Property, intangible

a blog about ownership of intellectual property rights and its licensing

Ball Bearing Trademark Rolling Free, Like a Fumbled Football

Both plaintiff and defendant sell ball bearings using the same four-digit codes. The codes provide information on the characteristics of the bearings. But this isn’t a copyright case about the numbering system, it’s a claim that the series numbers are trademarks.

The plaintiff, RBC Nice Bearings Inc., f/k/a Nice Ball Bearing Co. (“Nice”), started selling “1600” series bearings in 1946. The defendant, Peer Bearing Co. (“Peer”), began using the same series numbers in the early 60’s. Peer says it used the same numbers because they were commonly used as “an industry standard.” Plaintiff Nice also sells “7500” and “7600” series bearings, having begun at least as early as 1957; defendant Peer began selling the same series numbers in in 2002.

Since trademark ownership is based on priority of use, at first blush it doesn’t look like there should be a question of who owns the series designations, only whether they function as a trademark (the PTO currently thinks not; see the final refusals in the applications for 1621, 1630, 1635, and 1641). But there’s a wrinkle here: defendant Peer’s parent, SKF, USA, used to own plaintiff Nice, sold Nice to its current parent in 1997, then acquired Peer in 2008.

The claim for infringement of the 1600 series was kicked on laches, but the claim for infringement of the 7500 and 7600 series marks survived summary judgment. The court found that there were issues of fact on laches, secondary meaning and infringement. But the court also spotted an ownership problem:

The issue is whether SKF actually transferred ownership of the 7500 and 7600 Series designations to Plaintiffs pursuant to the APA in 1997. Section 2.01(i) of the APA states that SKF is transferring to RBC “all of [Nice’s] patents, copyrights, trademarks, trade names, service marks, service names, designs, know-how, processes, trade secrets, inventions, and other proprietary data[.]” However, the APA also includes a schedule purporting to list the trademarks being transferred to Plaintiffs, and this schedule does not list any Series terms or part numbers. In the context of their secondary meaning argument, Plaintiffs present an affidavit from Michael Gostomski, Executive Vice President of Roller Bearing Company. Mr. Gostomski states that, when SKF sold the Nice business to RBC, both parties agreed that SKF would transfer to RBC all intellectual property associated with the Nice business, including the ownership of the Series designations. According to Mr. Gostomski, during negotiation of the APA, there were “extensive discussions” regarding transfer of the Series designations at issue and that the ownership of these designations was a “key item.” Notwithstanding the alleged centrality of these assets, the APA makes absolutely no mention of them, although it does list the specific trademarks which were intended to be sold. Relying on the declaration of SKF’s former general counsel Allen Belenson, Defendants contend, on the other hand, that SKF never considered the Series designations or part numbers to be trademarks and thus did not contemplate or discuss transferring them to Plaintiffs. Therefore, marginally there is an issue of material fact with respect to whether the APA transferred ownership of the alleged marks to Plaintiffs. At trial, Plaintiffs will need prove that they own the designations at issue as a threshold matter.

It’s an interesting question. What the court is suggesting is that in 1997 SKF might not have transferred the 1600, 7500 and 7600 designations with the rest of the Nice assets, but SKF didn’t acquire Peer until 2008. There was evidence that in 2004 there were at least 25 other companies using the 1600 series of designations; one can assume that at least some of those were using 7500 and 7600 series designations. If SKF retained ownership of the series designations, whose use of the series names would have inured to its benefit so that SKF could maintain ownership for the 11 year gap? Nice? One of the other 25 companies? If SKF instead abandoned the mark during those 11 years, wouldn’t it have been available for any of those others, Nice and Peer included, to adopt?

This case is a demonstration of the parallel universes of trademark ownership, the paper trail universe and the consumer perception universe. If it was a cleaner situation, i.e., that only Peer and Nice were using the designations, the paper trail might win. Where there are so many using the same numbers, though, the consumer perception track should be the relevant one.

The case has settled, but Nice still has a long row to hoe to prove ownership of the series names.

RBC Nice Bearings, Inc. v. Peer Bearing Co., No. 3:06-cv-1380 (VLB), 2009 WL 3642770 (D. Conn. Oct. 29, 2009).

Creative Commons License
This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

Share Button