Edom Labora-tories, Inc.v.Glenn Lichter

Trademark Trial and Appeal Board

Jun 18, 2009

No. 92049824 (T.T.A.B. Jun. 18, 2009)

THIS OPINION IS NOT
A PRECEDENT OF
THE T.T.A.B.

Winter
Mailed: June 18, 2009

Cancellation No. 92049824

Edom Laboratories, Inc.

v.

Glenn Lichter

Before Hairston, Drost, and Taylor,
Administrative Trademark Judges.

By the Board:

Edom Laboratories, Inc. (“petitioner”) seeks to cancel
the registration of Glenn Lichter (“respondent”) for the
mark CHIRO-KLENZ for “herb tea.”1 As grounds for
cancellation, petitioner claims that respondent is not the
owner of the mark and was not the owner of the mark when
respondent’s predecessor-in-interest2 (“Special Tea”) filed
the application that matured into the involved registration.
In support of its claims, petitioner alleges, inter
alia, that on or about September 18, 1997, petitioner and

1 Registration No. 3327764 issued on October 30, 2007.

2 Respondent’s predecessor-in-interest is Special Tea, Inc. The
assignment of “the entire interest” to respondent was recorded
with the USPTO Assignment Division on January 7, 2008 at
Reel/Frame 3690/0752.
UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
P.O. Box 1451
Alexandria, VA 22313-1451
Cancellation No. 92049824
2
Special Tea entered into a contract whereby Special Tea sold
and assigned all of its rights, title and interest in the
mark CHIRO-KLENZ to petitioner; that upon payment in full,
Special Tea agreed to forward an assignment document
transferring the mark to petitioner; that petitioner paid
Special Tea in full and recorded said assignment document
with the USPTO on February 24, 1999;3 that on or about July
12, 2001, a new registration for the mark CHIRO-KLENZ issued
to petitioner;4 that under the same contract, petitioner
agreed that Special Tea would be its exclusive licensee and
supplier of “Chiro-Klenz” tea for ten years, subject to
provisions regarding quality control and termination for
cause; that said contract is binding upon the successors and
assigns of the parties to said contract, including
respondent; that on or about October 29, 2004, petitioner
sent a notice to Special Tea regarding the alleged poor
quality of tea shipments and that no improvements were made

3 The assignment data regarding the original trademark
registration (U.S. Reg. No. 1760128) for the mark CHIRO-KLENZ
(issued March 23, 1993) from Special Tea, Inc. to Edom Labs, Inc.
was not provided by petitioner. We note that respondent
essentially recognizes the filing of said assignment in stating
that “after the recordation of the assignment to Edom, Edom
allowed the first registration to lapse …” (see opposition brief
at 2).

4 U.S. Reg. No. 2459470 issued June 12, 2001 for “herbal tea for
food purposes.” The registration was cancelled on August 15,
2006 under Section 18 of the Act after a default judgment was
entered against petitioner in Cancellation No. 92045380. The
Board notes the copy of said registration attached to
petitioner’s motion as Exhibit 4 thereof.
Cancellation No. 92049824
3
to the quality of the tea; that on or about December 22,
2004, petitioner exercised its contractual right to
terminate the contract with Special Tea; that on or about
January 18, 2008, the Supreme Court of the State of New York
for the County of Suffolk (hereafter “New York state
court”), in a civil action brought by Special Tea against
petitioner, issued a judgment in favor of petitioner and
dismissed Special Tea’s complaint for breach of contract,
stating that Special Tea had received proper notice under
the contract; that the New York state court decision
precludes Special Tea and respondent from challenging
petitioner’s ownership of the involved mark; that Special
Tea procured a default judgment in its cancellation action
of petitioner’s second registration of the CHIRO-KLENZ
mark;5 that in Special Tea’s application which matured into

