TTAB - Trademark Trial and Appeal Board - *1 PERSONNEL DATA SYSTEMS, INC. v. PARAMETER DRIVEN SOFTWARE, INC. Cancellation No. 18,719 September 13, 1991

Trademark Trial and Appeal Board

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

 

*1 PERSONNEL DATA SYSTEMS, INC.

v.

PARAMETER DRIVEN SOFTWARE, INC.

Cancellation No. 18,719

September 13, 1991

Hearing: August 21, 1991

 

William H. Eilberg for Personnel Data Systems, Inc.

 

 

Robert C. Collins for Parameter Driven Software, Inc.

 

 

Before Rooney, Simms and Hohein

 

 

Members

 

 

Opinion by Rooney

 

 

Member

 

 

 A petition has been filed to cancel the registrations of the mark PDS for prerecorded computer programs for business applications [FN1] and the mark PDS and design (shown below) for computer programs for business applications. [FN2] Use in both applications was alleged to be September 1, 1981.

 

 

 The grounds for cancellation are that respondent's marks so resemble the mark PDS previously used by petitioner for computer programs for business applications as to be likely to cause confusion, mistake or deception. Respondent has denied petitioner's allegations of likelihood of confusion.

 

 

 The record consists of the registration files, respondent's answers and supplemental answers to petitioner's first set of interrogatories, petitioner's answers to respondent's first set of interrogatories and supplemental answers to certain ones thereof, all submitted under notices of reliance and testimony on behalf of both parties. Both parties were represented at the oral hearing held in this matter.

 

 

 Petitioner's business is developing, marketing and installing computer programs for business applications. Petitioner's programs include programs for personnel management, payroll processing and financial analysis. The company was started in April 1974 and has continuously identified itself as PDS, the initials of its company name, Personnel Data Systems, Inc. Petitioner started with personnel and payroll programs and later added software for financial applications. The area of concentration in the early years of the company was the large or main frame computer business. That has changed over the years and since the early 1980's petitioner has been moving into the lower end marketplace changing its software so that it can be used on small computers, such as microcomputers or personal computers. Petitioner's witness, Mr. Brody, testified that the trend in the industry has been toward smaller computers and away from main frames and super minis. The average price of petitioner's software is $60,000 to $65,000 but the range of petitioner's product prices is from $15,000 to $250,000. Since there has been more activity in the lower end of the market lately, stated Mr. Brody, the range of prices has been descending to the lower end. The current annual revenues for software sold under the mark are between $3 million and $5 million. Mr. Brody estimated that the company has spent "in the millions of dollars" on advertising since the founding of the company.

 

 

 Respondent was incorporated in August 1981 to market computer program products developed by a company called Wilmark, from which it later acquired the rights to the software. Included in respondent's software products are general accounting or financial application programs for accounts receivable, accounts payable, general ledger, asset management, purchase order, inventory control and a system software product identified as Adept. Respondent's programs are used on small computers such as minicomputers. The Adept generator product is used to generate the user's own application program. Applicant's witness, Mr. Comeaux, testified that respondent's products reach two distinct markets, the program generator market of systems software and the general accounting market of applications software. Respondent markets through resellers who sell systems consisting of both hardware and software. There are about 350 to 375 resellers of respondent's programs in the United States. The suggested retail price of the Adept product is from $495 to $16,000 and the suggested price of the general accounting software is from $550 to $12,500. Current yearly revenues are about $12 million. Of that, $2,500,000 comes from licensing of software. Respondent's advertising expenditures are approximately $120,000 yearly, not including brochures, exhibits and conventions.

 

 

  *2 The marks involved in this case consist of the identical letters. The fact that respondent uses its mark in a stylized format as well as in block letters does not alter the similarity of the marks to any significant degree. There is little doubt that use of the marks of these two parties on the same or related goods or services is likely to cause confusion as to the source thereof. Nor is there any question that petitioner was the prior user of the mark.

