Adaptrend, Inc. v. Coke Morgan Stewart, Acting Under Secretary of Commerce for Intellectual Property

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
ADAPTREND, INC.,
Appellant
v.
COKE MORGAN STEWART, ACTING UNDER
SECRETARY OF COMMERCE FOR
INTELLECTUAL PROPERTY AND ACTING
DIRECTOR OF THE UNITED STATES PATENT
AND TRADEMARK OFFICE,
Intervenor
______________________
2023-1195
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in No.
92074784.
______________________
Decided: January 28, 2025
______________________
G ORDON E. G RAY , III, Gray Law Firm, Long Beach, CA,
for appellant.
SARAH E. CRAVEN, Office of the Solicitor, United States
Patent and Trademark Office, Alexandria, VA, for
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ADAPTREND, INC. v. STEWART 2
intervenor. Also represented by CHRISTINA J. HIEBER ,
F ARHEENA Y ASMEEN RASHEED.
______________________
Before L OURIE and H UGHES , Circuit Judges, and
G ILSTRAP , Chief District Judge.1
L OURIE, Circuit Judge.
Adaptrend, Inc. (“Adaptrend”) appeals from a decision
of the United States Trademark Trial and Appeal Board
(“the Board”) cancelling its registration of the TONOSAMA
mark. Narita Exp. LLC v. Adaptrend, Inc., Cancellation
No. 9207478, 2022 WL 15328960 (T.T.A.B. Sept. 20, 2022)
(“Decision”). For the following reasons, we affirm.
BACKGROUND
This appeal arises from a trademark cancellation pro-
ceeding under 15 U.S.C. § 1064 brought by Narita Export
LLC (“Narita Export”). Narita Export sought to cancel
Adaptrend’s U.S. Trademark Registration No. 5,873,672
(“the ’672 registration”) on the ground that it was likely to
cause confusion with Narita Export’s same mark for simi-
lar goods.
Under 15 U.S.C. § 1064, “[a] petition to cancel a regis-
tration of a mark . . . may . . . be filed . . . by any person
who believes that he is or will be damaged . . . by the regis-
tration of a mark.” A petitioner may seek cancellation on
the ground that the “registration was obtained . . . contrary
to . . . section 1052 of this title.” Id. § 1064(3). Specifically,
§ 1052(d) prohibits the registration of a mark that is likely
to cause confusion with “a mark . . . previously used in the
United States by another.” Id. § 1052(d).
1 Honorable J. Rodney Gilstrap, Chief District
Judge, United States District Court for the Eastern Dis-
trict of Texas, sitting by designation.
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ADAPTREND, INC. v. STEWART 3
Adaptrend’s ’672 registration was filed on March 27,
2019, issued on October 1, 2019, and is directed to the word
mark TONOSAMA, for “[g]ift baskets containing candy;
[c]andy; [ca]ndies; [g]ift baskets containing candy and Jap-
anese candies.” S.A. 234.2
On October 23, 2019, Narita Export filed Application
88665122 (“the ’122 application”). S.A. 236. The ’122 ap-
plication is directed to the same word mark, TONOSAMA,
and the same category of goods as the ’672 registration. Id.
The United States Patent and Trademark Office (“the
USPTO”) refused Narita Export’s ’122 application based on
a likelihood of confusion with Adaptrend’s ’672 registra-
tion. S.A. 116.
In response to the rejection, Narita Export petitioned
to cancel Adaptrend’s registration, asserting a likelihood of
confusion with its identical TONOSAMA mark of the ’672
registration. Decision, at *1. Specifically, Narita Export
asserted that its predecessor-in-interest, Kabushiki Kai-
sha TI Express (“KKTI”), made its first commercial use of
the TONOSAMA mark on March 27, 2016, S.A. 115–16,
¶ 9, prior to the first commercial use of the mark of the ’672
registration, S.A. 117, ¶ 10. Narita Export further asserted
that because the subject marks are identical, the ’672 reg-
istration creates consumer confusion and is a source of
damage. S.A. 116–18, ¶¶ 6, 11.
During the discovery phase of the cancellation proceed-
ings, Adaptrend withdrew its previously-asserted affirma-
tive defenses of abandonment and non-ownership.
Decision, at *3; S.A. 161–62. Thereafter, upon close of dis-
covery, Narita Export filed a motion for summary judg-
ment. S.A. 20–41. Narita Export asserted entitlement to
a statutory cause of action under § 1064 and alleged
2 “S.A.” refers to the supplemental appendix filed in
connection with Adaptrend’s brief.
