Free Reply to Response to Motion - District Court of Connecticut - Connecticut

Case 3:03-cv-00874-MRK

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT

Light Sources, Inc., and Tan Systems, Inc., Plaintiffs,

v.
Cosmedico Light, Inc.,
Defendant.

) ) ) ) ) ) ) ) ) ) ) )

Civil Action No. 303-CV-874 (MRK)

April 29, 2004

DEFENDANT COSMEDICO LIGHT, INC.'S REPLY MEMORANDUM IN SUPPORT OF ITS MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO COUNTS I, II and V OF THE SECOND AMENDED COMPLAINT

I.

Introduction
The defendant in this action, Cosmedico Light, Inc. ("Cosmedico"), remains entitled

to summary judgment in its favor upholding the validity and enforceability of its federally registered VHR@trademark involved in counts I, II and V of the Second Amended Complaint filed by plaintiffs Light Sources, Inc. ("LSI") and Tan Systems, Inc. ("Tan Systems"). The facts admitted by LSI and Tan Systems in their brief opposing Cosmedico's

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summary judgment

motion

confirm tha t LSI's

present

attacks

on the validity

and

enforceability of the VHR@ trademark are based on the very same facts involved in the opposition proceeding in the United States Patent and Trademark Office. LSI consented to dismissal of that opposition with prejudice, and the outcome of that proceeding precludes LSI trom seeking to relitigate the issues that were raised and decided, or could have been raised and decided, in that forum. Tan Systems has left the suntanning business and, accordingly, lacks standing to contest the validity and enforceability of Cosmedico's registration. federal trademark

Stripped of its superfluous side issues and straw men, plaintiffs' opposition

reveals no genuine issues of disputed material fact that would preclude the requested summary judgment.

II.

Cosmedico's Summary Judgment Enforceability, Not Infringement

Motion

is

Directed

to

Validity

and

In order to divert attention from the futility of their validity attack, plaintiffs instead devote significant effort to differentiating their present noninfringement issues raised in the Trademark Office opposition proceeding. summary judgment at this time with respect to infungement. allegations from the

Cosmedico does not seek Nor does this motion involve

(as plaintiffs seem to suggest) the other registered trademark (CosmoLux VLR) in suit. Rather, the present motion is focused solely on the validity and enforceability of Cosmedico' s

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registered VHR@trademark as that issue is involved in counts I, II and V of the Second Amended Complaint.

III.

LSI Seeks Merely to Relitigate the Same Validity Challenges It Conceded in the Trademark Office Plaintiffs correctly observe that claims based on events occumng after a prior and,

litigation

necessarily

could not have been adjudicated

in that prior proceeding

accordingly, are not precluded by res judicata.

However, this is not such a case.

Plaintiffs'

pleading contains no allegation that any event that occurred after the issuance of the trademark registration has any bearing on the continuing validity and enforceability of the mark. In its 1996 Notice of Opposition, LSI contended that Cosmedico's VHR@trademark is "generic" and therefore cannot function as a source- identifying trademark: "Applicant seeks to register the acronym 'VHR' as a trademark for ultraviolet fluorescent lighting tubes. . . The fluorescent tube industry is using the

acronym 'VHR' on ultraviolet fluorescent tubes as a designation of such tubes which include a reflective coating over a portion of the surface. . . .

Accordingly, Opposer believes that this acronym is a generic designation not subject to appropriation by Applicant or any other"

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[Notice of Opposition, ~~1, 3 (see Cosmedico's L.R. 56(a)(1) Stmt., ~7)] In Count I of the Second Amended Complaint, plaintiffs use only slightly different words to now make the very same allegation: "26. . . . Defendant's federal registered mark VHR is invalid and/or

unenforceable. " "31. Defendant's use of the VHR mark is a descriptive acronym that

describes the physical characteristics of Defendant's tanning amp [sic], viz. a Very High Output Reflector significance. " "34. Defendant's VHR mark lacks any trademark significance, as lamp and, as such, lacks any trademark

Defendant's

said VHR letters are merely a short hand descriptive term or of Defendant's tanning

acronym that describes the physical characteristics

lamps, and not as a trademark for indicating source of origin." Nothing in plaintiffs' present pleading refers to or suggests any intervening acts or events that have allegedly adversely affected the validity or enforceability of the VHR@trademark since LSI abandoned its opposition and the trademark registration issued. Accordingly, LSI cannot avoid the preclusive effect of its stipulation to dismissal of its opposition before the Trademark Office. with prejudice