5 To the extent that petitioner argues that the default judgment
against it which resulted in the cancellation of U.S. Reg. No.
2459470 has no preclusive effect on this proceeding, respondent
agrees that “the issues before the TTAB in the Cancellation of
the second registration are not identical to the issues to be
decided here” [emphasis original]; thus, respondent does not seek
relief under the doctrine of res judicata, which may be applied
when the claim in a later proceeding is based on the same
transactional facts as the earlier proceeding for which there was
a final judgment on the merits. See Sharp Kabushiki Kaisha v.
ThinkSharp Inc. 448 F.3d 1368, 79 USPQ2d 1376, 1378 (Fed. Cir.
2006) [internal citations omitted]. We note also that the Office
may not have provided proper notice to petitioner of the earlier
proceeding after the notice of default issued therein was
returned to the Office as undeliverable. In view of the
foregoing, it does not appear that the default judgment in
Cancellation No. 92045380 has a preclusive effect on this
proceeding under the doctrine of res judicata. See Id. at 1379
(“When applying res judicata to bar causes of action that were
not before the court in the prior action, due process of law and
Cancellation No. 92049824
4
the involved registration, Special Tea falsely claimed to be
the current owner of the mark; that Special Tea assigned the
mark to respondent; that continued use of the mark by
respondent through his other business entities is a
violation of petitioner’s ownership rights in the mark; that
petitioner has been damaged by the improper use of the mark
by Special Tea and respondent; and that petitioner continues
to use the mark in interstate commerce and has filed an
action in the Supreme Court of the State of New York for the
County of Suffolk to enjoin respondent’s continued use of
the mark.
Respondent, in his amended answer, denies, inter alia,
that petitioner sent proper notice under the purchase and
sale/exclusive licensing and supply agreement; that
petitioner exercised “its right under the contract” to
terminate the licensing agreement; that the New York state
court found that Special Tea had received proper notice of
the alleged breach of the contract; that the terms of the
contract transferring the CHIRO-KLENZ trademark to
petitioner survive the termination of the contract and are
binding upon respondent; that the New York state court
decision precludes Special Tea and respondent from
challenging petitioner’s absolute ownership of the mark; and

the interest of justice require cautious restraint. Restraint is
particularly warranted when the prior action was dismissed on
procedural grounds” [internal citations omitted]).
Cancellation No. 92049824
5
that Special Tea falsely claimed that it was the current
owner of the CHIRO-KLENZ mark. Respondent admits that
petitioner continues to use the mark in interstate commerce.
This case now comes up for consideration of
petitioner’s motion (filed February 4, 2009) for summary
judgment on the ground that respondent does not own the
CHIRO-KLENZ mark. The motion is fully briefed.
Summary judgment is an appropriate method of disposing of
cases in which there are no genuine issues of material fact in
dispute, thus leaving the case to be resolved as a matter of
law. See Fed. R. Civ. P. 56(c). The purpose of summary
judgment is one of judicial economy, that is, to save the time
and expense of a useless trial where no genuine issue of
material fact remains and more evidence than is already
available in connection with the summary judgment motion could
not reasonably be expected to change the result. Pure Gold,
Inc. v. Syntex (U.S.A.), Inc., 739 F.2d 624, 222 USPQ 741, 743
(Fed. Cir. 1984).
A party moving for summary judgment has the burden of
demonstrating the absence of any genuine issue of material
fact, and that it is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c); and Celotex Corp. v. Catrett, 477 U.S.
317, 106 S. Ct. 2548 (1986). Additionally, the evidence must
be viewed in a light favorable to the non-movant, and all
justifiable inferences are to be drawn in the non-movant’s
Cancellation No. 92049824
6
favor. See Opryland USA, Inc. v. Great American Music Show,
Inc., 970 F.2d 847, 23 USPQ2d 1471 (Fed. Cir. 1993).
Petitioner essentially argues that there is no genuine
issue of fact that respondent does not own the CHIRO-KLENZ
mark and that petitioner is entitled to judgment in its
favor as a matter of law. In support of its motion,
petitioner has provided the declaration of its president,
Arthur Pollock, which authenticates various exhibits
attached to the motion,6 including a copy of the trademark
purchase/licensing-supply agreement between the parties and
a photocopy of a certified copy of the judgment order issued
by the New York state court in the civil proceeding brought
by Special Tea against petitioner, discussed supra.
Petitioner also argues that the following material facts are
undisputed, viz.:
• That on or about September 18, 1997, Special Tea and
petitioner entered into a contract for the purchase and
sale of the rights to the mark CHIRO-KLENZ;

