Precedential 19: TTAB Grants Bayer's Petition for Cancellation Of FLANAX Registration Under Section 14(3)

In a case of first impression, the Board granted Bayer's petition to cancel Belmora's registration for the mark FLANAX for "orally ingestible tablets of Naproxen Sodium for use as an analgesic," on the ground that the mark is being used by Belmora to misrepresent the source of its goods, in violation of Section 14(3) of the Trademark Act. The Board found that the record evidence "readily establishes blatant misuse of the FLANAX mark in a manner calculated to trade in the United States on the reputation and goodwill of petitioner’s mark created by its use in Mexico." Bayer Consumer Care AG v. Belmora LLC, Cancellation No. 92047741 (April 17, 2014) [precedential].



Belmora's FLANAX
Because Bayer could not show use of the FLANAX mark in the United States, the Board, in a prior ruling, dismissed its claims of likelihood of confusion and fraud. Bayer Consumer Care AG v. Belmora LLC, 90 USPQ2d 1587 (TTAB 2009) [precedential]. [TTABlogged here]. That same ruling also dismissed Bayer's claim of violation of Section 6bis of the Paris Convention because the Paris Convention is not self-executing and does not afford an independent cause of action for parties in Board proceedings.

Standing: Belmora challenged Bayer's standing at every stage of the proceeding, pointing out that Bayer does not own a registration for the mark FLANAX in the United States, and has not used and does not plan to use the mark here. In short, Belmora asserted, no use means no trademark rights. Bayer responded that Section 14 of the Trademark Act imposes no use requirement, in contrast to  Section 2(d).

Bayer established ownership of a Mexican registration for the mark FLANAX for pain relievers, and that it licenses its corporate affiliate to sell the product under that mark in Mexico. The Board found that Bayer met the CAFC's liberal standard for standing because it established that "it has an interest in protecting its Mexican FLANAX mark."

If respondent is using the FLANAX mark in the United States to misrepresent to U.S. consumers the source of respondent’s products as petitioner’s Mexican products, it is petitioner who loses the ability to control its reputation and thus suffers damage. *** [T]he record in this case clearly establishes that the reputation of the Mexican FLANAX mark does not stop at the Mexican border.

Section 14(3) Under Section 14(3) of the Trademark Act, a party may petition to cancel a registration of a mark if the mark "is being used by, or with the permission of, the respondent so as to misrepresent the source of the goods or services on or in connection with which the mark is used." The petitioner must show that respondent took steps to deliberately pass off its goods as those of petitioner.

The Board observed that, "although the facts before us present a matter of first impression, they do not present a close case." It found that Belmora"knowingly selected the identical mark FLANAX, used by petitioner's Mexican licensee on naproxen sodium-based painkillers, for use in the United States on the same type of goods."  The Board pointed to the fabrication of documents by, and untruthful testimony of, Belmora's founder regarding the origin of its FLANAX mark, the substantial copying of the FLANAX logo and packaging used in Mexico, and perhaps most importantly Belmora's repeated invocation of the reputation of Bayer's FLANAX mark when marketing its own FLANAX product in the United States - which the Board deemed an admission that Bayer's FLANAX mark "is known among the U.S. retailers and Hispanic consumers to whom respondent markets its products."

Belmora asserted that, because its own name and not Bayer's appears on its product, it could not have misrepresented the source of the product. The Board disagreed.

Respondent .. need not use the Bayer name to affirmatively misrepresent the source of its FLANAX-brand products. Respondent purposely achieved the same result by not only copying petitioner’s mark and logo – and, for several years, significant aspects of its packaging – but also by repeatedly holding itself out as the source in the United States of the product sold for decades under the same mark in the bordering country of Mexico.

Finally, Belmora maintained that it changed its packaging and discontinued its attempts to link its FLANAX product to Bayer's product, but the Board found that, even if those assertions were true, Belmora's "continued use of the FLANAX mark, coupled with its earlier deceptive marketing over several years as it built its business, constitutes misrepresentation of the source of respondent’s goods within the meaning of Section 14(3)."

