Lanzhou Foguang Pharmaceutical Co., Ltd.v.Kingsway Trading, Inc.

Trademark Trial and Appeal Board

Sep 24, 2007

No. 91158111 (T.T.A.B. Sep. 24, 2007)

Mailed: September 24, 2007
PTH

UNITED STATES PATENT AND TRADEMARK OFFICE
_____

Trademark Trial and Appeal Board
______

Lanzhou Foguang Pharmaceutical Co., Ltd.
v.
Kingsway Trading, Inc.
_____

Opposition Nos. 91158111 and 91160165
_____

I. Morley Drucker and Samuel L. Alberstadt of Fulwider
Patton LLP for Lanzhou Foguang Pharmaceutical Co.

Chris X. Lin and Kenneth Cang Li of Lin & Li, LLC for
Kingsway Trading, Inc.
______

Before Hairston, Kuhlke and Bergsman, Administrative
Trademark Judges.

Opinion by Hairston, Administrative Trademark Judge:

Applications were filed by Kingsway Trading, Inc.
(“Applicant”) to register the marks shown below both for
“herbal supplements; herbal teas for medicinal purposes;
THIS OPINION IS
NOT A PRECEDENT
OF THE TTAB
Opposition Nos. 91158111 and 91160165
2
food for medically restricted diets” in International Class
5.1
(1) (2)
Lanzhou Foguang Pharmaceutical Co., Ltd, (a Chinese
corporation, hereinafter “Opposer” or “Lanhou Foguang”) has
opposed registration in each instance. As grounds for
opposition, opposer alleged that since at least as early as
January 6, 1999, opposer has used the mark shown below in
interstate commerce,

1 (1) Application Serial No. 76406075, filed May 10, 2002,
alleging a date of first use anywhere and a date of first use in
commerce of August 1, 2001. The allegations of use and use in
commerce were subsequently deleted and an allegation of a bona
fide intention to use the mark in commerce was substituted. The
words “DEERS FORMULA” are disclaimed apart from the mark as
shown. The application includes the statements that “The
stippling is a feature of the mark” and “The stippling is for
shading purposes only.” (2) Application Serial No. 76417210,
filed June 4, 2004, alleging first use and first use in commerce
in February 2000. The mark is described as consisting of “a
graphic design and six Chinese characters.” The Chinese
characters “LING” “ZING” and “zhong” “yao” are disclaimed apart
from the mark as shown. The application includes the statement
that ”The stippling is for shading purposes only.”
Opposition Nos. 91158111 and 91160165
3
for, inter alia, medicinal herbs and herbal teas for
medicinal purposes; that it is the owner of application
Serial No. 78141238 for such mark and goods; that at least
as early as January 6, 1999, applicant was the United States
distributor of opposer’s products bearing the mark; that “at
no time did Opposer agree that Applicant had, or could have,
an ownership interest in the Double Deer and Design Mark of
Opposer, nor at any time did Opposer agree that Applicant
could file a trademark application, in the USA or elsewhere
to register the Double Deer and Design Mark of Opposer, or
any mark confusingly similar thereto;” and that applicant’s
marks, as applied to the identified goods, so resemble
opposer’s previously used and adopted mark, as to be likely
to cause confusion.
Applicant, in its answers, denied the allegations in
the notices of opposition.
By order of the Board dated April 19, 2006, the
oppositions were consolidated and we will decide both cases
in a single opinion. We note that at the time the
oppositions were consolidated, testimony and briefs had been
filed in Opposition No. 91158111 and the Board reset trial
and briefing dates for Opposition No. 91160165 only. The
parties did not take any additional testimony or submit any
other evidence. The parties did file additional briefs.
Opposition Nos. 91158111 and 91160165
4
Before turning to the record and merits of the case,
there is a preliminary matter we must discuss. Accompanying
applicant’s brief on the case (in Opposition No. 91158111)
are Exhibits A-F which were not made of record during
applicant’s testimony period. Opposer has moved to strike
the exhibits as untimely filed. The Trademark Board Manual
of Procedure §704.05 (2d ed. rev. 2004) states that
“[e]xhibits and other evidentiary materials attached to a
party’s brief on the case can be given no consideration
unless they were properly made of record during the time for
taking testimony.” Under the circumstances, opposer’s
motion is granted and Exhibits A-F which accompanied
applicant’s brief have been given no consideration in
reaching our decision herein.
The Record
The record in these consolidated cases consists of the
pleadings; the files of the involved applications; the trial
testimony depositions, with accompanying exhibits, of
Shoupeng Shang, opposer’s president and general manager and
former general manager of opposer’s predecessor Lanzhou
Chinese Herbal Medicine Factory (hereinafter “Lanzhou
Chinese”); Spring Chang, a specialist in Chinese
Intellectual Property Law; and Franklin Ng, applicant’s
president. Opposer submitted a notice of reliance on
applicant’s responses to opposer’s interrogatories and
Opposition Nos. 91158111 and 91160165
5
requests for admissions. As indicated, both parties filed
briefs.
Facts
Opposer’s predecessor, Lanzhou Chinese, was formed in
1956 as a Chinese state-owned company. (Shang dep. at 15.)
Lanzhou Chinese was a manufacturer of herbal medicine
products. (Shang dep. at 15.) Lanzhou Chinese was issued a
Chinese registration on June 20, 1988 for the mark shown
below which features a “Double Deer” design for “Chinese
herbal supplement.”

