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4993385.1 Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
AMSTER, ROTHSTEIN & EBENSTEIN LLPANTHONY F. LO CICERO, NY [email protected] ROTHSTEIN, NY [email protected] J ASON SBN2384832 (Pro Hac Vice Application Forthcoming)
[email protected] ESSICA CAPASSO, NY [email protected] Park AvenueNew York, NY 10016Telephone: (212) 336-8000Facsimile: (212) 336-8001(Admitted Pro Hac Vice)
HANSON BRIDGETT LLPGARNER K. WENG, [email protected] S. WALTERS, SBN267262
[email protected] Market Street, 26th FloorSan Francisco, California 94105Telephone: (415) 777-3200Facsimile: (415) 541-9366
Attorneys for Plaintiffs MACY'S, INC. andMACYS.COM, INC.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
MACY'S, INC. and MACYS.COM, INC.,
Plaintiffs,
v.
STRATEGIC MARKS, LLC,
Defendant.
Case No. CV 11-6198 SC
PLAINTIFFS' REPLY IN SUPPORT OFMOTION FOR PARTIAL SUMMARYJUDGMENT
Date: March 15, 2013Time: 10:00 a.m.Crtm: 1J udge: Honorable Samuel Conti
STRATEGIC MARKS, LLC,
Counter-Claimant,
v.
MACY'S, INC. and MACYS.COM, INC.
Counter-Defendants.
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4993385.1 -i- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
TABLE OF CONTENTS
Page
I. PRELIMINARY STATEMENT ................................................................................. 1II. ARGUMENT ........................................................................................................... 4
A. Defendant Did Not Use the Marks for "Retail Store" Services ...................... 4B. Defendant Did Not Use the Marks in Commerce for "Online Retail
Store" Services ............................................................................................. 6
1. Rearden Case Supports the Plaintiffs' Position ................................. 62. Ms. Horwich Was Not Produced for Deposition ................................. 73. Invoices Do Not Reflect the Defendant or the Marks at Issue ........... 84. Defendant's Own Admission Supports Plaintiffs ................................ 85. Office Action ...................................................................................... 9
III. CONCLUSION ...................................................................................................... 10
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4993385.1 -ii- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
TABLE OF AUTHORITIES
Page
CASESBrookfield Communs., Inc. v. West Coast Entertainment Corp.
174 F.3d 1036 (9th Cir. 1999) ................................................................................. 6
Chance v. Pac-Tel Teletrac Inc.242 F.3d 1151 (9th Cir. 2001) ................................................................................. 7
Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP311 F. Supp. 2d 690 (M.D. Tenn. 2004) ................................................................. 5
In re Ancor Holdings79 U.S.P.Q. 2d 1218 (T.T.A.B. 2006) ................................................................... 10
In re Bose Corp.580 F.3d 1240 (Fed. Cir. 2009) ............................................................................. 11
In re Retail Royalty Company2010 TTAB LEXIS 417, at *2 (T.T.A.B. Nov. 23, 2010) ........................................... 5
Rearden LLC v. Rearden Commerce, Inc.683 F.3d 1190 (9th Cir. 2012) ............................................................................. 6, 7
Stillwell v. RadioShack Corp.676 F. Supp. 2d 962 (S.D. Cal. 2009) ..................................................................... 5
STATUTES15 U.S.C. 1127 ............................................................................................................... 1
37 C.F.R. 2.76(c) ............................................................................................................ 1
RULESFed. R. Civ. P. 56(c)(2) ...................................................................................................... 3
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4993385.1 -1- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
Plaintiffs Macys, Inc. and Macys.com, Inc. (individually and collectively, Plaintiffs
or Macys) submit this reply and supplemental declaration of Anthony F. Lo Cicero in
further support of their motion for partial summary judgment.
