# Opposition Brief — Idaho Potato Commission v. M & M Produce Farm & Sales, Dba M & M Produce

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2004
- **Citation:** 541 U.S. 1027

## Text

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No. 03-1049 ‘
Supreme Court of the United States

IDAHO POTATO COMMISSION,
Petitioner,

M & M PRODUCE FARM & SALES D/B/A M & M PRODUCE, M & M
PACKAGING, INC., MATTHEW ROGOWSKI AND MARK ROGOWSKI,

Respondents.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

J. JOSEPH BAINTON*

JOHN GERARD MCCARTHY
BAINTON MCCARTHY LLC
26 Broadway

New York, New York 10004
(212) 480-3500

Counsel for Respondents

March 26, 2004 *Counsel of Record

ae
QUESTIONS PRESENTED FOR REVIEW

Are issues of federal preemption of state law implicated by
a court’s consideration of public policy as expressed in the
Lanham Act when deciding under principles of contract law
whether a provision in a contract of adhesion cannot be
enforced because it is unconscionable or void as against public
policy?

If preemption is implicated, does the Lanham Act preempt
application of the doctrine of licensee estoppel and “no
challenge” contract provisions with respect to certification
marks?

-ii-
PARTIES TO THE PROCEEDINGS
All Parties are listed in the caption.

Respondent M & M Packaging, Inc. is not a publicly held
company and does not have any parent company which is
publicly held. Respondent M & M Produce Farms & Sales is

a general partnership.

“Although not a party to this action, M & M Produce Farms and }
Sales, Inc., a New York corporation formed after this civil action
was commenced, has a financial interest in the outcome of this -

case due to its affiliation with Respondents Matthew Rogowski

and Mark Rogowski. It is not publicly held and does not have any

publicly held parent companies.

-i11-

TABLE OF CONTENTS
QUESTIONS PRESENTED FOR REVIEW
PARTIES TO THE PROCEEDINGS ................. 11
TABLE OF AUTHORITIES ........................ Vv
OPINIONS BELOW
JURISDICTION

STATUTES OR OTHER PROVISIONS INVOLVED .... 1

Drmeumenm: OF THE CASE ...... 2.6.5... c cece. l
A. Statutory Background ...................... l
B. Factual Background ....................... -
C. Proceedings Below ...................00007 7
REASONS FOR DENYING THE PETITION .......... 8
I. THE SECOND CIRCUIT’S DECISION IS BASED
ON CONTRACT LAW AND THUS DOES NOT
CONFLICT WITH PRECEDENT OF THIS COURT
OR OF ANY COURT OF APPEALS CONCERNING
oo 8

Il. THE DECISION BELOW IS NOT
INCONSISTENT WITH PRECEDENTS OF
OTHER COURTS CONCERNING LEAR AND
LANHAM ACT MARKS ..................... 1]

-1V-

Ill. THE IPC DID NOT PRESERVE THE QUESTION
PRESENTED FOR REVIEW BY THIS COURT ... 11

IV. PRACTICAL CONSIDERATIONS WARRANT
DENIAL OF THE PETITION ........----+-+++: 13

A. The Judgment From Which Review Is Sought
So rere ee er 13

B. The IPC Recently Appealed To the Ninth
Circuit A Final Judgment Which Brings Up
For Review An Order Following The Second
Circuit’s Decision

C.. The Dire Predictions Of The IPC And The Amici
Curiae Are Undercut By The Dearth Of Similar
Cases Since The 1989 Decision Of The Trademark
Trial and Appeal Board Rejecting Licensee
Estoppel For Certification Marks .........--- 16

D. It Is More Appropriate for Congress To Deal
With This Issue ............- 0c cc eeeeccees 17

6), ROC 6 | are eee 19

-V-
TABLE OF AUTHORITIES

CASES

American Angus Ass'n v. Sysco Corp.,
829 F. Supp. 807 (W.D.N.C. 1992)

American Auto. Ass'n v. National Auto. Ass'n.
127 U.S.P.Q. 423 (T.T.A.B. 1960)

Aronson v. Quick Point Pencil Co.,
440 U.S. 257 (1979)

Brotherhood of Locomotive Firemen v. Bangor &
~ Aroostock R. Co., 389 U.S. 327 (1967)

Community of Roquefort v. William Fehndirch. Inc.

303 F.2d 494 (2d Cir. 1962)

Delaware and Hudson Canal Co. v. Clark.
80 U.S. (Wall.) 311 (1871)

In re Florida Citrus Comm’n.
160 U.S.P.Q. 495 (T.T.A.B. 1968)

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co..
240 U.S. 251 (1916)

Illinois High School Ass'n v. GTE Vantage, Inc.,
99 F.3d 244 (7th Cir. 1996)

Intel Corp. v. Terabyte Int’l, Inc.,
6 F.3d 614 (9th Cir. 1993)

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-Vi-
Klos v. Polskie Lini Lotnicze,
133 F.3d 168 (2d Cir. 1997)... -- +++ sees errr res: Y
Lake v. Equitable Sav. & Loan Ass'n,
674 P.2d 419 (Idaho 1983) ..------ rrr 9,10
Lear v. Adkins, 395 U.S. 653 (1969) ..--- eee e ere? 11
Mazurek v. Armstrong, 520 U.S. 968 (1997)... +--+ +5 14

Midwest Plastic Fabricators, Inc. v. Underwriters Labs.,
Inc., 12 U.S.P.Q. 2d 1267 (T.T.A.B. 1989),
aff'd, 906 F.2d 1568 (Fed. Cir. a ae 16, 17

National Bd. for Certification in Occupational Therapy, Inc.

v. American Occupational Therapy Ass'n,
24 F. Supp. 2d 494 (D. Md. 1998) ...----- eect 16

New England Mutual Life Ins. Co. v. Caruso,
§35 N.E.2d 270 (N.Y. 1989) ...--eeeeecrecrree® 10

Northwestern Nat'l Ins. Co. v. Donovan, )
916 F.2d 372 (7th Cir. |. a ee ee a 8 :

Park ’N Fly, Inc. v. Dollar Park and Fly, Inc.,
469 U.S. 189 (1985) ..--- eee ere errr 3,4, 10

Potato Sales Co. v. Department of Agriculture,
| 92 F.3d 800 (9th Cir. 1996) ...-----e reer errr 6

Worlds Carpets, Inc. v. Dick Littrel’s New World Carpets,
438 F.2d 482 (Sth Cir. 1971) ..----e reer reece 3

-Vil-

STATUTES AND REGULATIONS

7 C.F.R. § 46.3 (2003) 00... cece cece cece cece eee. 6
7 C.F.R. § 46.45 (2003) 0.0.0. eee ccc cece ceceeees 6
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28 U.S.C. § 1254

-Vili-

LEGISLATIVE HISTORY
Pub. L. 105-330, § 301, 112 Stat. 3070 (Oct. 30, 1998) .. 18

Hearing on H.R. 3119, A Bill “To Amend the Trademark Act
of 1946 with respect to the Dilution of Famous Mark”, and
an Oversight Hearing in a Federal Right of Publicity; State
Marketing-Order Commissions and Product Certifications;
International Expropriation of Registered Marks; and Patent
Extension Review Before the House Subcomm. on Courts

and Intellectual Property, 105" Cong. (May 21, 1998) .- . 18

REGISTERED MARKS

Raw, Mo. SUZ AID «25 ic ecw en ere ver ccsennerence 4n
Reg. No. 2,161,268 ......----eeeeee eee ree restr 2
Res, NO: 2,568,675 «<0 2s - seer erersesneenerneeeees 2
SCHOLARLY AUTHORITY

J. Thomas McCarthy, McCarthy on Ti rademarks and
Unfair Competition (4th ed. 2003) .....------ passim

OTHER AUTHORITY

Restatement (Second) of Contracts § 208 i ) ee 9

W0 hie CIAL R AS eile es Viars hs

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents M & M Produce Farms & Sales (“M & M”’),
M & M Packaging, Inc., Matthew and Mark Rogowski
respectfully urge this Court to deny the petition for a writ of
certiorari to the United States Court of Appeals for the Second
Circuit filed by the Idaho Potato Commission (ine “TFC.

