Anil Meziniv.Koan, Inc.

Trademark Trial and Appeal Board

Feb 14, 2008

No. 92046748 (T.T.A.B. Feb. 14, 2008)

Goodman

Mailed: February 14, 2008

Opposition No. 91173681

Zodiac Spirits, Inc.

v.

Anil Mezini

and

Cancellation No. 92046748

Anil Mezini

v.

Koan, Inc.

Before Hohein, Zervas and Walsh, Administrative Trademark
Judges.

By the Board:

Applicant Anil Mezini (hereinafter Mezini) has applied
to register the mark ZODIAC TEA in standard character form
for “beverages made of tea; fruit teas; herbal tea for food
purposes; tea; tea-based beverages with fruit flavoring” in
International Class 30.1
Registration has been opposed by opposer Zodiac
Spirits, Inc. (hereinafter Zodiac) on the ground that

1 Application Serial No. 78677720, filed July 25, 2005, based on
a bona fide intention to use the mark in commerce pursuant to
Trademark Act Section 1(b); the word TEA is disclaimed.
UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
P.O. Box 1451
Alexandria, VA 22313-1451 THIS OPINION IS NOT
A PRECEDENT OF
THE T.T.A.B.
Opposition No. 91173681 and Cancellation No. 92046748
2
Mezini’s mark, when used on the identified goods, so
resembles Zodiac’s previously used and registered mark as to
be likely to cause confusion, mistake or deception.
Specifically, Zodiac has pleaded ownership of a registration
for the mark ZODIAC for “distilled spirits, liqueur and
whiskey” in International Class 33 and has pleaded common
law rights in such mark for “distilled spirits and related
beverage products.”2
In its answer, Mezini has denied the salient
allegations of the notice of opposition.
Mezini subsequently sought cancellation of Zodiac’s
pleaded registration for the mark ZODIAC in a separate
cancellation action against Koan Inc. (hereinafter Koan),
who is listed in USPTO records as the current owner of the
pleaded Zodiac registration in Opposition No. 91173681.
Koan is a wholly owned subsidiary of Zodiac. The grounds
for cancellation are fraud based on nonuse by the original
registrant, fraud based on nonuse of the mark on certain of
the goods, and the registration was void ab initio because
at the time of filing the underlying application the
original registrant was not the owner of the mark.
On January 11, 2007, the Board consolidated the
opposition and cancellation proceedings, finding that the

2 Registration No. 2293534 issued on November 16, 1999 on the
Principal Register; Section 8 accepted and Section 15
acknowledged June 9, 2005.
Opposition No. 91173681 and Cancellation No. 92046748
3
petition to cancel was essentially a compulsory counterclaim
to cancel the pleaded registration.
In lieu of filing an answer in the cancellation, Koan
has moved for summary judgment.
This case now comes up on the following motions:
1) Koan’s motion for summary judgment, filed
January 9, 2007;

2) Koan’s “request to correct registration,”
filed January 16, 2007;

3) Mezini’s motion for 56(f) discovery, filed
January 17, 2007;

4) Mezini’s motion for leave to amend the
petition to cancel, filed January 17, 2007;
and

5) Mezini’s cross-motion for summary judgment,
filed January 17, 2007.

