Cornaby's v. Carnet et al

MOTION for Partial Summary Judgment and Memorandum in Support on the Issue of Fraud Before the USPTO

D. UtahJuly 11, 2016

i 4840-3236-2290 Dax D. Anderson (UBN 10168) KIRTON McCONKIE 60 East South Temple, Suite 1800 Salt Lake City, Utah 84111 Phone: (801) 328-3600 Fax: (801) 321-4893 Email: danderson@kmclaw.com Attorney for Plaintiff Cornaby’s, LLC ______________________________________________________________________________ IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION CORNABY‟S, LLC, a Utah Limited Liability Company, Plaintiff, vs. CARNET, LLC, an Idaho Company and Carma Christensen, an individual, Defendants/Counterclaimants.. Civil Action No.: 2:14-cv-00462-JNP-DBP Judge Jill N. Parrish Magistrate Judge Dustin B. Pead PLAINTIFF CORNABY’S, LLC MOTION FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF FRAUD BEFORE THE USPTO Plaintiff Cornaby‟s, LLC (“Cornaby‟s”), by and through its undersigned counsel, and pursuant to Federal Rules of Civil Procedure 7(b) and 56(a), and DUCivRs 7-1 and 56-1, respectfully moves this Court for partial summary judgment in its favor on the issue of Defendants Carnet, LLC and Carma Christensen‟s (collectively, the “Carnet Parties”) Sixth Counterclaim of Fraud Before the United States Patent and Trademark Office (“USPTO”). Pursuant to Local Rule 7-1(a)(1), Cornaby‟s also provides herein a memorandum in support of its motion. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 1 of 21 ii 4840-3236-2290 PRECISE RELIEF SOUGHT AND SPECIFIC GROUNDS THEREFORE Pursuant to Local Rule 7-1(a)(1)(A), Cornaby‟s seeks summary adjudication on the Carnet Parties‟ claim that Cornaby‟s committed fraud before the USPTO. To prevail at trial, the Carnet Parties would need to prove each element with clear and convincing evidence. Discovery is now closed and the Carnet Parties cannot meet this burden. Cornaby‟s is therefore entitled to judgment as a matter of law in its favor on this issue. See FED. R. CIV. P. 56. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 2 of 21 iii 4840-3236-2290 TABLE OF CONTENTS Page(s) PRECISE RELIEF SOUGHT AND SPECIFIC GROUNDS THEREFORE ................................ ii INTRODUCTION ......................................................................................................................... vi STATEMENT OF ELEMENTS AND UNDISPUTED MATERIAL FACTS ............................ vii A. Elements of Fraud Before the USPTO .............................................................................. vii B. Statement of Undisputed Material Facts .......................................................................... viii ARGUMENT .................................................................................................................................. 1 A. Legal Standard of Review ................................................................................................... 1 B. Analysis............................................................................................................................... 2 1. There is no Clear and Convincing Evidence that Cornaby‟s‟ Declaration was False .... 3 a. No Legal Precedent Supports A Finding Of Fraud ..................................................... 3 b. Cornaby‟s Ownership Is Based On Undisputed Facts ................................................ 4 2. Cornaby‟s Believed That Its Declaration was True ........................................................ 7 3. Cornaby‟s Had No Intention to Deceive the USPTO ..................................................... 9 4. The USPTO Did Not Reasonably Rely on any Misrepresentation, and was Not Damaged ............................................................................................................................... 10 C. CONCLUSION ................................................................................................................. 11 Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 3 of 21 iv 4840-3236-2290 TABLE OF AUTHORITIES Cases Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ................................................................................................................ 1, 2 Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009) .................................................................................................. 2 Hana Financial, Inc. v. Hana Bank, 135 S. Ct. 907 (2015) .................................................................................................................. 4 Hornady Mfg. Co. v. Doubletap, Inc., 746 F.3d 995 (10th Cir. 2014) ............................................................................................. viii, 1 Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238 (10th Cir. 1990) .................................................................................................. 2 LD Kichler Co. v. Davoil, Inc., 192 F.3d 1349 (Fed. Cir. 1999) .................................................................................................. 4 Metro Traffic Control, Inc. v. Shadow Network, Inc., 104 F.3d 336 (Fed. Cir. 1997) .................................................................................................... 4 Petter Investments, Inc. v. Hydro Engineering, Inc., 2:14-CV-00045-DB, 2:11-CV-00139 (D. Utah January 4, 2016) ....................................... viii, 4 Petter Investments, Inc. v. Hydro Engineering, Inc., at *13. ........................................................ vii Quicksilver, Inc. v. Kymsta Corp., 466 F.3d 749 (9th Cir. 2006) .................................................................................................. 4, 8 San Juan Prods., Inc. v. San Juan Pools of Kansas, Inc., 849 F.2d 468 (10th Cir. 1988) ........... vii Stanfield v. Osborne Industries, Inc., 52 F.2d 867 (10th Cir. 1995) ............................................................................................. passim Tabor v. Hilti, Inc., 703 F.3d 1206 (10th Cir. 2013) .................................................................................................. 1 Turner v. Pub. Serv. Co. of Colo., 563 F.3d 1136 (10th Cir. 2009) .................................................................................................. 1 Universal Money Centers v. ATT, 22 F.3d 1527 (10th Cir. 1994) .................................................................................................... 1 Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 4 of 21 v 4840-3236-2290 Yocum v. Covington, 216 U.S.P.Q. 210 (T.T.A.B.1982) .............................................................................................. 8 Statutes 15 U.S.C. § 1051(a)(3)(D) ............................................................................................................ 10 15 U.S.C. § 1052 ........................................................................................................................... 10 38 C.F.R. § 2.33(B)(1) ................................................................................................................. 10 Other Authorities 6 McCarthy on Trademarks and Unfair Competition § 31:75 (4th Ed.) ......................................... 4 Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 5 of 21 vi 4840-3236-2290 INTRODUCTION Cornaby‟s owns US Trademark Registration No. 4,430,992 for ULTRA GEL. This registration entitles Cornaby‟s to statutory presumptions that Cornaby‟s mark is valid and Cornaby‟s is the owner of the mark. Cornaby‟s owner, Janet Cornaby Stocks, first used the ULTRA GEL trademark in January 1993 in connection with modified food starch. Ms. Stock‟s rights to the trademark were assigned to Cornaby‟s in 2005 and, on August 8, 2012, Cornaby‟s filed a trademark application for the ULTRA GEL trademark. The ULTRA GEL trademark registered on November 12, 2013 and Cornaby‟s has maintained it since that time. Carma Cornaby Christenson, Ms. Stock‟s sister and Carnet‟s owner, claims that Carnet owns the ULTRA GEL trademark. Ms. Christensen testified that she first used the mark in May of 1993, four months after Ms. Stocks‟ first use. Ms. Christensen filed an application for ULTRA GEL, which registered in 1994. However, Ms. Christensen‟s registration was later cancelled by the USPTO on January 15, 2005 due to her failure to maintain it. The Carnet Parties now seek to cancel Cornaby‟s ULTRA GEL registration, claiming the mark was obtained by fraud on the USPTO. Yet, there is no evidence, let alone clear and convincing evidence, to support their claim. It is undisputed that Ms. Stocks January 1993 date of first use precedes Ms. Christensen‟s or her company Carnet‟s first use of the ULTRA GEL mark by many months. The Carnet Parties seek to cancel Cornaby‟s registration using a tired and rejected theory of fraud on the USPTO based on executing the declaration while another entity in the marketplace is using the mark. However, there is no legal precedent to support such a theory. Moreover, Supreme Court precedent requires the Court to view the evidence through the clear and convincing standard which Carnet would bear at trial. The Carnet Parties cannot avoid summary judgment on the issue by merely showing a genuine issue of material fact sufficient for Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 6 of 21 vii 4840-3236-2290 a preponderance of the evidence standard. They must show a genuine issue of material fact sufficient for their clear and convincing evidence of fraud. This Carnet cannot do. Cornaby‟s brings this Motion to narrow the litigation by resolving the issue of whether there is any evidence that could be clear and convincing that Cornaby‟s defrauded the USPTO in filing its trademark application. The facts related to this issue are not subject to genuine dispute, and resolving these issues at this stage will narrow and expedite discovery, settlement negotiations, and (if necessary) trial, making better use of the resources of the parties, the Court, and the jury. STATEMENT OF ELEMENTS AND UNDISPUTED MATERIAL FACTS Pursuant to Local Rule 56-1(b)(2), Cornaby‟s provides the following Statement of Elements and Undisputed Material Facts. A. Elements of Fraud Before the USPTO The Carnet Parties claim that Cornaby‟s committed fraud before the USPTO. To prevail at trial, Carnet must prove with clear and convincing evidence each of the following elements: “(1) the false representation regarding a material fact; (2) [Cornaby‟s‟] knowledge or belief that the representation is false (scienter); (3) [Cornaby‟s‟] intention to induce action or refraining from action in reliance on the misrepresentation; (4) reasonable reliance on the misrepresentation; and (5) damages proximately resulting from such reliance.” San Juan Prods., Inc. v. San Juan Pools of Kansas, Inc., 849 F.2d 468 (10th Cir. 1988)), quoted in Stanfield v. Osborne Industries, Inc., 52 F.2d 867, 874 (10th Cir. 1995), and Petter Investments, Inc. v. Hydro Engineering, Inc., at *13. Cornaby‟s is entitled to summary judgment in its favor if it “points out a lack of [clear and convincing evidence] to support the [Carnet Parties‟] claim and [the Carnet Parties] cannot Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 7 of 21 viii 4840-3236-2290 identify specific facts to the contrary.” Petter Investments, Inc. v. Hydro Engineering, Inc., 2:14- CV-00045-DB, 2:11-CV-00139 (D. Utah January 4, 2016) (citing Hornady Mfg. Co. Inc. v. Doubletap, Inc., 746 F.3d 995, 1000-01 (10th Cir. 2014)); Applied Genetics v. First Affiliated Securities, 912 F.2d 1238, 1241, 1243 (10th Cir. 1990). B. Statement of Undisputed Material Facts Element One: The False Representation Regarding a Material Fact 1. On August 8, 2012, Cornaby‟s filed an application for the ULTRA GEL trademark in connection with “modified food starch” in International Class 30, citing its date of first use as January 1993. See File History for ULTRA GEL 4430992, attached as EXHIBIT 1; see also Excerpt of Deposition of David Cornaby (“Depo. of David Cornaby”) at 22-25, attached as EXHIBIT 2. 