I. PRELIMINARY STATEMENT
Plaintiffs motion is based on the uncontroverted evidence that defendant Strategic
Marks, LLC (Defendant) did not use its registered marks in commerce1 for any of the
services specified in its Registrations.2 The facts and law articulated in Defendants
opposition brief and declarations do not show otherwise.
Defendant filed four separate Statements of Use in its intent-to-use service mark
applications, thus amending them to applications based on actual bona fide use in
commerce. Defendant signed Declarations under oath that it had used its marks in
commerce on each and every one of the services listed in the application and submitted
purported actual specimens of such use. 37 C.F.R. 2.76(c). The law is clear that if
Defendant had not yet used the mark in commerce for all of the services specified in its
registrations on the dates it filed its Statements of Use, each listed service which was
wrongly alleged must be canceled from the registration. Furthermore, in cases such as
this where none of the listed services were actually used in commerce as of the date of
the filing, the Registration is incurably void ab initio.
With respect to each and every one of the various types of retail store services
alleged in its Statements of Use, Defendant does not (and cannot) refute the unequivocal
1Use in commerce for a service mark is defined in the Trademark Act as used or displayed in
the sale or advertising of services and the services are rendered in commerce . . . (emphasisadded). 15 U.S.C. 1127.2Defendants specified services for each Registration which are the subject of this motion areidentical, as follows:
retail department store and on-line retail department store services;retail and on-line retail clothing boutiques;retail and on-line retail clothing stores;retail and on-line retail apparel stores;retail and on-line retail store services featuring clothing and fashion accessories.
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4993385.1 -2- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
deposition testimony of its principal, Ellia Kassoff, and effectively admits that it has never
used any mark in connection with a physical brick and mortar store. So instead,
Defendant argues that the definition of retail store is vague enough that such physical
stores are not required. Defendant calls for the suspension of all common sense (and
ignores numerous cases and its own web site) in trying to convince the Court that retail
stores need not be physical brick and mortar stores, thus attempting to render
meaningless the differences in services in its own Registrations and the law
differentiating between retail store and online retail store.
With respect to the various online retail store portions of its registrations,
Defendant argues that despite the uncontroverted fact that it never sold a single product
in its purported online retail stores for the marks at issue, it nonetheless engaged in
use in commerce when the totality of the circumstances surrounding its activities are
considered.
The facts and law asserted by Defendant to show this totality are specious and
cannot withstand judicial scrutiny. First, Defendant asserts that it employed a supply
chain management method for online sales where goods are manufactured upon order.
But Defendant submits no evidence of such a method, and attempts to gloss over the
crucial fact that no such goods were ever manufactured since no goods were ever
ordered or sold through the alleged virtual stores.
Defendant relies in part on the purported activities of Helen Horwich, asserted to
be Defendants Merchandising Manager. (Dft. Opp. Brief at iv). However, Defendant
submits no evidence of any such activities. Moreover, Defendant should not be allowed
to rely on Ms. Horwichs alleged activities because Defendant has prevented Plaintiffs
from taking her deposition.3 Specifically, on February 19, 2013, less than 48 hours
before her scheduled deposition in Southern California (notably, both the date and the
3If not for the refusal to produce Ms. Horwich at her scheduled deposition, her testimony wouldhave been taken in time to be considered in this Reply brief.
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4993385.1 -3- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
place had been selected by Defendant), Defendants counsel unilaterally canceled Ms.
Horwichs deposition after all arrangements, flights, hotel reservations, and court reporter
were scheduled. The cancellation had nothing to do with the deponents availability (as it
had been the first time Defendant canceled the deposition of Ms. Horwich, in November
2012, due to an alleged illness). Rather, the purported reason was that Strategic Marks
has limited resources.4 (Lo Cicero Decl. Ex.U at 2).5
Notwithstanding the failure to produce Ms. Horwich for deposition, the ostensible
evidence submitted in support of Defendants use of the marks in commerce for online
services would not be admissible at trial, and therefore could not be said to raise a triable
issue of fact. Fed. R. Civ. P. 56(c)(2). Defendant submits alleged invoices from a
supplier to support its argument; but they do not reflect use of any of the marks and they
are not even issued to Defendant. There also is no supporting declaration or sworn
testimony as to what the invoices are or as to what Defendants alleged supply chain
management method entailed. However, even if Defendant could overcome these
evidentiary concerns and Defendants unsupported statements in the brief are accepted
as true, such activities still did not rise to the level of rendered services under the
marks.
