Friday, July 13, 2018

New York IP Law Association: Hot Topics in IP Law - July 17, 2018

The Trademark Law and Practice Committee of the New York Intellectual Property Law Association (NYIPLA) will host a half-day program entitled "Hot Topics in IP Law" on Tuesday, July 17th, from 12 noon to 5 PM at the Princeton Club of New York, 15 W 43rd Street, New York, New York 10036. The agenda is set out below. Registration here.



TTABlog comment: The TTABlogger will be in attendance.

Text Copyright John L. Welch 2018.

Finding Clothing Related to Athletic Training Services, TTAB Affirms 2(d) Refusal of MAVA

The Board affirmed a Section 2(d) refusal to register the mark MAVA for various clothing items, including t-shirts, pants, gym suits, athletic uniforms, and footwear, finding the mark likely to cause confusion with the identical mark registered for "personal training services in the field of athletic performance." Applicant contended that, because it owns registrations for MAVA for weight-lifting gloves and work-out gloves, it already owns "senior trademark rights in the product space." The Board did not agree. In re Zencom Global, Serial No. 87399153 (July 6, 2018) [not precedential] (Opinion by Linda A. Kuczma).


The Marks: The identity of the marks "strongly favors a finding of likelihood of confusion."

The Goods/Services: As we know, when the marks at issue are identical, a lesser degree of similarity between the involved goods/services is needed to support a finding of likely confusion. There need be "only a viable relationship between the goods and services."

Applicant's t-shirts, pants, gym suits, athletic uniforms, and footwear, and registrant's services all relate to athletic performance. Examining Attorney Claudia Garcia submitted website evidence showing that individuals and businesses provide personal training services as well as their own branded clothing. Moreover these goods and services are provided through the same channels of trade to the same class of consumers, which would include the general public. Therefore the Board concluded that the involved goods and services are related  for Section 2(d) purposes.

Eleventh du Pont Factor: This du Pont factor considers "[t]he extent to which applicant has a right to exclude others from use of its mark on its goods." Applicant argued that its prior registrations give it the right to exclude others from using its mark MAVA in its natural zone of expansion. In other words, it owns the senior federal trademark registrations "in the product space asserted in this case."

The Board, however, pointed out that the "zone of natural expansion" doctrine has limited applicability in ex parte proceedings. It typically is invoked in inter partes proceedings to claim priority. In ex parte proceedings, "the concept is considered through a traditional relatedness of goods and services approach." The co-existence of applicant's two prior registrations with the cited registration does not compel a different result.

Moreover, the Board determination must be based on the record before it, and it is not bound by the determination of an examining attorney that the cited mark was entitled to registration over applicant's marks.

Each case must be decided on its own facts, and occasionally an applicant with registrations for the same of very similar marks may be unable to obtain subsequent registrations. *** Even when one registration issues over the other and both exist side-by-side for some period of time (in this case only a little over a year), that is just one element “which is placed in the hopper with other matters which ordinarily are considered in resolving the question of likelihood of confusion, but which is not in the least determinative of said issue.”

Conclusion: The identity of the marks and the relatedness of the goods and services outweigh the point raised by applicant. Because there is a likelihood of confusion, it is not appropriate to allow applicant's mark to be published. The Board pointed out that, if applicant believes the cited registration should not have issued over its prior registrations, it may petition for cancellation.

And so the Board affirmed the refusal.

Read comments and post your comment here.

TTABlog comment: Note that the Morehouse defense is available only in the inter partes context. See In re Strategic Partners, Inc., 102 USPQ2d 1397 (TTAB 2012) [precedential]. [TTABlogged here]. Here the goods in the prior registrations and the pending application were not that close anyway.

Text Copyright John L. Welch 2018.

Thursday, July 12, 2018

TTAB Test: Is "SECOND OPINION" Generic for Cancer Testing Services?

The USPTO refused registration, on the Supplemental Register, of the term SECOND OPINION, finding it to be generic for "medical testing for diagnostic or treatment purposes in the field of cancer." On appeal, the Board rendered a split decision. How do you think this came out? In re Chronix Biomedical, Inc., Serial No. 86612457 (July 10, 2018) [not precedential] (Opinion by Judge Michael B. Adlin; dissenting opinion by Judge Linda A. Kuczma).


Section 23(c) requires that a mark, to be eligible for registration on the Supplemental Register, must be "capable of distinguishing the applicant's goods or services." Generic terms are incapable of doing so. The ultimate test for genericness is the primary significance of the term to the relevant public. The USPTO bears the burden of making a "strong" showing, with "clear evidence" that the applied-for term is generic.

