Lloyd Lifestyle Limited et al.v.Soaring Helmet Corp.

Trademark Trial and Appeal Board

Dec 11, 2007

No. 91164265 (T.T.A.B. Dec. 11, 2007)

Hearing: Mailed:
March 28, 2007 December 11, 2007
jtw

UNITED STATES PATENT AND TRADEMARK OFFICE
_____

Trademark Trial and Appeal Board
______

Lloyd Lifestyle Limited et al.
v.
Soaring Helmet Corp.
_____

Opposition No. 91164265
to Application Serial No. 76512629
filed on 5/8/2003

and

Cancellation No. 92045075
to Registration No. 2931393
_____

Christopher Allegaert, Michael S. Vogel and Howard Chen of
Allegaert Berger & Vogel LLP for Lloyd Lifestyle Limited et
al.

Mark Jordan of Invicta Law Group, PLLC for Soaring Helmet
Corp.
______

Before Rogers, Kuhlke and Walsh, Administrative Trademark
Judges.

Opinion by Walsh, Administrative Trademark Judge:

These consolidated proceedings include both an
opposition and a cancellation proceeding. In the
opposition, Lloyd Lifestyle Limited and Lloyd IP Limited
have opposed the intent-to-use application by Soaring Helmet
Corporation (“Soaring Helmet” or “defendant”), a Washington
THIS OPINION
IS NOT A PRECEDENT OF
THE T.T.A.B.
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State corporation, to register the mark NITRO in standard-
character form for “motorcycle helmets and protective
clothing” in International Class 9 (Application Serial No.
76512629). In the cancellation proceeding, Lloyd IP Limited
and VSJ Limited have petitioned to cancel the registration
also owned by Soaring Helmet for the mark NITRO RACING in
standard-character form also for “motorcycle helmets and
protective clothing” in International Class 9 (Registration
No. 2931393). The registration issued on March 8, 2005.
The opposers and petitioners are related United Kingdom
companies; we refer to them here collectively as either “the
Lloyd Group” or “plaintiffs.”
Both parties appeared at a hearing in the case on March
28, 2007, and both parties have filed briefs.
I. The Grounds
In the notice of opposition and petition to cancel
plaintiffs assert a number of grounds against defendant.
However, in their brief, as defendant argues, plaintiffs
maintain only one ground for opposition and cancellation.
Specifically, plaintiffs argue that they, not defendants,
owned the NITRO and NITRO RACING marks at the time the
applications for those marks were filed, and consequently
that defendant’s pending NITRO application and defendant’s
application which resulted in the NITRO RACING registration
were void as filed because defendant, the applicant in both
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instances, was not the owner of the mark under Trademark Act
Section 1, 15 U.S.C. § 1051. Accordingly, in view of the
pleadings and briefs, we have limited our consideration to
the ownership ground only and conclude that plaintiffs have
abandoned all other grounds previously asserted in both
proceedings. See Scranton Plastic Laminating, Inc. v.
Mason, 187 USPQ 335, 337 (TTAB 1975).
II. Standing
Defendant, in addition to objecting to our
consideration of grounds other than the ownership ground,
asserts further that plaintiffs failed to plead the
ownership ground adequately and that plaintiffs have also
failed to plead and establish their standing to assert the
ownership ground. Defendant states, “The Lloyd Group’s
basis for standing is a specious assertion that it uses the
Nitro marks ‘throughout the world.’ (Citation omitted.) In
this case, however, ‘throughout the world’ excludes the U.S.
Furthermore, Soaring Helmet was the first to use the mark in
the U.S., and Lloyd’s so-called ‘worldwide’ use was
admittedly not famous within the U.S. at the time.”
Defendant’s Brief at 27. Defendant argues further that “the
Lloyd Group has never engaged in the design, manufacture,
sales, marketing or distribution of Nitro or Nitro Racing
products in the U.S.” Id. Furthermore, defendant asserts
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more generally that plaintiffs had no interest in the U.S.
market in regard to the NITRO and NITRO RACING marks.
In response plaintiffs state, “The obvious problem with
Soaring Helmet’s standing argument is that it is completely
circular, taking as its premise the assumed conclusion that
it will prevail on the issue of ownership of the Nitro
Marks.” Plaintiffs’ Reply Brief at 6. Plaintiffs argue
further that defendant’s use of the NITRO and NITRO RACING
marks in the United States was as the licensee or
distributor for plaintiffs, and therefore, that defendant’s
use was not as owner but on plaintiffs’ behalf and subject
to plaintiffs’ control.
First, we find plaintiffs’ allegations in the notice of
opposition and petition to cancel, viewed in the full
context of those pleadings, sufficient both for the purpose
of stating the ownership claim and for the purpose of
asserting standing. Specifically, the notice of opposition,
in addition to claiming rights in the NITRO mark “throughout
the world,” states, “… Applicant acted and still acts as a
U.S. distributor or importer of motorcycle helmets and
motorcycle clothing, including protective motorcycle
clothing bearing Opposers’ NITRO mark.” Notice of
Opposition at ¶ 4. Likewise in the petition to cancel,
plaintiffs, in addition to claiming ownership of the mark in
the United Kingdom and other parts of the world, state, “…
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VSJ authorized Respondent to import and distribute the
Products in the United States, subject (among other things)
to the requirement that Respondent source the products from
specific authorized manufacturers and suppliers located in
China.” Petition to Cancel at ¶ 3. In the petition,
plaintiffs also state, ”At all relevant times during the
business relationship between VSJ (or Lloyd IP) and
Respondent, VSJ (or Lloyd IP) remained and continues to be
the owner of the Trademark.” Id. at ¶ 5.
We also conclude that plaintiffs have not only asserted
but established their standing. The nature of the ownership
claim is such that proof of the claim itself cannot be
separated entirely from the establishment of standing to
assert the claim. As we discuss below, we ultimately
conclude that plaintiffs prevail on their ownership claim in
both proceedings. This necessarily implies that plaintiffs
have established their standing.
In Ritchie v. Simpson, 170 F.3d 1092, 50 USPQ2d 1023
(Fed. Cir. 1999), the Court of Appeals for the Federal
Circuit enunciated a liberal threshold for determining
standing, namely, whether one’s belief that one has been or
will be damaged by the registration is reasonable and