Defendant also asserts that its sale of a single t-shirt on its Retro Department
Stores site, bearing a different department store brand than the ones at issue here,
shows that it had the ability to make sales in the relevant online stores. This, however, is
not the standard for use in commerce and is insufficient, even under the totality of the
circumstances test, to raise a triable issue of fact.
4Plaintiffs are prepared to seek sanctions against Defendant, including granting Plaintiffs motionin full, and an award of fees and costs incurred by Plaintiffs due to the last minute depositioncancellation. At the very least, the Court should infer that Ms. Horwichs testimony would nothave supported Defendants allegations.5Plaintiffs submit at Lo Cicero Decl. Ex. U the correspondence between Plaintiffs andDefendants counsel regarding the last minute cancellation of the Horwich deposition.
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4993385.1 -4- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
With respect to the issue of the USPTO office action for the Abraham and Straus
mark, Defendant is incorrect that the USPTO rejection was solely based on the specific
specimen of use and is, therefore, not relevant to all of the registrations at issue. Rather,
this was just one basis of the rejection. After Defendant submitted new specimens using
the words Abraham and Straus (not A & S) to the USPTO following the rejection, the
examiner issued another Office Action rejecting Defendants application, again finding
that the proposed mark on the website did not identify the source of any online retail
services, that the services were not yet being rendered in commerce, and that the only
service mark displayed in the specimens is Retro Department Stores, not each of the
Registered marks. Clearly, Defendants website does not constitute use of the marks for
online retail store services. Defendant has not refuted this.
Finally, Defendants tortured logic in concluding that the mere offer for sale of
products, even absent a sale, is enough to constitute use in commerce of online services,
is unsupported by authority and conflicts with Defendants own statements in its brief.
II. ARGUMENT
A. Defendant Did Not Use the Marks for "Retail Store" Services
Plaintiffs set forth iron-clad evidence in their opening brief that Defendant never
used the marks in connection with physical brick and mortar retail stores,6 and Defendant
tacitly concedes this. Defendant argues instead that Plaintiffs failed to provide a
cognizable definition of the specified services, and that the words physical and brick
and mortar are nowhere to be found in the specified services. (Dft. Opp. Brief at 2-3).
Aside from the obvious -- that in these days of the internet, retail stores are
referred to as brick and mortar stores -- there are numerous cases where retail stores
are defined as brick and mortar stores, including cases where brick and mortar retail
stores are distinguished from internet or on-line retail stores. See, e.g., Stillwell v.
6Dkt. No. 55, pages 10-12.
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4993385.1 -5- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
RadioShack Corp., 676 F. Supp. 2d 962, 972 (S.D. Cal. 2009) (court distinguishes
between company-owned retail stores -- defined as brick and mortar stores -- and
internet retailers for purposes of interpreting a franchise agreement); Gibson Guitar Corp.
v. Paul Reed Smith Guitars, LP, 311 F. Supp. 2d 690, 707 (M.D. Tenn. 2004) (court
recognized that retail stores were brick and mortar stores required for authorized
retailers, and distinguished from internet retailers).
The Trademark Trial and Appeal Board, in a published yet non-precedential
decision, has also distinguished between retail store services and online retail store
services, referring to the retail store services as brick and mortar retail store services.
