TTAB - Trademark Trial and Appeal Board - *1 MARCON, LTD. v. AVON PRODUCTS, INC. September 17, 1987

Trademark Trial and Appeal Board

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





September 17, 1987

Hearing: May 19, 1987



 Opposition No. 67,714 to application Serial No. 328,693 filed September 18, 1981.



HJM Melaro for MarCon, Ltd.



S. Michael Bender and Deborah Kramm, Albert Robin, Herbert Blecker and Howard B. Barnaby and Gary Gittelson for Avon Products, Inc.



Before Rice, Rooney and Simms






Opinion by Simms






 MarCon, Ltd., a Virginia corporation, has opposed the application of Avon Products, Inc. to register the mark AVON SILKEN SOAP for liquid body soap. [FN1] As grounds for opposition, opposer asserts essentially that applicant's mark, when applied to its goods, so resembles opposer's mark SILK, previously used and registered for a variety of cosmetic and beauty care products including bubble bath, hair shampoo and face and body creams and lotions, [FN2] as to be likely to cause confusion. Opposer has also asserted that applicant has abandoned its mark since, on information and belief, there is no product presently on the market bearing the mark sought to be registered.



 Applicant has denied the allegations of opposer and has asserted as affirmative defenses that opposer is barred by the doctrines of collateral estoppel and stare decisis from alleging that there is a likelihood of confusion between the parties' marks; that opposer is precluded from bringing this opposition by the terms of its agreement with applicant relating to use of trademarks including the word SILK on cosmetic and beauty aid products; that applicant has used the word 'silk' in the advertising and promotion of certain of its products fairly and in good faith to describe its products, their characteristics or features; and that the word SILK and designations which include that word have become commonly used in the cosmetic and toiletries industries.



 The record of this case consists of opposer's pleaded registration, applicant's answers to opposer's interrogatories and a dictionary definition, made of record by opposer's notice of reliance; certain pages of a discovery deposition given by the former attorney for applicant, S. Michael Bender, provided by applicant in response to one of opposer's interrogatories; [FN3] certain official records of this Office relied upon by opposer in rebuttal; [FN4] testimony (and exhibits) taken by applicant; and the application file.



 While opposer pleaded that applicant has abandoned its mark, not only did opposer fail to raise this issue in its brief but also the interrogatory answers demonstrate that applicant had substantial sales of its goods in 1982 and 1983, the latter year being the year in which opposer filed its notice of opposition charging abandonment. Also, because opposer has relied upon its valid registration of the mark SILK, priority is not an issue. The only issues for decision are, therefore, likelihood of confusion and the estoppel effect, if any, of the settlement agreement between the parties.



  *2 With respect to the issue of likelihood of confusion, opposer has offered no probative evidence in support of this claim other than its registration of the mark for various cosmetics and toiletries. Since opposer's registration issued for closely related goods such as body lotions, bubble bath and hair shampoo, the question before us is whether applicant's mark AVON SILKEN SOAP so resembles opposer's SILK mark for these highly related products as to be likely to cause confusion. We find that confusion is unlikely.



 First, despite opposer's attempt in its brief to dissect applicant's marks and to compare only its mark SILK and the SILKEN portion of applicant's mark, it is well settled that a mark should not be dissected but rather must be considered as a whole in determining likelihood of confusion. Franklin Mint Corp. v. Master Manufacturing Co., 667 F.2d 1005, 212 USPQ 233, 234 (CCPA 1981). Even discounting the generic word SOAP, which applicant has disclaimed, applicant's mark has obvious differences in sound, appearance and meaning from opposer's mark SILK. Applicant's arguments that the word SILKEN in its mark is a highly suggestive adjective modifying the word SOAP and that AVON is therefore the dominant feature are well taken. Accordingly, and in view of the suggestive nature of the mark SILK when used in connection with opposer's hair and skin care products (Melaro v. Pfizer Inc., 214 USPQ 645, 649 (TTAB 1982) and MarCon, Ltd. v. Tova Corporation, 222 USPQ 829, 830 (TTAB 1984)), the addition of applicant's housemark to the specifically different and suggestive term SILKEN is sufficient to distinguish between the marks and to avoid confusion. [FN5] See Central Soya Co., Inc. v. North American Plant Breeders, 212 USPQ 37, 48 (TTAB 1981) and Plus Products v. Redken Laboratories, Inc., 199 USPQ 111, 116-117 (TTAB 1978).



