Emerald Cities Collaborative, Inc. v. Roese , 666 F. App'x 908 ( 2016 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
EMERALD CITIES COLLABORATIVE, INC.,
Appellant
v.
SHERI JEAN ROESE,
Appellee
______________________
2016-1703
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in No.
91197060.
______________________
Decided: December 13, 2016
______________________
LAWRENCE EDWIN JAMES, JR., Reed Smith LLP, Chi-
cago, IL, for appellant. Also represented by JOSHUA
NEWMAN.
SHERI JEAN ROESE, Emerald Cities USA Ltd, Scotts-
dale, AZ, pro se.
______________________
Before PROST, Chief Judge, LOURIE and MOORE,
Circuit Judges.
2 EMERALD CITIES COLLABORATIVE v. ROESE
LOURIE, Circuit Judge.
Emerald Cities Collaborative, Inc. (“ECC”) appeals
from the decision of the United States Patent and Trade-
mark Office (“PTO”) Trademark Trial and Appeal Board
(“the Board”) cancelling ECC’s trademark registration of
THE EMERALD CITY and dismissing ECC’s opposition
to an application filed by Sheri Jean Roese (“Roese”) to
register the mark EMERALD CITIES. See Emerald
Cities Collaborative, Inc. v. Roese, No. 91197060 (T.T.A.B.
Dec. 4, 2015) (“Board Decision”). Because the Board did
not err in determining that the 2009 agreement between
ECC and Perry Orlando (“Orlando”) regarding the mark
THE EMERALD CITY prior to its registration constituted
an assignment of the intent-to-use application for that
mark in violation of Section 10 of the Lanham Act, 15
U.S.C. § 1060(a)(1), we affirm.
BACKGROUND
I
In November 2008, Orlando filed an application at the
PTO, seeking to register the mark THE EMERALD CITY
for use in business development and consulting services in
the renewable energy industry. The application was an
intent-to-use application under 15 U.S.C. § 1051(b). On
November 24, 2009, the PTO issued a Notice of Allow-
ance, which commenced a six-month period for Orlando to
file a Statement of Use (“SOU”) as required for registra-
tion of the mark.
Before filing the SOU, on December 30, 2009, Orlando
and ECC entered into an agreement concerning Orlando’s
applied-for mark (“the Agreement”). J.A. 212–17. The
Agreement is entitled “Trademark Assignment and Li-
cense,” J.A. 212, is governed by the laws of Delaware, J.A.
216, and has “an effective date of [December] 30, 2009,”
J.A. 212 (emphasis added).
EMERALD CITIES COLLABORATIVE v. ROESE 3
The Agreement recites that “Orlando owns certain
rights in the Mark, The Emerald City, U.S. Trademark
Application Serial No. 76/684,594 (the ‘Mark’)” and fur-
ther provides the following:
Assignment. Mr. Orlando agrees to convey and
assign unto ECC, all right, title and interest in
and to the Mark and any and all derivatives
thereof, together with any and all goodwill associ-
ated therewith, and the right to sue and recover
damages and profits for past, present and future
infringement, if any, related to the Mark, at such
time as the Mark is registered at the [PTO]. . . .
Use. Between the Effective Date and the Regis-
tration Date, Mr. Orlando may continue to use the
Mark. . . .
License. Upon registration of the Mark by the
[PTO] and completion of the transfer of the Mark
to ECC, ECC agrees to license certain rights in
the Mark to Mr. Orlando . . . .
J.A. 212–13 (emphases and underline added).
The Agreement additionally provides that: (1) “ECC
shall promptly pay” Orlando $25,000; (2) “[u]pon payment
of such amount, Mr. Orlando appoints Joel Rogers[, ECC’s
cofounder (“Rogers”),] as his Power of Attorney (with the
full power of substitution and resubstitution) for the
limited purpose of allowing ECC (and its attorneys) to
take over continued prosecution of the application for the
Mark”; (3) “[t]he Power of Attorney . . . is a Durable Power
of Attorney and is irrevocable”; (4) “[u]pon ECC’s re-
quest[,] Mr. Orlando agrees to execute any additional
documents as may be reasonably required to effect and/or
record this new Power of Attorney and to use reasonable
effort to assist ECC and its attorneys with the prosecution
of the application, satisfying the [PTO]’s requirement for
use of the Mark in commerce, and ensure registration of
4 EMERALD CITIES COLLABORATIVE v. ROESE
the Mark in a timely manner”; and (5) “Orlando agrees to
use the Mark . . . by January 31, 2010 and provide evi-
dence of such use in the form of a specimen and date of
first use to ECC to assist ECC in its registration of the
Mark.” J.A. 213 (emphases added). Under the Agree-
ment, ECC also agreed to pay Orlando $40,000 as a final
installment upon registration of the mark at the PTO. Id.Moreover, the Agreement states that “[t]his Agree-
ment shall commence on the Effective Date . . . and shall
continue in perpetuity,” that either party may terminate
the Agreement if the other party materially breaches, and
that “[u]pon termination of this Agreement by ECC . . .