For example, in In re Retail Royalty Company, the applicant sought to register its mark
for the following services: retail store services and online retail store services featuring
clothing and clothing accessories, footwear, headwear . . . . In distinguishing specimens
of use proffered for both retail store services and online retail store services, the TTAB
stated: [w]e first shall consider applicants proffered specimen for its retail store services
. . . featuring clothing . . . , which we deem to be what are commonly referred to as brick-
and-mortar retail store services. In re Retail Royalty Company, 2010 TTAB LEXIS 417,
at *2 (T.T.A.B. Nov. 23, 2010) (not precedential).
It is also obvious from Defendants own description of services provided to the
USPTO (e.g., retail department store and on-line retail department store services) that
the services include both traditional brick and mortar stores as well as on-line virtual
stores. The conjunctive and must have a meaning -- in this case, that the two elements
on either side of the term are not the same.
Finally, Defendants own website demonstrates that Defendants services were to
include an online virtual mall as well as brick and mortar stores. Under the heading
The Plan, Defendant states:
Youll see these stores first as part of this nostalgic virtualmall. Then we plan to branch out with unique accessoriesat small boutiques, followed by exclusive apparel by up andcoming designers, and then ultimately with actual Brick
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4993385.1 -6- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
and Mortar stores throughout the United States with a fullline-up of products. (Emphasis added.)
(Dkt. No. 56-2, Lo Cicero Decl. Ex. M).
The inevitable conclusions are that (i) Defendants argument that the specified
retail store services were not cognizably defined is without merit and unavailing; and (ii)
Defendant has not used the marks for retail stores in commerce.
B. Defendant Did Not Use the Marks in Commerce for "Online RetailStore" Services
1. Rearden Case Supports the Plaintiffs' Position
Once again, the Defendant does not refute the incontrovertible evidence that there
has been no rendering of any services under the marks at issue. Instead, Defendant
argues that the Court must consider a totality of the circumstances to determine
whether Defendant made a use in commerce of the marks for online services. In support
of this position, Defendant relies on Rearden LLC v. Rearden Commerce, Inc., 683 F.3d
1190 (9th Cir. 2012). However, Rearden is not apposite because it analyzes the use in
commerce issue from the perspective of determining priority of rights to the mark, which
is different than a determination of whether there is use in commerce for purposes of
registration.
Nevertheless, even ifRearden were to be followed, it confirms that the specified
services must actually be rendered in commerce for there to be use in commerce. In
quoting Brookfield Communs., Inc. v. West Coast Entertainment Corp., the Rearden court
recognizes that [t]he Lanham Act grants trademark protection only to marks that are
used to identify and to distinguish goods or services in commerce -- which typically
occurs when a mark is used in conjunction with the actual sale of goods or services.
Rearden, 683 F.3d at 1204 (quoting Brookfield Communs., Inc. v. West Coast
Entertainment Corp., 174 F.3d 1036, 1051 (9th Cir. 1999)) (emphasis added).
While stating that a lack of sales is not dispositive in determining whether a party
has established use in commerce, the Rearden court did recognize that there is a very
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4993385.1 -7- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
high standard to show use in commerce when there are no sales. Rearden, 683 F.3d at
1205. Thus, while not dispositive, a lack of sales is highly relevant. The court quoted
Chance v. Pac-Tel Teletrac Inc. and that courts determination that mailing 35,500
postcards, which generated only 128 telephone responses and no sales, was insufficient
to raise a triable issue of fact as to use in commerce. Rearden, 683 F.3d at 1205;
(quoting Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151, 1159-60 (9th Cir. 2001)).
As discussed below, Defendant submitted five irrelevant invoices, website screen
shots deemed insufficient by the USPTO, unsupported allegations of business methods,
and canceled a deposition with a purported manager referred to in the opposition brief.
Consequently, even if this Court were to consider a totality of the circumstances in
making its determination regarding use in commerce of Defendants registered marks,
Defendants evidence is wholly deficient and does not raise any triable issue of fact.