To the extent that Mezini seeks discovery under Fed. R.
Civ. P. 56(f), we find his motion moot because Mezini has
responded to Koan’s motion for summary judgment on its
merits.
We now turn to the parties’ cross motions for summary
judgment.
As background, Koan’s predecessor in interest, Demptos
Glass Company, LLC (hereinafter Demptos) filed, on February
11, 1998, application Serial No. 75432480 for the mark
ZODIAC for “spirits,” claiming a bona fide intention to use
the mark in commerce under Section 1(b). The identification
of goods was amended on July 23, 1998 to “spirits, namely
Opposition No. 91173681 and Cancellation No. 92046748
4
distilled spirits, liqueur and whiskey.” A notice of
allowance was issued on March 2, 1999 for all of the goods,
and on July 30, 1999, Demptos filed its statement of use,
signed by its President Godert Tegelberg, indicating use of
the mark on “spirits, namely, distilled spirits, liqueur and
whiskey” and alleging a date of first use in commerce of
April 30, 1999. Registration No. 2293534 issued on November
16, 1999, and on April 6, 2000, Demptos assigned the
registration and subject mark to Koan. On March 24, 2005,
Koan filed its Combined Declaration of Use and
Incontestability under Section 8 and 15 listing the
following goods: “spirits, namely, distilled spirits,
liqueur and whiskey.” Marc G. Beginin, Chief Executive
Officer of Koan, signed the Combined Declaration. The
petition to cancel Registration No. 2293534 was filed on
December 7, 2006. After the petition to cancel was filed,
Koan, on January 16, 2007, filed a “Request to Correct
Registration” under Section 7(g)) both with the USPTO Post
Registration section and with the Board seeking to delete
“liqueur and whiskey” from the registration. On May 22,
2007, the Post Registration division issued a Section 7
correction deleting “liqueur and whiskey” from the
identification of goods.
In support of its motion for summary judgment, Koan
argues, with respect to Mezini’s allegations of fraud based
Opposition No. 91173681 and Cancellation No. 92046748
5
on nonuse by Demptos, that on March 9, 1998, an “execution
agreement” between Demptos and Koan transferred brand
ownership to Koan at the time of execution. Koan
subsequently used the mark in 1999 which was the basis for
the date of first use in commerce stated in the application
and therefore, Koan has established that there was no fraud
with regard to Demptos’ allegations of use. With regard to
Mezini’s allegations of fraud based on nonuse with respect
to liqueur and whiskey, Koan argues that “[t]here is no
question that both liqueur and whiskey are … distilled
spirits” because the goods are not so distinct from one
another but “naturally interconnected” and therefore, there
is no fraud because “Demptos’ and Koan’s failure to use the
ZODIAC mark for liqueur and whiskey has no effect on another
party” since “anyone seeking to use the ZODIAC name for
whiskey would be prevented from doing so by virtue of Koan’s
registration of ZODIAC for distilled spirits.”
As evidentiary support, Koan has submitted the
affidavit of Thomas Benson, President of Koan, the
“execution agreement” between Demptos and Koan, and
newspaper articles referencing Koan’s use of ZODIAC in
connection with vodka.
In opposing the motion and in support of its cross
motion, Mezini argues that Koan’s admission that Demptos
transferred all rights of brand ownership on March 9, 1998,
Opposition No. 91173681 and Cancellation No. 92046748
6
establishes that there is no genuine issue of material fact
that Demptos’ declaration filed with the Statement of Use
was fraudulent as it falsely stated that Demptos was using
the mark and was the owner of the mark. Mezini argues that
“[b]ecause Demptos transferred all rights in the Zodiac name
some 16 months prior, the July 30, 1999 allegation in the
Statement of Use that Demptos was using the mark together
with the statement in the declaration that Demptos was the
owner of the mark, were materially false.” Mezini maintains
that “these circumstances constitute blatant and intentional
fraud in the procurement of the registration.”
Mezini also argues that there is no genuine issue of
material fact regarding whether ZODIAC has been used in
connection with “liqueur” or “whiskey” as Koan acknowledges
that the mark has never been used for “liqueur” or “whiskey”
and that Koan’s “claim that the fraudulent inclusion of
‘liqueur’ and ‘whiskey” in the registration has no effect on
another party is simply wrong.” Mezini asserts that there
is no genuine issue of material fact that at the time of
filing the Statement of Use and at the time of filing the
“Section 8” declaration of continued use, both Demptos and
Koan knew that the mark had not been used for “liqueur” or
“whiskey,” and therefore Mezini is entitled to summary
judgment.
Opposition No. 91173681 and Cancellation No. 92046748
7
As evidentiary support, Mezini has submitted, among
other things, a dictionary definition for liqueur.
In response to the cross-motion for summary judgment,
Koan argues that summary judgment is not appropriate on the
issue of fraud as genuine issues of material fact exist with
regard to “Demptos’ and Koan’s knowledge regarding the
falsity of the identification of goods”; “the status of Koan
as a licensee or an assignee at the time the statement of
use was filed”; and “Demptos’ state of mind at the time of