Orlando shall promptly cease use of the Mark.” J.A. 214
(emphases added). It further provides:
The products and services sold by Mr. Orlando
and his associated entities under the Mark shall
at all times be of a high quality, as determined by
ECC acting reasonably. If the products or ser-
vices sold by Mr. Orlando and his associated enti-
ties under the Mark fail to meet such quality
standards, Mr. Orlando shall immediately take
corrective action to ensure that the products or
services are of the appropriate quality. . . .
Mr. Orlando shall not challenge ECC’s use of the
Mark or support challenges by third parties,
whether before or after the Registration Date.
Only ECC shall have the exclusive right to file op-
positions or claims against the users of confusing-
ly similar trademarks. . . .
ECC shall be responsible for all payments in con-
nection with the continued prosecution of the
Mark in the United States or its possessions. . . .
J.A. 215 (emphases added).
On April 19, 2010, approximately four months after
the Agreement, the applicant filed the SOU, which con-
EMERALD CITIES COLLABORATIVE v. ROESE 5
tained an appointment of counsel to attorneys at Reed
Smith LLP, the law firm representing ECC in this appeal.
The SOU stated that THE EMERALD CITY was first
used in commerce at least as early as January 15, 2010.
The PTO accepted the SOU and registered the mark
under Trademark Registration No. 3814868 on July 6,
2010. Later that month, an assignment, which was
executed by Orlando and ECC on July 6, 2010, was rec-
orded at the PTO, indicating that Orlando assigned the
entire interest in the mark to ECC “with an effective date
of July 6th 2010 . . . pursuant to that certain 2009 Trade-
mark Assignment and License Agreement.” J.A. 218–19.
II
In September 2009, Roese filed an application at the
PTO, seeking to register the mark EMERALD CITIES.
Shortly after publication of Roese’s application in October
2010, ECC filed an opposition alleging that Roese’s mark
would likely cause confusion with ECC’s then-registered
mark THE EMERALD CITY. In response, Roese raised
several affirmative defenses, as well as a counterclaim,
seeking to cancel ECC’s registration of THE EMERALD
CITY. She alleged, inter alia, that ECC’s registration is
invalid because the Agreement between Orlando and ECC
violated 15 U.S.C. § 1060(a)(1). J.A. 42 (affirmative
defense); J.A. 46 (counterclaim).
The Board ruled that the Agreement constituted an
improper assignment of the intent-to-use application in
violation of § 1060(a)(1). Board Decision at 12–17. In
particular, the Board rejected ECC’s argument that the
Agreement was merely an “agreement to assign in the
future.” Id. at 13. Rather, based on the Agreement and
the deposition testimony of Rogers, ECC’s cofounder, the
Board concluded that “the ramifications of the Agreement
were such that Mr. Orlando relinquished, and [ECC]
acquired, control of the application and use of the in-
volved mark, in [a] manner tantamount to an assignment
6 EMERALD CITIES COLLABORATIVE v. ROESE
of ownership of the application.” Id. at 17. The Board
also found that the 2010 assignment recorded at the PTO
after registration was “merely a formality or confirmation
of a fait accompli resulting from the Agreement.” Id. The
Board therefore granted Roese’s request to cancel ECC’s
trademark registration. Moreover, because ECC’s likeli-
hood-of-confusion claim was based solely on its asserted
rights in the pleaded registration, not on any prior com-
mon law rights, the Board dismissed ECC’s opposition.
Id. at 17–18.
ECC timely appealed to this court. We have jurisdic-
tion under 28 U.S.C. § 1295(a)(4)(B).
DISCUSSION
We review the Board’s legal conclusions without def-
erence and its factual findings for substantial evidence.
In re Pacer Tech., 338 F.3d 1348, 1349 (Fed. Cir. 2003).
The fundamental question in this appeal is the proper
interpretation of the Agreement, and hence whether it
constituted an assignment in violation of 15 U.S.C.
§ 1060(a)(1). The proper interpretation of a contract is a
question of law that is reviewed de novo. First Annapolis
Bancorp, Inc. v. United States, 644 F.3d 1367, 1373 (Fed.
Cir. 2011).