OPINIONS BELOW
Another opinion of the United States District Court for the
Southern District of New York in this case. its Apmnil 26, 2000
Memorandum and Order, is reported at 95 F. Supp. 2d 150
(S.D.N.Y. 2000). That memorandum and order did not address
licensee estoppel. An unreported memorandum and order of

the District Court dated June 11, 2002 is reproduced in the
appendix hereto. Resp. App. la-6a.

JURISDICTION
This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1).
STATUTES OR OTHER PROVISIONS INVOLVED

Additional relevant portions of the Lanham Act, 15 U.S.C.
§§ 1051-1128, are reproduced at Resp. App. 7a-13a.

STATEMENT OF THE CASE

A. Statutory Background

The rights of a certification mark registrant differ
significantly from those of a trademark registrant. While a
trademark gives a specific producer of a product exclusive
nghts, a certification mark “must be made available without
discrimination to certify the goods .. . of any person who

2

maintains the standards or conditions which such marks
certifies.” Community of Roquefort v. William Fehndirch, Inc.
303 F.2d 494, 497 (2d Cir. 1962) (citation omitted). A
certification mark is intended to be used by a person other than
its owner while a “trademark” is used to identify and
distinguish a registrant’s own goods from those manufactured
or sold by others. 15 U.S.C. § 1127. Courts and commentators
uniformly note that a certification mark is “a special creature
created for a purpose uniquely different from that of an ordinary
service mark or trademark.” Jn re Florida Citrus Comm’n, 160
U.S.P.Q. 495, 499 (T.T.A.B. 1968); see also Midwest Plastic
Fabricators, Inc. v. Underwriters Labs., Inc., 12 U.S.P.Q. 2d
1267, 1270 n.6 (T.T.A.B. 1989) (noting differences between
certification mark and trademarks), aff’d, 906 F.2d 1568 (Fed.
Cir. 1990); 3 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition § 19:91, at 19-201 (4th ed. 2003).

When applying for registration on the Principal Register of
the United States Patent and Trademark Office (the “PTO”’), a
certification mark owner must designate what the mark
certifies. 3 McCarthy, supra § 19:92, at 19-205 (“applicant for
registration of a certification mark must specify . . . the
conditions under which the certification mark is used”); id. §
19:97, at 19-215 (reproduction of PTO Form 4.9 “Certification
Mark Application’’); Pet. at 26 (noting services that AAA Four
Diamond Award certifies and citing to Reg. No. 2,563,673);
Reg. No. 2,161,268 (noting that mark “certifies that the sailboat
and its sails strictly conform .. . to the official plans and
specifications of the [mark owner] for a ‘STAR CLASS’
yacht’). Once the mark is registered, its owner cannot refuse to
allow someone to use the marks other than failure of the goods
or services to meet the grounds for certification that was
designated in the application. 3 McCarthy, supra § 19:97, at
19-213 (“certifier cannot refuse to license the mark to anyone
on any ground other than the standard it has set’’).

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The Lanham Act prohibits registration of marks which are
primarily geographically descriptive. 15 U.S.C. § 1052(e)(2).
“Congress has expressly left accessible to all potential users
those names of subdivisions of the earth -- regions, nations,
counties, towns, rivers, lakes. and other natural and artificial
geographical units -- which could be employed to draw public
attention to the origin of a product or the situs of a business.”
Worlds Carpets, Inc. v. Dick Littrel’s New World Carpets, 438
F.2d 482. 485 (Sth Cir. 197] ); see also Delaware and Hudson
Canal Co. v. Clark. 80 U.S. (Wall.) 311, 324 (1871) (“it is
obvious that the same reasons which forbid the exclusive [use]
of generic names of those merely descriptive of the article
manufactured and which can be employed with truth by other
manufacturers, apply with equal force the appropriation of
geographical names, designated districts of country’’).
Congress carved out one exception to the prohibition against
registration of geographically descriptive terms — marks
certifying origin. AS U.S.C. § 1052(e)(2).

Once a mark is registered upon the Principal Register, its
Owner receives many new rights under the Lanham Act. See
Park 'N Fly, Inc. v. Dollar Park and F. ly, Inc., 469 U.S. 189,
i 193-94 (1985) (discussing nghts conferred by Lanham Act on
federally registered marks). The certificate of registration is
“prima facie evidence of the validity of the mark and of the
registration of the mark, of the registrant’s ownership of the
: mark, and of the registrant’s exclusive ri ght to use the registered
mark.” 15 U.S.C. § 1057(b). Congress provided that under
; certain conditions the right to use a mark can become
“incontestable.” 15 U.S.C. § 1065. Once a mark becomes
incontestable, the registration is conclusive proof of the mark’s
validity and the registrant’s right to use it. 15 U.S.C. § 11] 15(b);
Park ‘N Fly, 469 U.S. at 194. Congress snccifically provided
that a certification mark registration can be cancelled at any
time for four enumerated reasons. 15 U.S.C. § 1064(5).

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4

Congress also provided for cancellation at any time of the
registration of any mark if it becomes the generic name for the
goods or services. 15 U.S.C. § 1064(3); Park 'N Fly, 469 U.S.
at 194: see Illinois High School Ass'n v. GTE Vantage, Inc., 99
F.3d 244, 247 (7th Cir. 1996) (Posner, J.) (discussing generic
marks including “thermos” and “aspirin”); 2 McCarthy, supra
§ 12.1, at 12-6 to 12-7.

B. Factual Background

In 1937. Idaho growers and produce shippers established the
IPC to advertise fruits and vegetables grown in Idaho. The
Idaho legislature granted their association the statutory nght to
tax growers. Eventually, the IPC became a self-governing
agency of the State and focused solely on potatoes. It spends
more than half its $10 million annual budget advertising Idaho
potatoes. (Pet. App. 86a: id.24a.)

