Bausch & Lomb Incorporated v. Karl Storz GmbH & Co. KG

UNITED STATES PATENT AND TRADEMARK OFFICE

THIS OPINION IS A Trademark Trial and Appeal Board

PRECEDENT OF THE TTAB P.O. Box 1451

Alexandria, VA 22313-1451

MBA Mailed: May 28, 2008

Opposition No. 91174518

Bausch & Lomb Incorporated

v.

Karl Storz GmbH & Co. KG

Before Walters, Zervas and Mermelstein, Administrative

Trademark Judges

By the Board:

Karl Storz GmbH & Co. KG (“applicant”) seeks to

register the mark shown below

(“Applicant’s Mark”) for surgical, medical and veterinary

instruments,1 and registration is opposed by Bausch & Lomb

Incorporated (“opposer”). Opposer alleges that: (1)

Applicant’s Mark is confusingly similar to opposer’s mark

1

Application Serial No. 78692415, filed August 15, 2005 under

Section 44(e), for “Surgical, medical and veterinary instruments

and apparatus, namely surgical and medical apparatus and

instruments for use in general and endoscopic surgery; artificial

limbs, eyes and teeth; orthopedic articles, namely, suture

materials.”

Opposition No. 91174518

STORZ, which is used and registered,2 in typed and stylized

forms, for surgical instruments and related services; (2)

Applicant’s Mark “dilutes the distinctive quality of

Opposer’s STORZ Marks;” (3) “Applicant’s use and attempted

registration of Applicant’s STORZ Mark violate the terms of”

a 1982 agreement between the parties (the “Agreement,”

attached to opposer’s motion as Exhibit 8); and (4)

“Applicant’s claimed rights in, and attempted registration

of, Applicant’s STORZ Mark constitute fraud on the USPTO, as

Applicant knows that it does not have the right to claim

rights in, or obtain a registration for, this purported mark

pursuant to the Agreement.” Applicant, in its answer,

denies the salient allegations in the notice of opposition,

and raises a number of affirmative defenses, including

estoppel based on the parties’ Agreement and res judicata

based on final decisions issued in prior Board proceedings

between the parties.

2

Registration Nos.: (a) 1181498, issued December 1981, based

on a date of first use in commerce of 1940 for STORZ in typed

form for “Surgical Instrument Repair and Restoration Services”

and “Custom Design of Surgical Instruments;” (b) 2378031, issued

August 15, 2000, based on a date of first use in commerce of

March 1, 1927 for STORZ (stylized)for “ophthalmic surgical

instruments, namely instruments used in cataract and other

ophthalmic related surgery;” (c) 2925184, issued February 8,

2005, based on a date of first use in commerce of March 1, 1927

for STORZ (stylized) for “ophthalmic surgical instruments and

devices used in diagnosing eye conditions and performing

ophthalmic surgical procedures and component parts thereof …;”

and (d) 3116601, issued July 18, 2006, based on a date of first

use in commerce of January 1, 1940 for STORZ (stylized) for

“repair and restoration of surgical instruments.”

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Opposition No. 91174518

This case now comes up for consideration of opposer’s

motion, filed October 4, 2007, seeking summary judgment on

its pleaded claims of likelihood of confusion and fraud.3

Applicant contests opposer’s motion, which is fully briefed

and ready for decision. Because the parties’ arguments are

inextricably intertwined with their Agreement, we address it

first, prior to considering the parties’ arguments with

respect to opposer’s motion.

I. The Parties’ Agreement

Applicant and opposer’s predecessor in interest entered

into the Agreement on April 26, 1982. Opposer’s Motion Ex.

8. The Agreement recites the parties’ respective rights to

marks containing STORZ, and states that “the parties hereto

wish to resolve the differences between them as to the

registration and use of their respective marks in all

countries of the world … .” Id. (emphasis added). The

Agreement’s primary purpose “is to define the ways in which

the word ‘Storz’ can be used as a trademark or service mark

or as part of a trademark or service mark” by the parties,

3

Opposer also seeks summary judgment on an unpleaded claim

that “Applicant does not and did not at the time of its

Application have a bona fide intention to use the STORZ THE WORLD

OF ENDOSCOPY mark in commerce on or in connection with the

identified goods or services ….” Although opposer informally

seeks leave to amend its notice of opposition to include this

claim, it does so only through a single sentence in its reply

brief, and applicant has therefore not had the opportunity to

respond to this “motion.” Accordingly, this unpleaded claim will

not be considered. Paramount Pictures Corp. v. White, 31 USPQ2d

1768, 1772 (TTAB 1994) (summary judgment is not appropriate on

unpleaded issue).