And so the Board granted the petition for cancellation.

Read comments and post your comment here.

TTABlog note:  Wow! What would happen if Bayer brought a civil action in an attempt to enjoin Belmora's use of FLANAX? The courts in the United States do not recognize the "well-known  mark" basis for relief (but see Grupo Gigante v. Dallo), so what claim would it have? What if Bayer started using FLANAX in the United States. Could Belmora stop it? And what if a third-party began using FLANAX?

Marty Schwimmer, my go-to guy on these inter-jurisdictional trademark use issues, provides his commentary here at the Trademark Blog, in a post entitled "Bayer v Belmora (FLANAX): Is This The First TTAB 'Reputation Without Use' Case?"

Text Copyright John L. Welch 2014.

PTO Publishes Precedential Director's Ruling Reversing Abandonment Refusals

For the first time in years, the USPTO has published a precedential ruling of the Director: In re P.T. Polymindo Permata, 109 USPQ2d 1256, 1257-58 (Dir. USPTO 2013), in which the Director, exercising supervisory authority under Trademark Rule 2.146(a)(3), reversed the holding of abandonment in two applications. The Director found that applicant had substantially complied with Rule 2.65(b) by providing unverified but otherwise acceptable substitute specimens in its requests for reconsideration and then the necessary verifications on petition.

The Director found no clear error in the examining attorney's deeming the applications abandoned when applicant failed to file complete responses to the final refusals. Applicant had submitted, with requests for reconsideration, substitute specimens but failed to include appropriate verifications. However, the Director ruled, applicant had substantially complied with the examining attorney's requirements and had made a good faith attempt to advance prosecution. The preferred course of action for the examining attorney would have been to allow applicant 30 days within which to provide the required verifications. See Rule 2.65(b) and TMEP 715.03(a)(2)(c). Moreover, with its petition to the Director, applicant provided accompanying declarations under Rule 2.20.

The Director therefore exercised her supervisory authority under Rule 2.146(a)(3) to grant the petitions. The applications were returned to the examining attorney for consideration of the substitute specimens and supporting declarations.

Read comments and post your comment here.

Text Copyright John L. Welch 2014.

Test Your TTAB Judge-Ability: Is "N2WINES" Merely Descriptive of Wine Sold in Kegs?

N2Wines applied to register the mark N2WINES for "wine sold in kegs," but the PTO refused registration under Section 2(e)(1). The examining attorney deemed the mark merely descriptive of the goods, maintaining that "N2" is the symbol for nitrogen, an inert gas used in connection with wine tapping systems. Applicant's own website stated that its wine is "pushed through a tap system similar to draft beer, by an inert nitrogen (N2) based gas blend." How do you think this came out? In re N2Wines LLC, Serial No. 85680969 (April 15, 2014) [not precedential].

The examining attorney also relied on Internet articles and advertisements referring to other wine tapping systems that use nitrogen to preserve and dispense wine. The applicant and the examining attorney were seemingly in agreement that N2 is a recognized symbol for nitrogen.

The Board, however, found that "N2" takes on a different meaning and will be perceived by consumers in a manner that is not descriptive. The record supported applicant's assertion that "N2 when used in N2WINES is a double entendre meaning 'into wines.'"

Examples of marks that have been found to be registrable double entendres include SUGAR and SPICE for bakery products, SHEER ELEGANCE for pantyhose, SHEER PERFECTION for makeup for legs, FAST'N EASY for pre-cooked meats, and HAY DOLLY for self-loading trailers for hauling bales.

Applicant submitted evidence of registered marks and domain names in which "N2" means "into": for example, Dance N2 Shape; N2 Pottery, N2 Learning, N2 Graphics, and N2WIN.