The panel agreed that the genus in question is "medical testing services for diagnostic or treatment purposes," and that the relevant purchasing public includes both patients who seek medical testing, and doctors and other health care providers who order or purchase the tests. The panel did not agree on the relevant public's understanding of the term SECOND OPINION.

The panel majority had no doubt as to the genericness of SECOND OPINION, "especially because 'the determination of whether a proposed mark is capable of achieving significance as a source identifier must be made in relation to the goods and services for which registration is sought, not in the abstract.'" Dictionary definitions are consistent with applicant's own use of the term: applicant promotes the fact that its SECOND OPINION test is intended to "help doctors" or "clinicians" decide what to do in response to prior tests or examinations.

In other words, these materials reveal that Applicant’s “second opinion” test is conducted by or at the direction of a physician/clinician in order to provide an opinion, examination or evaluation to verify or challenge another physician’s diagnosis or recommendation, or to better understand the results of a first medical test.

The panel majority concluded that the genus "medical testing services for diagnostic or treatment purposes" encompasses medical testing services that are part of providing a "second opinion." Just as the term ATTIC was found to be "more in the nature of a type of sprinkler than of a source identifier," a "second opinion is a type or purpose of medical testing: 'second opinion medical testing.'" Therefore SECOND OPINION is generic and incapable of functioning as a mark.

In dissent, Judge Kuczma contended that SECOND OPINION may be merely descriptive of the end purpose of applicant's testing, i.e., to render second opinions, but "it does not refer to any class or type of medical tests and is not generic for 'medical testing services for diagnostic or treatment purposes.'"

Judge Kuczma acknowledged that, under the case law, "a term that names the central focus or subject matter of a service or the goods to be sold in connection with a service are regarded [is] regarded as 'generic'" for the services themselves. "However, that is not what we have here."

According to the definition of “second opinion” cited in the majority opinion, SECOND OPINION is “an opinion from a second qualified person . . . on a health . . . problem.” Under this definition, Applicant’s applied-for mark does not identify, nor is it generic for, medical testing services. At most, Applicant’s applied-for mark SECOND OPINION is merely descriptive of the medical testing services for diagnostic or treatment purposes which may be considered by doctors when providing a “second opinion.”

Judge Kuczma concluded that the USPTO failed to make the requisite substantial showing that SECOND OPINION is generic.

Read comments and post your comment here.

TTABlog comment: What do you think? I side with the dissent. Blood tests are a type of procedure. A second opinion is just a way of describing a blood test done to confirm the results of the first test. Maybe it's time to re-think the ATTIC decision.

Text Copyright John L. Welch 2018.

Wednesday, July 11, 2018

Bullet-Shaped Antenna Not Aesthetically Functional, But Lacks Acquired Distinctiveness, Says TTAB

The Board granted a petition for cancellation of a registration for the product configuration mark shown below (shaped like "a bullet cartridge") for "automobile antennas," finding that the mark lacked acquired distinctiveness. The Board rejected petitioner's claim that the design is aesthetically functional because petitioner failed to prove a competitive need for use of that shape. JVMAX, Inc. v. ESR Performance Corp., Cancellation No. 92063873 (June 29, 2018) [not precedential] (Opinion by Judge Marc A. Bergsman).


Aesthetic Functionality: Petitioner claimed that the registered design is functional under Section 2(e)(5) because "[c]onsumers purchase bullet shaped antennas based on the ornamental appearance of the antennas." Therefore, the shape is "essential to the purpose of the product which is purchase[d] in large part for the way it looks."

The Board observed that a mark is aesthetically functional if their is a "competitive need" for the feature. See, e.g., Brunswick Corp. v. British Seagull Ltd., 35 F.3d 1527, 32 USPQ2d 1120, 1122 (Fed. Cir. 1994) (the color black for boat engines is functional because it has color compatibility with a wide variety of boat colors and it makes the engines appear smaller); In re Florists’ Transworld Delivery Inc., 106 USPQ2d 1784, 1787 (TTAB 2013) (competitors need to use black packaging for flower arrangements in order to convey an appropriate message or sentiment, and the exclusive appropriation of the color black to single entity would severely limit the availability of appropriate color choices).

Petitioner failed to establish a competitive need for use of a bullet-shaped antenna. The parties and others sell equivalent antenna with many diverse designs. Petitioner alone sells 20 to 30 different types of antenna.

