TTAB - Trademark Trial and Appeal Board - *1 THE LOS ANGELES BONAVENTURE COMPANY v. BONAVENTURE ASSOCIATES Opposition No. 74,398 October 21, 1987

Trademark Trial and Appeal Board

Patent and Trademark Office (P.T.O.)





Opposition No. 74,398

October 21, 1987


Before Sams, Rice and Krugman






 An application has been filed by Bonaventure Associates to register the mark  'BONAVENTURE' for hotel services. [FN1]



 Registration has been opposed by the Los Angeles Bonaventure Company on the ground that since as early as December 29, 1976, it has used the mark 'BONAVENTURE' in connection with hotel services; that it is entitled to rely on its predecessor's interest in the mark 'BONAVENTURE', said predecessor having used the mark prior to December 29, 1976 within the United States to identify a hotel in Montreal, Canada; and that applicant's mark 'BONAVENTURE,' when applied to its services, so resembles opposer's mark 'BONAVENTURE,' as to be likely to cause confusion, mistake or deception.



 Applicant, in its answer, has denied the allegations of the notice of opposition. Applicant affirmatively asserts that the issues raised in this opposition were previously considered in Opposition No. 62,044 [FN2] and that the Board's decision in that opposition has res judicata effect.



 This case now comes up on applicant's motion for summary judgment, filed December 16, 1986 and opposer's cross-motion for summary judgment, filed January 21, 1987. The motions have been fully briefed by the parties. Applicant, in support of its motion, asserts that it previously opposed registration of the mark 'BONAVENTURE' for hotel services by Westin Hotel Company, a party in privity with opposer; that the ground for said opposition was likelihood of confusion between applicant's registered mark 'BONAVENTURE' for restaurant, construction and golf club services [FN3] and Westin's mark 'BONAVENTURE' for hotel services; that the opposition was sustained because of the related nature of hotel and restaurant services; that the logical inference of the Board's decision is that applicant, in the natural expansion of its business, also has the right to use 'BONAVENTURE' in connection with hotel services; and that under the doctrines of res judicata and collateral estoppel, the decision in the prior opposition precludes opposer from asserting superior or exclusive rights in 'BONAVENTURE' in connection with hotel services, as is necessary to prevail in this opposition. Accompanying applicant's motion for summary judgment is a copy of the Board's decision in Opposition No. 62,044; a detailed chart outlining the relationship between opposer and the Westin Hotel Company; opposer's responses to applicant's first set of interrogatories and a certified copy of applicant's Registration No. 964,861.



 Opposer, on the other hand, contends that the issue involved herein, namely, applicant's right to register 'BONAVENTURE' in connection with hotel services, was not determined in the prior opposition; that neither the doctrine of res judicata nor collateral estoppel is applicable herein; and that the 'expansion of business' doctrine is defensive in nature and cannot be relied upon by applicant to divest opposer of its intervening rights. We note that inasmuch as opposer has not disputed that it is in privity with the Westin Hotel Company, such matter is deemed conceded.



  *2 Under the doctrine of res judicata, a final judgment rendered by a court of competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies, and as to them constitutes an absolute bar to a subsequent action involving the same claim, demand or cause of action. See U. S. Soil, Inc. v. Colovic, 214 USPQ 471 (TTAB 1982). In Opposition No. 62,044 the claim involved was Westin's right to register 'BONAVENTURE' in connection with hotel services, whereas in the instant opposition the claim in controversy is applicant's right to register the identical mark for hotel services. Since these claims are not the same, it cannot be said that the Board's decision has res judicata effect. While the doctrine of collateral estoppel does serve to bar the relitigation herein of matters actually litigated and determined in the prior case, we nevertheless believe that summary judgment is not appropriate.



 The summary judgment procedure is a pre-trial device to dispose of cases in which there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See: Bongrain International v. Moquet Ltd., 230 USPQ 626 (TTAB 1986), affirmed in unpublished opinion, Appeal No. 86-1487 (CAFC January 16, 1987).



 Inasmuch as the present case involves identical marks ('BONAVENTURE') and identical services (hotel services), there is no genuine issue of material fact as to likelihood of confusion, and it is clear that there is likelihood of confusion as a matter of law. This brings us to the question of priority of use.