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ADAPTREND, INC. v. STEWART 4
(1) priority of use of the TONOSAMA mark based on
KKTI’s first sale in March 2016, and (2) a likelihood of con-
fusion based on Adaptrend’s use of the same mark for sim-
ilar goods. S.A. 20.
To support its priority of use claim, Narita Export re-
lied, in part, on the declarations of Mr. Izumi, KKTI’s for-
mer president, and Mr. Narita, Narita Export’s current
president, regarding the use and assignment of the
TONOSAMA mark (collectively, “the Izumi and Narita dec-
larations”). Decision, at *3. Mr. Izumi testified that KKTI
made its first commercial use of the TONSAMA mark on
March 27, 2016, and that, on or about November 25, 2016,
KKTI and Narita Export came to an oral agreement to as-
sign KKTI’s rights in the TONSAMA mark to Narita Ex-
port. Id.; S.A. 50–52. Mr. Izumi further testified that this
oral assignment was memorialized by a nunc pro tunc, or
backdated, assignment agreement on October 20, 2020.
Decision, at *3; S.A. 52. Similarly, Mr. Narita testified to
the oral assignment on November 25, 2016, and further de-
scribed Narita Export’s sales under the mark from Novem-
ber 25, 2016, onwards. Decision, at *4; S.A. 48–49. Both
declarants’ testimony was based on “personal knowledge or
on business records that were made at the time or in the
regular course of business.” S.A. 48, 50.
Adaptrend opposed the motion, arguing that there
were genuine issues of material fact regarding Narita Ex-
port’s priority of use and continuous use of the mark. Spe-
cifically, Adaptrend argued that Mr. Narita’s testimony
lacked foundation by failing to assert any personal
knowledge and constituted inadmissible hearsay. Deci-
sion, at *4. Adaptrend therefore contended that Narita Ex-
port could not establish its alleged common law rights in
the mark via KKTI. See id. Narita Export, in response,
provided rebuttal declarations from Mr. Izumi and Mr.
Narita reaffirming that they had personally reached an
oral agreement to transfer and assign all rights in the mark
in November 2016. Decision, at *5; S.A. 230–233.
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ADAPTREND, INC. v. STEWART 5
The Board granted Narita Export’s motion for sum-
mary judgment, determining that Narita Export estab-
lished (1) its entitlement to a statutory cause of action
under § 1064 and (2) priority of use and a likelihood of con-
fusion under § 1052(d) as a matter of law. Decision, at *10–
11. Regarding Narita Export’s statutory cause of action,
the Board determined that because it was undisputed that
the USPTO refused to register Narita Export’s ’122 appli-
cation in view of the ’672 registration, “there [was] no gen-
uine dispute that [Narita] ha[d] a legitimate interest in
seeking cancellation of [the ’672 registration] and a reason-
able belief in damage should [Adaptrend’s] mark continue
to be registered.” Id. at *6.
Turning to the merits, the Board found no genuine dis-
pute of material fact regarding (1) Narita’s priority of use
of the TONOSAMA mark or (2) a likelihood of confusion
between the identical marks of the ’122 application and the
’672 registration. Decision, at *7–11. Addressing priority
of use, the Board explained that “the Izumi and Narita dec-
larations present the undisputed fact that [Narita Export]
first used in commerce the TONOSAMA mark with candy
on March 27, 2016.” Id. at *8. And because Adaptrend as-
serted that June 13, 2016, was its date of first use, the
Board found that “there [was] no genuine dispute that
[Narita Export’s] prior use date of the TONOSAMA mark
on candy [was] earlier than either priority date asserted by
[Adaptrend],” such that Narita Export had established pri-
ority of use. Id. The Board rejected Adaptrend’s eviden-
tiary objections to the Izumi and Narita declarations,
explaining that it “f[ound] no genuine dispute of material
fact that the Izumi and Narita declarations made a suffi-
cient showing of personal knowledge of the facts stated
therein” because “each declaration is based on the declar-
ant’s position as president.” Id. at *5.
Finally, the Board determined that there was a likeli-
hood of confusion between the identical marks. Id. at *10.
The Board therefore held that Narita Export was entitled
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ADAPTREND, INC. v. STEWART 6
to judgment in its favor and cancelled the ’672 registration
accordingly. Id. at *11.
Adaptrend timely appealed and we have jurisdiction
under 15 U.S.C. § 1071(a) and 28 U.S.C. § 1295(a)(4)(B).
D ISCUSSION
Adaptrend challenges the Board’s summary judgment
decision, arguing that (1) Narita Export failed to establish
a statutory cause of action under § 1064, and (2) the Board
abused its discretion in relying on the Izumi and Narita
declarations to prove priority of use and establish Narita
Export’s continuous use.3 We address each issue in turn.
