TTAB Rules that Registrant May Challenge Cancellation Petitioner's Standing, Threatens Sanctions
[TTABlog caveat: yours truly served as Respondent Brady's counsel in connection with the motions discussed herein]. In its May 27, 2011 issue, BNA's Patent, Trademark & Copyright Journal reported on an interlocutory ruling in Kaplan v. Brady, Cancellation No. 92052482, involving a registration for the mark FUNNY-FACE for "powder for preparing soft drinks." Petitioner Jeffrey Kaplan filed for summary judgment on the ground of abandonment, but Respondent Kaplan countered with a cross-motion for summary judgment on the ground that Kaplan lacked standing. The Board denied both motions, but not before making several interesting rulings. Kaplan v. Brady, 98 USPQ2d 1830 (TTAB 2011) [not precedential].
Kaplan filed an I-T-U application for the mark FUNNY FACE FIZZY BLAST! for soft drink tablets, and on the next day filed his petition for cancellation. A few month's later Kaplan's application to register was refused in view of the FUNNY-FACE registration. When Kaplan filed for summary judgment of abandonment, Brady asserted that Kaplan lacked the requisite bona fide intent to use his mark when he filed the I-T-U application, and therefore that the application was void ab initio and standing was lacking.
Registrant established through discovery that Kaplan had no documentation to support his alleged bona fide intent, except for a purported "business plan" and his I-T-U application papers.
The Board ruled that Registrant had the right to challenge Petitioner's bona fides and his standing:
A plaintiff can rely on refusal of its application under Trademark Act Section 2(d), 15 U.S.C. Section 1052(d), based on likelihood of confusion with a defendant's involved registration as a means of establishing its standing to bring a proceeding to cancel that registration. *** However, the fact that petitioner's intent-to-use application was refused registration based on likelihood of confusion with the mark in respondent's pleaded registration does not preclude respondent from challenging petitioner's assertion in that application that he has a bona fide intent to use his pleaded mark in commerce. See Salacuse v. Ginger Spirits Inc., 44 USPQ2d 1415 (TTAB 1997).
Reviewing the evidence, the Board found that a genuine issue existed regarding whether Kaplan had a bona fide intent to use his mark at the time of filing. It noted that his business plan "includes many passages that appear to be lifted verbatim from a business plan regarding intended use of the mark BAKE OFF for 'disposable wipes impregnated with cleansing compounds for use on hard surfaces, tiles, pot and pans.'"
Furthermore, Respondent submitted copies of sixteen I-T-U applications filed by Petitioner Kaplan that were subsequently abandoned, for goods ranging from computer software for the creation of firewalls: to disposable wipes impregnated with cleansing compounds for use on hard surfaces, tiles, pot[s] and pans; lipsticks; to carbonated beverages. The Board pointed to the legislative history of the Trademark Law Revision Act of 1988, which sets for various "circumstances [that] may cast doubt upon the bona fide nature of the intent or even disprove it entirely. For example, the applicant may have filed ... an excessive number of intent-to-use applications to register marks which ultimately were not actually used ...."
The Board also noted a letter from Petitioner to Respondent's counsel, offering to withdraw the petition to cancel for $35,000.00.
Because there existed a genuine issue of fact regarding Petitioner's bona fide intent, and thus his standing, the Board denied Respondent Brady's summary judgment motion, and it declined to reach the abandonment issue raised by Petitioner.
The Board then went on to observe that "petitioner has commenced nine cancellation proceedings within the last year in which he has set forth abandonment claims and has based his standing in those proceedings on recently- or concurrently-filed intent-to-use applications." Pointing to FRCP Rule 11, the Board asserted that it "will entertain a motion for entry of further sanctions, including dismissal of the petition to cancel with prejudice, should violations of the Federal Rules of Evidence or the Federal Rules of Civil Procedure be shown."
And so the Board re-set discovery and trial dates, and the proceeding has resumed.
TTABlog comment: In footnote 7, the Board stated that Respondent must amend his answer to add an affirmative defense of lack of standing. However, in the most recent Amanda Blackhorse pre-trial order, the Board said that lack of standing is not an affirmative defense. [here, page 13]. I think the latter view is the correct one, since standing is a threshold issue in every Board proceeding.
TTABlog postscript: Mr. Kaplan withdrew his petition for cancellation on June 6, 2011 (here).
Text Copyright John L. Welch 2011.