Red Diamond, Co. dba National Sportswearv.National Sportswear Incorporated

Trademark Trial and Appeal Board

Mar 23, 2017

No. 92064690 (T.T.A.B. Mar. 23, 2017)

Baxley Mailed: March 23, 2017

Cancellation No. 92064690
Red Diamond, Co. dba National Sportswear1

v.
National Sportswear Incorporated

Before Kuhlke, Ritchie, and Hightower,
Administrative Trademark Judges.

By the Board:

National Sportswear Incorporated (“Respondent”) owns registrations for the mark
NATIONAL SPORTSWEAR in standard characters for various types of shirts in

1 The ESTTA cover form for the petition to cancel identifies Marc Tartaglia (“Tartaglia”) as
the plaintiff. However, the text of the petition to cancel identifies Petitioner as the plaintiff,
sets forth Petitioner’s allegations of standing, and includes no mention of Tartaglia. In
exhibits to the petition to cancel, Tartaglia is mentioned only as a person who signed a
settlement agreement between the parties on behalf of Petitioner. Moreover, the petition to
cancel is accompanied by a filing fee sufficient to pay for one plaintiff to seek cancellation of
two single-class registrations. See Trademark Rule 2.111(d). Accordingly, we have treated
this proceeding as having been filed by Petitioner as the sole plaintiff herein. See id.
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 opinion is not a
precedent of the Trademark
Trial and Appeal Board.
Cancellation No. 92064690

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International Class 252 and services “in the field of sportswear and apparel” in
International Class 40.3
Red Diamond, Co. d/b/a National Sportswear (“Petitioner”) filed a petition to
cancel Respondent’s registrations. Petitioner indicated in the ESTTA cover form for
the petition to cancel that it intended to allege (1) deceptiveness under Trademark
Act Section 2(a), 15 U.S.C. § 1052(a), and (2) misrepresentation of source under
Trademark Act Section 14(3), 15 U.S.C. § 1064(3), as grounds for cancellation.4
However, in the text of the petition to cancel, Petitioner pleaded instead different
claims, namely, (1) false suggestion of a connection with Petitioner under Trademark
Act Section 2(a), 15 U.S.C. § 1052(a), (2) likelihood of confusion under Trademark Act
Section 2(d), 15 U.S.C. § 1052(d), and (3) dilution under Trademark Act Section 43(c),
15 U.S.C. § 1125(c). In lieu of an answer, Respondent, on December 6, 2016, filed a
motion to dismiss the petition to cancel on the grounds of (1) lack of subject matter
jurisdiction; (2) res judicata based on an April 6, 2015 agreement that settled an
infringement action that Respondent brought on February 20, 2014 against

2 Registration No. 3222274, issued March 27, 2007, for “Dress shirts; Golf shirts; Knit shirts;
Night shirts; Open-necked shirts; Piquet shirts; Polo shirts; Shirts; Shirts for suits; Short-
sleeved or long-sleeved t-shirts; Short-sleeved shirts; Sleep shirts; Sport shirts; Sports shirts;
Sports shirts with short sleeves; Sweat shirts; T-shirts; Wind shirts” in International Class
25, Section 8 affidavit accepted, Section 15 affidavit acknowledged.

3 Registration No. 3073167, issued March 28, 2006, for “silkscreen-printing, embroidery,
custom imprinting with decorative designs, all in the field of sportswear and apparel” in
International Class 40, renewed.

4 The mere mention of a claim in the ESTTA cover form for a complaint is insufficient to plead
that claim. See Embarcadero Techs. Inc. v. RStudio Inc., 105 USPQ2d 1825, 1827 n.2 (TTAB
2013).
Cancellation No. 92064690

