Opinion
Civil No. CV 03-1120-JE.
September 9, 2004
Abby R. Michels, The DuBoff Law Group, LLC, Portland, OR, Attorneys for Plaintiff.
Robert S. Rapp, Craig J. Madson, Madson Metcalf, Salt Lake City, UT, Jere Michael Webb, David L. Silverman, Stoel Rives, LLP, Portland, OR, Attorneys for Defendants.
FINDINGS AND RECOMMENDATION
Plaintiff Carol Rogers, dba Quick Check Cashing Service (QCC), brings this action against defendant Quik Check Financial, Inc. (QCF). Defendant QCF moves for a partial summary judgment establishing that it did not fraudulently procure its registration for the "QUIK CHECK" service mark. In its response to the motion, plaintiff in turn "encourages the Court to, on its own motion, grant her summary judgment on the issue of fraudulent procurement of the QUIK CHECK trademark registration." The court construes this as a cross motion for partial summary judgment. Defendant's motion should be granted, and plaintiff's motion should be denied.
BACKGROUND
Defendant QCF filed a trademark application with the United States Patent and Trademark Office (PTO) on January 14, 1999. The application claimed rights in the mark "Quik Check" used in connection with providing small, short-term loan services, and stated that the mark "was first used in connection with the services at least as early as November 28, 1994. . . ." In its amended answer to plaintiff's complaint, QCF states that it began using the mark "QUIK CHECK EXCHANGE in commerce in connection with providing small, short-term loans in commerce in Orem, Utah," in November 1994, and that it began using the mark "QUIK CHECK" in commerce in May 1998.
In a trademark oath executed in support of the trademark application, David Dunkley, QCF's then Treasurer and CEO, stated that, to the best of his knowledge and belief, "no other person, firm, corporation, or association has the right to use said mark in commerce, either in the identical form or in such near resemblance thereto as may be likely, when applied to the services of such other person, to cause confusion, or to cause mistake, or to deceive. . . ."
In a declaration submitted during this litigation, Dunkley stated he did not believe that, when he signed the oath, he had "even heard the name `Quick Check Cashing Service.'" He added that, if he had, the name "Quick Check Cashing Service" would have suggested that the entity "performed check-cashing services, not lending services." He also stated that, when the trademark application was filed, he "believed that QCF was entitled to the registration it sought and had no reason to believe otherwise."
On January 18, 2000, the PTO registered the "Quick Check" service mark to defendant QCF.
Before QCF submitted its trademark application, Dunkley had filed a "Convenience and Advantage to the Community" questionnaire with the State of Oregon in support of its application for a license to operate as a lender in Oregon. In that questionnaire, Dunkley indicated that competitors for a proposed short-term loan business he sought to open in Klamath Falls, Oregon, included a company known as "Quick Check Cash." He further indicated that he was "not sure if Quick Check Cash" was licensed with the state as a lender, because "[t]hey would not let us know." He added that QCF was "not sure Quick Check is offering loans on personal checks." Dunkley also submitted a map of Klamath Falls indicating the location of Quick Check Cash and Check N Go, another business listed as a competitor. After obtaining a license from Oregon, QCF established a check cashing/loan business in Klamath Falls under the name "Postdate a Check." QCF's nine other business locations in Oregon operate under the name "Quik Check," and none of the others have ever operated under the name "Postdate a Check."
Plaintiff Rogers has not applied with the PTO to register the "Quick Check Cashing Service" mark to which she contends she has trademark rights. However, a printout from the Business Registry Database of the Oregon Secretary of State's Corporate Division website shows that plaintiff Rogers registered the business name of "Quick Check Cashing Service" in August 1994, and when her deposition was taken, Rogers testified that she began providing financial services under the service mark "Quick Check Cashing Service" in September 1994. Plaintiff Rogers further testified that, before defendant QCF applied for trademark registration, QCC provided check cashing services, made title loans, and provided various other services. Plaintiff has submitted evidence that Quick Check Cashing Services advertised on television and radio, and through newspapers and telephone, between 1995 and 2000. She has also provided evidence that, before defendant applied for trademark registration in February, 1999, signs affixed to her stores identified the businesses as "Quick Check Cashing Service," and indicated some of the services offered.
