Precedential No. 17: TTAB Rules that Retail Offering of One's Own Goods Qualifies as a "Service" Under the Trademark Act

In this opposition to registration of the mark BLIZZARD for various business services, Applicant Ava Labs, Inc., counterclaimed to cancel two pleaded registrations owned by Opposer Blizzard Entertainment for online retail store and mail order services. Ava asserted that the registered marks BLIZZARD and BLIZZARD ENTERTAINMENT have never been used or have been abandoned because the offering of one's own goods does not constitute a service done primarily for the benefit of others and therefore does not qualify as use of the marks. The Board disagreed. Blizzard Entertainment, Inc. v. Ava Labs, Inc., 2024 USPQ2d 1299 (TTAB 2024) [precedential].

Blizzard moved to dismiss the counterclaims under FRCP 12(b)(6), but since the motion was filed after Ava had answered the notice of opposition (and was therefore untimely), the Board construed the motion as one for judgment on the pleadings under FRCP 12(b)(2)(b). However, the standard for the two motions is the same: a complaint "'must state sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 566 U.S. 662, 678 (2009).

Ava argued that Blizzard's identified services - "electronic commerce services, namely, providing online retail store and mail order services, all featuring clothing, books, mouse pads, toys, games" - are not performed "to the order of, or for the benefit of" someone other than Blizzard itself and are not "qualitatively different from anything necessarily done" in connection with the sale of Blizzard's goods. Therefore, according to Ava, Blizzard has never used the marks in commerce on or in connection with the recited services and has abandoned the marks.

The question, then, was "whether, as a matter of law, online retail store or mail order activities featuring only a party’s own goods are 'services' as contemplated in the Trademark Act."

The Trademark Act defines "service mark" but does not define "services." However, certain criteria have evolved from the case law: (1) a service must be a real activity; (2) a service must be performed to the order of, or for the benefit of, someone other than the applicant; and (3) the activity performed must be qualitatively different from anything necessarily done in connection with the sale of the applicant’s goods or the performance of another service." In re Canadian Pac., Ltd., 754 F.2d 992, 994 (Fed. Cir. 1985).

The parties focused on the second and third criteria. As to the second, "the question is who primarily benefits from the activity." [Emphasis added]. See In re Venture Lending Assocs., Ser. No. 73402929, 1985 TTAB LEXIS 89, at *4-6 (TTAB 1985) (funds investment and providing capital for management is an activity that primarily benefits others even if applicant also derives some benefit from the performance thereof). If the activity primarily benefits Blizzard, it is not a registrable service even if others derive some benefit. In re Dr. Pepper Co., 836 F.2d 508, 510 (Fed. Cir. 1987) (contest promoting applicant’s goods not a service, even though benefits accrue to winners of contest).

As to the third criterion, “[t]he fact that an activity is ancillary to a principal service or to the sale of goods does not in itself mean that it is not a separately registrable service.” Carefirst of Md., 2005 TTAB LEXIS 600, at *33 (citing In re Universal Press Syndicate, Ser. No. 73447294, 1986 TTAB LEXIS 128 (TTAB 1986) (licensing cartoon character found to be a separate service that was not necessary to larger business of providing a magazine and newspaper cartoon strip)).

The Board observed that "it has long been recognized that gathering various products together, making a place available for purchasers to select goods, and providing any other necessary means for consummating purchases constitute the performance of a service." The International Classification of Goods and Services for the Purposes of the Registration of Marks, 12th Edition (2024) (“Nice Classification”), in an explanatory note, states that services classified in International Class 35 include:

the bringing together, for the benefit of others, of a variety of goods, excluding the transport thereof, enabling customers to conveniently view and purchase those goods; such services may be provided by retail stores, wholesale outlets, through vending machines, mail order catalogues or by means of electronic media, for example, through websites or television shopping programmes. [Emphasis by the Board].

"[O]nline retail store and mail order activities featuring one’s own goods primarily benefit consumers in that the activity provides a central location to find, examine, and purchase various goods; and this is true even though the retailer derives the benefit of selling its own goods." The Board noted that "n]either the Trademark Act nor authorities interpreting the Act distinguish between retail stores that sell products under the same brand name as the store and those that sell goods produced by and bearing the brands of others."

Furthermore, the Board has implicitly recognized that retail store activities featuring one’s own goods are services, acknowledging that "if a retail store also uses the name of the store on the goods themselves, the same mark can serve both a trademark and service mark function." Id. (citing Giant Food Inc. v. Rosso and Mastracco, Inc., Opp. No. 91060949, 1982 TTAB LEXIS 10, at *7-8 (TTAB 1982)).

The Board concluded that Blizzard's activities under the marks constitute use of the marks that satisfies the requirement of the Trademark Act. Accordingly, Ava's motion for judgment failed as a matter of law.

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TTABlogger comment: The line between what primarily benefits an entity and what doesn't primarily benefit an entity remains a bit murky.

Text Copyright John L. Welch 2024.