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Petitioner in a case styled National Sportswear, Inc. v. Red Diamond Co., d/b/a
National Sportswear, Case No. 2:14-cv-01117-WHW-CLW, filed in the United States
District Court for the District of New Jersey;5 and (3) failure to state a claim under
Fed. R. Civ. P. 12(b)(6). In a December 16, 2016 order, the Board determined that: (1)
it has subject matter jurisdiction to determine the registrability of marks in
cancellation proceedings under Trademark Act Section 14, 15 U.S.C. § 1064; (2) the
likelihood of confusion and dilution claims are time-barred under Trademark Act
Section 14(3) because the petition to cancel was filed more than five years after the
issuance of Respondent’s registrations; and (3) the false suggestion of a connection
claim is legally insufficient.6 The Board then suspended proceedings pending further
briefing and decision on the motion for summary judgment on the res judicata issue.
Res judicata can encompass both claim preclusion and issue preclusion. See Sharp
Kabushiki Kaisha v. ThinkSharp Inc., 448 F.3d 1368, 79 USPQ2d 1376, 1378 (Fed.
Cir. 2006). Because the claims in the civil action were not actually litigated, the

5 Pursuant to a joint motion by the parties and pursuant to a settlement agreement between
them, the District Court dismissed the civil action with prejudice in an April 16, 2015 order.
4 TTABVUE 27-28.

6 The false suggestion claim is based on Respondent’s alleged failure to abide by the parties’
settlement agreement in their civil action. See 1 TTABVUE 5 and 12. In the December 16,
2016 order, the Board stated as follows:
[T]o the extent that Petitioner alleges breach of contract, the Board is
empowered only to determine the registrability of marks. See TBMP § 102.01
(2016). The Board may not decide a cause of action for breach of contract, but
may consider a contract, its construction, or its validity if necessary to decide
the issues properly before the Board in an inter partes proceeding, including
the issue of estoppel. See Selva & Sons, Inc. v. Nina Footwear, Inc., 705 F.2d
1316, 217 USPQ 641, 647 (Fed. Cir. 1983); M-5 Steel Mfg. Inc. v. O’Hagin’s Inc.,
61 USPQ2d 1086, 1094-95 (TTAB 2001).
6 TTABVUE 4-5.

Cancellation No. 92064690

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doctrine of issue preclusion is inapplicable herein. See Jet Inc. v. Sewage Aeration
Sys., 223 F.3d 1360, 55 USPQ2d 1854, 1859 (Fed. Cir. 2000).
Regarding the doctrine of claim preclusion, such doctrine protects against
relitigation of a previously adjudicated claim between the same parties or their
privies. Under that doctrine, “a judgment on the merits in a prior suit bars a second
suit involving the same parties or their privies based on the same cause of action.”
Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.5 (1979). “[A] second suit will be
barred by claim preclusion if: (1) there is identity of parties (or their privies); (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., 55 USPQ2d at
1856. We note that Petitioner and Respondent were both parties to the civil action
and that the District Court’s April 16, 2015 dismissal with prejudice operates as a
judgment on the merits of whatever claims were raised therein. See Pactiv Corp. v.
Dow Chemical Co., 449 F.3d 1227, 78 USPQ2d 1939, 1941 (Fed. Cir. 2006); U.S.
Olympic Comm. v. Bata Shoe Co., Inc., 225 USPQ 340 (TTAB 1984). Because neither
party submitted a copy of the pleadings in the civil action, we cannot precisely
determine the nature of the claim therein.7
Nonetheless, the doctrine of claim preclusion is also available where a claim could
have been raised in the prior action. See Pactiv Corp., 78 USPQ2d at 1941; Urock
Network, LLC v. Sulpasso, 115 USPQ2d 1409, 1412 (TTAB 2015) (claim preclusion

7 Our primary reviewing court has held that civil actions involving infringement and Board
cancellation proceedings do not involve the same transactional facts. See Jet Inc., 55 USPQ2d
at 1856-58.
Cancellation No. 92064690