In her response to interrogatories, plaintiff Rogers indicated that she began providing "slow check" services to the public in 1997. On February 8, 1999, plaintiff Rogers obtained a license to conduct loan transactions from the Oregon Department of Finance and Corporate Securities.
As noted above, defendant originally operated a store in Klamath Falls under the name "Postdate-A-Check." In 1999, after defendant QCF changed the name of that store to "Quik Check," the Oregon Department of Finance and Corporate Securities contacted defendant concerning confusion in the marketplace between its use of the "Quik Check" name and plaintiff Roger's use of the name "Quick Check Cashing Service." Defendant acceded to the Department's request that it change its name back to "Postdate-a-Check."
In a letter dated June 2, 2003, defendant QCF demanded that plaintiff not use the term "Quick Check" in conjunction with lending services, and demanded that plaintiff transfer the name "Quick Check" to QCF. Plaintiff responded by reminding defendant of its agreement with a state agency in 1999 not to use the "Quik Check" mark in the Klamath Falls area, and filed the present action on August 15, 2003, alleging that defendant QCF has infringed on her common law trademark right to the "Quick Check Cashing Service" mark.
STANDARDS FOR EVALUATING MOTIONS FOR SUMMARY JUDGMENT
Federal Rule of Civil Procedure 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show the absence of an issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The moving party may discharge this burden by showing that there is an absence of evidence to support the nonmoving party's case.Id. When the moving party shows the absence of an issue of material fact, the nonmoving party must go beyond the pleadings and show that there is a genuine issue for trial. Id. at 324.
The substantive law governing a claim or defense determines whether a fact is material. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Reasonable doubts concerning the existence of a factual issue should be resolved against the moving party. Id. at 630-31. The evidence of the nonmoving party is to be believed, and all justifiable inferences are to be drawn in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1985). No genuine issue for trial exists, however, where the record as a whole could not lead the trier of fact to find for the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
DISCUSSION
1. Claim at issue
Plaintiff's infringement claim is based upon the allegation that defendant QCF fraudulently procured the registration of the Quik Check service mark by representing that it had no knowledge of the existence of plaintiff's business or of plaintiff's "Quick Check Cashing Service" mark. In the present motion, defendant seeks summary judgment on the fraudulent procurement claim.
2. Standards for establishing a fraudulent procurement claim
In order to prevail on a claim that a trademark registration has been fraudulently procured, a plaintiff must establish that the registrant made a false representation of a material fact, the registrant knew or believed that the representation was false, the registrant intended to induce reliance upon the misrepresentation, and that the plaintiff was proximately damaged. Robi v. Five Platters, Inc., 918 F.2d 1439, 1444 (9th Cir. 1990) (citing San Juan Products, Inc. v. San Juan Pools of Kansas, Inc., 849 F.2d 468, 473 (10th Cir. 1988)). This is a heavy burden. Id. (citing Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 942 (10th Cir. 1983)). Though I have found no Ninth Circuit decisions directly addressing the standard of proof, a number of courts have concluded that fraudulent procurement must be established by clear and convincing evidence. See, e.g., Advance Stores Co., Inc. v. Refinishing Specialties, Inc., 948 F. Supp. 643, 654 (W.D. Ky. 1996) aff'd, 188 F.3d 408 (6th Cir. 1999) (citing Smith Int'l, Inc. v. Olin Corp., 209 U.S.P.Q. 1033, 1044 (T.T.A.B. 1981) (party must establish allegations of fraudulent procurement by evidence leaving no "room for speculation, inference, or surmise"). Failure to inform the PTO of the asserted rights of another person is fraudulent only if the applicant knows that another person possesses "a superior or clearly established right to use the same or a substantially identical mark. . . ." Intellimedia Sports Inc. v. Intellimedia Corp., 43 U.S.P.Q. 2d 1203, 1207 (T.T.A.B. 1997). Rights in a mark may be clearly established by such documents as a court decree, a settlement agreement, or a trademark registration. Rosso and Mastracco, Inc. v. Giant Food Inc., 720 F.2d 1263, 1266 (Fed. Cir. 1983).