2. Approximately fifteen months later, on November 12, 2013, Cornaby‟s‟ ULTRA GEL trademark was registered. See File History for ULTRA GEL 4430992. 3. The ULTRA GEL trademark was created in the latter part of 1992. Excerpt of 30(b)(6) Deposition of Carnet, LLC (“Depo. of Carnet”) at 47-48, attached as EXHIBIT 3; Excerpt of Deposition of Janet Stocks (“Depo. of Janet Stocks”) at 11-12, attached as EXHIBIT 4. 4. At the beginning of January 1993, Ms. Stocks picked up the first bulk package of a modified food starch from Westco Products, Inc. (“Westco”). See Invoice from Westco Products, Inc., attached as EXHIBIT 5; Depo. of David Cornaby at 24-25; Excerpt of Deposition of Cornaby‟s (“Depo. of Cornaby‟s”) at 30-31, attached as EXHIBIT 6. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 8 of 21 ix 4840-3236-2290 5. Shortly after picking up the order from Westco, Ms. Stocks sold the modified food starch product under the name ULTRA GEL in January of 1993. Depo. of Janet Stocks at 12-13; Depo. of David Cornaby at 111; Depo. of Cornaby‟s at 30-31. 6. Ms. Christensen unequivocally testified that her date of first use of the ULTRA GEL mark was in May of 1993. Excerpt of Deposition of Carma Christensen (“Depo. of Carma Christensen”) at 50-54, attached as EXHIBIT 7; Depo. of Carnet at 21, 38, 88-89. 7. Ms. Christensen also testified that she had no recollection of any use of the ULTRA GEL mark before May of 1993. See Depo. of Carnet at 21. 8. Ms. Christensen testified that she was certain that her first use of the ULTRA GEL trademark was in May of 1993. See Depo. of Carma Christensen at 50-53 (“Q. That‟s my question. I want to clarify that. When did you first sell Ultra-Sperse M inventory? A. May of ‟93. Q. Okay. That was the very first time that you sold it? A. Uh-huh. Q. Are you sure about that? A. Uh-huh. … Q. Okay. So was that the first time you used the Ultra brand name? A. It was the first time it was used in commerce. Q. Okay. The first time you used it in commerce was in May of 1993? A. Uh-huh”); see also Depo. of Carnet at 21, 38, 43, 88-89. 9. However, upon reviewing her 1993 trademark application, she changed her testimony to January 1993 as her date of first use. Depo. of Carnet at 42-43, 73-74. 10. Later, Ms. Christensen again changed her testimony regarding her date of first use back to May of 1993. See Depo. of Carnet at 72 (“Q. Did you figure out your testimony after talking to your lawyer? A. Yes. We are going to go with May 5 th as being the date that we can document as first use.”). 11. In 1999, approximately one year after Ms. Stocks and Ms. Christensen stopped cooperating together to sell modified food starch, Ms. Stocks formed a company named J Carnet Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 9 of 21 x 4840-3236-2290 of Utah, and continued to use the ULTRA GEL trademark. See Depo. of Janet Stocks at 22-23; see also Depo. of Cornaby‟s at 24. 12. In 2005, Ms. Stocks renamed J Carnet of Utah to Cornaby‟s, LLC. See Depo. of Cornaby‟s at 26-27; see also Entity Details for Cornaby‟s LLC, attached as EXHIBIT 8. 13. Also in 2005, Ms. Stocks assigned all rights in the ULTRA GEL trademark to Cornaby‟s, LLC, which has used ULTRA GEL in connection with modified food starch continuously since that point. See Confirmatory Trademark Assignment from Janet Stocks to Cornaby‟s, LLC (“Ms. Stocks‟ TM Assignment”), attached as EXHIBIT 9. Element Two: Cornaby‟s‟ Knowledge or Belief That the Representation was False; and Element Three: Cornaby‟s‟ intention to induce action or refraining from action in reliance on the misrepresentation 14. As part of Cornaby‟s‟ application, and on its behalf, Cornaby‟s‟ then legal counsel signed a declaration which says in part, “to the best of his/her knowledge and belief no other person, firm, corporation, or association has the right to use the mark in commerce, either in identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, to cause mistake, or to deceive.” Application of ULTRA GEL, serial no. 85698759 at 6, exhibit 18 of Depo. Of David Cornaby, attached as EXHIBIT 10. 15. Mr. Cornaby believed that Ms. Stocks‟ prior use gave Cornaby‟s the right to register the ULTRA GEL trademark. See Depo. of Cornaby‟s at 39-40. 16. Mr. Cornaby testified that he believed his declaration was true, and did not intend to mislead the USPTO. See id. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 10 of 21 1 4840-3236-2290 ARGUMENT A. Legal Standard of Review Cornaby‟s seeks summary judgment on the Carnet Parties‟ Sixth cause of action for Fraud before the USPTO. See Defendants‟ Counterclaims at 14-16, docket no. 26, filed on September 22, 2014. Summary judgment is appropriate “if the pleadings and record demonstrate the absence of a genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Hornady Mfg. Co. v. Doubletap, Inc., 746 F.3d 995, 1001 (10th Cir. 2014) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); FED. R. CIV. P. 56(a). “A dispute over a material fact is genuine if a rational jury could find in favor of the nonmoving party on the evidence presented.” Tabor v. Hilti, Inc., 703 F.3d 1206, 1215 (10th Cir. 2013) (internal quotation marks omitted). “A fact is material if, under the governing law, it could have an effect on the outcome of the [claim]”. Id. In moving for summary judgment, Cornaby‟s “bears the burden of showing the absence of a genuine issue of material fact . . . .” Universal Money Centers v. ATT, 22 F.3d 1527, 1529 (10th Cir. 1994). However, “[the Carnet Parties] cannot avoid summary judgment merely by presenting a scintilla of evidence … ; [they] must proffer facts such that a reasonable jury could find in [its] favor.” Turner v. Pub. Serv. Co. of Colo., 563 F.3d 1136, 1142 (10th Cir. 2009) (citation and internal quotation marks omitted). The Carnet Parties bear fraud‟s enhanced clear and convincing evidentiary burden, a standard which must guide the Court‟s analysis. In Anderson v. Liberty Lobby, Inc., the Supreme Court held that any consideration of whether Rule 56 is satisfied must be done in light of the evidentiary burden applicable at trial. [I]n ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden. This conclusion is mandated by the nature of this determination. The question here is whether a jury could reasonably find either that the plaintiff proved his case by the quality and quantity of evidence required by the governing law or that he did not. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 11 of 21 2 4840-3236-2290 Anderson v. Liberty Lobby, Inc.,106 S.Ct. at 2513, 477 U.S. at 254-255 (emphasis added). Applying Liberty Lobby, the Tenth Circuit wrote, “[t]he Supreme Court has held that „the inquiry involved in a ruling on a motion for summary judgment… necessarily implicates the substantive evidentiary standard of proof that would apply at the trial on the merits.‟ The Court in Liberty Lobby specifically held that the clear and convincing standard of proof required in that libel action "should be taken into account in ruling on summary judgment motions." Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1243 (10th Cir. 1990) (citations omitted). A claim of fraud before the USPTO must also be proven with clear and convincing evidence. See Stanfield v. Osborne Industries, Inc., 52 F.3d 867, 874 (10th Cir. 1995) (“[The burden of proving fraudulent procurement of a registration is heavy. Any deliberate attempt to mislead the Patent Office must be established by clear and convincing evidence”); see also In re Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009) (“the very nature of the charge of fraud requires that it be proven „to the hilt‟ with clear and convincing evidence. There is no room for speculation, inference or surmise.”). Thus, if the Carnet Parties cannot point to evidence sufficient to create a genuine dispute under that heavy burden, then summary judgment must be entered, even if the evidence would create a factual dispute under a preponderance of the evidence standard. B. Analysis The Carnet Parties cannot succeed on their claim of fraud before the USPTO because there is no clear and convincing evidence of ANY of the required elements. First, the undisputed testimony shows Janet Stocks was the first to use the ULTRA GEL trademark in commerce, giving her priority and the senior right to the ULTRA GEL mark. Depo. of Janet Stocks at 12-13; Depo. of Carma Christensen at 52; Depo. of Carnet at 21. As successor-assignee to Ms. Stocks‟ Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 12 of 21 3 4840-3236-2290 rights in the mark, Cornaby‟s was the owner of the ULTRA GEL trademark at the time it filed the application. See Ms. Stocks‟ TM Assignment. Second, at the time of the filing, Cornaby‟s believed that Ms. Stocks‟ prior rights gave Cornaby‟s the trademark rights in the ULTRA GEL trademark, and thus Cornaby‟s believed its declaration to be true. Third, as Cornaby‟s believed that its representation was true, as evidenced by its earlier date of first use, it did not intend to deceive the USPTO, and there is no evidence to suggest otherwise. Finally, as no misrepresentation was made, the Carnet Parties cannot point to any evidence that the USPTO either relied on any misrepresentation, or was damaged thereby. As the undisputed evidence shows that the Carnet Parties cannot carry their burden of proof, summary judgment is appropriate in Cornaby‟s‟ favor. 1. There is no Clear and Convincing Evidence that Cornaby‟s‟ Declaration was False Carnet‟s fraud claim before the USPTO first requires that a false statement be made. Stanfield, at 874. Cornaby‟s‟ allegedly false statement reads, to the best of his/her knowledge and belief no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion. Application of ULTRA GEL, serial no. 85698759 at 6. a. No Legal Precedent Supports A Finding Of Fraud There is no legal precedent which recognizes Carnet‟s fraud claim. According to the leading scholar on trademark law Thomas McCarthy, “[t]he type of fraud allegation that has given rise to the largest number of cases is the charge that registrant signed the application oath Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 13 of 21 4 4840-3236-2290 knowing of use of the mark by others. … [S]uch charges of fraud and nondisclosure have uniformly been rejected.” 