US Foods, Inc.v.Orchids Paper Products Company

Trademark Trial and Appeal Board

Sep 30, 2014

No. 92056545 (T.T.A.B. Sep. 30, 2014)

This Opinion is Not a
Precedent of the TTAB

Mailed: September 30, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
_____

Trademark Trial and Appeal Board
_____

US Foods, Inc.
v.
Orchids Paper Products Company
_____

Cancellation No. 92056545
to Registration No. 1536352
registered on April 25, 1989

_____

Amy Cohen Heller and Clay A. Tillack of Schiff Hardin LLP
for US Foods, Inc.

Anthony J. Jorgenson of Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C.
for Orchids Paper Products Company
_____

Before Kuhlke, Wellington and Shaw,
Administrative Trademark Judges.

Opinion by Kuhlke, Administrative Trademark Judge:
US Foods, Inc. (“Petitioner”) filed a petition for cancellation of Registration
No. 1536352 for the mark VAL-U PLUS, in standard character form, registered by
Cancellation No. 92056545
Orchids Paper Products Company (“Respondent”), for bathroom tissue and paper
towels.1
BACKGROUND/PROCEDURAL HISTORY

The ground for cancellation is abandonment of the registered mark. In
support of its claim of abandonment, Petitioner alleges that Respondent has
discontinued use of the mark with intent not to resume such use and has not used
the VAL-U PLUS mark for the goods covered in Registration No. 1536352 for three-
consecutive years.
In its answer, Respondent admits that Petitioner filed Application Serial No.
85549499 and that the USPTO refused registration based on Respondent’s
registration, and denies the remaining allegations of the petition to cancel.
RECORD

By rule, the record includes Respondent's registration file. Trademark Rule
2.122(b), 37 CFR § 2.122(b). It also includes the petition for cancellation and
Respondent's answer to the petition. In addition, pursuant to Trademark Rule
2.120(j) Petitioner submitted the following evidence under notice of reliance:
Respondent’s Initial Disclosures; Respondent’s Answers to Petitioner's First Set of
Interrogatories; and Respondent’s Response to Petitioner’s First Set of Requests for
Admissions (TTABVue No. 6).
1 Registration No. 1536352 filed on May 23, 1988, issued on April 25, 1989, claiming a date
of first use anywhere of January 26, 1988, and a date of first use in commerce of March 15,
1988, Sections 8 and 9 combined declaration accepted and granted on January 1, 2009.

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Cancellation No. 92056545
Respondent submitted the testimony deposition with accompanying exhibits
of Rebecca Thomaselli, Respondent’s Regional Sales Manager, (TTABVue No. 9)
(“Thomaselli Test.”). In addition, pursuant to Trademark Rule 2.120(j)(5)
Respondent submitted its Second Supplemental Answers to Petitioner’s First Set of
Interrogatories.
Petitioner made various objections during Ms. Thomaselli’s deposition but
waited until its reply brief to renew certain objections; in view thereof, those
objections are deemed waived. Kohler Co. v. Baldwin Hardware Corp., 82 USPQ2d
1100, 1104 (TTAB 2007). Nonetheless, in our review of the record, we weigh the
probative value of each piece of evidence.
We note in particular Exhibits 16-20 and Ms. Thomaselli’s testimony
regarding these exhibits. The exhibits at issue comprise four “point of sale reports”
from one of Respondent’s wholesale customers, Bargain Barn. These reports
contain information on Bargain Barn’s retail sales of VAL-U PLUS bath tissue from
February 1, 2009 through June 2009: 198 units in February, 2009 (Thomaselli Test.
p. 27, Ex. 16); 634 units in March (Thomaselli Test. p. 28, Ex. 17); 329 units in
April, 2009 (Thomaselli Test. pp. 28-29, Ex. 18); 47 units in May, 2009 (Thomaselli
Test. p. 29, Ex. 19); and 1 unit in June, 2009 (Thomaselli Test. p. 29, Ex. 20). When
asked the context in which, during her employment as a Regional Sales Manager
for Respondent, she had the “occasion to see Bargain Barn point of sale reports in
the past,” Ms. Thomaselli testified, “[j]ust asking, from the sales person, asking how
the sales were doing at their stores.” Thomaselli Test. at p. 30. We find this
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Cancellation No. 92056545
sufficient foundation to testify as to whether or not the noted documents were the
documents produced upon her request for sales information from Bargain Barn.
However, as to the truth of the matter contained in the reports, Ms.
Thomaselli does not have sufficient personal knowledge to testify as to the accuracy
of the statements contained therein. FED. R. EVID. 602 provides in relevant part
that: “A witness may testify to a matter only if evidence is introduced sufficient to
support a finding that the witness has personal knowledge of the matter. Evidence
to prove personal knowledge may consist of the witness's own testimony.” The test
is whether a reasonable trier of fact could believe the witness had personal
knowledge. “In other words, the testimony is excluded only if, as a matter of law, no
[trier of fact] could reasonably conclude that the witness perceived the facts to
which she testifies.” 27 Charles Alan Wright et al., Federal Practice and Procedure
§ 6022 (2d ed. 2013).
There is a distinction between the admissibility of records maintained in the
ordinary course of business, which are an exception to the rule against hearsay
under FED. R. EVID. 803(6), and witnesses testifying in their personal capacity.
Testimony from such individuals based on a review of business records is
inadmissible hearsay if the witness lacks personal knowledge:
[T]he [business record hearsay exception] rule does not provide
for the admission into evidence of the testimony of a person who lacks
personal knowledge of the facts, who is unable to testify to the
fulfillment of the conditions specified within the rule, and who is
testifying only about what he has read or has been allowed to review.