Petitioner has not proven that the bullet-shaped antenna design serves an aesthetic purpose independent of any source-identifying function. Because a product design is aesthetically pleasing and commercially successful does not mean that it is aesthetically functional. See Florists’ Transworld Delivery Inc., 106 USPQ2d at 1789. “[F]unctionality hinges on whether registration of a particular feature hinders competition and not on whether the feature contributes to the product’s commercial success.” M-5 Steel Mfg. Inc. v. O’Hagin’s Inc., 61 USPQ2d 1086, 1097 (TTAB 2001).

Therefore the Board concluded that the bullet-shaped antenna is not aesthetically functional.

Acquired Distinctiveness: Of course, a product shape can never be inherently distinctive and may be registered as a trademark only upon a showing of acquired distinctiveness. The burden of proof to show acquired distinctiveness is heavier for product designs than for word marks.

The party seeking cancellation bears the initial burden to "establish a prima facie case of no acquired distinctiveness." It must overcome the record evidence of acquired distinctiveness, including everything submitted by respondent during prosecution. The burden of production shifts to registrant only if the petitioner established a prima facie case. The ultimate burden of persuasion rests on petitioner.

The Board first determined that petitioner had established a prima facie case of no acquired distinctiveness. The Board described in detail the evidence submitted in respondent's application for registration, which included sales figures (44,780 antenna sold for total revenue of $508,900 from 2010-2014), advertising expenditures (totaling $203,000), the distribution of tens of thousands of catalogs, and 104 identical customer declarations purportedly attesting to their recognition that bullet shaped antennas come from a single source. Petitioner provided testimony from two third-parties who sold bullet-shaped antennas, one beginning in 2007.

The Board concluded that petitioner had established its prima facie case. It found that at the time of filing its application to register, respondent's use of the design was not substantially exclusive. Moreover, respondent provided no testimony or evidence that would allow its sales and revenue figures to be evaluated in context. Sales figures may show that the product is commercially popular, but they are not necessarily indicative of acquired distinctiveness. The advertising figure of $203,000 was questionable, since it represents an unlikely 40% of respondent's revenues, and the assertion was undermined by respondent's testimony that it does not keep records of advertising expenditures per product.

In addition, respondent's advertising did not show the design alone, but only with other marks, and the bullet-shaped antenna was just one of may products displayed in respondent's catalogs. There was no "look for" advertising and nothing that highlighted or emphasized this shape. Finally, the customer declarations suffered from many deficiencies, leading the Board to question whether the statements accurately reflect the declarants' personal recollections and experience, or whether they merely "signed what was put before them."

The Board then looked at the rest of the record evidence. It found that respondent's nine years of use is "significant but not necessarily conclusive or persuasive considering the mark is a product configuration." Respondent never used the "tm" or "R" symbols in connection with its antennas, and prior to the filing of its application it took no action to notify competitors that it considered the shape to be a trademark. The only action it took after the registration issued was to send cease-and-desist letters.

There was no evidence of unsolicited media coverage identifying the design uniquely and exclusively with respondent and no evidence that any alleged copiers of the design did so to trade on respondent's goodwill, as opposed to adopting a desirable design.

The Board concluded that the record, viewed in its entirety, "is insufficient to prove that the primary significance of the bullet cartridge shaped automobile antenna identifies the source of the automobile antenna."

[The Board declined to consider petitioner's fraud claim in view of its ruling of no acquired distinctiveness].

Read comments and post your comment here.

TTABlog comment: Shouldn't the Board's conclusion have been that petitioner carried its burden to prove that there was no acquired distinctiveness? See page 11: "The Board must ... decide whether the party seeking cancellation has satisfied its ultimate burden of persuasion, based on all the evidence made of record ...." Instead, the Board said respondent failed to prove acquired distinctiveness.

Text Copyright John L. Welch 2018.

Tuesday, July 10, 2018

TTAB Finds Sales to Single Customer, Though Not Substantial, Sufficient to Avoid Abandonment of MOMBACHO for Cigars

The Board dismissed a petition for cancellation of a registration for the mark MOMBACHO for cigars, ruling that Petitioner had failed to prove its claim of abandonment. The Board rejected petitioner's contention that respondent Tropical Tobacco's meager sales were merely token sales that did not qualify as bona fide use of the mark. Mombacho Cigars S.A. v. Tropical Tobacco, Inc., Cancellation No. 92062543 (July 6, 2018) [not precedential] (Opinion by Judge Cindy B. Greenbaum).