In 1956, the IPC obtained its first registration for a
certification mark on the PTO’s Principal Register for a
circular seal within which is an outline map of Idaho and
“Grown in Idaho.” (See Pet. App. 45a.) This mark certifies the
“regional origin of produce. ’ In January 1966, the IPC obtained
a registration from the PTO for the word mark “IDAHO” in
connection with potatoes and onions certifying that “goods so
marked are grown in the State of Idaho.” (Pet. App. 45a.) The
IPC has since obtained three additional federal registrations for

| The lower courts erroneously reported that this registration was
for “the word ‘IDAHO’ in its distinctive font.” (Pet. App. 22a; id.
3a.) The Petition contains the same error (Pet. at 6), but in the
District Court the IPC contended that this mark was the word in any
form and the Certificate of Registration does not refer to a distinctive
font. See Reg. No. 802,418 (Jan. 18, 1966).

i

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5

stylized certification marks to be used to certify regional origin
of potatoes grown in Idaho. (Pet. App. 45a-46a.)

Potatoes come in several different varieties. Russet is the
most famous variety of Idaho potato. Russet potatoes are
grown in a number of states. The IPC contends that consumers
perceive Russets from Idaho as being the “Cadillac” of baking
potatoes. (Pet. App. 23a.)

The IPC’s uses its certification marks to control ti ghtly the
Idaho potato industry throughout the United States.

Under the IPC’s regulations, every Idaho potato
grower must be licensed, and must place the Idaho
mark upon containers and shipping documents for
its harvest; no Idaho potato may leave the State of
Idaho without the certification mark; every packer
and shipper of Idaho potatoes must be licensed;
every out-of-state purchaser of Idaho potatoes must
be licensed to use the [certification] marks and
every repacker and reseller who purchases Idaho
potatoes in bulk from a licensed out-of-state vendor
must also be licensed.

(Pet. App. 24a-25a:) The IPC checks a potential licensee’s
credit and background. The IPC also imposes other
requirements that do not have anything to do with certifying the
regional origin of potatoes. The IPC’s license agreements are
pre-printed forms, which are not subject to negotiation but
instead are offered on a “take it or leave it” basis.

The Unites States Department of Agriculture (the “USDA”)
comprehensively regulates the produce industry pursuant to the
Perishable Agricultural Commodities Act (“PACA”). 7 U.S.C.
§§ 499a-499t. The USDA requires produce packers to have a

6

PACA license. 7 C.F.R. § 46.3 (2003). The loss of a PACA
license spells the demise of a produce packer. The USDA may
revoke a PACA license if a packer has materially and
knowingly engaged in misbranding, i.e., incorrectly identified
the origin or variety of produce. 7 U.S.C. § 499b(5); 7 C.F.R.
§ 46.45 (2003); see Potato Sales Co. v. Department of
Agriculture, 92 F.3d 800 (9th Cir. 1996) (USDA properly
sanctioned seller of New Zealand apples packaged as
Washington apples). The USDA, not the IPC, inspects and
certifies potatoes leaving Idaho for sale elsewhere in the United
States. :

A packer may lawfully pack and sell Russet potatoes grown
in different states in consumer size bags that describe the
contents as “russet potatoes.” Jd. The prices packers pay for
Idaho potatoes are occasionally cheaper than the prices they pay
for the same variety from other states. The IPC’s regulations,
however, prohibit packers from obtaining Idaho potatoes to
fulfill generic orders for potatoes.

M & M, including M & M Packaging, is a small family
business devoted mainly to growing labor intensive root crops,
but not potatoes, on a small farm in upstate New York. These
crops are seasonal, so M & M also repacks potatoes to stay in i
business throughout the year. M & M has a PACA license. 4

In order to repack potatoes from Idaho, M & M entered into
a licensing agreement with the IPC. No negotiation took place
between M & M and the IPC concerning the terms of the
license. While M & M was an IPC licensee, it would purchase
potatoes in bulk from licensed Idaho potato vendors and would |
repackage those potatoes into five-pound bags bearing one or
more of the IPC’s certification marks. M & M’s largest
customer for its packing business was G&T Terminal
Packaging Inc. (“G&T”), a reseller of produce and an IPC

5

licensee. G&T’s primary customer base is supermarket chains,
which are sophisticated and experienced customers for produce.
G&T in essence used “M & M as an agent or independent
contractor to repack G&T’s potatoes in five pound bags with
G&T’s name on them as seller and then deliver the potatoes to
various customers of G&T, returning the delivery tickets to
G&T.” (Pet. App. 29a.)

In February 1995, the IPC revoked M & M’s license when
M & M was unable to produce certain of its records which had
been destroyed in a fire 18 months earlier. (Pet. App. 30a: see
also Resp. App. 4a-5a.) Since the IPC revoked M & M’s
license to use the certification marks, it has continuously denied
M & M’s requests to use them.

On two occasions during the pendency of this action,
M & M’s orders for rail cars of Idaho potatoes were cancelled.
The sellers told M & M that the IPC had ordered them not to
sell Idaho potatoes to M & M. In one case, the rail cars had
already reached New York State and M & M had already paid
the freight charges. As a result of M & M’s inability to obtain
bulk quantities of Idaho potatoes to fulfill orders, G&T began
having its five-pound bags packed in Idaho.

C. Proceedings Below

1. The District Court upheld the IPC’s licensee estoppel
position early during the pre-trial proceedings and dismissed
M & M’s counterclaims for cancellation of the various
certification marks. The parties did not conduct discovery
concerning those claims.

Throughout the district court proceedings, the IPC primarily
contended that M & M had sold misbranded or counterfeit
potatoes. (See Pet. App. 77a, n.6.) The jury concluded that the

8

IPC did not prove that M & M had sold as Idaho potatoes.
potatoes not grown in Idaho, a conclusion that the District
Court described as “inescapable.” (Pet. App. 32a; id. 34a-35a;
Resp. App. 2a & 4a.) The IPC nonetheless continued to deny
M & M and M & M Packaging a license to use the ‘ idaho”
certification mark, and the District Court denied Respondents’
post-trial application for a mandatory injunction compelling the
IPC to grant a license to them. (Resp. App. 5a-6a.)

2. Respondents urged the Second Circuit not to enforce the
no challenge provision based on legal principles applicable to
contracts of adhesion, containing terms that are unconscionable
or against public policy.

REASONS FOR DENYING THE PETITION

I. THE SECOND CIRCUIT’S DECISION IS BASED
ON CONTRACT LAW AND THUS DOES NOT
CONFLICT WITH PRECEDENT OF THIS
COURT OR OF ANY COURT OF APPEALS
CONCERNING PREEMPTION

Although not explicitly stated in its opinion, the Second
Circuit based its decision that the no challenge provision of the
license agreement is unenforceable on general principles of
contract law because it is a term in a contract of adhesion that
violates public policy and is unconscionable. A contract of
adhesion is one “that is offered by the authoring party on a take
it or leave it basis, rather than being negotiated between the
parties.” Northwestern Nat’! Ins. Co. v. Donovan, 916 F.2d
372, 377 (7th Cir. 1990). The IPC’s license agreement was
(and is) offered to potential licensees on such a “take it or leave
it” basis. Agreeing to the terms of that contract is the exclusive
means by which a merchant can use the IPC’s certification
marks indicating truthfully the Idaho ongin of its potatoes. The

SR le ie We ae eee eee

bk A re

9

IPC has also established a system to prevent out-of-state
packers from obtaining fresh potatoes from Idaho in bulk
quantities unless they agree to the terms of that contract. The
terms of the license agreement are and were non-negotiable. In
order to use the marks a potato packer has no choice but to
agree to sign the IPC license and purportedly by doing so to
surrender the night to ever challenge the validity of them. ‘The
concept of adhesion contracts . . . is a notion evolved from
public policy that refused to enforce a contract provision when
it offends basic notions of civility and fair play.” Klos v.
Polskie Lini Lotnicze, 133 F.3d 164, 168-69 (2d Cir. 1997): see
also Lake v. Equitable Sav. & Loan Ass'n. 674 P.2d 419. 423
(Idaho 1983) (noting that under Idaho law contract provisions
may be unenforceable as against public policy) .