 However, even if we had some doubt about the question of likelihood of confusion, we would dismiss this opposition because of opposer's agreement in 1980 not to interfere with applicant's use or registration of a mark containing the word SILK. As the testimony reveals, applicant's former attorney, Mr. Bender, was contacted by opposer when opposer objected to applicant's use of the trademark SMOOTH AS SILK. Opposer eventually filed suit against applicant in a state court in Virginia claiming trademark infringement, and applicant removed the action to the United States District Court for the Eastern District of Virginia. This litigation was eventually settled by an agreement dated December 5, 1980, which agreement was intended to resolve all disputes between the parties involving trademarks containing the word SILK. [FN6] Portions of the agreement are quoted below.

   1. The Melaros agree not to contest or to interfere in any way, by civil action or other proceeding, directly or indirectly, with Avon's use or registration of any trademark including the word SILK for any Avon product or service, including but not limited to SMOOTH AS SILK and SPUNSILK. [FN7]

    *3 2. The Melaros agree not to adopt, use or register any trademark which is likely to cause confusion with any Avon trademark.

   3. Rose Eilean Melaro hereby grants to Avon an irrevocable license to use the trademark SILK for cosmetic and beauty aid products, and Constance L. Melaro and Marie Antoinette Melaro and Marcon Ltd. hereby confirm their agreement to such license.

   4. As consideration for the above license and other covenants granted to Avon hereunder, Avon shall pay to said Rose Eilean Melaro an annual royalty of $5,000 for a period of five (5) years . . . [FN8]

   5. The parties agree that Avon's obligation to pay any annual royalties hereunder shall automatically terminate and the Melaros shall forthwith return to Avon all annual royalties previously paid by Avon to the Melaros pursuant to Paragraph 4 hereof in the event of, and upon the occurrence of, any one or more of the following:

 . . . .

 (c) there is a final judgment from which no appeal is or can be taken on or after the date of execution of this agreement by a court or by the United States Patent and Trademark Office that there is no likelihood of confusion between the trademark SILK of the Melaros and a trademark or trademarks of another which includes the word SILK . . .

   7. Avon agrees that whenever it shall introduce a new product line on which Avon shall use the trademark SILK, it will submit a sample of such product to the Melaros; and Avon further agrees that products bearing the trademark SILK shall be of good quality.



 Paragraph 1 of the agreement clearly states that opposer will not contest or interfere with applicant's use or registration 'of any trademark including the work SILK.' Paragraph 3 of the agreement gives applicant an irrevocable license to use the trademark SILK in connection with cosmetic and beauty aid products. Under this part of the agreement, applicant is required to submit products bearing the trademark SILK to opposer for purposes of quality control. Despite opposer's arguments that the settlement agreement is a license agreement covering all compound trademarks which include the word SILK, it is clear that this agreement, drafted by applicant's outside litigation counsel and Mr. Bender, consists of two parts--opposer's consent to the use and registration of certain marks, and a license agreement of opposer's mark SILK, beginning at Paragraph 3. The consent was given in the very first paragraph of the agreement and precedes those provisions dealing with the licensing of the mark SILK. If this were a valid license agreement of all marks containing the word SILK, as contended by opposer, then the licensee (Avon) would not have been given a right to use and register certain marks. As opposer acknowledges, a licensee is not the owner of a mark and only the owner (the licensor here) may register a trademark. This provision, therefore, is further evidence that the agreement is more than a license agreement. To construe the agreement as simply a license agreement would render the consent given in Paragraph 1 meaningless. [FN9]



  *4 In addition to permitting Avon to use the mark SILK alone under license pursuant to certain royalty and quality control provisions (Para. 3 et seq.), opposer has in effect conceded that certain other marks such as SMOOTH AS SILK and SPUNSILK are not likely to cause confusion with its SILK trademark, because of its permission for applicant to use and register those trademarks. Opposer, having sued applicant for infringement and obviously being aware of any potential for confusion, must have believed that SILK-composite marks were distinguishable from its SILK mark when it gave Avon permission to use and register those trademarks.