Section 45 of the Trademark Act provides that a mark shall be deemed abandoned "[w]hen its use has been discontinued with intent not to resume use ...." Nonuse for three consecutive years is prima facie evidence of abandonment. "Use of a mark means the bona fide use of such mark made in the ordinary course of trade, and not merely to reserve a right in a mark."

Petitioner had the burden to prove abandonment by a preponderance of the evidence. It presented testimony declarations of its president, of the president of the "largest cigar shop in the country," and of a cigar sales broker, all asserting that they were not aware of respondent's use of the mark MOMBACHO. Petitioner contended that respondent has a practice of "warehousing dormant marks," and it questioned the "bona fides of [Respondent's] de minimus (sic) sales from 2010 through 2015."

Respondent's President testified that sales of MOMBACHO were continuous since 2004, although sales dropped after 2010. Respondent's office manager confirmed that MOMACHO has been sold continuously, every year. Since about December 2015, respondent has sold MOMBACHO cigars exclusively to Serious Cigars and "now that we've done an exclusive with Serious, we hope the product really picks up."

Respondent's President admitted that the brand had not been actively promoted since 2010 and did not appear on the company's website from 2010-2015. It was not a "popular" cigar brand as of 2014. Respondent submitted invoices of sales to retailers for each year from 2005 to 2016. Beginning in 2012 (the appropriate starting point for considering abandonment with respect to a use-based application filed on January 10, 2012) the invoices demonstrated sales of between two and four boxes of twenty cigars each year to Serious Cigars. Seven weeks after the petition for cancellation was filed, respondent sold 24 boxes to Serious, and then 300 more to Serious, under an exclusive agreement to retail the product.

The Board found that there was no period of three consecutive years when Respondent did not sell MOMBACHO cigars.

While Respondent’s sales from 2010 to 2015 were admittedly slow and made virtually exclusively to one client (Serious Cigars), nothing in the record supports a finding that such sales were not “bona fide use[s] of [the] mark[s] in the ordinary course of trade,” rather than “made merely to reserve a right in [the] mark[s].” 15 U.S.C. § 1127. In other words, contrary to Petitioner’s assertions, the record does not support a finding that Respondent’s MOMBACHO mark was dormant or part of a purported trademark warehousing program. On the other hand, such near exclusivity would explain why Petitioner’s witnesses were not aware that Respondent was selling MOMBACHO cigars.

Respondent pointed to differences between respondent's invoices and its stated sales figures, but the Board found the discrepancies to be insignificant. It concluded that respondent's sales revenue, "while not substantial, is sufficient to demonstrate valid use of its mark MOMBACHO in commerce." Petitioner's assertion that it was merely "token use" was rejected by the Board, citing Person’s Co. Ltd. v. Christman, 900 F.2d 1565, 14 USPQ2d 1477, 1481-82 (Fed. Cir. 1990) (“Although sales ... were intermittent and the inventory of the corporation remained small, such circumstances do not necessarily imply abandonment. There is also no rule of law that the owner of a trademark must reach a particular level of success, measured either by the size of the market or by its own level of sales, to avoid abandoning a mark.”)

Finding that petitioner had failed to establish abandonment by a preponderance of the evidence, the Board dismissed the petition for cancellation.

Read comments and post your comment here.

TTABlog comment: De minimis non curat lex? Not this time. Note that respondent asserted a first use date of 2004 in its application. However, the period of time before filing was irrelevant to the abandonment issue; the question was whether the mark was subsequently abandoned.

Text Copyright John L. Welch 2018.

Monday, July 09, 2018

BUYER ENGINE Merely Descriptive of Real Estate Marketing Services, Says TTAB

[This is a guest post by Natali De Corso, a rising 2-L at Boston College Law School, and a summer associate at Wolf, Greenfield & Sacks, P.C.]. The Board affirmed a Section 2(e)(1) refusal of registration of the mark BUYER ENGINE, finding it merely descriptive of real estate marketing services in International Class 35. In re Cutting, Serial No. 87109861 (June 26, 2018) [not precedential] (Opinion by Judge Christopher C. Larkin).


Examining Attorney April A. Hesik first argued “that the record show[ed] that a feature of the services identified in the application as ‘real estate marketing services’ is the use of ‘search engines pertaining to information about real estate buyers.’” In fact, the Applicant had provided information that his “unique” services would “include a search engine and the search engine [would] pertain to information about real estate buyers.” The Board therefore agreed with the Examining Attorney.

