United States District Court, D. New Jersey
July 21, 2004.
UNIVERSAL NUTRITION CORPORATION, Plaintiff,
CARBOLITE FOODS, INC. AND BIG BEAR NATURAL FOODS, INC. Defendants.
The opinion of the court was delivered by: GARRETT BROWN, District Judge
This matter comes before the Court upon Carbolite Foods, Inc.
("Carbolite") and Big Bear Natural Foods, Inc. ("Big Bear,"
collectively with Carbolite, "Defendants") motion for summary
judgment and Plaintiff Universal Nutrition Corp.'s ("Universal"
or "Plaintiff") cross-motion for summary judgment, pursuant to
Fed.R.Civ.P. 56. The Court has jurisdiction over this matter
pursuant to 28 U.S.C. § 1331. The Court, having considered the
parties' submissions and having heard oral argument from counsel
on April 19, 2004, and for the reasons discussed below, will
grant Defendants' motion in part and will deny Plaintiff's
This action arises from, inter alia, Universal's claim of
trademark infringement and false designation of origin pursuant
to 15 U.S.C. § 1051 et seq. against Carbolite and Big Bear.
Compl. ¶ 1. Universal's claim is based on "Carbolites's use of
the mark CARBORITE as applied to low carbohydrate dietary
supplements and based on Big Bear's sale and promotion of those
products." Id. Defendant Carbolite has asserted counterclaims
against Universal for trademark infringement and false
designation of origin and seeks cancellation of Universal's
CARB-RITE trademark registration number.
Universal produces and sells a variety of low-carbohydrate
products, including chocolate bars. Plaintiff's L. Civ. R. 56.1
Statement ("Pl. R. 56.1 Stmt.") ¶¶ 7, 9. "Defendant Carbolite
sells an assortment of low carbohydrate dietary supplements
including candy, snacks, crackers, shakes and nutrition bars."
Complaint ¶ 13. Defendant Big Bear sells and markets products
bearing the CARBORITE mark through its New Jersey retail
establishment and its website. Answer ¶¶ 14, 20.
There is no genuine dispute as to the following facts:
On or about, July 28, 2001; August 6, 2001; and
August 14, 2001, Universal shipped orders which
included chocolate bars marked with the CARB-RITE
mark to three of its distributors: American
Nutritional, Universal Europe BV, and Brazcom
Services ("Brazcom"), respectively.*fn1 Pl. R.
56.1 Stmt. ¶¶ 11, 16, 19.
On August 20, 2001, Carbolite filed its
intent-to-use application to register the CARBORITE
mark for use in connection with "soft serve ice
cream, bake mixes, namely, cookies, waffle mixes,
cake mixes, pizza crust mixes and bread mixes, shake
mixes, cappucino drink mixes, mousses, namely, flavor
sweetened gelatin desserts, cheesecakes, chocolate
bars, candy and natural sweeteners" in International
Class 30 (Staple Foods). Affidavit of James T. Walsh
("Walsh Aff.") ¶ 12.
On October 18, 2001, Universal filed its
intent-to-use application to register the CARB-RITE
mark for "food supplements; nutritional supplements;
dietary supplements and nutritional bars for low carb
dieters," in International Class 5 (Pharmaceuticals).
Walsh Aff. ¶ 11.
On June 27, 2002, Universal filed its Statement of
Use reciting November 1, 2001 as its first date of
actual use. Pl. R. 56.1 Stmt. ¶ 28.
On October 22, 2002, Universal's registration for
CARB-RITE was issued. Walsh Aff. ¶ 11.
On March 24, 2003, Carbolite began selling products
with CARBORITE mark. Pl. R. 56.1 Stmt. ¶ 35.
On April 28, 2003, Carbolite filed its Statement of
Use. Walsh Aff. ¶ 12.
On September 2, 2003, Carbolite's registration for
CARBORITE was issued. Walsh Aff. ¶ 12.
Finally, there is no dispute that the parties' goods are
substantially similar and that CARBORITE is confusingly similar
to CARB-RITE. Pl. R. 56.1 Stmt. ¶¶ 42-43.