A court may refuse to enforce the contract. or may enforce
it without the unconscionable term, or may limit the application
of any unconscionable term to avoid an unconscionable result
where a contract or term is unconscionable at the time the
contract is made. Restatement (Second) of Contracts § 208
(1981). A determination of unconscionability is made in light
of the contract’s setting, purpose and effect, considering
whether there is gross disparity in the exchange and gross
inequality of bargaining power with terms unreasonably
favoring the stronger party. /d. cmts. a,c & d. In determining
whether a contract of adhesion is unconscionable, one factor to
consider is whether the ‘‘coerced” party had any alternatives.
Klos, 133 F.3d at 169 (citing Carnival Cruise Lines. Inc. v.
Shute, 499 U.S. 585, 594-95 (1991)). In this case, M & M was
a “coerced” party because it did not _have any alternative other
than signing the IPC’s license agreement if it wanted to
purchase in bulk potatoes grown in Idaho and apply the IPC’s
certification marks (including the word “Idaho”) to packages
containing Idaho-grown potatoes. The one-sided license
agreement essentially provided that the IPC, and only the ir,

10

could terminate the agreement and/or pursue other remedies for
an alleged breach. It further included the estoppel provision.

The Second Circuit, in determining whether the estoppel
provision subverts the public policies underlying the Lanham
Act. properly balanced the policy at issue and the degree to
which that policy is undermined by enforcement of the contract
against the public interest in seeing private agreements
enforced. See New England Mutual Life Ins. Co. v. Caruso,
535 N.E.2d 270 (N.Y. 1989); Lake, 674 P.2d at 423. The
policies underlying the Lanham Act, encouraging competition,
are completely undermined by the estoppel provision of the
IPC’s license agreement. Park ‘N Fly, 469 U.S. at 193
(‘Because trademarks desirably promote competition, and the
maintenance of product quality, Congress determined that ‘a
sound public policy requires that trademarks receive nationally
the greatest protection that can be given them.’”); Intel Corp.
v. Terabyte Int'l, Inc., 6 F.3d 614, 618 (9th Cir. 1993)
(explaining policy concerns sought to be furthered by Lanham
Act).

Congress determined that public policy requires that
certification marks can be cancelled at any time “on the ground
that the registrant . . . discriminately refuses . . . to continue to
certify the goods or services of any person who maintains the
standards or conditions which such mark certifies.” 15 U.S.C.
§ 1064(5)(D). The estoppel provision precludes the entire class
of persons who would be likely to challenge the IPC’s
certification marks on this ground from doing so, thereby
frustrating the policies embodied in the Lanham Act. In fact,
the T.T.A.B. has suggested that only persons who have been
refused certification after meeting the prescribed standards have
standing to seek cancellation of a certification mark. See
American Auto. Ass'n v. National Auto. Ass'n, 127 U.S.P.Q.
423, 427-28 (T.T.A.B. 1960); 3 McCarthy, supra § 20:61, at

)

1]

20-116. The practical result of the IPC’s form contract is the
removal of the IPC from the purview of the Lanham Act.
providing the IPC with free reign to act in whatever manner it
chooses without fear of reprisal for its illegal conduct. When
weighed against the public interest in seeing contracts enforced.
the balance tips decidedly in favor of holding the estoppel
provision unenforceable as a matter of contract law.

I]. THE DECISION BELOW IS NOT INCONSISTENT
WITH PRECEDENTS OF OTHER COURTS
CONCERNING LEAR AND LANHAM ACT MARKS

The Second Circuit correctly noted that the question
resolved by its decision had “not yet been squarely decided by
any federal circuit court.” (Pet. App. 8a.) First, no other Court
of Appeals has analyzed the applicability of the law governing
contracts of adhesion to certification marks. Second. no other
Court of Appeals has addressed the applicability of the licensee
estoppel doctrine to certification marks. As discussed earlier,
the Lanham Act differentiates certification marks from
trademarks in many key aspects. It is the very nature of the
certification mark, the requirement of “compulsory licensing,”
which prevents the doctrine of licensee estoppel from being
applicable to certification marks.

Ill. © THEIPC DID NOT PRESERVE THE QUESTION
PRESENTED FOR REVIEW BY THIS COURT

Before the Second Circuit, the IPC contended that the Lear,
Inc. v. Adkins, 395 U.S. 653 (1969), decision did not apply
solely because in this case there was an express contractual
provision while Lear involved an implied contractual term.
(See Pet. App. 12a (“IPC maintains that the Lear balancing test
is inapplicable because unlike the contract in Lear, which was
silent concerning the rights of the licensee to challenge the

12
patent. the contract signed by M & M specifically precluded M
& M from challenging the IPC’s marks.”).) The IPC’s brief did
not even cite to this Court’s opinion in Aronson v. Quick Point
Pencil Co., 440 U.S. 257 (1979). The IPC also did not ask the
Second Circuit to consider the issue as one of federal
preemption of state contract law, but chose instead to permit the
Second Circuit to address the issue as one involving M & M’s
claim that the IPC license agreement was a contract of adhesion
and unenforceable as a matter of state law.

After the Second Circuit issued its opinion, the IPC
petitioned for en banc rehearing. Once again, the IPC did not
mention Aronson or preemption. In its rehearing petition, the
IPC described the prior case law as holding “that there is a basis
for refusing to enforce a provision in a trademark-related
contract, but, only if the provision violates the public policy
behind trademark law of preventing confusion to the public.”
(Idaho Potato Commission’s Petition for En Banc Rehearing 9,
Idaho Potato Comm’nv.M & M Produce Farms & Sales, Nos.
02-7792 (L) & 02-7818 (XAP) (July 25, 2003).) Referring to
what it then perceived to be the test annunciated by the pnor
case law, the IPC told the Second Circuit that it had

no objection to this test being applied to the instant
case. Indeed, it is the only test that should be
applied.

(Jd. (emphasis added).) The IPC complained only about the
panel’s view that the appropriate policy expressed in the
Lanham Act is “free and open competition among producers
and distributors of the certified product” rather than prevention
of consumer confusion. (/d. at 13.) Having told the Second
Circuit that one test applied, the IPC should not now be heard
that a different one applies.

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13

IV. PRACTICAL CONSIDERATIONS WARRANT
DENIAL OF THE PETITION

A. The Judgment From Which Review Is Sought Is Not
Final

The District Court’s August 26, 1998 decision that M & M
could not challenge the validity of the IPC’s certification marks
was rendered before Respondents had an Opportunity to conduct
discovery on the issues relevant to their counterclaims.