reflects a real interest in the case. See also Jewelers
Vigilance Committee Inc. v. Ullenberg Corp., 823 F.2d 490, 2
USPQ2d 2021, 2023 (Fed. Cir. 1987). Cf. Floater Vehicle,
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Inc. v. Tryco Manufacturing Co., Inc., 497 F.2d 1355, 182
USPQ 203 (C.C.P.A. 1974). Plaintiffs’ ownership claims in
both proceedings fall well within these bounds.
Accordingly, we conclude that plaintiffs have
established standing in these proceedings.
III. The Record
The record in these proceedings consists of the
pleadings and the files related to the application and
registration at issue here. In addition, the record
includes testimony depositions of Mr. George Lloyd and Ms.
Catherine Lloyd, principals in the Lloyd Group, Mr. Lou Xu
and Ms. Jeanne DeMund, principals in Soaring Helmet, all
taken by plaintiffs. After plaintiffs had taken testimony
from the two principals in defendant, defendant’s counsel
deferred the examination of its witnesses until its own
testimony period, but defendant did not submit any testimony
from Mr. Xu or Ms. DeMund, or any other witnesses, taken
during defendant’s testimony period. The record also
includes notices of reliance filed by each of the parties.
Before proceeding we must address one issue regarding
the record. All testimony of all four witnesses and certain
exhibits introduced during that testimony were submitted
under seal as confidential. In each instance neither party
has made any attempt to delineate the truly confidential
portions by redaction. In addition, the parties have
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segregated certain testimony which was designated as “highly
confidential” or “trade secret/commercially sensitive”; this
testimony was redacted from the transcripts and submitted on
separate pages.
The parties may not shield from the public information
that is not appropriately confidential. See Trademark Rule
2.27(d) and (e). It is apparent that parts of the testimony
and exhibits submitted under seal are not confidential. In
fact, both plaintiffs and defendant refer to this evidence
in their briefs which were not filed under seal. Therefore,
within thirty days of the mailing date of this decision, the
parties are ordered to resubmit a redacted copy of all
testimony and exhibits submitted under seal with only those
portions which truly need to be kept under seal redacted.
The redacted copy will be placed in the public record. If
either party fails to make this submission, testimony and
exhibits relating to that party, with the exception of the
“highly confidential” or “trade secret/commercially
sensitive” portions which already have been properly
segregated, will become part of the public record.
For the purposes of this opinion we will not refer to
any information which is currently designated confidential
unless it has been discussed in the briefs of the parties.
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IV. Findings of Fact
A. The Plaintiffs
Mr. George Lloyd provided the testimony regarding
plaintiffs, the Lloyd Group. The Lloyd Group consists of
three United Kingdom companies identified above; Mr. Lloyd
is the chairman and “store president” of each of these
entities. Mr. Lloyd is a trained engineer and a lifelong
motorcycle enthusiast. He has been involved in the sale of
motorcycles and related accessories for fifty years. The
Lloyd Group designs and sells motorcycle helmets and
clothing, including jackets, boots and gloves. The Lloyd
Group employs 100 people directly, including fifteen in
product design. The Lloyd Group designs its own products,
including particular structural elements and graphics for
its helmets, in house and also through outside contractors.
The Lloyd Group manufactures products in China, Vietnam and
Pakistan. The Lloyd Group uses an independent testing group
in England to ensure that its products comply with relevant
legal standards, as well as its own specifications and
quality standards. The Lloyd Group develops and implements
marketing plans for its products. The Lloyd Group
distributes its products on its own in the United Kingdom
and through independent distributors/licensees in other
countries.
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B. The Defendant
Both Mr. Xu and Ms. DeMund provided testimony regarding
defendant, Soaring Helmet. However, plaintiffs, not
defendant, took the testimony of both witnesses associated
with defendant. Mr. Xu and Ms. DeMund are husband and wife
and each owns fifty percent of Soaring Helmet, which they
established in 1994. Soaring Helmet is based in the State
of Washington and sells motorcycle helmets and accessories
in the United States. Soaring Helmet employs 20 individuals
directly; it also has a network of sales representatives.
Soaring Helmet designs the graphics and other “cosmetic”
features of its helmets itself; its manufacturers design the
shell or structure of the helmets. Soaring Helmet
manufactures its helmets in China. In 1997 Soaring Helmet
began to have helmets manufactured by MHR, which is located
in Canton, China. At the time Soaring Helmet began to use
MHR to manufacture its helmets, MHR manufactured helmets for
Soaring Helmet under Soaring Helmet’s VEGA mark. In 2005
Soaring Helmet discontinued use of MHR as its manufacturer;
at the same time Mr. Xu shifted production to another
factory in China which Mr. Xu had built and owns.
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C. The NITRO Marks1
Mr. Lloyd developed the NITRO marks at issue here in
1996. The Lloyd Group began use of the NITRO marks on
motorcycle clothing in the United Kingdom late in 1999. The
clothing was made for the Lloyd Group in China. The Lloyd
Group began to manufacture and sell helmets in the United
Kingdom under the NITRO marks in 2002; the helmets were
manufactured for the Lloyd Group in China by MHR. Mr. Lloyd
first met with MHR representatives and toured the MHR
factory in 2001. In April 2002 MHR began manufacturing
helmets with the NITRO marks for the Lloyd Group for sale in
Europe.
At the end of 2001 when the Lloyd Group selected MHR to
manufacture helmets to be sold under the NITRO marks, the
Lloyd Group began to work with MHR to design the product.
In accordance with the Lloyd Group’s instructions, MHR
modified the MHR shell to incorporate Lloyd-designed
features, such as, vents, liners and the strap design,
desired by the Lloyd Group. G. Lloyd Test. at 59-62.
Mr. Lloyd also provided MHR with European-Community
specifications, identified as EC2205, for design of the
helmets for sale in the European market. Id. at 93. Mr.