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“extends to relitigation of ‘claims that were raised or could have been raised’ in an
earlier action” (quoting Allen v. McCurry, 449 US 90, 94 (1980) (emphasis added));
Bacardi & Co. Ltd. v. Ron Castillo, S.A., 178 USPQ 242, 244 (TTAB 1973); see also
Vitaline Corp. v. General Mills Inc., 891 F.2d 273, 13 USPQ2d 1172, 1173-74 (Fed.
Cir. 1989).
Courts and the Board have concurrent authority to cancel registrations. See
Trademark Act Section 37, 15 U.S.C. § 1119; Ditri v. Coldwell Banker Residential
Affiliates, Inc., 954 F.2d 869, 21 USPQ2d 1530, 1533-34 (3d Cir. 1992); Informix
Software, Inc. v. Oracle Corp., 927 F. Supp. 1283, 40 USPQ2d 1153, 1155 (N.D. Cal.
1996) (Section 37 “provides for concurrent jurisdiction in this Court and the
Trademark Trial and Appeal Board over the cancellation of trademark[]”
registrations); W & G Tennessee Imports, Inc. v. Esselte Pendaflex Corp., 769 F. Supp.
264, 266 (M.D. Tenn. 1991); 5 J. Thomas McCarthy, McCarthy on Trademarks &
Unfair Competition § 30:109 (4th ed. March 2017 update) (“McCarthy”). “Although a
petition to the [Board] is the primary means of securing a cancellation, the district
court has concurrent power to order cancellation as well for the obvious reason that
an entire controversy may thus be expediently resolved in one forum.” Ditri, 21
USPQ2d at 1534. Because a registration may be collaterally attacked in any civil
action where validity of the mark is in issue, a defendant charged with infringement
of a registered mark may counterclaim for cancellation of that registration. See Holley
Performance Products, Inc. v. Quick Fuel Technology, Inc., 624 F. Supp. 2d 610, 89
USPQ2d 1788, 1791 (W.D. Ky. 2008); Patsy’s Italian Restaurant, Inc. v. Banas, 575
Cancellation No. 92064690

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F. Supp. 2d 427, 464 (E.D.N.Y. 2008); 5 McCarthy § 30:109. Our primary reviewing
court held that a defendant who fails to file counterclaim for cancellation of plaintiff's
registration cannot thereafter petition the Board for cancellation of that registration
where the Board proceeding would effectively constitute a collateral attack on the
judgment in the first case. See Nasalok Coating Corp. v. Nylok Corp., 522 F.3d 1320,
86 USPQ2d 1369, 1375-76 (Fed. Cir. 2008).
The settlement agreement states that the parties each
release and forever discharge each other and irrevocably waive all
causes of action ... in law or equity that [each party] had, now have, or
may have against each other for any cause matter or thing whatsoever,
whether known or unknown, liquidated or unliquidated, absolute or
contingent, enforceable under any local, state or federal statute,
regulation or ordinance, or under the common law of the United States,
or of any of the states, which has occurred up until the time of execution
of this agreement.

1 TTABVUE 15. The parties further agreed that Respondent “has and retains federal
trademark [R]egistration [N]os. 3073167 and 3222274 in the ‘National Sportswear’
word mark, and all rights attendant thereto, which provide senior rights to those of”
Petitioner in Respondent’s territory, which consists of the entire United States other
than Petitioner’s territory, which is composed of eleven counties in New Jersey.8 1

8 The counties at issue are “Bergen, Essex, Hunterdon, Hudson, Middlesex, Morris, Passaic,
Somerset, Sussex, Union and Warren.” 1 TTABVUE 14.
In the petition to cancel, Petitioner relies upon Respondent’s maintenance of a Neptune,
New Jersey mailing address in support of its assertion that Respondent has breached the
settlement agreement. 1 TTABVUE 5 and 12. Petitioner further asserts in its brief in
response to Respondent’s motion that it is seeking to preserve its rights as the senior user of
the mark NATIONAL SPORTSWEAR “in New Jersey.” 7 TTABVUE 3. However, Petitioner’s
territory as set forth in the settlement agreement does not consist of the entire State of New
Jersey, but rather is limited to the aforementioned eleven counties. Further, Neptune, New
Jersey is in Monmouth County, which is located in Respondent’s territory. 4 TTABVUE 30-
33.
Cancellation No. 92064690