• That Clause I. of the contract provided that Special
Tea (“seller/licensee”) assigned all of its “right,
title and interest” in the mark to petitioner
(“buyer/licensor”) for a particular purchase price to
be paid in three installments;

• That Clause II. of the contract contained a licensing
and supply agreement whereby petitioner granted back to

6 The exhibits attached to the petition for cancellation do not
constitute evidence of record and have not been considered. See
TBMP §§ 317 and 704.05(a) (2d ed. rev. 2004). Cf. McCormick &
Company, Inc. v. Hygrade Food Products Corp., 124 USPQ 16, 17
(TTAB 1959) (“statements as to proposed evidence are not proper
matters for pleading”).

Cancellation No. 92049824
7
Special Tea a ten-year license for the exclusive use of
the CHIRO-KLENZ mark for the sole purpose of supplying
CHIRO-KLENZ tea to petitioner;

• That, under Clause II., at the time of the transfer of
the CHIRO-KLENZ mark, seller/licensee became the
exclusive supplier to petitioner in connection with the
supply, production, sale and packaging of the CHIRO-
KLENZ tea;

• That Clause II. stated that upon full payment for the
CHIRO-KLENZ trademark, the seller/licensee shall
forward to buyer/licensor for recording with the USPTO
the assignment document which transfers the CHIRO-KLENZ
mark to the buyer/licensor and that petitioner filed
said document with the USPTO [emphasis added];

• That, under Clause II., subparagraph B., Special Tea
acknowledged that “as between buyer/licensor and
seller/licensee, buyer/licensor owns the CHIRO-KLENZ
Trademark and all rights, registrations, applications
and filing with respect to such CHIRO-KLENZ Trademark,
and all renewals and extensions of any such
registrations applications and filings,” and that
Clause II. B. provided further that “all rights to the
Trademark other than those specifically granted to
seller/licensee under the contract are reserved to
buyer/licensor for its own use and benefit” [emphasis
added];

• That, under Clause IV., subparagraph A., Special Tea
acknowledged that all rights in the CHIRO-KLENZ mark
and formula and goodwill pertaining thereto “as between
buyer/licensor and seller/licensee belong exclusively
to buyer/licensor” [emphasis added];

• That, under Clause II., subparagraphs D. and F., and
Clause VII., subparagraph A., the contract allowed for
a quality control provision and method for the
buyer/licensor to (i) provide notice of a breach of
contract and to (ii) terminate the licensing and supply
agreement should seller/licensee breach and fail to
cure the contractual requirement to maintain the
quality of the tea provided under the CHIRO-KLENZ mark;

Cancellation No. 92049824
8
• That upon payment of $75,000,7 Special Tea executed a
document assigning all of its right, title and interest
in trademark registration number 1760128 for the mark
CHIRO-KLENZ to petitioner, which was recorded with the
USPTO;

• That petitioner notified Special Tea that petitioner
was terminating the licensing and supply agreement
after respondent failed to correct the tea quality
after having been notified by petitioner that it had
received complaints regarding the quality of the tea;

• That respondent procured a default judgment on or about
August 14, 2006 against petitioner for the cancellation
of petitioner’s second CHIRO-KLENZ trademark
registration (see notes 4 and 5 supra);

• That on or about May 13, 2006, respondent filed an
application to register the mark CHIRO-KLENZ and that
registration issued for said mark on or about October
30, 2007 (see note 1 supra);

• That on or about January 7, 2008, Special Tea assigned
the CHIRO-KLENZE trademark registration to Glenn
Lichter (respondent);

• That on or about January 18, 2008, in regard to a
complaint filed by Special Tea against petitioner for
breach of contract, the Supreme Court of the State of
New York for the County of Suffolk issued judgment in
favor of petitioner, stating that the termination of
the contract by petitioner was “proper and legal;” and

• That Special Tea did not appeal the state court
judgment.