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Opposition No. 91174518

and indeed, the Agreement specifies how each party may “use

the word ‘Storz’ in the trademark or service mark sense.”

Id. ¶¶ 2, 3. The word “STORZ” may be used “only as

specified” in the Agreement. Id. ¶ 3.

The Agreement provides that applicant may use: (1) KARL

STORZ GERMANY; (2) STORZ-GERMANY; (3) KARL STORZ; (4) KARL

STORZ USA; (5) KARL STORZ ENDOSCOPY-AMERICA; (6) KARL STORZ-

ENDOSCOPY; (7) STORZ ENDOSKOP; (8) KARL STORZ ENDOSKOP;

and(9) KS STORZ. Id. ¶ 3. It further provides that “[t]he

initial ‘K’ may be substituted for ‘KARL’ in any of the

foregoing,” and that applicant “may supplement any of the

above examples with additional trademark formatives, whether

by way of letters, numbers, words, syllable (sic), or

designs.” Id. Provided applicant complies with these

requirements, opposer may not “raise any objections in any

manner if KARL STORZ uses any of the marks specified … in

any country of the world or applies for registration of any

of such marks in any country of the world.” Id. ¶ 8.

While opposer’s motion does not specifically argue that

Applicant’s Mark should be refused registration based on the

Agreement alone, opposer asserts that the Agreement “does

not allow Applicant to use [Applicant’s Mark] or any other

variation using the word STORZ without the qualifiers Karl,

K., Germany or the German word ‘Endoskop.’” Applicant

claims, however, that Applicant’s Mark “is formed by

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Opposition No. 91174518

supplementing STORZ ENDOSKOP with approved formatives,”

specifically “the suffix ‘opy.’” According to applicant,

opposer “placed no limitation on [applicant’s] use of

supplemented STORZ ENDOSKOP marks such as the STORZ THE

WORLD OF ENDOSCOPY marks at issue, although [opposer] could

have done so.”

There is no dispute that on February 23, 1989,

opposer’s predecessor in interest objected in writing to

applicant’s use of Applicant’s Mark. Although applicant

responded in writing to this objection on April 3 and

December 8, 1989, opposer did not pursue its objection to

the use of Applicant’s Mark again until 2003. Opposer

claims, and applicant does not dispute, that opposer

“opposed [Applicant’s Mark] in Australia in August of 2003,

in Israel in October of 2004, and in Pakistan in December of

2004.” However, applicant contends that because opposer did

not pursue its objection to the use of Applicant’s Mark

between 1989 and 2003, applicant was “under the impression

that [opposer] had acquiesced to its use of [Applicant’s

Mark].”

II. Opposer’s Motion

A. Fraud

Opposer’s motion for summary judgment on its fraud

claim is based on applicant’s April 28, 2006 response to a

March 19, 2006 office action which refused registration of

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Opposition No. 91174518

Applicant’s Mark based on an alleged likelihood of confusion

with several of opposer’s registrations. In its response to

the office action, applicant: (a) stated that opposer and

applicant “reached a consent agreement regarding use and

registration of marks featuring wording STORZ;” (b) included

a complete copy of the Agreement as an exhibit; and (c)

argued that Applicant’s Mark “is a supplemented STORZ

ENDOSKOP mark in accordance with the Agreement.”

According to opposer, “[t]here can be no question that

both Applicant and Mr. Whitmyer, who signed the Response,

were well aware that [opposer] objected rather than

consented to Applicant’s use of [Applicant’s Mark].”

Opposer further argues that the “knowingly false

representation, which was never corrected, was material

because the examining attorney had previously refused the

Application due to likelihood of confusion with [opposer’s]

STORZ Marks and, based on Applicant’s false submission,

reversed course.”

Applicant claims, however, that while opposer “may

disagree with Applicant’s interpretation of the

[Agreement],” there was “no false or misleading statement

made to induce the Examining Attorney to approve the

application. The Examining Attorney was free to view the

text of the [Agreement] and come to a different conclusion.”