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Cancellation No. 92056545
City Nat'l Bank v. OPGI Mgmt. GP Inc./Gestion OPGI Inc., 106 USPQ2d 1668,
1673 (TTAB 2013) (quoting Olin Corp. v. Hydrotreat, Inc., 210 USPQ 63, 67 (TTAB
1981)).
Here, the testimony as to the information shown in Exhibits 16-20 is made
not as a result of personal knowledge, but based on Ms. Thomaselli’s review of the
business records of a third-party who is not a party to these proceedings. In view
thereof, their probative value is extremely limited.
STANDING

Standing is a threshold issue that must be proved in every inter partes case.
See Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213 USPQ 185, 189
(CCPA 1982) (“The facts regarding standing… must be affirmatively proved.
Accordingly, [plaintiff] is not entitled to standing solely because of the allegations in
its [pleading].”). To establish standing in a cancellation proceeding, petitioner must
show both “a real interest” in the proceedings as well as a “reasonable” basis for its
belief of damage. See Ritchie v. Simpson, 170 F.3d 1092, 50 USPQ2d 1023, 1025
(Fed. Cir. 1999). A petitioner may establish standing by alleging and proving that
its pending application was refused registration based on the respondent’s
registration. Lipton, 213 USPQ at 189 (“Thus, to have standing in this case, it
would be sufficient that [plaintiff] prove that it filed an application and that a
rejection was made because of [defendant's] registration”); Fiat Group Automobiles
S.p.A. v. ISM Inc., 94 USPQ2d 1111, 1112 (TTAB 2010), citing Life Zone Inc. v.
Middleman Group Inc., 87 USPQ2d 1953, 1959 (TTAB 2008), (“The filing of
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Cancellation No. 92056545
opposer's application and the Office's action taken in regard to that application
provides opposer with a basis for pleading its standing…”).
In this case, Petitioner has alleged and Respondent has admitted, that
Petitioner’s application was refused registration based on Respondent’s registration.
Pet. Canc. and Ans. ¶¶ 3-4.2 In view thereof, Petitioner has established its standing
by concession. See ShutEmDown Sports Inc. v. Lacy, 102 USPQ2d 1036, 1041
(TTAB 2012).
ABANDONMENT/INTENT TO RESUME USE