6 McCarthy on Trademarks and Unfair Competition § 31:75 (4th Ed.) (updated June 2016); see also, e.g., Stanfield, 52 F.3d 867; see also San Juan Products, Inc., 849 F.2d 468; and Petter Investments, Inc., 2:14-CV-00045, 2:11-CV-00139; and Quicksilver, Inc. v. Kymsta Corp., 466 F.3d 749 (9th Cir. 2006); and LD Kichler Co. v. Davoil, Inc., 192 F.3d 1349 (Fed. Cir. 1999); and Metro Traffic Control, Inc. v. Shadow Network, Inc., 104 F.3d 336 (Fed. Cir. 1997). Yet, this is the precise claim that the Carnet Parties raise here. Thus, the entire premise for Carnet‟s claim is rejected by the courts and lacks any legal support. b. Cornaby’s Statement Is True Because It Owns the ULTRA GEL trademark Trademark rights are determined by first use in commerce. Hana Financial, Inc. v. Hana Bank, 135 S. Ct. 907, 909 (2015). Thus, the first individual/entity to use the trademark in commerce is the proper owner. The undisputed evidence shows that Ms. Stocks was the first to use the ULTRA GEL trademark in commerce. The only testimony the Carnet Parties offer in support of their ownership position is inconsistent and contradictory. Ms. Stocks testified in her deposition that she first used the ULTRA GEL trademark in commerce in January of 1993. See Depo. of Janet Stocks at 12-13. This date of first use is corroborated by the packing receipt from Westco, showing Mr. Stocks picked up the modified food starch just before her claimed date of first use. See Invoice from Westco Products, Inc. Moreover, the Carnet Parties acknowledged the possibility of other earlier use aside from the Carnet Parties. See Depo. of Carnet at 21 (“Q. Does the company recall any use prior to receipt of labels bearing the Ultra Gel brand? Do you recall any use of the Ultra Gel mark prior to receiving the labels bearing the Ultra Gel brand? A. You mean it being sold? Q. Yes. A. If so, it was not under the company -- under the company umbrella.”) Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 14 of 21 5 4840-3236-2290 Ms. Christensen testified that her date of first use is May 1993 and that she does not recall using the ULTRA GEL trademark in commerce any time before May of 1993. Depo. of Carma Christensen at 50-53; Depo. of Carnet at 21, 38, 88-89. Because Ms. Stocks was the first to use the ULTRA GEL trademark, she held the rights to ULTRA GEL. All of Ms. Stocks‟ rights in the ULTRA GEL trademark were assigned to Cornaby‟s in 2005. See Ms. Stocks‟ TM Assignment. Cornaby‟s was entitled to register the ULTRA GEL trademark, which it did, because Ms. Stocks assigned the rights to Cornaby‟s. Based on this evidence that Cornaby‟s was the assignee of the senior user, Cornaby‟s had a factual basis to claim ownership in the ULTRA GEL trademark thus excluding fraud. The Carnet Parties‟ testimonies on ownership and priority are inconsistent and contradictory. Because “[a] genuine issue of material fact cannot be established by a party contradicting his own earlier statements,” this is fatal to the Carnet Parties‟ claim of fraud before the USPTO. Stanfield, 52 F.3d at 872 n.4. The Carnet Parties first give conflicting accounts of who they believe actually owned and owns the ULTRA GEL trademark. Specifically, Carnet alleges, “CORNABY [sic] knows … CARNET has, and has had at all times relevant, ownership of the instant mark.?? [sic].” Defendants‟ Counterclaims at 12-14 (emphasis added). Yet, in 1993, Ms. Christensen filed the first ULTRA GEL trademark application in her own name, and not the name of any company. See File History of Ultra Gel 1830485. Moreover, in her declaration, Ms. Christensen testified that she believes she is the owner, and that her company never had any ownership rights in the ULTRA GEL trademark until 2014. See Decl. of Carma Christensen at 2; see also Depo. of Carma Christensen at 157-58; see also Depo. of Carnet at 107-115. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 15 of 21 6 4840-3236-2290 Additionally, the Carnet Parties give inconsistent testimony on the date of first use. For example, when Ms. Christensen was initially questioned concerning her alleged date of first use, she testified that she first used the ULTRA GEL trademark in May of 1993. See Depo. of Carma Christensen at 50-53; see also Depo. of Carnet at 21, 38, 43, 88-89. However, after looking at her cancelled registration during the 30(b)(6) deposition and seeing the date of first use in January of 1993, Ms. Christensen backtracked and said that her first use was earlier than May. Depo. of Carnet at 42-43. Later, after taking a break to speak with her attorney, Ms. Christensen again changed her position, testifying that “[w]e are going to go with May 5 th as being the date that we can document as first use.” Depo. of Carnet at 72. The Carnet Parties also hold an inconsistent position with regard to the status of their “business.” They allege, “CORNABY [sic] knows that his [sic] presumed processor-in-interest [sic], Janet Stocks, a sister of Counterclaimant Carma Christensen, left CARNET in 1998, and also knows that CARNET continued its business unabated, including its continued use of the mark after the departure of Ms. Stocks.” The Carnet Parties‟ Counterclaims at 12-14. However, according to the Carnet Parties‟ own testimony, there was no legally recognized company before the Carnet Parties formed Carnet, LLC in 1998. Depo. of Carma Christensen at 89-90. Carnet did not “continue its business unabated,” because, until the separation in 1998, Ms. Christensen and Ms. Stocks had no formal business, but merely cooperated in a loose affiliation. See id. Still, regardless of whether Ms. Christensen was using the UTLRA GEL trademark personally or through Carnet, Ms. Stocks‟ use preceded the Carnet Parties‟ use. Neither Ms. Christensen nor Carnet owns or owned the ULTRA GEL trademark. Ms. Stocks owned the trademark until 2005, after which Cornaby‟s owned the mark as Ms. Stocks‟ assignee. The undisputed evidence shows that Ms. Stocks‟ used the ULTRA GEL trademark Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 16 of 21 7 4840-3236-2290 prior to the Carnet Parties‟ use, and that she assigned her rights to Cornaby‟s. In contrast, Carnet‟s testimony and pleadings show an inconsistent position on first use and ownership, key evidence in showing Cornaby‟s committed fraud when it signed the declaration. Accordingly, there is no clear and convincing evidence that Cornaby‟s did not own the rights in the ULTRA GEL mark at the time of its application, or that Cornaby‟s was not entitled to register the mark. The Carnet Parties have not offered any evidence to show first use of the trademark, let alone the clear and convincing evidence required. With no clear and convincing evidence to show Cornaby‟s‟ declaration was false, the Carnet Parties cannot meet their burden with respect to the first element. This alone warrants summary judgment in Cornaby‟s‟ favor on the issue of fraud before the USPTO. 2. Cornaby‟s Believed That Its Declaration was True To succeed in its claim of Fraud before the USPTO, the Carnet Parties would also need to show through clear and convincing evidence that Cornaby‟s actually believed that its Declaration was false at the time it submitted its application. See Stanfield, at 874 (“plaintiff has the burden of proving by clear and convincing evidence that [the opposing party] signed the oath knowing that it was false. There is no room for speculation, inference or surmise, and obviously, any doubt must be resolved against [the opposing party]”). Yet the undisputed evidence of record shows that Cornaby‟s is the owner of the ULTRA GEL mark, and that Mr. Cornaby believed that at the time of filing. The Carnet Parties provide no clear and convincing evidence that Cornaby‟s believed that any other “person, firm, corporation, or association [had] the right to use the mark in commerce.” See Trademark Application for Serial No. 85698759. Importantly, Cornaby‟s did not declare that no other person or entity was using the mark in commerce, only that no other person or entity Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 17 of 21 8 4840-3236-2290 had the right to use the mark in commerce. See id; see also Quicksilver, 466 F.3d 749, 755 (quoting Yocum v. Covington, 216 U.S.P.Q. 210, 216-17 (T.T.A.B.1982)) ("[T]he statement of an applicant that no other person `to the best of his knowledge' has the right to use the mark does not require the applicant to disclose those persons whom he may have heard are using the mark if he feels that the rights of such others are not superior to his."). This distinction is important. Cornaby‟s believed that it owned the rights to the trademark based on Ms. Stock‟s first use in commerce. Mr. Cornaby testified that at the time the application was filed Cornaby‟s was the only entity with rights to use the ULTRA GEL trademark in interstate commerce. Janet was the senior user. She had the senior rights. She used it first. Okay? After all these years, we found out that Carma, in fact, took the registration on her own, that there were some rights that Janet had that needed to be factored in; and those rights were made clear as we -- as we did this. Depo. of David Cornaby at 21-25, 111. Mr. Cornaby reiterated this position in the 30(b)(6) Deposition. A. It's Cornaby's understanding that first use was Janet's, and therefore, from that perspective, she would have superior rights to the trademark. Q. So, then, is it your testimony that Janet owned 100 percent of the Ultra Gel trademark rights? A. We believe that Janet was the first user, that she was also the first user in interstate commerce. So those two elements, I think, can be backed up by the facts. We -- we also believe that there was, at minimum, a mistake in the filing of the original Ultra Gel trademark application identifying Carma as the owner and first user of Ultra Gel. Depo. of Cornaby‟s at 30-31. Mr. Cornaby‟s testimony is consistent and unambiguous. Rather than show fraud, the evidence shows that Cornaby‟s actually believed its Declaration was true when it submitted its application. Indeed, the evidence shows Cornaby‟s belief was based on Ms. Stock‟s senior use of the ULTRA GEL mark. The Carnet Parties can provide no evidence to the contrary, especially no clear and Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 18 of 21 9 4840-3236-2290 convincing evidence. Accordingly, the Carnet Parties‟ cannot meet their clear and convincing burden with regard to this element. 3. Cornaby‟s Had No Intention to Deceive the USPTO Fraud before the USPTO also requires clear and convincing evidence that Cornaby‟s had the subjective intent to deceive the USPTO when it filed its declaration. Stanfield, 52 F.2d at 874. As with the other elements, “[t]here is no room for speculation, inference or surmise.” Id. Carnet can provide no evidence, let alone clear and convincing evidence, to suggest that Cornaby‟s had an intent to deceive the USPTO. In Stanfield v. Osborne Industries, Inc., the Tenth Circuit addressed a factually similar scenario. See id. at 874. There, one party alleged fraud when the accused party signed a declaration of exclusive rights when it knew the accusing party was also using the trademark. See id. The Court noted, however, that the accusing party “produced no evidence that [the accused party] knew the oath was false,” and the accused party testified that it “believed [it] had the right to register the trademarks.” Id. Affirming summary judgment in favor of the accused party, the Tenth Circuit concluded, “[w]ith no other evidence to contradict the defendants‟ statements, plaintiff has failed to establish the existence of an element essential to [its] case.” Id. Like the claimant in Stanfield, the Carnet Parties here have produced no evidence that Mr. Cornaby intended to mislead the USPTO. Additionally, like the accused party in Stanfield, Mr. Cornaby testified that Cornaby‟s believed it had the right to register the trademark. Depo. of David Cornaby at 21-25, 111. Cornaby‟s filed its application “to protect the rights of Janet to the trademark of Ultra Gel that she had worked with for many, many years.” Depo. of Cornaby‟s at 40. “[T]here was no intention to mislead anyone,” or “do anything other than to recognize that Janet had a bona fide interest, spanning many years, to the Ultra Gel trademark.” Id. at 39-40. Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 19 of 21 10 4840-3236-2290 Because there is no evidence that Cornaby‟s intended to deceive the USPTO, the Carnet Parties cannot carry their burden with regard to the third element. 4. There Was No Misrepresentation for the USPTO to Reasonably Rely on, and there was No Damage The Carnet Parties would also need to prove that the USPTO reasonably relied on the misrepresentation, and that the USPTO was damaged based on such reliance, in order to succeed in their claims. Stanfield, at 874. However, as the Carnet Parties cannot meet their burden with respect to the first three elements of the claim, they cannot prove either that the USPTO relied on, or was damaged by, a misrepresentation. The USPTO relies on each declaration to determine whether an applicant is entitled to registration. See 15 U.S.C. § 1051(a)(3)(D); 38 C.F.R. § 2.33(B)(1). However, as the evidence shows, Cornaby‟s‟ declaration was true, and the USPTO therefore relied on an accurate representation, not a misrepresentation. One of the USPTO‟s purposes is to “register[] trademarks based on the commerce clause of the Constitution (Article 1, Section 8, Clause 3). USPTO.gov, About Us, accessed on June 10, 2016, at http://www.uspto.gov/about-us, attached as EXHIBIT 11. Under the federal law, the ULTRA GEL trademark is eligible for protection. See 15 U.S.C. § 1052. Therefore, the USPTO was not damaged by its registration. The Carnet Parties cannot provide clear and convincing evidence of any of the elements required to succeed on their fraud claim. Instead, the evidence shows that Cornaby‟s was the owner of the ULTRA GEL trademark, and its declaration was true. There is no evidence to dispute Mr. Cornaby‟s testimony that he believed the declaration to be true and did not intend to deceive the USPTO. The evidence shows there was no misrepresentation that could have induced or damaged the USPTO. In light of the evidentiary burden the Carnet Parties would bear at trial, the Carnet Parties would need to produce clear and convincing evidence in order to create a Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 20 of 21 11 4840-3236-2290 genuine dispute as to the facts that form the basis of this Motion. Where they cannot do this, Cornaby‟s is entitled to summary judgment in its favor on the issue of fraud before the USPTO. C. CONCLUSION For the foregoing reasons, Cornaby‟s respectfully requests that the Court grant summary judgment in Cornaby‟s‟ favor. DATED this 15 th day of July, 2016. Respectfully submitted, KIRTON│McCONKIE By: /s/Dax Anderson Dax Anderson Attorneys for Plaintiff Cornaby’s, LLC Case 2:14-cv-00462-JNP-DBP Document 57 Filed 07/11/16 Page 21 of 21 Exhibit List 1. File History of ULTRAGEL 4430992 2. Excerpt of David Cornaby Deposition 3. Excerpt from Carnet 30(b)(6) Deposition 4. Excerpt from Janet Stocks Deposition 5. January Westco Invoice 6. Excerpt from Cornaby’s 30(b)(6) Deposition 7. Excerpt from Carma Christensen’s Deposition 8. Entity Details for Cornaby’s 9. Cornaby’s Trademark Assignment 10. Cornaby’s Trademark Application 11. About the USPTO Case 2:14-cv-00462-JNP-DBP Document 57-1 Filed 07/11/16 Page 1 of 1 4/22/2016 Trademark Status & Document Retrieval http://tsdr.uspto.gov/#caseNumber=85698759&caseType=SERIAL_NO&searchType=statusSearch 1/4 STATUS DOCUMENTS MAINTENANCE Back to Search Print On April 22, 2016 TSDR will update the XML schema from version ST-96 1_D3 to version ST-96 2.2.1. Consequently, 3rd party applications that utilize TSDR XML may not function as intended after that date. Therefore, the USPTO will make available the current XML schema at the following link: https://tsdrsec.uspto.gov/ts/cd/casestatus/SERIAL_OR_REG_NUMBER/v1/info.xml for a period of not less than 6 months. Any 3rd party applications that currently make calls to USPTO XML should be changed to point to that link. It is highly recommended that 3rd party applications be upgraded to utilize the USPTO API’s rather than the XML schema, which may change at any time rendering the 3rd party application inoperable. The link to the current API is https://tsdrapi.uspto.gov/ts/cd/casestatus/SERIAL OR_REG_NUMBER/info.xml . Questions may be directed to the TSDR Mailbox . Generated on: This page was generated by TSDR on 2016-04-22 13:50:39 EDT Mark: ULTRA GEL US Serial Number: 85698759 Application Filing Date: Aug. 08, 2012 US Registration Number: 4430992 Registration Date: Nov. 12, 2013 Register: Principal Mark Type: Trademark Status: A cancellation proceeding is pending at the Trademark Trial and Appeal Board. For further information, see TTABVUE on the Trademark Trial and Appeal Board web page. Status Date: Apr. 14, 2014 Publication Date: Aug. 27, 2013 Mark Information Mark Literal Elements: ULTRA GEL Standard Character Claim: Yes. The mark consists of standard characters without claim to any particular font style, size, or color. Mark Drawing Type: 4 - STANDARD CHARACTER MARK Case 2:14-cv-00462-JNP-DBP Document 57-2 Filed 07/11/16 Page 1 of 4 4/22/2016 Trademark Status & Document Retrieval http://tsdr.uspto.gov/#caseNumber=85698759&caseType=SERIAL_NO&searchType=statusSearch 2/4 Goods and Services Basis Information (Case Level) Current Owner(s) Information Disclaimer: "GEL" Note: The following symbols indicate that the registrant/owner has amended the goods/services: Brackets [..] indicate deleted goods/services; Double parenthesis ((..)) identify any goods/services not claimed in a Section 15 affidavit of incontestability; and Asterisks *..* identify additional (new) wording in the goods/services. For: Modified food starch International Class(es): 030 - Primary Class U.S Class(es): 046 Class Status: ACTIVE Basis: 1(a) First Use: Jan. 05, 1993 Use in Commerce: Jan. 05, 1993 Filed Use: Yes Currently Use: Yes Amended Use: No Filed ITU: No Currently ITU: No Amended ITU: No Filed 44D: No Currently 44D: No Amended 44D: No Filed 44E: No Currently 44E: No Amended 44E: No Filed 66A: No Currently 66A: No Filed No Basis: No Currently No Basis: No Owner Name: Cornaby's LLC Owner Address: 876 West 1300 North Mapleton, UTAH UNITED STATES 84664 Legal Entity Type: LIMITED LIABILITY COMPANY State or Country Where Organized: UTAH Case 2:14-cv-00462-JNP-DBP Document 57-2 Filed 07/11/16 Page 2 of 4 4/22/2016 Trademark Status & Document Retrieval http://tsdr.uspto.gov/#caseNumber=85698759&caseType=SERIAL_NO&searchType=statusSearch 3/4 Attorney/Correspondence Information Prosecution History Attorney of Record Attorney Name: Scott Raevsky Docket Number: CRNBY.003T Attorney Primary Email Address: efiling@knobbe.com Attorney Email Authorized: Yes Correspondent Correspondent Name/Address: CHRISTOPHER SHIPLETT RANDOLPH LAW PLLC PO BOX 50752 ARLINGTON, VIRGINIA UNITED STATES 22205 Phone: 949-760-0404 Fax: 949-760-9502 Correspondent e-mail: efiling@knobbe.com Correspondent e-mail Authorized: Yes Domestic Representative - Not Found Date Description Proceeding Number Apr. 14, 2014 CANCELLATION INSTITUTED NO. 999999 59022 Nov. 12, 2013 REGISTERED-PRINCIPAL REGISTER Aug. 27, 2013 OFFICIAL GAZETTE PUBLICATION CONFIRMATION E-MAILED Aug. 27, 2013 PUBLISHED FOR OPPOSITION Aug. 07, 2013 NOTIFICATION OF NOTICE OF PUBLICATION E-MAILED Jul. 24, 2013 LAW OFFICE PUBLICATION REVIEW COMPLETED 68552 Jul. 23, 2013 ASSIGNED TO LIE 68552 Jul. 02, 2013 APPROVED FOR PUB - PRINCIPAL REGISTER Jun. 01, 2013 TEAS/EMAIL CORRESPONDENCE ENTERED 88889 May 31, 2013 CORRESPONDENCE RECEIVED IN LAW OFFICE 88889 May 31, 2013 TEAS RESPONSE TO OFFICE ACTION RECEIVED Case 2:14-cv-00462-JNP-DBP Document 57-2 Filed 07/11/16 Page 3 of 4 4/22/2016 Trademark Status & Document Retrieval http://tsdr.uspto.gov/#caseNumber=85698759&caseType=SERIAL_NO&searchType=statusSearch 4/4 TM Staff and Location Information Assignment Abstract Of Title Information - Click to Load Dec. 05, 2012 NOTIFICATION OF NON-FINAL ACTION E-MAILED 6325 Dec. 05, 2012 NON-FINAL ACTION E-MAILED 6325 Dec. 05, 2012 NON-FINAL ACTION WRITTEN 73370 Dec. 05, 2012 ASSIGNED TO EXAMINER 73370 Aug. 16, 2012 NEW APPLICATION OFFICE SUPPLIED DATA ENTERED IN TRAM Aug. 11, 2012 NEW APPLICATION ENTERED IN TRAM TM Staff Information - None File Location Current Location: PUBLICATION AND ISSUE SECTION Date in Location: Nov. 12, 2013 Proceedings - Click to Load Case 2:14-cv-00462-JNP-DBP Document 57-2 Filed 07/11/16 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION CORNABY'S, LLC, Plaintiff and Counter-defendant, vs. CARNET, LLC and CARMA CHRISTENSEN, Defendants and Counter-claimants. _________________________ CARMA CHRISTENSEN, Third-Party Plaintiff, vs. DAVID CORNABY, an individual, Third-Party Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Deposition of: DAVID CORNABY Civil Action No. 2:14-cv-00462-RJS March 14, 2016 * 8:52 a.m. Location: Kirton & McConkie 2600 West Executive Parkway, Suite 400 Lehi, Utah Reporter: Susette M. Snider, CSR, RPR, CRR Notary Public in and for the State of Utah Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 1 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 2 A P P E A R A N C E S FOR THE PLAINTIFF, COUNTER-DEFENDANT AND THIRD-PARTY DEFENDANT: KIRTON & MCCONKIE Jonathon A. Schlegelmilch Attorney at Law 60 East South Temple, Suite 400 Salt Lake City, Utah 84111 Tel: 801.328.3600 Fax: 801.321.4893 jschlegelmilch@kmclaw.com FOR THE DEFENDANTS, COUNTERCLAIMANTS AND THIRD-PARTY PLAINTIFF: HUNTSMAN LAW GROUP, PLLC Robert A. Huntsman Stephanie Christensen Attorneys at Law 10400 West Overland, No. 174 Boise, Idaho 83709 Tel: 208.860.4379 bobh@huntsmanlg.com ALSO PRESENT: Carma Christensen Emory Christensen Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 2 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 3 I N D E X DAVID CORNABY: PAGE Examination by Mr. Huntsman................... 4 E X H I B I T S NUMBER DESCRIPTION PAGE 1 Amended Notice of Deposition of David .... Cornaby 4 2 March 17, 2014 email from David Cornaby .. to Carma 10 3 "Exhibit 1"............................... 47 8 June 29, 2993 letter from Paul F. Horton . to Carma Christensen, attachments 19 16 Screen shot of 37 CFR 11.301, ............ Meritorious claims ad contentions 105 18 Trademark/Service Mark Application, ...... Principal Register, Serial Number: 85698759 20 Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 3 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 21 Q. Okay. But I'm just trying to tell you that we're only going to talk about the first page, so if you'd limit your review to the first page, or first two pages, that would be helpful. (The witness reviewed the document.) (A discussion was held off the record.) THE WITNESS: Okay. Q. (By Mr. Huntsman) All right. So I'd represent to you that this document is a record of a trademark application from the United States Patent, Trademark Office, trademark records. Did Cornaby's, LLC, file a trademark application for the mark Ultra Gel? A. Yes. Q. Does this appear on its face to be an accurate representation of the application, as far as you know? A. Yes, as far as I know. Q. Okay. Did you have any personal involvement in having that application prepared? A. Yes. Q. Okay. As you'll note, down towards the bottom there's a line that says "First Use Anywhere Date," "First Use in Commerce Date." A. Um-hum (affirmative). Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 4 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 22 Q. Can you read for the record what it says in those two boxes? A. Okay, it says: First Use Anywhere Date at least as early as 1/5/1993; First use in commerce date at least as early as 1/5/1993. Q. And my question for you is can you tell me about the date of 1/5/1993 came from? A. Yes. There was a previous Ultra Gel trademark that -- that was -- that was applied for when Carma Christensen and Janet Stocks were in this partnership, and the -- we relied on Janet's trademark rights to come up with this same date as existed in the earlier application. Q. Two questions: So is it your testimony that you at least copied in part the trademark application of Carma in preparing this application? MR. SCHLEGELMILCH: Objection. Mischaracterization. THE WITNESS: I -- I don't know whether "copied" would be the right word. I would say that the basis for Ultra Gel was the same basis as existed for the original Ultra Gel application in that, you know, both parties were working as a partnership. Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 5 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 23 And Janet had used the Ultra Gel at least as early as Carma had, and therefore, the date as early as 1/5 seemed appropriate. Q. (By Mr. Huntsman) Okay. The date this was filed, did you have any reason to believe that date was inaccurate? A. Not at the time that this was filed. If I would have thought that it was accurate [sic], I wouldn't have filed that it way. Q. All right. So as of today, do you have any reason to believe that date is inaccurate? A. Given the documents that -- that have been produced, I believe that 1/5 is a dubious date. I think it would be after that by a few days. Q. So to your opinion, as of today -- or your testimony as of today is you believe that the first use of date -- the first use date is close to that date, within a few days? Is that what I heard you say? A. That is correct. Q. But not exactly that date? A. That is correct. Q. Okay. Can you tell me what transpired between the day you filed that and today that caused you to change your opinion? Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 6 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 24 A. As I look at the documents that have been produced, only a small sample of Ultra Gel was available to either of Carma or Janet prior to the 8th of January. So on the 8th of January, Janet picked up 50 pounds of Ultra Gel, and that was the first product that was available in any quantity that could be used to -- for sales, both for interstate sales or for first use. And so given the documents, I believe that as early as 1/8 is a more appropriate first use anywhere, and sometime in January would be the first use -- well, no. That would be -- either of those would -- would be -- would be the 8th because that was the first time it was available. Q. Okay. Did you just testify that you think the partnership was the first entity to use -- A. No. Q. -- the mark? A. No. Q. Okay. What is your testimony? What entity or person was the first to use the mark? A. Janet Stocks. Q. Okay. And what do you base that belief on? A. The -- the documents say that Janet picked Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 7 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 25 up 50 pounds of starch from Westco. She immediately began to use that in her training and sold it to people that were -- that she was training and teaching at that point in time. So my understanding, looking at the documents, is that Carma's first availability was not until at least a month later. So my understanding right now is the first use anywhere and the first use in commerce both were Janet's and that Carma did not have availability of any product for at least a month after Janet started to -- to sell the Ultra Gel. Q. Also -- I'm going to talk about the documents reviewed. Were there any documents other than the ones that have been disclosed that you relied on -- A. No. Q. -- to form that opinion? Did you review any documents from your parents regarding the use of the Ultra Gel trademark? A. To -- to prepare for this deposition? Is that what you're -- Q. To determine the first usage of the Ultra Gel mark. A. No. Q. Did your parents have a computer that Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 8 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 111 were not discussed. So the use of the mark and how they were using it and how that falls into rights, I don't know. Q. Don't you think the tribunal would have taken a second look at this if they knew there was a competing user for the mark? MR. SCHLEGELMILCH: Objection. Calls for speculation. THE WITNESS: I -- I don't know how the USPTO works -- or how the trademark section works. I have some idea about the patent; I don't know much about the trademark side. Q. (By Mr. Huntsman) So is it fair to say you're somewhat punting this to your legal counsel? You're saying that was Scott's problem, not yours? A. I think that there's this whole thing -- if you take the long view, okay, Janet was the senior user. She had the senior rights. She used it first. Okay? After all these years, we found out that Carma, in fact, took the registration on her own, that there were some rights that Janet had that needed to be factored in; and those rights were made clear as we -- as we did this. Now, as far as punting to this or that, I don't know how to answer that question. I don't Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 9 of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 David Cornaby * March 14, 2016 CITICOURT, LLC 801.532.3441 112 think there were any footballs in the -- in the room to punt. MR. HUNTSMAN: Okay. I propose to take a break. We have Janet scheduled at one, so I'm just trying to figure out how we want to proceed. If we just go by the schedule, we'll just pick up with Janet at one. (Discussion held off the record.) Q. (By Mr. Huntsman) So the question we still want to clarify has to do with these computers at your parents' house. And I have a problem because these guys are all familiar with the computers, and I'm not. Apparently there's more than one. Apparently you had a personal computer, and then there was one that was maintained by your mom and dad. Does that sound right? A. That's correct. There have been several that they've maintained. Some of them are still around; some of them are not. Q. Okay. The last one they had, Carma described, was a black computer. Would that -- do you know what she's talking about? A. There was a black computer. That one -- that one -- I don't know where -- where that one is. Case 2:14-cv-00462-JNP-DBP Document 57-3 Filed 07/11/16 Page 10 of 10 www.depo.com Atkinson-Baker Court Reporters 1 1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE DISTRICT OF UTAH 3 4 CORNABY'S, LLC, a Utah Limited ) Liability Company, ) 5 ) Plaintiff, ) 6 ) vs. ) Civil Action No. 7 ) 2:14-cv-00462-JNP-DBP CARNET, LLC, an Idaho Company, ) 8 and Carma Christensen, an ) individual, ) 9 ) Defendants/Counterclaimants. ) 10 _________________________________) 11 12 13 14 30(b)(6) DEPOSITION OF CARNET, LLC, 15 BY AND THROUGH CARMA CHRISTENSEN 16 March 10, 2016 17 Boise, Idaho 18 19 20 21 22 ATKINSON-BAKER, INC. COURT REPORTERS 23 (800) 288-3376 www.depo.com 24 FILE NO.: AA02A7A Reported by: 25 Andrea J. Couch, CSR #716, RDR, CRR, CBC Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 1 of 33 www.depo.com Atkinson-Baker Court Reporters 2 1 30(b)(6) DEPOSITION OF CARNET, LLC 2 BY AND THROUGH CARMA CHRISTENSEN 3 4 BE IT REMEMBERED that the 30(b)(6) deposition of 5 CARNET, LLC, was taken by the Plaintiff at the law 6 offices of Huntsman Law Group, located at 2854 South 7 Featherly Way, Boise, Idaho, before Associated Reporting 8 & Video, Andrea J. Couch, Court Reporter and Notary 9 Public in and for the County of Ada, State of Idaho, on 10 Thursday, the 10th day of March, 2016, commencing at the 11 hour of 9:00 a.m. in the above-entitled matter. 12 13 14 APPEARANCES: 15 For the Plaintiff: KIRTON McCONKIE 16 By: Dax D. Anderson, Esq. Jonathon Schlegelmilch, Esq. 17 50 East South Temple, Suite 1800 Salt Lake City, Utah 84111 18 Telephone: (801) 328-3600 danderson@kmclaw.com 19 jonathons@kmclaw.com 20 For the Defendants: HUNTSMAN LAW GROUP By: Robert A. Huntsman, Esq. 21 10400 West Overland, Suite 174 Boise, Idaho 83709 22 Telephone: (208) 860-4379 Facsimile: (208) 343-0181 23 bobH@huntsmanlg.com 24 Also Present: Stephanie Christensen David Cornaby 25 Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 2 of 33 www.depo.com Atkinson-Baker Court Reporters 3 1 I N D E X 2 E X A M I N A T I O N 3 CARMA CHRISTENSEN PAGE 4 5 By: Mr. Anderson.............................4 6 E X H I B I T S 7 NO. 8 8. Westco Invoice No. 5-18-575................27 Carma000419 (1 page) 9 9. Amended Notice of 30(b)(6) Deposition.......4 10 of Carnet, LLC (8 pages) 11 10. Defendants' Answer and Counterclaims......33 (76 pages) 12 11. National Starch and Chemical Company......51 13 Correspondence, Carma000074-Carma000081 (8 pages) 14 12. 1993 Idaho Sales..........................78 15 (7 pages) 16 13. 1993 Utah Sales...........................78 (3 pages) 17 14. Copy of Receipt No. 5985..................91 18 (1 page) 19 15. Defendants' Answer to First Amended......141 Complaint (21 pages) 20 16. Carnet, LLC, Profit and Loss.............160 21 Carma009875-Carma009901 (27 pages) 22 17. Advertising..............................170 Carma000001-Carma000016 (16 pages) 23 24 25 Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 3 of 33 www.depo.com Atkinson-Baker Court Reporters 20 1 night. 2 MR. HUNTSMAN: That was off the record. 3 We haven't formally objected. I mean, 4 it's a matter of record. 5 MR. ANDERSON: But before last night, we 6 didn't receive any objections to lack of 7 understanding or anything else about this 30(b)(6)? 8 MR. HUNTSMAN: That's correct. 9 MR. ANDERSON: That's correct? 10 Okay. Thank you. 11 Q. (BY MR. ANDERSON) Okay. Yesterday, we 12 talked, obviously, to you, but as -- as an 13 individual. And I want to get the company's take 14 on some of the same topics. 15 So there's going to be some overlap and 16 repetition with what we talked about yesterday and 17 just confirm that those answers are consistent 18 between you and the company. 19 So let's start with the date of first 20 use. 21 Do you recall yesterday how you 22 testified -- or what date you testified was the 23 date of first use? 24 A. I don't recall giving a specific date. 25 Q. Do you remember giving a month? Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 4 of 33 www.depo.com Atkinson-Baker Court Reporters 21 1 A. I remember giving the month of May. 2 Q. The month of May? 3 Is it the company's position that the 4 date of first use for the Ultra Gel trademark was 5 in May of 1993? 6 A. Yes. 7 Q. And is the company aware of any prior 8 use of the mark before May of 1993? 9 A. No. 10 Q. Does the company recall any use prior to 11 receipt of labels bearing the Ultra Gel brand? 12 Do you recall any use of the Ultra Gel 13 mark prior to receiving the labels bearing the 14 Ultra Gel brand? 15 A. You mean it being sold? 16 Q. Yes. 17 A. If so, it was not under the company -- 18 under the company umbrella. 19 Q. Okay. So the company only sold 20 Ultra Gel product if it bore the formal label with 21 "Ultra Gel" on it? 22 A. I would have to look at the date of the 23 receipt of the labels, but that's -- that is -- 24 that's my -- 25 I mean, that's my impression. Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 5 of 33 www.depo.com Atkinson-Baker Court Reporters 22 1 Q. Okay. Can you identify for me the 2 earliest -- 3 And let me go a different direction 4 first. 5 To ascertain the date of first use, what 6 documents would you look at? 7 A. I've got the invoices. 