1 For purposes of our discussion when we refer to “the NITRO
marks” we include both the NITRO and NITRO RACING marks.

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Lloyd also provided the graphics for the helmets which were
first produced and sold in April 2002. In 2002, MHR
manufactured substantial quantities of NITRO helmets for the
Lloyd Group in the MHR factory. The Lloyd Group enjoyed
early success in the sale of the NITRO helmets in the United
Kingdom; the sales were substantial. The Lloyd Group also
designed both gloves and boots for sale under the NITRO
marks; Chinese manufacturers also made these products for
the Lloyd Group.
The Lloyd Group applied to register the NITRO marks in
1996 in the United Kingdom and in the European Community and
obtained registrations based on those applications. Exh.
46. The Lloyd Group subsequently applied to register the
NITRO marks in additional countries, other than the United
States. At the time of Mr. Lloyd’s testimony, the Lloyd
Group had obtained one additional registration for NITRO in
China and all other applications remained pending. Id.
D. The Relationship Between Plaintiffs and Defendant
As noted above, both plaintiffs and defendant employed
MHR to manufacture helmets in the same factory at the same
time. This “coincidence” sets the stage both for the first
contact between the parties and ultimately for this dispute.
Predictably, plaintiffs and defendant have differing
accounts of their contacts and the relationship they
established.
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In general, plaintiffs claim: (1) that plaintiffs
developed the NITRO products with MHR for sale in Europe;
(2) that defendant expressed an interest in selling the
NITRO products in the United States; (3) that plaintiffs
agreed to permit defendant to sell the NITRO products
obtained from manufacturers approved by plaintiffs on a
nonexclusive basis in the United States; and (4) that
defendant did sell those products in the United States on
plaintiffs’ behalf. Plaintiffs also assert that plaintiffs
directed defendant to register the NITRO marks in the United
States on behalf of plaintiffs and at plaintiffs’ expense.
In general, defendant claims: (1) that plaintiffs
indicated to defendant that plaintiffs had no interest in
using the NITRO marks in the United States; (2) that
defendant proceeded to use and register the NITRO marks in
its own right in the United States; and (3) that defendant
thereby established its ownership of the NITRO marks in the
United States.
We must decide which version of the story the evidence
supports. Unfortunately, most of the contacts, and all of
the early contacts, between the parties were oral only.
That is, Mr. Lloyd and Mr. Xu either met and spoke to each
other or spoke on the telephone. The parties failed to
execute a written agreement before proceeding, most
importantly for our purposes, before defendant filed the
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U.S. applications to register the NITRO marks at issue here
and before defendant began to use the NITRO marks in the
United States. After the fact, we do have certain email
messages and letters discussed below which help in
construing the contacts leading up to these activities, but
still no executed written agreement. This is a classic
example of the unfortunate consequences resulting from a
failure to reduce an understanding to writing. See Cutting
Tools, Inc. v. Custanite Corp., 220 USPQ 1006, 1009 (TTAB
1984).
Before proceeding further we will discuss the probative
value of specific evidence, in particular, the testimony,
which is critical in determining the nature of the
relationship between the parties with respect to the NITRO
marks.
Mr. Lloyd is the only substantive witness connected
with plaintiffs. Ms. Lloyd’s testimony is for the sole
purpose of authenticating documents. Although both Mr. Xu
and Ms. DeMund testified, in most instances Mr. Xu was the
individual who communicated directly with Mr. Lloyd at
critical points in the development of the relationship
between the parties. Much of Ms. DeMund’s testimony, though
useful in many respects, is based on her conversations with
Mr. Xu regarding conversations Mr. Xu had had with Mr.
Lloyd.
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Overall we find Mr. Lloyd’s account to be more reliable
and more credible. We find much of Mr. Xu’s testimony to be
argumentative, internally contradictory and otherwise less
than clear. As we noted above, it was plaintiffs and not
defendant who took Mr. Xu’s testimony, and although
defendant reserved the right to take testimony during
defendant’s testimony period, defendant apparently never did
so, at least defendant did not submit any such testimony.
Perhaps defendant could have provided a more coherent
account of its version of the events if defendant had taken
and presented testimony from its own witnesses, but it has
not done so.
We will provide a few illustrations of the problems
with Mr. Xu’s testimony, as contrasted with the testimony
from Mr. Lloyd and even Ms. DeMund.
The following exchange illustrates one of the many
types of communication difficulty with Mr. Xu’s testimony:
Q. I’ll ask the question again. Do you use any
trademark or trade name that has in it the word
Nitro, other than the trademark Nitro or the
trademark Nitro Racing? Do you use any other
trademark?

