MEMORANDUM OPINION
This 15 U.S.C. § 1071(b) trademark dispute grows out of a decision of the Trader mark Trial and Appeal Board (“TTAB”) to cancel plaintiff Product Source International, LLC’s (“PSI”) registration of the trademark “NIC OUT” for mechanical cigarette filters designed to remove nicotine from cigarettes. In February 2010, defendant Leonid Nahshin (“Nahshin”), who contends that he is the actual owner of the NIC OUT mark, filed a petition with the TTAB seeking cancellation of PSI’s registration of the NIC OUT mark. This petition succeeded, and on June 21, 2013, the TTAB issued a decision cancelling PSI’s registration of the NIC OUT mark. In this § 1071(b) action, PSI contends that the TTAB incorrectly concluded that Nahshin, rather than PSI, owns the NIC OUT mark and requests that PSI’s registration of the mark be reinstated pursuant to 15 U.S.C. § 1119, which provides that “[i]n any action involving a registered mark the court may ... restore canceled registrations.” In response, Nahshin alleges three counterclaims:
(1) First, Nahshin asserts a claim for trademark infringement on the ground that PSI’s use of the “NIC OUT” mark constitutes a “false designatiоn of origin, false or misleading description of fact, or false or misleading representation of fact” that is likely to cause confusion or mistake as to the origin of the goods, in violation of 15 U.S.C. § 1125 (Count I);
(2) Second, Nahshin claims that PSPs , • NIC- OUT registration should be*387 cancelled because it is likely to cause consumer confusion (Count II); and
(3) Third, Nahshin claims that PSI’s NIC OUT registration should--.be cancelled because PSI was not the owner - of the mark at the time it applied for the registration (Count III).
The parties have filed cross-motions for summary judgment on PSI’s -claim for reinstatement of the mark and Nahshin’s three counterclaims. The claim and counterclaims raise the following common questions of law and fact:
(1) Whether the undisputed record evidence establishes that Nahshin- was the owner of the NIC OUT mark prior to PSPs trademark application;
(2) If the record establishes that Nahsh-in owned the mark, whether Nahshin is nevertheless barred from' asserting a cancellation action on the ground that he acquiesced in PSI’s ownership of the mark;
(3) If the record establishes that Nahsh-in owned the mark, whether Nahshin is nonetheless barred from bringing an infringement action against PSI as a result of Nahshin’s acquiescence in PSI’s use of the mark or as a -. result of the equitable doctrine of laches; and
(4) Finally, if the record establishes that Nahshin was not the owner of the NIC OUT mark at the time . PSI applied for registration of the mark, whether PSI is the owner and thus entitled to reinstatement of its registration of the mark. ..
For the-reasons that follow, the parties’ motions must be granted in part and denied in part. First, the undisputed summary judgment record clearly shows that Nahshin, not PSI, owned the NIC OUT mark at the time PSI applied for registration of the mark, and thus PSI’s claim for reinstatement must fail. Second, although PSI may not rely on the affirmative defenses of laches or acquiescence to divest Nahshin of his trademark or to prevent the issuance of prospective, equitable relief to enjoin PSI’s continuing ■ infringement, Nahshin’s implied consent to PSPs infringing use of the NIC 0(UT mark bars him from how rеcovering monetary damages for PSI’s past infringement.
I.
An applicant who is “dissatisfied with the final decision”' of the TTAB has a choice, of remedies: (i) the applicant may appeal that decision to the U.S. Court of Appeals for the Federal Circuit pursuant to 15 U.S.C. § 1071(a), or (ii) the applicant may have a “remedy by civil, action” in district court pursuant to 15 U.S.C. § 1071(b). In a ease pursuant to § 1071(b), a federal district court has authority “independent of the [U.S. Patent and Trademark Office (“PTO”)] to grant or cancel registrations and to decide related matters such as infringement and unfair competition claims.” Swatch AG v. Beehive Wholesale, LLC,
The TTAB administrative record has been made part of the summary judgment record as the parties have moved for its admission, and PSI has also introduced additional evidence. Accordingly, this additional evidence and the TTAB record are reviewed here efe novo. With this standard of review in mind, the record facts of the case can be succinctly stated as follows:
a. Leonid Ñahshin and P. Service
Leonid Nahshin is a citizen of Israel and the sole proprietor of an Israeli business, P. Service. Nahshin Depo. at 16-17.