8 Q. Okay. So it would be invoices? 9 Are there any other documents that 10 you're aware of that would help you know the date 11 of first use? 12 A. No, because I have every invoice from 13 1993. So if something was sold before that, it was 14 sold -- it was sold without my knowledge and 15 outside the -- outside Carnet. 16 Q. Okay. But for what Carnet knows about, 17 it would just look at the invoices? That's how you 18 would determine the earliest date of first use? 19 A. Yes. 20 Q. Okay. Can you show me the invoice for 21 the earliest one that you can identify? 22 A. Not easily. It was provided to you. 23 Q. So "not easily," what does that mean? 24 You can't -- 25 Can you look it up on your computer? Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 6 of 33 www.depo.com Atkinson-Baker Court Reporters 38 1 Ultra-Sperse M to sell. 2 A. Okay. 3 Q. Does that make sense? 4 A. Uh-huh. 5 Q. Okay. But in any event, even if you had 6 product back in, say, September of 1992, you were 7 not using the Ultra Gel mark in connection with the 8 modified food starch in that time frame? 9 A. Correct. 10 Q. Correct? 11 I'm sorry? 12 A. I said, "Correct." 13 Q. And the first date you would have used 14 it was in May of 1993. 15 Is that correct? 16 A. Yes. 17 Q. Okay. 18 (Deposition Exhibit No. 10 was marked.) 19 Q. (BY MR. ANDERSON) Let the record show 20 that you're looking through Exhibit 10, correct? 21 A. Uh-huh. 22 Okay. 23 Q. Have you had a chance to look at 24 Exhibit 10? Not read it, but just kind of skim 25 through it? Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 7 of 33 www.depo.com Atkinson-Baker Court Reporters 39 1 A. I have skimmed through it. 2 Q. And do you recognize Exhibit 10? 3 A. I recognize the first part of it. I do 4 not know why there are certain invoices in -- 5 Oh, I do know why. 6 Maybe I -- 7 Maybe I'm not sure why. 8 Q. What were you thinking? 9 A. I thought they might represent different 10 states, but that does not seem to be the state -- 11 the case. Maybe it is. I don't know. 12 I don't know. 13 Q. Okay. But you recognize Exhibit 10? 14 A. Yes. 15 Q. Okay. And what is Exhibit 10? 16 A. It is the defendants' answer and 17 counterclaim. 18 Q. So this is the pleadings that you filed, 19 your company and Carma Christensen individually 20 filed in response to the Cornaby's lawsuit? 21 A. Correct. 22 Q. Okay. There's two parts to this. 23 There's the first part, which is the brief. Not 24 the brief, I guess. The actual pleading. And then 25 there's exhibits that are attached to the pleading, Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 8 of 33 www.depo.com Atkinson-Baker Court Reporters 40 1 and they are paginated separately. The first is 2 21 pages, and the second is 51 pages. 3 Can you turn to the page 11 of 51 in the 4 back, in the second part. 5 Does that make sense? 6 A. Yes. 7 Q. Okay. 8 MR. HUNTSMAN: If I may interrupt, would it 9 be helpful if I just described the structure of 10 this or if I could, alternatively, take a break and 11 I could refresh Carma's memory? 12 MR. ANDERSON: No. We'll go through it. 13 MR. HUNTSMAN: Okay. 14 Q. (BY MR. ANDERSON) So if you look on 15 this -- 16 Do you know what this document is? 17 A. Well, it's from the USPTO. 18 Q. So this is the official record at the 19 USPTO for a trademark application? 20 A. Right. 21 Q. Do you recognize what mark this is? 22 A. It is the Ultra Gel mark. 23 Q. Do you know whose registration or 24 application this was? 25 A. It was mine. Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 9 of 33 www.depo.com Atkinson-Baker Court Reporters 41 1 Q. Okay. So it says Carma Christensen is 2 the applicant, right? 3 A. Uh-huh. 4 Q. Okay. And this is Exhibit B to the 5 answer and counterclaims. 6 This is actually part of the petition to 7 cancel -- 8 A. Right. 9 Q. -- when you prepared that. 10 On the third -- I guess the second line, 11 it says, "Word Mark: Ultra Gel." 12 Do you see that? 13 A. Uh-huh. 14 Q. The second line down, what does that 15 say. "Goods and Services"? 16 A. Uh-huh. 17 Q. Do you see that? 18 A. Right. 19 Q. And then the first thing it says is -- 20 A. Cancelled. 21 Q. And then it says, "IC 030." 22 Do you know what that means? 23 A. No. 24 Q. It means International Class 30. And 25 then there's some other identifying information. Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 10 of 33 www.depo.com Atkinson-Baker Court Reporters 42 1 And then it says, "G & S." 2 What are the goods and services that 3 this was applied for? 4 A. Modified food starch. 5 Q. Which is the Ultra-Sperse M that we've 6 been talking about? 7 A. Uh-huh. 8 Q. And then it says, "First Use." 9 Can you tell me what date that says? 10 A. 19930105. 11 Q. And do you know how to read that? 12 A. I'm guessing it's the year of 1993 and 13 the date of 1/05. 14 Q. Of January 5th, correct? 15 A. Uh-huh. 16 Q. And then it says, "First Use in 17 Commerce." 18 Can you read the date that you claimed 19 to -- 20 A. It says 1993, and it's January 5th. 21 Q. January 5th, 1993, correct? 22 A. Uh-huh. 23 Q. Okay. Can you explain to me why there's 24 a discrepancy between this application and your 25 testimony earlier? Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 11 of 33 www.depo.com Atkinson-Baker Court Reporters 43 1 Your date of first use was in May of 2 1993. 3 A. It's the first invoice I have. So 4 obviously, there must have been use before that. 5 There was a question in our minds as to 6 what constituted commercial use, so it may have 7 been that in conversing with the attorney, that 8 there was clarification there that -- that I was 9 not aware of. 10 Q. Okay. But would this change your 11 testimony then today that your date of first use 12 was different? 13 A. I would trust what I wrote in 1993 14 better than what I have from documents now. 15 Q. Okay. Do you have -- 16 I mean, if you wanted to go back and try 17 and find something that supported this date of 18 first use, how would you get there? What documents 19 would you look at? 20 A. I do not have any other invoices. And 21 that's what -- what would have dictated that. 22 Q. Okay. So you have no way to support -- 23 as you sit here today, you have no way to support a 24 January 5th, 1993, date of first use -- 25 A. Well -- Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 12 of 33 www.depo.com Atkinson-Baker Court Reporters 44 1 Q. -- other than this document here? 2 A. Correct. 3 Q. Okay. 4 A. But since I filled out that document, I 5 must have had a reason for it. 6 Q. Okay. That's -- 7 I understand that. But I'm trying to 8 see what evidence you could rely on other than this 9 document -- 10 A. Uh-huh. 11 Q. -- to show that. 12 A. Uh-huh. 13 Q. And do you have any other documents that 14 you could look to? 15 A. I could go back in the 1992 stuff. It 16 wasn't -- it -- it wasn't in the business stuff. 17 There might be something in my personal stuff in 18 1992. 19 Q. Okay. And you don't have any 20 recollection of using it prior to May of 1993? 21 A. I don't have any documentation of it. I 22 do have a document -- 23 The first documentation is -- is -- of 24 it being used under that name was in May of 1993. 25 Q. Okay. Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 13 of 33 www.depo.com Atkinson-Baker Court Reporters 45 1 A. But it's -- 2 If I said I used it earlier than that, I 3 must have used it earlier than that in some way. 4 Q. Okay. Do you think that there's a -- 5 that you were correlating this date with the Westco 6 shipping? 7 A. Absolutely not. 8 Q. Okay. 9 A. There would be no reason to do that. 10 Q. Okay. 11 A. Because it says, "First Use in 12 Commerce," and I'm sure the attorney would have 13 clarified that with me. 14 Q. Okay. So this isn't based on anything 15 with Westco. This is just -- 16 A. Heavens no. 17 Q. Okay. So do you remember the 18 conversation you had with your attorney back then? 19 We talked about it yesterday. 20 I guess, is there anything new that -- 21 After having seen this, do you recall 22 anything different than what you testified to 23 yesterday? 24 A. No, no. I'm certain he would have gone 25 through those things, and we would have had a Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 14 of 33 www.depo.com Atkinson-Baker Court Reporters 46 1 reason for what we said. 2 Q. Okay. But you wouldn't ever try and go 3 earlier than this date, would you? 4 A. You know what? I know -- 5 I'm betting that I was still working as 6 an individual at that point because Janet had not 7 joined the company. 8 So if there's something, it would be my 9 personal things. 10 Q. I'm not following what you're saying. 11 If you made -- 12 If you received the product, it would 13 have been as an individual. So you're talking 14 about in September -- between September and 15 January, September '92 to January '93, you were 16 working as an individual. Janet hadn't joined. 17 So if there had been some use, it would 18 have been through you as an individual? 19 A. Uh-huh. 20 Q. Okay. Do you think that there was 21 any -- 22 But you don't have any evidence to show 23 that use, do you? 24 A. I don't have any in my Carnet file, but 25 like I say, I could go back to my personal file and Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 15 of 33 www.depo.com Atkinson-Baker Court Reporters 47 1 I -- there's -- and look at that because I -- I 2 didn't look at that. 3 Q. Okay. Do you recall -- 4 And we talked about this yesterday, so 5 it kind of raises this issue again. 6 When did you come up with the Ultra Gel 7 name? 8 A. I don't know. 9 Q. Do you have any recollection? 10 You and your sister were on the phone 11 talking to each other. Was it in September? Was 12 it in the winter? Was it in -- 13 Obviously, I guess, it would have been 14 by January, so it would have been prior to January. 15 A. Right. I -- 16 Q. That would be your testimony? I don't 17 want to testify on your behalf. 18 You'd say at least on January 5th, you'd 19 come up with the name "Ultra Gel"? 20 A. If that's the date we used, we must 21 have. 22 Q. So between January and -- 23 What is the earliest date that you could 24 have done that? 25 A. Well, I think that -- that the letter Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 16 of 33 www.depo.com Atkinson-Baker Court Reporters 48 1 from Bob O'Mara was in September, I think. And at 2 that time, that indicated that I had received 3 samples at that point. 4 So we were working -- we were working 5 from something, but I suspect it was product I had 6 purchased personally. So it was not included in 7 the Carnet things. 8 Q. Okay. So do you think that -- 9 Did you ever use the Ultra Gel brand 10 with any other product besides Ultra-Sperse M? 11 A. No. 12 Q. Okay. So it would have been between the 13 time that you received from Bob O'Mara the 14 Ultra-Sperse M and January 5th, 1993 -- sometime in 15 that window you received product, came up with the 16 Ultra Gel name, and started using the product is 17 your testimony now? 18 A. I would say that that's -- that's -- 19 But it probably wouldn't have been with 20 the new official labels. 21 Q. Okay. It would not have been with the 22 new official labels? 23 A. Because I don't think we had them that 24 early. 25 Q. Okay. So how would you have used it if Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 17 of 33 www.depo.com Atkinson-Baker Court Reporters 72 1 prepared. That's a real problem for us. 2 I mean, this is obviously -- the date of 3 first use is a really key fact, something that we 4 talked about probably in three or four different 5 topics that we noticed, and she comes here and she 6 says, "I don't know the date of first use." 7 MR. HUNTSMAN: I think you're having trouble 8 understanding her testimony. Give me a ten-minute 9 break to consult with my client and -- 10 MR. ANDERSON: Well, let's try and see if we 11 can clarify. 