Tuesday, April 03, 2007

Precedential No. 25: Is IZZY'S Cancellation Petition Barred By Laches? It Isn't, Says TTAB

Laches or not? That was the question. Jansen Enterprises, owner of several IZZY'S marks for restaurant services, franchising services, and pizza, petitioned to cancel a registration for the mark shown immediately below for "restaurant services featuring bagels as a main entrée." The petition was filed six days before the fifth anniversary of the subject registration, prompting Respondents' claim of laches. Jansen Enterprises, Inc. v. Rind and Stone, 85 USPQ2d 1104 (TTAB 2007) [precedential].

Likelihood of confusion:
The Board focused its attention on Petitioner's stylized IZZY'S mark (shown below), the subject of a concurrent use registration for restaurant services (for the area west of the Mississippi River). It found the parties' services to be legally identical, since "restaurant services" encompass restaurants featuring bagels -- a factor weighing "heavily" in Petitioner's favor.

When the involved services are identical, a lesser degree of similarity between the marks is required to support a finding of likely confusion. Notwithstanding the prominence of the design features in Respondent's mark, the Board found that the literal portion is dominant and that, in turn, the literal portion is dominated by IZZY'S. The overall impression created by the parties' respective marks is that "the restaurant is owned by someone named 'IZZY.'" In sum, the Board concluded that the marks are confusingly similar.

As to other du Pont factors, Petitioner claimed fame but its evidence fell short. The Board did, however, find the mark to be "strong." As to the lack of actual confusion, the Board noted that the parties do not operate in the same geographical area, and thus "it may be that the same consumers have not been exposed to both restaurants."

Weighing the relevant du Pont factors, the Board found confusion likely.

Laches: Turning next to the affirmative defense of laches, the Board pointed out that Respondent must prove undue or unreasonable delay by petitioner and prejudice resulting from the delay. Jansen had threatened to cancel the subject registration in 2000, but filed its petition in January 2004. Respondent asserted that during the lull, it had continued to invest in and expand its business, opening a second restaurant in 2003.

Petitioner argued that its delay was not unreasonable because (1) it was busy with other cancellation proceedings, (2) it thought respondent was operating a bagel shop in New York (where Petitioner did not have rights), and (3) only in September 2003 did Respondent add pizza as a menu item.

Petitioner Jansen was on constructive notice of Respondent's service mark as of the date of issuance of the subject registration (February 2, 1999). Thus the length of delay was six days short of five years. The Board found, under the circumstances of this case, that this was "undue delay" and that Respondent was harmed by Petitioner's inaction.

But that was not the end of it. The question then became: was the delay excusable? Petitioner's "other litigation" alibi was "hardly sufficient:" only one legal action preceded the petition and it was concluded two years prior. Moreover, Petitioner never told Respondent that this was the reason for its delay. [Strike one.]

Jansen's assertion that it mistakenly believed Respondent to be located in New York was also meritless. Jansen and its attorney corresponded with Respondent at the latter's California address, and the subject registration states the California address. In any case, the challenged registration is not limited geographically. [Strike two].

However, the Board agreed with Petitioner Jansen that circumstances changed when Respondent began offering pizza in 2003, thereby "encroaching" on Jansen's turf (pizza being the "focal point of Petitioner's restaurant services"). "Because respondent changed the nature of his 'restaurant services featuring bagels as a main entrée' in September 2003, he is not entitled to rely on petitioner's inaction prior to that time." [Home run by Jansen!].

Therefore, the Board concluded that laches does not apply.

Inevitable Confusion: For the sake of completeness, the Board considered the doctrine of inevitable confusion. If confusion is inevitable, the doctrine goes, laches doesn't apply. However, because the marks are "clearly not identical," the Board did not view confusion as inevitable.

For the foregoing reasons, the Board rejected the laches defense and sustained the petition for cancellation.

Text Copyright John L. Welch 2007.


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