N2WINES is a double entendre meaning "into wines," which implies that consumers of applicant's goods are interested in wine. "It does not immediately convey an idea of any ingredient, quality, characteristic, feature, function, purpose or use of the goods, and thus is not merely descriptive of the goods."

The Board therefore reversed the refusal.

Read comments and post your comment here.

TTABlog comment:  Well, how did you do?

Text Copyright John L. Welch 2014.

TTAB Denies Motion to Strike Late-Filed Final Brief

In TTAB proceedings, the defendant sometimes gets confused as to when to file its brief at final hearing. Rule 2.128 says that the defendant's brief is due to be filed "not later than thirty days after the due date of the first brief." The first brief (i.e., plaintiff's brief) is due 60-days after the date set for the close of rebuttal testimony. If plaintiff's brief is served by mail, does defendant get an extra five days to file its brief under Rule 2.119(c)? No. Rule 2.119(c) is inapplicable to briefing deadlines. This point came to play in a recently ruling in Promark Brands Inc. and H.J. Heinz Company v. GFA Brands, Inc., Opposition No. 91194974. The Board, in this order, set a side the interlocutory attorney's order that had stricken defendant GFA's trial brief because it was filed six days late.

GFA mistakenly believed that Rule 2.119(c) applied, giving it five extra days to file its brief. Then it ran into problems e-filing its brief. It filed the brief at 11:10 p.m. Central Time, which was 12:10 a.m. Eastern Time. [ESTTA filing are subject to Eastern Time].

The interlocutory attorney granted Promark's motion to strike GFA's brief. GFA petitioned to the Director, which kicked the matter back to the Board for reconsideration of the interlocutory attorney's ruling. Meanwhile, GFA had requested oral argument and, in light of the order striking its brief, had asked for an extra 15 minutes to argue its case. [The case is set for oral argument at the Fordham IP Institute on April 25th (here)].

The Board noted that the time for filing GFA's brief was set by operation of Rule 2.128 and not by the date of service of Promark's brief, and so Rule 2.119(c) did not apply.

The Board looked to the Supreme Court's Pioneer decision (Pioneer Inv. Serv. Co. v. Brunswick Assoc. Ltd., 507 U.S. 380 (1993)), a five-to-four ruling, "which underscores that the question whether neglect of a matter is excusable is not easily or predictably answered." Such questions "necessarily must be left to resolution by exercise of the discretion of the Board."

The Board found no clear error in the interlocutory attorney's weighing the third Pioneer factor (the reason for the delay and whether it was within the reasonable control of the movant) heavily against GFA. Nor was there error in weighing the second factor (the length of the delay) "somewhat" against GFA.

Nonetheless, the Board may exercise its discretion to considered the additional circumstances that are "significant" in this case. The Board warned, however, that its ruling here is "based solely on the particular facts of the case, and should not be taken as an indication that a similar result would be attainable in another case that differs in any particular fact or circumstance."

The Board observed that having a full set of briefs prior to oral argument enhances the quality of the argument and may suggest issues that the Board panel should consider in its deliberations. Another factor concerned GFA's mistaken reliance on Rule 2.119(c). Similar mistaken reliance has occurred in other Board cases. The Board noted that the TBMP, in the section concerning the time for filing defendant's main brief, makes no reference to the inapplicability of Rule 2.119(c). [The Board suggested that a change to the Rules be considered, to incorporate clarifying language or cross-referencing regarding the interplay of these two Rules].

The Board therefore set aside the order striking Defendant GFA's brief. It denied the request for additional time for argument as moot.

Read comments and post your comment here.

TTABlog note:  Recently, in Pepsico, Inc. v. Jay Pirincci, Opposition No. 91187023 (April 14, 2014) [not precedential], the Board denied opposer's motion to strike applicant's brief that was filed one day late. Although the delay was unjustified, it was minimal in duration, caused no prejudice to opposer, had little impact on the proceeding, and apparently was not the result of bad faith.

Text Copyright John L. Welch 2014.

