Precedential No. 18: U.S. Seller, Not Foreign Manufacturer, Owns Trademark, TTAB Rules

This cancellation proceeding boiled down to a dispute between the U.S. seller (petitioner) and the foreign manufacturer (respondent) over ownership of the mark UVF861 for light bulbs and lighting fixtures. Petitioner contended that the goods were manufactured to its order and specifications, and therefore it owned the mark. Respondent maintained that as manufacturer it owned the mark, because petitioner was a mere distributor. The Board, after an extensive review of the record evidence, ruled in favor of petitioner. UVeritech, Inc. v. Amax Lighting, Inc., 115 USPQ2d 1242 (TTAB 2015) [precedential].

Although the proceeding was couched in terms of priority and likelihood of confusion under Section 2(a), the crux of the dispute was the issue of ownership. The parties fully tried that issue and argued it in their briefs.

There exists a legal presumption that, as between a manufacturer and an exclusive distributor of a product, the manufacturer is the owner of the mark, absent an agreement between them. However, the presumption is rebuttable.

Here there was no agreement regarding ownership of the mark. The Board therefore looked to the following factual framework in considering the ownership issue:

(1) which party created and first affixed the mark to the product;
(2) which party's name appeared with the trademark on packaging and promotional materials;
(3) which party maintained the quality and uniformity of the product, including technological changes;
(4) which party does the consuming public believe stands behind the product, e.g., to whom customers direct complaints and turn to for correction of defective products;
(5) which party paid for advertising; and
(6) what a party represents to others about the source or origin of the product.

The Board found petitioner to be owner of the mark UVF861 because factors 1 through 4 and six favored petitioner (factor no. 5 was neutral, there being no evidence regarding payment for advertising). Thus the factual evidence rebutted the presumption of ownership by the manufacturer.

The evidence showed that petitioner designed the bulbs for use in its ultraviolet counterfeit currency detector, and it conceived the mark UVF61. Petitioner hired respondent to make the bulbs under the mark to petitioner's specifications. Petitioner had already been using the mark UVF461, and looked to a bulb with twice as much wattage: thus the "8" in the subject mark instead of the "4" in the prior mark. Respondent had never sold a bulb under the mark UVF861 prior to its dealings with petitioner.

The most telling events, the Board found, occurred when petitioner became dissatisfied with respondent's products and turned to another manufacturer for a one-year period. The bulbs were still branded with the UVF861 mark, but respondent never objected or asserted its supposed rights in the mark.

Moreover, when quality problems arose, customers approached petitioner, not respondent, in seeking a solution. In other words, consumers believed petitioner to be the party standing behind the UVF861 bulbs. In fact, the product literature distributed with petitioner's equipment indicated that petitioner was the manufacturer, and included an order form for replacement bulbs.

Petitioner proved that it adopted the mark UVF861 as early as 2003 when it arranged for manufacture of the bulbs by respondent. There was no evidence that petitioner agreed to respondent's ownership of the mark, or that petitioner ever assigned the mark to respondent. Nor was there evidence that petitioner authorized respondent's filing of the application that issued as the challenged registration. Prior to its business relationship with petitioner, respondent never made similar products nor used the mark UVF861 for any products.

The sale of goods under a trademark does not require that the goods on which the mark is used be manufactured by the seller for the seller to be the owner of the mark. It is enough that the goods are manufactured for it, that it controls their production, or that the goods pass through its hands in the course of trade and that it gives to the goods the benefit of its reputation or of its name and business style.

The Board concluded that petitioner's claim of ownership was both consistent with applicable precedent and amply supported by the record evidence.

And so the Board granted the petition for cancellation.

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TTABlog comment: If ever a case existed for rebutting the presumption of ownership, this was it.

Text Copyright John L. Welch 2015.