The Examining Attorney further argued that both “BUYER” and “ENGINE” are “descriptive of search engines that feature information pertaining to potential buyers of real estate.” Based on the dictionary definitions of the words and third-party registrations of marks for similar services where “buyer” or “engine” is disclaimed, the Board again agreed.

Lastly, the Examining Attorney asserted that the words BUYER and ENGINE together constitute a “composite mark that is itself merely descriptive.” She explained that “consumers are accustomed to encountering the words ‘BUYER’ and ‘ENGINE’ in proximity to describe search engines pertaining to potential buyers of real estate,” citing internet evidence showing that search engines – such as Realtor.com, Trulia, and Zillow – are commonly used in real estate marketing. Consequently, she contended, BUYER ENGINE is “not incongruous” in the context of Applicant’s search engines that provide information relating to buyers.

Applicant, however, insisted that the combination of BUYER and ENGINE is “incongruous and unique” and that it “requires imagination, thought, mental, pause, and perception” to determine the meaning of the words. If the mark were REAL ESTATE BUYER SEARCH ENGINE, Applicant argued, a consumer would easily understand the meaning of the mark – but without the extra words, a consumer is left “puzzled and guessing.” This argument, the Board explained, “reflects a fundamental misunderstanding of the test for mere descriptiveness.” The important question is whether a consumer “who knows the goods and services will understand the mark to convey information about them.” Unsurprisingly then, the Board agreed with the Examining Attorney that the composite mark is merely descriptive of real estate marketing services.

The Board also found “unavailing” Applicant’s argument that the “fact that the examiner’s search revealed no similar or conflicting marks . . . further demonstrates that BUYER and ENGINE are not a common or natural pairing . . . .” The Examining Attorney, the Board explained, has no obligation to prove that others have used, or need to use, the mark. A term is not rendered distinctive simply because the Applicant may be the first or only user of the term. A term is descriptive as long as it meets the standard for descriptiveness in In re Gyulay, In re Chamber of Commerce, and DuoProSS. The Board held that the Examining Attorney showed that BUYER ENGINE met the descriptiveness standard.

Finally, Applicant cited three cases involving marks –“FRANKWURST” for wieners, “TINT TONE” for hair coloring, and “DRI-FOOT for anti-perspirant deodorant for feet – that were not found merely descriptive. The Board pointed out, first, that neither the Board nor the Attorney is bound by prior determinations of the Patent and Trademark Office “in cases involving different marks, different goods and services, and different records.” Second, BUYER ENGINE is distinguishable from these cases because the mark “does not refer in an incongruous manner to the desired end-result of applicant’s services.” Instead, the mark refers “to a significant feature of the services themselves, and in a manner that is not incongruous when applied to search engines featuring potential buyers of real estate.”

The Board therefore found that the record “clearly” demonstrated that BUYER ENGINE was merely descriptive of the services, and it affirmed the refusal to register.

Read comments and post your comment here.

TTABlog comment: Is this a WYHA?

Text Copyright John L. Welch and Natali De Corso 2018.

Friday, July 06, 2018

Professor McCarthy: "Trademark Strength and Fame: The Federal Circuit Corrects the Trademark Trial And Appeal Board"

In the latest issue of The Trademark Reporter, Professor J. Thomas McCarthy discusses (here) the CAFC's ruling in the INSIGNIA case, Joseph Phelps Vineyards, LLC v. Fairmont Holdings, LLC, 122 USPQ2d 1733 (Fed. Cir. 2017) [precedential], wherein the appellate court vacated the Board's decision due to improper consideration of the fifth du Pont factor, and remanded the case to the Board. [TTABlogged here].


As you will recall, the CAFC overturned the Board's decision of July 6, 2015 (here) dismissing a petition for cancellation of a registration for the mark ALEC BRADLEY STAR INSIGNIA for "cigars, tobacco, cigar boxes, cigar cutters and cigar tubes." The Board had found that respondent's mark was not likely to cause confusion with petitioner's registered mark INSIGNIA for wines. Concluding that the Board had applied an "incorrect standard for fame," the CAFC remanded the case to the TTAB for determination utilizing the correct standard.

The CAFC pointed out that, unlike for dilution, fame for likelihood of confusion purposes is not an "all-or-nothing" proposition. Consequently, the Board "did not properly apply the 'totality of the circumstances' standard, which requires considering all the relevant factors on a scale appropriate to their merits."