Machine Stand Configuration Lacked Acquired Distinctiveness, Says TTAB

The Board affirmed a refusal to register the product configuration shown below, for stands for industrial stirring machines, finding that applicant had failed to establish acquired distinctiveness under Section 2(f). The lack of "look-for" advertising calling attention to the "Z" shape was a major factor in the Board's decision. Netzsch-Feinmahltechnik GmbH, Serial No. 79100238 (March 25, 2014) [not precedential].

We know from Wal-Mart v. Samara Bros. that a product configuration cannot be inherently distinctive. To merit registration, the purported mark must have achieved acquired distinctiveness. In support of its Section 2(f) claim, applicant submitted marketing materials, advertisements and articles from trade publications, a declaration from a company representative, ten customer statements, and a copy of its registration for the mark ZETA.

The Board observed that, when prompted to look for the "Z" shape in applicant's design, one can recognize it, but nothing in applicant's marketing materials calls attention to the letter "Z" in any explicit way. The company declaration averred that the configuration had been in use since January 1997, and that applicant's products garnered a 35 to 40 percent share of the relevant market. But applicant's evidence did not show promotion of the specific stand configuration embodied in the applied-for mark, as opposed to touting the superiority of applicant's products in general.

The customer's declarations stated that they associated the alleged mark with applicant, but the declarations were insufficient in number to support a finding that the configuration serves as a trademark, particularly in view of the lack of look-for advertising. In short, the Board was "simply not persuaded by these statements that applicant has managed to create consumer recognition of this design as a source indicator."

The trade articles established that applicant is an industry leader, but lacking was any mention of the configuration of the goods, or that consumers associated the Z-shaped stand with applicant's products. These publications gave the Board no reason to conclude that applicant or its competitors use their product shapes as trademarks.

Finally, applicant's ownership of a registration for the word mark ZETA was of no help. Nothing in the record would lead one to conclude that the mark ZETA represents the same source indicator as the "fairly obscure, largely unmentioned shape of [applicant's] industrial milling stand."

Concluding that applicant had failed to establish acquired distinctiveness, the Board affirmed the refusal to register under Sections 1, 2, and 45 of the Trademark Act.

Read comments and post your comment here.

TTABlog comment:  Zzzzzzzzzzzz! Actually, this opinion was not that soporific. Only one Z.

Text Copyright John L. Welch 2014.

Precedential No. 18: Identity of One Party's Trial Witnesses Cannot Be Kept Secret from Other Party

Finding that Opposer Hunter Industries had established prior common-law rights in the mark PRECISION DISTRIBUTION CONTROL for irrigation sprinklers, the Board sustained its opposition to registration of the mark PRECISION for landscape irrigation nozzles and sensors on the ground of likelihood of confusion under Section 2(d). Perhaps more interesting than the Section 2(d) analysis were the Board's rulings on several evidentiary issues. Hunter Industries, Inc. v. The Toro Company, Opposition No. 91203612 (March 31, 2014) [precedential].

Evidentiary rulings: Hunter successfully moved to strike certain testimony and exhibits proffered by Applicant Toro. First, the Board excluded Toro's exhibits that were submitted on a flash drive because Rule 2.126 does not permit such submissions. The documents should have been submitted on paper or electronically via ESTTA. A CD-ROM containing two video files submitted by Toro was in acceptable form, since ESTTA is currently unable to accept video files. See, generally, TBMP Section 106.03.

However, the Board rejected the two video files because they had not been produced to Opposer Hunter during discovery. Toro did not dispute that the two videos fell withing at least one of Hunter's production requests. Toro claimed that it produced the documents as soon as it discovered them, but it offered no reason why the videos were not found sooner.

Toro submitted seven declarations from distributors of irrigation equipment [the parties' ACR agreement permitted submission of testimony by way of affidavits or declarations]. Portions of the declarations were designated "Trade Secret/Business Confidential" under the Board's Standard Protective Order, as modified by the ACR agreement. Hunter moved to strike these declarations on the ground that Toro had over-designated as confidential the identifying information for the declarants. The Board agreed with Hunter.