On August 18, 2000, Nahshin signed a contract with a Turkish manufacturer, Burda Ticaret, for the first shipment of his filters. Nahshin Depo. at 44.
b. Product Source International
PSI is a New -Jersey limited liability company formed in 1998 and owned by Eugene J. Higgins (“Higgins”). Higgins Decl. ¶ 1. In 2003, Higgins met Maslov at a New York City trade show where Maslov was promoting Nahshin’s cigarette filter under the brand name NIC OUT. Id. ¶ 2, 3; By this time, at Maslov’s requеst and with Nahshin’s agreement, the NIC OUT packaging had been changed to remove “Product of P.Service Israel” from the box and to state instead, “IMPORTER: Safety Aid Supplies, Inc New York USA www. nicout.com.” Pltfl’s Ex. B. Thus, when Higgins encountered the product at the trade show, the boxes reflected the SAS corpo
As a result of this- meeting at the trade show, Maslov and Higgins entered into an agreement Whereby SAS would provide PSI with NIC OUT. filters that -SAS purchased from Nahshin and PSI, in turn, would market and sell the NIC OUT marked filters in the United- States. Id. This agreement was embodied in a September 19, 2003 “‘Product Representation Agreement” signed by Higgins, on behalf of PSI, and by Maslov, on behalf of SAS. Pltf.’s Ex. D. PSI purchased its first batch of NIC OUT filters from SAS on July 10, 2003,-and began selling them in the United States in November of 2003. Higgins Decl. ¶ 2; Pltfi’s Ex. A (Purchase Order). At this time, SAS, of course, was purchasing the NIC OUT filters from Nahshin and P. Service. Higgins Decl. ¶ 7.
The relationship between PSI and SAS continued from 2003' to 2007 and was memorialized in a series of written agreements. Higgins Decl. ¶ 12. The third 'of these agreements included language stating that SAS granted PSI “an exclusive royalty free trademark license to use the Nic Out trademark.” Pltñ’s Ex.. D (Agreement dated January 10, 2006). During the course of this business relationship, Mas-lov and Higgins discussed registering the NIC OUT trademark. Higgins Decl. ¶ 13. Accordingly, on March 21, 2006, PSI filed an “intent to use” application with the U.S. Trademark Office. An “intent to use” application is one in which an applicant “who has a bona, fide intention ... to use a trademark in. commerce may request registration of its trademark.” 15 U.S.C. § 1051(b)(1). The applicant must-'verify that he or she is “entitled to use the mark in commerce,” has an intention to do so, and that “no other person has the right to use such mark in commerce.” § 1051(b)(3)(A)-(D). On December 4, 2007, the Trademark Office granted PSI a registration for the NIC OUT mark. See Trademark Registration No. 3, 350, 041.
In the second quarter of 2007, Higgins and Maslov agreed that their' companies would part ways by PSI’ceasing to buy NIC OUT filters from SAS. Higgins Decl. ¶ 15. At this time, PSI claims that Higgins and Maslov orally agreed that PSI would, ás Higgins contends, “keep” the trademark for NIC OUT. Id.
After PSI ceased buying filters from SAS, PSI sought other sources of the NIC OUT filter. Higgins Decl. ¶ 20. Higgins contends -that he- had- seen the name “P. Service” on some NIC OUT containers obtained through SfyS, and so Higgins reached out to P. Service to buy Nahshin’s NIC OUT filters for resale in the United States. Id. The record reflects that from May 2007 to November 2007, PSI purchased ’Nahshin’s NIC OUT marked filters from P. Service. Higgins Decl. ¶ 22. When
Around the time this request was made, Nahshin evidently drafted an email that an employee of P. Service, - Alexander Slobdiker, was to send to Higgins. That email was never sent,-but stated: the following:
We have known for over 2.5 years of your work on'our filters. That is why we are so interested in working together. We even did -not contest the priority to the trade' mark “Nic-Out” even though we have grounds.