A. Procedural History
On July 7, 2003 Universal commenced the instant action against
Carbolite and Big Bear. On December 15, 2003, Defendants filed
their Answer, Defenses and Counterclaims, with only Carbolite
asserting counterclaims against Universal.
A Scheduling Order was entered by Magistrate Judge Bongiovanni
on January 26, 2004. Initial disclosures were to have been
exchanged between the parties by February 23, 2004. The Court is
not aware of any discovery having been conducted in this case.
On or about January 31, 2004, Universal moved to strike
portions of defendant Carbolite's counterclaims; on April 2,
2004, Judge Bongiovanni denied Universal's motion. A motion for
reconsideration of Judge Bongiovanni's decision was filed on
April 18, 2004. As of this date, that motion is pending.
Presently before this Court are the parties' cross-motions for
A. Standard for Motion for Summary Judgment
A party seeking summary judgment must "show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P.
56(c)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366
(3d Cir. 1996); Healy v. New York Life Ins. Co., 860 F.2d 1209,
1219, n. 3 (3d Cir. 1988), cert. denied, 490 U.S. 1098 (1989);
Hersh v. Allen Prod. Co., 789 F.2d 230, 232 (3d Cir. 1986). The
threshold inquiry is whether there are "any genuine factual
issues that properly can be resolved only by a finder of fact
because they may reasonably be resolved in favor of either
party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
(1986) (noting that no issue for trial exists unless there is
sufficient evidence favoring the nonmoving party for a jury to
return a verdict in its favor). In deciding whether triable
issues of fact exist, the Court must view the underlying facts
and draw all reasonable inferences in favor of the non-moving
party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986); Pennsylvania Coal Ass'n v.
Babbitt, 63 F.3d 231, 236 (3d Cir. 1995); Hancock Indus. v.
Schaeffer, 811 F.2d 225, 231 (3d Cir. 1987).
Rule 56(e) of the Federal Rules of Civil Procedure provides, in
When a motion for summary judgment is made and
supported as provided in this rule, an adverse party
may not rest upon the mere allegations or denials of
the adverse party's pleading, but the adverse party's
response, by affidavits or as otherwise provided in
this rule, must set forth specific facts showing that
there is a genuine issue for trial. If the adverse
party does not so respond, summary judgment, if
appropriate, shall be entered against the adverse
party. Fed.R.Civ.P. 56(e).
The rule does not increase or decrease a party's ultimate burden
of proof on a claim. Rather, "the determination of whether a
given factual dispute requires submission to a jury must be
guided by the substantive evidentiary standards that apply to the
case." Anderson, 477 U.S. at 255-56.
Under the rule, a movant must be awarded summary judgment on
all properly supported issues identified in its motion, except
those for which the non-moving party has provided evidence to
show that a question of material fact remains. See Celotex, 477
U.S. at 324. Put another way, once the moving party has properly
supported its showing of no triable issue of fact and of an
entitlement to judgment as a matter of law, for example, with
affidavits, which may be "supplemented . . . by depositions,
answers to interrogatories, or further affidavits," id., "its
opponent must do more than simply show that there is some
metaphysical doubt as to the material facts." Matsushita, 475
U.S. at 586 n. 12; see also Anderson, 477 U.S. at 247-48 ("[B]y
its very terms, this standard provides that the mere existence of
some alleged factual dispute between the parties will not defeat
an otherwise properly supported motion . . . the requirement is
that there be no genuine issue of material fact.") (emphasis
What the non-moving party must do is "go beyond the pleadings
and by [its] own affidavits, or by the `depositions, answers to
interrogatories, and admissions on file,' designate `specific
facts showing that there is a genuine issue for trial.'"