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TTABVUE 14 and 16. The parties further agreed that Respondent’s use of its involved
registered mark in its territory “and/or in accordance with the terms of its
registrations and this Agreement does not constitute trademark infringement of”
Petitioner’s “name and mark” NATIONAL SPORTSWEAR under either the
Trademark Act or any state law and that, as long as Respondent uses its mark in
accordance with their agreement, Petitioner “shall not file suit against” Respondent
based on its use of the mark NATIONAL SPORTSWEAR. 1 TTABVUE 16-17.
Restatement (Second) of Judgments § 18(2) makes clear that a defense that could
have been interposed cannot later be used to attack the judgment of the first action.
When a former defendant attempts to undermine a previous judgment by asserting
in a subsequent action a claim or defense that was or could have been asserted in the
earlier case, the rules of defendant preclusion will apply. See Nasalok Coating Corp.,
86 USPQ2d at 1375.
Both of the involved registrations were issued more than six years prior to the
February 20, 2014 commencement of the civil action and are incontestable. See
Trademark Act Section 15, 15 U.S.C. § 1065. As noted, the likelihood of confusion and
dilution claims are time-barred under Trademark Act Section 14(3). However, the
fact that a registration has become incontestable does not preclude cancellation of
that registration under claims that may be brought at any time under Trademark Act
Section 14(3), 15 U.S.C. § 1064(3). See Trademark Act Section 15.
We turn now to the non-time barred claims to which Petitioner refers in the
petition to cancel. As noted in the December 16, 2016 order, Petitioner’s false
Cancellation No. 92064690

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suggestion of a connection claim is legally insufficient because it is based on the
similarity of the parties’ marks and not on an assertion that Respondent’s mark is
the same as or a close approximation of Petitioner’s name or identity. 6 TTBAVUE 4.
To properly plead a Section 2(a) claim of false suggestion of a connection, Petitioner
must allege facts which, if proven, would establish that (1) Respondent’s mark is the
same or a close approximation of its name or identity; (2) Respondent’s mark would
be recognized as such by purchasers, in that the mark points uniquely and
unmistakably to Petitioner; (3) Petitioner is not connected with the goods sold or
activities performed by Respondent under the mark; and (4) Petitioner’s name or
identity is of sufficient fame or reputation that when Respondent’s mark is used in
connection with its goods or services, a connection with Petitioner would be
presumed. See Nike, Inc. v. Palm Beach Crossfit Inc., 116 USPQ2d 1025, 1031 (TTAB
2015); Buffett v. Chi-Chi’s, Inc., 226 USPQ 428, 429 (TTAB 1985). The foregoing
criteria indicates that the facts that give rise to a claim of false suggestion of a
connection are generally of a nature that they would be largely, if not entirely, within
the possession of a plaintiff alleging such claim. Moreover, Petitioner alleges in its
brief in response to Respondent’s motion that it has been known under the name
NATIONAL SPORTSWEAR since eight years prior to Respondent’s first use of the
same mark. 7 TTABVUE 3. As such, the factual basis for a counterclaim for
cancellation of Respondent’s registrations on the ground of false suggestion of a
connection under Section 2(a) was within Petitioner’s knowledge prior to the
dismissal of the civil action. Because that counterclaim could have been raised in the
Cancellation No. 92064690

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civil action, Petitioner is barred by the rule of defendant preclusion from relying on
it in its petition to cancel.
The term misrepresentation of source, as used in Trademark Act Section 14(3),
refers to situations where it is deliberately misrepresented by or with the consent of
the registrant that goods and/or services originate from a manufacturer or other
entity when in fact those goods and/or services originate from another party. See Otto
Int’l Inc. v. Otto Kern GmbH, 83 USPQ2d 1861, 1863 (TTAB 2007). A pleading of
misrepresentation of source “must be supported by allegations of blatant misuse of
the mark by respondent in a manner calculated to trade on the goodwill and
reputation of petitioner.”9 McDonnell Douglas Corp. v. Nat’l Data Corp., 228 USPQ
45, 47 (TTAB 1985).
In the petition to cancel, Petitioner asserts that Respondent failed to abide by the
parties’ settlement agreement and cites as an example Respondent’s alleged
continuing to list a New Jersey mailing address. 1 TTABVUE 5. However, the
settlement agreement on its face does not prohibit Respondent from using the mark
NATIONAL SPORTSWEAR in the entire State of New Jersey, and instead merely