Pltf.’s Ex. E, (May 23, 2007 draft of email sent by Nahshin to Slobdiker). Furthermore, on May 19, 2008, Slobdiker sent Higgins an email informing Higgins that Maslov was now selling NIC OUT internationally without authorization. In response, Higgins wrote: “My company is the SOLE OWNER of the Nic Out Trademark [in the United States].” Pltf.’s Ex. H (May 19, 2008, email from Gene Higgins to “info@nic-out.com”). Slobdiker responded on May 20, 2008:
Hello Gene,
I am glad to realize that finally there is a company, which is áble to take care of Nic-Out product in whole USA territory.
Please inform me about all your steps rélated to our common business.
Wish you good luck!
Regards,
Alex
Id. (May 20, 2008, email from “info@nic-out.com” to Gene Higgins). Furthermore, in the course of PSI’s and Nahshin’s business relationship, Nahshin would direct U.S. wholesale -customers that contacted P. Service to PSI, which Nahshin identified as “our American distributor.” Pltf.’s Ex. H. (Feb. 13, 2008 email from “info@nic-out.com” to Greg Dupuis). PSI also notes that Slobdiker, the P. Service employee, wrote in an email to Higgins that “we have no idea what happens on the American market.” Pltf.’s Ex. H (May 19, 2008 email from ' “info@nic-out.com” to Gene Higgins). The. parties do not dispute that Nahshin knew as early as 2004 that PSI was selling Nahshin’s/P, Service’s NIC-OUT filters through SAS. The parties also do not dispute that Nahshin knew as early-as May 2007 that PSI had applied to register the trademark NIC OUT.
PSI continues today to promote and advertise NIC OUT marked filters through trade shows, television, internet, and print marketing. Higgins Decl. ¶ 29. The parties agree that Nahshin and P. Service did not personally invest in any advertising within the United States besides the creation of the www.nic-out.com website. Nahshin Depo. at 88-91. Besides selling large .quantities of his- NIC OUT marked filters to SAS and then directly to PSI, Nahshin also has sold NIC OUT to customers in the United States through this website. A compilation by PSI of receipts from www.nic-out.com internet sales shows close to 100 small dollar transactions from 2002 to 2006 with parties in dozens of states. Pltf.’s Ex. N. In addition, as already noted, Nahshin offers P. Service records showing between 36 and 343 indi
c. Proceedings before the TTAB
In 2008, PSI began purchasing cigarette filters from a different source while still selling these filters using the NIC OUT brand name. Nahshin became aware of this by the “middle of 2008.” Nahshin Depo. at 139-40. Then, on June 23, 2009, after receiving letters from PSI demanding that P. Service cease and desist allegedly infringing use of the NIC OUT mark, Nahshin petitioned the TTAB to cancel PSI’s NIC OUT registration. -Petition for Cancellation, Administrative Record at 73. The TTAB granted Nahshin’s petition to cаncel on the ground that PSI was not the owner of the mark “NIC OUT.” Nahshin v. Product Source International, LLC, Cancellation No. 92052240,
(1) Nahshin selected Nikolai (Nicolas) Maslov to distribute Nahshin’s NIC OUT filters in the United States, whiqh Maslov did from 2002 through 2008.
(2) PSI obtained NIC OUT filters from Maslov and began marketing them during the first quarter of-2003.
(3) PSI filed its application to register the mark NIC OUT for mechanical cigarette filters for removing nicotine on March 21, 2006.
(4) There is no evidence that Nahshin authorized the filing of this trade- ' mark application.
(5) There is no evidence that there was any transfer of rights to the mark NIC OUT from Nahshin to PSI.
