Novozymes Bioag, Inc.v.Cleary Chemicals, LLC

Trademark Trial and Appeal Board

Aug 16, 2013

No. 91200105 (T.T.A.B. Aug. 16, 2013)

jk Mailed: August 16, 2013

Opposition No. 91200105

Novozymes Bioag, Inc.

v.

Cleary Chemicals, LLC

Before Quinn, Wellington and Masiello,
Administrative Trademark Judges.

By the Board:

This proceeding is now before the Board for consideration
of the following fully-briefed motions:1
1) opposer’s January 26, 2012 motion for summary judgment
with respect to applicant’s first amended counterclaim
for fraud (filed January 19, 2012) against opposer’s
pleaded Registration No. 3511124;

2) opposer’s February 22, 2013 cross-motion for summary
judgment with respect to Counts I and II of
applicant’s second amended counterclaim (filed
December 21, 2012) against opposer’s pleaded
Registration No. 3511124;2 and

3) opposer’s February 22, 2013 motion to strike Count III
of applicant’s second amended counterclaim against
opposer’s pleaded Registration No. 3511124, or
alternatively strike paragraphs 25 and 26 thereof.

Analysis: Motions for Summary Judgment

1 The Board set forth the parties and their respective properties
in its December 20, 2011 and August 3, 2012 orders.
2 The Board notes applicant’s express withdrawal of its December
21, 2012 motion for summary judgment. Consistent with the
motions as they were captioned and filed, the Board continues to
refer to opposer’s motion as a cross-motion for summary judgment.
UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
P.O. Box 1451
Alexandria, VA 22313-1451
Opposition No. 91200105

2

Summary judgment is appropriate where the movant shows
that there is no genuine dispute as to any material fact and
that it is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a). A party asserting that a fact cannot be true
or is genuinely disputed must support its assertion by
either 1) citing to particular parts of materials in the
record, or 2) showing that the materials cited do not
establish the absence or presence of a genuine dispute, or
that an adverse party cannot produce admissible evidence to
support the fact. See Fed. R. Civ. P. 56(c).
The party seeking judgment in its favor carries the burden
of proof. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24
(1986). In deciding a summary judgment motion, the function of
the Board is not to try issues of fact, but to determine if
there are any genuine disputes of material fact to be tried.
See TBMP § 528.01 (2013), and cases cited therein.
Opposer’s motion for summary judgment with respect to
applicant’s first amended counterclaim for fraud

In its first amended counterclaim for fraud, applicant
alleges:
5. On information and belief, EMD’s mark was fraudulently
obtained. The original application was filed under
Section 1(a) of the Trademark Act. No specimen was
provided. No date of first use anywhere was provided.
The application was not signed and verified as required
therefore, the initial application was not complete. In
response to an Office Action, Opposer submitted a specimen
dated 2008, and fraudulently stated that the specimen had
been in use at least as early as the filing date of the
application, which was October 19, 2007. The described
Opposition No. 91200105

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acts of EMD were done knowingly and with the intent to
induce the Trademark Examiner to rely thereon and grant
said registration. Reasonably relying upon the truth of
said false statement, and as a consequence thereof, the
U.S. Patent and Trademark Office did, in fact, grant said
registration to EMD.

To prevail, opposer must demonstrate the absence of
genuine dispute of material fact as to whether it knowingly
made a false, material representation with the intent to
deceive the USPTO to allow the mark in its use-based
application for registration. See In re Bose Corp., 580 F.3d
1240, 91 USPQ2d 1938, 1941 (Fed. Cir. 2009).
The application underlying opposer’s registration was
filed October 19, 2007. Opposer argues that it made no
material misrepresentation in its application, asserting that
1) it submitted a specimen of use that was dated 2008 because
the label which had been used in 2007 was discontinued when
opposer changed the size of the container for the goods; 2) the
2007 and 2008 labels are substantially identical, different
only in the wording stating the net weight and net contents;
and 3) the application declaration supporting the specimen
contained no false statement because the 2008 specimen was an
example of use of the mark as of the filing date. Under the
declaration of one of its directors, opposer submitted, inter
alia, a copy of the label used in 2007 (Broughton decl., exh.
1).
Opposition No. 91200105

