Dallas Basketball Ltd.v.John Jacob Carlisle

Trademark Trial and Appeal Board

Nov 2, 2004

No. 91156064 (T.T.A.B. Nov. 2, 2004)

Butler Mail date: November 2, 2004
Opposition No. 91156064
Dallas Basketball Limited
v.
John Jacob Carlisle
Before Simms, Hanak and Walters, Administrative Trademark Judges.
By the Board:
Applicant is seeking to register the following mark
for “shirts, baseball caps, shorts, pants, socks, sweat suits,
jackets, sweatshirts, sweatpants, bandanas, shoes, wrist bands,
head bands, winter sock hats, visors, gloves and scarves.”1 The
sole ground for the opposition reads as follows: “Additionally,
Opposer contends that Applicant failed to have a bona fide
intention to use his mark in commerce when Applicant filed its
1 Application Serial No. 76165865, filed on November 16, 2000, claiming
a bona fide intent to use the mark in commerce.
UNITED STATES DEPARTMENT OF COMMERCE
Patent and Trademark Office
Trademark Trial and Appeal Board
Commissioner for Trademarks
P.O. Box 1451
Alexandria, VA 22313-1451
THIS DISPOSITION IS NOT
CITABLE AS PRECEDENT OF
THE T.T.A.B.
Opposition No. 91156064
2
intent-to-use application.”2 (See paragraph no. 5 of the notice
of opposition.) Applicant denies the allegations of the notice
of opposition.
This case now comes up on applicant’s fully briefed motion,
filed February 20, 2004, for summary judgment.
As background, applicant provides that, in 1998 when he was
a student in college, he and two of his friends, all members of
the basketball team, talked about how DEEP 3 would be a great
brand name for clothing, but that nothing further ensued.
Applicant states that no business relationship was formed, and
that no promises were made to operate as a partnership, but that
the three remained friends. Indeed, one friend, Jim Hajdukovich
is now applicant’s brother-in-law. According to applicant, in
October 2000, after gaining experience in graphic design and
marketing, applicant began to design DEEP 3 logos. Shortly
thereafter, applicant was speaking with one of his college
friends, Dan Meckel, who decided to purchase some DEEP3 t-shirts.
Applicant indicates that he then decided to formalize his
business by registering it as a sole proprietorship (in Texas);
filing an intent to use trademark application with the USPTO; and
registering a domain name, the latter with the assistance of Mr.
Hadjukovich, who applicant says he reimbursed the cost of the
registration. Applicant indicates that he sought Mr.
2 Opposer pleads ownership of a pending application, Serial No.
76380739, for the mark DEEP 3 for a wide variety of clothing items,
filed on March 8, 2002. Applicant’s application has been referenced
as a potential cite under Trademark Act Section 2(d), should it mature
into a registration.
Opposition No. 91156064
3
Hadjukovich’s assistance as a friend and because his wife,
applicant’s sister, was familiar with the domain name
registration process. Applicant states that, on December 1,
2000, he personally placed his first order for DEEP 3 logo t-
shirts, paid for on his personal checking account; and that, on
December 5, 2000, he made his first sale to The Hoop, in Salem,
Oregon. According to applicant, his business continued to grow
with the help of his friends, who were not business partners, did
not receive any receipts of sales, were not owners, and were not
paid for any help they provided. Eventually, though, the three
friends decided to enter into a formal relationship and, on
January 14, 2003, Deep Three, Inc. was incorporated. Throughout
this time, applicant indicates that he continuously sold clothing
bearing his mark. With respect to the abandonment of his
application in January 2002, which he discovered on May 31, 2002
doing a status check, applicant indicates that Mr. Hajdukovich
assisted him by filing the request for reinstatement but,
concerned that the request may be insufficient, applicant
contacted trademark counsel, who filed a supplement to the
request on July 11, 2002.3
Applicant argues that there are no genuine issues of
material fact and that he did not lack a bona fide intent to use
his mark when he filed his application and, in fact, has sold
clothing items bearing the mark and, thus, has made actual use.
3 The Office granted the requested reinstatement of the application on
September 29, 2002.