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The preclusive effect of the prior stipulation with prejudice might be different if LSI had truly pleaded a different claim in this action. Second Amended Complaint For example, if LSI had alleged in the has become generic due to

that the VHR@ trademark

Cosmedico's acquiescence in infunging uses by others (which, of course, is not true), then LSI could justifiably contend that the prior stipulation does not preclude such a claim. But LSI's actual pleading in this case does not admit of such an interpretation. Plaintiffs' Local Rule 52(a)(2) statement does not supply the missing distinction of the present claims over the prior adjudication. In particular, the two allegedly disputed "factual

issues" most recently advanced by plaintiffs pertaining to the validity of the VHR@ mark merely confirm that plaintiffs seek only to rehash the same issues determined in the Trademark Office opposition proceeding: "2. The invalidity issue asserted in the pleadings reqUIres the factual

determination as to whether or not the alleged registered mark VHR was used by another prior to Cosmedico's claimed date of first use of December 1994, which would nullify Cosmedico's mark." (emphasis added); "3. The validity issue relating to the registered VHR mark asserted in the which is disputed, also requires a factual determination as to exclusive use to or validity of its VHR

pleadings,

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whether

or not the mark VHR is genenc,

which

renders

the VHR

unregisterable

under 15 USC 1052, or merely descriptive

and lacks the

secondary meaning that is required for indicating source of origin, i.e. a trademark use." Both of the foregoing allegations are mere argument and therefore are defective under the local and federal rules in that they do not supply any aleged evidence to support the supposedly disputed "material" fact. See Fed. R. Civ. P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-250 (1986) (In response to a motion for summary jtrlgment, the nonmoving party "may not rest upon the mere allegations or denials of the adverse party's pleading" and must present more that "merely colorable" evidence of its position.)

Moreover, both allegations clearly refer to alleged impediments to registration that would have existed at the time LSI prosecuted its opposition in the Trademark Office. If there was ever any substance to these bare allegations, LSI could have and should have pursued the issues to decision in that forum. opposition with prejudice. Instead, LSI submitted to a stipulated dismissal of its

Res judicata is appropriate if the ground of recovery sought was

available in the prior action "whether or not it was actually litigated and decided," and even if the prior action was an administrative proceeding. See Jim Beam Brands, 937 F.2d at 736-37. LSI cannot now have another bite at the apple in this Court.

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The same reasoning applies to plaintiffs' attempt to seek cancellation of the VHR@ trademark registration in Count II of the Second Amended Complaint. Plaintiffs' allegations

in Count II all relate back to the very same issues determined in the prior opposition proceeding: "40. Defendant's federally registered trademark No. 2,124,659 for the mark

VHR is merely descriptive. . ."; "41. being VHR is a descriptive acronym which the relevant market understands is used by Defendant to describe the physic al characteristics of

Defendant's lamps."; "42. Defendant's registered VHR lacks the necessary distinctiveness to

indicate source of origin." Once again, all of these alleged impediments to registration either were or could have been raised by LSI in the prior opposition proceeding. LSI's submission to dismissal of the

opposition with prejudice precludes LSI from relitigating these issues. Count V of the Second Amended Complaint purports to state a claim of inequitable conduct based on statements made by Cosmedico' s attorney to the Trademark Office. Plaintiffs suggest that the attorney misled the Examining Attorney with respect to facts that might have persuaded the Examining Attorney not to allow the registration to issue. Once

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again, however, the issue was squarely raised by LSI in the opposition proceeding. Specifically, LSI now alleges that Cosmedico' s attorney deceived the Examining Attorney in responding to an inquiry as to whether the letters "VHR" had any significance (other than as a trademark) in the relevant trade or industry. Yet, not only was Cosmedico's allegedly deceptive statement available to LSI at the time of its opposition, this is precisely the issue that was expressly raised by LSI in its Notice of Opposition: "The fluorescent tube industry is using the acronym 'VHR' on ultraviolet fluorescent tubes as a designation of such tubes which include a reflective coating over a portion of the surface. . . . Accordingly, Opposer believes that this acronym is a generic designation not subject to appropriation by Applicant or any other." [Notice of Opposition, ,-r3(see L.R. 56(a)(1) Stmt., ,-r7)]. After raising this issue as an alleged bar to registration, LSI subsequently stipulated to dismissal of its opposition with prejudice. Clearly, LSI abandoned not only the argument that the VHR@ mark is generic, but also the contention that the Examining Attorney was duped into relying upon the Cosmedico attorney's statement (rather than simply accepting LSI's concession that the issue was without merit) in deciding to allow the registration to issue. LSI also expends considerable effort in arguing that the Trademark Office supposedly

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did not render a decision "on the merits" in the opposition proceeding.