A. Vega.

Q. Vega isn’t responsive to my question, unless you
use Nitro with Vega. I am asking whether you use
any other trademark that has the word Nitro in it?

A. Yes.

Q. Okay. What other trademark do you use that has
Nitro in it?
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A. I believe, a baseball cap.

Xu Test. at 368-369. Eventually, Mr. Xu grasped the point
of the question and stated that he had used the NITRO
TOURING mark also. Nonetheless, the communication
difficulty shown here is evident in much of Mr. Xu’s
testimony and seriously detracts from the reliability of Mr.
Xu’s testimony.
Contradictory statements are another difficulty with
the Xu testimony. Mr. Xu claimed to have had an “exclusive”
manufacturing arrangement with MHR, presumably meaning that
MHR was barred from making helmets for anyone else,
including the Lloyd Group. Xu Test. at 48. Mr. Xu later
acknowledges that MHR was making helmets for other companies
located in both the United States and Europe. Id. at 162.
Ms. DeMund acknowledges that defendant had no real control
over MHR making products for other companies. DeMund Test.
at 54.
Mr. Lloyd describes the MHR operation in some detail in
this regard. Mr. Lloyd testifies that, on his first visit
to the MHR plant, he observed MHR making helmets for a
number of companies under specific brands in substantial
quantities -- in addition to Soaring Helmet’s VEGA brand --
including companies from Greece, France and Italy. G. Lloyd
Test. at 81-83. He also observed that MHR was making
helmets under its own MHR brand. Id. Accordingly, we find
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Mr. Xu’s claims that Soaring Helmet had an exclusive
manufacturing arrangement with MHR not credible.
Also, Mr. Xu testifies that MHR was acting improperly
by manufacturing helmets for the Lloyd Group in secret at
night, helmets which Mr. Xu claims were copied from those
manufactured for defendant Soaring Helmet. On the other
hand, Mr. Lloyd testifies in some detail, based on his
experience and observations at the MHR factory, that the
manufacturing process for helmets extends over one month and
that each item being manufactured in the MHR plant was
clearly identified with the brand of the party for whom the
job was being done. G. Lloyd Test. at 102. Furthermore,
from the outset MHR manufactured helmets for the Lloyd Group
in large quantities, quantities which could not be concealed
as Mr. Xu asserts. Id. Accordingly, we find Mr. Xu’s
assertions that MHR and the Lloyd Group were acting in
secret not credible.
Mr. Xu is also argumentative, and prone to
overstatement, throughout his testimony. Mr. Xu attempts to
support his claim that the Lloyd Group was misappropriating
his helmet designs with sweeping statements that the Lloyd
Group lacked the ability to design helmets on its own. He
states, “At the beginning, I think Lloyd started this helmet
business, he doesn’t know how to deal with it. He has no
experience in helmet sales. Okay. No experience in helmet
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designs. No experience in helmet fittings. Okay. Those
elements is I spend (sic) the time and MHR developed.” Xu
Test. at 66.
However, when Mr. Xu was asked to provide particulars
with regard to what the Lloyd Group wrongly appropriated,
Mr. Xu was not able to identify particulars with any
clarity. See, e.g., Id. at 102. Mr. Xu makes these claims
even though Mr. Xu himself acknowledges that MHR provided
the structural core of the helmets and that Soaring Helmet
worked with MHR to develop only the cosmetic features of the
helmets. Mr. Xu acknowledges that he had not even seen the
Lloyd Group catalogs which included the allegedly “copied”
products before his testimony. Id. at 103.
Here again, Ms. DeMund acknowledges that Soaring Helmet
did not even make or sell helmets which met the European
Community specifications – specifications which MHR was
required to follow in the manufacture of the NITRO helmets
for the Lloyd Group. DeMund Test. at 39. Ms. DeMund also
acknowledged that the helmets MHR made for the Lloyd Group
differed from those MHR made for Soaring Helmet. Id. at 58.
On the other hand, Mr. Lloyd states that he provided
MHR with the overall designs, including graphics, for the
first NITRO helmets MHR manufactured for the Lloyd Group
under the NITRO marks. G. Lloyd Test. at 97. Mr. Lloyd
also states that he warned that those graphics could only be
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used on products manufactured for the Lloyd Group unless the
Lloyd Group granted permission for their use by others. Id.
at 111.
In fact, Mr. Lloyd also testified regarding a graphic
which he wished to use at a later point; he had concerns
that Soaring Helmet might have rights in the graphic.
Before authorizing MHR to proceed to use the graphic Mr.
Lloyd checked with Soaring Helmet. G. Lloyd Test. at 148-
149. The record includes an email exchange between the