(Shang dep. at 16, Opposer’s exh. 20). On November 20, 1997
Lanzhou Chinese entered into a distribution agreement with
GNC Industrial, a company formed by applicant, to sell
Lanzhou Chinese’s products in the U.S. (Shang dep. at 21-22,
Opposer’s exh. 21). Beginning in 1998, applicant placed
orders with Lanzhou Chinese, imported products with the
Double Deer design mark, and sold such products in the U.S.
(Shang dep. at 22-24, Opposer’s exh. 7, 8, 22, 23 and 30).
In March or April 2000, Lanzhou Chinese announced its
intention to declare bankruptcy. (Shang dep. at 39).
Opposer was formed on August 8, 2000 as a Chinese limited
liability company (Shang dep. at 11, 17). In 2001 Lanzhou
Opposition Nos. 91158111 and 91160165
6
Chinese declared bankruptcy, and opposer purchased the
assets of Lanzhou Chinese at a bankruptcy auction conducted
by a Chinese government bankruptcy agency. (Shang dep. at
49, Opposer’s exh. 30). Opposer subsequently obtained a
license from the Chinese government to manufacture and sell
Chinese patent medicines. (Shang dep. at 9-10, 17).
Shortly after the bankruptcy auction, opposer changed its
business type from a limited liability company to a joint
venture management company. (Shang dep. At 11). Opposer
has continued to sell products under the Double Deer design
mark in the U.S. (Shang dep. at 19, 41).
Likelihood of Confusion

At the outset, we note that applicant, in its briefs,
has not argued against the likelihood of confusion claims.
In particular, applicant does not dispute that the marks in
its applications are similar to opposer’s pleaded mark. In
this regard, we note that applicant admits that the mark
shown in its application Serial No. 76406075 is “visually
similar to Opposer’s mark” and that such mark “conveys a
substantially similar meaning to that of Opposer’s mark.”
Applicant’s responses to Requests for Admissions Nos. 8 and
10, respectively. Further, applicant does not dispute that
the herbal supplements and herbal teas identified in its
applications are essentially identical to the goods claimed
by opposer, i.e., medicinal herbs and herbal teas. Thus,
Opposition Nos. 91158111 and 91160165
7
there is no question that there is a likelihood of
confusion.
Ownership
Both parties claim ownership of marks featuring a
“Double Deer” design for medicinal herbs and herbal teas.
Opposer maintains that it is the owner of the mark shown
below,

(hereinafter “Double Deer design mark”) by virtue of
acquiring the tangible and intangible assets of the original
owner, Lanzhou Chinese, after bankruptcy.
Applicant, however, contends that opposer is not a true
successor in interest to Lanzhou Chinese, and therefore
could not have acquired rights to the Double Deer design
mark in the United States. Applicant maintains that the
bankruptcy of Lanzhou Chinese caused an abandonment of the
Double Deer design mark and thereby permitted applicant to
step in and acquire ownership rights in marks which also
feature a “Double Deer” design.2

2 We note that much of the testimony of applicant’s president,
Franklin Ng, is directed to a purported oral assignment of the
U.S. rights to the Double Deer design mark from Lanzhou Chinese
to applicant. As a result, opposer introduced evidence and
devoted a section of its initial brief to its contention that
there was no such oral assignment. However, applicant, in its
brief at 22, states that:
Opposition Nos. 91158111 and 91160165
8
With respect to the issue of ownership, we start by
observing that:
It is well settled that between a foreign
manufacturer and its exclusive United States
distributor, the foreign manufacturer is presumed
to be the owner of the mark unless an agreement
between them provides otherwise.