See id at *4-5. Although the TTAB panel expressed some skepticism with respect to PSI’s contention that SAS had orally agreed to transfer the trademark to PSI, the panel reasoned that even if this agreement had occurred, PSI eould not have acquired any rights to the trademark from SAS because SAS did not have any rights to convey. Further, the TTAB rejected the contention that PSI could have acquired ownership of the mark when it began purchasing the product directly from Nahshin/P. Service for further resale" to U.S. customers. In this regard, the TTAB noted that “[gjenerally, the mere fact that a U.S. distributor distributes a foreign manufacturer’s branded product does not, without more, give the U.S. distributor an ownership interest in the mark.” Id. at *7. Accordingly, the "TTAB concluded that Nahshin became the owner of trademark rights in the mark.NIC OUT in the United States through the distribution of NIC OUT filters in the United States by Mas-lov and thus that PSI could not have been the owner of. the mark at the time it applied for registration. Id. at *5. The TTAB therefore cancelled PSI’s registration.
II.
Summary judgment shall be granted in favor of a movant “if the movant shows that there is no genuine dispute as to any material fact and the movant.is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is “genuine” if “the evidence is such that a -reasonable [fact finder] could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
In the absence of a valid trademark registration, it is the common law that determines trademark rights. -Common law trademark ownership “is acquired by aсtual use of the mark in a given market.” Emergency One, Inc. v. Am. Fire Eagle Engine Co., Inc.,
The undisputed record- facts demonstrate that Nahshin established common law ownership of the NIC OUT mark prior to PSI’s application for registration by using the mark in the U.S. market through the substantial sales of NIC OUT filters to SAS. There is -no dispute that filters bearing the mark NIC OUT first arrived in the United States when Nahshin’s company, P. Service, entered a distribution agreement with SAS in 2002, nor is there any dispute that the NIC OUT branded filters PSI obtained from SAS and sold in the United States were filters from that same supply chain. Moreover, these sales preceded PSI’s March 2006 application for registration. Specifically, Nahshin sold NIC OUT filters to SAS in the United States from September of 2002 to early 2007, at which time Nahshin then began selling NIC OUT filters. directly -to PSI. In other words, Nahshin had been selling his NIC OUT markеd.filters within the United States for almost four-years before PSI applied to register the mark. Furthermore, the conclusion that Nahshin established common law ownership of the NIC OUT mark is not undermined by the fact that Nahshin primarily sold to distributors. The trademark use requirement does not require a manufacturer of trademarked goods to take those goods personally to market. In fact, the weight of authority holds that where a foreign manufacturer engages an exclusive U.S. distributor, the presumption is that, absent evidence to the contrary, trademark rights remain with the foreign manufacturer.
Furthermore,' although Nahshiris sales to SAS and PSI are, by themselves, sufficient to establish Nahshiris common law ownership of the NIC OUT mark, they are not the sole basis for that ownership. In addition, as the summary judgment record shows, Nahshin made other sales of his filters bearing the NIC OUT mark directly to оther customers in the United States. The summary judgment record establishes, for instance, that P. Service made over 200 individual sales of NIC OUT in more than forty states in 2005 and 2006, prior to PSI’s application for registration. See Decl. of Danielle Hart Ex. A; see also Pitt’s Ex. N. As noted earlier, P. Service also has records of two sales in 2003, prior to PSI entering into its agreement with SAS to sell NIC OUT filters.
PSI seeks to avoid this conclusion by arguing that Nahshin’s direct sales' in the United States were too sporadic and insubstantial to establish trademark rights. PSI’s focus on these individual sales is a doomed attempt to avoid the elephant -in the room, namely, Nahshhfs substantial sales of his NIC OUT marked filters to SAS and PSI over a five to six year period. In response, PSI contends that these sales do not constitute market usе by Nahshin because, as PSI claims, “Nahshin explicitly .endorsed SAS as the face of the brand from 2003-2006” by placing SAS’s name, phone number, and a URL — “www. nicout.com” — controlled by SAS on the NIC . OUT packaging. In-effect, PSI argues that SAS’s distribution of NIC OUT filters constituted market activity in favor of SAS’s ownership of the mark, not Nahshin’s ownership, which .ownership was then transferred to PSI in an alleged oral agreement with SAS when, the companies parted ways in 2007. Although PSI could theoretically have obtained the mark via this alleged oral agreement if SAS had owned the trademark at the time, the record shows the contrary, namely that SAS did not own the trademark then or ever.