A party’s right to confront an adverse witness is significantly impaired when it is prevented from knowing the name, employer and location of the witness. Although opposer’s counsel was privy to the redacted information, opposer itself practices in the relevant industry and likely is familiar with some or all of the witnesses or their employers. That kind of information may be critical when considering adverse testimony, and it generally should not be kept from a party.

Such identifying information may be protectable during discovery, but not when the individual is to be named as a witness. In short, when a party chooses to rely on the testimony of a witness at trial, that party has waived the protection provided by the Protective Order to trade secret/commercially sensitive information. The Board therefore struck the seven declarations from the record.

Priority: Applicant Toro relied on the filing date of its application, June 21, 2010, as its (constructive) first use date. Toro argued that its own mark PRECISION is suggestive, but that Hunter's mark is merely descriptive. However, the record did not sufficiently support a finding that Hunter's mark, in its entirety, is merely descriptive. In any case, Hunter presented ample evidence to show that the mark had acquired distinctiveness prior to June 21, 2010. It submitted proof of continuous use of the mark for its goods since 1992, and its sales figures and marketing expenditures were "appreciable."

Likelihood of Confusion: The Board found the word "PRECISION" to be the dominant and most significant feature of Hunter's mark, since "DISTRIBUTION CONTROL" clearly describes a precise feature of the sprinklers. Toro's mark PRECISION, the Board opined, would appear to prospective customers as a shortened version of Hunter's mark. Therefore the Board found the marks to be similar in sound, appearance, connotation, and commercial impression.

The Board found the goods to be identical in part, since the parties use their respective marks on rotating nozzles for irrigating lawns. The opposed application did not contain any limitation as to channels of trade or classes of customers, and so the Board assumed that Toro's goods moved in all the normal channels, and to all classes of purchasers, for those goods. Toro's channels necessarily overlapped with those of Hunter for its nozzles.

Hunter's mark PRECISION DISTRIBUTION CONTROL may be conceptually weak, but in light of Hunter's long use, sales, and promotion of the mark, the Board found that it is entitled to protection against registration of PRECISION for overlapping and closely related goods.

The Board recognized that purchasers for the involved goods are landscape contractors who will exercise a degree of care and deliberation in deciding to make a purchase. However, even sophisticated buyers are likely to view the subjects marks as indicating a single source when they are used on identical or closely related goods.

Balancing the relevant duPont factors, the Board found confusion likely, and so it sustained the opposition.

Read comments and post your comment here.

TTABlog comment:  I'm guessing that this opinion was deemed precedential because of the evidentiary rulings, rather than the rather straightforward Section 2(d) analysis. What do you think?

Text Copyright John L. Welch 2014.

Affirming Refusal, TTAB Says "HOURS OF ENERGY NOW" Not Being Used as a Trademark

The Board affirmed a refusal to register the applied-for mark HOURS OF ENERGY NOW for dietary supplements and "energy shots," because the phrase as it appears on applicant's specimens of use, fails to function as a trademark. In re Innovation Ventures, LLC, Serial No. 85637294 (March 25, 2014) [not precedential].

Of course, a phrase or slogan is not per se unregistrable, but it must serve as a source indicator to qualify as a trademark or service mark. The critical question is how the public perceives the purported mark.

Examining Attorney Won Teak Oh contended that consumers will not see the phrase as a trademark because it appears only in conjunction with other phrases touting the characteristics of the product.

The Board scrutinized applicant's specimens of use, observing that in two of them the phrase "Hours of energy now" appears as one of a series of "bullet points" providing informational text, in less prominent position than the mark 5-HOUR ENERGY. Third-party advertising evidence confirmed that consumers understand the phrase as providing information that the product is fast acting and long lasting. Contrary to applicant's argument, the PTO need not show that the phrase is in common, everyday use.