 

 

 In its brief, respondent has noted that it is clear that "(P)etitioner had established rights prior to issuance of the Registrations, and indeed prior to the existence of Respondent, in the personnel and payroll horizontal program markets for large computers, which can be generally described as 'prerecorded computer programs for business applications'. Thus, under prior law, in which a registrant was being viewed as 'struck' with the description of goods in its registrations ... Petitioner would have been entitled to cancellation of the two registrations at issue based upon the broad description of goods set forth therein." Respondent argued in its brief and at the oral hearing that this, however, is no longer the law and that under the Trademark Law Revision Act of 1988, the Board has the authority pursuant to Section 18 thereof to modify the description of goods or services in an application or registration if to do so would avoid a likelihood of confusion.  Respondent seeks to avoid the likelihood of confusion in this case by requesting the Board to amend the identification of goods in its registrations to read:

   Prerecorded computer programs for generation of application programs by customers in the general business field, and prerecorded computer programs for general accounting applications, namely general ledger, accounts payable, accounts receivable, asset management, purchase order, inventory control, order entry, payroll, and financial statements and reports, all for use on small computers.

Petitioner has objected to the proposed amendment saying that, even if allowed, it would not avoid the likelihood of confusion.

 

 

 Section 18 of the Trademark Act, as amended effective November 16, 1989, provides the Trademark Trial and Appeal Board with the authority to limit, or otherwise modify, the goods or services in a registration or an application. However, in this case, we decline to exercise our authority under the statute and rules for the reason that this proceeding was tried without respondent's ever having raised the issue of possible restriction of its recitation of goods. As a consequence, petitioner had not been put on notice before it presented its case that respondent intended to seek to have its identification of goods amended. That is to say, the Board will exercise its discretion under Trademark Rule 2.133(b) only where the petitioner or opposer has been put on notice during the trial period that the Board will be considering the issue of confusion with respect to a recitation of goods or services narrower in scope than that which was shown in the registration or application at the commencement of the proceeding. As stated in Space Base Inc. v. Stadis Corporation, 17 USPQ2d 1216 (TTAB 1990), a request to restrict an identification of goods under Section 18 may be made by way of an affirmative pleading in the answer or by way of a motion, under Trademark Rule 2.133. Respondent has utilized neither of these procedures but has merely requested the Board to take this action in its brief.

 

 

  *3 In view of the foregoing, respondent's testimony and arguments to the effect that the parties' goods are significantly different and that until recently petitioner was marketing its goods in a totally different stratum of the market than was respondent are to no avail. The fact remains that both parties are and have been marketing computer software programs for business applications. Respondent has conceded as much in its brief.

 

 

 As a final comment, we note that our decision would not have been different had the proposed restriction been entered. It is not necessary that goods or services be identical or even competitive in order to support a holding of likelihood of confusion. It is sufficient for that purpose that there be a relationship or an association between them such that one would assume, if they were to be marketed under the same or a similar mark, that they originated at the same source or that there is an association between the sources of each. See Oxford Pendaflex Corporation v. Anixter Brothers Inc., 201 USPQ 851 (TTAB 1978) and Kraft, Inc. v. Country Club Food Industries, Inc., 230 USPQ 549 (TTAB 1986).

 

 

 Here, the parties are both marketing computer software programs for business applications. We do not believe that the likelihood of confusion would necessarily be precluded simply because one party's programs may be intended for use on one size computer and the other's programs may be used on a different size computer. There is no evidence of record which indicates that these are mutually exclusive lines of business. Moreover, petitioner's witness has testified that at the time it started in the business there was no market for programs for personal or microcomputers so its programs were necessarily directed to the main frame market. In addition, there is testimony to the effect that petitioner had moved into the mini-computer market in the late 1970's and into personal computers in the early 1980's. One final point is that the term "small" computers, as proposed to be added to respondent's identification of goods, is somewhat indefinite.

 

 

 In addition to the fact that the goods are related, as indicated above, we note that in cases in which we are dealing with identical marks, the degree of similarity in the goods need not necessarily be as pronounced to find a likelihood of confusion as it would have to be where there is more of a difference in the marks. See Cooper Industries, Inc. v. Repcoparts USA, Inc., 218 USPQ 81 (TTAB 1983) and Merritt Foods v. Associated Citrus Packers, Inc., 222 USPQ 255 (TTAB 1984).

 

 

 In view of the foregoing, we find that there is a likelihood of confusion between these identical marks as used on the respective goods of these parties.

 

 

 Accordingly, the petition to cancel is granted and respondent's registrations will be cancelled in due course.

 

 

L. E. Rooney

 

 

R. L. Simms

 

 

G. D. Hohein

 

 

Members, Trademark Trial and Appeal Board

 

 

FN1. Regn. No. 1,324,117 issued March 12, 1985, Section 8 affidavit accepted.

 

 

FN2. Regn. No. 1,343,869 issued June 25, 1985, Section 8 affidavit accepted.

 

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