2. Ms. Horwich Was Not Produced for Deposition
To support its totality of the circumstances argument, Defendant states that [t]o
further develop its merchandise selection, Strategic Marks employed the services of
Helen Horwich as Merchandising Manager (Ashurov Decl. Ex. 1). (Dft. Opp. brief at iv).
However, Plaintiffs never had the chance to test this assertion because Defendant
unilaterally canceled Ms. Horwichs deposition at the 11th hour. This cancellation
deprived Plaintiffs of the opportunity to explore Defendants purported merchandising
efforts and supply chain method. In email correspondence regarding the cancellation,
Defendants counsel stated Plaintiffs are not likely to get very much, if any, information
from an elderly lady that it did not already obtain during Strategic Marks deposition. (Lo
Cicero Decl. Ex. U). Defendants unilateral decision of what Plaintiffs may or may not get
from Ms. Horwichs deposition is of no significance. Further, this so-called elderly lady
with no information is the person purportedly managing Defendants merchandising
efforts. Defendant cannot have it both ways -- it cannot on one hand rely on Ms. Horwich
to raise a question of fact under a totality of the circumstances scenario, yet then on the
other hand say that she does not have anything valuable to offer and cancel her
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4993385.1 -8- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
deposition.
3. Invoices Do Not Reflect the Defendant or the Marks at Issue
Defendant points to its alleged supply chain management method and online
sales fulfillment by a pre-contracted vendor (Dft. Opp. Brief at 5) to support its use in
commerce argument. However, purported evidence of these activities submitted by
Defendant is illusory. With respect to its purported supplier, Defendant provides five
invoices. (Dkt. No. 65, Kassoff Decl. Ex. F). However, not one of these invoices was
issued to Defendant. They were to entities called Astro Pop, LLC and Leaf Brand LLC.
These are believed to be entities that market goods (not even services as are involved in
this case) under brands which are not even involved in this case. (Lo Cicero Decl. Ex. V;
Kassoff Depo. at 25). Significantly, the invoices do not even mention any of the marks at
issue in this case, but all appear to be for activities related to these other entities.
Further, Mr. Kassoffs Declaration does not substantively discuss these invoices, or attest
to any facts about them. Thus, this evidence does not show any transaction by the
Defendant involving any mark in this case. Thus, there is no actual evidence of any such
supply chain management method or pre-contracted vendor.
4. Defendant's Own Admission Supports Plaintiffs
Defendant seeks to define online retail store services through a tortured logic
that ends up contradicting Defendants own subsequent statement. First, Defendant
quotes the definition of retail from the dictionary: to sell in small quantities directly to
the ultimate consumer. (Dft. Opp. Brief at 3) (Emphasis added.). Then, Defendant goes
on to extrapolate and states the following:
Strategic Marks contends that on-line means connectedto, served by, or available through a system and especially acomputer or telecommunications system (as the Internet).Thus, Strategic Marks submits that online retail servicesmeans selling in small quantities directly to consumersthrough the Internet, and online retail store servicesmeans providing a virtual store wherein goods are offeredfor sale in small quantities to ultimate consumers via theInternet.
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4993385.1 -9- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
(Dft. Opp. Brief at 3).
So, Defendant went from retail, which is to sell, to online retail services, which
means selling, to online retail store services, which somehow means a virtual store where
goods are offered for sale. How Defendant made the leap of logic from selling to offering
for sale is not explained. Moreover, in the very next sentence, Defendant states that [a]s
explained in section 2(c) below, Strategic Marks opened virtual retail stores in which
goods are sold in small quantities to ultimate consumers, thereby rendering online
retail store services. (Dft. Opp. Brief at 3). Not only does this contradict Defendants
prior statement (offered for sale vs. sold), but it is untrue. It is undisputed that
Defendant has never sold a single good or service under the marks at issue in this
motion. Thus, by Defendants own admission, its failure to make sales constitutes a
failure to render services.