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For its part, applicant states that “(W)hile Mr.
Broughton’s declaration might provide a reasonable explanation
as to why a false statement was made as to the specimen that
was provided, it does not explain Merck’s overall conduct and
the other false statements involved in Merck’s application”
(applicant’s brief, p. 5). It also states that there is
dispute regarding whether opposer acted with intent to deceive
the USPTO, or with an honest misunderstanding or inadvertence.3
On the record before us, opposer has carried its burden of
setting forth a record on summary judgment which demonstrates
that there is no genuine dispute that opposer did not make a
material misrepresentation when it submitted the 2008 specimen
and stated in its declaration that the specimen was in use as
of the filing date of the application. Specifically, opposer’s
2007 label and 2008 label both display the mark TORQUE for the
identified goods, and, as opposer explains, there are no
material differences between the labels, which display
different ”Net Weight” and “Net Contents” information. In
examining applications for registration of trademarks, the
Office does not apply Trademark Rules 2.34(a)(1)(iv), 2.56(a)
and 2.59(a) so as to require that a specimen of use must be an
archival example of the exact matter (the label, tag,
packaging, etc.) which was in use as of the application filing

3 In the majority of its brief, applicant presents arguments
regarding opposer’s use of its mark on the identified goods and
Opposition No. 91200105

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date. Rather, the Office routinely accepts specimens that an
applicant actually used subsequent to the filing date where
such specimen is of the same type, in all material respects, as
the marked matter that actually was in use at the appropriate
time. Applicant has not pointed to or submitted authority or
evidence which demonstrates to the contrary. Moreover,
consistent with this USPTO examination practice, the examining
attorney did not question the specimen even though it clearly
displays a copyright notice which reads “©2008 EMD Crop
BioScience.” The fact that the specimen submitted contained
net weight and net contents information that is different from
the information on the older specimen is immaterial to the
purposes of examination of the application in this case.
Based on these findings of fact supported by the record on
summary judgment, opposer’s submission in support of its
application of the 2008 label with its accompanying declaration
under Trademark Rule 2.20 was not a material misrepresentation
to the USPTO. Accordingly, this element of applicant’s fraud
claim is not present.
In view of these findings, opposer’s motion for summary
judgment is granted.
Opposer’s cross-motion for summary judgment with respect to
Counts I and II of applicant’s second amended counterclaim

its dates of use, arguments that are not relevant to the
allegations set forth in the counterclaim at issue.
Opposition No. 91200105

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In Count I, applicant asserts that the use-based
application underlying opposer’s Registration No. 3511124 is
void ab initio, alleging that it was filed in the name of an
entity that did not claim ownership rights through a related
company as required by Trademark Rule 2.38(b). Specifically,
applicant alleges:
10. If the mark is not in fact being used by the
applicant, but by a related company whose use inures to
the benefit of the applicant, such facts must be alleged
in the application. 37 C.F.R. § 2.38(b).

11. An application filed in the name of an entity that did
not own the mark as of the filing date of the application
is void. 37 C.F.R. 2.71(d).

12. The application to register TORQUE was filed
electronically in the name of the general partners of
Merck KGaA (“Merck”), … on October 19, 2007. It was
neither signed by the general partners nor the attorney
who filed the application. No signature was submitted.

13. An Office Action issued on November 29, 2007 in which
Merck was advised, among other things, that the
application was not signed and verified. …

14. In response to that Office Action, a declaration was
filed on May 27, 2008 in which it was declared that Merck
was the applicant. No facts declaring that Merck’s claim
of ownership was based on use by a related company were
set forth in the declaration. …

15. Upon information and belief, Merck, itself, made no
use of the mark TORQUE prior to and was not the owner of
the mark TORQUE on October 19, 2007.

16. Because Merck made no use of the mark TORQUE prior to
October 19, 2007, and did not claim ownership rights
through a related company, the application from which
TORQUE registered is void ab initio.

In Count II, based on the same operational facts,
applicant alleges:
Opposition No. 91200105

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19. Novozymes has represented that its predecessor-in-
interest, EMD Crop Bioscience Inc. (“EMD”), was a related
company to Merck.