filing” of the application or during prosecution of the
application. Koan “admits that the mark was not used on
whiskey or liqueur” but maintains that the “failure to
delete these items from the identification of goods clause
was nothing more than an honest mistake,” further arguing
that “the inclusion of ‘whiskey’ and ‘liqueur’ to the
identification of goods clause has no material bearing on
the scope of the ZODIAC mark” and is “immaterial for
purposes of establishing the presence of fraud.” Koan also
argues that there was no fraud at the time of filing the
Statement of Use because Koan was a licensee of Demptos
prior to the assignment and therefore Demptos was still the
owner of the mark at the time of filing the Statement of
Use; and that there was no fraud at the time of Koan’s
filing of the “Declaration under Sections 8 and 15” because
Opposition No. 91173681 and Cancellation No. 92046748
8
“[t]here is no evidence Koan knowingly made a false
representation of fact.”
As evidentiary support, Koan has submitted the
“execution agreement” between Demptos and Koan, a printout
of the Trademark Assignment Abstract of Title for the ZODIAC
mark, Registration No. 2293534, and Thomas Benson’s
Declaration in Support of Registrant’s Request to Correct
Registration.
In reply, Mezini argues that “there is no genuine issue
of material fact that both the Statement of Use and the
Section 8/15 affidavit filing were false” in view of Koan’s
subsequent filing of a declaration “admitting that ‘[a]s of
the date of the statement of use and §8 affidavit filing,
Koan was not offering liqueur or whiskey. As such the
current identification of goods is erroneous.’” Mezini
further argues that “the specific or actual intent of Mr.
Tegelberg, who signed the Statement of Use, and Mr. Benson
[sic], who signed the Section 8/15 affidavit, is not
material to the question of fraud” as the inquiry is into
the objective manifestations of intent; that Koan’s
“admission that the mark has not been used for two of the
three goods identified in the Registration” “is all that is
required to establish intent to commit fraud in the
procurement of the registration”; and that therefore
“cancellation is appropriate.”
Opposition No. 91173681 and Cancellation No. 92046748
9
Summary judgment is appropriate when there is no
genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. See Fed. R. Civ.
P. 56(c). All reasonable inferences must be drawn in favor
of the nonmoving party. The burden is on the moving party
to establish its right to summary judgment. The mere fact
that cross-motions for summary judgment on an issue have
been filed does not necessarily mean that there are no
genuine issues of material fact, and that trial is
unnecessary. See TBMP Section 528.01 (2d ed. rev. 2004) and
cases cited therein.
As an initial matter, Mezini’s standing as petitioner
in the cancellation has been established by its position as
applicant in the opposition inasmuch as the petition to
cancel was effectively a compulsory counterclaim. Thus,
petitioner’s standing, that is, his real interest in this
proceeding, has been established. See Carefirst of Maryland
Inc. v. FirstHealth of the Carolinas Inc., 77 USPQ2d 1492,
1502 (TTAB 2005) (“There is no issue regarding the standing
of the parties to bring their respective oppositions and
cancellation . . . . Applicant, by virtue of its position
as defendant in the opposition, has standing to seek
cancellation of the pleaded registrations”) citing Ohio
State University v. Ohio University, 51 USPQ2d 1289, 1293
(TTAB 1999).
Opposition No. 91173681 and Cancellation No. 92046748
10
Based on the record now before us and for the reasons
discussed below, we conclude that Mezini is entitled to
summary judgment on the ground of fraud based on Koan’s
nonuse of ZODIAC on “liqueur” and “whiskey.” By its motion,
Mezini has established that there are no genuine issues of
material fact remaining for trial in the cancellation as to
this ground of fraud.
Fraud in procuring a trademark registration occurs
when an applicant for registration knowingly makes false,
material representations of fact in connection with an
application to register or, in the case of maintaining a
registration, when a registrant makes false, material
representations of fact in connection with an affidavit of
continued use under Section 8. Torres v. Cantine Torresella
S.r.l., 808 F.2d 46, 1 USPQ2d 1483, 1484 (Fed. Cir. 1986).
Statements regarding the use of the mark on goods and
services are material to issuance and maintenance of a
registration covering such goods and services. Hachette
Filipacchi Presse v. Elle Belle, LLC, 85 USPQ2d 1090 (TTAB
2007); Hurley International LLC v. Volta, 82 USPQ2d 1339
(TTAB 2007); Standard Knitting, Ltd. v. Toyota Jidosha
Kabushiki Kaisha, 77 USPQ2d 1917 (TTAB 2006); Medinol Ltd.
v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003); and First
International Services Corp. v. Chuckles, 5 USPQ2d 1628
(TTAB 1988).
Opposition No. 91173681 and Cancellation No. 92046748
11
A party making a fraud claim is under a heavy burden
because fraud must be proved to the hilt with clear and
convincing evidence, leaving nothing to speculation,
conjecture, or surmise. Any doubt must be resolved against
the party making the claim. Sinclair Oil Corp. v. Sumatra
Kendrick, 85 USPQ2d 1032 (TTAB 2007).
