CAFC Affirms TTAB: Registration Cancelled Due to Invalid Assignment of I-T-U Application
The CAFC affirmed the TTAB's ruling [here] that ordered cancellation of a registration for the mark THE EMERALD CITY for business development and consulting services in the renewable energy industry. The Board had found that the underlying Section 1(b) application had been assigned to Opposer Emerald City Collaborative in violation of Section 10 of the Lanham Act. Emerald Cities Collaborative, Inc. v. Sheri Jean Roese, Appeal No. 2016-1703 (Fed. Cir. December 13, 2016) [not precedential].
On November 24, 2009, Perry Orlando received a notice a notice of allowance for his application to register THE EMERALD CITY. On December 30, 2009, he entered into an agreement with Emerald City Collaborative (ECC) entitled "Trademark Assignment and License," effective on that date. The Agreement stated that Orlando "agrees to convey and assigned" to EEC his mark "at such time as the Mark is registered at the [PTO]." EEC took over prosecution of the application and Orlando agreed to provided assistance with the prosecution. Orlando also agreed to use the mark by January 31, 2010, and his products "shall at all times be of a high quality," as determined by ECC. [Emphasis added by CAFC].
On April 19, 2010, Orlando filed a Statement of Use, and one month after the registration issued an assignment to ECC was recorded.
ECC filed an opposition to Roese's application to register EMERALD CITIES. She counterclaimed for cancellation on the ground that ECC's registration was invalid because the Agreement between Orlando and ECC violated Section 10 of the Lanham Act. The Board agreed with Roese, rejecting ECC's argument that the Agreement was merely an "agreement to assign in the future."
Section 10 of the Lanham Act contains an anti-trafficking provision, Section 10, which states that an intent-to-use application is assignable (1) only after the filing of a Statement of Use, or (2) if assigned to a successor to the business of the applicant to which the mark pertains, if that business is ongoing and existing. The second prong of Section 10 did not apply here. The question was whether the Agreement constituted an improper assignment of the Section 1(b) application prior to the filing of a statement of use.
Construing the Agreement as a whole, the CAFC reached the same conclusion as the Board: "the overall scheme and plan of the Agreement is that, by virtue of its execution, Orlando relinquished, and ECC acquired, immediate control and ownership over the intent-to-use application and the associated mark.
Orlando ceded control of the application to ECC and became obligated to assist ECC in its registration efforts. The Agreement provides that if it is terminated, Orlando must cease use of the Mark. In short, Orlando became a de facto licensee.
Moreover, Orlando agreed not to challenge ECC's use of the mark, whether before or after registration. Only ECC had the right to file oppositions or claims against confusingly similar marks, whether before or after registration.
Accordingly, we conclude that the Agreement, when read in its entirety, unambiguously shows that, by virtue of its execution, ECC acquired, and Orlando relinquished, immediate control and ownership of the intent-to-use application in a manner tantamount to an assignment." (quoting the TTAB opinion).
Because the Agreement violated Section 10, the Board did not err in cancelling the registration.
Read comments and post your comment here.
TTABlog comment: Sheri Jean Roese appeared pro se. How do you like those apples? Is there anything wrong with an agreement to assign a mark in the future, in terms of the Section 10 prohibition? Wouldn't that invite abuse? Pamela Chestek, please pick up the white courtesy phone!
Text Copyright John L. Welch 2016.