Celotex, 477 U.S. at 324; see also Lujan v. National Wildlife
Fed., 497 U.S. 871, 888 (1990) ("The object of [Rule 56(e)] is
not to replace conclusory allegations of the complaint . . . with
conclusory allegations of an affidavit."); Anderson, 477 U.S.
at 249; Big Apple BMW, Inc. v. BMW of N. Am., Inc.,
974 F.2d 1358, 1363 (3d Cir. 1992) ("To raise a genuine issue of material
fact . . . the [non-moving party] need not match, item for item,
each piece of evidence proffered by the movant" but rather must
exceed the `mere scintilla' threshold.), cert. denied,
507 U.S. 912 (1993).
B. Defendants' Motion for Summary Judgment
Defendants move for summary judgment based upon the earlier
filing date of their application for registration of the
CARBORITE mark and thus argue that the CARBORITE mark has
priority over Universal's CARB-RITE mark based upon its
constructive use pursuant to 15 U.S.C. § 1057(c).*fn2 In
addition, they argue that because there is no dispute as to there
being a likelihood of confusion between the CARBORITE mark and
Universal's CARB-RITE mark, they are entitled to summary
judgment. Defendants also contend that the different
classifications of the registrations assigned by the United
States Patent and Trademark Office ("PTO") is irrelevant.
Universal argues first that Carbolite's registration is invalid
and thus could not confer priority rights. In the alternative,
Universal contends that even if Carbolite's registration is
valid, any priority of the CARBORITE mark used with products in
the PTO's International Class 30 cannot apply to Universal's
products, because the registration for the CARB-RITE mark is in
International Class 5.
To establish a claim for trademark infringement, Carbolite must
prove that: "(1) its mark is valid and legally protectable; (2)
it owns the mark; and (3) [Universal's] use of the mark to
identify its goods or services is likely to create confusion
concerning the origin of those goods or services." Commerce
Nat'l Ins. Servs., Inc., v. Commerce Ins. Agency, Inc.,
214 F.3d 432, 437 (3d Cir. 2000) (citing Opticians Ass'n of Am. v.
Independent Opticians of Am., 920 F.2d 187, 192 (3d Cir. 1990);
see also Fisons Horticulture, Inc. v. Vigoro Indus. Inc.,
30 F.3d 466, 472 (3d Cir. 1994).
Carbolite contends that the date on which it filed the
application for the CARBORITE registration was prior to
Universal's use or application for registration of the CARB-RITE
mark and thus, pursuant to 15 U.S.C. § 1057(c), it has priority
rights based upon constructive use of the CARBORITE
mark.*fn3 However, Universal contends that there is a
genuine issue of material fact with respect to the validity of
Carbolite's registration. Fed.R.Civ.P. 56(f) Declaration of
Amy J. Benjamin ("Benjamin 56(f) Dec.") ¶¶ 8-9. Universal
contends Carbolite's registration is subject to cancellation if
either: (1) Carbolite did not have the requisite bone fide intent
to use the CARBORITE mark on the goods identified in the
application at the time the application was filed or (2) that
Carbolite's April 28, 2003 Statement of Use was false because it
was not in fact using the mark with all of the goods listed
therein. Benjamin 56(f) Dec., ¶ 8. Universal contends that
discovery is needed in order to obtain evidence in support of its
challenges to the validity of Carbolite's registration. Benjamin
56(f) Dec., ¶¶ 10-11.
When an affirmative defense challenging the validity of a
registration based on the lack of a bona fide intent to use a
mark for the goods identified in an application is asserted, the
denial of summary judgment is proper. Salacuse v. Ginger
Spirits, Inc., 44 U.S.P.Q.2d 1415 (P.T.O. T.T.A.B. 1997). In
addition, where a registrant makes a false statement as to the
use of the mark in connection with the goods or services listed
in its registration, cancellation of the mark is proper. Medinol
Ltd. v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205, 1208 (P.T.O.
T.T.A.B. 2003) (granting summary judgment in favor petitioner
based upon respondent's fraud on PTO in procurement of
registration); General Car & Truck Leasing Sys., Inc. v. General
Rent-A-Car Inc., 17 U.S.P.Q.2d 1398, 1401 (S.D. Fla. 1990)
(granting partial summary judgment in favor of defendant based
upon plaintiff's fraud on the PTO). Here, Universal has raised a
question of material fact as to the validity of Carbolite's
registration due to possible false statements as to the use of
the mark on the products listed in its registration.
Carbolite's federal registration of the CARBORITE mark is
prima facie evidence of its ownership of the mark.