In the case at hand, however, there is no dispute and
no genuine issue of material fact that the original
registrant Demptos had not used its mark in connection with
“liqueur” and “whiskey” at the time of filing the Statement
of Use and there is no dispute and no genuine issue of
material fact that current registrant Koan was not using the
mark in connection with “liqueur” and “whiskey” at the time
Koan filed its Combined Declaration of Use and
Incontestability under Sections 8 and 15. Koan’s
declaration in support of its request to correct its
registration states that “As of the date of the statement of
use and §8 affidavit filing, Koan was not offering liqueur
or whiskey.” Koan also admits in response to Mezini’s
cross-motion for summary judgment that “the mark was not
used on whiskey and liqueur.” Response brief at p.4
Koan has argued that its nonuse on “liqueur” and
“whiskey” is not material because these goods are also
considered distilled spirits which is also part of the
identification of goods and therefore there is no fraud.
Opposition No. 91173681 and Cancellation No. 92046748
12
However, if an identification of goods includes both a broad
product term and a specific product term which is
encompassed by the broad product term, averring to use of
the specific goods to procure or maintain a registration
when the mark is not in use with those particular goods is
fraudulent. Torres v. Cantine Torresella S.r.l., supra
(registrant committed fraud in filing Section 9 affidavit
averring to use in commerce on wine, vermouth and champagne
when the mark was no longer in use on vermouth and
champagne); Tri-Star Marketing LLC v. Nino Franco Spumanti
S.R.L., 84 USPQ2d 1912 (TTAB 2007) (identification of goods
in a trademark registration that includes both broad product
term and specific product term is fraudulent if registrant
is not using its mark on specific product, and product is
encompassed within the broad term).
Koan has also argued that genuine issues of material
fact remain as to both Demptos’ and Koan’s intent with
respect to their “knowledge of the falsity of the
identification of goods,” arguing “summary judgment on the
issue of fraud would unfairly impute a deceptive intent on
the part of Koan” given “Koan’s lack of knowledge or
documentation regarding how and why Demptos selected
‘whiskey’ and ‘liqueur.’” Koan also maintains that the
failure to delete “whiskey” and “liqueur” was “nothing more
than an honest mistake,” “inadvertent”, and of “ no
Opposition No. 91173681 and Cancellation No. 92046748
13
deceptive intent” and that because there is no evidence
“that Koan knowingly made a false representation of fact,”
summary judgment would not be proper on this issue.
However, it is well established that in inter partes
proceedings “proof of specific intent is not required,
rather, fraud occurs when an applicant or registrant makes a
false material representation that the applicant or
registrant knew or should have known was false.” Medinol,
supra at 67 USPQ2d 1209 (quoting General Car and Truck
Leasing Systems Inc. v. General Rent-A-Car Inc., 17 USPQ2d
1398, 1400-01 (S.D. Fla. 1990), aff'g General Rent-A-Car
Inc. v. General Leaseways, Inc., Canc. No. 14,870 (TTAB May
2, 1988)). See also First International Services Corp.,
supra at 5 USPQ2d 1636 ("we recognize that it is difficult,
if not impossible, to prove what occurs in a person's mind,
and that intent must often be inferred from the
circumstances and related statement made by that person.
Otherwise, all claims of fraud could easily be defeated by
the simple statement, 'I had no intent to do so.'"). As the
Board determined in Medinol, “the appropriate inquiry is
. . . not into the registrant’s subjective intent, but
rather into the objective manifestations of that intent.”
Medinol, supra at 67 USPQ2d 1209.
In this case, the undisputed facts clearly establish
that Demptos and Koan should have known at the time of
Opposition No. 91173681 and Cancellation No. 92046748
14
submission of the Statement of Use or the Combined
Declaration of Use and Incontestability under Sections 8 and
15 that the mark was not in use on all of the goods. Koan
now acknowledges its error and, for purposes of this summary
judgment motion, we accept its statements made in Thomas
Benson’s declaration “to correct registration” that “[t]he
error was unintentional and inadvertent and had not been
discovered previously” and that with respect to the Combined
Declaration of Use and Incontestability under Sections 8 and
15, the mistake “appears to have resulted from Koan
receiving an assignment of the trademark with the
identification of goods as currently listed and subsequently
failing to amend the identification of goods to more
accurately reflect Koan’s goods.” However, Mr. Benson’s
declaration does not provide an explanation as to why
Demptos and Koan should not have known that the Statement of
Use as well as the Combined Declaration of Use and
Incontestability under Sections 8 and 15 were materially
incorrect. Both Demptos’ President, Mr. Tegelberg, and
Koan’s Chief Executive Officer, Mr. Beginin, were obligated
to make appropriate inquiries to confirm the meaning and
accuracy of the statements contained in the Statement of Use
and the Combined Declaration of Use and Incontestability
under Sections 8 and 15 before signing the declarations and