Opposition No. 91156064
4
Applicant, in response to opposer’s anticipated argument that
applicant was not the proper owner of the mark at the time the
application was filed, argues that there are no genuine issues of
material fact and that he is the owner of the mark sought to be
registered. Applicant contends that the assistance of his
friends was nothing more; and that their later decision to enter
into a formal business relationship was a development of the
growth of his business.
Applicant’s motion is accompanied by his declaration and
accompanying exhibits4 as follows: an assumed business name
certificate and application therefor, filed by applicant on
November 11, 2000 in Bexar County, Texas; an invoice, dated
December 1, 2000, for shirts, purchased by applicant for further
resale; a copy of applicant’s personal check to the Commissioner
of Patent and Trademarks, dated November 13, 2000; a copy of an
invoice statement dated December 5, 2000 for applicant’s first
sale; a copy of schedule C of applicant’s 2000 federal tax return
where applicant lists his trademark filing fee, business license
fee, and webhosting fee as expenses; and a copy of a corporate
charter for Deep Three, Inc. dated January 14, 2003.5
In response, opposer argues that, at the time he filed his
application, applicant did not have the bona fide intent to use
the mark in his “individual” capacity, but always had the
4 Applicant’s declaration was filed under seal. In this decision, the
Board refers to the exhibits in general terms, as does applicant in
his motion.
5 Applicant’s separate exhibits B-D are copies of matter already in the
record (e.g., exhibit B is a copy of the notice of opposition).
Opposition No. 91156064
5
intention of forming a business with his friends, Mr. Meckel and
Mr. Hajdukovich, which subsequently came to pass when they formed
the corporation Deep Three, Inc. Opposer argues that, less than
four months after the application filing date, applicant sent an
email to his friends with ideas for corporate structure,
including proposed stock ownership. Opposer contends that, on
November 13, 2003 in order to support his recitation of the
facts, applicant amended his tax returns for the years 2000 and
2001; that the original returns do not reflect any income or loss
from any DEEP 3 business; and that applicant only relies on the
amended returns in support of his motion for summary judgment,
failing to inform the Board the originals did not reflect any
business related expenses. Opposer argues that it has submitted
documents produced by applicant which raise a genuine issue as to
applicant’s intent to use the mark in his individual capacity
because they refer to Deep Three as being founded by John
Carlisle, James Hajdukovich and Dan Meckel in November 2000;
because they show business undertaken with respect to the DEEP 3
mark by Mr. Hajdukovich; and because they show use of DEEP 3 by
James and Michael Hajdukovich for a summer camp during July 2000,
before applicant filed his application.
Opposer’s response is accompanied by excerpts from the
deposition of applicant concerning his email to his friends and
sister in March 2001 about the structure of a possible company;
an email exchange dated May 31, 2002 from Mr. Hajdukovich (to
Mark Cuban) concerning applicant’s then abandoned application
Opposition No. 91156064
6
stating, in part, “I … coined the phrase [Deep 3] with two
teammates and we started the business”; a copy of the request for
reinstatement of applicant’s application filed by Mr.
Hajdukovich; a copy of an email dated January 31, 2003 including
an account statement for “… your account ‘deep3.net’” addressed
to Michele (Mrs. Hajdukovich); a copy of the flyer for the July
2000 summer camp offered by Mike & Jimmy Hajdukovich showing use
of a DEEP 3 logo; copies of applicant’s original and amended tax
returns for calendar years 2000-2002; and a document entitled
“Deep Three Inc. (DBA Deep 3) Executive Summary,” which describes
the company, its products, its trademark, and its shareholders.
In reply, applicant argues that all the evidence establishes
that no genuine issues of material fact exist and that applicant
had a bona fide intent to use his mark as of the application
filing date. Applicant argues the opposer’s “insinuations” that
he amended his tax returns to develop a “story” are completely
unfounded; and that the tax returns were amended solely in
consultation with applicant’s accountant, who had missed an
opportunity for applicant to claim a valuable deduction.
Applicant argues that the “Executive Summary” was not prepared by
him, but was only a draft, never distributed, prepared by Mr.
