Thursday, January 11, 2007

CAFC Reverses TTAB's "First Niagara" Ruling re Use Required to Support 2(d) Opposition

In a precedential ruling, First Niagara Ins. Brokers, Inc. v. First Niagara Financial Group, Inc., 81 USPQ2d 1375 (Fed. Cir. 2007), the CAFC reversed the TTAB's decision in the First Niagara case, ruling that the Board had applied too stringent a test in requiring that Opposer First Niagara Insurance Brokers, Inc. ("FN-Canada") prove use of its marks "in commerce." First Niagara Ins. Brokers Inc. v. First Niagara Financial Group, Inc., 77 USPQ2d 1334 (TTAB 2005). [TTABlogged here].

The Board dismissed FN-Canada's Section 2(d) oppositions to registration of the mark FIRST NIAGARA for insurance brokerage services because Opposer failed to establish "use of its pleaded marks on insurance brokerage services regulable by Congress." Consequently, the Board held that FN-Canada "cannot establish priority and cannot prevail on its claim of likelihood of confusion."

The CAFC ruled, however, that the Board had applied the incorrect test. Section 2(d) uses the terminology "previously used in the United States by another." It does not state that the use must be "in commerce lawfully regulable by Congress," as the Board held. The CAFC pointed out that if "use in commerce" were required for a Section 2(d) opposition, then an opposition could not be based solely on intrastate use. That is not the law (as the Board acknowledged in footnote 15 of its decision). In other words:

"... a foreign opposer can present its opposition on the merits by showing only use of its mark in the United States."

Applicant FN-Canada did not argue that the Board had applied the wrong test, and the Board "apparently found" that FN-Canada had "waived the right to argue this case on the correct lesser use requirement." The CAFC, however, chose to consider the issue anyway, believing "it would be imprudent to render a decision predicated upon a hypothetical reading of Section 2(d), i.e., as if it requires 'use in commerce' instead of 'use in the United States.'"

The CAFC concluded that the Board clearly erred in dismissing the oppositions. "The record unquestionably reveals more than ample use of FN-Canada's marks in the United States to satisfy the use requirements of Section 2(d)."

The case was remanded to the TTAB for further proceedings.

TTABlog comment: I'm still thinking about this decision. What bothers me is whether the Canadian Opposer is "using" the service marks in question at all for purposes of the Lanham Act, since Opposer does not render its services in the United States. I find the CAFC's approach a little too glib. Sure, an intrastate user may oppose under Section 2(d), but at least it is "using" its mark in the United States. How is a company that renders its services only in Canada analogous to an intrastate user who uses its mark in this country? Why should a foreign entity be able to oppose a U.S. application if the foreign entity doesn't render its services in the U.S.?

But see Int'l Bancorp LLC v. Societe Des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F3d 359 (4th Cir. 2003). [Divided panel held that a foreign company's use of a mark in advertising in this country was sufficient to establish trademark rights here, even though its casino services were not rendered in the United States.] The Board had distinguished Int'l Bancorp on the ground that FN-Canada's activities in the U.S. were "minimal and incidental" and its advertising was directed to Canadian purchasers.

Text Copyright John L. Welch 2007.


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