parties; Ms. DeMund responded to the inquiry from the Lloyd
Group authorizing the Lloyd Group to use the graphic in
question. Exh. 48. This example confirms Mr. Lloyd’s
testimony that the Lloyd Group acted conscientiously in
developing its products and contradicts Mr. Xu’s broad
claims that the NITRO helmets MHR made for the Lloyd Group
were copied from Soaring Helmet without authorization.
We have reviewed the Soaring Helmet 2004 catalog (Exh.
3) and the Lloyd Group 2003/2004 catalogs (Exh. 4) and find
no evidence of copying. In fact, the products displayed in
the Lloyd Group catalogs consistently show a prominent
display of the NITRO RACING logo on the products themselves,
a logo which the Lloyd Group developed and used. That same
logo is displayed on products in the Soaring Helmet catalogs
for 2005/2006 (Exhs. 27 and 28) when defendant offered the
NITRO products in the United States. Mr. Xu acknowledges
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that he used the logo developed by plaintiffs. Xu Test. at
379.
Accordingly, we find that the Lloyd Group possessed
relevant experience and capability, at least equal to that
of Soaring Helmet, to design and manufacture motorcycle
helmets and protective clothing. We find Mr. Xu’s claims to
the contrary not credible. Furthermore, we also find that
the Lloyd Group acted independently and in good faith in the
development of its own helmets for sale under the NITRO
marks with MHR and that the NITRO helmets MHR produced for
the Lloyd Group were not “copies” of the helmets MHR was
producing for Soaring Helmet.
In this connection, we note that the objective in these
proceedings is to determine rights in the NITRO marks and
not rights in any designs related to products with which
those marks have been used. Cf. Carano v. Vina Concha Y
Toro S.A., 67 USPQ2d 1149, 1151-1152 (TTAB 2003).
Nonetheless, these findings are necessary for the limited
purpose of confirming that the Lloyd Group produced its own
products under the NITRO marks through MHR.
We now turn to the specific contacts between Mr. Lloyd
and Mr. Xu which are critical to our determination of the
nature of the relationship between plaintiffs and defendant
with regard to the NITRO marks.
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Mr. Lloyd met Mr. Xu in 2002 in passing at the MHR
factory. The two met more formally in 2003 in Indianapolis
at an industry trade show. At that time the parties had
lunch and discussed their experiences with MHR. Mr. Xu
mentioned minor problems he was having with MHR, such as
production delays, but he did not voice any problem with
plaintiffs and their use of MHR. The congenial nature of
the relationship, which is evident here, belies Mr. Xu’s
strident claims that the Lloyd Group was misappropriating
defendant’s designs at this time.
Around that time the parties discussed the possibility
of defendant selling plaintiffs’ NITRO products in the
United States in general terms, but not in detail.
According to Mr. Lloyd, Mr. Xu was interested in the NITRO
products because Mr. Xu judged the NITRO products to be
suited for the United States market and because the NITRO
products would complement other products Soaring Helmet then
offered in the United States. G. Lloyd Test. at 121-122.
Ms. DeMund also testified that Soaring Helmet was interested
in selling the NITRO products in the United States to
differentiate the NITRO products from those products Soaring
Helmet then offered in the United States and thereby expand
Soaring Helmet’s offerings and sales. DeMund Test. at 61.
Thereafter, Mr. Lloyd authorized MHR to provide NITRO
helmets to Soaring Helmet for sale in the United States; Mr.
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Lloyd also put Soaring Helmet in touch with the clothing
manufacturers the Lloyd Group used in China and authorized
Soaring Helmet to obtain NITRO products from those
manufacturers for sale in the United States. G. Lloyd Test.
at 124.
Throughout his testimony, Mr. Xu states that it was a
simple matter of the Lloyd Group having no interest in
entering the U.S. market with the NITRO products and leaving
it entirely for defendant to exploit on its own. For
example, Mr. Xu states, “He [Mr. Lloyd] was talking about –
he said well, I have no interest in the United States
market. I told him I have no interest in the European
market. And he said, well, you can take those things to the
U.S. market. And I said, well, you can take my helmet to
Europe (sic) market. That’s how we – you know, then we have
a common design. We can design together in the future, and
we work together.” Xu Test. at 79-80. Soaring Helmet, in
fact, proceeded to sell helmets under the NITRO marks made
by MHR in the United States, as well as clothing made by the
Lloyd Group’s clothing manufacturers in China. See Exhs. 27
and 28.
Mr. Xu and Mr. Lloyd are in agreement that Mr. Lloyd
first raised the subject of the need to register the NITRO