3. Analysis
Plaintiff contends that the record before the court includes evidence supporting the conclusion that defendant's procurement of the "Quik Check" service mark was fraudulent because QCF knew of plaintiff's right to use that or a "confusingly similar" mark when it applied for the trademark registration.
Defendant QCF contends that plaintiff cannot establish that Dunkley knew or had any reason to believe that plaintiff QCC had rights in the "Quik Check" mark that were superior to those of QCF when he submitted the oath in support of the registration application. Defendant QCF cites Dunkley's declaration that he does not believe he had even heard of "Quick Check Cashing Service" when he submitted the application, and that, even if he had heard that name, it would have suggested that the entity "performed check-cashing services, not lending services." Defendant further asserts that Dunkley had no information that would have suggested that plaintiff's rights in the mark were superior or "clearly established" when he filed the application.
Plaintiff has submitted evidence supporting the conclusion that defendant QCF may have known that plaintiff was providing financial services in Klamath Falls under the name "Quick Check Cashing Service" before it applied for registration of the "Quik Check" mark. Plaintiff has also cited evidence that she obtained a license to conduct business in Oregon and registered the assumed business name "Quick Check Cashing Service" in 1994, and that she has continuously and conspicuously advertised her businesses in Klamath Falls under that name for several years. Plaintiff has submitted evidence that, before QCF opened a business in Klamath Falls or applied for a trademark registration, Dunkley and other QCF agents performed market research that could have informed them that plaintiff had been operating for a number of years under the "Quick Check Cashing Service" name.
Based upon this evidence and other evidence in the record before the court, a trier of fact may ultimately conclude that plaintiff was using a name similar to defendant's registered mark before defendant began using the "Quik Check" mark. The evidence in the record might also support the conclusion that Dunkley knew of plaintiff's use of her business name when he executed the trademark oath stating that, to the best of his knowledge and belief, no other person or entity had the right to use the "Quik Check" mark. However, the evidence before the court would not permit a trier of fact to conclude that Dunkley knew that plaintiff had a superior or clearly established right to use the "Quik Check" mark or a substantially identical mark when the trademark oath was executed. Reported decisions addressing the issue consistently emphasize that the burden of establishing a fraudulent procurement claim is heavy, that the level of proof required is high, and the claim may not be established by inference and speculation. A trier of fact examining the record before the court could conclude that the registration was fraudulently procured only by indulging in speculation or by drawing impermissible inferences, because there is no objective evidence that, when the oath was executed, Dunkley knew that any other person or entity had a superior or clearly established right to the "Quik Check" or a confusingly similar mark. As noted above, Dunkley's oath stated that defendant began using the "Quick Check" mark "at least as early as November 28, 1994" in connection with providing short-term loans. There is no evidence that Dunkley knew when plaintiff actually began using her business name, or knew that she was using that name before November 1994, when the trademark oath was executed. There is likewise no evidence that plaintiff's rights in that or a confusingly similar mark had been "clearly established" by a court decree, settlement agreement, or trademark registration when the oath was filed.
Under these circumstances, defendant's motion for summary judgment on the fraudulent procurement claim should be granted, and plaintiff's cross motion on that issue should be denied.
CONCLUSION
Defendant QCF's motion for partial summary judgment (#64) should be GRANTED. Plaintiff's cross motion for partial summary judgment, set out in plaintiff's memorandum in opposition to defendant's motion (#94) should be DENIED.
SCHEDULING ORDER
The above Findings and Recommendation are referred to a United States District Judge for review. Objections, if any, are due September 27, 2004. If no objections are filed, review of the Findings and Recommendation will go under advisement on that date.
A party may respond to another party's objections within 10 days after service of a copy of the objection. If objections are filed, review of the Findings and Recommendation will go under advisement upon receipt of the response, or the latest date for filing a response.