Next, PSI argues that its sales of Nahshin’s NIC OUT marked filters within the United States cannot be credited to Nahshin because the usual presump
(1) which party invented- and first affixed the mark onto the product;
(2) which party’s name appeared with the trademark;
(3) which party maintained the quality and uniformity of the product; and
(4) with which party the public identified the product and to whom purchasers made complaints.
Sengoku Works, Ltd.,
The first factor — which party invеnted and first affixed the mark onto the product — weighs in favor of Nahshin. The evidence on this record shows that Nahshin first developed the NIC OUT mark with the help of his English-speaking wife in 1999. Further, the undisputed facts show that Nahshin worked with his Turkish manufacturer to affix the NIC OUT brand to the filters in 2000. Although PSI argues that an unrelated individual, Henry Hsu, registered the trademark “NICOUT” for a somewhat different cigarette product — a registration that- has since been cancelled — the undisputed facts show that Nahshin independently arrived at the mark NIC OUT for his mechanical cigarette filters, and then sold those NIC OUT branded filters in the United States through his relationship with SAS and Maslov and then through PSI. Thus, the first factor weighs against rebutting the presumption that Nahshin owned the mark.
The second factor — which party’s name appeared with the trademark — also weighs against rebutting the presumption in favor of Nahshin. Although the record reflects that neither Nahshin’s name nor that of his company, P. Service, appeared on most if not all of the NIC OUT packaging sold by SAS and PSI within the United States from 2003 to 2007,
The weight of the third factor — which party maintained the quality, and uniformity of the product — is' inconclusive. PSI
Finally, the fourth factor — which party the public identified with the product — is also neutral. On the one hand, PSI asserts that it fielded customer inquiries and .complaints about NIC OUT and, pursuant to PSI’s final agreement with SAS, took over control of the www.nicowt.com URL in 2007. Higgins Decl. ¶ 18. On the other, Nahshin maintained another website beginning in 2005, www.nic-out.com, which allowed consumers to purchase NIC OUT filters directly and provided information about the product and stated that'“Our Company (P.Service) is the exclusive proprietor of NIC-OUT cigarette filters.” Pltf.’s Ex. J. Thus, the fourth factor does not strongly favor either Nahshin or PSI.
On balance, therefore, the Sengoku factors do hot support rebutting the presumption in favor of Nahshin’s common law ownership of the NIC OUT mark. In summary, therefore, a review of the record points convincingly to the conclusion that Nahshin is the common law owner of the NIC OUT mark and that PSI is not entitled to reinstatement of its registration of the NIC OUT mark.
This does not end the analysis, hоwever, because PSI asserts the affirmative defense'of acquiescence, arguing that Nahshin impliedly consented to PSI’s use and ownership of the NIC OUT mark, and thus that Nahshin should be barred from now seeking cancellation. The Lanham Act explicitly incorporates the equitable
Importantly, however, acquiescence may not bar. cancellation claims where the likelihood of' confusion is highly likely or inevitable. Put differently, “a strоng showing of a likelihood of confusion can trump even a proven case of acquiescence by the senior user to the junior user’s usage.” 6 McCarthy on Trademarks § 31:41 (4th ed.); see also Sara Lee Corp.,
(i) the strength or distinctiveness of the plaintiffs mark as actually used in the marketplace;
(ii) the similarity of the two marks to consumers;
(iii) the similarity of the goods or.services that the marks identify;
(iv) the similarity of the facilities used by the markholders;
(v) the similarity of advertising used by the markholders;
(vi) the alleged infringer’s intent;
(vii) actual confusion;
(viii) the quality of the alleged infringer’s product; and
(ix) the sophistication of the consuming public.
Swatch AG,
It is undisputed that PSI spent substantial sums in promoting, marketing, and selling NIC OUT within the United States. And it may be that PSI made these investments in the mistaken belief that it, owned or would thereby gain trademark rights in the NIC OUT mark. Nevertheless, the undisputed facts show that Nahshin was.the common law owner of the NIC OUT mark 'at the time of PSI’s application for registration. Accordingly, it follows that PSI’s motion for summary judgment with respect to its claim for reinstatement must be denied and Nahshin’s cross motion for summary judgment on this claim must be granted.
m.