Abandonment of a mark occurs:
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.
Trademark Act Section 45, 15 U.S.C. § 1127.
A petitioner for cancellation of a registration on the ground of abandonment
bears the burden of proving such abandonment by a preponderance of evidence.
Cerverceria Centroamericana S.A. v. Cerveceria India Inc., 892 F.2d 1021, 13
USPQ2d 1307 (Fed. Cir. 1989). However, “[o]nce a prima facie case is established,
it ‘eliminates the challenger’s burden to establish the intent element of
2 We note that Petitioner failed to make of record its pending application for the mark
VALU + PLUS and design (Serial No. 85549499), and the Office Action refusing
registration under Section 2(d) of the Trademark Act based on Respondent’s registration
VAL-U PLUS (Reg. No. 1536352). However, as discussed above, Respondent’s admission is
sufficient.
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Cancellation No. 92056545
abandonment as an initial part of [his] case,’ and creates a rebuttable presumption
that the registrant abandoned the mark without intent to resume or commence use
under the statute. This presumption shifts the burden to the registrant to produce
evidence that he either used the mark during the statutory period or intended to
resume or commence use. The burden of persuasion, however, always remains with
the petitioner to prove abandonment by a preponderance of evidence.” Rivard v.
Linville, 133 F.3d 1446, 45 USPQ2d 1374 (Fed. Cir. 1998) citing, Imperial Tobacco
Ltd. v. Philip Morris, 899 F.2d 1575, 14 USPQ2d 1390, 1395 (Fed. Cir. 1990). See
also On-line Careline, Inc. v. America Online, Inc., 229 F.3d 1080, 56 USPQ2d 1471,
1476 (Fed. Cir. 2000).
To show intent to resume use, however, a respondent must put forth evidence
with respect either to specific activities undertaken during the period of nonuse, or
special circumstances which excuse nonuse. See Imperial Tobacco, 14 USPQ2d at
1394. See also Rivard, 45 USPQ2d at 1376 (“To provide excusable nonuse, the
registrant must produce evidence showing that, under his particular circumstances,
his activities are those that a reasonable businessman, who had a bona fide intent
to use the mark in United States commerce, would have undertaken.”) A mere
“affirmative desire by the registrant not to relinquish a mark is not determinative
of the intent element of abandonment under the Lanham Act.” Imperial Tobacco,
14 USPQ2d at 1394. To satisfy its burden of production, respondent must come
forward with evidence beyond mere conclusory statements or denials that it lacks
such intent to resume use. Id. at 1394-95. See also Rivard, 45 USPQ2d 1374 (Court
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Cancellation No. 92056545
upheld the Board’s finding that evidence of several trips to the United States to
establish hair dressing and beauty salons and contact with a franchising consultant
was insufficient to support an intent to commence use of the mark and the
registrant did not show that the nonuse of the mark during this period was
reasonable.) Subsequent use may be probative of whether the registrant intended
to resume use during a previous period of nonuse. Such evidence should temporally
and logically link the later use to the prior nonuse, such that an inference can be
drawn regarding the intent to use during the period of nonuse. Without more, mere
evidence of subsequent use may not suffice to establish that the registrant intended
to resume use. Parfums Nautee Ltd. v. American International Industries, 22
USPQ2d 1306, 1310 (TTAB 1992). “Once a trademark is abandoned, its registration
may be cancelled even if the registrant resumes use.” Cerveceria, 13 USPQ2d at
1313 n. 7, quoting Mission Dry Corp. v. Seven-up Co., 193 F.2d 201, 92 USPQ 144,
146 (CCPA 1951).
In support of its assertion that Respondent has not used its mark for three
years, Petitioner points to the admission by Ms. Thomaselli that Respondent “had
not used the mark in connection with bathroom tissue and paper towels for over
three consecutive years and that [Respondent] sold no goods in connection with the
mark in 2010, 2011 or 2012.” Pet. Br. at 5. An excerpt of Ms. Thomaselli’s relevant
testimony is set forth below:
A. Number 7: “On information and belief, Registrant has
not used the mark VAL-U PLUS in connection with
bathroom tissue and paper towels for three consecutive
years.”
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Cancellation No. 92056545
Q. Is that an accurate statement?
A. That would be an accurate statement.
…
A. No, I’m not aware of any sales [of bath tissue] in 2010.