Applicant argued that, because the Examining Attorney had withdrawn a Section 2(e)(1) mere descriptiveness refusal, the phrase must be a merely suggestive mark. But that was a nonsequitur because the phrase was not functioning as a mark at all.

In sum, the Board found that the proposed mark, as used by applicant, "merely informs prospective purchasers that applicant’s products will provide an immediate boost of energy upon consumption and that the increased levels of energy will last for several hours." It is therefore "incapable of functioning as a trademark." [Incapable? Maybe not, if used in a proper manner - ed.].

Read comments and post your comment here.

TTABlog comment: The phrase on the specimen above has an asterisk at the end. What if that were a "TM"?

Text Copyright John L. Welch 2014.

TTAB Tosses Out Fraud Claim - Insufficient Proof of Intent to Deceive the USPTO

In this cancellation proceeding, petitioner claimed that respondent had committed fraud on the USPTO when if filed its Sections 8, 9, and 15 declarations in connection with its registration for the mark shown below (translated loosely as "lucky old wang"). The declarations were signed by one Kevin Zhang as "Owner," despite the fact that he did not own the registration. Petitioner, however, did not take the testimony of Mr. Zhang or anyone else, and it failed to prove that Zhang intended to deceive the USPTO. Consequently, the Board denied the petition for cancellation. Multi Access Limited v. Wang Lao Ji Food & Beverage subsidiary, Yangcheng Pharmaceutical Stock Corp. Ltd of Guangzhou, Cancellation No. 92054959 (April 4, 2014) [not precedential].

The Board observed, once again, that fraud must be proven "to the hilt." Proof of subjective intent to deceive, although difficult to obtain, is an indispensable element of the claim. Such intent may be inferred from indirect or circumstantial evidence, but the evidence must be clear and convincing.

Mr. Zhang, an attorney who worked in California for a Chinese law firm, was Respondent's domestic representative but was not authorized to practice before the USPTO. Petitioner's theory was that Zhang knew he was not the owner of the registration and knew that he was not authorized to sign the declaration on behalf of respondent. Therefore, Respondent urged, Zheng intended to deceive the USPTO into accepting the maintenance declarations. Petitioner did not question that the mark was in use; its only claim was fraud based on Mr. Zhang's calling himself "Owner."

The Board found that the record evidence "falls short of establishing that respondent is guilty of fraud."

In response to interrogatories, Respondent stated that it did not know why Zheng had called himself "Owner." Zhang had first-hand knowledge of use of the mark in the USA. Respondent had instructed Zhang's law firm to filed the combined Section 8 & 9 document, and had fixed its seal (equivalent to a signature in China).  Respondent believed that by placing the seal on the document it was giving proper authority to the signatory. As to the Section 15 declaration, Respondent responded similarly. Petitioner provided no evidence to dispute these assertions.

The Board pointed out that a person who is authorized to verify facts on behalf of a registration owner may sign such declarations. That person may also serve as domestic representative. The fact that Mr. Zhang was not authorized to practice before the USPTO does not disqualify him from signing a verification on behalf of the registrant.

The Board agreed with Respondent that Petitioner's fraud claim was "based on inferences that are too speculative." Although his statement that he was the "Owner" of the registration was false, there was insufficient evidence to prove that Zhang intended to deceive the USPTO. The Board noted that the "owner" section of each declaration listed Respondent as the owner of the registration.

The Board therefore denied the petition for cancellation.

Read comments and post your comment here.

TTABlog note:  I don't understand how Petitioner possibly thought it could prove fraud given the evidence and the current state of fraud jurisprudence. So this is a WYHP?

Text Copyright John L. Welch 2014.

Precedential No. 17: Is PERKS Generic For Volume Discount Buying Services? Merely Descriptive?