Hajdukovich in December 2002, two years after the application was
filed, as the three friends were beginning to formalize their
relationship (which resulted in the formation of Deep Three, Inc.
on January 14, 2003); and that the deposition excerpts of
applicant and of Dan Meckel support the status of this document.
Opposition No. 91156064
7
With respect to Mr. Hajdukovich’s email to Mark Cuban, applicant
argues that it was sent 18 months after applicant filed his
application and, in any event, without applicant’s knowledge or
authority. Applicant argues that the basketball flyers for the
camp run by the Hajdukovich brothers were prepared by applicant,
but were never distributed;6 that the mock-up flyer was located
on applicant’s computer hard drive and produced in response to
document requests.7
Applicant’s reply is accompanied by applicant’s deposition
in support of his position; excerpts from the deposition of Dan
Meckel, one of applicant’s college friends and presently a
minority shareholder in Deep Three, Inc.; applicant’s
supplemental declaration stating in part that the decision to
amend his tax returns was made with the advice of his accountant
because the deductions were allowed and had been overlooked
earlier, and that the basketball camp flyer referred to by
opposer was a mock-up to see how the DEEP 3 logo would look, made
in October 2000 after the basketball camp (which took place in
the summer of 2000), and that the mock-up was never used, though
it was produced from applicant’s computer hard drive because it
was found when searching for documents; the declaration of
6 Applicant notes that opposer did not choose to depose Mr.
Hajdukovich, as it could have in view of the grant of the 56(f)
discovery. Applicant argues that, had opposer deposed Mr.
Hajdukovich, opposer could have asked questions about the basketball
camp and this flyer and ascertained that the flyer was never used.
7 Applicant explained previously the circumstances surrounding the
domain name registration, including the involvement of his sister and
his brother-in-law.
Opposition No. 91156064
8
Michael Hajdukovich (brother of James), stating that he never had
any ownership interest in Deep Three, Inc., with accompanying
exhibits of copies of the flyers actually for the basketball
camp, and further confirming that the flyer referenced by opposer
was not used for the camp and stating that he “… never saw it
until I was asked about it for this case”; the declaration of
James Hajdukovich, stating, in part, that he is now part owner of
Deep Three, Inc., introducing the flyers he and his brother used
for their basketball camp in the summers of 2001-2002,8 and
stating he never saw the flyer referenced by opposer until asked
about it for this case; a copy of applicant’s March 12, 2001
email to his friends and sister outlining a possible business
structure; and a copy of the previously referenced “Executive
Summary.”
As a preliminary matter, to the extent that opposer is
arguing that applicant was not the owner of the mark at the time
the application was filed, such argument is not the subject of a
pleaded issue (i.e., alleged in the notice of opposition). Thus,
it cannot be considered on summary judgment. See TBMP §528.07
(2nd ed. rev. 2004), and discussion therein. Moreover, ownership
issues arise in the context of an application seeking
registration under Trademark Act Section 1(a), which permits
“[t]he owner of a trademark used in commerce…” to request
registration of its trademark on the principal register. Cf.
Trademark Act Section 1(b) which permits “[a] person who has a
8 They are the same flyers introduced by Michael Hajdukovich.
Opposition No. 91156064
9
bona fide intention … to use a trademark in commerce…” to request
registration of its trademark on the principal register. See
also TMEP §803.01 (3rd ed. rev. 2 May 2003) (“An application to
register a mark must be filed by the owner of the mark or, in the
case of an intent-to-use application under 15 U.S.C. §1051(b), by
the person who is entitled to use the mark in commerce.”).
In a motion for summary judgment, the moving party has the
burden of establishing the absence of any genuine issue of
material fact and that it is entitled to judgment as a matter of
law. See Fed. R. Civ. P. 56. A genuine dispute with respect to
a material fact exists if sufficient evidence is presented that a
reasonable fact finder could decide the question in favor of the
non-moving party. See Opryland USA Inc. v. Great American Music
Show, Inc., 970 F.2d 847, 23 USPQ2d 1471 (Fed. Cir. 1992). Thus,
all doubts as to whether any particular factual issues are
genuinely in dispute must be resolved in the light most favorable
to the non-moving party. See Olde Tyme Foods Inc. v. Roundy’s
Inc., 961 F.2d 200, 22 USPQ 1542 (Fed. Cir. 1992).
