Thursday, February 09, 2006

TTAB Citable No. 8: Laches Grounds "GOLD SEAL" 2(d) Cancellation Petition

The Board denied a Section 2(d) petition for cancellation on the ground of laches, based on Petitioner Teledyne Technologies, Inc.'s 44-month delay in seeking cancellation of a registration for the mark GOLD SEAL for aircraft engines. Teledyne proved likelihood of confusion with its identical mark previously used for "airplane parts, namely ignition harnesses," but its unexplained delay coupled with the resulting prejudice to Registrant Western Skyways, Inc. proved fatal to its cause. Teledyne Technologies, Inc. v. Western Skyways, Inc., 78 USPQ2d 1203 (TTAB 2006). In its decision, the Board clarified the following point: in the absence of a petitioner's actual knowledge prior to the close of the opposition period, the cancellation laches period does not begin to run until the date the registration issues.

Petitioner Teledyne had trouble at take-off when it failed to introduce its GOLD SEAL trademark registration into evidence. It attached a photocopy of the registration to its petition for cancellation, but it failed to submit a status-and-title copy or to provide appropriate live testimony. However, Teledyne did establish prior common law rights in the mark.

As to likelihood of confusion, the identity of the marks, the relatedness of the goods, the similarity or identity of trade channels, and the overlap in classes of purchaser all pointed in favor of Petitioner. However, the Board noted that the purchasers of the involved goods are likely to be sophisticated, a factor favoring Registrant. And it found that the absence of actual confusion during ten years of concurrent use of the parties' marks also favored Registrant.

Turning to the laches issue, the Board pointed out that the subject registration was issued on March 2, 1999, thereby putting Petitioner Teledyne on constructive notice of Western's claim of ownership. [See TTABlog note below]. The petition for cancellation was filed on October 18, 2002. Teledyne was "conspicuously silent" regarding its reasons for the 44-month delay. Instead it took "the tack that laches does not apply due to the inevitability of confusion."

The Board found that Teledyne's inaction constituted "unreasonable delay," and the question then became whether Western was prejudiced by the delay. Western asserted "economic prejudice based on its development of valuable business and good will around its GOLD SEAL mark during the time petitioner raised no objection."

"economic prejudice to the defendant may ensue whether or not the plaintiff overtly lulled the defendant into believing that the plaintiff would not act, or whether or not the defendant believed that the plaintiff would have grounds for action. *** Economic prejudice arises from investment in and development of the trademark, and the continued commercial use and economic promotion of a mark over a prolonged period adds weight to the evidence of prejudice."

Western invested in and promoted its GOLD SEAL brand during the period of delay (although it did not provide "precise" sales and advertising figures for that period). "The record demonstrates economic prejudice to respondent if its registration were to be cancelled at this point in time." Therefore, the Board ruled that Western had established its laches defense.

Turning to Petitioner's "inevitable confusion" argument, the Board again ruled in Western's favor: although the marks are identical, the goods are not "the same or substantially the same," as required. Moreover, the sophistication of purchasers and the absence of actual confusion weighed against a finding of inevitable confusion.

Consequently, the Board dismissed the petition.

TTABlog note: The Board pointed out that mere publication of Western's application for opposition does not provide constructive notice of its claim. The Board also noted that "It would appear that petitioner's actual knowledge of respondent's business activities under the mark GOLD SEAL occurred after the registration of the mark in issue." Would prior actual knowledge have made any difference? Yes.

"Our decision is intended to clarify this point. That is, in the absence of actual knowledge prior to the close of the opposition period, the date of registration is the operative date for calculating laches" (footnote 10). If a party has actual knowledge prior to the close of the opposition period, then the laches period begins to run on the publication date.

Compare this decision with the Board's citable decision in Alfacell Corp. v. Anticancer, Inc., 71 USPQ2d 1301 (TTAB 2004) [Despite Petitioner's "substantial" and "unexplained" delay of more than seven years before filing petition for cancellation, Respondent failed to prove that material prejudice that would support a laches defense].

TTABlog Update: The CAFC affirmed this decision on December 6, 2006 (blogged here).

Copyright John L. Welch 2006.


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