In August 1998, Majestic Produce Corp. was a party in one
of the consolidated actions and was clearly not bound by license
estoppel from pursuing cancellation of the IPC’s marks. (Pet.
App. 71a.) In considering the grounds for cancellation --
including a challenge of the right of a certification mark owner
to require a license agreement before its mark can be used -- the
District Court identified areas that would need further
development of the facts before trial. (Pet. App. 82a - 83a; id.
88a; id. 92a; id. 95a.) After that decision, the parties and the
court spent a significant amount of time addressing the IPC’s
assertion of Eleventh Amendment immunity and applicability
of the State Action Doctrine. See Jdaho Potato Comm'n v. M
& M Produce Farms & Sales, 95 F. Supp. 2d 150, 151-54
(S.D.N.Y. 2000), aff'd sub nom., Hapco Farms, Inc. v. Idaho
Potato Comm'n, 238 F.3d 468 (2d Cir. 2001 ). By then,
Majestic Produce had filed for bankruptcy and no discovery
took place on the issues raised by the claims seeking
cancellation of the marks. Obviously, the trial in this action did
not involve any issue concerning the validity of the IPC’s marks
or whether they should be cancelled. Accordingly, the parties
have not had an opportunity to develop a complete record in the
case for the Court to review. The IPC essentially asks this
Court to become involved in the pleading stage of this issue.

14

This Court has repeatedly expressed its reluctance to.
exercise its certiorari jurisdiction to review interlocutory
judgments of the courts of appeals. See, e.g.. Brotherhood of
Locomotive Firemen v. Bangor & Aroostock R. Co., 389 U.S.
327. 328 (1967) (“because the Court of Appeals remanded the
case. it is not yet ripe for review by this Court”): Hamilton-
Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, 258 (1916)
(“except in extraordinary cases. the wnit is not issued until final
decree”); see also Mazurek v. Armstrong, 520 U.S. 968, 975
(1997) (noting exception to general rule because Court of
Appeals’ judgment was both “clearly erroneous” and produced
“immediate consequences” in form of injunction against State
of Montana).

The Second Circuit’s decision is not clearly erroneous and
it has no immediate consequences. The Court should decline
the IPC’s request to forgo its usual practice of awaiting a final
judgment before exercising certiorari jurisdiction.

B. The IPC Recently Appealed To the Ninth Circuit A
Final Judgment Which Brings Up For Review An
Order Following The Second Circuit’s Decision

The IPC commenced a civil action against M & M’s largest
customer, G&T, in the United States District Court for the
District of Idaho concerning G&T’s use of M & M to repack its
Idaho potatoes.” That lawsuit involved some of the very same
potatoes which were the subject of this action, so G&T
intervened in this actiom—Like M & M, G&T asked the New

2 The docket sheet for that case, State of Idaho Potato Comm'n v.

G&T Terminal Packaging, Inc., Case No. CIV 98-0088-S-DOC, is

available through the Idaho federal courts’ website,

—. _ http://www.id.uscourts.gov, which also contains links to imaged
| copies of the documents in the court’s file.

15

York court to cancel the IPC’s certification marks. Eventually.
the distnct court dismissed G&T’s intervention complaint.

On June 27, 2002. the Idaho district court granted summary
judgment to the IPC for breach of contract damages arising
from G&T’s efforts to cancel the IPC’s certification marks.
G&T filed a motion for reconsideration based on the Second
Circuit’s decision below. The Idaho district court held:

In sum. G&T has met its burden of showing a
change of law of a strongly convincing nature to
persuade the Court to reverse its prior decision. The
June 27 Order was entirely premised upon a New
York District Court Order which has been reversed
by the Second Circuit. The Second Circuit held that
G&T was not contractually estopped from
challenging the validity of the IPC’s license
agreement. While recognizing that the Second
Circuit’s decision is not binding on this Court, the
Court finds the reasoning and conclusion of the
Second Circuit decision applicable and persuasive.
Accordingly, G&T’s counterclaim against IPC in
New York District Court, challenging the IPC’s

licensing nie ements did not constitute a breach of
contract.

Order Granting Defendant’s Motion for Reconsideration and
Vacating June 27 Order, 12-13, The State of Idaho Potato
Comm'n v. G&T Terminal Packaging, Inc., Case No. Civ 98-
0088-S-DOC (D. Id. Oct. 24, 2003).

On March 17, 2004, the IPC filed a timely appeal to the
United States Court of Appeals for the Ninth Circuit from the
final judgment entered in the Idaho district court. In its Notice
of Appeal, the IPC specifically referred to the October 24, 2003

16

Order as one of the orders for which it intends to seek review by
the Ninth Circuit. This Court should deny the petition in this
case because the Second Circuit’s judgment is not final and the
IPC will shortly have the opportunity to present the question to
the Ninth Circuit on a fully developed record.

C. The Dire Predictions Of The IPC And The Amici
Curiae Are Undercut By The Dearth Of Similar
Cases Since The 1989 Decision Of The Trademark
Trial and Appeal Board Rejecting Licensee Estoppel
For Certification Marks

The IPC and the amici curiae predict that the Second
Circuit’s decision will result in a dramatic increase in litigation
over the validity of certification marks. The IPC further claims
the certification marks owners, which it describes as being
mainly “government entities with limited budgets (like [itself])
or non-profit organizations,” will be hampered by the expense
and risk of defending such claims. (Pet. at 26.) Both
arguments are wrong.

First, it has been almost fifteen years since the Trademark
Trial and Appeal Board held that “there can be no license
estoppel involving a certification mark because of the unique
character of a certification mark and the basic difference in
concept between a certification mark . . . and a trademark.”
Midwest Plastic Fabricators, 12 U.S.P.Q.2d at 1270 n.6. The
T.T.A.B.’s decision is addressed in the leading treatise on
United States trademark law. 2 McCarthy, supra, § 18.63 at 18-
116.4; id., § 19:92, n.6. Despite the passage of so much time,
no other court has issued a reported decision directly on point.
Cf National Bd. for Certification in Occupational Therapy, Inc.
v. American Occupational Therapy Ass'n, 24 F. Supp. 2d 494,
501 (D. Md. 1998) (holding licensee estoppel not applicable
because agreement was “more a distribution agreement than a

17

traditional ‘license’”). With the exception of the case before
this Court and the related case involving G&T, the record is
devoid of any other case involving these same issues since
Midwest Plastic Fabricators.

Second, the record in this case concerning the financial
positions of the parties does not support the IPC’s contentions.
The IPC has a $10 million annual budget and has spent more
than $1 million prosecuting this case. On the other hand.
Respondents are family farmers who earned a profit of less than
$42.000 packing Idaho potatoes in bags on which Respondents
used the IPC’s marks without its permission.’ The economic
incentive here to challenge the IPC’s marks are unique because
no competing certification mark owner exists and the IPC has
used its marks to prevent out-of-state packers like M & M from
being able to buy potatoes from Idaho in bulk. Moreover,
because the IPC claims all nghts to use the word “Idaho” in
connection with potatoes, Respondents cannot pack Idaho
potatoes (the supposed “‘Cadillac” of baking potatoes) without
the IPC’s blessing. By way of contrast, the “CERTIFIED
ANGUS BEEF” certification mark does not prevent a butcher
from selling Angus Beef. See American Angus Ass'n v. Sysco
Corp., 829 F. Supp. 807, 825-26 (W.D.N.C. 1992).