Q. Okay. And in 2011, are you aware of any sales of the
VAL-U PLUS bath tissue?
A. No.
Q. Are you aware of any sales of the VAL-U PLUS bath
tissue in 2012?
A. No.
…
A. Okay. No, not to my recollection, I’m not aware of
paper towels.
Q. Okay. So no paper towels that you’re aware of in 2009.
Are you aware of any sale of paper towels under the VAL-
U PLUS name in 2010.
A. No.
Q. How about in 2011?
A. No.
Q. And in 2012?
A. No.
Thomaselli Test. at pp. 64, 78-79, 80.
We find that Petitioner has established prima facie abandonment.
Specifically, Respondent has admitted that “[t]here was a period of time between
the sale of VAL-U PLUS products to Bargain Barn in 2009 and the sale of those
products to Bargain Barn in 2013 where there were not any sales of VAL-U PLUS
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Cancellation No. 92056545
products.” Thomaselli Test. at p. 64. See also Registrant’s Second Supplemental
Answers to Petitioner’s First Set of Interrogatories, Ans. 1 and 5.
In fact, although the VAL-U PLUS registration issued on April 25, 1989, the
record reflects that Respondent sold goods under the VAL-U PLUS mark twice to
only a single customer, Bargain Barn: on January 23, 2009 in connection with
bathroom tissue only and December, 2013 in connection with bathroom tissue and
paper towels. Thomaselli Test. at pp. 20-27, 36-37, 57-60; Exhs. 9-15, 23-24, 42-45.
Even including Bargain Barn’s subsequent retail sales of the goods under the VAL-
U PLUS mark in connection with bathroom tissue from February through June
2009, the break in sales for bathroom tissue is approximately four years and six
months and with the renewed sale occurring one year after the petition to cancel
was filed. Thomaselli Test. at pp. 27-29; Exhs. 16-20. With regard to paper towels,
the only evidence of sales is in 2013. The sales activity in 2013 consists of the order
placed by Bargain Barn for bath tissue and paper towels on July 24, 2013 and
shipped later in December 2013. Thomaselli Test. at pp. 36-37, 57-60; Exhs. 23-24,
42-45.
Respondent requests the Board to make an inference from the Bargain Barn
point of sale records that 9,031 units of the 10,240 units of VAL-U PLUS bath tissue
shipped to Bargain Barn in January, 2009, were sold by Bargain Barn “sometime
between June 30, 2009 and December 2013.” Respondent’s Br. at 6. However, when
asked specifically about how the sales reports of record were obtained, Ms.
Thomaselli testified that she talked to “the sales [representative] about this issue,
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Cancellation No. 92056545
about this trademark issue,” and that the representative “looked through his files,
and this is what they had.” Thomaselli Test. at p. 73. More importantly, despite Ms.
Thomaselli’s position as a “Regional Sales Manager” with product development
duties involving the reviewing of customer orders, configuring custom products
based on requests, for which she is then “responsible for getting the sign-off from
the CFO, from the Vice-president of Marketing, from the Plant Manager, [and from]
the process leaders who actually run the converting lines,” Thomaselli does not
know whether there were any other sales reports like Exhibits 16-20 from 2009 that
showed sales of the VAL-U PLUS mark in connection with bathroom tissue and
paper towels by Bargain Barn. Thomaselli Test. at pps. 11 and 73. That is, Ms.
Thomaselli did not ask Respondent’s sales person if he had any other reports in
2009 for Bargain Barn that reflected orders, whether placed or filled. “[The sales
representative] offered these up, and I assumed when he gave them to me that’s all
that he had or he would have given me whatever he had.” Thomaselli Test. at p. 73.
Based on this record, the reasonable inference is that no sales were made after June
2009, in particular in light of what appears to be a serious decline in sales from
March (634 units) through June (1 unit). Moreover, as discussed above, Ms.
Thomaselli does not have personal knowledge to testify as to the accuracy or truth
of the statements in these third-party reports.
In view thereof, a prima facie case of abandonment has been established and
the burden shifts to Respondent to establish that it had an intent to resume use
during the established three year period of nonuse.
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Cancellation No. 92056545
Respondent first argues that “the nature of the products at issue, and market
forces outside of Respondent’s control dictate the frequency of sales of VAL-U PLUS