9 To the extent that Petitioner seeks to allege that Respondent’s mark is deceptive under
Section 2(a), a Section 2(a) deceptiveness claim is not an alternative means of raising Section
2(d) issues. Rather, a mark is deceptive under Section 2(a) where it consists of or comprises
matter that (1) misdescribes the character, quality, function, composition or use of the goods
or services; (2) prospective purchasers are likely to believe describes the goods; and (3) is
likely to affect a significant portion of the relevant consumers’ decision to purchase. See In re
Spirits Int’l, N.V., 563 F.3d 1347, 90 USPQ2d 1489 (Fed. Cir. 2009); In re Budge Mfg. Co.,
857 F.2d 773, 775, 8 USPQ2d 1259, 1260 (Fed. Cir. 1988). Because Petitioner’s grounds for
cancellation are based on the alleged similarity of its mark and trade name to Respondent’s
mark and trade name as opposed to any misdescriptive character of Respondent’s mark, there
would appear to be no basis for a Section 2(a) deceptiveness claim herein.
Cancellation No. 92064690

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prohibits Respondent from using that mark in Petitioner’s territory, i.e., eleven
counties in New Jersey. 1 TTABVUE 14, 16 and 17.
Exhibit D of the petition to cancel, upon which Petitioner relies in support of its
assertion that Respondent has failed to abide by the settlement agreement, refers to
an address for Respondent in “Neptune,” New Jersey “07753.” 1 TTABVUE 12. We
take judicial notice that Neptune City and Township of Neptune, New Jersey are
located in Monmouth County. 4 TTABVUE 30-33. We also take judicial notice from
the United States Postal Service database that 07753 is a zip code for Neptune, New
Jersey and Neptune City, New Jersey.
https://tools.usps.com/go/ZipLookupAction_input. See In re Morinaga Nyugyo
Kabushiki Kaisha, 120 USPQ2d 1738, 1744 n.4 (TTAB 2016) (judicial notice of the
locations of Puyallup, Washington and Mount Rainier); Pinocchio's Pizza Inc. v.
Sandra Inc., 11 USPQ2d 1227, 1229 n. 6 (TTAB 1989) (judicial notice of the location
of Catonsville, Maryland). Cf. In re Aquamar, Inc., 115 USPQ 1122, 1127 n.6 (TTAB
2015) (Board may take judicial notice of census data). Neptune, New Jersey is not
located in the eleven counties which comprise Petitioner’s territory and is instead
located in Respondent’s territory under the settlement agreement. Therefore, we find
that Petitioner has failed to set forth a plausible basis for a misrepresentation of
source claim.
In view of Petitioner’s failure to file a counterclaim in the civil action and the
parties’ settlement agreement in that civil action, we find that the purported claims
in this proceeding are barred by the doctrine of claim preclusion because they are
Cancellation No. 92064690

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based on activities prior to the dismissal with prejudice of the civil action.
Accordingly, Respondent’s motion for summary judgment is hereby granted.
The Board’s general practice is to allow a plaintiff leave to file an amended
complaint after granting a motion to dismiss under Fed. R. Civ. P. 12(b)(6). See TBMP
§ 503.03 (Jan. 2017). However, we note that the doctrine of claim preclusion bars
Petitioner from pursuing any claims that could have been brought as a counterclaim
in the civil action and that Petitioner’s misrepresentation of source claim is
apparently based on a mistaken belief that the settlement agreement in the civil
action gives Petitioner senior rights in the mark NATIONAL SPORTSWEAR in the
entire State of New Jersey, as opposed to the eleven counties identified therein. We
therefore find that granting such leave would be futile in this case. See Embarcadero
Techs., Inc. v. Dephix Corp., 117 USPQ2d 1518, 1523 (TTAB 2016) (motion for leave
to amend denied where proposed claims are untimely and futile). Based on the
foregoing, the petition to cancel is therefore dismissed with prejudice.