In a somewhat complicated, yet enervating brouhaha, Coach/Braunsdorf petitioned for cancellation of a registration for the mark PERKSPOT for discount buying program services, claiming likelihood of confusion with its registered marks PERKS, Perks, and PERKSCARD for volume discount buying services. Respondent counterclaimed for cancellation of the first and third of Petitioner's pleaded registrations on the grounds of genericness, and cancellation of the second on the ground of mere descriptiveness. In a 57-page opinion that seemed much longer, the Board denied the genericness counterclaim, upheld the mere descriptiveness counterclaim, and dismissed Petitioner's likelihood of confusion claim. Coach/Braunsdorf Affinity, Inc. v. 12 Interactive, LLC, Cancellation No. 92051006 (March 24, 2014) [precedential].

Genericness counterclaim: The Board found the genus of Petitioner's services to be volume discount buying services. The relevant public comprised companies that purchase volume discount buying services for customers and employees, as well as individuals who join organizations offering volume discount buying services.

In determining how the relevant purchasers perceive the marks PERKS and PERKSCARD, the Board considered dictionary definitions, Petitioner's own use of the marks, and third-party use of the word "perks," including third-party registrations.

The dictionary evidence showed that a "perk" is an employee benefit that is additional to salary. Third-party use showed that the term "perks" has been extended to describe benefits provided to a person in order to induce him or her to enter into a commercial relationship, or provided as a reward to build loyalty.

A volume discount buying service is not, by its nature, a "perk." Neither PERKS nor PERKSCARD is the generic name of such a service. Although a volume discount buying service may be a "perk," not all volume discount buying services are "perks." For example, such a service may offered to a customer other than as compensation for employment or as an inducement to enter into some other commercial relationship.

And so the Board dismissed the genericness counterclaim. [Note that at page 3 of the decision, the Board said that all three pleaded registrations were the subject of this counterclaim - ed.].

Mere Descriptiveness Counterclaim: Petitioner's registration for the mark Perks had already been cancelled for failure to file the Section 8 declaration of use, but because the parties had briefed the mere descriptiveness issue, the Board decided it.

The Board noted that Petitioner's registration for the mark PERKS was more than five years old when the petition for cancellation was filed, and so that registration cannot be cancelled on the ground of mere descriptiveness (See Section 14 of the Trademark Act). The marks found the marks Perks and PERKS to be legal equivalents, and the services in each registration substantially equivalent.

Petitioner asserted that the counterclaim to cancel the Perks registration was an improper collateral attack on its "incontestable" PERKS registration. The Board agreed that it appeared illogical to cancel the Perks registration while the PERKS registration cannot be attacked for mere descriptiveness. However, the Board pointed out, the "prior registration" or Morehouse defense is an equitable defense that is not available against a claim of mere descriptiveness. The public interest demands that registrations for marks that are merely descriptive be cancelled. Petitioner's prior registration would remain viable, but the newer registration, with a newer filing date and less than five years of existence, was not immune to a mere descriptiveness attack.

The Board then found that the term "perks" directly conveys information concerning a characteristic of Petitioner's services because the services are administered as "perks" programs. Consequently, judgment was entered in favor of Respondent on this counterclaim.

Likelihood of Confusion:  The Board next considered the likelihood of confusion issue vis-a-vis Petitioners' two remaining pleaded registrations, for PERKS and PERKSCARD. It found the involved services to be legally identical, and it therefore presumed that the channels of trade and classes of purchasers are the same.

As to the strength of the pleaded marks, the Board found that in terms of conceptual strength, PERKS is descriptive. The fact that the PERKS registration is "incontestable" means only that it cannot be challenged as invalid on the ground of mere descriptiveness. However, for purposes of a likelihood of confusion analysis, the mark can be considered descriptive.

The mark PERKSCARD is likewise descriptive because it describes a card used to obtain perks or benefits.

Given the weakness of the term "perks" in Petitioner's marks, the Board concluded that Respondent's mark PERKSPOT is sufficiently different from the marks PERKS and PERKSCARD to avoid a likelihood of confusion. And so the Board denied the petition for cancellation of the PERKSCARD registration.