B. Likelihood of Confusion

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Opposition No. 91174518

In support of its motion for summary judgment on its

likelihood of confusion claim, opposer argues that the

parties’ marks are confusingly similar “in appearance,

sound, connotation and commercial impression,” that the

parties’ goods and services “are in some cases identical,”

or at least similar or related, and that because there are

no limitations with respect to channels of trade in either

opposer’s registrations or applicant’s application, “it must

be presumed that the services of each would be offered in

all the normal channels of trade.” Opposer further argues

that its STORZ marks are “famous” and “should be accorded a

wide latitude of legal protection,” that there has been

significant actual confusion between the parties (but not

specifically related to Applicant’s Mark) and that “greater

protection is required than in the ordinary case” because

the parties’ goods are medical and surgical in nature.

Finally, although it does not specifically allege that

applicant had an improper intent in adopting or using

Applicant’s Mark, opposer claims that Applicant’s Mark

“violates the terms” of the parties’ Agreement.

Applicant claims that there are genuine issues of

material fact remaining for trial on the issue of likelihood

of confusion. Specifically, applicant claims that there are

“clear visual differences and phonetic differences between

the marks,” and that there are questions of fact regarding

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Opposition No. 91174518

“the degree to which Applicant and Opposer overlap in their

channels of trade.” Applicant also claims that consumers of

the parties’ products “are highly sophisticated and less

prone to confusion.”

C. Applicant’s Affirmative Defenses

In addition to disputing opposer’s claims of fraud and

likelihood of confusion on the merits, applicant relies on

two of its affirmative defenses in arguing that opposer’s

motion should be denied. First, applicant claims that

opposer “is [contractually] estopped from maintaining the

present opposition” because Applicant’s Mark “is merely a

supplemented STORZ ENDOSKOP mark in accordance with” the

Agreement. Similarly, applicant claims that opposer is

equitably estopped from contesting registration of

Applicant’s Mark because applicant undertook “extensive

efforts to establish its marks as unique identifiers …,” in

reliance on the Agreement, opposer’s alleged approval of

marks similar to Applicant’s Mark, and opposer’s failure to

further pursue its 1989 objection to Applicant’s Mark for 14

years. Opposer, in its reply brief, argues that “none of

[opposer’s] conduct that pre-dates the Application can

support an equitable estoppel argument,” as a matter of law.

Second, applicant claims that the final decision in

Opposition Nos. 91160344 and 91160957 -- both brought by

opposer against applicant -- bars opposer’s claims in this

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Opposition No. 91174518

proceeding. In the prior opposition proceedings, opposer

sought to prevent applicant’s registration of the marks

shown below

for medical products. On February 28, 2007, the Board

issued an order dismissing each proceeding with prejudice,

following opposer’s withdrawal of both oppositions with

prejudice. In its reply brief, opposer claims that its

“withdrawal of its oppositions to a mark that included the

word ‘Karl’ is wholly irrelevant to [opposer’s] current

opposition to a materially different mark that does not

include the word ‘Karl’ or otherwise comply with the

[Agreement].”

III. Decision

Summary judgment is only appropriate where there are no

genuine issues of material fact in dispute, thus allowing

the case to be resolved as a matter of law. Fed. R. Civ. P.

56(c). Opposer, as the movant seeking summary judgment,

bears the initial burden of demonstrating the absence of any

genuine issue of material fact. See Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986); Sweats Fashions, Inc. v.

Pannill Knitting Co. Inc., 833 F.2d 1560, 1563, 4 USPQ2d

1793, 1796 (Fed. Cir. 1987). A factual dispute is genuine

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Opposition No. 91174518

if, on the evidence of record, a reasonable fact finder

could resolve the matter in favor of the non-moving party.

See Opryland USA Inc. v. Great American Music Show Inc., 970

F.2d 847, 850, 23 USPQ2d 1471, 1472 (Fed. Cir. 1992); Olde

Tyme Foods, Inc. v. Roundy’s, Inc., 961 F.2d 200, 202, 22

USPQ2d 1542, 1544 (Fed. Cir. 1992).

The evidence on summary judgment must be viewed in a

light most favorable to the non-movant, in this case

applicant, and all justifiable inferences are to be drawn in

applicant’s favor. Lloyd’s Food Products, Inc. v. Eli’s,

Inc., 987 F.2d 766, 767, 25 USPQ2d 2027, 2029 (Fed. Cir.