D. It Is More Appropriate for Congress To Deal With
This Issue

Congress has specifically provided that certification marks,
unlike trademarks, are subject to cancellation at any time on
four designated grounds. The IPC’s license agreement has the

> Following the trial, however, the District Court found that “the
record at trial . . . does not provide the IPC with an excuse for not
granting M & M a license.” (Resp. App. Sa.)

18

effect of overriding Congressional intent as expressed in the
Lanham Act with respect to the only class of persons with any
real incentive to pursue cancellation if a certification mark
owner discriminately refuses to continue to certify their
conforming goods.” If the burdens imposed by Section 13(5)
are too onerous for certification mark owners like the IPC.
Congress, not this Court, is the appropriate body to remedy the
situation. In 1999, Congress amended this section by adding
the last paragraph clarifying the meaning of one of the four
enumerated grounds for cancellation. Pub. L. 105-330, § 301.
112 Stat. 3070 (Oct. 30, 1998). That paragraph was added at
the urging of the IPC in response to arguments made by
Respondents in the District Court. See Hearing on H.R. 3119,
A Bill ‘‘To Amend the Trademark Act of 1946 with respect to
the Dilution of Famous Mark”, and an Oversight Hearing in a
Federal Right of Publicity; State Marketing-Order
Commissions and Product Certifications; International
Expropriation of Registered Marks; and Patent Extension
Review Before the House Subcomm. on Courts and Intellectual
Property, 105" Cong. (May 21, 1998) (statement of Patrick J.
Kole, Vice President of Legal and Governmental Affairs, Idaho
Potato Commission). This issue presents competing policy
issues which are best addressed by Congress. This Court
should therefore deny the IPC’s petition.

* As discussed earlier, some knowledgeable in trademark law
suggest that this very class would be the only one with standing to
seek cancellation on this ground. 3 McCarthy, supra § 20:61, at 20-
116; see American Auto Ass’n, 127 U.S.P.Q. at 427.

CONCLUSION

For the foregoing reasons. the petition for a writ of certiorari
should be denied.

Respectfully submitted,

J. JOSEPH BAINTON”

JOHN GERARD MSCARTHY
BAINTON MSCARTHY LLC
26 Broadway

New York, New York 10004
(212) 480-3500

Counsel for Respondents

March 26, 2004 * Counsel of Record

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APPENDIX

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

97 Civ. 8125 (CLB)

IDAHO POTATO COMMISSION,
Plaintiff,
-against-
M&M PRODUCE FARMS & SALES
d/b/a M&M PRODUCE, M&M PACKAGING, INC.,
MATTHEW J. ROGOWSKI, and MARK ROGOWSKI,

Defendants.

Memorandum and Order

Brieant, J., \

On May 14, 2002, the Court issued a_ post-trial
Memorandum & Order, Findings of Fact and Conclusions of
Law (“Memorandum”), in which it ordered the parties to this
litigation to submit a proposed final judgment in this
certification mark infringement lawsuit. Plaintiff Idaho Potato
Commission (“IPC”) submitted a proposed Notice of
Settlement and a proposed Judgment, both dated May 29, 2002,
which Defendants M&M Produce Farms & Sales d/b/a M&M
Produce, M&M Packaging Inc., Matthew Rogowski and Mark
Rogowski (“M&M” collectively) oppose as to its form and

2a

content. For the reasons set forth below, this Court adheres to
its conclusions in the May 14, 2002 Memorandum and orders
the Clerk of the Court to enter final judgment in this lawsuit
consistent with this Memorandum and Order and all pnor
orders and proceedings.

The issues before the Court in this litigation are (i) whether
Defendants M&M _ infringed IPC’s registered certification
marks, and (ii) whether the acts of Defendants M&M deceived
another person as to the origin of the potatoes M&M sold. See
15 U.S.C. § 1114 and § 1125(a). To resolve these issues, this
Court supervised four years of pre-trial litigation terminated by
a jury trial. On February 26, 2002, the jury returned a Special
Verdict, in which it determined that, with respect to each
Defendant, the IPC proved by a preponderance of the credible
evidence that during the period September 1, 1995 through
April 30, 2001, Defendants sold genuine Idaho grown potatoes
in bags labeled with the IPC’s certification marks for Idaho
grown potatoes without the consent of the IPC. As prompted by
the Special Verdict Form, the jury then found that Defendants
had earned $41,962.00 from such transactions. The jury also
found that, with respect to each Defendant, the IPC had not
proved by a preponderance of the credible evidence that during
the relevant period Defendants had sold as Idaho potatoes,
potatoes not grown in Idaho (misbranded potatoes).

It was the theory of Plaintiff's case that Defendants sold
misbranded potatoes in bags labeled with the certification
marks. Because of a failure of proof at trial, it now appears that
the potatoes sold were genuine, although Defendants may well
have been unlicenced.

By its post trial Memorandum dated May 14, 2002, the
Court concluded that the Clerk of the Court shall enter
judgment against Plaintiff on Counts II and III of its Amended
Complaint dated June 12, 1998, the federal claims for

3a

trademark dilution and false designation of origin under 15
U.S.C. § 1125(a) and (c); based on the jury’s conclusion that
the IPC failed to prove that M&M had falsely labeled bags of
non-Idaho potatoes with the IPC certification mark. See
Memorandum May 14, 2002 at 13. The Court reached the same
conclusion with respect to Counts IV through VII, the
corresponding state law claims. The Court adheres to this
decision.

With respect to Count I of the Amended Complaint, the
federal infringement claim under 15 U.S.C. § 1114, the Court
concluded in its Memorandum that the jury verdict, which
found that M&M had earned $41,692.00 in profits should be
vacated, because the evidence bearing on this issue does not
sustain the right to recover monetary damages in that amount.
See Memorandum at 13. This Court held that as a matter of law,
M&M was not liable to the IPC for damages because the [PC’s
certification mark rights required that it grant a license to re-
sellers of genuine Idaho potatoes. Because the jury concluded
that the IPC had failed to prove that M&M had sold counterfeit
potatoes, no damages can be awarded simply because
Defendants failed to seek a license and pay the licensing fees.
The Court upheld the IPC’s right to enforce its licensing
scheme, and therefore, determined that injunctive relief would
be appropriate to enjoin M&M from selling genuine Idaho
potatoes using the certification mark in the future without a
license.

The IPC now requests the Court to revisit this issue,
predicting that its effect will be catastrophic upon all
certification mark licensing schemes. Specifically, the IPC
contends that no incentive remains for a purchaser, packer,
seller, reseller or repacker ever to obtain an IPC license and pay
a licensing fee because the IPC has no recourse if a party uses
its certification mark without a license.

