United States District Court, W.D. Missouri, Western Division
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY
case arises from a long-running dispute over trademarks.
Plaintiff Hallmark Industries, Inc.
(“Plaintiff”), is a New Jersey corporation
engaged in the manufacture, marketing, sale, and wholesale
distribution of jewelry. Defendant Hallmark Licensing, LLC
(“Defendant”), is a wholly owned subsidiary of
Hallmark Cards, Inc., which owns and licenses various marks
that include the HALLMARK mark and Crown logo.
is appealing a decision of the Trademark Trial and Appeal
Board (“TTAB”) denying Plaintiff’s
applications to use two trademarks, HALLMARK and HALLMARK925,
on its jewelry because the marks were likely to be confused
with two of Defendant’s registered marks, HALLMARK
DIAMONDS and HALLMARK RINGS. Plaintiff argues the
TTAB’s ruling is incorrect because it actually owns the
HALLMARK DIAMONDS and HALLMARK RINGS marks. Plaintiff is
suing for an order vacating the TTAB’s decision and a
declaratory judgment that it owns the HALLMARK DIAMONDS and
HALLMARK RINGS marks. Plaintiff is also suing Defendant for
various related tort and infringement claims.
denies the allegations and seeks a declaratory judgment that
it is the rightful owner of the HALLMARK DIAMONDS and
HALLMARK RINGS trademarks. Defendant has also filed
counterclaims for trademark infringement, dilution, and
common law unfair competition.
before the Court are the parties’ cross motions for
partial summary judgment (Docs. 92, 95). Because the
undisputed material facts demonstrate Defendant owns the
HALLMARK DIAMONDS and HALLMARK RINGS marks, Defendant’s
motion is GRANTED and Plaintiff’s motion is DENIED.
moving party is entitled to summary judgment “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). The nonmoving party
may resist summary judgment by asserting affirmative
defenses, but it must support these defenses with specific
facts. Hiland Partners GP Holdings, LLC v. Nat’l
Union Fire Ins. Co., 847 F.3d 594, 601 (8th Cir. 2017).
purposes of resolving this motion, the Court finds the
material undisputed facts to be as follows.
Hallmark Licensing, LLC is a wholly owned subsidiary of
Hallmark Cards, Incorporated. Defendant owns and licenses a
large portfolio of marks, including the iconic HALLMARK mark
and Crown logo, in the United States.
Inc. (“Diastar”) was a New York corporation
wholly owned by Pramod Jain and his brother, Pradip Jain.
Diastar was in the business of selling jewelry in the U.S.
wholesale market for subsequent resale. In 1988 Diastar
purchased a HALLMARK trademark for jewelry, including
registrations and goodwill, from Hallmark Jewelry, a company
which was owned by Katy Industries. Diastar thereafter
maintained common law rights in the HALLMARK mark for use in
conjunction with jewelry.
2003, Diastar filed applications with the U.S. Patent and
Trademark Office (“PTO”) to register HALLMARK
DIAMONDS and HALLMARK RINGS for jewelry, claiming a date of
first use in 1988.
these applications were pending, Diastar entered into a
financing and loan agreement with Rosenthal & Rosenthal,
Inc. (“Rosenthal”). To secure repayment of
millions of dollars Rosenthal loaned to Diastar, Diastar
granted Rosenthal a security interest in all of its assets,
including all existing and future registered and unregistered
trademarks, pending trademark applications, and goodwill
associated therewith. This financing and loan agreement is
governed by New York law.
February 15, 2008, Pradip Jain, as vice-president of Diastar,
executed a document titled “Bill of Sale and Assignment
of Trademark Application” on behalf of Diastar that
purportedly assigned the HALLMARK DIAMONDS and HALLMARK RINGS
marks and related applications, together with all goodwill
associated therewith, to Monica Jain (Pradip Jain’s
spouse) and Anita Jain (Pramod Jain’s spouse). This
purported assignment was made without Rosenthal’s
knowledge, approval, or consent,  and the purported assignment
was not recorded with the PTO until September 4, 2012.
March 17, 2008, Pradip Jain, as vice-president of Diastar,
filed for Chapter 11 bankruptcy protection for Diastar in the
U.S. District Court for the District of New
Jersey. Diastar did not list either the HALLMARK
mark as an asset in its bankruptcy schedules, or the February
15, 2008, purported assignment of the HALLMARK RINGS and
HALLMARK DIAMONDS marks (and related applications) from
Diastar to Anita Jain and Monica Jain.
later, on April 23, 2008, Plaintiff Hallmark Industries, Inc.
was incorporated in New Jersey. It sells jewelry products
wholesale to retailers. The Jain brothers’ wives each
own 50 percent of the company. Initially, Monica Jain’s
husband, Pradip Jain, was Plaintiff’s president. In
2016, Monica Jain became president. Diastar never transferred
its common law rights in the HALLMARK mark for use in
conjunction with jewelry to Plaintiff. Plaintiff, however,
alleges that Diastar assigned its trademark applications for
the HALLMARK Marks (HALLMARK, HALLMARK DIAMONDS, and HALLMARK
RINGS) to Plaintiff.
secured creditor, Rosenthal filed a Proof of Claim, and the
Bankruptcy Court allowed the claim, deeming it a first
priority, secured lien on all of Diastar’s assets, up
to $5, 754, 117.08. This claim survived Diastar’s
Chapter 7 bankruptcy proceedings. Diastar never repaid its
debt to Rosenthal in full, and the outstanding unpaid balance
due to Rosenthal was not released or forgiven. Rosenthal
maintained its security interest, and it regularly filed UCC
continuations through April 2014.
HALLMARK DIAMONDS and HALLMARK RINGS marks were registered to
Diastar on January 4, 2011, both claiming a date of first use
in 1988. On April 24, 2008, the day after Plaintiff was
incorporated, Plaintiff filed an application with the PTO to
register HALLMARK in class 14 for use in conjunction with a
wide variety of jewelry items. The HALLMARK application claimed
April 23, 2008 (the date Plaintiff was incorporated), as the
date of first use.
February 9, 2009, Plaintiff filed an application with the PTO
to register HALLMARK925 in class 14 for use in conjunction
with similar jewelry items. The HALLMARK925 application
claimed May 30, 2008, as the date of first use and contained
no limitations regarding trade channels or classes of
March 6, 2012, the PTO trademark examiner issued an office
action refusing Plaintiff’s application to register
HALLMARK because it was confusingly similar to the registered
marks HALLMARK DIAMONDS and HALLMARK RINGS. In response, on
September 4, 2012, Plaintiff filed documents with the PTO
stating that the HALLMARK DIAMONDS and HALLMARK RINGS marks
had been assigned by Diastar in February 2008 to Monica Jain
and Anita Jain, and ...