 We note at the outset that the issue of priority of use was not involved or determined in the prior proceeding. As noted above, in that proceeding, the applicant in this case, relying upon its ownership of its registration of the mark 'BONAVENTURE' for restaurant services, construction services, and golf services, opposed an application filed by a predecessor of the opposer herein to register the same mark for hotel services. At the time of the filing of that opposition, the pleaded registration was more than five years old, and thus not subject to a counterclaim for cancellation on the Section 2(d) ground of priority of use and likelihood of confusion. There was, however, a counterclaim to cancel the registration on two other grounds, namely, fraud in the application oath and a false suggestion of a connection with the applicant therein (opposer herein).



 Certain relevant findings of fact from the prior proceeding, which serve as a background for the counterclaims, are quoted below (with added insertions to relate the positions of the parties in that proceeding to their positions herein):

   Opposer Bonaventure Associates [applicant herein] is a Florida land development partnership engaged in development, construction and sale of housing units and operation of club and recreational facilities that it acquired from Town Heights Development, Inc. ('Town Heights') in November of 1972. Town Heights, a corporation composed of Canadian owners and officers, began this development effort in 1967, overseeing the construction of the first golf course and the clubhouse, with restaurant, at the facility (opened in early 1971), arranging for construction of the first residential units (some 20 townhouses and villas completed toward the end of 1971 or early 1972), using the Bonaventure mark for the development effort and applying for registration of that mark for restaurant, construction and golf services in mid-1972 (prior to the sale to Bonaventure Associates) which registration ultimately issued in mid-1973. It appears that the mark was applied in promotion of these services prior to their actual commencement, first use of October of 1968 being claimed.

    *3 Applicant Westin Hotel Company [predecessor of the opposer herein] is an American corporation with principal offices in Seattle which operates a large chain of hotels identified by various names in the United States and abroad (approximately 55 hotels, including at least 25 in the United States). Among these are the 1500-room Bonaventure hotel in Los Angeles (opened in later 1976) and the 400-room Hotel Bonaventure in Montreal (opened in mid-1967) . . . Both of the Bonaventure Hotels . . . have been promoted extensively by applicant [opposer herein] through media advertisements and through brochures distributed to hotels in the chain and to travel agencies. Applicant maintains a reservation system in the United States (with toll free number located, as to termination point, in Omaha, Nebraska) through which reservations can be made by potential customers in the United States for the two Bonaventure hotels as well as for other hotels in the Westin chain.



 Against the foregoing factual background, it was the contention of the applicant in the prior proceeding (opposer herein) that the registration relied on by the opposer therein (applicant herein) was obtained by fraud because of 'opposer's [applicant herein] knowledge and withholding at the time of registration, with intent to deceive, of applicant's [opposer herein] superior rights in and prior use of the mark 'BONAVENTURE' for hotel services in the United States and Canada.' In connection therewith, the applicant in the prior proceeding (opposer herein) asserted that its first use of 'BONAVENTURE' in commerce regulable by Congress related back to the opening and operation of its Canadian hotel in 1967 by virtue of applicant's (opposer herein) activities on behalf of the Canadian hotel including United States advertising and promotional efforts, the United States-based reservation system and the general corporate direction of hotels from its U.S. headquarters location.



 The Board, in its discussion of the fraud ground, found that the principals of the opposer's (applicant herein) predecessor, Town Heights, knew of the existence of the Hotel Bonaventure in Montreal Canada when Town Heights commenced the Bonaventure land development project in Florida (the Montreal hotel having opened a year or so earlier). Indeed, the Board found that

   . . . the president of Town Heights (then and now a Montreal resident) admits having personally visited the Hotel Bonaventure in Montreal many times, having advertised to and solicited Montreal area and other Canadian citizens as potential buyers of residence in the Florida Bonaventure tract (particularly those of French extraction), and concedes that Town Heights adopted a lettering style for its Florida Bonaventure logo that was the same as that used by the Montreal Hotel.

Notwithstanding the foregoing, the Board held that the applicant therein  (opposer herein) had not met its burden of proof as counterclaim cancellation petitioner on the ground of fraud. In this regard, the Board noted, inter alia, the normal rule of law that use or promotion of a mark confined to a foreign country, including Canada, is immaterial to the use, ownership, and registration thereof in the United States, and then stated:

    *4 Applicant's [opposer herein] claim of prior right based on its Montreal hotel activities would, if recognized at all, depend on the advertising, promotional, and reservation service activities related to the Montreal hotel which were conducted in the United States and as to which the record shows no knowledge on the part of opposer [applicant herein].