marks in the United States. Xu Test. at 205. Mr. Lloyd
states the following regarding the registration of the NITRO
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marks in the United States, “He [Mr. Xu] said he would
organize that through his lawyer. It would get registered
in America quicker. He was in America. He had done this
before, so it would be quicker and easier if he registered
the name for us… I said ‘that will be fine. Yes. You can
register it on our behalf. If you do it, we’ll pay the
expenses, but thank you very much, but please do it as
quickly as possible.” G. Lloyd Test. at 127.
The parties also agreed that they would refer requests
for products in their respective territories to each other.
That is, Soaring Helmet would refer parties looking for
products in Europe to the Lloyd Group, and the Lloyd Group
would refer requests for products in the United States to
Soaring Helmet. There is evidence in the record, largely in
the form of email messages, showing that the parties, in
fact, followed through and made these referrals. See, e.g.,
Exhs. 5, 6 and 7.
Mr. Lloyd later discovered through the Lloyd Group’s
lawyers that defendant had filed applications to register
the NITRO marks in the United States in defendant’s name,
and plaintiffs demanded that steps be taken to substitute
plaintiffs as applicants. The parties corresponded
regarding this subject.
First, in an email message of December 6, 2003 from Ms.
DeMund to Ms. Lloyd, Ms. DeMund states, “George and Lou have
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23
discussed putting your company on the US trademark for NITRO
along with us. Please tell me the exact legal name of the
company you want on the trademark, as well as address,
phone, fax and the name of a corporate officer you would
like on the trademark… We will have our attorney add to the
application.” Exh. 15.
In a follow-up letter dated December 9, 2003, from
plaintiffs’ attorneys, Murgitroyd & Co., to defendant’s
counsel, Mark Jordan at the Invicta Law Group, plaintiffs
refer to the agreement that the U.S. applications will be
assigned from defendant to plaintiffs with specific
instructions regarding the drafting of the assignment. Exh.
16. The obvious point of this letter was to state with
clarity plaintiffs’ requirement, based on the understanding
of the parties, that plaintiffs must be substituted as
applicants not “added” to the applications.
In another email of December 15, 2003 from Mr. Xu to
Ms. Lloyd, Mr. Xu states, “Mark Jordan, our attorney,
received a letter from your attorney, requesting that the
Nitro trademark application we started be assigned to you.
Of course we will arrange for that.” Exh. 17. (Emphasis
added.) The message states further, “We would like to
develop an agreement between our companies that we can be
the exclusive authorized (sic) for use of the “Nitro” brand
name in the U.S.. (sic) If you agree in principle, we will
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24
ask Mark to draft an initial proposal. Please let me know
whether we can proceed with this.” Id.
In another letter, dated February 19, 2004, once again
plaintiffs’ attorneys wrote to defendant’s attorney
regarding the assignment of the U.S. NITRO applications.
The letter states, “With reference to our letter dated 9
December 2003, our client has met with Mr. Lou Xu of your
client company, and the parties have agreed that the two
above-mentioned US Applications are to be assigned to OGK
(Europe) Limited (a company owned by our client). Once you
have checked the above with your client, please send us a
signed assignment document for our client’s counter-
signature.” Exh. 18.
Again, in another email message from defendant’s
counsel to plaintiffs’ counsel, dated February 25, 2004,
defendant’s counsel confirmed that the assignment of the
applications would be done, stating, “I am a colleague of
Mark Jordan of the Invicta Law Group, PLLC. Soaring Helmet
Corporation has given us authority to draft the Trademark
Assignment and Trademark License Agreement referenced in
your February 19, 2004, letter. We expect to have copies
sent to you late this week or early next. Thank you.” Exh.
19.
There is no correspondence from defendant which in any
way challenges or contradicts plaintiffs’ representations in
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25
these documents with regard to plaintiffs’ claim to
ownership of the NITRO marks in the United States. It is
clear from the conduct of the parties and this
correspondence that defendant understood and acknowledges
that plaintiffs were the owners of the NITRO marks in the
United States and the proper applicants for the registration
of the marks. Defendant argues that defendant attached
conditions to the assignment. We find these arguments
unpersuasive when we view the totality of the contacts
between the parties disclosed in this correspondence.
V. Analysis/Conclusions of Law
Based on the totality of the evidence, we conclude that