The legislative history of the Trademark Law Revision Act of
1988 (TLRA) indicates that the purpose of the intent-to-use
provisions was to eliminate “… the requirement that U.S. citizens
and businesses, unlike their foreign counterparts, must use a
mark in commerce before they can file an application to register
it.” See S. Rep. 100-515 100th Cong., 2d Sess. (1988) at 4, 1988
U.S.C.C.A.N. 5577, 5580. Congress explains further that, in
recognition of the preapplication use requirements, courts had
Opposition No. 91156064
10
sanctioned the practice of “token use,” a legal fiction, not
available to all businesses and industries, essential under the
Trademark law at the time because it reduced some of the legal
and economic risks of entering the market place. Id. at 5-6,
5581-5582. Notwithstanding the virtues of an intent-to-use
system, Congress also recognized that there was some potential
for abuse, particularly where a single business or individual
sought to monopolize a large number of marks, which could be
minimized by requiring the specified intent to be bona fide. Id.
at 6, 5582. Inasmuch as a dual application system, based either
on preapplication use in commerce or an a bona fide intention to
use the mark in commerce, addresses the problems sought to be
resolved by the amendment to the Trademark Act, “token use”
became unnecessary and inappropriate under the intent-to-use
application system. Id. Thus, the legislative history
illustrates that the Trademark Act was amended to permit
applications, particularly domestic applications, to be filed
prior to actual use of the mark in commerce and to eliminate the
need for the legal fiction of “token use.” By requiring that an
intent-to-use applicant have a bona fide intent to use the mark
in commerce, Congress addressed the potential abuse of
trafficking in trademarks.
When considering whether an applicant has a bona fide
intention to use the mark in commerce, any such determination is
to be a fair, objective determination based on all the
Opposition No. 91156064
11
circumstances. See Lane Ltd. v. Jackson International Trading
Co., 33 USPQ2d 1351, 1355 (TTAB 1994).
In its response to applicant’s motion, opposer adds an
element that does not appear in the statute or in the legislative
history to Trademark Act Section 1(b). By arguing that applicant
did not have the bona fide intent to use the mark in a particular
legal entity-type capacity, opposer’s position effectively
imposes a limitation on any intent-to-use applicant that may have
hopes and plans for business development and licensing potential,
that may seek business consultation advice or legal advice from
third parties, and that may change its business type after filing
an intent-to-use application. This limitation may certainly
affect corporate subsidiary applicants which file intent-to-use
applications and later, as may happen under some corporate
business models, transfer the application or mark to the parent
or to a related trademark holding company responsible for
maintaining a trademark portfolio.
In this case, opposer contends that applicant lacked a
bona fide intent to use the mark in his individual capacity
because he always had the intention of forming a business with
his friends, as demonstrated, according to opposer, in his
actions of speaking of his hopes and plans with his family and
friends, of seeking and accepting the assistance of his friends
and family in the trademark application process, and in
developing a business, resulting in the incorporation of Deep
Three, Inc. However, opposer’s position simply does not raise a
Opposition No. 91156064
12
genuine issue of material fact for trial as to applicant’s bona
fide intention to use the mark in commerce in view of applicant’s
evidence, including his statements and accompanying
documentation, that he did have the requisite bona fide intention
to use the mark in commerce at the time of the application, has
subsequently used the mark in commerce, and continues to use the
mark in commerce.9
Accordingly, no genuine issue of material fact existing as
to applicant’s bona fide intention to use his mark, applicant’s
motion for summary judgment in his favor is granted, and the
opposition is dismissed with prejudice.
☼☼☼
9 Based on his statements that he continues to use the mark, it does
not appear that applicant has assigned the mark and the application to
the corporation, Deep Three, Inc. (nor is he required to do so).
However, in the event that applicant has transferred the mark, along
with the entire business relative to the mark, applicant may wish to
record any such assignment so that any subsequent registration will
issue in the name of the corporation. See Trademark Act Section 10;
and TMEP §501.01(a) (3rd ed. rev. 2 May 2003).