1993); Opryland USA, supra. The Board may not resolve

issues of material fact; it may only ascertain whether

issues of material fact exist. See Lloyd’s Food Products,

987 F.2d at 766, 25 USPQ2d at 2029; Olde Tyme Foods, 961

F.2d at 200, 22 USPQ2d at 1542.

A. Standing

As a preliminary matter, “opposer’s standing has been

adequately established by the introduction” of the parties’

Agreement. Vaughn Russell Candy Co. v. Coolies in Bloom

Inc., 47 USPQ2d 1635, 1638 n. 7 (TTAB 1998).4

4

Opposer attempted to make its registrations of record by

attaching to its notice of opposition printouts from the Office’s

electronic database records showing the current status and title

of its registrations. While this would have been sufficient to

make the registrations of record under the current version of

Trademark Rule 2.122(d)(1), it was not sufficient under the

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Opposition No. 91174518

B. The Agreement

“[A]lthough other courts would be the proper tribunals

in which to litigate a cause of action for enforcement or

breach of the contract here involved, that is not sufficient

reason for the board to decline to consider the agreement

….” Selva & Sons, Inc. v. Nina Footwear, Inc., 705 F.2d

1316, 1324, 217 USPQ 641, 647 (Fed. Cir. 1983); see also M-5

Steel Mfg. Inc. v. O’Hagin’s Inc., 61 USPQ2d 1086, 1095

(TTAB 2001). Applicant concedes as much, stating that “an

agreement that clearly dictates the parties’ rights with

respect to the marks at issue can be dispositive in

addressing the substance of an opposition.” Applicant’s

Opposition to Opposer’s Motion at 7.5 If the Agreement bars

applicant’s use of Applicant’s Mark, then applicant is not

entitled to registration. Vaughn Russell, 47 USPQ2d at

1637.

Because construction of a contract is a question of

law, resolution of the meaning and interpretation of a

contract is appropriate on summary judgment. See,

Interstate Gen. Gov’t Contractors, Inc. v. Stone, 980 F.2d

1433, 1434 (Fed. Cir. 1992) (“Interpretation of a contract

is a legal question …”). Furthermore, while opposer did not

version of the Rule in effect at the time opposer filed its

notice of opposition.

5

Applicant also concedes that “[t]here is no dispute that the

Agreement is in full force and effect ….” Applicant’s Opposition

at p. 9.

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Opposition No. 91174518

specifically move for summary judgment based directly on the

Agreement, the parties’ interpretation of the Agreement is

part and parcel of their arguments regarding summary

judgment, and is the issue on which each party focuses most

extensively. The Board may therefore enter summary

judgment, sua sponte, based directly on the Agreement

itself, because applicant was on notice of the need to come

forward with all evidence relevant to the Agreement. See,

Celotex Corp., 477 U.S. at 325.

There is no dispute that the Agreement does not

expressly authorize applicant to use Applicant’s Mark –

applicant concedes as much. Opposer’s Motion Ex. 5

(Deposition of Jack A. Frydrych Tr. 80) (Applicant’s Mark is

“not directly spelled out in Paragraph 3” of the Agreement).

The question presented boils down to whether, as applicant

contends, Applicant’s Mark “is formed by supplementing STORZ

ENDOSKOP with approved formatives,” i.e. “the suffix ‘opy.’”

We find that it is not, and that the Agreement bars use of

Applicant’s Mark.

Most importantly, Applicant’s Mark does not contain the

approved German word ENDOSKOP, or KARL STORZ, K STORZ, etc.

It instead contains the English word ENDOSCOPY. In the

context of the parties’ Agreement, this difference is

particularly significant. As opposer points out, each of

the nine marks specifically authorized by the Agreement

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Opposition No. 91174518

contain either: (a) the word KARL (or a K or KS); (b) the

German word ENDOSKOP (spelled with a “k”); and/or (c) an

indication that the mark is owned by applicant, the German

entity, i.e. STORZ-GERMANY. As opposer argues, each of the

specifically authorized marks “reduce the likelihood of

confusion between the U.S. company, Storz Instruments, and

the German company, Karl Storz, by identifying the user of

the mark as the German company ….” Opposer’s Motion at 5.

As opposer further argues, to allow applicant to use a mark

with the English word ENDOSCOPY, without any indication that

the mark is used by the German company, would make the

authorization for applicant to use the permitted mark KARL

STORZ-ENDOSCOPY superfluous. Agreements may not be

interpreted in such a manner. See, Gardiner, Kamya &

Associates, P.C. v. Jackson, 467 F.3d 1348, 1353 (Fed. Cir.

