Nasalok Coating Corporation v. Nylok Corporation

522 F.3d 1320 (Fed. Cir. 2008)

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Nature of the Case

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Facts

P and D are engaged in business related to self-locking fasteners using nylon locking elements. D applies nylon coatings to self-locking fasteners for use in industrial applications. D does business primarily in Korea and other parts of Asia, its products are purchased by many companies based in the United States. P, a U.S. corporation, manufactures and sells self-locking fasteners. P is the owner of a federal trademark. P filed a complaint against D alleging infringement of several trademarks. D failed to enter an appearance, and the district court entered a default judgment. Five months after the default judgment, D filed a petition to cancel the mark in that the registered mark is invalid because it is functional, a phantom mark, descriptive, generic, not distinctive, and ornamental; that P's use has not been substantially exclusive; and that P fraudulently obtained the mark by stating in its amended application that the mark had become distinctive of P's goods through substantially exclusive and continuous use in interstate commerce for five years. P moved for summary judgment, arguing that D was barred, under the doctrine of res judicata. The Board granted summary judgment in favor of P. The Board held that the doctrine of claim preclusion barred D's cancellation petition. The Board determined that the infringement action and the cancellation petition involved the same parties, that the infringement action had been a final judgment on the merits, and that the cancellation petition 'arose out of the same transactional facts as those present in the civil action,' because it was 'an attack on the registration that was adjudicated in the prior case.' D appealed.