LSI is wrong on the

law. cf, Storey, 347 F .2d at 385, n.12. LSI expressly stipulated to dismissal of its opposition with prejudice, thereby indicating to the Trademark Office that its opposition had no merit. The Trademark Office accepted the stipulation, "on the merits", and issued the trademark registration. "prejudice" LSI's preclusion from relitigating its attack on the VHR@ trademark is the it accepted in the prior proceeding. In any event, summary judgment is

particularly appropriate in resolving issues of trademark validity that have previously been stipulated by the parties. See Save the Children Foundation, Inc. v. Larry Jones International Ministries, Inc., 1996 U.S. Dist. Lexis 12928, *8 (Dist. Conn. 1996) (copy attached to Cosmedico's principal brief as Exh. A).

IV.

Tan Systems Has Permanently Left the Suntanning Standing to Contest Validity or Enforceability

Industry and Has No

As a last resort, plaintiffs contend that even if LSI is precluded from relitigating the issues that were, or could have been raised in the opposition proceeding, Tan Systems is not similarly precluded because the two plaintiffs were not in privity at that time. The Court need not determine the privity issue, as intervening events have obviated any standing Tan Systems might otherwise have had to bring such claims. Specifically, plaintiffs admit that Tan According to plaintiffs, Tan

Systems has sold its assets and left the suntanning business.

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Systems has even entered into a non-compete agreement that will preclude it from re-entering the industry. Thus, the continuing validity and enforceability of the VHR@ trademark

registration is of no future concern to Tan Systems, and will not affect its future business in any way. In particular, Tan Systems lacks standing to seek cancellation of the VHR@ federal trademark registration, as it seeks in Count V of the Second Amended Complaint. Under the express provisions of 15 U.S.c. §1064, the statute under which plaintiffs seek cancellation, that remedy is available only to a "person who believes that he is or will be damaged, including as a result of dilution under section 43( c), by the registration of a mark on the principal register. . ." The Federal Circuit has determined that a petitioner for cancellation of a registered trademark have a "real interest" in the cancellation proceeding. Herbko Int '1,Inc. v. Kappa Books, Inc., 308 F.3d 1156, 1161 (Fed. Cir. 2002); Int'! Order of Job's Daughters v. Lindeburg & Co., 727 F.2d 1087, 1092 (Fed. Cir. 1984). The "real interest" test can be met by showing a direct commercial interest in the dispute. Herbko, 308 F.3d at 1161;

Cunningham v. Laser Golf Corp., 222 F.3d 943, 946 (Fed. Cir. 2000). Similarly, the Second Circuit has denied trademark standing to a plaintiff who does not currently sell products in competition with the defendant and whose plans for future sales are too speculative to confer standing. PDK Labs v. Friedlander, 41 USPQ2d 1338, 1344 (2d Cir. 1997).

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Tan Systems' principal owner, Ms. Kristin Tiffany, in her declaration supporting plaintiffs' opposition to the present summary judgment motion, admits that "Tan Systems has sold its sun tanning business to I-eartland Tan and Tan Systems has ceased doing any sun tanning related business. . ." (Tiffany Dec!. at p. 8) Plaintiffs' opposition brief also concedes that "Tan Systems is no longer in the business of selling sun tanning equipment and/or sun tanning lamps; nor is Tan Systems now functioning as Light Sources exclusive distributor of the accused lamps." (see plaintiffs' brief at p. 7) Plaintiffs Local Rule 56(a)(2) statement, at paragraph 3, admits that "[a]s part of the sale of Tan Systems' business assets to Heartland, Tan Systems entered into a non-compete arrangement." no direct (or even prospective) Clearly, therefore, Tan Systems has

interest in the continuing validity of Cosmedico' s federal

trademark registration and is not one of the class of persons entitled to maintain a cancellation action under 15 U.S.C. §1064.

v.

Conclusion
For the reasons set forth above and in defendant's principal memorandum of points

and authorities, Cosmedico respectfully requests entry of summary judgment in its favor as to the validity and enforceability of its federally registered VHR@ trademark as that issue is involved in Counts I, II and V of the Second Amended Comphint.

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Respectfully submitted,

Dale A. Malone (Fed. Bar No. ct25020) Banner & Witcoff, Ltd. 28 State Street Boston, Massachusetts 02109 Tel: 617-720-9600 Fax: 617-720-9601 ,dmalone~ba(n~rwitcoff.com
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mes Oliver (Fed. Bar No. ct02510) erman and Sable 00 Pearl Street artford, CT 06103 Tel: 860-527-9699 Fax: 860-527-9077 Attorneys for Defendant, COSMEDICO LIGHT, INC.

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Certificate

of Service

I hereby certify that a copy of the foregoing document has been served, first class U.S. mail, postage prepaid, this 29th day of April, 2004, on plaintiffs' counsel of record as follows: Arthur T. Fattene Fattibene & Fattibene 2480 Post Road Southport, CT 0689~,
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