Tuesday, May 11, 2010

TTAB Cancels "CITYSTAY HOTELS" Registration as Void Ab Initio: Hotel Lodging Services Not Rendered as of Filing Date

In this streamlined cancellation proceeding, the parties filed a joint request to resolve the matter via Accelerated Case Resolution (ACR), accompanied by a joint stipulation of facts. Respondent CSH fatally stipulated that it had not rendered "hotel lodging" services at the time of filing its application that yielded the challenged registration for CITYSTAY HOTELS. And so the Board sustained the petition for cancellation on the ground that Respondent's mark was not in use as of the filing date, and its registration is therefore void ab initio. Jonathan M. Kelly v. Citystay Hotels, LLC, Cancellation No. 92048998 (April 28, 2010) [not precedential].

[click on illustration for larger picture]

Petitioner Kelly neglected to provide any evidence of its standing, but the Board nonetheless found standing established by statements made in Respondent's brief: it admitted that Kelly's application for the service mark CITISTAY had been suspended in light of the challenged registration.

Respondent CSH stipulated that as of its filing date it had not operated any "brick and mortar" establishments "commonly known as a 'hotel' providing lodging or other temporary residency for travelers and the public," nor had any entity related to CSH provided those services, nor had it licensed the mark to another. It had only hired website and marketing consultants, made presentations at hospitality trade shows, and negotiated with a hotel company regarding possible collaboration.

CSH feebly argued that brick and mortar establishments are not necessary and that "the exchange of money or some other trade in association with the mark is enough to satisfy commerce." It relied on definitions of "commerce" and "trade" from something called the "Lectric Law Library."

The Board turned to dictionary definitions of "hotel" and "lodging" to find that "hotel lodging means a commercial establishment offering persons a temporary place to stay" -- i.e., brick and mortar. Moreover the Lanham Act provides the pertinent meanings of "commerce" and "trade," not the "Lectric Law Library."

According to Section 45, a service mark is in "use in commerce" when "it is used or displayed in the sale or advertising of services and the services are rendered in commerce." Mere publicity about the services to be rendered in the future does not suffice; there must also be a rendition of the services in commerce.

Here, the mark CITYSTAY HOTELS was not in use as of Respondent's filing date. "It is not enough that respondent contracted with third parties to create a website and build technology and booking servers, or even that applicant advertised and promoted hotel lodging services."

Consequently, "the application and resulting involved registration are void ab initio."

TTABlog comment: A similar result was recently reached in Parametric Technology Corporation v. PLMIC, LLC, Opposition No. 91174641 and PLMIC, LLC v. Parametric Technology Corporation, Opposition No. 91177168 (February 12, 2010) [not precedential]. [TTABlogged here].

Text Copyright John L. Welch 2010.


At 11:37 AM, Anonymous Anonymous said...

Interesting case which raises a lot of issues we all suspected for a long time.
If you look at this case in conjunction with Parametric it would say that you are not offering services the day you open your doors and "offer the service" because "offering" not enough. It would seem that you now have to have an actual customer staying at your hotel.
I'll bet many retail stores and services are using the date they opened the door and offered the service, not the first sale date.
The time has come to have an actual dated receipt of the first sale with clear documentation. Perhaps a good idea to even submit that as part of your initial specimen for archiving purposes along with proof for each and every good/service, not just one.
The problem I have is that "first sale" is not the rule. The rule is "first use." So when I advertise services on the day I open my doors, my first use is not until I actually have a customer walk in the door or is it when I make an actual sale? What if they come in and just look around but decide not to buy the goods/services?
Very interesting issues raised in a very simple case. One problem is that not all services are easy to quantify as being used v. others.
Also, now that you can only put in one date in the electronic application form, what happens if the services or goods listed have different dates of first use? Should you put down the first or the last date? Obviously, the later date is safer. The USPTO created the problem by allowing only one date field for the use date, now people are going to get burned. I guess one should put the different dates as part of the list of goods like we did in the old days. Certainly no one has been doing this since the electronic filings started and I would guess most are using earliest date possible. I am sure the examiners are going to be thrilled if that starts to happen.
I bet 90% or more of applicants do not even know this is an issue in the first place.
I understand the result, but I have problems because the rule does not conform to actual practice in many situations.

At 1:17 PM, Blogger John L. Welch said...

Good point, anonymous. This is another reason to file ITUs.

At 5:50 PM, Anonymous Orrin A. Falby said...

The statute states that the date of first use is the date that the services are first "rendered". Many people do not take the time to understand this. The reason I think this happens is due to the specimen requirement. Most people "assume" that once the service is advertised, you have use is commerce -- wrong!! I always take the time to explain this particular issue to our clients. This is detrimental only if the claimed date of first use is before the application filing date.

At 4:13 PM, Anonymous Rob said...

Has the Federal Circuit ever affirmed a finding of registration void ab initio on any ground other than fraud?

At 10:24 AM, Anonymous Orrin A. Falby said...

Rob, void ab initio has a different standard than fraud. You do not have to show intent to deceive. The Federal Circuit upheld the TTAB in a case similar to the one commented on herein. See Aycock Engineering v. Airflite (Fed Cir. 2008). The case also clears up some of Anonymous' concerns regarding what constitutes use of a service mark.


Post a Comment

<< Home