Given the conclusion that Nahshin, not PSI, was the common law owner of the NIC OUT mark at the time PSI applied for registration, it is appropriate to turn to Nahshin’s counterclaim for trademark infringement. To establish his claim for trademark infringement, Nahshin must show that he possesses a protectable mark, as already concluded, and the following:
(i) that the alleged infringer, PSI, used the mark; ’
(ii) that the infringer’s use of the mark occurred “in commerce”;
(iii) that the infringer used the mark “in connection with the sale, offering for sale, distribution, or advertising” of goods or services; and
(iv) that the infringer used the mark in a manner likely to confuse consumers.
People for the Ethical Treatment of Animals v. Doughney,
Whеre a movant seeks summary judgment oh an affirmative defense, it must conclusively establish all essential elements of that defense. Ray Commc’ns, Inc. v. Clear Channel Commc’ns, Inc.,
PSI asserts two affirmative defenses to Nahshin’s trademark infringement counterclaim: (i) estoppel by laches and (ii) acquiescence. Estoppel by laches operates to deny relief to a claimant who had knowledge of the alleged infringement and who has, to the detriment of defendant,' unreasonably delayed in seeking redress. Sara Lee Corp.,
Under the doctrine of acquiescence, “[a]n infringement action may be barred ... where the owner of the trademark, by conveying ” to the defendant through affirmative word or deed, expressly or impliedly consents to the infringement.” Sara Lee Corp.,
It is useful first to determine at what point PSI’s use of the NIC OUT mark became infringing. See id. at 463 (holding that “a preexisting infringement is a prerequisite” to an acquiescence' defense because the trademark owner must “knowingly consent ... to the defendant’s infringing use of the mark”). Although PSI applied to register thе NIC OUT mark for its own benefit on March 21, 2006, PSI only began selling products labeled NIC OUT that did not originate with Nahshin and P. Service at the end of 2007 or the beginning of 2008. See Higgins Decl. ¶ 21 (stating that PSI purchased NIC OUT from Nahshin through November 2007). On the one hand, then, PSPs infringing use of the NIC OUT mark only began in 2008 when it first sold goods under the NIC OUT name without going through the P. Service supply chain. On the other hand, PSPs application for and registration of the NIC OUT mark in March 2006 for the precise product that Nahshin was selling was clearly an act adverse to Nahshin’s rights in the mark. Therefore, while not strictly infringing, March 21, 2006, is appropriately considered the point at which PSPs actions with respect to the NIC OUT mark became adverse to Nahshin’s .rights.
It must next be determined. whether Nahshin conveyed by' affirmative word or deed that he impliedly or expressly consented to PSPs adverse use of the NIC OUT mark. PSI contends that Nahshin knew of PSI’s claim to the NIC OUT mark no later than May 2007 when P. Service agreed to place PSPs name and trademark application number on the NIC OUT packaging. .Nahshin’s approval of this packaging change demonstrates that he knew of PSPs trademark application and thus that he knew PSI claimed trademark rights adverse to his own.
Finally, in some circuits, namely, the Second, Ninth, and Eleventh, a party asserting acquiescence as an affirmative defense must also show that the acquiescence of the trademark owner caused the alleged infringer undue prejudice. Seller Agency Council, Inc. v. Kennedy Ctr. for Real Estate Educ., Inc.,
Thus, because the undisputed record shows that Nahshin failed to take prompt action to disabuse PSI of the notion that PSI was entitled to register and use the NIC OUT mark as its own and indeed affirmatively took action in support of this misconception, PSI has successfully demonstrated that acquiescence bars Nahsh-
ÍV.