5. Office Action
Defendant argues that the Abraham and Straus Office Action is wholly
irrelevant because it was directed to a specific specimen of use. (Dft. Opp. brief at 7).
However, this ignores that the deficient specimen (A & S as opposed to Abraham and
Straus) was only one aspect of the rejection. The rejection was also based on the fact
that the services were not yet being rendered in commerce as required under the Aycock
case and other authorities, and that the use of the proposed mark on the website did not
identify the source of any online retail services.
The fact that the rejection was based on much more than simply the manner in
which the Abraham and Straus mark appeared was confirmed by the subsequent office
action dated March 9, 2012. (Lo Cicero Decl. Ex.W). After Defendant corrected the way
the mark appeared on the website and submitted new specimens, the examiner once
again rejected Defendants application. The rejection states as follows:
While the first web page submitted references a retrodepartment store, it does not show use of the mark inconnection with any actual store services. This isemphasized by the second submitted specimen. This
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4993385.1 -10- Case No. 11-6198 SCPLTFS' REPLY IN SUPPORT OF MOTION FOR PARTIAL SUMMARY J UDGMENT
specimen is a web page devoted to the ABRAHAM ANDSTRAUS store in particular. The contents of this page areas follows: historical facts about the ABRAHAM ANDSTRAUS department store, video links which appear to befor old commercials advertising the store, and a t-shirt for
sale that has ABRAHAM AND STRAUS written across thefront of it. As shown on this page, the applied for marksimply fails to show use in connection with any retailstore services. The mark as it appears on the page isnot used as a source indicator for any services, butappears only as part of informational matter about the oldABRAHAM AND STRAUS department store. The other useof the mark on the page is as decoration for the t-shirt;however, providing a t-shirt with the mark on it isinsufficient to show use as a source indicator for retailstore services.
(Lo Cicero Decl. Ex. W at 3).
Thus, the bottom line is that Defendants use of the marks on the Retro
Department Stores website does not constitute service mark use of the marks in the
registrations. This is applicable to all of the marks shown on the website as Defendants
web site makes similar use of each and every one of the subject marks.
Defendants citation to the In re Ancor Holdings decision is unavailing and does
not overcome this deficiency. See In re Ancor Holdings, 79 U.S.P.Q. 2d 1218 (T.T.A.B.
2006). In In re Ancor Holdings, the TTAB addressed an issue of semantics as to whether
the mark in question functioned to identify the source of goods as opposed to services.
In that case the applicant did not even offer any goods for sale, but the specimen referred
to tools to be used in rendering services. In re Ancor Holdings has nothing to do with
the present situation where, as the examiner has recognized, t-shirts bearing the marks
are offered for sale by Defendant, but the marks are not used to indicate the source of
any department store services.
III. CONCLUSION
In accordance with the above and with Plaintiffs original brief and supporting
papers, Plaintiffs respectfully request that their motion for partial summary judgment be
granted, that the Court dismiss Defendants first and fifth counterclaims with prejudice,
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4993385.1 -11- Case No. 11-6198 SC
and that the Court order cancellation of THE BROADWAY Registration, THE BON
MARCHE Registration, and the ROBINSONS Registration.7 In addition, Plaintiffs
respectfully request that the Court find that Defendant did not make use in commerce of
the ABRAHAM AND STRAUS mark, and Defendant does not have the right to register
the mark.
DATED: February 22, 2013 HANSON BRIDGETT LLP
By: /s/ Christopher S. WaltersGARNER K. WENG
CHRISTOPHER S. WALTERSAttorneys for Plaintiffs MACY'S, INC. andMACYS.COM, INC.
7In the alternative, if the Court finds that Defendant has used the marks in commerce for some ofits specified services, Plaintiffs respectfully request that the Registrations be appropriatelyrestricted to reflect only those services for which the marks are being used. In re Bose Corp., 580F.3d 1240, 1247 (Fed. Cir. 2009).
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