According to Professor McCarthy's commentary:

[U]nlike all other courts in the nation, the Federal Circuit and the TTAB usually use the word “fame” instead of “strength.” This has led the TTAB to ask if the senior user’s mark is or is not in a category of “famous” marks, rather than asking if the mark is strong enough that the junior user’s mark is likely to cause confusion. The federal anti-dilution law mandates that a mark must be so widely known to everyone across the United States as to be in the category of “famous” marks. But for traditional trademark infringement, the “strength” of a mark is measured on a graduated scale and not by two categories of “strong” and “weak.”

* * * * * * * *

The list of factors used by the Court of Appeals for the Federal Ciircuit is known as the Du Pont test. This thirteen-point test is used to evaluate likelihood of confusion in TTAB ex parte rejections of applications to register based on prior rights, as well as in inter partes oppositions and cancellations. This test differs from those used by all the other circuits in that it uses the word “fame” rather than “strength.” This eccentric usage can be traced back to the original 1973 Du Pont precedent. There, the court listed as the fifth factor the “fame” of the mark, not the “strength” of the mark.

* * * * * * * *

For a senior user’s mark that is only moderately strong in the marketplace, change brought about by the Joseph Phelps decision could strengthen the claim that a challenged application or registration is
likely to cause confusion.

Read comments and post your comment here.

TTABlog comment: IMHO, I consider the TTAB's approach in its INSIGNIA decision to more an exception than the rule. In my view, even before INSIGNIA, the Board usually looked at the degree of strength of the mark and considered whether the mark was famous for Section 2(d) purposes, but not just apply a yes-no test. It found some marks not famous but relatively strong, some marks weak, etc. So I don't see the CAFC's INSIGNIA decision as all that significant, other than to correct the Board's error in a wayward case and to keep the Board on the right track.

Again I thank The Trademark Reporter for granting leave to provide a link to this article, which is Copyright © 2018 the International Trademark Association and reprinted with the permission of The Trademark Reporter®, 108 TMR 904 (May - June 2018).

Thursday, July 05, 2018

Trademark Reporter Commentary: Raustiala and Sprigman, "Rethinking Post-Sale Confusion"

In the latest issue of The Trademark Reporter, Professors Kal Raustiala (UCLA Law School) and Christopher Jon Sprigman (NYU School of Law) consider and critique the role of post-sale confusion in trademark litigation, in their commentary, "Rethinking Post-Sale Confusion." [pdf here].


We believe post-sale confusion is real and ought to be addressed by the courts when merited by the circumstances and evidence. Post-sale confusion has distinctive characteristics, however, that have been insufficiently recognized and that render its use to establish an infringement cause of action more difficult than conventional wisdom suggests. In many instances post-sale confusion is either unlikely to exist or, even if it does exist among some observers of the goods at issue, it is unlikely to harm either consumers or mark owners. In such cases, courts should award neither injunctions nor monetary relief because there is no cognizable harm to remedy.

* * * * * * * *

In sum, plaintiffs in a post-sale claim should be required to demonstrate a valid basis for a claim of harm, not just observer confusion, to justify judicial relief. And defendants and courts alike should recognize that post-sale confusion linked to harm is plausible only in an unusual set of circumstances—circumstances that ought to be well-established by evidence, not conjecture, in any infringement litigation

Read comments and post your comment here.

Text Copyright John L. Welch 2018.

Tuesday, July 03, 2018

Precedential No. 23: TTAB Sidesteps Court Order to Transfer Pending Application, Provides Alternatives

The United States District Court for the District of New Jersey issued a Final Judgment ordering the Commissioner of the USPTO to "transfer" to Piano Wellness LLC the application of Charlotte K. Williams to register the mark KEYBOARD WELLNESS.COM for "Computer education training services." The Board concluded that the District Court lacked authority to order the transfer of a pending application, but the Board proposed several alternative ways to give effect to the court's judgment. Piano Wellness, LLC v. Charlotte K. Williams, 126 USPQ2d 1739 (TTAB 2018) [precedential].


This Board proceeding, commenced in 2009, was suspended in view of a civil action filed by Piano Wellness, LLC against Applicant Williams. The District Court found that "the trademark 'KEYBOARD WELLNESS.COM,' together with the associated goodwill, is rightly the property of Piano Wellness, LLC." The court directed the Commissioner of Trademarks to transfer the subject application to Piano Wellness, LLC, permanently enjoined Williams from using or claiming any rights in the mark, and entered judgment in favor of Piano Wellness, LLC.

The Board concluded that the court's directive to "transfer the application" fell outside the court's statutory authority to rectify the register under Section 37 of the Trademark Act, which is limited to registrations and does not encompass pending applications. Section 37 provides:

In any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby. (Emphasis added.)

