Nasalok Coating Corporationv.Nylok Corporation

Trademark Trial and Appeal Board

Mar 28, 2007

No. 92045050 (T.T.A.B. Mar. 28, 2007)

FSW

Mailed: March 28, 2007

Cancellation No. 92045050

NASALOK COATING CORPORATION

v.

NYLOK CORPORATION

Before Quinn, Bucher and Taylor,
Administrative Trademark Judges.

By the Board:

Nasalok Coating Corporation (“Nasalok”) has filed
a petition to cancel the mark shown below on the
grounds that the mark was procured by fraud, is
functional, has not acquired distinctiveness, is
generic, is a phantom mark and is ornamental.1

1 Reg. No. 2398840, registered October 31, 2000 for “metal
externally threaded prevailing torque locking fasteners, namely
screws, bolts, studs and shafts, and other specialty fasteners
having a nylon locking element;” Section 8 affidavit accepted.
The mark is described in the application as: “a patch of the
color blue on a selected number of threads of an externally
threaded fastener, with the blue patch extending more than 90
degrees and less than 360 degrees around the circumference of the
fastener.”

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.
Cancellation No. 92045050
2

Nylok Corporation (“Nylok”) has denied the salient
allegations in the complaint and asserted as an affirmative
defense that Nasalok’s claims are barred by the doctrine of
claim preclusion.
This case now comes before the Board on Nylok’s motion
for summary judgment on its affirmative defense of claim
preclusion. Nylok asserts that the petition to cancel is
barred by the infringement suit it brought against Nasalok
in 2005 in the U.S. District Court for the Northern District
of Illinois.2 In that case, Nylok pleaded prior use of the
color blue as a trademark for fasteners, ownership of
registration no. 2398840, a likelihood of confusion, and
damage from Nasalok’s continued use of its color blue
trademark. Nasalok defaulted, and the district court issued
a default judgment against Nasalok. The court also issued
an injunction against Nasalok, enjoining it from using the
color blue for fasteners. In the injunction, the court held
that Nylok is the “proper owner” of the registration; that
the registration covers “the color blue trademark;” and that

2 Nylok Corporation v. Fastener World Incorporation, Cashi
Components Corporation, Nasalok Components Corporation, Unilock
Industrial Co., Ltd., and Nypatch Industrial Co., Ltd., Case No.
03C-8238.

Cancellation No. 92045050
3
“Nylok’s color blue trademark is valid and enforceable in
the United States of America.” Nylok v. Fastener, et. al.,
Case No. 03C-8238, slip. op. page 3, (N.D.Ill. May 31,
2005). Neither party has pointed to any subsequent history
of this case and we thus presume no appeal was taken.
Under the doctrine of claim preclusion, “a judgment on
the merits in a prior suit bars a second suit involving the
same parties or their privies based on the same cause of
action.” Jet Inc. v. Sewage Aeration Systems, 223 F.3d
1360, 55 USPQ2d 1854 (Fed. Cir. 2000), quoting The Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5 (1979). Thus,
claim preclusion will bar a party in a second suit if: (1)
there is identity of parties (or their privies); (2) there
has been an earlier final judgment on the merits of a claim;
and (3) the second claim is based on the same set of
transactional facts as the first. Jet, 55 USPQ at 1856; see
also Lawlor v. National Screen Service Corp., 349 U.S. 322
(1955); and Flowers Industries, Inc. v. Interstate Brands
Corp., 5 USPQ2d 1580 (TTAB 1987).
Over the years, the doctrine has come to incorporate
common law concepts of merger and bar, extending to those
claims or defenses that could have been raised in the prior
action. Perma Ceram Enterprises Inc. v. Preco Industries
Ltd., 23 USPQ2d 1134, 1138 (TTAB 1992); see also Jet, 55
USPQ2d at 1856(“Claim preclusion refers to the effect of a
Cancellation No. 92045050
4
judgment in foreclosing litigation of a matter that never
has been litigated, because of a determination that it
should have been advanced in an earlier suit.”)
There is no dispute between the parties regarding
factors (1) and (2): the parties (Nylok and Nasalok) are
identical in both actions, and the infringement litigation
resulted in a final judgment. The fact that the judgment
was a result of Nasalok’s default is immaterial. “A default
judgment can operate as res judicata in appropriate
circumstances.” Sharp Kabushiki Kaisha v. ThinkSharp Inc.,
448 F.3d 1368, 79 USPQ2d 1376, 1378 (Fed. Cir. 2006); see
also Treadwell’s Drifters Inc. v. Marshak, 18 USPQ2d 1318,
1321 (TTAB 1990).
Although Nasalok argues that there is a question as to
whether the District Court was entitled to exercise personal
jurisdiction over it because it is a Korean company, the
court concluded that it had proper jurisdiction over
Nasalok, finding that Nasalok transacted business in the
judicial district and that the record showed it received
proof of service of the complaint. In view thereof, Nasalok
is precluded from claiming that the court lacked personal
jurisdiction. Further, we reiterate that no appeal was
taken from the District Court’s decision.
This case therefore reduces to an analysis of the
transactional facts involved in the two causes of action.
Cancellation No. 92045050
5
Nasalok contends that a judgment on the merits of Nylok’s
claim of infringement in the civil action involved a
different set of transactional facts than in this case,
because the claims pleaded herein against Nylok have nothing
to do with likelihood of confusion. Nylok responds that
Nasalok bases its claims herein on the same set of
transactional facts as it did in the civil action, namely,
that Nylok falsely stated in the declaration in its
trademark application, and in the statement of acquired
distinctiveness under Section 2(f), that it was the
exclusive user of the mark, despite its knowledge of use by
Nasalok and others of the color blue in connection with
fasteners.
We agree with Nylok that the same transactional facts
are present herein as existed in the civil action. In its
complaint in the civil action, Nylok claimed that the color
blue had acquired distinctiveness as a trademark for its
fasteners and that Nasalok had committed trademark
infringement by using the color blue on its own line of
fasteners. Nylok pleaded ownership of the registration that
is the subject of this proceeding, and prayed that the court
enjoin Nasalok “from using Nylok’s trademarked color blue.”
At the time of the infringement suit, Nylok’s statements of
acquired distinctiveness were known to Nasalok, inasmuch as
they were stated in the pleaded registration.
Cancellation No. 92045050
6
Thus, Nasalok’s present claims arise out of the same
transactional facts as those present in the civil action.
They are an attack on the registration that was adjudicated
in the prior case. The court’s order specifically held that
the “color blue trademark is valid and enforceable.” This
order encompassed the registration that issued for said
color blue. Nasalok’s claims herein that the registration
was procured by fraud, is functional, has not acquired
distinctiveness, is generic, is a phantom mark and is
ornamental were necessary to that determination. Since they
arise out of the same transactional facts as were present in
the civil action, Nasalok is barred from relitigating them
here.
Accordingly, Nylok’s motion for summary judgment is
hereby granted and the petition to cancel is dismissed with
prejudice.