I
We first address whether the Board erred in determin-
ing that Narita Export established a statutory cause of ac-
tion under § 1064, an issue we review de novo. Australian
Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, 965 F.3d
1370, 1373 (Fed. Cir. 2020). As the Board explained,
§ 1064 requires a party to demonstrate a real interest in
the proceeding and a reasonable belief of having incurred
damage. Decision, at *6 (citing Corcamore LLC v. SFM,
LLC, 978 F.3d 1298, 1303–04 (2020)); see also Empresa
Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 1275
(Fed. Cir. 2014). The real interests “test is ‘not especially
demanding,’” Corcamore, 978 F.3d at 1303 (quoting
Lexmark Int’l, Inc. v. Static Control Components, Inc.,
572 U.S. 118, 130 (2014)), and can be satisfied by demon-
strating a direct commercial interest in cancelling the reg-
istered mark. Id. at 1305–06.
Adaptrend argues that because “the [’]122 trademark
application was void ab initio, Narita Export did not have
evidence of entitlement to a statutory cause of action prior
3 Adaptrend does not challenge the Board’s likeli-
hood of confusion determination on appeal.
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ADAPTREND, INC. v. STEWART 7
to filing its petition to cancel.” Reply Br. 3. Specifically, it
contends that “Narita Export has provided no admissible
evidence that it acquired the alleged use-based rights from
March 2016 and KKTI” because “[a]t the time the petition
was filed, Narita Export did not have a [backdated]
assignment from KKTI and the declarations of [] Narita
and Izumi are not admissible to establish that the
assignment occurred prior to the filing of the petition to
cancel.” Id. at 5. Adaptrend also argues that its standing
argument was not “waived” because “the Board raised the
issue on its own decision.” Id. at 3.
Narita Export is not participating in this appeal. But
the Patent and Trademark Office (“the PTO”), as interve-
nor, contends that “Adaptrend admittedly failed to raise a
challenge to Narita [Export]’s entitlement to a statutory
cause of action before the Board,” and thus its challenge is
forfeited. Intervenor Br. 12. The PTO also argues that,
should we consider the merits of that argument, “[t]he
PTO’s refusal to register Narita [Export]’s mark based on
a confusingly similar mark is sufficient to prove both an
interest falling within the zone of interests protected by the
statute and damage proximately caused by the registration
of a mark.” Id. at 15.
We conclude that the Board correctly determined that
Narita Export is entitled to a statutory cause of action un-
der § 1064. Narita Export has a direct commercial interest
in the TONOSAMA mark as evidenced by the PTO’s undis-
puted refusal of Narita Export’s pending ’122 application,
which was based on a likelihood of confusion with the ’672
registration. S.A. 31; See Empresa Cubana, 753 F.3d
at 1275 (“[A] pending application that has been refused
registration based on a likelihood of confusion with a reg-
istered mark is sufficient to show that the petitioner seek-
ing to cancel the registered mark is the type of party
Congress authorized under 15 U.S.C. § 1064.”).
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ADAPTREND, INC. v. STEWART 8
Adaptrend’s arguments regarding Narita Export’s evi-
dence of an earlier oral assignment and a backdated agree-
ment memorializing that assignment are also misplaced.
Narita Export’s acquisition of prior common law rights to
the subject mark goes to the merits of Narita Export’s pri-
ority of use claim, not its statutory cause of action. See
Australian Therapeutic, 965 F.3d at 1374 (“Neither § 1064
nor our precedent requires that a petitioner have a propri-
etary right in its own mark in order to demonstrate a cause
of action before the Board.”).
We therefore agree with the Board that there is no gen-
uine dispute of material fact regarding Narita Export’s en-
titlement to a statutory cause of action under § 1064.
II
We next consider Narita Export’s priority of use of the
TONOSAMA mark under § 1052(d). “The Board’s determi-
nation of priority is a question of fact reviewed for substan-
tial evidence,” Araujo v. Framboise Holdings Inc., 99 F.4th
1377, 1380 (Fed. Cir. 2024), while the Board’s evidentiary
rulings are reviewed for abuse of discretion, Zheng Cai v.
Diamond Hong, Inc., 901 F.3d 1367, 1370–71 (Fed. Cir.
2018). Under § 1052(d), a party may petition to cancel the
registration of a mark that has been on the Principal Reg-
ister for fewer than five years based on a likelihood of con-
fusion with the petitioner’s ownership of a mark used in
the United States and not abandoned. 15 U.S.C. § 1052(d).
