Wednesday, July 31, 2013

TTAB Summarily Rejects Morehouse Defense

Respondent KCG moved for summary judgment in this Section 2(d) cancellation proceeding involving its registration for the mark CITADEL, in standard character form, for various financial services. KCG invoked the "Morehouse defense," relying on its ownership of a registration (incontestable) for the mark shown below for the same services. Not so fast, said the Board, denying the summary judgment motion and striking the affirmative defense. Citadel Federal Credit Union v. KCG IP Holdings LLC, Cancellation No. 92055228 (July 10, 2013) [not precedential].


The theory behind the Morehouse defense is that one party cannot be harmed by the issuance to, or existence of a registration of, a second party if the second party already owns a registration for essentially the same mark for essentially the same goods or services. Therefore, in order to prevail on its Morehouse defense to Petitioner's likelihood-of-confusion claim, KCG must show that "it owns a prior registration for essentially the same mark registered in connection with essential the same services that are the subject of the involved registration." See Morehouse Mfg. Corp. v. J. Strickland Co., 160 USPQ 715, 717 (CCPA 1969).

Petitioner did not dispute that the services in KCG's two registrations are essentially the same. The question, then, was whether the two marks are essentially the same.

KCG argued that the marks are pronounced the same and have the same meaning and commercial impression because CITADEL is the dominant element of the earlier mark and the design element has no significant effect. Petitioner contended that KCG improperly applied a test for mark similarity under a likelihood of confusion analysis, and not the stricter "essentially the same" standard required for the Morehouse defense. 

The Board agreed with Petitioner. It found the "crenellated design element" to be a "significant portion of the mark which presents a bold impression not present in the standard character mark." The design element is not merely a small difference that requires "careful inspection to detect." (quoting Morehouse, 160 USPQ at 717). Distinguishing two precedents, the Board observed that the design element here is not merely a background design nor mere stylization of a word mark.

Therefore the Board ruled that the Morehouse is not available to Respondent KCG, and it denied KCG's summary judgment motion and struck the affirmative defense, ordering that the proceeding proceed.

Read comments and post your comments here.

TTABlog comment: If and when Petitioner succeeds in this cancellation proceeding, do you think KCG will oppose Petitioner's published application based on KCG's prior, "incontestable registration" on the ground of likelihood of confusion? Then what happens?

Note that the Morehouse defense is available only in the inter partes context. See In re Strategic Partners, Inc., 102 USPQ2d 1397 (TTAB 2012) [precedential]. [TTABlogged here].

Text Copyright John L. Welch 2013.

2 Comments:

At 10:29 AM, Anonymous CHARLES QUINN said...

As counsel for the petitioner, I am not unbiased, but I think the Board should have designated this decsion as precedential, becasue there is a paucity of precedent out there on applying the Morehouse principal to the facts of other cases. We argued, successfully, that duPont likelihood of confusion did not apply; the Board had some interesting language that supported that postion. Incidentally, the motion was denied, not granted as erroneously stated in the TTABlog entry.

 
At 11:25 AM, Blogger John L. Welch said...

Thanks for the correction. I agree with you that this should be precedential. I suggest that you write to the Board and suggest re-designation.

 

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