20. Upon information and belief, prior to and on October
19, 2007, the filing date of the application, EMD, not
Merck, controlled the nature and quality of the goods sold
or services rendered under the mark TORQUE.

21. Because Merck did not control the nature and quality
of the goods sold or services rendered under the mark
TORQUE as of the filing date of the application, use of
the mark by EMD did not inure to the benefit of Merck,
Merck was not the owner of the mark as of the filing date
of the application, and had no right to file the
application.

Moving for summary judgment on Count I, opposer argues
that there is no genuine dispute that its application complied
with Trademark Rule 2.38(b) because said application included
the following statement, which is on the USPTO online
application filing form and satisfies the requirement in the
rule:
Use in Commerce: The applicant is using the mark in
commerce, or the applicant's related company or
licensee is using the mark in commerce, or the
applicant's predecessor in interest used the mark in
commerce, on or in connection with the identified
goods and/or services. 15 U.S.C. Section 1051(a),
as amended.

Turning to the merits of the motion, Trademark Rule
2.38(b) states:
If the mark is not in fact being used by the
applicant but is being used by one or more related
companies whose use inures to the benefit of the
applicant under section 5 of the Act, such facts
must be indicated in the application.

Opposition No. 91200105

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Here, by way of the online filing form, opposer stated
in its application that the mark was being used in commerce
by a related company. Applicant points to no authority in
support of the position that the statement that is part of
the application form does not satisfy the requirement of
Trademark Rule 2.38(b) that use by a related company “must
be indicated in the application.”
Opposer has carried its burden of demonstrating that
there is no genuine dispute that Merck KGaA complied with
Trademark Rule 2.38(b). In view of these findings,
opposer’s motion for summary judgment on Count I of
applicant’s second amended counterclaim is granted.
Moving for summary judgment on Count II, opposer argues
that use of the mark prior to the filing date was made by EMD
Crop BioScience, Inc., a wholly-owned subsidiary of EMD
Chemicals, Inc., which in turn is a wholly-owned subsidiary of
Merck KGaA. To show the parent-subsidiary relationship, it
submits financial statements of Merck KGaA for 2006 and 2007
(opposer’s motion, exh. A) indicating that Merck KGaA owned
100% direct equity interest of EMD Chemicals, Inc. It also
submits an August 2007 stock certificate to show that EMD
Chemicals, Inc. owned all 100 shares of EMD Crop BioScience,
Inc., as well as a February 7, 2011 “Irrevocable Stock Power”
document stating the sale and transfer of 100 shares of issued
and outstanding common stock of EMD Crop BioScience, Inc. to
Opposition No. 91200105

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the current owner, Novozymes US Inc. (opposer’s motion, exh.
B).
Opposer further argues that use by EMD Crop BioScience,
Inc. inured to the benefit of Merck KGaA, and that filing in
the name of the parent, Merck KGaA, is the expression of the
intention of the parties as to ownership of the mark; it
asserts that since the user, EMD Crop BioScience, Inc., is a
related company, control over the nature and quality of the
goods is conclusively established under USPTO regulations.
Opposer cites to TMEP § 1201.03(c) (October 2012), which reads,
in pertinent part:
Frequently, related companies comprise parent and
wholly owned subsidiary corporations. Either a
parent corporation or a subsidiary corporation may be
the proper applicant, depending on the facts
concerning ownership of the mark. The USPTO will
consider the filing of the application in the name of
either the parent or the subsidiary to be the
expression of the intention of the parties as to
ownership in accord with the arrangements between
them.