goods. … Thus temporary and involuntary cessations in the use of the Mark, even
where those discontinuances may exceed the three-year period necessary to
establish a prima facie case of abandonment are excusable…” Respondent’s Br. at p.
10. Respondent points to the purchasing of its VAL-U PLUS products in bulk as an
economic necessity with respect to the VAL-U PLUS products, which “are not high-
end, luxury, or premium quality goods. Rather, VAL-U PLUS paper products are in
the value market where profit margins are slim.” Respondent’s Br. at p. 9.
Petitioner responds that, “[t]here is no expert opinion, documentary evidence,
or any market analysis to support [Respondent’s] naked assertion that the ‘nature
of the products at issue’ and ‘market forces outside of [its] control’ are responsible
for causing the extended period of non-use of the Mark.” Pet. Reply Br. at p. 5,
quoting Respondent’s Br. at p. 10.
Based on this record, Respondent has not established standard practice in
the bathroom tissue and paper towel industry as a whole, or with respect to any
conditions specific to Respondent, in particular. The record fails to make clear what
constitutes a “usual” market cycle included, such as, how long of a time period
equals a “usual” market cycle, “usual” market sales to Bargain Barn, patterns of
sales to Bargain Barn or other similarly situated consumers, documented
discussions about changes in sales patterns generally or changes that specifically
refer to Bargain Barn. Instead, the record reflects use of the mark for approximately
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Cancellation No. 92056545
a six-month period from January of 2009 to June of 2009, and one order for which
inventory was short and required substitution, near December 2013. In view
thereof, Respondent has not established excusable nonuse for this time period.
Respondent points to various activities it engaged in during the period of
nonuse to support a finding of an intent to resume use. First, Respondent’s seeking
and obtaining registrations for related “VAL-U” marks does not demonstrate an
intent to resume use of the “VAL-U PLUS” mark.3
Respondent next argues that it “continually maintained up to date ‘spec
sheets’ and ‘pricing analysis’ for VAL-U PLUS bath tissue and paper towels” to be
used by Respondent’s sales personnel in planning and contacting customers to sell
products during the years between 2009 and 2013. Respondent’s Br. at p. 14.
According to the Respondent, “[t]hose ‘spec sheets’ clearly evidence [Respondent’s]
intent to use the Mark during the period of alleged non-use.” Id.; Thomaselli Test.
at p. 92. Ms. Thomaselli testifies that there was not “ever any discussion at
[Respondent] regarding discontinuance of the VAL-U PLUS mark. Thomaselli Test.
at pp. 66-67. Further, Thomaselli specifically recalls discussing with Respondent’s
Chief Financial Officer, “which [trademarks] we should spend money to re-do the
art work. You know, which marks were viable. Which ones had a better chance of
getting into the market onto the shelves. And he specifically said we’d work on VAL-
U PLUS.” Thomaselli Test. at p. 84. However, Ms. Thomaselli does not recall what
3 The Board notes that the registrations for the marks ULTRA VAL-U (Reg. No. 2033061)
and ULTRA VAL-U (Reg. No. 2045166) were not cited as a bar to Petitioner’s VALU +
PLUS application. As such, their existence offers little probative value with respect to the
issues herein.
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Cancellation No. 92056545
year that conversation occurred. Thomaselli Test. at p. 84. Nevertheless, Ms.
Thomaselli states that she was present for the “internal communications regarding
the viability of Registrant’s intent to continue using the mark.” Thomaselli Test. at
pp. 82-83; Answer to Interrog. No. 2.
The examples of “spec sheets” show the new version of the mark and we do
not know from this record when the new version was created, so we do not know
when these “spec sheets” were developed or used. While Ms. Thomaselli testifies
that “spec sheets” for VAL-U PLUS were not deleted from their system, the general
testimony about how sales representatives leave “spec sheets” with prospective
customers, stands in contradiction to the clear evidence that in 20 plus years
Respondent has sold VAL-U PLUS to only one customer begging the question
whether VAL-U PLUS “spec sheets” have in fact been used by the sales
representatives.
Finally, the Respondent argues its business practices establish its intent to
resume use as the market allowed, noting that “although warehouse space was
