoned the mark and the business altogether and has no intent to resume use”24
and Respondent “does not use the mark in association with any of the goods and
services listed on that application [sic].”)25 and fraud (i.e., Respondent “falsely
represented that it intended to use the trademark in connection with all of the goods
listed in its USPTO application filing through the International Bureau that it made
on November 12, 2012.”).26
The parties in the two proceedings are the same (ATS Health & Beauty Care
Corporation v. LE’ss) and there has been a final judgment in the Prior Cancellation
Proceeding.27 The crux of this case is whether Petitioner bases its claims in this

22 Petition for Cancellation ¶¶17 and 18 (1 TTABVUE 6-7).
23 Petition for Cancellation ¶19 (1 TTABVUE 7).
24 Petition for Cancellation ¶2 (7 TTABVUE 27).
25 Petition for Cancellation ¶3 (7 TTABVUE 27-28).
26 Petition for Cancellation ¶4 (7 TTABVUE 28).
27 7 TTABVUE 34-36.
Cancellation No. 92074012
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proceeding on the same transactional facts as those in the Prior Cancellaton
Proceeding.
Respondent contends that the facts supporting Petitioner’s abandonment claim
and fraud claim are identical and existed at the time Petitioner filed its petition to
cancel in the Prior Cancellation Proceeding.28 Specifically, Respondent argues that
the underlying pleaded facts supporting the abandonment claims are “directly
parallel.”29
The fact that the allegations supporting the ground of
“abandonment” from the Prior Cancellation to the Current
Cancellation were reworded and/or further clarified and
expanded does not overcome the dismissal with prejudice
of Petitioner’s abandonment ground under Section 14(3) of
the Trademark Act in the Prior Cancellation.30

Likewise, with respect to the fraud claims, Respondent argues that the claim in
the Prior Cancellation Proceeding (Respondent “falsely represented that it intended
to use the trademark in connection with all the goods listed in its USPTO
application”) is the same as in this proceeding (the registration was issued in reliance

28 Respondent’s Motion, p. 6 (7 TTABVUE 7). Petitioner listed Section 2(d) as a ground for cancellation
on the ESTTA cover sheet (7 TTABVUE 24) but it did not refer to Section 2(d) in the Petition for
Cancellation. Although the content of the ESTTA cover sheet is read in conjunction with the Petition
for Cancellation as an integral component, PPG Indus. Inc. v. Guardian Indus. Corp., 73 USPQ2d
1926, 1928 (TTAB 2005), the mere mention of a ground on the cover sheet is insufficient to constitute
a claim. Embarcadero Tech. Inc. v. RStudio Inc., 105 USPQ2d 1825, 1827 n.2 (TTAB 2013) (internal
citation omitted). Because Petitioner did not include any facts elucidating the basis for a likelihood of
confusion claim, we consider it forfeited and will not give it any further consideration.

In any event, the Section 2(d) likelihood of confusion claim in this proceeding is time barred under
Section 14 of the Trademark Act, 15 U.S.C. § 1064, because the Registration issued January 27, 2015
and Petitioner filed the Petition for Cancellation on April 20, 2020, more than five years after the
registration date.
29 Respondent’s Motion, p. 12 (7 TTABVUE 13).
30 Respondent’s Motion, p. 13 (7 TTABVUE 14).
Cancellation No. 92074012
11
on Respondent’s false statements (i.e., that it had a bona fide intent to use the mark
on the products listed in the description of goods)).31
In opposition to Respondent’s motion for summary judgment on the ground of res
judicata, Petitioner contends Respondent’s motion should fail because this proceeding
“involves claims that were not litigated in the First ATS Cancellation Proceeding and
which arise from different transactional facts.”32 Petitioner argues that the claims
that the registration is void ab initio are new and, therefore, are not based on the
same transactional facts as any of the claims in the Prior Cancellation Proceeding.33
Likewise, Petitioner asserts it bases its abandonment claim on a new set of
transactional facts.34 As best we understand Petitioner’s argument, because
Respondent’s predecessor-in-interest abandoned the ATS MARINE SPA registration
after Petitioner defaulted in the Prior Cancellation Proceeding, the second
abandonment claim arises from a new set of underlying facts. According to Petitioner,
Respondent’s “apparent disinterest in the related ATS MARINE SPA proceeding
motivates Petitioner to attempt, again,” to cancel Respondent’s ATS registration.35
There is no genuine dispute as to the material facts regarding the application of
res judicata in the case before us. First, Petitioner’s contention that Respondent’s
motion should fail because this proceeding “involves claims that were not litigated in

