Precedential No. 4: Foreign Cancellation Petitioner Fails to Meet Lexmark Test for "Standing" But TTAB Allows Time to Amend Petition

The requirement that a plaintiff in a TTAB proceeding plead and prove its entitlement to a statutory cause of action (formerly called "standing") is a low threshhold, but a critical one. Petitioner Ahal Al-Sara Group sought cancellation of a registration for the mark shown below for various cleaning products, claiming abandonment and fraud, but it failed to identify an interest that falls within the "zone of interests of the Trademark Act" and thus failed to sufficiently plead its entitlement to a statutory cause of action. The Board, however, gave the petitioner twenty days within which to serve and file an amended petition for cancellation. Ahal Al-Sara Group for Trading v. American Flash, Inc., 2023 USPQ2d 79 (TTAB  2023) [precedential].

Petitioner alleged that Respondent American Flash relied on the subject registration in a cancellation proceeding in Saudi Arabia involving petitioner's FIGHTER FLASH mark. American Flash moved for dismissal for lack of "standing," pointing out that petitioner is a Saudi Arabian company that has no sales in the United States, does not compete with American Flash in this country, does not manufacture goods here, and has not filed a U.S. trademark application for its mark or any variation thereof.

The Board looked to Section 45 of the Trademark Act, which (according to the Supreme Court in Lexmark) includes an "unusual, and extraordinarily helpful detailed statement of the statute's purpose" and which identifies the interests protected through the regulation of "commerce within the control of Congress." Accordingly, a plaintiff must plead facts that, if proved, demonstrate a "real interest" that affects U.S. commerce, including interstate commerce and commerce with foreign nations. Here, the petition relied only on challenges to petitioner's foreign marks in foreign proceedings.

Petitioner has not pleaded a presence in the United States. Petitioner does not contend that its interests involve selling or manufacturing goods within the United States, and Petitioner has not filed any U.S. trademark applications to register FIGHTER FLASH or AMERICAN FLASH or any variations thereof. Nor does Petitioner plead an intent to enter the U.S. market in the future, or any other facts that if proved, would demonstrate an interest related to or affecting U.S. commerce falling within the scope of protection under the Trademark Act.

The Board therefore concluded that petitioner failed to plead its entitlement to a statutory cause of action. However, consistent with its general practice, the Board allowed petitioner twenty days to cure its defective pleading.

For the sake of completeness, the Board took a look at petitioner's two pleaded claims: fraud and abandonment. It found the abandonment claim to be adequately pled, but it dismissed the fraud claim. Petitioner alleged that American Flash committed fraud by stating a false first date of use. The Board pointed out, however, that the dates of use stated in an application are not material to the Office's decision to approve an application for publication. As long as the mark at issue was in use prior to the filing date, the erroneous statement of first use dates cannot be fraudulent. Here, petitioner itself alleged that respondent used its mark before the filing date of its underlying application. End of story.

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TTABlogger comment: So, will the petitioner now plead an intention to enter the U.S. market?

Text Copyright John L. Welch 2023.