For the foregoing reasons, Nahshin’s motion for summary judgment as to PSI’s claim for reinstatement of its registration of the NIC OUT mark must be granted and PSI’s motion for summary judgment on this claim must be denied. Furthermore, because PSI has established that Nahshin acquiesced to PSl’s registration and use of the mark, PSl’s motion for summary judgment as to Nahshin’s infringement counterclaim (Count I) must be granted with respect to Nahshin’s claim for damáges but denied with respect to Nahshin’s request for future injunctive relief. Nahshin’s remaining counterclaims, both of which assert grounds for cancellation of PSl’s NIC OUT registration, must be denied as moot. The issue of framing an appropriate injunctive remedy against future infringement by PSI remains to be resolved.
An appropriate Order will issue.
Notes
. In its briefing, PSI makes such of the distinction between Nahshin and P. Service, essentially arguing that any activities relating to the trademark NIC OUT were undertaken by P. Service, not Nahshin. Yet, in the United States, there is generally no legal distinction between a sole proprietorship and the sole proprietor himself. See, e.g., Jeroski v. Federal Mine Safety & Health Review Comm’n,
. PSI disputes that Nahshin invented the mark, arguing that on July 13, 1998, Henry Hsu filed a trademark application with the PTO for "NICOUT” for use in connection with a device designed to aerate filters and cigarettes to reduce the smoke inhaled by the user. Pltf.’s Opp. ¶ 5; see Trademark Registration No. 2,337,463 (describing a mark used for a "Smoker's Apparatus for Puncturing Holes in Cigarettes”). This device is not al- ; leged to be the same as or similar to the cigarette filter Nahshin eventually marketed as the NIC OUT filter. Moreover, the PTO's trademark ’database shows that the Hsu "NICOUT” registration was canceled on January 6, 2007. See Trademark Electronic Search System, http://tmsearch.uspto.gov/bin/ gate.exe?f=searchss&state=A801:ql88da. 1.1, search "NICOUT” (last visited June 9, 2015). Nevertheless, PSI’s reference to the Hsu trademark application does not create a disputed issue of material fact on this point because the fact that a person developed a slightly different mark for a somewhat different product does not negate or controvert Nahshin's assertion that he was the first to develop and apply the brand name NIC OUT to his cigarette filters. In any event, whether Nahshin was the very first to invent the term NIC OUT in this context is not material to the trademark ownership dispute here. Even assuming arguendo that Hsu first registered the mark, this does not negate the fact that Nahshin was the first to use the mark NIC OUT in sales of his mechanical cigarette filters in the United States.
. Nahshin later worked with a different Turkish manufacturer, Atash. Nahshin Depo. at 26-27, 29.
. PSI points out that Burda Ticaret was already "manufacturing a cigarette filter with an essentially similar packaging design with the
. At this time Nahshin also signed a written "Agreement on Joint Activities” with a company called New Shore Corporation. Nahshin Depo. Ex. 6. Maslov, of SAS, was identified as the representative of New Shore Corporation. Id. Yet, the record shows that Nahshin never sold any product to New Shore Corporation and Nahshin testified that he simply complied with Maslov’s request that Nahshin ship the product to SAS instead. Nahshin Depo. at 58.
. PSI disputes these 2003 sales as unverified on the ground that PSI’s attempts to serve subpoenas on these customers were unsuccessful because the addresses obtained from P. Service’s records were invalid. This does not create a material issue for two reasons: First, the addresses came from sales records more than ten years old and it is therefore unsurprising that the addresses are no longer valid. Second, and morе importantly, these two sales were not the only sales made by Nahshin to customers in the United States before PSI applied to register the NIC OUT mark. Most notably, Nahshin was selling his filter under the mark NIC OUT to SAS and SAS was in turn selling those filters to PSI for at least three years before PSI’s trademark application. With respect to the California and Detroit sales, PSI also argues that they should be disregarded because these sales were by P. Service, not Nahshin. This argument fails as it ignores that a sole proprietorship is indistinguishable from the individual sole proprietor. See supra note 1.
. Even assuming that Higgins correctly recalls an oral agreement that PSI would keep the NIC OUT mark, this does not create a genuine issue of material fact as to who owned the mark at the time PSI applied to register it -because the facts establish that Maslov, did not have any rights to convey to PSI. The trademark rights Maslov allegedly conveyed to PSI in this agreement actually resided with Nahshin, not Maslov.