12 Mrs. Christensen -- 13 THE WITNESS: I think I want to consult with 14 my attorney first. 15 MR. ANDERSON: Okay. Go ahead. 16 (Break taken from 10:46 a.m. to 10:53 a.m.) 17 Q. (BY MR. ANDERSON) Did you figure out 18 your testimony after talking to your lawyer? 19 A. Yes. We are going to go with May 5th as 20 being the date that we can document as first use. 21 Q. Okay. And is it possible that the 22 registration which says 19930105 actually means 23 May 1, 1993, that you told your lawyer, "We used it 24 in May of '93," and -- 25 A. No. Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 18 of 33 www.depo.com Atkinson-Baker Court Reporters 73 1 Q. -- he said, "We'll put it in that way"? 2 A. No. 3 Q. So you're going with a date in May of 4 '93, but the registration says January of '93? 5 A. I'm saying that's what I can document 6 after searching my records. 7 Q. Okay. And is your recollection any 8 different than that? 9 A. Yes. 10 Q. What is your recollection? 11 A. My recollection is that it was probably 12 introduced at Harvest House on an earlier date. 13 Q. And do you know when that would have 14 been? 15 A. I would say it probably would have been 16 the first of January. 17 So are you asking me what I -- 18 I came here prepared to say that I can 19 document use on May 5th. Then you're asking me 20 another question. 21 Yes, I do think it was used earlier -- 22 Q. And what date -- 23 A. -- and that is my testimony. 24 Q. What day do you think it was used? 25 A. I think it was used on the 5th of Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 19 of 33 www.depo.com Atkinson-Baker Court Reporters 74 1 January. 2 Q. The 5th of January. 3 And you have no independent documents to 4 support that? 5 A. My testimony is: After doing a diligent 6 search of the records that I had available, that I 7 am -- that I can document May 5th. 8 Q. Okay. And I understand that. 9 So the documents do not indicate that 10 there's anything prior to May of '93 for a use. 11 Is that correct? 12 A. Is that a "yes" or "no" question? 13 MR. HUNTSMAN: Objection. 14 Q. (BY MR. ANDERSON) Go ahead and answer 15 the question. 16 MR. HUNTSMAN: Go ahead and answer, the best 17 you can. 18 THE WITNESS: Would you mind repeating it 19 again? 20 Q. (BY MR. ANDERSON) So the documents do 21 not indicate that there's anything prior to May of 22 '93 for a use? 23 A. The documents that -- that I have 24 searched do not. 25 MR. HUNTSMAN: Object to the question. It's Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 20 of 33 www.depo.com Atkinson-Baker Court Reporters 75 1 been asked and answered. 2 She testified that the letter from the 3 attorney and the discussion she had with the 4 attorney, that's a document. 5 We're not waiving that as evidence, if 6 that's your question. 7 MR. ANDERSON: It's not my question. 8 MR. HUNTSMAN: Okay. 9 Q. (BY MR. ANDERSON) Okay. I'm talking 10 about the documents that you have that are your 11 company documents -- 12 A. Uh-huh. 13 Q. -- show that your date of first use was 14 in May of 1993. 15 A. That was 23 years ago. 16 Q. Okay. But your recollection is that you 17 used it prior to May of 1993? 18 A. Yes. 19 Q. And you're not sure who you used it 20 with, but you think it was Harvest House? 21 A. Yes. 22 Q. And you used it, you think, January 5th, 23 1993. 24 Is that correct? 25 A. Now are you making my testimony for me? Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 21 of 33 www.depo.com Atkinson-Baker Court Reporters 76 1 Q. I'm trying to recap what you've said. 2 It's jumped around a lot, so I'm trying to say: 3 What is the final piece of testimony? What -- what 4 is your testimony? 5 I mean, you can give it to me. That 6 would be great. 7 You tell me. What is your recollection? 8 A. I think I've already said that. The 9 documents I have searched give -- that I can show, 10 that I have in my hands in originals from 22, 23 11 years ago give a date of May 5th. 12 Q. Right. I'm not asking about documents 13 anymore. I think that part of the testimony is 14 established. 15 Now I'm saying that your -- that you're 16 saying you've got a recollection but not really a 17 recollection -- 18 Is it even a recollection? 19 A. I would not have given that date to an 20 attorney without having good reason for it. 21 Q. Okay. But do you -- 22 A. And I'm sure he would have required that 23 from me. 24 Q. Okay. And so my question is: Do you 25 have any independent recollection from the -- from Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 22 of 33 www.depo.com Atkinson-Baker Court Reporters 77 1 sales documents and your receipts of using it prior 2 to May of 1993? 3 A. Are -- 4 So do you want to -- 5 Of using the product? 6 Q. I'm sorry. Of using the mark. 7 A. Yes. 8 Q. Okay. And what is that recollection? 9 A. That -- 10 Okay. And perhaps a specific 11 recollection is not as -- is -- is -- is going 12 further -- 13 I -- I would -- 14 Okay. Let me just scrap that, that line 15 of reasoning. 16 I do think that I would have given the 17 lawyer an accurate date, and that's what I'll stick 18 with. 19 Q. Okay. 20 A. And that he would have required it of 21 me. 22 So if I cannot produce a document from 23 23 years ago that gives that date, I still don't 24 think that it says it doesn't exist. 25 Q. Okay. And that's okay. Like I said, Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 23 of 33 www.depo.com Atkinson-Baker Court Reporters 88 1 Q. I'm trying to figure out what -- what -- 2 I'm trying to say, look, you've got 3 three categories here that potentially bear the 4 name of Ultra Gel. I want to figure out on this 5 graph which one is your -- is your potential first 6 use. 7 A. Of the books? 8 Q. Of any of them, anything bearing the 9 Ultra Gel mark. 10 A. As far as books are concerned, I could 11 go back to the printing invoice. 12 I -- I would guess that it was after 13 Ricks, but I don't know that for sure. 14 MR. HUNTSMAN: Can we go off the record 15 again? 16 (Discussion held off the record.) 17 Q. (BY MR. ANDERSON) Okay. So for the 18 Ultra Gel product, the date of first use that you 19 can identify, the earliest date of first use, is 20 what day for the starch? 21 A. For the -- 22 The 5th of May. 23 Q. The 5th of May? And that's on that 24 first page of Exhibit 12 about, I don't know, ten 25 lines down or so? Or eight lines or something like Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 24 of 33 www.depo.com Atkinson-Baker Court Reporters 89 1 that? 2 A. Uh-huh. 3 Q. Okay. And then for Utah -- 4 And -- and -- well -- 5 Do you have forms like this for 6 C&C Enterprises? 7 A. No. They're not that specific. 8 Q. Okay. In looking at Exhibit 13, what's 9 the earliest date of first use for Utah sales for 10 the Ultra Gel? 11 A. I'm showing the 28th of June. 12 Q. If you look, like, five lines up from 13 the bottom -- 14 Do you see that? 15 A. Is that the 29th of May? 16 Q. Yeah. 17 A. I -- 18 That looks -- that appears to be an 19 error because it's -- it's completely out of -- 20 Well, there are some others that are out 21 of date, too. So, yeah, it could be the 29th of 22 May. 23 I have the originals. I could go back 24 and look. 25 Q. Okay. But it's either the 29th of May Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 25 of 33 www.depo.com Atkinson-Baker Court Reporters 108 1 A. No. 2 Q. Okay. So it means that it was yours. 3 It counts as your use. 4 Is that -- 5 A. Yes. 6 Q. And that's how you viewed it? 7 A. Yes. 8 Q. Okay. And did you view your personal 9 use -- 10 A. Although, this -- 11 In '93, the trademark hadn't been 12 established at that point. It hadn't been branded 13 at that point. 14 MR. HUNTSMAN: The registration. 15 Q. (BY MR. ANDERSON) Yeah. I'm not talking 16 about that. You're right. That's okay. I don't 17 care about that. 18 A. Okay. 19 Q. I'm talking about: The use of the mark 20 by Janet was your use, in your mind, and the reason 21 for that was because of your majority ownership in 22 the company? 23 A. Yes. 24 Q. Okay. Did you view -- 25 Did the company view any use of the Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 26 of 33 www.depo.com Atkinson-Baker Court Reporters 109 1 Ultra Gel mark, whether it was Carma's use or 2 Janet's use or Reed's use or Melinda's use or 3 Emory's use or anybody else, did it ever view it as 4 its own use? 5 A. The company? 6 Q. Yes. Or did the company always say, you 7 know, "All of these uses are for Carma as an 8 individual"? 9 A. The trademark was mine. The uses -- I 10 guess if you consider those inuring to it, those 11 were mine as the president and major owner of the 12 company. 13 Okay. Now what's your specific 14 question? 15 Q. The company viewed all of the uses by 16 anyone who used it as your use? 17 A. Yes. 18 Q. Okay. So the company makes no claim of 19 ownership to the trademark? 20 MR. HUNTSMAN: Objection in that the 21 question asks for facts that are contrary to that 22 fact. 23 There was no company. 24 MR. ANDERSON: This -- 25 MR. HUNTSMAN: She can't answer the question Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 27 of 33 www.depo.com Atkinson-Baker Court Reporters 110 1 if it doesn't make sense. 2 MR. ANDERSON: Sure, she can. 3 What's the company's position? 4 MR. HUNTSMAN: What company? 5 MR. ANDERSON: Carnet. I mean, Carnet has 6 got a position. Now it's an assignee of the mark. 7 MR. HUNTSMAN: Right, but the LLC didn't 8 exist in 1993. 9 MR. ANDERSON: Right, but before it was 10 assigned, the company didn't own an asset, and I 11 make to make sure that's the case. 12 MR. HUNTSMAN: No, it didn't. 13 MR. ANDERSON: What's that? 14 MR. HUNTSMAN: There wasn't a company to own 15 an asset. 16 MR. ANDERSON: After she created the LLC. 17 THE WITNESS: There wasn't a company. 18 Q. (BY MR. ANDERSON) After you created the 19 LLC and before you made the assignment, the company 20 never owned the trademark. 21 That's correct, right? 22 A. There wasn't a company. 23 Q. After you formed a company and before 24 you assigned it -- 25 A. Formed which company? Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 28 of 33 www.depo.com Atkinson-Baker Court Reporters 111 1 Q. After you formed the LLC -- 2 MR. HUNTSMAN: Okay. 3 Q. (BY MR. ANDERSON) -- and before you 4 assigned it, that company did not have any 5 trademark rights in Ultra Gel, correct? 6 A. The Carnet, LLC? 7 Q. Yes. 8 A. I think the assignment was retroactive. 9 Q. But before that time -- 10 So let's go back in time to prior to 11 your signing. 12 A. Okay. 13 Q. Okay? And before they assigned it, 14 there was never -- 15 I mean, that's what your declaration 16 says, too. 17 MR. HUNTSMAN: I want to object because 18 you're asking for a legal conclusion from a fact 19 witness. 20 MR. ANDERSON: I'm asking for the company's 21 position. 22 We'll note your objection. 23 Q. (BY MR. ANDERSON) The company doesn't -- 24 didn't ever own a mark, right? 25 Until -- until the assignment part of Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 29 of 33 www.depo.com Atkinson-Baker Court Reporters 112 1 this litigation, the company never owned a 2 trademark? 3 A. And, again, that calls for a legal 4 conclusion because whether -- 5 The company was undocumented. 6 MR. ANDERSON: Here's the problem. 