See Pinnacle Pizza Co. v. Little Caesar Enters., Inc., 395 F. Supp. 2d 891, 905 (D.S.D. 2005) (“[Section 37] is limited to cancellation of registered marks, not trademark applications.”); Dunn Comp. Corp. v. Loudcloud, Inc., 133 F. Supp. 2d 823, 831, 57 USPQ2d 1626, 1633 (E.D. Va. 2001) (“Because this case does not involve any registered marks, no federal jurisdiction exists to order or cancel a registration under [Section 37].”); Johnny Blastoff Inc. v. L.A. Rams Football Co., 48 USPQ2d 1385, 1386 (W.D. Wis. 1998) (“this court is without authority to direct [the USPTO] to grant or deny the pending applications”), aff’d on other grounds, 188 F.3d 427 (7th Cir. 1999)).

The Board recognized that a district court may "determine the right to registration" of an applied-for mark, as it did here. But when it determines that an application should be transferred, the source of its authority is not Section 37, "but rather its plenary power to order to parties to take the steps required to effect the transfer." Here, for example, the court could direct Applicant Williams to assign the application to opposer and to record the assignment with the USPTO (or it could appoint opposer as attorney in fact for applicant for purposes of the recordation of the assignment).

Secondly, the Board pointed to another mechanism by which the court's judgment may be given effect. Under Section 18 of the Trademark Act, the Board may, upon motion of any party before it, amend the ownership of an application pursuant to the Board's authority to "register the mark or marks for the person or persons entitled thereto, as the rights of the parties . . . may be established in the proceedings." See also 8440 LLC v. Midnight Oil Co., 59 USPQ2d 1541, 1542 (TTAB 2001) (Board has authority to amend the application to reflect the proper owner); Chapman v. Mill Valley Cotton, 17 USPQ2d 1414, 1415 n.2 (TTAB 1990) (same).

As a third alternative, the Board could, upon motion, sustain the opposition - which would have the effect of an abandonment of the application - in view of the District Court's permanent injunction against Applicant.

The Board allowed applicant thirty days in which to inform the Board as to which of three alternatives it wished to pursue.

Read comments and post your comment here.

TTABlog comment: Opposer chose door number two. On June 29th, it filed a motion under Section 18 to amend the ownership of the application.

Text Copyright John L. Welch 2018.

Monday, July 02, 2018

Precedential No. 22: Failure to Plead Compulsory Counterclaim Leads to Claim Preclusion in Second Proceeding

The Board granted in part a respondent's motion for summary judgment on the ground of claim preclusion, finding that petitioner Freki's claim of abandonment due to naked licensing was a compulsory counterclaim that should have been pleaded in a prior proceeding between the same two parties. However, the Board ruled that Freki's claims of nonuse, fraud, and abandonment for nonuse were not precluded by the prior judgment. Freki Corporation N.V. d.b.a. Pinnacle Sports Worldwide v. Pinnacle Entertainment, Inc., 126 USPQ2d 1697 (TTAB 2018) [precedential].


In October 2016, Respondent Pinnacle Entertainment commenced a cancellation proceeding, seeking to cancel Freki's registrations for the marks PINNACLE SPORTS AFFILIATES and PINNACLE SPORTS DIRECT for various advertising services. Pinnacle Entertainment claimed ownership of, inter alia, the registered mark PINNACLE ENTERTAINMENT for amusement centers and nightclubs. Freki's answer included an "affirmative defense" that Pinnacle Entertainment had abandoned its marks through naked licensing. In April 2017, during the discovery period, Pinnacle Entertainment withdrew its petition for cancellation without consent, and so the Board dismissed the proceeding with prejudice.

In August 2017, Freki filed a petition to cancel Pinnacle Entertainment's registrations, alleging nonuse, abandonment through nonuse, abandonment via naked licensing, and fraud. Pinnacle then filed a motion for summary judgment, asserting that all of Freki's claims were compulsory counterclaims in the prior proceeding and therefore were barred by claim preclusion in light of the prior judgment. [Under Rule 2.127(e)(1), the summary judgment motion was timely despite being filed before service of Pinnacle's initial disclosures].