the relationship between plaintiffs and defendant with
regard to rights in the NITRO marks in the United States is
that of foreign manufacturer and U.S. distributor. The
legal relationships in circumstances such as this do not
always fit neatly into specific categories. Sengoku Works
Ltd. v. RMC International Ltd., 96 F.3d 1217, 40 USPQ2d 1149
(9th Cir. 1996). In this case a preponderance of the
evidence of the conduct of the parties establishes that
plaintiffs and defendant agreed that Soaring Helmet would
act as distributor for the Lloyd Group for the purpose of
sales of products bearing the NITRO marks in the United
States.
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26
For the purpose of our decision here, we need not and
do not decide specifically whether a licensor/licensee
relationship is also present. Both plaintiffs and defendant
argue that their agreement included a number of detailed
terms. We decline to interpret the conduct of the parties
further with regard to more detailed terms of their
relationship, including financial terms, in the absence of a
written agreement. Cutting Tools, Inc. v. Custanite Corp.,
220 USPQ at 1010.
Regarding financial terms, the clothing manufacturers
in China compensated plaintiffs directly for the sale of
NITRO products to defendant for sale in the United States.
DeMund Test. at 201. Although there is no evidence that
defendant or MHR had compensated opposers directly for sales
of NITRO helmets in the United States, opposers have
demanded payment of a royalty based on defendant’s sale of
NITRO helmets in the United States in the ongoing
discussions with defendant. Id. It is also apparent that
both opposers and defendant benefited from the mutual
referrals of business in their respective territories
discussed above. While the financial terms of the
relationship of the parties lack the usual clarity, this is
the result of the failure to enter into a formal written
agreement. We have taken these ambiguities into account,
along with other relevant evidence, in determining that the
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27
relationship between plaintiffs and defendant with regard to
the NITRO marks and products is that of foreign manufacturer
and U.S. distributor.
Furthermore, based on that relationship, we conclude
that plaintiffs were the owners of the NITRO marks in the
United States at the time defendant filed the applications
at issue here. Consequently, because the applications at
issue here were filed by defendant, and defendant was not
the owner of the NITRO marks at the time the applications
were filed, the applications were void as filed. Global
Maschinen GmbH v. Global Banking Systems, Inc., 227 USPQ
862, 867 (TTAB 1984).
The evidence establishes that the Lloyd Group developed
the NITRO marks. Of course, the mere conception or
“development” of a mark, without more, is not sufficient, by
itself, to establish rights in the mark in the United
States. Sengoku Works Ltd. v. RMC International Ltd., 40
USPQ2d at 1151. However, in this case, plaintiffs not only
developed the NITRO marks but plaintiffs developed products
based on those NITRO marks and undertook use of the marks on
those products. Also, we fully recognize that the
establishment of trademark rights in another country does
not, by itself, establish priority or rights in the United
States. Mother's Restaurants Inc. v. Mother's Other
Kitchen, Inc., 218 USPQ 1046, 1048 (TTAB 1983). However,
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28
the mere statement of this principle begs the question in
this case. The question here is whether defendant was
acting on behalf of plaintiffs when it filed its
applications and began its use of the NITRO marks in the
United States, a question not addressed in Mother’s
Restaurants and like cases.
We conclude further that the Lloyd Group is the legal
equivalent of a “foreign manufacturer” for the purposes of
the NITRO marks. Of course, to establish trademark rights,
it is not necessary for a party to manufacture the goods to
which the mark is applied. Lutz Superdyne, Inc. v. Arthur
Brown & Bro., Inc., 221 USPQ 354 (TTAB 1984). In fact, in
this case the record shows that both plaintiffs and
defendant contracted with a third party in a third country
to produce goods for sale in their respective countries.
That is, initially Soaring Helmet employed MHR to
manufacture its VEGA helmets in China for sale in the United
States, and the Lloyd Group employed MHR to manufacture its
NITRO helmets in China for sale in Europe. It is evident
that this type of arrangement is not unusual.
Furthermore, we see no reason why, under these
circumstances, the Lloyd Group should not receive the same
treatment for the purpose of trademark rights as a foreign
manufacturer which produces goods in its own factory, most
importantly, for the purpose of the presumptions U.S. law
Opposition No. 91164265 and Cancellation No. 92045075