7 MR. HUNTSMAN: Yeah. 8 MR. ANDERSON: See? I mean, we don't -- 9 Q. (BY MR. ANDERSON) Okay. I'm not asking 10 for a legal conclusion. I'm asking for your 11 company's position. 12 A. And the company position, again, on 13 what? 14 Q. Okay. In 1998, Carnet, LLC, was 15 registered, correct? 16 Let's say in 2000. The LLC existed, 17 right? 18 A. Uh-huh. Yes. 19 Q. In 2000, it did not own any rights in 20 the Carnet trademark. 21 A. Correct. 22 Q. I'm sorry. In the Ultra Gel trademark. 23 Is that correct? 24 A. Yes. 25 Q. Okay. And it wasn't until you assigned Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 30 of 33 www.depo.com Atkinson-Baker Court Reporters 113 1 your rights as part of this litigation, which -- 2 Let me look at the actual assignment 3 back here. 4 On the 7th day of July, 2014, that's the 5 first time that the company ever owned any interest 6 in the Ultra Gel trademark? 7 A. Yes. 8 Q. Okay. Does it still -- does the company 9 still own the Ultra Gel trademark? 10 A. Are you talking the ownership or are you 11 talking the registration? 12 Q. I'm talking ownership. I'm talking 13 ownership of any rights. 14 Does it claim any rights in the 15 Ultra Gel trademark? 16 A. Yes. 17 Q. Okay. So all the uses now are -- by 18 Carma or anybody else they say is their licensee 19 are now to the benefit of the company and no longer 20 to you? 21 A. As a result of the assignment? Is that 22 what you're saying? 23 Yes. 24 Q. Okay. So now you no longer have any 25 interest in the ownership. It's all in the Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 31 of 33 www.depo.com Atkinson-Baker Court Reporters 114 1 company? 2 A. Yes. 3 Q. And that hasn't changed since the 4 assignment -- 5 A. No. 6 Q. -- that we just referenced here? 7 A. No. 8 Q. Okay. Let's look down at paragraph -- 9 Well, let's -- 10 Okay. This may be the last question in 11 this line if that holds true, okay? 12 So let's look down at paragraph 8. 13 A. Which page are you looking at? 14 Q. I'm on page 2 of 51. 15 A. Okay. 16 Q. Okay. So on page 2 of 51, it says, "I 17 permitted the family business to use the name 18 Ultra Gel to identify its products." 19 A. Okay. 20 Q. Did I read that correctly? 21 A. Yep. 22 Q. Okay. So it's the company's position 23 today that this entire trademark, everything to do 24 with the trademark, was always Carma's 25 individual -- as an individual. Never Carma as Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 32 of 33 www.depo.com Atkinson-Baker Court Reporters 115 1 president, never the company's assets? 2 A. That's correct. 3 Q. Okay. So any use for licensing or 4 anything like that would have been done by Carma as 5 an individual and not as Carnet partnership or 6 Carnet, LLC? 7 A. Okay. The company used the name -- used 8 the trademark permissively. 9 And so your question again regarded that 10 any assignment should have come from Carma rather 11 than from Carnet? 12 Is that what you're saying? 13 Q. I'm saying that Carma is the one who 14 controlled the -- 15 I'm saying the company doesn't claim any 16 ownership interest in the mark, right? 17 A. They do now, but they didn't back then. 18 Q. Right, right. And we're talking back at 19 the time. 20 A. Uh-huh. 21 MR. HUNTSMAN: When you say "the company," 22 are you meaning the LLC? 23 MR. ANDERSON: Yes. 24 MR. HUNTSMAN: It's just -- 25 MR. ANDERSON: Or even the partnership Case 2:14-cv-00462-JNP-DBP Document 57-4 Filed 07/11/16 Page 33 of 33 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION CORNABY'S, LLC, Plaintiff and Counter-defendant, vs. CARNET, LLC and CARMA CHRISTENSEN, Defendants and Counter-claimants. _________________________ CARMA CHRISTENSEN, Third-Party Plaintiff, vs. DAVID CORNABY, an individual, Third-Party Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Deposition of: JANET STOCKS Civil Action No. 2:14-cv-00462-RJS March 14, 2016 * 1;25 p.m. Location: Kirton & McConkie 2600 West Executive Parkway, Suite 400 Lehi, Utah Reporter: Susette M. Snider, CSR, RPR, CRR Notary Public in and for the State of Utah Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 1 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 2 A P P E A R A N C E S FOR THE PLAINTIFF, COUNTER-DEFENDANT AND THIRD-PARTY DEFENDANT: KIRTON & MCCONKIE Jonathon A. Schlegelmilch Attorney at Law 60 East South Temple, Suite 400 Salt Lake City, Utah 84111 Tel: 801.328.3600 Fax: 801.321.4893 jschlegelmilch@kmclaw.com FOR THE DEFENDANTS, COUNTERCLAIMANTS AND THIRD-PARTY PLAINTIFF: HUNTSMAN LAW GROUP, PLLC Robert A. Huntsman Stephanie Christensen Attorneys at Law 10400 West Overland, No. 174 Boise, Idaho 83709 Tel: 208.860.4379 bobh@huntsmanlg.com ALSO PRESENT: Carma Christensen Emory Christensen David Cornaby Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 2 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 3 I N D E X JANET STOCKS: PAGE Examination by Mr. Huntsman................... 4 E X H I B I T S NUMBER DESCRIPTION PAGE. 41 Amended Notice of Deposition of Janet. 6 Stocks................... 42 Collection of invoices................... 62 Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 3 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 11 A. I don't have enough knowledge to answer that question. Q. Okay. All right. Fair enough. Let's talk about -- I'd be very interested to kind of hear your -- your version or your story of what happened in the early days of the company, particularly. I know you guys went back farther than the Ultra Gel that this case is about, the use of the Ultra Gel mark. So can you tell us what your earliest recollection is about using the Ultra Gel mark? A. It was in January of 1993. Q. So can you tell me how you recall coming up with the name? A. My children are very involved in everything that I do. I had six children at the time. One was a senior in high school, one was a sophomore, and we talked about -- around the kitchen table about this amazing product. When I was downstairs in the storage room, I was talking to someone on the phone, and it just hit me Ultra Gel would be the best choice for this, because it's a modification on its original name but tells more about what it does. So we were thinking of that. And then my Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 4 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 12 cousin came in from Oregon, and she purchased some of the Ultra Gel and took it home with her. And I told her -- at that time I said, I'm just not sure of a name for it yet. And she said, Ultra Gel. It makes sense. I told her, Well, you know, we thought of this and this and this. And she says, Ultra Gel just makes sense. So that's my recollection of how we got the name of Ultra Gel. Q. Okay. One of the issues in this case has to do with when product bearing the name Ultra Gel was actually used in the marketplace, which is kind of a legalese; but do you recall when product actually went out the door marked as Ultra Gel or an advertisement, you know, the first time you used it? A. Commercially? Q. Yes. A. Like in grocery stores or just selling it to people? Q. Yeah, either/or. The first time that it was used -- A. The first time I sold it was in January of 1993. Q. Okay. Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 5 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 13 A. Under that name. Q. Okay. So do you remember that, since it's a long way back, or is that as a result of reviewing documents? A. I didn't review a document. But I spoke to people who had purchased it at that particular time, and they referred to documents that they had to verify that we were -- I was teaching that class -- Q. Oh, okay. A. -- at that time, and the people in that class purchased Ultra Gel from me. Q. So you were able to just figure out from the -- from what you could recall about the circumstances. Okay. A. Um-hum (affirmative). Q. That's very helpful. We've had some discussions about the nature of this company because -- since there was no written operating agreement. So your term -- and I know it's been described as a loose group, a loose partnership, a family business. Rather than me telling -- just tell me how you would characterize the business in those early days. A. It was supposed to be a partnership. Q. Okay. Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 6 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 22 A. Not -- not because I work there, but my -- I have a daughter who has a major in English that writes our newsletters and helps with the products on her own -- Q. That's what she works on -- A. -- on her work, and I have a son who does Internet work for us and things like that based on his own merit as having an MBA. Q. Okay. Do you have any outstanding loans from David -- A. No. Q. -- personal loans? Okay. Have you had an ownership interest in any other businesses besides the ones we're discussing today? A. I had a personal -- as I said, at the beginning, Carma and I each had a separate business. Q. Okay. A. And I was -- I was the sole proprietor of that business. Q. Okay. But how about later on? Did you -- let me ask this: After you guys split, did you form a business? A. Yes. We incorporated -- S corp -- Q. And? Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 7 of 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Janet Stocks * March 14, 2016 CITICOURT, LLC 801.532.3441 23 A. -- in 1999, I believe. Q. And the name of that business was? A. Jay Carnet. My father's name is Jay Reed Cornaby. Q. Okay. A. Carnet came to pass because the old idea being half of one name and half of another, Carma, Janet. That's how we came up with -- my daughter and I actually came up with that. And since my -- my name starts with J and my dad's name starts with J, instead of, you know, changing everything we became Jay Carnet, and Carma kept the Carnet name, although at that time it became a sole proprietorship for her. I don't know if she -- she may have incorporated. I don't know if she did. But we incorporated. It was very important to Dad that we have formal company papers drawn. Carma was going to do that. I know she had a meeting with someone about that in December of 1992, but it didn't ever materialize, which is why we don't have any formal documents. Q. Okay. So that business you formed, was that just you, not with David, not with -- A. It was me and my father. Case 2:14-cv-00462-JNP-DBP Document 57-5 Filed 07/11/16 Page 8 of 8 INVOICE t-18-571 intermountain 805 West 2 Salt Lake City U PH: (801) 972.113 INVOICE NO. [.5677841 WESTCO PRODUCTS, INC. MU TO IZ-GEL CO. JANET STONES 45 NORTH 650 EAST SLSM 50 'AGE SHIP TO EZ -GEL CO. JANET STOKES 3345 NORTH 650 EAS . PROVO UT 34604 i vision South h 84119 A : (801).974-0928 84604 SPEpAL INSTRUCTIONS "If it's. Westco, it's Perfect!" DATE ACCOUNT tot./ ' 98/9 -] [37245 TELEPHONE COPy. r8Q1 *377 .. 744qE1 TERMStPURCHASE NUMBER 1% 10, NET 15 DAYS 86 ULrRh E, PEkSi: HUH YOU MAY DEDUCT 1310 Alt 01 0 03-0 REASON FOR RETURN INVOICE TOTAL 1 10 f 48 cfl , 4 ADD )1 N,' F 1 4 , EXTENDS 11 Damaged Goods 2) Spoiled Goods 3) Short on Delivery 4) Billing Error 5) Shipping Error 6) Qualittkomplaint 7) Customer Return 81 Sales Error IN ADDITION TO THE PRICE STATED HEREIN, BUYER AGREES TO PAY TO THE SELLER MAXIMUM LEGAL INTEREST ON AMOUNTS PAST DUE. ALL COLLECTION COST INCLUDING ATTORNEY'S FEES, COURT COSTS AND OTHER COSTS INVOLVED IN THE COLLECTION OF ANY ACCOUNTS, PAST DUE. CORRECTED AMOUNT- cSatitiactton guata4 %tido Aoclach illicittarzts g)tociotts (lila to & lirteroding . ggt 9.1T g‘ttegate .Pticc. CUSTOMER ORIGINAL Carma000419 Case 2:14-cv-00462-JNP-DBP Document 57-6 Filed 07/11/16 Page 1 of 1