TTAB Grants Cancellation for Nonuse: ULTRA SUN Sunscreen Was Offered For Sale But Not Sold or Transported Before Critical Date
The Board granted a petition for cancellation of a registration for the mark ULTRA SUN for "[c]osmetic sunscreen preparations; sunscreen creams; water resistant sunscreen, sunscreen preparations," finding that the mark was not in use as of the deadline for filing Respondent Sun Precautions' statement of use in the underlying application. The parties invoked the Board's Accelerated Case Resolution procedure but, the Board observed, they "wasted the efficiencies of ACR, their own resources, and the Board’s resources" by, inter alia, filing multiple copies of documents and other cumulative evidence, and by litigating irrelevant facts and issues. Ultrasun AG v. Sun Precautions, Inc., Cancellation No. 92072352 (April 18, 2023) [not precedential] (Opinion by Judge Jonathan Hudis).
Respondent filed its statement of use on October 4, 2018, claiming a first use date of October 3, 2018. The deadline date for filing the statement of use was October 6, 2018 (the "Critical Date").
The Board observed that Section 45 of the Trademark Act defines "use in commerce" for goods as follows:
the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. … [A] mark shall be deemed to be in use in commerce …on goods when — (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce[.]
Thus, in order to qualify for registration of a mark, "one must sell or transport goods bearing the mark such that the sale or transport would be subject to Congress’s power under the Commerce Clause, which includes its power to regulate interstate commerce.” (Emphasis by the Board).
The Board found nothing in the record demonstrating that, by the critical date, Respondent had sold or transported its goods bearing the ULTRA SUN mark. "[A]ll Respondent had done was to display one tube of ULTRA SUN sunscreen to make the item available for sale on its website, and make that same tube available for sale at its retail store. Neither of these activities constituted a sale or transport of the identified goods bearing the mark in commerce as of the Critical Date. Clorox Co. v. Salazar, 108 USPQ2d at 1086."
Respondent also argued that, because the supplier shipped (from out-of-state) the single tube of sunscreen to Respondent, which Respondent received on October 1, 2018, this constituted Respondent’s use in commerce of the ULTRA SUN mark before the critical date. Not so, said the Board.
“[A] shipment of goods from the manufacturer to the trademark owner … [does] not satisfy the use or transportation in commerce requirement [for the mark to have been used in commerce], as … [this constitutes] a [mere] shipment of the goods in preparation for offering the goods for sale.” Tao Licensing, 125 USPQ2d at 1052 (citing Avakoff v. Southern Pac. Co., 765 F.2d 1097, 226 USPQ 435, 436 (Fed. Cir. 1985)).
Finally, the Board observed that "[t]The parties spent an inordinate and unnecessary amount of discovery, trial and briefing time on events that transpired long after the Critical Date of October 6, 2018. All of this was wasted effort that focused on irrelevant facts and issues. Once it was established that Respondent had not used its ULTRA SUN mark in commerce by the Critical Date, all of its activities directed to the ULTRA SUN mark and product(s) after that date were of no consequence. Clorox Co. v. Salazar, 108 USPQ2d at 1086."
And so, the Board granted the petition for cancellation on the ground that Respondent did not make use of the ULTRA SUN mark in commerce as of the deadline for filing its Statement of Use pursuant to Trademark Act Section 1(d).
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TTABlogger comment: What if the Respondent had given the single tube of sunscreen to an out-of-state resident?
Text Copyright John L. Welch 2023.
posted by John L. Welch @ 4/21/2023
4 comments
4 Comments:
I don't like this decision at all although it was the right one for the case! What if the goods are extremely expensive and rarely sold - i.e. a mega-yacht? Use in commerce for trademark purposes should not depend on consumer decisions to buy or not to buy. Granted, in this case, the fact that they had only one item available for an item that should be available in bulk does look like they were gaming the system. I need to research a bit since I seem to remember a case that did involve a mega-yacht!
John, I have a case pending decision at the TTAB where the applicant gave out samples while driving from Oregon to California.
A correct decision. The transport across state lines was not "in the course of trade" (to use Australian parlance). The display in the retail store when only one item was in existence in the store can be seen as "not being an offer in good faith to sell". A good faith offer to sell or a single sale would require very detailed evidence to substantiate that. Merely displaying an article without more is insufficient. The intention/capacity to supply must be present. Extremely expensive items, such as bespoke cars or yachts, are backed up by the requisite intention and ability to supply with documentation to demonstrate that.
Bob Kelson
I agree with the decision. With respect to the question about a giving a tube of sunscreen to an out-of-state resident, and whether that would be OK, I am reminded of what John McEnroe used to say, "You have got to be kidding me!" We don't want to go back to "token use" by pushing it to the end of the period for filing a statement of use. We were supposed to have gotten rid of token use by allowing for intent to use applications. (Or am I missing something here?) I have excerpted a little bit I found on the legislative history of the Trademark Law Revision Act from the 80s, plus some of my own wording. See below:
Before 1989, the Trademark Act had required that a U.S. applicant seeking
registration of a trademark or a service mark “use” the mark in commerce at the
time of the filing of the application. See, for example, Aycock Engineering, Inc. v.
Airflite, Inc., 560 F.3d 1350, 1357 (Fed. Cir. 2009). However, in order to obtain a
registration, some applicants filed applications with very minimal use, or “token
use.” The purpose of this “token use” at the time of filing was to attempt to
obtain rights in a mark before the mark was used on a commercial scale sufficient
to legitimately seek registration. One of the problems with allowing such token
use before registration was that the Federal Register of marks could eventually
contain many registrations of marks that were not in actual use in commerce. See
S. Rep. No. 100-515, at 6 (1988), reprinted in 1988 U.S.C.C.A.N. 5577, 5582, cited
in M.Z. Berger & Co., Inc. v. Swatch AG, 787 F.3d 1368, 114 USPQ2d 1892 (Fed. Cir.
2015). Conversely, if an applicant attempted to comply with the law and began
real commercial use of a mark before filing, with the attendant expense of
commencing such commercial use, that applicant might face rejection by the
USPTO because of a previously filed application or registration, perhaps based
on mere token use.
In order to prevent applications supported only by “token use,” the Trademark
Law Revision Act of 1988 (TLRA), Pub.L. No. 100-667, 102 Stat. 3935 (effective
Nov. 16, 1989) changed the law to allow applicants to file for registration before
they had actually begun use of the mark in commerce, with commercial use of
the mark being deferred but still being required before registration. However, an
applicant who filed without actual use of the mark (use remaining as a basis for
filing but defined as “bona fide use…in the ordinary course of trade”) was
required to have a “bona fide intention…to use the mark in commerce.” 15 U.S.C.
§ 1051(b)(1)-(3). See H.R.REP. No. 100-1028 (“House Report”), at 8-9 (1988) (“By
permitting applicants to seek protection of their marks through an ‘intent to use’
system, there should be no need for ‘token use’ of a mark simply to provide a
basis for an application. The use of the term ‘bona fide’ is meant to eliminate
such ‘token use’ and to require, based on an objective view of the circumstances,
a good faith intention to eventually use the mark in a real and legitimate
commercial sense.”).
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