Opposer further relies on TMEP § 1201.03 (October 2012):
The essence of related-company use is the control
exercised over the nature and quality of the goods or
services on or in connection with which the mark is
used. When a mark is used by a related company, use
of the mark inures to the benefit of the party who
controls the nature and quality of the goods or
services. This party is the owner of the mark and,
therefore, the only party who may apply to register
the mark.
as well as TMEP § 1201.03(b) (October 2012):
Where the application states that use of the mark is
by a related company or companies, the USPTO does not
require an explanation of how the applicant controls
the use of the mark.
Opposition No. 91200105

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For its part, applicant argues that: 1) opposer’s stock
certificate does not show that EMD Crop Bioscience, Inc. was a
wholly-owned subsidiary of EMD Chemicals, Inc., 2) opposer
admitted in response to Interrogatory No. 7 that it (opposer)
has no knowledge of why Merck KGaA, and not the subsidiary,
filed the application,4 3) opposer stated in its motion to
strike that it (opposer) was not involved in selecting the
specimen of use, and 4) opposer stated in its motion to amend
its registration that it (opposer) does not have access to all
communications regarding dates of first use of the mark.
In reply, opposer explains that its lack of knowledge of
acts that took place in 2007, when the underlying application
was filed, is simply due to the fact that opposer (Novozymes US
Inc.) did not purchase the mark until 2011. Opposer further
addresses the 2006 and 2007 financial statements, as well as
the stock certificate, stating that the statements are filed,
respectively, with the Commercial Register of the Darmstadt
local court and with the electronic Federal Gazette accessible
at www.unternehmensregister.de, and stating that the
certificate was issued by the State of Delaware and shows that

4 Interrogatory No. 7: State “why” the application to register the
mark TORQUE was filed by Merck KGAA and not EMD Crop Bioscience,
Inc. Answer: Upon information and belief, Merck generally applies
for and owns all trademarks of its subsidiaries. Other than this
belief, opposer has no knowledge of why Merck applies for trademarks
in its own name.

Opposition No. 91200105

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EMD Chemicals, Inc. owned all 100 shares of EMD Crop
BioScience, Inc.
The term “related company” is defined as “any person whose
use of a mark is controlled by the owner of the mark with
respect to the nature and quality of the goods or services on
or in connection with which the mark is used.” Section 45 of
the Trademark Act of 1946, 15 U.S.C. § 1127. See also Ballet
Tech Foundation Inc. v. Joyce Theater Foundation Inc., 89
USPQ2d 1262, 1271 n.67 (TTAB 2008). The essence of “related
company” is the control of the nature and quality of the goods,
and this is the basis for allowing an applicant to claim
ownership of a mark based on the use by a related company.
Where it is stated that use is by a related company which is a
wholly owned subsidiary of applicant, and there is no
information in the application inconsistent with such a
statement, the control by applicant with use by the wholly
owned subsidiary inuring to applicant's benefit is presumed by
the Examining Attorney from the business structure.5 See In re
Pharmacia Inc., 2 USPQ2d 1883, 1884 (TTAB 1987). See also In
re Hand, 231 USPQ 487, 488 (TTAB 1986).
Opposer has carried its burden of setting forth a record
which demonstrates that there is no genuine dispute that, at

5 As noted above, the specimen of use itself states that the mark was
used by EMD Crop BioScience, Inc. It appears that based on the
application, the examining attorney presumed control by Merck KGaA,
with use by the wholly owned subsidiary EMD Crop BioScience, Inc.
inuring to the parent company’s benefit.
Opposition No. 91200105

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the time the application was filed, Merck KGaA was the owner of
the mark, and specifically that Merck KGaA controlled the
nature and quality of the goods through its position as the
parent company of EMD Crop BioScience, Inc. The financial
statements and stock certificate submitted by opposer indicate
a parent-subsidiary relationship between Merck KGaA and EMD
Crop BioScience, Inc., with 100% ownership residing in Merck
KGaA, and are the type of evidence that ordinarily is
sufficient to indicate control over the business of a company,
absent probative evidence to the contrary. Applicant has not
set forth evidence which contradicts or is inconsistent with
the presumption, arising from this corporate structure, that
there was a relationship of control between Merck KGaA and EMD
Crop BioScience, Inc., or which demonstrates in this particular
case that such relationship of control did not exist as of the
filing date; rather, applicant responded with argument only.
On this record, applicant has failed to establish the existence
of a genuine dispute with respect to the factual issue of
whether Merck KGaA was the owner of the mark as of the filing
date.
In view of these findings, opposer’s motion for summary
judgment on Count II of applicant’s second amended counterclaim
is granted.
Analysis – Motion to Strike