2006).

To “supplement” means to “complete,” or “add to.”

Random House College Dictionary 1320 (1st ed. rev. 1984).

Quite simply, Applicant’s Mark is not a “supplemented” STORZ

ENDOSKOP mark, because it uses the English word ENDOSCOPY,

rather than the German word ENDOSKOP; in addition, the mark

does not contain KARL or the letter K or letters KS. The

mark is therefore outside of the specific uses permitted by

the Agreement. Because the Agreement permits use of the

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Opposition No. 91174518

STORZ mark only as specified, we conclude that Applicant’s

Mark is prohibited.

C. Applicant’s Defenses

We are not persuaded by applicant’s defenses. First,

as explained above, applicant’s contractual estoppel

argument fails because the Agreement bars use or

registration of Applicant’s Mark, and permits opposer to

object to Applicant’s Mark. Applicant’s equitable estoppel

argument is also unavailing. Conduct which occurs prior to

the publication of the application for opposition generally

cannot support a finding of equitable estoppel. See,

Lincoln Logs Ltd. v. Lincoln Pre-Cut Log Homes, Inc., 971

F.2d 732, 734, 23 USPQ2d 1701, 1703 (Fed. Cir. 1992);

National Cable Television Ass’n Inc. v. American Cinema

Editors Inc., 937 F.2d 1572, 1581, 19 USPQ2d 1424, 1432

(Fed. Cir. 1991). While opposer apparently did not pursue

its objection to use of Applicant’s Mark between 1989 and

2003, there is no evidence that opposer knew or should have

known of applicant’s alleged use of Applicant’s Mark in the

U.S. In fact, opposer seeks summary judgment on its

unpleaded claim that applicant does not have a bona fide

intention to use Applicant’s Mark in the U.S.

Second, applicant’s res judicata argument based on

prior Opposition Nos. 91160344 and 91160957 fails because

the marks at issue in those proceedings were different than

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Opposition No. 91174518

the mark at issue here. Chromalloy American Corp. v.

Kenneth Gordon (New Orleans) Ltd., 736 F.2d 694, 698, 222

USPQ 187, 190 (Fed. Cir. 1984) (“The claim against LADY

GORDON is simply not the same claim as one against GORDON OF

NEW ORLEANS.”); Institut National Des Appellations d’Origine

v. Brown-Forman Corp., 47 USPQ2d 1875, 1894 (“applicant’s

MIST AND COGNAC mark … is a different mark … from CANADIAN

MIST AND COGNAC …”). As opposer notes, those marks included

the wording “KARL STORZ,” which was among the marks

explicitly permitted by the Agreement. Because they

involved a materially different mark, the prior

adjudications cannot bar opposer’s claims in this

opposition.

D. Conclusion

Because the Agreement prohibits the use of Applicant’s

Mark, opposer’s motion for summary judgment is GRANTED. The

opposition is sustained.6

News from the TTAB

The USPTO published a notice of final rulemaking in the

Federal Register on August 1, 2007, at 72 F.R. 42242. By

this notice, various rules governing Trademark Trial and

Appeal Board inter partes proceedings are amended. Certain

amendments have an effective date of August 31, 2007, while

most have an effective date of November 1, 2007. For

further information, the parties are referred to a reprint

of the final rule and a chart summarizing the affected

rules, their changes, and effective dates, both viewable on

the USPTO website via these web addresses:

6

Given our findings with respect to the Agreement, there is

no need to specifically consider opposer’s likelihood of

confusion or fraud claims.

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Opposition No. 91174518

http://www.uspto.gov/web/offices/com/sol/notices/72fr42242.pdf

http://www.uspto.gov/web/offices/com/sol/notices/72fr42242_FinalRuleChart.pdf

By one rule change effective August 31, 2007, the Board's

standard protective order is made applicable to all TTAB

inter partes cases, whether already pending or commenced on

or after that date. However, as explained in the final rule

and chart, this change will not affect any case in which any

protective order has already been approved or imposed by the

Board. Further, as explained in the final rule, parties are

free to agree to a substitute protective order or to

supplement or amend the standard order even after August 31,

2007, subject to Board approval. The standard protective

order can be viewed using the following web address:

http://www.uspto.gov/web/offices/dcom/ttab/tbmp/stndagmnt.htm

***

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