15 U.S.C. § 1057(b), 1115(a). Universal does not dispute Carbolite's
ownership of the CARBORITE mark. Additionally, Universal, by way
of its Complaint, alleges and thus concedes a likelihood of
confusion between the two marks. Therefore, the only remaining
issue is whether the CARBORITE registration is valid in light of
Universal's claim that Carbolite committed fraud against the PTO.
The parties also dispute the relevance of the PTO's
classification system for registrations. In trademark
infringement cases, the PTO's "classification of particular goods
is immaterial." In re Knapp-Monarch Co., 296 F.2d 230, 231
(C.C.P.A. 1961). Plaintiff's CARB-RITE mark is registered in
International Class 5 (Pharmaceuticals) and Carbolites' CARBORITE
mark is registered in International Class 30 (Staple Foods). Both
parties use their marks in connection with their low-carbohydrate
products, including, inter alia, chocolate bars.
A party seeking relief under the Lanham Act based upon its
federal registration is entitled to do so with respect to only
the products listed in its registration. Natural Footwear Ltd.
v. Hart, Schaffner & Marx, 760 F.2d 1383, 1396-97 (3d Cir. 1985)
(stating also that trademark rights for use with respect to
related products, beyond those recited on a registration, are
considered under the common law). The CARBORITE registration
lists chocolate bars among the products for which the mark is
used. Universal uses the CARB-RITE mark in the sale and
production of its chocolate bars. Thus, regardless of the PTO
classification, the CARBORITE registration, if it has priority,
would preclude the use of CARB-RITE by Universal in connection
with chocolate bars.
The classifications in a trademark registration are "only for
the administrative convenience of the PTO and neither limit nor
extend the scope of protection of the registered mark" and "the
fact that the infringer's goods fall within a different
classification from the registrant's goods is not determinative
of a likelihood of confusion." Jews For Jesus v. Brodsky,
993 F. Supp. 282, 299-301 (D.N.J. 1998) (quoting 3 McCarthy on
Trademarks, § 24:66, at 24-115). In that case, this Court held
that the classification of the registrations was irrelevant
because the category of plaintiff's and defendant's goods were
identical. Id. at 300. Similarly, here, both parties are
seeking relief based upon the use of their marks in connection
with chocolate bars. Thus, this Court finds the different
classifications of the registrations to be irrelevant and of no
consequence. Where the parties use their marks in connection with
admittedly identical products, the PTO's classification system
allowing the use of one mark with products considered to be
staple foods rather than dietary or nutritional supplements poses
no bar for a claim of trademark infringement.
Because the parties have not yet completed discovery and
Carbolite is in possession of facts and/or evidence pertaining to
Universal's challenges to the validity of the CARBORITE
registration, summary judgment cannot be granted in defendants'
favor at this time. Sames v. Gable, 732 F.2d 49, 51-52 (3d Cir.
1984). Thus, in light of the genuine issue of material fact
raised by Universal and the need for discovery on this issue
only, the Court will grant defendants' motion for summary
judgment in part.
C. Universal's Motion for Summary Judgment
Plaintiff Universal seeks summary judgment based upon the
priority of its CARB-RITE mark. More specifically, Universal
argues that because the date of its actual first use of the
CARB-RITE mark is earlier than the date of Carbolite's
application for registration, it has superior rights. The date of
actual first use that Universal now submits is different from
and earlier than the date listed on the application for
registration and/or Statement of Use which was November 1,
2001.*fn4 Thus, Universal asserts that it is the senior user
and has a common law right based upon priority of use.
Because Universal now seeks to prove a date of first use
earlier than the date identified in its application for
registration, it must do so by clear and convincing evidence.
Hydro-Dynamics, Inc. v. George Putnam & Co., Inc.,
811 F.2d 1470, 1473 (Fed. Cir. 1987). Universal submits that the proper
and actual date of first use that should have been alleged in its
application for registration and Statement of Use is July, 28,
2001. See generally Declaration of Michael Rockoff. In support
of this assertion, Universal offers evidence of three shipments
made to its customers who are distributors of Universal's
CARB-RITE line of products. These shipments were made on July 28,
2001; August 6, 2001; and August 14, 2001. Declaration of Tim
Tantum ("Tantum Dec.") ¶¶ 9, 15, 19; Exh. 7, 8, 11, 13.