Global Maschien GmbH v. Global Banking Systems, Inc.,
227 U.S.P.Q. 862, 866 (TTAB 1984). See also McCarthy on
Trademarks and Unfair Competition §29:8 (4th ed. database
updated 2007). In a case which is factually similar to the
present case, the district court stated that:
There is a presumption that in the absence of
express or implied acknowledgement or transfer by
the foreign manufacturer of rights in the United
States, all rights to the trademark are in the
foreign manufacturer.

…. whether this consent [to use and register the
Double Deer trademark in the United States under
applicant’s name] was effective became unimportant
once Lanzhou Chinese was dissolved during bankruptcy
in October 2001 and its distributorship with Applicant
terminated.
In fact, unlike Opposer, Applicant has never
based its claim to the U.S. Mark on an “assignment”
theory, which Opposer has taken great length to repute
[sic].”

Thus, notwithstanding the testimony of Mr. Ng, we deem these
statements in applicant’s brief as a concession that Lanzhou
Chinese did not orally assign the U.S. rights to the Double Deer
design mark to applicant. Under the circumstances, we have given
no further consideration to an oral assignment theory.

Opposition Nos. 91158111 and 91160165
9
Automated Productions Inc. v. FMB Maschinebaugesellschaft
mbH & Co., 34 USPQ2d 1505, 1515 (N.D. Ill. 1994). In
Automated Productions, the issue was whether the exclusive
U.S. distributor (Automated Productions, Inc.) or the
successor in interest (FMB) to the foreign manufacturer
owned rights to the mark “FMB” for bar loaders in the
machine tool field in the U.S. In that case, as here, the
successor in interest was the buyer in bankruptcy from the
foreign manufacturer. In analyzing the issue of ownership
of the “FMB” mark in the U.S., the court held that “any
first use, or any success which plaintiff [Automated
Productions, Inc.] has enjoyed in establishing the FMB mark
in the U.S. inures to the benefit of defendant [FMB].”
Automated Productions, 34 USPQ2d at 1515. The court
rejected the claim of ownership of Automated Productions,
Inc., the exclusive U.S. distributor, as against FMB, the
buyer in bankruptcy from the foreign manufacturer.
In this case, as in Automated Productions, there was no
express or implied agreement which transferred rights to the
Double Deer design mark in the U.S. from Lanzhou Chinese to
applicant. So as to be clear, with the statements in its
brief, applicant has conceded that there was no oral
agreement with respect to such rights. Thus, any first use
or success which applicant may have enjoyed in the mark
Opposition Nos. 91158111 and 91160165
10
flows back to opposer as Lanzhou Chinese’s successor in
bankruptcy.
Applicant’s argument that the bankruptcy of Lanzhou
Chinese created an abandonment of Lanzhou Chinese’s (and,
thus, opposer’s) rights in the Double Deer design mark in
the U.S. is without merit. Section 45 of the Trademark Act,
15 U.S.C. Section 1127, provides that a mark is abandoned
when “its use has been discontinued with intent not to
resume such use. Intent not to resume use may be inferred
from circumstances. Nonuse for three consecutive years
shall be prima facie abandonment.”
The bankruptcy, per se, of Lanzhou Chinese did not
constitute abandonment of the Double Deer design mark in the
U.S., and there is no evidence that opposer has discontinued
use of the Double Deer design mark in the U.S.
Priority
In view of our finding that opposer is the owner of the
Double Deer design mark in the U.S., opposer is entitled to
rely on the use of this mark for purposes of priority. With
respect to priority, the record shows that the Double Deer
design mark was used in the U.S. as early as 1998. This
date is prior to both the filing date of applicant’s intent-
to-use application Serial No. 76406075 and the dates of
first use alleged in applicant’s application Serial No.
76417210. Thus, priority rests with opposer, and as we have
Opposition Nos. 91158111 and 91160165
11
previously found, there is no question that there is a
likelihood of confusion.
Decision: The oppositions are sustained.