 Opposer contends, however, that applicant has repudiated the agreement on two grounds: (1) the discovery deposition given by Mr. Bender during the Shaklee litigation referred to above, in view of his 'most vicious and treacherous attack' (opposer's brief, 8) on opposer's mark; and (2) applicant's failure to submit product specimens to opposer for quality control purposes. In the Shaklee deposition, Mr. Bender responded to three questions with respect to whether Avon had ever used SILK alone as a trademark. He answered that Avon had used the word 'silk' in a generic or descriptive sense in advertising its products bearing different trademarks but never had used SILK as a trademark alone because applicant viewed the word 'silk' as 'non-distinctive and incapable of functioning as a trademark.' [FN10]



 We do not believe that Mr. Bender's comments were a repudiation of the agreement. First, Mr. Bender was truthfully expressing applicant's reason for never using the mark SILK alone, under subpoena of a third party during a deposition under which counsel was, of course, under oath. The cases involving the principle of licensee estoppel, that is, estoppel of a licensee from challenging by litigation the ownership or validity of a licensed trademark which the licensee had previously acknowledged, are inapposite. Here, applicant is not so challenging opposer's mark. Applicant has never filed any action or proceeding challenging the validity of opposer's mark. Indeed, in subsequent correspondence applicant has rejected opposer's claim of repudiation, and stated that it continues to follow the letter and spirit of the agreement. Applicant has expressed its desire to maintain the agreement to avoid future conflicts with opposer. Moreover, as applicant has pointed out, the Shaklee court expressly ruled that its decision was not influenced by the continued existence of MarCon's agreement with applicant. [FN11] Therefore, it is not seen how the Bender discovery deposition had any bearing on the outcome of that litigation or so impaired opposer's rights in the SILK mark that we should consider the agreement to have been repudiated.



 With respect to opposer's claim that applicant failed to comply with the quality control requirements of the agreement, because those provisions refer only to use of the trademark SILK, and since applicant has never made or sold products bearing that trademark alone under the license, it has never been obliged to submit appropriate specimens to opposer for review.



  *5 Opposer has made much of certain correspondence in which Mr. Bender allegedly agreed to submit samples of products which bear composite SILK marks for opposer's inspection. Suffice it to say that we find Mr. Bender's testimony persuasive that he wrote his responses without reviewing the quality control provisions of the agreement and had forgotten that the provisions applied only to use of the mark SILK alone. Subsequent letters demonstrate this fact. See applicant's exhibit 12, letter dated September 9, 1982. While his earlier language was mistaken, we do not believe that it served to alter or modify the quality control terms of the settlement agreement.



 Because the public policy encouraging the settlement of litigation and of holding parties to the terms of their agreements (Visa International Service Association v. Bankcard Holders of America, 784 F.2d 1472, 229 USPQ 288, 289 (9th Cir. 1986), T & T Manufacturing Co. v. A.T. Cross Co., 587 F.2d 533, 201 USPQ 561, 565-566 (1st Cir. 1978), Well Cargo, Inc. v. Well Cargo, Inc., 606 F.2d 961, 203 USPQ 564, 568 (CCPA 1979) and Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 328-29, 177 USPQ 609, 610-611 (6th Cir. 1973)) should not be casually disregarded, we believe that not only does the agreement present persuasive evidence on the question of likelihood of confusion but also that its provisions estop opposer from now challenging the mark applicant seeks to register herein. To opposer's argument, brief, 16:

   To permit Avon to register MarCon's already registered and incontestable trademark SILK by adding the linguistic particle/formative 'en' to it and then compounding the hoax by adding a generic term plus its housemark to it is to make a mockery not only of the entire trademark examining system, but the very existence of this Board and the Lanham Act as well . . .

we would respond simply that registration is not prohibited if there is no statutory bar (such as likelihood of confusion) and that opposer itself in the very first paragraph of the agreement obligated itself not to contest Avon's use or registration of any trademark which includes the word SILK. [FN12]



 Decision: The opposition is dismissed with prejudice.



J. E. Rice



L. E. Rooney



R. L. Simms



Members, Trademark Trial and Appeal Board



FN1. Serial No. 328,693, filed September 18, 1981, claiming use since August 20, 1981. Applicant has disclaimed the word 'SOAP'.



FN2. Registration No. 1,056,339, issued January 11, 1977, Section 8 affidavit accepted. This registration has been made of record in this proceeding in accordance with the provisions of former Trademark Rule 2.122(b), now Trademark Rule 2.122(d)(1).



FN3. On June 19, 1986, the Board granted in part applicant's motion to strike opposer's notice of reliance and struck those pages of the Bender deposition, sought to be relied upon by opposer, because it was a discovery deposition given in another proceeding to which applicant was not a party. See Trademark Rule 2.122(f). The Board adhered to its decision on reconsideration. However, as opposer has pointed out in a subsequent paper (opposer's memorandum in support of its motion for partial reconsideration filed December 2, 1986), the Bender discovery deposition given in a federal civil action between Shaklee Corporation and opposer (Shaklee Corp. v. Marcon, Ltd., No. 81-1423 (N.D. Cal. Aug. 31, 1982)) had been furnished by applicant in response to one of opposer's interrogatories. Had this fact been brought to the Board's attention during the course of this proceeding, the Board would have permitted opposer's reliance on this matter. In view thereof, we hereby set aside that part of the Board's June 19, 1986 ruling which excluded from the record the pages of the Bender discovery deposition on which opposer relies in its first notice of reliance submitted Nov. 15, 1985.