prior to submission to the USPTO. See e.g., Hachette
Opposition No. 91173681 and Cancellation No. 92046748
15
Filipacchi Presse, supra, 85 USPQ2d at 1094 (respondent’s
president “was obligated to confirm the meaning and accuracy
of the statements contained in the application before
signing the declaration and prior to submission to the
USPTO. ‘The obligation which the Lanham Act imposes on an
applicant is that he will not make knowingly inaccurate or
knowingly misleading statements in the verified declaration
forming a part of the application for registration.’ Bart
Schwartz International Textiles, Ltd., v. Federal Trade
Commission, 289 F.2d 665, 669, 129 USPQ 258, 260 (CCPA 1961)
(emphasis in original). Therefore, as indicated supra, an
applicant or registrant may not make a statement he/she knew
or should have known was false or misleading. Medinol,
supra at 1209”). In this case, there is no explanation in
the record as to why the president of Demptos and the Chief
Executive Officer of Koan could not have confirmed the
meaning and accuracy of the statements contained in the
Statement of Use as well as the Combined Declaration of Use
and Incontestability under Sections 8 and 15 before signing
the declaration and prior to submission to the USPTO.
The USPTO will not issue a registration based on use
covering goods upon which the mark has not been used, and
there is no question that the Statement of Use would not
have been accepted nor would the registration have issued
but for Demptos’ representation that it was using the mark
Opposition No. 91173681 and Cancellation No. 92046748
16
on all the goods identified in the Notice of Allowance. See
Trademark Rule 2.88(c). Additionally, there is no question
that a statement in a Combined Declaration of Use and
Incontestability under Sections 8 and 15 that the mark is
being used on all the goods is a material representation
inasmuch as without use on all of the goods, the declaration
of continued use would not have been accepted. See
Trademark Rule 2.161.
Accordingly, we conclude that Demptos and Koan should
have known that their averments regarding use in the
Statement of Use and the Combined Declaration of Use and
Incontestability under Sections 8 and 15 were false,
material misrepresentations of fact. Therefore, we find
that Demptos’ false material misrepresentations made in
connection with its Statement of Use were fraudulent and
Koan’s false material misrepresentations made in connection
with the Combined Declaration of Use and Incontestability
under Sections 8 and 15 were fraudulent.
Lastly, with respect to Koan’s request to correct its
registration, which in essence is an attempt to amend its
registration to delete the goods on which the mark has never
been used, such request sought after the petition to cancel
was filed does not change our decision in this matter. As
noted above, after the filing of the petition to cancel,
Koan filed its request both with the Board and with the
USPTO’s Post Registration section and the amendment was
Opposition No. 91173681 and Cancellation No. 92046748
17
entered by the Post Registration section on May 22, 2007.
However, because the registration was the subject of an
inter partes proceeding, the Post Registration section did
not have jurisdiction to determine the propriety of the
amendment and the approval of such amendment by the Post
Registration section was in error. Nevertheless, “the fact
that the Post Registration section mistakenly acted on the
amendment does not preempt the Board’s authority to
determine the issue of fraud with respect to the original
identification of the goods.” Hachette Filipacchi Presse,
supra at 85 USPQ2d 1095. Under the circumstances, the
amendment will be given no effect but we note that in any
event, Koan’s amendment sought after the petition to cancel
was filed would not serve to cure the fraud that was
committed inasmuch as a deletion of goods upon which the
mark has not yet been used does not remedy fraud upon the
USPTO. Id. citing Medinol, supra.
Therefore, we find that Demptos and Koan committed
fraud on the USPTO in procuring and maintaining Registration
No. 2293534.
Accordingly, Mezini’s motion for summary judgment on
the ground of fraud in the procurement and maintenance of
the ZODIAC registration based on nonuse of the mark ZODIAC
on “liqueur” and “whiskey” is granted. The registration
must be canceled in its entirety. See Standard Knitting,
Opposition No. 91173681 and Cancellation No. 92046748
18
supra at 77 USPQ2d 1928.3 In view of our decision herein,
we need not reach the grounds of fraud with respect to
Demptos’ nonuse of the mark at the time of filing the
Statement of Use, or whether the registration was void ab
initio.
Additionally, inasmuch as the cancellation only relates
to the maintenance of Registration No. 2293534, Zodiac, as
opposer in Opposition No. 91173681, is still entitled to
rely on its common law rights in the ZODIAC mark in
asserting its claims of likelihood of confusion in the
opposition. See Standard Knitting, supra. Accordingly,
the opposition will go forward on these claims.
In view thereof, judgment is hereby entered against
Koan and the petition to cancel is granted on the ground as
specified above.
Registration No. 2293534 will be cancelled in due
course.
Proceedings are resumed. Discovery and trial dates are
reset as follows:

3 Mezini’s motion to amend the petition to cancel is moot.
Opposition No. 91173681 and Cancellation No. 92046748
19
D ISC O V ER Y PER IO D TO C LO SE: June 14, 2008
Septem ber 12, 2008
N ovem ber 11, 2008
D ecem ber 26, 2008
30-day testim ony period for party in position of plaintiff
to close:
30-day testim ony period for party in position of defendant
to close:
15-day rebuttal testim ony period for party in position of
plaintiff to close:

In each instance, a copy of the transcript of testimony
together with copies of documentary exhibits, must be served
on the adverse party within thirty days after completion of
the taking of testimony. Trademark Rule 2.l25.
Briefs shall be filed in accordance with Trademark
Rules 2.128(a) and (b). An oral hearing will be set only
upon request filed as provided by Trademark Rule 2.l29.
* * * *
The USPTO published a notice of final rulemaking in the
Federal Register on August 1, 2007, at 72 F.R. 42242. By
this notice, various rules governing Trademark Trial and
Appeal Board inter partes proceedings are amended. Certain
amendments have an effective date of August 31, 2007, while
most have an effective date of November 1, 2007. For
further information, the parties are referred to a reprint
of the final rule and a chart summarizing the affected
rules, their changes, and effective dates, both viewable on
the USPTO website via these web addresses:
http://www.uspto.gov/web/offices/com/sol/notices/72fr42242.pdf
http://www.uspto.gov/web/offices/com/sol/notices/72fr42242_FinalRuleChart.pdf

By one rule change effective August 31, 2007, the Board's
standard protective order is made applicable to all TTAB
inter partes cases, whether already pending or commenced on
or after that date. However, as explained in the final rule
and chart, this change will not affect any case in which any
protective order has already been approved or imposed by the
Board. Further, as explained in the final rule, parties are
Opposition No. 91173681 and Cancellation No. 92046748
20
free to agree to a substitute protective order or to
supplement or amend the standard order even after August 31,
2007, subject to Board approval. The standard protective
order can be viewed using the following web address:
http://www.uspto.gov/web/offices/dcom/ttab/tbmp/stndagmnt.htm