29
affords foreign manufacturers. In the circumstances of this
case, the products in question are defined by the NITRO
marks and the concept the NITRO marks embody. As we noted
above, defendant acknowledges that the NITRO products
differed from products that it already offered in the United
States and that the NITRO products would expand its product
offerings in the United States.
There is a strong and longstanding presumption that, as
between a foreign manufacturer and U.S. distributor, the
foreign manufacturer is presumed to be the owner of the mark
in the United States. Sengoku Works Ltd. v. RMC
International Ltd., 40 USPQ2d at 1149; Roger & Gallet v.
Janmarie, Inc., 245 F.2d 505, 114 USPQ 238 (CCPA 1957);
Global Maschinen GmbH v. Global Banking systems, Inc., 227
USPQ at 867; In re Eucryl Limited, 193 USPQ 377 (TTAB 1976);
Bakker v. Steel Nurse of America Inc., 176 USPQ 447 (TTAB
1972); Compania Insular Tabacalera, S. A. v. Camacho Cigars,
Inc., 167 USPQ 299 (TTAB 1970); Far-Best Corporation v. Die
Casting “ID” Corporation, 165 USPQ 277 (TTAB 1970); In re
Geo. J. Ball, Inc., 153 USPQ 426 (TTAB 1967). This
presumption applies specifically “in the absence of an
agreement, express or otherwise.” Bakker v. Steel Nurse of
America Inc., 176 USPQ at 448. Indeed, the absence of a
clear agreement in these situations is the rule not the
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30
exception and the reason for the existence of the legal
presumption.
The circumstances of this case differ significantly
from cases where the parties have no “relationship” and the
U.S. company simply adopts a mark which has been used by
another company in another country. Cf. Person’s Co. Ltd.
v. Christman, 900 F.2d 1565, 14 USPQ2d 1477 (Fed. Cir.
1990).
We specifically reject defendant’s argument that the
parties entered into a reciprocal agreement whereby
plaintiff would be permitted to own and use defendant’s VEGA
mark in Europe and defendant would be permitted to own and
use plaintiffs’ NITRO marks in the United States. The
record overall does not support this position. It is quite
clear that plaintiffs had no interest in the VEGA mark.
Although plaintiffs did apply to register the VEGA mark in
Europe we find credible plaintiffs’ explanation that it did
so only as leverage to secure the assignment of the U.S.
NITRO applications from defendant once defendant filed in
its own name and delayed in fulfilling its promise to assign
the applications to plaintiffs.
Likewise we reject defendant’s alternative argument
that plaintiffs are guilty of naked licensing and presumably
have thereby abandoned plaintiffs’ U.S. rights in the NITRO
marks. Defendant did not plead abandonment as a defense in
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31
these proceedings. While plaintiffs have not objected to
defendant’s naked-license argument explicitly on this
ground, plaintiffs have, in effect, done so. Under the
circumstances, we decline to consider this unpled defense to
have been tried by consent when it was raised so late in the
game. Cf. Long John Silver's Inc. v. Lou Scharf Inc., 213
USPQ 263, 266 (TTAB 1982).
However, if we were to consider it, we would reject it
on the merits as well. As plaintiffs point out, if we found
that there was a license, which we have not, and defendant
were the licensee, defendant would be estopped from
attacking the license on grounds, such as failure of the
licensor to exercise the necessary control. Garri
Publication Associates Inc. v. Dabora Inc., 10 USPQ2d 1694,
1697 (TTAB 1988). Furthermore, plaintiffs’ involvement with
MHR, the helmet manufacturer for both parties, and the
clothing manufacturers for both parties, indicates an
adequate level of control by plaintiffs over the NITRO
products sold by defendant. Lastly, defendant’s use of
other manufacturers without the authorization or knowledge
of plaintiffs can hardly serve as the basis for finding a
naked license and an abandonment of rights by the plaintiffs
in this case.
In sum, we conclude that plaintiffs have shown by a
preponderance of the evidence: (1) that plaintiffs acted
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32
independently and in good faith to develop the NITRO marks
and products; (2) that MHR manufactured the NITRO products
for plaintiffs; (3) that plaintiffs acted as foreign
manufacturer and defendant as U.S. distributor for the sale
of the NITRO products in the United States; (4) that
plaintiffs are the owners of the NITRO marks in the United
States, and (5) that the applications defendant filed for
registration of the NITRO marks in the United States at
issue in these proceedings were not filed by the owner of
the marks, and therefore, were void as filed.
Decision: We sustain the opposition in Opposition No.
91164265; registration is refused. We grant the petition to
cancel in Cancellation No. 92045075; Registration No.
2931393 will be cancelled in due course.2
Also, as explained above, within thirty days of the
mailing date of this decision, the parties are ordered to
resubmit a redacted copy of all testimony and exhibits
submitted under seal with only those portions which truly
need to be kept under seal redacted.

2 Plaintiffs had requested in the alternative that we correct the
records under Trademark Act Section 18, 15 U.S.C. § 1968, in the
application and registration at issue here to identify plaintiffs
as owners. We decline to do so, among other reasons, because
plaintiffs have not identified the specific entity which is the
owner in either case. 8440 LLC v. Midnight Oil Co., 59
USPQ2d 1541 (TTAB 2001).