Similarly, the Board found that the evidence was insufficient to prove the Section 2(a) false suggestion of a connection claim.



 Having held that the counterclaim in the prior opposition must fail, the Board turned to the opposition itself; stated that since the opposer's (applicant herein) registration was valid and subsisting, priority of use was not an issue in the case; [FN4] found that there was likelihood of confusion; and accordingly sustained the opposition.



 Although priority of use was not an issue, and was not determined, in the prior proceedings, it is an issue in this proceeding. Moreover, there are genuine issues of material fact relating to this issue. For example, applicant's 'natural expansion' argument is, in effect, a claim that applicant is entitled to 'tack on' to its use of the mark 'BONAVENTURE' for hotel services its use of the same mark for restaurant services for purposes of determining priority of use herein. As we noted in Mason Engineering v. Mateson Chemical, 225 USPQ 956 (1985), at page 962, among the factors to be considered in determining whether an expansion is natural are:

   . . . (1) whether the second area of business (that is, the subsequent user's area of business, into which the first user has or potentially may expand) is a distinct departure from the first area of business (of the prior user), thereby requiring a new technology or know-how, or whether it is merely an extension of the technology involved in the first area of business; (2) the nature and purpose of the goods or services in each area; (3) whether the channels of trade and classes of customers for the two areas of business are the same, so that the goodwill established by the prior user in its first area of business would carry over into the second area; and (4) whether other companies have expanded from one area to the other. See: Central Soya Co., Inc. v. North American Plant Breeders, 212 USPQ 37 (TTAB 1981), and Porta-Tool, Inc. v. DND Corp., 196 USPQ 643 (TTAB 1977). Finally, the determination of whether an expansion is or would be natural must be made on the basis of the circumstances prevailing at the time when the subsequent user first began to do business under its mark, i.e., what was 'natural' in the relevant trade at that time. See: Viking Boat Co., Inc. v. Viking Camper Supply, Inc., 191 USPQ 297 (TTAB 1976).



 Clearly, there are genuine issues of material fact relating to the question of whether applicant's expansion from restaurant services to hotel services was a 'natural' expansion. These genuine issues include, for example, whether other companies have expanded from restaurant services to hotel services under a single mark, and, if so, when (this is not a matter appropriate for judicial notice by the Board).



  *5 Moreover, aside from the matter of applicant's 'natural expansion' claim, there are genuine issues of material fact as to whether opposer, prior to the opening of its first 'BONAVENTURE' hotel in the United States, established rights in the mark in the United States as a result of it activities (through a predecessor) in this country relating to its Montreal hotel (an issue not determined in the prior proceeding), and, if so, when. Cf. J. Thomas McCarthy, Trademarks and Unfair Competition, § 16:7, pages 735-736 in text, pages 38-39 in December, 1984 Cumulative Supplement (2d ed, 1984).



 In view of the foregoing, applicant's motion for summary judgment is denied; opposer's cross-motion for summary judgment is granted only as to the issue of likelihood of confusion; and this case will go to trial on the issue of priority of use. In this regard, the attention of the parties is directed to Trademark Rule 2.122(f).



 Trial dates, beginning with the time for discovery, are reset as follows.



J. D. Sams



J. E. Rice



G. D. Krugman



Members, Trademark Trial and Appeal Board



FN1. Application Serial No. 536,680 filed May 9, 1985, claiming a date of first use of June 11, 1981.



FN2. Bonaventure Associates v. Westin Hotel Company, 218 USPQ 537 (TTAB 1983).



FN3. Registration No. 964,851 issued July 24, 1973; combined affidavit under Sections 8 and 15 filed.



FN4. The Board cited, in this regard, King Candy Co. v. Eunice King's Kitchen, Inc., 496 F.2d 1216, 182 USPQ 108 (CCPA 1974), wherein the Court held, in essence, that the question of priority does not arise in an opposition proceeding where the opposer relies upon a registered trademark (and there is no well-taken counterclaim for cancellation thereof) because Section 2(d) prohibits the registration of a mark which so resembles, inter alia, a mark registered in the Patent and Trademark Office as to be likely, when applied to the goods (or services) of the applicant, to cause confusion, or to cause mistake, or to deceive. That is, Section 2(d) does not speak of priority with respect to a registered mark.


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