Precedential No. 26: Licensee Cannot Establish Priority Based On Licensor's Use

In a case of first impression, the TTAB ruled that a licensee cannot establish priority based on use of the subject mark by her licensor. Consequently, the Board dismissed Plaintiff' Julie A. Moreno's oppositions to registration of the marks shown immediately below, and denied her petition for cancellation of a registration for the word mark CASANOVA, all for boxing equipment. Moreno claimed prior rights in the mark CASANOVA for boxing gloves based on her licensor's use of the mark since 1972, well before Pro Boxing's priority dates. Julie A. Moreno v. Pro Boxing Supplies, Inc., 124 USPQ2d 1028 (TTAB 2017) [precedential] (Opinion by Cindy B. Greenbaum)

Plaintiff Moreno is the exclusive US licensee of Deportes Casanova of Mexico City. Moreno alleged that Deportes owns a Mexican registration for a mark highly similar to the mark shown above right. She claimed priority for herself and for Deportes Casanova based on common law use of the latter's mark CASANOVA since at least 1972.

Moreno and Deportes Casanova entered into a license agreement on July 23, 2013, granting Moreno the exclusive right to use the mark CASANOVA and the design mark, and to protect the marks by "all appropriate legal means."

Standing: Pro Boxing challenged Moreno's standing to bring these proceedings, claiming that the license was invalid because it did not contain a control provision. The Board disagreed, finding quality control to be inherent in the agreement because Moreno was buying the licensed products from Deportes Casanova and simply re-selling them.

Priority: There was no question that the marks at issue are confusingly similar. The critical issue to be determined was priority. Defendant Pro Boxing relied on the filing dates of its applications in March 2013 as its priority dates. Because Moreno did not use the licensed mark before Pro Boxing's constructive first use dates, she based her priority claim on the common law use of the mark CASANOVA by non-party Deportes Casanova.

Although the Board has not previously addressed this precise issue, it has encountered cases in which a licensor and licensee were joint plaintiffs, and each was required to establish its own priority. However, whether a licensee can assert priority based on use by the licensor of the licensed mark, as Moreno claimed, was an issue of first impression for the Board.

Of course use of a mark by a licensee inures to the benefit of the licensor. Moreno provided no support for the converse principle: "that use of a mark by the controlling trademark owner inures to the benefit of the licensee," nor was the Board aware of any supporting authority. The Board found such a proposition troubling:

Allowing a licensee to claim priority for itself in an inter partes proceeding based on the licensor’s use of the mark (whether through the license or otherwise), could result in a licensee being able to claim de facto ownership of the licensed mark.

The license was clear, however, that Moreno obtained no ownership rights in the mark.

The Board found that Moreno, as a mere licensee, could not rely on her licensor's use to establish priority. Therefore she could not prevail on her Section 2(d) claim. And so the Board dismissed the oppositions and denied the petition for cancellation.

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TTABlog comment: The solution: have Deportes Casanova be the plaintiff in a new proceeding.

Text Copyright John L. Welch 2017.