Here, the parties do not dispute that the Agreement is
governed by Delaware law. “Delaware law adheres to the
objective theory of contracts, i.e., a contract’s construction
should be that which would be understood by an objective,
reasonable third party.” Salamone v. Gorman, 106 A.3d
354, 367–68 (Del. 2014). When interpreting a contract, a
court “give[s] priority to the parties’ intentions as reflect-
ed in the four corners of the agreement, construing the
agreement as a whole and giving effect to all its provi-
sions.” Id. at 368. Accordingly, “the meaning which
arises from a particular portion of an agreement cannot
control the meaning of the entire agreement where such
inference runs counter to the agreement’s overall scheme
EMERALD CITIES COLLABORATIVE v. ROESE 7
and plan.” E.I. du Pont de Nemours & Co. v. Shell Oil
Co., 498 A.2d 1108, 1113 (Del. 1985).
ECC argues that the Board erred in construing the
Agreement as an immediate assignment, and therefore
that it was not in violation of § 1060(a)(1). ECC contends
that the Agreement shows that ECC and Orlando intend-
ed to assign the mark only upon registration, and that the
Board’s interpretation disregarded and contradicted the
intention of the parties. ECC also argues that the Board
erred in interpreting the provisions relating to (1) ECC’s
right to oversee the quality of products sold under the
mark, and (2) ECC’s exclusive right to enforce the mark
against third parties, as evidence of an immediate as-
signment. According to ECC, those provisions only ap-
plied after registration. ECC also contends that the
Power of Attorney merely created an agent-principal
relationship between Orlando, the trademark owner, and
the appointed representative. ECC argues, moreover,
that the Board improperly relied on Rogers’s ambiguous
deposition testimony in interpreting the Agreement.
Lastly, ECC contends that the Board improperly acted as
de facto counsel for Roese, who was a pro se litigant.
Roese, proceeding pro se in this appeal, responds that
the Board properly construed the Agreement as an imme-
diate assignment of the intent-to-use application in viola-
tion of Section 10 of the Lanham Act.
We agree with the Board and Roese that the Agree-
ment, when construed as a whole, constituted an immedi-
ate assignment of Orlando’s intent-to-use application
before the filing of the SOU, which rendered the subse-
quent registration of THE EMERALD CITY invalid.
Section 10 of the Lanham Act, 15 U.S.C. § 1060(a)(1),
contains an anti-trafficking rule, which provides that:
[N]o application to register a mark under section
1051(b) of this title shall be assignable prior to
8 EMERALD CITIES COLLABORATIVE v. ROESE
the filing of an amendment under section 1051(c)
of this title to bring the application into conformi-
ty with section 1051(a) of this title or the filing of
the verified statement of use under section
1051(d) of this title, except for an assignment to a
successor to the business of the applicant, or por-
tion thereof, to which the mark pertains, if that
business is ongoing and existing.
Section 1060(a)(1)’s anti-trafficking rule prohibits the
assignment of an intent-to-use application prior to the
filing of an SOU, unless a statutory exception is met, viz.,
that the intent-to-use application is transferred with at
least part of the applicant’s “ongoing and existing” busi-
ness to which the mark pertains. As the Board found, and
ECC does not dispute, such statutory exception does not
apply to ECC. Board Decision at 13 n.23. The question,
then, is whether the Agreement constituted an improper
assignment of the intent-to-use application prior to the
filing of the SOU on April 19, 2010. We conclude that it
did.
On its face, the Agreement provides that it has an “ef-
fective date” of December 30, 2009, J.A. 212, and that it
“shall commence on the Effective Date,” J.A. 214. On the
other hand, the Agreement also provides that “Orlando
agrees to convey and assign . . . the Mark . . . at such time
as the Mark is registered at the [PTO],” J.A. 212, and that
upon registration, ECC agrees to license certain rights to
Orlando, id., which might suggest that Orlando retained
ownership of the intent-to-use application at least until
registration of the mark on July 6, 2010. However, we
must construe the Agreement as a whole. In doing so, we
reach the same conclusion as the Board that the overall
scheme and plan of the Agreement is that, by virtue of its
execution, Orlando relinquished, and ECC acquired,
immediate control and ownership over the intent-to-use
application and the associated mark.
EMERALD CITIES COLLABORATIVE v. ROESE 9
First, the Agreement grants an irrevocable Power of
Attorney to Rogers, ECC’s cofounder, with the full power
of substitution and resubstitution, “for the limited pur-
pose of allowing ECC (and its attorneys) to take over
continued prosecution of the application.” J.A. 213. It
requires Orlando “to assist ECC and its attorneys with the
prosecution of the application” and “to assist ECC in its
registration of the Mark.” Id. (emphases added). Thus,
rather than establishing an agent (Rogers) and principal
(Orlando) relationship under a standard Power of Attor-
ney, the contract language here indicates that Orlando
ceded control over the intent-to-use application to ECC
and instead became obligated to assist ECC in its regis-
tration of the applied-for mark.