Opposition No. 91200105

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The Board has the authority to strike an impermissible
claim or portion of a claim or counterclaim from a pleading.
See TBMP § 506.01 (2013).
When applicant filed its December 21, 2012 motion for
leave to amend to add the two counterclaims that the
application was void ab initio, opposer’s summary judgment
motion was pending, and proceedings had been suspended pending
said motion under Trademark Rule 2.127(d) (see January 30, 2012
order). In its brief on its motion for leave to amend,
applicant made no mention of having added allegations to Count
III, its counterclaim for fraud. Moreover, during the January
22, 2013 telephone conference – which the Board held to resolve
(and wherein it granted) applicant’s motion for leave to amend
to add the two void ab initio counterclaims – applicant’s
counsel failed to inform either the Board or opposer that it
had added allegations to its fraud counterclaim.6 (see January
30, 2013 order).
The allegations that applicant inserted to Count III seek
to allege a misrepresentation to form a new basis for a fraud
claim. Opposer moves to strike Count III on the basis that
applicant sought to insert the amendments while proceedings
were suspended and without seeking leave to do so. It

6 As the Board noted in its January 30, 2013 order, counsel for
applicant clarified that its second amended counterclaim is the
version which is not marked “DRAFT.”
Opposition No. 91200105

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maintains that applicant sought to enter the amendment in a
procedurally inappropriate manner.
In ruling on applicant’s December 21, 2012 motion for
leave to amend, the Board did not address the amendments to
Count III because applicant did not move to amend to add the
new allegations. Applicant’s insertion of new allegations
without seeking leave to do so in its motion for leave to amend
pursuant to Fed. R. Civ. P. 15(a)(2), is, at best, questionable
practice, and is procedurally inappropriate. See TBMP § 507.01
(2013).
In view of this, opposer’s motion to strike Count III of
the second amended counterclaim is granted.7
Opposer’s October 25, 2012 and December 21, 2012 unconsented
motions to amend its Registration No. 3511124

It is the practice of the Board to defer ruling on motions
to amend the dates of first use set forth in an application to
register until final hearing. Such motions shall be granted
only if the proposed amendment is established by, or is not
inconsistent with, evidence adduced during the testimony
period. Fort Howard Paper Co. v. G.V. Gambina Inc., 4 USPQ2d
1552, 1554 (TTAB 1987).

7 The remainder of Count III – set forth in paragraph 24 thereof
- has been disposed of hereinabove in the Board’s ruling on
opposer’s motion for summary judgment on applicant’s first
amended counterclaim for fraud.
Opposition No. 91200105

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Applicant’s consent to opposer’s motion is not of record.
Consideration of opposer’s motion is deferred until final
hearing.8
Schedule
Proceedings are resumed. Discovery and trial dates with
respect to the notice of opposition are hereby reset as
follows:
Deadline for Discovery Conference 9/16/2013
Discovery Opens 9/16/2013
Initial Disclosures Due9 10/16/2013
Expert Disclosures Due 2/13/2014
Discovery Closes 3/15/2014
Plaintiff's Pretrial Disclosures due 4/29/2014
Plaintiff's 30-day Trial Period Ends 6/13/2014
Defendant's Pretrial Disclosures due 6/28/2014
Defendant's 30-day Trial Period Ends 8/12/2014
Plaintiff's Rebuttal Disclosures due 8/27/2014
Plaintiff's 15-day Rebuttal Period
Ends 9/26/2014

In each instance, a copy of the transcript of
testimony, together with copies of documentary exhibits,
must be served on the adverse party within thirty days after
completion of the taking of testimony. Trademark Rule
2.l25.
Briefs shall be filed in accordance with Trademark
Rules 2.128(a) and (b). An oral hearing will be set only
upon request filed as provided by Trademark Rule 2.l29.

8 As the Board noted in its August 3, 2012 order, the Board
defers consideration of applicant’s unconsented motion to
restrict its identification of goods.
Opposition No. 91200105

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9 Opposer states in its January 26, 2012 motion that it served
its initial disclosures.