In order to establish trademark rights on the basis of use, a
party must establish sufficient market penetration. There is a
four-factor test "to determine whether the market penetration of
a trademark in an area is sufficient to warrant protection: (1)
the volume of sales of the trademarked product; (2) the growth
trends (both positive and negative) in the area; (3) the number
of persons actually purchasing the product in relation to the
potential number of customers; and (4) the amount of product
advertising in the area." Lucent Info. Mgmt., Inc. v. Lucent
Techs., Inc., 186 F.3d 311, 317 (3d Cir. 1999) (quoting Natural
Footwear, 760 F.2d at 1398-99).*fn5
Universal asserts that on July 28, 2001; August 6, 2001; and
August 14, 2001, it sent shipments of its products which included
chocolate bars marked with the CARB-RITE mark to three different
distributors: American Nutritional, Universal Europe BV, and
Brazcom, respectively. Based upon its use of the CARB-RITE mark
in connection with these sales to its distributors, Universal
argues that its trademark rights have priority over those of
Carbolite. The shipments to American Nutritional and Brazcom were
sent to Florida. Tantum Dec., Exh. 8, 13. The shipment to
Universal Europe BV was sent to the Netherlands. Tantum Dec., Exh
In applying the four-factor test, the Court will consider only
the two sales to the Florida distributors because the sale of
goods to a non-U.S. distributor does not constitute "use in
commerce." 15 U.S.C. § 1127.*fn6 It does not appear that the
sales to the two Florida distributors are sufficient to satisfy
the first factor. On July 28, 2001, Universal sent 48 boxes of
its diet chocolate bars bearing the CARB-RITE mark to American
Nutritional. On August 14, 2001, Universal sent 72 boxes of its
diet chocolate bars bearing the CARB-RITE mark to Brazcom.
Universal has not provided a dollar amount for the 120 boxes
that were sent to the two Florida distributors in July and August
of 2001. Defendants have provided some information as to a
possible dollar amount for the two sales. At present, boxes of
Universal's chocolate bars are available for approximately $25.00
for a box of twelve chocolate bars or $40.00 for a box of 20
chocolate bars. Declaration of Roeland Polet, ¶ 5, Exh. B. Thus,
Defendants assert that Universal sold a maximum of 2,400
chocolate bars to American Nutritional and Brazcom with an
estimated retail value of $4,800.
The Third Circuit has held that the volume of sales must be
more than de minimis. Lucent, 186 F.3d at 317 (citing Natural
Footwear, 760 F.2d at 1400 which found de minimis clothing
sales of less than $5,000, and a maximum 50 customers per state
for two years). In the instant case, Universal relies on the two
shipments it sent to American Nutritional and Brazcom during the
course of approximately four weeks. Universal has not offered any
evidence as to the dollar value of the products shipped, nor has
it presented any information as to additional sales of its
CARB-RITE chocolate bars prior to August 20, 2001. See supra,
note 5. Therefore, the Court finds that Universal has not shown
that its volume of sales is sufficient to satisfy the first
factor of the test for market penetration.
Even if the Court were to assume that Plaintiff established
more than a de minimis volume of sales, it has nonetheless
failed to establish the three remaining factors to show market
penetration.*fn7 Universal's evidence is limited to the
sales made to the three distributors, and the Court is only
considering the shipments made to the Florida distributors.
Therefore, the Court, here, as in Lucent, cannot find and
review any growth trends in the area. Moreover, Plaintiff has
failed to offer any evidence as to the sale of its product to
consumers before August 20, 2001.
Thus, there is no triable issue of fact as to Plaintiff's
motion for summary judgment. Moreover, the Court finds that
Universal, as a matter of law, does not have a common law
trademark right based upon its use of the CARB-RITE mark prior to
Carbolite's purported "constructive use;" its use has failed to
satisfy the four-factor test for market penetration. Therefore,
the Court will deny Plaintiff's motion.
For the foregoing reasons, Defendants' motion for summary
judgment is granted in part and Plaintiff's motion for summary
judgment is denied. An appropriate form of order accompanying the
original Memorandum Opinion was signed by this Court on June 4,
2004 and filed on June 7, 2004.*fn8