Second, as the Board noted, the Agreement provides
that, after the Agreement “commence[d] on the Effective
Date,” in the event of termination by ECC, “Orlando shall
promptly cease use of the Mark.” J.A. 214. That lan-
guage is inconsistent with the interpretation now advo-
cated by ECC that Orlando retained ownership between
the effective date and the registration date. Indeed, the
Agreement provides that Orlando “may continue to use”
the mark during that period, J.A. 213 (emphasis added),
and gives ECC the right to ensure that Orlando’s products
sold under the mark “shall at all times be of a high quali-
ty,” J.A. 215 (emphasis added). The contract language
thus signals that, by virtue of the Agreement, ECC ac-
quired an ownership interest, including the right to
control the quality of goods and services sold under the
mark by a licensee, and Orlando became such a de facto
licensee.
Third, the Agreement provides that Orlando “shall
not challenge ECC’s use of the Mark or support challeng-
es by third parties, whether before or after the Registration
Date.” J.A. 215 (emphasis added). That language again
reinforces the interpretation that ECC became an owner,
and Orlando only a licensee, well before the registration
10 EMERALD CITIES COLLABORATIVE v. ROESE
date. Indeed, the next sentence states: “Only ECC shall
have the exclusive right to file oppositions or claims
against the users of confusingly similar trademarks.” Id.(emphases added). Notably, the contract does not limit
ECC’s exclusive right to enforce the mark to a particular
period, such as only after the registration of the mark.
We are unpersuaded by ECC’s argument that the
quality-control and right-to-enforce provisions only apply
upon registration of the mark. Although it is true that
certain provisions in the Agreement contain the language
“[u]pon registration of the Mark by the [PTO] and comple-
tion of the transfer of the Mark to ECC,” J.A. 213–14
(Sections 2.2 (Final Payment), 2.3 (License), 3.1 (Grant of
License)), that language does not appear anywhere in the
quality-control or right-to-enforce provision. Instead, as
indicated, the quality-control provision says “at all times,”
and the immediately preceding sentence to the exclusive-
right-to-enforce provision states “whether before or after
the Registration Date.” J.A. 215. ECC’s argument is thus
contrary to the plain language of the Agreement.
ECC also argues conclusorily that the Agreement did
not result in the transfer of all rights in the mark. Appel-
lant’s Br. 10. The only such unassigned right ECC identi-
fies, however, is “the right to sue and recover damages
and profits for past, present and future infringement.” Id.at 19–20 n.6 (citing J.A. 212) (Assignment provision). We
find ECC’s argument to be without merit. Although the
Assignment provision does state that Orlando agrees to
assign the right to sue, along with other rights, “at such
time as the Mark is registered at the [PTO],” J.A. 212, the
contract clearly provides that “[o]nly ECC shall have the
exclusive right to file oppositions or claims” against third
parties, J.A. 215, and that Orlando may not challenge
ECC’s use of the mark “whether before or after the Regis-
tration Date,” id. When read as a whole, the Agreement
did not reserve the right to sue to Orlando for the period
between the effective date and the registration date.
EMERALD CITIES COLLABORATIVE v. ROESE 11
Accordingly, we conclude that the Agreement, when
read in its entirety, unambiguously shows that, by virtue
of its execution, ECC acquired, and Orlando relinquished,
immediate control and ownership of the intent-to-use
application in a “manner tantamount to an assignment.”
Board Decision at 17. Because the Agreement itself is
clear and unambiguous, we need not consider whether
Rogers’s deposition testimony supports or contradicts the
Board’s and our interpretation of the Agreement. GMG
Capital Invs., LLC v. Athenian Venture Partners I, L.P.,
36 A.3d 776, 783 (Del. 2012) (“If a contract is unambigu-
ous, extrinsic evidence may not be used to interpret the
intent of the parties, to vary the terms of the contract or
to create an ambiguity.”).
Lastly, because the Agreement violated § 1060(a)(1),
we further conclude that the Board did not err in cancel-
ling the registration of the mark THE EMERALD CITY.
See, e.g., Oculu, LLC v. Oculus VR, Inc., No. 14-0196,
2015 WL 3619204, at *7 (C.D. Cal. June 8, 2015) (“Violat-
ing this ‘anti-trafficking rule’ [of § 1060(a)(1)] voids the
assignment as well as the underlying application and
resulting registration.”) (citing The Clorox Co. v. Chemical
Bank, 40 U.S.P.Q.2d (BNA) 1098, 1104 (T.T.A.B. 1996)).
Moreover, because ECC’s opposition to Roese’s application
was based solely on the now-canceled registration, the
Board properly dismissed ECC’s opposition.
CONCLUSION
We have considered the parties’ remaining argu-
ments, but find them to be unpersuasive. For the forego-
ing reasons, we affirm the Board’s decision cancelling the
registration of THE EMERALD CITY and dismissing
ECC’s opposition.
AFFIRMED