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4a

The Court disagrees. First, the Court has upheld and
continues to recognize the validity of the certification mark
owner's license requirement, as well as a certification mark
owner’s right to ensure the genuine origin of goods labeled with
its mark through licensing fees, marketing and advertising, and
periodic audit and inspection. In its Memorandum, this Court,
bound by the ruling of our Court of Appeals in Community of
Roquefort v. William Faehndrich, Inc., 303 F.2d 494, 497 (2d
Cir. 1962), simply reaffirmed the obligation of a certification
mark owner to grant its license to those who sell a genuine
product. Here, the jury determined that the IPC failed to prove
that M&M sold counterfeit potatoes from September 1, 1995
through April 30, 2001. Without more evidence that M&M was
engaging in counterfeit sales, the IPC, by virtue of its status as
a certification mark owner, did not have the right to recoup the
profits of M&M from sale of genuine Idaho potatoes. In the
entry of Judgment, any court is bound by the trial record of the
issues as actually litigated. The entire focus of plaintiff's proof
of damages was addressed to misbranded potatoes. As to any
such sales, recovery of profits would have been an appropriate
measure of damages. There were none. Perhaps, had it chosen
to do so, Plaintiff could have presented to our jury an alternate
theory of damages, if, as turned out to be the case, the offense
of Defendants was not misbranding, but simply failure to take
a license for the repacking of genuine Idaho potatoes. In such a
situation, the damages would at most be the withheld fees, plus
the reasonable costs of obtaining an injunction against further
violation. For obvious reasons of trial tactics, Plaintiff did not
present an alternative damage theory in the event the jury found,
as it did, that the misbranding claim failed. Having so tried the
case, Plaintiff may not now reopen the record to present another
theory of damages to fit the facts as found.

In any event, the Court need not reach the issue of whether
certification mark infringement occurs in the case of a former
licensee who continues to sell genuine product, post-revocation

Sa

of a certification mark license agreement. A prior licensee
enjoys some protection when selling genuine products without
_ a license because no fraud is perpetrated upon the consuming
public: the product is what it purports to be, and the consumer
pays for what it gets. See Memorandum of May 14, 2002 at 18.

The IPC contends that it revoked M&M’s license in
February 1995 because M&M failed to keep adequate records.
M&M contended during trial that the required records were
destroyed during a warehouse fire, and thus it failed to comply
with the document requirements of the IPC license. The jury
was not asked by either side to determine whether this
testimony about the fire, easily verifiable, was true, but here
was no contrary evidence concerning the destruction of
Defendants’ records. This testimony is entitled to a
presumption of regularity by this Court and the record at trial
therefore does not provide the IPC with an excuse for not
granting M&M a license.

Based on the jury’s finding and the law in this Circuit with
respect to certification marks, the Court concludes that liability
in the form of money damages for certification mark
infringement will not lie on this trial record, in which the
quantum of such damages could have been litigated, but for
tactical reasons was not, nor may profits be recovered as
damages in any case where the certification mark licensor
denies a license to the seller of a genuine product. Equitable
relief is the appropriate remedy in such a case. A court may
order the seller enjoined from such sales without a license, but
will not award the licensor damages for infringement where it
unlawfully refused to grant a license. The availability of
equitable relief avoids rendering meaningless all certification
mark licensing schemes, as now predicted by the IPC.

In various letter briefs, the latest of which is dated June 10,
2002, Defendants ask this Court to “enter a mandatory

; 6a

injunction” compelling IPC, in effect, to license the Defendants.
This application is denied without prejudice. The issue was not
litigated in this case, and it is time for this Court to bring this
case to an end. In passing, we are somewhat surprised that
having been unjustly accused of serious wrongdoing by the IPC,
Defendants apparently desire to enter into a relationship with
IPC’s present management to become a licensed reseller of
Idaho potatoes, and to use this Court’s equitable powers, rather
than arms length negotiation, to achieve such a result. While
Idaho potatoes enjoy a certain cachet and command a market
premium, there are other fine russet baking potatoes, just as
there are blue cheeses other than Roquefort, and the right to
repack them seem hardly the key to happiness. A license
arrangement compelled by a court is likely to lead to frequent
visits of high priced auditors to the Rogowski homestead.

Conclusion

It is time for this litigation (more than 300 separate docket
entries over four and one-half years) to come to an end in this
Court. No more papers or letter are to be filed except for
Notices of Appeal.

A judgment has been signed.
SO ORDERED.

Dated: White Plains, New York
June 11, 2002

CHARLES L. BRIEANT
Charles L. Brieant, U.S.D.J.

7a

15 U.S.C. § 1052(e)(2). Trademarks registrable on
principal register; concurrent
registration

No trademark by which the goods of the applicant may be
distinguished from the goods of others shall be refused
registration on the principal register on account of its nature
unless it—

* * *

(e) Consists of a mark which . . . (2) when used on or in
connection with the goods of the applicant is primarily
geographically descriptive of them, except as indications of
regional origin may be registrable under section 1054 of this
Hie ....

(July 5, 1946, ch. 540, title I, Sec. 2, 60 Stat. 428; Pub. L. 87-
772, Sec. 2, Oct. 9, 1962, 76 Stat. 769; Pub. L. 93-596, Sec. 1,
Jan. 2, 1975, 88 Stat. 1949; Pub. L. 100-667, title I, Sec. 104,
Nov. 16, 1988, 102 Stat. 3937; Pub. L. 103-182, title III, Sec.
333(a), Dec. 8, 1993, 107 Stat. 2114; Pub. L. 103-465, title V,
Sec. 522, Dec. 8, 1994, 108 Stat. 4982; Pub. L. 105-330, title II,
Sec. 201(a)(2), (12), Oct. 30,-1998, 112 Stat. 3069, 3070; Pub.
L. 106-43, Sec. 2(a), Aug. 5, 1999, 113 Stat. 218; Pub. L. 106-
113, div. B, Sec. 1000(a)(9) [title IV, Sec. 4732(b)(1)(B)], Nov.
29, 1999, 113 Stat. 1536, 1501 A-583.)

15 U.S.C. § 1057(a)&(b). Certificates of registration
(a) Issuance and form

Certificates of registration of marks registered upon the
principal register shall be issued in the name of the United
States of America, under the seal of the Patent and Trademark
Office, and shall be signed by the Director or have his signature
placed thereon, and a record thereof shall be kept in the Patent
and Trademark Office. The registration shall reproduce the

8a

mark, and state that the mark is registered on the principal

register under this chapter, the date of the first use of the mark,

the date of the first use of the mark in commerce, the particular

goods or services for which it is registered, the number and date’
of the registration, the term thereof, the date on which the

application for registration was received in the Patent and

Trademark Office, and any conditions and limitations that may

be imposed in the registration.

(b) Certificate as prima facie evidence

A certificate of registration of a mark upon the principal
register provided by this chapter shall be prima facie evidence
of the validity of the registered mark and of the registration of
the mark, of the registrant's ownership of the mark, and of the
registrant's exclusive nght to use the registered mark in
commerce on or in connection with the goods or services
specified in the certificate, subject to any conditions or
limitations stated in the certificate.

* * *

(July 5, 1946, ch. 540, title I, Sec. 7, 60 Stat. 430; Aug. 17,
1950, ch. 733, 64 Stat. 459; Pub. L. 87-772, Sec. 4, Oct. 9,
1962, 76 Stat. 769; Pub. L. 93-596, Sec. 1, Jan. 2, 1975, 88 Stat.
1949; Pub. L. 100- 667, title I, Sec. 109, Nov. 16, 1988, 102
Stat. 3938; Pub. L. 105-330, title II, Sec. 201(a)(3), Oct. 30,
1998, 112 Stat. 3070; Pub. L. 106- 113, div. B, Sec. 1000(a)(9)
[title IV, Sec. 4732(b)(1)(B)], Nov. 29, 1999, 113 Stat. 1536,
1501A-583.)

