In a whopping 163-page opinion, the Board granted a petition for cancellation of two registrations for the configuration of safety helmets, rejecting Petitioner Honeywell's Section 2(e)(5) functionality claim but sustaining Honeywell's claim of lack of acquired distinctiveness. The Board noted that "[t]he Respondent’s failure to comply with its discovery and disclosure obligations plays a pivotal role in our determination." [This blog post will summarize the high points of the decision.]. Honeywell Safety Products USA, Inc. v. ERB Industries, Inc., Cancellation No. 92070774 (March 13, 2023) [not precedential] (Opinion by Judge Angela Lykos).
The marks consist of the "three dimensional configuration of two ridges located along the center of a safety helmet," one helmet with a surrounding brim and the other with a short brim at the front. (referred to as the "Ridge Designs").
Discovery Sanctions: The Board made certain adverse inferences against Respondent ERB for failure to comply with a Board order compelling interrogatory answers, including inferences that Respondent ERB did not conduct any look-for advertising and did not conduct any survey to show acquired distinctiveness.
Section 2(e)(5) Functionality: Honeywell alleged that the Ridge Designs are "essential to the use or purpose of the registered goods, in that they function to help absorb impact and increase stability” and put “competitors at a significant competitive disadvantage since there are only a limited number of ways to design a safety helmet to absorb impact in a cost-effective manner." The Board framed the issue as follows:
[W]e must determine whether the Ridge Designs as depicted in the ’481 and ’482 registrations are essential to their use or purpose or affect the cost or quality of the product [the Supreme Court's Inwood standard], that is, whether allowing the trademark registrations to continue to exist will hinder competition. In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 213 USPQ 9, 12-15 (CCPA 1982). In other words, the issue is whether the designs of both safety helmets work better in the configurations at issue.
If functionality is established under Inwood, further inquiry under the Morton-Norwich factors is unnecessary. See TrafFix, 58 USPQ2d at 1006.
After an exhaustive review of the evidence, the Board concluded that Honeywell "failed to meet its burden under the preponderance of the evidence standard [to] rebut the presumption that Respondent's Ridge Designs are valid and nonfunctional under Inwood." The Board noted that it might have found otherwise on a more developed record.
The Board then turned to the Morton-Norwich factors:
-
(1) the existence of a utility patent disclosing the utilitarian advantages of the design;
- (2) advertising materials in which the originator of the design touts the design’s utilitarian advantages;
- (3) the availability to competitors of functionally equivalent designs; and
- (4) facts indicating that the design results in a comparatively simple or cheap method of manufacturing the product.
There was no relevant patent or patent application, and so the first factor favored Respondent ERB. As to the second factor, there was no evidence of advertising touting the utilitarian benefits of the Ridge Designs. As the the third, the record included many alternative designs, thus favoring ERB. And finally, there was no proven benefit to the Ridge Designs in terms of ease or cost of manufacture.
And so, the Board concluded that Honeywell had failed to make a prima facie case of invalidity under Section 2(e)(5).
Lack of Acquired Distinctiveness: Of course, product designs cannot be inherently distinctive and are registrable as trademarks only upon a showing of acquired distinctiveness under Section 2(f). The party seeking to cancel a registration for lack of acquired distinctiveness bears the initial burden to make a prima facie case.
To satisfy this initial burden, the party seeking cancellation must “present sufficient evidence or argument on which the board could reasonably conclude' that the party has overcome the record evidence of acquired distinctiveness—which includes everything submitted by the applicant during prosecution. The burden of producing additional evidence or argument in defense of registration only shifts to the registrant if and when the party seeking cancellation establishes a prima facie showing of invalidity. The Board must then decide whether the party seeking cancellation has satisfied its ultimate burden of persuasion, based on all the evidence made of record during prosecution and any additional evidence introduced in the cancellation proceeding.
In making its determination regarding acquired distinctiveness, the Board looked to the CAFC's Converse factors:
-
(1) association of the trade[mark] with a particular source by actual purchasers (typically measured by consumer surveys);
- (2) length, degree, and exclusivity of use;
- (3) amount and manner of advertising;
- (4) amount of sales and number of customers;
- (5) intentional copying; and
- (6) unsolicited media coverage of the product embodying the mark.
The Board found "minimal direct evidence" that consumers perceive the Ridge Designs as source indicators, giving Respondent ERB's testimony from its own employees little weight and noting the absence of survey evidence. ERB's claim of long use (2004 and 2008) was not necessarily persuasive in the context of a product configuration.
With regard to exclusivity of use, the record failed to support a finding that "other marketplace uses are significant enough to conclude that Respondent’s marks have not been in substantially exclusive use." The Board noted that on a more developed record it might find otherwise.
ERB's evidence regarding advertising and promotional expenditures were both questionable and lacking in marketplace context. As to look-for advertising, in addition to the adverse inference drawn by the Board, there was no attempt in ERB's advertising to call attention to the Ridge Designs as source indicators. ERB's sales figures were not impressive, and they also lacked marketplace context. And there was no evidence of intentional copying or of media coverage.
The Board concluded that Honeywell had made a prima facie case that the Ridge Designs lacked acquired distinctiveness. The burden then shifted to Respondent to provide "additional evidence or argument" in this cancellation proceeding. Petitioner Honeywell, however, bore the ultimate burden of proof by a preponderance of the evidence.
ERB failed to produce any additional evidence or argument to overcome Honeywell's prima facie showing, and so the Board found that Honeywell had "satisfied its ultimate burden of persuasion under the preponderance of the evidence standard"
And so, the Board ordered that the two registrations be cancelled.
Read comments and post your comment here.
TTABlogger comment: Exhaustive and exhausting.
Text Copyright John L. Welch 2023.