scarce, at all times, it maintained VAL-U PLUS raw materials, including ‘poly-
wrap’ and shipping boxes known as, ‘knock-downs,’ on hand so that it could quickly
fulfill orders for VAL-U PLUS products.” Respondent’s Br. at p. 14. “Clearly, if
[Respondent] did not intend to resume use of its VAL-U PLUS mark, it could have
discarded or recycled those packaging items and freed up valuable warehouse space.
It did not.” Id.
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Cancellation No. 92056545
The Petitioner argues that Respondent’s retention of raw materials and
shipping boxes amounts to “warehousing marks,” essentially keeping product
materials “on the off chance that a customer may, at some unspecified point in the
future, place an order for products bearing the mark.” Petitioner’s Reply Br. at p. 8.
Respondent asserts that, “the nature of the goods at issue, and the market
conditions that dictate how those goods are shipped and sold, establish that a delay
of even three to four years between sales of VAL-U PLUS products is entirely
reasonable.” Respondent’s Br. at p. 12.
First, the record only includes stock reports dated July 24, 2013 showing the
product was on hand as of that date. In addition, the plastic packaging material
that was on hand as of that date, displays the VAL-U PLUS mark that was not in
use in 2008 or 2009. Thomaselli Test. Ex. 31. Furthermore, Ms. Thomaselli does not
know the date on which the new art work displayed thereon was developed.
Thomaselli Test. at pp. 76-78; Ex. 26, 32. Thus, there is no documentary evidence to
establish that such products or packaging material was on hand from June 2009-
June 2013. Put simply, the stock reports run on July 24, 2013 do not add to our
understanding of what was occurring between June 2009 and June 2013.
Second, maintaining sample plastic packaging material and raw materials
used to make bathroom tissues and paper towels is not sufficient to support a
finding of an intent to resume use of the mark, as the record does not indicate that
such materials were of use only with VAL-U PLUS products. In that such materials
were “raw” materials, it is reasonable to conclude that those materials could be used
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Cancellation No. 92056545
to make any of Respondent’s other bathroom tissue or paper towels. The record does
not indicate that the noted raw materials were of no use in making other paper
products.
In fact, the record makes clear that Respondent had the ability to substitute
goods bearing the VAL-U PLUS mark for other products shipped to consumers,
Bargain Barn in particular. The record shows that when Bargain Barn’s July, 2013
VAL-U PLUS order was short due to a shortfall in inventory; Respondent (with
approval from Bargain Barn) substituted a product called “DRY MOP,” because it
was “the same item.”4 Therefore, the goods were interchangeable. This evidence also
undercuts the probative value of the stock reports in that the report indicated 864
cases were in stock, but in fact only 593 cases were in stock. Compare Thomaselli
Test. Ex. 25 (stock report showing Y next to 864 cases of paper towels indicating
product is stocked) with Ex. 41 (email exchange indicating they only have 593 cases
in stock). In short, the Thomaselli testimony and accompanying exhibits are
insufficient to show an intent to resume use.
In view of the foregoing, we find that Respondent failed to rebut the prima
facie case of abandonment established by Petitioner. Respondent has not made use
of the mark on the items identified in the registration for a period of time lasting in
excess of three years, has not shown an intent to resume use of the mark during
4 The email dated December 19, 2013, 3:53 pm states as follows: Gary, Please read below.
You ordered 864 of the Value Plus towel, but we only have 93 cases. We have 202 cases of
Dr[sic] Mop towel which is the same item. I would like to add the 202 cases of item #108351
and ship 795 cases to come closer to filling up the truck….Is that OK with you?” Thomaselli
Test., Ex. 41, pg. 2.
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Cancellation No. 92056545
that time period and has therefore abandoned use of the mark for all of the goods in
Registration No. 1536352. Accordingly, pursuant to 15 U.S.C. §§ 1064 and 1127,
Registration No. 1536352 shall be cancelled in its entirety on the ground of
abandonment.
Decision: The petition for cancellation is granted on the ground of
abandonment. Registration No. 1536352 shall be cancelled in due course.
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