The Board observed that when a party seeks to preclude a defendant in a first action from bringing certain claims in a second action the rules of defendant preclusion apply: 

A defendant is precluded only if: (1) the claim or defense asserted in the second action was a compulsory counterclaim that the defendant failed to assert in the first action; or (2) the claim or defense represents what is essentially a collateral attack on the first judgment. Nasalok Coating Corp. v. Nylok Corp., 522 F.3d 1320, 86 USPQ2d 1369, 1372 (Fed. Cir. 2008). Under Rule 2.114(b)(3)(i), a defense attacking the validity of a registration pleaded in a cancellation action is a compulsory counterclaim if grounds for the counterclaim existed at the time when the answer is filed or are learned during the course of the cancellation action. Jive Software, Inc. v. Jive Commc’ns, Inc., 125 USPQ2d 1175, 1177 (TTAB 2017).


Compulsory Counterclaim?: To the extent Freki’s naked licensing affirmative defense was an attack on the validity of Pinnacle’s pleaded registrations, it was a compulsory counterclaim that should have been pleaded with the original answer or pleaded promptly after the grounds were learned. 15 U.S.C. § 1064; Jive Software, 125 USPQ2d at 1177. Freki’s assertion of its naked licensing claim as an affirmative defense in the prior proceeding demonstrated that the claim and its underlying facts were known at the time the answer in that proceeding was filed. There was nothing to indicate that Freki learned of any information about the naked licensing claim asserted in the second proceeding that it did not have when it asserted the naked licensing affirmative defense in the first proceeding. Because Freki knew of the basis for the counterclaim when it filed its answer in the first proceeding, its failure to counterclaim serves as a bar to bringing that claim as a plaintiff in the new action. Libertyville Saddle Shop, Inc. v. E. Jeffries & Sons Ltd., 24 USPQ2d 1376, 1379 (TTAB 1992).

On the other hand, Freki did not assert the claims of nonuse, abandonment, and fraud in the first proceeding, and the record did not indicated that Freki was aware of the grounds for these counterclaims during the first proceeding.

Collateral Attack?: Turning to the second basis for applying defendant claim preclusion, the CAFC has found a collateral attack where the later action would impair the other party’s rights as established in the first action. Nasalok Coating Corp., 86 USPQ2d at 1376. In the Prior Proceeding, however, the Board dismissal with prejudice did not determine any specific rights of Pinnacle with respect to its pleaded registrations. Am. Hygienic Lab., Inc. v. Tiffany & Co., 228 USPQ 855 (TTAB 1986) (the only claims extinguished by virtue of the stipulated dismissal in the previous action are claims made by the plaintiff in the previous action). Therefore this basis for applying claim preclusion does not apply to Freki's naked licensing claim in the second proceeding.

As to Freki’s claims of nonuse, abandonment, and fraud, those claims were not not before the Board, and therefore Freki’s assertion of these claims in the new proceeding cannot be considered a collateral attack on the judgment in the prior proceeding. Consequently the second basis for defendant claim preclusion does not apply to these claims.

Conclusion: The Board granted Pinnacle’s motion for summary judgment with respect to Freki’s claim of abandonment due to naked licensing, but denied the motion as to its claims of abandonment due to nonuse, nonuse and fraud.

The Board went on to find that Freki's claims of nonuse and fraud were not properly pleaded: the nonuse allegations had not been clearly delineated as a separate claim, and the fraud allegations were based merely on "information and belief" rather than on specific factual allegations as required by FRCP 9(b). The Board allowed Pinnacle nineteen days within which to file an amended petition for cancellation.

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TTABlog comment: Abandonment, nonuse, and fraud are not affirmative defenses. They are attacks on the validity of the pleaded claim. Affirmative defenses - e.g., laches and estoppel - do not attack the validity of the underlying claim but offer reasons why there is no liability even if the allegations in the complaint are true (in the nature of confession and avoidance).

Text Copyright John L. Welch 2018.

Saturday, June 30, 2018

TTABlog Quarterly Index: April - June 2018

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Section 2(a) - Deceptive:
Section 2(a) - False Association:
Section 2(d) - Likelihood of Confusion:


Section 2(e)(1) - Mere Descriptiveness:
Section 2(e)(1) - Deceptive Misdescriptiveness:
Section 2(e)(2) - Primarily Geographically Descriptive:
Section 2(e)(3) - Primarily Geographically Deceptively Misdescriptive:
Section 2(e)(4) - Primarily Merely a Surname:
Section 2(e)(5) - Functionality:
Section 2(f) - Acquired Distinctiveness:
Abandonment:
Fraud:
Genericness:
Laches:
Nonuse/Abandonment/Specimen of Use/Failure to Function:

Discovery/Evidence/Procedure::
CAFC Decisions:
Recommended Reading:
Other:

Text Copyright John L. Welch 2018.