9a

15 U.S.C. § 1065 Incontestability of right to use mark
under certain conditions -

Except on a ground for which application to cancel may be
filed at any time under paragraphs (3) and (5) of section 1064
of this title, and except to the extent, if any, to which the use of
a mark registered on the principal register infringes a valid right
acquired under the law of any State or Territory by use of a
mark or trade name continuing from a date prior to the date of
registration under this chapter of such registered mark, the right
of the registrant to use such registered mark in commerce for
the goods or services on or in connection with which such
registered mark has been in continuous use for five consecutive
years subsequent to the date of such registration and is still in
use in commerce, shall be incontestable: Provided, That--

(1) there has been no final decision adverse to
registrant's claim of ownership of such mark for such goods
or services, or to registrant's nght to register the same or to
keep the same on the register; and

(2) there is no proceeding involving said rights pending
in the Patent and Trademark Office or in a court and not
finally disposed of; and

(3) an affidavit is filed with the Director within one year
after the expiration of any such five-year period setting
forth those goods or services stated in the registration on or
in connection with which such mark has been in continuous
use for such five consecutive years and is still in use in
commerce, and other matters specified in paragraphs (1)
and (2) of this section; and

(4) no incontestable nght shall be acauired in a mark
which is the generic name for the goods or services or a
portion thereof, for which it is registered.

Subject to the conditions above specified in this section, the
incontestable nght with reference to a mark registered under

10a

this chapter shall apply to a mark registered under the Act of
March 3, 1881, or the Act of February 20, 1905, upon the filing
of the required affidavit with the Director within one year after
the expiration of any period of five consecutive years after the
date of publication of a mark under the provisions of subsection
(c) of section 1062 of this title. |

The Director shall notify any registrant who files the above-
prescribed affidavit of the filing thereof.

(July 5, 1946, ch. 540, title I, Sec. 15, 60 Stat. 433; Pub. L. 87-
772, Sec. 10, Oct. 9, 1962, 76 Stat. 771; Pub. L. 93-596, Sec. 1,
Jan. 2, 1975, 88 Stat. 1949; Pub. L. 97-247, Sec. 10, Aug. 27,
1982, 96 Stat. 320; Pub. L. 100-667, title I, Sec. 116, Nov. 16,
1988, 102 Stat. 3941; Pub. L. 106-113, div. B, Sec. 1000(a)(9)
[title IV, Sec. 4732(b)(1)(B)], Nov. 29, 1999, 113 Stat. 1536,
1501A-583.)

15 U.S.C. § 1115. Registration on principal register as
evidence of exclusive right to use mark;
defenses

(a) Evidentiary value; defenses

- Any registration issued under the Act of March 3, 1881, or
the Act of February 20, 1905, or of a mark registered on the
principal register provided by this chapter and owned by a party
to an action shall be admissible in evidence and shall be prima
facie evidence of the validity of the registered mark and of the
registration of the mark, of the registrant's ownership of the
mark, and of the registrant's exclusive right to use the registered
mark in commerce on or in connection with the goods or
services specified in the registration subject to any conditions
or limitations stated therein, but shall not preclude another
person from proving any legal or equitable defense or defect,
including those set forth in subsection (b) of this section, which
might have been asserted if such mark had not been registered.

lla

(b) Incontestability; defenses

To the extent that the right to use the registered mark has
become incontestable under section 1065 of this title, the
registration shall be conclusive evidence of the validity of the
registered mark and of the registration of the mark, of the
registrant's ownership of the mark, and of the registrant's
exclusive nght to use the registered mark in commerce. Such
conclusive evidence shall relate to the exclusive right to use the
mark on or in connection with the goods or services specified
in the affidavit filed under the provisions of section 1065 of this
title, or in the renewal application filed under the provisions of
section 1059 of this title if the goods or services specified in the
renewal are fewer in number, subject to any conditions or
limitations in the registration or in such affidavit or renewal
application. Such conclusive evidence of the right to use the
registered mark shall be subject to proof of infringement as
defined in section 1114 of this title, and shall be subject to the
following defenses or defects:

(1) That the registration or the incontestable right to use
the mark was obtained fraudulently; or

(2) That the mark has been abandoned by the registrant;
or

(3) That the registered mark is being used by or with the
permission of the registrant or a person in privity with the
registrant, so as to misrepresent the source of the goods or
services On or in connection with which the mark is used; or

(4) That the use of the name, term, or device charged to
be an infringement is a use, otherwise than as a mark, of the
party's individual name in his own business, or of the
individual name of anyone in privity with such party, or of

a term or device which is descriptive of and used fairly and

in good faith only to describe the goods or services of such

party, or their geographic origin; or
(5) That the mark whose use by a party is charged as an
infringement was adopted without knowledge of the

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registrant's prior use and has been continuously used by
such party or those in privity with him from a date prior to
(A) the date of constructive use of the mark established
pursuant to section 1057(c) of this title, (B) the registration
of the mark under this chapter if the application for
registration is filed before the effective date of the
Trademark Law Revision Act of 1988, or (C) publication of
the registered mark under subsection (c) of section 1062 of
this title: Provided, however, That this defense or defect
shall apply only for the area in which such continuous prior
use is proved; or

(6) That the mark whose use is charged as an
infringement was registered and used prior to the
registration under this chapter or publication under
subsection (c) of section 1062 of this title of the registered
mark of the registrant, and not abandoned: Provided,
however, That this defense or defect shall apply only for the
area in which the mark was used prior to such registration
or such publication of the registrant's mark; or

(7) That the mark has been or is being used to violate
the antitrust laws of the United States; or

(8) That the mark is functional; or

(9) That equitable principles, including laches, estoppel,
and acquiescence, are applicable.

(July 5, 1946, ch. 540, title VI, Sec. 33, 60 Stat. 438; Pub. L.
-87-772, Sec. 18, Oct. 9, 1962, 76 Stat. 774; Pub. L. 100-667,
title I, Sec. 128(a), (b), Nov. 16, 1988, 102 Stat. 3944; Pub. L.
105-330, title II, Sec. 201(a)(9), Oct. 30, 1998, 112 Stat. 3070.)

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15 U.S.C. § 1119. Power of court over registration

In any action involving a registered mark the court may
determine the right to registration, order the cancellation of
registrations, in whole or in part, restore canceled registrations,
and otherwise rectify the register with respect to the
registrations of any party to the action. Decrees and orders shall
be certified by the court to the Director, who shall make
appropriate entry upon the records of the Patent and Trademark
Office, and shall be controlled thereby.

(July 5, 1946, ch. 540, title VI, Sec. 37, 60 Stat. 440; Pub. L.
93-596, Sec. 1, Jan. 2, 1975, 88 Stat. 1949; Pub. L. 106-113,
div. B, Sec. 1000(a)(9) [title IV, Sec. 4732(b)(1)(B)], Nov. 29,
1999, 113 Stat. 1536, 1501A-583.)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_0982%3A2. Public record. Not legal advice.