Wednesday, December 26, 2007

Foreign Manufacturer, Not US Distributor, Owns "NITRO" Marks for Helmets, Says TTAB

In a battle over the marks NITRO and NITRO RACING for motorcycle helmets and protective clothing, the Board ruled in favor of Opposer/Petitioner Lloyd Lifestyle in finding that Applicant/Registrant Soaring Helmet was not the owner of the marks at the time it applied for registration. Consequently, the Board sustained Lloyd's opposition and granted its petition for cancellation. Lloyd Lifestyle Ltd. v. Soaring Helmet Corp., Opposition No. 91164265 and Cancellation No. 92045075 (December 11, 2007) [not precedential].

Plaintiffs and Defendant were using the same Chinese factory to make their respective helmets, which led to the original contacts between the parties. Plaintiffs claimed that it developed the NITRO products for sale in Europe and, when Defendant expressed an interested in selling the products in the USA, Plaintiffs agreed that they could sell NITRO brand products made by approved manufacturers. Plaintiffs also claimed that it directed Defendants to register the mark in the USA on Plaintiffs' behalf. Defendant asserted that Plaintiffs expressed no interest in the USA, and that Defendant, by using and registering the marks in the USA, became the owner.

Because there was no written agreement between the parties, the Board had to decide which version of the story was supported by the evidence. It found Plaintiff's account to be "more reliable and more credible" and Defendant's testimony to be "argumentative, internally contradictory and otherwise less than clear."

"In this case a preponderance of the evidence of the conduct of the parties establishes that plaintiffs and defendant agreed that Soaring Helmet would act as distributor for the Lloyd Group for the purpose of sales of products bearing the NITRO marks in the United States."

Plaintiffs "not only developed the NITRO marks but plaintiffs developed products based on those NITRO marks and undertook use of the marks on those products." The Board noted that Lloyd was not the actual manufacturer of the goods, but it saw no reason why Lloyd should not be given the same treatment under the law as a foreign manufacturer who makes products in its own factory. Under U.S. law, the foreign manufacturer rather than the U.S. distributor is presumed to be the owner of the mark in dispute. "Indeed the absence of a clear agreement in these situations is the rule not the exception and the reason for the existence of the legal presumption."

"In sum, we conclude that plaintiffs have shown by a preponderance of the evidence: (1) that plaintiffs acted independently and in good faith to develop the NITRO marks and products; (2) that MHR manufactured the NITRO products for plaintiffs; (3) that plaintiffs acted as foreign manufacturer and defendant as U.S. distributor for the sale of the NITRO products in the United States; (4) that plaintiffs are the owners of the NITRO marks in the United States, and (5) that the applications defendant filed for registration of the NITRO marks in the United States at issue in these proceedings were not filed by the owner of the marks, and therefore, were void as filed."

TTABlog note: For a recent TTAB decision in which the US distributor and not the foreign manufacturer was found to be the owner of the mark in dispute, go here.

Text Copyright John L. Welch 2007.


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