Property, intangible

a blog about ownership of intellectual property rights and its licensing

Senior User to One’s Self

When a case is captioned Protech Diamond Tools, Incorporation v. Protech Diamond Tool Inc., you know that there’s a fight about who owns a mark. Protech Diamond Tool is actually the second named defendant, but you get the idea.

There are at least three different “Protech” entities mentioned in the suit.* The first is non-party Protech Diamond, Inc., an Oregon corporation (Protech Oregon). It markets and sells professional diamond-tip cutting tools designed by defendant David Liao. After starting Protech Oregon, Liao then moved to Canada and started defendant Protech Diamond Tools, Inc. (Protech Canada).

Protech Canada marketed its products in the United States. Liao then created another company, plaintiff Protech Diamond Tools Incorporation (Protech San Leandro), that he jointly owned with Dennies Chung – Chung was 70% owner and Liao 30% owner.

Protech San Leadro began distributing saw blades from Protech Canada using the Protech mark. Chung then filed an application with the U.S. Patent and Trademark Office in the name of Protech San Leandro for a logo form of the mark.

Protech San Leandro later learned that Protech Canada had unsuccessfully tried to register the Protech Diamond mark in the U.S. several years earlier, so sent Protech Canada a cease and desist letter demanding that Protech Canada not use the Protech mark in the United States. Protech Canada responded by filing a petition to cancel the Protech San Leandro registration in August, 2006. Protech San Leandro filed the instant infringement suit in August, 2008.

The ownership issue was raised defensively on a motion for preliminary injunction. Protech San Leandro had an incontestable registration – conclusive evidence of its ownership – so to avoid an injunction Protech Canada had to argue that it was entitled to the senior user defense of Section 15 of the Lanham Act: “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 . . . shall be incontestable . . . .”

Under the totality of the circumstances standard described in Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151 (9th Cir. 2001), the court found that Protech Canada had made a prima facie showing of first use. Thus, Protech San Leandro’s had only a possible, not strong, likelihood of success on the merits. Protech San Leandro’s claim of immediate, irreparable harm was also undercut by its two-year delay in filing suit, so the motion for preliminary injunction was denied.

Plaintiff’s web site here.

Defendant’s web site here.

Protech Diamond Tools, Incorporation v. Liao, No. C 08-3684 SBA, 2009 WL 1626587 (N.D. Cal. June 8, 2009).

* A fourth entity, “Protech Diamand USA, Inc.,” is also listed as a defendant but plays no part in this decision.

© 2009 Pamela Chestek

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