31 Respondent’s Motion, p. 14 (7 TTABVUE 15).
32 Petitioner’s Response, p. 4 (13 TTABVUE 5).
33 Petitioner’s Response, pp. 5-6 (13 TTABVUE 6-7).
34 Petitioner’s Response, pp. 6-7 (13 TTABVUE 7-8).
35 Petitioner’s Response pp. 6-7 (7-8).
Cancellation No. 92074012
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the First ATS Cancellation Proceeding” conflates claim preclusion and issue
preclusion.
Issue preclusion refers to the effect of a judgment in
foreclosing relitigation of a matter that has been litigated
and decided. This effect is also referred to as direct or
collateral estoppel. Claim preclusion refers to the effect of
a judgment in foreclosing litigation of a matter that never
has been litigated, because of a determination that it
should have been advanced in an earlier suit.

Sharp Kabushiki Kaisha, 79 USPQ2d at 1378. Inasmuch as Respondent bases its
motion on claim preclusion, the fact that the parties did not litigate the claims is not
relevant.
Second, res judicata is applicable because there is no genuine dispute of material
fact that the transactional facts are the same. In other words, all the claims in this
cancellation proceeding could have been pleaded and potentially litigated in the Prior
Cancellation Proceeding. With respect to the abandonment claim, Petitioner alleges
Respondent “either has never used the ATS mark in commerce in the U.S. in
connection with some or all of the goods identified in the Registration, or has ceased
using the ATS mark on some or all of the goods identified in the Registration.”36
Petitioner could have pleaded the abandonment claim in the Prior Cancellation
Proceeding but it did not. Petitioner’s contention that the abandonment and
cancellation of Respondent’s registration of the mark ATS MARINE SPA somehow
changes the circumstances regarding Respondent’s use of the mark ATS is specious.

36 Petition for Cancellation ¶9 (1 TTABVUE 3).
Cancellation No. 92074012
13
ATS MARINE SPA is a different mark for different albeit overlapping goods and on
its face has no bearing on Respondent’s use of ATS.
Petitioner’s claim that Respondent’s registration is void ab initio because
Respondent did not have a bona fide intent to use its mark on all the products listed
in the description of goods when Respondent submitted its request for extension of
protection to the USPTO37 could have been pleaded and potentially litigated in the
Prior Cancellation Proceeding. The passing of time has no bearing on whether
Respondent had a bona fide intent to use its mark when it sought an extension of
protection.
Likewise, the passage of time has no bearing on Petitioner’s remaining claims:
● Respondent’s registration is void ab initio because “the application giving rise to
such Registration was not filed by a limited company formed under the laws of the
Republic of Korea” and “Registrant is not in fact a corporation formed under the laws
of the Republic of Korea,”38 if this is even a claim upon which Petitioner can seek to
cancel Respondent’s registration; and
● Fraud.39
There is no genuine dispute of material fact that all the foregoing claims are based
on the same transactional facts in existence at the time Petitioner filed the Prior
Cancellation Proceeding.

37 Petition for Cancellation ¶16 (1 TTABVUE 6).
38 Petition for Cancellation ¶¶17 and 18 (1 TTABVUE 6-7).
39 Petition for Cancellation ¶19 (1 TTABVUE 7).
Cancellation No. 92074012
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Petitioner could have timely asserted these claims in the Prior Cancellation
Proceeding, but it failed to do so. Therefore, res judicata precludes those claims in
this case. We grant Respondent’s motion for summary judgment based res judicata.
In view thereof, there is no need to entertain Respondent’s alternative motion to
dismiss for failure to state a claim.
Decision: The Petition for Cancellation is denied with prejudice.