Based on these and other factual allegations, petitioner
argues, inter alia, that Special Tea agreed to sell its
rights in the CHIRO-KLENZ mark to petitioner; that
petitioner paid the full purchase price for the mark; that
respondent executed an assignment instrument for the mark,

7 We understand petitioner’s statement to refer to the total
purchase price due of $75,000 payable in three installments of
Cancellation No. 92049824
9
which was recorded with the USPTO; that Special Tea claimed
to be the current owner of the mark in the trademark
application that matured into the subject registration; that
once petitioner paid the purchase price for the CHIRO-KLENZ
mark, the only right Special Tea retained for itself was a
reversionary right to the tea formula, which matured only if
Special Tea terminated the licensing and supply agreement
based on petitioner’s material breach thereof; that the
cancellation of the licensing and supply agreement between
petitioner and Special Tea did not cause the trademark
CHIRO-KLENZ to revert back to Special Tea; and that “the
unambiguous terms of the contract clearly establish
[petitioner] as the owner of the Mark and all goodwill
appurtenant to it” (motion at 19). Petitioner also argues
that respondent is collaterally estopped from arguing before
the Board that petitioner breached the subject contract
because the New York state court has already decided that
petitioner did not materially breach the licensing and
supply agreement between the parties (motion at 16-19).
In opposition, respondent primarily argues that
petitioner did not have a right to terminate the
licensing/supply agreement between itself and Special Tea;
that petitioner breached the contract by purchasing the tea
product to be used with the CHIRO-KLENZ mark from another