Read comments and post your comment here.

TTABlog note:  Zzzzzzzzzzzzzz!

Text Copyright John L. Welch 2014.

Precedential No. 16: TTAB Orders Cancellation of Registration - Applicant not Owner of Underlying Foreign Registration

Petitioner SARL Corexco moved for summary judgment in this proceeding seeking cancellation of a registration for the mark BEARWW for "Internet based social networking and introduction services ...." Corexco claimed likelihood of confusion with its registered mark BEARWWW for "online social networking services," and further claimed that the application for the challenged registration was void ab initio because the original applicant (Respondent Webid's predecessor-in-interest) did not own a foreign registration which could have served as a Section 44(e) basis for issuance of the registration. The Board summarily granted the petition on the second ground. SARL Corexco v. Webid Consulting Ltd., Cancellation No. 92056456 (March 27, 2014) [precedential].

Webid's Effective Admissions: Corexco's summary judgment motion hinged in part on Applicant Webid's effective admissions resulting from its failure to timely respond to Corexco's admission requests. Webid filed a cross-motion for leave to substitute its actual (belated) responses to petitioner’s requests. Webid pointed out that the parties were discussing settlement at the time Webid served its responses four days late. The Board exercised its discretion under FRCP 36(b) to allow Webid to substitute its responses to the requests for admission for the effective admissions.

Clearly, the parties’ settlement discussions contributed to the respondent’s delay in timely serving its answers. As noted above, there is a two-prong test for allowing withdrawal or amendment of admissions: The presentation of the merits of the action will be subserved thereby, and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action on the merits.

The Board concluded that the merits of the action will be subserved by allowing the amendment, since the effective admissions largely formed the basis for petitioner’s motion for summary
judgment. And Corexco will suffer no recognizable prejudice, since the case was still in the pre-trial stage and any potential prejudice could be mitigated by extending the discovery period.

Likelihood of Confusion: Corexco's motion for summary judgment on the ground of likelihood of confusion was based solely on Webid's admissions by default. Because Webid's responses were deemed amended, the Board denied the motion as to the Section 2(d) claim.

Lack of Proper Section 44(d) Basis: The original applicant (Respondent’s predecessor-in-interest, Ms. Leclercq), filed an application to register the BEARWW mark under Section 1(a) of the Trademark Act. On August 11, 2011, she  amended the filing basis to Section 44(e), relying on a Canadian registration for the mark.

In Webid's amended admission responses, however, it admitted that Ms.Leclercq never owned the Canadian registration, that on August 11, 2011, Webid was the owner of the Canadian registration, and that on that date Webid was not the owner of the U.S. trademark application.The Board pointed out that:

If an application is filed based on Section 1(a) or Section 1(b), and the applicant later amends the application to add or substitute Section 44 as a basis, the applicant must be the owner of the foreign application or registration as of the filing date of the amendment adding or substituting a Section 44 claim of priority or basis for registration. 

Webid admitted that Ms. Leclercq was not the owner of the Canadian registration at the time the amendment was made to the Section 44(e)basis. Therefore the application was deemed void ab initio, and the Board granted Corexco's motion for summary judgment on that ground.

Read comments and post your comment here.

TTABlog note:  I found the Board's reasoning and citations on the last issue to be very difficult to follow. Is this a case of first impression? I think it is, but it's hard to tell from the confusing citations. The Board cites to Rule 35(b)(1) as if it covered the situation, but that rule doesn't say much of anything.

What is the significance, if any, of the fact that Ms. LeClercq did not own the Canadian registration at the time the challenged registration issued? If she had owned it then, would that have solved the problem or would the application still have been void ab initio?

I found particularly unhelpful the use of the "cf." citation signal on pages 8 and 9 without adequate explanation of what point was being made.

Text Copyright John L. Welch 2014.