FN4. The Board, through its interlocutory staff attorney G. D. Hohein, had deferred ruling upon applicant's motion to strike certain documents which opposer had attempted to rely upon as rebuttal evidence. We hereby deny applicant's motion but note that those official records have very limited probative value on the issue of likelihood of confusion.



FN5. See also the Shaklee decision involving opposer's mark and Revlon's mark RAINSILK, where the court ruled:

   SILK is a highly suggestive mark. Although not descriptive of the products' ingredients, it does not take much imagination to connect the product with the name. 'SILK' is a commonly used term which refers to the fibers or cloth from the silkworm . . . It connotes softness, smoothness, and shininess. As evidenced by the testimony of persons in the hair care and cosmetics industries, those qualities are desirable for skin and hair, and so the word 'silk' represents connotations attractive to users of hair and skin products. The large number of 'silk' related names in the hair care and skin care fields reflects the suggestive character of the word. [Footnotes omitted.]



FN6. The preface of the agreement states that the Melaros (including opposer MarCon, Ltd.) 'are desirous of resolving all matters which have arisen or may arise in the future between them as a result of Avon's use of various trademarks including the word SILK for cosmetic and beauty aid products.'



FN7. In its brief, 6, applicant admits that this paragraph encompasses the term 'SILKEN.'



FN8. After tendering two royalty payments, Avon made no further payments since a decision in the Shaklee case had become final as a result of the Ninth Circuit's dismissal of an appeal for lack of prosecution. While applicant's contingent obligation to pay annual royalties ran for five years, the agreement has no date of expiration and opposer's statement in its brief that the agreement expired in December 1985 is unfounded. Indeed, in opposer's September 16, 1981 letter to applicant, opposer states that 'These licenses were granted in good faith for perpetual use of our said mark . . .'



FN9. The fact that opposer in hindsight in its reply brief, 9, calls the inclusion of this paragraph 'imprudent' does not alter our interpretation of the agreement as both a consent by opposer to applicant's use and registration of marks including the word SILK and a license of the mark SILK.



FN10. The specific question and answer, at pp. 8-9, are:

   Q. Maybe I can get to the information I'm looking for with this question: Were you aware of any desire on the part of Avon prior to this litigation to obtain rights to the trademark, 'silk,' standing alone, just s-i-l-k?

   A. Avon, to my knowledge and thinking only of my experience at Avon, was not interested in the word, 'silk' standing alone as a trademark, because Avon always held the view, and still does, that the word, 'silk,' is nondistinctive and incapable of functioning as a trademark.

   We did, however, have interest from time to time in so-called silk compound brands or trademarks, and we still do have interest in silk compound brands.

   I think you will find that interest is reflected by virtually every other company in the cosmetic industry.



FN11. The court's decision stated:

   Marcon has purportedly licensed its mark to various entities, most notably Avon and Revlon. There has been much discussion regarding the nature of these 'licenses' and to what extent, if at all, acts of Marcon's 'licensees' benefit Marcon. It is undisputed that none of the asserted licensees sell any product under the name SILK, although they do market products which names contain the word silk. The court does not find it necessary to determine the effect of the licenses, as they are not relevant to whether there is any likelihood of confusion between SILK and RAINSILK.



FN12. The result reached herein is consistent with the results reached in cases involving opposer and a third party wherein the Board construed very similar language in an agreement between opposer and that third party as precluding opposer from challenging that applicant's right to register a mark containing the word SILK. (See Board's decisions issued November 10, 1982 and March 7, 1983 in Opposition No. 64,518, MarCon, Ltd. v. Revlon, Inc., and Board's decisions issued November 30, 1983 in Opposition No. 67,323, MarCon, Ltd. v. Revlon, Inc. See also Board's decisions issued January 30, 1986 and September 29, 1986 in Cancellation No. 14,366, MarCon, Ltd. v. Revlon, Inc., wherein the Board noted, among other things that petitioner's claim that respondent breached the agreement by its failure to submit product samples pursuant to similar quality control provisions of the agreement was refuted by the clear language in the agreement that respondent was only obligated to submit samples for new product lines which used the mark SILK alone.)


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