$25,000 (see Clause I.).
Cancellation No. 92049824
10
supplier; that the rights to the tea formula reverted back
to Special Tea; and that, as a result the alleged reversion
of the formula, the right “to produce the product under the
name to which consumer had become accustomed,” i.e. the
CHIRO-KLENZ mark, also reverted back to Special Tea
(opposition at 7). Respondent also asserts, inter alia,
that petitioner has misused the CHIRO-KLENZ mark by using it
with a different formula tea product; and that petitioner
failed both to maintain its first registration for the
CHIRO-KLENZ mark and to defend itself in the cancellation
proceeding brought previously by respondent in connection
with petitioner’s second registration. Respondent’s brief
did not include any declarations or evidence in support of
his assertions and arguments. Respondent does not dispute
the authenticity of the copy of the contract between
petitioner and Special Tea that was provided by petitioner.
Before we consider whether summary judgment is
appropriate in this case, we will consider the question of
whether petitioner has the proper standing to bring this
cancellation proceeding.
Standing is a threshold issue that must be proven by a
plaintiff in every inter partes case. Ritchie v. Simpson,
170 F.3d 1092, 50 USPQ2d 1023 (Fed. Cir. 1999) and Lipton
Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213
USPQ 185 (CCPA 1982). The purpose of the standing
Cancellation No. 92049824
11
requirement, which is directed solely to the interest of the
plaintiff, is to prevent litigation when there is no real
controversy between the parties. Lipton Industries, 213
USPQ at 189. In the case of a petition to cancel, the
standing requirement of a plaintiff has its statutory basis
in Section 14 of the Act which provides that “any person who
believes he is or will be damaged … by the registration of a
mark on the principal register …” may file a petition to
cancel. To establish standing, it must be shown that the
plaintiff has a “real interest” in the outcome of a
proceeding; that is, plaintiff must have a direct and
personal stake in the outcome of the cancellation. Ritchie,
50 USPQ2d at 1023. Facts regarding legitimate personal
interest are a part of the plaintiff’s case and must be
proved. Lipton Industries, 213 USPQ at 189.
We find that petitioner has established its standing to
seek cancellation of respondent’s registration inasmuch as
it has provided a declaration in support of the contract
which evidences its ownership rights in the CHIRO-KLENZ mark
and respondent has admitted that petitioner continues to use
the mark in interstate commerce (amended answer, ¶40). This
evidence demonstrates that petitioner has a real interest in
whether respondent’s registration is maintained.
We turn now to the merits of petitioner’s motion. To
determine if there is a genuine issue of fact as to whether
Cancellation No. 92049824
12
respondent’s predecessor-in-interest was the rightful owner
of the mark at the time the application that matured into
the subject registration was filed requires the Board to
consider closely the contract between petitioner and
respondent’s predecessor-in-interest. Based on our review
of said agreement, we find that the terms of the contract
between those parties clearly state that upon payment of
certain consideration, Special Tea will provide an
assignment to petitioner of all rights to the CHIRO-KLENZ
mark and that the assignment was recorded with the
Assignment Division of the USPTO. Further, there is no
provision in the subject contract for any rights in the
CHIRO-KLENZ trademark to revert to the seller/licensee
(Special Tea, respondent’s predecessor-in-interest), even
though the rights to the tea formula could have reverted to
seller/licensee if petitioner had materially breached the
licensing/supply segment of the contract. There is also no
dispute that all rights in the trademark CHIRO-KLENZ and the
goodwill appurtenant thereto belonged to the buyer/licensor
(petitioner), that Special Tea acknowledged those rights in
the contract, and that early termination of licensing/supply
agreement for material breach by Special Tea did not
effectuate a reversion of either the mark or the rights to
the tea formula. There is also no dispute that petitioner
continues to use the mark CHIRO-KLENZ in connection with a
Cancellation No. 92049824
13
tea product and that the involved registration was assigned
to respondent. See Trademark Rule 2.122(b), 37 C.F.R. §
2.122(b); and TBMP § 704.03(a) (2d ed. rev. 2004). In view
of the foregoing facts of record, we find that there is no
genuine issue of material fact that respondent does not own
the CHIRO-KLENZ mark which is the subject of the
registration sought to be cancelled in this proceeding and
that respondent’s predecessor-in-interest did not own the
mark at the time the application therefor was filed.
Accordingly, the involved registration is void ab initio and
petitioner is entitled to judgment as a matter of law.
Trademark Act Section 1, 15 U.S.C. § 1052. See, e.g., Huang
v. Tzu Wei Chen Food Co. Ltd., 849 F.2d 1458, 7 USPQ2d 1335,
1336 (Fed. Cir. 1988); and Great Seats, Ltd. v. Great Seats,
Inc., 84 USPQ2d 1235 (TTAB 2007).
For clarification purposes, however, we feel obliged to
comment regarding petitioner’s argument that respondent is
collaterally estopped from arguing that his predecessor-in-
interest did not breach the contract at issue. The parties
should note that the New York state court decision is
irrelevant to our decision herein inasmuch as the narrow
issue raised by petitioner’s pleading and its motion for
summary judgment is whether respondent is the owner of the
mark, which is not affected by the parties’ actions in
connection with the licensing/supply agreement. The CHIRO-
KLENZ trademark was assigned to petitioner upon full payment
Cancellation No. 92049824
14
of the $75,000 in consideration and the subsequent licensing
arrangement, which was addressed by the New York state court
decision, has no affect on that assignment. Nonetheless,
even if the decision were relevant to our disposition of
this matter, we note that the state court ruled against
respondent’s predecessor-in-interest.
Respondent should also note that his potential claim of
misuse of the CHIRO-KLENZ mark by petitioner or other
contractual claim in regard to the licensing/supply
agreement discussed herein may not be addressed before the
Board. The Board’s jurisdiction is limited to the issue of
the right to register a mark. The Board is not authorized
to determine the right to use, nor may it decide broader
questions of infringement or unfair competition. See, e.g.,
Person’s Co. v. Christman, 900 F.2d 1565, 14 USPQ2d 1477,
1481 (Fed. Cir. 1990); and TBMP § 102.01 (2d ed. rev. 2004).
In view thereof, respondent’s contentions regarding
petitioner’s alleged misuse of the mark and its alleged
breach of the licensing/supply agreement have not been
considered.
In sum, there is no issue of fact that respondent did not
own the CHIRO-KLENZ mark at the time the application that
issued into the involved registration was filed. Accordingly,
respondent’s registration is void ab initio. Petitioner is
entitled to judgment as a matter of law.
Cancellation No. 92049824
15
Accordingly, judgment is hereby entered against
respondent, the petition to cancel is GRANTED, and
Registration No. 3327764 will be cancelled in due course.
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