Adaptrend argues the Board’s priority of use determi-
nation was flawed because the Izumi and Narita declara-
tions regarding the oral assignment agreement between
Narita Export and KKTI in November 2016 lack founda-
tion under Federal Rule of Evidence 602 (requiring a testi-
fying witness to have personal knowledge of the matter
they are testifying to) and constitute inadmissible hearsay
under Federal Rule of Evidence 802 (barring out of court
statements offered for the truth of the matter asserted), be-
cause neither Mr. Izumi nor Mr. Narita were present for
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ADAPTREND, INC. v. STEWART 9
the alleged agreement or provided any evidence of
firsthand knowledge. See generally Appellant’s Br. 7–19.
Adaptrend also contends that the declarations are not cred-
ible. Id.
Adaptrend alternatively argues that, even if the decla-
rations are admissible, they are not sufficient evidence of
Narita Export’s continuous use of the mark. In particular,
Adaptrend argues that Narita Export’s declarations fail to
account for sales after 2017, resulting in a genuine dispute
of fact regarding Narita Export’s priority of use claim. Ap-
pellant’s Br. 20.
The PTO responds that the Board did not abuse its dis-
cretion in relying on Narita Export’s declarations because
the testimony of Mr. Izumi and Mr. Narita, as the respec-
tive corporate officers of KKTI and Narita Export, is suffi-
cient to show personal knowledge of the oral assignment
agreement and any deficiencies in their initial declarations
are properly resolved by their rebuttal declarations, which
“unambiguously assert Izumi’s and Narita’s personal
knowledge of the oral assignment of the TONOSAMA mark
from KKTI to Narita on November 25, 2016.” Intervenor
Br. 20–21; S.A. 10. The PTO further argues that Narita
Export is not required to show continuous use of the
TONOSAMA mark for priority of use purposes, and regard-
less, Adaptrend affirmatively waived its abandonment de-
fense. Intervenor Br. 25.
We conclude that the Board’s priority of use determi-
nation was supported by substantial evidence, and the
Board did not abuse its discretion in relying on the Izumi
and Narita declarations. Narita Export’s priority of use of
the TONOSAMA mark is based on its acquired common-
law rights to the mark from KKTI, as memorialized by the
backdated trademark assignment. Adaptrend’s eviden-
tiary challenges that purport to create a dispute regarding
Narita’s priority of use were appropriately rejected.
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ADAPTREND, INC. v. STEWART 10
The Izumi and Narita declarations were based on the
witnesses’ personal knowledge and are admissible to sup-
port Narita Export’s motion for summary judgment. See
S.A. 230, (Reply Decl. of Mr. Narita: “I personally reached
an oral agreement with Mr. Izumi to transfer all the right,
title, and interest in the TONOSAMA trademark to Narita
[Export]”); S.A. 232 (Reply Decl. of Mr. Izumi: “Mr. Narita
and I personally reached an oral agreement regarding this
transfer on November 25, 2016.”). To avoid any doubt, and
as the Board explained, the declarants “are positioned to
know or have access to information relevant to the sub-
stance of their respective declarations and the assignment
referenced therein.” Decision, at *5; see also In re DBC,
545 F.3d 1373, 1383 (Fed. Cir. 2008) (explaining that an
employee’s declaration reciting personal knowledge of the
subject content was sufficient). Moreover, “[w]hen pre-
sented with the evidence provided in the [Izumi and
Narita] declaration[s] and nothing to contradict it, a rea-
sonable mind could conclude that [Narita Export] had es-
tablished its priority date.” Araujo, 99 F.4th at 1381.
Turning to the merits of the Board’s priority of use de-
termination, it is undisputed that KKTI first used the
TONOSAMA mark on March 27, 2016, Appellant’s Br. 25,
several months before Adaptrend’s alleged first commer-
cial use on June 13, 2016, id. at 7. And based on the Izumi
and Narita declarations, it is also undisputed that on Oc-
tober 20, 2020, Izumi and Narita executed a backdated
trademark assignment with an effective date of Novem-
ber 25, 2016, memorializing the parties’ oral trademark as-
signment and thereby providing Narita Export with prior
common law rights to the mark as of March 27, 2016. S.A.
48, 52. We therefore conclude that the Board’s priority of
use decision was supported by substantial evidence.
Adaptrend’s belated argument regarding abandonment is
deemed waived, and regardless, it is without merit because
“continuous use” is not a statutory requirement of a likeli-
hood-of-confusion claim.
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ADAPTREND, INC. v. STEWART 11
CONCLUSION
We have considered Adaptrend’s remaining arguments
and find them unpersuasive. For the foregoing reasons, we
affirm.
AFFIRMED
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