. PSI also requested that P. Service рlace PSI’s Patent Pending number (11/895005) on the box. Pltf.'s Ex. G.-
. PSI contends that it was not required to "own” the mark at the time of registration. To be sure, it is true that an applicant with an intention to use a trademark may be entitled to register the mark even though the applicant may not have yet used that trademark in commerce so as to "own” that mark under the common law. But this misses the point; PSI was not entitled to register the mark if the mark was owned by someone else. See 15 U.S.C. § 1051(b)(3)(D) (requiring that an applicant with a “bona fide intention to use” a , trademark must verify that "no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto”).
. Imperial Tobacco Ltd. v. Philip Morris, Inc.,
. Silverman v. CBS Inc.,
. See also Exxon Corp. v. Humble Exploration Co., Inc.,
. See, e.g., Roger & Gallet v. Janmarie, Inc.,
. Again, PSI’s failure to serve the individuals who made these purchases in 2003 does not
. Moreover, PSI's belief that SAS wás the owner of the NIC OUT trademark and thus capable of conveying ownership is irrelevánt; PSI’s belief does not control common law ownership of the mark.
. It is also worth noting that, in addition to SAS having nothing to transfer,. PSI filed its intent to use application in March 2006, months before the alleged 2007 oral agreement with SAS that PSI would “keep” the NIC OUT mark.
. See also Hill Holliday Connors Cosmopulos, Inc. v. Greenfield,
. The record does not disclose whether the NIC OUT filters Nahshin sold directly to individual consumers in the United States bore the P. Service name. It is undisputed that Nahshin changed the NIC OUT packaging to remove P. Service and replace it with "IMPORTER: Safety Aid Supplies, Inc.” at least with respect to the filters sold to SAS before the New York City trade show at which Mas-lov met Higgins. Higgins contends that the NIC OUT filters on display at this trade show did not bear Nahshin’s or P. Service’s name.
. PSI also points to evidence that (i) PSI asked P. Service to fix problems with product packaging, such as a window that was off center. Higgins Decl. ¶¶ 22-26; Ex. H; and that (ii) when a wholesale customer contacted P. Service with a question about NIC OUT in February of 2008, P. Service directed that customer to PSI. See Pltf.’s Ex. H ("Dear Sir, For every question about distribution and - purchasing of Nic-Out filters, please contact our American distributor by the following address.”). In addition, the final agreement between PSI and SAS, dated November 1, 2007 stated that PSI was responsible for "quality control and complaints." But the relevant time period for determining trademark ownership is prior to that tithe; specifically the three years that Nahshin was selling to SAS which, in turn, was selling Nahshin’s NIC OUT marked filters to PSI. It is the first NIC OUT sales activity — and whether at that time the brand name was more closely associated with Nahshin and P. Service or PSI — that determines which patty was truly the bona fide user in the ordinary course of trade. In this regard, the summary judgment record as a whole points persuasively in favor of Nahsh-in.
. In its opposition to Nahshin’s motion-for summary judgment, PSI attempts to dispute the fact that Nahshin made design changes to the cigarette filters but its citation to record evidence — Nahshin’s Deposition at 41:5-42:12—actually supports rather than refutes Nahshin’s contention that he made design changes and responded to problems with the product design. Although Nahshin testified at one point that he did not make any design changes to the filter-he initially procured from Burda Ticaret, it appears that he later did have design input when he shifted his business from Burda Ticaret to Atash. See Nahshin Depo. at 27-30.
. The Lanham Act provides that "evidence of the right to use the registered mark shall be subject to proof of infringement ... and shall be subject.to ... defenses or defects" including "equitable principles, including laches, es-toppel, and acquiescence.” 15 U.S.C. § 1115(b).
. See, e.g., Sara Lee Corp. v. Kayser-Roth Corp.,
. PSI points out that because Nahshin had previously applied for registration of the NIC OUT mark — an application which was denied at the time — he would know the import of PSI’s trademark application number. See Ex. V at 8 (2003 trademark application).